HBA-ATS H.B. 3274 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3274 By: Averitt Insurance 3/25/1999 Introduced BACKGROUND AND PURPOSE Under Texas law, insurance agents are classified as local recording agents or solicitors. A local recording agent (agent) is a person who engages in soliciting and writing insurance on behalf of an insurance company or insurance carrier and maintains an office. Agents are typically independent contractors. To obtain a contract from an insurer, an agent is often required to join an organization sponsored by the insurer. Usually, the agent and the sponsoring organization share office space. Employees of a local recording agent who perform clerical functions are not required to be licensed, but those employees that perform assigned duties must be licensed. Assigned duties, including binding insurance risks, may be performed only with the express prior approval of the local recording agent for whom an insurance service representative works. Sometimes these duties are not performed by the employees of the agent but by personnel from the sponsoring organization with whom the agent shares office space. H.B. 3274 redefines the statutory definition of "insurance service representative" to provide that an insurance service representative may perform assigned duties only with the express prior approval of the local recording agent who supervises the representative. In addition, this bill includes the condition that salaried individuals, rather than employees, not involved in solicitation or negotiation of insurance must be supervised while performing their clerical duties in the office of a local recording agent. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 2(a)(5), Article 21.14, Insurance Code, to redefine "insurance service representative" by providing that an insurance service representative may perform assigned duties only with the express prior approval of the local recording agent who supervises the representative. SECTION 2. Amends Section 20(i), Article 21.14, Insurance Code, to include the condition that salaried individuals, rather than employees, not involved in solicitation or negotiation of insurance must be supervised while performing their clerical duties in the office of a local recording agent. SECTION 3. Effective date: September 1, 1999. SECTION 4. Emergency clause. Effective date: upon passage.