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By: Smithee (Senate Sponsor - Averitt) |
H.B. No. 1590 |
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(In the Senate - Received from the House April 23, 2007; |
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April 26, 2007, read first time and referred to Committee on State |
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Affairs; May 4, 2007, reported favorably by the following vote: |
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Yeas 8, Nays 0; May 4, 2007, sent to printer.) |
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A BILL TO BE ENTITLED
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AN ACT
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relating to lapse rates in the computation of reserves for certain |
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life insurance contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 425, Insurance Code, is |
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amended by adding Section 425.071 to read as follows: |
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Sec. 425.071. LAPSE RATES IN MINIMUM STANDARD OF VALUATION. |
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(a) The minimum standard of valuation under this subchapter may |
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include lapse rates in the calculation of reserves for a secondary |
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guarantee in universal life contracts issued after December 31, |
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2006. |
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(b) For purposes of this section, a secondary guarantee |
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refers to specified conditions in a universal life contract that, |
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if satisfied, provide for death benefits to remain in effect |
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regardless of the accumulation value in the contract. |
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(c) Lapse rates authorized by this section may not exceed |
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two percent per year. |
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(d) The commissioner is authorized to adopt rules to |
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implement this section. |
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SECTION 2. This Act takes effect June 1, 2007, if it |
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receives a vote of two-thirds of all the members elected to each |
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house, as provided by Section 39, Article III, Texas Constitution. |
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If this Act does not receive the votes necessary for effect on that |
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date, this Act takes effect September 1, 2007. |
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* * * * * |