2005 Texas Insurance Code CHAPTER 543. PROHIBITED PRACTICES RELATED TO POLICY OR CERTIFICATE OF MEMBERSHIP

INSURANCE CODE

CHAPTER 543. PROHIBITED PRACTICES RELATED TO POLICY OR CERTIFICATE 
OF MEMBERSHIP

SUBCHAPTER A. PROHIBITIONS


	§ 543.001. MISREPRESENTATION PROHIBITED.  (a) In this 
section, "life, health, or casualty insurer" includes a corporation 
operating on a cooperative or assessment plan, a mutual insurance 
company, a fraternal benefit society, and any other society or 
association authorized to issue an insurance policy in this state.
	(b)  A life, health, or casualty insurer, an officer, 
director, agent, or representative of that insurer, or any other 
person, corporation, or copartnership may not:
		(1)  issue, circulate, or cause or permit to be issued 
or circulated any statement, including an illustration or estimate, 
that misrepresents:
			(A)  the terms of a policy or certificate of 
membership issued by a life, health, or casualty insurer;
			(B)  other benefits or advantages provided by the 
policy or certificate;  or
			(C)  the dividends or share of surplus to be 
received on the policy or certificate;
		(2)  use a name or title of a policy, policy class, 
certificate of membership, or certificate class that misrepresents 
the policy, certificate, or class;  or
		(3)  make a misleading representation or incomplete 
comparison of a policy or certificate of membership to an insured or 
member for the purpose of inducing or tending to induce the insured 
or member to forfeit, surrender, or allow the lapse of the insurance 
or membership.
	(c)  The commissioner may adopt and enforce reasonable rules 
as provided by Subchapter I, Chapter 541, to accomplish the 
purposes of Subsection (b)(1) as those purposes relate to life 
insurance companies.

Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.          


	§ 543.002. CONTRACT EXPRESSED IN POLICY ONLY.  An insurer 
or an agent of an insurer may not make an insurance contract or an 
agreement relating to an insurance contract other than as expressed 
in the policy issued in connection with the contract.

Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.          


	§ 543.003. THING OF VALUE NOT SPECIFIED IN POLICY.  An 
insurer or an officer, agent, or representative of an insurer may 
not:
		(1)  directly or indirectly pay, allow, or give or 
offer to pay, allow, or give as an inducement to insurance a thing 
of value or other inducement that is not specified in the policy, 
including:
			(A)  a rebate of premium payable on the policy;                              
			(B)  a special favor or advantage in the dividends 
or other benefits to accrue on the policy;  or
			(C)  paid employment or a contract for service;  
or                        
		(2)  give, sell, or purchase or offer to give, sell, or 
purchase as an inducement to insurance or in connection with 
insurance a thing of value that is not specified in the policy, 
including:
			(A)  stocks, bonds, or other securities of an 
insurer or other corporation, association, or partnership;  or
			(B)  dividends or profits to accrue on the stocks, 
bonds, or other securities of an insurer or other corporation, 
association, or partnership.

Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.          


	§ 543.004. SHARING OF OR PARTICIPATION IN SPECIAL FUND 
PROHIBITED.  An insurer or an officer, agent, or representative of 
an insurer may not issue a policy that contains a special or board 
contract or similar provision by the terms of which the policy will 
share or participate in a special fund derived from a tax or a 
charge against any portion of the premium on another policy.

Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.          

SUBCHAPTER B. ENFORCEMENT;  PENALTY


	§ 543.051. SUSPENSION OR REVOCATION OF CERTIFICATE, 
CHARTER, PERMIT, OR LICENSE.  (a) On a hearing, the commissioner 
may suspend or revoke the certificate, charter, permit, or license 
to engage in the business of insurance of A society, association, 
corporation, or person that violates Subchapter A.
	(b)  The commissioner must give 10 days' notice of the 
hearing by certified mail to the society, association, corporation, 
or person.

Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.          


	§ 543.052. CRIMINAL PENALTY.  (a) A person commits an 
offense if the person violates Subchapter A.
	(b)  An offense under this section is a Class A misdemeanor.                   
	(c)  The penalty provided by this section is in addition to 
any other penalty specifically provided by law.

Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.