BILL ANALYSIS
Senate Research Center C.S.S.B. 1168
81R22518 AJA-D By: Hinojosa et al.
Committee Report (Substituted)
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
A "free look" period would allow Texans time to examine a recently purchased annuity policy. During this time period, consumers can receive a refund if they decide they do not want the annuity. Free look periods give consumers the opportunity to consult with friends, family, or a financial advisor to be sure that this long-term investment is right for them. Some states have laws that establish annuity free look periods for up to 45 days.
C.S.S.B. 1168 amends current law relating to a rescission period for annuity contracts.
RULEMAKING AUTHORITY
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subtitle A, Title 7, Insurance Code, by adding Chapter 1116, as follows:
CHAPTER 1116. REQUIRED PROVISIONS FOR ANNUITY CONTRACT
Sec. 1116.001. DEFINITION. Defines "annuity."
Sec. 1116.002. RESCISSION PERIOD REQUIRED. Requires that an annuity contract:
(1) authorize the purchaser to rescind the contract and return it to the issuer without surrender fees for at least:
(A) 15 days after the date the contract is entered into; or
(B) 30 days after the date the contract is entered into if:
(i) the purchaser is 65 years of age or older; or
(ii) the agreement is entered into by mail; and
(2) provide for a refund to a purchaser who rescinds the contract during the applicable rescission period equal to the amount paid by the purchaser under the contract.
SECTION 2. Makes application of this Act prospective to January 1, 2010.
SECTION 3. Effective date: September 1, 2009.