Tex. Human Resources Code Section 32.02613
Life Insurance Assets; Life Insurance Policy Conversion

(a)

For purposes of this section, “long-term care services and support” includes home health care, assisted living, and nursing facility services.

(b)

The owner of a life insurance policy with a face amount of more than $10,000 may enter into a life settlement contract under Chapter 1111A (Life Settlement Contracts), Insurance Code, for the benefit of a recipient of long-term care services and support in exchange for direct payments to:

(1)

a health care provider for the provision of those services to that recipient; or

(2)

the state to offset the costs of providing those services to that recipient under the medical assistance program.

(c)

The proceeds of a life settlement contract entered into under this section must be used for the payment of long-term care services and support, except for the amount specified in Subsection (d)(1). To the extent feasible and allowed under federal law, the medical assistance program may act only as the secondary payor for long-term care services and support provided to a person who is eligible for medical assistance and for whose benefit an owner of a life insurance policy has entered into a life settlement contract under this section.

(d)

In addition to the requirements under Chapter 1111A (Life Settlement Contracts), Insurance Code, a life settlement contract entered into under this section must:

(1)

provide that the lesser of five percent of the face amount of the life insurance policy or $5,000 is reserved and is payable to the owner’s estate or a named beneficiary for funeral expenses;

(2)

provide that the balance of proceeds under the life settlement contract that are unpaid on the death of the owner must be paid to the owner’s estate or a named beneficiary; and

(3)

specify the total amount payable for the benefit of the recipient of long-term care services and support under the life settlement contract.

(e)

All proceeds of a life settlement contract entered into under this section must be held in an irrevocable state or federally insured account for the benefit of the recipient of long-term care services and support or for payment as otherwise required by this section.

(f)

Only a recipient of long-term care services and support for whose benefit an owner enters into a life settlement contract under this section may choose the provider and type of services provided to the recipient and paid for out of an account described by Subsection (e). Any attempt by a person to require the recipient to choose a specific provider is strictly prohibited and constitutes an unfair method of competition or an unfair or deceptive act or practice under the Insurance Code.

(g)

A person who enters into a life settlement contract with an owner of a life insurance policy under this section must maintain:

(1)

a surety bond executed and issued by an insurer authorized to issue surety bonds in this state;

(2)

a policy of errors and omissions insurance; or

(3)

a deposit in the amount of $500,000 in any combination of cash, certificates of deposit, or securities.

(h)

In accordance with the requirements of Chapter 1111A (Life Settlement Contracts), Insurance Code, a life settlement contract provider who enters into life settlement contracts with owners of life insurance policies under this section must file with the Texas Department of Insurance:

(1)

all life settlement contract forms used by the provider; and

(2)

all advertising and marketing materials used by the provider.

(i)

Section 1111A.022 (Life Settlement Antifraud Initiatives)(a)(2)(A), Insurance Code, does not apply to a life insurance policy that is the subject of a life settlement contract entered into under this section if the contract has been in force at least five years.

(j)

A claim against a life settlement contract provider with whom an owner of a life insurance policy enters into a life settlement contract under this section by the owner, the owner’s estate, a named beneficiary, or any other person with respect to the contract may not exceed the face amount of the policy, less the proceeds paid under the contract, plus the total amount of premiums paid by the owner since entering into the contract. A life settlement contract provider must pay a claim under this subsection from the funds in an account described by Subsection (e).

(k)

In accordance with Chapter 1111A (Life Settlement Contracts), Insurance Code, the Texas Department of Insurance may conduct periodic market examinations of each life settlement contract provider who enters into a life settlement contract with an owner of a life insurance policy under this section.

(l)

The commission shall educate applicants for long-term care services and support under the medical assistance program about options for life insurance policies, including options that do not allow a life insurance policy to be considered as an asset or resource in determining eligibility for medical assistance.

(m)

The executive commissioner, in consultation with the commissioner of insurance, shall adopt rules necessary to implement this section. The rules must ensure that:

(1)

proceeds from a life settlement contract are used to reimburse a provider of long-term care services and support or the state to offset the cost of medical assistance long-term care services and support;

(2)

eligibility and need for medical assistance are determined without considering the balance of proceeds from a life settlement contract as provided in this section; and

(3)

payments to a provider of long-term care services and support and applied income payments are made in accordance with this chapter.

