By Armbrister S.B. No. 1482
76R8128 PB-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to procedures to issue to certain self-service storage
1-3 facility companies limited licenses as insurance agents.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 21, Article 21.07, Insurance Code, as
1-6 added by Chapter 820, Acts of the 75th Legislature, Regular
1-7 Session, 1997, is redesignated as Section 23, Article 21.07,
1-8 Insurance Code, and amended to read as follows:
1-9 Sec. 23 [21]. (a) Notwithstanding any provisions of either
1-10 this Article or of this Code to the contrary, the Commissioner
1-11 shall issue a license under this Article to a rental car company
1-12 or a self-service storage facility company, or to the franchisee of
1-13 a rental car company or a self-service storage facility company,
1-14 that complies with the provisions of this section and only for the
1-15 limited purposes as set forth in this section.
1-16 (b) As used in this section:
1-17 (1) "Limited licensee" means a person authorized to
1-18 sell certain insurance coverages under this section relating to the
1-19 rental of:
1-20 (A) motor vehicles; or
1-21 (B) self-service storage facilities [pursuant to
1-22 the provisions of this section].
1-23 (2) "Rental agreement" means any written agreement
1-24 setting forth the terms and conditions governing the use of:
2-1 (A) a vehicle provided by a [the] rental car
2-2 company; or
2-3 (B) a self-service storage facility provided by
2-4 a self-service storage facility company.
2-5 (3) "Rental car company" means any person in the
2-6 business of providing leased or rented vehicles to the public.
2-7 (4) "Renter" means any person obtaining the use, under
2-8 the terms of a rental agreement, of:
2-9 (A) a vehicle from a rental car company; or
2-10 (B) a self-service storage facility [under the
2-11 terms of a rental agreement].
2-12 (5) "Self-service storage facility company" means a
2-13 business entity that operates self-service storage facilities.
2-14 (6) "Self-service storage facility" means a room,
2-15 unit, locker, or open space offered for rental to the public for a
2-16 set term for the temporary storage of personal belongings and light
2-17 commercial goods.
2-18 (7) "Vehicle" means a motor vehicle of the private
2-19 passenger type including passenger vans and minivans that are
2-20 primarily intended for the transport of persons.
2-21 (c) The Commissioner may issue to a rental car company, a
2-22 self-service storage facility company, or [to] a franchisee of a
2-23 rental car company or a self-service storage facility company,
2-24 that has complied with the requirements of this section, a limited
2-25 license authorizing the licensee, known as a "limited licensee"
2-26 for the purpose of this section, to act as agent, with reference to
2-27 the kinds of insurance specified in this section, or any insurer
3-1 authorized to write such kinds of insurance in this State.
3-2 (d) The prerequisites for issuance of a limited license
3-3 under this section are the filing with the Commissioner of the
3-4 following:
3-5 (1) a written application, signed by an officer of the
3-6 applicant, for the limited license in such form or forms, and
3-7 supplements thereto, and containing such information, as the
3-8 Commissioner may prescribe; and
3-9 (2) a certificate by the insurer that is to be named
3-10 in such limited license, stating that it has satisfied itself that
3-11 the named applicant is trustworthy and competent to act as its
3-12 insurance agent for this limited purpose and that the insurer will
3-13 appoint such applicant to act as the agent in reference to the
3-14 doing of such kind or kinds of insurance as are permitted by this
3-15 section, if the limited license applied for is issued by the
3-16 Commissioner. Such certification shall be subscribed by an officer
3-17 or managing agent of such insurer and affirmed as true under the
3-18 penalties of perjury.
3-19 (e) In the event that any provision of this section is
3-20 violated by a limited licensee, the Commissioner may:
3-21 (1) revoke or suspend a limited license issued under
3-22 this section in accordance with the provisions of Article 21.01-2
3-23 of this Code; or
3-24 (2) after notice and hearing, impose such other
3-25 penalties, including suspending the transaction of insurance at
3-26 specific [rental] locations where violations of this section have
3-27 occurred, as the Commissioner deems to be necessary or convenient
4-1 to carry out the purposes of this section.
4-2 (f) A [The] rental car company or rental car company
4-3 franchisee licensed pursuant to Subsection (c) of this section may
4-4 act as agent for an authorized insurer only in connection with the
4-5 rental of vehicles and only with respect to the following kinds of
4-6 insurance:
4-7 (1) excess liability insurance that provides coverage
4-8 to the rental car company or franchisee and renters and other
4-9 authorized drivers of rental vehicles, in excess of the standard
4-10 liability limits provided by the rental car company in its rental
4-11 agreement, for liability arising from the negligent operation of
4-12 the rental vehicle;
4-13 (2) accident and health insurance that provides
4-14 coverage to renters and other vehicle occupants for accidental
4-15 death or dismemberment and for medical expenses resulting from an
4-16 accident involving the rental vehicle that occurs during the rental
4-17 period;
4-18 (3) personal effects insurance that provides coverage
4-19 to renters and other rental vehicle occupants for the loss of, or
4-20 damage to, personal effects that occurs during the rental period;
4-21 or
4-22 (4) any other coverage that the Commissioner may
4-23 approve as meaningful and appropriate in connection with the rental
4-24 of vehicles.
