By:  Averitt                                                      S.B. No. 1668


A BILL TO BE ENTITLED

AN ACT

relating to the sale of insurance by financial institutions 
employed by a trustee.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subsection (f), Section 113.053, Property Code, 
is amended to read as follows:
	(f)  A national banking association, a state-chartered 
corporation, including a state-chartered bank or trust company, a 
state or federal savings and loan association that has the right to 
exercise trust powers and that is serving as trustee, or such an 
institution that is serving as custodian with respect to an 
individual retirement account, as defined by Section 408, Internal 
Revenue Code, or an employee benefit plan, as defined by Section 
3(3), Employee Retirement Income Security Act of 1974 (29 U.S.C. 
Section 1002(3)), regardless of whether the custodial account is, 
or would otherwise be, considered a trust for the purposes of this 
subtitle, may:
		(1)  employ an affiliate or division within a financial 
institution to provide brokerage, insurance, investment, 
administrative, custodial, or other account services for the trust 
or custodial account and charge the trust or custodial account for 
the services, provided, however, that this section does not alter 
or negate applicable licensing and regulatory requirements 
administered by a functional regulatory agency of this state 
[nothing in this section shall allow an affiliate or division to 
engage in the sale or business of insurance if not otherwise 
permitted to do so]; and
		(2)  receive compensation, directly or indirectly, on 
account of the services performed by the affiliate or division 
within the financial institution, whether in the form of shared 
commissions, fees, or otherwise, provided that any amount charged 
by the affiliate or division for the services is disclosed and does 
not exceed the customary or prevailing amount that is charged by the 
affiliate or division, or a comparable entity, for comparable 
services rendered to a person other than the trust.
	SECTION 2.  This Act takes effect September 1, 2003.