Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 3 - LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES › Subchapter FF - CREDIT LIFE AND CREDIT ACCIDENT AND HEALTH INSURANCE › Division 2 - APPLICATIONS AND POLICIES › Section 3.5106 - Prohibited Provisions and Practices

Current through Reg. 49, No. 28; July 12, 2024
(a)
					 The policy or certificate of insurance shall not contain provisions which would
					 encourage misrepresentation or are unjust, unfair, inequitable, misleading,
					 deceptive, or contrary to law or to the public policy of this state. A policy,
					 certificate of insurance, notice of proposed insurance, application for
					 insurance, endorsement, and rider filed with the commissioner shall be presumed
					 to be unjust, unfair, inequitable, misleading, deceptive, or to encourage
					 misrepresentation unless:
(1) printed
					 material is in 10-point type;
(2)
					 each policy or certificate of insurance contains provisions substantially as
					 follows.
(A) Grace period. A grace period of
					 31 days shall be granted to the policyholder or premium payor for the payment
					 of each premium falling due after the first premium. During the grace period,
					 the coverage shall continue in force unless the policyholder or premium payor
					 shall have given the insurer written notice of discontinuance in advance of the
					 date of discontinuance and in accordance with the terms of the policy. If the
					 insured shall die during the grace period, the overdue premium may be deducted
					 in any settlement made under the policy.
(B) Entire contract. The policy and any
					 application shall constitute the entire contract between the parties. (This
					 requirement is an optional provision for certificates of insurance.)
(C) Representations by insureds. In the
					 absence of fraud, all statements made by the policyholders or the persons
					 insured shall be deemed representations and not warranties.
(D) Incontestability.
(i) For individual coverage, the policy shall
					 be incontestable after it has been in force during the lifetime of the insured
					 for two years from its date, except for nonpayment of premium. No material
					 misstatement made by the applicant in the application for the policy shall be
					 used to contest the validity of the policy, during the contestable period,
					 unless the misstatement is contained in a written statement signed by the
					 applicant, and a copy of the statement is furnished to the applicant or to his
					 beneficiary. Companies may elect to provide an additional statement to clarify
					 that fraudulent misstatements regarding credit disability coverage may be
					 contested without regard to the two-year time limitation.
(ii) For group coverage, the validity of the
					 policy shall not be contested by the insurer, except for nonpayment of
					 premiums, after it has been in force for two years from its date of issue. No
					 statement made by any person insured under the policy relating to his
					 insurability shall be used in contesting the validity of the insurance with
					 respect to which such statement was made after such insurance has been in force
					 prior to the contest for a period of two years during such person's lifetime
					 and unless it is contained in a written instrument signed by him, a copy of
					 which instrument has been furnished to such person or to his beneficiary.
					 Companies may elect to provide an additional statement to clarify that
					 fraudulent misstatements regarding credit disability which are made by the
					 persons insured under the policy coverage may be contested without regard to
					 the two-year time limitation.
(E) Misstatement of age. If the age of the
					 debtor has been misstated, and according to the correct age the debtor would
					 not have been eligible for insurance coverage, the company shall specify the
					 method of adjustment to be used. If coverage is inadvertently issued to a
					 debtor who correctly stated his age and his age exceeds the eligibility age,
					 the insurer has the right, within 90 days of the effective date of coverage, to
					 terminate the coverage and refund the full charge for insurance, provided such
					 termination is accomplished and the appropriate refund is made prior to the
					 incurred date of a claim; otherwise, the coverage remains in full
					 force.
(F) Death benefit claims.
					 When a policy shall become a claim by the death of the insured, settlement
					 shall be made upon receipt of or not later than two months after receipt of due
					 proof of death and the right of the claimant to the proceeds.
(G) Notice of disability claims. Written
					 notice of a claim must be given to the insurer within 20 days after the
					 occurrence or commencement of any loss covered by the policy, or as soon as is
					 reasonably possible.
(H) Disability
					 claim forms. The insurer will furnish to the person making claim, or to the
					 policyholder for delivery to such person, such forms as are usually furnished
					 by it for filing proof of loss. If such forms are not furnished before the
					 expiration of 15 days after the insurer receives notice of any claim under the
					 policy, the person making such claim shall be deemed to have complied with the
					 requirements of the policy as to proof of loss upon submitting, within the time
					 fixed in the policy for filing proof of loss, written proof of the occurrence,
					 character, and extent of the loss for which claim is made.
(I) Proofs of loss (disability). Written
					 proof of loss must be furnished to the insurer within 90 days after the
					 commencement of the period for which the insurer is liable. Subsequent written
					 proofs of the continuation of such disability must be furnished to the insurer
					 at such intervals as the insurer may reasonably require. Failure to furnish
					 proof within such time shall not invalidate or reduce any claim if it was not
					 reasonably possible to furnish proof within such time, provided proof is
					 furnished as soon as reasonably possible; but in no event, except in the
					 absence of legal capacity of the claimant, later than one year from the time
					 proof is otherwise required.
(J)
					 Disability claim payments. Benefits payable under the policy for any loss other
					 than loss for which the policy provides any periodic payment will be paid upon
					 receipt of due written proof of such loss. Subject to due written proof of
					 loss, all accrued benefits payable for loss for which the policy provides
					 periodic payment shall be paid _____ (insert period for payment as provided in
					 the policy) during the continuance of the period for which the insurer is
					 liable, and any balance remaining unpaid at the termination of such period
					 shall be paid after receipt of due written proof.
(K) Physical examinations and autopsy. The
					 insurer, at its own expense, shall have the right and opportunity to examine
					 the person of the insured when and as often as it may reasonably require during
					 the pendency of a claim hereunder and to make an autopsy in case of death where
					 it is not forbidden by law.
(L)
					 Legal action. Policy provisions related to legal action must comply with the
					 statutes applicable to the policy.