By Madla S.B. No. 957
76R6464 DLF-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the licensing of certain persons who provide services
1-3 related to the business of insurance.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. SPECIALTY LICENSES
1-6 SECTION 1.01. Subchapter A, Chapter 21, Insurance Code, is
1-7 amended by adding Article 21.09 to read as follows:
1-8 Art. 21.09. SPECIALTY LICENSES
1-9 Sec. 1. GENERAL PROVISIONS. (a) The commissioner may issue
1-10 a specialty license to an applicant who is an entity and who has
1-11 complied with the requirements of this article. A specialty
1-12 license authorizes the license holder to act as an agent for the
1-13 types of insurance specified in this article for any insurer
1-14 authorized to write these types of insurance in this state. A
1-15 person who holds a license under this article is known as a
1-16 "specialty license holder."
1-17 (b) For a specialty license to be issued under this article,
1-18 the applicant must submit to the commissioner:
1-19 (1) a written application, signed by an officer of the
1-20 applicant, on a form and supplements to the form prescribed by the
1-21 commissioner, that contains the information prescribed by the
1-22 commissioner;
1-23 (2) a certification by the insurer authorized to do
1-24 business in this state that is to be named in the specialty
2-1 license, that:
2-2 (A) is signed by an officer of the insurer and
2-3 affirmed as true under the penalties of perjury; and
2-4 (B) states that:
2-5 (i) the insurer has satisfied itself that
2-6 the named applicant is trustworthy and competent to act as the
2-7 insurer's agent for a limited purpose authorized by this article;
2-8 and
2-9 (ii) the insurer will appoint the
2-10 applicant to act as the agent for a type of insurance permitted by
2-11 this article, if the specialty license applied for is issued by the
2-12 department; and
2-13 (3) a nonrefundable license fee set by the department
2-14 in an amount necessary to administer this article.
2-15 (c) A specialty license issued under this article authorizes
2-16 a salaried employee of the license holder to act as an agent with
2-17 respect to the kinds of insurance specified in this article if the
2-18 salaried employee:
2-19 (1) is trained under Subsection (d) of this section to
2-20 act individually on behalf of the specialty license holder; and
2-21 (2) is acting on behalf of and under the supervision
2-22 of the license holder.
2-23 (d) Each entity licensed under this article shall conduct a
2-24 training program for each individual who is acting on behalf of the
2-25 license holder with respect to the specific type of insurance. The
2-26 training program must be submitted to the commissioner for approval
2-27 before the training program is used and must meet the following
3-1 minimum standards:
3-2 (1) each trainee must receive basic instruction about
3-3 the kinds of insurance the license holder is authorized to offer
3-4 for purchase by prospective consumers;
3-5 (2) each trainee must be instructed to inform a
3-6 prospective consumer that, except as may be specifically provided
3-7 by another law of this state, the purchase of insurance specified
3-8 in this article is not required in order to complete the associated
3-9 consumer transaction; and
3-10 (3) each trainee must be instructed to inform a
3-11 prospective consumer that the consumer may currently have an
3-12 insurance policy that provides the coverage being offered by the
3-13 license holder under this article.
3-14 (e) Except as provided by Subsection (f) of this section, a
3-15 specialty license holder acting under this article shall comply
3-16 with all applicable provisions of this subchapter.
3-17 (f) Notwithstanding any other provision of this subchapter
3-18 or any rule adopted by the commissioner, a specialty license holder
3-19 is not required to treat premiums collected from a consumer
3-20 purchasing insurance when completing an associated consumer
3-21 transaction as money received in a fiduciary capacity if:
3-22 (1) the insurer represented by the specialty license
3-23 holder has consented in writing, signed by an officer of the
3-24 insurer, that premiums need not be segregated from money received
3-25 by the license holder on account of the associated consumer
3-26 transaction; and
3-27 (2) the charges for insurance coverage are itemized
4-1 but not billed to the consumer separately from the charges for the
4-2 associated consumer transaction.
4-3 (g) Insurance may not be issued under this article unless:
4-4 (1) at each location at which sales of insurance
4-5 policies covered by this article occur, brochures or other written
4-6 materials are prominently displayed and readily available to the
4-7 prospective consumer that:
4-8 (A) summarize, clearly and correctly, the
4-9 material terms of insurance coverage offered to consumers,
4-10 including the identity of the insurer;
4-11 (B) disclose that the policies offered by the
4-12 license holder may provide a duplication of coverage already
4-13 provided by a consumer's personal auto insurance policy,
4-14 homeowner's insurance policy, personal liability insurance policy,
4-15 or other source of coverage;
4-16 (C) state that, except as specifically provided
4-17 by another law of this state, the purchase by the consumer of the
4-18 kinds of insurance specified in this article is not required to
4-19 complete the associated consumer transaction;
4-20 (D) describe the process for filing a claim in
4-21 the event the consumer elects to purchase coverage and in the event
4-22 of a claim; and
4-23 (E) contain any additional information on the
4-24 price, benefits, exclusions, conditions, or other limitations of
4-25 the policies required by the commissioner by rule; and
4-26 (2) evidence of coverage is provided to each consumer
4-27 who elects to purchase the coverage.
