Section 87.13 - Disclosure(a) Approval of a disclosure form in prior plan. (1) A prior plan vendor may complete an annual disclosure form for each investment product in which a plan participant has an account balance. If a variable annuity product has several investment choices, the plan administrator may require all disclosures related to those investment choices. A prior plan vendor may be required by plan administrator to complete a disclosure on each investment product that has plan participant funds.(2) Upon receipt, the plan administrator shall review a disclosure form to determine whether it complies with the requirements of this section in addition to any other applicable state or federal regulatory requirements. The plan administrator must approve the disclosure form if it complies. Otherwise, the plan administrator shall disapprove the disclosure form.(3) A prior plan vendor shall submit its disclosure form to the plan administrator upon request even if the disclosure form has not changed. The disclosure form must be submitted within 30 days of the plan administrator's request.(b) Contents of disclosure forms. (1) A prior plan vendor must uniformly state on all its disclosure forms basic information common to all qualified investment products offered by the prior plan vendor and also disclose any other state or federal regulatory information required.(2) A prior plan vendor may not describe two or more qualified investment products on the same disclosure form.(3) A prior plan vendor must attach to a disclosure form any information that will not conveniently fit on the disclosure form itself. Information that a prior plan vendor may attach to a disclosure form includes schedules of payments, fees, cash values, or any other items required to be disclosed.(4) A disclosure form must contain the current interest rate and the date on which the rate could or will change. A disclosure form must include the date the fees or penalties will expire for participants, if applicable.(5) If a qualified investment product has a variable interest rate, the disclosure form for that product must contain: (A) the word "variable"; and(B) a blank for the prior plan vendor's representative to enter the current interest rate.(6) A prospectus must be submitted for each of those qualified investment products, (if applicable).(c) Use of disclosure forms. (1) A prior plan vendor or vendor representative must enter the fees/charges and product information on a disclosure form when a participant and the prior plan vendor or representative sign the participation agreement and/or change agreement and the disclosure form.(2) The prior plan vendor or vendor representative must enter the current interest rate and the effective date of that rate in the appropriate blanks.(3) A prior plan vendor representative fails to provide a disclosure form if the vendor or representative does not enter all the required information.(4) If a prior plan vendor representative misstates the current interest rate on a disclosure form, the plan administrator may: (A) consider the prior plan vendor or representative as having failed to provide a disclosure form; or(B) bind the prior plan vendor to the interest rate as stated on the form.(d) Life insurance products. (1) This subsection applies when an employee of a prior plan vendor or a prior plan vendor representative sells an existing replacement life insurance product to a participant.(2) The employee or representative shall deliver to the prior plan vendor offering the product and to the participant a written statement containing: (A) the specific reasons why the participant's best interests would benefit from the replacement product;(B) the exact time that will be necessary for the cash value of the replacement life product to reach the cash value of the original life product as of the date of the replacement, if applicable.(3) Before a transfer or new deferral may become effective, the written statement must be filed with the plan administrator.(4) An employee of a prior plan vendor or a prior plan vendor representative does not satisfy paragraph (2) of this subsection unless the participant signs the statement. If the participant refuses to sign the statement, then the employee or representative may not sell an existing replacement life product to the participant. The employee and representative shall permanently retain a copy of the signed written statement.34 Tex. Admin. Code § 87.13
The provisions of this §87.13 adopted to be effective March 28, 1991, 16 TexReg 1560; amended to be effective January 10, 1992, 16 TexReg 7743; amended to be effective November 23, 1992, 17 TexReg 7911; amended to be effective January 1, 1994, 18 TexReg 8460; amended to be effective November 9, 1994, 19 TexReg 8617; amended to be effective January 5, 1996, 20 TexReg 11022; amended to be effective November 11, 1996, 21 TexReg 10766; amended to be effective September 30, 2004, 29 TexReg 9204; amended to be effective June 14, 2007, 32 TexReg 3357