CHAPTER 1201. ACCIDENT AND HEALTH INSURANCE
INSURANCE CODE
TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES
SUBTITLE A. HEALTH COVERAGE IN GENERAL
CHAPTER 1201. ACCIDENT AND HEALTH INSURANCE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1201.001. DEFINITIONS. In this chapter:
(1) "Accident and health insurance policy" includes any policy
or contract that provides insurance against loss resulting from:
(A) accidental bodily injury;
(B) accidental death; or
(C) sickness.
(2) "Policy" means the entire contract between an insurer and an
insured and includes riders, endorsements, and the application,
if attached.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.002. PURPOSE. The purpose of this chapter is to:
(1) provide for reasonable standardization, readability, and
simplification of terms and coverages in individual accident and
health insurance policies;
(2) promote public understanding of coverages;
(3) eliminate provisions in individual accident and health
insurance policies that may be unjust, unfair, misleading, or
unreasonably confusing in connection with:
(A) the purchase of coverage; or
(B) the settlement of claims; and
(4) provide for full and fair disclosure in sales of accident
and health coverage.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.003. APPLICABILITY OF CHAPTER. (a) This chapter
applies only to an accident and health insurance policy delivered
or issued for delivery in this state.
(b) Except as otherwise provided by this chapter, this chapter
applies only to an individual accident and health insurance
policy delivered or issued for delivery by:
(1) a life, health, and accident insurance company;
(2) a mutual insurance company, including:
(A) a mutual life insurance company; and
(B) a mutual assessment life insurance company;
(3) a local mutual aid association;
(4) a mutual or natural premium life or casualty insurance
company;
(5) a general casualty company;
(6) a Lloyd's plan;
(7) a reciprocal or interinsurance exchange;
(8) a nonprofit hospital, medical, or dental service
corporation, including a corporation operating under Chapter 842;
or
(9) another insurer required by law to be authorized by the
department.
(c) This chapter applies to an accident and health insurance
policy issued by a stipulated premium company subject to Chapter
884.
(d) This chapter does not apply to:
(1) any society, company, or other insurer whose activities are
exempt by statute from the control of the department and that is
entitled by statute to a certificate from the department that
shows the entity's exempt status;
(2) a credit accident and health insurance policy issued under
Chapter 1153;
(3) a workers' compensation insurance policy;
(4) a liability insurance policy, with or without supplementary
expense coverage;
(5) a reinsurance policy or contract;
(6) a blanket or group insurance policy, except as otherwise
provided by this chapter; or
(7) a life insurance endowment or annuity contract or a contract
supplemental to a life insurance endowment or annuity contract if
the contract or supplemental contract contains only provisions
relating to accident and health insurance that:
(A) provide additional benefits in case of accidental death,
accidental dismemberment, or accidental loss of sight; or
(B) operate to:
(i) safeguard the contract or supplemental contract against
lapse; or
(ii) give a special surrender value, a special benefit, or an
annuity if the insured or annuitant becomes totally and
permanently disabled, as defined by the contract or supplemental
contract.
(e) Subchapters C and D do not apply to a conversion policy
issued under a contractual conversion privilege under a group
accident and health insurance policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.004. CONSTRUCTION OF CHAPTER. This chapter does not
enlarge the powers of an entity listed in Section 1201.003.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.005. REFERENCES TO CHAPTER. In this chapter, a
reference to this chapter includes a reference to:
(1) Section 1202.052;
(2) Section 1271.005(a), to the extent that the subsection
relates to the applicability of Section 1201.105, and Sections
1271.005(d) and (e);
(3) Chapter 1351;
(4) Subchapters C and E, Chapter 1355;
(5) Chapter 1356;
(6) Chapter 1365;
(7) Subchapter A, Chapter 1367; and
(8) Subchapters A, B, and G, Chapter 1451.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.006. RULEMAKING AUTHORITY. The commissioner may adopt
reasonable rules as necessary to implement the purposes and
provisions of this chapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.007. NOTICE AND HEARING. The commissioner may adopt a
general rule or order relating to a matter covered by this
chapter only after a hearing held after the 10th day following
the date the department by mail notifies each insurer to which
this chapter applies.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.008. JUDICIAL REVIEW. An insurer that is dissatisfied
with an order, act, rule, administrative ruling, or decision of
the commissioner under this chapter may, after failing to get
relief from the commissioner, file a petition seeking judicial
review of the order, act, rule, ruling, or decision in accordance
with Subchapter D, Chapter 36. The action has precedence over all
other causes on the docket of a different nature.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.009. NONCONFORMING POLICY. (a) This chapter governs
the rights, duties, and obligations of the insurer, the insured,
and the beneficiary of an accident and health insurance policy
regardless of a provision in the policy that conflicts with this
chapter.
(b) An accident and health insurance policy that violates this
chapter is a valid policy, but the policy shall be construed in a
manner to make the policy consistent with this chapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.010. THIRD-PARTY OWNERSHIP OF POLICY. The use of
"insured" in this chapter does not prevent a person with an
insurable interest, other than the insured, from:
(1) applying for and owning an individual accident and health
insurance policy covering the insured; or
(2) being entitled to an indemnity, right, or benefit provided
for in an individual accident and health insurance policy
covering the insured.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.011. COVERAGE FOR PREMIUM PERIOD WITH LIMITATIONS BY
AGE OR DATE; MISSTATEMENT OF AGE OF INSURED. (a) Regardless of
a provision in an individual accident and health insurance policy
that specifies a date, by age limitation or otherwise, after
which coverage under the policy is not effective, coverage
continues in force, subject to any right of cancellation, until
the end of the period for which the insurer accepts a premium if:
(1) the insurer accepts the premium after the specified date; or
(2) the specified date falls before the end of the period for
which the insurer accepts the premium.
