Texas Administrative Code
Title 28 - INSURANCE
Part 1 - TEXAS DEPARTMENT OF INSURANCE
Chapter 3 - LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES
Subchapter S - MINIMUM STANDARDS AND BENEFITS AND READABILITY FOR INDIVIDUAL ACCIDENT AND HEALTH INSURANCE POLICIES
Section 3.3050 - Standards for Renewability Provisions

Universal Citation: 28 TX Admin Code § 3.3050

Current through Reg. 50, No. 13; March 28, 2025

(a) Each policy subject to this subchapter:

(1) Shall include a renewal, continuation, or nonrenewal provision, consistent with the requirements of this subchapter. The language or specifications of such provision must be consistent with the type of contract to be issued (e.g., guaranteed renewable, noncancellable, limited guarantee of renewability, limited renewability at the option of the insurer, single term nonrenewable, etc.). Such provision must be appropriately captioned and commence or be referenced on the first page of the policy. All limitations on renewability must be clearly stated.

(2) Which contains a provision reserving the right of the insurer to increase the premium charged for such policy at the time such policy is renewed shall have printed at the top of the first page of such policy, and may not be preceded by any language except the company name, logo, or masthead (and address if shown) in not less than 10 point type, a statement that the premium may be increased upon the renewal date.

(3) Which contains a provision reserving the right of the insurer to nonrenew the policy upon the insured's attaining a certain age or a provision whereby the policy terminates upon attainment of a certain age shall have printed at the top of the first page of such policy, and may not be preceded by any language except the company name, logo, or masthead (and address, if shown) in not less than 10 point type, a statement that such policy may be subject to nonrenewal upon attainment of a certain age or that the policy will be terminated upon attainment of a specified age. This requirement may be combined into one statement with the requirement in paragraph (2) of this subsection, if the policy is subject to change in premium upon renewal and to nonrenewal or termination upon the insured's attainment of a specified age.

(b) Standards for specific types of renewability provisions.

(1) Noncancellable Policy--A renewal provision of a policy characterized as "noncancellable" must be consistent with the minimum requirements set forth in § 3.3019 of this title (relating to Policy Definition of Noncancellable Policies). In a family policy covering both husband and wife the age of the younger spouse must be used as the basis for fulfilling the age (at least to age 50) or durational (for at least five years if issued after age 44) requirements for the definition of a noncancellable policy for the purpose of defining the period of noncancellability of the policy. This requirement shall not prevent termination of coverage of the older spouse upon attainment of the stated age limit (e.g., age 65), so long as the termination is not otherwise prohibited by law and the policy may be continued in force as to the younger spouse to the age or for the durational period as specified in said definition. Except as otherwise provided in §3.3019(b), a policy shall not refer to a noncancellable policy as "noncancellable and guaranteed renewable," unless the policy also meets the definition of guaranteed renewable set forth in § 3.3020(a) of this title (relating to Policy Definition of Guaranteed Renewable and Limited Guarantee of Renewability) and § 3.3038 of this title (relating to Mandatory Guaranteed Renewability Provisions for Individual Hospital, Medical or Surgical Coverage; Exceptions) of this subchapter.

(2) Guaranteed renewable policy--Except as provided in § 3.3020(b)(4) of this title (relating to Policy Definition of Guaranteed Renewable and Limited Guarantee of Renewability), the renewal provision used in a policy which is characterized as a "guaranteed renewable policy" must be consistent with the minimum requirements relating to use of the term guaranteed renewable set forth in §3.3020 and the provisions of § 3.3038 of this title (relating to Mandatory Guaranteed Renewability Provisions for Individual Hospital, Medical or Surgical Coverage; Exceptions) of this subchapter. Every policy offering individual hospital, medical or surgical coverage shall contain a guaranteed renewability provision applicable to such coverage.

(3) Limited guarantee of renewability policy--The renewal provision used in a policy which is characterized as having a "limited guarantee of renewability" must be consistent with the minimum requirements relating to use of the term "limited guarantee of renewability" set forth in § 3.3020 of this title (relating to Policy Definition of Guaranteed Renewable and Limited Guarantee of Renewability). The renewal provision will be the same as that contained in a "noncancellable policy" except for the reservation of the right to the insurer to change premium on a class basis. Such right shall be clearly expressed within the renewal provision and referenced in the caption of such provision. A limited guarantee of renewability may apply to excepted benefits, but shall not apply to individual hospital, medical or surgical coverage.

(4) Renewable subject to consent of company and variants thereof. The renewability options set forth below may apply to excepted benefits, but shall not apply to individual hospital, medical or surgical coverage.
(A) The renewal provision of a policy which is renewable at the option of the company shall be appropriately captioned. The provision shall clearly declare that renewal of the policy is subject to the consent of the insurer and that the premium rate applicable to such policy shall be that currently in use on each renewal date of the policy. If the insurer reserves the right of cancellation, notice of the existence of the provision shall be cross-referenced in the renewal provision.

(B) Conditional or limited continuance--A policy which provides a qualified right of continuance (after expiration of the period during which such policy is noncancellable or subject to a limited guarantee of renewability) must clearly specify the conditions which must be fulfilled to permit continuance of the policy. If premiums are to be based on an attained age or on a step-rate basis, such must be declared in the renewal provision. The age limit, if any, to which any policy is renewed shall be declared in the renewal provision.

(C) Qualified right of renewal--A renewal provision, other than enumerated above, may grant to the insured the right of renewal by timely payment of premium up to a stated age, if any, subject to the reserved right of the insurer to nonrenew all such policies on a specified basis upon the giving of a specified period of notice, which shall be set forth in the appropriate provision of the policy. The right of the insured to renew the policy may be conditioned upon the continuation of a reasonable specified status (e.g., an employee of a named employer, member of a named organization, while engaged in a specific occupation associated with such employment or such organization, residence in a given state or geographic area, insured under a given form of insurance having like form number identification). The rights of the insured and of the insurer shall be clearly set forth in the renewal provision. Such provision shall include, where applicable, the specified age limit, requirements as to the professional or occupational status, and requirements as to the continuing relationship of the employee or member. Continuance of insurance after the insured ceases to be eligible for coverage under the plan may be at the option of the insurer. If a different table of premium rates is to be applicable with respect to renewals occurring thereafter, such fact shall be declared in the renewal provision.

(D) Single term nonrenewable policy--A policy characterized as a "single term nonrenewable policy" shall include a provision appropriately captioned (e.g., "This policy is not renewable" or words of similar import). Such provision must identify or reference the proper part of the contract within which the duration of the coverage is specified.

(5) Limited renewability at the option of the insured--A policy which may not be characterized as noncancellable or as having a limited guarantee of renewability solely because such policy may not be continuable to age 50 or for a minimum period of five years, may use a renewal provision caption, subject to the approval of the commissioner, which states that the right of the renewal is vested in the insured for a stated period of years, to a stated age, to the occurrence of a stated event or during the continuance of a given status. Such a provision may apply to excepted benefits, but shall not apply to individual hospital, medical or surgical coverage. A policy printed on or after the effective date of this subchapter shall not refer to such a renewability provision as "renewable at the option of the insured." However, in regards to excepted benefits, an insurer may continue to issue through May 31, 1998, policies from printed stock existing on the day before the effective date of this subchapter that refer to such a renewability provision as "renewable at the option of the insured," as was previously allowed by rule.

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