2023 Texas Statutes › Insurance Code › Title 7 - Life Insurance and Annuities › Subtitle B - Group Life Insurance › Chapter 1131 - Group Life Insurance and Wholesale, Franchise, or Employee Life Insurance › Subchapter C. Group Life Insurance: Required Provisions › Section 1131.110. Right to Individual Policy on Termination of Employment or Membership

Sec. 1131.110.  RIGHT TO INDIVIDUAL POLICY ON TERMINATION OF EMPLOYMENT OR MEMBERSHIP.  (a)  A group life insurance policy must provide that if any portion of the insurance on an individual insured under the policy ceases because the individual's employment or membership in the class or classes eligible for coverage under the policy terminates, the individual is entitled to have the insurer issue to the individual an individual life insurance policy without disability or other supplementary benefits.
(b)  An individual must apply for an individual policy and pay the first premium to the insurer not later than the 31st day after the date the individual's employment or membership terminates.
(c)  An individual policy under this section must be issued without evidence of insurability.
(d)  The insured may select any individual policy, other than a term life insurance policy, customarily issued by the insurer for an individual of the insured's age and for the amount requested.
(e)  Except as provided by Subsection (f), the individual policy must be in an amount not to exceed the amount of life insurance that ceases because of the termination of employment or membership.
(f)  For purposes of Subsection (e), any amount of insurance that, on or before the date of the termination of employment or membership, has matured as an endowment payable to the insured is not included in the amount that is considered to cease because of the termination.  This subsection applies without regard to whether the endowment is payable in full, in installments, or in the form of an annuity.
(g)  The premium on an individual policy must be at the insurer's then customary rate applicable to:
(1)  the form and amount of the individual policy;
(2)  the class of risk to which the insured then belongs;  and
(3)  the insured's age on the effective date of the individual policy.
(h)  This section does not apply to:
(1)  a policy issued to a creditor to insure the creditor's debtors;  or
(2)  a policy to which Section 1131.703 applies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003.
Sec. 1131.111.  RIGHT TO INDIVIDUAL POLICY ON TERMINATION OF COVERAGE UNDER GROUP POLICY.  (a)  A group life insurance policy must provide that if the policy terminates or is amended so as to terminate the insurance of a class of insured individuals, each individual insured under the policy on the date of the termination or amendment whose insurance terminates and who has been insured under the policy for at least five years before the date of the termination or amendment is entitled to have the insurer issue to the individual an individual life insurance policy, subject to the conditions and limitations provided by Section 1131.110.
(b)  Notwithstanding Section 1131.110(e), a group life insurance policy may provide that the amount of an individual policy issued under this section may not exceed the lesser of:
(1)  the amount of the individual's life insurance coverage that ceases because of the termination or amendment of the group policy, less the amount of any life insurance for which the individual is or becomes eligible under any group policy issued or reinstated by the same or another insurer not later than the 31st day after the date of the termination or amendment;  or
(2)  $2,000.
(c)  This section does not apply to:
(1)  a policy issued to a creditor to insure the creditor's debtors;  or
(2)  a policy to which Section 1131.703 applies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003.