CHAPTER 1131. GROUP LIFE INSURANCE AND WHOLESALE, FRANCHISE, OR EMPLOYEE LIFE INSURANCE
INSURANCE CODE
TITLE 7. LIFE INSURANCE AND ANNUITIES
SUBTITLE B. GROUP LIFE INSURANCE
CHAPTER 1131. GROUP LIFE INSURANCE AND WHOLESALE, FRANCHISE, OR
EMPLOYEE LIFE INSURANCE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1131.001. DEFINITION. In this chapter, "wholesale,
franchise, or employee life insurance" means a term life
insurance plan under which a number of individual term life
insurance policies are issued to a selected group at a rate that
is lower than the rate shown in the issuing insurer's manual for
an individually issued policy of the same type issued to an
insured of the same class.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.002. CERTAIN GROUP LIFE INSURANCE AUTHORIZED. A group
life insurance policy may be delivered in this state only if the
policy:
(1) covers a group described by Subchapter B; and
(2) complies with this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.003. CERTAIN WHOLESALE, FRANCHISE, OR EMPLOYEE LIFE
INSURANCE AUTHORIZED. A wholesale, franchise, or employee life
insurance policy may be issued or delivered in this state only if
the policy:
(1) covers a group described by Section 1131.065; and
(2) complies with Subchapter P.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.004. FORFEITURE OF CERTIFICATE OF AUTHORITY FOR
UNAUTHORIZED GROUP LIFE INSURANCE CONTRACT. The certificate of
authority to engage in the business of insurance in this state of
an insurer that enters into a group life insurance contract other
than as authorized by this chapter may be forfeited by an action
brought for that purpose by the attorney general at the
department's request.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.005. GUARANTEEING ISSUANCE OF LIFE INSURANCE POLICY
WITHOUT EVIDENCE OF INSURABILITY. (a) In this section,
"qualified pension or profit-sharing plan" means a plan that
meets the requirements of:
(1) Section 401 or 403, Internal Revenue Code of 1986, and their
subsequent amendments; or
(2) any corresponding provisions of prior or subsequent United
States revenue laws.
(b) This code does not prohibit a life insurance company
authorized to engage in the business of insurance in this state
from guaranteeing to issue individual life insurance policies
insuring participants in a qualified pension or profit-sharing
plan on other than the term plan without evidence of
insurability.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.006. ASSIGNMENT OF BENEFITS. (a) Subject to the
terms of a group life insurance policy, an insured under the
policy may make to any individual, firm, corporation,
association, trust, or other legal entity, other than the
insured's employer, an absolute or collateral assignment of all
rights and benefits conferred on the insured by the policy or by
Subchapter C.
(b) Subsection (a) applies without regard to the date a policy
is issued.
(c) Subject to the terms of the policy, an assignment by an
insured before September 1, 1969, is valid for the purpose of
vesting in the assignee all assigned rights and privileges but
without prejudice to the insurer because of any payment the
insurer makes or individual policy the insurer issues before
receiving notice of the assignment.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.007. POLICY FORM. A policy of group life insurance is
subject to Chapter 1701.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2F.007, eff. April 1, 2009.
SUBCHAPTER B. GROUP AND WHOLESALE, FRANCHISE, OR EMPLOYEE LIFE
INSURANCE: ELIGIBLE POLICYHOLDERS
Sec. 1131.051. EMPLOYERS. (a) A group life insurance policy
may be issued to an employer or to trustees of a fund established
by an employer to insure the employer's employees for the benefit
of persons other than the employer.
(b) A policy to which this section applies may provide that
"employee" includes:
(1) an individual proprietor or partner, if the employer is an
individual proprietorship or partnership;
(2) an employee of a subsidiary corporation of the employer;
(3) an employee, individual proprietor, or partner of an
affiliated corporation, proprietorship, or partnership, if the
business of the employer and the affiliated corporation,
proprietorship, or partnership is under common control through
stock ownership, contract, or otherwise; or
(4) a retired employee.
(c) The employer or the trustees of a fund established by an
employer are the policyholder under a policy to which this
section applies.
(d) A policy to which this section applies is subject to
Subchapter E.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.052. LABOR UNIONS. (a) A group life insurance policy
may be issued to a labor union to insure the union's members who
are actively engaged in the same occupation.
(b) For purposes of this chapter:
(1) a labor union is considered to be an employer; and
(2) a member of a labor union is considered to be an employee of
the union.
(c) The labor union is the policyholder under a policy to which
this section applies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.053. FUNDS ESTABLISHED BY EMPLOYERS OR LABOR UNIONS.
(a) A group life insurance policy that insures the employers'
employees or the unions' members for the benefit of persons other
than the employers or unions may be issued to the trustees of a
fund established or adopted by two or more employers in the same
industry or by one or more labor unions, by one or more employers
in the same industry and one or more labor unions, or by one or
more employers and one or more labor unions whose members are in
the same or related occupations or trades.
(b) A policy to which this section applies may provide that
"employee" includes:
(1) an individual proprietor or partner, if the employer is an
individual proprietorship or partnership;
(2) a trustee, an employee of the trustee, or both, if the
person's duties are principally connected with the trusteeship;
or
(3) a retired employee.
(c) The trustees are the policyholder under a policy to which
this section applies.
