Texas 2019 - 86th Regular

Texas House Bill HB207 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 207
	1	+	By: Craddick (Senate Sponsor - Hancock) H.B. No. 207
	2	+	(In the Senate - Received from the House April 23, 2019;
	3	+	April 24, 2019, read first time and referred to Committee on
	4	+	Business & Commerce; May 14, 2019, reported adversely, with
	5	+	favorable Committee Substitute by the following vote: Yeas 8,
	6	+	Nays 0; May 14, 2019, sent to printer.)
	7	+	Click here to see the committee vote
	8	+	COMMITTEE SUBSTITUTE FOR H.B. No. 207 By: Hancock
2	9
3	10
	11	+	A BILL TO BE ENTITLED
4	12		AN ACT
5	13		relating to certain disclosures and notices required for certain
6	14		life insurance policies.
7	15		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	16		SECTION 1. Chapter 1101, Insurance Code, is amended by
9	17		adding Subchapter E to read as follows:
10	18		SUBCHAPTER E. DISCLOSURES AND NOTICES RELATING TO LIFE INSURANCE
11	19		POLICIES WITH NON-GUARANTEED CHARGES
12	20		Sec. 1101.201. PURPOSE. This subchapter is intended to
13	21		provide standards for disclosures relating to changes in certain
14	22		non-guaranteed charges of life insurance policies subject to this
15	23		subchapter.
16	24		Sec. 1101.202. DEFINITIONS. In this subchapter:
17	25		(1) "Adverse change" means a change by an insurer in
18	26		the insurer's current scale of charges applied to a policy that
19	27		increases a premium or charge to a policy owner.
20	28		(2) "Current scale of charges" means the scale or
21	29		schedule of non-guaranteed charges in effect for a policy during
22	30		the period of time immediately before an adverse change to the
23	31		policy.
24	32		(3) "Non-guaranteed charges" means the scale or
25	33		schedule of charges in a policy provision at the time the policy was
26	34		issued that may be changed at the insurer's discretion without the
27	35		consent or request of the policy owner. The term does not include a
28	36		policy loan interest rate charged on a policy loan.
29	37		Sec. 1101.203. APPLICABILITY. (a) This subchapter applies
30	38		to a life insurance policy issued by an insurer, as defined by
31	39		Section 1102.001, that contains non-guaranteed charges that may
32	40		change at the discretion of the insurer.
33	41		(b) This subchapter does not apply to:
34	42		(1) group life insurance without separately
35	43		identifiable accounts for insureds;
36	44		(2) a life insurance policy in which the insurer
37	45		assumes all risk and contractually guarantees a death benefit in
38	46		exchange for a guaranteed premium set at the time of the policy's
39	47		issuance;
40	48		(3) an individual or group annuity contract;
41	49		(4) credit life insurance;
42	50		(5) a life insurance policy with no illustrated death
43	51		benefits on any individual exceeding $10,000;
44	52		(6) a bank-owned or corporate-owned life insurance
45	53		policy; or
46	54		(7) a life insurance policy that does not provide for
47	55		cash values or nonforfeiture values.
48	56		Sec. 1101.204. DISCLOSURE OF NON-GUARANTEED CHARGE
49	57		INCREASE AFTER ISSUANCE OF POLICY. (a) If an insurer increases a
50	58		non-guaranteed charge applied to a policy, the insurer must provide
51	59		a written notice to the policy owner:
52	60		(1) disclosing:
53	61		(A) each non-guaranteed charge that has changed;
54	62		(B) the new scale of non-guaranteed charges after
55	63		the change;
56	64		(C) the current scale of charges; and
57	65		(D) the guaranteed maximum scale of charges; and
58	66		(2) including a prominent display of any adverse
59	67		change in the current scale of charges identifying:
60	68		(A) the nature of the change;
61	69		(B) that the change is adverse or the conditions
62	70		under which the change would be adverse; and
63	71		(C) the new age and year at which the policy will
64	72		lapse if there are no changes to payments or coverage.
