| (a) An exception or exclusion is any provision in a
policy whereby coverage for a specified hazard in entirely eliminated.
It is a statement of a risk not assumed under the terms and provisions
of the contract. Extensive listing of diseases to be excluded will
not be acceptable unless the insurer can show that such are necessary
and proper to the coverage provided.
(b) A reduction is a provision which takes away some
portion, but not all of the coverage of the policy under certain specific
conditions. Such relates to a risk assumed by the insurer but payment
upon the occurrence of such loss is limited to some amount or period
less than would be otherwise payable had such reduction clause not
been used.
(c) Exceptions, exclusions, and reductions must be
clearly expressed as a part of the benefit provision to which such
applies or, if applicable to more than one benefit provision, must
be set forth as a separate provision and appropriately captioned.
Policies containing the specified exclusionary subjects appearing
in Exhibit A will be acceptable; however, this may not preclude the
consideration or approval of other exceptions or exclusions if such
are deemed reasonable and appropriate to the risk undertaken and are
approved by the commissioner. Exhibit A is adopted herein by reference.
Copies of Exhibit A may be obtained by contacting the Texas Department
of Insurance, Life and Health Division, Filings Intake, MC-LH-LHL,
P.O. Box 12030, Austin, Texas 78711-2030, or by accessing the department's
website at www.tdi.texas.gov/forms.
(d) The acceptable exclusions set forth in Exhibit
A may not impair or limit the use of waivers to exclude, limit, or
reduce coverage or benefits for named or specifically described pre-existing
disease, physical condition, or extra hazardous activity. If waivers
are required as a condition of issuance, renewal, or reinstatement,
signed acceptance by the insured is required unless on initial issuance
the full text of the waiver is contained either on the first page
or specification page of the policy or unless notice of the waiver
appears on the first page or specification page.
(e) If a policy contains a military service exclusion
or a provision suspending coverage during military service, and if
the premiums are either reduced or refunded for the period of such
military service, such must be clearly stated in the policy.
(1) As to coverage that is not noncancellable, subject
to limited renewability at option of the insured or subject to a limited
guarantee of renewability:
(A) if the policy contains a "status" type of exclusion
which excludes all coverages applicable to an insured person while
in military service on full-time active duty, the policy must provide,
upon receipt of written request, for refund of premiums as applicable
to such person on a pro rata basis;
(B) if the policy contains a "causation" type exclusion
(loss resulting from military service) while an insured person is
on full-time active duty in the military, refund of premium is not
required since the policy would be operative as to any other loss
not resulting from military service causes;
(C) if a policy contains a provision for voluntary
suspension of coverage during military service and an identifiable
premium is charged for such coverage upon written request for suspension,
a pro rata premium must be refunded.
(2) As to coverage that is noncancellable, subject
to limited renewability at option of the insured or a limited guarantee
of renewability:
(A) the policy may provide for refund of the entire
premium for the period of military service or for a partial refund
of the premium from the date the insurer receives notice and it may
adjust any such refund for any change in reserves during the period
of suspension;
(B) the policy may contain a military service exclusion
or a provision for suspension of coverage upon entry into military
service with the right of reinstatement upon termination of such service
without evidence of insurability, if applied for within a specified
period of not less than 60 days;
(C) the insurer may charge a partial premium during
the period of suspension which will anticipate accumulation of reserves
required by law or regulation and related cost factors.
|
| Source Note: The provisions of this §3.3057 adopted to be effective January 26, 1977, 2 TexReg 159; amended to be effective December 7, 1983, 8 TexReg 4858; amended to be effective December 22, 1997, 22 TexReg 12503; amended to be effective May 11, 2022, 47 TexReg 2758 |
