1-1 By: Madla S.B. No. 957
1-2 (In the Senate - Filed March 5, 1999; March 8, 1999, read
1-3 first time and referred to Committee on Economic Development;
1-4 April 16, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 7, Nays 0; April 16, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 957 By: Madla
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the licensing of certain persons who provide services
1-11 related to the business of insurance.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 ARTICLE 1. SPECIALTY LICENSES
1-14 SECTION 1.01. Subchapter A, Chapter 21, Insurance Code, is
1-15 amended by adding Article 21.09 to read as follows:
1-16 Art. 21.09. SPECIALTY LICENSES
1-17 Sec. 1. GENERAL PROVISIONS. (a) The commissioner may issue
1-18 a specialty license to an applicant who has complied with the
1-19 requirements of this article. A specialty license authorizes the
1-20 license holder to act as an agent for the types of insurance
1-21 specified in this article for any insurer authorized to write these
1-22 types of insurance in this state. A person who holds a license
1-23 under this article is known as a "specialty license holder."
1-24 (b) For a specialty license to be issued under this article,
1-25 the applicant must submit to the commissioner:
1-26 (1) a written application, signed by an officer of the
1-27 applicant, on a form and supplements to the form prescribed by the
1-28 commissioner, that contains the information prescribed by the
1-29 commissioner;
1-30 (2) a certification by an insurer authorized to do
1-31 business in this state that:
1-32 (A) is signed by an officer of the insurer and
1-33 affirmed as true under the penalties of perjury; and
1-34 (B) states that:
1-35 (i) the insurer has satisfied itself that
1-36 the named applicant is trustworthy and competent to act as the
1-37 insurer's agent for a limited purpose authorized by this article;
1-38 and
1-39 (ii) the insurer will appoint the
1-40 applicant to act as the agent for a type of insurance permitted by
1-41 this article, if the specialty license applied for is issued by the
1-42 department; and
1-43 (3) a nonrefundable license fee set by the department
1-44 in an amount necessary to administer this article.
1-45 (c) A specialty license issued under this article authorizes
1-46 an employee of the license holder to act as an agent with respect
1-47 to the kinds of insurance specified in this article if the
1-48 employee:
1-49 (1) is trained under Subsection (d) of this section to
1-50 act individually on behalf of the specialty license holder;
1-51 (2) is acting on behalf of and under the supervision
1-52 of the license holder; and
1-53 (3) is not compensated based primarily on the amount
1-54 of insurance sold by the employee under this article.
1-55 (d) Each person licensed under this article shall conduct a
1-56 training program for each individual who is acting on behalf of the
1-57 license holder with respect to the specific type of insurance. The
1-58 training program must be submitted to the commissioner for approval
1-59 before the training program is used and must meet the following
1-60 minimum standards:
1-61 (1) each trainee must receive basic instruction about
1-62 the kinds of insurance the license holder is authorized to offer
1-63 for purchase by prospective consumers;
1-64 (2) each trainee must be instructed to inform a
2-1 prospective consumer that, except as may be specifically provided
2-2 by another law of this state, the purchase of insurance specified
2-3 in this article is not required in order to complete the associated
2-4 consumer transaction; and
2-5 (3) each trainee must be instructed to inform a
2-6 prospective consumer that the consumer may currently have an
2-7 insurance policy that provides the coverage being offered by the
2-8 license holder under this article.
2-9 (e) Except as otherwise provided by this article, a
2-10 specialty license holder acting under this article shall comply
2-11 with all applicable provisions of this subchapter.
2-12 (f) Notwithstanding any other provision of this subchapter
2-13 or any rule adopted by the commissioner, a specialty license holder
2-14 is not required to treat premiums collected from a consumer
2-15 purchasing insurance when completing an associated consumer
2-16 transaction as money received in a fiduciary capacity if:
2-17 (1) the insurer represented by the specialty license
2-18 holder has consented in writing, signed by an officer of the
2-19 insurer, that premiums need not be segregated from money received
2-20 by the license holder on account of the associated consumer
2-21 transaction; and
2-22 (2) the charges for insurance coverage are itemized
2-23 but not billed to the consumer separately from the charges for the
2-24 associated consumer transaction.
2-25 (g) Insurance may not be issued under this article unless:
2-26 (1) at each location at which sales of insurance
2-27 policies covered by this article occur, brochures or other written
2-28 materials are prominently displayed and readily available to the
2-29 prospective consumer that:
2-30 (A) summarize, clearly and correctly, the
2-31 material terms of insurance coverage offered to consumers,
2-32 including the identity of the insurer;
2-33 (B) disclose that the policies offered by the
2-34 license holder may provide a duplication of coverage already
2-35 provided by a consumer's personal auto insurance policy,
2-36 homeowner's insurance policy, personal liability insurance policy,
2-37 or other source of coverage;
2-38 (C) state that, except as specifically provided
2-39 by another law of this state, the purchase by the consumer of the
2-40 kinds of insurance specified in this article is not required to
2-41 complete the associated consumer transaction;
2-42 (D) describe the process for filing a claim in
2-43 the event the consumer elects to purchase coverage and in the event
2-44 of a claim; and
2-45 (E) contain any additional information on the
2-46 price, benefits, exclusions, conditions, or other limitations of
2-47 the policies required by the commissioner by rule; and
2-48 (2) evidence of coverage is provided to each consumer
2-49 who elects to purchase the coverage.
