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.