NU Online News Service, Jan. 30, 12:30 p.m. – Texas Insurance Commissioner Jose Montemayor has set up a 14-member advisory committee to study “upside down” life insurance policies — small policies that end up costing more than they pay out in benefits.
State lawmakers ordered the commissioner to appoint the committee and give them a report on its findings in December 2002.
The committee will probably focus on policies with face amounts of $15,000 or less, and premiums that exceed death benefits by at least 50% over the life of a policy or match the face amount within five years, according to officials with the Texas Department of Insurance.
The committee will also study whether consumers get enough information about pricing of small life policies, and whether selling several small policies to one individual is appropriate, the department says.
The committee will hold its first meeting Friday in Austin, Texas.