1. (a) Definition. In this subsection, the term "advertising material" includes:

   1. (1) descriptive literature or advertisements of a qualified vendor or vendor representative that are published in newspapers, magazines, or other publications;
   2. (2) material a qualified vendor or vendor representative encloses in mailing to participants or employees;
   3. (3) scripts used in television or radio advertisements or in telephone solicitations;
   4. (4) displays on billboards and similar media;
   5. (5) scripts, displays and any other plan material used on the internet;
   6. (6) descriptive literature, sales talks, and sales aids that a qualified vendor or vendor representative uses during presentations to participants or employees on a group or individual basis;

   7. (7) all material used to solicit:

      1. (A) increased deferrals from existing participants;
      2. (B) renewals of investments in qualified investment products; or
      3. (C) transfers; and
   8. (8) material distributed by a qualified vendor to a participant who has invested deferrals and investment income in one or more of the vendor's qualified investment products.

2. (b) General requirements for advertising material.

   1. (1) All advertising material must refer to the plan.
   2. (2) A qualified vendor may not use or authorize a vendor representative to use advertising material until the vendor has received the plan administrator's written approval of the material.
   3. (3) If a qualified vendor does not intend to use or authorize a vendor representative to use any advertising material, the vendor must provide written notice of that intention to the plan administrator.
   4. (4) A vendor representative may not use advertising material in connection with a qualified investment product until the qualified vendor offering the product has authorized the use of the material.
   5. (5) Advertising material may not contain information or statements that conflict with or are misleading concerning the qualified investment product being advertised. The advertising material may not state that loans are permitted.
   6. (6) An insurance company must tailor its advertising material to the plan.
   7. (7) The plan administrator may not approve advertising material used by an insurance company or by a vendor representative of an insurance company until the plan administrator has obtained the Texas Department of Insurance's written approval of the material.
   8. (8) No marketing or solicitation is allowed on previous Plan products after August 31, 2000.

3. (c) Endorsements.

   1. (1) If a qualified vendor receives an endorsement of one or more of its qualified investment products, the vendor shall immediately send written notice of the endorsement to the plan administrator.
   2. (2) An endorser of a qualified investment product may not use advertising material until the endorser has received the plan administrator's written approval of the material.

   3. (3) Advertising material that contains information about an endorsement must state:

      1. (A) the relationship between the qualified vendor and the endorser; and
      2. (B) the basis for the endorsement.

4. (d) General requirements for solicitation.

   1. (1) A qualified vendor may solicit business from participants and employees through vendor representatives, the mail, or direct presentations.
   2. (2) Qualified vendors and vendor representatives may solicit business at a state agency's office only with the prior permission of the agency.
   3. (3) A qualified vendor or vendor representative may not conduct any activity with respect to a qualified investment product unless the appropriate license has been obtained.
   4. (4) A qualified vendor or vendor representative may not make a representation about a qualified investment product that is contrary to any attribute of the product or that is misleading with respect to the product.
   5. (5) A qualified vendor or vendor representative may not state, represent, or imply that its qualified investment product is endorsed or recommended by the plan administrator, the trustee, a state agency, the State of Texas, or an employee of the foregoing.
   6. (6) A qualified vendor or vendor representative may not state, represent, or imply that its qualified investment product is the only product available under the plan.
   7. (7) When soliciting business for a qualified investment product, a qualified vendor or vendor representative shall provide each participant a copy of the approved disclosure form for that product. If a variable annuity product has several alternative investment choices, the participant must receive disclosures concerning all investment choices. The form must be provided regardless of whether the participant decides to invest in the product.
   8. (8) A qualified vendor or vendor representative may not use the sales opportunities obtained through participation in the plan to solicit investments in non-qualified investment products. For example, in a presentation to participants, a qualified vendor or vendor representative may not solicit investments in both a non-qualified investment product and a qualified investment product even if the vendor or representative clearly states that the non-qualified investment product is being offered outside the plan.
   9. (9) A qualified vendor is responsible for any violations of the sections in this chapter by a vendor representative who is marketing the vendor's qualified investment products.

5. (e) Solicitation methods.

   1. (1) A qualified vendor shall notify the plan administrator in writing if the vendor will be marketing its qualified investment products directly. The vendor must ensure that the plan administrator receives the notice before the vendor commences the marketing of its products. If the vendor subsequently decides to use vendor representatives to market its products, the vendor shall notify the plan administrator in accordance with paragraph (2) of this subsection.

   2. (2) A qualified vendor shall notify the plan administrator in writing if the vendor will be marketing its qualified investment products through vendor representatives. The notification must contain a complete identification of the vendor representatives who will be marketing the products. Every vendor representative and agent that enrolls participants in the plan and is authorized by the vendor to sign plan forms must be included on this notification. The vendor must ensure that the plan administrator receives:

      1. (A) the notice before the vendor commences the marketing of its products; and
      2. (B) a written update of the list of vendor representatives no later than November 1 of each year.

Source Note:The provisions of this §87.11 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 November 11, 1996, 21 TexReg 10766; amended to be effective September 10, 1998, 23 TexReg 9067; amended to be effective January 5, 2003, 27 TexReg 12370.