By: Madla S.B. No. 957
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the licensing of certain persons who provide services
1-2 related to the business of insurance.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 ARTICLE 1. SPECIALTY LICENSES
1-5 SECTION 1.01. Subchapter A, Chapter 21, Insurance Code, is
1-6 amended by adding Article 21.09 to read as follows:
1-7 Art. 21.09. SPECIALTY LICENSES
1-8 Sec. 1. GENERAL PROVISIONS. (a) The commissioner may issue
1-9 a specialty license to an applicant who has complied with the
1-10 requirements of this article. A specialty license authorizes the
1-11 license holder to act as an agent for the types of insurance
1-12 specified in this article for any insurer authorized to write these
1-13 types of insurance in this state. A person who holds a license
1-14 under this article is known as a "specialty license holder."
1-15 (b) For a specialty license to be issued under this article,
1-16 the applicant must submit to the commissioner:
1-17 (1) a written application, signed by the applicant, on
1-18 a form and supplements to the form prescribed by the commissioner,
1-19 that contains the information prescribed by the commissioner;
1-20 (2) a certification by an insurer authorized to do
1-21 business in this state that:
1-22 (A) is signed by an officer of the insurer and
1-23 affirmed as true under the penalties of perjury; and
1-24 (B) states that:
2-1 (i) the insurer has satisfied itself that
2-2 the named applicant is trustworthy and competent to act as the
2-3 insurer's agent for a limited purpose authorized by this article;
2-4 and
2-5 (ii) the insurer will appoint the
2-6 applicant to act as the agent for a type of insurance permitted by
2-7 this article, if the specialty license applied for is issued by the
2-8 department; and
2-9 (3) a nonrefundable license fee set by the department
2-10 in an amount necessary to administer this article.
2-11 (c) A specialty license issued under this article authorizes
2-12 an employee of the license holder to act as an agent with respect
2-13 to the kinds of insurance specified in this article if the
2-14 employee:
2-15 (1) is trained under Subsection (d) of this section to
2-16 act individually on behalf of the specialty license holder;
2-17 (2) is acting on behalf of and under the supervision
2-18 of the license holder; and
2-19 (3) is not compensated based primarily on the amount
2-20 of insurance sold by the employee under this article.
2-21 (d) Each person licensed under this article shall conduct a
2-22 training program for each individual who is acting on behalf of the
2-23 license holder with respect to the specific type of insurance. The
2-24 training program must be submitted to the commissioner for approval
2-25 before the training program is used and must meet the following
2-26 minimum standards:
3-1 (1) each trainee must receive basic instruction about
3-2 the kinds of insurance the license holder is authorized to offer
3-3 for purchase by prospective consumers;
3-4 (2) each trainee must be instructed to inform a
3-5 prospective consumer that, except as may be specifically provided
3-6 by another law of this state or the United States, the purchase of
3-7 insurance specified in this article is not required in order to
3-8 complete the associated consumer transaction; and
3-9 (3) each trainee must be instructed with respect to
3-10 the disclosures required to be made to consumers.
3-11 (e) Except as otherwise provided by this article, a
3-12 specialty license holder acting under this article shall comply
3-13 with all applicable provisions of this subchapter.
3-14 (f) Notwithstanding any other provision of this subchapter
3-15 or any rule adopted by the commissioner, a specialty license holder
3-16 is not required to treat premiums collected from a consumer
3-17 purchasing insurance when completing an associated consumer
3-18 transaction as money received in a fiduciary capacity if:
3-19 (1) the insurer represented by the specialty license
3-20 holder has consented in writing, signed by an officer of the
3-21 insurer, that premiums need not be segregated from money received
3-22 by the license holder on account of the associated consumer
3-23 transaction; and
3-24 (2) the charges for insurance coverage are itemized
3-25 but not billed to the consumer separately from the charges for the
3-26 associated consumer transaction.
4-1 (g) Insurance may not be issued under this article unless:
4-2 (1) at each location at which sales of insurance
4-3 policies covered by this article occur, brochures or other written
4-4 materials are prominently displayed and readily available to the
4-5 prospective consumer that:
4-6 (A) summarize, clearly and correctly, the
4-7 material terms of insurance coverage offered to consumers,
4-8 including the identity of the insurer;
4-9 (B) disclose that the policies offered by the
4-10 license holder may provide a duplication of coverage already
4-11 provided by a consumer's personal auto insurance policy,
4-12 homeowner's insurance policy, personal liability insurance policy,
4-13 or other source of coverage;
4-14 (C) state that, except as specifically provided
4-15 by another law of this state or the United States, the purchase by
4-16 the consumer of the kinds of insurance specified in this article is
4-17 not required to complete the associated consumer transaction;
4-18 (D) describe the process for filing a claim in
4-19 the event the consumer elects to purchase coverage and in the event
4-20 of a claim; and
4-21 (E) contain any additional information on the
4-22 price, benefits, exclusions, conditions, or other limitations of
4-23 the policies required by the commissioner by rule; and
4-24 (2) evidence of coverage is provided to each consumer
4-25 who elects to purchase the coverage.
