Texas Administrative Code
Title 28 - INSURANCE
Part 1 - TEXAS DEPARTMENT OF INSURANCE
Chapter 3 - LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES
Subchapter CC - STANDARDS FOR ACCELERATION-OF-LIFE-INSURANCE BENEFITS FOR INDIVIDUAL AND GROUP POLICIES AND RIDERS
Section 3.4312 - Notice and Disclosure Requirements for Life Insurance Contracts Containing Acceleration-of-Life-Insurance Benefits
Universal Citation: 28 TX Admin Code § 3.4312
Current through Reg. 50, No. 13; March 28, 2025
(a) Except as otherwise stated in this section, every life insurance contract containing an acceleration-of-life-insurance benefit provision shall be subject to the notice and disclosure requirements in paragraphs (1)-(5) of this section.
(1) Except as otherwise provided in this
paragraph, the face of every such life insurance contract shall contain a
prominent notice printed, over-printed or stamped, as appropriate,
substantially as follows: "Death benefits, cash values, and loan values will be
reduced if an acceleration-of-life-insurance benefit is paid." This statement
shall be appropriately modified for contracts which have no cash or loan
values, or in which the cash value is not reduced.
(2) The title of any
acceleration-of-life-insurance benefit shall be descriptive of the coverage
provided and shall use such terms as "acceleration-of-life-insurance benefit,"
"accelerated benefit" or words of similar import.
(3) At the time of the payment of a lump sum
acceleration-of-life-insurance benefit, or, if periodic payments are being
made, no less frequently than every 12 months, the insurer shall send a
statement to the owner or holder of the life insurance contract, specifying:
(A) the amount of benefits paid (or the
amount of benefits paid since the last report);
(B) the effect of the
acceleration-of-life-insurance benefit payment on the death benefit, face
amount, specified amount, accumulation values, cash values, loan amounts,
future charges, and future premiums; and
(C) the amount of benefits remaining
available for acceleration.
(4) Notice that the owner of the life
insurance contract will receive the statement described in paragraph (3) of
this subsection shall be included in the acceleration-of-life-insurance benefit
provisions of the life insurance contract.
(5) As appropriate, the disclosures contained
in either subsection (a) or (b) of §
3.4316 of this title (relating to
Disclosures Related to Tax Qualification of Benefits and Benefits' Effect on
Public Assistance), and the disclosure contained in subsection (c) of
§3.4316, or disclosures substantially similar to these disclosures, must
be included on or attached to the front page of each life insurance contract
subject to this subchapter, except as provided in subsection (e) of
§3.4316.
(b) The notice and disclosure requirements in subsection (a) must be provided only with the document actually containing the acceleration-of-life-insurance provisions. For example, if acceleration-of-life insurance benefits are provided through a rider to a life policy, the disclosures must only be provided with the rider, not the policy.
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