5-1 (h) If a specialty license holder violates this subchapter,
5-2 the commissioner may:
5-3 (1) impose any disciplinary action authorized by
5-4 Article 21.01-2 of this code; or
5-5 (2) after notice and opportunity for hearing, impose
5-6 other penalties, including suspending the transaction of insurance
5-7 at specific locations where a violation of this subchapter has
5-8 occurred, as the commissioner considers necessary or convenient to
5-9 implement the purposes of this subchapter.
5-10 (i) A specialty license holder may not in any manner
5-11 advertise, represent, or otherwise hold out the license holder or
5-12 any employee of the license holder as a licensed insurance agent
5-13 under another article of this code unless the entity or individual
5-14 actually holds the applicable license.
5-15 (j) A person who holds a general agent's license issued
5-16 under Chapter 213, Acts of the 54th Legislature, Regular Session,
5-17 1955 (Article 21.07-1, Vernon's Texas Insurance Code), or Article
5-18 21.14 of this code is not required to obtain a specialty license
5-19 but is subject to the other requirements of this article in the
5-20 solicitation, sale, or delivery of an insurance product subject to
5-21 this article.
5-22 (k) Each insurance company appointing an agent under this
5-23 article shall submit a certification of the appointment signed by
5-24 an officer of the insurer and affirm that the insurer has satisfied
5-25 itself that the license holder is trustworthy and competent to act
5-26 as an insurance agent on behalf of the insurer.
5-27 Sec. 2. RENTAL CAR COMPANIES. (a) In this section:
6-1 (1) "Rental agreement" means a written agreement that
6-2 sets forth the terms and conditions governing the use of a vehicle
6-3 provided by a rental car company.
6-4 (2) "Rental car company" means a person engaged in the
6-5 business of providing leased or rented vehicles to the public.
6-6 (3) "Renter" means a person who obtains the use of a
6-7 vehicle from a rental car company under the terms of a rental
6-8 agreement.
6-9 (4) "Vehicle" means a private passenger motor vehicle,
6-10 including passenger vans and minivans, that are primarily intended
6-11 for the transport of persons.
6-12 (b) Notwithstanding any other provision of this article or
6-13 this code, the commissioner shall issue a specialty license under
6-14 Section 1 of this article to a rental car company, or to the
6-15 franchisee of a rental car company, that complies with this section
6-16 only for the limited purposes set forth in this section.
6-17 (c) The rental car company or franchisee licensed under
6-18 Section 1 of this article may act as an agent for an authorized
6-19 insurer only in connection with the rental of vehicles and only
6-20 with respect to:
6-21 (1) excess liability insurance that provides coverage
6-22 to the rental car company or franchisee and renters and other
6-23 authorized drivers of rental vehicles, in excess of the standard
6-24 liability limits provided by the rental car company in the rental
6-25 agreement, for liability arising from the negligent operation or
6-26 use of the rental vehicle;
6-27 (2) accident and health insurance that provides
7-1 coverage to renters and other vehicle occupants for accidental
7-2 death or dismemberment and for medical expenses resulting from an
7-3 accident involving the rental vehicle that occurs during the rental
7-4 period;
7-5 (3) personal effects insurance that provides coverage
7-6 to renters and other rental vehicle occupants for the loss of, or
7-7 damage to, personal effects that occurs during the rental period;
7-8 or
7-9 (4) any other coverage that the commissioner may
7-10 approve as meaningful and appropriate in connection with the rental
7-11 of vehicles.
7-12 (d) Insurance may not be issued under this section unless:
7-13 (1) the rental period under the rental agreement does
7-14 not exceed 30 consecutive days; and
7-15 (2) the brochures or other written materials
7-16 containing the disclosures required by Section 1(g) of this article
7-17 are prominently displayed and readily available to the prospective
7-18 renter.
7-19 Sec. 3. CREDIT INSURANCE. (a) In this section:
7-20 (1) "Credit insurance" includes:
7-21 (A) credit life insurance;
7-22 (B) credit accident and health insurance;
7-23 (C) credit property insurance;
7-24 (D) credit involuntary unemployment insurance;
7-25 and
7-26 (E) insurance that covers the difference between
7-27 the actual cash value of a motor vehicle used as security for a
8-1 loan or lease and the outstanding balance of that loan or lease in
8-2 the event of loss or damage in which the vehicle is rendered an
8-3 actual or constructive total loss while the debt for which the
8-4 vehicle serves as security exceeds the actual cash value of the
8-5 vehicle.
