Relating to the exchange or surrender of an annuity contract.

New payment deadlines protect annuity owners

This Texas law took effect September 1, 2025, and covers annuity exchanges and surrenders initiated on or after January 1, 2026. Insurers must transfer the contract value for exchanges, or pay owners the current cash surrender value, within 30 business days. That clock starts only after the insurer receives all required information. Covered exchanges move money directly between insurers and keep the same owner and annuitant. The new insurer must send an exchange request with information required for federal tax-free treatment and by state law. The old insurer must send the owner a required letter within five business days, unless already sent. For surrenders, owners must use the insurer’s required process, and insurers must make forms and submission methods available. Different timing applies for contract deferrals, agreed deadlines, state or federal law, or suspected insurance fraud requiring a report. Changing an exchange deadline by agreement requires both insurers and the owner; surrender agreements require the insurer and owner. Late amounts accrue 10% annual penalty interest from the first business day after the deadline until fully transferred. Existing sales suitability duties remain unchanged, and insurers retain flexibility to agree on processing formats and assistance.