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) A person licensed under this article may not allow an
2-22 individual to act on the license holder's behalf with respect to
2-23 the specific type of insurance that the license holder is
2-24 authorized to offer unless that individual has completed an
2-25 approved training program. An insurer that writes the specific
2-26 type of insurance for which the specialty license is sought must
3-1 provide the materials for the training program to the license
3-2 holder. The insurer must submit the training program to the
3-3 commissioner for approval before the training program is used. The
3-4 training program must meet the following minimum standards:
3-5 (1) each trainee must receive basic instruction about
3-6 the kinds of insurance the license holder is authorized to offer
3-7 for purchase by prospective consumers;
3-8 (2) each trainee must be instructed to inform a
3-9 prospective consumer that, except as may be specifically provided
3-10 by another law of this state or the United States, the purchase of
3-11 insurance specified in this article is not required in order to
3-12 complete the associated consumer transaction; and
3-13 (3) each trainee must be instructed with respect to
3-14 the disclosures required to be made to consumers.
3-15 (e) Except as otherwise provided by this article, a
3-16 specialty license holder acting under this article shall comply
3-17 with all applicable provisions of this subchapter.
3-18 (f) Notwithstanding any other provision of this subchapter
3-19 or any rule adopted by the commissioner, a specialty license holder
3-20 is not required to treat premiums collected from a consumer
3-21 purchasing insurance when completing an associated consumer
3-22 transaction as money received in a fiduciary capacity if:
3-23 (1) the insurer represented by the specialty license
3-24 holder has consented in writing, signed by an officer of the
3-25 insurer, that premiums need not be segregated from money received
3-26 by the license holder on account of the associated consumer
4-1 transaction; and
4-2 (2) the charges for insurance coverage are itemized
4-3 but not billed to the consumer separately from the charges for the
4-4 associated consumer transaction.
4-5 (g) Insurance may not be issued under this article unless:
4-6 (1) at each location at which sales of insurance
4-7 policies covered by this article occur, brochures or other written
4-8 materials are prominently displayed and readily available to the
4-9 prospective consumer that:
4-10 (A) summarize, clearly and correctly, the
4-11 material terms of insurance coverage offered to consumers,
4-12 including the identity of the insurer;
4-13 (B) disclose that the policies offered by the
4-14 license holder may provide a duplication of coverage already
4-15 provided by a consumer's personal auto insurance policy,
4-16 homeowner's insurance policy, personal liability insurance policy,
4-17 or other source of coverage;
4-18 (C) state that, except as specifically provided
4-19 by another law of this state or the United States, the purchase by
4-20 the consumer of the kinds of insurance specified in this article is
4-21 not required to complete the associated consumer transaction;
4-22 (D) describe the process for filing a claim in
4-23 the event the consumer elects to purchase coverage and in the event
4-24 of a claim; and
4-25 (E) contain any additional information on the
4-26 price, benefits, exclusions, conditions, or other limitations of
5-1 the policies required by the commissioner by rule; and
5-2 (2) evidence of coverage is provided to each consumer
5-3 who elects to purchase the coverage.
5-4 (h) If a specialty license holder violates this subchapter,
5-5 the commissioner may:
5-6 (1) impose any disciplinary action authorized by
5-7 Article 21.01-2 of this code; or
5-8 (2) after notice and opportunity for hearing, impose
5-9 other penalties, including suspending the transaction of insurance
5-10 at specific locations where a violation of this subchapter has
5-11 occurred, as the commissioner considers necessary or appropriate to
5-12 implement the purposes of this subchapter.
5-13 (i) A specialty license holder may not in any manner
5-14 advertise, represent, or otherwise hold out the license holder or
5-15 any employee of the license holder as a licensed insurance agent
5-16 under another article of this code unless the entity or individual
5-17 actually holds the applicable license.
5-18 (j) A person who holds a general agent's license issued
5-19 under Chapter 213, Acts of the 54th Legislature, Regular Session,
5-20 1955 (Article 21.07-1, Vernon's Texas Insurance Code), as amended,
5-21 or Article 21.14 of this code or who holds a substantially
5-22 equivalent license under this code, as determined by the
5-23 commissioner, is not required to obtain a specialty license but is
5-24 subject to the other requirements of this article in the
5-25 solicitation, sale, or delivery of an insurance product subject to
5-26 this article.
6-1 (k) Each insurance company appointing an agent under this
6-2 article shall submit a certification of the appointment signed by
6-3 an officer of the insurer and affirm that the insurer has satisfied
6-4 itself that the license holder is trustworthy and competent to act
6-5 as an insurance agent on behalf of the insurer.
6-6 (l) An examination is not required for issuance of a license
6-7 under this article and continuing education requirements do not
6-8 apply to a license issued under this article.
6-9 (m) A person who is licensed as an agent for a legal reserve
6-10 life insurance company or as a local recording agent, or who holds
6-11 a substantially equivalent license under this code, as determined
6-12 by the commissioner, and who enters into a contract with an insurer
6-13 to act as the insurer's agent in soliciting or writing policies or
6-14 certificates of insurance covered by this article may assign and
6-15 transfer to the agent's employer any commission, fee, or other
6-16 compensation to be paid to the agent under the agent's contract
6-17 with the insurer, but only if the sale of the insurance product
6-18 occurred within the scope of the agent's employment.
