By: Hancock  S.B. No. 840
         (In the Senate - Filed February 26, 2013; March 5, 2013,
  read first time and referred to Committee on Business and Commerce;
  March 13, 2013, reported favorably by the following vote:  Yeas 8,
  Nays 0; March 13, 2013, sent to printer.)
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to certain promotional practices not considered to be
  prohibited discrimination, rebates, or inducements in insurance.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subsection (b), Section 541.058, Insurance Code,
  is amended to read as follows:
         (b)  It is not a rebate or discrimination prohibited by
  Section 541.056(a) or 541.057:
               (1)  for a life insurance or life annuity contract, to
  pay a bonus to a policyholder or otherwise abate the policyholder's
  premiums in whole or in part out of surplus accumulated from
  nonparticipating insurance policies if the bonus or abatement:
                     (A)  is fair and equitable to policyholders; and
                     (B)  is in the best interests of the insurer and
  its policyholders;
               (2)  for a life insurance policy issued on the
  industrial debit plan, to make to a policyholder who has
  continuously for a specified period made premium payments directly
  to the insurer's office an allowance in an amount that fairly
  represents the saving in collection expenses;
               (3)  for a group insurance policy, to readjust the rate
  of premium based on the loss or expense experience under the policy
  at the end of a policy year if the adjustment is retroactive for
  only that policy year;
               (4)  for a life annuity contract, to waive surrender
  charges under the contract when the contract holder exchanges that
  contract for another annuity contract issued by the same insurer or
  an affiliate of the same insurer that is part of the same holding
  company group if:
                     (A)  the waiver and the exchange are fully,
  fairly, and accurately explained to the contract holder in a manner
  that is not deceptive or misleading; and
                     (B)  the contract holder is given credit for the
  time that the previous contract was held when determining any
  surrender charges under the new contract;
               (5)  in connection with an accident and health
  insurance policy, to provide to policy or certificate holders, in
  addition to benefits under the terms of the insurance contract,
  health-related services or health-related information, or to
  disclose the availability of those additional services and
  information to prospective policy or certificate holders; [or]
               (6)  in connection with a health maintenance
  organization evidence of coverage, to provide to enrollees, in
  addition to benefits under the evidence of coverage, health-related
  services or health-related information, or to disclose the
  availability of those additional services and information to
  prospective enrollees or contract holders; or
               (7)  in connection with an offer or sale of a life
  insurance policy or contract, accident and health insurance policy
  or contract, or annuity contract, to give, provide, or allow or
  offer to give, provide, or allow an item that is a promotional
  advertising item, educational item, or traditional courtesy
  commonly extended to consumers and that is valued at $25 or less.
         SECTION 2.  Section 1806.053, Insurance Code, is amended to
  read as follows:
         Sec. 1806.053.  DISCRIMINATIONS OR DISTINCTIONS. Except as
  provided by this subchapter [Section 1806.056], with respect to
  business written in this state:
               (1)  an insurer may not discriminate or make a
  distinction, or permit discrimination or a distinction to be made,
  among insureds having like hazards with respect to premiums charged
  for, or dividends or other benefits payable under, an insurance
  policy;
               (2)  an insurer or an insurer's agent may not make an
  insurance contract or an agreement relating to that insurance,
  other than as expressed in the policy; and
               (3)  an insurer or an insurer's agent or other
  representative may not directly or indirectly pay, allow, or give,
  or offer to pay, allow, or give, as an inducement to the insured, a
  rebate payable on the policy or a special favor or advantage in the
  dividends or other benefits to accrue, or anything of value, not
  specified in the policy.
         SECTION 3.  Subchapter B, Chapter 1806, Insurance Code, is
  amended by adding Section 1806.059 to read as follows:
         Sec. 1806.059.  CERTAIN PROMOTIONAL PRACTICES AUTHORIZED.
  Section 1806.053 does not prohibit an insurer or an insurer's agent
  or other representative from, in connection with an offer or sale of
  an insurance policy subject to this subchapter, giving, providing,
  or allowing or offering to give, provide, or allow an item that is a
  promotional advertising item, educational item, or traditional
  courtesy commonly extended to consumers and that is valued at $25 or
  less.
         SECTION 4.  Subchapter C, Chapter 1806, Insurance Code, is
  amended by adding Section 1806.1041 to read as follows:
         Sec. 1806.1041.  CERTAIN PROMOTIONAL PRACTICES AUTHORIZED.  
  Section 1806.104 does not prohibit an insurer, an insurer's
  employee, or a broker or agent from, in connection with an offer or
  sale of an insurance policy subject to this subchapter, giving,
  providing, or allowing or offering to give, provide, or allow an
  item that is a promotional advertising item, educational item, or
  traditional courtesy commonly extended to consumers and that is
  valued at $25 or less.
         SECTION 5.  Subchapter D, Chapter 1806, Insurance Code, is
  amended by adding Section 1806.1541 to read as follows:
         Sec. 1806.1541.  CERTAIN PROMOTIONAL PRACTICES AUTHORIZED.  
  Section 1806.153 does not prohibit an insurer from, in connection
  with an offer or sale of an insurance policy or contract subject to
  this subchapter, giving, providing, or allowing or offering to
  give, provide, or allow an item that is a promotional advertising
  item, educational item, or traditional courtesy commonly extended
  to consumers and that is valued at $25 or less.
         SECTION 6.  Section 4005.053, Insurance Code, is amended by
  adding Subsection (d) to read as follows:
         (d)  Subsection (c) does not prohibit an agent from, in
  connection with an offer or sale of an insurance policy or contract,
  giving, providing, or allowing or offering to give, provide, or
  allow an item that is a promotional advertising item, educational
  item, or traditional courtesy commonly extended to consumers and
  that is valued at $25 or less.
         SECTION 7.  The change in law made by this Act applies only
  to conduct that occurs on or after the effective date of this Act.
  Conduct that occurs before the effective date of this Act is
  governed by the law applicable to the conduct immediately before
  the effective date of this Act, and that law is continued in effect
  for that purpose.
         SECTION 8.  This Act takes effect September 1, 2013.
 
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