CHAPTER 1108. BENEFITS EXEMPT FROM SEIZURE - Texas Statutes

INSURANCE CODE

TITLE 7. LIFE INSURANCE AND ANNUITIES

SUBTITLE A. LIFE INSURANCE IN GENERAL

CHAPTER 1108. BENEFITS EXEMPT FROM SEIZURE

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 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.

Sec. 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

Sec. 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.

Sec. 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.

Sec. 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

Sec. 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.

Sec. 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.