8-6 (2) "Credit insurance agent" means an entity licensed
8-7 to sell credit insurance under this article as specifically
8-8 provided by this section.
8-9 (3) "Credit property insurance" means insurance that
8-10 provides coverage on personal property used as collateral for
8-11 securing a personal or consumer loan or on personal property under
8-12 an installment sales agreement or through a consumer credit
8-13 transaction that is purchased in connection with or in relation to
8-14 the personal or consumer loan, installment sale, or consumer credit
8-15 transaction. The term does not include insurance that provides
8-16 theft, collision, liability, property damage, or comprehensive
8-17 insurance coverage on an automobile, motorized aircraft,
8-18 motorcycle, truck, truck-tractor, traction engine, or any other
8-19 self-propelled vehicle that is designed primarily for operation in
8-20 the air, or on highways, roadways, waterways, or the sea, and the
8-21 operating equipment of the self-propelled vehicle or craft, or that
8-22 is necessitated by reason of the liability imposed by law for
8-23 damages arising out of the ownership, operation, maintenance, or
8-24 use of any of those vehicles and crafts, other than single interest
8-25 coverage on any vehicle or craft described in this subdivision that
8-26 insures the interest of the creditor in the same manner as
8-27 collateral for a loan.
9-1 (b) Notwithstanding any other provision of this article or
9-2 this code, the commissioner may issue a license under Section 1 of
9-3 this article to a retail distributor of goods, an automobile
9-4 dealer, or a bank that complies with this section only for the
9-5 limited purposes set forth in this section.
9-6 (c) On appointment by the insurance company, a credit
9-7 insurance agent may act as the agent of any company authorized to
9-8 engage in the business of insurance under this code in the sale of
9-9 any type of credit insurance that the company is authorized to
9-10 write. The authority conferred under this section specifically
9-11 permits the sale of both individual and group credit insurance.
9-12 (d) Insurance may not be issued under this section unless
9-13 the brochures or other written materials containing the disclosures
9-14 required by Section 1(g) of this article are prominently displayed
9-15 and readily available to the prospective consumer.
9-16 Sec. 4. ASSIGNMENT OF COMMISSIONS. (a) Notwithstanding any
9-17 other provision of this article or this code, an employee,
9-18 officer, director, or shareholder of a state or national bank, a
9-19 state or federal savings and loan association or corporation, or a
9-20 state or federal credit union who is licensed as an agent under
9-21 this subchapter and who enters into a contract with an insurer to
9-22 act as the insurer's agent in soliciting or writing policies or
9-23 certificates of credit life insurance, credit accident and health
9-24 insurance, or both, that cover debtors of the bank, savings and
9-25 loan, or credit union of which the agent is an employee, officer,
9-26 director, or shareholder, may assign and transfer to the bank,
9-27 savings and loan, or credit union any commission, fee, or other
10-1 compensation to be paid to the agent under the agent's contract
10-2 with the insurer.
10-3 (b) Notwithstanding any other provision of this article or
10-4 this code, an employee, officer, director, or shareholder of an
10-5 automobile dealer who holds a dealer's general distinguishing
10-6 number issued by the Texas Department of Transportation under
10-7 Chapter 503, Transportation Code, or of a retailer who holds a
10-8 license issued by the Texas Department of Housing and Community
10-9 Affairs under the Texas Manufactured Housing Standards Act (Article
10-10 5221f, Vernon's Texas Civil Statutes), who is licensed as a credit
10-11 insurance agent under this article, and who enters into a contract
10-12 with an insurer to act as the insurer's agent in soliciting or
10-13 writing policies or certificates of credit life insurance, credit
10-14 accident and health insurance, or both, may assign and transfer to
10-15 the dealer or retailer, or any affiliate of the dealer or retailer,
10-16 any commission, fee, or other compensation to be paid to the agent
10-17 under the agent's contract with the insurer.
10-18 Sec. 5. TRAVEL INSURANCE LICENSE. (a) In this section:
10-19 (1) "Planned trip" means any journey or travel
10-20 arranged through the services of a travel agency.
10-21 (2) "Travel agency" means a person engaged in the
10-22 business of selling or arranging transportation or accommodations
10-23 for the public.
10-24 (3) "Traveler" means an individual who seeks the
10-25 assistance of a travel agency in connection with the planning and
10-26 purchase of a trip.
10-27 (b) Notwithstanding any other provision of this article or
11-1 this code, the commissioner may issue a specialty license under
11-2 Section 1 of this article to a travel agency, the franchisee of a
11-3 travel agency, or a public carrier that complies with this section
11-4 only for the limited purposes set forth in this section.
