Tex. Ins. Code Section 463.254
Life or Health Insurance Policies or Contracts


(a)

This section applies only when the association is taking an action under Section 463.252 (Impaired Domestic, Foreign, or Alien Insurer Not Paying Claims)(b)(2) or 463.253 (Insolvent Insurer) with respect to a life or health insurance policy or contract.

(b)

The association, in accordance with Subsections (c) and (d), as applicable, shall ensure payment of benefits identical to the benefits that would have been payable under the policy or contract of the insurer.

(c)

For a group policy or contract, the association shall ensure payment of benefits under Subsection (b) for claims incurred before the later of:

(1)

the earlier of the next renewal date under the policy or contract or the 45th day after the date the association becomes obligated with respect to the policy or contract; or

(2)

the 30th day after the date the association becomes obligated with respect to the policy or contract.

(d)

For an individual policy, the association shall ensure payment of benefits under Subsection (b) for claims incurred before the later of:

(1)

the earlier of the next renewal date under the policy, if any, or the first anniversary of the date the association becomes obligated with respect to the policy; or

(2)

the 30th day after the date the association becomes obligated with respect to the policy.

(e)

The association shall diligently attempt to provide each known insured, enrollee, or group policy or contract holder with notice before the 30th day before the date the benefits are terminated.

(f)

As provided by Subsections (g)-(i), the association shall make substitute coverage available on an individual basis to:

(1)

each known insured or enrollee under an individual policy, or the owner if other than the insured or enrollee; and

(2)

each individual who:

(A)

was formerly insured or enrolled under a group policy or contract; and

(B)

is not eligible for replacement group coverage.

(g)

Substitute coverage is available for an individual policy under Subsection (f) only if the insured, enrollee, or owner was entitled under law or the terminated policy to continue an individual policy in force until a specified age or for a specified period during which the insurer:

(1)

was not entitled to unilaterally change a provision of the policy; or

(2)

was entitled only to change a premium by class.

(h)

Substitute coverage is available for a group policy or contract under Subsection (f) only if the formerly insured or enrolled individual was entitled under law or the terminated policy or contract to convert group coverage to individual coverage.

(i)

To provide substitute coverage under Subsection (f), the association may offer to reissue the terminated coverage or issue an alternative policy. The association shall offer the reissued or alternative policy without requiring evidence of insurability, at actuarially justified rates. The reissued or alternative policy may not provide for a waiting period or exclusion that would not have applied under the terminated policy. The association may reinsure a reissued or alternative policy.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 432 (S.B. 1153), Sec. 19, eff. September 1, 2019.

Source: Section 463.254 — Life or Health Insurance Policies or Contracts, https://statutes.­capitol.­texas.­gov/Docs/IN/htm/IN.­463.­htm#463.­254 (accessed Mar. 23, 2024).

463.001
Short Title
463.002
Purpose
463.003
General Definitions
463.004
Construction
463.005
Immunity
463.006
Rules
463.007
Construction of Long-term Care Rider
463.0031
Definition of Principal Place of Business of Plan Sponsor or Other Person
463.0032
Use of Terms Policy and Contract
463.051
Purpose and Regulation of Association
463.052
Required Participation in Association
463.053
Board of Directors
463.054
Eligibility to Serve as Public Representative
463.055
Term
463.056
Compensation of Board Members
463.057
Financial Statement of Board Member
463.058
Conflict of Interest
463.059
Meetings by Telephone and Videoconference
463.101
General Powers and Duties
463.102
Plan of Operation
463.103
Personnel
463.104
Association Records
463.105
Accounts
463.106
Delegation of Powers and Duties
463.107
Exemption from Taxation
463.108
Detection and Prevention of Impairment and Insolvency
463.109
Association Appearance Before Court
463.110
Annual Report
463.111
Board and Association Advice and Assistance
463.112
Board Access to Records
463.113
Board Report at Conclusion of Insolvency
463.114
Summary Document
463.151
Making and Payment of Assessment
463.152
Classes of Assessments
463.153
Amount of Assessments
463.154
Deferment
463.155
Deposit of Assessments
463.156
Certificate of Contribution
463.157
Refunds
463.158
Use of Assessments
463.159
Failure to Pay
463.160
Premium Tax Credit for Class a Assessment
463.161
Premium Tax Credit for Class B Assessment
463.162
Assignment or Transfer of Credit
463.163
Insured’s Liability Under Assessment Plan
463.201
Persons Covered
463.202
Policies and Contracts Covered
463.203
Policies and Contracts Excluded
463.204
Obligations Excluded
463.205
Protection Provided by Other Jurisdiction
463.206
Association Discretion in Manner of Providing Benefits
463.251
Impaired Domestic Insurer
463.252
Impaired Domestic, Foreign, or Alien Insurer Not Paying Claims
463.253
Insolvent Insurer
463.254
Life or Health Insurance Policies or Contracts
463.255
Policy or Contract with Guaranteed Interest Rate
463.256
Alternative Policy
463.257
Imposition of Lien or Moratorium
463.258
Premium for Reissuance of Terminated Coverage
463.259
Premium Due During Receivership
463.260
Limits on and Termination of Association Obligation
463.261
Assignment of Rights
463.262
Effect of Subrogation and Assignment of Rights and Available Assets on Association Obligation
463.263
Deposit to Be Paid to Association
463.264
Reinsurance
463.301
Issuance or Renewal of Policies Following Conservatorship or Receivership
463.302
Distributions to Shareholders and Affiliates
463.303
Assets Attributable to Covered Policies
463.304
Distribution of Ownership Rights of Impaired or Insolvent Insurer
463.351
Notice of Commissioner Actions
463.352
Advice from Board
463.353
Examination
463.354
Demand to Cure Impairment
463.355
Failure to Comply with Plan of Operation
463.356
Assumption of Powers and Duties of Association
463.357
Notification of Effect of Chapter
463.358
Statement of Premiums
463.401
Appeal to Commissioner
463.402
Venue
463.403
Appeal Bond
463.404
Stay of Proceedings
463.451
Prohibited Use of Protection Provided by Chapter

Accessed:
Mar. 23, 2024

§ 463.254’s source at texas​.gov