Bill not drafted by TLC or Senate E&E.

      Line and page numbers may not match official copy.

      By Turner of Coleman                            H.B. No. 2221

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to limitations upon the amount of life insurance risk that

 1-3     may be written by certain agents of or assumed by a stipulated

 1-4     premium insurance company.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Sec. 3. (b) of Art. 21.07, Insurance Code, is

 1-7     amended to read as follows:

 1-8           (b)  Such applicant, if not a partnership or corporation,

 1-9     shall not be authorized to write life insurance in excess of

1-10     [$7,500] $10,000 upon any one life unless:  (i) applicant, if not a

1-11     partnership or corporation, shall have first passed a written

1-12     examination as provided for in this Article 21.07, as amended, or

1-13     (ii) applicant will act only as a ticket-selling agent of a public

1-14     carrier with respect to accident life insurance covering risks of

1-15     travel or as an agent selling credit life, health and accident

1-16     insurance issued exclusively in connection with credit

1-17     transactions, or (iii) applicant will write policies or riders to

1-18     policies providing only lump sum cash benefits in the event of the

1-19     accidental death, or death by accidental means, or dismemberment,

1-20     or providing only ambulance expense benefits in the event of

1-21     accident or sickness.

1-22           SECTION 2.  Sec. 4A. (a) of Art. 21.07 Insurance Code, is

1-23     amended to read as follows:

 2-1                   Examination of Applicant for License to

 2-2                      Write Life Insurance Upon Any One

 2-3                     Life in excess of [$7,500] $10,000

 2-4           (a)  Each applicant for a license under the provisions of

 2-5     this Article 21.07, Insurance Code, as amended, who desires to

 2-6     write life insurance in excess of [$7,500] $10,000 upon any one

 2-7     life, other than as expected in Section 3 of this Article 21.07,

 2-8     within this state shall submit to a personal written examination

 2-9     prescribed by the State Board of Insurance and administered in the

2-10     English or Spanish language to determine his competency with

2-11     respect to life insurance and his familiarity with the pertinent

2-12     provisions of the laws of the State of Texas relating to life

2-13     insurance and shall pass the same to the satisfaction of the State

2-14     Board of Insurance; except that no written examination shall be

2-15     required of an applicant that is a partnership or corporation.

2-16           SECTION 3.  Sec. 4A (e) of Art. 21.07 Insurance Code, is

2-17     amended to read as follows:

2-18           (e)  When any license shall be issued by the State Board of

2-19     Insurance to an applicant entitled to write life insurance upon any

2-20     one life in excess of [$7,500] $10,000, the license shall have

2-21     stamped thereon the words, "Life Insurance in Excess of [$7,500]

2-22     $10,000."

2-23           SECTION 4.  Art. 21.07, Insurance Code, is hereby amended by

2-24     adding a new Sec. 15A reading as follows:

2-25           Sec. 15A.   Any person or corporation that holds a license

2-26     under the provisions of Art. 21.07-1, Insurance Code, shall be

2-27     entitled to write life insurance under such license for stipulated

2-28     premium companies when appointed by a stipulated premium company

2-29     without having to obtain a license under this Article 21.07.  Each

2-30     stipulated premium company is authorized to appoint as its agent,

 3-1     any person or corporation that holds a license under the provisions

 3-2     of Art. 21.07-1, Insurance Code.

 3-3           SECTION 5.  Sec. 1. (b) of Art. 22.13 Insurance Code, is

 3-4     amended to read as follows:

 3-5           (b)  It shall be unlawful for any stipulated premium company

 3-6     to assume liability on a life insurance risk on any one life in an

 3-7     amount in excess of Ten Thousand Dollars ($10,000.00).  Provided,

 3-8     however, when a stipulated premium company assumes a life insurance

 3-9     risk under a life insurance policy, the initial death benefit of

3-10     Ten Thousand Dollars ($10,000) or less may increase to an amount

3-11     greater than Ten Thousand Dollars ($10,000) through policy

3-12     dividends or contractual death benefit increases designed to keep

3-13     pace with inflation without being in violation of this subsection

3-14     or this Act.

3-15           SECTION 6.  Art. 22.23(a)(1), Insurance Code, is amended to

3-16     read as follows:

3-17                 (1)  no individual Life shall be insured for more than

3-18     $10,000[;] except as provided in Sec. 1(b) of Art. 22.13, Insurance

3-19     Code;

3-20           SECTION 7.  This Act takes effect September 1, 1997.

3-21           SECTION 8.  The importance of this legislation and the

3-22     crowded condition of the calendars in both houses create an

3-23     emergency and an imperative public necessity that the

3-24     constitutional rule requiring bills to be read on three several

3-25     days in each house be suspended, and this rule is hereby suspended.