Texas House Bill HB2739

Texas 2009 - 81st Regular

Caption

Relating to the regulation of certain life settlement contracts; providing penalties.

Impact

The legislation amends the Texas Insurance Code to strengthen the registration requirements for entities involved in life settlements, creating additional oversight and accountability. Organizations that wish to engage in life settlement contracts must ensure their compliance with new rules outlined in the statute, which aim to prevent practices that could exploit or harm consumers. This is particularly important as life settlements can involve significant financial stakes, especially for vulnerable populations like the elderly or those facing terminal illnesses.

Summary

House Bill 2739 pertains to the regulation of life settlement contracts, establishing stricter guidelines that providers, brokers, and other entities must adhere to when engaging in life settlements. The bill aims to enhance consumer protection for individuals transferring their life insurance policies, which may involve complex financial arrangements where they sell their death benefit for immediate cash. Key provisions include definitions of relevant terms such as 'provider', 'purchaser', and 'premium finance loan', ensuring clarity in transactions and roles involved in life settlement agreements.

Contention

There are notable debates surrounding the appropriateness and enforcement of these regulations. While proponents argue that the bill promotes transparency and protects consumers against fraud and unethical sales practices, opponents may express concerns regarding the compliance burden it places on smaller firms. Additionally, potential challenges could arise in balancing consumer privacy with the necessity of sharing personal health and financial information during the life settlement process. The bill’s detailed reporting requirements are also seen as an avenue for ensuring the integrity of the market, although it could lead to increased administrative costs for providers.