CHAPTER 1131. GROUP LIFE INSURANCE AND WHOLESALE, FRANCHISE, OR EMPLOYEE LIFE INSURANCE - Texas Statutes

INSURANCE CODE

TITLE 7. LIFE INSURANCE AND ANNUITIES

SUBTITLE B. GROUP LIFE INSURANCE

CHAPTER 1131. GROUP LIFE INSURANCE AND WHOLESALE, FRANCHISE, OR

EMPLOYEE LIFE INSURANCE

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1131.001. DEFINITION. In this chapter, "wholesale,

franchise, or employee life insurance" means a term life

insurance plan under which a number of individual term life

insurance policies are issued to a selected group at a rate that

is lower than the rate shown in the issuing insurer's manual for

an individually issued policy of the same type issued to an

insured of the same class.

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

2003.

Sec. 1131.002. CERTAIN GROUP LIFE INSURANCE AUTHORIZED. A group

life insurance policy may be delivered in this state only if the

policy:

(1) covers a group described by Subchapter B; and

(2) complies with this chapter.

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

2003.

Sec. 1131.003. CERTAIN WHOLESALE, FRANCHISE, OR EMPLOYEE LIFE

INSURANCE AUTHORIZED. A wholesale, franchise, or employee life

insurance policy may be issued or delivered in this state only if

the policy:

(1) covers a group described by Section 1131.065; and

(2) complies with Subchapter P.

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

2003.

Sec. 1131.004. FORFEITURE OF CERTIFICATE OF AUTHORITY FOR

UNAUTHORIZED GROUP LIFE INSURANCE CONTRACT. The certificate of

authority to engage in the business of insurance in this state of

an insurer that enters into a group life insurance contract other

than as authorized by this chapter may be forfeited by an action

brought for that purpose by the attorney general at the

department's request.

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

2003.

Sec. 1131.005. GUARANTEEING ISSUANCE OF LIFE INSURANCE POLICY

WITHOUT EVIDENCE OF INSURABILITY. (a) In this section,

"qualified pension or profit-sharing plan" means a plan that

meets the requirements of:

(1) Section 401 or 403, Internal Revenue Code of 1986, and their

subsequent amendments; or

(2) any corresponding provisions of prior or subsequent United

States revenue laws.

(b) This code does not prohibit a life insurance company

authorized to engage in the business of insurance in this state

from guaranteeing to issue individual life insurance policies

insuring participants in a qualified pension or profit-sharing

plan on other than the term plan without evidence of

insurability.

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

2003.

Sec. 1131.006. ASSIGNMENT OF BENEFITS. (a) Subject to the

terms of a group life insurance policy, an insured under the

policy may make to any individual, firm, corporation,

association, trust, or other legal entity, other than the

insured's employer, an absolute or collateral assignment of all

rights and benefits conferred on the insured by the policy or by

Subchapter C.

(b) Subsection (a) applies without regard to the date a policy

is issued.

(c) Subject to the terms of the policy, an assignment by an

insured before September 1, 1969, is valid for the purpose of

vesting in the assignee all assigned rights and privileges but

without prejudice to the insurer because of any payment the

insurer makes or individual policy the insurer issues before

receiving notice of the assignment.

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

2003.

Sec. 1131.007. POLICY FORM. A policy of group life insurance is

subject to Chapter 1701.

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

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2F.007, eff. April 1, 2009.

SUBCHAPTER B. GROUP AND WHOLESALE, FRANCHISE, OR EMPLOYEE LIFE

INSURANCE: ELIGIBLE POLICYHOLDERS

Sec. 1131.051. EMPLOYERS. (a) A group life insurance policy

may be issued to an employer or to trustees of a fund established

by an employer to insure the employer's employees for the benefit

of persons other than the employer.

(b) A policy to which this section applies may provide that

"employee" includes:

(1) an individual proprietor or partner, if the employer is an

individual proprietorship or partnership;

(2) an employee of a subsidiary corporation of the employer;

(3) an employee, individual proprietor, or partner of an

affiliated corporation, proprietorship, or partnership, if the

business of the employer and the affiliated corporation,

proprietorship, or partnership is under common control through

stock ownership, contract, or otherwise; or

(4) a retired employee.

(c) The employer or the trustees of a fund established by an

employer are the policyholder under a policy to which this

section applies.

(d) A policy to which this section applies is subject to

Subchapter E.

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

2003.

Sec. 1131.052. LABOR UNIONS. (a) A group life insurance policy

may be issued to a labor union to insure the union's members who

are actively engaged in the same occupation.

(b) For purposes of this chapter:

(1) a labor union is considered to be an employer; and

(2) a member of a labor union is considered to be an employee of

the union.

(c) The labor union is the policyholder under a policy to which

this section applies.

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

2003.

Sec. 1131.053. FUNDS ESTABLISHED BY EMPLOYERS OR LABOR UNIONS.

(a) A group life insurance policy that insures the employers'

employees or the unions' members for the benefit of persons other

than the employers or unions may be issued to the trustees of a

fund established or adopted by two or more employers in the same

industry or by one or more labor unions, by one or more employers

in the same industry and one or more labor unions, or by one or

more employers and one or more labor unions whose members are in

the same or related occupations or trades.

(b) A policy to which this section applies may provide that

"employee" includes:

(1) an individual proprietor or partner, if the employer is an

individual proprietorship or partnership;

(2) a trustee, an employee of the trustee, or both, if the

person's duties are principally connected with the trusteeship;

or

(3) a retired employee.

(c) The trustees are the policyholder under a policy to which

this section applies.

(d) A policy may not be issued under this section to insure

employees of:

(1) an employer whose eligibility to participate in the fund as

an employer arises out of considerations directly related to the

employer being a commercial correspondent or business client or

patron of another employer, without regard to whether the other

employer participates in the fund; or

(2) an employer that is not located in this state, unless:

(A) the majority of the employers whose employees are to be

insured are located in this state; or

(B) the policy is issued to the trustees of a fund established

or adopted by one or more labor unions.

