| 1 | 1 | | 84R24070 SCL-F |
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| 2 | 2 | | By: Smithee H.B. No. 2586 |
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| 3 | 3 | | Substitute the following for H.B. No. 2586: |
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| 4 | 4 | | By: Sheets C.S.H.B. No. 2586 |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to contingent deferred annuity contracts. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Section 1107.002(a), Insurance Code, is amended |
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| 12 | 12 | | to read as follows: |
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| 13 | 13 | | (a) This chapter does not apply to: |
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| 14 | 14 | | (1) a reinsurance contract; |
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| 15 | 15 | | (2) a group annuity contract that is purchased under a |
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| 16 | 16 | | retirement plan or plan of deferred compensation established or |
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| 17 | 17 | | maintained by an employer, including a partnership or sole |
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| 18 | 18 | | proprietorship, by an employee organization, or by both, other than |
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| 19 | 19 | | a plan that provides individual retirement accounts or individual |
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| 20 | 20 | | retirement annuities under Section 408, Internal Revenue Code of |
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| 21 | 21 | | 1986, as amended; |
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| 22 | 22 | | (3) a premium deposit fund; |
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| 23 | 23 | | (4) a variable annuity contract; |
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| 24 | 24 | | (5) an investment annuity contract; |
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| 25 | 25 | | (6) an immediate annuity contract; |
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| 26 | 26 | | (7) a deferred annuity contract under which annuity |
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| 27 | 27 | | payments have begun; [or] |
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| 28 | 28 | | (8) a reversionary annuity contract; or |
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| 29 | 29 | | (9) a contingent deferred annuity contract as defined |
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| 30 | 30 | | by Section 1116.003. |
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| 31 | 31 | | SECTION 2. Chapter 1116, Insurance Code, is amended by |
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| 32 | 32 | | adding Section 1116.003 to read as follows: |
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| 33 | 33 | | Sec. 1116.003. RULEMAKING AUTHORITY FOR CONTINGENT |
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| 34 | 34 | | DEFERRED ANNUITY CONTRACTS. (a) In this section, "contingent |
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| 35 | 35 | | deferred annuity contract" means an annuity contract in which a |
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| 36 | 36 | | life insurer makes periodic payments for the annuitant's lifetime |
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| 37 | 37 | | beginning when a designated investment that is not owned or held by |
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| 38 | 38 | | the insurer is depleted to an amount specified by the contract due |
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| 39 | 39 | | to contractually permitted withdrawals, market performance, fees, |
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| 40 | 40 | | or other charges. |
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| 41 | 41 | | (b) The commissioner by rule may adopt reasonable standards |
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| 42 | 42 | | for contingent deferred annuity contracts, including standards |
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| 43 | 43 | | for: |
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| 44 | 44 | | (1) the procedures for department review and approval |
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| 45 | 45 | | of contingent deferred annuity contracts and the criteria the |
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| 46 | 46 | | department will use in approving the contracts; |
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| 47 | 47 | | (2) replacement, suitability, and disclosure |
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| 48 | 48 | | requirements that are consistent with applicable model regulations |
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| 49 | 49 | | developed by the National Association of Insurance Commissioners; |
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| 50 | 50 | | and |
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| 51 | 51 | | (3) advertising of contingent deferred annuity |
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| 52 | 52 | | contracts that are consistent with applicable model regulations |
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| 53 | 53 | | developed by the National Association of Insurance Commissioners. |
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| 54 | 54 | | SECTION 3. This Act takes effect immediately if it receives |
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| 55 | 55 | | a vote of two-thirds of all the members elected to each house, as |
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| 56 | 56 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 57 | 57 | | Act does not receive the vote necessary for immediate effect, this |
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| 58 | 58 | | Act takes effect September 1, 2015. |
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