RS S.B. 206 75(R) BILL ANALYSIS INSURANCE S.B. 206 By: Madla (Eiland) 4-18-97 Committee Report (Unamended) BACKGROUND Currently, the Insurance Code exempts from licensing requirements officers or employees of an insurance company who engage in the solicitation of insurance. The problem is that licensing provisions of the Insurance Code do not apply equally to all persons engaged in the solicitation of insurance. This bill provides who must register to sell insurance in the State of Texas and provides for an interim study by the commissioner of insurance. PURPOSE As proposed, S.B. 206 provides who is considered an insurance agent, which insurance employees are covered by the Act, and which insurance companies are excepted from the Act. RULEMAKING AUTHORITY Rulemaking authority is granted to the commissioner of insurance in SECTION 2 (Section 20A(e), Article 21.14), Insurance Code of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 20, Article 21.14, Insurance Code, as follows: Sec. 20 LIFE, HEALTH AND ACCIDENT INSURANCE, INAPPLICABLE TO; OTHER EXCEPTIONS. This article does not apply to the Life, Health and Accident Insurance business, or any of the following: (a) An actual full-time employee of any insurance carrier licensed to do business in Texas, other than an employee who solicits or receives an application for the sale of insurance through an oral, written or electronic communication in accordance with Section 20A of this article. (i) Full-time clerical employees of a local recording agents who perform only certain administrative duties and do not solicit insurance, receive commissions, and their salaries are not varied by the volume of premiums taken and received, are not required to be licensed. SECTION 2. Amends Article 21.14, Insurance Code, by adding Section 20A, as follows: Sec. 20A. FULL-TIME HOME OFFICE SOLICITORS; MANDATORY REGISTRATION, CONTINUING EDUCATION, AND NOTIFICATION TO CONSUMERS; AND DISCIPLINARY ACTIONS. (a)Requires any actual full-time home office salaried employee of any insurance carrier licensed to do business in Texas who solicits or receives an application for the sale of insurance through an oral, written or electronic communication to register with the commissioner of insurance (commissioner). (b)Requires carriers licensed to do business in Texas to certify to the commissioner that certain employees receive continuing education which meets certain requirements. (c)Sets criteria for commissioner to discipline employees if needed for violating certain provisions. (d)Requires registrants under this section to disclose such registration when making a communication to solicit or receive an application for the sale of insurance. (e)Requires the commissioner to adopt rules to implement provisions of this section. SECTION 3. Amends Chapter 21, Insurance Code, by adding Section 21.15-7, as follows: Sec. 21.15-7. INTERIM STUDY OF AGENTS AND AGENTS LICENSES STATUTES BY COMMISSIONER. Requires the commissioner to review and evaluate agents and agent licenses and report to the legislature no later than January 1, 1999. Sets forth requirements for review and evaluation of agents and agent licenses. SECTION 4. Effective date: September 1, 1997. SECTION 5. Emergency clause.