S.B. No. 840
AN ACT
relating to certain promotional practices not considered to be
prohibited discrimination, rebates, or inducements in insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (b), Section 541.058, Insurance Code,
is amended to read as follows:
(b) It is not a rebate or discrimination prohibited by
Section 541.056(a) or 541.057:
(1) for a life insurance or life annuity contract, to
pay a bonus to a policyholder or otherwise abate the policyholder's
premiums in whole or in part out of surplus accumulated from
nonparticipating insurance policies if the bonus or abatement:
(A) is fair and equitable to policyholders; and
(B) is in the best interests of the insurer and
its policyholders;
(2) for a life insurance policy issued on the
industrial debit plan, to make to a policyholder who has
continuously for a specified period made premium payments directly
to the insurer's office an allowance in an amount that fairly
represents the saving in collection expenses;
(3) for a group insurance policy, to readjust the rate
of premium based on the loss or expense experience under the policy
at the end of a policy year if the adjustment is retroactive for
only that policy year;
(4) for a life annuity contract, to waive surrender
charges under the contract when the contract holder exchanges that
contract for another annuity contract issued by the same insurer or
an affiliate of the same insurer that is part of the same holding
company group if:
(A) the waiver and the exchange are fully,
fairly, and accurately explained to the contract holder in a manner
that is not deceptive or misleading; and
(B) the contract holder is given credit for the
time that the previous contract was held when determining any
surrender charges under the new contract;
(5) in connection with an accident and health
insurance policy, to provide to policy or certificate holders, in
addition to benefits under the terms of the insurance contract,
health-related services or health-related information, or to
disclose the availability of those additional services and
information to prospective policy or certificate holders; [or]
(6) in connection with a health maintenance
organization evidence of coverage, to provide to enrollees, in
addition to benefits under the evidence of coverage, health-related
services or health-related information, or to disclose the
availability of those additional services and information to
prospective enrollees or contract holders; or
(7) in connection with an offer or sale of a life
insurance policy or contract, accident and health insurance policy
or contract, or annuity contract, to give, provide, or allow or
offer to give, provide, or allow an item that is a promotional
advertising item, educational item, or traditional courtesy
commonly extended to consumers and that is valued at $25 or less.
SECTION 2. Section 1806.053, Insurance Code, is amended to
read as follows:
Sec. 1806.053. DISCRIMINATIONS OR DISTINCTIONS. Except as
provided by this subchapter [Section 1806.056], with respect to
business written in this state:
(1) an insurer may not discriminate or make a
distinction, or permit discrimination or a distinction to be made,
among insureds having like hazards with respect to premiums charged
for, or dividends or other benefits payable under, an insurance
policy;
(2) an insurer or an insurer's agent may not make an
insurance contract or an agreement relating to that insurance,
other than as expressed in the policy; and
(3) an insurer or an insurer's agent or other
representative may not directly or indirectly pay, allow, or give,
or offer to pay, allow, or give, as an inducement to the insured, a
rebate payable on the policy or a special favor or advantage in the
dividends or other benefits to accrue, or anything of value, not
specified in the policy.
SECTION 3. Subchapter B, Chapter 1806, Insurance Code, is
amended by adding Section 1806.059 to read as follows:
Sec. 1806.059. CERTAIN PROMOTIONAL PRACTICES AUTHORIZED.
Section 1806.053 does not prohibit an insurer or an insurer's agent
or other representative from, in connection with an offer or sale of
an insurance policy subject to this subchapter, giving, providing,
or allowing or offering to give, provide, or allow an item that is a
promotional advertising item, educational item, or traditional
courtesy commonly extended to consumers and that is valued at $25 or
less.
SECTION 4. Subchapter C, Chapter 1806, Insurance Code, is
amended by adding Section 1806.1041 to read as follows:
Sec. 1806.1041. CERTAIN PROMOTIONAL PRACTICES AUTHORIZED.
Section 1806.104 does not prohibit an insurer, an insurer's
employee, or a broker or agent from, in connection with an offer or
sale of an insurance policy subject to this subchapter, giving,
providing, or allowing or offering to give, provide, or allow an
item that is a promotional advertising item, educational item, or
traditional courtesy commonly extended to consumers and that is
valued at $25 or less.
SECTION 5. Subchapter D, Chapter 1806, Insurance Code, is
amended by adding Section 1806.1541 to read as follows:
Sec. 1806.1541. CERTAIN PROMOTIONAL PRACTICES AUTHORIZED.
Section 1806.153 does not prohibit an insurer from, in connection
with an offer or sale of an insurance policy or contract subject to
this subchapter, giving, providing, or allowing or offering to
give, provide, or allow an item that is a promotional advertising
item, educational item, or traditional courtesy commonly extended
to consumers and that is valued at $25 or less.
SECTION 6. Section 4005.053, Insurance Code, is amended by
adding Subsection (d) to read as follows:
(d) Subsection (c) does not prohibit an agent from, in
connection with an offer or sale of an insurance policy or contract,
giving, providing, or allowing or offering to give, provide, or
allow an item that is a promotional advertising item, educational
item, or traditional courtesy commonly extended to consumers and
that is valued at $25 or less.
SECTION 7. The change in law made by this Act applies only
to conduct that occurs on or after the effective date of this Act.
Conduct that occurs before the effective date of this Act is
governed by the law applicable to the conduct immediately before
the effective date of this Act, and that law is continued in effect
for that purpose.
SECTION 8. This Act takes effect September 1, 2013.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 840 passed the Senate on
March 21, 2013, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 840 passed the House on
April 25, 2013, by the following vote: Yeas 135, Nays 0, one
present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor