2025 Texas sessionsRegular and both called sessions have ended. This index covers House and Senate bills, not resolutions. Statuses come from official reports.

2025 · Regular session · House bill

HB4386

HB4386 sets processing requirements for certain annuity exchanges and surrenders initiated on or after January 1, 2026.

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Official caption: Relating to the exchange or surrender of an annuity contract.

Signed by governorSource-checked explanation published

Official report lists House author(s): Wharton. This does not identify sponsors or amendment drafters.

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Bill explanation published · Version and amendment review scope is stated below · Individual amendment records may not be separately annotated.

Bill highlights

Selected points from the published explanation. Follow each point to its source-linked context; conditions and limits may matter.

HB4386 sets processing requirements for certain annuity exchanges and surrenders initiated on or after January 1, 2026.
For a covered exchange, money must pass directly between the existing and replacing insurers, and the new contract must have the same owner and annuitant—the person on whose life the annuity is based—at the time of the exchange.
The existing insurer must send the contract owner the letter required by Insurance Code Section 1114.054(c) within five business days after receiving the exchange notice, unless it already supplied the letter.
The ordinary deadline to transfer the exchange value is 30 business days after receiving the notice.
Both deadlines have exceptions: a contract may allow a different deferral period; the relevant parties may agree to another transfer date; state or federal law may require another period; or the insurer may determine or reasonably suspect reportable insurance fraud.
If a required payment is late under the applicable period, the insurer owes 10% annual penalty interest on the unpaid amount, beginning on the first business day after payment was due and continuing until payment is completed.

Read the full explanation ↓

What does it do?

HB4386 sets processing requirements for certain annuity exchanges and surrenders initiated on or after January 1, 2026. The act itself took effect September 1, 2025, after being signed June 20. An annuity exchange moves money to another insurer’s annuity; a surrender pays the contract’s current cash surrender value to its owner.

For a covered exchange, money must pass directly between the existing and replacing insurers, and the new contract must have the same owner and annuitant—the person on whose life the annuity is based—at the time of the exchange. The replacing insurer initiates the exchange with a notice containing the information necessary for federal tax-free treatment under 26 U.S.C. Section 1035 and information required by state law. The notice can use an ACORD form, another generally accepted form, or another manner used by an insurer. This state processing rule does not independently guarantee federal tax treatment.

The existing insurer must send the contract owner the letter required by Insurance Code Section 1114.054(c) within five business days after receiving the exchange notice, unless it already supplied the letter. That letter concerns the owner’s right to information about the existing contract’s value.

The ordinary deadline to transfer the exchange value is 30 business days after receiving the notice. For a surrender, the owner uses the insurer’s required form and manner, which the insurer must make available; the ordinary payment deadline is also 30 business days after the request. In either case, the payment clock does not start until the insurer has all required information.

Both deadlines have exceptions: a contract may allow a different deferral period; the relevant parties may agree to another transfer date; state or federal law may require another period; or the insurer may determine or reasonably suspect reportable insurance fraud. For an exchange, the agreement involves both insurers and the owner; for a surrender, it involves the insurer and owner. These are not unconditional promises of payment within 30 calendar days.

If a required payment is late under the applicable period, the insurer owes 10% annual penalty interest on the unpaid amount, beginning on the first business day after payment was due and continuing until payment is completed. This is an annual interest rate, not an automatic 10% lump-sum payment. The act expressly leaves Chapter 1115’s annuity suitability requirements unchanged.

What changed along the way?

The introduced bill addressed life-insurance and annuity replacement or surrender more broadly, proposed payment within 30 days, and proposed 18% annual late-payment interest. Those terms are not the enacted rule.

The House committee substitute created separate annuity exchange and surrender sections, defined the qualifying exchange, used business-day deadlines, reduced interest to 10%, and added incomplete-information and contract-deferral provisions. It also specified detailed form contents and acknowledgment requirements. The House engrossed text matched that substitute.

The Senate committee substitute replaced the exchange form-content list with federal-tax and state-law information requirements and more flexible formats. It changed the exchange acknowledgment to the existing contract-information letter, removed the separate surrender acknowledgment and five-day paper-form mailing requirement, and added the agreed-date, legal-period and suspected-fraud exceptions. Those changes survived in the enrolled law; the House concurred May 28.

The amendment index lists no individual floor amendments. The history, text index and Senate amendments packet document the Senate substitute and concurrence. “No indexed floor amendments” does not mean the bill passed unchanged.

For the full amendment record, open the official amendment index.

Official bill versions

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Who could benefit—and who could bear the costs?

Annuity owners and replacing insurers gain specified processing rules and an interest consequence for overdue required payments. Insurers must administer the notices, information checks, transfers and exceptions and may owe late-payment interest. Contract owners still need complete submissions, and permitted deferrals or fraud concerns can affect timing.

The law does not promise a refund of all premiums, eliminate surrender charges, or determine whether replacing or surrendering an annuity is financially suitable. It directs payment of the applicable contract value or current cash surrender value and preserves the existing suitability framework. The retained fraud-reporting provision requires reporting qualifying suspicions; the exception is not described as a general right to delay without a reason.

The final listed fiscal note anticipated no significant state or local-government fiscal impact and assumed state costs could be absorbed with existing resources. It did not quantify private insurers’ compliance costs or the total interest owners might receive.

Review boundary: This explains the enacted processing rules and their history, not a particular contract’s surrender value, tax result, suitability or disputed payment deadline.

Official sources

Catalog report retrieved 2026-10-25. Check the official record for corrections or later changes.