(b) Notwithstanding Subsection (a), if the age of the insured is
misstated and, because of the insured's correct age, coverage of
the insured would not have become effective or would have
terminated before the insurer's acceptance of a premium, the
liability of the insurer is limited to the refund, on request, of
the premiums paid for the period not covered by the policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.012. DEFENSE OF CLAIM. The following actions by an
insurer do not operate as a waiver of the insurer's rights in
defense of a claim that arises under an individual accident and
health insurance policy:
(1) acknowledgment of the receipt of notice given under the
policy;
(2) provision of a form for filing a proof of loss;
(3) acceptance of a proof of loss; or
(4) investigation of a claim under the policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.013. PROGRAMS PROMOTING DISEASE PREVENTION, WELLNESS,
AND HEALTH. (a) An insurer issuing an accident and health
insurance policy may establish premium discounts, rebates, or a
reduction in otherwise applicable copayments, coinsurance, or
deductibles, or any combination of these incentives, for an
insured who participates in programs promoting disease
prevention, wellness, and health.
(b) A discount, rebate, or reduction established under this
section does not violate Section 541.056(a).
Added by Acts 2007, 80th Leg., R.S., Ch.
112, Sec. 2, eff. May 17, 2007.
SUBCHAPTER B. POLICY TERMS
Sec. 1201.051. ENTIRE CONSIDERATION. An individual accident and
health insurance policy must state the entire monetary and other
consideration for the policy in the policy or in the application,
if the application is made a part of the policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.052. TIME OF EFFECTIVENESS AND TERMINATION. An
individual accident and health insurance policy must state the
time the insurance takes effect and the time the insurance
terminates.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.053. PERSONS INSURED. (a) Except as provided by this
section, an individual accident and health insurance policy may
not insure more than one individual.
(b) On the application of an adult member of a family, an
individual accident and health insurance policy may, at the time
of original issuance or by subsequent amendment, insure two or
more eligible members of the adult's family, including a spouse,
unmarried children younger than 25 years of age, including a
grandchild of the adult as described by Section 1201.062(a)(1), a
child the adult is required to insure under a medical support
order issued under Chapter 154, Family Code, or enforceable by a
court in this state, and any other individual dependent on the
adult.
(c) The adult who applies for the individual accident and health
insurance policy is considered the policyholder.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.054. APPEARANCE OF TEXT. (a) In this section, "text"
includes all printed matter of an individual accident and health
insurance policy except:
(1) the name and address of the insurer;
(2) the name or title of the policy;
(3) the brief description, if any; and
(4) captions and subcaptions.
(b) An individual accident and health insurance policy must
have:
(1) a style, arrangement, or overall appearance that does not
give undue prominence to any portion of the text; and
(2) every printed portion of its text and of any endorsements or
attached papers printed plainly in a lightfaced type:
(A) of a style in general use; and
(B) in a uniform size not less than 10-point with a lowercase
unspaced alphabet length not less than 120-point.
(c) Subsection (b)(2) does not apply to a copy of an application
or identification card.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.055. EXCEPTIONS AND REDUCTIONS OF INDEMNITY. (a) An
individual accident and health insurance policy must state each
exception to or reduction of indemnity for the policy.
(b) Except as provided by Subchapter E, each exception to or
reduction of indemnity for the policy must be printed, at the
insurer's option:
(1) with the benefit provision to which the exception or
reduction applies; or
(2) under an appropriate caption such as:
(A) "Exceptions"; or
(B) "Exceptions and Reductions."
(c) Notwithstanding Subsection (b), if an exception or reduction
specifically applies only to a particular benefit of an
individual accident and health insurance policy, the statement of
the exception or reduction must be included with the benefit
provision to which the exception or reduction applies.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.056. FORM NUMBER. Each form that constitutes a part
of an individual accident and health insurance policy, including
each rider or endorsement, must be identified by a form number
placed in the lower left corner of the first page of the form.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.057. INCORPORATION OF OR REFERENCE TO OTHER DOCUMENTS.
(a) An individual accident and health insurance policy that
provides that a portion of the charter, rules, constitution, or
bylaws of the insurer are a part of the policy must state that
portion fully in the policy.
(b) An individual accident and health insurance policy may
incorporate or refer to:
(1) a statement of rates or classification of risks; or
(2) a short-rate table filed with the department.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.058. NOTIFICATION THAT POLICY IS RETURNABLE; EFFECT OF
RETURN. (a) An individual accident and health insurance policy
must include a notice that states in substance that the
individual to whom the policy is issued is entitled to have the
premium paid refunded if, after the individual examines the
policy, the individual is not satisfied with the policy for any
reason and returns the policy not later than the 10th day after
the date the policy is delivered to the individual.
(b) An individual accident and health insurance policy returned
to the insurer at the insurer's home or branch office or to the
agent through whom the policy was purchased within the time
provided by the notice is void from the date the policy was
issued, and the parties are in the same position as if the policy
had not been issued.
(c) The notice required by this section may be printed on the
policy or attached to the policy.
(d) This section does not apply to a single premium nonrenewable
policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.059. TERMINATION OF COVERAGE BASED ON AGE OF CHILD IN
INDIVIDUAL, BLANKET, OR GROUP POLICY. (a) An accident and
health insurance policy, including an individual, blanket, or
group policy, and including a policy issued by a corporation
operating under Chapter 842, that provides that coverage of a
child terminates when the child attains a limiting age specified
in the policy must provide in substance that the child's
attainment of that age does not terminate coverage while the
child is:
(1) incapable of self-sustaining employment because of mental
retardation or physical disability; and
(2) chiefly dependent on the insured or group member for support
and maintenance.
(b) To obtain coverage for a child as described by Subsection
(a), the insured or group member must provide to the insurer
proof of the child's incapacity and dependency:
(1) not later than the 31st day after the date the child attains
the limiting age; and
(2) subsequently as the insurer requires, except that the
insurer may not require proof more frequently than annually after
the second anniversary of the date the child attains the limiting
age.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.060. REQUIRED DEFINITION OF "EMERGENCY CARE" IN
INDIVIDUAL OR GROUP POLICY. An individual or group accident and
health insurance policy that provides an emergency care benefit,
including a policy issued by a corporation operating under
Chapter 842, must define "emergency care" as follows:
"Emergency care" means bona fide emergency services provided
after the sudden onset of a medical condition manifesting itself
by acute symptoms of sufficient severity, including severe pain,
such that the absence of immediate medical attention could
reasonably be expected to result in:
(1) placing the patient's health in serious jeopardy;
(2) serious impairment to bodily functions; or
(3) serious dysfunction of any bodily organ or part.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.0601. REQUIRED DEFINITIONS: SPECIFIED DISEASE POLICY.
An individual or group specified disease insurance policy that
uses the term "actual charge" or "actual fee" must define the
terms as follows:
"Actual charge" or "actual fee" means the amount actually paid by
or on behalf of the insured and accepted by a provider for
services provided.
Added by Acts 2005, 79th Leg., Ch.
974, Sec. 1, eff. September 1, 2005.
Sec. 1201.061. COVERAGE FOR ADOPTED CHILD. (a) An individual
accident and health insurance policy that provides coverage for
an insured's immediate family or children may not, solely because
the insured's child is adopted:
(1) exclude the child from coverage; or
(2) limit coverage for the child.
(b) For the purposes of this section, a child is an insured's
child if the insured is a party to a suit in which the insured
seeks to adopt the child.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.062. COVERAGE FOR CERTAIN CHILDREN IN INDIVIDUAL OR
GROUP POLICY OR IN PLAN OR PROGRAM. (a) An individual or group
accident and health insurance policy that is delivered, issued
for delivery, or renewed in this state, including a policy issued
by a corporation operating under Chapter 842, or a self-funded or
self-insured welfare or benefit plan or program, to the extent
that regulation of the plan or program is not preempted by
federal law, that provides coverage for a child of an insured or
group member, on payment of a premium, must provide coverage for:
(1) each grandchild of the insured or group member if the
grandchild is:
(A) unmarried;
(B) younger than 25 years of age; and
(C) a dependent of the insured or group member for federal
income tax purposes at the time application for coverage of the
grandchild is made; and
(2) each child for whom the insured or group member must provide
medical support under an order issued under Chapter 154, Family
Code, or enforceable by a court in this state.
(b) Coverage for a grandchild of the insured or group member may
not be terminated solely because the grandchild is no longer a
dependent of the insured or group member for federal income tax
purposes.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.063. PROHIBITION OF CERTAIN CRITERIA RELATING TO
CHILD'S COVERAGE IN INDIVIDUAL OR GROUP POLICY. Regarding a
natural or adopted child of an insured or group member or a child
for whom the insured or group member must provide medical support
under an order issued under Chapter 154, Family Code, or
enforceable by a court in this state, an individual or group
accident and health insurance policy that provides coverage for a
child of an insured or group member may not set a different
premium for the child, exclude the child from coverage, or
discontinue coverage of the child because:
(1) the child does not reside with the insured or group member;
or
(2) the insured or group member does not claim the child as an
exemption for federal income tax purposes under Section
151(c)(1)(B), Internal Revenue Code of 1986.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.064. COVERAGE FOR CHILD OF SPOUSE IN INDIVIDUAL OR
GROUP POLICY. An individual or group accident and health
insurance policy that provides coverage for a child of an insured
or group member may not:
(1) set a premium for a child that is different from the premium
for other children because the child is the natural or adopted
child of the spouse of the insured or group member;
(2) exclude a child described by Subdivision (1) from coverage;
or
(3) discontinue coverage of a child described by Subdivision
(1).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.065. AGE AND SCHOOL ENROLLMENT ELIGIBILITY CRITERIA
FOR DEPENDENT CHILDREN IN INDIVIDUAL OR GROUP POLICY; LATE
ENROLLMENT. (a) An individual or group accident and health
insurance policy may contain criteria relating to a maximum age
or enrollment in school to establish continued eligibility for
coverage of a child 25 years of age or older.
(b) In the case of a late enrollment, an insurer may require
evidence of insurability that is satisfactory to the insurer
before a child is included for coverage under the policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.023(a), eff. September 1, 2005.
SUBCHAPTER C. GENERAL POLICY STANDARDS AND PROVISIONS
Sec. 1201.101. STANDARDS FOR POLICY PROVISIONS. (a) The
commissioner shall adopt reasonable rules establishing specific
standards for:
(1) the content of an individual accident and health insurance
policy; and
(2) the manner of sale of an individual accident and health
insurance policy, including disclosures required to be made in
connection with the sale.
(b) Rules adopted under this section must establish standards
for:
(1) policy readability; and
(2) full and fair policy disclosures.
(c) Standards established under this section may include
standards that address:
(1) terms of policy renewability;
(2) initial and subsequent conditions of eligibility;
(3) nonduplication of coverage;
(4) coverage of dependents;
(5) preexisting conditions;
(6) termination of insurance;
(7) probationary periods;
(8) limitations;
(9) exceptions;
(10) reductions;
(11) elimination periods;
(12) requirements for replacement;
(13) recurrent conditions; and
(14) definitions of terms, including definitions of:
(A) "accident";
(B) "accidental means";
(C) "guaranteed renewable and noncancellable";
(D) "hospital";
(E) "injury";
(F) "nervous disorder";
(G) "partial disability";
(H) "physician";
(I) "sickness"; and
(J) "total disability."
(d) A definition of "hospital" adopted under Subsection (c) may
not apply to a corporation operating under Chapter 842.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.102. PROHIBITION OF POLICY PROVISIONS. The
commissioner may adopt rules prohibiting specific individual
accident and health insurance policy provisions not specifically
authorized by statute that the commissioner determines are
unjust, unfair, or unfairly discriminatory to:
(1) the policyholder;
(2) an insured under the policy; or
(3) a beneficiary.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.103. COMPLIANCE WITH MINIMUM STANDARDS FOR BENEFITS.
(a) An individual accident and health insurance policy must meet
the minimum standards for benefits established under Section
1201.104 for each category of coverage provided under the policy.
(b) Subsection (a) does not apply if the commissioner determines
that the policy is a supplemental policy or experimental policy
or determines that the policy will fulfill a reasonable public
need and the policy meets the requirements of Chapter 1701.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.104. MINIMUM STANDARDS FOR BENEFITS. (a) For
individual accident and health insurance policies, the
commissioner shall adopt rules establishing minimum standards for
benefits under each of the following categories of coverage:
(1) basic hospital expense;
(2) basic medical-surgical expense;
(3) hospital confinement indemnity;
(4) major medical expense;
(5) disability income protection;
(6) accident only;
(7) specified disease;
(8) specified accident; and
(9) limited benefit.
(b) This section does not prohibit the issuance of an individual
accident and health insurance policy that combines categories of
coverage listed by this section.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.105. MINIMUM STANDARDS FOR BENEFITS FOR LONG-TERM CARE
IN INDIVIDUAL, GROUP, OR BLANKET POLICY. (a) The commissioner
shall adopt rules establishing minimum standards for benefits for
long-term care coverage under individual, group, and blanket
accident and health insurance policies and certificates delivered
or issued for delivery in this state.
(b) Rules adopted under this section apply to group coverages
delivered or issued for delivery by a corporation operating under
Chapter 842.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.106. IDENTIFICATION OF POLICIES ACCORDING TO COVERAGE
PROVIDED. The commissioner shall prescribe the method to
identify an individual accident and health insurance policy
according to the coverages the policy provides.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.107. OUTLINE OF COVERAGE REQUIRED. (a) An outline of
coverage for an individual accident and health insurance policy
must be delivered to the applicant at the time application is
made, and an acknowledgment of receipt or certificate of delivery
of an outline of coverage must be provided to the insurer with
the application.
(b) If the policy issued differs from the policy for which the
applicant applied, an outline of coverage that properly describes
the policy must:
(1) accompany the policy when delivered; and
(2) clearly state that the policy is not the policy for which
the applicant applied.
(c) Subsection (a) does not apply to a direct response insurance
product.
(d) An outline of coverage under a direct response insurance
product must accompany the policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.108. FORMAT AND CONTENT OF OUTLINE OF COVERAGE. (a)
In this section, "format" means style, arrangement, and overall
appearance, including:
(1) the size, color, and prominence of type; and
(2) the arrangement of text and captions.
(b) The commissioner shall prescribe the format and content of
an outline of coverage required by Section 1201.107.
(c) An outline of coverage must include:
(1) a statement that identifies the applicable categories of
coverage listed by Section 1201.104 and provided by the policy;
(2) a description of the principal benefits and coverage
provided by the policy;
(3) a statement of the exceptions, reductions, and limitations
in the policy;
(4) a statement of the renewal provision, including any
reservation of the insurer's right to change premiums;
(5) a statement that:
(A) the outline is a summary of the policy issued or applied
for; and
(B) the policy should be consulted to determine governing
contractual provisions;
(6) as the commissioner determines necessary to carry out the
purposes of this chapter, a summary of the provisions required by
Subchapter E to be in the policy; and
(7) any other statement, description, or outline that the
commissioner determines is reasonably necessary to carry out the
purposes of this chapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
SUBCHAPTER D. PREEXISTING CONDITIONS
Sec. 1201.151. COMPLIANCE WITH SUBCHAPTER; PROHIBITION OF
DEFENSE. Except as provided by this subchapter, an individual
accident and health insurance policy may not include a provision
that permits a defense based on a preexisting condition.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.152. COVERAGE UNDER SIMPLIFIED APPLICATION FORM. (a)
Notwithstanding Clause (b) of the provision required by Section
1201.208(a), an individual accident and health insurance policy
must cover any loss that occurs after 12 months from a
preexisting condition if the insurer uses a simplified
application form that does not include a question concerning the
applicant's health history or medical treatment history.
(b) This section applies regardless of whether the simplified
application form includes a question regarding the applicant's
health at the time of application.
(c) This section does not require an insurer to cover a loss
from a condition that the policy specifically excludes from
coverage.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.153. COVERAGE FOR INDIVIDUALS AGE 65 OR OLDER. (a)
Notwithstanding Section 1201.152 or Clause (b) of the provision
required by Section 1201.208(a), an individual accident and
health insurance policy delivered or issued for delivery to an
individual who is 65 years of age or older may not include a
provision that excludes from coverage a loss that occurs from a
preexisting condition more than six months after the effective
date of coverage under the policy.
