HBA-DMD C.S.S.B. 956 76(R) BILL ANALYSIS
Office of House Bill AnalysisC.S.S.B. 956
By: Madla
Insurance
5/14/1999
Committee Report (Substituted)
BACKGROUND AND PURPOSE
Currently, Article 21.15-7, Insurance Code, requires the commissioner of
insurance to review and evaluate the current agents' licensing statute and
make recommendations to the legislature to reduce the number and type of
agents' licenses, determine which statutory provisions should apply
uniformly to all insurance licenses, address new marketing methods, and to
address any other problems which may exist. C.S.S.B. 956 consolidates
agents' licenses and promotes uniformity in the regulation of agents.
RULEMAKING AUTHORITY
It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of insurance in
SECTIONS 1.01, 1.02, 1.06, 1.11, and 2.01 (Section 4, Article 21.01,
Insurance Code; Sections 1 and 3, Article 21.01-1, Insurance Code; Section
5A, Article 21.012, Insurance Code; Section 2, Article 21.07, Insurance
Code; and Section 4, Article 21.07-1, Insurance Code); that rulemaking
previously delegated to the commissioner of insurance is modified in
SECTION 4.04 (Section 5, Article 21.11, Insurance Code); and that
rulemaking previously delegated to the State Board of Insurance is
transferred to the commissioner of insurance in SECTION 1.02 (Section 1,
Article 21.01-1, Insurance Code) and SECTION 5.07 (Section 21, Article
21.07-3, Vernon's Texas Insurance Code) of this bill.
SECTION BY SECTION ANALYSIS
ARTICLE 1. GENERAL PROVISIONS APPLICABLE TO ALL INSURANCE AGENTS
SECTION 1.01. Amends Article 21.01, Insurance Code, as follows:
Article 21.01. New heading: PURPOSE; CONSOLIDATION OF LICENSES;
APPLICATION;
CERTIFICATE OF AUTHORITY OR LICENSE REQUIRED; RULEMAKING AUTHORITY
Sec. 1. PURPOSE. Sets forth legislative purpose.
Sec. 2. CERTIFICATE OF AUTHORITY OR LICENSE REQUIRED. Prohibits any person
from acting as an agent or otherwise, in soliciting or receiving
applications for insurance of any kind whatever in this state, or in any
manner to aid in the transaction of the business of any insurance company
incorporated in this state, or out of it, without first procuring a
license, in addition to a certificate of authority from the Texas
Department of Insurance (department), rather than the State Board of
Insurance (board).
Sec. 3. APPLICATION. Sets forth the licensed persons to whom this
subchapter applies, except as otherwise provided by this code. Provides
that except as otherwise provided by law, each reference in this code and
other laws of this state to a particular type of license authorizing an
agent to engage in the business of insurance in this state means a license
designation as made by amendment, enactment, or reenactment of or to
Subchapter A (Agents and Agents' Licenses), Chapter 21 (General
Provisions), of this code by the 76th Legislature, Regular Session, 1999,
or subsequent amendments to that subchapter. Provides that a reference in
this subchapter to a statutory provision applies to all reenactments,
revisions, or amendments of that provision.
Sec. 4. RULES. Authorizes the commissioner of insurance (commissioner) to
adopt rules as necessary to implement this subchapter and to meet the
minimum requirements of federal law and regulations.
SECTION 1.02. Amends Article 21.01-1, Insurance Code, as follows:
Article 21.01-1. New heading: AGENTS' QUALIFYING EXAMINATION; CONTINUING
EDUCATION REQUIREMENTS FOR AGENTS
Sec. 1. EXAMINATION ADMINISTRATION. (a) Authorizes the commissioner, rather
than the State Board of Insurance, to accept examinations administered by a
testing service as satisfying the examination requirements of persons
seeking license as agents, counselors, or adjusters under this code, rather
than persons seeking license as agents, solicitors, counselors, or
adjusters under this code. Requires the commissioner to hold a public
hearing in accordance with Chapter 2001 (Administrative Procedure),
Government Code, rather than in accordance with the provisions of Section
5, Article 6252-13a, V.T.C.S. (Administrative Procedure and Texas Register
Act), and to adopt rules and standards, rather than rules, regulations, and
standards, as may be deemed appropriate by the commissioner to implement
the authority granted in this article. Makes conforming changes.
(b) Makes a conforming change.
(c) Requires the department, rather than the State Board of Insurance, to
administer any required qualifying examination in accordance with this
article, rather than in accordance with the provisions of the respective
statutes governing the issuance of the license sought by the applicant.
Authorizes the commissioner to adopt rules relating to the scope, type, and
conduct of the written examinations and the times and places in this state
at which the examinations will be conducted. Authorizes the commissioner's
rules to designate textbooks, manuals, and other materials to be studied by
applicants in preparation for examinations conducted under this subsection.
Authorizes those textbooks, manuals, or other materials to consist of
material available to an applicant by purchase from the publisher or of
material prepared at the direction of the commissioner and distributed to
an applicant on request and on payment of the reasonable cost of the
material. Requires all examination questions to be prepared from the
contents of the textbooks, manuals, and other materials designated or
prepared by the commissioner under this subsection.
(d) Makes a nonsubstantive change.
(e) Makes no change.
Sec. 2. EXAMINATION OF LICENSE APPLICANT. (a) Provides that each applicant
for a license to act as an insurance agent in this state must submit to a
personal written examination that is prescribed by the department and must
pass the examination to the satisfaction of the department, except as
provided by Subsections (c) and (d). Requires the examination to determine
certain applicant competencies. Sets forth the areas in which the
examination is required to determine the applicant's competence.
(b) Requires the department to charge each applicant an examination fee in
an amount to be determined by the department as necessary for
administration of the examination. Provides that the fee must accompany
each application in order to take the examination. Provides that the fee is
nonrefundable other than for failure of an applicant to appear and take the
examination after the applicant has given at least 24 hours' notice of an
emergency situation to the department and received the department's
approval of refund of the fee.
(c) Requires the commissioner to prescribe a limited written licensing
examination for applicants for a limited license under Article 21.07-1 or
Article 21.14 of this code. Requires a limited examination to be
administered according to the provisions of this article and to determine
the applicant's competence and understanding of certain laws, principles,
and obligations.
(d) Prohibits the department from requiring certain persons to take an
examination under this article.
(e) Provides that a license to which the exemption authorized under
Subsection (d) of this section applies must be held by the applicant in an
individual capacity and is not transferable.
(f) Requires each examination administered under this article to be offered
in English and Spanish.
Sec. 3. CONTINUING EDUCATION REQUIREMENTS. (a) Provides that the department
has exclusive jurisdiction for all matters relating to the continuing
education of insurance agents who are licensed under this code.
(b) Requires each individual who holds a license issued by the department,
except as provided by Subsection (d) of this section, to complete
continuing education. Provides that all continuing education hours must be
completed before the expiration date of an individual's license. Requires
an individual who holds a life, accident, and health license, a life and
health insurance counselor license, or a property and casualty license to
complete 15 hours of continuing education annually. Prohibits an agent from
being required to complete more than 15 continuing education hours annually
as a result of holding more than one license for which continuing education
is required. Requires an individual who holds a limited life, accident, and
health license or a limited property and casualty license to complete five
hours of continuing education annually. Requires each individual who holds
a license issued by the department to complete 4 hours of continuing
education in ethics during each license renewal period. Provides that at
least 50 percent of all required continuing education hours must be
completed in a classroom setting or a classroom equivalent setting approved
by the department. Authorizes the department to grant reciprocity to
license holders who complete continuing education requirements in other
professions or in associations with professional designations in an
insurance-related field.
(c) Authorizes the department, on a timely written request of an agent, to
extend the time for an agent to comply with the continuing education
requirements of this section or to exempt an agent from some or all of the
requirements for a licensing period provided that the department finds that
the agent is unable to comply with the requirements because of illness,
medical disability, or another extenuating circumstance beyond the control
of the agent. Requires the commissioner, by rule, to prescribe the criteria
for an exemption or extension under this subsection.
(d) Provides that an individual who has continuously held a license issued
under this code to operate as an insurance agent for the 20 years preceding
September 1, 1999, is exempt from the continuing education requirements of
this section. Authorizes the commissioner, by rule, to provide for other
reasonable exemptions.
(e) Requires the department to certify continuing education programs for
agents. Authorizes only a program that satisfies the criteria established
by rule by the commissioner to receive certification. Requires the
certification criteria to be designed to ensure that continuing education
programs enhance the knowledge, understanding, and professional competence
of the license holder. Provides that a nonrefundable certification fee, in
an amount set by the commissioner as necessary for administering the
program, must accompany each application for certification of a continuing
education program. Requires the fee to be established by rule and to be
based on a graduated scale according to the number of hours required to
complete the program.
(f) Requires each continuing education course provider to register with the
department as a course provider. Requires the department to assess a
registration fee for each application for registration as a provider, set
by the commissioner in an amount necessary for the proper administration of
this section. Authorizes the commissioner to adopt rules establishing the
requirements for continuing education course providers. Authorizes the
department to negotiate agreements with independent contractors under which
the independent contractor certifies and registers continuing education
courses and providers. Authorizes the department to require those
independent contractors to correspond directly with providers with regard
to the administration of continuing education courses, and the contractors
are authorized to collect fees from the providers for administration of the
courses. Provides that the department retains the authority to establish
the scope and type of continuing education requirements for each type of
license.
(g) Authorizes the commissioner to appoint an advisory council to furnish
the commissioner with information and assistance in the conduct of the
continuing education program for agents licensed under this subchapter.