4-26 (h) If a specialty license holder violates this subchapter,
5-1 the commissioner may:
5-2 (1) impose any disciplinary action authorized by
5-3 Article 21.01-2 of this code; or
5-4 (2) after notice and opportunity for hearing, impose
5-5 other penalties, including suspending the transaction of insurance
5-6 at specific locations where a violation of this subchapter has
5-7 occurred, as the commissioner considers necessary or appropriate to
5-8 implement the purposes of this subchapter.
5-9 (i) A specialty license holder may not in any manner
5-10 advertise, represent, or otherwise hold out the license holder or
5-11 any employee of the license holder as a licensed insurance agent
5-12 under another article of this code unless the entity or individual
5-13 actually holds the applicable license.
5-14 (j) A person who holds a general agent's license issued
5-15 under Chapter 213, Acts of the 54th Legislature, Regular Session,
5-16 1955 (Article 21.07-1, Vernon's Texas Insurance Code), as amended,
5-17 or Article 21.14 of this code or who holds a substantially
5-18 equivalent license under this code, as determined by the
5-19 commissioner, is not required to obtain a specialty license but is
5-20 subject to the other requirements of this article in the
5-21 solicitation, sale, or delivery of an insurance product subject to
5-22 this article.
5-23 (k) Each insurance company appointing an agent under this
5-24 article shall submit a certification of the appointment signed by
5-25 an officer of the insurer and affirm that the insurer has satisfied
5-26 itself that the license holder is trustworthy and competent to act
6-1 as an insurance agent on behalf of the insurer.
6-2 (l) An examination is not required for issuance of a license
6-3 under this article and continuing education requirements do not
6-4 apply to a license issued under this article.
6-5 (m) A person who is licensed as an agent for a legal reserve
6-6 life insurance company or as a local recording agent, or who holds
6-7 a substantially equivalent license under this code, as determined
6-8 by the commissioner, and who enters into a contract with an insurer
6-9 to act as the insurer's agent in soliciting or writing policies or
6-10 certificates of insurance covered by this article may assign and
6-11 transfer to the agent's employer any commission, fee, or other
6-12 compensation to be paid to the agent under the agent's contract
6-13 with the insurer, but only if the sale of the insurance product
6-14 occurred within the scope of the agent's employment.
6-15 Sec. 2. RENTAL CAR COMPANIES. (a) In this section:
6-16 (1) "Rental agreement" means a written agreement that
6-17 sets forth the terms and conditions governing the use of a vehicle
6-18 provided by a rental car company.
6-19 (2) "Rental car company" means a person engaged in the
6-20 business of providing leased or rented vehicles to the public.
6-21 (3) "Renter" means a person who obtains the use of a
6-22 vehicle from a rental car company under the terms of a rental
6-23 agreement.
6-24 (4) "Vehicle" means a private passenger motor vehicle,
6-25 including passenger vans and minivans that are primarily intended
6-26 for the transport of persons.
7-1 (b) Notwithstanding any other provision of this article or
7-2 this code, the commissioner shall issue a specialty license under
7-3 Section 1 of this article to a rental car company, or to the
7-4 franchisee of a rental car company, that complies with this section
7-5 only for the limited purposes set forth in this section.
7-6 (c) The rental car company or franchisee licensed under
7-7 Section 1 of this article may act as an agent for an authorized
7-8 insurer only in connection with the rental of vehicles and only
7-9 with respect to:
7-10 (1) excess liability insurance that provides coverage
7-11 to the rental car company or franchisee and renters and other
7-12 authorized drivers of rental vehicles, in excess of the standard
7-13 liability limits provided by the rental car company in the rental
7-14 agreement, for liability arising from the negligent operation or
7-15 use of the rental vehicle;
7-16 (2) accident and health insurance that provides
7-17 coverage to renters and other vehicle occupants for accidental
7-18 death or dismemberment and for medical expenses resulting from an
7-19 accident involving the rental vehicle that occurs during the rental
7-20 period;
7-21 (3) personal effects insurance that provides coverage
7-22 to renters and other rental vehicle occupants for the loss of, or
7-23 damage to, personal effects that occurs during the rental period;
7-24 or
7-25 (4) any other coverage that the commissioner may
7-26 approve as meaningful and appropriate in connection with the rental
8-1 of vehicles.
8-2 (d) Insurance may not be issued under this section unless:
8-3 (1) the rental period under the rental agreement does
8-4 not exceed 30 consecutive days; and
8-5 (2) the brochures or other written materials
8-6 containing the disclosures required by Section 1(g) of this article
8-7 are prominently displayed and readily available to the prospective
8-8 renter.