(n)

The entry into a life settlement contract by an owner of a life insurance policy under this section is not the only method by which the owner may avoid having the policy considered as an asset or resource in determining the eligibility of the owner for medical assistance.

(o)

Notwithstanding the provisions of this section, the commission may not implement a provision of this section if the commission determines that implementation of the provision is not cost-effective or feasible.
Added by Acts 2013, 83rd Leg., R.S., Ch. 1001 (H.B. 2383), Sec. 1, eff. June 14, 2013.
Amended by:
Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 4.091, eff. April 2, 2015.

Source: Section 32.02613 — Life Insurance Assets; Life Insurance Policy Conversion, https://statutes.­capitol.­texas.­gov/Docs/HR/htm/HR.­32.­htm#32.­02613 (accessed Jun. 5, 2024).

32.001
Purpose of Chapter 32.002
Construction of Chapter 32.003
Definitions 32.021
Administration of the Program 32.022
Medical and Hospital Care Advisory Committees 32.023
Cooperation with Other State Agencies 32.024
Authority and Scope of Program 32.025
Application for Medical Assistance 32.026
Certification of Eligibility and Need for Medical Assistance 32.027
Selection of Provider of Medical Assistance 32.028
Fees, Charges, and Rates 32.029
Methods of Payment 32.031
Receipt and Expenditure of Funds 32.032
Prevention and Detection of Fraud and Abuse 32.033
Subrogation 32.034
Contract Cancellation 32.035
Appeals 32.036
Program Payments Nonassignable and Exempt from Legal Process 32.038
Collection of Insurance Payments 32.039
Damages and Penalties 32.040
Identification of Husband or Alleged Father 32.043
Procurement Rules for Public Disproportionate Share Hospitals 32.044
Group Purchasing for Disproportionate Share Hospitals 32.045
Enhanced Reimbursement 32.046
Sanctions and Penalties Related to the Provision of Pharmacy Products 32.047
Prohibition of Certain Health Care Service Providers 32.048
Managed Care Information and Training Plan 32.049
Managed Care Contract Compliance 32.050
Dual Medicaid and Medicare Coverage 32.051
Misdirected Billing 32.052
Waiver Programs for Children with Disabilities or Special Health Care Needs 32.054
Dental Services 32.055
Catastrophic Case Management 32.056
Compliance with Texas Health Steps Comprehensive Care Program 32.057
Contracts for Disease Management Programs 32.058
Limitation on Medical Assistance in Certain Alternative Community-based Care Settings 32.059
Use of Respiratory Therapists for Respiratory Therapy Services 32.061
Community Attendant Services Program 32.062
Admissibility of Certain Evidence Relating to Nursing Institutions 32.063
Third-party Billing Vendors 32.064
Cost Sharing 32.067
Delivery of Comprehensive Care Services to Certain Recipients of Medical Assistance 32.068
In-person Evaluation Required for Certain Services 32.069
Chronic Kidney Disease Management Initiative 32.070
Audits of Providers 32.071
Recipient and Provider Education 32.072
Direct Access to Eye Health Care Services 32.073
Health Information Technology Standards 32.074
Access to Personal Emergency Response System 32.075
Employment Assistance and Supported Employment 32.076
Substitute Dentists 32.101
Definitions 32.102
Database of Medical Assistance Program Providers 32.103
Certain Fees Prohibited 32.104
Authority to Contract 32.105
Rules 32.201
Definitions 32.202
Electronic Communications 32.0211
Restrictions on Executive Commissioners, Former Members of a Board, Commissioners, and Their Business Partners 32.0212
Delivery of Medical Assistance 32.0213
Nursing Facility Bed Certification and Decertification 32.0214
Designations of Primary Care Provider by Certain Recipients 32.0215
Home or Community Care Providers: Civil Monetary Penalties 32.0231
Announcement of Funding or Program Change 32.0241
