SECTION 7.5. Discrimination as to Premium Notices to Accident or Health Insurance Policyholders

There shall be no discrimination between individuals of the same class and of essentially the same hazard holding policies or contracts of accident or health insurance respecting notification to individuals of premiums due or about to become due. The discrimination as between policyholders in the expenditure of company funds for such items as postage, office supplies, clerical salaries, machine and equipment time, etc., or in any other manner concerning the notification of such policyholders of premiums due or about to become due constitutes a violation of the Insurance Code, Article 21.21. Therefore, if any company elects to follow the practice of furnishing premium notices to any policyholder, it is incumbent upon such company to follow a uniform practice of sending such premium notices to all policyholders. Wherever in the course of an examination the State Board of Insurance finds that an insurer follows the practice of not sending notices to certain individuals with the apparent intention of bringing about a lapse of the policy by reason of failure of the policyholder to pay his premium within the period required by the contract, it shall accumulate such facts as necessary to show a violation, if any, of the Insurance Code, Article 21.21. In this connection, reference is made to the Insurance Code, Article 1.10, §7, which provides the State Board of Insurance with authority to take disciplinary action against any company for failure to comply with applicable law.

Source Note: The provisions of this §7.5 adopted to be effective August 19, 1976, 1 TexReg 2214; amended to be effective January 17, 1984, 9 TexReg 279.