Texas 2025 - 89th Regular

Texas House Bill HB2221 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		89R4400 SCR-F
2	2		By: Hull H.B. No. 2221
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3	5
4	6
5	7		A BILL TO BE ENTITLED
6	8		AN ACT
7	9		relating to certain trade practices related to life insurance,
8	10		annuity contracts, and accident and health coverage.
9	11		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	12		SECTION 1. The heading to Title 9, Insurance Code, is
11	13		amended to read as follows:
12	14		TITLE 9. PROVISIONS APPLICABLE TO LIFE INSURANCE, ANNUITY
13	15		CONTRACTS, AND ACCIDENT AND HEALTH COVERAGES
14	16		SECTION 2. Title 9, Insurance Code, is amended by adding
15	17		Chapter 1702 to read as follows:
16	18		CHAPTER 1702. REGULATION OF CERTAIN TRADE PRACTICES
17	19		SUBCHAPTER A. GENERAL PROVISIONS
18	20		Sec. 1702.001. PURPOSE. The purpose of this chapter is to:
19	21		(1) set forth uniform standards of prohibited acts and
20	22		practices for life insurance, annuity contracts, accident and
21	23		health insurance, and health care plans; and
22	24		(2) provide for more uniformity in well-recognized
23	25		exceptions to existing rebate and discrimination laws for certain
24	26		value-added services, acts, or practices recognized in existing law
25	27		or contained in uniform model laws developed and recommended by the
26	28		National Association of Insurance Commissioners.
27	29		Sec. 1702.002. DEFINITIONS. In this chapter:
28	30		(1) "Agent" means a person authorized to act as an
29	31		insurance agent as defined by Section 4001.003.
30	32		(2) "Consumer" means a policyholder or potential
31	33		policyholder, a certificate holder or potential certificate
32	34		holder, an insured or potential insured, a contract holder or
33	35		potential contract holder, an enrollee or potential enrollee, or an
34	36		applicant for insurance, an annuity, or health care plan coverage.
35	37		(3) "Enrollee" and "health care plan" have the
36	38		meanings assigned by Section 843.002.
37	39		(4) "Insurer" means an insurance company, including a
38	40		reciprocal or interinsurance exchange, mutual insurance company,
39	41		capital stock company, Lloyd's plan, fraternal benefit society,
40	42		group hospital service corporation, or other legal entity
41	43		authorized to engage in the business of life, accident, or health
42	44		insurance or annuities in this state.
43	45		(5) "Loss-control or value-added product or service"
44	46		means a product or service offered or provided by an insurer, health
45	47		maintenance organization, or agent, by or through an employee,
46	48		affiliate, or third-party representative, to an insured,
47	49		annuitant, or enrollee at no or reduced cost when such products or
48	50		services are not specified in the insurance policy, annuity
49	51		contract, or health care plan contract and that:
50	52		(A) relates to the insurance, annuity, or health
51	53		care plan coverage; and
52	54		(B) is primarily designed to do one or more of the
53	55		following:
54	56		(i) provide loss mitigation or loss
55	57		control;
56	58		(ii) reduce claim costs or claim settlement
57	59		costs;
58	60		(iii) provide education about liability
59	61		risks or risk of loss to persons or property;
60	62		(iv) monitor or assess risk, identify
61	63		sources of risk, or develop strategies for eliminating or reducing
62	64		risk;
63	65		(v) enhance health;
64	66		(vi) enhance financial wellness through
65	67		items such as education or financial planning services;
66	68		(vii) provide post-loss services;
67	69		(viii) provide incentives for behavioral
68	70		changes to improve the health or reduce the risk of death or
69	71		disability of an insured, annuitant, or enrollee; or
70	72		(ix) assist in the administration of
71	73		employee or retiree benefit insurance, annuity, or health care plan
72	74		coverage.
73	75		Sec. 1702.003. APPLICABILITY OF CHAPTER: LIFE INSURANCE AND
74	76		ANNUITIES. Except as otherwise provided by this chapter, this
75	77		chapter applies to an insurance company writing life insurance and
76	78		annuities in this state, including:
77	79		(1) a stock life insurance company;
78	80		(2) a mutual life insurance company, including a
79	81		mutual life assessment company;
80	82		(3) a stipulated premium life insurance company; and
81	83		(4) a fraternal benefit society authorized under
82	84		Chapter 885.
