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A BILL TO BE ENTITLED
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AN ACT
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relating to preexisting condition provisions in individual |
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accident and health insurance policies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 1201.152, Insurance Code, is amended to |
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read as follows: |
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Sec. 1201.152. PREEXISTING CONDITION PROVISION. (a) A |
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preexisting condition provision in an individual accident and |
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health insurance policy may apply only to coverage for a disease or |
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condition for which medical advice, diagnosis, care, or treatment |
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was recommended or received during the six months before the |
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earlier of: |
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(1) the effective date of coverage; or |
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(2) the first day of any waiting period applicable |
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under the policy. |
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(b) A preexisting condition provision in an individual |
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accident and health insurance policy may not apply to expenses |
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incurred on or after the first anniversary of the initial effective |
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date of coverage of the insured. [COVERAGE UNDER SIMPLIFIED
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APPLICATION FORM. (a)
Notwithstanding Clause (b) of the provision
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required by Section 1201.208(a), an individual accident and health
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insurance policy must cover any loss that occurs after 12 months
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from a preexisting condition if the insurer uses a simplified
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application form that does not include a question concerning the
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applicant's health history or medical treatment history.
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[(b)
This section applies regardless of whether the
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simplified application form includes a question regarding the
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applicant's health at the time of application.] |
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(c) This section does not require an insurer to cover a loss |
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from a condition that the policy specifically excludes from |
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coverage. |
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SECTION 2. Section 1201.153(a), Insurance Code, is amended |
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to read as follows: |
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(a) Notwithstanding Section 1201.152 [or Clause (b) of the
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provision required by Section 1201.208(a)], an individual accident |
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and health insurance policy delivered or issued for delivery to an |
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individual who is 65 years of age or older may not include a |
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provision that excludes from coverage a loss that occurs from a |
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preexisting condition more than six months after the effective date |
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of coverage under the policy. |
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SECTION 3. Sections 1201.154(b) and (c), Insurance Code, |
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are amended to read as follows: |
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(b) A preexisting condition provision in an individual |
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accident and health insurance policy may not apply to an |
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individual who was continuously covered for an aggregate period of |
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12 [18] months by creditable coverage that was in effect up to a |
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date not more than 63 days before the effective date of the |
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individual coverage, excluding any waiting period. |
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(c) In determining whether a preexisting condition |
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provision of an individual accident and health insurance policy |
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applies to an individual, an insurer shall credit the time the |
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individual previously was covered under creditable coverage if the |
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previous coverage was in effect at any time during the 12 [18] |
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months preceding the effective date of the individual coverage. |
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SECTION 4. The heading to Section 1201.208, Insurance Code, |
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is amended to read as follows: |
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Sec. 1201.208. POLICY PROVISION: INCONTESTABILITY; |
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PREEXISTING CONDITION. |
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SECTION 5. Section 1201.208, Insurance Code, is amended by |
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amending Subsections (a), (b), and (c) and adding Subsection (e) to |
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read as follows: |
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(a) Except as provided by Subsection (c), an individual |
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accident and health insurance policy must contain the following |
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provision: |
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"Time Limit on Certain Defenses: [(a)] After the second |
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anniversary of the date this policy is issued, a misstatement, |
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other than a fraudulent misstatement, made by the applicant in the |
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application for the policy may not be used to void the policy or to |
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deny a claim for loss incurred or disability (as defined in the |
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policy) beginning after that anniversary." |
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["(b) A claim for loss incurred or disability (as defined in
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the policy) beginning after the second anniversary of the date this
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policy is issued may not be reduced or denied on the ground that a
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disease or physical condition not excluded from coverage by name or
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specific description effective on the date of loss existed before
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the effective date of coverage of this policy."] |
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(b) The [Clause (a) of the] provision required by |
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Subsection (a) does not: |
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(1) affect any legal requirement for avoidance of a |
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policy or denial of a claim during the initial two-year period; or |
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(2) limit the application of Section 1201.219, |
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1201.220, or 1201.221 in a case of a misstatement regarding age, |
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occupation, or other insurance. |
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(c) For a policy that provides that the insured is entitled |
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to continue the policy in force by the timely payment of premiums |
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until the insured reaches at least 50 years of age or, if the policy |
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was issued after the insured reached 44 years of age, until at least |
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the fifth anniversary of the policy's date of issuance, an insurer |
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may use the following clause instead of [Clause (a) of] the |
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provision required by Subsection (a): |
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"After this policy has been in force for a period of two years |
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during the lifetime of the insured (excluding any period during |
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which the insured is disabled), it shall become incontestible as to |
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the statements contained in the application." |
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(e) The commissioner by rule shall adopt a policy provision |
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governing coverage for preexisting conditions under an individual |
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accident and health insurance policy. The provision must comply |
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with Subchapter D. An individual accident and health insurance |
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policy must contain the provision in the words provided by the rules |
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adopted under this subsection, subject to Sections 1201.201(b) and |
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(c). |
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SECTION 6. The commissioner of insurance shall adopt rules |
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as required by Section 1201.208, Insurance Code, as amended by this |
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Act, not later than December 1, 2009. |
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SECTION 7. This Act applies only to an individual accident |
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and health insurance policy delivered, issued for delivery, or |
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renewed on or after January 1, 2010. A policy delivered, issued for |
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delivery, or renewed before January 1, 2010, is governed by the law |
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as it existed immediately before the effective date of this Act, and |
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that law is continued in effect for that purpose. |
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SECTION 8. This Act takes effect September 1, 2009. |