CHAPTER 1701. POLICY FORMS - Texas Statutes

INSURANCE CODE

TITLE 9. PROVISIONS APPLICABLE TO LIFE AND HEALTH COVERAGES

CHAPTER 1701. POLICY FORMS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1701.001. DEFINITION. In this chapter, "use" includes

issue and deliver.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.002. APPLICABILITY OF CHAPTER TO FORMS OF CERTAIN

DOCUMENTS. This chapter applies to the form of the following

document:

(1) a policy, contract, or certificate of:

(A) accident or health insurance, including group accident or

health insurance;

(B) medical or surgical insurance, including group medical or

surgical insurance;

(C) life or term insurance, including group life or term

insurance;

(D) endowment insurance;

(E) industrial life insurance; or

(F) fraternal benefit insurance;

(2) an annuity or pure endowment contract, including a group

annuity contract;

(3) an application attached or required to be attached to the

policy, contract, or certificate; or

(4) a rider or endorsement to be attached to, printed on, or

used in connection with the policy, contract, or certificate.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.003. APPLICABILITY OF CHAPTER TO CERTAIN INSURERS.

(a) Except as provided by Subsection (b), this chapter applies

to any insurer that uses a document described by Section 1701.002

in this state, including:

(1) a life, accident, health, or casualty insurance company;

(2) a mutual life insurance company;

(3) a mutual insurance company other than a mutual life

insurance company;

(4) a mutual or natural premium life insurance company;

(5) a general casualty company;

(6) a Lloyd's plan;

(7) a reciprocal or interinsurance exchange;

(8) a fraternal benefit society; and

(9) a group hospital service corporation.

(b) This chapter does not apply to a society, company, or other

insurer whose activities are by statute exempt from department

control and that is entitled by statute to a certificate from the

department showing that exempt status.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.004. CONSTRUCTION OF CHAPTER. This chapter may not be

construed to enlarge the powers of an insurer subject to this

chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.005. EXEMPTIONS. (a) This chapter does not apply to:

(1) a rider or endorsement that is used at the request of the

holder of a policy, contract, or certificate subject to this

chapter and that relates to:

(A) the manner of distribution of benefits under the policy,

contract, or certificate; or

(B) the reservation of rights and benefits under the policy,

contract, or certificate; or

(2) the modification of a previously approved insurance policy

form for the sole purpose of adding the statement required by

Section 154.2021(a)(3), Finance Code.

(b) The commissioner by written order may exempt a document from

the requirements of this chapter for the period the commissioner

considers proper if the commissioner determines that:

(1) this chapter may not practically be applied to the document;

(2) the document's preparation, use, and meaning have become

routine or commonplace; or

(3) the filing and approval of the form of the document are not

desirable, appropriate, required, or necessary for the protection

of the public.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Amended by:

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

1190, Sec. 34, eff. September 1, 2009.

SUBCHAPTER B. FILING REQUIREMENT

Sec. 1701.051. FILING REQUIRED. (a) Except as provided by

Section 1701.005, an insurer may not use a document described by

Section 1701.002 in this state unless the form of the document is

filed with the department in accordance with this chapter.

(b) Except as provided by Section 1701.052, the insurer must

file the form of the document not later than the 60th day before

the date the document is used.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.052. FILE AND USE. (a) An insurer may use a document

described by Section 1701.002 immediately after the form of the

document is filed if the form, when filed, is accompanied by a

certification that meets the requirements of Subsection (b).

(b) The certification accompanying a form must:

(1) be signed by:

(A) an attorney licensed to practice law in this state;

(B) an actuary familiar with the requirements of this code and

applicable rules adopted under this code;

(C) the chief executive officer of the insurer; or

(D) an individual designated by the chief executive officer of

the insurer; and

(2) affirm that:

(A) the certification is made on behalf of the insurer filing

the form;

(B) the insurer is bound by the certification;

(C) the individual making the certification has reviewed the

form; and

(D) to the best knowledge, information, and belief of the

individual making the certification, the form complies with this

code and rules applicable to the form.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.053. FILING FEE. (a) The department shall collect a

fee in an amount determined by the commissioner for the filing of

the form of a document under this chapter.

(b) The fee may not exceed:

(1) $100 for filing the form of a new or amended document that

is not exempt from review under Section 1701.005(b); and

(2) $50 for filing the form of a new or amended document that is

exempt from review under Section 1701.005(b).

