BILL ANALYSIS |
C.S.S.B. 1107 |
By: Eltife |
Insurance |
Committee Report (Substituted) |
BACKGROUND AND PURPOSE
It has been asserted that the authority of the Texas Department of Insurance (TDI) to regulate annuities has not kept pace with the growing market of annuity products. There is additional concern that in the context of new and unique annuity products, such as contingent deferred annuities and indexed annuities that replicate investment market returns, the current authority of TDI to regulate annuity contracts results in an incomplete regulatory framework that does not respond well to market changes or adequately protect consumers. C.S.S.B. 1107 seeks to address these issues.
|
||||||||
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
|
||||||||
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is expressly granted to the commissioner of insurance in SECTION 2 of this bill.
|
||||||||
ANALYSIS
C.S.S.B. 1107 amends the Insurance Code to authorize the commissioner of insurance by rule to adopt reasonable standards for contingent deferred annuity contracts, including standards for the procedures for Texas Department of Insurance (TDI) review and approval of contingent deferred annuity contracts and the criteria TDI will use in approving the contracts; standards for replacement, suitability, and disclosure requirements that are consistent with applicable model regulations developed by the National Association of Insurance Commissioners (NAIC); and standards for advertising of contingent deferred annuity contracts that are consistent with applicable model regulations developed by the NAIC. The bill defines "contingent deferred annuity contract" as an annuity contract in which a life insurer makes periodic payments for the annuitant's lifetime beginning when a designated investment that is not owned or held by the insurer is depleted to an amount specified by the contract due to contractually permitted withdrawals, market performance, fees, or other charges.
C.S.S.B. 1107 exempts a contingent deferred annuity contract from statutory provisions governing standard nonforfeiture law for certain life insurance annuities.
|
||||||||
EFFECTIVE DATE
On passage, or, if the bill does not receive the necessary vote, September 1, 2015.
|
||||||||
COMPARISON OF SENATE ENGROSSED AND SUBSTITUTE
While C.S.S.B. 1107 may differ from the engrossed in minor or nonsubstantive ways, the following comparison is organized and formatted in a manner that indicates the substantial differences between the engrossed and committee substitute versions of the bill.
|
||||||||
|