| (a) Except as provided by subsection (c) of this section,
all individual hospital, medical or surgical coverage (as defined
in §3.3002(b)(12) of this title (relating to Definitions)) must
be renewed or continued in force at the option of the insured.
(b) Medicare eligibility or entitlement is not a basis
for nonrenewal or termination of individual hospital, medical or surgical
coverage; however, such coverage sold to an insured before the insured
attains Medicare eligibility may contain a clause that excludes payments
for benefits under the policy to the extent that Medicare pays for
such benefits.
(c) Individual hospital, medical or surgical coverage
may only be discontinued or nonrenewed based on one or more of the
following circumstances:
(1) the policyholder has failed to pay premiums or
contributions in accordance with the terms of the policy, including
any timeliness requirements;
(2) the policyholder has performed an act or practice
that constitutes fraud, or has made an intentional misrepresentation
of material fact, relating in any way to the policy, including claims
for benefits under the policy;
(3) the insurer is ceasing to offer individual hospital,
medical or surgical coverage under the particular type of policy,
or is ceasing to offer any form of individual hospital, medical or
surgical coverage in this state, in accordance with subsections (d)
and (e) of this section;
(4) in regards only to coverage offered by an issuer
under Insurance Code Chapter 842, the insured no longer resides, lives,
or works in the service area of the issuer, or area for which the
issuer is authorized to do business, but only if coverage is terminated
uniformly without regard to any health-status-related factor of covered
individuals.
(d) An insurer may elect to discontinue offering a
particular type of individual hospital, medical or surgical coverage
plan in the individual market only if the insurer:
(1) provides written notice to each covered individual
of the discontinuation before the 90th day preceding the date of the
discontinuation of the coverage;
(2) offers to each covered individual on a guaranteed
issue basis the option to purchase any other individual hospital,
medical or surgical insurance coverage offered by the insurer at the
time of the discontinuation; and
(3) acts uniformly without regard to any health-status
related factors of a covered individual or dependents of a covered
individual who may become eligible for the coverage.
(e) An insurer may elect to refuse to renew all individual
hospital, medical or surgical coverage plans delivered or issued for
delivery by the insurer in this state only if the insurer:
(1) notifies the commissioner of the election not later
than the 180th day before the date coverage under the first individual
hospital, medical or surgical health benefit plan terminates;
(2) notifies each affected covered individual not later
than the 180th day before the date on which coverage terminates for
that individual; and
(3) acts uniformly without regard to any health-status
related factor of covered individuals or dependents of covered individuals
who may become eligible for coverage.
(f) An insurer that elects not to renew all individual
hospital, medical or surgical coverage in Texas in accordance with
subsection (e) of this section may not issue any such coverage in
Texas during the five-year period beginning on the date of discontinuation
of the last such coverage not renewed.
(g) Nothing in this section prohibits or restricts
an insurer's ability to make changes in premium rates by classes in
accordance with applicable laws and regulations.
(h) Nothing in this section may be interpreted as prohibiting
an insurer from making policy modifications mandated by state law,
or, acting consistently with §3.3040(b) of this title (relating
to Prohibited Policy Provisions), from honoring requests from a policyholder
for modifications to an individual policy or offering policy modifications
uniformly to all insureds under a particular policy form.
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