REGULATION OF CERTAIN TRADE PRACTICES

Tex. INS Code ch. 1702

in effect

Tex. INS Code § 1702.001. PURPOSE.

The purpose of this chapter is to: (1) set forth uniform standards of prohibited acts and practices for life insurance, annuity contracts, accident and health insurance, and health care plans; and (2) provide for more uniformity in well-recognized exceptions to existing rebate and discrimination laws for certain value-added services, acts, or practices recognized in existing law or contained in uniform model laws developed and recommended by the National Association of Insurance Commissioners. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.002. DEFINITIONS.

In this chapter: (1) "Agent" means: (A) a person authorized to act as an insurance agent as defined by Section 4001.003 ; or (B) a third-party administrator authorized to act as an administrator for an insurer under Chapter 4151 . (2) "Consumer" means a policyholder or potential policyholder, a certificate holder or potential certificate holder, an insured or potential insured, a contract holder or potential contract holder, an enrollee or potential enrollee, or an applicant for insurance, an annuity, or health care plan coverage. (3) "Enrollee" and "health care plan" have the meanings assigned by Section 843.002 . (4) "Insurer" means an insurance company, including a reciprocal or interinsurance exchange, mutual insurance company, capital stock company, Lloyd's plan, fraternal benefit society, group hospital service corporation, or other legal entity authorized to engage in the business of life, accident, or health insurance or annuities in this state. (5) "Loss-control or value-added product or service" means a product or service offered or provided by an insurer, health maintenance organization, or agent, by or through an employee, affiliate, or third-party representative, to an insured, annuitant, or enrollee at no or reduced cost when such products or services are not specified in the insurance policy, annuity contract, or health care plan contract and that: (A) relates to the insurance, annuity, or health care plan coverage; and (B) is primarily designed to do one or more of the following: (i) provide loss mitigation or loss control; (ii) reduce claim costs or claim settlement costs; (iii) provide education about liability risks or risk of loss to persons or property; (iv) monitor or assess risk, identify sources of risk, or develop strategies for eliminating or reducing risk; (v) enhance health; (vi) enhance financial wellness through items such as education or financial planning services; (vii) provide post-loss services; (viii) provide incentives for behavioral changes to improve the health or reduce the risk of death or disability of an insured, annuitant, or enrollee; or (ix) assist in the administration of employee or retiree benefit insurance, annuity, or health care plan coverage. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.003. APPLICABILITY OF CHAPTER: LIFE INSURANCE AND ANNUITIES.

(a) Except as otherwise provided by this chapter, this chapter applies to an insurance company writing life insurance and annuities in this state, including: (1) a stock life insurance company; (2) a mutual life insurance company, including a mutual life assessment company; (3) a stipulated premium life insurance company; and (4) a fraternal benefit society authorized under Chapter 885 . (b) This chapter applies to a third-party administrator acting on behalf of a life insurer. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.004. APPLICABILITY OF CHAPTER: ACCIDENT AND HEALTH.

(a) Except as otherwise provided by this chapter, this chapter applies to: (1) an insurer authorized to engage in the business of accident and health insurance in this state, including: (A) a life, health, and accident stock insurance company; (B) a mutual insurance company, including: (i) a mutual life insurance company; and (ii) a mutual assessment life insurance company; (C) a local mutual aid association; (D) a mutual or natural premium life or casualty insurance company; (E) a general casualty company; (F) a nonprofit hospital, medical, or dental service corporation, including a corporation operating under Chapter 842 ; (G) a multiple employer welfare arrangement that holds a certificate of coverage under Chapter 846 ; (H) a Lloyd's plan operating under Chapter 941 ; (I) a reciprocal or interinsurance exchange operating under Chapter 942 ; and (J) any other type of insurer required by law to be authorized by the department to issue accident and health insurance policies; and (2) a health maintenance organization operating under Chapter 843 . (b) This chapter applies to a third-party administrator acting on behalf of an accident and health insurer. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.005. CONSTRUCTION.

Nothing in this chapter may be construed to: (1) permit conduct that is an unfair method of competition or a false, misleading, or deceptive act or practice under Section 17.46 , Business & Commerce Code, or Chapter 541 of this code; (2) prohibit an insurer, health maintenance organization, or agent from offering or giving to a consumer, for free or at a discounted price in a manner that is not unfairly discriminatory to consumers of the same class and of essentially the same hazard, a loss-control or value-added product or service relating to the risks covered under the relevant policy or contract, subject to Sections 1702.051 and 1702.053 ; or (3) permit an insurer, health maintenance organization, or agent or any other person to obtain information from a tracking device used as part of a loss-control or value-added product or service permitted under this chapter in a manner that would violate privacy requirements under Chapter 601 or 602 . Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.006. RULES.

The commissioner may adopt reasonable rules necessary to implement this chapter. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025. SUBCHAPTER B. ANCILLARY PRODUCTS OR SERVICES AND PROHIBITED INDUCEMENTS

Tex. INS Code § 1702.051. LOSS-CONTROL OR VALUE-ADDED PRODUCTS AND SERVICES.