65	73		(b) The notice under Subsection (a) must include the
66	74		insurer's telephone number and the following statement placed
67	75		prominently on the front of the notice:
68	76		"YOU SHOULD KNOW: This increase may change the value of your
69	77		policy and may change how long your policy will last unless you
70	78		increase your premium payments or reduce your coverage, if
71	79		permitted under your policy. Ask your insurance company for an
72	80		illustration, at no cost, that shows the effect of this change on
73	81		your policy and discuss with your agent or financial advisor other
74	82		options that are available to you."
75	83		(c) The notice required by Subsection (a) must be given not
76	84		later than the 90th day before the date the change is applied.
77	85		(d) The notice required by Subsection (a) does not
78	86		constitute an illustration, as defined by rules adopted by the
79	87		department relating to life insurance illustrations.
80	88		Sec. 1101.205. DISCLOSURE OF CREDITED INTEREST RATE
81	89		DECREASE AFTER ISSUANCE OF POLICY. (a) If an insurer decreases the
82	90		credited interest rate paid on a policy's accumulation value, the
83	91		insurer must provide annually a written notice to the policy owner:
84	92		(1) disclosing:
85	93		(A) the new current credited interest rate;
86	94		(B) the previous credited interest rate;
87	95		(C) the minimum credited interest rate stated in
88	96		the policy; and
89	97		(D) the effective date of the change; and
90	98		(2) including a prominent display of the new age and
91	99		year at which the policy will lapse based on all changes to
92	100		non-guaranteed charges and the credited interest rate if there are
93	101		no changes to payments or coverage.
94	102		(b) The notice under Subsection (a) must include the
95	103		insurer's telephone number and the following statement placed
96	104		prominently on the front of the notice:
97	105		"YOU SHOULD KNOW: This decrease may change the value of your
98	106		policy and may change how long your policy will last unless you
99	107		increase your premium payments or reduce your coverage. Ask your
100	108		insurance company for an in-force illustration that shows the
101	109		effect of this change on your policy and discuss with your agent or
102	110		financial advisor other options that are available to you."
103	111		(c) Notwithstanding any other provision of this section,
104	112		this section does not apply to or require disclosures for a variable
105	113		universal or indexed life insurance policy.
106	114		Sec. 1101.206. ANNUAL ILLUSTRATION. Regardless of whether
107	115		any non-guaranteed charges are changed, an insurer that issues a
108	116		policy subject to this subchapter must offer to provide to the
109	117		policy owner at least annually an in-force illustration. If the
110	118		insurer has changed any non-guaranteed charges or the credited
111	119		interest rate, the insurer must offer the illustration at no
112	120		charge.
113	121		Sec. 1101.207. RULES. (a) The commissioner may adopt rules
114	122		as necessary to implement this subchapter.
115	123		(b) The commissioner by rule may exempt certain types of
116	124		life insurance policies from one or more of the requirements of this
117	125		subchapter.
118	126		(c) Section 2001.0045, Government Code, does not apply to
119	127		rules adopted under this section.
120	128		SECTION 2. Subchapter E, Chapter 1101, Insurance Code, as
121	129		added by this Act, applies only to an increase in a non-guaranteed
122	130		charge applied to an insurance policy on or after January 1, 2020.
123	131		Subchapter E, Chapter 1101, Insurance Code, as added by this Act,
124	132		applies only to a decrease in a credited interest rate applied to an
125	133		insurance policy on or after January 1, 2021.
126	134		SECTION 3. This Act takes effect September 1, 2019.
127		-	______________________________ ______________________________
128		-	President of the Senate Speaker of the House
129		-	I certify that H.B. No. 207 was passed by the House on April
130		-	18, 2019, by the following vote: Yeas 146, Nays 1, 2 present, not
131		-	voting; and that the House concurred in Senate amendments to H.B.
132		-	No. 207 on May 23, 2019, by the following vote: Yeas 140, Nays 0, 1
133		-	present, not voting.
134		-	______________________________
135		-	Chief Clerk of the House
136		-	I certify that H.B. No. 207 was passed by the Senate, with
137		-	amendments, on May 21, 2019, by the following vote: Yeas 31, Nays
138		-	0.
139		-	______________________________
140		-	Secretary of the Senate
141		-	APPROVED: __________________
142		-	Date
143		-	__________________
144		-	Governor
	135	+	* * * * *