(e) A policy to which this section applies is subject to

Subchapter F.

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

2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

689, Sec. 1, eff. September 1, 2009.

Sec. 1131.054. GOVERNMENTAL ENTITIES OR ASSOCIATIONS OF PUBLIC

EMPLOYEES. (a) In this section, "employee" includes an elected

or appointed officer of the state.

(b) A group life insurance policy may be issued to a

governmental entity or an association of public employees listed

in Subsection (c) to insure the governmental entity's employees

or the association's members for the benefit of persons other

than the governmental entity or association.

(c) This section authorizes issuance of a group life insurance

policy to:

(1) a municipality, independent school district, or common

school district;

(2) a department of state government;

(3) a state college or university; or

(4) an association of public employees, including an association

of:

(A) employees of the United States government, if the majority

of the members of the association reside in this state;

(B) state employees; or

(C) any combination of state, county, and municipal employees.

(d) The governmental entity or association is the policyholder

under a policy to which this section applies.

(e) A policy to which this section applies is subject to

Subchapter G.

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

2003.

Sec. 1131.055. SPOUSES AND CHILDREN OF EMPLOYEES OF UNITED

STATES GOVERNMENT. (a) A group term life insurance policy may

be extended, in the form of group term life insurance only, to

insure the spouse and natural or adopted minor children of an

insured employee of the United States government if:

(1) the policy constitutes a part of the employee benefit

program established for the benefit of employees of the United

States government; and

(2) the spouse or children of other employees covered by the

same employee benefit program in other states are or may be

covered by group term life insurance.

(b) A policy to which this section applies is subject to

Subchapter H.

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

2003.

Sec. 1131.056. PRINCIPALS. (a) In this section, "agent"

includes a general agent, subagent, or salesperson.

(b) A group life insurance policy may be issued to a principal,

or if the principal is a life, life and accident, or life,

accident, and health insurer, by or to the principal, to insure

the principal's agents for the benefit of persons other than the

principal.

(c) A policy to which this section applies is subject to

Subchapter I.

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

2003.

Sec. 1131.057. CREDITORS. (a) A group life insurance policy

may be issued to a creditor to insure the creditor's debtors.

(b) The creditor is the policyholder under a policy to which

this section applies.

(c) A policy to which this section applies is subject to

Subchapter J.

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

2003.

Sec. 1131.058. VETERANS' LAND BOARD. (a) A group life

insurance policy may be issued to the Veterans' Land Board to

insure persons purchasing land under the Veterans' Land Program

as provided by Subchapter I, Chapter 161, Natural Resources Code.

(b) The Veterans' Land Board is the policyholder under a policy

to which this section applies.

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

2003.

Sec. 1131.059. ASSOCIATIONS OR TRUSTS FOR PAYMENT OF FUNERAL

EXPENSES. A group life insurance policy may be issued to an

association or trust for a group of individuals for the payment

of future funeral expenses.

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

2003.

Sec. 1131.060. NONPROFIT ORGANIZATIONS OR ASSOCIATIONS. (a) A

group life insurance policy may be issued to a nonprofit service,

civic, fraternal, or community organization or association to

insure the organization's or association's members and employees

for the benefit of persons other than the organization or

association or an officer of the organization or association.

(b) To be eligible to obtain a group life insurance policy under

this section, an organization or association must:

(1) have a constitution or bylaws;

(2) have actively existed for at least two years; and

(3) have been formed for purposes other than that of obtaining

insurance.

(c) The organization or association is the policyholder under a

policy to which this section applies.

(d) A policy to which this section applies is subject to

Subchapter K.

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

2003.

Sec. 1131.064. OTHER GROUPS. (a) A group life insurance policy

may be issued to cover a group other than a group described by

Sections 1131.051-1131.060 if the commissioner finds that:

(1) the issuance of the policy is not contrary to the best

interest of the public;

(2) the issuance of the policy would result in economies of

acquisition or administration; and

(3) the benefits are reasonable in relation to the premiums

charged.

(b) Group life insurance coverage may not be offered under this

section in this state by an insurer under a policy issued in

another state unless this state or another state having

requirements substantially similar to those prescribed by

Subsections (a)(1)-(3) has determined that those requirements

have been met.

(c) A policy to which this section applies is subject to

Subchapter O.

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

2003.

Sec. 1131.065. WHOLESALE, FRANCHISE, OR EMPLOYEE LIFE INSURANCE.

(a) Policies of wholesale, franchise, or employee life

insurance may be issued to:

(1) the employees of a common employer or employers;

(2) the members of one or more labor unions; or

(3) the members of one or more credit unions.

(b) A policy to which this section applies is subject to

Subchapter P.

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

2003.

SUBCHAPTER C. GROUP LIFE INSURANCE: REQUIRED PROVISIONS

Sec. 1131.101. REQUIRED PROVISIONS. (a) A group life insurance

policy may not be delivered in this state unless the policy

contains in substance the provisions prescribed by this

subchapter or provisions in relation to provisions prescribed by

this subchapter that, in the opinion of the commissioner, are:

(1) more favorable to an insured under the policy; or

(2) at least as favorable to an insured under the policy and

more favorable to the policyholder.

(b) The standard provisions required for individual life

insurance policies do not apply to group life insurance policies.

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

2003.

Sec. 1131.102. NONFORFEITURE. (a) A group life insurance

policy other than a group term life insurance policy must contain

nonforfeiture provisions that, in the commissioner's opinion, are

equitable to the insured and the policyholder.

(b) This section does not require that a group life insurance

policy contain the same nonforfeiture provisions as required for

an individual life insurance policy.

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

2003.

