HBA-ATS H.B. 2550 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2550
By: Janek
Insurance
4/16/1999
Introduced



BACKGROUND AND PURPOSE 

The Insurance Code limits the amount of life insurance that can be
purchased on a spouse life under a group life insurance policy.  Currently,
a group term life insurance policy upon the life of a spouse is prohibited
from exceeding the lesser of $10,000 or one-half of the amount of insurance
of an insured employee under a group policy.  H.B. 2550 deletes the
condition that a group term life insurance policy upon the life of a spouse
is prohibited from exceeding the lesser of $10,000 or onehalf of the amount
of insurance of an insured employee under the group policy.  In addition,
this bill prohibits the amount of insurance of the spouse of the insured
under any group term life insurance policy from exceeding an amount equal
to the amount of insurance on the insured, and the amount of insurance on
the life of a child from exceeding one-half of the amount of insurance on
the life of the insured. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 1, Article 3.50, Insurance Code, as follows:

Sec. 1. DEFINITIONS.  (a) Prohibits any group life insurance policy
(policy) from being delivered in this state unless it conforms to one of
the policies described under this section. 

(b) Authorizes a policy to be issued to an employer, who is the
policyholder, to insure employees of the employer for the benefit of
persons other than the employer, subject to certain enumerated
requirements. 

(c) Makes conforming changes.

(d) Makes conforming changes.

(e) Makes conforming changes.

(f) Makes conforming changes.

(g) Makes a conforming change.

(h) Makes conforming changes.

(i) Makes conforming changes and a nonsubstantive change.

(j) Makes conforming changes.

(k) Makes conforming changes.

(l) Deletes the condition that a group term life insurance policy upon the
life of a spouse  is prohibited from exceeding the lesser of $10,000 or one
half of the amount of insurance of an insured employer under the group
policy.  Makes conforming and nonsubstantive changes. 

(m) Makes conforming changes.

SECTION 2.  Amends Section 1, Article 3.51-4A, Insurance Code, as follows:

Sec. 1. (a)  Specifies that the spouse and children are the spouse and
children of the insured. Makes conforming and nonsubstantive changes. 

(b) Makes conforming and nonsubstantive changes.

(c) Prohibits the amount of insurance of the spouse of the insured under
any group term life insurance policy from exceeding an amount equal to the
amount of insurance on the insured.  Prohibits the amount of insurance on
the life of a child from exceeding one-half of the amount of insurance on
the life of the insured. 

SECTION 3.  Makes application of this Act prospective for a group life
insurance policy that is delivered, issued for delivery, or renewed on or
after January 1, 2000. 

SECTION 4.Emergency clause.
  Effective date: 90 days after adjournment.