The Texas Department of Insurance has filed a proposed rule that would prohibit the use of discretionary clauses in life, accident, and health insurance policy forms. The proposed rule was filed as a result of an October 2009 request from the Office of Public Insurance Counsel.
According to TDI, “discretionary clauses are contractual provisions that reserve or purport to reserve for insurers the discretion to interpret the terms of an insurance contract and alter the judicial standard of review upon appeal.”
The department asserts that the new rule would “protect insurance consumers from the possibility of incorrect and unfair coverage determinations by insurers without a subsequent opportunity for a full and independent review under a non-deferential standard.”
The proposal would add new 28 TAC Chapter 3, Subchapter M, Sections 3.1201 – 3.1203, concerning discretionary clauses in insurance policies. It was filed with the Office of the Secretary of State for publication in the Texas Register on June 4, 2010.
Written comments on the proposal must be submitted no later than 5:00 p.m. on June 28, 2010.
In addition to the proposed rules, a public hearing under Docket Number 2713 has been scheduled on July 12, 2010 at 9:30 a.m. in Room 100 of the William P. Hobby, Jr. State Office Building at 333 Guadalupe Street, Austin, Texas.
The proposed rule can be accessed online at http://www.tdi.state.tx.us/rules/2010/documents/discretion.pdf.
Topics Texas
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