11-5 (c) The travel agency or franchisee licensed under Section 1
11-6 of this article may act as an agent for any authorized insurer only
11-7 in connection with the sale or arrangement of transportation or
11-8 accommodations for travelers and only with respect to:
11-9 (1) accident and health insurance that provides
11-10 coverage to a traveler for accidental death or dismemberment and
11-11 for medical expenses resulting from an accident involving the
11-12 traveler that occurs during the planned trip;
11-13 (2) insurance that provides coverage to a traveler for
11-14 expenses incurred as a result of trip cancellation or interruption
11-15 of a planned trip;
11-16 (3) personal effects insurance that provides coverage
11-17 to a traveler for the loss of, or damage to, personal effects that
11-18 occurs during the planned trip;
11-19 (4) life insurance covering risks of travel during a
11-20 planned trip that does not exceed $10,000 on any one life; or
11-21 (5) any other coverage that the commissioner may
11-22 approve as meaningful and appropriate in connection with the
11-23 transportation or accommodations arranged through a travel agency.
11-24 (d) Insurance may not be issued under this section unless
11-25 the brochures or other written materials containing the disclosures
11-26 required by Section 1(g) of this article are prominently displayed
11-27 and readily available to the prospective traveler.
12-1 Sec. 6. RULES. The commissioner may adopt rules necessary
12-2 to implement this article and to meet the minimum requirements of
12-3 federal law and regulations.
12-4 ARTICLE 2. LIFE AND HEALTH INSURANCE COUNSELOR LICENSE
12-5 SECTION 2.01. Chapter 29, Acts of the 54th Legislature,
12-6 Regular Session, 1955 (Article 21.07-2, Vernon's Texas Insurance
12-7 Code), is transferred to the Insurance Code, redesignated as
12-8 Article 21.07-2, Insurance Code, and amended to read as follows:
12-9 Art. 21.07-2. LIFE AND HEALTH INSURANCE COUNSELOR LICENSE
12-10 Sec. 1. DEFINITION OF TERM. The term "Life and Health
12-11 Insurance Counselor" as used in this article [Act] shall mean any
12-12 person who, for money, fee, commission or any other thing of value
12-13 offers to examine, or examines any policy of life, accident, or
12-14 health insurance, any health benefit plan, or any annuity or pure
12-15 endowment contract for the purpose of giving, or gives, or offers
12-16 to give, any advice, counsel, recommendation or information in
12-17 respect to the terms, conditions, benefits, coverage or premium of
12-18 any such policy or contract, or in respect to the expediency or
12-19 advisability of altering, changing, exchanging, converting,
12-20 replacing, surrendering, continuing or rejecting any such policy,
12-21 plan, or contract, or of accepting or procuring any such policy,
12-22 plan, or contract from any insurer or issuer of a health benefit
12-23 plan, or who in or on advertisements, cards, signs, circulars or
12-24 letterheads, or elsewhere, or in any other way or manner by which
12-25 public announcements are made, uses the title "insurance adviser,"
12-26 "insurance specialist," "insurance counselor," "insurance analyst,"
12-27 "policyholders' adviser," "policyholders' counselor," or any other
13-1 similar title, or any title indicating that the person [he] gives,
13-2 or is engaged in the business of giving advice, counsel,
13-3 recommendation or information to an insured, or a beneficiary, or
13-4 any person having any interest in a life, accident, or health
13-5 insurance contract, health benefit plan contract, annuity or pure
13-6 endowment contract. This definition is not intended to prevent a
13-7 person who has obtained the professional designation of chartered
13-8 life underwriter (CLU), chartered financial consultant (ChFC) or
13-9 certified financial planner (CFP) by completing a course of
13-10 instruction recognized within the business of insurance from using
13-11 that designation to indicate professional achievement.
13-12 Sec. 2. LICENSE REQUIRED; ISSUANCE BY DEPARTMENT [BOARD].
13-13 No person shall act as a Life and Health Insurance Counselor, as
13-14 defined in Section 1 of this article [hereof], unless authorized so
13-15 to act by a license issued by the department under [Board of
13-16 Insurance Commissioners of the State of Texas pursuant to the
13-17 provisions of] this article [Act].
13-18 Sec. 3. EXEMPTIONS. The provisions of this article [Act]
13-19 shall not apply to the following persons:
13-20 (a) Licensed agents for a life insurance company while
13-21 acting for an insurer as its agent.
13-22 (b) Licensed attorneys at law of this State when
13-23 acting within the course or scope of their profession.
13-24 (c) Licensed public accountants of this State while
13-25 acting within the course or scope of their profession.
13-26 (d) A regular salaried officer or employee of an
13-27 authorized insurer issuing policies of life or health insurance
14-1 while acting for such insurer in discharging the duties of the
14-2 [his] position or employment.
14-3 (e) An officer or employee of any bank or trust
14-4 company who receives no compensation from sources other than the
14-5 bank or trust company for such activities connected with the [his]
14-6 employment.
