Current through Register 2024 Notice Reg. No. 38, September 20, 2024
An association must submit an application for commissioner
approval before investing in, or buying capital stock, obligations or other
securities of a common subsidiary, wholly owned, or independent service
corporation. The procedure for securing approval is as follows:
(a) Application. A written application
submitted in duplicate, in letter form, signed by an officer of each
association shall be filed with the commissioner. The application shall
include:
(1) In duplicate, the articles of
incorporation and bylaws which comply with Section
103.601;
(2) The names of all participation
associations;
(3) A statement that
the service corporation is a common, wholly owned or independent service
corporation;
(4) The amount of
investment by each association; and
(5) Such other information as the
Commissioner may required.
(b) Written agreement. The service
corporation must execute a written agreement with the Commissioner, bearing the
written approval of the association, and containing provisions satisfactory to
the Commissioner, including but not limited to provisions:
(1) Requiring the service corporation to
submit reports in the form and contain information as is directed by the
Commissioner;
(2) Subjecting the
service corporation to inspection and examination by the Commissioner on the
same basis as the association is, including an annual examination by an
independent public accountant and to special examinations by the Commissioner
or by an independent public accountant selected by the Commissioner, all at the
expense of the service corporation.
(3) Requiring the service corporation to
comply with any written order of the Commissioner which requires the service
corporation to (A) withdraw from an activity, or (B) to terminate any
investment or holding or relationship, or cease any operation found by the
Commissioner to be prejudicial to the interests of its stockholders or to the
interests or financial condition of the service corporation, or in which
Commissioner approval has not been obtained within the time and under the
conditions as provided in the regulations. The order and enforcement may be
modified, suspended or withdrawn by the Commissioner and may be modified,
suspended or enjoined by a court of competent jurisdiction;
(4) Requiring the service corporation to
submit written notification to the Commissioner when removing or changing the
location as set forth in the agreement, or to establishing other
locations;
(5) That amendments to
the articles of incorporation and bylaws be approved by the
Commissioner;
(6) That the exact
nature of the business and activities of the service corporation be specified
in detail. Any change shall require the written permission of the
Commissioner;
(7) That the service
corporation shall maintain books and records and shall prepare financial
statements in a manner consistent with the prescribed for associations in
Subchapter 1 of these regulations.
1. Change
without regulatory effect renumbering former Section
230.3 to Section
108.100 (Register 87, No. 14). For
prior history, see Register 82, No. 52.
Note: Authority cited: Sections
5255 and
6702.1,
Financial Code. Reference: Section
6702.1,
Financial Code.
