The Texas State Capitol. Credit: Moab Republic/Adobe Stock
A Texas House bill could help Lone Star State clients surrender and exchange annuities more quickly.
The bill, H.R. 4386, would require insurers to complete many of the transactions within 30 days after receiving a complete, accurate transaction request.
The state House passed the bill by a 145-1 vote May 6. The state Senate Business and Commerce Committee voted 11-0 to approve the bill Tuesday.
The deadline for bills to pass in the state Senate this year in an ordinary session is May 28.
What it means: If the Texas bill becomes law, it could give annuity owners in Texas easier access to assets held within annuities.
The backdrop: Texas residents spend about $35 billion per year on annuities and account for about 10% of U.S. individual annuity purchases.
"Current Texas law allows annuity holders to transfer their policies to a different insurer for better returns but does not establish a timeframe for completing these transfers," according to a Senate staff analysis. "As a result, delays can lead to financial losses for consumers due to missed investment opportunities and fluctuating interest rates."
Bill details: H.R. 4386 would require an insurer to acknowledge receipt of a transaction request within five days, complete an ordinary transaction within 30 days and pay 18% interest annual interest on unpaid amounts if completion of a transaction took longer than 30 days.
The provisions would start to apply Jan. 1, 2026.
Exceptions: An insurer could take longer than 30 days to complete a requested transaction if it believed the request involved fraud.
An insurer could also take longer than 30 days if the annuity contract had a provision giving the issuer the right to defer payments for a different time period; the insurers involved in the exchange asked for different transfer periods; or a different transfer period was required under state or federal law.
Credit: Moab Republic/Adobe Stock
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.