By Eiland H.B. No. 1163
77R4414 MXM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of certain insurance agents and to the
1-3 consolidation of insurance agent licenses; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. GENERAL PROVISIONS APPLICABLE TO
1-6 ALL INSURANCE AGENTS
1-7 SECTION 1.01. Article 21.01, Insurance Code, is amended to
1-8 read as follows:
1-9 Art. 21.01. PURPOSE; CONSOLIDATION OF LICENSES; APPLICATION;
1-10 CERTIFICATE OF AUTHORITY OR LICENSE REQUIRED; RULEMAKING AUTHORITY
1-11 Sec. 1. PURPOSE. It is the intent of the legislature to:
1-12 (1) simplify and reform the regulation of insurance
1-13 agents in this state by consolidating the types of licenses issued
1-14 to insurance agents under this subchapter; and
1-15 (2) promote uniformity in the licensing, examination,
1-16 continuing education, and disciplinary requirements for agents in
1-17 this state and with other states.
1-18 Sec. 2. CERTIFICATE OF AUTHORITY OR LICENSE REQUIRED. It
1-19 shall not be lawful for any person to act [within this State], as
1-20 an agent or otherwise, in soliciting or receiving applications for
1-21 insurance of any kind whatever in this state, or in any manner to
1-22 aid in the transaction of the business of any insurance company
1-23 incorporated in this state [State], or out of it, without first
1-24 procuring a license or certificate of authority from the department
2-1 [Board].
2-2 Sec. 3. APPLICATION. Except as otherwise provided by this
2-3 code, this subchapter applies to each person licensed in accordance
2-4 with:
2-5 (1) Section 4, Article 1.14-2, of this code;
2-6 (2) Section 7, Article 3.75, of this code;
2-7 (3) Subsection (c), Article 5.13-1, of this code;
2-8 (4) Article 10.37-3 of this code;
2-9 (5) Article 16.24A of this code;
2-10 (6) Section 9, Article 17.25, of this code;
2-11 (7) Article 21.07 of this code;
2-12 (8) Article 21.07-1 of this code;
2-13 (9) Chapter 29, Acts of the 54th Legislature, Regular
2-14 Session, 1955 (Article 21.07-2, Vernon's Texas Insurance Code);
2-15 (10) the Managing General Agents' Licensing Act
2-16 (Article 21.07-3, Vernon's Texas Insurance Code);
2-17 (11) Chapter 407, Acts of the 63rd Legislature,
2-18 Regular Session, 1973 (Article 21.07-4, Vernon's Texas Insurance
2-19 Code);
2-20 (12) Article 21.07-6 of this code;
2-21 (13) Article 21.07-7 of this code;
2-22 (14) Article 21.09 of this code;
2-23 (15) Article 21.11 of this code;
2-24 (16) Article 21.14 of this code;
2-25 (17) Article 21.14-1 of this code;
2-26 (18) Article 21.14-2 of this code; or
2-27 (19) Article 23.23A of this code.
3-1 Sec. 4. RULES. The commissioner may adopt rules as
3-2 necessary to implement this subchapter and to meet the minimum
3-3 requirements of federal law and regulations.
3-4 SECTION 1.02. Article 21.01-1, Insurance Code, is amended to
3-5 read as follows:
3-6 Art. 21.01-1. AGENTS' QUALIFYING EXAMINATION; CONTINUING
3-7 EDUCATION REQUIREMENTS FOR AGENTS
3-8 Sec. 1. EXAMINATION ADMINISTRATION. (a) The commissioner
3-9 [State Board of Insurance] may[, at its discretion,] accept
3-10 examinations administered by a testing service as satisfying the
3-11 examination requirements of persons seeking license as agents,
3-12 [solicitors,] counselors, or adjusters under this code. The
3-13 commissioner [State Board of Insurance] may negotiate agreements
3-14 with such testing services to include performance of examination
3-15 development, test scheduling, examination site arrangements, and
3-16 test administration, grading, reporting and analysis. The
3-17 commissioner [State Board of Insurance] may require such testing
3-18 services to correspond directly with the applicants with regard to
3-19 the administration of such examinations and that such testing
3-20 services collect fees for administering such examinations directly
3-21 from the applicants. The commissioner [State Board of Insurance]
3-22 may stipulate that any agreements with such testing services
3-23 provide for the administration of examinations in specific locales
3-24 and at specified frequencies. The commissioner [State Board of
3-25 Insurance] shall retain the authority to establish the scope and
3-26 type of all examinations. Prior to negotiating and making any
3-27 agreement with any testing service as authorized hereby, the
4-1 commissioner [State Board of Insurance] shall hold a public hearing
4-2 [thereon] in accordance with Chapter 2001, Government Code [the
4-3 provisions of Section 5 of the Administrative Procedure and Texas
4-4 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)],
4-5 and shall adopt such rules[, regulations,] and standards as may be
4-6 deemed appropriate by the commissioner [Board] to implement the
4-7 authority granted in this article [Article].
4-8 (b) The commissioner may appoint advisory boards consisting
4-9 of any of the following persons: persons holding a license for
4-10 which the respective examinations are intended, persons who are
4-11 employed by insurance companies appointing such licensees, persons
4-12 acting as general agents or managers, persons teaching insurance at
4-13 an accredited college or university in Texas, persons who are
4-14 citizens of the State of Texas but who are not of any of the
4-15 preceding descriptions, or any combination of such persons. The
4-16 function of such advisory boards will be to make recommendations to
4-17 the commissioner [State Board of Insurance] or the testing service
4-18 with respect to the scope, type, and conduct of such examinations
4-19 and the times and places within the state where they shall be held.
4-20 The members of such advisory boards shall serve without pay but
4-21 shall be reimbursed for their reasonable expenses in attending
4-22 meetings of their respective advisory boards.
4-23 (c) In the absence of an agreement with a testing service,
4-24 the department [State Board of Insurance] shall administer any
4-25 required qualifying examination in accordance with this article
4-26 [the provisions of the respective statutes governing the issuance
4-27 of the license sought by the applicant]. The commissioner may
5-1 adopt rules relating to the scope, type, and conduct of the written
5-2 examinations and the times and places in this state at which the
5-3 examinations will be conducted. The commissioner's rules may
5-4 designate textbooks, manuals, and other materials to be studied by
5-5 applicants in preparation for examinations conducted under this
5-6 subsection. Those textbooks, manuals, or other materials may
5-7 consist of material available to an applicant by purchase from the
5-8 publisher or of material prepared at the direction of the
5-9 commissioner and distributed to an applicant on request and on
5-10 payment of the reasonable cost of the material. All examination
5-11 questions shall be prepared from the contents of the textbooks,
5-12 manuals, and other materials designated or prepared by the
5-13 commissioner under this subsection.
5-14 (d) Not later than the 30th day after the date on which a
5-15 licensing examination is administered under this code, the
5-16 department shall notify each examinee of the results of the
5-17 examination. However, if an examination is graded or reviewed by a
5-18 testing service, the department shall notify each examinee
5-19 [examinees] of the results of the examination not later than the
5-20 14th day after the date on which the department receives the
5-21 results from the testing service. If the notice of examination
5-22 results graded or reviewed by a testing service will be delayed for
5-23 longer than 90 days after the examination date, the department
5-24 shall notify the examinee of the reason for the delay before the
5-25 90th day. The department may require a testing service to notify
5-26 examinees of the results of an examination.
5-27 (e) If requested in writing by a person who fails a
6-1 licensing examination administered under this code, the department
6-2 shall furnish the person with an analysis of the person's
6-3 performance on the examination.
6-4 Sec. 2. EXAMINATION OF LICENSE APPLICANT. (a) Except as
6-5 otherwise provided by this code, each applicant for a license to
6-6 act as an insurance agent in this state must submit to a personal
6-7 written examination that is prescribed by the commissioner and must
6-8 pass the examination to the satisfaction of the department. The
6-9 examination shall determine the applicant's competence with respect
6-10 to:
6-11 (1) the type of insurance contracts for which the
6-12 applicant seeks a license;
6-13 (2) the laws of this state regulating the business of
6-14 insurance; and
6-15 (3) the ethical obligations and duties of an insurance
6-16 agent.
6-17 (b) The department shall charge each applicant an
6-18 examination fee in an amount determined by the department as
6-19 necessary for administration of the examination. The fee must
6-20 accompany each application to take the examination. The fee is
6-21 nonrefundable other than for failure of the applicant to appear and
6-22 take the examination after the applicant has given at least 24
6-23 hours' notice of an emergency situation to the department and
6-24 received the department's approval of refund of the fee.
6-25 (c) The commissioner shall prescribe a limited written
6-26 licensing examination for applicants for a limited license under
6-27 Article 21.07-1 or 21.14 of this code. A limited examination shall
7-1 be administered according to the provisions of this article and
7-2 shall determine the applicant's competence and understanding of:
7-3 (1) the basic principles of insurance contracts;
7-4 (2) the basic laws of this state regulating the
7-5 business of insurance; and
7-6 (3) the ethical obligations and duties of an insurance
7-7 agent.
7-8 (d) The department may not require a person to take an
7-9 examination under this article if the person is:
7-10 (1) an applicant for the renewal of an unexpired
7-11 license issued by the department;
7-12 (2) an applicant whose license issued by the
7-13 department expired less than one year before the date of the
7-14 application, if the previous license was not denied, revoked, or
7-15 suspended by the commissioner;
7-16 (3) a partnership, corporation, or depository
7-17 institution;
7-18 (4) an applicant for a life, accident, and health
7-19 license who has attained the designation of chartered life
7-20 underwriter (CLU);
7-21 (5) an applicant for a life and health insurance
7-22 counselor license who has attained the designation of chartered
7-23 life underwriter (CLU), chartered financial consultant (ChFC), or
7-24 certified financial planner (CFP);
7-25 (6) an applicant for a property and casualty license
7-26 who has attained the designation of chartered property and casualty
7-27 underwriter (CPCU);
8-1 (7) an applicant for a specialty license issued under
8-2 Article 21.09 of this code;
8-3 (8) a nonresident individual who is exempt from the
8-4 examination requirement under Article 21.11 of this code; or
8-5 (9) an applicant for a general life, accident, and
8-6 health license who was authorized to solicit or procure insurance
8-7 on behalf of a fraternal benefit society on September 1, 1999, if
8-8 the applicant:
8-9 (A) solicited or procured insurance on behalf of
8-10 the fraternal benefit society for at least 24 months preceding
8-11 September 1, 1999;
8-12 (B) does not solicit or procure insurance for
8-13 any other insurer or a different fraternal benefit society on or
8-14 after September 1, 1999;
8-15 (C) does not solicit or procure an insurance
8-16 contract on or after September 1, 1999, except from a person who is
8-17 eligible for membership in the fraternal benefit society; and
8-18 (D) does not solicit or procure an
8-19 interest-sensitive life insurance contract that exceeds $35,000 of
8-20 coverage on an individual life on or after September 1, 1999,
8-21 unless the applicant has obtained the designation of "Fraternal
8-22 Insurance Counselor" at the time the contract is solicited or
8-23 procured.
8-24 (e) A license to which the exemption authorized under
8-25 Subsection (d)(9) of this section applies must be held by the
8-26 applicant in an individual capacity and is not transferable.
8-27 (f) Each examination administered under this article shall
9-1 be offered in English and Spanish.
9-2 Sec. 3. CONTINUING EDUCATION REQUIREMENTS. (a) The
9-3 department has exclusive jurisdiction for all matters relating to
9-4 the continuing education of insurance agents who are licensed under
9-5 this code.
9-6 (b) Except as provided by Subsection (d) of this section,
9-7 each individual who holds a license issued by the department shall
9-8 complete continuing education. All required continuing education
9-9 hours must be completed before the expiration date of the
9-10 individual's license. An individual who holds a general life,
9-11 accident, and health license, a life and health insurance counselor
9-12 license, or a general property and casualty license shall complete
9-13 15 hours of continuing education annually. The agent may not be
9-14 required to complete more than 15 continuing education hours
9-15 annually as a result of holding more than one license for which
9-16 continuing education is required. An individual who holds a
9-17 limited life, accident, and health license or a limited property
9-18 and casualty license shall complete five hours of continuing
9-19 education annually. Each individual who holds a license issued by
9-20 the department shall complete four hours of continuing education in
9-21 ethics during each license renewal period. At least 50 percent of
9-22 all required continuing education hours must be completed in a
9-23 classroom setting or a classroom equivalent setting approved by the
9-24 department. The department may accept continuing education hours
9-25 completed in other professions or in association with professional
9-26 designations in an insurance-related field.
9-27 (c) On a timely written request of an agent, the department
10-1 may extend the time for the agent to comply with the continuing
10-2 education requirements of this section or may exempt the agent from
10-3 some or all of the requirements for a licensing period if the
10-4 department finds that the agent is unable to comply with the
10-5 requirements because of illness, medical disability, or another
10-6 extenuating circumstance beyond the control of the agent. The
10-7 commissioner by rule shall prescribe the criteria for an exemption
10-8 or extension under this subsection.
10-9 (d) An individual who has continuously held a license issued
10-10 under this code to operate as an insurance agent for at least 20
10-11 years is exempt from the continuing education requirements of this
10-12 section. The commissioner by rule may provide for other reasonable
10-13 exemptions.
10-14 (e) The department shall certify continuing education
10-15 programs for agents. Only a program that satisfies the criteria
10-16 established by rule by the commissioner may receive certification.
10-17 The certification criteria shall be designed to ensure that
10-18 continuing education programs enhance the knowledge, understanding,
10-19 and professional competence of the license holder. A nonrefundable
10-20 certification fee, in an amount set by the commissioner as
10-21 necessary for administering this section, must accompany each
10-22 application for certification of a continuing education program.
10-23 The fee shall be established by rule and based on a graduated scale
10-24 according to the number of hours required to complete the program.