(d) A policy may not be issued under this section to insure
employees of:
(1) an employer whose eligibility to participate in the fund as
an employer arises out of considerations directly related to the
employer being a commercial correspondent or business client or
patron of another employer, without regard to whether the other
employer participates in the fund; or
(2) an employer that is not located in this state, unless:
(A) the majority of the employers whose employees are to be
insured are located in this state; or
(B) the policy is issued to the trustees of a fund established
or adopted by one or more labor unions.
(e) A policy to which this section applies is subject to
Subchapter F.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
689, Sec. 1, eff. September 1, 2009.
Sec. 1131.054. GOVERNMENTAL ENTITIES OR ASSOCIATIONS OF PUBLIC
EMPLOYEES. (a) In this section, "employee" includes an elected
or appointed officer of the state.
(b) A group life insurance policy may be issued to a
governmental entity or an association of public employees listed
in Subsection (c) to insure the governmental entity's employees
or the association's members for the benefit of persons other
than the governmental entity or association.
(c) This section authorizes issuance of a group life insurance
policy to:
(1) a municipality, independent school district, or common
school district;
(2) a department of state government;
(3) a state college or university; or
(4) an association of public employees, including an association
of:
(A) employees of the United States government, if the majority
of the members of the association reside in this state;
(B) state employees; or
(C) any combination of state, county, and municipal employees.
(d) The governmental entity or association is the policyholder
under a policy to which this section applies.
(e) A policy to which this section applies is subject to
Subchapter G.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.055. SPOUSES AND CHILDREN OF EMPLOYEES OF UNITED
STATES GOVERNMENT. (a) A group term life insurance policy may
be extended, in the form of group term life insurance only, to
insure the spouse and natural or adopted minor children of an
insured employee of the United States government if:
(1) the policy constitutes a part of the employee benefit
program established for the benefit of employees of the United
States government; and
(2) the spouse or children of other employees covered by the
same employee benefit program in other states are or may be
covered by group term life insurance.
(b) A policy to which this section applies is subject to
Subchapter H.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.056. PRINCIPALS. (a) In this section, "agent"
includes a general agent, subagent, or salesperson.
(b) A group life insurance policy may be issued to a principal,
or if the principal is a life, life and accident, or life,
accident, and health insurer, by or to the principal, to insure
the principal's agents for the benefit of persons other than the
principal.
(c) A policy to which this section applies is subject to
Subchapter I.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.057. CREDITORS. (a) A group life insurance policy
may be issued to a creditor to insure the creditor's debtors.
(b) The creditor is the policyholder under a policy to which
this section applies.
(c) A policy to which this section applies is subject to
Subchapter J.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.058. VETERANS' LAND BOARD. (a) A group life
insurance policy may be issued to the Veterans' Land Board to
insure persons purchasing land under the Veterans' Land Program
as provided by Subchapter I, Chapter 161, Natural Resources Code.
(b) The Veterans' Land Board is the policyholder under a policy
to which this section applies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.059. ASSOCIATIONS OR TRUSTS FOR PAYMENT OF FUNERAL
EXPENSES. A group life insurance policy may be issued to an
association or trust for a group of individuals for the payment
of future funeral expenses.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.060. NONPROFIT ORGANIZATIONS OR ASSOCIATIONS. (a) A
group life insurance policy may be issued to a nonprofit service,
civic, fraternal, or community organization or association to
insure the organization's or association's members and employees
for the benefit of persons other than the organization or
association or an officer of the organization or association.
(b) To be eligible to obtain a group life insurance policy under
this section, an organization or association must:
(1) have a constitution or bylaws;
(2) have actively existed for at least two years; and
(3) have been formed for purposes other than that of obtaining
insurance.
(c) The organization or association is the policyholder under a
policy to which this section applies.
(d) A policy to which this section applies is subject to
Subchapter K.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.064. OTHER GROUPS. (a) A group life insurance policy
may be issued to cover a group other than a group described by
Sections 1131.051-1131.060 if the commissioner finds that:
(1) the issuance of the policy is not contrary to the best
interest of the public;
(2) the issuance of the policy would result in economies of
acquisition or administration; and
(3) the benefits are reasonable in relation to the premiums
charged.
(b) Group life insurance coverage may not be offered under this
section in this state by an insurer under a policy issued in
another state unless this state or another state having
requirements substantially similar to those prescribed by
Subsections (a)(1)-(3) has determined that those requirements
have been met.
(c) A policy to which this section applies is subject to
Subchapter O.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.065. WHOLESALE, FRANCHISE, OR EMPLOYEE LIFE INSURANCE.
(a) Policies of wholesale, franchise, or employee life
insurance may be issued to:
(1) the employees of a common employer or employers;
(2) the members of one or more labor unions; or
(3) the members of one or more credit unions.
(b) A policy to which this section applies is subject to
Subchapter P.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
SUBCHAPTER C. GROUP LIFE INSURANCE: REQUIRED PROVISIONS
Sec. 1131.101. REQUIRED PROVISIONS. (a) A group life insurance
policy may not be delivered in this state unless the policy
contains in substance the provisions prescribed by this
subchapter or provisions in relation to provisions prescribed by
this subchapter that, in the opinion of the commissioner, are:
(1) more favorable to an insured under the policy; or
(2) at least as favorable to an insured under the policy and
more favorable to the policyholder.
(b) The standard provisions required for individual life
insurance policies do not apply to group life insurance policies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.102. NONFORFEITURE. (a) A group life insurance
policy other than a group term life insurance policy must contain
nonforfeiture provisions that, in the commissioner's opinion, are
equitable to the insured and the policyholder.
