RS C.S.H.B. 839 75(R)BILL ANALYSIS INSURANCE C.S.H.B. 839 By: Driver 4-14-97 Committee Report (Substituted) BACKGROUND Current state law does not prohibit an insurer, that offers health or life insurance, from refusing to insure or charging higher premiums for a person who has been a victim of family violence. Such discrimination victimizes the family violence victim for a second time, by causing the person to be uninsured or pay higher premiums for insurance. Fear of insurance discrimination could discourage a person from reporting family violence. PURPOSE As proposed, HB 839 will make it an unfair and deceptive practice for an insurer to deny life or health insurance to a person or group solely because that person or a member of the group has been a victim of family violence or to limit the coverage available or charge the person or group a different rate. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter B, Chapter 21, Insurance Code, by adding Article 21.21-5, as follows: ARTICLE 21.21-5 - VICTIMS OF FAMILY VIOLENCE Sec. 1. Definition. Defines "family violence." Sec. 2. Scope of Article. Describes health and life insurers to which article applies and those to which it does not apply. Sec. 3. Prohibitions (a) Prohibits an insurer from denying coverage, refusing to renew an insurance policy, canceling a policy, limiting the coverage available, or charging an individual or group a different rate because of the individual's status as a victim of family violence. (b) An insurer may not require an applicant for insurance to reveal whether the applicant has been or may become a victim of family violence. Sec. 4. Sanctions. Violation of this article is an unfair and deceptive practice as defined by Article 21.21, Insurance Code. Sec. 5. Release from liability An insurer who delivers, issues, or renews a policy for life or health insurance to an individual who has been or may become a victim of family violence cannot be held civilly or criminally liable for the death or injury incurred by that individual as a result of family violence. Sec. 6. Underwriting criteria. Article does not prohibit an insurer from underwriting a risk on the basis of an individual's physical or mental condition, regardless of the cause of the condition, as long as the criteria is used consistently and not as a pretext for evading section 3 of this article. Sec. 7. Continued coverage. Provides for continued coverage under Section 3B, Article 3.51-6, Insurance Code. Sec. 8. Confidentiality. (a) Prohibits insurer from releasing information relating to status as a victim of family violence, except as provided in (b). (b) Exceptions to prohibition against releasing information. SECTION 2. Amends Section 14(b), Texas Health Maintenance Organization Act (Article 20A.14, Insurance Code), to apply the provisions of new Article 21.21-5 to health maintenance organizations. SECTION 3. Effective September 1, 1997. Applies only to insurance policy, contract , or evidence of insurance delivered, issued for delivery, or renewed or or after January 1, 1998. SECTION 4. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The following changes are made in Section 1, new Article 21.21-5: 1. Changes term "insurer" to "Health benefit plan provider or life insurer" throughout article. 2. The definition of "insurer", found in paragraph (a)(2), is deleted and replaced with a new Sec. 2, "Scope of Article". 3. Changes paragraphs (b) and (c) in HB 839 to Sec. 3, "Prohibitions," in CSHB 839 and changes the language describing the prohibition from "solely because an individual has been a victim of family violence" to "because of an individual's status as a victim of family violence." 4. Changes paragraph (d) in HB 839 to Sec. 4, "Sanctions," in CSHB 839. 5. Changes paragraph (e) in HB 839 to Sec. 5, "Release from Liability" in CSHB 839. 6. Changes paragraph (f) in HB 839 to Sec. 6, "Underwriting Criteria," in CSHB 839. 7. Adds a new Sec. 7, "Continued Coverage," to stipulate that an individual is entitled to continued coverage under the provisions of Section 3B, Article 3.51-6, Insurance Code. 8. Adds a new Sec. 8, "Confidentiality," to require that information concerning an individual's status as a family violence victim be kept confidential by the insurer except under circumstances described in this section.