Each independent Regular Member and each consolidated group, fleet or insurance holding company system composed of affiliated Regular Members shall have one vote on all issues presented to the Membership at Regular or special meetings thereof. The consolidated group, fleet or insurance holding company system shall designate which of its Regular Members shall cast its vote at such meetings.

Section 2. Associate Members. Associate Members of the Association shall consist of those Associate Members of the Predecessor Organizations and such additional Associate Members that subsequently apply for Membership and are accepted by the Board of Directors. The term "Associate Members" or "Associate Membership," wherever it appears in these Bylaws shall mean any other Member not eligible for Regular Membership under Section 1 of this Article III and shall be limited to and consist of individuals or businesses who are actively Associated with any portion of the life or health insurance business in the State of Texas. An Associate Member shall not be entitled to any vote in the Association’s business, and the executive officers of such Associate Member shall not be eligible to serve as an officer or director of the Association. Associate Members shall be subject to any and all regulations and rules with respect thereto as may be adopted from time to time by the Board of Directors.Any insurance company or group of insurance companies that would otherwise qualify as a Regular Member of the Association under Article III, Section 1., above, and any affiliate, officer, or employee of any of such insurance company or group of insurance companies, is not authorized to be an Associate Member of the Association under Article III, Section 2., unless such insurance company or group of insurance companies is, or becomes, a Regular Member of the Association under Section 1. hereof.

Section 3. The Board of Directors, in considering and passing upon the application of any independent Insurance company, consolidated group, fleet or insurance holding company system of insurance company affiliates for Regular Membership or any individual or business for Associate Membership in the Association, shall give due consideration and weight to the character, principles, reputation, integrity, standing, ability and experience of the executive officers of the Applicant.

Section 4. When an application for Regular Membership is accepted and approved for Membership, applicant shall furnish to the Association the names, addresses and official status of the executive officers of the Member insurance company it desires to represent the Member(s) in the Association, and in what capacity such officers shall be entitled to participate.

Article IV - Association Policies - The general policies of the Association regarding legislative or regulatory matters before the Texas Department of Insurance, the Commissioner of Insurance, the Texas Legislature, the United States Congress and other groups which affect the life or health insurance business or the Members of the Association, shall be determined at the Annual Meeting or at any special meeting of the Association Membership. In the interim between meetings of the Membership, the Board of Directors shall determine such policies of the Association.

Article V - Meetings of Members - Section 1. Annual Meeting. The Annual Meeting of the Members of the Association shall be held at such a time and place as may be determined by the Board of Directors at least sixty days in advance thereof. Written notice of the Annual Meeting shall be sent to all Members not less than thirty days prior to the date of the meeting.

Section 2. Special Meetings. Special meetings of the Members of the Association shall be held at any time and place upon the call of the Chair or a majority of the Board of Directors. Written notice of any special meeting shall be sent to all Members not less than ten days prior to the date of the meeting.

Section 3. Notice. The notice of each meeting shall specify the purpose thereof.

Section 4. Voting. A majority of the voting Regular Members in attendance shall determine all matters coming before such meetings.

Article VI - Officers - Section 1. The officers of this Association shall be a Past Chair, Chair, Vice-Chair, Secretary and Treasurer. Persons shall be eligible to serve as an officer of the Association if that person performs the functions of an officer in a Regular member company.  However, at all times, there shall be allowed only two officers of the Association that are qualified persons from a Regular member company that is not domiciled in Texas or does not have its principal or executive office in the State of Texas. The officers shall have the authority and perform the functions usually exercised by such officers, as well as such additional duties as may be delegated to them from time to time by the Board of Directors.

Section 2. Each year, after the first year, the officers shall be elected by a majority of the voting Regular Members of the Association in attendance at the Annual Meeting. The previous year’s Chair shall automatically succeed to the office of Past Chair. The previous year’s Vice-Chair shall automatically be nominated to the office of Chair; the previous year’s Secretary shall automatically be nominated to the office of Vice-Chair; the previous year’s Treasurer shall automatically be nominated to the office of Secretary; and the Nominating Committee shall recommend and nominate a person for the office of Treasurer. Additional nominations of other qualified persons for any of such offices may be received if such nomination is made by at least five voting Regular Members.

Section 3. Term of Office. Each officer shall serve a period of one year from Annual Meeting to Annual Meeting, or until their successors are duly elected.

Section 4. Vacancies. A vacancy in the office of Past Chair shall not be filled. A vacancy in any other office shall be filled by the next officer in line of succession succeeding to that position. The Board of Directors may then elect a successor Treasurer from one of the directors. In the event an officer dies, resigns, or becomes incapacitated or ineligible for any reason to serve in such office, the Board of Directors shall have the authority to elect a successor to fill the unexpired term of such officer.

Article VII - Directors - Section 1. Initial Board of Directors. The initial Board of Directors of the Association shall be all of the officers and directors of the Predecessor Organizations holding office at December 31, 1996.

