89R17119 TYPED     By: Wharton H.B. No. 4386       A BILL TO BE ENTITLED   AN ACT   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   insurer, until the later of:                (1)  the fifth anniversary of the date of receipt of the   notification; or                (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   owner.          (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   within 5 business days, and                (2)  send the payment to either the contract or policy   owner or the replacing insurer as specified in the notice within 30   days of receipt of the notice.          (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   within 5 business days, and                (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   payment is made in full.          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   January 1, 2026.          SECTION 3.  This Act takes effect September 1, 2025.