Texas 2009 - 81st Regular

Texas House Bill HB2570 Compare Versions

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1	1	H.B. No. 2570
2	2
3	3
4	4	AN ACT
5	5	relating to the regulation of stipulated premium insurance
6	6	companies.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Subsections (a) and (c), Section 884.054,
9	9	Insurance Code, are amended to read as follows:
10	10	(a) A proposed stipulated premium company's capital stock
11	11	must be in an amount of at least $200,000 [$15,000].
12	12	(c) To be incorporated, a stipulated premium company must
13	13	possess at the time of incorporation, in addition to its capital,
14	14	surplus in an amount of at least $75,000 [$7,500]. The amount of
15	15	the surplus is not required to be stated in the company's articles
16	16	of incorporation.
17	17	SECTION 2. Subsection (b), Section 884.202, Insurance Code,
18	18	is amended to read as follows:
19	19	(b) Capital stock may be decreased to an amount that is less
20	20	than $200,000 [$100,000] only to avoid insolvency as provided by
21	21	Section 884.205 [and may never be decreased to an amount that is
22	22	less than the minimum amount of paid-up stock required by Section
23	23	884.054].
24	24	SECTION 3. Subsection (a), Section 884.205, Insurance Code,
25	25	is amended to read as follows:
26	26	(a) If, when computing the liabilities of a stipulated
27	27	premium company under this chapter, one-third or more of the
28	28	company's capital stock becomes impaired, the company shall correct
29	29	the impairment not later than the 60th day after the date the
30	30	company becomes subject to this subsection by:
31	31	(1) reducing the company's capital stock [subject to
32	32	the limitation provided by Section 884.202(b)];
33	33	(2) adjusting the premium rate if permitted by policy
34	34	contract; or
35	35	(3) both reducing capital stock and adjusting the
36	36	premium rate.
37	37	SECTION 4. Subsection (b), Section 884.303, Insurance Code,
38	38	is amended to read as follows:
39	39	(b) A stipulated premium company may not insure one life
40	40	under this section for more than $25,000 [$15,000], except as
41	41	provided by Section 884.304 or Subchapter I.
42	42	SECTION 5. Section 884.304, Insurance Code, is amended to
43	43	read as follows:
44	44	Sec. 884.304. LIFE INSURANCE OF MORE THAN $25,000
45	45	[$15,000]. (a) Except as provided by this section, a stipulated
46	46	premium company may not assume liability on a life insurance risk on
47	47	one life in an amount that exceeds $25,000 [$15,000].
48	48	(b) If a stipulated premium company assumes a life insurance
49	49	risk under a life insurance policy, the initial death benefit of
50	50	$25,000 [$15,000] or less may increase to an amount greater than
51	51	$25,000 [$15,000] subject to this section.
52	52	(c) For each policy year of a policy for which, after
53	53	issuance, the death benefit exceeds $25,000 [$15,000], the amount
54	54	of the increase of the death benefit at the end of that policy year
55	55	from the end of the preceding policy year may not exceed the greater
56	56	of:
57	57	(1) the amount computed using the maximum rate of
58	58	increase provided by the policy, which rate may not exceed five
59	59	percent a year, compounded annually; or
60	60	(2) the amount computed using the consumer price index
61	61	for all urban consumers for all items and for all regions of the
62	62	United States combined, as determined by the United States
63	63	Department of Labor, Bureau of Labor Statistics, on September 30 of
64	64	the year preceding the year in which the policy year ends,
65	65	compounded annually.
66	66	SECTION 6. Subsection (a), Section 884.404, Insurance Code,
67	67	is amended to read as follows:
68	68	(a) A stipulated premium company that issues any insurance
69	69	coverage under this subchapter shall maintain at all times the
70	70	capital and unencumbered surplus required under Section 884.054
71	71	[when the stipulated premium company began writing the coverage].
72	72	SECTION 7. Section 4054.051, Insurance Code, is amended to
73	73	read as follows:
74	74	Sec. 4054.051. LICENSE REQUIRED. Except as provided by
75	75	Subchapter G, a person is required to hold a general life, accident,
76	76	and health license if the person acts as:
77	77	(1) an agent who represents a health maintenance
78	78	organization;
79	79	(2) an industrial life insurance agent for an insurer
80	80	that writes only weekly premium life insurance on a debit basis
81	81	under Chapter 1151;
82	82	(3) an agent who writes life, accident, and health
83	83	insurance for a life insurance company;
84	84	(4) an agent who writes only accident and health
85	85	insurance;
86	86	(5) an agent who writes fixed or variable annuity
87	87	contracts or variable life contracts;
88	88	(6) an agent who writes for a stipulated premium
89	89	company:
90	90	(A) only life insurance in excess of $25,000
91	91	[$15,000] on any one life;
92	92	(B) only accident and health insurance; or
93	93	(C) both kinds of insurance described by
94	94	Paragraphs (A) and (B);
95	95	(7) an agent who writes life, accident, and health
96	96	insurance for any type of authorized life insurance company that is
97	97	domiciled in this state, including a legal reserve life insurance
98	98	company, and who represents the company:
99	99	(A) in a foreign country or territory; and
100	100	(B) on a United States military installation or
101	101	with United States military personnel;
102	102	(8) an agent who writes life, accident, and health
103	103	insurance for a fraternal benefit society except as provided by
104	104	Section 885.352; or
105	105	(9) an agent who writes any other kind of insurance as
106	106	required by the commissioner for the protection of the insurance
107	107	consumers of this state.