2-50 (h) If a specialty license holder violates this subchapter,
2-51 the commissioner may:
2-52 (1) impose any disciplinary action authorized by
2-53 Article 21.01-2 of this code; or
2-54 (2) after notice and opportunity for hearing, impose
2-55 other penalties, including suspending the transaction of insurance
2-56 at specific locations where a violation of this subchapter has
2-57 occurred, as the commissioner considers necessary or appropriate to
2-58 implement the purposes of this subchapter.
2-59 (i) A specialty license holder may not in any manner
2-60 advertise, represent, or otherwise hold out the license holder or
2-61 any employee of the license holder as a licensed insurance agent
2-62 under another article of this code unless the entity or individual
2-63 actually holds the applicable license.
2-64 (j) A person who holds a general agent's license issued
2-65 under Chapter 213, Acts of the 54th Legislature, Regular Session,
2-66 1955 (Article 21.07-1, Vernon's Texas Insurance Code), as amended,
2-67 or Article 21.14 of this code or who holds a substantially
2-68 equivalent license under this code, as determined by the
2-69 commissioner, is not required to obtain a specialty license but is
3-1 subject to the other requirements of this article in the
3-2 solicitation, sale, or delivery of an insurance product subject to
3-3 this article.
3-4 (k) Each insurance company appointing an agent under this
3-5 article shall submit a certification of the appointment signed by
3-6 an officer of the insurer and affirm that the insurer has satisfied
3-7 itself that the license holder is trustworthy and competent to act
3-8 as an insurance agent on behalf of the insurer.
3-9 (l) An examination is not required for issuance of a license
3-10 under this article and continuing education requirements do not
3-11 apply to a license issued under this article.
3-12 (m) A person who is licensed as an agent for a legal reserve
3-13 life insurance company or as a local recording agent, or who holds
3-14 a substantially equivalent license under this code, as determined
3-15 by the commissioner, and who enters into a contract with an insurer
3-16 to act as the insurer's agent in soliciting or writing policies or
3-17 certificates of insurance covered by this article may assign and
3-18 transfer to the agent's employer any commission, fee, or other
3-19 compensation to be paid to the agent under the agent's contract
3-20 with the insurer, but only if the sale of the insurance product
3-21 occurred within the scope of the agent's employment.
3-22 Sec. 2. RENTAL CAR COMPANIES. (a) In this section:
3-23 (1) "Rental agreement" means a written agreement that
3-24 sets forth the terms and conditions governing the use of a vehicle
3-25 provided by a rental car company.
3-26 (2) "Rental car company" means a person engaged in the
3-27 business of providing leased or rented vehicles to the public.
3-28 (3) "Renter" means a person who obtains the use of a
3-29 vehicle from a rental car company under the terms of a rental
3-30 agreement.
3-31 (4) "Vehicle" means a private passenger motor vehicle,
3-32 including passenger vans and minivans that are primarily intended
3-33 for the transport of persons.
3-34 (b) Notwithstanding any other provision of this article or
3-35 this code, the commissioner shall issue a specialty license under
3-36 Section 1 of this article to a rental car company, or to the
3-37 franchisee of a rental car company, that complies with this section
3-38 only for the limited purposes set forth in this section.
3-39 (c) The rental car company or franchisee licensed under
3-40 Section 1 of this article may act as an agent for an authorized
3-41 insurer only in connection with the rental of vehicles and only
3-42 with respect to:
3-43 (1) excess liability insurance that provides coverage
3-44 to the rental car company or franchisee and renters and other
3-45 authorized drivers of rental vehicles, in excess of the standard
3-46 liability limits provided by the rental car company in the rental
3-47 agreement, for liability arising from the negligent operation or
3-48 use of the rental vehicle;
3-49 (2) accident and health insurance that provides
3-50 coverage to renters and other vehicle occupants for accidental
3-51 death or dismemberment and for medical expenses resulting from an
3-52 accident involving the rental vehicle that occurs during the rental
3-53 period;
3-54 (3) personal effects insurance that provides coverage
3-55 to renters and other rental vehicle occupants for the loss of, or
3-56 damage to, personal effects that occurs during the rental period;
3-57 or
3-58 (4) any other coverage that the commissioner may
3-59 approve as meaningful and appropriate in connection with the rental
3-60 of vehicles.
3-61 (d) Insurance may not be issued under this section unless:
3-62 (1) the rental period under the rental agreement does
3-63 not exceed 30 consecutive days; and
3-64 (2) the brochures or other written materials
3-65 containing the disclosures required by Section 1(g) of this article
3-66 are prominently displayed and readily available to the prospective
3-67 renter.