8-9 Sec. 3. CREDIT INSURANCE. (a) In this section:
8-10 (1) "Credit insurance" includes:
8-11 (A) credit life insurance;
8-12 (B) credit accident and health insurance;
8-13 (C) credit property insurance;
8-14 (D) credit involuntary unemployment insurance;
8-15 and
8-16 (E) insurance that covers the difference between
8-17 the actual cash value of a motor vehicle used as security for a
8-18 loan or lease and the outstanding balance of that loan or lease in
8-19 the event of loss or damage in which the vehicle is rendered an
8-20 actual or constructive total loss while the debt for which the
8-21 vehicle serves as security exceeds the actual cash value of the
8-22 vehicle.
8-23 (2) "Credit insurance agent" means a person licensed
8-24 to sell credit insurance under this article as specifically
8-25 provided by this section.
8-26 (3) "Credit property insurance" means insurance that
9-1 provides coverage on personal property used as collateral for
9-2 securing a personal or consumer loan or on personal property under
9-3 an installment sales agreement or through a consumer credit
9-4 transaction that is purchased in connection with or in relation to
9-5 the personal or consumer loan, installment sale, or consumer credit
9-6 transaction. The term does not include insurance that provides
9-7 theft, collision, liability, property damage, or comprehensive
9-8 insurance coverage on an automobile, motorized aircraft,
9-9 motorcycle, truck, truck-tractor, traction engine, or any other
9-10 self-propelled vehicle that is designed primarily for operation in
9-11 the air, or on highways, roadways, waterways, or the sea, and the
9-12 operating equipment of the self-propelled vehicle or craft, or that
9-13 is necessitated by reason of the liability imposed by law for
9-14 damages arising out of the ownership, operation, maintenance, or
9-15 use of any of those vehicles and crafts, other than single interest
9-16 coverage on any vehicle or craft described in this subdivision that
9-17 insures the interest of the creditor in the same manner as
9-18 collateral for a loan.
9-19 (b) Notwithstanding any other provision of this article or
9-20 this code, the commissioner may issue a license under Section 1 of
9-21 this article to a retail distributor of goods, an automobile
9-22 dealer, a bank, a state or federal savings and loan, a state or
9-23 federal credit union, a finance company, a production credit
9-24 association, a manufactured home retailer, or a mobile home
9-25 retailer that complies with this section only for the limited
9-26 purposes set forth in this section.
10-1 (c) On appointment by the insurance company, a credit
10-2 insurance agent may act as the agent of any company authorized to
10-3 engage in the business of insurance under this code in the sale of
10-4 any type of credit insurance that the company is authorized to
10-5 write. The authority conferred under this section specifically
10-6 permits the sale of both individual and group credit insurance.
10-7 (d) A license holder and the license holder's representative
10-8 are not required to make the disclosures required by Section 1(g)
10-9 of this article if the license holder or the license holder's
10-10 representative complies with all disclosure requirements prescribed
10-11 by another provision of this code or another law of this state or
10-12 the United States relating to the sale or delivery of a credit
10-13 insurance product that is subject to this section.
10-14 Sec. 4. TRAVEL INSURANCE LICENSE. (a) In this section:
10-15 (1) "Planned trip" means any journey or travel
10-16 arranged through the services of a travel agency.
10-17 (2) "Travel agency" means an entity engaged in the
10-18 business of selling or arranging transportation or accommodations
10-19 for the public.
10-20 (3) "Traveler" means an individual who seeks the
10-21 assistance of a travel agency in connection with the planning and
10-22 purchase of a trip.
10-23 (b) Notwithstanding any other provision of this article or
10-24 this code, the commissioner may issue a specialty license under
10-25 Section 1 of this article to a travel agency, the franchisee of a
10-26 travel agency, or a public carrier that complies with this section
11-1 only for the limited purposes set forth in this section.
11-2 (c) The travel agency or franchisee licensed under Section 1
11-3 of this article may act as an agent for any authorized insurer only
11-4 in connection with the sale or arrangement of transportation or
11-5 accommodations for travelers and only with respect to:
11-6 (1) accident and health insurance that provides
11-7 coverage to a traveler for accidental death or dismemberment and
11-8 for medical expenses resulting from an accident involving the
11-9 traveler that occurs during the planned trip;
11-10 (2) insurance that provides coverage to a traveler for
11-11 expenses incurred as a result of trip cancellation or interruption
11-12 of a planned trip;
11-13 (3) personal effects insurance that provides coverage
11-14 to a traveler for the loss of, or damage to, personal effects that
11-15 occurs during the planned trip;
11-16 (4) life insurance covering risks of travel during a
11-17 planned trip that does not exceed $50,000 on any one life; or
11-18 (5) any other coverage that the commissioner may
11-19 approve as meaningful and appropriate in connection with the
11-20 transportation or accommodations arranged through a travel agency.
11-21 (d) Insurance may not be issued under this section unless
11-22 the brochures or other written materials containing the disclosures
11-23 required by Section 1(g) of this article are prominently displayed
11-24 and readily available to the prospective traveler.
