CHAPTER 543. PROHIBITED PRACTICES RELATED TO POLICY OR CERTIFICATE OF MEMBERSHIP - Texas Statutes

INSURANCE CODE

TITLE 5. PROTECTION OF CONSUMER INTERESTS

SUBTITLE C. DECEPTIVE, UNFAIR, AND PROHIBITED PRACTICES

CHAPTER 543. PROHIBITED PRACTICES RELATED TO POLICY OR

CERTIFICATE OF MEMBERSHIP

SUBCHAPTER A. PROHIBITIONS

Sec. 543.001. MISREPRESENTATION PROHIBITED. (a) In this

section, "life, health, or casualty insurer" includes a

corporation operating on a cooperative or assessment plan, a

mutual insurance company, a fraternal benefit society, and any

other society or association authorized to issue an insurance

policy in this state.

(b) A life, health, or casualty insurer, an officer, director,

agent, or representative of that insurer, or any other person,

corporation, or copartnership may not:

(1) issue, circulate, or cause or permit to be issued or

circulated any statement, including an illustration or estimate,

that misrepresents:

(A) the terms of a policy or certificate of membership issued by

a life, health, or casualty insurer;

(B) other benefits or advantages provided by the policy or

certificate; or

(C) the dividends or share of surplus to be received on the

policy or certificate;

(2) use a name or title of a policy, policy class, certificate

of membership, or certificate class that misrepresents the

policy, certificate, or class; or

(3) make a misleading representation or incomplete comparison of

a policy or certificate of membership to an insured or member for

the purpose of inducing or tending to induce the insured or

member to forfeit, surrender, or allow the lapse of the insurance

or membership.

(c) The commissioner may adopt and enforce reasonable rules as

provided by Subchapter I, Chapter 541, to accomplish the purposes

of Subsection (b)(1) as those purposes relate to life insurance

companies.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 543.002. CONTRACT EXPRESSED IN POLICY ONLY. An insurer or

an agent of an insurer may not make an insurance contract or an

agreement relating to an insurance contract other than as

expressed in the policy issued in connection with the contract.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 543.003. THING OF VALUE NOT SPECIFIED IN POLICY. An

insurer or an officer, agent, or representative of an insurer may

not:

(1) directly or indirectly pay, allow, or give or offer to pay,

allow, or give as an inducement to insurance a thing of value or

other inducement that is not specified in the policy, including:

(A) a rebate of premium payable on the policy;

(B) a special favor or advantage in the dividends or other

benefits to accrue on the policy; or

(C) paid employment or a contract for service; or

(2) give, sell, or purchase or offer to give, sell, or purchase

as an inducement to insurance or in connection with insurance a

thing of value that is not specified in the policy, including:

(A) stocks, bonds, or other securities of an insurer or other

corporation, association, or partnership; or

(B) dividends or profits to accrue on the stocks, bonds, or

other securities of an insurer or other corporation, association,

or partnership.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 543.004. SHARING OF OR PARTICIPATION IN SPECIAL FUND

PROHIBITED. An insurer or an officer, agent, or representative

of an insurer may not issue a policy that contains a special or

board contract or similar provision by the terms of which the

policy will share or participate in a special fund derived from a

tax or a charge against any portion of the premium on another

policy.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

SUBCHAPTER B. ENFORCEMENT; PENALTY

Sec. 543.051. SUSPENSION OR REVOCATION OF CERTIFICATE, CHARTER,

PERMIT, OR LICENSE. (a) On a hearing, the commissioner may

suspend or revoke the certificate, charter, permit, or license to

engage in the business of insurance of A society, association,

corporation, or person that violates Subchapter A.

(b) The commissioner must give 10 days' notice of the hearing by

certified mail to the society, association, corporation, or

person.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 543.052. CRIMINAL PENALTY. (a) A person commits an

offense if the person violates Subchapter A.

(b) An offense under this section is a Class A misdemeanor.

(c) The penalty provided by this section is in addition to any

other penalty specifically provided by law.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.