(b) This section does not require that a group life insurance
policy contain the same nonforfeiture provisions as required for
an individual life insurance policy.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.103. GRACE PERIOD. (a) A group life insurance policy
must provide that the policyholder or premium payor is entitled
to a grace period of 31 days for the payment of any premium,
other than the first, due under the policy. During the grace
period, the death benefit coverage continues in force unless the
policyholder or premium payor gives the insurer written notice of
discontinuance before the date of discontinuance and in
accordance with the policy.
(b) The policy may provide that the policyholder or premium
payor is liable to the insurer for payment of a pro rata premium
for the time the policy was in force during a grace period.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.104. INCONTESTABILITY OF POLICY. A group life
insurance policy must provide that:
(1) the validity of the policy may not be contested, except for
nonpayment of premiums, after the policy has been in force for
two years after its date of issue; and
(2) a statement made by any insured under the policy relating to
the insured's insurability may not be used in contesting the
validity of the insurance with respect to which the statement was
made after the insurance has been in force before the contest for
a period of two years from its date of issue during the insured's
lifetime and unless the statement is contained in a written
instrument signed by the insured making the statement.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.105. APPLICATION FOR POLICY; STATEMENTS OF INSURED. A
group life insurance policy must provide that:
(1) a copy of any application for the policy by the policyholder
must be attached to the policy when issued;
(2) a statement made by the policyholder or an insured is
considered a representation and not a warranty; and
(3) a statement made by an insured may not be used in any
contest under the policy unless a copy of the instrument
containing the statement is or has been furnished to the person
or the person's beneficiary.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.106. EVIDENCE OF INSURABILITY. A group life insurance
policy must state the conditions, if any, under which the insurer
reserves the right to require an individual eligible for
insurance to furnish evidence of individual insurability
satisfactory to the insurer as a condition of obtaining part or
all of the coverage.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.107. ADJUSTMENT OF PREMIUMS OR BENEFITS IF AGE OF
INSURED IS MISSTATED. (a) A group life insurance policy must
specify an equitable adjustment of premiums, benefits, or both,
to be made if the age of an insured has been misstated.
(b) The provision required by Subsection (a) must contain a
clear statement of the method of adjustment to be used.
(c) This section does not apply to a policy to which Section
1131.703 applies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.108. INSURANCE CERTIFICATE. (a) A group life
insurance policy must provide that the insurer will issue to the
policyholder for delivery to each insured an individual
certificate stating:
(1) the insurance protection to which the insured is entitled;
(2) to whom the insurance benefits are payable; and
(3) the rights and conditions specified by Sections
1131.110-1131.112.
By agreement between the insurer and the policyholder, the
certificate of insurance may be delivered electronically.
(b) This section does not apply to:
(1) a policy issued to a creditor to insure the creditor's
debtors; or
(2) a policy to which Section 1131.703 applies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 1075, Sec. 1, eff.
Sept. 1, 2003.
Sec. 1131.109. PERSON TO WHOM BENEFITS ARE PAYABLE. (a) A
group life insurance policy must provide that any amount due
because of an insured's death must be paid to the beneficiary
designated by the insured or the beneficiary's assignee, subject
to:
(1) the provisions of the policy, if the designated beneficiary
as to all or any part of the amount is not living at the time the
insured dies; and
(2) any right reserved by the insurer in the policy and stated
in the certificate to pay at the insurer's option a portion of
the amount not to exceed $250 to any person the insurer
determines is equitably entitled to the portion because of having
incurred funeral or other expenses incident to the last illness
or death of the insured.
(b) This section does not apply to:
(1) a policy issued to a creditor to insure the creditor's
debtors; or
(2) a policy to which Section 1131.703 applies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.110. RIGHT TO INDIVIDUAL POLICY ON TERMINATION OF
EMPLOYMENT OR MEMBERSHIP. (a) A group life insurance policy
must provide that if any portion of the insurance on an
individual insured under the policy ceases because the
individual's employment or membership in the class or classes
eligible for coverage under the policy terminates, the individual
is entitled to have the insurer issue to the individual an
individual life insurance policy without disability or other
supplementary benefits.
(b) An individual must apply for an individual policy and pay
the first premium to the insurer not later than the 31st day
after the date the individual's employment or membership
terminates.
(c) An individual policy under this section must be issued
without evidence of insurability.
(d) The insured may select any individual policy, other than a
term life insurance policy, customarily issued by the insurer for
an individual of the insured's age and for the amount requested.
(e) Except as provided by Subsection (f), the individual policy
must be in an amount not to exceed the amount of life insurance
that ceases because of the termination of employment or
membership.
(f) For purposes of Subsection (e), any amount of insurance
that, on or before the date of the termination of employment or
membership, has matured as an endowment payable to the insured is
not included in the amount that is considered to cease because of
the termination. This subsection applies without regard to
whether the endowment is payable in full, in installments, or in
the form of an annuity.
(g) The premium on an individual policy must be at the insurer's
then customary rate applicable to:
(1) the form and amount of the individual policy;
(2) the class of risk to which the insured then belongs; and
(3) the insured's age on the effective date of the individual
policy.
(h) This section does not apply to:
(1) a policy issued to a creditor to insure the creditor's
debtors; or
(2) a policy to which Section 1131.703 applies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.111. RIGHT TO INDIVIDUAL POLICY ON TERMINATION OF
COVERAGE UNDER GROUP POLICY. (a) A group life insurance policy
must provide that if the policy terminates or is amended so as to
terminate the insurance of a class of insured individuals, each
individual insured under the policy on the date of the
termination or amendment whose insurance terminates and who has
been insured under the policy for at least five years before the
date of the termination or amendment is entitled to have the
insurer issue to the individual an individual life insurance
policy, subject to the conditions and limitations provided by
Section 1131.110.