3-68 Sec. 3. CREDIT INSURANCE. (a) In this section:
3-69 (1) "Credit insurance" includes:
4-1 (A) credit life insurance;
4-2 (B) credit accident and health insurance;
4-3 (C) credit property insurance;
4-4 (D) credit involuntary unemployment insurance;
4-5 and
4-6 (E) insurance that covers the difference between
4-7 the actual cash value of a motor vehicle used as security for a
4-8 loan or lease and the outstanding balance of that loan or lease in
4-9 the event of loss or damage in which the vehicle is rendered an
4-10 actual or constructive total loss while the debt for which the
4-11 vehicle serves as security exceeds the actual cash value of the
4-12 vehicle.
4-13 (2) "Credit insurance agent" means a person licensed
4-14 to sell credit insurance under this article as specifically
4-15 provided by this section.
4-16 (3) "Credit property insurance" means insurance that
4-17 provides coverage on personal property used as collateral for
4-18 securing a personal or consumer loan or on personal property under
4-19 an installment sales agreement or through a consumer credit
4-20 transaction that is purchased in connection with or in relation to
4-21 the personal or consumer loan, installment sale, or consumer credit
4-22 transaction. The term does not include insurance that provides
4-23 theft, collision, liability, property damage, or comprehensive
4-24 insurance coverage on an automobile, motorized aircraft,
4-25 motorcycle, truck, truck-tractor, traction engine, or any other
4-26 self-propelled vehicle that is designed primarily for operation in
4-27 the air, or on highways, roadways, waterways, or the sea, and the
4-28 operating equipment of the self-propelled vehicle or craft, or that
4-29 is necessitated by reason of the liability imposed by law for
4-30 damages arising out of the ownership, operation, maintenance, or
4-31 use of any of those vehicles and crafts, other than single interest
4-32 coverage on any vehicle or craft described in this subdivision that
4-33 insures the interest of the creditor in the same manner as
4-34 collateral for a loan.
4-35 (b) Notwithstanding any other provision of this article or
4-36 this code, the commissioner may issue a license under Section 1 of
4-37 this article to a retail distributor of goods, an automobile
4-38 dealer, a bank, a state or federal savings and loan, a state or
4-39 federal credit union, a finance company, a production credit
4-40 association, a manufactured home retailer, or a mobile home
4-41 retailer that complies with this section only for the limited
4-42 purposes set forth in this section.
4-43 (c) On appointment by the insurance company, a credit
4-44 insurance agent may act as the agent of any company authorized to
4-45 engage in the business of insurance under this code in the sale of
4-46 any type of credit insurance that the company is authorized to
4-47 write. The authority conferred under this section specifically
4-48 permits the sale of both individual and group credit insurance.
4-49 (d) Insurance may not be issued under this section unless
4-50 the brochures or other written materials containing the disclosures
4-51 required by Section 1(g) of this article are prominently displayed
4-52 and readily available to the prospective consumer.
4-53 Sec. 4. TRAVEL INSURANCE LICENSE. (a) In this section:
4-54 (1) "Planned trip" means any journey or travel
4-55 arranged through the services of a travel agency.
4-56 (2) "Travel agency" means an entity engaged in the
4-57 business of selling or arranging transportation or accommodations
4-58 for the public.
4-59 (3) "Traveler" means an individual who seeks the
4-60 assistance of a travel agency in connection with the planning and
4-61 purchase of a trip.
4-62 (b) Notwithstanding any other provision of this article or
4-63 this code, the commissioner may issue a specialty license under
4-64 Section 1 of this article to a travel agency, the franchisee of a
4-65 travel agency, or a public carrier that complies with this section
4-66 only for the limited purposes set forth in this section.
4-67 (c) The travel agency or franchisee licensed under Section 1
4-68 of this article may act as an agent for any authorized insurer only
4-69 in connection with the sale or arrangement of transportation or
5-1 accommodations for travelers and only with respect to:
5-2 (1) accident and health insurance that provides
5-3 coverage to a traveler for accidental death or dismemberment and
5-4 for medical expenses resulting from an accident involving the
5-5 traveler that occurs during the planned trip;
5-6 (2) insurance that provides coverage to a traveler for
5-7 expenses incurred as a result of trip cancellation or interruption
5-8 of a planned trip;
5-9 (3) personal effects insurance that provides coverage
5-10 to a traveler for the loss of, or damage to, personal effects that
5-11 occurs during the planned trip;
5-12 (4) life insurance covering risks of travel during a
5-13 planned trip that does not exceed $10,000 on any one life; or
5-14 (5) any other coverage that the commissioner may
5-15 approve as meaningful and appropriate in connection with the
5-16 transportation or accommodations arranged through a travel agency.