Sec. 1131.103. GRACE PERIOD. (a) A group life insurance policy

must provide that the policyholder or premium payor is entitled

to a grace period of 31 days for the payment of any premium,

other than the first, due under the policy. During the grace

period, the death benefit coverage continues in force unless the

policyholder or premium payor gives the insurer written notice of

discontinuance before the date of discontinuance and in

accordance with the policy.

(b) The policy may provide that the policyholder or premium

payor is liable to the insurer for payment of a pro rata premium

for the time the policy was in force during a grace period.

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

2003.

Sec. 1131.104. INCONTESTABILITY OF POLICY. A group life

insurance policy must provide that:

(1) the validity of the policy may not be contested, except for

nonpayment of premiums, after the policy has been in force for

two years after its date of issue; and

(2) a statement made by any insured under the policy relating to

the insured's insurability may not be used in contesting the

validity of the insurance with respect to which the statement was

made after the insurance has been in force before the contest for

a period of two years from its date of issue during the insured's

lifetime and unless the statement is contained in a written

instrument signed by the insured making the statement.

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

2003.

Sec. 1131.105. APPLICATION FOR POLICY; STATEMENTS OF INSURED. A

group life insurance policy must provide that:

(1) a copy of any application for the policy by the policyholder

must be attached to the policy when issued;

(2) a statement made by the policyholder or an insured is

considered a representation and not a warranty; and

(3) a statement made by an insured may not be used in any

contest under the policy unless a copy of the instrument

containing the statement is or has been furnished to the person

or the person's beneficiary.

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

2003.

Sec. 1131.106. EVIDENCE OF INSURABILITY. A group life insurance

policy must state the conditions, if any, under which the insurer

reserves the right to require an individual eligible for

insurance to furnish evidence of individual insurability

satisfactory to the insurer as a condition of obtaining part or

all of the coverage.

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

2003.

Sec. 1131.107. ADJUSTMENT OF PREMIUMS OR BENEFITS IF AGE OF

INSURED IS MISSTATED. (a) A group life insurance policy must

specify an equitable adjustment of premiums, benefits, or both,

to be made if the age of an insured has been misstated.

(b) The provision required by Subsection (a) must contain a

clear statement of the method of adjustment to be used.

(c) This section does not apply to a policy to which Section

1131.703 applies.

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

2003.

Sec. 1131.108. INSURANCE CERTIFICATE. (a) A group life

insurance policy must provide that the insurer will issue to the

policyholder for delivery to each insured an individual

certificate stating:

(1) the insurance protection to which the insured is entitled;

(2) to whom the insurance benefits are payable; and

(3) the rights and conditions specified by Sections

1131.110-1131.112.

By agreement between the insurer and the policyholder, the

certificate of insurance may be delivered electronically.

(b) This section does not apply to:

(1) a policy issued to a creditor to insure the creditor's

debtors; or

(2) a policy to which Section 1131.703 applies.

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

2003. Amended by Acts 2003, 78th Leg., ch. 1075, Sec. 1, eff.

Sept. 1, 2003.

Sec. 1131.109. PERSON TO WHOM BENEFITS ARE PAYABLE. (a) A

group life insurance policy must provide that any amount due

because of an insured's death must be paid to the beneficiary

designated by the insured or the beneficiary's assignee, subject

to:

(1) the provisions of the policy, if the designated beneficiary

as to all or any part of the amount is not living at the time the

insured dies; and

(2) any right reserved by the insurer in the policy and stated

in the certificate to pay at the insurer's option a portion of

the amount not to exceed $250 to any person the insurer

determines is equitably entitled to the portion because of having

incurred funeral or other expenses incident to the last illness

or death of the insured.

(b) This section does not apply to:

(1) a policy issued to a creditor to insure the creditor's

debtors; or

(2) a policy to which Section 1131.703 applies.

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

2003.

Sec. 1131.110. RIGHT TO INDIVIDUAL POLICY ON TERMINATION OF

EMPLOYMENT OR MEMBERSHIP. (a) A group life insurance policy

must provide that if any portion of the insurance on an

individual insured under the policy ceases because the

individual's employment or membership in the class or classes

eligible for coverage under the policy terminates, the individual

is entitled to have the insurer issue to the individual an

individual life insurance policy without disability or other

supplementary benefits.

(b) An individual must apply for an individual policy and pay

the first premium to the insurer not later than the 31st day

after the date the individual's employment or membership

terminates.

(c) An individual policy under this section must be issued

without evidence of insurability.

(d) The insured may select any individual policy, other than a

term life insurance policy, customarily issued by the insurer for

an individual of the insured's age and for the amount requested.

(e) Except as provided by Subsection (f), the individual policy

must be in an amount not to exceed the amount of life insurance

that ceases because of the termination of employment or

membership.

(f) For purposes of Subsection (e), any amount of insurance

that, on or before the date of the termination of employment or

membership, has matured as an endowment payable to the insured is

not included in the amount that is considered to cease because of

the termination. This subsection applies without regard to

whether the endowment is payable in full, in installments, or in

the form of an annuity.

(g) The premium on an individual policy must be at the insurer's

then customary rate applicable to:

(1) the form and amount of the individual policy;

(2) the class of risk to which the insured then belongs; and

(3) the insured's age on the effective date of the individual

policy.

(h) This section does not apply to:

(1) a policy issued to a creditor to insure the creditor's

debtors; or

(2) a policy to which Section 1131.703 applies.

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

2003.

Sec. 1131.111. RIGHT TO INDIVIDUAL POLICY ON TERMINATION OF

COVERAGE UNDER GROUP POLICY. (a) A group life insurance policy

must provide that if the policy terminates or is amended so as to

terminate the insurance of a class of insured individuals, each

individual insured under the policy on the date of the

termination or amendment whose insurance terminates and who has

been insured under the policy for at least five years before the

date of the termination or amendment is entitled to have the

insurer issue to the individual an individual life insurance

policy, subject to the conditions and limitations provided by

Section 1131.110.

