Texas Senate Bill SB1109

Texas 2009 - 81st Regular

• Out of Senate Committee: 4/8/09
• Voted on by Senate: 4/23/09

Caption

Relating to the regulation of stipulated premium insurance companies.

Impact

If enacted, SB1109 will have a significant impact on state laws governing stipulated premium insurance companies. With the new limit set at $25,000 for life insurance on a single life, companies would need to revise their policies and offerings to comply with the amended regulations. This change aims to provide consumers with better coverage options while still maintaining a regulated framework for insurance operations. By enabling companies to offer policies with higher limits, the bill could also potentially lead to increased competition within the insurance market, benefiting consumers seeking life insurance products.

Summary

SB1109 seeks to amend existing provisions in Texas Insurance Code regarding stipulated premium insurance companies, specifically addressing the coverage limits for life insurance policies. The bill proposes to increase the maximum death benefit that such companies can issue from $15,000 to $25,000. This change reflects an attempt to modernize insurance products and enhance consumer protection by allowing for more comprehensive life insurance options for residents. The bill's language includes provisions for how the death benefit may increase over time under certain conditions, reflecting inflationary adjustments based on a specified rate or consumer price index.

Contention

During discussions surrounding SB1109, notable points of contention arose regarding the potential impact on consumer choice and the sustainability of stipulated premium insurance companies. Some advocates of the bill argue that raising the coverage limit is essential for meeting the needs of consumers who require more substantial death benefits. However, critics have expressed concerns that this increase might lead to higher premiums or undermine the financial stability of smaller insurance companies that rely on these stipulated premium products. The debates also highlighted the importance of balancing consumer protection with the financial viability of insurance providers.