5-17 (d) Insurance may not be issued under this section unless
5-18 the brochures or other written materials containing the disclosures
5-19 required by Section 1(g) of this article are prominently displayed
5-20 and readily available to the prospective traveler.
5-21 Sec. 5. SELF-SERVICE STORAGE FACILITY LICENSE. (a) In this
5-22 section:
5-23 (1) "Rental agreement" means a written agreement that
5-24 sets forth the terms and conditions governing the use of storage
5-25 space provided by a self-service storage facility.
5-26 (2) "Self-service storage facility" means a person
5-27 engaged in the business of providing leased or rented storage space
5-28 to the public.
5-29 (3) "Renter" means a person who obtains the use of
5-30 storage space from a self-service storage facility under a rental
5-31 agreement.
5-32 (4) "Storage space" means a room, unit, locker, or
5-33 open space offered for rental to the public for temporary storage
5-34 of personal belongings or light commercial goods.
5-35 (b) Notwithstanding any other provision of this article or
5-36 this code, the commissioner may issue a specialty license under
5-37 Section 1 of this article to a self-service storage facility or to
5-38 the franchisee of a self-service storage facility that complies
5-39 with this section only for the limited purposes set forth in this
5-40 section.
5-41 (c) A self-service storage facility or franchisee licensed
5-42 under Section 1 of this article may act as an agent for any
5-43 authorized insurer only in connection with the rental of storage
5-44 space and only with respect to:
5-45 (1) insurance that provides hazard insurance coverage
5-46 to renters for the loss of, or damage to, tangible personal
5-47 property in storage or in transit during the rental period; or
5-48 (2) any other coverage the commissioner may approve as
5-49 meaningful and appropriate in connection with the rental of storage
5-50 space.
5-51 (d) Insurance may not be issued under this section unless
5-52 the brochures or other written materials containing the disclosures
5-53 required by Section 1(g) of this article are prominently displayed
5-54 and readily available to the prospective renter.
5-55 Sec. 6. RULES. The commissioner may adopt rules necessary
5-56 to implement this article and to meet the minimum requirements of
5-57 federal law and regulations.
5-58 ARTICLE 2. LIFE AND HEALTH INSURANCE COUNSELOR LICENSE
5-59 SECTION 2.01. Chapter 29, Acts of the 54th Legislature,
5-60 Regular Session, 1955 (Article 21.07-2, Vernon's Texas Insurance
5-61 Code), is transferred to the Insurance Code, redesignated as
5-62 Article 21.07-2, Insurance Code, and amended to read as follows:
5-63 Art. 21.07-2. LIFE AND HEALTH INSURANCE COUNSELOR LICENSE
5-64 Sec. 1. DEFINITION OF TERM. The term "Life and Health
5-65 Insurance Counselor" as used in this article [Act] shall mean any
5-66 person who, for money, fee, commission or any other thing of value
5-67 offers to examine, or examines any policy of life, accident, or
5-68 health insurance, any health benefit plan, or any annuity or pure
5-69 endowment contract for the purpose of giving, or gives, or offers
6-1 to give, any advice, counsel, recommendation or information in
6-2 respect to the terms, conditions, benefits, coverage or premium of
6-3 any such policy or contract, or in respect to the expediency or
6-4 advisability of altering, changing, exchanging, converting,
6-5 replacing, surrendering, continuing or rejecting any such policy,
6-6 plan, or contract, or of accepting or procuring any such policy,
6-7 plan, or contract from any insurer or issuer of a health benefit
6-8 plan, or who in or on advertisements, cards, signs, circulars or
6-9 letterheads, or elsewhere, or in any other way or manner by which
6-10 public announcements are made, uses the title "insurance adviser,"
6-11 "insurance specialist," "insurance counselor," "insurance analyst,"
6-12 "policyholders' adviser," "policyholders' counselor," or any other
6-13 similar title, or any title indicating that the person [he] gives,
6-14 or is engaged in the business of giving advice, counsel,
6-15 recommendation or information to an insured, or a beneficiary, or
6-16 any person having any interest in a life, accident, or health
6-17 insurance contract, health benefit plan contract, annuity or pure
6-18 endowment contract. This definition is not intended to prevent a
6-19 person who has obtained the professional designation of chartered
6-20 life underwriter (CLU), chartered financial consultant (ChFC) or
6-21 certified financial planner (CFP) by completing a course of
6-22 instruction recognized within the business of insurance from using
6-23 that designation to indicate professional achievement.
6-24 Sec. 2. LICENSE REQUIRED; ISSUANCE BY DEPARTMENT. No person
6-25 shall act as a Life and Health Insurance Counselor, as defined in
6-26 Section 1 of this article [hereof], unless authorized so to act by
6-27 a license issued by the department under [Board of Insurance
6-28 Commissioners of the State of Texas pursuant to the provisions of]
6-29 this article [Act].
6-30 Sec. 3. EXEMPTIONS. The provisions of this article [Act]
6-31 shall not apply to the following persons:
6-32 (a) Licensed agents for a life insurance company while
6-33 acting for an insurer as its agent.
