78R6190 DLF-D

By:  Ellis                                                        S.B. No. 1622



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 under Chapter 
841, 882, 884, or 982.  This subchapter does not apply to an insurer 
operating under Chapter 881, 885, 886, 887, or 888 or 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.  PROHIBITION.  An insurer that issues a life 
insurance policy that provides a death benefit of $2,000 or less and 
that includes the option to increase coverage required by Section 
1101.202 may not issue a subsequent life insurance policy  that 
provides a death benefit of $2,000 or less to the same insured.
	Sec. 1101.204.  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.