By Madla S.B. No. 206
75R3696 DLF-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to licensing requirements for certain insurance agents.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Article 21.02, Insurance Code, is amended to
1-5 read as follows:
1-6 Art. 21.02. WHO ARE AGENTS. (a) Any person who makes an
1-7 oral, written, or electronic communication to solicit or who
1-8 otherwise solicits insurance on behalf of any insurance company,
1-9 whether incorporated under the laws of this or any other state or
1-10 foreign government, or who takes or transmits other than for
1-11 himself any application for insurance or any policy of insurance to
1-12 or from such company, or who advertises or otherwise gives notice
1-13 that he will receive or transmit the same, or who shall receive or
1-14 deliver a policy of insurance of any such company, or who shall
1-15 examine or inspect any risk, or receive, or collect, or transmit
1-16 any premium of insurance, or make or forward any diagram of any
1-17 building or buildings, or do or perform any other act or thing in
1-18 the making or consummating of any contract of insurance for or with
1-19 any such insurance company other than for himself, or who shall
1-20 examine into, or adjust, or aid in adjusting, any loss for or on
1-21 behalf of any such insurance company, whether any of such acts
1-22 shall be done at the instance or request, or by the employment of
1-23 such insurance company, or of, or by, any broker or other person,
1-24 shall be held to be the agent of the company for which the act is
2-1 done, or the risk is taken, as far as relates to all the
2-2 liabilities, duties, requirements and penalties set forth in this
2-3 chapter.
2-4 (b) This article does not authorize an agent to orally, in
2-5 writing, or otherwise alter, amend, modify, waive, or change a term
2-6 or condition of an insurance policy or application for an insurance
2-7 policy.
2-8 (c) The provisions of this subchapter shall not apply to
2-9 citizens of this State who arbitrate in the adjustment of losses
2-10 between the insurers and insured, nor to the adjustment of
2-11 particular or general average losses of vessels or cargoes by
2-12 marine adjusters who had paid an occupation tax of Two Hundred
2-13 ($200.00) Dollars for the year in which the adjustment is made, nor
2-14 to practicing attorneys at law in the State of Texas, acting in the
2-15 regular transaction of their business as such attorneys at law, and
2-16 who are not local agents, nor acting as adjusters for any insurance
2-17 company.
2-18 (d) Any person who shall do any of the acts mentioned in
2-19 this article for or on behalf of any insurance company without such
2-20 company having first complied with the requirements of the laws of
2-21 this State, shall be personally liable to the holder of any policy
2-22 of insurance in respect of which such act was done for any loss
2-23 covered by the same.
2-24 SECTION 2. Section 1, Article 21.07, Insurance Code, is
2-25 amended by adding Subsection (d) to read as follows:
2-26 (d) Each officer or employee of any insurance company
2-27 licensed to do business in this state who negotiates or solicits
3-1 any type of insurance on behalf of that company must be
3-2 individually licensed under this article. For purposes of this
3-3 section, a person negotiates or solicits insurance if that person
3-4 makes any oral, written, or electronic communication to another
3-5 person regarding insurance coverage, rates, benefits, or policy
3-6 terms for the purpose of soliciting insurance.
3-7 SECTION 3. Article 21.09, Insurance Code, is amended to
3-8 read as follows:
3-9 Art. 21.09. RESIDENT AGENTS, COMPANIES EXCEPTED. (a) Any
3-10 fire, fire and marine, marine, tornado, rent, accident, casualty,
3-11 liability, health, elevator, disability, plate glass, burglary,
3-12 bonding, title, surety, or fidelity insurance company, legally
3-13 authorized to do business in this State is hereby prohibited from
3-14 authorizing or allowing any person, agent, firm or corporation that
3-15 is a nonresident of the State of Texas to issue, or cause to be
3-16 issued, to sign or countersign, or to deliver, or cause to be
3-17 delivered, any policy or policies of insurance on property, person
3-18 or persons located in this State, except through regularly licensed
3-19 local recording agents of such companies in Texas. By the term
3-20 "Local Recording Agent" is meant a person or firm engaged in
3-21 soliciting and writing insurance, being authorized by an insurance
3-22 company or insurance carrier including Fidelity and Surety
3-23 Companies to solicit business and to write, sign, execute and
3-24 deliver policies of insurance and to bind companies on insurance
3-25 risks, and who maintains an office and a record of such business
3-26 and the transactions which are involved, who collects premiums on
3-27 such business and otherwise performs the customary duties of a
4-1 local recording agent representing an insurance carrier in its
4-2 relation with the public.
