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House Bill 1293 |
House Author: Eiland |
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Effective: Vetoed |
Senate Sponsor: Ellis |
House Bill 1293 amends the Insurance Code to require the commissioner of insurance by rule to adopt buyer's guides for consumers who are considering purchasing certain annuity contracts or certificates and specifies the types of guides the commissioner is authorized to adopt. The bill establishes standards and deadlines for presenting a disclosure document and the appropriate buyer's guide to an applicant for an annuity contract or certificate and sets forth minimum requirements for the information included in the disclosure document.
House Bill 1293 requires the insurer, in certain cases, to provide each contract owner with a report at least annually on the status of the contract that contains certain minimum information regarding the reporting period. The bill establishes that a violation of a requirement in the bill's provisions by an insurer or agent constitutes an unfair or deceptive act or practice in the business of insurance for the purposes of the state laws governing unfair methods of competition and unfair or deceptive acts or practices in the business of insurance and specifies that compliance with these provisions or with rules implementing these provisions is not an affirmative defense in any action brought by or for the Texas Department of Insurance alleging a violation of those and other insurance laws.
House Bill 1293 expands the conditions under which it is not a rebate or discrimination prohibited by state law to waive surrender charges under a life annuity contract and requires an insurer that offers to waive such charges to provide reasonable notice of such offers to its prospective or current contract holders through any available means. The bill's provisions apply to an application for an annuity contract or certificate, or a solicitation for an annuity contract, made on or after January 1, 2010.
Reason Given For Veto: 'House Bill No. 1293 creates specific disclosure requirements and consumer education standards relating to the sale and marketing of life insurance annuities. Although the bill establishes standards of transparency and improvements that are important, I believe it will do more harm than good.
'This legislation designates any violation of these standards as an unfair or deceptive act or practice, which would expose agents and insurers to private claims for damages, attorney fees and costs for any such violation. Because the Texas Insurance Code already addresses suitable remedies for such offenses, I am opposed to this bill, which creates greater opportunities for frivolous litigation throughout the state.'