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A BILL TO BE ENTITLED
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AN ACT
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relating to disclosure of information regarding and conditions for |
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payment of death benefits under certain policies, contracts, and |
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group benefit plans; providing a civil penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 1101, Insurance Code, is amended by |
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adding Subchapters E and F to read as follows: |
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SUBCHAPTER E. DISCLOSURES REGARDING DEATH BENEFITS |
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Sec. 1101.201. DEFINITION. Notwithstanding Section |
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30.003, in this subchapter, "person" has the meaning assigned by |
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Section 311.005, Government Code. |
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Sec. 1101.202. APPLICABILITY OF SUBCHAPTER. This |
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subchapter applies to any person who is an issuer, sponsor, |
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trustee, or third-party administrator of any insurance policy, |
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annuity or other contract, or group benefit plan that provides a |
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death benefit payable to a beneficiary, including: |
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(1) an insurance company operating under Chapter 841; |
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(2) a statewide mutual assessment company operating |
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under Chapter 881; |
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(3) a mutual life insurance company operating under |
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Chapter 882; |
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(4) a stipulated premium insurance company operating |
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under Chapter 884; |
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(5) a fraternal benefit society operating under |
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Chapter 885; |
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(6) a local mutual aid association operating under |
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Chapter 886; |
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(7) a burial association operating under Chapter 888; |
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(8) an employer or other group benefit plan sponsor, |
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regardless of whether the death benefit is provided through an |
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insurance policy or is self-insured; |
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(9) the board of trustees for the Employees Retirement |
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System of Texas; |
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(10) the Teacher Retirement System of Texas; |
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(11) a voluntary association that holds a group life |
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insurance policy under Chapter 1578; |
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(12) The University of Texas System; |
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(13) The Texas A&M University System; |
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(14) a political subdivision that is providing group |
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benefits, or is a member of a group of political subdivisions |
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providing group benefits, under Chapter 172, Local Government Code; |
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(15) a person acting as third-party administrator |
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under Chapter 4151 for group benefits that include a death benefit; |
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and |
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(16) a trustee of a trust-funded prepaid funeral |
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benefits contract regulated under Subchapter F, Chapter 154, |
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Finance Code. |
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Sec. 1101.203. REQUEST FOR DISCLOSURES REGARDING DEATH |
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BENEFITS. (a) A person who issues, sponsors, is a trustee of, or |
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administers an insurance policy, annuity or other contract, or |
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group benefit plan that provides a death benefit shall make the |
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disclosures required by Section 1101.204 to a person who makes a |
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written request for the information by fax or e-mail, accompanied |
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by a power of attorney granting the requestor the authority to |
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request the information on behalf of a person claiming to be a |
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beneficiary of death benefits under the policy, contract, or plan. |
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The power of attorney may be included in or accompanied by an |
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assignment to the requestor of death benefits by the person |
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claiming to be a beneficiary. |
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(b) A person to whom this subchapter applies: |
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(1) may require that a request under this section be |
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accompanied by proof of death; and |
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(2) shall accept as the required proof of death for the |
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purpose of making a disclosure under Section 1101.204 any of the |
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following items: |
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(A) a certified death certificate; |
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(B) an obituary; |
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(C) a burial permit; or |
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(D) any other documentation of the death |
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originating from a person other than the person making the request |
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or claiming to be a beneficiary. |
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Sec. 1101.204. REQUIRED DISCLOSURES. (a) A person to whom |
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this subchapter applies shall disclose the following information to |
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a person who submits a request that complies with Section 1101.203: |
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(1) whether the person who granted the power of |
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attorney is a beneficiary under the insurance policy, contract, or |
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group benefit plan referenced in the request; and |
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(2) if the person who granted the power of attorney is |
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a beneficiary: |
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(A) the relationship of that beneficiary to the |
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person on whose death the payment of benefits is contingent; |
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(B) the birth date of the person on whose death |
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the payment of benefits is contingent or that person's age on the |
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date the policy, contract, or group benefit plan coverage providing |
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the death benefit was issued, entered into, or otherwise initiated; |
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(C) whether sufficient death benefits are |
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available to that beneficiary to pay: |
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(i) the funeral costs of the deceased |
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proposed to be advanced to that beneficiary by the requestor, as |
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specified in an assignment of benefits accompanying the request; |
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and |
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(ii) any other amount proposed to be |
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advanced to that beneficiary by the requestor, as specified in an |
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assignment of benefits accompanying the request; |
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(D) the total amount of death benefits available |
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to that beneficiary, if the beneficiary has specifically authorized |
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a disclosure of that amount in the power of attorney accompanying |
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the request; |
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(E) whether those death benefits are contestable |
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and, if so, on what basis the benefits are contestable; and |
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(F) any reason that the death benefits would not |
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be paid to a person to whom the benefits were assigned in accordance |
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with any assignment of benefits accompanying the request. |
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(b) A disclosure required to be made under this section must |
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be made to the requestor and, if specified by the request, to the |
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person claiming to be a beneficiary. The disclosure must be made by |
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fax, e-mail, or telephone within 48 hours of receipt of the request, |
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excluding any day that is a Saturday, Sunday, or Texas state or |
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federal holiday. |
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Sec. 1101.205. PENALTY; DISCIPLINARY ACTION. (a) A person |
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who does not make a disclosure required by this subchapter in the |
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time prescribed by Section 1101.204(b) is liable to the person who |
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granted the power of attorney to the person who submitted the |
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request for a penalty, recoverable in a civil action, in an amount |
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not to exceed $500 for each violation. Each day the violation |
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continues is a separate violation. |
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(b) The commissioner may suspend or revoke the certificate |
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of authority of a person who wilfully violates this subchapter. |
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SUBCHAPTER F. PAYMENT OF DEATH BENEFIT |
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Sec. 1101.251. ADEQUACY OF DEATH CERTIFICATE. The issuer, |
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sponsor, trustee, or third-party administrator of an insurance |
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policy, annuity or other contract, or group benefit plan to whom |
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Subchapter E applies may not require, as a condition of payment of a |
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death benefit, that the death certificate for the person on whose |
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death payment of the benefit is contingent specify a cause or manner |
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of death. |
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Sec. 1101.252. TIME FOR PAYMENT OF DEATH BENEFIT TO |
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ASSIGNEE. Notwithstanding Section 1101.011 and subject to Section |
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1103.102(c)(2), if applicable, and Sections 154.207 and 154.262, |
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Finance Code, if applicable, the issuer, sponsor, trustee, or |
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third-party administrator of an insurance policy, annuity or other |
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contract, or group benefit plan to whom Subchapter E applies must |
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pay a death benefit provided under the policy, contract, or plan to |
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a person to whom the benefit is assigned at the assignee's address |
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not later than two weeks after the receipt of: |
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(1) a properly executed assignment of the death |
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benefit by the person otherwise entitled to the benefit to the |
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assignee requesting payment; |
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(2) a death certificate for the person on whose death |
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the payment of benefits is contingent; and |
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(3) a properly completed claim form. |
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SECTION 2. This Act takes effect September 1, 2013. |