83	85		Sec. 1702.004. APPLICABILITY OF CHAPTER: ACCIDENT AND
84	86		HEALTH. Except as otherwise provided by this chapter, this chapter
85	87		applies to:
86	88		(1) an insurer authorized to engage in the business of
87	89		accident and health insurance in this state, including:
88	90		(A) a life, health, and accident stock insurance
89	91		company;
90	92		(B) a mutual insurance company, including:
91	93		(i) a mutual life insurance company; and
92	94		(ii) a mutual assessment life insurance
93	95		company;
94	96		(C) a local mutual aid association;
95	97		(D) a mutual or natural premium life or casualty
96	98		insurance company;
97	99		(E) a general casualty company;
98	100		(F) a nonprofit hospital, medical, or dental
99	101		service corporation, including a corporation operating under
100	102		Chapter 842;
101	103		(G) a Lloyd's plan operating under Chapter 941;
102	104		(H) a reciprocal or interinsurance exchange
103	105		operating under Chapter 942; and
104	106		(I) any other type of insurer required by law to
105	107		be authorized by the department to issue accident and health
106	108		insurance policies; and
107	109		(2) a health maintenance organization operating under
108	110		Chapter 843.
109	111		Sec. 1702.005. CONSTRUCTION. Nothing in this chapter may
110	112		be construed to:
111	113		(1) permit conduct that is an unfair method of
112	114		competition or a false, misleading, or deceptive act or practice
113	115		under Section 17.46, Business & Commerce Code, or Chapter 541 of
114	116		this code; or
115	117		(2) prohibit an insurer, health maintenance
116	118		organization, or agent from offering or giving to a consumer, for
117	119		free or at a discounted price in a manner that is not unfairly
118	120		discriminatory to consumers of the same class and of essentially
119	121		the same hazard, a loss-control or value-added product or service
120	122		relating to the risks covered under the relevant policy or
121	123		contract, subject to Sections 1702.051 and 1702.053.
122	124		Sec. 1702.006. RULES. The commissioner may adopt
123	125		reasonable rules necessary to implement this chapter.
124	126		SUBCHAPTER B. ANCILLARY PRODUCTS OR SERVICES AND PROHIBITED
125	127		INDUCEMENTS
126	128		Sec. 1702.051. LOSS-CONTROL OR VALUE-ADDED PRODUCTS AND
127	129		SERVICES. (a) The cost to an insurer, health maintenance
128	130		organization, or agent for a loss-control or value-added product or
129	131		service provided to an insured, annuitant, or enrollee must be
130	132		reasonable in comparison to that insured's, annuitant's, or
131	133		enrollee's premiums or coverage for the class of the insured's,
132	134		annuitant's, or enrollee's policy or contract.
133	135		(b) If an insurer, health maintenance organization, or
134	136		agent provides a loss-control or value-added product or service to
135	137		an insured, annuitant, or enrollee, the insurer, health maintenance
136	138		organization, or agent must ensure that the insured, annuitant, or
137	139		enrollee is provided with contact information to assist the
138	140		insured, annuitant, or enrollee with questions regarding the
139	141		product or service.
140	142		(c) An insurer, health maintenance organization, or agent
141	143		must:
142	144		(1) base the availability of the loss-control or
143	145		value-added product or service on documented objective criteria;
144	146		(2) offer the product or service in a manner that is
145	147		not unfairly discriminatory; and
146	148		(3) maintain the documented criteria and produce the
147	149		criteria on request by the department.
148	150		Sec. 1702.052. PROHIBITED INDUCEMENTS. Except as provided
149	151		by this chapter, an insurer, health maintenance organization, or
150	152		agent may not:
151	153		(1) offer or provide insurance, annuity, or health
152	154		care plan coverage as an inducement to the purchase of another
153	155		policy or contract; or
154	156		(2) otherwise use "free," "no cost," or words of
155	157		similar meaning in an advertisement.
156	158		Sec. 1702.053. NON-CASH GIFTS, CHARITABLE DONATIONS,
157	159		RAFFLES, OR OTHER ITEMS AND SERVICES. (a) An insurer, health
158	160		maintenance organization, or agent may offer or provide non-cash
159	161		gifts, items, or services, including meals, to or charitable
160	162		donations on behalf of a consumer, in connection with the
161	163		marketing, sale, purchase, or retention of policies or contracts of
162	164		insurance, annuity, or health care plan coverage, provided:
163	165		(1) the cost does not exceed an amount determined to be
164	166		reasonable by the commissioner per policy or contract year per
165	167		term;
166	168		(2) the offer is made in a manner that is not unfairly
167	169		discriminatory; and
168	170		(3) the consumer is not required to purchase, continue
169	171		to purchase, or renew a policy or contract in exchange for the gift,
170	172		item, or service.
