1-1 By: Maxey, et al. (Senate Sponsor - Shapleigh) H.B. No. 1865
1-2 (In the Senate - Received from the House May 8, 1997;
1-3 May 9, 1997, read first time and referred to Committee on Economic
1-4 Development; May 17, 1997, reported favorably by the following
1-5 vote: Yeas 7, Nays 0; May 17, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to payment of accelerated life insurance benefits.
1-9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10 SECTION 1. Article 3.50-6, Insurance Code, is amended to
1-11 read as follows:
1-12 Art. 3.50-6. PAYMENT OF ACCELERATED LIFE INSURANCE BENEFITS
1-13 [DEATH BENEFIT IN EVENT OF TERMINAL ILLNESS OR INJURY]. (a) In
1-14 this article:
1-15 (1) "Accelerated benefit" means a benefit paid to an
1-16 insured in lieu of a portion of a death benefit.
1-17 (2) "Death benefit" means a benefit payable to a
1-18 beneficiary on the death of an insured.
1-19 (3) "Long-term care illness" means an illness or
1-20 physical condition that results in the inability to perform the
1-21 activities of daily life or the substantial and material duties of
1-22 any occupation.
1-23 (4) "Specified disease" means an illness or physical
1-24 condition that is likely to cause permanent disability or premature
1-25 death, including the following:
1-26 (A) acquired immunodeficiency syndrome (AIDS);
1-27 (B) a malignant tumor;
1-28 (C) a condition that requires an organ
1-29 transplant; and
1-30 (D) a coronary artery disease that results in
1-31 acute infarction or requires surgery.
1-32 (5) "Terminal illness" means an illness or physical
1-33 condition, including a physical injury, that can reasonably be
1-34 expected to result in death in two years or less.
1-35 (b) An insurance company may pay an accelerated benefit
1-36 under an individual or [a] group term life insurance policy or
1-37 certificate if:
1-38 (1) the company has received a written medical
1-39 opinion, satisfactory to the company, that the insured has a [is
1-40 not expected to continue living for more than 12 months because of]
1-41 terminal illness, a long-term care illness, or a specified disease
1-42 [or injury]; and
1-43 (2) [the amount of the accelerated benefit does not
1-44 exceed the greater of $25,000 or 50 percent of the amount of the
1-45 death benefit payable under the policy or certificate; and]
1-46 [(3)] the amount of the accelerated benefit is
1-47 deducted from the amount of the death benefit payable under the
1-48 policy or certificate and from any amount the insured would
1-49 otherwise be entitled to convert to an individual contract.
1-50 (c) The commissioner may adopt rules to implement this
1-51 article.
1-52 SECTION 2. This Act takes effect on September 1, 1997, and
1-53 applies only to a policy or contract that is delivered, issued for
1-54 delivery, or renewed on or after that date. A policy or contract
1-55 that is delivered, issued for delivery, or renewed before the
1-56 effective date of this Act is governed by the law as it existed
1-57 immediately before that date, and that law is continued in effect
1-58 for that purpose.
1-59 SECTION 3. The importance of this legislation and the
1-60 crowded condition of the calendars in both houses create an
1-61 emergency and an imperative public necessity that the
1-62 constitutional rule requiring bills to be read on three several
1-63 days in each house be suspended, and this rule is hereby suspended.