Provides that an advisory council, if appointed, must be composed of nine
members, four of whom must be public members. Provides that the public
members are entitled to reimbursement for their reasonable travel expenses
in attending meetings of the advisory council, subject to any applicable
limit in the General Appropriations Act. Sets forth eligibility
prohibitions for a public member.
SECTION 1.03. Redesignates Section 2, Article 21.01-2, Insurance Code, as
Section 1A, Article 21.01-2, Insurance Code, and amends Section 1A, Article
21.01-2, as follows:
Sec. 1A. New heading: EXPIRATION AND RENEWAL OF LICENSES. (a) Provides that
each agent license issued by the department expires on the fifth
anniversary of the date of issuance unless suspended or revoked by the
commissioner, except as provided by a staggered renewal system adopted
under Subsection (h) of this section. Authorizes a person to renew a
license, rather than an unexpired license, that has not expired or has not
been suspended or revoked by filing a properly completed renewal
application with the department.
(b) Provides that on the filing of a completed renewal application not
later than the expiration date of the license accompanied by the renewal
fee set by the commissioner, the original license continues in force until
the department issues the renewal license or the commissioner issues an
order revoking the license.
(c) Authorizes a person to renew a license by filing a renewal application
with the department and paying the department the required renewal fee and
an additional fee that is equal to one-half of the renewal fee, rather than
license fee, for the license, if a person's license has been expired for 90
days or less. Makes nonsubstantive changes.
(d) Prohibits a person from renewing a license, if a person's license has
been expired for more than 90 days but less than one year, but the person
is entitled to a new license without taking the applicable examination, if
the person submits a new application, the license fee, and an additional
fee equal to one-half of the license fee to the department.
(e) Prohibits a person from renewing a license, if a person's license has
been expired for one year or more, rather than 90 days. Redesignated from
Subsection (c).
(f) Authorizes the department to renew without reexamination an expired
license of a person who was licensed in this state, moved to another state,
and is currently licensed and has been in continual practice in the other
state for the period, rather than two years, preceding application. Makes
conforming and nonsubstantive changes. Redesignated from Subsection (c).
(g) Requires the department, at least 30 days before the expiration of a
person's license, to send written notice of the impending license
expiration to the person at the person's last known mailing address, rather
than last known address, according to the records of the department.
Redesignated from Subsection (d).
(h) Requires license fees, for the licensing period in which the license
expiration is changed, to be prorated, rather than prorated on a monthly
basis, so that each license holder is required to pay only that portion of
the license fee that is allocable to the period, rather than the number of
months, during which the license is valid. Redesignated from Subsection
(e).
(i) Provides that this section is not applicable to a license issued under
Article 21.07-7 (Reinsurance Intermediary Act), in addition to Article
21.07-6 (Third Party Administrators) of this code. Redesignated from
Subsection (f).
SECTION 1.04. Amends Article 21.02-2, Insurance Code, by adding Section
2A, as follows:
Sec. 2A. PROHIBITED ACTIVITIES. (a) Prohibits a person licensed under this
code who receives a commission or other consideration for services as an
insurance agent from receiving an additional fee for those services
provided to the same client except for a fee described by Article 21.35A
(Permissible Reimbursement) or 21.35B (Permissible Payments) of this code.
(b) Prohibits an insurer or licensed insurance agent engaged in the
business of insurance in this state from paying, directly or indirectly,
and from accepting, any commission or other valuable consideration to or
from any person for services performed by that person as an insurance agent
unless the person holds a license to act as an insurance agent as required
by the laws of this state. Provides that this subsection does not prevent
the payment or receipt of renewal or other deferred commissions to or by
any person solely because the person ceased to hold a license to act as an
insurance agent.
(c) Prohibits an insurance agent licensed under this code from paying,
allowing, or giving, or offering to pay, allowing, or giving, directly or
indirectly, to any person who is not a licensed insurance agent, any rebate
of premiums payable, commission, paid employment, or contract for service,
or any other valuable consideration or inducement, that is not specified in
the policy or contract of insurance for or on account of the solicitation
or negotiation of insurance contracts.
(d) Provides that, in addition to any other penalty imposed under this
code, a person who is determined by the department to have committed
conduct described by this subsection is barred from receiving a license as
an insurance agent before the fifth anniversary of the date of the
determination. Sets forth the persons to whom this subsection applies.
(e) Prohibits a person who has had an insurance license revoked in this
state or any other state from soliciting or otherwise transacting business
under Chapter 10 (Fraternal Benefit Societies) of this code, unless it is
determined by the department to be in the public interest, for good cause
shown, to allow the person to act in that capacity.
(f) Prohibits a person who has had an insurance license revoked in this
state or any other state from acting as an officer, director, member,
manager, or partner, or as a shareholder with a controlling interest, of an
entity that is licensed under this subchapter unless it is determined by
the department to be in the public interest, for good cause shown, to allow
the person to act in that capacity.
(g) Prohibits a property and casualty agent from knowingly granting,
writing, or permitting a greater amount of insurance against loss by fire
than the reasonable value of the subject of insurance.
(h) Sets forth that this section does not apply to a person who is licensed
under, or holds a certificate of authority issued under, Chapter 9 (Texas
Title Insurance Act) of this code.
SECTION 1.05. Redesignates Section 5, Article 21.01-2, Insurance Code, as
Section 3A, Article 21.01-2, Insurance Code, and amends Section 3A, Article
21.02-2, Insurance Code, as follows:
Sec. 3A. New heading: DENIAL OR REFUSAL OF LICENSE APPLICATION; SUSPENSION
OR REVOCATION OF LICENSES; DISCIPLINE OF LICENSE HOLDERS. (a) Authorizes,
rather than requires, in addition to any other remedy available under
Section 7 (May Order Sanctions), Article 1.10 (Duties of the Department),
of this code, the department to refuse to issue an original license,
revoke, suspend, or refuse to renew a license, place on probation a person
whose license has been suspended, assess an administrative penalty, or
reprimand a license holder for a violation of this code, another insurance
law of this state, or a rule of the commissioner, rather than commissioner
or the board.
(b) Makes no change.
(c) Sets forth certain actions of an applicant or license holder,
individually or through any officer, director, or shareholder which would
authorize the department to discipline a license holder or deny a license
application under this article.
(d) Prohibits an individual whose license application is denied or whose
license has been revoked under this article from applying for any license
as an insurance agent before the fifth anniversary of the effective date of
the denial or revocation; or if the applicant or license holder seeks
judicial review of the department's action, the date of the final court
order or decree affirming that action.
(e) Authorizes the commissioner to deny a timely application filed under
Subsection (d) of this section, if the applicant does not show good cause
why the denial or revocation of the previous license application should not
be considered a bar to the issuance of a new license. Provides that this
subsection does not apply to an applicant whose license application was
denied for failure to pass a required written examination or for failure to
submit a properly completed license application.
(f) Authorizes the department, instead of or in addition to taking
disciplinary action under this section, to order that a license holder who
is currently afflicted with a disability to be placed on disability
probation under the terms and conditions specified under Article 21.15-6
(Probation of Agent Based on Certain Disabilities) of this code and
department rules.
(g) Provides that Subsections (c) - (f) of this section do not apply to a
person who is licensed under, or holds a certificate of authority issued
under, Chapter 9 of this code. Deletes text requiring the commissioner to
prescribe procedures by which all decisions to deny, suspend, or revoke a
license, or to refuse to renew a license, are made by or are appealable to
the commissioner.
SECTION 1.06. Amends Article 21.01-2, Insurance Code, by adding Sections
4A, 5A, and 6A, as follows:
Sec. 4A. JUDICIAL REVIEW. Sets forth the conditions under which a license
applicant or a license holder is authorized to appeal as provided by
Article 1.04 (Appeal of Decision by Commissioner) of this code.
Sec. 5A. AUTOMATIC FINES. (a) Authorizes the commissioner to establish, by
rule, monetary fines for certain violations in order to expedite the
department's processing of certain violations of this code. Sets forth the
violations for which fines are authorized to be assessed.
(b) Prohibits this section from being construed to limit the department's
authority to take any other disciplinary action against a license holder as
provided under another provision of this code.
(c) Provides that if a person disputes an assessment of a fine under this
section, the matter is a contested case subject to Chapter 2001, Government
Code.
Sec. 6A. ENFORCEMENT OF SUBCHAPTER. Authorizes the attorney general, a
district or county attorney, or the department acting through the
commissioner to institute an injunction proceeding or any other proceeding
to enforce this subchapter and to enjoin any person, firm, corporation, or
bank from engaging or attempting to engage in the business of insurance in
violation of this code or any other insurance law of this state. Provides
that the provisions of this section are cumulative of the other penalties
or remedies provided by this article.
SECTION 1.07. Amends Article 21.04, Insurance Code, as follows:
Art. 21.04. New heading: LICENSE HOLDER DEEMED COMPANY'S AGENT.
SECTION 1.08. Amends Article 21.06, Insurance Code, as follows:
Art. 21.06. New heading: AUTHORITY TO APPOINT AGENTS. Requires each
domestic in addition to foreign insurance company, by resolution of its
board of directors, to designate an officer or agent, rather than some
officer or agent, who is empowered to appoint or employ its agents, rather
than its agents or solicitors, in this state, and such officer or agent is
required to promptly notify the department, rather than board, in writing
of the name, title, and address of each person so appointed or employed.
Provides that the authority of that designee to act on behalf of the
insurance company continues in force, unless revoked by the commissioner,
rather than board, for cause or canceled at the request of the insurance
company. Deletes text regarding the requirement of the board to issue a
certificate to a person, including a copy of a certificate of authority,
which authorizes a company to do business in this state. Deletes text
requiring the certificate to continue in force until the first day of
March.
