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Amend CSSB 1007 (Senate committee report) by inserting the 
following appropriately numbered SECTIONS and renumbering 
subsequent SECTIONS of the bill appropriately:
	SECTION ____.  Subchaper B, Chapter 541, Insurance Code, is 
amended by adding Section 541.062 to read as follows:
	Sec. 541.062.  BAD FAITH CANCELLATION OR RESCISSION.  It is 
an unfair method of competition or an unfair or deceptive act or 
practice for a health benefit plan issuer to:
		(1)  set cancellation or rescission goals, quotas, or 
targets;       
		(2)  pay compensation of any kind, including a bonus or 
award, that varies according to the number of cancellations or 
rescissions;
		(3)  set, as a condition of employment, a number or 
volume of cancellations or rescissions to be achieved; or
		(4)  set a performance standard, for employees or by 
contract with another entity, based on the number or volume of 
cancellations or rescissions.
	SECTION ____.  Chapter 1202, Insurance Code, is amended by 
adding Subchapter C to read as follows:
	SUBCHAPTER C.   NOTICE REQUIRED FOR CERTAIN CANCELLATION OR 
RESCISSION DECISIONS
	Sec. 1202.101.  APPLICABILITY.  (a)  This subchapter 
applies only to a health benefit plan, including a small or large 
employer health benefit plan written under Chapter 1501, that 
provides benefits for medical or surgical expenses incurred as a 
result of a health condition, accident, or sickness, including an 
individual, group, blanket, or franchise insurance policy or 
insurance agreement, a group hospital service contract, or an 
individual or group evidence of coverage or similar coverage 
document that is offered by:
		(1)  an insurance company;                                             
		(2)  a group hospital service corporation operating 
under Chapter 842;
		(3)  a fraternal benefit society operating under 
Chapter 885;        
		(4)  a stipulated premium company operating under 
Chapter 884;       
		(5)  a reciprocal exchange operating under Chapter 942;                
		(6)  a Lloyd's plan operating under Chapter 941;                       
		(7)  a health maintenance organization operating under 
Chapter 843;  
		(8)  a multiple employer welfare arrangement that holds 
a certificate of authority under Chapter 846; or
		(9)  an approved nonprofit health corporation that 
holds a certificate of authority under Chapter 844.
	(b) This subchapter does not apply to:                                  
		(1)  a health benefit plan that provides coverage:                     
			(A)  only for a specified disease or for another 
limited benefit other than an accident policy;
			(B)  only for accidental death or dismemberment;                      
			(C)  for wages or payments in lieu of wages for a 
period during which an employee is absent from work because of 
sickness or injury;
			(D)  as a supplement to a liability insurance 
policy;               
			(E)  for credit insurance;                                            
			(F)  only for dental or vision care;                                  
			(G)  only for hospital expenses; or                                   
			(H)  only for indemnity for hospital confinement;                     
		(2)  a Medicare suplemental policy as defined by 
Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss), 
as amended;
		(3)  a workers' compensation insurance policy;                         
		(4)  medical payment insurance coverage provided under 
a motor vehicle insurance policy; or
		(5)  a long-term care insurance policy, including a 
nursing home fixed indemnity policy, unless the commissioner 
determines that the policy provides benefit coverage so 
comprehensive that the policy is a health benefit plan described by 
Subsection (a).
	Sec. 1202.102.  NOTICE OF INTENT TO CANCEL OR RESCIND.  (a) A 
health benefit plan issuer may not cancel or rescind a health 
benefit plan on the basis of a misrepresentation or a preexisting 
condition without first notifying an affected individual in writing 
sixty days before the issuer's intent to cancel or rescind the 
health benefit plan.
	(b)  The notice required under Subsection (a) must include, 
as applicable:
		(1)  the principal reasons for the decision to cancel 
or rescind the health benefit plan;
		(2)  the clinical basis for a determination that a 
preexisting condition exists;
		(3)  a description of any general screening criteria 
used to evaluate issued health benefit plans and determine 
eligibility for a decision to cancel or rescind;
		(4)  notice that the individual may file a complaint 
with the department if the individual believes the cancellation or 
rescission is inappropriate.
	Sec. 1202.103.  RULES.  The commissioner shall adopt rules 
to implement and administer this subchapter.