(b) Notwithstanding Section 1131.110(e), a group life insurance
policy may provide that the amount of an individual policy issued
under this section may not exceed the lesser of:
(1) the amount of the individual's life insurance coverage that
ceases because of the termination or amendment of the group
policy, less the amount of any life insurance for which the
individual is or becomes eligible under any group policy issued
or reinstated by the same or another insurer not later than the
31st day after the date of the termination or amendment; or
(2) $2,000.
(c) This section does not apply to:
(1) a policy issued to a creditor to insure the creditor's
debtors; or
(2) a policy to which Section 1131.703 applies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.112. PAYMENT OF BENEFITS ON DEATH OF INSURED BEFORE
INDIVIDUAL POLICY BECOMES EFFECTIVE. (a) A group life insurance
policy must provide that if an individual insured under the group
policy dies during the period within which the individual would
have been entitled to have an individual policy issued as
provided by Section 1131.110 or 1131.111 and before such an
individual policy takes effect, the amount of life insurance that
the individual would have been entitled to have issued to the
individual under the individual policy is payable as a claim
under the group policy.
(b) This section applies without regard to whether:
(1) the application for the individual policy has been made; or
(2) the first premium for the individual policy has been paid.
(c) This section does not apply to:
(1) a policy issued to a creditor to insure the creditor's
debtors; or
(2) a policy to which Section 1131.703 applies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
SUBCHAPTER D. GROUP LIFE INSURANCE: OPTIONAL PROVISIONS
Sec. 1131.151. CONTINUATION OF BENEFITS FOR FAMILY MEMBERS AFTER
DEATH OF INSURED. (a) A group life insurance policy that
provides for the insurer to pay benefits for members of the
family or dependents of an individual in the insured group may
provide for a continuation of any part of those benefits after
the death of the individual in the insured group.
(b) Any amounts of insurance provided by benefits under
Subsection (a) are not considered to be life insurance for the
purpose of determining the maximum amount of term insurance that
may be issued on any one life.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
SUBCHAPTER E. GROUP LIFE INSURANCE POLICIES ISSUED TO EMPLOYERS:
ADDITIONAL REQUIREMENTS
Sec. 1131.201. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a group life insurance policy issued to a group
described by Section 1131.051.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.202. ELIGIBLE EMPLOYEES. All employees of the
employer, or all of any class or classes of employees determined
by conditions relating to their employment, are eligible for
insurance under the policy.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.203. PAYMENT OF PREMIUMS. The policyholder must pay
the premium for the policy:
(1) wholly from the employer's fund or funds contributed by the
employer;
(2) partly from funds described by Subdivision (1) and partly
from funds contributed by the insured employees; or
(3) wholly from funds contributed by the insured employees.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
1073, Sec. 1, eff. June 18, 2005.
Acts 2005, 79th Leg., Ch.
1073, Sec. 2, eff. June 18, 2005.
Sec. 1131.204. MINIMUM ENROLLMENT. (a) The policy must cover
at least two employees on the date the policy is issued.
(b) Repealed by Acts 2005, 79th Leg., Ch. 1073, Sec. 2, eff.
June 18, 2005.
(c) A policy as to which the insured employees do not pay any
part of the premium must insure:
(1) all eligible employees; or
(2) all eligible employees except any employees as to whom
evidence of individual insurability is not satisfactory to the
insurer.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
2, Sec. 1, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
1073, Sec. 2, eff. June 18, 2005.
Sec. 1131.205. AMOUNTS OF INSURANCE. (a) The amounts of
insurance under the policy must be based on a plan that precludes
individual selection by the employees or by the employer or
trustees.
(b) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(1), eff.
June 17, 2005.
(c) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(1), eff.
June 17, 2005.
(d) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(1), eff.
June 17, 2005.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
496, Sec. 2(1), eff. June 17, 2005.
SUBCHAPTER F. GROUP LIFE INSURANCE POLICIES ISSUED TO FUNDS
ESTABLISHED BY EMPLOYERS OR LABOR UNIONS: ADDITIONAL REQUIREMENTS
Sec. 1131.251. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a group life insurance policy issued to a group
described by Section 1131.053.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.252. ELIGIBLE EMPLOYEES OR MEMBERS. (a) The
individuals eligible for insurance under the policy are:
(1) all employees of the employers and the employees of the
trade association of those employers;
(2) all members of the labor union; or
(3) all of any class or classes of employees or members
determined by conditions relating to their employment, to their
membership in the unions, or both.
(b) A director of a corporate employer is not eligible for
insurance under the policy unless the person is otherwise
eligible as a bona fide employee of the corporation by performing
services other than the usual duties of a director.
(c) An individual proprietor or partner is not eligible for
insurance under the policy unless the person is actively engaged
in and devotes a substantial part of the person's time to
conducting the business of the proprietorship or partnership.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.253. PAYMENT OF PREMIUMS. (a) Subject to Subsection
(b), the policyholder must pay the premium for the policy:
(1) wholly from funds contributed by the employer or employers,
the labor union or unions, or both; or
(2) partly from funds described by Subdivision (1) and partly
from funds contributed by the insureds.
(b) An insured's contribution toward the cost of the insurance
may not exceed 40 cents per month for each $1,000 of insurance
coverage.