Review of Waiver Request 32.0242
Verification of Certain Information 32.0243
Periodic Review of Eligibility for Certain Recipients 32.0244
Nursing Facility Beds in Certain Counties 32.0245
Nursing Facility Beds for Certain Facilities Treating Alzheimer’s Disease 32.0246
Medical Assistance Reimbursement for Certain Behavioral Health and Physical Health Services 32.0247
Medical Assistance for Certain Persons Making Transition from Foster Care to Independent Living 32.0249
Mental Health Screenings in Texas Health Steps Program 32.0251
Eligibility Notification and Review for Certain Children 32.251
Definitions 32.252
Partnership for Long-term Care Program 32.253
Asset Disregard 32.254
Reciprocal Agreements 32.0255
Transitional Medical Assistance 32.255
Training 32.0256
Continuation of Medical Assistance for Certain Individuals 32.256
Rules 32.0261
Continuous Eligibility 32.0262
Eligibility Transition 32.0263
Health Care Orientation 32.0264
Suspension and Reinstatement of Eligibility for Children in Juvenile Facilities 32.0265
Notice of Certain Placements in Juvenile Facilities 32.0266
Suspension, Termination, and Automatic Reinstatement of Eligibility for Individuals Confined in County Jails 32.0275
Military Medical Treatment Facilities and Affiliated Health Care Providers 32.0281
Rules and Notice Relating to Payment Rates 32.0282
Public Hearing on Rates 32.0284
Calculation of Payments Under Certain Supplemental Hospital Payment Programs 32.0285
Calculation of Medical Education Add-on for Reimbursement of Teaching Hospitals that Provide Behavioral Health and Physical Health Services 32.0287
Prescribed Pediatric Extended Care Center Reimbursement 32.0291
Prepayment Reviews and Payment Holds 32.0311
Drug Reimbursement Under Certain Programs 32.0312
Reimbursement for Services Associated with Preventable Adverse Events 32.0314
Reimbursement for Durable Medical Equipment and Supplies 32.0315
Funds for Graduate Medical Education 32.0316
Electronic Transactions 32.0317
Reimbursement for Services Provided Under School Health and Related Services Program 32.0321
Surety Bond 32.0322
Criminal History Record Information 32.0381
Icf-iid Payment Rates 32.0391
Criminal Offense 32.0421
Administrative Penalty for Failure to Provide Information 32.0422
Health Insurance Premium Payment Reimbursement Program for Medical Assistance Recipients 32.0423
Recovery of Reimbursements from Health Coverage Providers 32.0424
Requirements of Third-party Health Insurers 32.0425
Reimbursement for Wheeled Mobility Systems 32.0461
Vendor Drug Program 32.0462
Vendor Drug Program 32.0463
Medications and Medical Supplies 32.0531
Pace Program Team 32.0532
Pace Program Reimbursement Methodology 32.0551
Optimization of Case Management Systems 32.0561
Maternal Depression Screening 32.0641
Recipient Accountability Provisions 32.0705
External Audits of Certain Medicaid Contractors Based on Risk 32.0755
Prevocational Services Under Certain Waiver Programs 32.02451
Additional Personal Needs Allowance for Guardianship Expenses of Certain Recipients 32.02471
Medical Assistance for Certain Former Foster Care Adolescents Enrolled in Higher Education 32.02611
Exclusion of Assets in Prepaid Tuition Programs and Higher Education Savings Plans 32.02613
Life Insurance Assets 32.03115
Reimbursement for Medication-assisted Treatment for Opioid or Substance Use Disorder 32.03117
Reimbursement for Non-opioid Treatments 32.03141
Authority of Advanced Practice Registered Nurses and Physician Assistants Regarding Durable Medical Equipment and Supplies 32.04242
Payor of Last Resort 32.024715
Streamlined Eligibility Determination Process for Certain Former Foster Care Youth 32.026101
Determination of Eligibility by Health Care Exchanges Prohibited
Green check means up to date. Up to date

Accessed:
Jun. 5, 2024

§ 32.02613’s source at texas​.gov