11-25 Sec. 5. SELF-SERVICE STORAGE FACILITY LICENSE. (a) In this
11-26 section:
12-1 (1) "Rental agreement" means a written agreement that
12-2 sets forth the terms and conditions governing the use of storage
12-3 space provided by a self-service storage facility.
12-4 (2) "Self-service storage facility" means a person
12-5 engaged in the business of providing leased or rented storage space
12-6 to the public.
12-7 (3) "Renter" means a person who obtains the use of
12-8 storage space from a self-service storage facility under a rental
12-9 agreement.
12-10 (4) "Storage space" means a room, unit, locker, or
12-11 open space offered for rental to the public for temporary storage
12-12 of personal belongings or light commercial goods.
12-13 (b) Notwithstanding any other provision of this article or
12-14 this code, the commissioner may issue a specialty license under
12-15 Section 1 of this article to a self-service storage facility or to
12-16 the franchisee of a self-service storage facility that complies
12-17 with this section only for the limited purposes set forth in this
12-18 section.
12-19 (c) A self-service storage facility or franchisee licensed
12-20 under Section 1 of this article may act as an agent for any
12-21 authorized insurer only in connection with the rental of storage
12-22 space and only with respect to:
12-23 (1) insurance that provides hazard insurance coverage
12-24 to renters for the loss of, or damage to, tangible personal
12-25 property in storage or in transit during the rental period; or
12-26 (2) any other coverage the commissioner may approve as
13-1 meaningful and appropriate in connection with the rental of storage
13-2 space.
13-3 (d) Insurance may not be issued under this section unless
13-4 the brochures or other written materials containing the disclosures
13-5 required by Section 1(g) of this article are prominently displayed
13-6 and readily available to the prospective renter.
13-7 Sec. 6. RULES. The commissioner may adopt rules necessary
13-8 to implement this article and to meet the minimum requirements of
13-9 federal law and regulations.
13-10 ARTICLE 2. LIFE AND HEALTH INSURANCE COUNSELOR LICENSE
13-11 SECTION 2.01. Chapter 29, Acts of the 54th Legislature,
13-12 Regular Session, 1955 (Article 21.07-2, Vernon's Texas Insurance
13-13 Code), is transferred to the Insurance Code, redesignated as
13-14 Article 21.07-2, Insurance Code, and amended to read as follows:
13-15 Art. 21.07-2. LIFE AND HEALTH INSURANCE COUNSELOR LICENSE
13-16 Sec. 1. DEFINITION OF TERM. The term "Life and Health
13-17 Insurance Counselor" as used in this article [Act] shall mean any
13-18 person who, for money, fee, commission or any other thing of value
13-19 offers to examine, or examines any policy of life, accident, or
13-20 health insurance, any health benefit plan, or any annuity or pure
13-21 endowment contract for the purpose of giving, or gives, or offers
13-22 to give, any advice, counsel, recommendation or information in
13-23 respect to the terms, conditions, benefits, coverage or premium of
13-24 any such policy or contract, or in respect to the expediency or
13-25 advisability of altering, changing, exchanging, converting,
13-26 replacing, surrendering, continuing or rejecting any such policy,
14-1 plan, or contract, or of accepting or procuring any such policy,
14-2 plan, or contract from any insurer or issuer of a health benefit
14-3 plan, or who in or on advertisements, cards, signs, circulars or
14-4 letterheads, or elsewhere, or in any other way or manner by which
14-5 public announcements are made, uses the title "insurance adviser,"
14-6 "insurance specialist," "insurance counselor," "insurance analyst,"
14-7 "policyholders' adviser," "policyholders' counselor," or any other
14-8 similar title, or any title indicating that the person [he] gives,
14-9 or is engaged in the business of giving advice, counsel,
14-10 recommendation or information to an insured, or a beneficiary, or
14-11 any person having any interest in a life, accident, or health
14-12 insurance contract, health benefit plan contract, annuity or pure
14-13 endowment contract. This definition is not intended to prevent a
14-14 person who has obtained the professional designation of chartered
14-15 life underwriter (CLU), chartered financial consultant (ChFC) or
14-16 certified financial planner (CFP) by completing a course of
14-17 instruction recognized within the business of insurance from using
14-18 that designation to indicate professional achievement.
14-19 Sec. 2. LICENSE REQUIRED; ISSUANCE BY DEPARTMENT. No person
14-20 shall act as a Life and Health Insurance Counselor, as defined in
14-21 Section 1 of this article [hereof], unless authorized so to act by
14-22 a license issued by the department under [Board of Insurance
14-23 Commissioners of the State of Texas pursuant to the provisions of]
14-24 this article [Act].
14-25 Sec. 3. EXEMPTIONS. The provisions of this article [Act]
14-26 shall not apply to the following persons:
15-1 (a) Licensed agents for a life insurance company while
15-2 acting for an insurer as its agent.
15-3 (b) Licensed attorneys at law of this State when
15-4 acting within the course or scope of their profession.
15-5 (c) Licensed public accountants of this State while
15-6 acting within the course or scope of their profession.