4-3 (b) This law shall not apply to property owned by the
4-4 railroad companies or other common carriers. Upon oath made in
4-5 writing by any person that he can not procure insurance on property
4-6 through such agents in Texas it shall be lawful for any insurance
4-7 company not having an agent in Texas to insure property of any
4-8 person upon application of said person, upon his filing said oath
4-9 with the county clerk of the county in which such person resides,
4-10 and with the Board of Insurance Commissioners.
4-11 (c) Countersigning may be effected manually or by stamp or
4-12 by any other method of printing, if authorized by the agent in
4-13 writing.
4-14 (d) This Article shall not apply to insurance companies
4-15 whose general plan of operation does not contemplate the use of
4-16 local recording agents, and such companies may issue policies
4-17 signed by any of their other resident licensed agents. However, an
4-18 officer or employee of an insurance company described by Subsection
4-19 (a) of this article who negotiates or solicits any type of property
4-20 or casualty insurance on behalf of that company must be
4-21 individually licensed under Article 21.14 of this code. For
4-22 purposes of this subsection, a person negotiates or solicits
4-23 insurance if that person makes any oral, written, or electronic
4-24 communication to another person regarding insurance coverage,
4-25 rates, benefits, or policy terms for the purpose of soliciting
4-26 insurance.
4-27 (e) This Article shall not apply to bid bonds issued by any
5-1 surety company authorized to do business in the State of Texas in
5-2 connection with any public or private contract.
5-3 SECTION 4. Section 20, Article 21.14, Insurance Code, is
5-4 amended to read as follows:
5-5 Sec. 20. LIFE, HEALTH AND ACCIDENT INSURANCE, INAPPLICABLE
5-6 TO; OTHER EXCEPTIONS. (a) The [No] provisions of this article do
5-7 not [shall] apply to the Life, Health and Accident Insurance
5-8 business or the Life, Health and Accident Department of the
5-9 companies engaged therein, nor shall it apply to any of the
5-10 following, namely:
5-11 (1) an [(a) Any] actual full-time home office salaried
5-12 employee of any insurance carrier licensed to do business in Texas,
5-13 other than an employee who solicits or negotiates the sale of
5-14 insurance;
5-15 (2) an [. (b) Any] actual attorney in fact and its
5-16 actual traveling salaried representative as to business transacted
5-17 through such attorney in fact or salaried representative of any
5-18 reciprocal exchange or interinsurance exchange admitted to do
5-19 business in Texas;
5-20 (3) an [. (c) Any] adjuster of losses, and/or
5-21 inspector of risks, for an insurance carrier licensed to do
5-22 business in Texas;
5-23 (4) a [. (d) Any] General Agent or State Agent or
5-24 Branch Manager representing an admitted and licensed insurance
5-25 company or carrier, or insurance companies or carriers, in a
5-26 supervisory capacity;
5-27 (5) the [. (e) The] actual attorney in fact for any
6-1 Lloyds; and
6-2 (6) the [. (f) All] incorporated or unincorporated
6-3 mutual insurance companies, their agents and representatives,
6-4 organized and/or operating under and by authority of Chapters 16
6-5 and 17 of this code.
6-6 (b) For purposes of Subsection (a)(1) of this section, an
6-7 employee negotiates or solicits insurance if that employee makes
6-8 any oral, written, or electronic communication to another person
6-9 regarding insurance coverage, rates, benefits, or policy terms for
6-10 the purpose of soliciting insurance.
6-11 (c) [(g)] Nothing in this entire article shall ever be
6-12 construed to apply to any member, agent, employee, or
6-13 representative of any county or farm mutual insurance company as
6-14 exempted under Chapters 16 and 17 of this code.
6-15 (d) [(h)] Nothing in this article shall apply to the group
6-16 motor vehicle insurance business or the group motor vehicle
6-17 department of the companies engaged in that business.
6-18 SECTION 5. This Act takes effect on September 1, 1997, and
6-19 applies only to the negotiation or solicitation of insurance on or
6-20 after January 1, 1998. The negotiation or solicitation of
6-21 insurance before January 1, 1998, is governed by the law as it
6-22 existed immediately before the effective date of this Act, and that
6-23 law is continued in effect for this purpose.
6-24 SECTION 6. The importance of this legislation and the
6-25 crowded condition of the calendars in both houses create an
6-26 emergency and an imperative public necessity that the
6-27 constitutional rule requiring bills to be read on three several
7-1 days in each house be suspended, and this rule is hereby suspended.