6-19 Sec. 2. RENTAL CAR COMPANIES. (a) In this section:
6-20 (1) "Rental agreement" means a written agreement that
6-21 sets forth the terms and conditions governing the use of a vehicle
6-22 or vehicle equipment provided by a rental car company.
6-23 (2) "Rental car company" means a person engaged in the
6-24 business of providing leased or rented vehicles or vehicle
6-25 equipment to the public.
6-26 (3) "Renter" means a person who obtains the use of a
7-1 vehicle or vehicle equipment from a rental car company under the
7-2 terms of a rental agreement.
7-3 (4) "Vehicle" means:
7-4 (A) a private passenger motor vehicle, including
7-5 passenger vans and minivans that are primarily intended for the
7-6 transport of persons;
7-7 (B) a motor home;
7-8 (C) a motorcycle;
7-9 (D) a trailer with a gross vehicle weight rating
7-10 of 10,000 pounds or less; or
7-11 (E) a truck with a gross vehicle weight rating
7-12 of 26,000 pounds or less the operation of which does not require a
7-13 commercial driver's license.
7-14 (5) "Vehicle equipment" means a cartop carrier, tow
7-15 bar, or tow dolly specifically designed for use with a vehicle.
7-16 (b) Notwithstanding any other provision of this article or
7-17 this code, the commissioner shall issue a specialty license under
7-18 Section 1 of this article to a rental car company, or to the
7-19 franchisee of a rental car company, that complies with this section
7-20 only for the limited purposes set forth in this section.
7-21 (c) The rental car company or franchisee licensed under
7-22 Section 1 of this article may act as an agent for an authorized
7-23 insurer only in connection with the rental of vehicles or vehicle
7-24 equipment and only with respect to:
7-25 (1) excess liability insurance that provides coverage
7-26 to the rental car company or franchisee and renters and other
8-1 authorized drivers of rental vehicles, in excess of the standard
8-2 liability limits provided by the rental car company in the rental
8-3 agreement, for liability arising from the negligent operation or
8-4 use of the rental vehicle or vehicle equipment;
8-5 (2) accident and health insurance that provides
8-6 coverage to renters and other vehicle occupants for accidental
8-7 death or dismemberment and for medical expenses resulting from an
8-8 accident involving the rental vehicle or vehicle equipment that
8-9 occurs during the rental period;
8-10 (3) personal effects insurance that provides coverage
8-11 to renters and other rental vehicle occupants for the loss of, or
8-12 damage to, personal effects or household belongings that occurs
8-13 during the rental period; or
8-14 (4) any other coverage that the commissioner may
8-15 approve as meaningful and appropriate in connection with the rental
8-16 of vehicles or vehicle equipment.
8-17 (d) Insurance may not be issued under this section unless:
8-18 (1) the rental period under the rental agreement does
8-19 not exceed 30 consecutive days; and
8-20 (2) the brochures or other written materials
8-21 containing the disclosures required by Section 1(g) of this article
8-22 are prominently displayed and readily available to the prospective
8-23 renter of a vehicle or vehicle equipment.
8-24 Sec. 3. CREDIT INSURANCE. (a) In this section:
8-25 (1) "Credit insurance" includes:
8-26 (A) credit life insurance;
9-1 (B) credit accident and health insurance;
9-2 (C) credit property insurance;
9-3 (D) credit involuntary unemployment insurance;
9-4 and
9-5 (E) insurance that covers the difference between
9-6 the actual cash value of a motor vehicle used as security for a
9-7 loan or lease and the outstanding balance of that loan or lease in
9-8 the event of loss or damage in which the vehicle is rendered an
9-9 actual or constructive total loss while the debt for which the
9-10 vehicle serves as security exceeds the actual cash value of the
9-11 vehicle.
9-12 (2) "Credit insurance agent" means a person licensed
9-13 to sell credit insurance under this article as specifically
9-14 provided by this section.
9-15 (3) "Credit property insurance" means insurance that
9-16 provides coverage on personal property used as collateral for
9-17 securing a personal or consumer loan or on personal property under
9-18 an installment sales agreement or through a consumer credit
9-19 transaction that is purchased in connection with or in relation to
9-20 the personal or consumer loan, installment sale, or consumer credit
9-21 transaction. The term does not include insurance that provides
9-22 theft, collision, liability, property damage, or comprehensive
9-23 insurance coverage on an automobile, motorized aircraft,
9-24 motorcycle, truck, truck-tractor, traction engine, or any other
9-25 self-propelled vehicle that is designed primarily for operation in
9-26 the air, or on highways, roadways, waterways, or the sea, and the
10-1 operating equipment of the self-propelled vehicle or craft, or that
10-2 is necessitated by reason of the liability imposed by law for
10-3 damages arising out of the ownership, operation, maintenance, or
10-4 use of any of those vehicles and crafts, other than single interest
10-5 coverage on any vehicle or craft described in this subdivision that
10-6 insures the interest of the creditor in the same manner as
10-7 collateral for a loan.
