H.B. No. 508
AN ACT
relating to notice of an increase in certain rates or charges for
certain group policies or contracts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Article 3.51-10, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Art. 3.51-10. NOTICE OF PREMIUM RATE INCREASE. (a) Not
less than 60 [30] days before the date on which a premium rate
increase takes effect on a group policy of health, accident and
health, or life, health, and accident insurance delivered or issued
for delivery in this state by a life, accident, health or casualty
insurance company, mutual life insurance company, mutual insurance
company other than life, mutual or natural premium life insurance
company, general casualty company, Lloyds, reciprocal or
interinsurance exchange, fraternal benefit society, group
hospitalization service insurer, or local mutual aid association,
the insurer shall give written notice of the premium rate increase
to the policyholder or in the instance of a multiple employer trust
to the trustee or group policyholder of the amount of such increase
and the date on which the increase is to take effect. Such notice is
also required for increases in subscriber charges and service fees
under group policies or contracts or coverage provided by health
maintenance organizations. Notice shall be based upon coverages in
effect on the date of the notice and nothing contained herein shall
be construed to prevent the insurer or health maintenance
organization from negotiating changes in benefits and/or rates at
the request of the policyholder after the required notice has been
delivered.
(b) An insurer may not require a policyholder or trustee
entitled to notice under this article to respond to the insurer to
renew the policy or take other action relating to the renewal or
extension of the policy before the 45th day after the date the
notice described by Subsection (a) of this article is given.
SECTION 2. Section 1132.001, Insurance Code, as effective
June 1, 2003, is amended by amending Subsection (b) and adding
Subsection (f) to read as follows:
(b) Not later than the 61st [31st] day before the date on
which a premium rate increase takes effect on a group policy of life
insurance delivered or issued for delivery in this state by an
insurer, the insurer shall give written notice to the policyholder
of:
(1) the amount of the increase; and
(2) the date on which the increase is to take effect.
(f) An insurer may not require a policyholder or trustee
entitled to notice under this section to respond to the insurer to
renew the policy or take other action relating to the renewal or
extension of the policy before the 45th day after the date the
notice described by Subsection (b) is given.
SECTION 3. The change in law made by this Act to Article
3.51-10 and Section 1132.001(b), Insurance Code, applies only to an
insurance policy delivered, issued for delivery, or renewed on or
after March 1, 2004. An insurance policy delivered, issued for
delivery, or renewed before March 1, 2004, is governed by the law as
it existed immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2003.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 508 was passed by the House on May 10,
2003, by a non-record vote.
______________________________
Chief Clerk of the House
I certify that H.B. No. 508 was passed by the Senate on May
28, 2003, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor