Law:Title 7. Life Insurance And Annuities. Subtitle A. Life Insurance In General from Chapter 1108. Benefits Exempt From Seizure (Texas)

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Subtitle A. Life Insurance In General

Contents

Chapter 1108. Benefits Exempt From Seizure

Subchapter A. General Provisions

Section  1108.001.  Construction With Other Law.

The exemptions under this chapter are in addition to the exemptions from garnishment, attachment, execution, or other seizure under Chapter 42, Property Code.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003.



Section  1108.002.  Annuity Contracts.

For purposes of regulation under this code, an annuity contract is considered an insurance policy or contract if the annuity contract is issued:

(1)  by a life, health, or accident insurance company, including a mutual company or fraternal benefit society; or

(2)  under an annuity or benefit plan used by an employer or individual.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003.



Subchapter B. Exemptions From Seizure

Section  1108.051.  Exemptions For Certain Insurance And Annuity Benefits.

(a) Except as provided by Section 1108.053, this section applies to any benefits, including the cash value and proceeds of an insurance policy, to be provided to an insured or beneficiary under:

(1)  an insurance policy or annuity contract issued by a life, health, or accident insurance company, including a mutual company or fraternal benefit society; or

(2)  an annuity or benefit plan used by an employer or individual.

(b)  Notwithstanding any other provision of this code, insurance or annuity benefits described by Subsection (a):

(1)  inure exclusively to the benefit of the person for whose use and benefit the insurance or annuity is designated in the policy or contract; and

(2)  are fully exempt from:

(A)  garnishment, attachment, execution, or other seizure;

(B)  seizure, appropriation, or application by any legal or equitable process or by operation of law to pay a debt or other liability of an insured or of a beneficiary, either before or after the benefits are provided; and

(C)  a demand in a bankruptcy proceeding of the insured or beneficiary.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003.



Section  1108.052.  Exemptions Unaffected By Beneficiary Designation.

The exemptions provided by Section 1108.051 apply regardless of whether:

(1)  the power to change the beneficiary is reserved to the insured; or

(2)  the insured or the insured's estate is a contingent beneficiary.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003.



Section  1108.053.  Exceptions To Exemptions.

The exemptions provided by Section 1108.051 do not apply to:

(1)  a premium payment made in fraud of a creditor, subject to the applicable statute of limitations for recovering the payment;

(2)  a debt of the insured or beneficiary secured by a pledge of the insurance policy or the proceeds of the policy; or

(3)  a child support lien or levy under Chapter 157, Family Code.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.301(a), eff. Sept. 1, 2003.



Subchapter C. Assignment Of Benefits

Section  1108.101.  Assignment Generally.

This chapter does not prevent an insured, owner, or annuitant from assigning, in accordance with the terms of the policy or contract:

(1)  any benefits to be provided under an insurance policy or annuity contract to which this chapter applies; or

(2)  any other rights under the policy or contract.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003.



Section  1108.102.  Certain Assignments Void.

If an insurance policy, annuity contract, or annuity or benefit plan described by Section 1108.051 prohibits a beneficiary from assigning or commuting benefits to be provided or other rights under the policy, contract, or plan, an assignment or commutation or attempted assignment or commutation of the benefits or rights by the beneficiary is void.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003.


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