SECTION 1.09. Amends Section 1, Article 21.07, Insurance Code, as follows:
Sec. 1. New heading: APPLICABILITY OF ARTICLE. (a) Prohibits any person,
rather than person, corporation or bank, from acting as an agent of any
insurance company, health maintenance organization, rather than certain
specified associates and companies, or other type of insurance carrier
licensed to do business in the State of Texas and which insurance carrier's
agents are required to be licensed under the provision of this subchapter,
rather than article on the date that this Act is required to become
effective, unless that person, rather than individual or entity, is
required to have first procured a license from the department as provided
by this subchapter, and requires no such insurance carrier to appoint any
person to act as its agent unless such person is required to have obtained
a license under the provisions of this subchapter, rather than article, and
prohibits any such person who obtains a license from engaging in business
as an agent until that person has been appointed to act as an agent by some
duly authorized insurance carrier designated by the provisions of this
code, rather than article, and authorized to do business in the State of
Texas. Deletes text authorizing any person, corporation, or bank desiring
to act as an agent of any insurance carrier licensed to do business in the
State of Texas and writing a health and accident insurance to obtain a
separate license as an agent to write health and accident insurance. Makes
conforming changes.
(b) Sets forth certain provisions to which this subchapter does not apply.
Deletes existing Subsection (b) which relates to conditions under which a
commission may be paid to any person by an insurer or licensed insurance
agent, and Subsection (c) which prohibits a person whose license is revoked
from soliciting or otherwise transacting business.
SECTION 1.10. Amends Section 1A, Article 21.07, Insurance Code, to define
"agent," "bank," "control," "corporation," "individual," "insurance
company," "partnership," "person," and "subagent." Deletes the existing
definition of "person."
SECTION 1.11. Amends Section 2, Article 21.07, Insurance Code, as follows:
Sec. 2. APPLICATION FOR LICENSE; TO WHOM LICENSE MAY BE ISSUED. (a)
Requires any person that desires to become an agent for an insurance
company or health maintenance organization, the agents of which are
required to be licensed under this subchapter, to submit to the department
an application for a license in the form required by the department.
Deletes existing text relating to corporation or bank application
requirements to become a type of insurance carrier licensed to do business
in the State of Texas.
(b) Requires each applicant for a license to act as an insurance agent in
this state to file with the commissioner a completed application on forms
developed by the department. Requires the commissioner to establish by rule
the requirements for a properly completed application.
(c) Prohibits the commissioner from granting a license as an insurance
agent to write any form of insurance unless the department finds that the
applicant is or intends to be actively engaged in the soliciting or writing
of insurance for the public generally and is to be actively engaged in the
business of insurance; and the application is not made to evade the laws
against rebating and discrimination, either for the applicant or for some
other person.
(d) Provides that this section does not prohibit an applicant insuring
property that the applicant owns or in which the applicant has an interest,
but it is the intent of this section to prohibit coercion of insurance and
to preserve to each individual the right to choose that individual's own
agent or insurance company, and to prohibit the licensing of a person to
engage in the insurance business principally to handle business that the
applicant controls only through ownership, mortgage or sale, family
relationship, or employment. Provides that an applicant for an original
license must have a bona fide intention to engage in business in which, in
any calendar year, at least 25 percent of the total volume of premiums is
derived from persons other than the applicant and from property other than
that on which the applicant controls the placing of insurance through
ownership, mortgage, sale, family relationship, or employment.
(e) Prohibits the department from denying a license application solely on
the ground that the applicant will act only part-time as an agent.
(f) Requires the department to issue a license to an individual, rather
than to an individual or to a general partnership, to engage in the
business of on insurance if the individual meets certain enumerated
qualifications. Deletes the information needed to be found on the
application for licensure as an insurance agent. Makes a conforming change.
Redesignated from Subsection (c).
(g) Requires an individual agent licensed under Section 2 (Acting for
Unauthorized Companies Prohibited), Article 21.07-1, of this code or
Section 2 (Definitions; Certain Orders, Societies or Associations Not
Affected), Article 21.14, of this code, who is operating as an individual
agent and who is not covered by an errors and omissions insurance policy of
a general agency or corporation to certify to the department that the agent
will maintain the ability to pay any amount that the individual agent might
become legally obligated to pay due to any claim made against the agent by
a customer and caused by a negligent act, error, or omission of the
individual agent or any person for whose acts the individual agent is
legally liable in the conduct of business under this code. Provides that
the insurance or bond requirement adopted under this subsection does not
apply to an employee of a licensed insurer, but does apply to a person who
operates as an independent contractor. Defines "customer." Specifies the
means by which the individual agent is required to maintain proof of the
ability to pay the amount.
(h) Provides that a binding commitment to issue a policy or bond described
by Subsection (g) of this section is sufficient in connection with an
application for a license. Provides that an individual agent licensed under
both Articles 21.07-1 and 21.14 of this code is only required to maintain
one errors and omissions policy or bond in order to comply with Subsection
(g) of this section.
(i) Authorizes an individual engaging in the insurance business as a safe
proprietor under the authority of a license issued under this subchapter to
incorporate, but provides that the corporation does not have greater
license authority than that granted to the license holder in the holder's
individual capacity.
(j) Requires each individual license holder to notify the department on a
monthly basis of a change of the license holder's mailing address, a
conviction of the license holder of a felony, or an administrative action
taken against the license holder by the insurance regulator of another
state. Deletes the provision that a partner in the partnership must be
licensed individually as an agent.
(k) Includes a partnership among the entities that are required to receive
a license from the department if the department finds that:
(1) the corporation or partnership is organized under the laws of this
state or any other state or territory of the United States, admitted to
conduct business in this state by the secretary of state, if so required,
and authorized by its articles of incorporation or its partnership
agreement to act as an insurance agent (Deletes qualification needed to be
demonstrated by a corporation if it is to receive a license from the
department);
(2) the corporation or partnership meets the definition of that entity
adopted under Section 1A of this article (Deletes qualifications needed to
be demonstrated by a corporation and its officers, directors, and
shareholders if the corporation is to receive a license from the
department);
(3) at least one officer of the corporation or one active partner of the
partnership and all other persons performing any acts of an agent on behalf
of the corporation or partnership in this state are individually licensed
by the department separately from the corporation or partnership;
(4) a corporation or partnership is required to maintain, rather than
prove, its ability to pay any sums up to $25,000 which it might become
legally obligated to pay in an errors and omissions policy against errors
and omissions in at least $250,000, rather than 100,000, with a deductible
of not more than 10 percent of the face amount of the policy, rather than
no more than a $10,000 deductible, issued by a licensed insurance company
or if a policy cannot be obtained from a company licensed in this state,
through a properly obtained surplus lines policy, rather than by a company
not licensed in this state with the commissioner's approval. (Deletes the
deposit of cash or securities by a corporation or partnership as one of the
ways in which a corporation or partnership could prove that it maintains an
ability to pay any sums up to $25,000 which it might become legally
obligated to pay);
(5) the corporation or partnership intends to be actively engaged in the
business of insurance as required under Subsection (c) of this section;
(6) each location from which the corporation or partnership will conduct
its business in this state under authority of an insurance license is
separately registered with the department;
(7) the corporation or partnership has submitted the application,
appropriate fees, and any other information required by the department; and
(8) an officer, director, member, manager, partner, or any other person who
has the right or ability to control the license holder has not had a
license suspended or revoked or been the subject of any other disciplinary
action by the insurance regulator of this or any other state, or has not
committed an act for which a license may be denied under Article 21.01-2
(General Provisions Applicable to Certain License Holders).
Makes conforming and nonsubstantive changes. Redesignated from Subsection
(d).
(l) Prohibits in this section, rather than herein, from being construed to
permit any unlicensed employee or agent of any corporation or partnership
to perform any act of an agent under this subchapter, rather than this
article, without obtaining a license.
(m) Requires each corporation or partnership licensed as an agent to file,
under oath, on a form developed by the department, biographical information
for each, rather than a list of the names and addresses of all, of its
executive officers and directors, rather than officers, directors, and
shareholders, or unlicensed partners who administer the entity's operations
in this state, and shareholders who are in control of the corporation, or
any other partners who have the right or ability to control the
partnership. Provides that if any corporation or partnership is owned, in
whole or in part, by another entity, a biographical form is required for
each individual who is in control of the parent entity. Deletes the
requirement that a list of the names and addresses of all shareholders must
be provided by the corporation with its application for renewal license.
Deletes the provision that requires the cancellation of a corporation's
agent's license if it does not maintain the necessary qualifications.
Deletes the provision that should any person acquire shares in a
corporation holding a license an agent by devise or descent fails to
dispose of the shares in a timely manner to a licensed agent, then they
must be purchased by the corporation for their book value. Deletes the
provision that requires the cancellation of a corporation's license should
it fail or refuse to so purchase such shares. Deletes the provision that
grants a corporation the power to redeem the shares of any shareholder.
(n) Specifies the information of which each corporation or partnership is
required to notify the department on a monthly basis.
(o) Requires the department to issue a license to a bank in the manner
provided for the licensing of a corporation.
(p) Prohibits a person from acquiring any ownership interest in an entity
licensed as an agent if the person is, or after the acquisition would be,
directly or indirectly, in control of the license holder, or otherwise
acquire control of or exercise any control over the license holder, unless
the person has filed certain information with the department under oath.