10-25 (f) Each continuing education program provider shall
10-26 register with the department as a course provider. The department
10-27 shall assess a registration fee for each application for
11-1 registration as a provider, set by the commissioner in an amount
11-2 necessary for the proper administration of this section. The
11-3 commissioner may adopt rules establishing the requirements for
11-4 continuing education program providers. The department may enter
11-5 into agreements with independent contractors under which the
11-6 independent contractor certifies and registers continuing education
11-7 programs and providers. The department may require those
11-8 independent contractors to correspond directly with providers with
11-9 regard to the administration of continuing education programs, and
11-10 the contractors may collect fees from the providers for
11-11 administration of the courses. The department retains the
11-12 authority to establish the scope and type of continuing education
11-13 requirements for each type of license.
11-14 (g) The commissioner may appoint an advisory council to
11-15 provide the commissioner with information and assistance in the
11-16 conduct of the continuing education program for agents licensed
11-17 under this subchapter. If an advisory council is appointed, it
11-18 must be composed of nine members, four of whom must be public
11-19 members. A public member is entitled to reimbursement for the
11-20 member's travel expenses as provided by Chapter 660, Government
11-21 Code, and the General Appropriations Act. A public member may not:
11-22 (1) be an officer, director, or employee of an
11-23 insurance company, insurance agency, agent, broker, adjuster, or
11-24 any other business entity regulated by the department;
11-25 (2) be a person required to register with the Texas
11-26 Ethics Commission under Chapter 305, Government Code; or
11-27 (3) be related to a person described by Subdivision
12-1 (1) or (2) of this subsection within the second degree by affinity
12-2 or consanguinity, as determined under Chapter 573, Government Code.
12-3 SECTION 1.03. Section 2, Article 21.01-2, Insurance Code, is
12-4 redesignated as Section 1A, Article 21.01-2, Insurance Code, and
12-5 amended to read as follows:
12-6 Sec. 1A [2]. EXPIRATION AND RENEWAL OF LICENSES. (a)
12-7 Except as provided by a staggered renewal system adopted under
12-8 Subsection (j) of this section, each agent license issued by the
12-9 department expires on the second anniversary of the date of
12-10 issuance unless suspended or revoked by the commissioner. The
12-11 commissioner by rule may change the two-year expiration period if
12-12 the commissioner finds that the change is necessary to promote a
12-13 uniform license period among this state and the other states. A
12-14 person may renew a [an unexpired] license that has not expired or
12-15 has not been suspended or revoked by filing a properly completed
12-16 renewal application with the department in the form prescribed by
12-17 the department and paying to the department before the expiration
12-18 date of the license the required renewal fee. A renewal fee paid
12-19 under this section is nonrefundable.
12-20 (b) On the filing of a completed renewal application not
12-21 later than the expiration date of the license accompanied by the
12-22 renewal fee set by the commissioner, the original license continues
12-23 in force until:
12-24 (1) the department issues the renewal license; or
12-25 (2) the commissioner issues an order revoking the
12-26 license.
12-27 (c) If a person's license has been expired for 90 days or
13-1 less, the person may renew the license by filing a renewal
13-2 application with the department in the form prescribed by the
13-3 department and paying to the department the required renewal fee
13-4 and an additional [a] fee that is equal to one-half of the renewal
13-5 [license] fee[, if any,] for the license.
13-6 (d) If a person's license has been expired for more than 90
13-7 days but less than one year, the person may not renew the license,
13-8 but is entitled to a new license without taking the applicable
13-9 examination if the person submits to the department a new
13-10 application, the license fee, and an additional fee equal to
13-11 one-half of the license fee.
13-12 (e) [(c)] If a person's license has been expired for one
13-13 year or more [longer than 90 days], the person may not renew the
13-14 license. The person may obtain a new license by submitting to
13-15 reexamination, if examination is required for original issuance of
13-16 the license, and complying with the requirements and procedures for
13-17 obtaining an original license.
13-18 (f) The [However, the] department may renew without
13-19 reexamination an expired license of a person who was licensed in
13-20 this state, moved to another state, and is currently licensed and
13-21 has been in continual practice in the other state [for the two
13-22 years] preceding the date of the application. The person must pay
13-23 to the department a fee that is equal to the license fee.
13-24 (g) Not later than the 30th day after moving from one state
13-25 to another state, a nonresident or resident agent licensed in this
13-26 state shall file with the department:
13-27 (1) the agent's new address; and
14-1 (2) proof of authorization to engage in the business
14-2 of insurance in the new state of residence.
14-3 (h) The department may not charge a fee or require a license
14-4 application under Subsection (g) of this section.
14-5 (i) [(d)] At least 30 days before the expiration of a
14-6 person's license, the department shall send written notice of the
14-7 impending license expiration to the person at the person's last
14-8 known mailing address according to the records of the department.
14-9 (j) [(e)] The commissioner by rule may adopt a system under
14-10 which licenses expire on various dates during a licensing period.
14-11 For the licensing period in which the license expiration is
14-12 changed, license fees shall be prorated [on a monthly basis] so
14-13 that each license holder shall pay only that portion of the license
14-14 fee that is allocable to the period [number of months] during which
14-15 the license is valid. On renewal of the license on the new
14-16 expiration date, the total license renewal fee is payable. The
14-17 commissioner shall adopt a system under which a person who holds
14-18 more than one license may renew all the licenses held in a single
14-19 process.
14-20 (k) [(f)] This section is not applicable to a license issued
14-21 under Article 21.07-6 of this code.
14-22 SECTION 1.04. Article 21.01-2, Insurance Code, is amended by
14-23 adding Section 2A to read as follows:
14-24 Sec. 2A. PROHIBITED ACTIVITIES. (a) A person licensed
14-25 under this code who receives a commission or other consideration
14-26 for services as an insurance agent may not receive an additional
14-27 fee for those services provided to the same client except for a fee
15-1 described by Article 21.35A or 21.35B of this code.
15-2 (b) An insurer or licensed insurance agent engaged in the
15-3 business of insurance in this state may not pay, directly or
15-4 indirectly, and may not accept, any commission or other valuable
15-5 consideration to or from any person for services performed by that
15-6 person as an insurance agent in this state unless the person holds
15-7 a license to act as an insurance agent as required by the laws of
15-8 this state. This subsection does not prevent the payment or
15-9 receipt of renewal or other deferred commissions to or by any
15-10 person solely because the person has ceased to hold a license to
15-11 act as an insurance agent.
15-12 (c) An insurance agent licensed under this code may not pay,
15-13 allow, or give, or offer to pay, allow, or give, directly or
15-14 indirectly, to any person who is not a licensed insurance agent,
15-15 any rebate of premiums payable, commission, paid employment, or
15-16 contract for service, or any other valuable consideration or
15-17 inducement, that is not specified in the policy or contract of
15-18 insurance for or on account of the solicitation or negotiation of
15-19 contracts of insurance.
15-20 (d) In addition to any other penalty imposed under this
15-21 code, a person who is determined by the department to have
15-22 committed conduct described by this subsection is barred from
15-23 receiving a license as an insurance agent before the fifth
15-24 anniversary of the date of the determination. This subsection
15-25 applies to a person who:
15-26 (1) acts as an insurance agent without holding a
15-27 license under this code;
16-1 (2) solicits a contract of insurance or acts as an
16-2 insurance agent without having been appointed or designated by an
16-3 authorized insurance company, association, or organization to do so
16-4 as provided by this code;
16-5 (3) solicits any contract of insurance or acts as an
16-6 agent for a person, including an insurance company, association, or
16-7 organization, not authorized to engage in the business of insurance
16-8 in this state without holding a license issued under Article 1.14-2
16-9 of this code; or
16-10 (4) as an officer or representative of an insurance
16-11 company, knowingly contracts with or appoints as an agent a person
16-12 who does not hold a valid and outstanding license.
16-13 (e) A person who has had an insurance license revoked in
16-14 this state or any other state may not solicit or otherwise transact
16-15 business under Chapter 10 of this code unless it is determined by
16-16 the department to be in the public interest, for good cause shown,
16-17 to allow the person to act in that capacity.
16-18 (f) A person who has had an insurance license revoked in
16-19 this state or any other state may not act as an officer, director,
16-20 member, manager, or partner, or as a shareholder with a controlling
16-21 interest, of an entity licensed under this subchapter unless it is
16-22 determined by the department to be in the public interest, for good
16-23 cause shown, to allow the person to act in that capacity.
16-24 (g) A property and casualty agent may not knowingly grant,
16-25 write, or permit a greater amount of insurance against loss by fire
16-26 than the reasonable value of the subject of the insurance.
16-27 (h) An insurance agent licensed under this code may not pay,
17-1 allow, or give, or offer to pay, allow, or give, directly or
17-2 indirectly, to a person who is not a licensed insurance agent, a
17-3 fee or other valuable consideration for the referral of a customer
17-4 who seeks to purchase, or seeks an opinion on or advice regarding
17-5 an insurance product, based on the purchase of insurance by that
17-6 customer.
17-7 (i) This section does not apply to a person who is licensed
17-8 under or holds a certificate of authority issued under Chapter 9 of
17-9 this code.
17-10 SECTION 1.05. Section 5, Article 21.01-2, Insurance Code, is
17-11 redesignated as Section 3A, Article 21.01-2, Insurance Code, and
17-12 amended to read as follows:
17-13 Sec. 3A [5]. DENIAL OR REFUSAL OF LICENSE APPLICATION;
17-14 SUSPENSION OR REVOCATION OF LICENSES; DISCIPLINE OF LICENSE
17-15 HOLDERS. (a) In addition to any other remedy available under
17-16 Chapter 82 of this code, the [The] department may [shall] refuse to
17-17 issue an original license, revoke, suspend, or refuse to renew a
17-18 license, place on probation a person whose license has been
17-19 suspended, assess an administrative penalty, or reprimand a license
17-20 holder for a violation of this code, another insurance law of this
17-21 state, or a rule of the commissioner [or the board]. If a license
17-22 suspension is probated, the commissioner may require the person to:
17-23 (1) report regularly to the department on matters that
17-24 are the basis of the probation;
17-25 (2) limit the person's practice to the areas
17-26 prescribed by the department; or
17-27 (3) continue or review professional education until
18-1 the person attains a degree of skill satisfactory to the
18-2 commissioner in those areas that are the basis of the probation.
18-3 (b) If the department proposes to refuse to issue an
18-4 original license, or to suspend, revoke, or refuse to renew a
18-5 license, the person affected is entitled to a hearing conducted by
18-6 the State Office of Administrative Hearings in accordance with
18-7 Chapter 40 [Article 1.33B] of this code. Notice of the hearing
18-8 shall be provided to the person and to any insurance carrier
18-9 appearing on the application as desiring that the license be
18-10 issued.
18-11 (c) The department may discipline a license holder or deny a
18-12 license application under this article if the department determines
18-13 that the applicant or license holder, individually or through any
18-14 officer, director, or shareholder:
18-15 (1) has wilfully violated any provision of the
18-16 insurance laws of this state;
18-17 (2) has intentionally made a material misstatement in
18-18 the license application;
18-19 (3) has obtained, or attempted to obtain, a license by
18-20 fraud or misrepresentation;
18-21 (4) has misappropriated, converted to the applicant's
18-22 or license holder's own use, or illegally withheld money belonging
18-23 to:
18-24 (A) an insurer;
18-25 (B) a health maintenance organization; or
18-26 (C) an insured, enrollee, or beneficiary;
18-27 (5) has engaged in fraudulent or dishonest acts or
19-1 practices;
19-2 (6) has materially misrepresented the terms and
19-3 conditions of an insurance policy or contract, including a contract
19-4 relating to membership in a health maintenance organization;
19-5 (7) has made or issued, or caused to be made or
19-6 issued, any statement misrepresenting or making incomplete
19-7 comparisons regarding the terms or conditions of an insurance or
19-8 annuity contract legally issued by an insurer or a membership
19-9 issued by a health maintenance organization to induce the owner of
19-10 the contract or membership to forfeit or surrender the contract or
19-11 membership or allow it to lapse for the purpose of replacing the
19-12 contract or membership with another;
19-13 (8) is convicted of a felony;
19-14 (9) has offered or given a rebate of an insurance
19-15 premium or commission to an insured or enrollee;
19-16 (10) is not actively engaged in the soliciting or
19-17 writing of insurance for the public generally as required by
19-18 Section 2(c), Article 21.07, of this code; or
19-19 (11) has obtained or attempted to obtain a license,
19-20 not for the purpose of holding the license holder or applicant out
19-21 to the general public as an agent, but primarily for the purpose of
19-22 soliciting, negotiating, or procuring insurance or annuity
19-23 contracts or memberships covering:
19-24 (A) the applicant or license holder;
19-25 (B) a member of the applicant's or license
19-26 holder's family; or
19-27 (C) a business associate of the applicant or
20-1 license holder.
20-2 (d) An individual whose license application is denied or
20-3 whose license has been revoked under this article may not apply for
20-4 any license as an insurance agent before the fifth anniversary of:
20-5 (1) the effective date of the denial or revocation; or
20-6 (2) if the applicant or license holder seeks judicial
20-7 review of the department's action, the date of the final court
20-8 order or decree affirming that action.
20-9 (e) The commissioner may deny a timely application filed
20-10 under Subsection (d) of this section if the applicant does not show
20-11 good cause why the denial or revocation of the previous license
20-12 application or license should not be considered a bar to the
20-13 issuance of a new license. This subsection does not apply to an
20-14 applicant whose license application was denied for failure to:
20-15 (1) pass a required written examination; or
20-16 (2) submit a properly completed license application.
20-17 (f) Instead of or in addition to taking disciplinary action
20-18 under this section, the department may order that a license holder
20-19 who is currently afflicted with a disability be placed on
20-20 disability probation under the terms and conditions specified under
20-21 Article 21.15-6 of this code and department rules.
20-22 (g) The department may institute a disciplinary proceeding
20-23 against a license holder for conduct that the license holder
20-24 committed before the effective date of a voluntary surrender or
20-25 automatic forfeiture of the license. In the proceeding, the fact
20-26 that the license holder has surrendered or forfeited the license
20-27 does not affect the license holder's culpability for that conduct.
21-1 (h) Subsections (c)-(f) of this section do not apply to a
21-2 person who is licensed under or holds a certificate of authority
21-3 issued under Chapter 9 of this code. [The commissioner shall
21-4 prescribe procedures by which all decisions to deny, suspend, or
21-5 revoke a license, or to refuse to renew a license, are made by or
21-6 are appealable to the commissioner.]
21-7 SECTION 1.06. Article 21.01-2, Insurance Code, is amended by
21-8 adding Sections 4A, 5A, and 6A to read as follows:
21-9 Sec. 4A. JUDICIAL REVIEW. A license applicant or license
21-10 holder may appeal as provided by Chapter 36 of this code if:
21-11 (1) the commissioner:
21-12 (A) refuses an application for a license as
21-13 provided by this article; or
21-14 (B) suspends, revokes, or refuses to renew a
21-15 license at a hearing as provided by this article; and
21-16 (2) the applicant or license holder is dissatisfied
21-17 with the action of the commissioner.
21-18 Sec. 5A. AUTOMATIC FINES. (a) To expedite the department's
21-19 processing of certain violations of this code, the commissioner may
21-20 establish by rule monetary fines for certain violations. Violations
21-21 for which the fines may be assessed include a failure to:
21-22 (1) obtain the total number of continuing education
21-23 hours before the renewal date of the license;
21-24 (2) timely report a change of address to the
21-25 department; or
21-26 (3) notify the department of an administrative action
21-27 taken against the agent by another state or federal financial or
22-1 insurance regulator.
22-2 (b) This section does not limit the department's authority
22-3 to take any other disciplinary action against a license holder as
22-4 provided under another provision of this code.
22-5 (c) If a person disputes the assessment of a fine under this
22-6 section, the matter is a contested case subject to Chapter 2001,
22-7 Government Code.
22-8 Sec. 6A. ENFORCEMENT OF SUBCHAPTER. The attorney general, a
22-9 district or county attorney, or the department acting through the
22-10 commissioner may institute an injunction proceeding or any other
22-11 proceeding to enforce this subchapter and to enjoin any person,
22-12 firm, corporation, or depository institution from engaging or
22-13 attempting to engage in the business of insurance in violation of
22-14 this code or any other insurance law of this state. The provisions
22-15 of this section are cumulative of the other penalties or remedies
22-16 provided by this article.
22-17 SECTION 1.07. Article 21.02, Insurance Code, is amended to
22-18 read as follows:
22-19 Art. 21.02. WHO ARE AGENTS. (a) Any person who solicits
22-20 insurance on behalf of any insurance company, whether incorporated
22-21 under the laws of this or any other state or foreign government, or
22-22 who takes or transmits other than for himself any application for
22-23 insurance or any policy of insurance to or from such company, or
22-24 who advertises or otherwise gives notice that he will receive or
22-25 transmit the same, or who shall receive or deliver a policy of
22-26 insurance of any such company, or who shall examine or inspect any
22-27 risk, or receive, or collect, or transmit any premium of insurance,
23-1 or make or forward any diagram of any building or buildings, or do
23-2 or perform any other act or thing in the making or consummating of
23-3 any contract of insurance for or with any such insurance company
23-4 other than for himself, or who shall examine into, or adjust, or
23-5 aid in adjusting, any loss for or on behalf of any such insurance
23-6 company, whether any of such acts shall be done at the instance or
23-7 request, or by the employment of such insurance company, or of, or
23-8 by, any broker or other person, shall be held to be the agent of
23-9 the company for which the act is done, or the risk is taken, as far
23-10 as relates to all the liabilities, duties, requirements and
23-11 penalties set forth in this chapter. This article does not
23-12 authorize an agent to orally, in writing, or otherwise alter,
23-13 amend, modify, waive, or change a term or condition of an insurance
23-14 policy or application for an insurance policy. The provisions of
23-15 this subchapter shall not apply to citizens of this State who
23-16 arbitrate in the adjustment of losses between the insurers and
23-17 insured, nor to the adjustment of particular or general average
23-18 losses of vessels or cargoes by marine adjusters who had paid an
23-19 occupation tax of $200 [Two Hundred ($200.00) Dollars] for the year
23-20 in which the adjustment is made, nor to practicing attorneys at law
23-21 in the State of Texas, acting in the regular transaction of their
23-22 business as such attorneys at law, and who are not local agents,
23-23 nor acting as adjusters for any insurance company. Any person who
23-24 shall do any of the acts mentioned in this article for or on behalf
23-25 of any insurance company without such company having first complied
23-26 with the requirements of the laws of this State, shall be
23-27 personally liable to the holder of any policy of insurance in
24-1 respect of which such act was done for any loss covered by the
24-2 same.
24-3 (b) The referral by an unlicensed person of a customer or
24-4 potential customer to a licensed insurance agent is not an act of
24-5 an agent under this article, unless the unlicensed person discusses
24-6 specific insurance policy terms or conditions with the customer or
24-7 potential customer.
24-8 SECTION 1.08. Article 21.04, Insurance Code, is amended to
24-9 read as follows:
24-10 Art. 21.04. LICENSE HOLDER [SOLICITOR] DEEMED COMPANY'S
24-11 AGENT. Any person who solicits an application for life, accident,
24-12 or health insurance, or property or casualty insurance, shall, in
24-13 any controversy between the insured or the insured's beneficiary
24-14 and the company issuing any policy upon such application or between
24-15 the insured or the insured's dependents and that company, be
24-16 regarded as the agent of the company, and not the agent of the
24-17 insured, but such agent shall not have the power to waive, change
24-18 or alter any of the terms or conditions of the application or
24-19 policy.
24-20 SECTION 1.09. Section 1, Article 21.07, Insurance Code, is
24-21 amended to read as follows:
24-22 Sec. 1. APPLICABILITY OF ARTICLE [ACT]. (a) No person[,
24-23 corporation, or bank] shall act as an agent of any insurance
24-24 company, health maintenance organization, or [(i) local mutual aid
24-25 association, (ii) local mutual burial association, (iii) statewide
24-26 mutual assessment corporation, (iv) stipulated premium company, (v)
24-27 county mutual insurance company, (vi) casualty company writing
25-1 accident and health insurance, or (vii) any] other type of
25-2 insurance carrier licensed to do business in the State of Texas and
25-3 which insurance carrier's agents are required to be licensed under
25-4 the provisions of this code [Article, on the date that this Act
25-5 shall become effective,] unless that person [individual or entity]
25-6 shall have first procured a license from the department as [in this
25-7 Article is] provided by this subchapter, and no such insurance
25-8 carrier shall appoint any person[, corporation, or bank] to act as
25-9 its agent unless such person[, corporation, or bank] shall have
25-10 obtained a license under the provisions of this subchapter
25-11 [Article], and no such person[, corporation, or bank] who obtains a
25-12 license shall engage in business as an agent until that person
25-13 [individual or entity] shall have been appointed to act as an agent
25-14 by some duly authorized insurance carrier designated by the
25-15 provisions of this code [Article] and authorized to do business in
25-16 the State of Texas. [Any person, corporation, or bank desiring to
25-17 act as an agent of any insurance carrier licensed to do business in
25-18 the State of Texas and writing health and accident insurance may
25-19 obtain a separate license as an agent to write health and accident
25-20 insurance provided such person, corporation, or bank complies with
25-21 the provisions of this Article and has been appointed to act as an
25-22 agent by some duly authorized insurance carrier authorized to do
25-23 health and accident insurance business in the State of Texas.]
25-24 (b) This subchapter does not apply to:
25-25 (1) an actual full-time home office salaried employee
25-26 of an insurance carrier licensed to do business in this state,
25-27 other than an employee who solicits or receives an application for
26-1 the sale of insurance through an oral, written, or electronic
26-2 communication in accordance with Article 21.14 of this code;
26-3 (2) an actual attorney in fact or the actual traveling
26-4 salaried representative of a reciprocal exchange or interinsurance
26-5 exchange admitted to do business in this state as to business
26-6 transacted through the attorney in fact or salaried representative;
26-7 (3) the actual attorney in fact for a Lloyd's plan
26-8 insurer;
26-9 (4) the group motor vehicle insurance business or the
26-10 group motor vehicle department of companies engaged in that
26-11 business; or
26-12 (5) a salaried employee who is not involved in the
26-13 solicitation or negotiation of insurance in the office of a
26-14 licensed agent who devotes the employee's full time to clerical and
26-15 administrative services, including the incidental taking of
26-16 information from customers and receipt of premiums in the office of
26-17 a licensed agent, if the employee does not receive any commissions
26-18 and the employee's compensation is not varied by the volume of
26-19 premiums taken and received. [No insurer or licensed insurance
26-20 agent doing business in this State shall pay directly or indirectly
26-21 any commission, or other valuable consideration, to any person,
26-22 corporation, or bank for services as an insurance agent within this
26-23 State, unless such person, corporation, or bank shall hold a
26-24 currently valid license to act as an insurance agent as required by
26-25 the laws of this State; nor shall any person, corporation, or bank
26-26 other than a duly licensed insurance agent, accept any such
26-27 commission or other valuable consideration; provided, however, that
27-1 the provisions of this Section shall not prevent the payment or
27-2 receipt of renewal or other deferred commissions to or by any
27-3 person solely because such person, corporation, or bank has ceased
27-4 to hold a license to act as an insurance agent.]
27-5 [(c) A person who has had a license revoked under Section 10
27-6 of this article may not solicit or otherwise transact business
27-7 under Chapter 10 of this code.]
27-8 SECTION 1.10. Section 1A, Article 21.07, Insurance Code, is
27-9 amended to read as follows:
27-10 Sec. 1A. DEFINITIONS. Unless the context clearly indicates
27-11 otherwise, in [In] this subchapter:
27-12 (1) "Agent" means a person who is an authorized agent
27-13 of an insurance company or health maintenance organization, any
27-14 person who is a subagent of an agent, and any other person who
27-15 performs the acts of an agent, whether through an oral, written, or
27-16 electronic communication or otherwise, in the solicitation of,
27-17 negotiation for, procurement of, or collection of premiums on an
27-18 insurance or annuity contract, or who represents or purports to
27-19 represent a health maintenance organization, including a health
27-20 maintenance organization offering only a single health care service
27-21 plan, in the solicitation of, negotiation for, procurement of, or
27-22 effectuation of membership in the health maintenance organization.
27-23 The term does not include:
27-24 (A) a regular salaried officer or employee of an
27-25 insurance company, health maintenance organization, or insurance
27-26 agent who:
27-27 (i) devotes substantially all of the
28-1 officer's or employee's time to activities other than the
28-2 solicitation of applications for insurance, annuity contracts, or
28-3 memberships;
28-4 (ii) does not receive a commission or
28-5 other compensation directly dependent on the business obtained; and
28-6 (iii) does not solicit or accept from the
28-7 public applications for insurance, annuity contracts, or
28-8 memberships;
28-9 (B) an employer or an employer's officers or
28-10 employees or the trustees of an employee benefit plan, to the
28-11 extent that those employers, officers, employees, or trustees are
28-12 engaged in the administration or operation of any program of
28-13 employee benefits involving the use of insurance or annuities
28-14 issued by an insurance company or memberships issued by a health
28-15 maintenance organization, if those employers, officers, employees,
28-16 or trustees are not compensated, directly or indirectly, by the
28-17 insurance company or health maintenance organization issuing the
28-18 insurance or annuity contracts or memberships;
28-19 (C) except as otherwise provided by this code, a
28-20 depository institution, or the officers and employees of a
28-21 depository institution, to the extent that the depository
28-22 institution or officers and employees collect and remit premiums or
28-23 charges by charging those premiums or charges against accounts of
28-24 depositors on the orders of those depositors; or
28-25 (D) a person or the employee of a person who has
28-26 contracted to provide administrative, management, or health care
28-27 services to a health maintenance organization and who is
29-1 compensated for those services by the payment of an amount computed
29-2 as a percentage of the revenues, net income, or profit of the
29-3 health maintenance organization, if that method of compensation is
29-4 the sole basis for subjecting that person or the employee of the
29-5 person to this article.
29-6 (2) "Depository institution" means:
29-7 (A) a bank or savings association as defined by
29-8 12 U.S.C. Section 1813, as amended;
29-9 (B) a foreign bank that maintains a branch,
29-10 agency, or commercial lending company in the United States;
29-11 (C) a federal or state credit union as defined
29-12 by 12 U.S.C. Section 1752, as amended;
29-13 (D) a bank branch; or
29-14 (E) a bank subsidiary, as defined by state or
29-15 federal law.
29-16 (3) "Control" means the power to direct or cause the
29-17 direction of the management and policies of a license holder,
29-18 whether directly or indirectly. For the purposes of this
29-19 subchapter, a person is considered to control:
29-20 (A) a corporate license holder if the person,
29-21 individually or acting with others, directly or indirectly, holds
29-22 with the power to vote, owns, or controls, or holds proxies
29-23 representing, at least 10 percent of the voting stock or voting
29-24 rights of the corporate license holder; or
29-25 (B) a partnership if the person through a right
29-26 to vote or through any other right or power exercises rights in the
29-27 management, direction, or conduct of the business of the
30-1 partnership.
30-2 (4) "Corporation" means a legal entity that is
30-3 organized under the business corporations laws or limited liability
30-4 company laws of this state, another state, or a territory of the
30-5 United States and that has as one of its purposes the authority to
30-6 act as an insurance agent. The licensing and regulation of a
30-7 limited liability company is subject to all provisions of this
30-8 subchapter that apply to a corporation licensed under this
30-9 subchapter.
30-10 (5) "Individual" means a natural person. The term
30-11 includes a resident or a nonresident of this state.
30-12 (6) "Insurance company," "insurance carrier," or
30-13 "insurer" means an insurance company regulated by the department.