(b) Notwithstanding Section 1131.110(e), a group life insurance

policy may provide that the amount of an individual policy issued

under this section may not exceed the lesser of:

(1) the amount of the individual's life insurance coverage that

ceases because of the termination or amendment of the group

policy, less the amount of any life insurance for which the

individual is or becomes eligible under any group policy issued

or reinstated by the same or another insurer not later than the

31st day after the date of the termination or amendment; or

(2) $2,000.

(c) This section does not apply to:

(1) a policy issued to a creditor to insure the creditor's

debtors; or

(2) a policy to which Section 1131.703 applies.

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

2003.

Sec. 1131.112. PAYMENT OF BENEFITS ON DEATH OF INSURED BEFORE

INDIVIDUAL POLICY BECOMES EFFECTIVE. (a) A group life insurance

policy must provide that if an individual insured under the group

policy dies during the period within which the individual would

have been entitled to have an individual policy issued as

provided by Section 1131.110 or 1131.111 and before such an

individual policy takes effect, the amount of life insurance that

the individual would have been entitled to have issued to the

individual under the individual policy is payable as a claim

under the group policy.

(b) This section applies without regard to whether:

(1) the application for the individual policy has been made; or

(2) the first premium for the individual policy has been paid.

(c) This section does not apply to:

(1) a policy issued to a creditor to insure the creditor's

debtors; or

(2) a policy to which Section 1131.703 applies.

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

2003.

SUBCHAPTER D. GROUP LIFE INSURANCE: OPTIONAL PROVISIONS

Sec. 1131.151. CONTINUATION OF BENEFITS FOR FAMILY MEMBERS AFTER

DEATH OF INSURED. (a) A group life insurance policy that

provides for the insurer to pay benefits for members of the

family or dependents of an individual in the insured group may

provide for a continuation of any part of those benefits after

the death of the individual in the insured group.

(b) Any amounts of insurance provided by benefits under

Subsection (a) are not considered to be life insurance for the

purpose of determining the maximum amount of term insurance that

may be issued on any one life.

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

2003.

SUBCHAPTER E. GROUP LIFE INSURANCE POLICIES ISSUED TO EMPLOYERS:

ADDITIONAL REQUIREMENTS

Sec. 1131.201. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a group life insurance policy issued to a group

described by Section 1131.051.

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

2003.

Sec. 1131.202. ELIGIBLE EMPLOYEES. All employees of the

employer, or all of any class or classes of employees determined

by conditions relating to their employment, are eligible for

insurance under the policy.

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

2003.

Sec. 1131.203. PAYMENT OF PREMIUMS. The policyholder must pay

the premium for the policy:

(1) wholly from the employer's fund or funds contributed by the

employer;

(2) partly from funds described by Subdivision (1) and partly

from funds contributed by the insured employees; or

(3) wholly from funds contributed by the insured employees.

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

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

1073, Sec. 1, eff. June 18, 2005.

Acts 2005, 79th Leg., Ch.

1073, Sec. 2, eff. June 18, 2005.

Sec. 1131.204. MINIMUM ENROLLMENT. (a) The policy must cover

at least two employees on the date the policy is issued.

(b) Repealed by Acts 2005, 79th Leg., Ch. 1073, Sec. 2, eff.

June 18, 2005.

(c) A policy as to which the insured employees do not pay any

part of the premium must insure:

(1) all eligible employees; or

(2) all eligible employees except any employees as to whom

evidence of individual insurability is not satisfactory to the

insurer.

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

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

2, Sec. 1, eff. September 1, 2005.

Acts 2005, 79th Leg., Ch.

1073, Sec. 2, eff. June 18, 2005.

Sec. 1131.205. AMOUNTS OF INSURANCE. (a) The amounts of

insurance under the policy must be based on a plan that precludes

individual selection by the employees or by the employer or

trustees.

(b) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(1), eff.

June 17, 2005.

(c) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(1), eff.

June 17, 2005.

(d) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(1), eff.

June 17, 2005.

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

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

496, Sec. 2(1), eff. June 17, 2005.

SUBCHAPTER F. GROUP LIFE INSURANCE POLICIES ISSUED TO FUNDS

ESTABLISHED BY EMPLOYERS OR LABOR UNIONS: ADDITIONAL REQUIREMENTS

Sec. 1131.251. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a group life insurance policy issued to a group

described by Section 1131.053.

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

2003.

Sec. 1131.252. ELIGIBLE EMPLOYEES OR MEMBERS. (a) The

individuals eligible for insurance under the policy are:

(1) all employees of the employers and the employees of the

trade association of those employers;

(2) all members of the labor union; or

(3) all of any class or classes of employees or members

determined by conditions relating to their employment, to their

membership in the unions, or both.

(b) A director of a corporate employer is not eligible for

insurance under the policy unless the person is otherwise

eligible as a bona fide employee of the corporation by performing

services other than the usual duties of a director.

(c) An individual proprietor or partner is not eligible for

insurance under the policy unless the person is actively engaged

in and devotes a substantial part of the person's time to

conducting the business of the proprietorship or partnership.

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

2003.

Sec. 1131.253. PAYMENT OF PREMIUMS. (a) Subject to Subsection

(b), the policyholder must pay the premium for the policy:

(1) wholly from funds contributed by the employer or employers,

the labor union or unions, or both; or

(2) partly from funds described by Subdivision (1) and partly

from funds contributed by the insureds.

(b) An insured's contribution toward the cost of the insurance

may not exceed 40 cents per month for each $1,000 of insurance

coverage.

(c) The policy may provide that a participating employer or

labor union may pay the premium directly to the insurer for the

policy issued to the trustee. If payment is made as provided by

this subsection, the employer or labor union is the premium payor

for the insured employees or union members for that employer

unit.

