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. 2-21 * * * * *