Title IN, Insurance Code

Sec. 1114.001. PURPOSE. The purpose of this chapter is to: (1) regulate the activities of insurers and agents with respect to the replacement of existing life insurance and annuities; (2) protect the interests of purchasers of life insurance or annuities by establishing minimum s…

Sec. 1114.002. GENERAL DEFINITIONS. In this chapter: (1) "Agent" means an individual who holds a license under Chapter 4054 and who sells, solicits, or negotiates life insurance or annuities in this state. (2) "Direct-response solicitation" means a solicitation made: (A) by a spo…

Sec. 1114.003. DEFINITION OF POLICY SUMMARY. (a) For purposes of this chapter, "policy summary" has the meaning assigned by this section. (b) For a policy or contract other than a universal life insurance policy, "policy summary" means a written statement regarding the policy or …

Sec. 1114.004. APPLICABILITY; EXEMPTIONS. (a) Except as otherwise specifically provided by this chapter, this chapter does not apply to transactions involving: (1) credit life insurance; (2) group life insurance or group annuities for which there is no direct solicitation of indi…

Sec. 1114.005. FINANCED PURCHASE. (a) If a withdrawal, surrender, or borrowing involving the policy values of an existing policy is used to pay premiums on a new policy that is owned by the same policyholder and is issued by the same insurer not earlier than four months before th…

Sec. 1114.006. CONSUMER NOTICE DOCUMENTS. (a) The commissioner by rule shall adopt or approve model documents to be used for consumer notices under this chapter. (b) The department may develop model documents under this section, or the commissioner may approve model documents dev…

Sec. 1114.007. RULES. The commissioner may adopt reasonable rules in the manner prescribed by Subchapter A, Chapter 36, to accomplish and enforce the purpose of this chapter. Added by Acts 2007, 80th Leg., R.S., Ch. 904 (H.B. 2762), Sec. 1, eff. September 1, 2007. SUBCHAPTER B. D…

Sec. 1114.051. DUTIES OF AGENT; NOTICE. (a) An agent who initiates an application for a life insurance policy or annuity contract shall submit to the insurer, with or as part of the application, a statement signed by both the applicant and the agent as to whether the applicant ha…

Sec. 1114.052. DUTIES OF INSURERS THAT USE AGENTS. (a) An insurer that uses an agent shall comply with this section. (b) Each insurer shall maintain a system of supervision and control to ensure compliance with the requirements of this chapter. Under the system, the insurer must,…

Sec. 1114.053. DUTIES OF REPLACING INSURERS THAT USE AGENTS. (a) If a transaction under this chapter involves a replacement, the replacing insurer shall comply with this section. (b) The replacing insurer shall verify that the required forms are received and are in compliance wit…

Sec. 1114.054. DUTIES OF EXISTING INSURER. (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, unti…

Sec. 1114.0541. PROCESSING OF ANNUITY CONTRACT EXCHANGES. (a) In this section, "exchange" means an annuity replacement transaction: (1) in which the money in an existing annuity contract must pass directly from the existing annuity contract and existing insurer to a new annuity c…

Sec. 1114.0542. PROCESSING OF SURRENDER REQUESTS FOR ANNUITY CONTRACTS. (a) To initiate a surrender of an annuity contract, a contract owner must submit a surrender request to the insurer in the form and manner required by the insurer. An insurer that issues an annuity contract s…

Sec. 1114.055. DUTIES OF INSURERS REGARDING DIRECT RESPONSE SOLICITATIONS. (a) In the case of an application initiated as a result of a direct response solicitation, the insurer shall require submission of a statement asking whether the applicant, by applying for the proposed pol…

Sec. 1114.056. REGISTERED CONTRACTS. A registered contract is exempt from the requirements of Sections 1114.053(c) and 1114.054(c) with respect to the provision of illustrations or policy summaries, but must provide instead premium or contract contribution amounts and identificat…

Sec. 1114.057. DISCLOSURE OF AVAILABILITY OF WAIVER OF SURRENDER CHARGES. An insurer that offers to waive surrender charges as described by Section 1702.104(4) shall provide reasonable notice of that offer to the insurer's prospective or current contract holders. The notice may b…

