1-1     By:  Counts (Senate Sponsor - Haywood)                H.B. No. 1356

 1-2           (In the Senate - Received from the House May 6, 1997;

 1-3     May 7, 1997, read first time and referred to Committee on Economic

 1-4     Development; May 18, 1997, reported adversely, with favorable

 1-5     Committee Substitute by the following vote:  Yeas 11, Nays 0;

 1-6     May 18, 1997, sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR H.B. No. 1356                 By:  Haywood

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to licensing of funeral prearrangement life insurance

1-11     agents.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Chapter 213, Acts of the 54th Legislature,

1-14     Regular Session, 1955 (Article 21.07-1, Vernon's Texas Insurance

1-15     Code), is amended by adding Section 5A to read as follows:

1-16           Sec. 5A.  FUNERAL PREARRANGEMENT LIFE INSURANCE AGENT.

1-17     (a)  In this section, "funeral prearrangement life insurance agent"

1-18     means a life insurance agent who, subject to the limitations of

1-19     this section, writes only life insurance policies and fixed annuity

1-20     contracts to secure the delivery of funeral services and

1-21     merchandise under prepaid funeral contracts regulated by the Texas

1-22     Department of Banking under Chapter 512, Acts of the 54th

1-23     Legislature, Regular Session, 1955 (Article 548b, Vernon's Texas

1-24     Civil Statutes).

1-25           (b)  The commissioner shall issue a limited purpose license

1-26     to act as a funeral prearrangement life insurance agent for an

1-27     authorized legal reserve life insurance company to an applicant

1-28     other than a partnership or corporation after receiving

1-29     certification from the insurance company that the applicant has

1-30     completed a course of study and instruction offered by the

1-31     insurance company and passed without aid a written examination

1-32     administered by the insurance company.

1-33           (c)  The commissioner shall authorize a legal reserve life

1-34     insurance company to administer a funeral prearrangement life

1-35     insurance agent examination after the commissioner approves for the

1-36     insurance company a complete outline and explanation of the course

1-37     of study and instruction on life insurance and fixed annuities for

1-38     applicants and the nature and manner of conducting the examination

1-39     for applicants.  On or before September 1, 1997, the commissioner

1-40     shall promulgate a uniform examination for applicants fairly

1-41     addressing the information contained in the approved course of

1-42     study and instruction.

1-43           (d)  The course of study and instruction shall be for five

1-44     (5) hours and shall include instruction on both the policies to be

1-45     sold and the law relating to funeral prearrangement.

1-46           (e)  The commissioner may investigate as necessary the manner

1-47     and method of instruction and examination of each authorized legal

1-48     reserve life insurance company.  The commissioner may at the

1-49     commissioner's discretion withdraw from an insurance company the

1-50     authority to offer instruction and administer an examination.

1-51           (f)  A funeral prearrangement life insurance agent licensed

1-52     under this section may not:

1-53                 (1)  act as an agent for an insurance company unless

1-54     the agent acts under the supervision of a person or corporation who

1-55     holds a license to act as a legal reserve life insurance agent for

1-56     that insurance company and who holds or is an authorized

1-57     representative of the holder of a permit from the Texas Department

1-58     of Banking to sell prepaid funeral benefits under Chapter 512, Acts

1-59     of the 54th Legislature, Regular Session, 1955 (Article 548b,

1-60     Vernon's Texas Civil Statutes);

1-61                 (2)  write any coverage or combination of coverages

1-62     with an initial guaranteed death benefit in excess of $15,000 on

1-63     any life; or

1-64                 (3)  act as an agent for more than one insurance

 2-1     company.

 2-2           (g)  The commissioner shall stamp "FUNERAL PREARRANGEMENT

 2-3     LIFE INSURANCE AGENT LICENSE" on a license issued under this

 2-4     section.

 2-5           (h)  A license issued under this section to act as an agent

 2-6     for an insurance company expires when the license holder ceases to

 2-7     act as an agent for that insurance company.  Within fifteen (15)

 2-8     days after the license holder ceases to act as an agent for an

 2-9     insurance company, the insurance company shall send written

2-10     notification of the expiration of the license to the commissioner.

2-11           (i)  An applicant for or holder of a license issued under

2-12     this section is not subject to the requirements of this article,

2-13     other than the requirements of Sections 5A and 12.

2-14           SECTION 2.  The importance of this legislation and the

2-15     crowded condition of the calendars in both houses create an

2-16     emergency and an imperative public necessity that the

2-17     constitutional rule requiring bills to be read on three several

2-18     days in each house be suspended, and this rule is hereby suspended,

2-19     and that this Act take effect and be in force from and after its

2-20     passage, and it is so enacted.

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