108	108	SECTION 8. The heading to Subchapter E, Chapter 4054,
109	109	Insurance Code, is amended to read as follows:
110	110	SUBCHAPTER E. LIFE INSURANCE NOT
111	111	EXCEEDING $25,000 [$15,000]
112	112	SECTION 9. Subsection (a), Section 4054.201, Insurance
113	113	Code, is amended to read as follows:
114	114	(a) The department shall issue a license to an individual
115	115	applicant to act as an agent who writes only life insurance policies
116	116	in an amount that does not exceed $25,000 [$15,000] on any one life
117	117	on receipt of certification from a stipulated premium company, a
118	118	statewide mutual assessment company, a local mutual aid
119	119	association, or a local mutual burial association, that the
120	120	applicant has:
121	121	(1) completed a course of study and instruction in
122	122	compliance with this subchapter; and
123	123	(2) passed without aid a written examination
124	124	administered by the insurer.
125	125	SECTION 10. Section 4054.206, Insurance Code, is amended to
126	126	read as follows:
127	127	Sec. 4054.206. LIMIT ON AGENT'S AUTHORITY. An insurance
128	128	agent licensed under this subchapter may not write any coverage or
129	129	combination of coverages with an initial guaranteed death benefit
130	130	that exceeds $25,000 [$15,000] on any life.
131	131	SECTION 11. Subsections (a) and (d), Section 4054.301,
132	132	Insurance Code, are amended to read as follows:
133	133	(a) Except as provided by Subsection (b), a person is
134	134	required to hold a life agent license if the person does not hold a
135	135	general life, accident, and health license under Subchapter B and
136	136	the person acts as:
137	137	(1) an agent who writes insurance coverage on human
138	138	lives, including endowment benefits and annuities, benefits in the
139	139	event of death or dismemberment by accident, and benefits for
140	140	disability income;
141	141	(2) an industrial life insurance agent for an insurer
142	142	that writes only weekly premium life insurance on a debit basis
143	143	under Chapter 1151;
144	144	(3) an agent who writes fixed or variable annuity
145	145	contracts or variable life contracts;
146	146	(4) an agent who writes for a stipulated premium
147	147	company only life insurance in excess of $25,000 [$15,000] on any
148	148	one life; or
149	149	(5) an agent who writes any other kind of insurance as
150	150	required by the commissioner for the protection of the insurance
151	151	consumers of this state.
152	152	(d) A person who holds a license to write life insurance not
153	153	exceeding $25,000 [$15,000] under Subchapter E and who engages in
154	154	the business of insurance only within the scope of that license is
155	155	not required to hold a life agent license. A person who holds a life
156	156	agent license may write the insurance described by that subchapter.
157	157	SECTION 12. A stipulated premium company shall increase its
158	158	capital stock and surplus as required under Chapter 884, Insurance
159	159	Code, as amended by this Act, not later than a date prescribed by
160	160	rule by the commissioner of insurance in connection with a
161	161	reasonable schedule of intermediate increases adopted by the
162	162	commissioner to provide for a 10-year phase-in of the changes in law
163	163	made by this Act.
164	164	SECTION 13. This Act applies only to an insurance policy
165	165	delivered, issued for delivery, or renewed on or after January 1,
166	166	2010. A policy delivered, issued for delivery, or renewed before
167	167	January 1, 2010, is governed by the law as it existed immediately
168	168	before the effective date of this Act, and that law is continued in
169	169	effect for that purpose.
170	170	SECTION 14. This Act takes effect September 1, 2009.
171	171	______________________________ ______________________________
172	172	President of the Senate Speaker of the House
173	173	I certify that H.B. No. 2570 was passed by the House on April
174	174	15, 2009, by the following vote: Yeas 147, Nays 0, 1 present, not
175	175	voting; and that the House concurred in Senate amendments to H.B.
176	176	No. 2570 on May 29, 2009, by the following vote: Yeas 142, Nays 0,
177	177	1 present, not voting.
178	178	______________________________
179	179	Chief Clerk of the House
180	180	I certify that H.B. No. 2570 was passed by the Senate, with
181	181	amendments, on May 23, 2009, by the following vote: Yeas 31, Nays
182	182	0.
183	183	______________________________
184	184	Secretary of the Senate
185	185	APPROVED: __________________
186	186	Date
187	187	__________________
188	188	Governor