By:  Ellis                                                                S.B. No. 137



A BILL TO BE ENTITLED

AN ACT

relating to certain life insurance policies insuring the life of an 
employee or other third parties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  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)  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 would otherwise be permitted under 
Section 1103.003 or 1103.004.
	SECTION 2.  Section 1103.056, Insurance Code, as effective 
June 1, 2003, is repealed.
	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.