6-34 (b) Licensed attorneys at law of this State when
6-35 acting within the course or scope of their profession.
6-36 (c) Licensed public accountants of this State while
6-37 acting within the course or scope of their profession.
6-38 (d) A regular salaried officer or employee of an
6-39 authorized insurer issuing policies of life or health insurance
6-40 while acting for such insurer in discharging the duties of the
6-41 [his] position or employment.
6-42 (e) An officer or employee of any bank or trust
6-43 company who receives no compensation from sources other than the
6-44 bank or trust company for such activities connected with the [his]
6-45 employment.
6-46 (f) Employers or their officers or employees, or the
6-47 trustees of any employee benefit plan, to the extent that such
6-48 employers, officers, employees or trustees are engaged in the
6-49 administration or operation of any program of employee benefits
6-50 involving the use of insurance or annuities issued by a legal
6-51 reserve life insurance company.
6-52 Sec. 4. CONTRACT, WRITING REQUIRED; DUPLICATES; OTHER
6-53 REQUISITES. No contract or agreement between a Life and Health
6-54 Insurance Counselor, as defined in this article [Act], and any
6-55 other person, firm or corporation, relating to the activities,
6-56 services, advice, recommendations or information referred to in
6-57 Section 1 of this article [Act], shall be enforceable by or on
6-58 behalf of such Life and Health Insurance Counselor unless it is in
6-59 writing and executed in duplicate by the person, firm or
6-60 corporation to be charged, nor unless one of said duplicates is
6-61 delivered to and retained by such person, firm or corporation when
6-62 executed, nor unless such contract or agreement plainly specifies
6-63 the amount of the fee paid or to be paid by such person, firm or
6-64 corporation, and the services to be rendered by such Life and
6-65 Health Insurance Counselor; provided, however, that the foregoing
6-66 provisions shall not be applicable to any of the persons set out in
6-67 Section 3 of this article [above].
6-68 Sec. 4a. PROHIBITION OF DUAL COMPENSATION. A person
6-69 licensed under the provisions of this article [Act] who is also
7-1 licensed under Chapter 213, Acts of the 54th Legislature, Regular
7-2 Session, 1955 ([Article 21.07 or] Article 21.07-1, Vernon's Texas
7-3 Insurance [of this] Code), as amended, and who receives a
7-4 commission or compensation for [his] services as an agent licensed
7-5 under Chapter 213, Acts of the 54th Legislature, Regular Session,
7-6 1955 ([Article 21.07 or] Article 21.07-1, Vernon's Texas Insurance
7-7 Code), as amended, shall not be entitled to receive a fee for the
7-8 same services [his service] to the same client as a Life and Health
7-9 Insurance Counselor.
7-10 Sec. 5. MODE OF LICENSING AND REGULATION. (a) Except as
7-11 provided by this article, [The] licensing and regulation of a Life
7-12 and Health Insurance Counselor, as that term is defined herein,
7-13 shall be in the same manner and subject to the same requirements as
7-14 applicable to the licensing of agents under this subchapter [of
7-15 legal reserve life insurance companies as provided in Article
7-16 21.07-1 of the Texas Insurance Code, 1951,] or as provided by any
7-17 existing or subsequent applicable law governing the licensing of
7-18 such agents, and all the provisions thereof are hereby made
7-19 applicable to applicants and licensees under this article [Act],
7-20 except that a Life and Health Insurance Counselor shall not
7-21 advertise in any manner and shall not circulate materials
7-22 indicating professional superiority or the performance of
7-23 professional service in a superior manner; provided, however, that
7-24 an appointment to act for an insurer shall not be a condition to
7-25 the licensing of a Life and Health Insurance Counselor.
7-26 (b) An [In addition to the above requirements, the applicant
7-27 for licensure as a Life Insurance Counselor shall submit to the
7-28 Commissioner documentation that he has been licensed as a life
7-29 insurance agent in excess of three years. After the Insurance
7-30 Commissioner has satisfied himself as to these requirements, he
7-31 shall then cause the] applicant for a Life and Health Insurance
7-32 Counselor's license must [to] sit for an examination administered
7-33 under Article 21.01-1 of this code that includes [which shall
7-34 include] the following five subjects and subject areas:
7-35 (1) Fundamentals of life and health insurance;
7-36 (2) Group life insurance, pensions and health
7-37 insurance;
7-38 (3) Law, trust and taxation;
7-39 (4) Finance and economics; and
7-40 (5) Business insurance and estate planning.
7-41 (c) No license shall be granted until such individual shall
7-42 have successfully passed each of the five parts under Subsection
7-43 (b) of this section. Such examinations may be given and scheduled
7-44 by the Commissioner at the Commissioner's [his] discretion. The
7-45 department shall, without further examination, issue a license
7-46 under this article to an individual who, on September 1, 1999,
7-47 holds a [Individuals currently holding] Life Insurance Counselor
7-48 license [licenses] issued by the department [Texas State Board of
7-49 Insurance, who do not have the equivalent of the requirements above
7-50 listed, shall have one year from the date of enactment hereof to so
7-51 qualify].