10-8 (b) Notwithstanding any other provision of this article or
10-9 this code, the commissioner may issue a license under Section 1 of
10-10 this article to a retail distributor of goods, an automobile
10-11 dealer, a bank, a state or federal savings and loan, a state or
10-12 federal credit union, a finance company, a production credit
10-13 association, a manufactured home retailer, or a mobile home
10-14 retailer that complies with this section only for the limited
10-15 purposes set forth in this section.
10-16 (c) On appointment by the insurance company, a credit
10-17 insurance agent may act as the agent of any company authorized to
10-18 engage in the business of insurance under this code in the sale of
10-19 any type of credit insurance that the company is authorized to
10-20 write. The authority conferred under this section specifically
10-21 permits the sale of both individual and group credit insurance.
10-22 (d) A license holder and the license holder's representative
10-23 are not required to make the disclosures required by Section 1(g)
10-24 of this article if the license holder or the license holder's
10-25 representative complies with all disclosure requirements prescribed
10-26 by another provision of this code or another law of this state or
11-1 the United States relating to the sale or delivery of a credit
11-2 insurance product that is subject to this section.
11-3 Sec. 4. TRAVEL INSURANCE LICENSE. (a) In this section:
11-4 (1) "Planned trip" means any journey or travel
11-5 arranged through the services of a travel agency.
11-6 (2) "Travel agency" means an entity engaged in the
11-7 business of selling or arranging transportation or accommodations
11-8 for the public.
11-9 (3) "Traveler" means an individual who seeks the
11-10 assistance of a travel agency in connection with the planning and
11-11 purchase of a trip.
11-12 (b) Notwithstanding any other provision of this article or
11-13 this code, the commissioner may issue a specialty license under
11-14 Section 1 of this article to a travel agency, the franchisee of a
11-15 travel agency, or a public carrier that complies with this section
11-16 only for the limited purposes set forth in this section.
11-17 (c) The travel agency or franchisee licensed under Section 1
11-18 of this article may act as an agent for any authorized insurer only
11-19 in connection with the sale or arrangement of transportation or
11-20 accommodations for travelers and only with respect to:
11-21 (1) accident and health insurance that provides
11-22 coverage to a traveler for accidental death or dismemberment and
11-23 for medical expenses resulting from an accident involving the
11-24 traveler that occurs during the planned trip;
11-25 (2) insurance that provides coverage to a traveler for
11-26 expenses incurred as a result of trip cancellation or interruption
12-1 of a planned trip;
12-2 (3) personal effects insurance that provides coverage
12-3 to a traveler for the loss of, or damage to, personal effects that
12-4 occurs during the planned trip;
12-5 (4) life insurance covering risks of travel during a
12-6 planned trip that does not exceed $150,000 on any one life; or
12-7 (5) any other coverage that the commissioner may
12-8 approve as meaningful and appropriate in connection with the
12-9 transportation or accommodations arranged through a travel agency.
12-10 (d) Insurance may not be issued under this section unless
12-11 the brochures or other written materials containing the disclosures
12-12 required by Section 1(g) of this article are prominently displayed
12-13 and readily available to the prospective traveler.
12-14 Sec. 5. SELF-SERVICE STORAGE FACILITY LICENSE. (a) In this
12-15 section:
12-16 (1) "Rental agreement" means a written agreement that
12-17 sets forth the terms and conditions governing the use of storage
12-18 space provided by a self-service storage facility.
12-19 (2) "Renter" means a person who obtains the use of
12-20 storage space from a self-service storage facility under a rental
12-21 agreement.
12-22 (3) "Self-service storage facility" means a person
12-23 engaged in the business of providing leased or rented storage space
12-24 to the public.
12-25 (4) "Storage space" means a room, unit, locker, or
12-26 open space offered for rental to the public for temporary storage
13-1 of personal belongings or light commercial goods.
13-2 (b) Notwithstanding any other provision of this article or
13-3 this code, the commissioner may issue a specialty license under
13-4 Section 1 of this article to a self-service storage facility or to
13-5 the franchisee of a self-service storage facility that complies
13-6 with this section only for the limited purposes set forth in this
13-7 section.
13-8 (c) A self-service storage facility or franchisee licensed
13-9 under Section 1 of this article may act as an agent for any
13-10 authorized insurer only in connection with the rental of storage
13-11 space and only with respect to:
13-12 (1) insurance that provides hazard insurance coverage
13-13 to renters for the loss of, or damage to, tangible personal
13-14 property in storage or in transit during the rental period; or
13-15 (2) any other coverage the commissioner may approve as
13-16 meaningful and appropriate in connection with the rental of storage
13-17 space.
13-18 (d) Insurance may not be issued under this section unless
13-19 the brochures or other written materials containing the disclosures
13-20 required by Section 1(g) of this article are prominently displayed
13-21 and readily available to the prospective renter.
13-22 Sec. 6. RULES. The commissioner may adopt rules necessary
13-23 to implement this article and to meet the minimum requirements of
13-24 federal law and regulations.
