State RegulationsTX specificDifficulty 2/5
Under TIC 1131.006, which of the following is true about assignment of group life insurance coverage in Texas?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under TIC 1131.006, the person insured under a group life policy may assign the incidents of ownership in that coverage, including the right to designate the beneficiary, subject to the terms of the group policy. The employer holds the master contract, but the insured's own interest in the coverage belongs to the insured and can be transferred. As with any assignment, the assignee takes only what the assignor had, so an absolute assignment carries the right to name and change the beneficiary.
Why the other options are wrong
- A) A new certificate is not required to make an assignment effective; the assignment operates on the insured's interest under the group policy.
- C) The policyholder's ownership of the master policy does not prevent the insured from assigning the insured's own incidents of ownership.
- D) TIC 1131.006 permits assignment by the insured individual; it is not prohibited.
Memory hook
The employer owns the master policy, but the insured owns the incidents of ownership and can assign them.