H.B. No. 207

	AN ACT
	relating to certain disclosures and notices required for certain
	life insurance policies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Chapter 1101, Insurance Code, is amended by
	adding Subchapter E to read as follows:
	SUBCHAPTER E. DISCLOSURES AND NOTICES RELATING TO LIFE INSURANCE
	POLICIES WITH NON-GUARANTEED CHARGES
	Sec. 1101.201.  PURPOSE. This subchapter is intended to
	provide standards for disclosures relating to changes in certain
	non-guaranteed charges of life insurance policies subject to this
	subchapter.
	Sec. 1101.202.  DEFINITIONS. In this subchapter:
	(1)  "Adverse change" means a change by an insurer in
	the insurer's current scale of charges applied to a policy that
	increases a premium or charge to a policy owner.
	(2)  "Current scale of charges" means the scale or
	schedule of non-guaranteed charges in effect for a policy during
	the period of time immediately before an adverse change to the
	policy.
	(3)  "Non-guaranteed charges" means the scale or
	schedule of charges in a policy provision at the time the policy was
	issued that may be changed at the insurer's discretion without the
	consent or request of the policy owner. The term does not include a
	policy loan interest rate charged on a policy loan.
	Sec. 1101.203.  APPLICABILITY. (a)  This subchapter applies
	to a life insurance policy issued by an insurer, as defined by
	Section 1102.001, that contains non-guaranteed charges that may
	change at the discretion of the insurer.
	(b)  This subchapter does not apply to:
	(1)  group life insurance without separately
	identifiable accounts for insureds;
	(2)  a life insurance policy in which the insurer
	assumes all risk and contractually guarantees a death benefit in
	exchange for a guaranteed premium set at the time of the policy's
	issuance;
	(3)  an individual or group annuity contract;
	(4)  credit life insurance;
	(5)  a life insurance policy with no illustrated death
	benefits on any individual exceeding $10,000;
	(6)  a bank-owned or corporate-owned life insurance
	policy; or
	(7)  a life insurance policy that does not provide for
	cash values or nonforfeiture values.
	Sec. 1101.204.  DISCLOSURE OF NON-GUARANTEED CHARGE
	INCREASE AFTER ISSUANCE OF POLICY. (a) If an insurer increases a
	non-guaranteed charge applied to a policy, the insurer must provide
	a written notice to the policy owner:
	(1)  disclosing:
	(A)  each non-guaranteed charge that has changed;
	(B)  the new scale of non-guaranteed charges after
	the change;
	(C)  the current scale of charges; and
	(D)  the guaranteed maximum scale of charges; and
	(2)  including a prominent display of any adverse
	change in the current scale of charges identifying:
	(A)  the nature of the change;
	(B)  that the change is adverse or the conditions
	under which the change would be adverse; and
	(C)  the new age and year at which the policy will
	lapse if there are no changes to payments or coverage.
	(b)  The notice under Subsection (a) must include the
	insurer's telephone number and the following statement placed
	prominently on the front of the notice:
	"YOU SHOULD KNOW: This increase may change the value of your
	policy and may change how long your policy will last unless you
	increase your premium payments or reduce your coverage, if
	permitted under your policy.  Ask your insurance company for an
	illustration, at no cost, that shows the effect of this change on
	your policy and discuss with your agent or financial advisor other
	options that are available to you."
	(c)  The notice required by Subsection (a) must be given not
	later than the 90th day before the date the change is applied.
	(d)  The notice required by Subsection (a) does not
	constitute an illustration, as defined by rules adopted by the
	department relating to life insurance illustrations.
	Sec. 1101.205.  DISCLOSURE OF CREDITED INTEREST RATE
	DECREASE AFTER ISSUANCE OF POLICY.  (a)  If an insurer decreases the
	credited interest rate paid on a policy's accumulation value, the
	insurer must provide annually a written notice to the policy owner:
	(1)  disclosing:
	(A)  the new current credited interest rate;
	(B)  the previous credited interest rate;
	(C)  the minimum credited interest rate stated in
	the policy; and
	(D)  the effective date of the change; and
	(2)  including a prominent display of the new age and
	year at which the policy will lapse based on all changes to
	non-guaranteed charges and the credited interest rate if there are
	no changes to payments or coverage.
	(b)  The notice under Subsection (a) must include the
	insurer's telephone number and the following statement placed
	prominently on the front of the notice:
	"YOU SHOULD KNOW: This decrease may change the value of your
	policy and may change how long your policy will last unless you
	increase your premium payments or reduce your coverage.  Ask your
	insurance company for an in-force illustration that shows the
	effect of this change on your policy and discuss with your agent or
	financial advisor other options that are available to you."
	(c)  Notwithstanding any other provision of this section,
	this section does not apply to or require disclosures for a variable
	universal or indexed life insurance policy.
	Sec. 1101.206.  ANNUAL ILLUSTRATION. Regardless of whether
	any non-guaranteed charges are changed, an insurer that issues a
	policy subject to this subchapter must offer to provide to the
	policy owner at least annually an in-force illustration. If the
	insurer has changed any non-guaranteed charges or the credited
	interest rate, the insurer must offer the illustration at no
	charge.
	Sec. 1101.207.  RULES. (a)  The commissioner may adopt rules
	as necessary to implement this subchapter.
	(b)  The commissioner by rule may exempt certain types of
	life insurance policies from one or more of the requirements of this
	subchapter.
	(c)  Section 2001.0045, Government Code, does not apply to
	rules adopted under this section.
	SECTION 2.  Subchapter E, Chapter 1101, Insurance Code, as
	added by this Act, applies only to an increase in a non-guaranteed
	charge applied to an insurance policy on or after January 1, 2020.
	Subchapter E, Chapter 1101, Insurance Code, as added by this Act,
	applies only to a decrease in a credited interest rate applied to an
	insurance policy on or after January 1, 2021.
	SECTION 3.  This Act takes effect September 1, 2019.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 207 was passed by the House on April
	18, 2019, by the following vote:  Yeas 146, Nays 1, 2 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 207 on May 23, 2019, by the following vote:  Yeas 140, Nays 0, 1
	present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 207 was passed by the Senate, with
	amendments, on May 21, 2019, by the following vote:  Yeas 31, Nays
	0.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor