By: Wentworth S.B. No. 1149
73R6687 DLF-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to group accident and health insurance policies issued to
1-3 an employer or trustees of a fund established by an employer.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1(a), Article 3.51-6, Insurance Code, is
1-6 amended to read as follows:
1-7 (a) Group accident and health insurance is hereby defined to
1-8 be that form of accident, sickness, or accident and sickness
1-9 insurance covering groups of persons as provided in Subdivisions
1-10 (1) through (6) below:
1-11 (1) under a policy issued to an employer or trustees
1-12 of a fund established by an employer, who shall be deemed the
1-13 policyholder, insuring employees of such employer for the benefit
1-14 of persons including <other than> the employer. The term
1-15 "employees" as used herein shall be deemed to include the officers,
1-16 managers, and employees of the employer, the individual proprietor,
1-17 or partner if the employer is an individual proprietor or
1-18 partnership, the officers, managers, and employees of subsidiary or
1-19 affiliated corporations, the individual proprietors, partners, and
1-20 employees of individuals and firms, if the business of the employer
1-21 and such individual or firm is under common control through stock
1-22 ownership, contract, or otherwise, and retired employees. A
1-23 policy issued to insure employees of a public body may provide that
1-24 the term "employees" shall include elected or appointed officials.
2-1 The policy may provide that the term "employees" shall include the
2-2 trustees or their employees, or both, if their duties are
2-3 principally connected with such trusteeship;
2-4 (2) under a policy issued to an association, including
2-5 but not limited to a labor union or organizations of such unions,
2-6 membership corporations organized or holding a certificate of
2-7 authority under the Texas Non-Profit Corporation Act (Article
2-8 1396-1.01 et seq., Vernon's Texas Civil Statutes), and cooperatives
2-9 and corporations subject to the supervision and control of the Farm
2-10 Credit Administration of the United States of America, and which
2-11 association shall have a constitution and bylaws, which has been
2-12 organized and has had an active existence for at least two years,
2-13 and which is maintained in good faith for purposes other than that
2-14 of obtaining insurance, to insure members, employees, or employees
2-15 of members (active and retired for the benefit of persons other
2-16 than the association or its officers or trustees);
2-17 (3) under a policy issued to the trustees of a fund
2-18 established by two or more employers in the same or related
2-19 industry or by one or more labor unions or by one or more employers
2-20 and one or more labor unions or by an association as defined in (2)
2-21 above, which trustees shall be deemed the policyholder, to insure
2-22 employees of the employers or members of the unions or such
2-23 association, or employees or members of such association for the
2-24 benefit of persons other than the employers or the unions or such
2-25 association. The term "employees" as used herein may include the
2-26 officers, managers, and employees of the employer, retired
2-27 employees, and the individual proprietor or partners if the
3-1 employer is an individual proprietor or partnership. The policy
3-2 may provide that the term "employees" shall include the trustees or
3-3 their employees, or both, if their duties are principally connected
3-4 with such trusteeship;
3-5 (4) under a policy issued to any person or
3-6 organization to which a policy of group life insurance may be
3-7 issued or delivered in this state to insure any class or classes of
3-8 individuals that could be insured under such group life policy;
3-9 (5) under a policy issued by an insurer to a trustee
3-10 of a fund, which shall be deemed to be the policyholder, to insure
3-11 former employees, former members, their spouses, former spouses,
3-12 and their dependents, who were previously insured by such insurer
3-13 under a policy issued to any of the groups provided for in this
3-14 article;
3-15 (6) under a policy issued to cover any other group
3-16 subject to the following requirements:
3-17 (A) No such group health insurance policy shall
3-18 be delivered in this state unless the Commissioner of Insurance
3-19 finds that:
3-20 (i) the issuance of such group policy is
3-21 not contrary to the best interest of the public;
3-22 (ii) the issuance of the group policy
3-23 would result in economies of acquisition or administration; and
3-24 (iii) the benefits are reasonable in
3-25 relation to the premiums charged.
3-26 (B) No such group health insurance coverage may
3-27 be offered in this state by an insurer under a policy issued in
4-1 another state unless this state or another state having
4-2 requirements substantially similar to those contained in
4-3 Subparagraphs (i), (ii), and (iii) of Paragraph (A) of this
4-4 subdivision has made a determination that such requirements have
4-5 been met.
4-6 (C) The premium for the policy shall be paid
4-7 either from the policyholder's funds or from funds contributed by
4-8 the covered persons, or from both.
4-9 SECTION 2. This Act takes effect September 1, 1993, and
4-10 applies only to a group accident and health insurance policy that
4-11 is delivered, issued for delivery, or renewed on or after January
4-12 1, 1994. A group accident and health insurance policy that is
4-13 delivered, issued for delivery, or renewed before January 1, 1994,
4-14 is governed by the law as it existed immediately before the
4-15 effective date of this Act, and that law is continued in effect for
4-16 that purpose.
4-17 SECTION 3. The importance of this legislation and the
4-18 crowded condition of the calendars in both houses create an
4-19 emergency and an imperative public necessity that the
4-20 constitutional rule requiring bills to be read on three several
4-21 days in each house be suspended, and this rule is hereby suspended.