13-25 ARTICLE 2. LIFE AND HEALTH INSURANCE COUNSELOR LICENSE
13-26 SECTION 2.01. Chapter 29, Acts of the 54th Legislature,
14-1 Regular Session, 1955 (Article 21.07-2, Vernon's Texas Insurance
14-2 Code), is transferred to the Insurance Code, redesignated as
14-3 Article 21.07-2, Insurance Code, and amended to read as follows:
14-4 Art. 21.07-2. LIFE AND HEALTH INSURANCE COUNSELOR LICENSE
14-5 Sec. 1. DEFINITION OF TERM. The term "Life and Health
14-6 Insurance Counselor" as used in this article [Act] shall mean any
14-7 person who, for money, fee, commission or any other thing of value
14-8 offers to examine, or examines any policy of life, accident, or
14-9 health insurance, any health benefit plan, or any annuity or pure
14-10 endowment contract for the purpose of giving, or gives, or offers
14-11 to give, any advice, counsel, recommendation or information in
14-12 respect to the terms, conditions, benefits, coverage or premium of
14-13 any such policy or contract, or in respect to the expediency or
14-14 advisability of altering, changing, exchanging, converting,
14-15 replacing, surrendering, continuing or rejecting any such policy,
14-16 plan, or contract, or of accepting or procuring any such policy,
14-17 plan, or contract from any insurer or issuer of a health benefit
14-18 plan, or who in or on advertisements, cards, signs, circulars or
14-19 letterheads, or elsewhere, or in any other way or manner by which
14-20 public announcements are made, uses the title "insurance adviser,"
14-21 "insurance specialist," "insurance counselor," "insurance analyst,"
14-22 "policyholders' adviser," "policyholders' counselor," or any other
14-23 similar title, or any title indicating that the person [he] gives,
14-24 or is engaged in the business of giving advice, counsel,
14-25 recommendation or information to an insured, or a beneficiary, or
14-26 any person having any interest in a life, accident, or health
15-1 insurance contract, health benefit plan contract, annuity or pure
15-2 endowment contract. This definition is not intended to prevent a
15-3 person who has obtained the professional designation of chartered
15-4 life underwriter (CLU), chartered financial consultant (ChFC) or
15-5 certified financial planner (CFP) by completing a course of
15-6 instruction recognized within the business of insurance from using
15-7 that designation to indicate professional achievement.
15-8 Sec. 2. LICENSE REQUIRED; ISSUANCE BY DEPARTMENT. No person
15-9 shall act as a Life and Health Insurance Counselor, as defined in
15-10 Section 1 of this article [hereof], unless authorized so to act by
15-11 a license issued by the department under [Board of Insurance
15-12 Commissioners of the State of Texas pursuant to the provisions of]
15-13 this article [Act].
15-14 Sec. 3. EXEMPTIONS. The provisions of this article [Act]
15-15 shall not apply to the following persons:
15-16 (a) Licensed agents for a life insurance company while
15-17 acting for an insurer as its agent.
15-18 (b) Licensed attorneys at law of this State when
15-19 acting within the course or scope of their profession.
15-20 (c) Licensed public accountants of this State while
15-21 acting within the course or scope of their profession.
15-22 (d) A regular salaried officer or employee of an
15-23 authorized insurer issuing policies of life or health insurance
15-24 while acting for such insurer in discharging the duties of the
15-25 [his] position or employment.
15-26 (e) An officer or employee of any bank or trust
16-1 company who receives no compensation from sources other than the
16-2 bank or trust company for such activities connected with the [his]
16-3 employment.
16-4 (f) Employers or their officers or employees, or the
16-5 trustees of any employee benefit plan, to the extent that such
16-6 employers, officers, employees or trustees are engaged in the
16-7 administration or operation of any program of employee benefits
16-8 involving the use of insurance or annuities issued by a legal
16-9 reserve life insurance company.
16-10 Sec. 4. CONTRACT, WRITING REQUIRED; DUPLICATES; OTHER
16-11 REQUISITES. No contract or agreement between a Life and Health
16-12 Insurance Counselor, as defined in this article [Act], and any
16-13 other person, firm or corporation, relating to the activities,
16-14 services, advice, recommendations or information referred to in
16-15 Section 1 of this article [Act], shall be enforceable by or on
16-16 behalf of such Life and Health Insurance Counselor unless it is in
16-17 writing and executed in duplicate by the person, firm or
16-18 corporation to be charged, nor unless one of said duplicates is
16-19 delivered to and retained by such person, firm or corporation when
16-20 executed, nor unless such contract or agreement plainly specifies
16-21 the amount of the fee paid or to be paid by such person, firm or
16-22 corporation, and the services to be rendered by such Life and
16-23 Health Insurance Counselor; provided, however, that the foregoing
16-24 provisions shall not be applicable to any of the persons set out in
16-25 Section 3 of this article [above].
16-26 Sec. 4a. PROHIBITION OF DUAL COMPENSATION. A person
17-1 licensed under the provisions of this article [Act] who is also
17-2 licensed under Chapter 213, Acts of the 54th Legislature, Regular
17-3 Session, 1955 ([Article 21.07 or] Article 21.07-1, Vernon's Texas
17-4 Insurance [of this] Code), as amended, and who receives a
17-5 commission or compensation for [his] services as an agent licensed
17-6 under Chapter 213, Acts of the 54th Legislature, Regular Session,
17-7 1955 ([Article 21.07 or] Article 21.07-1, Vernon's Texas Insurance
17-8 Code), as amended, shall not be entitled to receive a fee for the
17-9 same services [his service] to the same client as a Life and Health
17-10 Insurance Counselor.