7-52 Sec. 6. INTENT OF LEGISLATURE; STATUTES AND AMENDMENTS
7-53 APPLICABLE. Except as provided by this article, it [It] is the
7-54 legislative intent, and it is hereby provided, that the licensing
7-55 and regulation of any person acting as a Life and Health Insurance
7-56 Counselor shall be subject to the same statutes and requirements
7-57 applicable to the licensing and regulation of agents under this
7-58 subchapter [of legal reserve life insurance companies]. In event
7-59 of subsequent legislative enactment applicable to agents under this
7-60 subchapter [of legal reserve life insurance companies in lieu of,
7-61 or as an amendment to, present Article 21.07 of the Texas Insurance
7-62 Code], it is hereby provided that such statute shall be applicable
7-63 to any person acting as a Life and Health Insurance Counselor, as
7-64 defined in this article [Act].
7-65 Sec. 7. VIOLATIONS. [(a)] A [person commits an offense if
7-66 the person acts as a life insurance counselor without a license
7-67 issued under this Act or otherwise violates this Act. Each
7-68 violation constitutes a separate offense. An offense under this
7-69 subsection is a Class C misdemeanor.]
8-1 [(b) In addition to being subject to the penalty imposed
8-2 under Subsection (a) of this section, a] person who commits a
8-3 violation of this article [Act] is subject to license revocation
8-4 under [Section 5,] Article 21.01-2 of this code[, Insurance Code].
8-5 If the department revokes the license, the license holder is not
8-6 eligible for a new license for two years after the effective date
8-7 of the license revocation.
8-8 Sec. 8. PARTIAL INVALIDITY. Should any Section or part
8-9 [thereof] of this article [Act] be held to be invalid for any
8-10 reason, such holding shall not be construed as affecting the
8-11 validity of any of the remaining Sections or parts of this article
8-12 [thereof], it being the legislative intent that the remainder of
8-13 this article [Section] shall stand, notwithstanding the invalidity
8-14 of any Section or part of this article [thereof].
8-15 Sec. 9. CONTINUING EDUCATION. A person who holds a license
8-16 issued under this article shall complete continuing education as
8-17 required by rules of the department or any applicable article of
8-18 this code.
8-19 Sec. 10. RULES. The commissioner may adopt rules necessary
8-20 to implement this article and to meet the minimum requirements of
8-21 federal law and regulations.
8-22 Sec. 11. REFERENCE IN OTHER LAW. A reference in any law to
8-23 Chapter 29, Acts of the 54th Legislature, Regular Session, 1955,
8-24 means this article.
8-25 ARTICLE 3. ADJUSTERS LICENSES
8-26 SECTION 3.01. Chapter 407, Acts of the 63rd Legislature,
8-27 Regular Session, 1973 (Article 21.07-4, Vernon's Texas Insurance
8-28 Code), is amended by amending Sections 15, 16, 17, and 23 and
8-29 adding Section 24 to read as follows:
8-30 Sec. 15. PLACE OF BUSINESS. Every licensed adjuster shall
8-31 have and maintain [in this state] a place of business accessible to
8-32 the public. Such place of business shall be located where the
8-33 adjuster principally conducts transactions under the [his] license.
8-34 The [address of his place of business shall appear on all licenses
8-35 of the licensee, and the] licensee shall promptly notify the
8-36 commissioner of any change in the location of the place of business
8-37 [thereof].
8-38 Sec. 16. EXPIRATION AND RENEWAL OF LICENSES. Expiration and
8-39 renewal of licenses issued under this Act are governed by rules of
8-40 the department or any applicable article of the Insurance Code or
8-41 another insurance law of this state. [(a) Except as may be
8-42 provided by a staggered renewal system adopted under Article
8-43 21.01-2, Insurance Code, an adjuster's license expires two years
8-44 after the date of issuance.]
8-45 [(b) Subject to the right of the commissioner to suspend,
8-46 revoke, or refuse to renew an adjuster's license, any such license
8-47 may be renewed by filing, on the form prescribed by the
8-48 commissioner, on or before the expiration date, a written request,
8-49 by or on behalf of the licensee, for such renewal, accompanied by
8-50 payment of the renewal fee.]
8-51 Sec. 17. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE.