14-7 (f) Employers or their officers or employees, or the
14-8 trustees of any employee benefit plan, to the extent that such
14-9 employers, officers, employees or trustees are engaged in the
14-10 administration or operation of any program of employee benefits
14-11 involving the use of insurance or annuities issued by a legal
14-12 reserve life insurance company.
14-13 Sec. 4. CONTRACT, WRITING REQUIRED; DUPLICATES; OTHER
14-14 REQUISITES. No contract or agreement between a Life and Health
14-15 Insurance Counselor, as defined in this article [Act], and any
14-16 other person, firm or corporation, relating to the activities,
14-17 services, advice, recommendations or information referred to in
14-18 Section 1 of this article [Act], shall be enforceable by or on
14-19 behalf of such Life and Health Insurance Counselor unless it is in
14-20 writing and executed in duplicate by the person, firm or
14-21 corporation to be charged, nor unless one of said duplicates is
14-22 delivered to and retained by such person, firm or corporation when
14-23 executed, nor unless such contract or agreement plainly specifies
14-24 the amount of the fee paid or to be paid by such person, firm or
14-25 corporation, and the services to be rendered by such Life and
14-26 Health Insurance Counselor; provided, however, that the foregoing
14-27 provisions shall not be applicable to any of the persons set out in
15-1 Section 3 of this article [above].
15-2 Sec. 4a. PROHIBITION OF DUAL COMPENSATION. A person
15-3 licensed under the provisions of this article [Act] who is also
15-4 licensed under Chapter 213, Acts of the 54th Legislature, Regular
15-5 Session, 1955 ([Article 21.07 or] Article 21.07-1, Vernon's Texas
15-6 Insurance [of this] Code) and who receives a commission or
15-7 compensation for [his] services as an agent licensed under Chapter
15-8 213, Acts of the 54th Legislature, Regular Session, 1955 ([Article
15-9 21.07 or] Article 21.07-1, Vernon's Texas Insurance Code), shall
15-10 not be entitled to receive a fee for the same services [his
15-11 service] to the same client as a Life and Health Insurance
15-12 Counselor.
15-13 Sec. 5. MODE OF LICENSING AND REGULATION. (a) Except as
15-14 provided by this article, [The] licensing and regulation of a Life
15-15 and Health Insurance Counselor, as that term is defined herein,
15-16 shall be in the same manner and subject to the same requirements as
15-17 applicable to the licensing of agents under this subchapter [of
15-18 legal reserve life insurance companies as provided in Article
15-19 21.07-1 of the Texas Insurance Code, 1951,] or as provided by any
15-20 existing or subsequent applicable law governing the licensing of
15-21 such agents, and all the provisions thereof are hereby made
15-22 applicable to applicants and licensees under this article [Act],
15-23 except that a Life and Health Insurance Counselor shall not
15-24 advertise in any manner and shall not circulate materials
15-25 indicating professional superiority or the performance of
15-26 professional service in a superior manner; provided, however, that
15-27 an appointment to act for an insurer shall not be a condition to
16-1 the licensing of a Life and Health Insurance Counselor.
16-2 (b) An [In addition to the above requirements, the applicant
16-3 for licensure as a Life Insurance Counselor shall submit to the
16-4 Commissioner documentation that he has been licensed as a life
16-5 insurance agent in excess of three years. After the Insurance
16-6 Commissioner has satisfied himself as to these requirements, he
16-7 shall then cause the] applicant for a Life and Health Insurance
16-8 Counselor's license must [to] sit for an examination administered
16-9 under Article 21.01-1 of this code that includes [which shall
16-10 include] the following five subjects and subject areas:
16-11 (1) Fundamentals of life and health insurance;
16-12 (2) Group life insurance, pensions and health
16-13 insurance;
16-14 (3) Law, trust and taxation;
16-15 (4) Finance and economics; and
16-16 (5) Business insurance and estate planning.
16-17 (c) No license shall be granted until such individual shall
16-18 have successfully passed each of the five parts under Subsection
16-19 (b) of this section. Such examinations may be given and scheduled
16-20 by the Commissioner at the Commissioner's [his] discretion. The
16-21 department shall, without further examination, issue a license
16-22 under this article to an individual who, on September 1, 1999,
16-23 holds a [Individuals currently holding] Life Insurance Counselor
16-24 license [licenses] issued by the department [Texas State Board of
16-25 Insurance, who do not have the equivalent of the requirements above
16-26 listed, shall have one year from the date of enactment hereof to so
16-27 qualify].
