|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to lapse rates in the computation of reserves for certain |
|
life insurance contracts. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Subchapter B, Chapter 425, Insurance Code, is |
|
amended by adding Section 425.071 to read as follows: |
|
Sec. 425.071. LAPSE RATES IN MINIMUM STANDARD OF VALUATION. |
|
(a) The minimum standard of valuation under this subchapter may |
|
include lapse rates in the calculation of reserves for a secondary |
|
guarantee in universal life contracts issued after December 31, |
|
2006. |
|
(b) For purposes of this section, a secondary guarantee |
|
refers to specified conditions in a universal life contract that, |
|
if satisfied, provide for death benefits to remain in effect |
|
regardless of the accumulation value in the contract. |
|
(c) Lapse rates authorized by this section may not exceed |
|
two percent per year. |
|
(d) The commissioner is authorized to adopt rules to |
|
implement this section. |
|
SECTION 2. This Act takes effect June 1, 2007, if it |
|
receives a vote of two-thirds of all the members elected to each |
|
house, as provided by Section 39, Article III, Texas Constitution. |
|
If this Act does not receive the votes necessary for effect on that |
|
date, this Act takes effect September 1, 2007. |