Key Takeaways
- Texas Insurance Code Chapter 1131 regulates group life insurance
- Group life must be offered on a non-discriminatory basis to eligible employees
- The conversion period for group life insurance is 31 days from termination
- Certificates of insurance must be provided to all covered group members
- Texas regulates both employer-sponsored and association group life plans
Texas Group Life Insurance Requirements
Texas Insurance Code Chapter 1131 establishes requirements for group life insurance policies to protect employees and ensure fair plan administration.
Eligible Groups
Texas allows group life insurance for various groups:
| Group Type | Description |
|---|---|
| Employer Groups | Employees of common employer |
| Labor Unions | Members of bona fide unions |
| Associations | Groups organized for purposes other than insurance |
| Creditor Groups | Debtors of a creditor |
| Multiple Employer Trusts | As approved by TDI |
| Discretionary Groups | Other groups approved by Commissioner |
Employer Group Requirements
Eligibility Standards
| Requirement | Description |
|---|---|
| Non-Discrimination | Cover all eligible employees |
| Eligibility Definition | Clear criteria based on employment |
| Waiting Period | Reasonable periods allowed |
| Evidence of Insurability | Limited for eligible employees |
Coverage Determination
Group life coverage may be based on:
- Salary multiples (1x, 2x, 3x salary)
- Position or job class
- Length of service
- Flat amounts by category
Exam Tip: Coverage formulas must be applied consistently and cannot discriminate unfairly among eligible employees in Texas.
Certificate of Insurance
Certificate Requirements
Every covered employee must receive:
| Element | Description |
|---|---|
| Coverage Amount | Death benefit and any riders |
| Beneficiary Instructions | How to designate/change |
| Contribution | Employee premium share (if any) |
| Claims Procedures | How to file a claim |
| Conversion Rights | Conversion privilege explained |
Conversion Rights
Texas requires conversion privileges for terminated group members:
Conversion Period
| Element | Requirement |
|---|---|
| Timeframe | 31 days from termination |
| Notice | Employer must inform employee |
| Evidence | No evidence of insurability |
| Coverage Type | Individual permanent policy |
When Conversion Applies
Employees have conversion rights when:
- Employment terminates
- No longer eligible for group coverage
- Policy terminates for their class
- Dependent loses eligibility
Conversion Limitations
| Limitation | Description |
|---|---|
| Policy Type | Typically whole life only |
| Premium | Attained age rates |
| Maximum Amount | Up to group coverage |
| Health Questions | None required |
Continuation of Coverage
Situations for Continuation
| Situation | Continuation |
|---|---|
| FMLA Leave | Federal law applies |
| Military Leave | USERRA protections |
| Disability | Per policy provisions |
| Layoff | Per policy terms |
Premium Arrangements
Contributory vs. Non-Contributory
| Plan Type | Features |
|---|---|
| Contributory | Employee pays portion; 75% participation typical |
| Non-Contributory | Employer pays 100%; 100% participation required |
Payroll Deduction
- Standard method for contributory plans
- Employee authorizes deduction
- Must be documented
How long does a Texas employee have to convert group life insurance after termination?
What document must Texas employers provide to employees covered under group life insurance?
Which Texas statute primarily governs group life insurance?
In a non-contributory group life plan in Texas, what percentage of eligible employees must be covered?
When a Texas employee exercises conversion rights, they typically receive: