Bill > HB3960

This bill modifies Texas insurance law regarding misrepresentations in insurance policy applications, particularly for life insurance policies. The bill clarifies that when an insurance policy contains misrepresentations, the insurer's ability to contest or rescind the policy depends on specific conditions. For life insurance policies issued within the first two years, an insurer can rescind the policy if the misrepresentation is material to the risk and affects the assumed risks, and the insurer must refund the premium. The bill also specifies that proof of fraud is not required to contest a policy if the policy contains a contestability provision. Additionally, the bill establishes that insurers must provide notice of rescission within 90 days of discovering a misrepresentation, and must notify either the insured or the policy beneficiaries. The legislation also specifies that this new law will apply only to insurance policies delivered, issued, or renewed on or after January 1, 2026, with existing policies continuing to be governed by previous law. Furthermore, the bill clarifies that in cases of conflict between this chapter and common law regarding insurance application misrepresentations, the new statutory provisions will take precedence.

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https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB3960