15-7 (d) A regular salaried officer or employee of an
15-8 authorized insurer issuing policies of life or health insurance
15-9 while acting for such insurer in discharging the duties of the
15-10 [his] position or employment.
15-11 (e) An officer or employee of any bank or trust
15-12 company who receives no compensation from sources other than the
15-13 bank or trust company for such activities connected with the [his]
15-14 employment.
15-15 (f) Employers or their officers or employees, or the
15-16 trustees of any employee benefit plan, to the extent that such
15-17 employers, officers, employees or trustees are engaged in the
15-18 administration or operation of any program of employee benefits
15-19 involving the use of insurance or annuities issued by a legal
15-20 reserve life insurance company.
15-21 Sec. 4. CONTRACT, WRITING REQUIRED; DUPLICATES; OTHER
15-22 REQUISITES. No contract or agreement between a Life and Health
15-23 Insurance Counselor, as defined in this article [Act], and any
15-24 other person, firm or corporation, relating to the activities,
15-25 services, advice, recommendations or information referred to in
15-26 Section 1 of this article [Act], shall be enforceable by or on
16-1 behalf of such Life and Health Insurance Counselor unless it is in
16-2 writing and executed in duplicate by the person, firm or
16-3 corporation to be charged, nor unless one of said duplicates is
16-4 delivered to and retained by such person, firm or corporation when
16-5 executed, nor unless such contract or agreement plainly specifies
16-6 the amount of the fee paid or to be paid by such person, firm or
16-7 corporation, and the services to be rendered by such Life and
16-8 Health Insurance Counselor; provided, however, that the foregoing
16-9 provisions shall not be applicable to any of the persons set out in
16-10 Section 3 of this article [above].
16-11 Sec. 4a. PROHIBITION OF DUAL COMPENSATION. A person
16-12 licensed under the provisions of this article [Act] who is also
16-13 licensed under Chapter 213, Acts of the 54th Legislature, Regular
16-14 Session, 1955 ([Article 21.07 or] Article 21.07-1, Vernon's Texas
16-15 Insurance [of this] Code), as amended, and who receives a
16-16 commission or compensation for [his] services as an agent licensed
16-17 under Chapter 213, Acts of the 54th Legislature, Regular Session,
16-18 1955 ([Article 21.07 or] Article 21.07-1, Vernon's Texas Insurance
16-19 Code), as amended, shall not be entitled to receive a fee for the
16-20 same services [his service] to the same client as a Life and Health
16-21 Insurance Counselor.
16-22 Sec. 5. MODE OF LICENSING AND REGULATION. (a) Except as
16-23 provided by this article, [The] licensing and regulation of a Life
16-24 and Health Insurance Counselor, as that term is defined herein,
16-25 shall be in the same manner and subject to the same requirements as
16-26 applicable to the licensing of agents under this subchapter [of
17-1 legal reserve life insurance companies as provided in Article
17-2 21.07-1 of the Texas Insurance Code, 1951,] or as provided by any
17-3 existing or subsequent applicable law governing the licensing of
17-4 such agents, and all the provisions thereof are hereby made
17-5 applicable to applicants and licensees under this article [Act],
17-6 except that a Life and Health Insurance Counselor shall not
17-7 advertise in any manner and shall not circulate materials
17-8 indicating professional superiority or the performance of
17-9 professional service in a superior manner; provided, however, that
17-10 an appointment to act for an insurer shall not be a condition to
17-11 the licensing of a Life and Health Insurance Counselor.
17-12 (b) An [In addition to the above requirements, the applicant
17-13 for licensure as a Life Insurance Counselor shall submit to the
17-14 Commissioner documentation that he has been licensed as a life
17-15 insurance agent in excess of three years. After the Insurance
17-16 Commissioner has satisfied himself as to these requirements, he
17-17 shall then cause the] applicant for a Life and Health Insurance
17-18 Counselor's license must [to] sit for an examination administered
17-19 under Article 21.01-1 of this code that includes [which shall
17-20 include] the following five subjects and subject areas:
17-21 (1) Fundamentals of life and health insurance;
17-22 (2) Group life insurance, pensions and health
17-23 insurance;
17-24 (3) Law, trust and taxation;
17-25 (4) Finance and economics; and
17-26 (5) Business insurance and estate planning.
18-1 (c) No license shall be granted until such individual shall
18-2 have successfully passed each of the five parts under Subsection
18-3 (b) of this section. Such examinations may be given and scheduled
18-4 by the Commissioner at the Commissioner's [his] discretion. The
18-5 department shall, without further examination, issue a license
18-6 under this article to an individual who, on September 1, 1999,
18-7 holds a [Individuals currently holding] Life Insurance Counselor
18-8 license [licenses] issued by the department [Texas State Board of
18-9 Insurance, who do not have the equivalent of the requirements above
18-10 listed, shall have one year from the date of enactment hereof to so
18-11 qualify].
