81R6082 PMO-F
By: Flynn H.B. No. 2663
A BILL TO BE ENTITLED
AN ACT
relating to certain life insurer conduct regarding life settlement
and viatical settlement contracts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 1111, Insurance Code, is
amended by adding Section 1111.007 to read as follows:
Sec. 1111.007. NOTICE REQUIRED BY INSURERS. (a) This
section applies only to an issuer of an individual or group life
insurance policy that insures a person who the issuer has actual
knowledge is:
(1) chronically or terminally ill; or
(2) at least 60 years of age.
(b) The insurer shall deliver a written notice to each owner
of an individual life insurance policy or a certificate holder
under a group life insurance policy that informs the owner or
certificate holder that a life settlement contract or viatical
settlement contract is available:
(1) when the owner or certificate holder:
(A) requests to surrender, wholly or partly, an
individual life insurance policy or a certificate under a group
life insurance policy;
(B) requests an accelerated death benefit under
an individual life insurance policy or a certificate under a group
life insurance policy; or
(C) requests to assign an individual life
insurance policy or a certificate under a group life insurance
policy to secure a loan;
(2) on a notice of lapse of an individual life
insurance policy or a certificate under a group life insurance
policy; or
(3) as the commissioner requires by rule.
SECTION 2. Subchapter A, Chapter 1111, Insurance Code, is
amended by adding Section 1111.008 to read as follows:
Sec. 1111.008. PROHIBITED ACTS. A life insurer may not:
(1) prohibit, restrict, limit, or impair a life,
accident, and health agent from lawfully negotiating or aiding,
assisting, or otherwise participating in a life settlement or
viatical settlement transaction under this subchapter;
(2) discriminate or permit discrimination between
individuals of the same class, the same policy amount, and equal
expectation of life in the rates charged for any life insurance
policy or annuity contract because an individual entered into a
life settlement contract or viatical settlement contract or is
insured under a policy;
(3) make any false or misleading statements about life
settlements, viatical settlements, or financing premiums due for a
policy to any policy owner or insured to prevent or discourage the
policy owner or insured from entering into a life settlement
contract or viatical settlement contract; or
(4) engage in any transaction, act, practice, or
course of business or dealing that restricts, limits, or impairs
the lawful transfer of ownership, change of beneficiary, or
assignment of a policy.
SECTION 3. (a) Except as provided by Subsection (b) of
this section, this Act takes effect September 1, 2009.
(b) Section 1111.007, Insurance Code, as added by this Act,
takes effect January 1, 2010.