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Life Health > Life Insurance

Texas Committee Studies Upside Down Life Policies

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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.

Committee members who represent the insurance industry include David Hawkins, Texas Association of Insurance Officials, Dallas; Paul Herrera, Association of Insurance and Financial Advisors, Austin; Mark France, Funeral Directors Life Insurance Company, Austin; and Brenda Nation, American Council of Life Insurers, Alexandria, Va.

The Texas insurance regulators on the committee are Rod Bordelon, from the Office of Public Insurance Counsel, and four staff members from the Texas insurance department: Mike Boerner, managing actuary; David Durden, an associate commissioner in government relations; Ana Smith-Daley, a deputy commissioner with the life and health division; and William Goodman, a special litigation counsel.

The other committee members Rob Schneider, Consumers Union, Austin; Cynthia Postell, Singing Hills Funeral Home, DeSoto; Jermaine Thomas, a consumer representative from Houston; Dain Eric Moran, League of United Latin American Citizens, San Antonio; and William Paul Thomas, Rainbow Push Coalition, Houston.

More information is available from the Texas department Web site, at


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