HB2221 - Relating to certain trade practices related to life insurance, annuity contracts, and accident and health coverage.

      H.B. No. 2221         AN ACT   relating to certain trade practices related to life insurance,   annuity contracts, and accident and health coverage.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  The heading to Title 9, Insurance Code, is   amended to read as follows:   TITLE 9. PROVISIONS APPLICABLE TO LIFE INSURANCE, ANNUITY   CONTRACTS, AND ACCIDENT AND HEALTH COVERAGES          SECTION 2.  Title 9, Insurance Code, is amended by adding   Chapter 1702 to read as follows:   CHAPTER 1702. REGULATION OF CERTAIN TRADE PRACTICES   SUBCHAPTER A.   GENERAL PROVISIONS           Sec. 1702.001.  PURPOSE. The purpose of this chapter is to:                 (1)     set forth uniform standards of prohibited acts and   practices for life insurance, annuity contracts, accident and   health insurance, and health care plans; and                 (2)     provide for more uniformity in well-recognized   exceptions to existing rebate and discrimination laws for certain   value-added services, acts, or practices recognized in existing law   or contained in uniform model laws developed and recommended by the   National Association of Insurance Commissioners.           Sec. 1702.002.  DEFINITIONS. In this chapter:                 (1)  "Agent" means:                       (A)     a person authorized to act as an insurance   agent as defined by Section 4001.003; or                       (B)     a third-party administrator authorized to   act as an administrator for an insurer under Chapter 4151.                 (2)     "Consumer" means a policyholder or potential   policyholder, a certificate holder or potential certificate   holder, an insured or potential insured, a contract holder or   potential contract holder, an enrollee or potential enrollee, or an   applicant for insurance, an annuity, or health care plan coverage.                 (3)     "Enrollee" and "health care plan" have the   meanings assigned by Section 843.002.                 (4)     "Insurer" means an insurance company, including a   reciprocal or interinsurance exchange, mutual insurance company,   capital stock company, Lloyd's plan, fraternal benefit society,   group hospital service corporation, or other legal entity   authorized to engage in the business of life, accident, or health   insurance or annuities in this state.                 (5)     "Loss-control or value-added product or service"   means a product or service offered or provided by an insurer, health   maintenance organization, or agent, by or through an employee,   affiliate, or third-party representative, to an insured,   annuitant, or enrollee at no or reduced cost when such products or   services are not specified in the insurance policy, annuity   contract, or health care plan contract and that:                       (A)     relates to the insurance, annuity, or health   care plan coverage; and                       (B)     is primarily designed to do one or more of the   following:                             (i)     provide loss mitigation or loss   control;                             (ii)     reduce claim costs or claim settlement   costs;                             (iii)     provide education about liability   risks or risk of loss to persons or property;                             (iv)     monitor or assess risk, identify   sources of risk, or develop strategies for eliminating or reducing   risk;                             (v)  enhance health;                             (vi)     enhance financial wellness through   items such as education or financial planning services;                             (vii)  provide post-loss services;                             (viii)     provide incentives for behavioral   changes to improve the health or reduce the risk of death or   disability of an insured, annuitant, or enrollee; or                             (ix)     assist in the administration of   employee or retiree benefit insurance, annuity, or health care plan   coverage.           Sec.   1702.003.     APPLICABILITY OF CHAPTER: LIFE INSURANCE AND   ANNUITIES.   (a)   Except as otherwise provided by this chapter, this   chapter applies to an insurance company writing life insurance and   annuities in this state, including:                 (1)  a stock life insurance company;                 (2)     a mutual life insurance company, including a   mutual life assessment company;                 (3)  a stipulated premium life insurance company; and                 (4)     a fraternal benefit society authorized under   Chapter 885.           (b)     This chapter applies to a third-party administrator   acting on behalf of a life insurer.           Sec.   1702.004.     APPLICABILITY OF CHAPTER: ACCIDENT AND   HEALTH.   (a)   Except as otherwise provided by this chapter, this   chapter applies to:                 (1)     an insurer authorized to engage in the business of   accident and health insurance in this state, including:                       (A)     a life, health, and accident stock insurance   company;                       (B)  a mutual insurance company, including:                             (i)  a mutual life insurance company; and                             (ii)     a mutual assessment life insurance   company;                       (C)  a local mutual aid association;                       (D)     a mutual or natural premium life or casualty   insurance company;                       (E)  a general casualty company;                       (F)     a nonprofit hospital, medical, or dental   service corporation, including a corporation operating under   Chapter 842;                       (G)     a multiple employer welfare arrangement that   holds a certificate of coverage under Chapter 846;                       (H)  a Lloyd's plan operating under Chapter 941;                       (I)     a reciprocal or interinsurance exchange   operating under Chapter 942; and                       (J)     any other type of insurer required by law to   be authorized by the department to issue accident and health   insurance policies; and                 (2)     a health maintenance organization operating under   Chapter 843.           (b)     This chapter applies to a third-party administrator   acting on behalf of an accident and health insurer.           Sec.   1702.005.     CONSTRUCTION. Nothing in this chapter may   be construed to:                 (1)     permit conduct that is an unfair method of   competition or a false, misleading, or deceptive act or practice   under Section 17.46, Business & Commerce Code, or Chapter 541 of   this code;                 (2)     prohibit an insurer, health maintenance   organization, or agent from offering or giving to a consumer, for   free or at a discounted price in a manner that is not unfairly   discriminatory to consumers of the same class and of essentially   the same hazard, a loss-control or value-added product or service   relating to the risks covered under the relevant policy or   contract, subject to Sections 1702.051 and 1702.053; or                 (3)     permit an insurer, health maintenance   organization, or agent or any other person to obtain information   from a tracking device used as part of a loss-control or value-added   product or service permitted under this chapter in a manner that   would violate privacy requirements under Chapter 601 or 602.           Sec.   1702.006.     RULES. The commissioner may adopt   reasonable rules necessary to implement this chapter.   SUBCHAPTER B.   ANCILLARY PRODUCTS OR SERVICES AND PROHIBITED   INDUCEMENTS           Sec.   1702.051.     LOSS-CONTROL OR VALUE-ADDED PRODUCTS AND   SERVICES.   (a)   The cost to an insurer, health maintenance   organization, or agent for a loss-control or value-added product or   service provided to an insured, annuitant, or enrollee must be   reasonable in comparison to that insured's, annuitant's, or   enrollee's premiums or coverage for the class of the insured's,   annuitant's, or enrollee's policy or contract.           (b)     If an insurer, health maintenance organization, or   agent provides a loss-control or value-added product or service to   an insured, annuitant, or enrollee, the insurer, health maintenance   organization, or agent must ensure that the insured, annuitant, or   enrollee is provided with contact information to assist the   insured, annuitant, or enrollee with questions regarding the   product or service.           (c)     An insurer, health maintenance organization, or agent   must:                 (1)     base the availability of the loss-control or   value-added product or service on documented objective criteria;                 (2)     offer the product or service in a manner that is   not unfairly discriminatory; and                 (3)     maintain the documented criteria and produce the   criteria on request by the department.           (d)     An insurer, health maintenance organization, or agent   may not use or implement a tracking device to [Text truncated for display. 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