| 1 | 1 | | By: Smithee (Senate Sponsor - Davis) H.B. No. 1032 |
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| 2 | 2 | | (In the Senate - Received from the House April 11, 2011; |
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| 3 | 3 | | April 20, 2011, read first time and referred to Committee on State |
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| 4 | 4 | | Affairs; May 3, 2011, reported favorably by the following vote: |
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| 5 | 5 | | Yeas 8, Nays 0; May 3, 2011, sent to printer.) |
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| 6 | 6 | | |
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| 7 | 7 | | |
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| 8 | 8 | | A BILL TO BE ENTITLED |
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| 9 | 9 | | AN ACT |
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| 10 | 10 | | relating to a rescission period for annuity contracts. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Subtitle A, Title 7, Insurance Code, is amended |
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| 13 | 13 | | by adding Chapter 1116 to read as follows: |
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| 14 | 14 | | CHAPTER 1116. REQUIRED PROVISIONS FOR ANNUITY CONTRACT |
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| 15 | 15 | | Sec. 1116.001. DEFINITION. In this chapter, "annuity" |
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| 16 | 16 | | means a fixed, variable, or modified guaranteed annuity that is |
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| 17 | 17 | | individually solicited, whether classified as an individual |
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| 18 | 18 | | annuity or group annuity. |
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| 19 | 19 | | Sec. 1116.002. RESCISSION PERIOD REQUIRED. (a) A fixed |
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| 20 | 20 | | annuity contract must provide that, for a period of at least 20 days |
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| 21 | 21 | | after the date the contract is delivered, the purchaser may rescind |
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| 22 | 22 | | the contract and receive an unconditional refund of premiums paid |
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| 23 | 23 | | for the contract, including any contract fees or charges. |
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| 24 | 24 | | (b) Except as provided by Subsection (c), a variable or |
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| 25 | 25 | | modified guaranteed annuity contract must provide that, for a |
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| 26 | 26 | | period of at least 20 days after the date the contract is delivered, |
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| 27 | 27 | | the purchaser may rescind the contract and receive an unconditional |
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| 28 | 28 | | refund that is equal to the cash surrender value provided in the |
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| 29 | 29 | | contract plus any fees or charges deducted from the premiums or |
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| 30 | 30 | | imposed under the contract. |
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| 31 | 31 | | (c) Subsection (b) does not apply to an annuity contract if |
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| 32 | 32 | | the prospective owner is an accredited investor, as defined by 17 |
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| 33 | 33 | | C.F.R. Section 230.501(a) as adopted by the United States |
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| 34 | 34 | | Securities and Exchange Commission. |
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| 35 | 35 | | SECTION 2. The change in law made by this Act applies only |
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| 36 | 36 | | to an annuity contract delivered or issued for delivery on or after |
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| 37 | 37 | | January 1, 2012. A contract delivered or issued for delivery before |
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| 38 | 38 | | January 1, 2012, is governed by the law in effect immediately before |
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| 39 | 39 | | the effective date of this Act, and that law is continued in effect |
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| 40 | 40 | | for that purpose. |
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| 41 | 41 | | SECTION 3. This Act takes effect September 1, 2011. |
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| 42 | 42 | | * * * * * |
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