By: Smithee (Senate Sponsor - Davis) H.B. No. 1032
(In the Senate - Received from the House April 11, 2011;
April 20, 2011, read first time and referred to Committee on State
Affairs; May 3, 2011, reported favorably by the following vote:
Yeas 8, Nays 0; May 3, 2011, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to a rescission period for annuity contracts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 7, Insurance Code, is amended
by adding Chapter 1116 to read as follows:
CHAPTER 1116. REQUIRED PROVISIONS FOR ANNUITY CONTRACT
Sec. 1116.001. DEFINITION. In this chapter, "annuity"
means a fixed, variable, or modified guaranteed annuity that is
individually solicited, whether classified as an individual
annuity or group annuity.
Sec. 1116.002. RESCISSION PERIOD REQUIRED. (a) A fixed
annuity contract must provide that, for a period of at least 20 days
after the date the contract is delivered, the purchaser may rescind
the contract and receive an unconditional refund of premiums paid
for the contract, including any contract fees or charges.
(b) Except as provided by Subsection (c), a variable or
modified guaranteed annuity contract must provide that, for a
period of at least 20 days after the date the contract is delivered,
the purchaser may rescind the contract and receive an unconditional
refund that is equal to the cash surrender value provided in the
contract plus any fees or charges deducted from the premiums or
imposed under the contract.
(c) Subsection (b) does not apply to an annuity contract if
the prospective owner is an accredited investor, as defined by 17
C.F.R. Section 230.501(a) as adopted by the United States
Securities and Exchange Commission.
SECTION 2. The change in law made by this Act applies only
to an annuity contract delivered or issued for delivery on or after
January 1, 2012. A contract delivered or issued for delivery before
January 1, 2012, is governed by the law in effect immediately before
the effective date of this Act, and that law is continued in effect
for that purpose.
SECTION 3. This Act takes effect September 1, 2011.
* * * * *