4-25 (g) A self-service storage facility company or self-service
4-26 storage facility company franchisee licensed under Subsection (c)
4-27 of this section may act as agent for an authorized insurer only in
5-1 connection with property in storage for the perils set forth in the
5-2 policy, which must include coverage for the property while in
5-3 transit to and from the self-service storage facility.
5-4 (h) No insurance may be issued pursuant to this section
5-5 unless:
5-6 (1) the rental period of the rental agreement does not
5-7 exceed 31 [30] consecutive days; and
5-8 (2) at every [rental car] location where rental [car]
5-9 agreements are executed, brochures or other written materials are
5-10 prominently displayed and readily available to the prospective
5-11 renter that:
5-12 (A) summarize, clearly and correctly, the
5-13 material terms of insurance coverage, including the identity of the
5-14 insurer, offered to renters;
5-15 (B) disclose that these policies offered by the
5-16 rental car company or self-service storage facility company may
5-17 provide a duplication of coverage already provided by a renter's
5-18 personal automobile insurance policy, homeowner's insurance policy,
5-19 personal liability insurance policy, or other source of coverage;
5-20 (C) state that the purchase by the renter of the
5-21 kinds of insurance specified in this section is not required in
5-22 order to rent a vehicle or a self-service storage facility;
5-23 (D) describe the process for filing a claim in
5-24 the event the renter elects to purchase coverage and in the event
5-25 of a claim; and
5-26 (E) contain any additional information on the
5-27 price, benefits, exclusions, conditions, or other limitations of
6-1 such policies as the Commissioner may by regulation prescribe; and
6-2 (3) evidence of coverage is provided to every renter
6-3 who elects to purchase such coverage.
6-4 (i) [(h)] Any limited license issued under this section
6-5 shall also authorize any salaried employee of the licensee who,
6-6 pursuant to Subsection (j) [(i)] of this section, is trained to act
6-7 individually on behalf, and under the supervision, of the licensee
6-8 with respect to the kinds of insurance specified in this section.
6-9 (j) [(i)] Each rental car company, self-service storage
6-10 facility company, or franchisee licensed pursuant to this section
6-11 shall conduct a training program which shall be submitted to the
6-12 Commissioner for approval prior to use and which shall meet the
6-13 following minimum standards:
6-14 (1) each trainee shall receive basic instruction about
6-15 the kinds of insurance specified in this section offered for
6-16 purchase by prospective renters [of rental vehicles];
6-17 (2) each trainee shall be instructed to acknowledge to
6-18 a prospective renter [of a rental vehicle] that purchase of any
6-19 such insurance specified in this section is not required in order
6-20 for the renter to rent a vehicle or a self-service storage
6-21 facility; and
6-22 (3) each trainee shall be instructed to acknowledge to
6-23 a prospective renter [of a rental vehicle] that the renter may have
6-24 insurance policies that already provide the coverage being offered
6-25 by the rental car company or self-service storage facility company
6-26 pursuant to this section.
6-27 (k) [(j)] Limited licensees acting pursuant to and under the
7-1 authority of this section shall comply with all applicable
7-2 provisions of this Article, except that notwithstanding any other
7-3 provision of this Article, or any rule adopted by the Commissioner,
7-4 a limited licensee pursuant to this section shall not be required
7-5 to treat premiums collected from renters purchasing such insurance
7-6 [when renting vehicles] as funds received in a fiduciary capacity,
7-7 provided that:
7-8 (1) the insurer represented by the limited licensee
7-9 has consented in writing, signed by the insurer's officer, that
7-10 premiums need not be segregated from funds received by the rental
7-11 car company on account of vehicle rental or by the self-service
7-12 storage facility company because of rental of a self-service
7-13 storage facility; and
7-14 (2) the charges for insurance coverage are itemized
7-15 but not billed to the renter separately from the charges for the
7-16 rental vehicles or the rental of the self-service storage facility.
7-17 (l) [(k)] No limited licensee under this section shall
7-18 advertise, represent, or otherwise hold itself or any of its
7-19 employees or themselves out as licensed insurance agents.
7-20 SECTION 2. Section 23, Article 21.07, Insurance Code, as
7-21 redesignated and amended by this Act, applies only to sale of an
7-22 insurance policy or contract that is delivered, issued for
7-23 delivery, or renewed on or after January 1, 2000. Sale of a policy
7-24 or contract that is delivered, issued for delivery, or renewed
7-25 before January 1, 2000, is governed by the law as it existed
7-26 immediately before the effective date of this Act, and that law is
7-27 continued in effect for that purpose.
8-1 SECTION 3. This Act takes effect September 1, 1999.
8-2 SECTION 4. The importance of this legislation and the
8-3 crowded condition of the calendars in both houses create an
8-4 emergency and an imperative public necessity that the
8-5 constitutional rule requiring bills to be read on three several
8-6 days in each house be suspended, and this rule is hereby suspended.