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

2003.

Sec. 1131.254. MINIMUM ENROLLMENT. (a) The policy must cover

at least 100 individuals on the date the policy is issued unless

the policy is issued to the trustees of a fund established by:

(1) employers that have assumed obligations through a collective

bargaining agreement and are participating in the fund to:

(A) comply with those obligations with regard to one or more

classes of their employees who are covered by the collective

bargaining agreement; or

(B) provide insurance benefits for other classes of their

employees; or

(2) one or more labor unions.

(b) A policy as to which the insureds are to pay part of the

premium from funds contributed specifically for their insurance

may take effect only if at least 75 percent of the individuals of

each participating employer unit who are eligible on the date the

policy takes effect, excluding any individuals as to whom

evidence of insurability is not satisfactory to the insurer,

elect to make the required contributions.

(c) A policy as to which the insureds do not pay any part of the

premium must insure:

(1) all eligible individuals; or

(2) all eligible individuals except any individuals as to whom

evidence of individual insurability is not satisfactory to the

insurer.

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

2003.

Sec. 1131.255. AMOUNTS OF INSURANCE. (a) The amounts of

insurance under the policy must be based on a plan that precludes

individual selection by the insureds or by the policyholder or

employer.

(b) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(2), eff.

June 17, 2005.

(c) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(2), eff.

June 17, 2005.

(d) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(2), eff.

June 17, 2005.

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

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

496, Sec. 2(2), eff. June 17, 2005.

SUBCHAPTER G. GROUP LIFE INSURANCE POLICIES ISSUED TO

GOVERNMENTAL ENTITIES OR ASSOCIATIONS OF PUBLIC EMPLOYEES:

ADDITIONAL REQUIREMENTS

Sec. 1131.301. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a group life insurance policy issued to a group

described by Section 1131.054.

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

2003.

Sec. 1131.302. ELIGIBLE EMPLOYEES OR MEMBERS. All employees of

the employer or all members of the association are eligible for

insurance under the policy.

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

2003.

Sec. 1131.303. PAYMENT OF PREMIUMS. (a) The premium for the

policy may be paid wholly or partly from funds contributed by:

(1) the employer;

(2) the individuals insured under the policy; or

(3) the insured employees who are members of the association of

employees.

(b) Any money or credits received by or allowed to the

policyholder under any participation agreement contained in or

issued in connection with the policy must be applied to the

payment of future premiums and to the pro rata abatement of the

insured employees' contribution for future premiums.

(c) The employer may deduct from an employee's salary the

employee's contribution for the premiums if authorized to do so

in writing by that employee.

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

2003.

Sec. 1131.304. MINIMUM ENROLLMENT. (a) The policy must cover

at least 10 employees or members on the date the policy is

issued.

(b) A policy as to which the insured employees or members pay

part of the premium may take effect only if at least 75 percent

of the employees or members eligible on the date the policy takes

effect, excluding any employees or members as to whom evidence of

individual insurability is not satisfactory to the insurer, elect

to make the required contributions.

(c) A group policy issued before September 1, 1969, to a group

described by Section 1131.054 that was in existence on that date

continues in force without regard to whether the number of the

employees or members insured under the policy was less than 75

percent of the employees or members eligible on that date.

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

2003.

SUBCHAPTER H. GROUP TERM LIFE INSURANCE POLICIES EXTENDED TO

SPOUSES AND CHILDREN OF EMPLOYEES OF UNITED STATES: ADDITIONAL

REQUIREMENTS

Sec. 1131.351. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a group term life insurance policy extended to a

group described by Section 1131.055.

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

2003.

Sec. 1131.352. PAYMENT OF PREMIUMS. The policyholder must pay

the premium for the group term life insurance solely from funds

contributed by the insured employees.

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

2003.

Sec. 1131.353. AMOUNTS OF INSURANCE. (a) The amounts of

insurance under the policy must be based on a plan that precludes

individual selection by the insured employees or by the

policyholder.

(b) Group term life insurance on the life of an employee's

spouse may not exceed the lesser of:

(1) $10,000; or

(2) one-half of the amount of insurance on the life of the

insured employee under the group policy.

(c) Group term life insurance on the life of an employee's minor

child may not exceed $2,000.

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

2003.

Sec. 1131.354. CONVERSION RIGHTS. On termination of group term

life insurance coverage for a spouse insured under this

subchapter because the insured employee's employment terminates

or the employee dies, or because the group contract terminates,

the spouse has the same conversion rights as to the group term

life insurance on the spouse's life as the employee.

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

2003.

Sec. 1131.355. CERTIFICATE OF INSURANCE. Only one certificate

of insurance issued for delivery to an insured employee is

required if the certificate includes a statement concerning any

dependent's coverage.

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

2003.

SUBCHAPTER I. GROUP LIFE INSURANCE POLICIES ISSUED TO PRINCIPALS:

ADDITIONAL REQUIREMENTS

Sec. 1131.401. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a group life insurance policy issued to a group

described by Section 1131.056.

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

2003.

Sec. 1131.402. ELIGIBLE AGENTS. Agents who are under contract

to provide personal services for the principal for a commission

or other fixed or ascertainable compensation, or any class or

classes of those agents determined by conditions relating to the

services the agents provide to the principal, are eligible for

insurance under the policy.

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

2003.

Sec. 1131.403. PAYMENT OF PREMIUMS. The premium for the policy

must be paid:

(1) wholly by the principal; or

(2) partly from funds contributed by the principal and partly

from funds contributed by the insured agents.

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

2003.

Sec. 1131.404. MINIMUM ENROLLMENT. (a) The policy must cover

at least 10 agents on the date the policy is issued.