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.054. APPROVAL OF FORM. (a) A form filed under this

chapter that is not affirmatively approved or disapproved in a

written order of the commissioner on or before the 60th day after

the date the form is filed is considered approved on the 61st day

after the date of filing unless the approval period is extended

under this section.

(b) An insurer may request in writing that the approval period

for a form be extended for an additional period not to exceed 45

days.

(c) An extension requested under this section is considered

granted on the date the department receives the request.

(d) Only one extension may be granted under this section.

(e) If an extension is granted under this section and the

commissioner does not affirmatively approve or disapprove the

form before the extended period expires, the form is considered

approved on the day after the date the extended period expires.

(f) If the commissioner approves a form that is filed without a

certification meeting the requirements of Section 1701.052(b)

before the expiration of the approval period, including any

extension, the remaining portion of the period is waived.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.055. DISAPPROVAL OF FORM OR WITHDRAWAL OF APPROVAL OR

EXEMPTION. (a) Except as provided by Subsection (d), the

commissioner may disapprove or, after notice and hearing,

withdraw approval of a form if the form:

(1) violates this code, a rule of the commissioner, or any other

law; or

(2) contains a provision, title, or heading that is unjust,

encourages misrepresentation, or is deceptive.

(b) A form filed under this chapter that contains a coordination

of benefits provision may not be approved for use in this state

unless the form provides for the order of benefits determination

for insured dependent children. An order of benefits

determination provision may not be approved if the provision:

(1) violates this code, a rule of the commissioner, or any other

law; or

(2) contains a provision, title, or heading that is unjust,

encourages misrepresentation, or is deceptive.

(c) If necessary to accomplish the purpose of Subsection (b),

the commissioner may adopt a policy provision and order the

inclusion of that provision in a document subject to that

subsection.

(d) If a form has been on file with the department for at least

180 days and has previously been affirmatively approved by the

commissioner, been considered approved under this chapter, or

been exempted from the approval requirements under this chapter,

the commissioner may withdraw the approval or exemption only if:

(1) the form violates this code or a rule adopted under this

code; or

(2) the commissioner finds proof of gross misrepresentation or

fraud to a policyholder.

(e) An order of the commissioner disapproving or withdrawing

approval for a form must state the grounds for the disapproval or

withdrawal of approval and describe in adequate detail the

changes that are necessary to obtain approval.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.056. USE OF DISAPPROVED FORM PROHIBITED. An insurer

who receives written notice that a form filed by the insurer has

been disapproved by the commissioner shall immediately stop using

the form.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.057. WITHDRAWAL OF INDIVIDUAL ACCIDENT AND HEALTH

INSURANCE POLICY FORM APPROVAL. (a) Except as provided by

Subsection (b), the commissioner may, after notice and hearing,

withdraw approval of an individual accident and health insurance

policy form if, after consideration of all relevant facts, the

commissioner determines that:

(1) the benefits provided under the form are unreasonable in

relation to the premium charged; or

(2) the reserve required by Section 862.102 is not maintained by

the insurer on the policies issued on the form.

(b) If an individual accident and health insurance policy form

has been on file with the department for at least 360 days and

has been affirmatively approved by the commissioner, been

considered approved under this chapter, or been exempted from the

approval requirements of this chapter, the commissioner may

withdraw the approval or exemption only if:

(1) the form violates this code or a rule adopted under this

code; or

(2) the commissioner finds proof of gross misrepresentation or

fraud to a policyholder.

(c) To enable the department to determine compliance with

Subsection (b), the commissioner:

(1) shall require an insurer to file the rates charged by that

insurer for individual accident and health insurance policies;

and

(2) may adopt and require an insurer to file in conjunction with

the annual statement required under Section 841.255, 982.101, or

982.103 a form for reporting the insurer's experience on

individual accident and health insurance policy forms issued by

the insurer.

(d) The commissioner shall, in accordance with Section 1201.007,

adopt reasonable rules necessary to establish standards under

which the approval of an individual accident and health insurance

policy form may be withdrawn.

(e) This section does not grant the commissioner the authority

to determine, fix, prescribe, or promulgate rates to be charged

for an individual accident and health insurance policy.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.058. RECONSIDERATION OF FORM. (a) Not later than the

45th day after the date of an order of the commissioner

disapproving or withdrawing approval of a form under Section

1701.055, an insurer may correct the deficiencies described by

the order and file the corrected form with the department for

reconsideration by the commissioner.