Section 2. Successor Directors. Beginning with the 1997 Annual Meeting, the Board of Directors shall consist of (i) the officers of the Association, (ii) two directors designated by each of the Predecessor Organizations, one of whom shall serve a one year term and the other of whom shall serve a two year term, and (iii) four directors elected by the voting Regular Members at the Annual Meeting, two of whom shall serve a one year term and two of whom shall serve a two year term.

Beginning with the 1998 Annual Meeting, the Board of Directors shall consist of (i) the officers of the Association, (ii) four directors who will serve the second year of their initial terms, and (iii) four directors to be elected at the Annual Meeting by the voting Regular Members for a two year term.

Beginning with the 1999 Annual Meeting, the Board of Directors shall consist of (i) the officers and (ii) eight additional directors, four of whom shall be serving the second year of their elected terms, and four of whom shall be elected at the Annual Meeting by the voting Regular Members for a two year term.

Thereafter, the Board shall consist of the officers and twelve directors composed of three groups of four directors serving staggered three year terms, with one group of four directors to be elected at each Annual Meeting by the voting Regular Meeting.  Of the total members of the Board, at least five directors shall be officers of the smaller Insurance companies comprising one-half of the Regular Members, based on the Regular Members’ assets as of December 31 of the preceding calendar year.

The Nominating Committee shall recommend and nominate the persons for the position of director. Additional nominations of qualified persons for director may be received if such nomination is made by at least five Regular Members.

Except as provided above, directors’ terms shall be for two years, serving from Annual Meeting to Annual Meeting, or until their successors are elected.

Section 3. Meetings. The Board of Directors shall meet at the Annual Meeting, and otherwise upon the call of the Chair or of five Members of the Board of Directors.

Section 4. At all meetings of the Board of Directors, the presence of a majority of the Members of the Board shall constitute a quorum.

Section 5. Vacancies. The Board of Directors shall be authorized to fill any vacancy of the Board, and shall have such other powers as are provided in these Bylaws.

Section 6. The Chair, or in the absence of the Chair, the Vice-Chair, shall preside at all meetings of the Board of Directors.

Section 7. Except as may be otherwise provided by the laws of this State and the charter and Bylaws of the Association, the Board of Directors shall have full and complete authority to control, regulate and manage the affairs of the Association. Such Authority includes (a) the power to appoint whatever agents, counsel and employees as may be necessary to properly carry out the business of the Association; (b) to discharge them at any time; (c) to prescribe the duties and to fix the compensation of such agents, counsel and employees, and (d) to delegate to such agents, counsel and employees such powers as they deem best or may find appropriate. The Board of Directors shall annually select one or more outside counsel to represent the Association. The Board of Directors shall establish procedures for directing the action to be taken by the retained outside counsel.

Section 8. The Board of Directors, by a three-fourths majority vote, may terminate for cause any Membership in the Association after reasonable notice and opportunity for a hearing has been given. If the Membership of a Regular Member is terminated, the executive officers representing such company in the Association shall likewise lose all right to participate in the affairs of the Association.

Article VIII - Indemnification of Directors and Officers - (a) Directors and Officers. The corporation shall indemnify its directors and officers to the fullest extent permitted and not otherwise prohibited by Article 1396-2.22A of the Miscellaneous Corporation Laws of Texas; provided, however, that the corporation shall not be required to indemnify any director or officer in connection with any proceeding (or part of such) initiated by such person or any proceeding by such person against the corporation or its directors, officers, employees or other agents unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the board of directors of the corporation or, (iii) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under either the Texas Non-Profit Corporation Act or the Miscellaneous Corporation Laws of Texas.

(b) Other Officers, Employees and Other Agents. The corporation shall have the power to indemnify its employees, counsel and other agents as set forth in Article 1396-2.22 A of the Miscellaneous Corporation Laws of Texas.

(c) Determination by the Corporation. Promptly after receipt of a request for indemnification under this (and in any event within 90 days of such) a reasonable, good faith determination as to whether indemnification of the director or officer is proper under the circumstances because such director or officer has met the applicable standard of care shall be made by:

(1) A majority vote of a quorum consisting of directors who are not parties to such proceeding;

(2) If such quorum is not obtainable, by independent legal counsel in a written opinion; or

(3) Approval or ratification by the affirmative vote of a majority of the Regular Members of this corporation represented and voting at a duly held meeting at which a quorum is present; where the Regular Member represented by the person to be indemnified shall not be considered entitled to vote on such.

(d) Good Faith.

(1) For purposes of any determination under this bylaw, a director or officer shall be deemed to have acted in good faith and in manner he/she reasonably believed to be in the best interest of the corporation and its Members, and, with respect to any criminal action or proceeding, to have had no reasonable cause to believe that his/her conduct was unlawful, if his/her action is based on information, opinions, reports and statements, including financial statements and other financial data, in each case prepared or presented by:

(h) Survival of Rights. The rights conferred on any person by this bylaw shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

(i) Insurance. The corporation, upon approval by the board of directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this bylaw.

(j) Amendments. Any repeal or modification of this bylaw shall only be prospective and shall not affect the rights under this bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the corporation.

(k) Saving Clause. If this bylaw or any portion of it shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director and officer to the fullest extent permitted by any applicable portion of this bylaw that shall not have been invalidated, or by any other applicable law.

