78R2307 AKH-D

By:  Woolley                                                      H.B. No. 508



A BILL TO BE ENTITLED

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.   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.
	SECTION 2.  Section 1132.001(b), Insurance Code, as 
effective June 1, 2003, is amended 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.                        
	SECTION 3.  Article 3.51-10 and Section 1132.001(b), 
Insurance Code, as amended by this Act, apply only to an increase in 
premium rates, subscriber charges, or service fees that takes 
effect on or after March 1, 2004. An increase that takes effect 
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 this purpose.
	SECTION 4.  This Act takes effect September 1, 2003.