171	173		(b) An insurer, health maintenance organization, or agent
172	174		may conduct raffles or drawings to the extent permitted by the laws
173	175		of this state, provided:
174	176		(1) there is no financial cost to participate;
175	177		(2) the raffle or drawing does not obligate
176	178		participants to purchase, continue to purchase, or renew a policy
177	179		or contract;
178	180		(3) the prizes are not valued in excess of a reasonable
179	181		amount determined by the commissioner and the raffle or drawing is
180	182		open to the public; and
181	183		(4) the raffle or drawing is offered in a manner that
182	184		is not unfairly discriminatory.
183	185		SUBCHAPTER C. PRACTICES RELATED TO LIFE AND ANNUITY COVERAGE
184	186		Sec. 1702.101. APPLICABILITY OF SUBCHAPTER. This
185	187		subchapter applies only to an insurer described by Section
186	188		1702.003.
187	189		Sec. 1702.102. PROHIBITED REBATES AND INDUCEMENTS. (a)
188	190		Except as provided by this subchapter, an insurer or agent may not,
189	191		with respect to business written in this state:
190	192		(1) knowingly permit the making of, offer to make, or
191	193		make a life insurance policy or annuity contract or an agreement
192	194		regarding the policy or contract, other than as plainly expressed
193	195		in the issued policy or contract;
194	196		(2) directly or indirectly pay, give, or allow or
195	197		offer to pay, give, or allow as inducement to enter into a life
196	198		insurance policy or annuity contract either:
197	199		(A) a rebate of premiums payable on the policy or
198	200		contract; or
199	201		(B) a special favor or advantage in the dividends
200	202		or other benefits of the policy or contract or a valuable
201	203		consideration or inducement not specified in the policy or
202	204		contract; or
203	205		(3) give, sell, or purchase or offer to give, sell, or
204	206		purchase in connection with a life insurance policy or annuity
205	207		contract or as inducement to enter into the policy or contract:
206	208		(A) stocks, bonds, or other securities of an
207	209		insurer or other corporation, association, or partnership;
208	210		(B) dividends or profits accrued from the stocks,
209	211		bonds, or securities; or
210	212		(C) anything of value not specified in the
211	213		contract.
212	214		(b) An insurer may not permit an agent, officer, or employee
213	215		to issue or deliver as an inducement to enter into a life insurance
214	216		policy or annuity contract:
215	217		(1) company stock or other capital stock;
216	218		(2) a benefit certificate or share in a corporation;
217	219		(3) a security; or
218	220		(4) a special or advisory board contract or any other
219	221		contract promising returns or profits.
220	222		(c) This section does not prohibit issuing or delivering a
221	223		participating insurance policy or annuity contract otherwise
222	224		authorized by law.
223	225		Sec. 1702.103. PROHIBITED DISTINCTIONS AND DISCRIMINATION.
224	226		Except as provided by Section 1702.104, an insurer may not, with
225	227		respect to a life insurance policy or annuity contract, make or
226	228		permit a distinction or unfair discrimination between individuals
227	229		of the same class and equal life expectancy regarding:
228	230		(1) the rate charged;
229	231		(2) the dividend or other payable benefit; or
230	232		(3) any of the other terms of the policy or contract.