30-14 The term includes:
30-15 (A) any domestic or foreign, stock and mutual,
30-16 life, health, or accident insurance company;
30-17 (B) any domestic or foreign, stock and mutual,
30-18 fire and casualty insurance company;
30-19 (C) a Mexican casualty company;
30-20 (D) a domestic or foreign Lloyd's plan insurer;
30-21 (E) a domestic or foreign reciprocal or
30-22 interinsurance exchange;
30-23 (F) a domestic or foreign fraternal benefit
30-24 society;
30-25 (G) a stipulated premium insurance company;
30-26 (H) a nonprofit or for-profit legal service
30-27 corporation;
31-1 (I) a statewide mutual assessment company;
31-2 (J) a local mutual aid association;
31-3 (K) a local mutual burial association;
31-4 (L) an exempt association under Article 14.17 of
31-5 this code;
31-6 (M) a nonprofit hospital, medical, or dental
31-7 service corporation, including a company subject to Chapter 20 of
31-8 this code;
31-9 (N) a health maintenance organization;
31-10 (O) a county mutual insurance company; or
31-11 (P) a farm mutual insurance company.
31-12 (7) "Partnership" means an association of two or more
31-13 persons organized under the partnership laws or limited liability
31-14 partnership laws of this state, another state, or a territory of
31-15 the United States. The term includes a general partnership,
31-16 limited partnership, limited liability partnership, and limited
31-17 liability limited partnership.
31-18 (8) "Person" means an individual, partnership,
31-19 corporation, or depository institution.
31-20 (9) "Subagent" means any person engaging in activities
31-21 described under Subdivision (1) of this section who acts for or on
31-22 behalf of an agent, whether through an oral, written, or electronic
31-23 communication or otherwise, in the solicitation of, negotiation
31-24 for, or procurement of an insurance or annuity contract or health
31-25 maintenance organization membership, or the collection of premiums
31-26 or charges on an insurance or annuity contract or health
31-27 maintenance organization membership, whether or not the subagent is
32-1 designated by the agent as a subagent or by any other title. A
32-2 subagent is an agent, for all purposes of this subchapter, and
32-3 wherever the term "agent" is used in this chapter, it includes
32-4 subagents whether or not a subagent is specifically mentioned
32-5 [Article, "person" means an individual or a general partnership
32-6 composed of two or more individuals or a limited liability
32-7 partnership registered with the Secretary of State under Section
32-8 3.08, Texas Revised Partnership Act (Article 6132b-3.08, Vernon's
32-9 Texas Civil Statutes). The term "partnership" or "agency
32-10 partnership" as used in this Article means a general partnership or
32-11 a registered limited liability partnership].
32-12 SECTION 1.11. Section 2, Article 21.07, Insurance Code, is
32-13 amended to read as follows:
32-14 Sec. 2. APPLICATION FOR LICENSE; TO WHOM LICENSE MAY BE
32-15 ISSUED. (a) Any person[, corporation, or bank] that desires to
32-16 become an agent for an [a local mutual aid association, a local
32-17 mutual burial association, a statewide mutual assessment
32-18 corporation, a stipulated premium company, a county mutual]
32-19 insurance company or health maintenance organization[, a casualty
32-20 company writing accident and health insurance, or any other type of
32-21 insurance carrier licensed to do business in the State of Texas],
32-22 the agents of which are required to be licensed under this
32-23 subchapter [Article], shall submit to the department an application
32-24 for a license in the form required by the department.
32-25 (b) Each applicant for a license to act as an insurance
32-26 agent in this state shall file with the department a completed
32-27 application in the format prescribed by the department. The
33-1 commissioner shall establish by rule the requirements for a
33-2 properly completed application.
33-3 (c) The department may not grant a license as an insurance
33-4 agent to write any form of insurance unless the department finds
33-5 that:
33-6 (1) the applicant is or intends to be actively engaged
33-7 in the soliciting or writing of insurance for the public generally
33-8 and is to be actively engaged in the business of insurance; and
33-9 (2) the application is not made to evade the laws
33-10 against rebating and discrimination, either for the applicant or
33-11 for some other person.
33-12 (d) This section does not prohibit an applicant from
33-13 insuring property that the applicant owns or in which the applicant
33-14 has an interest, but it is the intent of this section to prohibit
33-15 coercion of insurance and to preserve to each individual the right
33-16 to choose that individual's own agent or insurance company, and to
33-17 prohibit the licensing of a person to engage in the insurance
33-18 business principally to handle business that the applicant controls
33-19 only through ownership, mortgage or sale, family relationship, or
33-20 employment. An applicant for an original license must have a bona
33-21 fide intention to engage in business in which, in any calendar
33-22 year, at least 25 percent of the total volume of premiums is
33-23 derived from persons other than the applicant and from property
33-24 other than that on which the applicant controls the placing of
33-25 insurance through ownership, mortgage, sale, family relationship,
33-26 or employment.
33-27 (e) The department may not deny a license application solely
34-1 on the ground that the applicant will act only part-time as an
34-2 agent.
34-3 (f) [The application must bear a signed endorsement by an
34-4 officer or properly authorized representative of the insurance
34-5 carrier that the individual applicant or each member of the
34-6 partnership or each officer, director, and shareholder of the
34-7 corporation or the responsible officer and employee of the bank is
34-8 qualified to hold that individual or the partnership, the
34-9 corporation, or the bank out in good faith to the general public as
34-10 an insurance agent, and that the insurance carrier desires that the
34-11 applicant act as an insurance agent to represent it in this State.]
34-12 [(c)] The department shall issue a license to an individual
34-13 to engage [or to a general partnership engaging] in the business of
34-14 insurance if the department finds that the individual:
34-15 (1) is at least 18 years of age;
34-16 (2) has passed the licensing examination required
34-17 under this code within the past 12 months;
34-18 (3) has not committed an act for which a license may
34-19 be denied under Article 21.01-2 of this code; and
34-20 (4) has submitted the application, appropriate fees,
34-21 and any other information required by the department.
34-22 (g) An individual engaging in the business of insurance as a
34-23 sole proprietorship under the authority of a license issued under
34-24 this subchapter may incorporate, but the corporation does not have
34-25 greater license authority than that granted to the license holder
34-26 in the holder's individual capacity.
34-27 (h) Each individual license holder shall notify the
35-1 department on a monthly basis of:
35-2 (1) a change of the license holder's mailing address;
35-3 (2) a conviction of the license holder of a felony; or
35-4 (3) an administrative action taken against the license
35-5 holder by a financial or insurance regulator of this state, another
35-6 state, or the United States [partner in the partnership must be
35-7 licensed individually as an agent under this Article].
35-8 (i) [(d)] The department shall issue a license to a
35-9 corporation or partnership if the department finds that:
35-10 (1) [That] the corporation or partnership is:
35-11 (A) organized under the laws of this state or
35-12 any other state or territory of the United States;
35-13 (B) admitted to conduct business in this state
35-14 by the secretary of state, if so required; and
35-15 (C) authorized by its articles of incorporation
35-16 or its partnership agreement to act as an insurance agent [a Texas
35-17 corporation organized or existing under the Texas Business
35-18 Corporation Act or the Texas Professional Corporation Act (Article
35-19 1528e, Vernon's Texas Civil Statutes) having its principal place of
35-20 business in the State of Texas and having as one of its purposes
35-21 the authority to act as an agent covered by this Article];
35-22 (2) the corporation or partnership meets the
35-23 definition of that entity adopted under Section 1A of this article;
35-24 [That every officer, director, and shareholder of the corporation
35-25 is individually licensed under the provisions of this Article, or
35-26 that every officer and director of the corporation is individually
35-27 licensed under this Article, that the corporation is a wholly owned
36-1 subsidiary of a parent corporation that is licensed under this
36-2 Article, and that every shareholder of the parent corporation is
36-3 individually licensed under this Article; and]
36-4 (3) at least one officer of the corporation or one
36-5 active partner of the partnership and all other persons performing
36-6 any acts of an agent on behalf of the corporation or partnership in
36-7 this state are individually licensed by the department separately
36-8 from the corporation or partnership;
36-9 (4) the [That such] corporation or partnership will
36-10 have the ability to pay any sums up to $25,000 which it might
36-11 become legally obligated to pay on account of any claim made
36-12 against it by any customer and caused by any negligent act, error,
36-13 or omission of the corporation or partnership or any person for
36-14 whose acts the corporation or partnership is legally liable in the
36-15 conduct of its business under this code [Article]. The term
36-16 "customer" means any person, firm, or corporation to whom such
36-17 corporation or partnership sells or attempts to sell a policy of
36-18 insurance, or from whom such corporation or partnership accepts an
36-19 application for insurance. Such ability shall be maintained
36-20 [proven] in one of the following ways:
36-21 (A) an errors and omissions policy insuring such
36-22 corporation or partnership against errors and omissions in at least
36-23 the sum of $250,000 [$100,000] with [no more than] a [$10,000]
36-24 deductible of not more than 10 percent of the full amount of the
36-25 policy [feature] issued by an insurance company licensed to do
36-26 business in this state [the State of Texas] or, if a policy cannot
36-27 be obtained from a company licensed to do business in this state
37-1 [Texas], a surplus lines insurance policy issued under Article
37-2 1.14-2 of this code [by a company not licensed to do business in
37-3 Texas on filing an affidavit with the department stating the
37-4 inability to obtain coverage and receiving the commissioner's
37-5 approval]; or
37-6 (B) a bond executed by such corporation or
37-7 partnership as principal and a surety company authorized to do
37-8 business in this state [State], as surety, in the principal sum of
37-9 $25,000, payable to the department for the use and benefit of
37-10 customers of such corporation or partnership, conditioned that such
37-11 corporation or partnership shall pay any final judgment recovered
37-12 against it by any customer[; or]
37-13 [(C) a deposit of cash or securities of the
37-14 class authorized by Articles 2.08 and 2.10, Insurance Code, as
37-15 amended, having a fair market value of $25,000 with the
37-16 comptroller. The comptroller is directed to accept and receive
37-17 such deposit and hold it exclusively for the protection of any
37-18 customer of such corporation recovering a final judgment against
37-19 such corporation. Such deposit may be withdrawn only upon filing
37-20 with the department evidence satisfactory to it that the
37-21 corporation has withdrawn from business and has no unsecured
37-22 liabilities outstanding, or that such corporation has provided for
37-23 the protection of its customers by furnishing an errors and
37-24 omissions policy or a bond as provided. Securities so deposited
37-25 may be exchanged from time to time for other qualified securities].
37-26 A binding commitment to issue such a policy or bond[, or the tender
37-27 of such securities,] shall be sufficient in connection with any
38-1 application for license;
38-2 (5) the corporation or partnership intends to be
38-3 actively engaged in the business of insurance as required under
38-4 Subsection (c) of this section;
38-5 (6) each location from which the corporation or
38-6 partnership will conduct its business in this state under authority
38-7 of an insurance license is separately registered with the
38-8 department;
38-9 (7) the corporation or partnership has submitted the
38-10 application, appropriate fees, and any other information required
38-11 by the department; and
38-12 (8) an officer, director, member, manager, partner, or
38-13 any other person who has the right or ability to control the
38-14 license holder has not:
38-15 (A) had a license suspended or revoked or been
38-16 the subject of any other disciplinary action by a financial or
38-17 insurance regulator of this state, another state, or the United
38-18 States; or
38-19 (B) committed an act for which a license may be
38-20 denied under Article 21.01-2 of this code.
38-21 (j) Nothing contained in this section [herein] shall be
38-22 construed to permit any unlicensed employee or agent of any
38-23 corporation or partnership to perform any act of an agent under
38-24 this subchapter [Article] without obtaining a license.
38-25 (k) [If at any time, any corporation holding an agent's
38-26 license does not maintain the qualifications necessary to obtain a
38-27 license, the license of such corporation to act as an agent shall
39-1 be cancelled or denied in accordance with the provisions of
39-2 Sections 10 and 11 of this Article; provided, however, that should
39-3 any person who is not a licensed agent under this Article acquire
39-4 shares in such a corporation by devise or descent, that person
39-5 shall have a period of 90 days from date of acquisition within
39-6 which to obtain a license or to dispose of the shares to a person
39-7 licensed under this Article.]
39-8 [Should such an unlicensed person acquire shares in a
39-9 corporation and not dispose of them within a period of 90 days to a
39-10 licensed agent, then they must be purchased by the corporation for
39-11 their book value, that is, the value of said shares of stock as
39-12 reflected by the regular books and records of said corporation, as
39-13 of the date of the acquisition of said shares by said unlicensed
39-14 person. Should the corporation fail or refuse to so purchase such
39-15 shares, its license shall be cancelled.]
39-16 [Any such corporation shall have the power to redeem
39-17 the shares of any shareholder, or the shares of a deceased
39-18 shareholder, upon such terms as may be agreed upon by the board of
39-19 directors and such shareholder or such shareholder's personal
39-20 representative, or at a price and upon such terms as may be
39-21 provided in the articles of incorporation, the bylaws, or an
39-22 existing contract entered into between the shareholders of the
39-23 corporation.]
39-24 Each corporation or partnership licensed as an agent
39-25 under this subchapter [Article] shall file, under oath, on a form
39-26 developed by the department, biographical information for each [a
39-27 list of the names and addresses of all] of its executive officers
40-1 and[,] directors or unlicensed partners who administer the entity's
40-2 operations in this state, and shareholders who are in control of
40-3 the corporation, or any other partners who have the right or
40-4 ability to control the partnership. If any corporation or
40-5 partnership is owned, in whole or in part, by another entity, a
40-6 biographical form is required for each individual who is in control
40-7 of the parent entity[, and shareholders with its application for
40-8 renewal license].
40-9 (l) Each corporation or partnership shall notify the
40-10 department not later than the 30th day after the date of:
40-11 (1) a felony conviction of a licensed agent of the
40-12 entity or any individual associated with the corporation or
40-13 partnership who is required to file biographical information with
40-14 the department;
40-15 (2) an event that would require notification under
40-16 Section 81.003 of this code; and
40-17 (3) the addition or removal of an officer, director,
40-18 partner, member, or manager.
40-19 (m) The department shall issue a license to a depository
40-20 institution in the manner provided for the licensing of a
40-21 corporation under this section.
