A Texas applicant for a deferred annuity was not given the buyer's guide and the required disclosure document at or before the time of application. Under the Texas free-look rule, what free-look period must the delivered annuity contract provide?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under 28 TAC 4.2311(a), if the buyer's guide and the disclosure document required by the annuity disclosure subchapter are not provided at or before the time of application, a free look period of at least 15 calendar days must be provided during which the applicant may return the contract without penalty. Under Subsection (c), the period begins on the date the consumer receives the annuity contract, and under Subsection (b) the notice of the free look must be included on or attached to the cover page of the delivered contract. The extension is the remedy for the disclosure failure and cannot be negotiated away.
Why the other options are wrong
- A) Ten days is the variable life free-look figure under 28 TAC 4.1504(3)(A)(v), and the annuity extension period runs from receipt of the contract, not delivery of an application-stage figure.
- B) Thirty-one days is the life insurance grace period figure under TIC 1101.005, not part of the free-look rules.
- D) The extended free look runs from the date the consumer receives the contract, not from the application date.
Memory hook
No buyer's guide at application: fifteen days from receipt.