(b) Subject to Subsection (c), a policy as to which the insured

agents pay part of the premium must cover, on the date the policy

is issued, at least:

(1) 75 percent of the eligible agents; or

(2) 75 percent of any class or classes of eligible agents,

determined by conditions relating to the services the agents

provide to the principal.

(c) Benefits may be extended to another class of agents if 75

percent of the class request coverage.

(d) A policy as to which the insured agents do not pay any part

of the premium must insure:

(1) all eligible agents; or

(2) all of any class or classes of eligible agents determined by

conditions relating to the services the agents provide to the

principal.

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

2003.

Sec. 1131.405. AMOUNTS OF INSURANCE. (a) The amounts of

insurance under the policy must be based on a plan that precludes

individual selection by the agents or by the principal.

(b) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(3), eff.

June 17, 2005.

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

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

496, Sec. 2(3), eff. June 17, 2005.

SUBCHAPTER J. GROUP LIFE INSURANCE POLICIES ISSUED TO CREDITORS:

ADDITIONAL REQUIREMENTS

Sec. 1131.451. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a group life insurance policy issued to a group

described by Section 1131.057.

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

2003.

Sec. 1131.452. ELIGIBLE DEBTORS. All individuals who become

borrowers, or purchasers of securities, merchandise, or other

property, under an agreement to pay the borrowed amount or to pay

the balance of the price of the securities, merchandise, or other

property purchased, are eligible for insurance under the policy.

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

2003.

Sec. 1131.453. PAYMENT OF PREMIUMS. The policyholder must pay

the premium for the policy from:

(1) the creditor's funds;

(2) charges collected from the insured debtors; or

(3) both the creditor's funds and charges collected from the

insured debtors.

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

2003.

Sec. 1131.454. MINIMUM ENROLLMENT. The policy must cover at

least 50 debtors at all times.

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

2003.

Sec. 1131.455. AMOUNT OF INSURANCE. (a) Except as otherwise

provided by this section, the amount of insurance on a debtor's

life under the policy may not exceed the amount of the debtor's

indebtedness.

(b) Subject to Subsections (c) and (d), the face amount of any

loan or loan commitment, totally or partially executed, made to a

debtor for educational purposes or to a debtor with seasonal

income by a creditor in good faith for general agricultural or

horticultural purposes, secured or unsecured, under which the

debtor becomes personally liable for the payment of the loan, may

be insured in an initial amount of insurance not to exceed the

total amount payable under the contract of indebtedness.

(c) If indebtedness described by Subsection (b) is payable in

substantially equal installments, the amount of insurance may not

at any time exceed the greater of the scheduled or actual amount

of unpaid indebtedness.

(d) Insurance on a loan commitment described by Subsection (b)

that does not exceed one year in duration may be written up to

the amount of the loan commitment on a nondecreasing or level

term plan.

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

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

496, Sec. 1, eff. June 17, 2005.

Sec. 1131.456. PAYMENT OF PROCEEDS. (a) The proceeds of the

insurance must be payable to the policyholder.

(b) Payment to the policyholder reduces or extinguishes the

debtor's unpaid indebtedness to the extent of the payment. In the

case of a debtor under a loan or loan commitment described by

Section 1131.455(b), any insurance proceeds in excess of the

indebtedness to the creditor are payable:

(1) to the debtor's estate; or

(2) under a facility of payment clause.

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

2003.

Sec. 1131.457. ANNUITIES AND ENDOWMENT INSURANCE PROHIBITED.

The insurance issued may not include annuities or endowment

insurance.

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

2003.

SUBCHAPTER K. GROUP LIFE INSURANCE POLICIES ISSUED TO NONPROFIT

ORGANIZATIONS OR ASSOCIATIONS: ADDITIONAL REQUIREMENTS

Sec. 1131.501. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a group life insurance policy issued to a group

described by Section 1131.060.

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

2003.

Sec. 1131.502. ELIGIBLE MEMBERS. All members of the

organization or association, or all of any class of members

determined by conditions relating to their membership in the

organization or association, are eligible for insurance under the

policy.

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

2003.

Sec. 1131.503. PAYMENT OF PREMIUMS. (a) The policyholder must

pay the premium from:

(1) the policyholder's funds;

(2) funds contributed by the employees or members specifically

for their insurance; or

(3) both the policyholder's funds and funds contributed by the

employees or members.

(b) The policy may provide that the premium may be paid directly

to the insurer by individual employees or members from their own

funds. If the premium is paid as provided by this subsection, the

respective employees or members become the premium payor for that

particular certificate.

(c) For purposes of Sections 222.002, 257.001, and 281.004, only

the final retrospectively determined premium amount remitted to

the issuer by the group policyholder is taxable as gross

premiums, without regard to whether membership contributions,

fees, assessments, dues, revenues, or other considerations in

excess of that final amount are also collected from members.

This subsection applies only to a nonprofit membership

association that:

(1) qualifies under Section 501(c)(9), Internal Revenue Code of

1986;

(2) has been in existence for at least 50 years;

(3) limits association membership to:

(A) members of the uniformed services of the United States

serving on active duty;

(B) members of the ready reserve forces of the United States,

including the Army and Air National Guard;

(C) retirees and separatees of:

(i) the uniformed services of the United States; or

(ii) the ready reserve forces of the United States, including

the Army and Air National Guard;

(D) cadets and midshipmen in the service academies of the United

States and other officer candidates;

(E) federal employees and contractors who are employed by the

United States government or other related governmental entities

or retired with pay from that employment;

(F) employees or members of any state, county, municipal, or

other local governmental body or other organized governmental

entity who are involved in homeland defense and homeland security

operations; and

(G) any other category of membership established by the

governing body of the association that falls within the scope of

permissible membership authorized by Section 501(c)(9), Internal

Revenue Code of 1986;

(4) has no separate membership enrollment or application

requirement;

(5) collects member contributions, fees, or dues, including

funds contributed specifically for insurance and remitted by the

group policyholder to the issuer following a retrospective

premium determination; and

(6) provides insurance and noninsurance membership benefits.

