Law:Title 8. Health Insurance And Other Health Coverages (Texas)

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Subtitle A. Health Coverage In General

Contents

Chapter 1201. Accident And Health Insurance

Subchapter A. General Provisions

Section  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.



Section  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.



Section  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.



Section  1201.004.  Construction Of Chapter. Thi

s 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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section 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

Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section 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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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

Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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

Section  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.



Section  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.



Section  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.



Section  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

Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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.



Section  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, 2005.



Section  1201.227.  Policy Provision: Intoxicants And Narcotics.

An individual accident and health insurance policy must contain the following provision if the policy addresses the subject matter of the provision:

"Intoxicants and Narcotics: The insurer is not liable for any loss sustained or contracted in consequence of the insured's being intoxicated or under the influence of any narcotic unless the narcotic is administered on the advice of a physician."

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.



Subchapter F. Application For Policy

Section  1201.271.  Alteration Of Policy Application.

(a) A person may not alter a written application for an individual accident and health insurance policy unless the person has the written consent of the applicant.

(b)  Notwithstanding Subsection (a), an insurer may make an insertion to an application solely for administrative purposes in a manner that indicates clearly that the insertion is not attributed to the applicant.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.



Section  1201.272.  False Statements.

The falsity of a statement in an application for an individual accident and health insurance policy does not bar a right to recovery under the policy unless the statement materially affected the acceptance of the risk or the hazard assumed by the insurer.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.



Section  1201.273.  Binding Statements.

An insured may not be bound by a statement made in an application for an individual accident and health insurance policy unless a copy of the application is attached to or endorsed on the policy as a part of the policy when issued.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.



Section  1201.274.  Insurer's Evidentiary Use Of Application For Reinstatement Or Renewal.

(a) If an individual accident and health insurance policy is reinstated or renewed, and the insured or the beneficiary or assignee of the policy makes a written request for a copy of the application for reinstatement or renewal, the insurer shall, not later than the 15th day after the date the insurer receives the request at its home or branch office, deliver or mail a copy of the application to the person who made the request.

(b)  An insurer that fails to comply with this section may not introduce the application for reinstatement or renewal as evidence in any action or proceeding based on or involving the policy or its reinstatement or renewal.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.



Subchapter O. Enforcement

Section  1201.701.  Civil Penalty.

A person, partnership, or corporation that wilfully violates this chapter or an order of the commissioner made under this chapter is liable to the state for a civil penalty in an amount not to exceed $5,000 for each violation. The penalty may be recovered through a civil action.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.



Section  1201.702.  Action Against Certificate Of Authority Or License.

The commissioner may suspend or revoke the certificate of authority or license of an insurer or agent who wilfully violates this chapter or an order of the commissioner made under this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.

Chapter 1202. Cancellation And Continuation Of Policies In General

Subchapter A. Continuous Policies

Section  1202.001.  Continuous Policies.

(a) A guaranteed renewable insurance policy or a noncancellable insurance policy is considered to be a continuous policy, subject only to the policy terms and conditions, including payment of the policy premium.

(b)  A guaranteed renewable insurance policy or a noncancellable insurance policy:

(1)  is continued in effect by the payment of the policy premium in accordance with the policy terms and conditions; and

(2)  may not be considered or treated as a renewed policy by the payment of the policy premium.

(c)  This section does not apply to a small employer health benefit plan adopted in accordance with Chapter 1501.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.



Subchapter B. Individual Health Insurance Policies

Section  1202.051.  Renewability And Continuation Of Individual Health Insurance Policies.

(a) This section applies only to an individual health insurance policy that provides benefits for medical care under a hospital, medical, or surgical policy.

(b)  Except as provided by Subsection (c), an insurer shall renew or continue an individual health insurance policy at the option of the individual.

(c)  An insurer may decline to renew or continue an individual health insurance policy:

(1)  for failure to pay a premium or contribution in accordance with the terms of the policy;

(2)  for fraud or intentional misrepresentation;

(3)  because the insurer is ceasing to offer coverage in the individual market in accordance with rules adopted by the commissioner;

(4)  because an individual no longer resides, lives, or works in an area in which the insurer is authorized to provide coverage, but only if all policies are not renewed or not continued under this subdivision uniformly without regard to any health-status related factor of covered individuals; or

(5)  in accordance with federal law, including regulations.

(d)  The commissioner shall adopt rules necessary to:

(1)  implement this section; and

(2)  meet the minimum requirements of federal law, including regulations.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.



Section  1202.052.  Cancellation Prohibited For Aids Or Hiv.

(a) In this section, "AIDS" and "HIV" have the meanings assigned by Section 81.101, Health and Safety Code.

(b)  Except as provided by Subsection (c), an insurer that delivers or issues for delivery an individual accident and health insurance policy in this state may not cancel that policy during its term because the insured:

(1)  has been diagnosed as having AIDS or HIV;

(2)  has been treated for AIDS or HIV; or

(3)  is being treated for AIDS or HIV.

(c)  The insurer may cancel the policy for:

(1)  failure to pay a premium when due; or

(2)  fraud or misrepresentation in obtaining coverage by not disclosing a diagnosis of an AIDS or HIV-related condition.

(d)  The provisions of Chapter 1201, including provisions relating to the applicability, purpose, and enforcement of that chapter, construction of policies under that chapter, rulemaking under that chapter, and definitions of terms applicable in that chapter, apply to this section.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.


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