The bill amends Section 1114.054 of the Texas Insurance Code to establish new requirements for existing insurers when handling replacement transactions of life insurance and annuity contracts. It introduces several new subsections (e) through (g) that mandate the existing insurer to acknowledge receipt of replacement notices within five business days and to process payments to the policy or contract owner or the replacing insurer within thirty days. Additionally, if a policyholder intends to surrender their policy, the existing insurer must also acknowledge this notice within five business days and send the surrender payment within the same thirty-day timeframe.

Furthermore, the bill stipulates that if a transfer or surrender payment is not completed within thirty days of notice, the existing insurer is required to pay interest on the unpaid amount at an annual rate of 18 percent, accruing from the thirty-first day until the payment is made in full. These provisions will apply only to annuity contracts or insurance policies transferred or surrendered on or after January 1, 2026, and the act is set to take effect on September 1, 2025.

Statutes affected:
Introduced: Insurance Code 1114.054 (Insurance Code 1114)