78R5529 AKH-D

By:  Giddings                                                     H.B. No. 2807



A BILL TO BE ENTITLED

AN ACT

relating to the maximum cumulative premiums for certain small face 
amount life insurance policies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 1101, Insurance Code, as effective June 
1, 2003, is amended by adding Subchapter G to read as follows:

SUBCHAPTER G.  MAXIMUM CUMULATIVE PREMIUMS CHARGED FOR

CERTAIN LIFE INSURANCE POLICIES
	Sec. 1101.301.  APPLICABILITY.  (a)  This subchapter applies 
to each insurer authorized to write life insurance in this state, 
including  an insurer operating under Chapter 841, 881, 882, 884, 
885, 886, 887, 888, or 982 and an insurer exempt under Section 
887.102.
	(b)  This subchapter applies to any individual or group life 
insurance policy, other than a term life insurance policy, issued 
in this state, including an industrial insurance policy offered 
under Chapter 1151.
	Sec. 1101.302.  MAXIMUM CUMULATIVE PREMIUM.  (a)  An insurer 
that issues a life insurance policy with a face amount of $10,000 or 
less may not collect cumulative premiums on that policy that exceed 
325 percent of the face amount of the policy after deducting any 
cash dividends paid by the insurer on the policy.
	(b)  For purposes of this section, cumulative premiums 
include premiums paid for a rider or endorsement to the policy.  
However, the face amount does not include the benefit attributable 
to the riders.
	SECTION 2.  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.