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.