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

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1252, Sec. 1, eff. June 15, 2007.

Sec. 1131.504. MINIMUM ENROLLMENT. The policy must cover at

least 25 individuals on the date the policy is issued.

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

2003.

Sec. 1131.505. AMOUNTS OF INSURANCE. The amounts of insurance

under the policy must be based on a plan that precludes

individual selection by the insured members or by the

organization or association.

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

2003.

SUBCHAPTER O. GROUP LIFE INSURANCE POLICIES ISSUED TO OTHER

GROUPS: ADDITIONAL REQUIREMENTS

Sec. 1131.701. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a group life insurance policy issued to a group

described by Section 1131.064.

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

2003.

Sec. 1131.702. PAYMENT OF PREMIUMS. The premium for the policy

must be paid from:

(1) the policyholder's funds;

(2) funds contributed by the insureds; or

(3) both the policyholder's funds and funds contributed by the

insureds.

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

2003.

Sec. 1131.703. INSURANCE FOR LIABILITIES RELATED TO FRINGE

BENEFITS. (a) Notwithstanding any other law, an employer may

insure the lives of the employer's officers, directors,

employees, and retired employees under Section 1131.064 to and in

an amount necessary to provide funds to offset liabilities

related to fringe benefits.

(b) An employer shall submit evidence of the purpose of the

policy to the commissioner.

(c) A policy issued for the purpose described by this section

does not reduce any other life insurance benefits offered or

provided by the employer.

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

2003.

SUBCHAPTER P. WHOLESALE, FRANCHISE, OR EMPLOYEE LIFE INSURANCE

POLICIES: ADDITIONAL REQUIREMENTS

Sec. 1131.751. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a wholesale, franchise, or employee life

insurance policy issued as provided by Section 1131.065.

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

2003.

Sec. 1131.752. PAYMENT OF PREMIUMS. (a) The premium for the

policy must be paid:

(1) wholly from funds contributed by the employer or employers

of the insureds;

(2) wholly from funds contributed by the labor or credit union

or unions; or

(3) partly from funds described by Subdivision (1) or (2) and

partly from funds contributed by the insureds.

(b) An insured's contribution toward the cost of the insurance

may not exceed 40 cents per month for each $1,000 of insurance

coverage.

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

2003.

Sec. 1131.753. MINIMUM ENROLLMENT. A policy of wholesale,

franchise, or employee life insurance must cover at least five

employees or members of a labor union or credit union on the date

the policy is issued.

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

2003.

Sec. 1131.755. INDIVIDUAL APPLICATION REQUIRED. (a) An insurer

must take an individual application for each policy of wholesale,

franchise, or employee life insurance.

(b) Repealed by Acts 2005, 79th Leg., Ch. 496, Sec. 2(5), eff.

June 17, 2005.

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

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

496, Sec. 2(5), eff. June 17, 2005.

Sec. 1131.756. RIGHT TO INDIVIDUAL POLICY ON TERMINATION OF

EMPLOYMENT OR MEMBERSHIP. (a) A policy of wholesale, franchise,

or employee life insurance must contain in substance the

provisions prescribed by this section.

(b) The policy must provide that, subject to Subsections (c) and

(d), if the insurance on an individual insured under the policy

ceases because the individual's employment or membership in the

labor or credit union terminates, the individual is entitled to

have the insurer issue to the individual an individual life

insurance policy without disability or other supplementary

benefits.

(c) An individual policy under this section must be issued

without evidence of insurability.

(d) An individual must apply for an individual policy and pay

the first premium to the insurer not later than the 31st day

after the date the individual's employment or membership

terminates.

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

2003.

Sec. 1131.757. OPTIONAL POLICY PROVISIONS. A policy of

wholesale, franchise, or employee life insurance may contain in

substance provisions under which:

(1) the policy is renewable at the option of the insurer only;

(2) coverage by the insurer terminates on termination of

employment or membership by the insured employee or member; or

(3) an individual eligible for insurance must furnish evidence

of individual insurability satisfactory to the insurer as a

condition to coverage.

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

2003.

Sec. 1131.758. CERTAIN POLICIES AND PLANS UNAFFECTED. This

subchapter does not impair or otherwise affect:

(1) a policy issued before August 28, 1961;

(2) a plan of wholesale, franchise, or employee life insurance

in effect before August 28, 1961, if the plan was legal on the

date policies were issued under the plan; or

(3) a policy issued on a salary savings franchise plan, bank

deduction plan, pre-authorized check plan, or similar plan of

premium collection.

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

2003.

SUBCHAPTER Q. EXTENSION OF GROUP LIFE INSURANCE TO SPOUSES AND

CHILDREN

Sec. 1131.801. APPLICABILITY OF SUBCHAPTER. This subchapter

applies to any group life insurance policy issued and delivered

under the laws of this state other than a policy issued and

delivered to a creditor as provided by Section 1131.057 or other

law providing for credit life insurance.

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

2003.

Sec. 1131.802. EXTENSION OF GROUP LIFE INSURANCE TO SPOUSES AND

CHILDREN; ELIGIBLE CHILDREN. Insurance under a group life

insurance policy may be extended to cover:

(1) the spouse of each individual eligible to be insured under

the policy;

(2) a natural or adopted child of each individual eligible to be

insured under the policy if the child is:

(A) unmarried and younger than 25 years of age; or

(B) physically or mentally disabled and under the parents'

supervision; or

(3) a natural or adopted grandchild of each individual eligible

to be insured under the policy if the child is:

(A) unmarried;

(B) younger than 25 years of age; and

(C) a dependent of the insured for federal income tax purposes

at the time the application for coverage of the child is made.

