Texas Senate Bill SB2071

Texas 2021 - 87th Regular

Caption

Relating to consumer protections for accident and health insurance that excludes coverage for preexisting conditions.

Impact

The implementation of SB2071 is designed to protect consumers from unfair practices by insurance companies regarding coverage exclusions related to preexisting conditions. By prohibiting insurers from terminating policies before their expiration without valid reasons—such as nonpayment or fraud—the bill aims to enhance policyholder security and ensure they remain covered under their existing terms. Insurers must also provide written notice detailing the reasons for termination and inform policyholders of their rights to contest such decisions.

Summary

SB2071 is a legislative bill aimed at enhancing consumer protections within the scope of accident and health insurance, particularly regarding the exclusion of coverage for preexisting conditions. It amends the Texas Insurance Code by introducing Chapter 1223, which specifies the conditions under which health insurance policies may exclude coverage for preexisting conditions. This chapter mandates that insurers cannot enforce such exclusions unless the application or enrollment form explicitly requires full disclosure of any prior medical conditions, thereby promoting transparency in insurance practices.

Contention

While the bill seeks to clarify coverage requirements and bolster consumer rights, there may be contention regarding how these protections impact the insurance market as a whole. Critics may argue that stricter regulations could lead to increased premiums or reduced coverage options if insurers face higher risks without the ability to exclude preexisting conditions. Thus, the balance between consumer protections and market sustainability is likely to be a focal point of debate as the bill progresses through the legislative process.