Bill Text: TX HB207 | 2019-2020 | 86th Legislature | Introduced


Bill Title: Relating to certain disclosures and notices required for certain life insurance policies.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2019-02-19 - Referred to Insurance [HB207 Detail]

Download: Texas-2019-HB207-Introduced.html
  86R1333 MEW-F
 
  By: Craddick H.B. No. 207
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to certain disclosures and notices required for certain
  life insurance policies.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 1101, Insurance Code, is amended by
  adding Subchapter E to read as follows:
  SUBCHAPTER E. DISCLOSURES AND NOTICES RELATING TO LIFE INSURANCE
  POLICIES WITH NON-GUARANTEED CHARGES
         Sec. 1101.201.  PURPOSE. This subchapter is intended to
  provide standards for disclosures relating to changes in certain
  non-guaranteed charges of life insurance policies subject to this
  subchapter.
         Sec. 1101.202.  APPLICABILITY. (a)  This subchapter applies
  to a universal life insurance policy issued by an insurer, as
  defined by Section 1102.001.
         (b)  This subchapter does not apply to:
               (1)  group life insurance without separately
  identifiable accounts for insureds;
               (2)  a life insurance policy in which the insurer
  assumes all risk and contractually guarantees a death benefit in
  exchange for a premium schedule set at the time of the policy's
  issuance; or
               (3)  a bank-owned or corporate-owned life insurance
  policy.
         Sec. 1101.203.  DEFINITION. In this subchapter, "cost of
  insurance charge" means a charge applied by an insurer to a policy
  based on the current schedule of mortality rates. The term does not
  include an expense charge or any credited interest paid on the
  accumulation value of a policy.
         Sec. 1101.204.  DISCLOSURE OF COST OF INSURANCE CHARGE
  INCREASE AFTER ISSUANCE OF POLICY. (a) If an insurer increases the
  cost of insurance charge applied to a policy, the insurer must
  provide a written notice to the policy owner disclosing:
               (1)  the percentage increase in the cost of insurance
  charge;
               (2)  the maximum cost of insurance charge stated in the
  policy;
               (3)  the effective date of the change;
               (4)  a comparison of the change to the current and
  maximum cost of insurance charges; and
               (5)  the options available to the policy owner under
  the policy.
         (b)  The notice under Subsection (a) must include the
  insurer's telephone number and the following statement placed
  prominently on the front of the notice:
         "YOU SHOULD KNOW: This increase will change the value of your
  policy and change how long your policy will last. Ask your agent for
  an illustration that shows the effect of this change on your
  policy."
         (c)  The notice required by Subsection (a) must be given not
  later than the 90th day before the date the change is applied.
         Sec. 1101.205.  DISCLOSURE OF CREDITED INTEREST RATE
  DECREASE AFTER ISSUANCE OF POLICY. (a) Except as provided by
  Subsection (d), if an insurer decreases the credited interest rate
  paid on a policy's accumulation value, the insurer must provide a
  written notice to the policy owner disclosing:
               (1)  the percentage decrease in the credited interest
  rate;
               (2)  the minimum credited interest rate stated in the
  policy;
               (3)  the effective date of the change;
               (4)  a comparison of the change to the current and
  minimum credited interest rate; and
               (5)  the options available to the policy owner under
  the policy.
         (b)  The notice under Subsection (a) must include the
  insurer's telephone number and the following statement placed
  prominently on the front of the notice:
         "YOU SHOULD KNOW: This decrease will change the value of your
  policy and change how long your policy will last. Ask your agent for
  an illustration that shows the effect of this change on your
  policy."
         (c)  If notice is required under Subsection (a), the notice
  must be given on the next anniversary of the date of issuance of the
  policy.
         (d)  If an insurer changes the credited interest rate paid on
  a policy's accumulation value more than once during a policy year,
  the insurer is required to provide the notice under Subsection (a)
  only if, after taking into account all changes made to the credited
  interest rate during the policy year, the changes result in an
  overall decrease in the credited interest rate.
         Sec. 1101.206.  ANNUAL ILLUSTRATION OF CHARGES. Regardless
  of whether any non-guaranteed charges are changed, an insurer that
  issues a policy subject to this subchapter must provide to the
  policy owner at least annually an illustration containing charges
  specified by the commissioner by rule.
         Sec. 1101.207.  RULES. (a)  The commissioner may adopt rules
  as necessary to implement this subchapter.
         (b)  The commissioner by rule may exempt certain types of
  life insurance policies from one or more of the requirements of this
  subchapter.
         SECTION 2.  Subchapter E, Chapter 1101, Insurance Code, as
  added by this Act, applies only to an increase in a cost of
  insurance charge or a decrease in a credited interest rate applied
  to an insurance policy on or after January 1, 2020.
         SECTION 3.  This Act takes effect September 1, 2019.
feedback