SRC-JEC S.B. 1621 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1621
78R4947 AKH-DBy: Ellis, Rodney
State Affairs
4/8/2003
As Filed


DIGEST AND PURPOSE 

Currently, insurers frequently sell multiple small face amount life
insurance policies to the same individual.  Often, when the insured dies,
the beneficiary of one of the policies claims the benefits of that policy,
and the other policies are never claimed or paid.  As proposed, S.B. 1621
requires the commissioner of insurance to adopt rules defining a "due
diligence" standard for insurers in locating other policies sold by the
insurer on the same person's life and paying the policy amounts to the
proper beneficiaries. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the commissioner of insurance
in SECTION  1 (Section 1101.352, Insurance Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 1101, Insurance Code, by adding Subchapter H,
as follows: 

SUBCHAPTER H.  UNCLAIMED BENEFITS UNDER CERTAIN POLICIES

Sec. 1101.351.  APPLICABILITY.  (a)  Sets forth insurers to which this
subchapter does and does not apply. 

  (b)  Sets forth insurance policies to which this subchapter applies.

Sec. 1101.352.  DUE DILIGENCE STANDARDS.  Requires the commissioner of
insurance to adopt rules as necessary to define minimum standards of due
diligence that an insurer must exercise relating to the payment of
unclaimed benefits payable on the death of an insured who is covered under
more than one life insurance policy issued by the insurer. 

SECTION 2.  Requires the commissioner of insurance to adopt the rules
required by Section 1101.352, Insurance Code, as added by this Act, not
later than January 1, 2004. 

SECTION  3.  Effective date:  September 1, 2003.