TITLE: Relating to disclosure of an automatic premium loan provision in a life insurance policy.

SUMMARY: Relating to disclosure of an automatic premium loan provision in a life insurance policy.

FULL TEXT:
AN ACT relating to disclosure of an automatic premium loan provision in a life insurance policy. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Chapter 1101, Insurance Code, is amended by adding Subchapter Gto read as follows: SUBCHAPTER G. REQUIRED DISCLOSURES AND NOTICES Sec. 1101.301. DISCLOSURE OF AUTOMATIC PREMIUM LOAN PROVISION. (a) Before issuing a life insurance policy that contains an automatic premium loan provision, an insurer shall: (1) provide a written notice disclosing the automatic premium loan provision that: (A) is printed in at least 16-point font on a separate page of the application or enrollment form for the policy; (B) includes an affirmation that the insurer read the notice aloud as required by Subdivision (2); and (C) is signed by the applicant separately from the rest of the application or enrollment form; and (2) read the notice described by Subdivision (1) aloud to the applicant. (b) If any related policy document is in a language other than English, notice under Subsection (a) must be provided and read in that language in addition to English. (c) The commissioner may adopt rules as necessary to implement this section, including rules establishing what satisfies the oral notice requirement under Subsection (a)(2). SECTION 2. Subchapter G, Chapter 1101, Insurance Code, as added by this Act, applies only to an insurance policy delivered or issued for delivery on or after January 1, 2024. A policy delivered or issued for delivery before January 1, 2024, is governed by the law as it existed immediately before the effective date of this Act, and that law is continued in effect for that purpose. SECTION 3. This Act takes effect September 1, 2023.