SB 1823

relating to the replacement transactions of certain life insurance
and annuity contracts from an insurer to a replacing insurer.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 1114.054, Insurance Code, is amended by
adding Subsections (e) through (g) to read as follows:
(a)  If a transaction involves a replacement, the existing
insurer shall comply with this section.
(b)  The existing insurer shall retain and be able to produce
all replacement notifications received, indexed by the replacing
(1)  the fifth anniversary of the date of receipt of the
(2)  the date of conclusion of the next regular
examination conducted by the insurance regulatory authority of the
existing insurer's state of domicile.
(c)  The existing insurer shall send a letter to the policy
or contract owner regarding the owner's right to receive
information regarding the existing policy or contract values.  The
letter must include, if available, an in force illustration or, if
an in force illustration cannot be produced not later than the fifth
business day after the date of receipt of a notice that an existing
policy or contract is being replaced, a policy summary.  The
information must be provided not later than the fifth business day
after the date of receipt of the request from the policy or contract
(d)  On receipt of a request to borrow, surrender, or
withdraw any policy values, the existing insurer shall send a
notice advising the policy owner that the release of policy values
may affect the guaranteed elements, nonguaranteed elements, face
amount, or surrender value of the policy from which the values are
released.  The notice must be sent separately from the payment if
the payment is sent to any person other than the policy owner.  In
the case of consecutive automatic premium loans, the insurer is
only required to send the notice at the time of the first loan.
(e)  Notwithstanding Section 1114.004(a)(9), on receipt of a
notice from a policy or contract owner or the replacing insurer of a
replacement policy or contract, the existing insurer shall:
(1)  provide acknowledgement of receipt of the notice
(2)  send the payment to either the contract or policy
owner or the replacing insurer as specified in the notice within 30
(f)  Notwithstanding Section 1114.004(a)(9), on receipt of a
notice from a policy or contract owner of intent to surrender the
policy or contract, the existing insurer shall:
(1)  provide acknowledgement of receipt of the notice
(2)  send the surrender payment to the contract or
policy owner within 30 days of receipt of the notice.
(g)  If a transfer or surrender payment is not completed
within 30 days following notice from the contract or policy holder,
the existing insurer shall pay interest on the unpaid amount at an
annual rate of 18 percent, accruing from the 31st day until the
SECTION 2.  Sections 1114.054(e) through 114.054(g),
Insurance Code, as added by this Act, apply only to an annuity
contract or insurance policy transferred or surrendered on or after
SECTION 3.  This Act takes effect September 1, 2025.