17-11 Sec. 5. MODE OF LICENSING AND REGULATION. (a) Except as
17-12 provided by this article, [The] licensing and regulation of a Life
17-13 and Health Insurance Counselor, as that term is defined herein,
17-14 shall be in the same manner and subject to the same requirements as
17-15 applicable to the licensing of agents under this subchapter [of
17-16 legal reserve life insurance companies as provided in Article
17-17 21.07-1 of the Texas Insurance Code, 1951,] or as provided by any
17-18 existing or subsequent applicable law governing the licensing of
17-19 such agents, and all the provisions thereof are hereby made
17-20 applicable to applicants and licensees under this article [Act],
17-21 except that a Life and Health Insurance Counselor shall not
17-22 advertise in any manner and shall not circulate materials
17-23 indicating professional superiority or the performance of
17-24 professional service in a superior manner; provided, however, that
17-25 an appointment to act for an insurer shall not be a condition to
17-26 the licensing of a Life and Health Insurance Counselor.
18-1 (b) An [In addition to the above requirements, the applicant
18-2 for licensure as a Life Insurance Counselor shall submit to the
18-3 Commissioner documentation that he has been licensed as a life
18-4 insurance agent in excess of three years. After the Insurance
18-5 Commissioner has satisfied himself as to these requirements, he
18-6 shall then cause the] applicant for a Life and Health Insurance
18-7 Counselor's license must [to] sit for an examination administered
18-8 under Article 21.01-1 of this code that includes [which shall
18-9 include] the following five subjects and subject areas:
18-10 (1) Fundamentals of life and health insurance;
18-11 (2) Group life insurance, pensions and health
18-12 insurance;
18-13 (3) Law, trust and taxation;
18-14 (4) Finance and economics; and
18-15 (5) Business insurance and estate planning.
18-16 (c) No license shall be granted until such individual shall
18-17 have successfully passed each of the five parts under Subsection
18-18 (b) of this section. Such examinations may be given and scheduled
18-19 by the Commissioner at the Commissioner's [his] discretion. The
18-20 department shall, without further examination, issue a license
18-21 under this article to an individual who, on September 1, 1999,
18-22 holds a [Individuals currently holding] Life Insurance Counselor
18-23 license [licenses] issued by the department [Texas State Board of
18-24 Insurance, who do not have the equivalent of the requirements above
18-25 listed, shall have one year from the date of enactment hereof to so
18-26 qualify].
19-1 Sec. 6. INTENT OF LEGISLATURE; STATUTES AND AMENDMENTS
19-2 APPLICABLE. Except as provided by this article, it [It] is the
19-3 legislative intent, and it is hereby provided, that the licensing
19-4 and regulation of any person acting as a Life and Health Insurance
19-5 Counselor shall be subject to the same statutes and requirements
19-6 applicable to the licensing and regulation of agents under this
19-7 subchapter [of legal reserve life insurance companies]. In event
19-8 of subsequent legislative enactment applicable to agents under this
19-9 subchapter [of legal reserve life insurance companies in lieu of,
19-10 or as an amendment to, present Article 21.07 of the Texas Insurance
19-11 Code], it is hereby provided that such statute shall be applicable
19-12 to any person acting as a Life and Health Insurance Counselor, as
19-13 defined in this article [Act].
19-14 Sec. 7. VIOLATIONS. [(a)] A [person commits an offense if
19-15 the person acts as a life insurance counselor without a license
19-16 issued under this Act or otherwise violates this Act. Each
19-17 violation constitutes a separate offense. An offense under this
19-18 subsection is a Class C misdemeanor.]
19-19 [(b) In addition to being subject to the penalty imposed
19-20 under Subsection (a) of this section, a] person who commits a
19-21 violation of this article [Act] is subject to license revocation
19-22 under [Section 5,] Article 21.01-2 of this code[, Insurance Code].
19-23 If the department revokes the license, the license holder is not
19-24 eligible for a new license for two years after the effective date
19-25 of the license revocation.
19-26 Sec. 8. PARTIAL INVALIDITY. Should any Section or part
20-1 [thereof] of this article [Act] be held to be invalid for any
20-2 reason, such holding shall not be construed as affecting the
20-3 validity of any of the remaining Sections or parts of this article
20-4 [thereof], it being the legislative intent that the remainder of
20-5 this article [Section] shall stand, notwithstanding the invalidity
20-6 of any Section or part of this article [thereof].
20-7 Sec. 9. CONTINUING EDUCATION. A person who holds a license
20-8 issued under this article shall complete continuing education as
20-9 required by rules of the department or any applicable article of
20-10 this code.
20-11 Sec. 10. RULES. The commissioner may adopt rules necessary
20-12 to implement this article and to meet the minimum requirements of
20-13 federal law and regulations.
