(a) This section applies only to a policy that is delivered, issued for delivery, or renewed in this state and that provides coverage for a child whose parent:
(1) purchased the policy; or
(2) is a member of the group covered under the policy.
(b) Each policy must include a requirement that, after written notice to the insurer or group hospital service corporation at the insurer’s or group hospital service corporation’s home office, benefits payable on behalf of a child must be paid to the Texas Department of Human Services if:
(1) the parent who purchased the policy or who is a group member is required to pay child support by a court order or court-approved agreement and:
(A) is a possessory conservator of the child under a court order issued in this state; or
(B) is not entitled to possession of or access to the child;
(2) the Texas Department of Human Services is paying benefits on behalf of the child under Chapter 31 or 32, Human Resources Code; and
(3) the insurer or group hospital service corporation is notified, through an attachment to the claim for benefits at the time the claim is first submitted to the insurer or group hospital service corporation, that the benefits must be paid directly to the Texas Department of Human Services.