78R5528 AKH-D

By:  Giddings                                                     H.B. No. 2809



A BILL TO BE ENTITLED

AN ACT

relating to required payment options 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 E to read as follows:

SUBCHAPTER E.  SMALL FACE AMOUNT LIFE INSURANCE POLICIES
	Sec. 1101.201.  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. 1101.202.  REQUIRED ALTERNATIVE PAYMENT OPTIONS.  (a)  
An insurer that offers a life insurance policy that provides a death 
benefit of $10,000 or less must offer alternative premium payment 
options to the payment options the insurer would otherwise have 
offered if, at any point in time over the term of the policy, the 
cumulative premiums paid, less dividends paid by the insurer, might 
exceed 150 percent of the face amount of the policy.
	(b)  For purposes of this section, the insurer must offer 
alternative premium payment options that include payment schedules 
that allow for shorter payment periods and schedules for making 
payments less often.
	(c)  The alternative payment option information shall be 
provided to the policyholder before the sale of the policy, and 
again not later than the day on which the policy is delivered.
	(d)  For purposes of this section, cumulative premiums 
include premiums paid for riders. 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 a life insurance policy that is delivered, issued 
for delivery, or renewed on or after January 1, 2004. A life 
insurance policy that is delivered, issued for delivery, or renewed 
before January 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.