This website will be unavailable from Friday, April 26, 2024 at 6:00 p.m. through Monday, April 29, 2024 at 7:00 a.m. due to data center maintenance.

                                                                                

78R4067 DLF-D

By:  Dukes                                                        H.B. No. 978



A BILL TO BE ENTITLED

AN ACT

relating to certain life insurance policies insuring the life of an 
officer, stockholder, partner, or employee.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Sections 1103.003 and 1103.004, Insurance Code, 
as effective June 1, 2003, are amended to read as follows:
	Sec. 1103.003.  CORPORATION, JOINT STOCK ASSOCIATION, OR 
TRUST ESTATE AS BENEFICIARY.  (a)  Subject to Subsection (b), a [A]  
corporation, a joint stock association, or a trust estate that is 
engaging in business for profit may be designated as a beneficiary 
in a policy that insures the life of an officer or stockholder of 
the corporation, joint stock association, or trust estate.
	(b)  A designation under this section is valid only with the 
written consent of the officer or stockholder whose life is 
insured.
	Sec. 1103.004.  PARTNERSHIP OR PARTNER AS BENEFICIARY.  (a)  
Subject to Subsection (b), a [A] partnership or a member of a 
partnership may be designated as a beneficiary in a policy that 
insures the life of a member of the partnership.
	(b)  A designation under this section is valid only with the 
written consent of the member of the partnership whose life is 
insured.
	SECTION 2.  Subchapter B, Chapter 1103, Insurance Code, as 
effective June 1, 2003, is amended by adding Section 1103.057 to 
read as follows:
	Sec. 1103.057.  CERTAIN LIFE INSURANCE POLICIES INSURING 
EMPLOYEES PROHIBITED.  (a)  Notwithstanding Section 1103.054, 
1103.055, or 1103.056, an individual who is insured under a life 
insurance policy may not designate or consent to the designation of 
an individual, partnership, association, corporation, or other 
legal entity who is the employer of the individual as a beneficiary 
of the policy.
	(b)  Subsection (a) does not apply if:                                  
		(1)  the employer is an individual who is related by 
blood or marriage to the individual who is insured under the policy; 
or
		(2)  the designation is authorized under Section 
1103.003 or 1103.004.
	SECTION 3.  This Act takes effect September 1, 2003, and 
applies only to an insurance policy that is delivered or issued for 
delivery on or after that date.  A policy that is delivered or 
issued for delivery before  September 1, 2003,  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.