On October 9, 2009, the Texas Department of Insurance (TDI) received a petition from the Office of Public Insurance Counsel (OPIC) for the adoption of a rule prohibiting the use of discretionary clauses in life, accident, and health insurance policy forms. On December 9, 2009, TDI held a public meeting to receive comment on the application and use of discretionary clauses. TDI received numerous comments regarding the practical effect of the use of discretionary clauses, the harm to citizens and policyholders, and comments regarding the long term use of the clauses without any debilitating effect upon Texas citizens and policyholders. The Department is considering all of the comments as it evaluates the OPIC request. As TDI evaluates this request, its policy and form review resources will be heavily impacted. This evaluation will be resolved within the next 90 day period.
TDI urges all insurers conducting life, accident and health insurance business during this evaluation and determination of the application and impact of discretionary clauses to suspend filing of insurance policy forms containing discretionary clauses while the Commissioner of Insurance considers a rule prohibiting the use of discretionary clauses in life, accident, and health insurance policy forms.
If you have any questions regarding this bulletin, you may call the Life/Health Division at 512-322-3409 or contact them by e-mail at LifeHealth@tdi.state.tx.us.
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Mike Geeslin
Commissioner of Insurance