40-22 (n) A person may not acquire in any manner any ownership
40-23 interest in an entity licensed as an agent under this subchapter if
40-24 the person is, or after the acquisition would be, directly or
40-25 indirectly, in control of the license holder, or otherwise acquire
40-26 control of or exercise any control over the license holder, unless
40-27 the person has filed the following information with the department
41-1 under oath:
41-2 (1) a biographical form for each person by whom or on
41-3 whose behalf the acquisition of control is to be effected;
41-4 (2) a statement certifying that no person who is
41-5 acquiring an ownership interest in or control of the license holder
41-6 has been the subject of a disciplinary action taken by a financial
41-7 or insurance regulator of this state, another state, or the United
41-8 States;
41-9 (3) a statement certifying that, immediately on the
41-10 change of control, the license holder will be able to satisfy the
41-11 requirements for the issuance of the license to solicit the line or
41-12 lines of insurance for which it is licensed; and
41-13 (4) any additional information that the commissioner
41-14 may by rule prescribe as necessary or appropriate to the protection
41-15 of the insurance consumers of this state or as in the public
41-16 interest.
41-17 (o) If a person required to file a statement under
41-18 Subsection (n) of this section is a partnership, limited
41-19 partnership, syndicate, or other group, the commissioner may
41-20 require that the information required by Subdivisions (1)-(4) of
41-21 that subsection for an individual be provided regarding each
41-22 partner of the partnership or limited partnership, each member of
41-23 the syndicate or group, and each person who controls the partner or
41-24 member. If the partner, member, or person is a corporation or the
41-25 person required to file the statement under Subsection (n) of this
41-26 section is a corporation, the commissioner may require that the
41-27 information required by Subdivisions (1)-(4) of that subsection be
42-1 provided regarding:
42-2 (1) the corporation;
42-3 (2) each individual who is an executive officer or
42-4 director of the corporation; and
42-5 (3) each person who is directly or indirectly the
42-6 beneficial owner of more than 10 percent of the outstanding voting
42-7 securities of the corporation.
42-8 (p) The department may disapprove an acquisition of control
42-9 if, after notice and opportunity for hearing, the commissioner
42-10 determines that:
42-11 (1) immediately on the change of control the license
42-12 holder would not be able to satisfy the requirements for the
42-13 issuance of the license to solicit the line or lines of insurance
42-14 for which it is presently licensed;
42-15 (2) the competence, trustworthiness, experience, and
42-16 integrity of the persons who would control the operation of the
42-17 license holder are such that it would not be in the interest of the
42-18 insurance consumers of this state to permit the acquisition of
42-19 control; or
42-20 (3) the acquisition of control would violate this code
42-21 or another law of this state, another state, or the United States.
42-22 (q) Notwithstanding Subsection (o) of this section, a change
42-23 in control is considered approved if the department has not
42-24 proposed to deny the requested change before the 61st day after the
42-25 date of receipt by the department of all information required by
42-26 this section.
42-27 (r) The commissioner is the corporation's or partnership's
43-1 agent for service of process in the manner provided by Section 3,
43-2 Article 1.36, of this code in a legal proceeding against the
43-3 corporation or partnership if:
43-4 (1) the corporation or partnership licensed to
43-5 transact business in this state fails to appoint or maintain an
43-6 agent for service in this state;
43-7 (2) an agent for service cannot with reasonable
43-8 diligence be found; or
43-9 (3) the license of a corporation or partnership is
43-10 revoked.
43-11 (s) If a license holder does not maintain the qualifications
43-12 necessary to obtain the license, the department shall revoke or
43-13 suspend the license or deny the renewal of the license under
43-14 Article 21.01-2 of this code.
43-15 (t) A person licensed under this subchapter shall maintain
43-16 all insurance records, including all records relating to customer
43-17 complaints, separate from the records of any other business in
43-18 which the person may be engaged.
43-19 (u) A subagent must be licensed to write each type of
43-20 insurance that the subagent is employed to write, but the subagent
43-21 is not required to hold each type of license issued to the agent
43-22 for whom the subagent acts.
43-23 [Each corporation shall notify the department upon any
43-24 change in its officers, directors, or shareholders not later than
43-25 the 30th day after the date on which the change becomes effective.]
43-26 [Except as provided by Subdivision (2) of this
43-27 subsection, a corporation may not own any interest in another
44-1 corporation licensed under this Article, and each owner of an
44-2 interest in a corporation licensed under this Article shall be a
44-3 natural person who holds a valid license issued under this Article.]
44-4 [(e) The department shall issue a license to a bank if the
44-5 department finds that:]
44-6 [(1) the bank satisfies the definition of Section 1C
44-7 of this Article;]
44-8 [(2) at least one officer of the bank and each
44-9 individual who will be performing any acts as an agent for the bank
44-10 are individually licensed under this Article; and]
44-11 [(3) the bank will have the ability to pay any sums up
44-12 to $25,000 that it might become legally obligated to pay on account
44-13 of any claim made against it by a customer and caused by a
44-14 negligent act, error, or omission of the bank or any person for
44-15 whose acts the bank is legally liable in the conduct of its
44-16 business under this Article. The term "customer" means any person,
44-17 firm, or corporation to whom the bank sells or attempts to sell a
44-18 policy of insurance or from whom the bank accepts an application
44-19 for insurance. That ability shall be proven through:]
44-20 [(A) an errors and omissions policy insuring the
44-21 bank against errors and omissions in at least the sum of $100,000
44-22 with not more than a $10,000 deductible feature, issued by an
44-23 insurance company licensed to do business in this state or, if a
44-24 policy cannot be obtained from a company licensed to do business in
44-25 this state, a policy issued by a company not licensed to do
44-26 business in this state on filing an affidavit with the department
44-27 stating the inability to obtain coverage and receiving the
45-1 department's approval;]
45-2 [(B) a bond executed by the bank as principal
45-3 and a surety company authorized to do business in this state, as
45-4 surety, in the principal sum of $25,000, payable to the department
45-5 for the use and benefit of customers of the bank, conditioned that
45-6 the bank shall pay any final judgment recovered against it by a
45-7 customer; or]
45-8 [(C) a deposit with the comptroller of cash or
45-9 securities of the class authorized by Articles 2.08 and 2.10 of
45-10 this code, with a fair market value of $25,000. The comptroller
45-11 shall accept and receive the deposit and hold it exclusively for
45-12 the protection of a customer of the bank who recovers a final
45-13 judgment against the bank. The deposit may be withdrawn only on
45-14 filing with the department satisfactory evidence that the bank has
45-15 withdrawn from the business of insurance and has no unsecured
45-16 liabilities outstanding or that the bank has provided for the
45-17 protection of its customers by furnishing an errors and omissions
45-18 policy or a bond as provided by this subdivision. Securities so
45-19 deposited may be exchanged from time to time for other qualified
45-20 securities.]
45-21 [A binding commitment to issue such a policy or bond,
45-22 or the tender of applicable securities, is sufficient in connection
45-23 with an application for license.]
45-24 [Nothing in this subsection permits an unlicensed
45-25 employee or agent of a bank to perform any act of an agent under
45-26 this Article without obtaining a license.]
45-27 [A bank licensed as an agent under this Article may
46-1 have additional offices from which the business of insurance is
46-2 conducted only in a place with a population of 5,000 or less and
46-3 must comply with the department's regulations regarding additional
46-4 offices.]
46-5 [A bank licensed as an agent under this Article must
46-6 maintain the insurance records of the bank, including all files
46-7 relating to customer complaints, separate from records relating to
46-8 the banking transactions of the bank.]
46-9 [If at any time, a bank that holds an agent's license
46-10 does not maintain the qualifications necessary to obtain a license,
46-11 the license of that bank to act as an agent shall be canceled or
46-12 denied in accordance with Sections 10 and 11 of this Article.]
46-13 [Each bank licensed as an agent under this Article
46-14 shall file under oath with its application for license renewal a
46-15 list of the name and address of each individual who will be acting
46-16 as an agent on behalf of the bank and of each officer and director
46-17 of the bank, as defined by Article 21.02 of this code, and other
46-18 biographical information as required by the department.]
46-19 [Each bank shall notify the department of any change in
46-20 its officers and directors, and any change in other persons who
46-21 will be acting as agents, as defined by Article 21.02 of this code,
46-22 and submit biographical information on those officers, directors,
46-23 and persons as required by the department not later than the 30th
46-24 day after the date on which the change takes effect.]
46-25 SECTION 1.12. Article 21.07, Insurance Code, is amended by
46-26 adding Section 3A to read as follows:
46-27 Sec. 3A. TEMPORARY LICENSE. (a) The department may issue a
47-1 temporary agent's license to an applicant for a license under
47-2 Section 2 of this article who is being considered for appointment
47-3 as an agent by another license holder, an insurer, or a health
47-4 maintenance organization. An applicant for a temporary license is
47-5 not required to pass a written examination. A temporary license is
47-6 valid for the 90 days after the date of issuance. The department
47-7 shall issue a temporary license immediately on receipt by the
47-8 department of a properly completed application executed by the
47-9 person in the form required by Section 2 of this article,
47-10 accompanied by the nonrefundable filing fee set by the department
47-11 and a certificate signed by an officer or properly authorized
47-12 representative of the agent, insurer, or health maintenance
47-13 organization stating that:
47-14 (1) the applicant is being considered for appointment
47-15 by the agent, insurer, or health maintenance organization as its
47-16 full-time agent;
47-17 (2) the agent, insurer, or health maintenance
47-18 organization desires that the applicant be issued a temporary
47-19 license; and
47-20 (3) the applicant will complete, under the agent's,
47-21 insurer's, or health maintenance organization's supervision, at
47-22 least 40 hours of training as prescribed by Subsection (h) of this
47-23 section not later than the 14th day after the date on which the
47-24 application, certificate, and nonrefundable fee are delivered or
47-25 mailed to the department.
47-26 (b) If the temporary license is not received from the
47-27 department before the eighth day after the date on which the
48-1 application, certificate, and nonrefundable fee are delivered or
48-2 mailed to the department and the agent, insurer, or health
48-3 maintenance organization has not been notified that the application
48-4 is denied, the agent, insurer, or health maintenance organization
48-5 may assume that the temporary license will be issued and the
48-6 applicant may proceed to act as an agent.
48-7 (c) A temporary license may not be renewed or issued more
48-8 than once in a consecutive six-month period to the same applicant.
48-9 (d) A temporary license may not be granted to a person who
48-10 does not intend to apply for a license to sell insurance or
48-11 memberships to the public generally.
48-12 (e) A temporary license may not be used to obtain
48-13 commissions from sales made to persons who have family, employment,
48-14 or business relationships with the temporary license holder. An
48-15 agent, insurer, or health maintenance organization may not
48-16 knowingly pay, directly or indirectly, to the holder of a temporary
48-17 license under this section, and a temporary license holder may not
48-18 receive or accept, a commission on the sale of a contract of
48-19 insurance or membership covering:
48-20 (1) the temporary license holder;
48-21 (2) a person related to the temporary license holder
48-22 by consanguinity or affinity;
48-23 (3) a person who is or has been during the past six
48-24 months the temporary license holder's employer, either as an
48-25 individual or as a member of a partnership, association, firm, or
48-26 corporation; or
48-27 (4) a person who is or who has been during the past
49-1 six months the employee of the temporary license holder.
49-2 (f) A person who has been issued a temporary license under
49-3 this section and is acting under the authority of the temporary
49-4 license may not engage in any insurance solicitation, sale, or
49-5 other agency transaction that results in or is intended to result
49-6 in the replacement of any existing individual life insurance policy
49-7 form or annuity contract that is in force, or receive, directly or
49-8 indirectly, any commission or other compensation that may or does
49-9 result from such a solicitation, sale, or other agency transaction.
49-10 A person who holds a permanent license may not circumvent or
49-11 attempt to circumvent the intent of this subsection by acting for
49-12 or with a person holding a temporary license. As used in this
49-13 subsection, "replacement" means a transaction in which a new life
49-14 insurance or annuity contract is to be purchased, and it is known
49-15 or should be known to the temporary agent that by reason of the
49-16 solicitation, sale, or other transaction the existing life
49-17 insurance or annuity contract has been or is to be:
49-18 (1) lapsed, forfeited, surrendered, or otherwise
49-19 terminated;
49-20 (2) converted to reduced paid-up insurance, continued
49-21 as extended term insurance, or otherwise reduced in value by the
49-22 use of nonforfeiture benefits or other policy values;
49-23 (3) amended so as to effect either a reduction in
49-24 benefits or in the term for which coverage would otherwise remain
49-25 in force or for which benefits would be paid;
49-26 (4) reissued with any reduction in cash value; or
49-27 (5) pledged as collateral or subjected to borrowing,
50-1 whether in a single loan or under a schedule of borrowing over a
50-2 period of time, for amounts in the aggregate exceeding 25 percent
50-3 of the loan value set forth in the policy.
50-4 (g) The department may cancel, suspend, or revoke the
50-5 temporary appointment powers of an agent, insurer, or health
50-6 maintenance organization if, after notice and opportunity for
50-7 hearing, the commissioner finds that that agent, insurer, or health
50-8 maintenance organization has abused the temporary appointment
50-9 powers. An appeal from the department's decision is subject to
50-10 Chapter 36 of this code. In considering whether abuse has
50-11 occurred, the department may consider:
50-12 (1) the number of temporary appointments made;
50-13 (2) the percentage of appointees sitting for
50-14 examination as agents under this article, as provided by Subsection
50-15 (j) of this section; and
50-16 (3) the number of appointees who pass the examination.
50-17 (h) The agent, insurer, or health maintenance organization
50-18 shall administer at least 40 hours of training to each applicant
50-19 for a temporary license not later than the 14th day after the date
50-20 on which the application, certificate, and nonrefundable fee are
50-21 delivered or mailed to the department. At least 10 hours must be
50-22 taught in a classroom setting, including an accredited college,
50-23 university, junior college, or community college, a business
50-24 school, or a private institute or classes sponsored by the agent,
50-25 insurer, or health maintenance organization and especially
50-26 established for this purpose. The training program must be
50-27 designed to provide an applicant with basic knowledge of:
51-1 (1) the broad principles of insurance, including the
51-2 licensing and regulatory laws of this state;
51-3 (2) the broad principles of health maintenance
51-4 organizations, including membership requirements and related
51-5 licensing and regulatory laws of this state; and
51-6 (3) the ethical obligations and duties of an agent.
