| 1 | 1 | | 81R6082 PMO-F |
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| 2 | 2 | | By: Flynn H.B. No. 2663 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to certain life insurer conduct regarding life settlement |
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| 8 | 8 | | and viatical settlement contracts. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subchapter A, Chapter 1111, Insurance Code, is |
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| 11 | 11 | | amended by adding Section 1111.007 to read as follows: |
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| 12 | 12 | | Sec. 1111.007. NOTICE REQUIRED BY INSURERS. (a) This |
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| 13 | 13 | | section applies only to an issuer of an individual or group life |
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| 14 | 14 | | insurance policy that insures a person who the issuer has actual |
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| 15 | 15 | | knowledge is: |
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| 16 | 16 | | (1) chronically or terminally ill; or |
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| 17 | 17 | | (2) at least 60 years of age. |
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| 18 | 18 | | (b) The insurer shall deliver a written notice to each owner |
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| 19 | 19 | | of an individual life insurance policy or a certificate holder |
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| 20 | 20 | | under a group life insurance policy that informs the owner or |
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| 21 | 21 | | certificate holder that a life settlement contract or viatical |
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| 22 | 22 | | settlement contract is available: |
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| 23 | 23 | | (1) when the owner or certificate holder: |
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| 24 | 24 | | (A) requests to surrender, wholly or partly, an |
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| 25 | 25 | | individual life insurance policy or a certificate under a group |
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| 26 | 26 | | life insurance policy; |
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| 27 | 27 | | (B) requests an accelerated death benefit under |
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| 28 | 28 | | an individual life insurance policy or a certificate under a group |
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| 29 | 29 | | life insurance policy; or |
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| 30 | 30 | | (C) requests to assign an individual life |
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| 31 | 31 | | insurance policy or a certificate under a group life insurance |
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| 32 | 32 | | policy to secure a loan; |
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| 33 | 33 | | (2) on a notice of lapse of an individual life |
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| 34 | 34 | | insurance policy or a certificate under a group life insurance |
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| 35 | 35 | | policy; or |
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| 36 | 36 | | (3) as the commissioner requires by rule. |
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| 37 | 37 | | SECTION 2. Subchapter A, Chapter 1111, Insurance Code, is |
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| 38 | 38 | | amended by adding Section 1111.008 to read as follows: |
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| 39 | 39 | | Sec. 1111.008. PROHIBITED ACTS. A life insurer may not: |
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| 40 | 40 | | (1) prohibit, restrict, limit, or impair a life, |
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| 41 | 41 | | accident, and health agent from lawfully negotiating or aiding, |
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| 42 | 42 | | assisting, or otherwise participating in a life settlement or |
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| 43 | 43 | | viatical settlement transaction under this subchapter; |
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| 44 | 44 | | (2) discriminate or permit discrimination between |
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| 45 | 45 | | individuals of the same class, the same policy amount, and equal |
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| 46 | 46 | | expectation of life in the rates charged for any life insurance |
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| 47 | 47 | | policy or annuity contract because an individual entered into a |
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| 48 | 48 | | life settlement contract or viatical settlement contract or is |
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| 49 | 49 | | insured under a policy; |
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| 50 | 50 | | (3) make any false or misleading statements about life |
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| 51 | 51 | | settlements, viatical settlements, or financing premiums due for a |
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| 52 | 52 | | policy to any policy owner or insured to prevent or discourage the |
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| 53 | 53 | | policy owner or insured from entering into a life settlement |
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| 54 | 54 | | contract or viatical settlement contract; or |
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| 55 | 55 | | (4) engage in any transaction, act, practice, or |
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| 56 | 56 | | course of business or dealing that restricts, limits, or impairs |
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| 57 | 57 | | the lawful transfer of ownership, change of beneficiary, or |
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| 58 | 58 | | assignment of a policy. |
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| 59 | 59 | | SECTION 3. (a) Except as provided by Subsection (b) of |
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| 60 | 60 | | this section, this Act takes effect September 1, 2009. |
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| 61 | 61 | | (b) Section 1111.007, Insurance Code, as added by this Act, |
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| 62 | 62 | | takes effect January 1, 2010. |
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