SECTION 3.5305. Conditions of Life Insurance Benefits

The standards and principles for the application of presumptive rates established for credit life insurance are as follows.

(1) The credit life insurance contract may require submission of the debtor's written and signed evidence of the debtor's insurability or that the debtor be in gainful employment at the time the insurance becomes effective, or both, on a form filed with and approved by the commissioner of insurance, and that such contract contains no conditions for validity of insurance more restrictive than contestability based on material misrepresentation and no exclusions other than for suicide, nonscheduled aircraft, and war or military service hazard. Such exclusions shall not remain effective after termination of the contestable period. Employment or good health may not be a condition precedent to the payment of claims unless the insurer required the insured to sign an application which stated the applicant was employed and in good health.

(2) Life insurance coverage is provided or offered to all debtors regardless of age; or may contain, at the option of the insurer, age restrictions making debtors ineligible for life coverage if they are 65 or over at the time the indebtedness is incurred or debtors who will have attained age 66 or over on the maturity date of the indebtedness.

Source Note: The provisions of this §3.5305 adopted to be effective October 1, 1980, 5 TexReg 2772; amended to be effective June 30, 1992, 17 TexReg 4345.