Texas 2025 - 89th Regular

Texas House Bill HB4386 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R17119 TYPED
2	2	By: Wharton H.B. No. 4386
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the replacement transactions of certain life insurance
10	10	and annuity contracts from an insurer to a replacing insurer.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 1114.054, Insurance Code, is amended by
13	13	adding Subsections (e) through (g) to read as follows:
14	14	(a) If a transaction involves a replacement, the existing
15	15	insurer shall comply with this section.
16	16	(b) The existing insurer shall retain and be able to produce
17	17	all replacement notifications received, indexed by the replacing
18	18	insurer, until the later of:
19	19	(1) the fifth anniversary of the date of receipt of the
20	20	notification; or
21	21	(2) the date of conclusion of the next regular
22	22	examination conducted by the insurance regulatory authority of the
23	23	existing insurer's state of domicile.
24	24	(c) The existing insurer shall send a letter to the policy
25	25	or contract owner regarding the owner's right to receive
26	26	information regarding the existing policy or contract values. The
27	27	letter must include, if available, an in force illustration or, if
28	28	an in force illustration cannot be produced not later than the fifth
29	29	business day after the date of receipt of a notice that an existing
30	30	policy or contract is being replaced, a policy summary. The
31	31	information must be provided not later than the fifth business day
32	32	after the date of receipt of the request from the policy or contract
33	33	owner.
34	34	(d) On receipt of a request to borrow, surrender, or
35	35	withdraw any policy values, the existing insurer shall send a
36	36	notice advising the policy owner that the release of policy values
37	37	may affect the guaranteed elements, nonguaranteed elements, face
38	38	amount, or surrender value of the policy from which the values are
39	39	released. The notice must be sent separately from the payment if
40	40	the payment is sent to any person other than the policy owner. In
41	41	the case of consecutive automatic premium loans, the insurer is
42	42	only required to send the notice at the time of the first loan.
43	43	(e) Notwithstanding Section 1114.004(a)(9), on receipt of a
44	44	notice from a policy or contract owner or the replacing insurer of a
45	45	replacement policy or contract, the existing insurer shall:
46	46	(1) provide acknowledgement of receipt of the notice
47	47	within 5 business days, and
48	48	(2) send the payment to either the contract or policy
49	49	owner or the replacing insurer as specified in the notice within 30
50	50	days of receipt of the notice.
51	51	(f) Notwithstanding Section 1114.004(a)(9), on receipt of a
52	52	notice from a policy or contract owner of intent to surrender the
53	53	policy or contract, the existing insurer shall:
54	54	(1) provide acknowledgement of receipt of the notice
55	55	within 5 business days, and
56	56	(2) send the surrender payment to the contract or
57	57	policy owner within 30 days of receipt of the notice.
58	58	(g) If a transfer or surrender payment is not completed
59	59	within 30 days following notice from the contract or policy holder,
60	60	the existing insurer shall pay interest on the unpaid amount at an
61	61	annual rate of 18 percent, accruing from the 31st day until the
62	62	payment is made in full.
63	63	SECTION 2. Sections 1114.054(e) through 114.054(g),
64	64	Insurance Code, as added by this Act, apply only to an annuity
65	65	contract or insurance policy transferred or surrendered on or after
66	66	January 1, 2026.
67	67	SECTION 3. This Act takes effect September 1, 2025.