SECTION 3.3020. Policy Definition of Guaranteed Renewable and Limited Guarantee of Renewability

(a) In regards to individual hospital, medical or surgical coverage, the term "guaranteed renewable" shall not be defined more restrictively than set forth in §3.3038 of this title (relating to Mandatory Guaranteed Renewability Provisions for Individual Hospital, Medical or Surgical Coverage; Exceptions). Unless the policy or coverage also is noncancellable (as defined in §3.3019 of this title (relating to Policy Definition of Noncancellable), the policy definition of guaranteed renewable shall state clearly that the insurer retains the right, at the time of renewal of a policy, to make changes in premium rates by classes.

(b) In regards to excepted benefits:

(1) Except in the limited circumstances delineated in paragraph (4) of this subsection the term "guaranteed renewable" shall not be used unless the term is defined consistently with subsection (a) of this section and mirrors all mandatory provisions of §3.3038 of this title (relating to Mandatory Guaranteed Renewability Provisions for Individual Hospital, Medical or Surgical Coverage; Exceptions).

(2) An insurer may use the term "limited guarantee of renewability," which shall not be defined more restrictively than the right of the insured to continue the coverage in force by the timely payment of premiums until at least age 50, or in the case of a policy issued after age 44, for at least five years from its date of issue, during which period the insurer has no right to unilaterally make any change in any provision of the policy while the policy is in force, except that the insurer may make changes in premium rates by classes.

(3) Unless the policy or coverage also is noncancellable (as defined in §3.3019 of this title (relating to Policy Definition of Noncancellable), the policy definition of guaranteed renewable or of limited guarantee of renewability shall state clearly that the insurer retains the right, at the time of renewal of a policy, to make changes in premium rates by classes.

(4) An insurer may continue to issue through May 31, 1998, policies from printed stock existing on the day before the effective date of this subchapter that contain a policy definition of "guaranteed renewable" conforming to the definition of the term allowed by rule before the effective date of this subchapter. The previous definition, setting the minimum standard for a guaranteed renewable policy, was the same as the definition of limited guarantee of renewability, as set forth in paragraph (2) of this subsection. An insurer may not print any new policies offering excepted benefits on or after the effective date of this subchapter which use policy language describing the policy as "guaranteed renewable," unless such policy also conforms to the definition of "guaranteed renewable" set forth in subsection (a) of this section and in §3.3038 of this title (relating to Mandatory Guaranteed Renewability Provisions for Individual Hospital, Medical or Surgical Coverage; Exceptions) of this subchapter.

Source Note: The provisions of this §3.3020 adopted to be effective January 26, 1977, 2 TexReg 159; amended to be effective December 22, 1997, 22 TexReg 12503.