(b) Notwithstanding Subsection (a), the commissioner may
authorize a policy provision that excludes coverage for a
preexisting condition for a period of not more than one year if
the commissioner determines that the provision would serve the
public interest.
(c) This section does not require an insurer to provide coverage
for a loss from a preexisting condition specifically excluded
from coverage by name or specific description in an exclusion
endorsement or rider that is effective on the date of the loss.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.154. COVERAGE FOR CERTAIN PREVIOUSLY COVERED PERSONS.
(a) In this section, "creditable coverage" has the meaning
assigned by Section 1205.004(a).
(b) A preexisting condition provision in an individual accident
and health insurance policy may not apply to an individual who
was continuously covered for an aggregate period of 18 months by
creditable coverage that was in effect up to a date not more than
63 days before the effective date of the individual coverage,
excluding any waiting period.
(c) In determining whether a preexisting condition provision of
an individual accident and health insurance policy applies to an
individual, an insurer shall credit the time the individual
previously was covered under creditable coverage if the previous
coverage was in effect at any time during the 18 months preceding
the effective date of the individual coverage.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.024, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
1070, Sec. 1, eff. June 15, 2007.
SUBCHAPTER E. REQUIRED POLICY PROVISIONS
Sec. 1201.201. POLICY PROVISIONS REQUIRED. (a) Except as
provided by Subsections (b) and (c), an individual accident and
health insurance policy must contain the provisions required by
this subchapter in the words provided by this subchapter.
(b) An insurer may substitute for a policy provision required by
this subchapter a provision with different wording approved by
the commissioner in accordance with reasonable rules adopted by
the commissioner. A substituted provision may not be less
favorable to an insured or a beneficiary of the policy than the
provision required by this subchapter.
(c) If a policy provision required by this subchapter is wholly
or partly inapplicable to or inconsistent with the coverage
provided by a particular form of policy, the insurer, with the
commissioner's approval, shall:
(1) omit from the policy each inapplicable provision or part of
a provision; and
(2) modify each inconsistent provision or part of a provision so
that the provision as contained in the policy is consistent with
the coverage provided by the policy.
(d) A policy provision required by this subchapter must be
preceded by the caption for the provision provided by this
subchapter or, at the option of the insurer, by an appropriate
individual or group caption or subcaption approved by the
commissioner.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.202. ORDER OF REQUIRED POLICY PROVISIONS. (a) Except
as provided by Subsection (b), policy provisions required by this
subchapter or corresponding substitute provisions must be printed
in the same consecutive order as provided by this subchapter.
(b) An insurer may print a policy provision required by this
subchapter or a corresponding substitute provision as a unit in
any part of the policy with other provisions to which the
provision is logically related.
(c) A policy printed under Subsection (b) may not be wholly or
partly unintelligible, uncertain, ambiguous, abstruse, or likely
to mislead a person to whom the policy is offered, delivered, or
issued.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.203. OTHER POLICY PROVISIONS. A policy provision that
is not otherwise subject to this subchapter may not make an
individual accident and health insurance policy or any portion of
the policy less favorable in any way to the insured or the
beneficiary than the policy provisions that are subject to this
chapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.204. POLICY PROVISIONS REQUIRED BY OTHER JURISDICTION.
An individual accident and health insurance policy of a foreign
or alien insurer may contain any provision that is:
(1) not less favorable to the insured or the beneficiary than
the provisions of this chapter; and
(2) prescribed or required by the law of the state under which
the insurer is organized.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.205. POLICY PROVISIONS FOR POLICY DELIVERED OUTSIDE
THIS STATE. An individual accident and health insurance policy
issued by a domestic insurer for delivery in another state or
country may contain any provision permitted or required by the
laws of that state or country.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.206. FILING PROCEDURE. (a) The commissioner may
adopt reasonable rules regarding the procedure for submitting
policies subject to this chapter that are necessary, proper, or
advisable for the administration of this chapter.
(b) This section does not limit any authority otherwise granted
by law to the commissioner or department.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.207. POLICY PROVISION: ENTIRETY OF CONTRACT; POLICY
CHANGES. An individual accident and health insurance policy must
contain the following provision:
"Entire Contract; Changes: This policy, including the
endorsements and the attached papers, if any, constitutes the
entire contract of insurance. A change in this policy is not
valid until the change is approved by an executive officer of the
insurer and unless the approval is endorsed on or attached to the
policy. An agent does not have authority to change this policy or
to waive any of its provisions."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.208. POLICY PROVISION: INCONTESTABILITY. (a) Except
as provided by Subsection (c), an individual accident and health
insurance policy must contain the following provision:
"Time Limit on Certain Defenses: (a) After the second anniversary
of the date this policy is issued, a misstatement, other than a
fraudulent misstatement, made by the applicant in the application
for the policy may not be used to void the policy or to deny a
claim for loss incurred or disability (as defined in the policy)
beginning after that anniversary.
"(b) A claim for loss incurred or disability (as defined in the
policy) beginning after the second anniversary of the date this
policy is issued may not be reduced or denied on the ground that
a disease or physical condition not excluded from coverage by
name or specific description effective on the date of loss
existed before the effective date of coverage of this policy."
(b) Clause (a) of the provision required by Subsection (a) does
not:
(1) affect any legal requirement for avoidance of a policy or
denial of a claim during the initial two-year period; or
(2) limit the application of Section 1201.219, 1201.220, or
1201.221 in a case of a misstatement regarding age, occupation,
or other insurance.
