HBA-DMH H.B. 362 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 362 By: Averitt Insurance 7/19/2001 Enrolled BACKGROUND AND PURPOSE Prior to the 77th Legislature, an insurance company could not waive a surrender charge for an annuity contract policyholder when the policyholder exchanged the original annuity contract for a new annuity contract with the same insurer. This waiver was considered a rebate which was defined by the statutes as a special favor, advantage, or benefit. House Bill 362 excludes waiver of surrender charges from being considered a rebate; therefore, allowing policyholders to take advantage of better rates or other annuity contract options from the same insurer without incurring a surrender charge. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 362 amends the Insurance Code to exclude from the definition of discrimination or rebate the practice of waiving surrender charges under a life annuity contract when the contract holder exchanges the annuity contract for another annuity contract issued by the same insurer, if the wavier and the exchange are fully, fairly, and accurately explained to the contract holder in a manner that is not deceptive or misleading. EFFECTIVE DATE September 1, 2001.