(a) Membership. The association is governed by Insurance Code Chapter 2203. Any insurer authorized to write and engaged in writing any insurance, the writing of which requires the insurer to become a member of the association under Insurance Code §2203.055, will become a member of the association on the first day of January immediately following the date the insurer started writing such insurance. The determination of the insurer's participation in the association will be made as of the date of such membership in the same manner as for all members of the association. Any member that ceases to be authorized to write or that ceases to engage in the writing of any insurance that would require such insurer to become a member of the association will remain a member of the association until midnight of December 31 next following the date the insurer ceases to be authorized to write or ceases to write such insurance, and the insurer's participation in the association will cease as of that time; provided, however, that each member must participate in any financial deficit of the association for all calendar years subsequent to December 31, 1976, during which the insurer was a member of the association, whenever such deficit is determined. The member must be charged or credited in due course with its proper share of all expenses or losses and any recoupment or reimbursement allocable to the member. If a member is merged or consolidated with another insurer, the continuing insurer will become a member of the association in place of the merged or consolidated member, provided that such member will be deemed to have become a member of the association on the date the merged or consolidated member became a member and provided, further, that such member will pay no initial expense fee.
(b) Expense fees.
  (1) Initial expense fee. Each member must pay to the association an initial expense fee of $100. All members of the association must pay such fees on or before the date they become members of the association.
  (2) Annual expense fee. In addition to the initial expense fee, each member must pay to the association an annual expense fee in an amount to be determined by the board of directors and approved by the Commissioner. All members of the association must pay such annual expense fee on or before the first of January for each year during which the association exists.
  (3) Remedy for failure to pay fees. If any member fails or refuses to pay either the initial expense fee or the annual expense fee after receipt of written notice by the association that such fee is due and payable, then such member will be subject to the same remedies as provided in §5.2003(d)(4) of this title (relating to Property and Casualty Insurance) for the failure of the member to pay any assessment levied by the association.
  (4) Use of fees. All expense fees paid to the association will be used in such manner as the board of directors may from time to time direct in accordance with this subchapter.
(c) Meetings of members.
  (1) Notice of meetings. Written or printed notice stating the place, date, hour, subjects of the meeting, and the purpose or purposes for which the meeting is called, must be delivered not less than 10 nor more than 50 days before the date of the meeting, either personally or by mail, by or at the direction of the chair of the board of directors, the secretary, or other person calling the meeting, to each member entitled to vote at such meeting. Public notice of meetings must be given as required by Government Code Chapter 551.
  (2) Meetings.
    (A) Annual meeting. The annual meeting of the members must be held not later than the 30th day of September of each year at an hour and place to be determined by the board of directors for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the election of directors is not held on the day designated for any annual meeting of the members, the board of directors must cause the election to be held at a special meeting of the members as soon as may be convenient after the annual meeting.
    (B) Special meetings. The board of directors, the chair of the board of directors, or 20% of the members may call a special meeting of the members and designate any place as the place of the special meeting.
  (3) Quorum. Fifty members, represented by person or by proxy, is a quorum at a meeting of the members. If fewer than 50 members are represented at a meeting, a majority of the members represented may adjourn the meeting from time to time without further notice. At the next meeting after adjournment at which a quorum is present or represented, any business may be transacted at the meeting as originally notified. The members represented at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough persons to leave less than a quorum.
  (4) Voting.
    (A) Each member is entitled to one vote at the annual meeting and each special meeting.
    (B) A member may vote by proxy executed in writing by the member. No proxy will be valid after the next annual meeting after the date of its execution unless otherwise provided in the proxy. Each proxy is revocable.
    (C) Each member's vote may be voted by such officer, agent, or proxy as the bylaws of such member may authorize or, in the absence of such authorization, as such member may determine.
    (D) Voting on any question or in any election may be by voice vote or by show of hands unless the presiding officer orders, or any member demands, that voting be by written ballot.
  (5) Rules. To the extent applicable, Robert's Rules of Order govern the conduct of and procedure at all meetings of the members.
(d) Directors.
  (1) Selection. At each annual meeting of members or as otherwise provided in subsection (c)(2) of this section, the members must elect five directors from member companies for the categories set forth in paragraph (2)(B) and (C) of this subsection. Four directors must be selected in the manner set forth in paragraph (2)(D) - (F) of this subsection. Directors take office on October 1 of each year and will hold office until the next election of directors or until a successor has been selected and qualified.
  (2) Membership.
    (A) The number of the directors of the association must be nine.
    (B) Three directors to be elected in accordance with paragraph (1) of this subsection must be elected by the members and be separate members of the association representing each of the following:
      (i) the American Property Casualty Insurers Association;
      (ii) the National Association of Mutual Insurance Companies; and
      (iii) the Insurance Council of Texas.
    (C) Two directors must be elected by the members and must be:
      (i) a member insurer organized under the laws of and domiciled in Texas; and
      (ii) a member insurer that is either (or both):
        (I) not a member of those associations described in subparagraph (B) of this paragraph, or
        (II) an insurer that is not domiciled in Texas.
    (D) One director must be a physician who is appointed by the Texas Medical Association or its successor.
    (E) One director must be a representative of hospitals appointed by the Texas Hospital Association or its successor.
    (F) Two directors must be members of the public to be appointed by the Commissioner.
    (G) No director may fill more than one seat on the board of directors, and no member affiliated by ownership, management, or control may simultaneously occupy seats on the board of directors. No later than 60 days before the annual meeting, the board of directors must select a nominating committee of three member companies. The three directors who will represent the organizations set forth in subparagraph (B) of this paragraph must be nominated by the nominating committee. The two directors described in subparagraph (C) of this paragraph must be nominated by any member of the association by submitting the nominee's name to the nominating committee. To be eligible for selection to the board of directors by the members, a member must be nominated at least 30 days before the annual meeting at which such directors are selected.
  (3) Term of office. Unless removed in accordance with this subchapter, each director will hold office until the next election of directors or until a successor has been selected and qualified.
  (4) Regular meetings. A regular meeting of the board of directors must be held with notice as provided for in this subsection, immediately after and at the same place as the annual meeting of the members. The board of directors may provide, by resolution, the time and place for the holding of additional regular meetings with notice to the directors at least 10 days before each regular meeting as provided in this subsection.
Cont'd...