8-52 [(a)] The department may discipline an adjuster or deny an
8-53 application under department rules or any other applicable article
8-54 of the Insurance Code or another insurance law of this state. The
8-55 rules may specify grounds for discipline that are comparable to
8-56 grounds for discipline of other license holders under this
8-57 subchapter [Section 5, Article 21.01-2, Insurance Code, for any of
8-58 the following causes:]
8-59 [(1) for any cause for which issuance of the license
8-60 could have been refused had it been existent and been known to the
8-61 board;]
8-62 [(2) if the applicant or licensee willfully violates
8-63 or knowingly participates in the violation of any provision of this
8-64 Act;]
8-65 [(3) if the applicant or licensee has obtained or
8-66 attempted to obtain any such license through willful
8-67 misrepresentation or fraud, or has failed to pass any examination
8-68 required under this Act;]
8-69 [(4) if the applicant or licensee has misappropriated,
9-1 or converted to the applicant's or licensee's own use, or has
9-2 illegally withheld moneys required to be held in a fiduciary
9-3 capacity;]
9-4 [(5) if the applicant or licensee has, with intent to
9-5 deceive, materially misrepresented the terms or effect of an
9-6 insurance contract, or has engaged in any fraudulent transactions;
9-7 or]
9-8 [(6) if the applicant or licensee is convicted, by
9-9 final judgment, of a felony.]
9-10 [(b) An applicant or licensee whose license application or
9-11 license has been denied, refused, or revoked under this section may
9-12 not apply for any license as an insurance agent or adjuster before
9-13 the first anniversary of the effective date of the denial, refusal,
9-14 or revocation, or, if the applicant or licensee seeks judicial
9-15 review of the denial, refusal, or revocation, before the first
9-16 anniversary of the date of the final court order or decree
9-17 affirming that action. The commissioner may deny an application
9-18 timely filed if the applicant does not show good cause why the
9-19 denial, refusal, or revocation of the previous license application
9-20 or license should not be considered a bar to the issuance of a new
9-21 license. This subsection does not apply to an applicant whose
9-22 license application was denied for failure to pass a required
9-23 written examination].
9-24 Sec. 23. DUPLICATE LICENSE; FEE. The department
9-25 [Commissioner of Insurance] shall collect in advance from an
9-26 adjuster [adjusters] requesting a duplicate license [licenses] a
9-27 fee in an amount determined by the department [not to exceed $20.
9-28 The State Board of Insurance shall determine the amount of the
9-29 fee].
9-30 Sec. 24. RULES. The commissioner may adopt rules necessary
9-31 to implement this Act and to meet the minimum requirements of
9-32 federal law and regulations.
9-33 ARTICLE 4. AGRICULTURE AGENTS
9-34 SECTION 4.01. Article 21.14-2, Insurance Code, is amended to
9-35 read as follows:
9-36 Art. 21.14-2. [LICENSING OF] AGRICULTURAL INSURANCE AGENTS
9-37 Sec. 1. APPOINTING CERTAIN AGRICULTURAL INSURANCE AGENTS.
9-38 An insurance company that holds a valid certificate of authority
9-39 issued by this state to authorize the company to engage in the
9-40 insurance business in this state, and whose authority in this state
9-41 and in each other jurisdiction in which the company is licensed to
9-42 do business is limited [but limiting the insurance business only]
9-43 to the transaction of the business of insurance of risks on growing
9-44 crops, may appoint and act through agents who hold [qualify for] a
9-45 license under Article 21.14 of this code, subject to this article.
9-46 Sec. 2. REQUIREMENTS FOR APPOINTMENT. (a) To appoint a
9-47 license holder [obtain a license] to act as an agent under this
9-48 article, an insurance company [applicant] must submit a completed
9-49 appointment form [written application] to the department
9-50 [commissioner of insurance on a form prescribed by the State Board
9-51 of Insurance] and pay a [$50] nonrefundable fee in an amount
9-52 determined by the commissioner. The appointment form [application]
9-53 must bear an endorsement signed by a representative [an agent] of
9-54 an insurance company that meets the requirements of Section 1 of
9-55 this article [and must state that the applicant is a resident of
9-56 this state].
9-57 (b) The commissioner of insurance shall approve the
9-58 appointment [license application] unless the commissioner
9-59 determines that the applicant does not meet the requirements of
9-60 this subchapter [article].
9-61 (c) The department may waive any examination requirement
9-62 imposed under this subchapter for a license applicant seeking a
9-63 company appointment under this article if the applicant has
9-64 successfully completed an examination as required under the Federal
9-65 Crop Insurance Corporation guidelines for delivery of the federal
9-66 crop insurance program. [Except as provided by a staggered renewal
9-67 system adopted under Article 21.01-2 of this code, a license issued
9-68 under this article expires two years after the date of its issuance
9-69 unless a completed application to renew the license is filed with
10-1 the commissioner and the $50 nonrefundable renewal fee is paid on
10-2 or before that date, in which case the license continues in full
10-3 force and effect until renewed or the renewal is denied.]
10-4 (d) The department may, at its discretion, accept continuing
10-5 education hours completed under the guidelines of the Federal Crop
10-6 Insurance Corporation as satisfying the continuing education
10-7 requirements imposed under this subchapter. [An applicant for an
10-8 original or renewal license is not required to pass an examination
10-9 or meet any basic or continuing educational requirements to obtain
10-10 or renew a license under this article.]
