deadlines for moving a life insurance policy or annuity

The text as introduced · 554 words

89R17119 TYPED

By: Parker
S.B. No. 1823

A BILL TO BE ENTITLED

AN ACT

relating to the replacement transactions of certain life insurance

and annuity contracts from an insurer to a replacing insurer.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 1114.054, Insurance Code, is amended by

adding Subsections (e) through (g) to read as follows:

(a) If a transaction involves a replacement, the existing

insurer shall comply with this section.

(b) The existing insurer shall retain and be able to produce

all replacement notifications received, indexed by the replacing

insurer, until the later of:

(1) the fifth anniversary of the date of receipt of the

notification; or

(2) the date of conclusion of the next regular

examination conducted by the insurance regulatory authority of the

existing insurer's state of domicile.

(c) The existing insurer shall send a letter to the policy

or contract owner regarding the owner's right to receive

information regarding the existing policy or contract values. The

letter must include, if available, an in force illustration or, if

an in force illustration cannot be produced not later than the fifth

business day after the date of receipt of a notice that an existing

policy or contract is being replaced, a policy summary. The

information must be provided not later than the fifth business day

after the date of receipt of the request from the policy or contract

owner.

(d) On receipt of a request to borrow, surrender, or

withdraw any policy values, the existing insurer shall send a

notice advising the policy owner that the release of policy values

may affect the guaranteed elements, nonguaranteed elements, face

amount, or surrender value of the policy from which the values are

released. The notice must be sent separately from the payment if

the payment is sent to any person other than the policy owner. In

the case of consecutive automatic premium loans, the insurer is

only required to send the notice at the time of the first loan.

(e) Notwithstanding Section 1114.004(a)(9), on receipt of a

notice from a policy or contract owner or the replacing insurer of a

replacement policy or contract, the existing insurer shall:

(1) provide acknowledgement of receipt of the notice

within 5 business days, and

(2) send the payment to either the contract or policy

owner or the replacing insurer as specified in the notice within 30

days of receipt of the notice.

(f) Notwithstanding Section 1114.004(a)(9), on receipt of a

notice from a policy or contract owner of intent to surrender the

policy or contract, the existing insurer shall:

(1) provide acknowledgement of receipt of the notice

within 5 business days, and

(2) send the surrender payment to the contract or

policy owner within 30 days of receipt of the notice.

(g) If a transfer or surrender payment is not completed

within 30 days following notice from the contract or policy holder,

the existing insurer shall pay interest on the unpaid amount at an

annual rate of 18 percent, accruing from the 31st day until the

payment is made in full.

SECTION 2. Sections 1114.054(e) through 114.054(g),

Insurance Code, as added by this Act, apply only to an annuity

contract or insurance policy transferred or surrendered on or after

January 1, 2026.

SECTION 3. This Act takes effect September 1, 2025.