SECTION 21.704. Unfair Discrimination

(a) General propositions.

(1) No inquiry in an application for health or life insurance coverage, or in an investigation conducted by or on behalf of an insurer in connection with an application for such coverage, may be directed toward determining the proposed insured's sexual orientation.

(2) Sexual orientation may not be used in the underwriting process or in the determination of insurability.

(3) Insurers may not direct, require, or request insurance support organizations to investigate, directly or indirectly, the sexual orientation of a proposed insured or a beneficiary.

(b) Medical/lifestyle applications, questions, and underwriting standards.

(1) No question may be used which is designed to establish the sexual orientation of the proposed insured.

(2) Questions relating to the proposed insured having, or having been diagnosed as having, acquired immune deficiency syndrome (AIDS) or AIDS-related complex are permissible if they are factual and designed to establish the existence of the condition.

(3) Questions relating to medical and other factual matters intending to reveal the possible existence of a medical condition are permissible if they are not used as a proxy to establish the sexual orientation of the proposed insured, and if the proposed insured has been given an opportunity to provide an explanation for any affirmative answers given in the application.

(4) Questions relating to applicant's having, or having been diagnosed as having, sexually transmitted disease are permissible.

(5) Neither the marital status, the living arrangements, the occupation, the gender, the medical history, the beneficiary designation, nor the zip code or other classification of a proposed insured may be used to establish, or aid in establishing, the proposed insured's sexual orientation.

(6) For purposes of rating a proposed insured for health and life insurance, an insurer may impose territorial rates, but only if the rates are based on sound actuarial principles or are related to actual or reasonably anticipated experience.

(7) No adverse underwriting decision may be made because medical records or a report from any other source shows that the proposed insured has demonstrated acquired immune deficiency syndrome-related concerns by seeking counseling from health care professionals. This paragraph does not apply to a proposed insured seeking or having sought treatment.

(8) Whenever a proposed insured is requested to take an HIV-related test in connection with an application for insurance, the use of such a test must be revealed to the proposed insured or to any other person legally authorized to consent to such a test, and his or her written authorization obtained. The form of such authorization must be printed on a separate piece of paper and must contain the specific language in the form, entitled Notice and Consent for HIV-Related Testing, which the Texas Department of Insurance has adopted and incorporated herein by reference, effective January 7, 1997. This form is published by the Texas Department of Insurance and copies of this form are available from and on file at the offices of the Texas Department of Insurance, Life and Health Lines, MC-LH-LHL, P.O. Box 12030 Austin, Texas 78711-2030. Other information may be included so long as it is not misleading or violative of any applicable law or rule. Testing may be required only on a nondiscriminatory basis. No adverse underwriting decision shall be made on the basis of such a positive HIV-related test unless the established test protocol as provided by §21.705 of this title (relating to Nondiscriminatory Testing for Human Immunodeficiency Virus) has been followed.

(9) Insurers are permitted to ask a proposed insured whether the proposed insured has tested positive on an acquired immune deficiency syndrome-related test.

(10) The result of an HIV-related test is confidential.

(A) An insurer may not release or disclose the test results or allow them to become known, except in the following circumstances:

(i) as may be required by law; or

(ii) pursuant to the written request or authorization of the proposed insured or other person legally authorized to consent to the test on behalf of the proposed insured, with such release pursuant to written request limited to:

(I) the proposed insured;

(II) the person legally authorized to consent to the test;

(III) a licensed physician, medical practitioner, or other person designated by the proposed insured;

(IV) an insurance medical information exchange under procedures that are designed to assure confidentiality, including the use of general codes that also cover results of tests for other diseases or conditions not related to AIDS, or for the preparation of statistical reports that do not disclose the identity of any particular proposed insured;

(V) a reinsurer, if the reinsurer is involved in the underwriting process, under procedures that are designed to assure confidentiality;

(VI) persons within the insurer's organization who have the responsibility to make underwriting decisions on behalf of the insurer; or

(VII) outside legal counsel who needs such information to effectively represent the insurer in regard to matters concerning the proposed insured.

(B) Should a proposed insured or the person legally authorized to consent to the test request that the test result be sent to him or her directly, in addition to being provided notice as otherwise required by law, the insurer shall mail the test result to the proposed insured or the person legally authorized to consent to the test by registered mail with delivery restricted to the addressee.

(C) Written notice of a positive HIV-related test result must be provided by the insurer to either:

(i) a physician designated by the proposed insured or other person legally authorized to consent to the test; or

(ii) in the absence of such designation, to the Texas Department of Health, in order that the proposed insured be provided notice of such result as required by law.

(c) Severability. If any provision of this section or the application thereof to any person or circumstance is held invalid for any reason, the invalidity shall not affect the other provisions or any other application of the provisions of this section which can be given effect without the invalid provisions or application. To this end, all provisions of this subchapter are declared to be severable.

Source Note: The provisions of this §21.704 adopted to be effective February 1, 1988, 13 TexReg 344; amended to be effective March 1, 1990, 15 TexReg 878; amended to be effective January 8, 1997, 22 TexReg 53; amended to be effective November 7, 2021, 46 TexReg 7408