(q) Authorizes the commissioner, if a person required to file a statement
under Subsection (p) of this section is a partnership, limited partnership,
syndicate, or other group, to require that the information required by that
subsection for an individual be provided regarding each partner of the
partnership or limited partnership, each member of the syndicate or group,
and each person who controls the partner or member. Authorizes the
commissioner, if the partner, member, or person is a corporation or the
person required to file the statement under Subsection (p) of this section
is a corporation, to require that the information required by that
subsection be provided regarding the corporation, each individual who is an
executive officer or director of the corporation, and each person who is
directly or indirectly the beneficial owner of more than 10 percent of the
outstanding voting securities of the corporation.
(r) Authorizes the department to disapprove an acquisition of control if,
after notice and opportunity for hearing, the commissioner determines that
immediately on the change of control the license holder would not be able
to satisfy the requirements for the issuance of the license to solicit the
line or lines of insurance for which it is presently licensed; the
competence, trustworthiness, experience, and integrity of the persons who
would control the operation of the license holder are such that it would
not be in the interest of the insurance consumers of this state to permit
the acquisition of control; or the acquisition of control would violate
this code or another law of this state, another state, or the United
States.
(s) Provides that a change in control is considered approved if the
department has not proposed to deny the requested change before the 91st
day after the date of receipt by the department of all information
required by this section, notwithstanding Subsection (g).
(t) Requires the commissioner to be the corporation's or partnership's
attorney for service of process on whom all lawful process, notice, or
demand may be served in any legal proceeding against the corporation or
partnership if the licensed corporation or partnership fails to appoint or
maintain an attorney for service in this state; an attorney for service
cannot with reasonable diligence be found; or the license of a corporation
or partnership is revoked.
(u) Requires the department to deny, revoke, or suspend the license of a
corporation or partnership to act as an agent as provided by Article
21.01-2 of this code, if the corporation or partnership that holds an
agent's license does not maintain the qualifications necessary for issuance
of the license.
(v) Requires a person licensed under this subchapter to maintain all
insurance records, including all records relating to customer complaints,
separate from the records of any other business in which the person may be
engaged. Deletes the requirement that each corporation must notify the
department upon any change in its officers, directors, or shareholders.
Deletes the prohibition against a corporation owning any interest in
another licensed corporation. Deletes the requirement that each owner of
an interest in a licensed corporation be a natural person who holds a valid
license. Deletes qualifications needed to be demonstrated by a bank if it
is to receive a license from the department. Deletes definition of
"customer." Deletes required criteria of a bank's ability to pay claims
against it up to $25,000 by certain enumerated standards.
SECTION 1.12. Amends Article 21.07, Insurance Code, by adding Section 3A,
as follows:
Sec. 3A. TEMPORARY LICENSE. (a) Authorizes the department to issue a
temporary agent's license to an applicant for a license under Section 2
(Application for License; To Whom License May Be Issued) of this article
who is being considered for appointment as an agent by another license
holder, an insurer, or a health maintenance organization. Provides that an
applicant for a temporary license is not required to pass a written
examination and the temporary license is valid for the 90 days after the
date of issuance. Requires the department to issue a temporary license
immediately on receipt by the department of a property completed
application executed by the person in the form required by Section 2 of
this article, accompanied by the nonrefundable filing fee set by the
department and a certificate signed by an officer or properly authorized
representative of the agent, insurer, or health maintenance organization
that includes certain statements.
(b) Authorizes the agent, insurer, or health maintenance organization to
assume that the temporary license will be issued in due course and the
applicant is authorized to proceed to act as an agent, if the temporary
license is not received from the department before the eighth day after the
date on which the application, certificate, and nonrefundable fee are
delivered or mailed to the department and the agent, insurer, or health
maintenance organization has not been notified that the application is
denied.
(c) Prohibits a temporary license from being renewed or issued more than
once in a consecutive six-month period to the same applicant.
(d) Prohibits a temporary license from being granted to a person who does
not intend to apply for a license to sell insurance or membership to the
public generally.
(e) Prohibits a temporary license from being used to obtain commissions
from sales made to persons who have family, employment, or business
relationships with the temporary license holder. Prohibits an agent,
insurer, or health maintenance organization from knowingly paying, directly
or indirectly, to the holder of a temporary license under this section, and
a temporary license holder is prohibited from receiving or accepting, a
commission on the sale of certain contracts of insurance or memberships.
(f) Prohibits a person who has been issued a temporary license under this
section and is acting under the authority of the temporary license from
engaging in any insurance solicitation, sale, or other agency transaction
that results in or is intended to result in the replacement of any existing
individual life insurance policy form or annuity contract that is in force,
or receiving, directly or indirectly, any commission or other compensation
that may or does result from such a solicitation, sale, or other agency
transaction. Prohibits a person who holds a permanent license from
circumventing or attempting to circumvent the intent of this subsection by
acting for or with a person holding a temporary license. Defines
"replacement."
(g) Authorizes the department to cancel, suspend, or revoke the temporary
appointment powers of an agent, insurer, or health maintenance organization
if, after notice and opportunity for hearing, the commissioner finds that
agent, insurer, or health maintenance organization has abused the temporary
appointment powers. Provides that an appeal from the department's decision
is subject to Article 1.04 of this code. Sets forth, when considering
whether abuse has occurred, what the department is authorized to consider.
(h) Requires the agent, insurer, or health maintenance organization to
administer at least 40 hours of training to each applicant for a temporary
license no later than 14 days after the application, certificate, and
nonrefundable fee are delivered or mailed to the department. Provides that
at least 10 hours must be taught in a classroom setting, including an
accredited college, university, junior college, or community college, a
business school, or a private institute or classes sponsored by the agent,
insurer, or health maintenance organization and especially established for
this purpose. Sets forth the knowledge that the training program must
provide to an applicant.
(i) Authorizes the commissioner to require an affected agent, insurer, or
health maintenance organization to file with the department a description
of the agent's, insurer's, or health maintenance organization's training
program and to require the agent, insurer, or health maintenance
organization to obtain the approval of the department before continuing to
use the training program, if the commissioner finds under Subsection (g) of
this section that an abuse of temporary appointment powers has occurred.
(j) Requires each agent, insurer, or maintenance organization to ensure
that, during any two consecutive calendar quarters, at least 70 percent of
the agent's, insurer's, or health maintenance organization's applicants for
temporary licenses sit for the required licensing examination. Provides
that at least 50 percent of the applicants taking the examination must pass
during that period.
(k) Prohibits an agent, insurer, or health maintenance organization from
making more than 250 appointments of temporary license holders during a
calendar year.
SECTION 1.13. Amends Section 6, Article 21.07, Insurance Code, as follows:
Sec. 6. New heading: FILING OF ADDITIONAL APPOINTMENTS. (a) Authorizes a
licensed agent, except as specifically prohibited by another provision of
this code, to represent and act as an agent for more than one insurance
carrier at any time while the agent's license is in force, if the agent so
desires. Requires any such agent and the insurance carrier involved to file
with the department, rather than must give notice to the State Board of
Insurance of, any additional appointment, rather than any additional
appointment or appointments, authorizing an agent to act a agent for an
additional insurance carrier or carriers no later than 30 days after the
effective date of the appointment. Provides that the filing must include
certain enumerated information. Makes conforming and nonsubstantive
changes.
(b) Provides that an appointment made under this article to authorize an
agent to act as an agent for an insurance carrier continues in effect
without the necessity of renewal until it is terminated or, rather than
and, withdrawn by the insurance carrier or agent. Requires the insurance
carrier to follow the procedures established under Section 6B of this
article, if the agent is terminated for cause. Provides that each renewal
license issued to the agent authorizes the agent to represent and act for
the insurance carriers for which the agent holds an appointment until the
appointment is terminated or withdrawn, and that agent is considered to be
the agent of the appointing insurance carriers for the purposes of this
code. Makes conforming and nonsubstantive changes.
(c) Authorizes an agent appointed under this section to act on behalf of
the appointing carrier before the department receives a filing made under
this section.
(d) Provides that a person acting as a sub-agent is not required to be
separately appointed by each insurance carrier that has appointed the
licensed person who has designated the sub-agent in writing to the
department. Requires termination of the sub-agent by the licensed person to
be reported promptly to the department and terminates the sub-agent's
authority to act for the licensed person and that person's insurance
carriers.
SECTION 1.14. Amends Article 21.07, Insurance Code, by adding Sections 6B,
6C, 6D, and 6E, as follows:
Sec. 6B. INSURANCE CARRIER TO NOTIFY DEPARTMENT OF TERMINATION OF CONTRACT;
COMMUNICATION PRIVILEGED. (a) Requires each insurance carrier, on
termination of the appointment of an agent for cause, to immediately file a
statement of the facts relating to the termination of the appointment and
the date and cause of the termination with the department. Requires the
department, upon receiving the statement, to record the termination of the
appointment of that agent to represent the insurance carrier in this state.
(b) Provides that a document, record, statement, or other information
required to be made or disclosed to the department under this section is
privileged and confidential communication and is not admissible in evidence
in any court action or proceeding except under a subpoena issued by a court
of record.
(c) Provides that an insurance carrier, an employee or agent of the
carrier, or any other person, acting without malice, is not liable for
providing the information required to be disclosed under this section.
Sec. 6C. FEES; USE OF FUNDS. (a) Requires the department to collect from
each agent of an insurance carrier writing insurance in this state under
this code, a nonrefundable license fee and a nonrefundable appointment fee
for each appointment by an insurance carrier. Requires these fees, together
with examination fee, license fees, and license renewal fees, to be
deposited to the credit of the department operating fund.