(c) The policy may provide that a participating employer or
labor union may pay the premium directly to the insurer for the
policy issued to the trustee. If payment is made as provided by
this subsection, the employer or labor union is the premium payor
for the insured employees or union members for that employer
unit.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.254. MINIMUM ENROLLMENT. (a) The policy must cover
at least 100 individuals on the date the policy is issued unless
the policy is issued to the trustees of a fund established by:
(1) employers that have assumed obligations through a collective
bargaining agreement and are participating in the fund to:
(A) comply with those obligations with regard to one or more
classes of their employees who are covered by the collective
bargaining agreement; or
(B) provide insurance benefits for other classes of their
employees; or
(2) one or more labor unions.
(b) A policy as to which the insureds are to pay part of the
premium from funds contributed specifically for their insurance
may take effect only if at least 75 percent of the individuals of
each participating employer unit who are eligible on the date the
policy takes effect, excluding any individuals as to whom
evidence of insurability is not satisfactory to the insurer,
elect to make the required contributions.
(c) A policy as to which the insureds do not pay any part of the
premium must insure:
(1) all eligible individuals; or
(2) all eligible individuals except any individuals as to whom
evidence of individual insurability is not satisfactory to the
insurer.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.255. AMOUNTS OF INSURANCE. (a) The amounts of
insurance under the policy must be based on a plan that precludes
individual selection by the insureds or by the policyholder or
employer.
(b) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(2), eff.
June 17, 2005.
(c) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(2), eff.
June 17, 2005.
(d) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(2), eff.
June 17, 2005.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
496, Sec. 2(2), eff. June 17, 2005.
SUBCHAPTER G. GROUP LIFE INSURANCE POLICIES ISSUED TO
GOVERNMENTAL ENTITIES OR ASSOCIATIONS OF PUBLIC EMPLOYEES:
ADDITIONAL REQUIREMENTS
Sec. 1131.301. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a group life insurance policy issued to a group
described by Section 1131.054.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.302. ELIGIBLE EMPLOYEES OR MEMBERS. All employees of
the employer or all members of the association are eligible for
insurance under the policy.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.303. PAYMENT OF PREMIUMS. (a) The premium for the
policy may be paid wholly or partly from funds contributed by:
(1) the employer;
(2) the individuals insured under the policy; or
(3) the insured employees who are members of the association of
employees.
(b) Any money or credits received by or allowed to the
policyholder under any participation agreement contained in or
issued in connection with the policy must be applied to the
payment of future premiums and to the pro rata abatement of the
insured employees' contribution for future premiums.
(c) The employer may deduct from an employee's salary the
employee's contribution for the premiums if authorized to do so
in writing by that employee.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.304. MINIMUM ENROLLMENT. (a) The policy must cover
at least 10 employees or members on the date the policy is
issued.
(b) A policy as to which the insured employees or members pay
part of the premium may take effect only if at least 75 percent
of the employees or members eligible on the date the policy takes
effect, excluding any employees or members as to whom evidence of
individual insurability is not satisfactory to the insurer, elect
to make the required contributions.
(c) A group policy issued before September 1, 1969, to a group
described by Section 1131.054 that was in existence on that date
continues in force without regard to whether the number of the
employees or members insured under the policy was less than 75
percent of the employees or members eligible on that date.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
SUBCHAPTER H. GROUP TERM LIFE INSURANCE POLICIES EXTENDED TO
SPOUSES AND CHILDREN OF EMPLOYEES OF UNITED STATES: ADDITIONAL
REQUIREMENTS
Sec. 1131.351. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a group term life insurance policy extended to a
group described by Section 1131.055.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.352. PAYMENT OF PREMIUMS. The policyholder must pay
the premium for the group term life insurance solely from funds
contributed by the insured employees.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.353. AMOUNTS OF INSURANCE. (a) The amounts of
insurance under the policy must be based on a plan that precludes
individual selection by the insured employees or by the
policyholder.
(b) Group term life insurance on the life of an employee's
spouse may not exceed the lesser of:
(1) $10,000; or
(2) one-half of the amount of insurance on the life of the
insured employee under the group policy.
(c) Group term life insurance on the life of an employee's minor
child may not exceed $2,000.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.354. CONVERSION RIGHTS. On termination of group term
life insurance coverage for a spouse insured under this
subchapter because the insured employee's employment terminates
or the employee dies, or because the group contract terminates,
the spouse has the same conversion rights as to the group term
life insurance on the spouse's life as the employee.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.355. CERTIFICATE OF INSURANCE. Only one certificate
of insurance issued for delivery to an insured employee is
required if the certificate includes a statement concerning any
dependent's coverage.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
SUBCHAPTER I. GROUP LIFE INSURANCE POLICIES ISSUED TO PRINCIPALS:
ADDITIONAL REQUIREMENTS
Sec. 1131.401. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a group life insurance policy issued to a group
described by Section 1131.056.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.402. ELIGIBLE AGENTS. Agents who are under contract
to provide personal services for the principal for a commission
or other fixed or ascertainable compensation, or any class or
classes of those agents determined by conditions relating to the
services the agents provide to the principal, are eligible for
insurance under the policy.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.403. PAYMENT OF PREMIUMS. The premium for the policy
must be paid:
(1) wholly by the principal; or
(2) partly from funds contributed by the principal and partly
from funds contributed by the insured agents.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.404. MINIMUM ENROLLMENT. (a) The policy must cover
at least 10 agents on the date the policy is issued.