(a) The cost to an insurer, health maintenance organization, or agent for a loss-control or value-added product or service provided to an insured, annuitant, or enrollee must be reasonable in comparison to that insured's, annuitant's, or enrollee's premiums or coverage for the class of the insured's, annuitant's, or enrollee's policy or contract. (b) If an insurer, health maintenance organization, or agent provides a loss-control or value-added product or service to an insured, annuitant, or enrollee, the insurer, health maintenance organization, or agent must ensure that the insured, annuitant, or enrollee is provided with contact information to assist the insured, annuitant, or enrollee with questions regarding the product or service. (c) An insurer, health maintenance organization, or agent must: (1) base the availability of the loss-control or value-added product or service on documented objective criteria; (2) offer the product or service in a manner that is not unfairly discriminatory; and (3) maintain the documented criteria and produce the criteria on request by the department. (d) An insurer, health maintenance organization, or agent may not use or implement a tracking device to track or gather the data of an individual as part of a loss-control or value-added product or service unless, before any use or implementation: (1) the intended use or implementation of the device is disclosed to the individual; and (2) the individual consents to the device's use or implementation. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.052. PROHIBITED INDUCEMENTS.

Except as provided by this chapter, an insurer, health maintenance organization, or agent may not: (1) offer or provide insurance, annuity, or health care plan coverage as an inducement to the purchase of another policy or contract; or (2) otherwise use "free," "no cost," or words of similar meaning in an advertisement. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.053. NONCASH GIFTS, CHARITABLE DONATIONS, RAFFLES, OR OTHER ITEMS AND SERVICES.

(a) An insurer, health maintenance organization, or agent may offer or provide noncash gifts, items, or services, including meals, to or charitable donations on behalf of a consumer, in connection with the marketing, sale, purchase, or retention of policies or contracts of insurance, annuity, or health care plan coverage, provided: (1) the cost does not exceed an amount determined to be reasonable by the commissioner per policy or contract year per term; (2) the offer is made in a manner that is not unfairly discriminatory; and (3) the consumer is not required to purchase, continue to purchase, or renew a policy or contract in exchange for the gift, item, or service. (b) An insurer, health maintenance organization, or agent may conduct raffles or drawings to the extent permitted by the laws of this state, provided: (1) there is no financial cost to participate; (2) the raffle or drawing does not obligate participants to purchase, continue to purchase, or renew a policy or contract; (3) the prizes are not valued in excess of a reasonable amount determined by the commissioner and the raffle or drawing is open to the public; and (4) the raffle or drawing is offered in a manner that is not unfairly discriminatory. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025. SUBCHAPTER C. PRACTICES RELATED TO LIFE AND ANNUITY COVERAGE

Tex. INS Code § 1702.101. APPLICABILITY OF SUBCHAPTER.

This subchapter applies only to an insurer described by Section 1702.003 . Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.102. PROHIBITED REBATES AND INDUCEMENTS.

(a) Except as provided by this subchapter, an insurer or agent may not, with respect to business written in this state: (1) knowingly permit the making of, offer to make, or make a life insurance policy or annuity contract or an agreement regarding the policy or contract, other than as plainly expressed in the issued policy or contract; (2) directly or indirectly pay, give, or allow or offer to pay, give, or allow as inducement to enter into a life insurance policy or annuity contract either: (A) a rebate of premiums payable on the policy or contract; or (B) a special favor or advantage in the dividends or other benefits of the policy or contract or a valuable consideration or inducement not specified in the policy or contract; or (3) give, sell, or purchase or offer to give, sell, or purchase in connection with a life insurance policy or annuity contract or as inducement to enter into the policy or contract: (A) stocks, bonds, or other securities of an insurer or other corporation, association, or partnership; (B) dividends or profits accrued from the stocks, bonds, or securities; or (C) anything of value not specified in the contract. (b) An insurer may not permit an agent, officer, or employee to issue or deliver as an inducement to enter into a life insurance policy or annuity contract: (1) company stock or other capital stock; (2) a benefit certificate or share in a corporation; (3) a security; or (4) a special or advisory board contract or any other contract promising returns or profits. (c) This section does not prohibit issuing or delivering a participating insurance policy or annuity contract otherwise authorized by law. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.103. PROHIBITED DISTINCTIONS AND DISCRIMINATION.

Except as provided by Section 1702.104 , an insurer may not, with respect to a life insurance policy or annuity contract, make or permit a distinction or unfair discrimination between individuals of the same class and equal life expectancy regarding: (1) the rate charged; (2) the dividend or other payable benefit; or (3) any of the other terms of the policy or contract. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.104. EXEMPTIONS.

