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Senate Bill 778 |
Senate Author: Carona |
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Effective: 9-1-13 |
House Sponsor: Clardy |
Senate Bill 778 amends the Property Code to authorize certain financial institutions serving as trustee or as custodian of specified accounts, subject to the institution's fiduciary duties, to purchase insurance underwritten or otherwise distributed by an affiliate, a division within the financial institution, or a syndicate or selling group that includes the financial institution or an affiliate and charge the trust or custodial account for the insurance premium under certain conditions. The bill authorizes such an institution, subject to its fiduciary duties, to receive a fee or compensation on account of the insurance product sold, provided that any amount charged for the insurance product is disclosed and does not exceed the customary or prevailing amount charged for comparable insurance provided to a person other than the trust.
Senate Bill 778 also creates an exception to the requirement that a trustee disburse one‑half of the regular compensation of the trustee and of any person providing investment advisory or custodial services to the trustee from income and disburse the remaining one-half of such compensation from principal if the trustee, consistent with the trustee's fiduciary duties, determines that a different portion, none, or all of the compensation should be allocated to income. In that case, the portion of the disbursements that are not allocated to income must be allocated to principal.