20-14 Sec. 11. REFERENCE IN OTHER LAW. A reference in any law to
20-15 Chapter 29, Acts of the 54th Legislature, Regular Session, 1955,
20-16 means this article.
20-17 ARTICLE 3. ADJUSTERS LICENSES
20-18 SECTION 3.01. Chapter 407, Acts of the 63rd Legislature,
20-19 Regular Session, 1973 (Article 21.07-4, Vernon's Texas Insurance
20-20 Code), is amended by amending Sections 15, 16, 17, and 23 and
20-21 adding Section 24 to read as follows:
20-22 Sec. 15. PLACE OF BUSINESS. Every licensed adjuster shall
20-23 have and maintain [in this state] a place of business accessible to
20-24 the public. Such place of business shall be located where the
20-25 adjuster principally conducts transactions under the [his] license.
20-26 The [address of his place of business shall appear on all licenses
21-1 of the licensee, and the] licensee shall promptly notify the
21-2 commissioner of any change in the location of the place of business
21-3 [thereof].
21-4 Sec. 16. EXPIRATION AND RENEWAL OF LICENSES. Expiration and
21-5 renewal of licenses issued under this Act are governed by rules of
21-6 the department or any applicable article of the Insurance Code or
21-7 another insurance law of this state. [(a) Except as may be
21-8 provided by a staggered renewal system adopted under Article
21-9 21.01-2, Insurance Code, an adjuster's license expires two years
21-10 after the date of issuance.]
21-11 [(b) Subject to the right of the commissioner to suspend,
21-12 revoke, or refuse to renew an adjuster's license, any such license
21-13 may be renewed by filing, on the form prescribed by the
21-14 commissioner, on or before the expiration date, a written request,
21-15 by or on behalf of the licensee, for such renewal, accompanied by
21-16 payment of the renewal fee.]
21-17 Sec. 17. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE.
21-18 [(a)] The department may discipline an adjuster or deny an
21-19 application under department rules or any other applicable article
21-20 of the Insurance Code or another insurance law of this state. The
21-21 rules may specify grounds for discipline that are comparable to
21-22 grounds for discipline of other license holders under this
21-23 subchapter [Section 5, Article 21.01-2, Insurance Code, for any of
21-24 the following causes:]
21-25 [(1) for any cause for which issuance of the license
21-26 could have been refused had it been existent and been known to the
22-1 board;]
22-2 [(2) if the applicant or licensee willfully violates
22-3 or knowingly participates in the violation of any provision of this
22-4 Act;]
22-5 [(3) if the applicant or licensee has obtained or
22-6 attempted to obtain any such license through willful
22-7 misrepresentation or fraud, or has failed to pass any examination
22-8 required under this Act;]
22-9 [(4) if the applicant or licensee has misappropriated,
22-10 or converted to the applicant's or licensee's own use, or has
22-11 illegally withheld moneys required to be held in a fiduciary
22-12 capacity;]
22-13 [(5) if the applicant or licensee has, with intent to
22-14 deceive, materially misrepresented the terms or effect of an
22-15 insurance contract, or has engaged in any fraudulent transactions;
22-16 or]
22-17 [(6) if the applicant or licensee is convicted, by
22-18 final judgment, of a felony.]
22-19 [(b) An applicant or licensee whose license application or
22-20 license has been denied, refused, or revoked under this section may
22-21 not apply for any license as an insurance agent or adjuster before
22-22 the first anniversary of the effective date of the denial, refusal,
22-23 or revocation, or, if the applicant or licensee seeks judicial
22-24 review of the denial, refusal, or revocation, before the first
22-25 anniversary of the date of the final court order or decree
22-26 affirming that action. The commissioner may deny an application
23-1 timely filed if the applicant does not show good cause why the
23-2 denial, refusal, or revocation of the previous license application
23-3 or license should not be considered a bar to the issuance of a new
23-4 license. This subsection does not apply to an applicant whose
23-5 license application was denied for failure to pass a required
23-6 written examination].
23-7 Sec. 23. DUPLICATE LICENSE; FEE. The department
23-8 [Commissioner of Insurance] shall collect in advance from an
23-9 adjuster [adjusters] requesting a duplicate license [licenses] a
23-10 fee in an amount determined by the department [not to exceed $20.
23-11 The State Board of Insurance shall determine the amount of the
23-12 fee].
23-13 Sec. 24. RULES. The commissioner may adopt rules necessary
23-14 to implement this Act and to meet the minimum requirements of
23-15 federal law and regulations.
23-16 ARTICLE 4. AGRICULTURE AGENTS
23-17 SECTION 4.01. Article 21.14-2, Insurance Code, is amended to
23-18 read as follows:
23-19 Art. 21.14-2. [LICENSING OF] AGRICULTURAL INSURANCE AGENTS
23-20 Sec. 1. APPOINTING CERTAIN AGRICULTURAL INSURANCE AGENTS.
23-21 An insurance company that holds a valid certificate of authority
23-22 issued by this state to authorize the company to engage in the
23-23 insurance business in this state, and whose authority in this state
23-24 and in each other jurisdiction in which the company is licensed to
23-25 do business is limited [but limiting the insurance business only]
23-26 to the transaction of the business of insurance of risks on growing
24-1 crops, may appoint and act through agents who hold [qualify for] a
24-2 license under Article 21.14 of this code, subject to this article.
