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.