(c) For a policy that provides that the insured is entitled to
continue the policy in force by the timely payment of premiums
until the insured reaches at least 50 years of age or, if the
policy was issued after the insured reached 44 years of age,
until at least the fifth anniversary of the policy's date of
issuance, an insurer may use the following clause instead of
Clause (a) of the provision required by Subsection (a):
"After this policy has been in force for a period of two years
during the lifetime of the insured (excluding any period during
which the insured is disabled), it shall become incontestible as
to the statements contained in the application."
(d) The provision provided by Subsection (c) must be under the
caption "Incontestable." An insurer that uses the provision may
omit the parenthetical clause.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.209. POLICY PROVISION: GRACE PERIOD. (a) An
individual accident and health insurance policy must contain the
following provision:
"Grace Period: A grace period of __________ (insert appropriate
number) days will be granted for the payment of each premium due
after the first premium. During the grace period, the policy
continues in force."
(b) The number of days of the grace period may not be less than:
(1) 7 for a weekly premium policy;
(2) 10 for a monthly premium policy; or
(3) 31 for any other policy.
(c) A policy that contains a cancellation provision may add, at
the end of the provision required by Subsection (a): "subject to
the right of the insurer to cancel the policy in accordance with
the policy's cancellation provision."
(d) A policy in which the insurer reserves the right to refuse
any renewal must include the following provision at the beginning
of the provision required by Subsection (a):
"Unless, not less than five days before the premium due date, the
insurer has delivered to the insured, or has mailed to the
insured's last address as shown by the insurer's records, a
written notice of the insurer's intention not to renew this
policy beyond the period for which the premium has been accepted,
...."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.210. POLICY PROVISION: REINSTATEMENT. (a) Except as
provided by Subsection (b), an individual accident and health
insurance policy must contain the following provision:
"Reinstatement: If a renewal premium is not paid before the
expiration of the period granted for the insured to make the
payment, a subsequent acceptance of the premium by the insurer or
any agent authorized by the insurer to accept the premium,
without requiring in connection with the acceptance an
application for reinstatement, reinstates the policy. However, if
the insurer or authorized agent requires an application for
reinstatement and issues a conditional receipt for the premium
tendered, the policy will be reinstated on approval of the
application by the insurer or, if the application is not
approved, on the 45th day after the date of the conditional
receipt unless the insurer before that date has notified the
insured in writing of the insurer's disapproval of the
application. The reinstated policy covers only loss resulting
from an accidental injury sustained after the date of
reinstatement and loss due to sickness that begins more than 10
days after the date of reinstatement. In all other respects the
insured and insurer have the same rights under the reinstated
policy as they had under the policy immediately before the due
date of the defaulted premium, subject to any provisions endorsed
in the policy or attached to the policy in connection with the
reinstatement. Any premium accepted in connection with a
reinstatement shall be applied to a period for which premium has
not been previously paid, but not to any period more than 60 days
before the date of reinstatement."
(b) The insurer may omit the last sentence of the provision
required by Subsection (a) in a policy that provides that the
insured is entitled to continue the policy in force by the timely
payment of premiums until the insured reaches at least 50 years
of age or, if the policy was issued after the insured reached 44
years of age, until at least the fifth anniversary of the
policy's date of issuance.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.211. POLICY PROVISION: NOTICE OF CLAIM. (a) Except
as provided by Subsection (b), an individual accident and health
insurance policy must contain the following provision:
"Notice of Claim: A written notice of claim must be given to the
insurer before the 21st day after the date of the occurrence or
beginning of any loss covered by the policy, or as soon after
that date as is reasonably possible. A notice given by or on
behalf of the insured or the beneficiary to the insurer at
__________ (insert the location of any office the insurer
designates for the purpose), or to any authorized agent of the
insurer, with information sufficient to identify the insured,
constitutes notice to the insurer."
(b) In a policy that provides a loss of time benefit that may be
payable for at least two years, an insurer may insert, between
the first and second sentences of the provision required by
Subsection (a), the following provision:
"Subject to the qualifications below, and except in the event of
a legal incapacity, if the insured suffers loss of time on
account of disability for which indemnity may be payable for at
least two years, the insured shall, at least once in every
__________ (insert appropriate number) months after having given
notice of claim, give to the insurer notice of continuance of the
disability. In applying this provision, the period of __________
(insert appropriate number) months following a filing of proof by
the insured or any payment by the insurer on account of the claim
or any denial of liability in whole or in part by the insurer
shall be excluded. Delay in giving the notice does not impair the
insured's right to any indemnity that would otherwise have
accrued during the period of __________ (insert appropriate
number) months preceding the date on which the notice is actually
given."
(c) The number of months inserted in the clause permitted by
Subsection (b) may not be less than one or greater than six.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.212. POLICY PROVISION: CLAIM FORMS. (a) Except as
provided by Subsection (b), an individual accident and health
insurance policy must contain the following provision:
"Claim Forms: The insurer, on receipt of a notice of claim, will
provide to the claimant the forms usually provided by the insurer
for filing proof of loss. If the forms are not provided before
the 16th day after the date of the notice, the claimant shall be
considered to have complied with the requirements of this policy
as to proof of loss on submitting, within the time fixed in the
policy for filing proofs of loss, written proof covering the
occurrence, the character, and the extent of the loss for which
the claim is made."