24-3 Sec. 2. REQUIREMENTS FOR APPOINTMENT. (a) To appoint a
24-4 license holder [obtain a license] to act as an agent under this
24-5 article, an insurance company [applicant] must submit a completed
24-6 appointment form [written application] to the department
24-7 [commissioner of insurance on a form prescribed by the State Board
24-8 of Insurance] and pay a [$50] nonrefundable fee in an amount
24-9 determined by the commissioner. The appointment form [application]
24-10 must bear an endorsement signed by a representative [an agent] of
24-11 an insurance company that meets the requirements of Section 1 of
24-12 this article [and must state that the applicant is a resident of
24-13 this state].
24-14 (b) The commissioner of insurance shall approve the
24-15 appointment [license application] unless the commissioner
24-16 determines that the applicant does not meet the requirements of
24-17 this subchapter [article].
24-18 (c) The department may waive any examination requirement
24-19 imposed under this subchapter for a license applicant seeking a
24-20 company appointment under this article if the applicant has
24-21 successfully completed an examination as required under the Federal
24-22 Crop Insurance Corporation guidelines for delivery of the federal
24-23 crop insurance program. [Except as provided by a staggered renewal
24-24 system adopted under Article 21.01-2 of this code, a license issued
24-25 under this article expires two years after the date of its issuance
24-26 unless a completed application to renew the license is filed with
25-1 the commissioner and the $50 nonrefundable renewal fee is paid on
25-2 or before that date, in which case the license continues in full
25-3 force and effect until renewed or the renewal is denied.]
25-4 (d) The department may, at its discretion, accept continuing
25-5 education hours completed under the guidelines of the Federal Crop
25-6 Insurance Corporation as satisfying the continuing education
25-7 requirements imposed under this subchapter. [An applicant for an
25-8 original or renewal license is not required to pass an examination
25-9 or meet any basic or continuing educational requirements to obtain
25-10 or renew a license under this article.]
25-11 Sec. 3. MULTIPLE APPOINTMENTS AUTHORIZED. A license holder
25-12 appointed under this article may act as an agent for more than one
25-13 insurance company, but may act as an agent under this article only
25-14 with respect to the business of insurance on growing crops. [The
25-15 license of an agent is automatically suspended or canceled if the
25-16 agent does not have outstanding a valid appointment to act as an
25-17 agent for an insurance company described in Section 1 of this
25-18 article. The department may discipline a licensee or deny an
25-19 application under Section 5, Article 21.01-2, of this code if it
25-20 determines that the license applicant or licensee:]
25-21 [(1) has intentionally or knowingly violated the
25-22 insurance laws of this state;]
25-23 [(2) has obtained or attempted to obtain a license by
25-24 fraud or misrepresentation;]
25-25 [(3) has misappropriated, converted, or illegally
25-26 withheld money belonging to an insurer or an insured or
26-1 beneficiary;]
26-2 [(4) has been guilty of fraudulent or dishonest acts;]
26-3 [(5) has materially misrepresented the terms and
26-4 conditions of an insurance policy or contract;]
26-5 [(6) has made or issued or caused to be made or issued
26-6 any statement misrepresenting or making incomplete comparisons
26-7 regarding the terms or conditions of an insurance contract legally
26-8 issued by an insurance carrier for the purpose of inducing or
26-9 attempting to induce the owner of the contract to forfeit or
26-10 surrender the contract or allow the contract to expire or for the
26-11 purpose of replacing the contract with another contract;]
26-12 [(7) has been convicted of a felony; or]
26-13 [(8) is guilty of rebating an insurance premium or
26-14 discriminating between insureds.]
26-15 Sec. 4. APPLICATION OF OTHER LAW. This subchapter applies
26-16 [Article 21.14 of this code does not apply] to the licensing and
26-17 [or] regulation of an agent appointed under this article.
26-18 Sec. 5. RULES. The commissioner may adopt rules necessary
26-19 to implement this article and to meet the minimum requirements of
26-20 federal law and regulations.
26-21 ARTICLE 5. LICENSING REQUIREMENTS FOR AUTOMOBILE CLUBS
26-22 SECTION 5.01. Subchapter F, Chapter 21, Insurance Code, is
26-23 amended by adding Article 21.80 to read as follows:
26-24 Art. 21.80. LICENSING REQUIREMENTS FOR AUTOMOBILE CLUBS.
26-25 (a) An automobile club as defined in Section 722.002(2),
26-26 Transportation Code, may provide insurance service only as provided
27-1 by this section.
27-2 (b) An automobile club may provide a member accidental
27-3 injury and death benefit insurance coverage through purchase of a
27-4 group policy of insurance issued to the automobile club for the
27-5 benefit of its members. The coverage must be purchased from an
27-6 insurance company authorized to sell that type of coverage in this
27-7 state. The automobile club shall provide each member covered by
27-8 the insurance a certificate of participation. The certificate of
27-9 participation must state on its face in at least 14-point black
27-10 boldfaced type that the certificate is only a certificate of
27-11 participation in a group accidental injury and death policy and is
27-12 not motor vehicle liability insurance coverage.