(b) Authorizes the department to use any portion of the fees collected to
enforce this subchapter; to employ persons as it considers necessary to
investigate and make reports regarding alleged violations of this code and
misconduct on the part of agents; and to pay the salaries and expenses of
those persons and office employees and other expenses necessary to enforce
this subchapter from the fees collected. Authorizes a person employed by
the department under this section to administer the oath and to examine
under oath any person considered necessary in gathering information and
evidence and to have that information and evidence reduced to writing if
considered necessary, and all such expenses are required to be paid from
the fees.
(c) Requires the department to set the fees in amounts reasonable and
necessary to implement this subchapter.
Sec. 6D. DUPLICATE LICENSE FEE. Requires the department to collect in
advance from an agent requesting a duplicate license, a fee in an amount
set by the department. Requires the fee collected under this section to be
deposited to the credit of the department operating fund.
Sec. 6E. REQUIREMENT TO APPOINT SUB-AGENT. Requires a general agent to
submit to the department in writing, in the form prescribed by the
department, notice of the subagent's appointment, if a general life,
accident, and health agent or general property and casualty agent who has
been appointed by an insurance carrier that has a permit to do business in
this state desires to appoint a sub-agent in the operation of an insurance
business. Provides that the notice must be accompanied by a nonrefundable
fee in an amount determined by the commissioner.
ARTICLE 2. LIFE, ACCIDENT, AND HEALTH LICENSES
SECTION 2.01. Amends Subchapter A, Chapter 21, Insurance Code, by adding
Article 21.07-1, as follows:
Art. 21.07-1. TEXAS LIFE, ACCIDENT, AND HEALTH AGENTS LICENSE ACT
Sec. 1. SHORT TITLE; APPLICATION. Authorizes this article to be cited as
the Texas Life, Accident, and Health Agents License Act. Provides that each
agent of an insurance company authorized to provide life, accident, and
health insurance coverage in this state is subject to this article. Sets
forth persons to whom this article applies.
Sec. 2. GENERAL LIFE, ACCIDENT, AND HEALTH LICENSE; LICENSE REQUIRED. (a)
Sets forth certain persons who are required to have a general life,
accident, and health insurance license.
(b) Defines "combination company." Requires each person who acts as a
combination life insurance agent for a combination company to have a
general life, accident, and health license. Authorizes a combination
company and a combination life insurance agent to also write ordinary life
insurance contracts.
(c) Provides that except as otherwise provided by this subsection, a
general life, accident, and health license is required for an agent writing
life, accident, and health insurance for a fraternal benefit society under
Chapter 10 of this code. Provides that a license is not required for an
agent, regularly salaried officer, employee, representative, or member of a
fraternal benefit society who devotes less than 50 percent of the person's
time to the solicitation or procurement of insurance contracts for the
society. Provides that a person who, in the preceding calendar year, has
solicited or procured certain amounts on certain insurance contracts on
behalf of a fraternal benefit society is presumed to have devoted 50
percent or more of the person's time to the solicitation or procurement of
insurance contracts.
Sec. 3. AUTHORITY TO WRITE ADDITIONAL PRODUCT LINES. Authorizes a person
who holds a general life, accident, and health license issued under the
requirements of this subchapter to write additional types of insurance
contracts as provided under Section 4 of this article or under a specialty
license program established by the department without obtaining an
additional license.
Sec. 4. LIMITED LIFE, ACCIDENT, AND HEALTH LICENSE. (a) Defines "job
protection insurance."
(b) Sets forth certain agents to whom this section applies.
(c) Provides that a person to whom this section applies must hold a limited
life, health, and accident license under this section. Authorizes the
commissioner to adopt rules as necessary to implement this section.
(d) Sets forth, notwithstanding this section or any other law, prohibited
actions of a funeral prearrangement life insurance agent.
(e) Authorizes a person who holds a limited life, accident, and health
license issued under this section to write only the types of insurance
products described by this section.
(f) Provides that an applicant for a limited life, accident, and health
license is eligible for a temporary license under Section 3A, Article 21.07
of this code.
Sec. 5. FUNERAL PREARRANGEMENT LIFE INSURANCE AGENT. (a) Defines "funeral
prearrangement life insurance agent."
(b) Requires the commissioner to issue a license to act as a funeral
prearrangement life insurance agent to an individual after receiving
certification from an insurance company authorized to write life insurance
and annuities in this state that the applicant has completed a course of
study and instruction on life insurance and fixed annuities for applicants
offered by the insurance company and passed without aid a written
examination administered by the insurance company. Provides that the course
of study and instruction must be at least a five-hour course and must
include instruction on the policies to be sold and the laws relating to
funeral prearrangement.
(c) Requires the commissioner to authorize an insurance company to
administer a funeral prearrangement life insurance agent examination as
provided by Subsection (b) of this section after approval by the
commissioner of a complete outline and explanation of the course of study
and instruction and the nature and manner of conducting the examination for
applicants. Requires the commissioner to prescribe a uniform examination
for applicants that fairly addresses the information contained in the
approved course of study and instruction.
(d) Authorizes the commissioner to investigate as necessary the manner of
instruction and the examination administered by an insurance company under
this section. Authorizes the commissioner to withdraw from an insurance
company the authority under this section to offer instruction and
administer an examination.
(e) Specifies prohibitions for a funeral prearrangement life insurance
agent licensed under this section.
(f) Provides that a license issued under this section to act as an agent
for an insurance company is canceled when the license holder ceases to act
as an agent for an insurance company. Requires the insurance company or
agent, no later than 15 days after the license holder ceases to act as an
agent for an insurance company, to send written notification to the
department.
(g) Provides that the provisions of Subchapter A of this chapter that apply
to a limited license apply to a license issued under this section, except
as specifically provided by this section.
Sec. 6. LIFE INSURANCE NOT EXCEEDING $15,000. (a) Requires the commission
to issue a license to act as an agent to an individual who writes only life
insurance not to exceed $15,000 on any one life after receiving
certification from a stipulated premium insurance company, a statewide
mutual assessment company, a local mutual aid association, or a local
mutual burial association, that the applicant has completed a course of
study and instruction on life insurance and fixed annuities for applicants
offered by the insurer and passed without aid a written examination
administered by the insurer. Provides that the course of study must be at
least a five-hour course and must include instruction on the policies to be
sold and the law relating to the regulation of insurance in this state.
(b) Requires the commissioner to authorize an insurer described by
Subsection (a) of this section to administer an agent examination as
provided by Subsection (a) of this section after approval by the
commissioner of a complete outline and explanation of the course of study
and instruction and the nature and manner of conducting the examination for
applicants. Requires the commissioner to prescribe a uniform examination
for applicants that fairly addresses the information contained in the
approved course of study and instruction.
(c) Authorizes the commissioner to investigate as necessary the manner of
instruction and the examination administered by an insurer under this
section. Authorizes the commissioner to withdraw from an insurer the
authority under this section to offer instruction and administer an
examination.
(d) Prohibits an insurance agent licensed under this section from writing
any coverage or combination of coverages with an initial guaranteed death
benefit that exceeds $15,000 on any life.
(e) Provides that the provisions of Subchapter A of this chapter that apply
to a limited license apply to a limited license issued under this section,
except as specifically provided by this section.
ARTICLE 3. PROPERTY AND CASUALTY LICENSES
SECTION 3.01. Amends Article 21.14, Insurance Code, as follows:
Art. 21.14. New heading: TEXAS PROPERTY AND CASUALTY AGENTS LICENSE ACT
Sec. 1. SHORT TITLE; APPLICATION. (a) Authorizes this article to be cited
as the Texas Property and Casualty Agents License Act.
(b) Provides that each agent of an insurance company authorized to provide
property casualty insurance coverage in this state is subject to this
article. Provides that this article applies to each person who performs
that acts of an agent, as defined by Article 21.02 of this code, whether
through oral, written, or electronic communications or otherwise, by the
solicitation of, negotiation for, procurement of, or collection of premiums
on an insurance contract offered by any type of insurance carrier
authorized to sell certain property and casualty insurance products in this
state.
Sec. 2. GENERAL PROPERTY AND CASUALTY LICENSE; LICENSE REQUIRED. Sets forth
the persons acting in certain manners who are required to have a general
property and casualty license.
Sec. 3. AUTHORITY TO WRITE ADDITIONAL PRODUCT LINES. Authorizes a person
who holds a general property and casualty license issued under this chapter
to write additional types of insurance contracts as provided under Section
6 of this article or under a specialty license program established by the
department.
Sec. 4. AUTHORITY TO WRITE ACCIDENT AND HEALTH INSURANCE. Authorizes a
person who holds a general property and casualty license issued under this
subchapter to write health and accident insurance for a property and
casualty insurer authorized to sell those insurance products in this state
without holding a license issued under Article 21.07-1 of this code.
Sec. 5. EMERGENCY LICENSE WITHOUT EXAMINATION. Authorizes the department,
in the event of the death or disability of a property and casualty agent or
if a property and casualty agent is found to be insolvent and unable to pay
for premiums as they become due to an insurer, to issue to an applicant for
a property and casualty license an emergency property and casualty license
without examination, if it is established to the satisfaction of the
department that the emergency license is necessary for the preservation of
the agency assets of a deceased, disabled, or insolvent property and
casualty agent. Provides that an emergency license is valid for 90 days in
any 12 consecutive months and is authorized to be renewed by the department
for an additional 90 days during the 12-month period if the other
requirements of this subchapter are met.
Sec. 6. LIMITED PROPERTY AND CASUALTY LICENSE. (a) Sets forth the persons
for whom a limited property and casualty license is required,
notwithstanding any other law.
(b) Provides that Subsection (a) of this section applies to a production
credit association or bank for a cooperative, as provided under the farm
credit system under 12 U.S.C. 2001 et seq., as amended.
