Texas Senate Bill SB773

Texas 2021 - 87th Regular

Caption

Relating to notice of available alternatives to the lapse or surrender of a life insurance policy.

Impact

The implementation of SB773 is expected to create a significant impact on state insurance laws by introducing requirements that insurance providers must follow when dealing with elderly clients. By ensuring that these clients receive adequate information about their options, the bill seeks to decrease the instances where older adults may unknowingly surrender or lapse their life insurance policies, potentially jeopardizing their financial security. The provisions of this bill underscore the importance of informed decision-making for vulnerable populations, particularly in matters involving long-term financial commitments.

Summary

Senate Bill 773 aims to enhance consumer protection for individuals over the age of 60 who hold life insurance policies. By mandating insurers to provide written notices regarding available alternatives to policy lapse or surrender, the bill intends to ensure that older policyholders are fully informed of their options. This notification must occur under several circumstances, including requests for policy termination, loans against the policy's cash value, or changes in the terms of the policy.

Contention

One of the notable points of contention regarding SB773 revolves around the balance between providing adequate consumer protection and the potential burden placed on insurance companies. Proponents of the bill argue that informing older policyholders is crucial in preventing unintended financial consequences, while opponents may express concerns about the administrative impact on insurers and the costs associated with complying with these new notice requirements. The discussions within the legislative assembly may also highlight varying perspectives on whether this requirement could lead to improved financial outcomes for senior citizens or if it might inadvertently complicate the claims process.