(a) An accident and health insurance policy or evidence of coverage may not be delivered, issued for delivery, or renewed in this state if:
(1) a provision of the policy or evidence of coverage excludes or reduces the payment of benefits to or on behalf of an insured or enrollee;
(2) the reason for the exclusion or reduction is that benefits are also payable or have been paid to or on behalf of the insured or enrollee under a supplemental policy of accident and health insurance; and
(3) the supplemental policy is individually underwritten and individually issued as a plan of coverage for:
(A) hospital confinement indemnity;
(B) a specified disease; or
(C) a limited benefit.
(b) Application of Subsection (a) to a provision of an accident and health insurance policy or evidence of coverage is not affected by:
(1) the mode or channel by which the premium for a supplemental policy of accident and health insurance is paid to the insurer; or
(2) a reduction in the premium for a supplemental policy of accident and health insurance because of the insured's membership in an organization or status as an employee.