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A BILL TO BE ENTITLED
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AN ACT
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relating to certain life insurer conduct regarding life settlement |
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and viatical settlement contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 1111, Insurance Code, is |
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amended by adding Section 1111.007 to read as follows: |
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Sec. 1111.007. NOTICE REQUIRED BY INSURERS. (a) This |
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section applies only to an issuer of an individual or group life |
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insurance policy that insures a person who the issuer has actual |
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knowledge is: |
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(1) chronically or terminally ill; or |
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(2) at least 60 years of age. |
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(b) The insurer shall deliver a written notice to each owner |
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of an individual life insurance policy or a certificate holder |
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under a group life insurance policy that informs the owner or |
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certificate holder that a life settlement contract or viatical |
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settlement contract is available: |
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(1) when the owner or certificate holder: |
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(A) requests to surrender, wholly or partly, an |
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individual life insurance policy or a certificate under a group |
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life insurance policy; |
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(B) requests an accelerated death benefit under |
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an individual life insurance policy or a certificate under a group |
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life insurance policy; or |
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(C) requests to assign an individual life |
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insurance policy or a certificate under a group life insurance |
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policy to secure a loan; |
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(2) on a notice of lapse of an individual life |
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insurance policy or a certificate under a group life insurance |
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policy; or |
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(3) as the commissioner requires by rule. |
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SECTION 2. Subchapter A, Chapter 1111, Insurance Code, is |
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amended by adding Section 1111.008 to read as follows: |
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Sec. 1111.008. PROHIBITED ACTS. A life insurer may not: |
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(1) prohibit, restrict, limit, or impair a life, |
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accident, and health agent from lawfully negotiating or aiding, |
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assisting, or otherwise participating in a life settlement or |
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viatical settlement transaction under this subchapter; |
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(2) discriminate or permit discrimination between |
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individuals of the same class, the same policy amount, and equal |
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expectation of life in the rates charged for any life insurance |
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policy or annuity contract because an individual entered into a |
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life settlement contract or viatical settlement contract or is |
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insured under a policy; |
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(3) make any false or misleading statements about life |
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settlements, viatical settlements, or financing premiums due for a |
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policy to any policy owner or insured to prevent or discourage the |
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policy owner or insured from entering into a life settlement |
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contract or viatical settlement contract; or |
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(4) engage in any transaction, act, practice, or |
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course of business or dealing that restricts, limits, or impairs |
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the lawful transfer of ownership, change of beneficiary, or |
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assignment of a policy. |
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SECTION 3. (a) Except as provided by Subsection (b) of |
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this section, this Act takes effect September 1, 2009. |
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(b) Section 1111.007, Insurance Code, as added by this Act, |
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takes effect January 1, 2010. |