Texas Register, Volume 29, Number 30, Pages 7013-7230, July 23, 2004 Page: 7,068
7013-7230 p. ; 28 cm.View a full description of this periodical.
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(d) Review of investment products.
(1) General requirements. The plan administrator may not
issue a product approval notice concerning an investment product un-
less:
(A) the prior plan [qualified] vendor offering the invest-
ment product submits to the plan administrator the documentation and
information the plan administrator requires;
(B) the prior plan [qualified] vendor offering the prod-
uct agrees to accept both transfers to and the investment of deferrals in
its product;
(C) the plan administrator finds that the advertising ma-
terial for the product, if any, complies with the sections in this chapter;
(D) the plan administrator determines that the disclo-
sure form for the product complies with the sections in this chapter;
(E) the plan administrator finds that the investment
product has a guaranteed minimum interest rate if the product has a
variable interest rate;
(F) the plan administrator determines that the invest-
ment product complies with 87.7(b)[(e)](5) of this title (relating to
prior plan vendor participation[Vender Participation]), if the product is
a mutual fund;
(G) the plan administrator concludes that the inclusion
of the investment product in the plan would be in the best interests of
the plan; and
(H) the plan administrator ascertains that the vendor has
obtained the necessary approvals from the appropriate regulatory agen-
cies.
(2) Additional requirements for approving investment
products offered by insurance companies. Before the plan administra-
tor may sign a product contract, the plan administrator must:
(A) obtain written confirmation from the Texas Depart-
ment of Insurance that the investment product has been approved for
sale in Texas;
(B) determine that the amount of the investment prod-
uct' s premiums, payments, and benefits are not calculated with regard
to the sex of the person insured or of the recipient of the benefits; and
(C) determine that the investment product does not in-
sure anyone other than a participant.
(e) Product contracts.
(1) The plan administrator may not sign a product contract
with a prior plan [qualified] vendor unless the plan administrator has al-
ready issued a product approval notice concerning the investment prod-
uct that will be covered by the product contract.
(2) The plan administrator may not sign a product contract
that does not comply with the sections in this chapter and applicable
law.
(3) The plan administrator may, in its sole discretion, per-
mit a prior plan [qualified] vendor to replace, substitute, or merge an
existing plan product with another product, if procedures established
by the plan administrator are met.
(f) Withdrawal of a qualified investment product from the plan.
(1) A prior plan [qualified] vendor may withdraw a qual-
ified investment product from the plan after notifying, in writing, the
plan administrator and all participants whose deferrals and investment
income are invested in the qualified investment product. The prior planvendor must ensure that the plan administrator and the participants re-
ceive the written notice no later than the 60th day before the effective
date of the withdrawal.
(2) A prior plan [qualified] vendor may establish the effec-
tive date of a withdrawal of the vendor's qualified investment product.
The prior plan vendor must clearly state the effective date in the written
notice required by paragraph (1) of this subsection.
(3) Notwithstanding paragraph (2) of this subsection, if a
qualified investment product has a specific term, such as a three-year
certificate of deposit or a 30-day passbook account, the effective date
of the withdrawal may not be before the term of the product has ex-
pired for every participant unless approved by the plan administrator,
the prior plan vendor must hold the participants, the plan and plan ad-
ministrator harmless from any fees or penalties that may be applica-
ble in connection with such premature termination or withdrawal. The
term of a product will be deemed expired if all participants have trans-
ferred their funds to another qualified investment product.
(4) After receiving notice of withdrawal, the plan adminis-
trator shall [request that the agencies] contact each affected participant
to submit a prior funds transfer form changee agreement] for the dis-
position of their deferrals and investment income. For each participant
from whom the plan administrator has not received a prior funds trans-
fer form changee agreement] by the effective date of the withdrawal, the
plan administrator shall initiate a transfer of all deferrals and investment
income from the qualified investment product being withdrawn to the
default fund [ether qualified investment pr]duts,] in the revised plan.
(5) When a prior plan [qualified] vendor withdraws a qual-
ified investment product from the plan, the vendor may not charge a
fee or permit to be charged or penalty to participants, the plan or plan
administratorfor transfers made after the notice of withdrawal.
(6) When a prior plan [qualified] vendor that is an insur-
ance company with existing life policies in the plan withdraws a life
insurance product from the plan, this paragraph applies in addition to
the preceding paragraphs of this subsection.
(A) In this paragraph, the term "withdrawn life insur-
ance product" means a life insurance product that is no longer a qual-
ified investment product because the life insurance company offering
the product has withdrawn the product from the plan.
(B) A participant whose deferrals and investment in-
come have been invested in a withdrawn life insurance product may
continue life insurance coverage with the insurance company offering
the product.
(C) If the insurance company has a life insurance prod-
uct remaining in the plan that is comparable to the withdrawn life in-
surance product, this paragraph applies. The insurance company shall
offer continuing coverage in:
(i) a qualified investment product that is comparable
to the withdrawn life insurance product; and
(ii) a life insurance product that is not a qualified
investment product but is comparable to the withdrawn life insurance
product.
(D) If the insurance company does not have a life insur-
ance product remaining in the plan that is comparable to the withdrawn
life insurance product, this paragraph applies. The company must offer
continuing life insurance coverage to each participant whose deferrals
and investment income were invested in the withdrawn life insurance
product. The insurance company shall offer continuing coverage in a
life insurance product that is comparable to the withdrawn life insur-
ance product.29 TexReg 7068 July 23, 2004 Texas Register
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Texas. Secretary of State. Texas Register, Volume 29, Number 30, Pages 7013-7230, July 23, 2004, periodical, July 23, 2004; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth101134/m1/55/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.