Texas Insurance Code 1107.004 – Optional Termination Provision
(a) Notwithstanding the requirements of Section 1107.003, an annuity contract may provide that the company has the option to terminate the contract by making a cash payment of the then present value of that portion of the paid-up annuity benefit if:
(1) no considerations are received under the contract for two years; and
(2) at maturity, payments on the portion of the paid-up annuity benefit on the plan stipulated in the contract attributable to considerations paid before that period would be less than $20 each month.
(b) If an annuity contract contains a provision permitted under Subsection (a):
(1) the present value of a portion of a paid-up annuity benefit paid under that provision must be computed on the basis of the mortality table, if any, and interest rates specified in the contract for determining the paid-up annuity benefit; and
(2) a payment made under that provision relieves the company of any further obligation under the contract.
Terms Used In Texas Insurance Code 1107.004
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Contract: A legal written agreement that becomes binding when signed.
- Month: means a calendar month. See Texas Government Code 312.011
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.