Bill Text: TX SB1499 | 2017-2018 | 85th Legislature | Comm Sub


Bill Title: Relating to the regulation of for-profit legal service contract companies.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2017-04-18 - Committee report printed and distributed [SB1499 Detail]

Download: Texas-2017-SB1499-Comm_Sub.html
 
 
  By: Zaffirini  S.B. No. 1499
         (In the Senate - Filed March 8, 2017; March 20, 2017, read
  first time and referred to Committee on Business & Commerce;
  April 18, 2017, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 9, Nays 0; April 18, 2017,
  sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1499 By:  Zaffirini
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the regulation of for-profit legal service contract
  companies.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 953.001(1), Occupations Code, is amended
  to read as follows:
               (1)  "Administrator" means the person responsible for
  the administration of a legal service contract. [The term includes
  a person responsible for any filing required by this chapter.]
         SECTION 2.  Section 953.156, Occupations Code, is amended to
  read as follows:
         Sec. 953.156.  FORM OF LEGAL SERVICE CONTRACT AND REQUIRED
  DISCLOSURES. [(a)     A legal service contract must be filed with the
  executive director before it is marketed, sold, offered for sale,
  administered, or issued in this state. Any subsequent endorsement
  or attachment to the contract must also be filed with the executive
  director before the endorsement or attachment is delivered to legal
  service contract holders.
         [(b)]  A legal service contract marketed, sold, offered for
  sale, administered, or issued in this state must:
               (1)  be written, printed, or typed in clear,
  understandable language that is easy to read;
               (2)  include the name and full address of the company;
               (3)  include the purchase price of the contract and the
  terms under which the contract is sold;
               (4)  include the terms and restrictions governing
  cancellation of the contract by the company or the legal service
  contract holder;
               (5)  identify:
                     (A)  any administrator, if the administrator is
  not the company;
                     (B)  the sales representative; and
                     (C)  the name of the legal service contract
  holder;
               (6)  include the amount of any deductible or copayment;
               (7)  specify the legal services and other benefits to
  be provided under the contract, and any limitation, exception, or
  exclusion;
               (8)  specify the legal services, if any, for which the
  company will provide reimbursement and the amount of that
  reimbursement;
               (9)  specify any restriction governing the
  transferability of the contract or the assignment of benefits;
               (10)  include the duties of the legal service contract
  holder;
               (11)  [include the contact information for the
  department, including the department's toll-free number and
  electronic mail address, as well as a statement that the department
  regulates the company and the company's sales representatives;
               [(12)]  explain the method to be used in resolving the
  legal service contract holder's complaints and grievances;
               (12) [(13)]  explain how legal services may be obtained
  under the legal service contract;
               (13) [(14)]  include a provision stating that no change
  in the contract is valid until the change has been approved by an
  executive officer of the company and unless the approval is
  endorsed or attached to the contract;
               (14) [(15)]  include any eligibility and effective
  date requirements, including a definition of eligible dependents
  and the effective date of their coverage;
               (15) [(16)]  include the conditions under which
  coverage will terminate;
               (16) [(17)]  explain any subrogation arrangements;
               (17) [(18)]  contain a payment provision that provides
  for a grace period of at least 31 days; and
               (18) [(19)]  include conditions under which contract
  rates may be modified[; and
               [(20)     include any other items required by the
  executive director as determined by rule].
         SECTION 3.  Section 953.162, Occupations Code, is amended to
  read as follows:
         Sec. 953.162.  APPOINTMENT AND RESPONSIBILITIES OF
  ADMINISTRATOR. [(a)]  A company may appoint an administrator or
  designate a person to be responsible for:
               (1)  all or any part of the administration or sale of
  legal service contracts; and
               (2)  compliance with this chapter.
         [(b)     The executive director may adopt rules regarding the
  registration of an administrator with the department.]
         SECTION 4.  Chapter 953, Occupations Code, is amended by
  adding Subchapter F to read as follows:
  SUBCHAPTER F. ENFORCEMENT
         Sec. 953.251.  DECEPTIVE TRADE PRACTICE. A violation of
  this chapter is a deceptive trade practice actionable under
  Subchapter E, Chapter 17, Business & Commerce Code.
         SECTION 5.  The following provisions of the Occupations Code
  are repealed:
               (1)  Sections 953.001(4), (5), and (6);
               (2)  Sections 953.004, 953.005, and 953.155; and
               (3)  Subchapters B, C, and E, Chapter 953.
         SECTION 6.  (a)  On the effective date of this Act, a
  registration issued under former Subchapter B, Chapter 953,
  Occupations Code, expires.
         (b)  On the effective date of this Act, a pending proceeding
  under Chapter 953, Occupations Code, including a complaint
  investigation, disciplinary action, or administrative penalty
  proceeding, relating to a registration issued under former
  Subchapter B, Chapter 953, Occupations Code, or relating to another
  former provision of Chapter 953, Occupations Code, that is repealed
  by this Act, is dismissed.
         SECTION 7.  This Act takes effect only if a specific
  appropriation for the implementation of the Act is provided in a
  general appropriations act of the 85th Legislature.
         SECTION 8.  This Act takes effect September 1, 2019.
 
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