SRC-TBR, H.B. 362 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 362
77R1970 AJA-FBy: Averitt (Sibley)
Business & Commerce
4/30/2001
Engrossed


DIGEST AND PURPOSE 

Under current law, an insurance company can not waive a surrender charge
for an annuity contract policyholder when the policyholder exchanges the
original annuity contract for a new annuity contract with the same insurer.
The Department of Insurance currently considers waiver of a surrender
charge a rebate which is defined by the statutes as a special favor,
advantage, or benefit. H.B. 362 excludes waiver of surrender charges from
being considered a rebate, therefore, allowing policyholders to take
advantage of better rates or other annuity contract options from the same
insurer without incurring a surrender charge.  


RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency.  

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 4, Article 21.21, Insurance Code to prohibit the
inclusion within the definition of discrimination or rebates, the waiving
of surrender charges under an annuity contract when the contract holder
exchanges the annuity contract for another annuity contract issued by the
same insurer, in the case of a life annuity, if the waiver and the exchange
are fully, fairly, and accurately explained to the contract holder in a
manner that is not deceptive or misleading. 

SECTION 2.  Effective date:  September 1, 2001.