79R6621 DLF-D

By:  Olivo                                                        H.B. No. 3039



A BILL TO BE ENTITLED

AN ACT

relating to certain life insurance policies insuring the life of an 
employee.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter B, Chapter 1103, Insurance Code, is 
amended by adding Section 1103.057 to read as follows:
	Sec. 1103.057.  CERTAIN LIFE INSURANCE POLICIES INSURING 
EMPLOYEES PROHIBITED. (a)  Notwithstanding any other provision of 
this subchapter and subject to Subsection (b), an individual, 
partnership, association, corporation, or other legal entity, 
including a governmental entity, who is the employer of an 
individual who is insured under a life insurance policy may not be 
designated as a beneficiary to receive the proceeds of the policy.
	(b)  Subsection (a) does not prohibit the designation of an 
employer as a beneficiary of a policy 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.
	(c)  In addition to other penalties authorized by this code, 
a violation of this section is an unfair or deceptive act or 
practice in the business of insurance for purposes of Chapter 541.  
An insurer that violates this section is subject to sanctions under 
Chapter 82.
	SECTION 2.  This Act applies only to an insurance policy that 
is delivered or issued for delivery on or after the effective date 
of this Act.  A policy that is delivered or issued for delivery 
before the effective date of this Act is governed by the law as it 
existed immediately before that date, and that law is continued in 
effect for that purpose.
	SECTION 3.  This Act takes effect September 1, 2005.