By: Madla S.B. No. 206
A BILL TO BE ENTITLED
AN ACT
1-1 relating to licensing requirements for certain insurance agents.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Section 20, Article 21.14, Insurance Code, is
1-4 amended to read as follows:
1-5 Sec. 20. LIFE, HEALTH AND ACCIDENT INSURANCE, INAPPLICABLE
1-6 TO; OTHER EXCEPTIONS. The [No] provisions of this article do not
1-7 [shall] apply to the Life, Health and Accident Insurance business
1-8 or the Life, Health and Accident Department of the companies
1-9 engaged therein, nor shall it apply to any of the following,
1-10 namely:
1-11 (a) Any actual full-time home office salaried employee of
1-12 any insurance carrier licensed to do business in Texas, other than
1-13 an employee who solicits or receives an application for the sale of
1-14 insurance through an oral, written, or electronic communication in
1-15 accordance with Section 20A of this article.
1-16 (b) Any actual attorney in fact and its actual traveling
1-17 salaried representative as to business transacted through such
1-18 attorney in fact or salaried representative of any reciprocal
1-19 exchange or interinsurance exchange admitted to do business in
1-20 Texas.
1-21 (c) Any adjuster of losses, and/or inspector of risks, for
1-22 an insurance carrier licensed to do business in Texas.
1-23 (d) Any General Agent or State Agent or Branch Manager
2-1 representing an admitted and licensed insurance company or carrier,
2-2 or insurance companies or carriers, in a supervisory capacity.
2-3 (e) The actual attorney in fact for any Lloyds.
2-4 (f) All incorporated or unincorporated mutual insurance
2-5 companies, their agents and representatives, organized and/or
2-6 operating under and by authority of Chapters 16 and 17 of this
2-7 code.
2-8 (g) Nothing in this entire article shall ever be construed
2-9 to apply to any member, agent, employee, or representative of any
2-10 county or farm mutual insurance company as exempted under Chapters
2-11 16 and 17 of this code.
2-12 (h) Nothing in this article shall apply to the group motor
2-13 vehicle insurance business or the group motor vehicle department of
2-14 the companies engaged in that business.
2-15 (i) Salaried employees not involved in solicitation or
2-16 negotiation of insurance in the office of a local recording agent
2-17 who devote their full time to clerical and administrative services,
2-18 including the incidental taking of information from customers and
2-19 receipt of premiums in the office of a local recording agent,
2-20 provided the employees do not receive any commissions and their
2-21 compensation is not varied by the volume of premiums taken and
2-22 received.
2-23 SECTION 2. Article 21.14, Insurance Code, is amended by
2-24 adding Section 20A to read as follows:
2-25 Sec. 20A. FULL-TIME HOME OFFICE SOLICITORS; MANDATORY
3-1 REGISTRATION, CONTINUING EDUCATION, AND NOTIFICATION TO CONSUMERS;
3-2 AND DISCIPLINARY ACTIONS. (a) Any actual full-time home office
3-3 salaried employee of any insurance carrier licensed to do business
3-4 in Texas who solicits or receives an application for the sale of
3-5 insurance through an oral, written, or electronic communication
3-6 shall register with the commissioner.
3-7 (b) Any insurance carrier licensed to do business in Texas
3-8 whose general plan of operation includes the use of employees
3-9 described in Subsection (a) shall certify to the commissioner that
3-10 such employees receive continuing education of not less than 15
3-11 hours per year designed to give such employees:
3-12 (1) reasonable familiarity with the broad principles
3-13 of insurance, with licensing and regulatory laws, and with
3-14 provisions, terms, and conditions of the insurance which the
3-15 registrant transacts; and
3-16 (2) a fair and general understanding of the
3-17 obligations and duties of an insurer to an insured, including
3-18 training in ethical considerations.
3-19 (c) The registration of any actual full-time home office
3-20 salaried employee shall be suspended and the employer insurance
3-21 carrier may be disciplined in accordance with the insurance laws of
3-22 this state, if the commissioner finds that the registrant:
3-23 (1) has wilfully violated any provision of this code,
3-24 the laws of this state, or a rule of the commissioner;
3-25 (2) has been guilty of fraudulent or dishonest acts;
4-1 (3) has materially misrepresented the terms and
4-2 conditions of any insurance policies or contracts;
4-3 (4) has made or issued, or caused to be made or
4-4 issued, any statement misrepresenting or making incomplete
4-5 comparisons regarding the terms or conditions of any insurance
4-6 contract legally issued by an insurance carrier for the purpose of
4-7 inducing or attempting to induce the owner of such contract to
4-8 forfeit or surrender such contract or allow it to expire for the
4-9 purpose of replacing such contract with another;
4-10 (5) is guilty of rebating any insurance premium or
4-11 discriminating as between insureds; or
4-12 (6) has been convicted of a felony involving fraud or
4-13 breach of fiduciary duty.
4-14 (d) Registrants under this section shall disclose such
4-15 registration when making an oral, written, or electronic
4-16 communication to solicit or receive an application for the sale of
4-17 insurance.
4-18 (e) The commissioner shall adopt rules to implement the
4-19 provisions of this section.
4-20 SECTION 3. Chapter 21, Insurance Code, is amended by adding
4-21 Article 21.15-7 to read as follows:
4-22 Art. 21.15-7. INTERIM STUDY OF AGENTS AND AGENTS' LICENSES
4-23 STATUTES BY COMMISSIONER. The commissioner shall review and
4-24 evaluate the current agents and agents' licenses statutes in
4-25 Subchapter A of this chapter and report to the legislature on the
5-1 findings no later than January 1, 1999. In the review and
5-2 evaluation of such statutes the commissioner shall determine any
5-3 changes needed: to address new methods of marketing insurance,
5-4 including new technologies such as the Internet and telemarketing;
5-5 to reduce the number and types of agents' licenses and streamline
5-6 and combine such licenses where feasible; to determine which
5-7 provisions of these statutes should consistently apply to all
5-8 licenses to be granted under Subchapter A of this chapter; and to
5-9 address other problems which exist or may be occurring with agents'
5-10 licensing requirements. In performing the review and evaluation,
5-11 the commissioner shall appoint an advisory committee to assist in
5-12 the evaluation and to obtain input from the various interested
5-13 parties. The advisory committee shall include independent agents,
5-14 captive agents, insurers (including direct writers and insurers
5-15 that utilize agents), consumers, banks, and others who the
5-16 commissioner believes could contribute to the evaluation.
5-17 SECTION 4. This Act takes effect September 1, 1997.
5-18 SECTION 5. The importance of this legislation and the
5-19 crowded condition of the calendars in both houses create an
5-20 emergency and an imperative public necessity that the
5-21 constitutional rule requiring bills to be read on three several
5-22 days in each house be suspended, and this rule is hereby suspended.