27-13 (c) An automobile club may endorse insurance products and
27-14 refer members to agents or insurers authorized to provide the
27-15 insurance products in this state. The automobile club or an agent
27-16 of the automobile club may not receive remuneration for the
27-17 referral.
27-18 (d) Except as provided by Subsection (e) of this article, an
27-19 automobile club performing services permitted by this article is
27-20 not subject to regulation under the insurance laws of this state
27-21 because of the performance of those services.
27-22 (e) An automobile club may sell insurance products to a
27-23 member for a consideration separate from the amount that the member
27-24 pays for membership in the automobile club if the automobile club
27-25 is properly licensed as an agent under the applicable provisions of
27-26 this code.
28-1 (f) In addition to reimbursement services enumerated in
28-2 Section 722.002(2), Transportation Code, an automobile club may
28-3 contract with a member to reimburse the member for expenses the
28-4 member incurs for towing, emergency road service, and lockout or
28-5 lost key service and to provide immediate destination assistance
28-6 and trip interruption service. The insurance laws of this state do
28-7 not apply to reimbursement provided under this subsection.
28-8 SECTION 5.02. Section 722.013, Transportation Code, is
28-9 repealed.
28-10 ARTICLE 6. REPEALER
28-11 SECTION 6.01. The following laws are repealed:
28-12 (1) Section 21, Article 21.07, Insurance Code, as
28-13 added by Chapter 820, Acts of the 75th Legislature, Regular
28-14 Session, 1997;
28-15 (2) Section 21, Article 21.07, Insurance Code, as
28-16 added by Chapter 1196, Acts of the 75th Legislature, Regular
28-17 Session, 1997; and
28-18 (3) Sections 18 and 19, Chapter 407, Acts of the 63rd
28-19 Legislature, Regular Session, 1973 (Article 21.07-4, Vernon's Texas
28-20 Insurance Code).
28-21 ARTICLE 7. GRANDFATHER PROVISIONS; EFFECTIVE DATE; EMERGENCY
28-22 SECTION 7.01. This Act takes effect September 1, 1999.
28-23 SECTION 7.02. (a) Not later than January 1, 2000, the Texas
28-24 Department of Insurance shall issue an appropriate license under
28-25 Article 21.09, Insurance Code, as added by this Act, to a person
28-26 who, immediately before the effective date of this Act, holds an
29-1 agent license issued by the Texas Department of Insurance under
29-2 Section 21, Article 21.07, Insurance Code, as added by Chapter 820,
29-3 Acts of the 75th Legislature, Regular Session, 1997, or Section
29-4 21, Article 21.07, Insurance Code, as added by Chapter 1196, Acts
29-5 of the 75th Legislature, Regular Session, 1997. On issuance of the
29-6 new license, the license holder is subject to Article 21.09,
29-7 Insurance Code, as added by this Act.
29-8 (b) A travel agency or franchisee is not required to be
29-9 licensed as provided by Section 4, Article 21.09, Insurance Code,
29-10 as added by this Act, before January 1, 2000.
29-11 (c) A self-service storage facility or franchisee is not
29-12 required to be licensed under Section 5, Article 21.09, Insurance
29-13 Code, as added by this Act, before January 1, 2000.
29-14 (d) A person required to be licensed under Article 21.07-2,
29-15 Insurance Code, as redesignated and amended by this Act, who was
29-16 not required to be licensed under Chapter 29, Acts of the 54th
29-17 Legislature, Regular Session, 1955 (Article 21.07-2, Vernon's Texas
29-18 Insurance Code), as it existed immediately before the effective
29-19 date of this Act, is not required to be licensed as provided by
29-20 this Act before January 1, 2000.
29-21 (e) A person who holds a license to operate as an
29-22 agricultural insurance agent under Article 21.14-2, Insurance Code,
29-23 on the effective date of this Act is eligible for a license under
29-24 Article 21.14, Insurance Code, if the person applies for the
29-25 license to the Texas Department of Insurance before March 1, 2000,
29-26 and pays any required fees. To maintain the license, the person
S.B. No. 957
30-1 must pass the required qualifying examination for that license on
30-2 or before March 1, 2002.
30-3 SECTION 7.03. The importance of this legislation and the
30-4 crowded condition of the calendars in both houses create an
30-5 emergency and an imperative public necessity that the
30-6 constitutional rule requiring bills to be read on three several
30-7 days in each house be suspended, and this rule is hereby suspended.
________________________________ ________________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 957 passed the Senate on
April 22, 1999, by a viva-voce vote; May 28, 1999, Senate refused
to concur in House amendments and requested appointment of
Conference Committee; May 28, 1999, House granted request of the
Senate; May 30, 1999, Senate adopted Conference Committee Report by
a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 957 passed the House, with
amendments, on May 23, 1999, by a non-record vote; May 28, 1999,
House granted request of the Senate for appointment of Conference
Committee; May 30, 1999, House adopted Conference Committee Report
by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
________________________________
Date
________________________________
Governor