Texas Insurance Code
§ 1111A.013 — DISCLOSURE TO INSURER
IN § 1111A.013Title 7. LIFE INSURANCE AND ANNUITIES · Part A. LIFE INSURANCE IN GENERAL · Ch. 1111A. LIFE SETTLEMENT CONTRACTS
Statute text
View on source(a)Without limiting the ability of an insurer to assess the insurability of a policy applicant and to determine whether to issue the policy, and in addition to other questions an insurance carrier may lawfully pose to a life insurance applicant, an insurer may inquire in the application for insurance whether the proposed owner intends to pay premiums with the assistance of financing from a lender that will use the policy as collateral to support the financing.
(b)If, as described in Sections 1111A.002(11) and (11-A), the loan provides funds that can be used for a purpose other than paying for the premiums, costs, and expenses associated with obtaining and maintaining the life insurance policy and loan, and notwithstanding any other law, the application must be rejected as a violation of Section 1111A.017.
(c)If the financing does not violate Section 1111A.017, the insurance carrier:
(1)may make disclosures, not later than the date of the delivery of the policy, to the applicant and the insured, either on the application or on an amendment to the application that include the following or substantially similar statements: "If you have entered into a loan arrangement in which the policy is used as collateral, and the policy does change ownership at some point in the future in satisfaction of the loan, the following may be true:
(A)a change of ownership could lead to a stranger owning an interest in the insured's life;
(B)a change of ownership could in the future limit your ability to purchase future insurance on the insured's life because there is a limit to how much coverage insurers will issue on one life;
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Legislative history
Added by Acts 2011, 82nd Leg., R.S., Ch. 1156 (H.B. 2277), Sec. 3, eff. September 1, 2011.