SECTION 7.1606. Requirements Related to Ownership Interest and Change of Control

(a) For purposes of this section only, control:

(1) means the power to direct, or cause the direction of, the management and policies of a person, other than the power that results from an official position with or corporate office held by the person;

(2) may be possessed by various means, including through:

(A) ownership of voting securities;

(B) ownership by contract; or

(C) direct or indirect control of one or more persons that control an administrator; and

(3) exists if an individual or a member of an individual's immediate family, directly or indirectly, owns, controls, or holds with the power to vote 10 percent or more of the voting securities or authority of:

(A) an administrator; or

(B) another person that directly or indirectly controls an administrator, including when a person holds proxies representing 10 percent or more of the voting securities or authority of the person.

(b) Pursuant to the Insurance Code §4151.052(b), an applicant or an administrator shall notify the department in writing of a change of control in the ownership of the applicant or administrator not later than the 30th day after the effective date of the change.

(c) An applicant or administrator may not file the notification required by subsection (b) of this section until a proposed acquisition of control has been approved under the Insurance Code §4151.211.

Source Note: The provisions of this §7.1606 adopted to be effective June 25, 2009, 34 TexReg 4143