78R4969 KCR-D

By:  Ellis                                                        S.B. No. 1619



A BILL TO BE ENTITLED

AN ACT

relating to regulating premiums charged for certain life insurance 
policies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 1101, Insurance Code, is amended by 
adding Subchapter F to read as follows:

SUBCHAPTER F. MAXIMUM AMOUNT OF PREMIUMS CHARGED FOR CERTAIN LIFE 
INSURANCE POLICIES
	Sec. 1101.251.  DEFINITION.  In this subchapter, "insurer" 
means any insurance company or other entity authorized to engage in 
the business of life insurance in this state.  The term does not 
include a fraternal benefit society.
	Sec. 1101.252.  APPLICABILITY.  This subchapter applies only 
to a life insurance policy issued in this state with an initial face 
amount of $15,000 or less.
	Sec. 1101.253.  MAXIMUM AMOUNT OF PREMIUMS PAID.  (a)  An 
insurer may not charge or collect premiums for a life insurance 
policy that in the aggregate, less dividends paid in cash, exceed 
the amount computed under this section by multiplying the amount of 
the maximum death benefit available under the policy by the 
appropriate numerical factor associated with the age of the insured 
at the time the policy is issued.
	(b)  If the policy is issued before the insured reaches the 
insured's 21st birthday, the numerical factor is 1.5.
	(c)  If the policy is issued on or after the insured's 21st 
birthday but before the insured reaches the insured's 46th 
birthday, the numerical factor is computed by:
		(1)  subtracting 20 from the age of the insured in whole 
years as of the insured's most recent birthday;
		(2)  multiplying the result computed under Subdivision 
(1) by .04; and
		(3)  adding 1.5 to the result computed under 
Subdivision (2).        
	(d)  If the policy is issued on or after the insured's 46th 
birthday but before the insured reaches the insured's 65th 
birthday, the numerical factor is computed by:
		(1)  subtracting 45 from the age of the insured in whole 
years as of the insured's most recent birthday;
		(2)  multiplying the result computed under Subdivision 
(1) by .05; and
		(3)  adding 2.5 to the result computed under 
Subdivision (2).        
	(e)  If the policy is issued on or after the insured's 65th 
birthday but before the insured reaches the insured's 86th 
birthday, the numerical factor is 3.5.
	(f)  If the policy is issued on or after the insured's 86th 
birthday but before the insured reaches the insured's 89th 
birthday, the numerical factor is computed by:
		(1)  subtracting 85 from the age of the insured in whole 
years as of the insured's most recent birthday;
		(2)  multiplying the result computed under Subdivision 
(1) by .18; and
		(3)  subtracting the result computed under Subdivision 
(2) from 3.5. 
	(g)  If the policy is issued on or after the insured's 89th 
birthday but before the insured reaches the insured's 96th 
birthday, the numerical factor is computed by:
		(1)  subtracting 85 from the age of the insured in whole 
years as of the insured's most recent birthday;
		(2)  multiplying the result computed under Subdivision 
(1) by .18; and
		(3)  subtracting the result computed under Subdivision 
(2) from 3.51.
	(h)  If the policy is issued on or after the insured's 96th 
birthday but before the insured reaches the insured's 99th 
birthday, the numerical factor is computed by:
		(1)  subtracting 85 from the age of the insured in whole 
years as of the insured's most recent birthday;
		(2)  multiplying the result computed under Subdivision 
(1) by .18; and
		(3)  subtracting the result computed under Subdivision 
(2) from 3.52.
	(i)  If the policy is issued on or after the insured's 99th 
birthday, the numerical factor is 1.
	Sec. 1101.254.  EFFECT OF PAYING MAXIMUM PREMIUMS.  When the 
aggregate premiums paid for a life insurance policy reach the 
maximum amount computed under Section 1101.203, the life insurance 
policy becomes a paid-up policy.
	Sec. 1101.255.  RULES.  The commissioner may adopt rules 
necessary for the implementation of this subchapter.
	SECTION 2.  (a) This Act takes effect September 1, 2003, and 
applies only to a life insurance policy that is delivered, issued 
for delivery, or renewed after January 1, 2004.
	(b)  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 
the former law is continued in effect for that purpose.