18-12 Sec. 6. INTENT OF LEGISLATURE; STATUTES AND AMENDMENTS
18-13 APPLICABLE. Except as provided by this article, it [It] is the
18-14 legislative intent, and it is hereby provided, that the licensing
18-15 and regulation of any person acting as a Life and Health Insurance
18-16 Counselor shall be subject to the same statutes and requirements
18-17 applicable to the licensing and regulation of agents under this
18-18 subchapter [of legal reserve life insurance companies]. In event
18-19 of subsequent legislative enactment applicable to agents under this
18-20 subchapter [of legal reserve life insurance companies in lieu of,
18-21 or as an amendment to, present Article 21.07 of the Texas Insurance
18-22 Code], it is hereby provided that such statute shall be applicable
18-23 to any person acting as a Life and Health Insurance Counselor, as
18-24 defined in this article [Act].
18-25 Sec. 7. VIOLATIONS. [(a)] A [person commits an offense if
18-26 the person acts as a life insurance counselor without a license
19-1 issued under this Act or otherwise violates this Act. Each
19-2 violation constitutes a separate offense. An offense under this
19-3 subsection is a Class C misdemeanor.]
19-4 [(b) In addition to being subject to the penalty imposed
19-5 under Subsection (a) of this section, a] person who commits a
19-6 violation of this article [Act] is subject to license revocation
19-7 under [Section 5,] Article 21.01-2 of this code[, Insurance Code].
19-8 If the department revokes the license, the license holder is not
19-9 eligible for a new license for two years after the effective date
19-10 of the license revocation.
19-11 Sec. 8. PARTIAL INVALIDITY. Should any Section or part
19-12 [thereof] of this article [Act] be held to be invalid for any
19-13 reason, such holding shall not be construed as affecting the
19-14 validity of any of the remaining Sections or parts of this article
19-15 [thereof], it being the legislative intent that the remainder of
19-16 this article [Section] shall stand, notwithstanding the invalidity
19-17 of any Section or part of this article [thereof].
19-18 Sec. 9. CONTINUING EDUCATION. A person who holds a license
19-19 issued under this article shall complete continuing education as
19-20 required by rules of the department or any applicable article of
19-21 this code.
19-22 Sec. 10. RULES. The commissioner may adopt rules necessary
19-23 to implement this article and to meet the minimum requirements of
19-24 federal law and regulations.
19-25 Sec. 11. REFERENCE IN OTHER LAW. A reference in any law to
19-26 Chapter 29, Acts of the 54th Legislature, Regular Session, 1955,
20-1 means this article.
20-2 ARTICLE 3. ADJUSTERS LICENSES
20-3 SECTION 3.01. Chapter 407, Acts of the 63rd Legislature,
20-4 Regular Session, 1973 (Article 21.07-4, Vernon's Texas Insurance
20-5 Code), is amended by amending Sections 15, 16, 17, and 23 and
20-6 adding Section 24 to read as follows:
20-7 Sec. 15. PLACE OF BUSINESS. Every licensed adjuster shall
20-8 have and maintain [in this state] a place of business accessible to
20-9 the public. Such place of business shall be located where the
20-10 adjuster principally conducts transactions under the [his] license.
20-11 The [address of his place of business shall appear on all licenses
20-12 of the licensee, and the] licensee shall promptly notify the
20-13 commissioner of any change in the location of the place of business
20-14 [thereof].
20-15 Sec. 16. EXPIRATION AND RENEWAL OF LICENSES. Expiration and
20-16 renewal of licenses issued under this Act are governed by rules of
20-17 the department or any applicable article of the Insurance Code or
20-18 another insurance law of this state. [(a) Except as may be
20-19 provided by a staggered renewal system adopted under Article
20-20 21.01-2, Insurance Code, an adjuster's license expires two years
20-21 after the date of issuance.]
20-22 [(b) Subject to the right of the commissioner to suspend,
20-23 revoke, or refuse to renew an adjuster's license, any such license
20-24 may be renewed by filing, on the form prescribed by the
20-25 commissioner, on or before the expiration date, a written request,
20-26 by or on behalf of the licensee, for such renewal, accompanied by
21-1 payment of the renewal fee.]
21-2 Sec. 17. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE.
21-3 [(a)] The department may discipline an adjuster or deny an
21-4 application under department rules or any other applicable article
21-5 of the Insurance Code or another insurance law of this state. The
21-6 rules may specify grounds for discipline that are comparable to
21-7 grounds for discipline of other license holders under this
21-8 subchapter [Section 5, Article 21.01-2, Insurance Code, for any of
21-9 the following causes:]
21-10 [(1) for any cause for which issuance of the license
21-11 could have been refused had it been existent and been known to the
21-12 board;]
21-13 [(2) if the applicant or licensee willfully violates
21-14 or knowingly participates in the violation of any provision of this
21-15 Act;]
21-16 [(3) if the applicant or licensee has obtained or
21-17 attempted to obtain any such license through willful
21-18 misrepresentation or fraud, or has failed to pass any examination
21-19 required under this Act;]
21-20 [(4) if the applicant or licensee has misappropriated,
21-21 or converted to the applicant's or licensee's own use, or has
21-22 illegally withheld moneys required to be held in a fiduciary
21-23 capacity;]
21-24 [(5) if the applicant or licensee has, with intent to
21-25 deceive, materially misrepresented the terms or effect of an
21-26 insurance contract, or has engaged in any fraudulent transactions;
22-1 or]
22-2 [(6) if the applicant or licensee is convicted, by
22-3 final judgment, of a felony.]