231	233		Sec. 1702.104. EXEMPTIONS. The following are not
232	234		considered to constitute a rebate, inducement, distinction, or
233	235		discrimination prohibited by this subchapter:
234	236		(1) for a life insurance policy or annuity contract, a
235	237		bonus payment to a policyholder or contract holder or other
236	238		abatement in the policyholder's or contract holder's premiums
237	239		provided wholly or partly out of surplus accumulated from
238	240		nonparticipating policies or contracts if the payment or abatement:
239	241		(A) is fair and equitable to policyholders and
240	242		contract holders; and
241	243		(B) is in the best interests of the insurer and
242	244		the insurer's policyholders and contract holders;
243	245		(2) for a life insurance policy issued on an
244	246		industrial debit plan, an allowance to a policyholder who has
245	247		continuously for a specified period made premium payments directly
246	248		to the insurer's office that is in an amount that fairly represents
247	249		the insurer's savings in collection expenses;
248	250		(3) for a group insurance policy, a readjustment in
249	251		the rate of premium based on the loss or expense experience under
250	252		the policy at the end of a policy year if the adjustment is
251	253		retroactive for only that policy year;
252	254		(4) for an annuity contract, a waiver of surrender
253	255		charges under the contract when the contract holder exchanges that
254	256		contract for another annuity contract issued by the same insurer or
255	257		an affiliate of the same insurer that is part of the same holding
256	258		company group if:
257	259		(A) the waiver and the exchange are fully,
258	260		fairly, and accurately explained to the contract holder in a manner
259	261		that is not deceptive or misleading; and
260	262		(B) the contract holder is given credit for the
261	263		time that the previous contract was held in determining any
262	264		surrender charges under the new contract;
263	265		(5) in connection with an offer or sale of a life
264	266		insurance policy or annuity contract, a promotional advertising
265	267		item, educational item, or traditional courtesy commonly extended
266	268		to consumers and that is valued at $25 or less; or
267	269		(6) any loss-control or value-added service or product
268	270		or other item allowed by Subchapter B.
269	271		SUBCHAPTER D. PRACTICES RELATED TO ACCIDENT AND HEALTH COVERAGE
270	272		Sec. 1702.151. APPLICABILITY OF SUBCHAPTER. This
271	273		subchapter applies only to an insurer or health maintenance
272	274		organization described by Section 1702.004.
273	275		Sec. 1702.152. PROHIBITED REBATES AND INDUCEMENTS. (a)
274	276		Except as provided by this subchapter or another provision in this
275	277		code, with respect to accident and health insurance or health care
276	278		plan coverage written in this state, an insurer, health maintenance
277	279		organization, or agent may not:
278	280		(1) knowingly permit the making of or offering of,
279	281		offer to make, or make an accident and health insurance policy or
280	282		health care plan contract or an agreement regarding the policy or
281	283		contract other than as plainly expressed in the issued policy or
282	284		contract;
283	285		(2) directly or indirectly pay, give, or allow or
284	286		offer to pay, give, or allow as an inducement to enter into an
285	287		accident and health insurance policy or health care plan contract:
286	288		(A) a rebate of premiums payable on the policy or
287	289		contract; or
288	290		(B) a special favor or advantage in the dividends
289	291		or other benefits of the policy or contract or a valuable
290	292		consideration or inducement not specified in the policy or
291	293		contract; or
292	294		(3) give, sell, or purchase or offer to give, sell, or
293	295		purchase in connection with an accident and health insurance policy
294	296		or health care plan contract or as an inducement to enter into the
295	297		policy or contract:
296	298		(A) stocks, bonds, or other securities of an
297	299		insurer or other corporation, association, or partnership;
298	300		(B) dividends or profits accrued from the stocks,
299	301		bonds, or securities; or
300	302		(C) anything of value not specified in the policy
301	303		or contract.
302	304		(b) An insurer or health maintenance organization may not
303	305		permit an agent, officer, or employee to issue or deliver as an
304	306		inducement to entering into an insurance policy or health care plan
305	307		contract:
306	308		(1) company stock or other capital stock;
307	309		(2) a benefit certificate or share in a corporation;
308	310		(3) securities; or
309	311		(4) a special or advisory board contract or any other
310	312		contract promising returns or profits.
311	313		(c) This section does not prohibit an insurer or health
312	314		maintenance organization from issuing or delivering a
313	315		participating insurance policy or health care plan contract
314	316		otherwise authorized by law.
315	317		Sec. 1702.153. PROHIBITED DISCRIMINATION AND DISTINCTIONS.
316	318		Except as provided by Section 1702.154 and other applicable
317	319		provisions in this code specific to particular types of accident
318	320		and health coverage or health care plan coverage, an insurer or
319	321		health maintenance organization may not, with respect to an
320	322		accident and health insurance policy or health care plan contract,
321	323		make or permit a distinction or an unfair discrimination between
322	324		individuals of the same class and equal life expectancy regarding:
323	325		(1) the rate charged;
324	326		(2) the dividend or other payable benefit; or
325	327		(3) any of the other terms of the policy or contract.