The following are not considered to constitute a rebate, inducement, distinction, or discrimination prohibited by this subchapter: (1) for a life insurance policy or annuity contract, a bonus payment to a policyholder or contract holder or other abatement in the policyholder's or contract holder's premiums provided wholly or partly out of surplus accumulated from nonparticipating policies or contracts if the payment or abatement: (A) is fair and equitable to policyholders and contract holders; and (B) is in the best interests of the insurer and the insurer's policyholders and contract holders; (2) for a life insurance policy issued on an industrial debit plan, an allowance to a policyholder who has continuously for a specified period made premium payments directly to the insurer's office that is in an amount that fairly represents the insurer's savings in collection expenses; (3) for a group insurance policy, a readjustment in the rate of premium based on the loss or expense experience under the policy at the end of a policy year if the adjustment is retroactive for only that policy year; (4) for an annuity contract, a waiver of surrender charges under the contract when the contract holder exchanges that contract for another annuity contract issued by the same insurer or an affiliate of the same insurer that is part of the same holding company group if: (A) the waiver and the exchange are fully, fairly, and accurately explained to the contract holder in a manner that is not deceptive or misleading; and (B) the contract holder is given credit for the time that the previous contract was held in determining any surrender charges under the new contract; (5) in connection with an offer or sale of a life insurance policy or annuity contract, a promotional advertising item, educational item, or traditional courtesy commonly extended to consumers and that is valued at $25 or less; or (6) any loss-control or value-added service or product or other item allowed by Subchapter B. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025. SUBCHAPTER D. PRACTICES RELATED TO ACCIDENT AND HEALTH COVERAGE

Tex. INS Code § 1702.151. APPLICABILITY OF SUBCHAPTER.

This subchapter applies only to an insurer or health maintenance organization described by Section 1702.004 . Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.152. PROHIBITED REBATES AND INDUCEMENTS.

(a) Except as provided by this subchapter or another provision in this code, with respect to accident and health insurance or health care plan coverage written in this state, an insurer, health maintenance organization, or agent may not: (1) knowingly permit the making of or offering of, offer to make, or make an accident and health insurance policy or health care plan contract or an agreement regarding the policy or contract other than as plainly expressed in the issued policy or contract; (2) directly or indirectly pay, give, or allow or offer to pay, give, or allow as an inducement to enter into an accident and health insurance policy or health care plan contract: (A) a rebate of premiums payable on the policy or contract; or (B) a special favor or advantage in the dividends or other benefits of the policy or contract or a valuable consideration or inducement not specified in the policy or contract; or (3) give, sell, or purchase or offer to give, sell, or purchase in connection with an accident and health insurance policy or health care plan contract or as an inducement to enter into the policy or contract: (A) stocks, bonds, or other securities of an insurer or other corporation, association, or partnership; (B) dividends or profits accrued from the stocks, bonds, or securities; or (C) anything of value not specified in the policy or contract. (b) An insurer or health maintenance organization may not permit an agent, officer, or employee to issue or deliver as an inducement to entering into an insurance policy or health care plan contract: (1) company stock or other capital stock; (2) a benefit certificate or share in a corporation; (3) securities; or (4) a special or advisory board contract or any other contract promising returns or profits. (c) This section does not prohibit an insurer or health maintenance organization from issuing or delivering a participating insurance policy or health care plan contract otherwise authorized by law. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.153. PROHIBITED DISCRIMINATION AND DISTINCTIONS.

Except as provided by Section 1702.154 and other applicable provisions in this code specific to particular types of accident and health coverage or health care plan coverage, an insurer or health maintenance organization may not, with respect to an accident and health insurance policy or health care plan contract, make or permit a distinction or an unfair discrimination between individuals of the same class and equal life expectancy regarding: (1) the rate charged; (2) the dividend or other payable benefit; or (3) any of the other terms of the policy or contract. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.154. EXEMPTIONS.

The following are not considered a rebate, inducement, or discrimination prohibited by this subchapter: (1) for an accident and health policy or a health care plan contract, a bonus payment to a policyholder or contract holder or other abatement in the policyholder's or contract holder's premiums provided wholly or partly out of surplus accumulated from nonparticipating policies or contracts if the bonus or abatement: (A) is fair and equitable to policyholders or contract holders; and (B) is in the best interests of the insurer or health maintenance organization and its policyholders or contract holders; (2) for a group insurance policy or health care plan contract, a readjustment in the rate of premium based on the loss or expense experience under the policy or contract at the end of a policy or contract year if the adjustment is retroactive for only that policy or contract year; (3) in connection with an offer or sale of an accident and health insurance policy or health care plan contract, a promotional advertising item, educational item, or traditional courtesy commonly extended to consumers and that is valued at $25 or less; or (4) a loss-control or value-added product or service or other item allowed by Subchapter B. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Tex. INS Code § 1702.155. PROGRAMS PROMOTING DISEASE PREVENTION, WELLNESS, AND HEALTH.

(a) An insurer issuing an accident and health insurance policy or a health maintenance organization issuing a health care plan contract may establish premium discounts, rebates, or a reduction in otherwise applicable copayments, coinsurance, or deductibles, or any combination of those incentives, for an insured or enrollee who participates in programs promoting disease prevention, wellness, or health. (b) A discount, rebate, or reduction established under this section is not considered a prohibited rebate or inducement, an unfair method of competition, or an unfair or deceptive act or trade practice in the business of insurance. Added by Acts 2025, 89th Leg., R.S., Ch. 581 (H.B. 2221 ), Sec. 2, eff. September 1, 2025.

Source: TX Statutes (Official Site)URL: https://statutes.capitol.texas.gov/Fetched: 6/29/2026