SRC-DBM S.B. 1196 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 1196
By: Shapiro
Economic Development
4/5/1999
As Filed


DIGEST 

Currently, Texas law does not allow an individual to designate, at any
point in time, a third-party as the owner and/or beneficiary of an
insurance policy on the individual's life.  S.B. 1196 would allow any
person of legal age to consent in writing to the purchase of or the
application for insurance on his or her life and to designate in writing
any person, persons, partnership, association, corporation, or other legal
entity, or any combination thereof, as the beneficiary or beneficiaries of
his or her life insurance policy. 

PURPOSE

As proposed, S.B. 1196 sets forth provisions related to the purchase or
application for, and description of owners or beneficiaries of, certain
life insurance policies. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 113, Article 3.49-1, Insurance Code, as follows:

Sec. 1.  Authorizes with respect to any person of legal age who applies for
insurance on his life  in any legal reserve or mutual assessment life
insurance company and in such application designates in writing any person,
persons, partnership, association, corporation, or other legal entity, or
any combination thereof, as the beneficiary or beneficiaries, or the
absolute or partial owner or owners , or both the beneficiary and owner, of
any policy or policies issued in connection with such application.
Authorizes a beneficiary or owner so designated to have an insurable
interest in the life of such person, except as provided in Section 4 of
this Act, rather than Section 3 hereof. 

 Sec. 2.  Makes a conforming change.

Sec. 3.  Authorizes any person of legal age to consent in writing to the
purchase of or the application for an individual or group insurance policy
or policies issued by any legal reserve or mutual assessment life insurance
company by a third party or parties and in such written document consent to
or designate any person, persons, partnership, association, corporation, or
other legal entity, or any combination thereof, as the absolute or partial
owner or owners , or any combination thereof, of any policy or policies
issued in connection with such consent or designation; and with respect to
any such policy or policies any such owner or beneficiary shall at all
times thereafter have an insurable interest in the life of such person,
except as provided in Section 4 of this Act. 

Sec. 4.  Prohibits, notwithstanding the provisions thereof, any person,
persons, partnership, association, corporation, or other legal entity, or
any other combination thereof, from directly or indirectly engaging in the
business of burying the dead or from having or obtaining, directly or
indirectly, any insurable interest in the life of any person by virtue of
Sections 1, 2, or 3 of this Act. 

  Sec. 5.  Makes a conforming change.

SECTION 2.Effective date: September 1, 1999.
  Makes application of this Act prospective to January 1, 2000.

SECTION 3.Emergency clause.