(c) Authorizes a person who holds a limited property and casualty license
issued under this subchapter to write only the types of insurance products
designated on the license by the department.
Sec. 7. FULL-TIME HOME OFFICE EMPLOYEES: MANDATORY REGISTRATION, CONTINUING
EDUCATION REQUIREMENTS, AND NOTIFICATION TO CONSUMERS; DISCIPLINARY
ACTIONS. (a) Requires each actual full-time home office salaried employee
of an insurance carrier licensed to do business in this state who solicits
or receives an application for the sale of insurance through oral, written,
or electronic communication to register with the commissioner.
(b) Requires an insurance carrier licensed to do business in this state
whose general plan of operation includes the use of employees described by
Subsection (a) of this section to certify to the commissioner that each of
those employees receives at least 15 hours of continuing education
annually. Requires each continuing education course provided by the
insurance carrier to be submitted to the department for approval as
provided by Section 3, Article 21.01-1, of this code. Requires a person
registered under this section to comply with the continuing education
requirements adopted under Section 3, Article 21.01-1, of this code, as if
the person were a licensed agent. Sets forth the areas of study that the
continuing education must be designed to give the employee.
(c) Requires the registration of an actual full-time home office salaried
employee to be suspended and the employer insurance carrier is authorized
to be disciplined for any act for which an agent may be disciplined under
Article 21.01-2 of this code.
(d) Requires each registrant under this section to disclose the fact of the
registration when making an oral, written, or electronic communication to
solicit or receive an application for the sale of insurance.
(e) Requires each person who registers under this section to submit a
nonrefundable registration fee in an amount determined by the department.
Sec. 8. INSURANCE SERVICE REPRESENTATIVE LICENSE. (a) Provides that an
insurance service representative license is required for each person who is
employed on a salaried basis to perform assigned duties only within the
office of a property and casualty agent. Authorizes those duties to include
the issuance of insurance binders only with the express approval of the
property and casualty agent who supervises the insurance service
representative.
(b) Provides that the provisions of Subchapter A of this chapter that apply
to a general license apply to a license issued under this section, except
that proof of financial responsibility is not required of a person licensed
only as an insurance service representative.
Sec. 9. COUNTY MUTUAL AGENT LICENSE. (a) Requires the commission to issue a
license to act as an agent for a county mutual insurance company under
Chapter 17 (County Mutual Insurance Companies) of this code to an
individual after receiving certification from the insurance company that
the applicant has completed a course of study and instruction on motor
vehicle insurance and insurance covering dwellings for applicants offered
by the insurance company and passed without aid a written examination
administered by the insurance company. Provides that the course of study
must be at least a five-hour course and must include instruction on the
policies to be sold and the law relating to the regulation of insurance in
this state.
(b) Requires the commissioner to authorize a county mutual insurance
company to administer an agent examination as provided by Subsection (a) of
this section after approval by the commissioner of a complete outline and
explanation of the course of study and instruction and the nature and
manner of conducting the examination for applicants. Requires the
commissioner to prescribe a uniform examination for applicants that fairly
addresses the information contained in the approved course of study and
instruction.
(c) Authorizes the commissioner to investigate as necessary the manner of
instruction and the examination administered by an insurance company under
this section. Authorizes the commissioner to withdraw from an insurance
company the authority under this section to offer instruction and
administer an examination.
(d) Provides that the provisions of Subchapter A of this chapter that apply
to a limited license apply to a limited license issued under this section,
except as specifically provided by this section.
Deletes heading to existing Article 21.14; deletes existing Sections 1 -
16, 18 - 27; and Sections 3a, 5a, 5b, 5c, 5d, 6a, and 20A, as follows:
Deletes original text relating to division of classes of agents into local
recording agents and solicitors; definitions, certain orders, societies and
associations not affected; application for license, to whom license may be
issued; persons other than licensed local recording agents who may share in
profits of local recording agent; requirements as to knowledge or
instruction for local recording agent's license; continuing education;
advisory council; jurisdiction for continuing education; examination;
death, disability or insolvency, emergency license without examination;
conduct of examinations, notice, manual of questions and answers;
expiration of license, renewal; fees payable before examination; renewal
fees; issuance of license; notice to commissioner of insurance of
appointment of local recording agent by insurance company; application for
solicitor's license; notice to insurance commissioners of solicitor's
appointment, authority to solicit; fire insurance in excess of value,
writing of forbidden; suspension or revocation of license; appeal; notice
to last address; life, health and accident insurance in applicable to other
exceptions; full-time home office solicitors, mandatory registration,
continuing education and notification to consumers, disciplinary actions;
fees, disposition of fees, appropriations; rebates or inducements
forbidden; repeal, laws not in conflict not attached, act cumulative;
violation of act; enforcement of article; administration of article; and
rules.
ARTICLE 4. NONRESIDENT AGENT LICENSE
SECTION 4.01. Amends Section 1, Article 21.11, Insurance Code, as follows:
Sec. 1. NONRESIDENT AGENT LICENSE. (a) Requires the department to license a
person who is not a resident of this state to act as a nonresident agent if
the department finds certain conditions exist. Deletes text requiring the
department, notwithstanding Sections 3(a) and (b), Article 21.14, of this
code, to license a person who is not a resident of this state to act as a
nonresident agent in accordance with Article 21.14 of this code, subject to
the limitations of this article.
(b) Authorizes the commissioner to enter into a reciprocal agreement with
the appropriate official of another state waiving the written examination
requirement for an applicant who is a resident if certain conditions are
met.
(c) Authorizes a person who resides in a town through which the state line
runs and whose residence is located in the town in the adjoining state to
be licensed as a resident agent if the person maintains the person's
business office in this state.
(d) Authorizes the department, rather than requires the department, to
waive any license requirement for an applicant with a valid license from
another state or jurisdiction that has license requirements substantially
equivalent to those of this state. Deletes text providing that an
applicant for issuance of a license must meet the requirements for issuance
of a license under Article 21.14 of this code.
(e) Requires the commissioner to be the attorney for service of process on
whom all lawful process, notice, or demand may be served in any legal
proceeding against a nonresident agent licensed to transact business in
this state if certain conditions exist.
Makes conforming and nonsubstantive changes.
SECTION 4.02. Amends Sections 2(a) and (b), Article 21.11, Insurance Code,
as follows:
(a) Provides that except as otherwise specifically provided by this code,
rather than this section, a license under this article to an individual who
is not a resident of this state grants the same rights and privileges
afforded to a resident license holder, rather than afforded under a license
issued under Article 21.14 of this code.
(b) Provides that a person who holds a license issued under this article
and who is in compliance with the continuing education requirements of the
person's state of residence is exempt from the continuing education
requirements imposed under Article 21.01-1 of this code. Deletes text
prohibiting a person who holds a license issued under this article from
maintaining an office in this state, soliciting insurance business in this
state, or employing solicitors or others to directly or indirectly solicit
insurance in this state.
SECTION 4.03. Amends Section 3, Article 21.11, Insurance Code, to delete
existing Subdivision (3) which provides that this article does not permit
any person or firm who holds a license issued under this article to engage
in any form of direct solicitation of insurance within this state. Provides
that this subchapter applies to licensing of a nonresident agent under this
article. Deletes existing text relating to the commissioner's requirement
to revoke certain nonresident agents' licenses, the license of the affected
local recording agent and the requirement to order that any insurance
transacted under an arrangement otherwise described by this section be
canceled. Makes conforming changes.
SECTION 4.04. Amends Sections 4 and 5, Article 21.11, Insurance Code, as
follows:
Sec. 4. HOME OFFICE EMPLOYEE. Provides that this article does not affect
the authority established under Section 7, rather than Section 20, Article
21.14 of this code of an actual full-time home office salaried employee of
an insurance carrier licensed to do business in this state.
Sec. 5. RULES. Authorizes the commissioner to adopt rules as necessary to
implement this article and to meet the minimum requirements of federal law
and regulations.
ARTICLE 5. CONFORMING AMENDMENTS
SECTION 5.01. Amends Section 1, Article 3.71, Insurance Code, to make
conforming and nonsubstantive changes.
SECTION 5.02. Amends Section 7, Article 3.75, Insurance Code, to make
conforming changes.
SECTION 5.03. Amends Subsection (c), Article 5.13-1, Insurance Code, to
make conforming and nonsubstantive changes.
SECTION 5.04. Amends Chapter 10, Insurance Code, by adding Article
10.37-3, as follows:
Art. 10.37-3. AGENT'S LICENSE REQUIRED. (a) Prohibits a person from
soliciting or procuring insurance contracts on behalf of a fraternal
benefit society unless the person meets certain conditions.
(b) Provides that the licensing and regulation of agents for fraternal
benefit societies under this chapter is subject to the requirements adopted
under Subchapter A, Chapter 21, of this code and other existing or
subsequent applicable laws governing the licensing of those agents.
Provides that a provision of such a law is applicable to a license
applicant and license holder under this chapter.
SECTION 5.05. Amends Article 16.24A, Insurance Code, as follows:
Art. 16.24A. New heading: LICENSING OF AGENTS. Makes conforming changes.
SECTION 5.06. Amends Section 9, Article 17.25, Insurance Code, to make
conforming changes.
SECTION 5.07. Amends Sections 4, 19, and 21, Article 21.07-3, Vernon's
Texas Insurance Code (Managing General Agents' Licensing Act), as follows:
Sec. 4. New heading: REDEMPTION OF SHARES. Deletes Subsections (a)-(d)
and (f)-(j), relating to the application for and issuance of a managing
general agent's license. Makes a conforming change.