10-11 Sec. 3. MULTIPLE APPOINTMENTS AUTHORIZED. A license holder
10-12 appointed under this article may act as an agent for more than one
10-13 insurance company, but may act as an agent under this article only
10-14 with respect to the business of insurance on growing crops. [The
10-15 license of an agent is automatically suspended or canceled if the
10-16 agent does not have outstanding a valid appointment to act as an
10-17 agent for an insurance company described in Section 1 of this
10-18 article. The department may discipline a licensee or deny an
10-19 application under Section 5, Article 21.01-2, of this code if it
10-20 determines that the license applicant or licensee:]
10-21 [(1) has intentionally or knowingly violated the
10-22 insurance laws of this state;]
10-23 [(2) has obtained or attempted to obtain a license by
10-24 fraud or misrepresentation;]
10-25 [(3) has misappropriated, converted, or illegally
10-26 withheld money belonging to an insurer or an insured or
10-27 beneficiary;]
10-28 [(4) has been guilty of fraudulent or dishonest acts;]
10-29 [(5) has materially misrepresented the terms and
10-30 conditions of an insurance policy or contract;]
10-31 [(6) has made or issued or caused to be made or issued
10-32 any statement misrepresenting or making incomplete comparisons
10-33 regarding the terms or conditions of an insurance contract legally
10-34 issued by an insurance carrier for the purpose of inducing or
10-35 attempting to induce the owner of the contract to forfeit or
10-36 surrender the contract or allow the contract to expire or for the
10-37 purpose of replacing the contract with another contract;]
10-38 [(7) has been convicted of a felony; or]
10-39 [(8) is guilty of rebating an insurance premium or
10-40 discriminating between insureds.]
10-41 Sec. 4. APPLICATION OF OTHER LAW. This subchapter applies
10-42 [Article 21.14 of this code does not apply] to the licensing and
10-43 [or] regulation of an agent appointed under this article.
10-44 Sec. 5. RULES. The commissioner may adopt rules necessary
10-45 to implement this article and to meet the minimum requirements of
10-46 federal law and regulations.
10-47 ARTICLE 5. REPEALER
10-48 SECTION 5.01. The following laws are repealed:
10-49 (1) Section 21, Article 21.07, Insurance Code, as
10-50 added by Chapter 820, Acts of the 75th Legislature, Regular
10-51 Session, 1997;
10-52 (2) Section 21, Article 21.07, Insurance Code, as
10-53 added by Chapter 1196, Acts of the 75th Legislature, Regular
10-54 Session, 1997; and
10-55 (3) Sections 18 and 19, Chapter 407, Acts of the 63rd
10-56 Legislature, Regular Session, 1973 (Article 21.07-4, Vernon's Texas
10-57 Insurance Code).
10-58 ARTICLE 6. GRANDFATHER PROVISIONS; EFFECTIVE DATE; EMERGENCY
10-59 SECTION 6.01. This Act takes effect September 1, 1999.
10-60 SECTION 6.02. (a) Not later than January 1, 2000, the Texas
10-61 Department of Insurance shall issue an appropriate license under
10-62 Article 21.09, Insurance Code, as added by this Act, to a person
10-63 who, immediately before the effective date of this Act, holds an
10-64 agent license issued by the Texas Department of Insurance under
10-65 Section 21, Article 21.07, Insurance Code, as added by Chapter 820,
10-66 Acts of the 75th Legislature, Regular Session, 1997, or Section
10-67 21, Article 21.07, Insurance Code, as added by Chapter 1196, Acts
10-68 of the 75th Legislature, Regular Session, 1997. On issuance of the
10-69 new license, the license holder is subject to Article 21.09,
11-1 Insurance Code, as added by this Act.
11-2 (b) A travel agency or franchisee is not required to be
11-3 licensed as provided by Section 4, Article 21.09, Insurance Code,
11-4 as added by this Act, before January 1, 2000.
11-5 (c) A self-service storage facility or franchisee is not
11-6 required to be licensed under Section 5, Article 21.09, Insurance
11-7 Code, as added by this Act, before January 1, 2000.
11-8 (d) A person required to be licensed under Article 21.07-2,
11-9 Insurance Code, as redesignated and amended by this Act, who was
11-10 not required to be licensed under Chapter 29, Acts of the 54th
11-11 Legislature, Regular Session, 1955 (Article 21.07-2, Vernon's Texas
11-12 Insurance Code), as it existed immediately before the effective
11-13 date of this Act, is not required to be licensed as provided by
11-14 this Act before January 1, 2000.
11-15 (e) A person who holds a license to operate as an
11-16 agricultural insurance agent under Article 21.14-2, Insurance Code,
11-17 on the effective date of this Act is eligible for a license under
11-18 Article 21.14, Insurance Code, if the person applies for the
11-19 license to the Texas Department of Insurance before March 1, 2000,
11-20 and pays any required fees. To maintain the license, the person
11-21 must pass the required qualifying examination for that license on
11-22 or before March 1, 2002.
11-23 * * * * *