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.