(b) Subject to Subsection (c), a policy as to which the insured
agents pay part of the premium must cover, on the date the policy
is issued, at least:
(1) 75 percent of the eligible agents; or
(2) 75 percent of any class or classes of eligible agents,
determined by conditions relating to the services the agents
provide to the principal.
(c) Benefits may be extended to another class of agents if 75
percent of the class request coverage.
(d) A policy as to which the insured agents do not pay any part
of the premium must insure:
(1) all eligible agents; or
(2) all of any class or classes of eligible agents determined by
conditions relating to the services the agents provide to the
principal.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.405. AMOUNTS OF INSURANCE. (a) The amounts of
insurance under the policy must be based on a plan that precludes
individual selection by the agents or by the principal.
(b) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(3), eff.
June 17, 2005.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
496, Sec. 2(3), eff. June 17, 2005.
SUBCHAPTER J. GROUP LIFE INSURANCE POLICIES ISSUED TO CREDITORS:
ADDITIONAL REQUIREMENTS
Sec. 1131.451. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a group life insurance policy issued to a group
described by Section 1131.057.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.452. ELIGIBLE DEBTORS. All individuals who become
borrowers, or purchasers of securities, merchandise, or other
property, under an agreement to pay the borrowed amount or to pay
the balance of the price of the securities, merchandise, or other
property purchased, are eligible for insurance under the policy.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.453. PAYMENT OF PREMIUMS. The policyholder must pay
the premium for the policy from:
(1) the creditor's funds;
(2) charges collected from the insured debtors; or
(3) both the creditor's funds and charges collected from the
insured debtors.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.454. MINIMUM ENROLLMENT. The policy must cover at
least 50 debtors at all times.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.455. AMOUNT OF INSURANCE. (a) Except as otherwise
provided by this section, the amount of insurance on a debtor's
life under the policy may not exceed the amount of the debtor's
indebtedness.
(b) Subject to Subsections (c) and (d), the face amount of any
loan or loan commitment, totally or partially executed, made to a
debtor for educational purposes or to a debtor with seasonal
income by a creditor in good faith for general agricultural or
horticultural purposes, secured or unsecured, under which the
debtor becomes personally liable for the payment of the loan, may
be insured in an initial amount of insurance not to exceed the
total amount payable under the contract of indebtedness.
(c) If indebtedness described by Subsection (b) is payable in
substantially equal installments, the amount of insurance may not
at any time exceed the greater of the scheduled or actual amount
of unpaid indebtedness.
(d) Insurance on a loan commitment described by Subsection (b)
that does not exceed one year in duration may be written up to
the amount of the loan commitment on a nondecreasing or level
term plan.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
496, Sec. 1, eff. June 17, 2005.
Sec. 1131.456. PAYMENT OF PROCEEDS. (a) The proceeds of the
insurance must be payable to the policyholder.
(b) Payment to the policyholder reduces or extinguishes the
debtor's unpaid indebtedness to the extent of the payment. In the
case of a debtor under a loan or loan commitment described by
Section 1131.455(b), any insurance proceeds in excess of the
indebtedness to the creditor are payable:
(1) to the debtor's estate; or
(2) under a facility of payment clause.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.457. ANNUITIES AND ENDOWMENT INSURANCE PROHIBITED.
The insurance issued may not include annuities or endowment
insurance.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
SUBCHAPTER K. GROUP LIFE INSURANCE POLICIES ISSUED TO NONPROFIT
ORGANIZATIONS OR ASSOCIATIONS: ADDITIONAL REQUIREMENTS
Sec. 1131.501. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a group life insurance policy issued to a group
described by Section 1131.060.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.502. ELIGIBLE MEMBERS. All members of the
organization or association, or all of any class of members
determined by conditions relating to their membership in the
organization or association, are eligible for insurance under the
policy.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.503. PAYMENT OF PREMIUMS. (a) The policyholder must
pay the premium from:
(1) the policyholder's funds;
(2) funds contributed by the employees or members specifically
for their insurance; or
(3) both the policyholder's funds and funds contributed by the
employees or members.
(b) The policy may provide that the premium may be paid directly
to the insurer by individual employees or members from their own
funds. If the premium is paid as provided by this subsection, the
respective employees or members become the premium payor for that
particular certificate.
(c) For purposes of Sections 222.002, 257.001, and 281.004, only
the final retrospectively determined premium amount remitted to
the issuer by the group policyholder is taxable as gross
premiums, without regard to whether membership contributions,
fees, assessments, dues, revenues, or other considerations in
excess of that final amount are also collected from members.
This subsection applies only to a nonprofit membership
association that:
(1) qualifies under Section 501(c)(9), Internal Revenue Code of
1986;
(2) has been in existence for at least 50 years;
(3) limits association membership to:
(A) members of the uniformed services of the United States
serving on active duty;
(B) members of the ready reserve forces of the United States,
including the Army and Air National Guard;
(C) retirees and separatees of:
(i) the uniformed services of the United States; or
(ii) the ready reserve forces of the United States, including
the Army and Air National Guard;
(D) cadets and midshipmen in the service academies of the United
States and other officer candidates;
(E) federal employees and contractors who are employed by the
United States government or other related governmental entities
or retired with pay from that employment;
(F) employees or members of any state, county, municipal, or
other local governmental body or other organized governmental
entity who are involved in homeland defense and homeland security
operations; and
(G) any other category of membership established by the
governing body of the association that falls within the scope of
permissible membership authorized by Section 501(c)(9), Internal
Revenue Code of 1986;
(4) has no separate membership enrollment or application
requirement;
(5) collects member contributions, fees, or dues, including
funds contributed specifically for insurance and remitted by the
group policyholder to the issuer following a retrospective
premium determination; and
(6) provides insurance and noninsurance membership benefits.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
1252, Sec. 1, eff. June 15, 2007.