22-4 [(b) An applicant or licensee whose license application or
22-5 license has been denied, refused, or revoked under this section may
22-6 not apply for any license as an insurance agent or adjuster before
22-7 the first anniversary of the effective date of the denial, refusal,
22-8 or revocation, or, if the applicant or licensee seeks judicial
22-9 review of the denial, refusal, or revocation, before the first
22-10 anniversary of the date of the final court order or decree
22-11 affirming that action. The commissioner may deny an application
22-12 timely filed if the applicant does not show good cause why the
22-13 denial, refusal, or revocation of the previous license application
22-14 or license should not be considered a bar to the issuance of a new
22-15 license. This subsection does not apply to an applicant whose
22-16 license application was denied for failure to pass a required
22-17 written examination].
22-18 Sec. 23. DUPLICATE LICENSE; FEE. The department
22-19 [Commissioner of Insurance] shall collect in advance from an
22-20 adjuster [adjusters] requesting a duplicate license [licenses] a
22-21 fee in an amount determined by the department [not to exceed $20.
22-22 The State Board of Insurance shall determine the amount of the
22-23 fee].
22-24 Sec. 24. RULES. The commissioner may adopt rules necessary
22-25 to implement this Act and to meet the minimum requirements of
22-26 federal law and regulations.
23-1 ARTICLE 4. AGRICULTURE AGENTS
23-2 SECTION 4.01. Article 21.14-2, Insurance Code, is amended to
23-3 read as follows:
23-4 Art. 21.14-2. [LICENSING OF] AGRICULTURAL INSURANCE AGENTS
23-5 Sec. 1. APPOINTING CERTAIN AGRICULTURAL INSURANCE AGENTS.
23-6 An insurance company that holds a valid certificate of authority
23-7 issued by this state to authorize the company to engage in the
23-8 insurance business in this state, and whose authority in this state
23-9 and in each other jurisdiction in which the company is licensed to
23-10 do business is limited [but limiting the insurance business only]
23-11 to the transaction of the business of insurance of risks on growing
23-12 crops, may appoint and act through agents who hold [qualify for] a
23-13 license under Article 21.14 of this code, subject to this article.
23-14 Sec. 2. REQUIREMENTS FOR APPOINTMENT. (a) To appoint a
23-15 license holder [obtain a license] to act as an agent under this
23-16 article, an insurance company [applicant] must submit a completed
23-17 appointment form [written application] to the department
23-18 [commissioner of insurance on a form prescribed by the State Board
23-19 of Insurance] and pay a [$50] nonrefundable fee in an amount
23-20 determined by the commissioner. The appointment form [application]
23-21 must bear an endorsement signed by a representative [an agent] of
23-22 an insurance company that meets the requirements of Section 1 of
23-23 this article [and must state that the applicant is a resident of
23-24 this state].
23-25 (b) The commissioner of insurance shall approve the
23-26 appointment [license application] unless the commissioner
24-1 determines that the applicant does not meet the requirements of
24-2 this subchapter [article].
24-3 (c) The department may waive any examination requirement
24-4 imposed under this subchapter for a license applicant seeking a
24-5 company appointment under this article if the applicant has
24-6 successfully completed an examination as required under the Federal
24-7 Crop Insurance Corporation guidelines for delivery of the federal
24-8 crop insurance program. [Except as provided by a staggered renewal
24-9 system adopted under Article 21.01-2 of this code, a license issued
24-10 under this article expires two years after the date of its issuance
24-11 unless a completed application to renew the license is filed with
24-12 the commissioner and the $50 nonrefundable renewal fee is paid on
24-13 or before that date, in which case the license continues in full
24-14 force and effect until renewed or the renewal is denied.]
24-15 (d) The department may, at its discretion, accept continuing
24-16 education hours completed under the guidelines of the Federal Crop
24-17 Insurance Corporation as satisfying the continuing education
24-18 requirements imposed under this subchapter. [An applicant for an
24-19 original or renewal license is not required to pass an examination
24-20 or meet any basic or continuing educational requirements to obtain
24-21 or renew a license under this article.]
