82R9140 PMO-F
By: Eiland H.B. No. 2152
A BILL TO BE ENTITLED
AN ACT
relating to the method of payment of insurance benefits.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 1102, Insurance Code, is amended to read
as follows:
CHAPTER 1102. PAYMENT OF INSURANCE BENEFITS [IN CURRENCY]
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1102.001. DEFINITIONS. In this chapter:
(1) "Insurance policy" means a policy, certificate, or
contract of:
(A) life, term, or endowment insurance,
including an annuity or pure endowment contract;
(B) group life or term insurance, including a
group annuity contract;
(C) industrial life insurance;
(D) accident or health insurance;
(E) group accident or health insurance;
(F) hospitalization insurance;
(G) group hospitalization insurance;
(H) medical or surgical insurance;
(I) group medical or surgical insurance; or
(J) fraternal benefit insurance.
(2) "Insurer" means any insurer, including a:
(A) life, accident, health, or casualty
insurance company;
(B) mutual life insurance company;
(C) mutual insurance company other than a life
insurance company;
(D) mutual or natural premium life insurance
company;
(E) general casualty company;
(F) Lloyd's plan or a reciprocal or
interinsurance exchange;
(G) fraternal benefit society; or
(H) group hospital service corporation.
(3) "Life insurance policy" means a policy,
certificate, or contract of:
(A) life, term, or endowment insurance,
including an annuity or pure endowment contract;
(B) group life or term insurance, including a
group annuity contract;
(C) industrial life insurance; or
(D) fraternal benefit insurance, other than
insurance for:
(i) benefits for hospital, medical, or
nursing expenses resulting from sickness, bodily infirmity, or
accident; or
(ii) other accident or health insurance.
(4) "Retained asset account" means a checking or draft
account into which an insurer, on behalf of a beneficiary, deposits
proceeds payable under a life insurance policy for withdrawal by
the beneficiary at the beneficiary's discretion.
Sec. 1102.002. RULES. The commissioner may adopt
reasonable rules to accomplish the purposes of this chapter,
including rules requiring:
(1) appropriate reserves for insurance policies
subject to this chapter; or
(2) prudent investment of premiums collected from
insurance policies subject to this chapter regardless of any other
provision of this code related to the investment of money by an
insurance company.
SUBCHAPTER B. PAYMENT OF BENEFITS IN CURRENCY
Sec. 1102.051 [1102.002]. BENEFITS PAYABLE IN CURRENCY.
Each benefit payable under an insurance policy delivered, issued,
or used in this state by an insurer shall be payable in currency.
Sec. 1102.052 [1102.003]. STATEMENT REGARDING VALUE OF
FOREIGN CURRENCY. (a) An insurance policy described by Section
1102.051 [1102.002] providing that benefits are payable in foreign
currency must include a conspicuous statement that the value of the
currency denominated in the policy can fluctuate as compared to the
value of United States currency.
(b) The statement must be:
(1) included as part of the policy; or
(2) attached to the insurance policy at the time it is
issued.
Sec. 1102.053 [1102.004]. PREVIOUSLY APPROVED INSURANCE
POLICY FORM PAYABLE IN FOREIGN CURRENCY. (a) The commissioner may
disapprove or withdraw approval of a previously approved insurance
policy form that provides benefits payable in foreign currency if
the commissioner determines that the foreign currency has been less
stable than United States currency in the previous 20-year period.
(b) This section does not require the resubmission for
approval of any previously approved insurance policy form unless:
(1) withdrawal of approval is authorized under this
section or Chapter 1701; or
(2) after notice and hearing, the commissioner
determines that approval was obtained by improper means, including
by misrepresentation, fraud, or a misleading statement or document.
[Sec. 1102.005. RULES. The commissioner may adopt
reasonable rules to accomplish the purposes of this chapter,
including rules requiring:
[(1) appropriate reserves for insurance policies
subject to this chapter; or
[(2) prudent investment of premiums collected from
insurance policies subject to this chapter regardless of any other
provision of this code related to the investment of money by an
insurance company.]
SUBCHAPTER C. RETAINED ASSET ACCOUNTS
Sec. 1102.101. RETAINED ASSET ACCOUNT ELECTION. (a) An
insurer may not transfer proceeds payable under a life insurance
policy to a retained asset account unless the insurer obtains the
written consent of the beneficiary or, in the case of a group
contract, the policy owner before transferring the proceeds to the
account.
(b) An insurer may not use a retained asset account as the
insurer's default method of payment of proceeds under a life
insurance policy.
Sec. 1102.102. DISCLOSURE REQUIREMENTS. (a) The claim
form for payment of proceeds under a life insurance policy must
include a statement, written in plain language and in boldfaced
type, disclosing benefit payment options available under the
policy, including payment through the use of a retained asset
account or by check directly to the claimant.
(b) An insurer may not transfer proceeds payable under a
life insurance policy to a retained asset account unless the
insurer, before transferring the proceeds and in a written document
signed by the claimant, discloses to the claimant, or advises the
claimant concerning, the following information:
(1) a recommendation to consult a tax, investment, or
other financial advisor about tax liability and investment options;
(2) the initial interest rate for the retained asset
account, when and how the interest rate may change, and any
dividends and other gains that may be paid or distributed to the
account holder;
(3) the name and address of the custodian of the
retained asset account;
(4) any coverage of the retained asset account
guaranteed by the Federal Deposit Insurance Corporation and the
amount of the coverage;
(5) any limitations on withdrawal of funds from the
retained asset account, including any minimum or maximum benefit
payment amounts;
(6) the anticipated duration of any delays that the
retained asset account holder might encounter in completing an
authorized transaction;
(7) any fees for services provided, including a list
of the fees and the method of the fee calculation;
(8) the nature and frequency with which statements
concerning the retained asset account are issued, which must be not
less than once annually;
(9) that some or all of the benefit may be paid through
check, draft, or other instrument;
(10) that the entire proceeds are available to the
retained asset account holder by the use of a single check, draft,
or other instrument;
(11) whether the insurer or a related party may earn
income from the retained asset account, in addition to any fees
charged on the account, from the total gains received on the
investment of the balance of funds in the account;
(12) the telephone number, address, and other contact
information, including website address, to obtain additional
information regarding the retained asset account;
(13) a description of the insurer's policy regarding
retained asset accounts that may become inactive; and
(14) any other information prescribed by the
commissioner by rule.
Sec. 1102.103. INACTIVE ACCOUNTS. Not later than the 30th
day after the date a retained asset account becomes inactive, an
insurer shall return to the beneficiary the remaining balance of
the account. For purposes of this section, a retained asset account
is inactive if:
(1) for a period of three years, no amount of money is
withdrawn from the account; and
(2) no affirmative directive on the disposition of the
account has been provided to the insurer by the beneficiary.
SECTION 2. This Act applies only to a claim made under a
life insurance policy on or after September 1, 2011. A claim made
before September 1, 2011, is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2011.