Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 3 - LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES › Subchapter S - MINIMUM STANDARDS AND BENEFITS AND READABILITY FOR INDIVIDUAL ACCIDENT AND HEALTH INSURANCE POLICIES › Section 3.3057 - Standards for Exceptions, Exclusions, and Reductions Provision

Current through Reg. 49, No. 28; July 12, 2024
(a) An exception or exclusion is any
				  provision in a policy whereby coverage for a specified hazard in entirely
				  eliminated. It is a statement of a risk not assumed under the terms and
				  provisions of the contract. Extensive listing of diseases to be excluded will
				  not be acceptable unless the insurer can show that such are necessary and
				  proper to the coverage provided.
(b) A reduction is a provision which takes
				  away some portion, but not all of the coverage of the policy under certain
				  specific conditions. Such relates to a risk assumed by the insurer but payment
				  upon the occurrence of such loss is limited to some amount or period less than
				  would be otherwise payable had such reduction clause not been used.
(c) Exceptions, exclusions, and reductions
				  must be clearly expressed as a part of the benefit provision to which such
				  applies or, if applicable to more than one benefit provision, must be set forth
				  as a separate provision and appropriately captioned. Policies containing the
				  specified exclusionary subjects appearing in Exhibit A will be acceptable;
				  however, this may not preclude the consideration or approval of other
				  exceptions or exclusions if such are deemed reasonable and appropriate to the
				  risk undertaken and are approved by the commissioner. Exhibit A is adopted
				  herein by reference. Copies of Exhibit A may be obtained by contacting the
				  Texas Department of Insurance, Life and Health Division, Filings Intake,
				  MC-LH-LHL, P.O. Box 12030, Austin, Texas 78711-2030, or by accessing the
				  department's website at
www.tdi.texas.gov/forms
.
(d) The acceptable exclusions set forth in
				  Exhibit A may not impair or limit the use of waivers to exclude, limit, or
				  reduce coverage or benefits for named or specifically described pre-existing
				  disease, physical condition, or extra hazardous activity. If waivers are
				  required as a condition of issuance, renewal, or reinstatement, signed
				  acceptance by the insured is required unless on initial issuance the full text
				  of the waiver is contained either on the first page or specification page of
				  the policy or unless notice of the waiver appears on the first page or
				  specification page.
(e) If a policy
				  contains a military service exclusion or a provision suspending coverage during
				  military service, and if the premiums are either reduced or refunded for the
				  period of such military service, such must be clearly stated in the policy.
(1) As to coverage that is not
				  noncancellable, subject to limited renewability at option of the insured or
				  subject to a limited guarantee of renewability:
(A) if the policy contains a "status" type of
				  exclusion which excludes all coverages applicable to an insured person while in
				  military service on full-time active duty, the policy must provide, upon
				  receipt of written request, for refund of premiums as applicable to such person
				  on a pro rata basis;
(B) if the
				  policy contains a "causation" type exclusion (loss resulting from military
				  service) while an insured person is on full-time active duty in the military,
				  refund of premium is not required since the policy would be operative as to any
				  other loss not resulting from military service causes;
(C) if a policy contains a provision for
				  voluntary suspension of coverage during military service and an identifiable
				  premium is charged for such coverage upon written request for suspension, a pro
				  rata premium must be refunded.