(b) If the commissioner does not approve or disapprove a form

filed for reconsideration under this section on or before the

45th day after the date the form is filed, the form is considered

approved on the 46th day after the date the form is filed.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.059. REPLACEMENT OR AMENDMENT OF DOCUMENT. The

commissioner may order an insurer to replace a document described

by Section 1701.002 with a corrected document or to amend and

correct the document by endorsement or rider if:

(1) the commissioner disapproves or withdraws approval of the

form of the document under Section 1701.055(a); or

(2) the document is used before the form was approved under this

chapter and corrections must be made to the document to bring the

document into compliance with this code and rules of the

commissioner before the commissioner will approve the form of the

document.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.060. GENERAL RULEMAKING AUTHORITY. (a) The

commissioner may adopt reasonable rules necessary to implement

the purposes of this chapter, including, after notice and

hearing, rules that establish procedures and criteria under

which:

(1) each type of form submitted to the department under this

chapter will be reviewed and approved by the commissioner or

exempted under Section 1701.005(b); and

(2) particular types of forms designated by the commissioner may

be given a summary review and approval if considered appropriate

by the commissioner to expedite review and approval of those

forms.

(b) A rule adopted under this chapter may not be repealed or

amended until after the first anniversary of the date the rule

was adopted unless the commissioner determines that repeal or

amendment is in the significant and material interests of the

citizens of this state or is necessary as a result of legislative

enactment.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.076(a), eff. September 1, 2005.

Sec. 1701.061. NONINSURANCE BENEFITS. (a) In this section,

"noninsurance benefit" means a good or service provided or

disclosed as part of a policy or certificate of insurance that is

reasonably related to the type of policy or certificate being

issued. Examples of noninsurance benefits include:

(1) discount cards for health care programs, vision care

programs, dental care programs, prescriptions, physical fitness

programs or facilities, or other similar programs;

(2) financial planning, will preparation, or similar services;

and

(3) contributions for educational savings on behalf of a

policyholder or certificate holder.

(b) An insurer may include a noninsurance benefit that is

reasonably related to a policy or certificate as part of the

policy or certificate form to be issued to an insured or

certificate holder.

(c) A policy form filing that includes a noninsurance benefit

shall include:

(1) a description of the noninsurance benefit;

(2) a notice that fully discloses the noninsurance benefit to

the policyholder or certificate holder; and

(3) an explanation of any condition on which termination of the

noninsurance benefit will occur.

(d) Section 541.061 applies to a noninsurance benefit provided

as part of a policy or certificate.

(e) Section 1102.002 does not apply to a noninsurance benefit

provided as part of a policy or certificate.

(f) The commissioner may adopt rules to implement this section,

including rules to:

(1) determine which noninsurance benefits are reasonably related

to the types of insurance subject to this chapter;

(2) ensure that noninsurance benefits included as part of a

policy or certificate are not unfairly deceptive or do not

otherwise constitute a prohibited inducement; and

(3) address application of other chapters of this code to

noninsurance benefits provided as part of a policy or

certificate, including Chapters 82-84, 222, 257, 463, 541-544,

1501, and 1506.

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

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

SUBCHAPTER C. SANCTIONS; APPLICABILITY OF OTHER LAWS

Sec. 1701.101. RESTITUTION. (a) The commissioner may order an

insurer to make complete restitution to each insured of this

state who is financially damaged by the insurer's use of a form

filed and used but not approved under this chapter if, after

notice and opportunity for hearing, the commissioner determines:

(1) the form does not comply with this code and the rules of the

commissioner;

(2) use of the form resulted in financial damage to an insured

of this state; and

(3) the insurer intentionally used the form with the knowledge

that it did not comply with this code and the rules of the

commissioner.

(b) The commissioner may determine the form and amount of

restitution ordered under this section and the period in which

the restitution must be made.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.102. LIMIT ON SANCTIONS. Except as provided by

Section 1701.101, the commissioner may not impose penalties or

other sanctions on an insurer for the issuance of a document the

form of which is filed under Section 1701.052.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

Sec. 1701.103. APPLICABILITY OF OTHER LAWS. Except as provided

by Section 1701.102, this chapter may not be construed to limit

the applicability of any other statute.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.

SUBCHAPTER D. CERTAIN POLICY APPLICATION FORMS

Sec. 1701.151. POLICY APPLICATION FORM FOR INDIVIDUAL ACCIDENT

AND HEALTH POLICY. A policy application form that is required to

be or that is attached to an individual accident and health

policy shall comply with the rules of the commissioner adopted

under Chapter 1201.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 5, eff. April 1,

2005.