17-1 Sec. 6. INTENT OF LEGISLATURE; STATUTES AND AMENDMENTS
17-2 APPLICABLE. Except as provided by this article, it [It] is the
17-3 legislative intent, and it is hereby provided, that the licensing
17-4 and regulation of any person acting as a Life and Health Insurance
17-5 Counselor shall be subject to the same statutes and requirements
17-6 applicable to the licensing and regulation of agents under this
17-7 subchapter [of legal reserve life insurance companies]. In event
17-8 of subsequent legislative enactment applicable to agents under this
17-9 subchapter [of legal reserve life insurance companies in lieu of,
17-10 or as an amendment to, present Article 21.07 of the Texas Insurance
17-11 Code], it is hereby provided that such statute shall be applicable
17-12 to any person acting as a Life and Health Insurance Counselor, as
17-13 defined in this article [Act].
17-14 Sec. 7. VIOLATIONS[; MISDEMEANOR; PENALTIES]. [(a)] A
17-15 [person commits an offense if the person acts as a life insurance
17-16 counselor without a license issued under this Act or otherwise
17-17 violates this Act. Each violation constitutes a separate offense.
17-18 An offense under this subsection is a Class C misdemeanor.]
17-19 [(b) In addition to being subject to the penalty imposed
17-20 under Subsection (a) of this section, a] person who commits a
17-21 violation of this article [Act] is subject to license revocation
17-22 under [Section 5,] Article 21.01-2 of this code [, Insurance Code].
17-23 If the department revokes the license, the license holder is not
17-24 eligible for a new license for two years after the effective date
17-25 of the license revocation.
17-26 Sec. 8. PARTIAL INVALIDITY. Should any Section or part
17-27 [thereof] of this article [Act] be held to be invalid for any
18-1 reason, such holding shall not be construed as affecting the
18-2 validity of any of the remaining Sections or parts of this article
18-3 [thereof], it being the legislative intent that the remainder of
18-4 this article [Section] shall stand, notwithstanding the invalidity
18-5 of any Section or part of this article [thereof].
18-6 Sec. 9. CONTINUING EDUCATION. A person who holds a license
18-7 issued under this article shall complete continuing education as
18-8 required by rules of the department or any applicable article of
18-9 this code.
18-10 Sec. 10. RULES. The commissioner may adopt rules necessary
18-11 to implement this article and to meet the minimum requirements of
18-12 federal law and regulations.
18-13 Sec. 11. REFERENCE IN OTHER LAW. A reference in any law to
18-14 Chapter 29, Acts of the 54th Legislature, Regular Session, 1955,
18-15 means this article.
18-16 ARTICLE 3. ADJUSTERS LICENSES
18-17 SECTION 3.01. Chapter 407, Acts of the 63rd Legislature,
18-18 Regular Session, 1973 (Article 21.07-4, Vernon's Texas Insurance
18-19 Code), is amended by amending Sections 15, 16, 17, and 23 and
18-20 adding Section 24 to read as follows:
18-21 Sec. 15. PLACE OF BUSINESS. Every licensed adjuster shall
18-22 have and maintain [in this state] a place of business accessible to
18-23 the public. Such place of business shall be located where the
18-24 adjuster principally conducts transactions under the [his] license.
18-25 The [address of his place of business shall appear on all licenses
18-26 of the licensee, and the] licensee shall promptly notify the
18-27 commissioner of any change in the location of the place of business
19-1 [thereof].
19-2 Sec. 16. EXPIRATION AND RENEWAL OF LICENSES. Expiration and
19-3 renewal of licenses issued under this Act are governed by rules of
19-4 the department or any applicable article of the Insurance Code or
19-5 another insurance law of this state [(a) Except as may be provided
19-6 by a staggered renewal system adopted under Article 21.01-2,
19-7 Insurance Code, an adjuster's license expires two years after the
19-8 date of issuance.]
19-9 [(b) Subject to the right of the commissioner to suspend,
19-10 revoke, or refuse to renew an adjuster's license, any such license
19-11 may be renewed by filing, on the form prescribed by the
19-12 commissioner, on or before the expiration date, a written request,
19-13 by or on behalf of the licensee, for such renewal, accompanied by
19-14 payment of the renewal fee].
19-15 Sec. 17. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE.
19-16 [(a)] The department may discipline an adjuster or deny an
19-17 application under department rules or any other applicable article
19-18 of the Insurance Code or another insurance law of this state. The
19-19 rules may specify grounds for discipline that are comparable to
19-20 grounds for discipline of other license holders under this
19-21 subchapter [Section 5, Article 21.01-2, Insurance Code, for any of
19-22 the following causes:]
19-23 [(1) for any cause for which issuance of the license
19-24 could have been refused had it been existent and been known to the
19-25 board;]
19-26 [(2) if the applicant or licensee willfully violates
19-27 or knowingly participates in the violation of any provision of this
20-1 Act;]
20-2 [(3) if the applicant or licensee has obtained or
20-3 attempted to obtain any such license through willful
20-4 misrepresentation or fraud, or has failed to pass any examination
20-5 required under this Act;]
20-6 [(4) if the applicant or licensee has misappropriated,
20-7 or converted to the applicant's or licensee's own use, or has
20-8 illegally withheld moneys required to be held in a fiduciary
20-9 capacity;]
20-10 [(5) if the applicant or licensee has, with intent to
20-11 deceive, materially misrepresented the terms or effect of an
20-12 insurance contract, or has engaged in any fraudulent transactions;
20-13 or]
20-14 [(6) if the applicant or licensee is convicted, by
20-15 final judgment, of a felony.]
