HBA-TYH H.B. 792 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 792
By: Maxey
Insurance
2/11/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, the Texas Department of Insurance (TDI) regulates the viatical
settlement industry.  Since the enactment of the regulating legislation
though, the industry has shifted from its original focus on serving the
terminally ill and now offers viatical settlements to healthy seniors as
well.  The original legislation defined a viatical settlement to apply only
to the sale of a policy of an individual with a terminal illness.  Thus,
settlements involving healthy seniors are not included in the TDI's
regulatory powers.   

H.B. 792 expands the statutory definition of "viatical settlement" to cover
any transfer of an individual's life insurance benefit in exchange for
payment and authorizes TDI to use the same powers that are generally
available to it for enforcement of the Insurance Code. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Commissioner of Insurance
(commissioner) in SECTION 2 (Section 3, Article 3.50-6A, Insurance Code) of
this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 1(2), Article 3.50-6A, Insurance Code, by
establishing that a "viatical settlement" concerns the life insurance
policy of an individual, rather than that of an individual who has a
catastrophic or life-threatening illness or condition.   

SECTION 2.  Amends Sections 3 and 4, Article 3.50-6A, Insurance Code, as
follows: 

Sec. 3.  New title: APPLICATION OF OTHER INSURANCE LAWS.   Authorizes the
commissioner  by rule to specify other provisions of this code or other
insurance laws of this state that apply to a person engaging in the
business of viatical settlements.  Deletes  existing text. 

Sec. 4.  ENFORCEMENT.  Authorizes the commissioner to take any appropriate
action against a person engaging in the business of viatical settlements
who violates this article, an applicable provision of this code or another
insurance law of this state, or a rule adopted under this article or under
such a provision.  Deletes existing text. 

SECTION 3.  Makes application of this Act prospective.

SECTION 4.  Effective date: September 1, 1999.

SECTION 5.  Emergency clause.