State RegulationsTX specificDifficulty 2/5
A Texas applicant asks the agent to backdate the life insurance policy so that coverage begins as of a date before the application was signed. What does the Texas statute governing retroactive issuance permit?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under TIC 1101.054, a Texas life insurer may not issue a policy or permit it to take effect retroactively, subject to the statutory carve-outs for a policy issued in exchange for, or on conversion of, an existing policy; the rule is aimed at fabricated coverage periods and backdated ages. The practical consequence is that an agent must never promise a retroactive effective date or backdate an application to secure a lower rate class for the applicant.
Why the other options are wrong
- B) Paying premium for the backdated period does not cure a prohibited retroactive issuance.
- C) There is no 6-month backdating window; the 6-month period in TIC 1101.009 is the policy-loan deferral.
- D) Obtaining a lower rate by backdating an age is precisely the abuse the prohibition targets.
Memory hook
Coverage starts when the application does — no rewriting of history.