(ii) under a contract issued to an association, including, but not limited to, a labor union or organizations of such unions, membership corporations organized or holding a certificate of authority under the Texas Nonprofit Corporation Act, and cooperatives
and corporations subject to the supervision and control of the Farm Credit Administration of the United States of America and which association shall have a constitution and bylaws, and which has been organized and is maintained in good faith for purposes other than that of obtaining insurance, to insure members, employees, or employees of members (active and retired for the benefit of persons other than the association of its officers or trustees).     (B) A group contract may contain a provision which guarantees each enrollee under a group contract the right to convert within 30 days to an individual contract in the event of termination of employment or membership in the group. The requirements of this provision shall not apply when the entire group withdraws from coverage under the group contract.     (C) The premium rate in effect during the current 12-month period shall be used in computing the amount of premium due hereunder for the next contract
year in accordance with annual experience rating adjustment. New rates may be established for any of the benefits provided under the contract on any contract anniversary date, provided the current rates have been in effect at least 12 months and provided further that notification of the intent to raise the rates is given to the policyholder at least 31 days in advance of such contract anniversary date.     (D) An issuing company may, in lieu of reinstatement rights under a group policy, provide for a periodic time for re-enrollment.   (9) Franchise policies.     (A) "Franchise policies" means individual policies that are issued to five or more employees of any corporation, copartnership, or individual employer or any governmental corporation, agency, or department thereof, or 10 or more members or employees of any trade or professional association or of a labor union or any other association having had an active existence for at least
two years where such association or union has a constitution or bylaws and is formed in good faith for purposes other than that of obtaining insurance.     (B) Where such employees or members, with or without their dependents, are issued the same form of an individual franchise policy, such policy may vary from other such policies only as to amounts and kinds of coverages.     (C) Premium on individual franchise policies may be paid to the insurer periodically by the employer, with or without payroll deductions, or by the association for its members, or by some designated person acting on behalf of such employer or association.     (D) Rates charged for such coverage may not be based on the number of employees in the group. (d) Disapproval. The commissioner shall disapprove any form or withdraw any previous approval if:   (1) it does not meet the requirements of this section; or   (2) it
is unfair, unfairly discriminatory, misleading, obscure, or encourages misrepresentation or misunderstanding of the policy, including cases where the form:     (A) provides services or benefits that are too restrictive to achieve the purpose for which the form was designed;     (B) fails to attain a reasonable degree of readability, simplicity and conciseness;     (C) is misleading, deceptive or obscure because of its physical aspects such as format, typography, style, color, material, or organization;     (D) provides services or benefits or contains other provisions that would endanger the solidity of the issuing company; or     (E) is contrary to law or the public policy of this state. (e) Submission of additional information. The commissioner may require the submission of any other relevant information deemed necessary in determining whether to approve or disapprove a filing made pursuant
to this section.


Source Note: The provisions of this §23.6 adopted to be effective January 1, 1976; amended to be effective September 24, 1976, 1 TexReg 2523; amended to be effective May 19, 1978, 3 TexReg 1673; amended to be effective June 11, 1981, 6 TexReg 1960; amended to be effective December 31, 1982, 7 TexReg 4387.