Sec. 1114.101. UNFAIR METHOD OF COMPETITION; SANCTIONS AND PENALTIES. (a) A failure by an insurer or agent to comply with this chapter constitutes a violation of Chapter 541 and is subject to sanctions and penalties as provided by that chapter. For purposes of this section, examp…

Sec. 1114.102. ADDITIONAL SANCTIONS. (a) In addition to sanctions and penalties under Chapter 541 as provided by Section 1114.101, an insurer or agent that violates this chapter is subject to sanctions as provided by Chapter 82, which may include: (1) the revocation or suspension…

Sec. 1115.001. PURPOSE. The purpose of this chapter is to require an agent to act in the best interest of the consumer when making a recommendation of an annuity and to require insurers to establish and maintain a system to supervise those recommendations so that the insurance ne…

Sec. 1115.002. DEFINITIONS. In this chapter: (1) "Agent" means an individual who holds a license under Chapter 4054 and who sells, solicits, or negotiates insurance or annuity contracts in this state. (2) "Annuity" means an annuity that is an insurance product under the laws of t…

Sec. 1115.003. APPLICABILITY; EXEMPTIONS. (a) This chapter applies to any sale of an annuity. (b) Unless otherwise specifically included, this chapter does not apply to transactions involving: (1) direct response solicitations if there is no recommendation based on information co…

Sec. 1115.004. NO CAUSE OF ACTION CREATED. This chapter may not be construed to create or imply a private cause of action against an agent or insurer or to subject an agent or insurer to civil liability for a violation of: (1) this chapter or a rule adopted under this chapter; or…

Sec. 1115.005. RULES. The commissioner may adopt reasonable rules in the manner prescribed by Subchapter A, Chapter 36, to accomplish and enforce the purpose of this chapter. Added by Acts 2007, 80th Leg., R.S., Ch. 736 (H.B. 2761), Sec. 1, eff. September 1, 2007. SUBCHAPTER B. D…

Sec. 1115.0505. AGENTS EXERCISING MATERIAL CONTROL. (a) This subchapter applies to each agent who: (1) exercises material control or influence in making a recommendation or sale; and (2) receives direct compensation as a result of the recommendation or sale, regardless of whether…

Sec. 1115.0506. TRANSACTIONS NOT BASED ON RECOMMENDATION; CERTAIN EXEMPTIONS FROM SUBCHAPTER. An agent does not have an obligation to a consumer under Section 1115.0513 if: (1) the agent does not make a recommendation; (2) the agent makes a recommendation based on materially inac…

Sec. 1115.0507. INSURER OBLIGATIONS. (a) Notwithstanding Section 1115.0506, an insurer's issuance of an annuity must be reasonable under the circumstances known to the insurer at the time the annuity is issued. (b) If there is no agent involved in an annuity transaction, the obli…

Sec. 1115.0508. ADDITIONAL LICENSURE NOT REQUIRED. Nothing in this subchapter may be construed to require an agent to obtain a license other than the license described by Chapter 4054. Added by Acts 2021, 87th Leg., R.S., Ch. 262 (H.B. 1777), Sec. 6, eff. September 1, 2021.

Sec. 1115.051. BEST-INTEREST OBLIGATION. (a) When making a recommendation of an annuity, an agent shall act in the best interest of the consumer under the circumstances known to the agent at the time the recommendation is made, without placing the agent's or the insurer's financi…

Sec. 1115.0513. CARE OBLIGATION. (a) In making a recommendation, an agent shall exercise reasonable diligence, care, and skill to: (1) obtain consumer profile information from the consumer before making the recommendation of an annuity; (2) know the consumer's financial situation…

Sec. 1115.0514. DISCLOSURE OBLIGATION. (a) Before the recommendation or sale of an annuity, an agent shall provide a disclosure to the consumer on a form prescribed by the commissioner by rule. (b) The prescribed form must be substantially similar to the National Association of I…

Sec. 1115.0515. CONFLICT OF INTEREST OBLIGATION. (a) An agent shall take reasonable steps to discover a material conflict of interest, including a material conflict of interest related to an ownership interest. (b) An agent shall: (1) identify and avoid a material conflict of int…

