Texas Annuities

Texas law gives annuity buyers one of the stronger review windows in the country:

• New annuity contracts: a 20-day free look period from delivery, during which you may return the contract for an unconditional refund.
• Replacement annuities: a 30-day free look period when the new contract replaces an existing annuity.

For fixed annuities the refund is all premiums paid, including any contract fees or charges. An additional 15-day free look applies if the insurer fails to provide the required buyer's guide and disclosure document at or before application; it runs concurrently with the standard period.

Texas adopted the NAIC's 2020 revisions to the Suitability in Annuity Transactions Model Regulation (#275), effective September 1, 2021. Under 28 Tex. Admin. Code Chapter 1115, an agent recommending an annuity must act in the best interest of the consumer — without placing the agent's or insurer's financial interest ahead of the consumer's. The standard imposes four obligations: care, disclosure, conflict of interest, and documentation. Agents must complete state-approved best-interest training, and insurers must maintain supervision systems over recommendations.

Texas Insurance Code Chapter 1114 governs annuity replacements. When a new annuity would replace an existing policy or contract, the agent and insurer must:

• Obtain a signed replacement notice listing every policy or contract proposed to be replaced, identified by insurer, annuitant, and contract number.
• Notify the existing insurer of the proposed replacement so it can provide the consumer with policy information.
• Maintain insurer supervision systems to monitor replacement activity and detect churning.

Combined with the 30-day replacement free look, these rules exist to prevent agents from rolling consumers between contracts to generate commissions.