| (G) increase the premiums charged to the participant solely because the participant elected to continue coverage. (9) An insurance company must ensure that each participant entitled to continue life insurance coverage under this subsection receives written notice of the participant's right by no later than the 30th day after the plan administrator mails notice to the company of a termination described in paragraph (1) of this subsection. (10) If an insurance company does not comply with paragraph (9) of this subsection, then a participant may exercise the participant's right to continue life insurance coverage up to the 60th day after the insurance company actually mails written notice to the participant containing a full explanation of the participant's rights. (d) Disciplinary procedures. (1) The plan administrator may act without a prior hearing when necessary to remedy or protect either the plan or participants from an imminent or actual violation of the sections in this chapter. (2) The plan administrator may refer violations of the sections in this chapter or noncompliance with a prior plan vendor's contractual obligations to the attorney general for appropriate action. (e) A prior plan vendor's failure to act. (1) A prior plan vendor shall reimburse the State of Texas, or effective January 1, 1999, the trust, for a financial loss that results from the vendor's failure to process a request for a transfer in a reasonable time, not to exceed 30 days. (2) A prior plan vendor shall reimburse a participant for a financial loss that results from the prior plan vendor's failure to process a distribution or transfer in a reasonable time, not to exceed 30 days. (f) Misrepresentations of qualified investment products. (1) A prior plan vendor is responsible for an intentional or unintentional misrepresentation or misstatement of any attribute of the vendor's qualified investment products by an employee of the prior plan vendor or by a vendor representative. This paragraph applies even if the prior plan vendor did not authorize the misrepresentation or misstatement. (2) The plan administrator may bind a prior plan vendor to a misrepresentation or misstatement by the prior plan vendor's employees or representatives of an attribute of the prior plan vendor's qualified investment products if the attribute as misrepresented or misstated is more advantageous to the participant than the attribute would be if it had been accurately depicted. (g) Alternative action by the plan administrator. (1) This subsection applies when a section in this chapter requires or permits the plan administrator to terminate a prior plan vendor's participation in the plan or expel a prior plan vendor from the plan. (2) In lieu of imposing the termination or expulsion, the plan administrator may: (A) prohibit a prior plan vendor from receiving additional deferrals and investment income; (B) discipline a prior plan vendor; (C) impose special requirements on a prior plan vendor; (D) take other appropriate action; or (E) perform a combination of the actions listed in subparagraphs (A)-(D) of this paragraph. (3) Paragraph (2) of this subsection applies only if the plan administrator determines that alternative action is in the best interests of the plan. (h) Violations of state insurance or securities laws. The plan administrator shall refer possible violations of state insurance or securities laws or regulations to the Texas Department of Insurance or the State Securities Board for appropriate action. |
| Source Note: The provisions of this §87.21 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 September 19, 1995, 20 TexReg 6932; amended to be effective January 5, 1996, 20 TexReg 11022; amended to be effective September 10, 1998, 23 TexReg 9067; amended to be effective January 5, 2003, 27 TexReg 12370; amended to be effective September 11, 2003, 28 TexReg 7785; amended to be effective September 30, 2004, 29 TexReg 9204 |