Sec. 1131.504. MINIMUM ENROLLMENT. The policy must cover at
least 25 individuals on the date the policy is issued.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.505. AMOUNTS OF INSURANCE. The amounts of insurance
under the policy must be based on a plan that precludes
individual selection by the insured members or by the
organization or association.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
SUBCHAPTER O. GROUP LIFE INSURANCE POLICIES ISSUED TO OTHER
GROUPS: ADDITIONAL REQUIREMENTS
Sec. 1131.701. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a group life insurance policy issued to a group
described by Section 1131.064.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.702. PAYMENT OF PREMIUMS. The premium for the policy
must be paid from:
(1) the policyholder's funds;
(2) funds contributed by the insureds; or
(3) both the policyholder's funds and funds contributed by the
insureds.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.703. INSURANCE FOR LIABILITIES RELATED TO FRINGE
BENEFITS. (a) Notwithstanding any other law, an employer may
insure the lives of the employer's officers, directors,
employees, and retired employees under Section 1131.064 to and in
an amount necessary to provide funds to offset liabilities
related to fringe benefits.
(b) An employer shall submit evidence of the purpose of the
policy to the commissioner.
(c) A policy issued for the purpose described by this section
does not reduce any other life insurance benefits offered or
provided by the employer.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
SUBCHAPTER P. WHOLESALE, FRANCHISE, OR EMPLOYEE LIFE INSURANCE
POLICIES: ADDITIONAL REQUIREMENTS
Sec. 1131.751. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a wholesale, franchise, or employee life
insurance policy issued as provided by Section 1131.065.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.752. PAYMENT OF PREMIUMS. (a) The premium for the
policy must be paid:
(1) wholly from funds contributed by the employer or employers
of the insureds;
(2) wholly from funds contributed by the labor or credit union
or unions; or
(3) partly from funds described by Subdivision (1) or (2) and
partly from funds contributed by the insureds.
(b) An insured's contribution toward the cost of the insurance
may not exceed 40 cents per month for each $1,000 of insurance
coverage.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.753. MINIMUM ENROLLMENT. A policy of wholesale,
franchise, or employee life insurance must cover at least five
employees or members of a labor union or credit union on the date
the policy is issued.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.755. INDIVIDUAL APPLICATION REQUIRED. (a) An insurer
must take an individual application for each policy of wholesale,
franchise, or employee life insurance.
(b) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(5), eff.
June 17, 2005.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
496, Sec. 2(5), eff. June 17, 2005.
Sec. 1131.756. RIGHT TO INDIVIDUAL POLICY ON TERMINATION OF
EMPLOYMENT OR MEMBERSHIP. (a) A policy of wholesale, franchise,
or employee life insurance must contain in substance the
provisions prescribed by this section.
(b) The policy must provide that, subject to Subsections (c) and
(d), if the insurance on an individual insured under the policy
ceases because the individual's employment or membership in the
labor or credit union terminates, the individual is entitled to
have the insurer issue to the individual an individual life
insurance policy without disability or other supplementary
benefits.
(c) An individual policy under this section must be issued
without evidence of insurability.
(d) An individual must apply for an individual policy and pay
the first premium to the insurer not later than the 31st day
after the date the individual's employment or membership
terminates.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.757. OPTIONAL POLICY PROVISIONS. A policy of
wholesale, franchise, or employee life insurance may contain in
substance provisions under which:
(1) the policy is renewable at the option of the insurer only;
(2) coverage by the insurer terminates on termination of
employment or membership by the insured employee or member; or
(3) an individual eligible for insurance must furnish evidence
of individual insurability satisfactory to the insurer as a
condition to coverage.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.758. CERTAIN POLICIES AND PLANS UNAFFECTED. This
subchapter does not impair or otherwise affect:
(1) a policy issued before August 28, 1961;
(2) a plan of wholesale, franchise, or employee life insurance
in effect before August 28, 1961, if the plan was legal on the
date policies were issued under the plan; or
(3) a policy issued on a salary savings franchise plan, bank
deduction plan, pre-authorized check plan, or similar plan of
premium collection.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
SUBCHAPTER Q. EXTENSION OF GROUP LIFE INSURANCE TO SPOUSES AND
CHILDREN
Sec. 1131.801. APPLICABILITY OF SUBCHAPTER. This subchapter
applies to any group life insurance policy issued and delivered
under the laws of this state other than a policy issued and
delivered to a creditor as provided by Section 1131.057 or other
law providing for credit life insurance.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.802. EXTENSION OF GROUP LIFE INSURANCE TO SPOUSES AND
CHILDREN; ELIGIBLE CHILDREN. Insurance under a group life
insurance policy may be extended to cover:
(1) the spouse of each individual eligible to be insured under
the policy;
(2) a natural or adopted child of each individual eligible to be
insured under the policy if the child is:
(A) unmarried and younger than 25 years of age; or
(B) physically or mentally disabled and under the parents'
supervision; or
(3) a natural or adopted grandchild of each individual eligible
to be insured under the policy if the child is:
(A) unmarried;
(B) younger than 25 years of age; and
(C) a dependent of the insured for federal income tax purposes
at the time the application for coverage of the child is made.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
1243, Sec. 1, eff. September 1, 2007.