326	328		Sec. 1702.154. EXEMPTIONS. The following are not
327	329		considered a rebate, inducement, or discrimination prohibited by
328	330		this subchapter:
329	331		(1) for an accident and health policy or a health care
330	332		plan contract, a bonus payment to a policyholder or contract holder
331	333		or other abatement in the policyholder's or contract holder's
332	334		premiums provided wholly or partly out of surplus accumulated from
333	335		nonparticipating policies or contracts if the bonus or abatement:
334	336		(A) is fair and equitable to policyholders or
335	337		contract holders; and
336	338		(B) is in the best interests of the insurer or
337	339		health maintenance organization and its policyholders or contract
338	340		holders;
339	341		(2) for a group insurance policy or health care plan
340	342		contract, a readjustment in the rate of premium based on the loss or
341	343		expense experience under the policy or contract at the end of a
342	344		policy or contract year if the adjustment is retroactive for only
343	345		that policy or contract year;
344	346		(3) in connection with an offer or sale of an accident
345	347		and health insurance policy or health care plan contract, a
346	348		promotional advertising item, educational item, or traditional
347	349		courtesy commonly extended to consumers and that is valued at $25 or
348	350		less; or
349	351		(4) a loss-control or value-added product or service
350	352		or other item allowed by Subchapter B.
351	353		Sec. 1702.155. PROGRAMS PROMOTING DISEASE PREVENTION,
352	354		WELLNESS, AND HEALTH. (a) An insurer issuing an accident and
353	355		health insurance policy or a health maintenance organization
354	356		issuing a health care plan contract may establish premium
355	357		discounts, rebates, or a reduction in otherwise applicable
356	358		copayments, coinsurance, or deductibles, or any combination of
357	359		those incentives, for an insured or enrollee who participates in
358	360		programs promoting disease prevention, wellness, or health.
359	361		(b) A discount, rebate, or reduction established under this
360	362		section is not considered a prohibited rebate or inducement or
361	363		unfair discrimination.
362	364		SECTION 3. Section 81.001(c), Insurance Code, is amended to
363	365		read as follows:
364	366		(c) This section does not apply to conduct that is:
365	367		(1) a violation that is ongoing at the time the
366	368		department seeks to impose the sanction, penalty, or fine;
367	369		(2) a violation of Subchapter A, Chapter 544, or
368	370		Section 1702.103 [541.057], as those provisions relate to
369	371		discrimination on the basis of race or color, regardless of the time
370	372		the conduct occurs; or
371	373		(3) a violation of Title 5, Labor Code.
372	374		SECTION 4. Section 846.007(d), Insurance Code, is amended
373	375		to read as follows:
374	376		(d) A multiple employer welfare arrangement may establish
375	377		premium discounts, rebates, or a reduction in otherwise applicable
376	378		copayments or deductibles in return for adherence to programs of
377	379		health promotion and disease prevention. A discount, rebate, or
378	380		reduction established under this subsection does not violate
379	381		Section 1702.152 [541.056(a)].
380	382		SECTION 5. Section 1114.057, Insurance Code, is amended to
381	383		read as follows:
382	384		Sec. 1114.057. DISCLOSURE OF AVAILABILITY OF WAIVER OF
383	385		SURRENDER CHARGES. An insurer that offers to waive surrender
384	386		charges as described by Section 1702.104(4) [541.058(b)(4)] shall
385	387		provide reasonable notice of that offer to the insurer's
386	388		prospective or current contract holders. The notice may be
387	389		provided by any available means, including a disclosure document or
388	390		by display on a link that is prominently placed on the insurer's
389	391		Internet website.
390	392		SECTION 6. Section 1501.107(b), Insurance Code, is amended
391	393		to read as follows:
392	394		(b) A discount, rebate, or reduction established under this
393	395		section does not violate Section 1702.152 [541.056(a)].
394	396		SECTION 7. Sections 541.056, 541.057, 541.058, 543.003, and
395	397		1201.013, Insurance Code, are repealed.
396	398		SECTION 8. The changes in law made by this Act apply only to
397	399		an insurance policy, annuity contract, or health care plan contract
398	400		that is delivered, issued for delivery, or renewed on or after
399	401		January 1, 2026. A policy or contract delivered, issued for
400	402		delivery, or renewed before January 1, 2026, is governed by the law
401	403		as it existed immediately before the effective date of this Act, and
402	404		that law is continued in effect for that purpose.
403	405		SECTION 9. This Act takes effect September 1, 2025.