Texas § IN.1115.054 - SAFE HARBOR

§ IN.1115.054. SAFE HARBOR

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 business rules, controls, and procedures that satisfy a comparable standard even if such standard would not otherwise apply to the product or recommendation at issue. (b) This section does not affect or limit the commissioner's ability to enforce or investigate under this chapter. (c) This section does not limit the insurer's obligation to comply with Section 1115.052 (a), although the insurer may base its analysis on information received from either the financial professional or the entity supervising the financial professional. (d) Subsection (a) applies only if the insurer: (1) using information collected in the normal course of the insurer's business, monitors the relevant conduct of the financial professional or the entity responsible for supervising the financial professional, such as the financial professional's broker-dealer or an investment adviser registered under federal or state securities laws; and (2) provides to the entity responsible for supervising the financial professional, such as the financial professional's broker-dealer or investment adviser registered under federal or state securities laws, information and reports that are reasonably appropriate to assist the entity in maintaining the entity's supervision system. (e) For purposes of this section, "financial professional" means an agent that is regulated and acting as: (1) a broker-dealer registered under federal or state securities laws or a registered representative of a broker-dealer; (2) an investment adviser registered under federal or state securities laws or an investment adviser representative associated with the federal or state registered investment adviser; or (3) a plan fiduciary under Section 3(21), Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1002(21)) or a fiduciary under Section 4975(e)(3), Internal Revenue Code of 1986. (f) For purposes of this section, "comparable standards" means: (1) with respect to a broker-dealer or a registered representative of a broker-dealer, applicable rules of the Financial Industry Regulatory Authority (FINRA) or a successor agency and the United States Securities and Exchange Commission pertaining to best interest obligations and supervision of annuity recommendations and sales, including Regulation Best Interest (17 C.F.R. Section 240.15l-1), including subsequent amendments or successor regulations; (2) with respect to an investment adviser registered under federal or state securities laws or an investment adviser representative, the fiduciary duties and all other requirements imposed on those investment advisers or investment adviser representatives by contract or under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or applicable state securities law or regulations, including Form ADV (17 C.F.R. Section 279.1), and interpretations; and (3) with respect to a plan fiduciary or a fiduciary, the duties, obligations, prohibitions, and all other requirements attendant to that status under the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.) or the Internal Revenue Code of 1986. Added by Acts 2007, 80th Leg., R.S., Ch. 736 (H.B. 2761 ), Sec. 1, eff. September 1, 2007. Amended by: Acts 2009, 81st Leg., R.S., Ch. 1043 (H.B. 4492 ), Sec. 1, eff. September 1, 2009. Acts 2011, 82nd Leg., R.S., Ch. 1156 (H.B. 2277 ), Sec. 12, eff. September 1, 2011. Acts 2021, 87th Leg., R.S., Ch. 262 (H.B. 1777 ), Sec. 13, eff. September 1, 2021.