51-7 (i) If the commissioner finds under Subsection (g) of this
51-8 section that an abuse of temporary appointment powers has occurred,
51-9 the commissioner may require the affected agent, insurer, or health
51-10 maintenance organization to file with the department a description
51-11 of the agent's, insurer's, or health maintenance organization's
51-12 training program and may require the agent, insurer, or health
51-13 maintenance organization to obtain the approval of the department
51-14 before continuing to use the training program.
51-15 (j) Each agent, insurer, or health maintenance organization
51-16 shall ensure that, during any two consecutive calendar quarters, at
51-17 least 70 percent of the agent's, insurer's, or health maintenance
51-18 organization's applicants for temporary licenses sit for the
51-19 required licensing examination. At least 50 percent of the
51-20 applicants taking the examination must pass during that period.
51-21 (k) An agent, insurer, or health maintenance organization
51-22 may not make more than 250 appointments of temporary license
51-23 holders during a calendar year.
51-24 SECTION 1.13. Section 6, Article 21.07, Insurance Code, is
51-25 amended to read as follows:
51-26 Sec. 6. FILING OF [AGENT MAY BE LICENSED TO REPRESENT]
51-27 ADDITIONAL APPOINTMENTS [INSURERS]. (a) Except as specifically
52-1 prohibited by another provision of this code, an [Any] agent
52-2 licensed under this subchapter [Article] may represent and act as
52-3 an agent for more than one insurance carrier at any time while the
52-4 agent's license is in force, if the agent so desires. Any such
52-5 agent and the insurance carrier involved shall notify the
52-6 department, in a form prescribed by the department, of [must give
52-7 notice to the State Board of Insurance of] any additional
52-8 appointment [or appointments] authorizing the agent to act as agent
52-9 for an additional insurance carrier or carriers not later than the
52-10 30th day after the effective date of the appointment. The filing
52-11 [Such notice] must include [be accompanied by a certificate from
52-12 each insurance carrier to be named in each additional appointment,
52-13 and must state that said insurance company desires to appoint the
52-14 applicant as its agent. This notice shall also contain such other
52-15 information as the State Board of Insurance may require. The agent
52-16 shall be required to pay] a nonrefundable fee in an amount [not to
52-17 exceed $16 as] determined by the commissioner [State Board of
52-18 Insurance] for each additional appointment for which the insurance
52-19 carrier applies [applied for, which fee shall accompany the notice.
52-20 If approval of the additional appointment is not received from the
52-21 State Board of Insurance before the eighth day after the date on
52-22 which the completed application and fee were received by the Board,
52-23 the agent and the insurance carrier, in the absence of notice of
52-24 disapproval, may assume that the Board approves the application,
52-25 and the agent may act for the insurance carrier].
52-26 (b) An appointment made under this Article to authorize an
52-27 agent to act as an agent for an insurance carrier continues in
53-1 effect without the necessity of renewal until it is terminated or
53-2 [and] withdrawn by the insurance carrier or agent. If the agent is
53-3 terminated for cause, the insurance carrier shall follow the
53-4 procedures established under Section 6B of [as provided by this
53-5 section or is otherwise terminated in accordance with] this
53-6 Article. Each renewal license issued to the agent authorizes the
53-7 agent to represent and act for the insurance carriers for which the
53-8 agent holds an appointment until the appointment is terminated or
53-9 withdrawn, and that agent is considered to be the agent of the
53-10 appointing insurance carriers for the purposes of this code
53-11 [Article].
53-12 (c) An agent appointed under this section may act on behalf
53-13 of the appointing carrier before the department receives the filing
53-14 made under this section.
53-15 (d) If a general life, accident, and health agent or general
53-16 property and casualty agent who has been appointed by an insurance
53-17 carrier authorized to engage in the business of insurance in this
53-18 state appoints a subagent, the general agent shall notify the
53-19 department about the appointment in writing on a form prescribed by
53-20 the department. The notice must be accompanied by a nonrefundable
53-21 fee in an amount determined by the commissioner.
53-22 (e) An insurance carrier is not required to separately
53-23 appoint a subagent who has been designated in writing to the
53-24 department as a subagent by an agent.
53-25 (f) If an agent terminates a subagent for any reason other
53-26 than for cause, the agent shall promptly report the termination to
53-27 the department. The termination ends the subagent's authority to
54-1 act for the licensed agent or the insurance carrier for whom the
54-2 agent is acting. If the subagent is terminated for cause, Section
54-3 6B of this article applies.
54-4 SECTION 1.14. Article 21.07, Insurance Code, is amended by
54-5 adding Sections 6B and 6C to read as follows:
54-6 Sec. 6B. INSURANCE CARRIER TO NOTIFY DEPARTMENT OF
54-7 TERMINATION OF CONTRACT FOR CAUSE; COMMUNICATION PRIVILEGED. (a)
54-8 Each insurance carrier or agent shall, on termination of the
54-9 appointment of an agent for cause, immediately file with the
54-10 department a statement of the facts relating to the termination of
54-11 the appointment and the date and cause of the termination. On
54-12 receipt of the statement the department shall record the
54-13 termination of the appointment of that agent to represent the
54-14 insurance carrier in this state.
54-15 (b) A document, record, statement, or other information
54-16 required to be made or disclosed to the department under this
54-17 section is a privileged and confidential communication and is not
54-18 admissible in evidence in any court action or proceeding except
54-19 under a subpoena issued by a court of record.
54-20 (c) An insurance agent, insurance carrier, an employee or
54-21 agent of the carrier, or any other person, acting without malice,
54-22 is not liable for providing the information required to be
54-23 disclosed under this section.
54-24 Sec. 6C. FEES; USE OF FUNDS. (a) The department shall
54-25 collect from each agent of an insurance carrier writing insurance
54-26 in this state under this code a nonrefundable license fee and a
54-27 nonrefundable appointment fee for each appointment by an insurance
55-1 carrier. These fees, together with examination fees, license fees,
55-2 and license renewal fees, shall be deposited to the credit of the
55-3 Texas Department of Insurance operating fund.
55-4 (b) The department may use any portion of the fees collected
55-5 to enforce this subchapter, may employ persons as it considers
55-6 necessary to investigate and make reports regarding alleged
55-7 violations of this code and misconduct on the part of agents, and
55-8 may pay the salaries and expenses of those persons and office
55-9 employees and other expenses necessary to enforce this subchapter
55-10 from the fees collected. A person employed by the department under
55-11 this section may administer the oath and examine under oath any
55-12 person considered necessary in gathering information and evidence
55-13 and may have that information and evidence reduced to writing if
55-14 considered necessary, and all related expenses shall be paid from
55-15 the fees.
55-16 (c) The department shall set the fees in amounts reasonable
55-17 and necessary to implement this subchapter.
55-18 ARTICLE 2. LIFE, ACCIDENT, AND HEALTH LICENSES
55-19 SECTION 2.01. Subchapter A, Chapter 21, Insurance Code, is
55-20 amended by adding Article 21.07-1 to read as follows:
55-21 Art. 21.07-1. TEXAS LIFE, ACCIDENT, AND HEALTH AGENTS
55-22 LICENSE ACT
55-23 Sec. 1. SHORT TITLE; APPLICATION. (a) This article may be
55-24 cited as the Texas Life, Accident, and Health Agents License Act.
55-25 (b) Each agent of an insurance company authorized to provide
55-26 life, accident, and health insurance coverage in this state is
55-27 subject to this article. This article applies to each person who:
56-1 (1) performs the acts of an agent, as defined by
56-2 Article 21.02 of this code, whether through oral, written, or
56-3 electronic communications or otherwise, by the solicitation of,
56-4 negotiation for, procurement of, or collection of premiums on an
56-5 insurance or annuity contract offered by any type of insurance
56-6 carrier authorized to sell life, accident, and health insurance
56-7 products in this state; or
56-8 (2) represents or purports to represent a health
56-9 maintenance organization in the solicitation, negotiation,
56-10 procurement, or effectuation of membership in the health
56-11 maintenance organization.
56-12 Sec. 2. GENERAL LIFE, ACCIDENT, AND HEALTH LICENSE; LICENSE
56-13 REQUIRED. (a) A general life, accident, and health license is
56-14 required for each person who acts as:
56-15 (1) an agent writing life, accident, and health
56-16 insurance for a life insurance company;
56-17 (2) an agent writing only accident and health
56-18 insurance;
56-19 (3) an agent representing a health maintenance
56-20 organization;
56-21 (4) an agent writing fixed or variable annuity
56-22 contracts or variable life contracts;
56-23 (5) an industrial life insurance agent for an
56-24 industrial company that writes only weekly premium life insurance
56-25 on a debit basis under Article 3.52 of this code;
56-26 (6) an agent writing:
56-27 (A) only life insurance in excess of $15,000 on
57-1 any one life for a stipulated premium insurance company;
57-2 (B) only accident and health insurance for a
57-3 stipulated premium insurance company; or
57-4 (C) both types of insurance described by
57-5 Paragraphs (A) and (B) of this subdivision;
57-6 (7) an agent writing life, accident, and health
57-7 insurance for any type of authorized life insurance company,
57-8 including a legal reserve life insurance company, domiciled in this
57-9 state, representing the insurer in a foreign country or territory
57-10 and either on a United States military installation or with United
57-11 States military personnel;
57-12 (8) an agent writing life, accident, and health
57-13 insurance for a fraternal benefit society except as provided by
57-14 Article 10.37-3 of this code; or
57-15 (9) an agent writing any other type of insurance as
57-16 required by the commissioner for the protection of the insurance
57-17 consumers of this state.
57-18 (b) For the purposes of this subsection, a "combination
57-19 company" is an insurer that writes weekly premium life insurance or
57-20 monthly ordinary life insurance on a debit basis. A general life,
57-21 accident, and health license is required for each person who acts
57-22 as a combination life insurance agent for a combination company. A
57-23 combination company and a combination life insurance agent may also
57-24 write ordinary contracts of life insurance.
57-25 Sec. 3. AUTHORITY TO WRITE ADDITIONAL PRODUCT LINES. A
57-26 person who holds a general life, accident, and health license
57-27 issued under the requirements of this subchapter may, without
58-1 obtaining an additional license, write additional types of
58-2 insurance contracts as provided under:
58-3 (1) Sections 4, 5, and 6 of this article; or
58-4 (2) Article 21.09 of this code.
58-5 Sec. 4. LIMITED LIFE, ACCIDENT, AND HEALTH LICENSE. (a) An
58-6 agent must hold a limited life, accident, and health license if the
58-7 agent writes:
58-8 (1) a policy or rider to a policy that provides only:
58-9 (A) lump-sum cash benefits in the event of
58-10 accidental death, death by accidental means, or dismemberment; or
58-11 (B) ambulance expense benefits in the event of
58-12 accident or sickness;
58-13 (2) a prepaid legal services contract under Article
58-14 5.13-1 or Chapter 23 of this code;
58-15 (3) credit insurance except as otherwise provided
58-16 under Article 21.09 of this code; or
58-17 (4) any other type of insurance, if determined
58-18 necessary by the commissioner to protect insurance consumers in
58-19 this state.
58-20 (b) A person who holds a limited life, accident, and health
58-21 license issued under this section may write only the types of
58-22 insurance products designated on the license by the department.
58-23 (c) An applicant for a limited life, accident, and health
58-24 license is eligible for a temporary license under Section 3A,
58-25 Article 21.07, of this code.
58-26 Sec. 5. FUNERAL PREARRANGEMENT LIFE INSURANCE AGENT. (a)
58-27 In this section, "funeral prearrangement life insurance agent"
59-1 means a life insurance agent who, subject to the limitations of
59-2 this section, writes only life insurance policies and fixed annuity
59-3 contracts to secure the delivery of funeral services and
59-4 merchandise under prepaid funeral contracts regulated by the Texas
59-5 Department of Banking under Chapter 154, Finance Code.
59-6 (b) The department shall issue a license to act as a funeral
59-7 prearrangement life insurance agent to an individual after
59-8 receiving certification from an insurance company authorized to
59-9 write life insurance and annuities in this state that the applicant
59-10 has completed a course of study and instruction on life insurance
59-11 and fixed annuities for applicants offered by the insurance company
59-12 and passed without aid a written examination administered by the
59-13 insurance company. The course of study and instruction must be at
59-14 least a five-hour course and must include instruction on:
59-15 (1) the policies to be sold; and
59-16 (2) the laws relating to funeral prearrangement.
59-17 (c) The commissioner shall authorize an insurance company to
59-18 administer a funeral prearrangement life insurance agent
59-19 examination as provided by Subsection (b) of this section after
59-20 approval by the commissioner of a complete outline and explanation
59-21 of the course of study and instruction and the nature and manner of
59-22 conducting the examination for applicants. The commissioner shall
59-23 prescribe a uniform examination for applicants that fairly
59-24 addresses the information contained in the approved course of study
59-25 and instruction.
59-26 (d) The commissioner may investigate as necessary the manner
59-27 of instruction and the examination administered by an insurance
60-1 company under this section. The commissioner may withdraw from an
60-2 insurance company the authority under this section to offer
60-3 instruction and administer an examination.
60-4 (e) A funeral prearrangement life insurance agent licensed
60-5 under this section may not:
60-6 (1) write any coverage or combination of coverages
60-7 with an initial guaranteed death benefit that exceeds $15,000 on
60-8 any life; or
60-9 (2) act as an agent for more than one insurance
60-10 company.
60-11 (f) A license issued under this section to act as an agent
60-12 for an insurance company is canceled when the license holder ceases
60-13 to act as an agent for an insurance company. Not later than the
60-14 15th day after the date on which the license holder ceases to act
60-15 as an agent for an insurance company, the insurance company or
60-16 agent shall send written notification to the department.
60-17 (g) Except as specifically provided by this section, the
60-18 provisions of this subchapter that apply to a limited license apply
60-19 to a license issued under this section.