Sec. 19. New heading: ADMINISTRATION AND REGULATION OF MANAGING GENERAL
AGENTS; VIOLATIONS OF ACT. Provides that the licensing and regulation of a
person acting as a managing general agent is subject to the laws and
requirements applicable to the licensing and regulation of other agents
under Subchapter A, Chapter 21, Insurance Code. Requires any person, firm,
or corporation who violates any of the provisions of this Act or any rule,
regulation, or order adopted under this Act or Subchapter A, Chapter 21,
Insurance Code, to be subject to Sections 2A, 3A, 4A, 5A, 6A, Article
21.01-2, Insurance Code. Makes conforming and nonsubstantive changes.
Sec. 21. ADMINISTRATION OF ACT. Vests in the commissioner, rather than the
board, the administration of this Act and authorizes the commissioner,
rather than the board, to establish and amend reasonable rules for the
administration of this Act.
SECTION 5.08. Amends Article 22.14, Insurance Code, to require all agents
of stipulated premium companies to be licensed in accordance with the
provisions of Subchapter A of Chapter 21 of this code, rather than Article
21.07 of Chapter 21 of this code.
SECTION 5.09. Amends Chapter 23, Insurance Code, by adding Article 23.23A,
as follows:
Art. 23.23A. REGULATION OF AGENTS. Provides that the licensing and
regulation of an agent authorized to solicit prepaid legal services
contracts for corporations complying with this chapter is subject to
Subchapter A, Chapter 21, of this code.
ARTICLE 6. SURPLUS LINES
SECTION 6.01. Amends Section 2(a) (1), Article 1.14-2, Insurance Code, to
modify the definition of "surplus lines agent."
SECTION 6.02. Amends Section 2(a)(2), Article 1.14-2, Insurance Code, to
require a surplus lines agent, as a condition of being licensed as a
surplus lines agent and as a condition of continuing to be licensed as a
surplus lines agent, to offer the proof of financial responsibility, rather
than financial solvency and demonstrated responsibility or proof of
adequate bond or surety, in respect of transactions with insured under
policies of surplus lines insurance as required by reasonable rules, rather
than reasonable rules and regulations, of the department. Makes conforming
and nonsubstantive changes.
SECTION 6.03. Amends Section 2(a)(3), Article 1.14-2, Insurance Code, to
require any surplus lines license granted under Article 21.07-3, Vernon's
Texas Insurance Code (Managing General Agents' Licensing Act), rather than
Acts, 1967, 60th Legislature, Chapter 727, but not licensed under Article
21.14 of this code to be limited to the acceptance of business originating
through a regularly licensed general property and casualty agent, rather
than recording agent, and does not, rather than shall not, authorize the
surplus lines agency to transact business directly with the applicant for
insurance. Makes conforming and nonsubstantive changes.
SECTION 6.04. Amends Section 4(b), Article 1.14-2, Insurance Code, to
authorize the department to issue a surplus lines license to an applicant
if the applicant submits a properly completed license application and an
application fee as determined by the department and the department
determines that the applicant is a certain individual; is a corporation or
partnership that has at least one certain officer or director or at least
one certain active partner; is currently licensed as a general property and
casualty agent under Article 21.14 of this code or as a managing general
agent under Article 21.07-3, Vernon's Texas Insurance Code; and provides
proof of financial responsibility as required under Section 2 of this
article; and is a nonresident insurance agent authorized under Article
21.11 of this code who holds a general property and casualty license from
the department and whose authority as a surplus lines agent is limited to
acting on behalf of a purchasing group operating in this state in the
placement of liability insurance for risks located in this state. Deletes
text authorizing the department to issue a surplus lines license to a
specified agent after the agent has remitted the application fee set by the
department, submitted a completed license application, and passed a
qualifying examination. Deletes text regarding certain conditions placed on
an agent. Makes conforming and nonsubstantive changes.
SECTION 6.05. Amends Section 4(c), Article 1.14-2, Insurance Code, to
provide that in addition to the requirements of this article, the
administration and regulation of a surplus lines agent's license is
governed by Subchapter A, Chapter 21, of this code, except that Article
21.07 of this code does not apply to a license issued under this article.
Deletes text providing that unless the State Board of Insurance adopts a
system for staggered renewal of licenses, each license issued is for a
two-year term.
SECTION 6.06. Amends Section 4(d), Article 1.14-2, Insurance Code, to
authorize the department to revoke or suspend the license or deny the
renewal of that license in accordance with Article 21.012 of this code, if
a license holder does not maintain the qualifications necessary to obtain
the license. Deletes text providing that by filing a completed application
and paying a nonrefundable renewal fee not to exceed $50, an unexpired
license is authorized to be renewed.
ARTICLE 7. REPEALER
SECTION 7.01. Repealers:
(1) Sections 4(f), (g), and (h), Article 1.14-2, Insurance Code (Requires
the commissioner to collect in advance from an agent who request a
duplicate license a fee not to exceed $20, required to be set by the State
Board of Insurance; requires the board to deposit all fees in the state
treasury to the credit of the State Board of Insurance operating fund; such
fees are not refundable; and provides that unless the State Board of
Insurance accepts a qualifying examination administered by a testing
service, each person required to be examined shall pay a fee before being
examined; the State Board of Insurance shall determine the amount of the
fee, a certain fee must be paid, and certain paid fees may not be refunded,
respectively).
(2) Section 15, Article 17.25, Insurance Code (Violation by Agent).
(3) Section 20A.15, Insurance Code (Regulation of Agents), Section 20A.15A
(Agents for Single Health Care Service Plans), Vernon's Texas Insurance
Code.
(4) Sections 1, 3, 4, and 6, Article 21.01-2, Insurance Code (Application,
Licensing by Endorsement, Continuing Education, and Statutory References,
respectively).
(5) Article 21.02-1, Insurance Code (Penalty for Unlawfully Acting as an
Agent).
(6) Article 21.05, Insurance Code (Who May Not Be Agents).
(7) Article 21.07, Insurance Code, the following sections:
(A) Sections 1B and 1C (Licensing of Limited Liability Companies and
Licensing of Banks, respectively).
(B) Section 3, as amended by Chapters 596 and 972, Acts of the 75th
Legislature, Regular Session, 1997 (Issuance of License Under Certain
Circumstances).
(C) Sections 3B, 4, 4A, 5, 7, 8, 9, 10, 10A, 11, 12, 13, 14, 15, 15A, 16,
17, 18, 19, and 20 (Resident Status; Certain Nonresidents Maintaining
Office in State; Examination of Applicant for License to Write Health and
Accident Insurance; Examination of Applicant for License to Write Life
Insurance Upon Any One Life in Excess of $10,000; Failure of Applicant to
Qualify for License; Expiration and Renewal of License; Temporary License;
Insurance Carrier to Notify State Board of Insurance of Termination of
Contract; Communications Privileged; Denial, Refusal, Suspension or
Revocation of Licenses; Ineligibility Based on Felony Conviction; Judicial
Review of Acts of State Board of Insurance; Penalty; Texas Department of
Insurance May Establish Rules and Regulations; Fees and Use of Funds; Dual
Licensing; Certain Agents for Stipulated Premium Companies; Wording on
License; Expiration of Existing Licenses; Assignment of Agent's
Commissions; Agent for United States Military Personnel in Foreign
Countries; and Duplicate License; Fee, respectively).
(D) Section 21, as added by Chapter 820, Acts of the 75th Legislature,
Regular Session, 1997 (Rental Car Companies).
(E) Section 21, as added by Chapter 1196, Acts of the 75th Legislature,
Regular Session, 1997 (Credit Insurance Agents).
(8) Article 21.07A, Insurance Code (Penalty for Acting As, or Employing,
Life, Health, or Accident Insurance Agent Without License).
(9) Article 21.07-1, Insurance Code (Legal Reserve Life Insurance Agents;
Examination; Licenses).
(10) Article 21.07-3, Insurance Code, the following sections:
(A) Sections 4A, 4B, and 4C (Persons Other than Managing General Agents
Who May Share in Profits of a Managing General Agent; Continuing
Requirements for Licensed Corporations; and Security for Liability,
respectively);
(B) Section 5(h) (prohibits, except as provided herein , a licensee that
qualifies under this section from being owned in whole or in part by
certain banks or holding companies, provides that this subsection does not
apply to any licensee that on a certain date is owned by certain banks or
holding companies. Requires the commissioner, before renewing a license,
to require certain actions from a licensee);
(C) Sections 6 and 6A (Examination Required; Exceptions and Continuing
Education, respectively);
(D) Sections 8, 9, and 10 (Conduct of Examinations; Expiration of License;
Renewal; and Fees, respectively);
(E) Sections 12, 13, 14, and 15 (Denial, Refusal, Suspension, or
Revocation of Licenses; Notice and Hearings: Judicial Review of Acts of
Commissioner; and Notice to Last Address, respectively);
(F) Section 17 (Fees Collected);
(G) Section 20 (Enforcement of Act).
(11) Section 14, Article 21.14-1, Insurance Code (Penalty).
(12) Article 21.15, Insurance Code (Revocation of Agent's Certificate).
(13) Article 21.15-2, Insurance Code (Penalty for Soliciting Without
Certificate of Authority).
(14) Article 21.15-3, Insurance Code (Agent Procuring by Fraudulent
Representation; Penalty).
(15) Article 21.15-4, Insurance Code (Agent or Physician Making False
Statement; Penalty).
(16) Article 21.15-7, Insurance Code (Interim Study of Agents and Agents'
Licenses Statutes by Commissioner).
