(a) Under Texas Family Code §231.015, the Child
Support Division (CSD) of the Office of the Attorney General, in consultation
with the Texas Department of Insurance and representatives of the
insurance industry, is required to operate by rule an insurance intercept
program under which insurers must cooperate with the CSD in matching
the names of claimants with the names of child support obligors who
owe past-due child support. When such an individual is identified,
the insurer will receive either a notice of child support lien or
an income withholding order to secure the payment of the amount of
past-due support. This subchapter explains how the matching process
and the reporting process work.
(b) Except as provided by subsection (c) of this section,
as used in this subchapter, a "claim" that must be matched and must
be reported is any which seeks an economic benefit for the claimant.
(1) An "economic benefit" under a life, accident, health
policy or annuity is defined as a payment in which an individual is
paid as the payee or co-payee:
(A) for a claim by a beneficiary under a life insurance
policy;
(B) for the cash surrender value by an owner of a life
insurance policy or annuity;
(C) for payments to an annuitant; or
(D) a payment to an individual as the payee or co-payee
on a first-party claim as defined herein, unless excluded under subsection
(c)(2) of this section.
(2) An "economic benefit" under a property and casualty
insurance policy is defined as a payment involving:
(A) a payment to an individual as the payee or co-payee
on a first-party claim as defined herein, unless excluded under subsection
(c)(1) of this section; payments involving third-party claims, as
defined herein, where the individual would be entitled to compensations
from an insured covered by a liability insurance policy or self-insurer
including claims covering personal or bodily injury, lost wages, property
damage, non-economic tort damages, wrongful death damages, or accidental
death damages; or
(B) payments to individuals for employment or workers'
compensation benefits covered by an insurance policy or certified
self-insurer.
(3) The term "first-party claim" means:
(A) a claim that is made by the insured or policyholder
under an insurance policy or contract or by a beneficiary named in
a life insurance policy or annuity; and
(B) the proceeds must be paid by the insurer directly
to the insured or beneficiary.
(4) The term "third-party claim" means a claim for
bodily injury, property damage or other damages that is brought by
a third-party against an insured that is covered by a liability insurance
policy or contract or by a self-insured.
(c) The following economic benefits are not considered
economic benefits that require reporting:
(1) "first-party actual property damage claims" defined
as benefits payable under an insurance policy arising out of covered
damage for actual repair, replacement, or loss of use of insured property.
Examples include:
(A) physical damage coverage under a personal automobile
policy for actual repair, replacement, loss of use, or other associated
costs including, but not limited to towing, storage, vehicle rentals,
or costs to an insured vehicle;
(B) coverage for loss of damage to an insured dwelling
and contents under a residential, homeowners, farm and ranch owners,
condominium owners, tenant property insurance policy, or other similar
policies including additional living expenses payable under such a
policy;
(C) benefits paid to the mortgagee or lienholder of
the property including payments issued jointly to the insured and
mortgagee; and
(D) coverage for physical loss or damage to commercial
property or business personal property insured under a commercial
property, farm, inland marine, builder's risk, or other similar policies.
(2) "actual medical expenses" defined as a payment
(A) issued and sent directly to a healthcare provider;
or
(B) issued and sent directly to the claimant after
the claimant provides proof of the amount actually paid by the claimant
to the healthcare provider or providers, the amount is at least as
much as the insurance payment and, the amount does not include any
amounts billed but not paid.
(3) A co-payable insurance payment mailed directly
to a vendor, repair facility, or healthcare provider that includes
the claimant as a co-payee under subsection (1) or (2) of this section.
(4) A loan against the cash value or surrender value
of an insurance policy or annuity, including loans for premium payments.
(5) Dividends or other payments made under an insurance
policy or annuity that are credited or retained by the insurer or
that will not exceed $1,200 over a 12-month period.
(6) Benefits payable directly to a creditor of a claimant
under the terms of the policy.
(7) Benefits assigned to be paid to a healthcare provider
or facility for "actual expenses" defined as the amount actually owed
by the insured not otherwise paid or reimbursed.
(8) Limited benefits that include coverage for one
or more specified diseases or illnesses; dental or vision benefits;
hospital indemnity or other fixed indemnity insurance coverage; and,
short-term major medical contracts, including any benefits to be paid
under a plan or rider of accident insurance, accidental death, or
loss of limb coverage.
(9) Benefits paid in accordance with a "long term care
benefit plan" as defined in §1651.003 of the Insurance Code.
(10) Benefits paid on behalf of an individual directly
to a retirement plan or an accelerated death benefit as defined in
Chapter 1111 of the Insurance Code.
(11) "third-party property damage claims" defined as
benefits paid or payable to:
(A) a vendor or repair facility for the actual repair,
replacement, or loss of use of:
(i) a dwelling, condominium, or other improvements
on real property;
(ii) a vehicle, including a motor vehicle, motorcycle,
or recreational vehicle; or
(iii) other tangible property that has sustained actual
damage or loss; or
(B) a claimant for reimbursement of the claimant for
payments made by the claimant to a vendor or repair facility for the
actual repair, replacement, or loss of use of:
(i) a dwelling, condominium, or other improvements
on real property;
(ii) a vehicle, including a motor vehicle, motorcycle,
or recreational vehicle; or
(iii) other tangible property that has sustained actual
damage or loss.
(12) Benefits paid or payable to a claimant under workers'
compensation coverage where the claimant has paid a healthcare provider's
bill and payment is no greater than the amount owed for the treatment
rendered.
(13) A claim for benefits, or a portion of a claim
for benefits, assigned to be paid to a funeral service provider or
facility for actual funeral expenses owed by the insured that are
not otherwise paid or reimbursed.
(d) All insurers are subject to the matching and reporting
requirements under this subchapter and must match and report any claim
seeking an economic benefit in which:
(1) the owner of a life policy or annuity that was
issued to an individual resides in Texas;
(2) the beneficiary making a claim on a life policy
or annuity resides in Texas;
(3) a first-party claimant making a claim resides in
Texas;
(4) a third-party claimant making a third-party claim,
as defined in subsection (b)(4) of this section, resides in Texas;
or
(5) a liability insurer or an eligible surplus lines
insurer is providing coverage to an insured on a third-party claim
and the claim occurs in Texas.
(e) For a claim under subsection (d)(4) or (d)(5) of
this section, the liability insurer must comply with the match and
reporting requirements if coverage to an insured would result in payments
to the third-party claimant as a child support obligor based on the
liability of the insured to the third-party claimant.
(f) To determine whether a recipient of funds paid
under a claim owes child support arrearages or is subject to a lien
for child support arrearages, insurers are encouraged to report all
claims.
(g) As used in this subchapter, "insurer" means:
(1) a domestic, foreign, or alien company which provides
insurance coverage of any kind, including:
(A) life insurance;
(B) health insurance;
(C) liability insurance for an occurrence;
(D) an annuity; or
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