(l) Certain Definitions. For the purposes of this bylaw, the following definitions shall apply:

(1) The term "proceeding" shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement and appeal of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative.

(2) The term "expenses" shall be broadly construed and shall include, without limitation, court cost, attorney fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature of kind incurred in connection with any proceeding, including expenses of establishing a right to indemnification under this bylaw or any applicable law.

(3) The term the "corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this bylaw with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

(4) References to a "director," "officer," "employee," "counsel," or "agent" of the corporation shall include, without limitation, situations where such person is serving at the request of the corporation as a director, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.

Article IX - Dues - Annual dues for Members shall be determined by the Board of Directors, after review by and upon recommendation of the Executive Committee.

Any Member that fails to pay its dues within three months of billing may be dropped from Membership by a majority vote of the Board of Directors until such time as the amount of the delinquent dues are received.

Article X - Committees - Except as otherwise provided, the Chair shall have the authority and responsibility to appoint a Chair and Members of the following Committees and any other committee that the Board deems necessary.

Section 1. Legislative and Regulatory Committee. A Legislative and Regulatory Committee of not less than seven Members shall be appointed to serve for one year, or until the appointment of successors. The Legislative and Regulatory Committee may create, subject to the approval of the Board of Directors, such sub-committees, advisory groups, or task forces as shall be deemed appropriate. All meetings of the Committee, sub-committees, advisory groups and task forces will be open to all Members of the Association. In the absence of any policy or direction by the general Membership or the Board of Directors, such Legislative and Regulatory Committee shall determine the policies of the Association on any proposed or pending legislation, or any matter arising before the Texas Department of Insurance, the Commissioner of Insurance, and other groups. The Legislative and Regulatory Committee shall be authorized to act for the Association during the interim between meetings of the Membership and meetings of the Board of Directors. However, such Legislative and Regulatory Committee shall not act contrary to any decision or policy adopted at a Regular or special Membership meeting, or a Regular or special meeting of the Board of Directors. The General Counsel, Executive Director or any person designated by the Association to present the position of the Association to the Legislature, the Texas Department of Insurance, the Commissioner of Insurance, and other groups, shall be guided by the action taken at any Regular or special meeting of the Membership, the Board of Directors, or in accordance with the decision of the majority of the Legislative and Regulatory Committee. Actions by the Legislative and Regulatory Committee shall be promptly communicated to the Board of Directors and/or Executive Director for immediate dissemination to the general Membership.

Section 2. Executive Committee. The Executive Committee shall consist of the officers of the Association. It shall recommend a budget and make recommendations to the Board of Directors concerning compensation of the Executive Director and Counsel.

Section 3. Membership Committee. The Membership Committee shall consist of at least four Members of the Association, two of such Members shall represent the larger Insurance companies comprising one-half of the Regular Members and two shall represent the smaller Insurance companies comprising one-half of the Regular Members, with the size to be determined by the Regular Member’s assets as of the preceding December 31. The Committee shall review applications for Membership to the Association and make recommendations covering such application to the Board of Directors.

Section 4. Nominating Committee. The Nominating Committee shall consist of at least four Members, three of whom shall have served as Chair of the Association or Chairman or President of any of the Predecessor Organizations. Provided, however, that until the 1998 Annual Meeting of the Association, the Nominating Committee shall consist of at least one Regular Member from each of the Predecessor Organizations. Thereafter, the Nominating Committee shall consist of at least four Regular Members of the Association, two of which shall represent the larger Insurance companies comprising one-half of the Regular Members and two shall represent the smaller Insurance companies comprising one-half of the Regular Members, with the size to be determined by the Regular Member’s assets as of the preceding December 31. The Nominating Committee shall recommend and nominate persons for the position of Treasurer and expiring director positions to the Membership at the Annual Meeting.

Section 5. The Chair shall be an ex officio Member without a vote of the Legislative and Regulatory Committee, the Membership Committee and the Nominating Committee.

Section 6. The Executive Director shall be an ex officio Member without a vote of all Committees.

Article XI - Fiscal Year - The fiscal year of the Association shall begin on the first day of January and end on the last day of December of each year.

Article XII - Bylaws - These Bylaws, with the exception of Article VII, Section 2, may be amended at any time by the affirmative vote of at least a majority of the Members of the Board of Directors. Article VII, Section 2, may be amended at any time with an 80% affirmative vote of the Members of the Board of Directors. Such amendments shall be effective until the next Regular or special meeting of the Membership when such amendments shall then be ratified and approved, or rejected, or further amended by the majority vote of the Members present at such Regular, or special meeting of the Membership.

Any three or more Regular Members are authorized to present in writing to the Board, no later than seven (7) days prior to a Regular meeting of the Board, a recommendation for an amendment to the Association’s Bylaws. Upon receipt of the proposed amendment by the Chairman, he shall present such recommendation to the Board for consideration at the next Regularly scheduled Board meeting. The Board shall act upon the proposed amendment in accordance with its powers as authorized by these Bylaws.

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