(17) Section 10, Article 21.58A, Insurance Code (Unlawful and Prohibited
Practices; Penalties).
(18) Article 23.23, Insurance Code (Regulation of Agents).
ARTICLE 8. GRANDFATHER CLAUSE; TRANSITION
SECTION 8.01. Provides that on the effective date of this Act, a person
who holds a license issued by the department that is in good standing is
considered licensed under the applicable licensing law as amended by this
Act; entitled to act as an agent under the new license type, subject to
this article; and subject to the provisions of the Insurance Code as
amended by this Act.
SECTION 8.02. (a) Provides that a person who, immediately before the
effective date of this Act, holds an agent license issued by the department
and who obtained that license by passing a written examination is entitled
to the appropriate license as provided by Subchapter A, Chapter 21,
Insurance Code, as amended by this Act, without further examination.
(b) Provides that a person who, immediately before the effective date of
this Act, holds an agent license issued by the department before January 1,
1999 and who obtained that license without taking a written examination or
who actually solicited insurance on behalf of a stipulated premium company,
farm mutual company, or county mutual insurance company before January 1,
1999, is entitled to the appropriate license as provided by Subchapter A,
Chapter 21, Insurance Code, as amended by this Act, but must pass the
appropriate license examination not later than the second anniversary of
the date of issuance, to retain the license. Provides that the license of
a person who does not pass the license examinations as required by this
subsection expires on the second anniversary of the date of issuance and
may not be renewed.
(c) Provides that a person who, immediately before the effective date of
this Act, holds an agent license issued by the department and who obtained
that license without taking a written examination or who actually solicited
insurance on behalf of a stipulated premium company, farm mutual company,
or county mutual insurance company on or after January 1, 1999, but before
the effective date of this Act, is entitled to the appropriate license as
provided by Subchapter A, Chapter 21, Insurance Code, as amended by this
Act, but must pass the appropriate license examination not later than May
31, 2000, to retain the license. Provides that the license of a person who
does not pass the license examinations as required by this subsection
expires on May 31, 2000.
(d) Provides that a person who has actually solicited insurance on behalf
of a stipulated premium company, farm mutual company, or county mutual
insurance company for at least 24 months preceding the effective date of
this Act is entitled to the appropriate license and any renewal license as
provided by Subchapter A, Chapter 21, Insurance Code, as amended by this
Act, without further examination.
SECTION 8.03. (a) Authorizes the department to issue life, accident, and
health insurance on behalf of a fraternal benefit society immediately
before the effective date of this Act on submission to the department by
the person certain information and a fee.
(b) Requires a person, to retain a license issued under Subsection (a) of
this section, who has solicited insurance on behalf of a fraternal benefit
society for less than two years as of the effective date of this Act to
pass the license examination required under Subchapter A, Chapter 21,
Insurance Code, not later than the 180th day after the date of issuance of
the license. Provides that the license of a person who does not pass the
license examinations as required by this subsection expires on the 180th
day after the date of issuance of the license and may not be renewed.
SECTION 8.04. Provides that, notwithstanding any other law, the contract of
a surety who guarantees the promise of a bonded principal to appear in
court as directed by the court must provide that the surety is not liable
based on a default by the principal until the first anniversary of the date
on which the court declares that the principal is in default and the
liability of the surety is fully discharged if certain conditions exist.
ARTICLE 9. EFFECTIVE DATE; TRANSITION; EMERGENCY
SECTION 9.01. Effective date: September 1, 1999.
Makes application of Section 3, Article 21.01-1, Insurance Code, as
amended by this Act prospective to January 1, 2001.
SECTION 9.02. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
This substitute modifies proposed Section 2, Article 21.01-1, Insurance
Code, in SECTION 1.02, to add a reference to Subsection (d) as an exception
to the provision that each applicant for a license to act as an insurance
agent in this state must submit to a personal written examination that is
prescribed by the Department of Insurance (department) and must pass the
examination to the satisfaction of the department.
This substitute makes a nonsubstantive change in proposed Subsection (c).
In proposed Subsection (d), this substitute prohibits the department from
requiring a person to take an examination under this article if the person
is an applicant for the renewal of an unexpired license issued by the
department, rather than for the renewal of a license issued by the
department and the applicant obtained the license by successful completion
of a written examination. Additionally, this substitute prohibits the
department from requiring a person to take an examination under this
article if the person is an applicant for a general life, accident, and
health license who was authorized to solicit insurance on behalf of a
fraternal benefit society on September 1, 1999, provided that the applicant
does not solicit or procure an insurance contract on or after September 1,
1999, with an exception, and does not solicit or procure an
interest-sensitive life insurance contract that exceeds $35,000 of coverage
on an individual life on or after the specified date, unless certain
conditions are met. The original bill prohibited the department from
requiring a person to take an examination under this article if the person
is an applicant for a general life, accident, and health license who was
authorized to solicit insurance on behalf of a fraternal benefit society on
September 1, 1999, provided that the applicant limits insurance
solicitations on or after September 1, 1999, to eligible members of the
fraternal benefit society and does not solicit interest-sensitive life
insurance certificates with face amounts exceeding $35,000 on or after the
specified date, unless certain conditions are met.
This substitute further amends Article 21.06, Insurance Code, in SECTION
1.08, by deleting text requiring the certificate of authority to continue
in force until the first day of March next after its issuance, and be
renewed annually.
This substitute further amends Section 2, Article 21.07, Insurance Code, in
SECTION 1.11, by providing in proposed Subsection (g) that the insurance or
bond requirement adopted under this subsection does not apply to an
employee of a licensed insurer, but does apply to a person who operates as
an independent contractor.
This substitute further amends proposed Subsection (k) to include a
partnership among the entities to which department is required to issue a
license if the department finds that a corporation or partnership is able
to pay any sums it is legally obligated to pay, up to $25,000, as evidenced
by an errors and omissions policy against errors and omissions in at least
the sum of $250,000 with a deductible of not more than 10 percent of the
face amount of the policy, rather than no more than a $10,000 deductible,
issued by a licensed insurance company or if a policy cannot be obtained
from a company licensed in this state, through a properly obtained surplus
lines policy, rather than by a company not licensed in this state with the
approval of the commissioner of insurance. Makes conforming and
nonsubstantive changes.
This substitute adds new Subsection (v), to require a person licensed under
this subchapter to maintain all insurance records, including all records
relating to customer complaints, separate from the records of any other
business in which the person may be engaged.
This substitute modifies proposed Section 3A, Article 21.07, Insurance
Code, in SECTION 1.12, to authorize the department to issue a temporary
agent's license to an applicant for a license under Section 2 (Application
for License; To Whom License May Be Issued) of this article who is being
considered for appointment as an agent by another license holder, in
addition to an insurer or a health maintenance organization. This
substitute requires the department to issue a temporary license immediately
on receipt by the department of a properly completed application executed
by the person in the form required by Section 2 of this article,
accompanied by the nonrefundable filing fee set by the department and a
certificate signed by an officer or properly authorized representative of
the agent, as well as to a properly authorized representative of an insurer
or heath maintenance organization, that includes certain statements. Makes
conforming changes.
This substitute modifies proposed Section 3, Article 21.07-1, Insurance
Code, in SECTION 2.01, by correcting a reference to another section of that
proposed article.
This substitute modifies proposed Section 4, Article 21.07-1, Insurance
Code, in SECTION 2.01, by removing the definition of "funeral
prearrangement life insurance agent." In proposed Subsection (b), this
substitute removes Subdivision (1) of the original to make a conforming
change. This substitute deletes Subdivision (3) from the original which
specified that this section applies to an agent for a stipulated premium
company who writes life insurance worth a specified amount. This substitute
adds new Subdivision (5) to provide that this section applies to an agent
writing credit insurance except as otherwise provided under a specialty
license program established by the department. This substitute redesignates
proposed Subdivisions (2), (4)-(6), and (7)-(8) in the original to proposed
Subdivisions (1), (2)-(4), and (6)-(7) in the substitute, respectively.
This substitute adds new Section 5, Article 21.07-1, Insurance Code, in
SECTION 2.01. For further explanation, please refer to the
Section-by-Section Analysis in this document.
This substitute adds new Section 6, Article 21.07-1, Insurance Code, in
SECTION 2.01. For further explanation, please refer to the
Section-by-Section Analysis in this document.
This substitute modifies proposed Section 2, Article 21.14, Insurance Code,
in SECTION 3.01, to delete the provision that a general property and
casualty license is required for each person who acts as an agent writing
property and casualty insurance for a county mutual insurance company. This
substitute redesignates Subdivision (4) in the original as Subdivision (3)
in the substitute.
This substitute modifies proposed Section 6, Article 21.14, Insurance Code,
in SECTION 3.01, by providing that, notwithstanding any other law, a
limited property and casualty license is required for each person who
desires to act as an agent writing credit insurance, except as otherwise
required by a specialty license program established by the department,
rather than to act as an agent writing the marketing, offering for sale, or
delivery of credit insurance products for use by certain persons.
This substitute adds new Section 9, Article 21.14, Insurance Code, in
SECTION 3.01. For further explanation, please refer to the
Section-by-Section Analysis in this document.
This substitute modifies SECTION 8.02 to provide that a person who has
actually solicited insurance on behalf of a stipulated premium company,
farm mutual company, or county mutual insurance company for at least 24
months preceding the effective date of this Act is entitled to any renewal
license, in addition to the appropriate license, as provided by Subchapter
A, Chapter 21, Insurance Code, as amended by this Act, without further
examination.
This substitute adds new SECTION 8.04. For further explanation please refer
to the Section-bySection Analysis in this document.