Sec. 1115.0516. DOCUMENTATION OBLIGATION. At the time of the recommendation or sale, an agent shall: (1) make a written record of the recommendation and the basis for the recommendation; (2) if applicable, obtain a statement signed by the consumer on a form prescribed by the comm…

Sec. 1115.052. SUPERVISION SYSTEM. (a) Except as provided in Section 1115.0506, an insurer may not issue an annuity recommended to a consumer unless there is a reasonable basis to believe the annuity would effectively address the consumer's financial situation, insurance needs, a…

Sec. 1115.0521. PROHIBITED PRACTICES. An agent or insurer may not dissuade or attempt to dissuade a consumer from: (1) truthfully responding to an insurer's request for confirmation of consumer profile information; (2) filing a complaint; or (3) cooperating with the investigation…

Sec. 1115.053. CERTIFICATION REQUIREMENTS. A person may not provide a certification under Section 1115.052(c-1)(1) unless the person: (1) is a senior manager with responsibility for the delegated functions; and (2) has a reasonable basis for making the certification. Added by Act…

Sec. 1115.054. SAFE HARBOR. (a) Recommendations and sales of annuities made in compliance with comparable standards satisfy the requirements of this chapter. This section applies to recommendations and sales of annuities made by a financial professional in compliance with busines…

Sec. 1115.055. RECORDKEEPING REQUIREMENTS. (a) Each agent, general agent, independent agency, and insurer shall maintain, or otherwise be able to make available to the commissioner, records of the information collected from the consumer, disclosures made to the consumer, includin…

Sec. 1115.056. AGENT TRAINING REQUIREMENTS. (a) An agent may not solicit the sale of an annuity product unless the agent has adequate knowledge of the product to recommend the annuity and the agent is in compliance with the insurer's standards for product training. An agent may r…

Sec. 1115.101. MITIGATION. An insurer is responsible for compliance with this chapter. If a violation occurs because of the action or inaction of the insurer or the insurer's agent, the commissioner may: (1) order: (A) the insurer to take reasonable appropriate corrective action …

Sec. 1115.102. SANCTIONS. (a) The commissioner may impose sanctions as provided by Chapter 82 for a violation of this chapter. (b) The commissioner shall reduce or eliminate a sanction for a violation of this chapter otherwise applicable if: (1) corrective action for the consumer…

Sec. 1116.001. DEFINITION. In this chapter, "annuity" means a fixed, variable, or modified guaranteed annuity that is individually solicited, whether classified as an individual annuity or group annuity. Added by Acts 2011, 82nd Leg., R.S., Ch. 77 (H.B. 1032), Sec. 1, eff. Septem…

Sec. 1116.002. RESCISSION PERIOD REQUIRED. (a) A fixed annuity contract must provide that, for a period of at least 20 days after the date the contract is delivered, the purchaser may rescind the contract and receive an unconditional refund of premiums paid for the contract, incl…

Sec. 1116.003. RULEMAKING AUTHORITY FOR CONTINGENT DEFERRED ANNUITY CONTRACTS. (a) In this section, "contingent deferred annuity contract" means an annuity contract in which a life insurer makes periodic payments for the annuitant's lifetime beginning when a designated investment…

Sec. 1117.001. PURPOSE. The purpose of this chapter is to establish standards to protect consumers from misleading and fraudulent marketing practices with respect to the use of certain senior-specific certifications and professional designations in soliciting the sale or purchase…

Sec. 1117.002. DEFINITIONS. In this chapter: (1) "Insurance agent" means an agent licensed under this code to sell, solicit the sale of, or negotiate a life insurance or annuity product. (2) "Senior-specific certification or professional designation" means a certification or desi…

Sec. 1117.003. APPLICABILITY OF CHAPTER; CONSTRUCTION WITH OTHER LAW. (a) This chapter applies to any solicitation, sale or purchase of, or advice made in connection with, a life insurance or annuity product by an insurance agent. (b) Nothing in this chapter may be construed to l…