(b) The provision required by this section is not required to be
contained in a policy issued by a corporation operating under
Chapter 842.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.213. POLICY PROVISION: PROOF OF LOSS. An individual
accident and health insurance policy must contain the following
provision:
"Proof of Loss: For a claim for loss for which this policy
provides any periodic payment contingent on continuing loss, a
written proof of loss must be provided to the insurer at the
insurer's designated office before the 91st day after the
termination of the period for which the insurer is liable. For a
claim for any other loss, a written proof of loss must be
provided to the insurer at the insurer's designated office before
the 91st day after the date of the loss. Failure to provide the
proof within the required time does not invalidate or reduce any
claim if it was not reasonably possible to give proof within the
required time. In that case, the proof must be provided as soon
as reasonably possible but not later than one year after the time
proof is otherwise required, except in the event of a legal
incapacity."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.214. POLICY PROVISION: TIME OF PAYMENT OF CLAIMS. (a)
Except as provided by Subsection (c), an individual accident and
health insurance policy must contain the following provision:
"Time of Payment of Claims: Indemnities payable under this policy
for any loss, other than a loss for which this policy provides
any periodic payment, will be paid immediately on receipt of due
written proof of the loss. Subject to due written proof of loss,
all accrued indemnities for a loss for which this policy provides
periodic payment will be paid __________ (insert period for
payment) and any balance remaining unpaid on termination of
liability will be paid immediately on receipt of due written
proof of loss."
(b) The period for payment to be inserted in the clause required
by Subsection (a) may not be less frequent than monthly.
(c) The provision required by this section is not required to be
contained in a policy issued by a corporation operating under
Chapter 842.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.215. POLICY PROVISION: PAYMENT OF CLAIMS. (a) Except
as provided by Subsection (d), an individual accident and health
insurance policy must contain the following provision:
"Payment of Claims: Indemnity for loss of life will be payable in
accordance with the beneficiary designation and the provisions
respecting indemnity payments that may be prescribed in this
policy and effective at the time of payment. If such a
designation or provision is not then effective, the indemnity
will be payable to the insured's estate. Any other accrued
indemnities unpaid at the insured's death may, at the option of
the insurer, be paid either in accordance with the beneficiary
designation or to the insured's estate. All other indemnities
will be payable to the insured."
(b) An insurer may include with the provision required by
Subsection (a) one or both of the following provisions:
"If any indemnity of this policy is payable to the insured's
estate, or to an insured or beneficiary who is a minor or is
otherwise not competent to give a valid release, the insurer may
pay the indemnity, up to an amount not exceeding $__________
(insert amount), to any relative by blood or connection by
marriage of the insured or beneficiary who is considered by the
insurer to be equitably entitled to the indemnity. Any payment
made by the insurer in good faith in accordance with this
provision fully discharges the insurer to the extent of the
payment."
"Subject to any written direction of the insured, in the
application or otherwise, all or a portion of any indemnity
provided by this policy on account of hospital, nursing, medical,
or surgical services may, at the insurer's option and unless the
insured requests otherwise in writing not later than the time of
filing proof of the loss, be paid directly to the hospital or
person providing the services. It is not required that the
service be provided by a particular hospital or person."
(c) The amount to be inserted in the clause permitted by
Subsection (b) may not exceed $1,000.
(d) The provision required by Subsection (a) is not required to
be contained in a policy issued by a corporation operating under
Chapter 842.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.216. POLICY PROVISION: PHYSICAL EXAMINATIONS AND
AUTOPSY. An individual accident and health insurance policy must
contain the following provision:
"Physical Examinations and Autopsy: The insurer at its own
expense has the right and opportunity to conduct a physical
examination of the insured when and as often as the insurer
reasonably requires while a claim under the policy is pending
and, in case of death, to require that an autopsy be conducted if
not forbidden by law."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.217. POLICY PROVISION: LEGAL ACTIONS. An individual
accident and health insurance policy must contain the following
provision:
"Legal Actions: An action at law or in equity may not be brought
to recover on this policy before the 61st day after the date
written proof of loss has been provided in accordance with the
requirements of this policy. An action at law or in equity may
not be brought after the expiration of three years after the time
written proof of loss is required to be provided."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.218. POLICY PROVISION: CHANGE OF BENEFICIARY. (a)
Except as provided by Subsection (b), an individual accident and
health insurance policy must contain the following provision:
"Change of Beneficiary: Unless the insured makes an irrevocable
designation of beneficiary, the right to change a beneficiary is
reserved for the insured, and the consent of the beneficiary or
beneficiaries is not required for the surrender or assignment of
this policy, for any change of beneficiary or beneficiaries, or
for any other changes in this policy."
(b) An insurer may omit the first clause of the provision
required by Subsection (a) relating to an irrevocable designation
of beneficiary.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.219. POLICY PROVISION: CHANGE OF OCCUPATION. An
individual accident and health insurance policy must contain the
following provision if the policy addresses the subject matter of
the provision:
"Change of Occupation: If the insured is injured or contracts a
sickness after the insured changes the insured's occupation to
one classified by the insurer as more hazardous than the
occupation stated in this policy or while doing for compensation
anything pertaining to an occupation so classified, the insurer
will pay only the portion of the indemnity provided in this
policy as the premium paid would have purchased at the rates and
within the limits fixed by the insurer for the more hazardous
occupation. If the insured changes the insured's occupation to
one classified by the insurer as less hazardous than the
occupation stated in this policy, the insurer, on receipt of
proof of the change of occupation, will reduce the premium rate
accordingly, and will return the excess pro rata unearned premium
from the date of change of occupation or from the policy
anniversary date immediately preceding the receipt of the proof,
whichever date is more recent. In applying this provision, the
classification of occupational risk and the premium rates are the
classification and rates that, before the occurrence of the loss
for which the insurer is liable or before the date of proof of
change in occupation, were:
(1) last filed by the insurer with the state official having
supervision of insurance in the state where the insured resided
at the time this policy was issued; or
(2) if filing was not required, last made effective by the
insurer in the state where the insured resided at the time this
policy was issued."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.220. POLICY PROVISION: MISSTATEMENT OF AGE. An
individual accident and health insurance policy must contain the
following provision if the policy addresses the subject matter of
the provision:
"Misstatement of Age: If the age of the insured has been
misstated, the amounts payable under this policy are the amounts
the premium paid would have purchased at the correct age."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.221. POLICY PROVISION: EXCESS INSURANCE. An
individual accident and health insurance policy must contain one
of the following provisions if the policy addresses the subject
matter of the provision:
"Other Insurance With This Insurer: If an accident or health or
accident and health policy or policies previously issued by the
insurer to the insured is in force concurrently with this policy,
making the aggregate indemnity for __________ (insert types of
coverages) in excess of $__________ (insert maximum limit of
indemnity or indemnities), the excess insurance is void and all
premiums paid for the excess shall be returned to the insured or
to the insured's estate."