Sec. 1131.803. PAYMENT OF PREMIUMS. The premium for group life
insurance extended to cover a spouse or child may be paid by:
(1) the group policyholder;
(2) the insured under the policy; or
(3) the group policyholder and the insured jointly.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.804. AMOUNTS OF INSURANCE. (a) The amounts of
insurance under the policy must be based on a plan that precludes
individual selection by the insured or the policyholder.
(b) The amount of insurance on the life of the spouse or a child
may not exceed the amount of insurance for which the insured is
eligible under the policy.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.805. CONVERSION RIGHTS. On termination of group life
insurance coverage for a spouse insured under this subchapter
because the insured's employment terminates, the insured's
eligibility for insurance terminates, or the insured dies, or
because the group life insurance policy terminates, the spouse
has the same conversion rights as to the group life insurance on
the spouse's life as the insured.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.806. CERTIFICATE OF INSURANCE. Only one certificate
of insurance issued for delivery to an insured is required if the
certificate includes a statement concerning any spouse's or
child's coverage.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
SUBCHAPTER R. CONTINUATION OF CERTAIN GROUP LIFE INSURANCE DURING
LABOR DISPUTE
Sec. 1131.851. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a group life insurance policy that is delivered
or issued for delivery in this state and as to which any part of
the premium is paid or is to be paid by an employer under the
terms of a collective bargaining agreement.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.852. CONTINUATION OF GROUP LIFE INSURANCE DURING LABOR
DISPUTE REQUIRED FOR CERTAIN POLICIES. An insurer may not
deliver or issue for delivery a policy subject to this subchapter
unless the policy provides that if the employees covered by the
policy stop work because of a labor dispute, coverage continues
under the policy, on timely payment of the premium, for each
employee who:
(1) is covered under the policy on the date the work stoppage
begins;
(2) continues to pay the employee's individual contribution,
subject to the conditions provided by this subchapter; and
(3) assumes and pays during the work stoppage the contribution
due from the employer, subject to the conditions provided by this
subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.853. CONTRIBUTIONS IF POLICYHOLDER IS TRUSTEE. (a)
An employee's contribution for purposes of a policy as to which
the policyholder is a trustee or the trustees of a fund
established or maintained wholly or partly by the employer is the
amount the employee and employer would have been required to
contribute to the fund for the employee if:
(1) the work stoppage had not occurred; and
(2) the agreement requiring the employer to make contributions
to the fund were in effect.
(b) The policy may provide that continuation of coverage is
contingent on the collection of individual contributions by the
policyholder or the policyholder's agent.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.854. CONTRIBUTIONS IF POLICYHOLDER IS NOT TRUSTEE.
(a) A policy as to which the policyholder is not a trustee or
the trustees of a fund established or maintained in whole or in
part by the employer must provide that the employee's individual
contribution:
(1) is the policy rate applicable:
(A) on the date the work stoppage begins; and
(B) to an individual in the class to which the employee belongs
as provided by the policy; or
(2) if the policy does not provide for a rate applicable to an
individual, is an amount equal to the amount determined by
dividing:
(A) the total monthly premium in effect under the policy on the
date the work stoppage begins; by
(B) the total number of insureds under the policy on that date.
(b) The policy may provide that continuation of coverage under
this subchapter is contingent on the collection of individual
contributions by the union or unions representing the employees.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.855. PAYMENT OF CONTRIBUTION AND PREMIUM. A policy
may provide that continuation of coverage for an employee under
the policy is contingent on timely payment of:
(1) contributions by the employee; and
(2) the premium by the entity responsible for collecting the
individual employee contributions.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.856. PAST DUE PREMIUM. (a) A policy may provide that
the continuation of coverage is contingent on payment of any
premium that:
(1) is unpaid on the date the work stoppage begins; and
(2) became due before the date the work stoppage begins.
(b) A premium described by Subsection (a) must be paid before
the date the next premium becomes due under the policy.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.857. INDIVIDUAL PREMIUM RATE INCREASE. (a) A policy
may provide that, during the period of a work stoppage, an
individual premium rate may be increased by an amount not to
exceed 20 percent of the amount shown in the policy, or a greater
percentage as approved by the commissioner, to provide sufficient
compensation to the insurer to cover increased:
(1) administrative costs; and
(2) mortality and morbidity.
(b) If a policy provides for a premium rate increase in
accordance with this section, the amount of an employee's
contribution must be increased by the same percentage.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.858. PREMIUM RATE CHANGE NOT LIMITED. (a) This
subchapter does not limit any right of the insurer under a policy
to increase or decrease a premium rate before, during, or after a
work stoppage if the insurer would be entitled to increase the
premium rate had a work stoppage not occurred.
(b) A change in a premium rate made in accordance with this
section takes effect on a date that is determined by the insurer
in accordance with the terms of the policy.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.859. LIMITATIONS ON CONTINUATION OF COVERAGE. This
subchapter does not require the continuation of coverage under a
policy for a period:
(1) longer than six months after a work stoppage occurs;
(2) beyond the time that 75 percent of the covered employees
continue the coverage; or
(3) as to an individual covered employee, beyond the time that
the employee takes a full-time job with another employer.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.
Sec. 1131.860. OTHER PROVISIONS; COMMISSIONER APPROVAL REQUIRED.
A policy may contain any other provision relating to
continuation of policy coverage during a work stoppage that the
commissioner approves.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1,
2003.