The Texas Department of Insurance is considering the possibility of adopting a rule that would prohibit the use of discretionary clauses in life, accident and health insurance policy forms.
The Texas Office of Public Insurance Counsel petitioned the Texas department to adopt a ban on discretionary clauses in October 2009.
The department held a hearing on the petition in December 2009.
Some hearing participants said the clauses hurt policyholders and others, and some said the clauses have caused no debilitating effects, Texas Insurance Commissioner Texas Geeslin writes in Commissioner's Bulletin #B-0003-10.
The department now is evaluating the petition and the comments.
"As TDI evaluates this request, its policy and form review resources will be heavily impacted," Geeslin writes in the bulletin. "This evaluation will be resolved within the next 90 day period."
While the review is under way, the Texas department "urges all insurers conducting life, accident and health insurance business during this evaluation and determination of the application and impact of discretionary clauses to suspend filing of insurance policy forms containing discretionary clauses," Geeslin writes.
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