House Bill No. 4386 amends the Texas Insurance Code to establish new requirements for existing insurers when handling replacement transactions of life insurance and annuity contracts. The bill introduces several new subsections (e) through (g) to Section 1114.054, which mandate that upon receiving a notice of replacement from a policy or contract owner or the replacing insurer, the existing insurer must acknowledge receipt within five business days and process any payments to the policy owner or replacing insurer within 30 days. Additionally, if a policy owner intends to surrender their policy, the existing insurer is required to acknowledge this notice and send the surrender payment within the same timeframe.

Furthermore, the bill stipulates that if a transfer or surrender payment is not completed within 30 days of notice, the existing insurer must pay interest on the unpaid amount at an annual rate of 18 percent, accruing from the 31st day until the payment is made in full. These new provisions will apply 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)