60-20 Sec. 6. LIFE INSURANCE NOT EXCEEDING $15,000. (a) The
60-21 department shall issue a license to act as an agent to an
60-22 individual who writes only life insurance not to exceed $15,000 on
60-23 any one life after receiving certification from a stipulated
60-24 premium insurance company, a statewide mutual assessment company, a
60-25 local mutual aid association, or a local mutual burial association,
60-26 that the applicant has completed a course of study and instruction
60-27 on life insurance and fixed annuities offered by the insurer and
61-1 passed without aid a written examination administered by the
61-2 insurer. The course of study and instruction must be at least a
61-3 five-hour course and must include instruction on:
61-4 (1) the policies to be sold; and
61-5 (2) the laws relating to the regulation of insurance
61-6 in this state.
61-7 (b) The commissioner shall authorize an insurer described by
61-8 Subsection (a) of this section to administer an agent examination
61-9 as provided by Subsection (a) of this section after approval by the
61-10 commissioner of a complete outline and explanation of the course of
61-11 study and instruction and the nature and manner of conducting the
61-12 examination for applicants. The commissioner shall prescribe a
61-13 uniform examination for applicants that fairly addresses the
61-14 information contained in the approved course of study and
61-15 instruction.
61-16 (c) The commissioner may investigate as necessary the manner
61-17 of instruction and the examination administered by an insurer under
61-18 this section. The commissioner may withdraw from an insurer the
61-19 authority under this section to offer instruction and administer an
61-20 examination.
61-21 (d) An insurance agent licensed under this section may not
61-22 write any coverage or combination of coverages with an initial
61-23 guaranteed death benefit that exceeds $15,000 on any life.
61-24 (e) This section does not apply to an agent who wrote
61-25 policies that generated, in the aggregate, less than $20,000 in
61-26 direct premium in the previous calendar year.
61-27 (f) Except as specifically provided by this section, the
62-1 provisions of this subchapter that apply to a limited license apply
62-2 to a license issued under this section.
62-3 ARTICLE 3. PROPERTY AND CASUALTY LICENSES
62-4 SECTION 3.01. Article 21.14, Insurance Code, is amended to
62-5 read as follows:
62-6 Art. 21.14. TEXAS PROPERTY AND CASUALTY AGENTS LICENSE ACT
62-7 Sec. 1. SHORT TITLE; APPLICATION. (a) This article may be
62-8 cited as the Texas Property and Casualty Agents License Act.
62-9 (b) Each agent of an insurance company authorized to provide
62-10 property and casualty insurance coverage in this state is subject
62-11 to this article. This article applies to each person who performs
62-12 the acts of an agent, as defined by Article 21.02 of this code,
62-13 whether through oral, written, or electronic communications or
62-14 otherwise, by the solicitation of, negotiation for, procurement of,
62-15 or collection of premiums on an insurance contract offered by any
62-16 type of insurance carrier authorized to sell property and casualty
62-17 insurance products in this state, including:
62-18 (1) a fidelity or surety company;
62-19 (2) an inter-insurance exchange;
62-20 (3) a mutual company, including a farm mutual or a
62-21 county mutual;
62-22 (4) a reciprocal exchange; or
62-23 (5) a Lloyd's plan insurer.
62-24 Sec. 2. GENERAL PROPERTY AND CASUALTY LICENSE; LICENSE
62-25 REQUIRED. A general property and casualty license is required for
62-26 each person who acts as:
62-27 (1) an agent writing property and casualty insurance
63-1 for an insurance carrier authorized to provide property and
63-2 casualty insurance coverage in this state;
63-3 (2) a subagent of a person licensed as an agent under
63-4 this article who solicits and binds insurance risks on behalf of
63-5 that agent; or
63-6 (3) an agent writing any other type of insurance as
63-7 required by the commissioner for the protection of the insurance
63-8 consumers of this state.
63-9 Sec. 3. AUTHORITY TO WRITE ADDITIONAL PRODUCT LINES. A
63-10 person who holds a general property and casualty license issued
63-11 under this subchapter may write additional types of insurance
63-12 contracts as provided under:
63-13 (1) Sections 6 and 9 of this article; or
63-14 (2) Article 21.09 of this code.
63-15 Sec. 4. AUTHORITY TO WRITE ACCIDENT AND HEALTH INSURANCE. A
63-16 person who holds a general property and casualty license issued
63-17 under this subchapter may write health and accident insurance for a
63-18 property and casualty insurer authorized to sell those insurance
63-19 products in this state without holding a license issued under
63-20 Article 21.07-1 of this code.
63-21 Sec. 5. EMERGENCY LICENSE WITHOUT EXAMINATION. In the event
63-22 of the death or disability of a property and casualty agent or if a
63-23 property and casualty agent is found to be insolvent and unable to
63-24 pay for premiums as they become due to an insurer, the department
63-25 may issue to an applicant for a property and casualty license an
63-26 emergency property and casualty license without examination if it
63-27 is established to the satisfaction of the department that the
64-1 emergency license is necessary for the preservation of the agency
64-2 assets of a deceased, disabled, or insolvent property and casualty
64-3 agent. An emergency license is valid for 90 days in any 12
64-4 consecutive months and may be renewed by the department for an
64-5 additional 90 days during the 12-month period if the other
64-6 requirements of this subchapter are met.
64-7 Sec. 6. LIMITED PROPERTY AND CASUALTY LICENSE. (a) A
64-8 limited property and casualty license is required for each person
64-9 who desires to act as an agent writing:
64-10 (1) job protection insurance as defined by Article
64-11 25.01 of this code;
64-12 (2) insurance only on growing crops under Article
64-13 21.14-2 of this code;
64-14 (3) any form of insurance authorized under Chapter 16
64-15 of this code for a farm mutual insurance company;
64-16 (4) exclusively all forms of insurance authorized to
64-17 be solicited and written in this state that cover the ownership,
64-18 operation, maintenance, or use of a motor vehicle that is designed
64-19 for use on the public highways, including a trailer or semitrailer,
64-20 and the motor vehicle's accessories or equipment;
64-21 (5) exclusively all forms of insurance authorized to
64-22 be solicited and written in this state that relate to the
64-23 ownership, occupancy, maintenance, or use of a manufactured home
64-24 that is classified as personal property under Section 2.001,
64-25 Property Code;
64-26 (6) prepaid legal services contracts under Article
64-27 5.13-1 or Chapter 23 of this code;
65-1 (7) only industrial fire insurance policies covering
65-2 dwellings, household goods, and wearing apparel written on a
65-3 weekly, monthly, or quarterly basis on a continuous premium payment
65-4 plan and written for an insurance company whose business is devoted
65-5 exclusively to that business as described by Article 17.02 of this
65-6 code;
65-7 (8) credit insurance, except as otherwise provided by
65-8 Article 21.09 of this code; or
65-9 (9) any other type of insurance as required by the
65-10 commissioner for the protection of the insurance consumers of this
65-11 state.
65-12 (b) Subsection (a)(2) of this section applies to a
65-13 production credit association or bank for a cooperative, as
65-14 provided under the farm credit system under 12 U.S.C. 2001 et seq.,
65-15 as amended.
65-16 (c) A person who holds a limited property and casualty
65-17 license issued under this subchapter may write only the types of
65-18 insurance products designated on the license by the department.
65-19 (d) This section does not apply to a person who wrote:
65-20 (1) policies, authorized under Chapter 16 of this code
65-21 for a farm mutual insurance company, that generated, in the
65-22 aggregate, less than $50,000 in direct premium for the previous
65-23 calendar year; or
65-24 (2) industrial fire insurance policies that generated,
65-25 in the aggregate, less than $20,000 in direct premium for the
65-26 previous calendar year.
65-27 Sec. 7. FULL-TIME HOME OFFICE EMPLOYEES: MANDATORY
66-1 REGISTRATION, CONTINUING EDUCATION REQUIREMENTS, AND NOTIFICATION
66-2 TO CONSUMERS; DISCIPLINARY ACTIONS. (a) Each actual full-time
66-3 home office salaried employee of an insurance carrier licensed to
66-4 do business in this state who solicits or receives an application
66-5 for the sale of insurance through an oral, written, or electronic
66-6 communication shall register with the department.
66-7 (b) An insurance carrier licensed to do business in this
66-8 state whose general plan of operation includes the use of employees
66-9 described by Subsection (a) of this section shall certify to the
66-10 department that each of those employees receives at least 15 hours
66-11 of continuing education annually. Each continuing education course
66-12 provided by the insurance carrier shall be submitted to the
66-13 department for approval as provided by Section 3, Article 21.01-1,
66-14 of this code. A person registered under this section shall comply
66-15 with the continuing education requirements adopted under Section 3,
66-16 Article 21.01-1, of this code, as if the person were a licensed
66-17 agent. The continuing education must be designed to give the
66-18 employee:
66-19 (1) reasonable familiarity with:
66-20 (A) the broad principles of insurance;
66-21 (B) insurance licensing and regulatory laws; and
66-22 (C) the terms and conditions of the insurance
66-23 that the registrant transacts; and
66-24 (2) a fair and general understanding of the duties of
66-25 an insurer to an insured, including training in ethical
66-26 considerations.
66-27 (c) The registration of an actual full-time home office
67-1 salaried employee shall be suspended and the employer insurance
67-2 carrier may be disciplined for any act for which an agent may be
67-3 disciplined under Article 21.01-2 of this code.
67-4 (d) Each registrant under this section shall disclose the
67-5 fact of the registration when making an oral, written, or
67-6 electronic communication to solicit or receive an application for
67-7 the sale of insurance.
67-8 (e) Each person who registers under this section shall
67-9 submit a nonrefundable registration fee in an amount determined by
67-10 the department.
67-11 Sec. 8. INSURANCE SERVICE REPRESENTATIVE LICENSE. (a) An
67-12 insurance service representative license is required for each
67-13 person who is employed on a salaried basis to perform assigned
67-14 duties only in the office of a property and casualty agent,
67-15 including explaining insurance coverage, describing an insurance
67-16 product, quoting insurance premium rates, and issuing insurance
67-17 binders only with the express approval of the property and casualty
67-18 agent who supervises the insurance service representative.
67-19 (b) The provisions of this subchapter that apply to a
67-20 general license apply to a license issued under this section,
67-21 except that proof of financial responsibility is not required of a
67-22 person licensed only as an insurance service representative.
67-23 Sec. 9. COUNTY MUTUAL AGENT LICENSE. (a) The department
67-24 shall issue a license to act as an agent for a county mutual
67-25 insurance company under Chapter 17 of this code to an individual
67-26 applicant after receiving certification from the insurance company
67-27 that the applicant has:
68-1 (1) completed a course of study and instruction on
68-2 motor vehicle insurance and insurance covering dwellings offered by
68-3 the insurance company; and
68-4 (2) passed without aid a written examination
68-5 administered by the insurance company.
68-6 (b) The course completed under Subsection (a) of this
68-7 section must be at least a five-hour course and must include
68-8 instruction on:
68-9 (1) the policies to be sold; and
68-10 (2) the laws relating to the regulation of insurance
68-11 in this state.
68-12 (c) The commissioner shall authorize a county mutual
68-13 insurance company to administer an agent examination as provided by
68-14 Subsection (a) of this section after approval by the commissioner
68-15 of a complete outline and explanation of the course of study and
68-16 instruction and the nature and manner of conducting the examination
68-17 for applicants. The commissioner shall prescribe a uniform
68-18 examination for applicants that fairly addresses the information
68-19 contained in the approved course of study and instruction.
68-20 (d) The department may investigate as necessary the manner
68-21 of instruction and the examination administered by an insurance
68-22 company under this section. The department may withdraw from an
68-23 insurance company the authority under this section to offer
68-24 instruction and administer an examination.
68-25 (e) Except as specifically provided by this section, the
68-26 provisions of this subchapter that apply to a limited license apply
68-27 to a license issued under this section. [LICENSING OF LOCAL
69-1 RECORDING AGENTS AND SOLICITORS; LIFE, HEALTH AND ACCIDENT
69-2 INSURANCE EXCEPTED; OTHER EXCEPTIONS]
69-3 [Sec. 1. CLASSES OF AGENTS. Insurance agents, as that term
69-4 is defined in the laws of this State, shall for the purpose of this
69-5 article be divided into two classes: Local Recording Agents and
69-6 Solicitors.]
69-7 [Sec. 2. DEFINITIONS; CERTAIN ORDERS, SOCIETIES OR
69-8 ASSOCIATIONS NOT AFFECTED. (a) In this article:]
69-9 [(1) "Local Recording Agent" means a person or firm
69-10 engaged in soliciting and writing insurance, being authorized by an
69-11 insurance company or insurance carrier, including fidelity and
69-12 surety companies, to solicit business and to write, sign, execute,
69-13 and deliver policies of insurance, and to bind companies on
69-14 insurance risks, and who maintain an office and a record of such
69-15 business and the transactions which are involved, who collect
69-16 premiums on such business and otherwise perform the customary
69-17 duties of a local recording agent representing an insurance carrier
69-18 in its relation with the public; or a person or firm engaged in
69-19 soliciting and writing insurance, being authorized by an insurance
69-20 company or insurance carrier, including fidelity and surety
69-21 companies, to solicit business, and to forward applications for
69-22 insurance to the home office of the insurance companies and
69-23 insurance carriers, where the insurance company's and insurance
69-24 carrier's general plan of operation in this State provides for the
69-25 appointment and compensation of agents for insurance and for the
69-26 execution of policies of insurance by the home office of the
69-27 insurance company or insurance carrier, or by a supervisory office
70-1 of such insurance company or insurance carrier, and who maintain an
70-2 office and a record of such business and the transactions which are
70-3 involved, and who collect premiums on such business and otherwise
70-4 qualify and perform the customary duties of a local recording agent
70-5 representing an insurance carrier in its relation with the public.]
70-6 [(2) "Solicitor" means a person who is a bona fide
70-7 solicitor and engaged in the business of soliciting and binding
70-8 insurance risks on behalf of a local recording agent, and who
70-9 offices with such local recording agent, and who does not sign and
70-10 execute policies of insurance, and who does not maintain company
70-11 records of such transactions. This shall not be construed to make
70-12 a solicitor of a local recording agent, who places business of a
70-13 class which the rules of the company or carrier require to be
70-14 placed on application or to be written in a supervisory office. A
70-15 solicitor may bind insurance risks only with the express prior
70-16 approval of the local recording agent for whom the solicitor works.]
