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