20-16 [(b) An applicant or licensee whose license application or
20-17 license has been denied, refused, or revoked under this section may
20-18 not apply for any license as an insurance agent or adjuster before
20-19 the first anniversary of the effective date of the denial, refusal,
20-20 or revocation, or, if the applicant or licensee seeks judicial
20-21 review of the denial, refusal, or revocation, before the first
20-22 anniversary of the date of the final court order or decree
20-23 affirming that action. The commissioner may deny an application
20-24 timely filed if the applicant does not show good cause why the
20-25 denial, refusal, or revocation of the previous license application
20-26 or license should not be considered a bar to the issuance of a new
20-27 license. This subsection does not apply to an applicant whose
21-1 license application was denied for failure to pass a required
21-2 written examination].
21-3 Sec. 23. DUPLICATE LICENSE; FEE. The department
21-4 [Commissioner of Insurance] shall collect in advance from an
21-5 adjuster [adjusters] requesting a duplicate license [licenses] a
21-6 fee in an amount determined by the department [not to exceed $20.
21-7 The State Board of Insurance shall determine the amount of the
21-8 fee].
21-9 Sec. 24. RULES. The commissioner may adopt rules necessary
21-10 to implement this Act and to meet the minimum requirements of
21-11 federal law and regulations.
21-12 ARTICLE 4. AGRICULTURE AGENTS
21-13 SECTION 4.01. Article 21.14-2, Insurance Code, is amended to
21-14 read as follows:
21-15 Art. 21.14-2. [LICENSING OF] AGRICULTURAL INSURANCE AGENTS
21-16 Sec. 1. APPOINTING CERTAIN AGRICULTURAL INSURANCE AGENTS.
21-17 An insurance company that holds a valid certificate of authority
21-18 issued by this state to authorize the company to engage in the
21-19 insurance business in this state and whose authority in this state
21-20 and in each other jurisdiction in which the company is licensed to
21-21 do business is limited [, but limiting the insurance business only]
21-22 to the transaction of the business of insurance of risks on growing
21-23 crops, may appoint and act through agents who hold [qualify for] a
21-24 license under Article 21.14 of this code, subject to this article.
21-25 Sec. 2. REQUIREMENTS FOR APPOINTMENT. (a) To appoint a
21-26 license holder [obtain a license] to act as an agent under this
21-27 article, an insurance company [applicant] must submit a completed
22-1 appointment form [written application] to the department
22-2 [commissioner of insurance on a form prescribed by the State Board
22-3 of Insurance] and pay a [$50] nonrefundable fee in an amount
22-4 determined by the commissioner. The appointment form [application]
22-5 must bear an endorsement signed by a representative [an agent] of
22-6 an insurance company that meets the requirements of Section 1 of
22-7 this article [and must state that the applicant is a resident of
22-8 this state].
22-9 (b) The commissioner of insurance shall approve the
22-10 appointment [license application] unless the commissioner
22-11 determines that the applicant does not meet the requirements of
22-12 this subchapter [article].
22-13 (c) The department may waive any examination requirement
22-14 imposed under this subchapter for a license applicant seeking a
22-15 company appointment under this article if the applicant has
22-16 successfully completed an examination as required under the Federal
22-17 Crop Insurance Corporation guidelines for delivery of the federal
22-18 crop insurance program [Except as provided by a staggered renewal
22-19 system adopted under Article 21.01-2 of this code, a license issued
22-20 under this article expires two years after the date of its issuance
22-21 unless a completed application to renew the license is filed with
22-22 the commissioner and the $50 nonrefundable renewal fee is paid on
22-23 or before that date, in which case the license continues in full
22-24 force and effect until renewed or the renewal is denied].
22-25 (d) The department may, at its discretion, accept
22-26 continuing education hours completed under the guidelines of the
22-27 Federal Crop Insurance Corporation as satisfying the continuing
23-1 education requirements imposed under this subchapter [An applicant
23-2 for an original or renewal license is not required to pass an
23-3 examination or meet any basic or continuing educational
23-4 requirements to obtain or renew a license under this article].
