By: Averitt S.B. No. 1668
(In the Senate - Filed March 14, 2003; March 20, 2003, read
first time and referred to Committee on Business and Commerce;
April 10, 2003, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 9, Nays 0; April 10, 2003,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1668 By: Jackson
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.
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