78R5530 DLF-D

By:  Giddings                                                     H.B. No. 2810


A BILL TO BE ENTITLED
AN ACT
relating to certain 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. CERTAIN POLICIES WITH SMALL FACE VALUE
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 INCREASE IN DEATH BENEFIT. (a) A life insurance policy that provides a death benefit of $2,000 or less must include an option for the insured to increase the death benefit to not more than $15,000. (b) The insurer must provide the additional death benefit required by this section: (1) without evidence of insurability; and (2) at the insurer's current applicable rates for issuance of a new policy to the insured at the insured's age at the time the option is exercised. (c) The exercise of an option under Subsection (a) may not result in a reduction of the cash value of the life insurance policy. Sec. 1101.203. RULES. The commissioner may adopt rules as necessary to implement this subchapter. 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.