81R7928 PB-D
 
  By: McReynolds H.B. No. 1989
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to certain amounts payable by the Texas Life, Accident,
  Health, and Hospital Service Insurance Guaranty Association.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 463.204, Insurance Code, is amended to
  read as follows:
         Sec. 463.204.  OBLIGATIONS EXCLUDED.  A contractual
  obligation does not include:
               (1)  death benefits in an amount in excess of $300,000
  or a net cash surrender or net cash withdrawal value in an amount in
  excess of $100,000 under one or more policies on a single life;
               (2)  an amount in excess of:
                     (A)  $250,000 [$100,000] in the present value
  under one or more annuity contracts issued with respect to a single
  life under individual annuity policies or group annuity policies;
  or
                     (B)  $5 million in unallocated annuity contract
  benefits with respect to a single contract owner regardless of the
  number of those contracts;
               (3)  an amount in excess of the following amounts,
  including any net cash surrender or cash withdrawal values, under
  one or more accident, health, accident and health, or long-term
  care insurance policies on a single life:
                     (A)  $500,000 for basic hospital,
  medical-surgical, or major medical insurance, as those terms are
  defined by this code or rules adopted by the commissioner;
                     (B)  $300,000 for disability and long-term care
  insurance, as those terms are defined by this code or rules adopted
  by the commissioner; or
                     (C)  $200,000 for coverages that are not defined
  as basic hospital, medical-surgical, major medical, disability, or
  long-term care insurance;
               (4)  an amount in excess of $250,000 [$100,000] in
  present value annuity benefits, in the aggregate, including any net
  cash surrender and net cash withdrawal values, with respect to each
  individual participating in a governmental retirement benefit plan
  established under Section 401, 403(b), or 457, Internal Revenue
  Code of 1986 (26 U.S.C. Sections 401, 403(b), and 457), covered by
  an unallocated annuity contract or the beneficiary or beneficiaries
  of the individual if the individual is deceased;
               (5)  an amount in excess of $250,000 [$100,000] in
  present value annuity benefits, in the aggregate, including any net
  cash surrender and net cash withdrawal values, with respect to each
  payee of a structured settlement annuity or the beneficiary or
  beneficiaries of the payee if the payee is deceased;
               (6)  aggregate benefits in an amount in excess of
  $300,000 with respect to a single life, except with respect to:
                     (A)  benefits paid under basic hospital,
  medical-surgical, or major medical insurance policies, described
  by Subdivision (3)(A), in which case the aggregate benefits are
  $500,000; and
                     (B)  benefits paid to one owner of multiple
  nongroup policies of life insurance, whether the policy owner is an
  individual, firm, corporation, or other person, and whether the
  persons insured are officers, managers, employees, or other
  persons, in which case the maximum benefits are $5 million
  regardless of the number of policies and contracts held by the
  owner;
               (7)  an amount in excess of $5 million in benefits, with
  respect to either one plan sponsor whose plans own directly or in
  trust one or more unallocated annuity contracts not included in
  Subdivision (4) irrespective of the number of contracts with
  respect to the contract owner or plan sponsor or one contract owner
  provided coverage under Section 463.201(a)(3)(B), except that, if
  one or more unallocated annuity contracts are covered contracts
  under this chapter and are owned by a trust or other entity for the
  benefit of two or more plan sponsors, coverage shall be afforded by
  the association if the largest interest in the trust or entity
  owning the contract or contracts is held by a plan sponsor whose
  principal place of business is in this state, and in no event shall
  the association be obligated to cover more than $5 million in
  benefits with respect to all these unallocated contracts;
               (8)  any contractual obligations of the insolvent or
  impaired insurer under a covered policy or contract that do not
  materially affect the economic value of economic benefits of the
  covered policy or contract; or
               (9)  punitive, exemplary, extracontractual, or bad
  faith damages, regardless of whether the damages are:
                     (A)  agreed to or assumed by an insurer or
  insured; or
                     (B)  imposed by a court.
         SECTION 2.  The change in law made by this Act applies only
  to an insurer that first becomes an impaired or insolvent insurer on
  or after the effective date of this Act. An insurer that becomes an
  impaired or insolvent insurer 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, 2009.