By Ellis S.B. No. 1143
75R5672 PB-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to requirements regarding certain production quotas for
1-3 insurance agents; providing administrative penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 21, Insurance Code, is amended by adding
1-6 Article 21.49-2E to read as follows:
1-7 Art. 21.49-2E. AGENT PRODUCTION QUOTA REQUIREMENTS
1-8 Sec. 1. DEFINITION. In this article, "underserved area"
1-9 means an insurance market area designated by the commissioner as
1-10 underserved under Section 1(a), Article 21.49-12, of this code, or
1-11 Section 1(a), Article 21.79, of this code.
1-12 Sec. 2. APPLICATION. This article applies to each insurer
1-13 who limits the authority of an agent of the insurer to bind the
1-14 insurer or limits the agent's commissions for lines of property or
1-15 casualty insurance based on the sale by that agent of life or
1-16 health insurance policies.
1-17 Sec. 3. PLAN; ADMINISTRATIVE PENALTY. (a) Each insurer
1-18 subject to this article shall file with the commissioner a plan
1-19 that demonstrates how the limits imposed by the insurer on its
1-20 agents do not adversely impact the availability of insurance
1-21 coverage within underserved areas.
1-22 (b) At a minimum, the plan must specify, separately for
1-23 agents writing coverage in underserved areas and agents writing
1-24 coverage in other areas, the number or premium volume of life or
2-1 health insurance policies required by the insurer to be written by
2-2 each agent and the required ratio of life and health insurance
2-3 policies to property and casualty insurance policies.
2-4 (c) An insurer who, without commissioner approval of the
2-5 insurer's plan, limits the authority of an agent of the insurer to
2-6 bind the insurer or limits the agent's commissions for lines of
2-7 property or casualty insurance based on the sale by that agent of
2-8 life or health insurance policies is subject to an administrative
2-9 penalty under Article 1.10E of this code.
2-10 Sec. 4. EVALUATION OF PLAN. (a) The commissioner shall
2-11 notify an insurer whether a plan is approved or disapproved not
2-12 later than the 30th day after the date on which the plan is filed
2-13 with the commissioner.
2-14 (b) The commissioner shall disapprove a plan if the
2-15 commissioner determines that the plan does not adequately
2-16 demonstrate compliance with this article.
2-17 (c) In evaluating a plan, the commissioner shall consider:
2-18 (1) whether the requirements for agents writing
2-19 coverage in underserved areas should be substantially less
2-20 stringent than the requirements for agents writing coverage in
2-21 other areas; and
2-22 (2) the insurer's efforts to:
2-23 (A) recruit and contract with agents who are
2-24 members of minority groups; and
2-25 (B) place agents in areas that have been
2-26 designated by the commissioner as underserved for homeowners
2-27 insurance or private passenger motor vehicle insurance.
3-1 Sec. 5. NOTICE TO AGENTS. Each insurer required to file a
3-2 plan under this article shall provide a copy of the plan to each of
3-3 its agents.
3-4 Sec. 6. RULES. The commissioner shall adopt rules as
3-5 necessary to enforce this article.
3-6 Sec. 7. ACCESS TO INFORMATION; CONFIDENTIALITY REQUIREMENTS.
3-7 (a) On request of the public insurance counsel, the department
3-8 shall make a plan filed under this article available to the office
3-9 of public insurance counsel. The information contained in a filed
3-10 plan is confidential and the department or office of public
3-11 insurance counsel may not make the information available to the
3-12 public.
3-13 (b) Notwithstanding Subsection (a) of this section, the
3-14 department or office of public insurance counsel may disclose to
3-15 the public a summary of the information contained in a plan that
3-16 does not directly or indirectly identify the insurer who filed the
3-17 plan.
3-18 SECTION 2. (a) Except as provided by Subsection (b) of this
3-19 section, this Act takes effect September 1, 1997.
3-20 (b) An insurer is not required to file a plan with the
3-21 commissioner of insurance as required under Article 21.49-2E,
3-22 Insurance Code, as added by this Act, until January 1, 1998.
3-23 Section 3(c), Article 21.49-2E, Insurance Code, as added by this
3-24 Act, takes effect March 1, 1998.
3-25 SECTION 3. The importance of this legislation and the
3-26 crowded condition of the calendars in both houses create an
3-27 emergency and an imperative public necessity that the
4-1 constitutional rule requiring bills to be read on three several
4-2 days in each house be suspended, and this rule is hereby suspended.