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A BILL TO BE ENTITLED
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AN ACT
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relating to partial surrender of or withdrawals from annuity |
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contracts, life insurance policies, and endowment contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 1113, Insurance Code, is amended by |
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adding Section 1113.002 to read as follows: |
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Sec. 1113.002. PARTIAL SURRENDER OR WITHDRAWAL. (a) A |
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partial surrender of or withdrawal from an annuity contract or a |
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partial surrender or withdrawal of all or part of the cash surrender |
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value of a life insurance policy or endowment contract may not be |
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made unless, at minimum: |
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(1) an owner of the contract or policy requests the |
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withdrawal in a writing that is: |
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(A) signed by the owner or each joint owner; |
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(B) notarized; and |
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(C) delivered to: |
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(i) the agent who sold the contract or |
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policy; |
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(ii) a representative of the issuer of the |
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contract or policy at an office of the issuer located in the city or |
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county where the owner resides; or |
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(iii) if the issuer does not have a local |
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office and the agent who sold the contract or policy is no longer an |
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agent for the issuer, the agent of record for the contract or |
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policy; and |
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(2) the agent or representative who receives the |
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request delivered under Subdivision (1): |
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(A) provides the information required by |
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Subsection (b); |
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(B) signs the request; and |
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(C) forwards the request to the appropriate |
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office of the issuer of the contract or policy for processing the |
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request. |
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(b) An agent or representative who receives a request that |
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is subject to this section must provide the requestor with accurate |
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information concerning the consequences of the requested surrender |
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or withdrawal, including any tax penalties the owner may incur. |
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(c) Except as provided by this section or other law or as |
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specifically requested by the owner of the annuity contract, life |
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insurance policy, or endowment contract, the issuer of the contract |
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or policy may not delay or otherwise impede a surrender or |
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withdrawal that is subject to this section, including by attempting |
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to persuade the owner to redirect the proceeds of the surrender or |
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withdrawal into another product marketed by the issuer. |
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(d) The issuer of an annuity contract, life insurance |
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policy, or endowment contract may impose additional requirements on |
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a request for a partial surrender of or withdrawal from the contract |
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or policy, including requiring the signature of the spouse of the |
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owner, a beneficiary, or an assignee. |
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SECTION 2. Except as specifically provided by a conflicting |
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provision of an annuity contract, life insurance policy, or |
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endowment contract delivered or issued for delivery before the |
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effective date of this Act, the change in law made by this Act |
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applies to an annuity contract, life insurance policy, or endowment |
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contract delivered or issued for delivery before, on, or after the |
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effective date of this Act. |
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SECTION 3. This Act takes effect September 1, 2011. |