This section says certain insurer insiders may engage in listed activities and transactions that are otherwise not prohibited, including policyholder participation, some compensation, some related transactions, and lawful dividends.
Sec. 805.004. ACTIVITIES NOT PROHIBITED. This subchapter does not prohibit: (1) a director, officer, or major shareholder of an insurer from: (A) becoming a policyholder of the insurer and exercising the usual rights of a policyholder; (B) participating as beneficiary in a pension plan, deferred compensation plan, profit-sharing or bonus plan, stock option plan, or similar plan adopted by the insurer and for which the director, officer, or major shareholder may be eligible under the terms of the plan; (C) receiving a salary, bonus, or other remuneration for a service rendered to the insurer as an employee of the insurer and not in violation of another provision of this code; or (D) entering into an arms-length transaction with the insurer if: (i) the transaction is not prohibited by another statute; and (ii) the commissioner approves the transaction before the transaction is made; (2) a director of an insurer from: (A) performing professional services not required of a director by law; or (B) receiving director's fees or reimbursement for an expense incurred in the performance of a duty as a director; (3) a transaction within an insurance holding company system by an insurer with its holding company, subsidiary, or affiliate that: (A) is not prohibited by law; (B) meets the test of being fair and proper; and (C) is regulated by another statute; (4) a transaction or arrangement that: (A) is not prohibited by law; and (B) meets the test of being fair and proper as prescribed by rules adopted by the commissioner; or (5) the approval and payment of lawful dividends to policyholders and shareholders. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003. SUBCHAPTER B. CERTAIN PAYMENTS BY DIRECTORS, OFFICERS, AND TRUSTEES