75R11348 SAW-F                           

         By Maxey, et al.                                      H.B. No. 1865

         Substitute the following for H.B. No. 1865:

         By Burnam                                         C.S.H.B. No. 1865

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to payment of accelerated life insurance benefits.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Article 3.50-6, Insurance Code, is amended to

 1-5     read as follows:

 1-6           Art. 3.50-6.  PAYMENT OF ACCELERATED LIFE INSURANCE BENEFITS

 1-7     [DEATH BENEFIT IN EVENT OF TERMINAL ILLNESS OR INJURY].  (a)  In

 1-8     this article:

 1-9                 (1)  "Accelerated benefit" means a benefit paid to an

1-10     insured in lieu of a portion of a death benefit.

1-11                 (2)  "Death benefit" means a benefit payable to a

1-12     beneficiary on the death of an insured.

1-13                 (3)  "Long-term care illness" means an illness or

1-14     physical condition that results in the inability to perform the

1-15     activities of daily life or the substantial and material duties of

1-16     any occupation.

1-17                 (4)  "Specified disease" means an illness or physical

1-18     condition that is likely to cause permanent disability or premature

1-19     death, including the following:

1-20                       (A)  acquired immunodeficiency syndrome (AIDS);

1-21                       (B)  a malignant tumor;

1-22                       (C)  a condition that requires an organ

1-23     transplant; and

1-24                       (D)  a coronary artery disease that results in

 2-1     acute infarction or requires surgery.

 2-2                 (5)  "Terminal illness" means an illness or physical

 2-3     condition, including a physical injury, that can reasonably be

 2-4     expected to result in death in two years or less.

 2-5           (b)  An insurance company may pay an accelerated benefit

 2-6     under an individual or [a] group term life insurance policy or

 2-7     certificate if:

 2-8                 (1)  the company has received a written medical

 2-9     opinion, satisfactory to the company, that the insured has a [is

2-10     not expected to continue living for more than 12 months because of]

2-11     terminal illness, a long-term care illness, or a specified disease

2-12     [or injury]; and

2-13                 (2)  [the amount of the accelerated benefit does not

2-14     exceed the greater of $25,000 or 50 percent of the amount of the

2-15     death benefit payable under the policy or certificate; and]

2-16                 [(3)]  the amount of the accelerated benefit is

2-17     deducted from the amount of the death benefit payable under the

2-18     policy or certificate and from any amount the insured would

2-19     otherwise be entitled to convert to an individual contract.

2-20           (c)  The commissioner may adopt rules to implement this

2-21     article.

2-22           SECTION 2.  This Act takes effect on September 1, 1997, and

2-23     applies only to a policy or contract that is delivered, issued for

2-24     delivery, or renewed on or after that date.  A policy or contract

2-25     that is delivered, issued for delivery, or renewed before the

2-26     effective date of this Act is governed by the law as it existed

2-27     immediately before that date, and that law is continued in effect

 3-1     for that purpose.

 3-2           SECTION 3.  The importance of this legislation and the

 3-3     crowded condition of the calendars in both houses create an

 3-4     emergency and an imperative public necessity that the

 3-5     constitutional rule requiring bills to be read on three several

 3-6     days in each house be suspended, and this rule is hereby suspended.