By: Williams S.B. No. 373
A BILL TO BE ENTITLED
AN ACT
relating to notice of an increase in certain rates or charges for
certain group policies or contracts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Article 3.51-10, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Art. 3.51-10. NOTICE OF PREMIUM RATE INCREASE. Not less than
60 [30] days before the date on which a premium rate increase takes
effect on a group policy of health, accident and health, or life,
health, and accident insurance delivered or issued for delivery in
this state by a life, accident, health or casualty insurance
company, mutual life insurance company, mutual insurance company
other than life, mutual or natural premium life insurance company,
general casualty company, Lloyds, reciprocal or interinsurance
exchange, fraternal benefit society, group hospitalization service
insurer, or local mutual aid association, the insurer shall give
written notice of the premium rate increase to the policyholder or
in the instance of a multiple employer trust to the trustee or group
policyholder of the amount of such increase and the date on which
the increase is to take effect. Such notice is also required for
increases in subscriber charges and service fees under group
policies or contracts or coverage provided by health maintenance
organizations. Notice shall be based upon coverages in effect on
the date of the notice and nothing contained herein shall be
construed to prevent the insurer or health maintenance organization
from negotiating changes in benefits and/or rates at the request of
the policyholder after the required notice has been delivered.
SECTION 2. Subsection (b), Section 1132.001, Insurance
Code, as effective June 1, 2003, is amended to read as follows:
(b) Not later than the 61st [31st] day before the date on
which a premium rate increase takes effect on a group policy of life
insurance delivered or issued for delivery in this state by an
insurer, the insurer shall give written notice to the policyholder
of:
(1) the amount of the increase; and
(2) the date on which the increase is to take effect.
SECTION 3. Article 3.51-10 and Subsection (b), Section
1132.001, Insurance Code, as amended by this Act, apply only to an
increase in premium rates, subscriber charges, or service fees that
takes effect on or after March 1, 2004. An increase that takes
effect before March 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 this purpose.
SECTION 4. This Act takes effect September 1, 2003.