"Other Insurance With This Insurer: Insurance effective at any
one time on the insured under the same type of policy or policies
with this insurer is limited to the one policy elected by the
insured, the insured's beneficiary, or the insured's estate, as
the case may be, and the insurer will return all premiums paid
for all other policies of the same type."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.222. POLICY PROVISION: RELATION OF EARNINGS TO
INSURANCE. (a) Subject to Subsection (b), an individual
accident and health insurance policy must contain the following
provision if the policy addresses the subject matter of the
provision:
"Relation of Earnings to Insurance: If the total monthly amount
of loss of time benefits promised for the same loss under all
valid loss of time coverage on the insured, regardless of whether
the benefits are payable on a weekly or monthly basis, exceeds
the amount of monthly earnings of the insured at the time the
insured's disability began or the insured's average amount of
monthly earnings for the period of two years immediately
preceding a disability for which claim is made, whichever amount
is greater, the insurer will be liable only for the proportionate
amount of loss of time benefits under this policy as the amount
of the insured's monthly earnings or average monthly earnings
bears to the total amount of monthly benefits for the same loss
under all loss of time coverage on the insured at the time the
disability begins and for the return of the part of the premiums
paid during the immediately preceding two years that exceeds the
pro rata amount of the premiums for the benefits actually paid
under this policy. This provision does not reduce the total
monthly amount of benefits payable under all loss of time
coverage on the insured to less than $200 or the sum of the
monthly benefits specified in the loss of time coverages,
whichever amount is less, and does not reduce benefits other than
loss of time benefits."
(b) The provision described by Subsection (a) may be included
only in a policy that provides that the insured is entitled to
continue the policy in force subject to its terms by the timely
payment of premiums until the insured reaches at least 50 years
of age or, if the policy was issued after the insured reached 44
years of age, until at least the fifth anniversary of the
policy's date of issuance.
(c) An insurer may include in the provision described by
Subsection (a) a definition of "valid loss of time coverage." The
form of the definition must be approved by the commissioner. The
subject matter of the definition must be limited to:
(1) coverage provided by:
(A) governmental agencies; or
(B) organizations subject to regulation by insurance laws or by
insurance authorities of this or any other state or any province
of Canada;
(2) any other coverage the inclusion of which is approved by the
commissioner; or
(3) any combination of coverages described by Subdivisions (1)
and (2).
(d) In the absence of a definition authorized under Subsection
(c), "valid loss of time coverage" does not include:
(1) coverage provided for the insured under a compulsory benefit
statute, including a workers' compensation or employer's
liability statute; or
(2) benefits provided by:
(A) a union welfare plan;
(B) an employer benefit organization; or
(C) an employee benefit organization.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.223. POLICY PROVISION: UNPAID PREMIUM. An individual
accident and health insurance policy must contain the following
provision if the policy addresses the subject matter of the
provision:
"Unpaid Premium: At the time of payment of a claim under this
policy, any premium then due and unpaid or covered by any note or
written order may be deducted from the payment."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.224. POLICY PROVISION: CANCELLATION. An individual
accident and health insurance policy must contain the following
provision if the policy addresses the subject matter of the
provision:
"Cancellation: The insurer may cancel this policy at any time by
written notice delivered to the insured, or mailed to the
insured's last address as shown by the records of the insurer,
stating when the cancellation is effective, which may not be
earlier than five days after the date the notice is delivered or
mailed. After this policy has been continued beyond its original
term, the insured may cancel the policy at any time by written
notice delivered or mailed to the insurer, effective on receipt
or on a later date specified in the notice. In the event of
cancellation, the insurer will promptly return the unearned
portion of any premium paid. If the insured cancels, the earned
premium shall be computed by the use of the short-rate table last
filed with the state official having supervision of insurance in
the state where the insured resided when the policy was issued.
If the insurer cancels, the earned premium shall be computed pro
rata. Cancellation is without prejudice to any claim originating
before the effective date of cancellation."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.225. POLICY PROVISION: CONFORMITY WITH STATE STATUTES.
An individual accident and health insurance policy must contain
the following provision if the policy addresses the subject
matter of the provision:
"Conformity With State Statutes: Any provision of this policy
that, on its effective date, conflicts with the statutes of the
state in which the insured resides on the effective date is by
this clause effectively amended to conform to the minimum
requirements of that state's statutes."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1201.226. POLICY PROVISION: ILLEGAL OCCUPATION. An
individual accident and health insurance policy must contain the
following provision if the policy addresses the subject matter of
the provision:
"Illegal Occupation: The insurer is not liable for any loss to
which a contributing cause was the insured's commission of or
attempt to commit a felony or to which a contributing cause was
the insured's being engaged in an illegal occupation."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
20