24-22 Sec. 3. MULTIPLE APPOINTMENTS AUTHORIZED. A license holder
24-23 appointed under this article may act as an agent for more than one
24-24 insurance company, but may act as an agent under this article only
24-25 with respect to the business of insurance on growing crops. [The
24-26 license of an agent is automatically suspended or canceled if the
25-1 agent does not have outstanding a valid appointment to act as an
25-2 agent for an insurance company described in Section 1 of this
25-3 article. The department may discipline a licensee or deny an
25-4 application under Section 5, Article 21.01-2, of this code if it
25-5 determines that the license applicant or licensee:]
25-6 [(1) has intentionally or knowingly violated the
25-7 insurance laws of this state;]
25-8 [(2) has obtained or attempted to obtain a license by
25-9 fraud or misrepresentation;]
25-10 [(3) has misappropriated, converted, or illegally
25-11 withheld money belonging to an insurer or an insured or
25-12 beneficiary;]
25-13 [(4) has been guilty of fraudulent or dishonest acts;]
25-14 [(5) has materially misrepresented the terms and
25-15 conditions of an insurance policy or contract;]
25-16 [(6) has made or issued or caused to be made or issued
25-17 any statement misrepresenting or making incomplete comparisons
25-18 regarding the terms or conditions of an insurance contract legally
25-19 issued by an insurance carrier for the purpose of inducing or
25-20 attempting to induce the owner of the contract to forfeit or
25-21 surrender the contract or allow the contract to expire or for the
25-22 purpose of replacing the contract with another contract;]
25-23 [(7) has been convicted of a felony; or]
25-24 [(8) is guilty of rebating an insurance premium or
25-25 discriminating between insureds.]
25-26 Sec. 4. APPLICATION OF OTHER LAW. This subchapter applies
26-1 [Article 21.14 of this code does not apply] to the licensing and
26-2 [or] regulation of an agent appointed under this article.
26-3 Sec. 5. RULES. The commissioner may adopt rules necessary
26-4 to implement this article and to meet the minimum requirements of
26-5 federal law and regulations.
26-6 ARTICLE 5. REPEALER
26-7 SECTION 5.01. The following laws are repealed:
26-8 (1) Section 21, Article 21.07, Insurance Code, as
26-9 added by Chapter 820, Acts of the 75th Legislature, Regular
26-10 Session, 1997;
26-11 (2) Section 21, Article 21.07, Insurance Code, as
26-12 added by Chapter 1196, Acts of the 75th Legislature, Regular
26-13 Session, 1997; and
26-14 (3) Sections 18 and 19, Chapter 407, Acts of the 63rd
26-15 Legislature, Regular Session, 1973 (Article 21.07-4, Vernon's Texas
26-16 Insurance Code).
26-17 ARTICLE 6. GRANDFATHER PROVISIONS; EFFECTIVE DATE; EMERGENCY
26-18 SECTION 6.01. This Act takes effect September 1, 1999.
26-19 SECTION 6.02. (a) Not later than January 1, 2000, the Texas
26-20 Department of Insurance shall issue an appropriate license under
26-21 Article 21.09, Insurance Code, as added by this Act, to a person
26-22 who, immediately before the effective date of this Act, holds an
26-23 agent license issued by the Texas Department of Insurance under
26-24 Section 21, Article 21.07, Insurance Code, as added by Chapter 820,
26-25 Acts of the 75th Legislature, Regular Session, 1997, or Section
26-26 21, Article 21.07, Insurance Code, as added by Chapter 1196, Acts
27-1 of the 75th Legislature, Regular Session, 1997. On issuance of the
27-2 new license, the license holder is subject to Article 21.09,
27-3 Insurance Code, as added by this Act.
27-4 (b) A travel agency or franchisee is not required to be
27-5 licensed as provided by Section 4, Article 21.09, Insurance Code,
27-6 as added by this Act, before January 1, 2000.
27-7 (c) A self-service storage facility or franchisee is not
27-8 required to be licensed under Section 5, Article 21.09, Insurance
27-9 Code, as added by this Act, before January 1, 2000.
27-10 (d) A person required to be licensed under Article 21.07-2,
27-11 Insurance Code, as redesignated and amended by this Act, who was
27-12 not required to be licensed under Chapter 29, Acts of the 54th
27-13 Legislature, Regular Session, 1955 (Article 21.07-2, Vernon's Texas
27-14 Insurance Code), as it existed immediately before the effective
27-15 date of this Act, is not required to be licensed as provided by
27-16 this Act before January 1, 2000.
27-17 (e) A person who holds a license to operate as an
27-18 agricultural insurance agent under Article 21.14-2, Insurance Code,
27-19 on the effective date of this Act is eligible for a license under
27-20 Article 21.14, Insurance Code, if the person applies for the
27-21 license to the Texas Department of Insurance before March 1, 2000,
27-22 and pays any required fees. To maintain the license, the person
27-23 must pass the required qualifying examination for that license on
27-24 or before March 1, 2002.
27-25 SECTION 6.03. The importance of this legislation and the
27-26 crowded condition of the calendars in both houses create an
28-1 emergency and an imperative public necessity that the
28-2 constitutional rule requiring bills to be read on three several
28-3 days in each house be suspended, and this rule is hereby suspended.