23-5 Sec. 3. MULTIPLE APPOINTMENTS AUTHORIZED. A license holder
23-6 appointed under this article may act as an agent for more than one
23-7 insurance company [The license of an agent is automatically
23-8 suspended or canceled if the agent does not have outstanding a
23-9 valid appointment to act as an agent for an insurance company
23-10 described in Section 1 of this article. The department may
23-11 discipline a licensee or deny an application under Section 5,
23-12 Article 21.01-2, of this code if it determines that the license
23-13 applicant or licensee:]
23-14 [(1) has intentionally or knowingly violated the
23-15 insurance laws of this state;]
23-16 [(2) has obtained or attempted to obtain a license by
23-17 fraud or misrepresentation;]
23-18 [(3) has misappropriated, converted, or illegally
23-19 withheld money belonging to an insurer or an insured or
23-20 beneficiary;]
23-21 [(4) has been guilty of fraudulent or dishonest acts;]
23-22 [(5) has materially misrepresented the terms and
23-23 conditions of an insurance policy or contract;]
23-24 [(6) has made or issued or caused to be made or issued
23-25 any statement misrepresenting or making incomplete comparisons
23-26 regarding the terms or conditions of an insurance contract legally
23-27 issued by an insurance carrier for the purpose of inducing or
24-1 attempting to induce the owner of the contract to forfeit or
24-2 surrender the contract or allow the contract to expire or for the
24-3 purpose of replacing the contract with another contract;]
24-4 [(7) has been convicted of a felony; or]
24-5 [(8) is guilty of rebating an insurance premium or
24-6 discriminating between insureds].
24-7 Sec. 4. APPLICATION OF OTHER LAW. This subchapter applies
24-8 [Article 21.14 of this code does not apply] to the licensing and
24-9 [or] regulation of an agent appointed under this article.
24-10 Sec. 5. RULES. The commissioner may adopt rules necessary
24-11 to implement this article and to meet the minimum requirements of
24-12 federal law and regulations.
24-13 ARTICLE 5. REPEALER
24-14 SECTION 5.01. The following laws are repealed:
24-15 (1) Section 21, Article 21.07, Insurance Code, as
24-16 added by Chapter 820, Acts of the 75th Legislature, Regular
24-17 Session, 1997;
24-18 (2) Section 21, Article 21.07, Insurance Code, as
24-19 added by Chapter 1196, Acts of the 75th Legislature, Regular
24-20 Session, 1997; and
24-21 (3) Sections 18 and 19, Chapter 407, Acts of the 63rd
24-22 Legislature, Regular Session, 1973 (Article 21.07-4, Vernon's Texas
24-23 Insurance Code).
24-24 ARTICLE 6. GRANDFATHER PROVISIONS; EFFECTIVE DATE; EMERGENCY
24-25 SECTION 6.01. This Act takes effect September 1, 1999.
24-26 SECTION 6.02. (a) Not later than January 1, 2000, the
24-27 department shall issue an appropriate license under Article 21.09,
25-1 Insurance Code, as added by this Act, to an entity that,
25-2 immediately before the effective date of this Act, holds an agent
25-3 license issued by the Texas Department of Insurance under Section
25-4 21, Article 21.07, Insurance Code, as added by Chapter 820, Acts of
25-5 the 75th Legislature, Regular Session, 1997, or Section 21,
25-6 Article 21.07, Insurance Code, as added by Chapter 1196, Acts of
25-7 the 75th Legislature, Regular Session, 1997. On issuance of the new
25-8 license, the license holder is subject to Article 21.09, Insurance
25-9 Code, as added by this Act.
25-10 (b) A travel agency or franchisee is not required to be
25-11 licensed as provided by Section 5, Article 21.09, Insurance Code,
25-12 as added by this Act, before January 1, 2000.
25-13 (c) A person required to be licensed under Article 21.07-2,
25-14 Insurance Code, as redesignated and amended by this Act, who was
25-15 not required to be licensed under Chapter 29, Acts of the 54th
25-16 Legislature, Regular Session, 1955 (Article 21.07-2, Vernon's Texas
25-17 Insurance Code), as it existed immediately before the effective
25-18 date of this Act, is not required to be licensed as provided by
25-19 this Act before January 1, 2000.
25-20 (d) A person who holds a license to operate as an
25-21 agricultural insurance agent under Article 21.14-2, Insurance Code,
25-22 on the effective date of this Act, is eligible for a license under
25-23 Article 21.14, Insurance Code, if the person applies for the
25-24 license to the Texas Department of Insurance before March 1, 2000,
25-25 and pays any required fees. To maintain the license, the person
25-26 must pass the required qualifying examination for that license on
25-27 or before March 1, 2002.
26-1 SECTION 6.03. The importance of this legislation and the
26-2 crowded condition of the calendars in both houses create an
26-3 emergency and an imperative public necessity that the
26-4 constitutional rule requiring bills to be read on three several
26-5 days in each house be suspended, and this rule is hereby suspended.