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

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1243, Sec. 1, eff. September 1, 2007.

Sec. 1131.803. PAYMENT OF PREMIUMS. The premium for group life

insurance extended to cover a spouse or child may be paid by:

(1) the group policyholder;

(2) the insured under the policy; or

(3) the group policyholder and the insured jointly.

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

2003.

Sec. 1131.804. AMOUNTS OF INSURANCE. (a) The amounts of

insurance under the policy must be based on a plan that precludes

individual selection by the insured or the policyholder.

(b) The amount of insurance on the life of the spouse or a child

may not exceed the amount of insurance for which the insured is

eligible under the policy.

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

2003.

Sec. 1131.805. CONVERSION RIGHTS. On termination of group life

insurance coverage for a spouse insured under this subchapter

because the insured's employment terminates, the insured's

eligibility for insurance terminates, or the insured dies, or

because the group life insurance policy terminates, the spouse

has the same conversion rights as to the group life insurance on

the spouse's life as the insured.

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

2003.

Sec. 1131.806. CERTIFICATE OF INSURANCE. Only one certificate

of insurance issued for delivery to an insured is required if the

certificate includes a statement concerning any spouse's or

child's coverage.

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

2003.

SUBCHAPTER R. CONTINUATION OF CERTAIN GROUP LIFE INSURANCE DURING

LABOR DISPUTE

Sec. 1131.851. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a group life insurance policy that is delivered

or issued for delivery in this state and as to which any part of

the premium is paid or is to be paid by an employer under the

terms of a collective bargaining agreement.

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

2003.

Sec. 1131.852. CONTINUATION OF GROUP LIFE INSURANCE DURING LABOR

DISPUTE REQUIRED FOR CERTAIN POLICIES. An insurer may not

deliver or issue for delivery a policy subject to this subchapter

unless the policy provides that if the employees covered by the

policy stop work because of a labor dispute, coverage continues

under the policy, on timely payment of the premium, for each

employee who:

(1) is covered under the policy on the date the work stoppage

begins;

(2) continues to pay the employee's individual contribution,

subject to the conditions provided by this subchapter; and

(3) assumes and pays during the work stoppage the contribution

due from the employer, subject to the conditions provided by this

subchapter.

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

2003.

Sec. 1131.853. CONTRIBUTIONS IF POLICYHOLDER IS TRUSTEE. (a)

An employee's contribution for purposes of a policy as to which

the policyholder is a trustee or the trustees of a fund

established or maintained wholly or partly by the employer is the

amount the employee and employer would have been required to

contribute to the fund for the employee if:

(1) the work stoppage had not occurred; and

(2) the agreement requiring the employer to make contributions

to the fund were in effect.

(b) The policy may provide that continuation of coverage is

contingent on the collection of individual contributions by the

policyholder or the policyholder's agent.

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

2003.

Sec. 1131.854. CONTRIBUTIONS IF POLICYHOLDER IS NOT TRUSTEE.

(a) A policy as to which the policyholder is not a trustee or

the trustees of a fund established or maintained in whole or in

part by the employer must provide that the employee's individual

contribution:

(1) is the policy rate applicable:

(A) on the date the work stoppage begins; and

(B) to an individual in the class to which the employee belongs

as provided by the policy; or

(2) if the policy does not provide for a rate applicable to an

individual, is an amount equal to the amount determined by

dividing:

(A) the total monthly premium in effect under the policy on the

date the work stoppage begins; by

(B) the total number of insureds under the policy on that date.

(b) The policy may provide that continuation of coverage under

this subchapter is contingent on the collection of individual

contributions by the union or unions representing the employees.

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

2003.

Sec. 1131.855. PAYMENT OF CONTRIBUTION AND PREMIUM. A policy

may provide that continuation of coverage for an employee under

the policy is contingent on timely payment of:

(1) contributions by the employee; and

(2) the premium by the entity responsible for collecting the

individual employee contributions.

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

2003.

Sec. 1131.856. PAST DUE PREMIUM. (a) A policy may provide that

the continuation of coverage is contingent on payment of any

premium that:

(1) is unpaid on the date the work stoppage begins; and

(2) became due before the date the work stoppage begins.

(b) A premium described by Subsection (a) must be paid before

the date the next premium becomes due under the policy.

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

2003.

Sec. 1131.857. INDIVIDUAL PREMIUM RATE INCREASE. (a) A policy

may provide that, during the period of a work stoppage, an

individual premium rate may be increased by an amount not to

exceed 20 percent of the amount shown in the policy, or a greater

percentage as approved by the commissioner, to provide sufficient

compensation to the insurer to cover increased:

(1) administrative costs; and

(2) mortality and morbidity.

(b) If a policy provides for a premium rate increase in

accordance with this section, the amount of an employee's

contribution must be increased by the same percentage.

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

2003.

Sec. 1131.858. PREMIUM RATE CHANGE NOT LIMITED. (a) This

subchapter does not limit any right of the insurer under a policy

to increase or decrease a premium rate before, during, or after a

work stoppage if the insurer would be entitled to increase the

premium rate had a work stoppage not occurred.

(b) A change in a premium rate made in accordance with this

section takes effect on a date that is determined by the insurer

in accordance with the terms of the policy.

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

2003.

Sec. 1131.859. LIMITATIONS ON CONTINUATION OF COVERAGE. This

subchapter does not require the continuation of coverage under a

policy for a period:

(1) longer than six months after a work stoppage occurs;

(2) beyond the time that 75 percent of the covered employees

continue the coverage; or

(3) as to an individual covered employee, beyond the time that

the employee takes a full-time job with another employer.

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

2003.

Sec. 1131.860. OTHER PROVISIONS; COMMISSIONER APPROVAL REQUIRED.

A policy may contain any other provision relating to

continuation of policy coverage during a work stoppage that the

commissioner approves.

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

2003.