70-17 [(3) "Board" means the State Board of Insurance.]
70-18 [(4) "Company" or "Carrier" means any insurance
70-19 company, corporation, inter-insurance exchange, mutual, reciprocal,
70-20 association, Lloyds or other insurance carrier licensed to transact
70-21 business in the State of Texas other than as excepted herein.]
70-22 [(5) "Insurance service representative" means a
70-23 solicitor employed on a salaried basis who performs assigned duties
70-24 only within the office of a local recording agent, which may
70-25 include binding insurance risks, but only with the express prior
70-26 approval of the local recording agent for whom the representative
70-27 works.]
71-1 [(b) Nothing contained in this article shall be so construed
71-2 as to affect or apply to orders, societies, or associations which
71-3 admit to membership only persons engaged in one or more crafts or
71-4 hazardous occupations in the same or similar lines of business, and
71-5 the ladies' societies, or ladies' auxiliary to such orders,
71-6 societies or associations, or any secretary of a Labor Union or
71-7 organization, or any secretary or agent of any fraternal benefit
71-8 society, which does not operate at a profit, except that a person
71-9 who has had a license revoked under Section 16 of this article may
71-10 not solicit or otherwise transact business under Chapter 10 of this
71-11 code.]
71-12 [Sec. 3. APPLICATION FOR LICENSE; TO WHOM LICENSE MAY BE
71-13 ISSUED. (a) When any person, partnership, registered limited
71-14 liability partnership, limited liability company, corporation, or
71-15 bank shall desire to engage in business as a local recording agent
71-16 for an insurance company, or insurance carrier, that person or
71-17 entity shall make application for a license to the Texas Department
71-18 of Insurance, in such form as the Department may require. Such
71-19 application shall bear a signed endorsement by a general, state or
71-20 special agent of a qualified insurance company, or insurance
71-21 carrier that applicant or each member of the partnership or each
71-22 stockholder of the corporation or each member of the limited
71-23 liability company is a resident of this state.]
71-24 [(b) The Department shall issue a license to an individual
71-25 or a general partnership or a limited liability partnership
71-26 registered with the Secretary of State under Section 3.08, Texas
71-27 Revised Partnership Act (Article 6132b-3.08, Vernon's Texas Civil
72-1 Statutes), engaging in the business of insurance. The Department
72-2 may not issue a license to a partnership if an inactive partner who
72-3 is not subject to Section 3a of this article has an interest in the
72-4 partnership principally to have written and be compensated therefor
72-5 for insurance on property controlled through ownership, mortgage or
72-6 sale, family relationship, or employment; and provided further,
72-7 that all licensed agents must be residents of Texas. Provided,
72-8 that a person who resides in a town through which the state line
72-9 runs and whose residence is in the town in the adjoining state may
72-10 be licensed, if the person's business office is being maintained in
72-11 this state. All persons acting as agent or solicitor for health
72-12 and accident insurance within the provisions hereof, and who
72-13 represent only fire and casualty companies, and not life insurance
72-14 companies, shall be required to procure only one license, and such
72-15 license as is required under the provisions of this article.]
72-16 [(c) The Department shall issue a license to a corporation
72-17 if the Department finds:]
72-18 [(1) That the corporation is a Texas corporation
72-19 organized or existing under the Texas Business Corporation Act or
72-20 the Texas Professional Corporation Act having its principal place
72-21 of business in the State of Texas and having as one of its purposes
72-22 the authority to act as a local recording agent; and]
72-23 [(2) That every officer, director and shareholder of
72-24 the corporation is individually licensed as a local recording agent
72-25 under the provisions of this Insurance Code, except as may be
72-26 otherwise permitted by this Section or Section 3a of this article,
72-27 or that every officer and director of the corporation is
73-1 individually licensed as a local recording agent under this
73-2 Insurance Code, that the corporation is a wholly owned subsidiary
73-3 of a parent corporation that is licensed as a local recording agent
73-4 under this Insurance Code, and that every shareholder of the parent
73-5 corporation is individually licensed as a local recording agent
73-6 under this Insurance Code, and except as specifically provided by
73-7 this article, that no shareholder of the corporation is a corporate
73-8 entity; and]
73-9 [(3) That such corporation will have the ability to
73-10 pay any sums up to $25,000 which it might become legally obligated
73-11 to pay on account of any claim made against it by any customer and
73-12 caused by any negligent act, error or omission of the corporation
73-13 or any person for whose acts the corporation is legally liable in
73-14 the conduct of its business as a local recording agent. The term
73-15 "customer" as used herein shall mean any person, firm or
73-16 corporation to whom such corporation sells or attempts to sell a
73-17 policy of insurance, or from whom such corporation accepts an
73-18 application for insurance. Such ability shall be proven in one of
73-19 the following ways:]
73-20 [(A) An errors and omissions policy insuring
73-21 such corporation against errors and omissions, in at least the sum
73-22 of $100,000 with no more than a $10,000 deductible feature or the
73-23 sum of at least $300,000 with no more than a $25,000 deductible
73-24 feature, issued by an insurance company licensed to do business in
73-25 the State of Texas or, if a policy cannot be obtained from a
73-26 company licensed to do business in Texas, a policy issued by a
73-27 company not licensed to do business in Texas, on filing an
74-1 affidavit with the Texas Department of Insurance stating the
74-2 inability to obtain coverage and receiving the Department's
74-3 approval; or]
74-4 [(B) A bond executed by such corporation as
74-5 principal and a surety company authorized to do business in this
74-6 state, as surety, in the principal sum of $25,000, payable to the
74-7 Texas Department of Insurance for the use and benefit of customers
74-8 of such corporation, conditioned that such corporation shall pay
74-9 any final judgment recovered against it by any customer; or]
74-10 [(C) A deposit of cash or securities of the
74-11 class authorized by Articles 2.08 and 2.10 of this Code, having a
74-12 fair market value of $25,000 with the comptroller. The comptroller
74-13 is hereby authorized and directed to accept and receive such
74-14 deposit and hold it exclusively for the protection of any customer
74-15 of such corporation recovering a final judgment against such
74-16 corporation. Such deposit may be withdrawn only upon filing with
74-17 the Department evidence satisfactory to it that the corporation has
74-18 withdrawn from business, and has no unsecured liabilities
74-19 outstanding, or that such corporation has provided for the
74-20 protection of its customers by furnishing an errors and omissions
74-21 policy or a bond as hereinbefore provided. Securities so deposited
74-22 may be exchanged from time to time for other qualified securities.]
74-23 [A binding commitment to issue such a policy or bond,
74-24 or the tender of such securities, shall be sufficient in connection
74-25 with any application for license.]
74-26 [Nothing contained herein shall be construed to permit
74-27 any unlicensed employee or agent of any corporation to perform any
75-1 act of a local recording agent without obtaining a local recording
75-2 agent's license. The Department shall not require a corporation to
75-3 take the examination provided in Section 6 of this Article 21.14.]
75-4 [If at any time, any corporation holding a local
75-5 recording agent's license does not maintain the qualifications
75-6 necessary to obtain a license, the license of such corporation to
75-7 act as a local recording agent shall be cancelled or denied in
75-8 accordance with the provisions of Sections 16, 17 and 18 of this
75-9 Article 21.14; provided, however, that should any person who is
75-10 not a licensed local recording agent acquire shares in such a
75-11 corporation by devise or descent, they shall have a period of 90
75-12 days from date of acquisition within which to obtain a license as a
75-13 local recording agent or to dispose of the shares to a licensed
75-14 local recording agent except as may be permitted by Section 3a of
75-15 this article.]
75-16 [Should such an unlicensed person, except as may be
75-17 permitted by Section 3a of this article, acquire shares in such a
75-18 corporation and not dispose of them within said period of 90 days
75-19 to a licensed local recording agent, then they must be purchased by
75-20 the corporation for their book value, that is, the value of said
75-21 shares of stock as reflected by the regular books and records of
75-22 said corporation, as of the date of the acquisition of said shares
75-23 by said unlicensed person. Should the corporation fail or refuse
75-24 to so purchase such shares, its license shall be cancelled.]
75-25 [Any such corporation shall have the power to redeem
75-26 the shares of any shareholder, or the shares of a deceased
75-27 shareholder, upon such terms as may be agreed upon by the Board of
76-1 Directors and such shareholder or his personal representative, or
76-2 at such price and upon such terms as may be provided in the
76-3 Articles of Incorporation, the Bylaws, or an existing contract
76-4 entered into between the shareholders of the corporation.]
76-5 [Each corporation licensed as a local recording agent
76-6 shall file, under oath, a list of the names and addresses of all of
76-7 its officers, directors and shareholders with its application for
76-8 renewal license.]
76-9 [Each corporation licensed as a local recording agent
76-10 shall notify the Texas Department of Insurance upon any change in
76-11 its officers, directors or shareholders not later than the 30th day
76-12 after the date on which the change became effective.]
76-13 [The term "firm" as it applies to local recording
76-14 agents in Sections 2, 12 and 16 of this Article 21.14 shall be
76-15 construed to include corporations.]
76-16 [(d) The department shall issue a license to a bank if the
76-17 department finds that:]
76-18 [(1) the bank is a national banking association
76-19 organized and existing under the National Bank Acts (12 U.S.C.
76-20 Section 21 et seq.), a state bank organized and existing under
76-21 Subtitle A, Title 3, Finance Code, a state savings bank organized
76-22 and existing under Subtitle C, Title 3, Finance Code, or a bank
76-23 operating subsidiary, as defined by state or federal law, that is
76-24 located and doing business in this state in a place with a
76-25 population of 5,000 or less;]
76-26 [(2) at least one officer of the bank and each
76-27 individual who will be performing any acts of an agent for the bank
77-1 are individually licensed under this Article; and]
77-2 [(3) the bank will have the ability to pay any sums up
77-3 to $25,000 that it might become legally obligated to pay on account
77-4 of any claim made against it by a customer and caused by a
77-5 negligent act, error, or omission of the bank or any person for
77-6 whose acts the bank is legally liable in the conduct of its
77-7 business as a local recording agent. The term "customer" means any
77-8 person, firm, or corporation to whom the bank sells or attempts to
77-9 sell a policy of insurance or from whom the bank accepts an
77-10 application for insurance. That ability shall be proven through:]
77-11 [(A) an errors and omissions policy insuring the
77-12 bank against errors and omissions, in at least the sum of $100,000
77-13 with not more than a $10,000 deductible feature, or the sum of at
77-14 least $300,000 with not more than a $25,000 deductible feature,
77-15 issued by an insurance company licensed to do business in this
77-16 state or, if a policy cannot be obtained from a company licensed to
77-17 do business in this state, a policy issued by a company not
77-18 licensed to do business in this state, on filing an affidavit with
77-19 the department stating the inability to obtain coverage and
77-20 receiving the department's approval;]
77-21 [(B) a bond executed by the bank as principal
77-22 and a surety company authorized to do business in this state, as
77-23 surety, in the principal sum of $25,000, payable to the department
77-24 for the use and benefit of customers of the bank, conditioned that
77-25 the bank shall pay any final judgment recovered against it by a
77-26 customer; or]
77-27 [(C) a deposit with the comptroller of cash or
78-1 securities of the class authorized by Articles 2.08 and 2.10 of
78-2 this code, with a fair market value of $25,000. The comptroller
78-3 shall accept and receive the deposit and hold it exclusively for
78-4 the protection of a customer of the bank who recovers a final
78-5 judgment against the bank. The deposit may be withdrawn only on
78-6 filing with the department satisfactory evidence that the bank has
78-7 withdrawn from the business of insurance and has no unsecured
78-8 liabilities outstanding or that the bank has provided for the
78-9 protection of its customers by furnishing an errors and omissions
78-10 policy or a bond as provided by this subsection. Securities so
78-11 deposited may be exchanged from time to time for other qualified
78-12 securities.]
78-13 [A binding commitment to issue such a policy or bond,
78-14 or the tender of applicable securities, is sufficient in connection
78-15 with an application for license.]
78-16 [Nothing in this subsection shall be construed to
78-17 permit an unlicensed employee or agent of a bank to perform any act
78-18 of a local recording agent without obtaining a local recording
78-19 agent's license. The department may not require a bank to take the
78-20 examination provided by Section 6 of this Article.]
78-21 [A bank licensed as an agent under this Article may
78-22 have additional offices from which the business of insurance is
78-23 conducted only in a place with a population of 5,000 or less and
78-24 must comply with the department's regulations regarding additional
78-25 offices.]
78-26 [A bank licensed as an agent under this article must
78-27 maintain its insurance records, including all files relating to and
79-1 reflecting customer complaints, separate from records relating to
79-2 banking transactions of the bank.]
79-3 [If a bank that holds a local recording agent's license
79-4 does not maintain the qualifications necessary to obtain a license,
79-5 the license of that bank to act as a local recording agent shall be
79-6 canceled or denied in accordance with Sections 16 and 18 of this
79-7 article.]
79-8 [Each bank licensed as a local recording agent shall
79-9 file under oath with its application for license renewal a list of
79-10 the name and address of each individual who will be acting as an
79-11 agent on behalf of the bank and of each officer and director of the
79-12 bank, as defined by Article 21.02 of this code, and other
79-13 biographical information as required by the department.]
79-14 [Each bank licensed as a local recording agent shall
79-15 notify the department of any change in its officers and directors
79-16 and any change in other persons who will be performing any acts of
79-17 an agent, as defined by Article 21.02 of this code, and submit
79-18 biographical information on those officers, directors, and persons
79-19 as required by the department not later than the 30th day after the
79-20 date on which the change takes effect.]
79-21 [The term "firm," as that term applies to local
79-22 recording agents in Sections 2, 12, and 16 of this article,
79-23 includes corporations and banks.]
79-24 [(e) The term "partnership" or "agency partnership" as used
79-25 in this Article means a general partnership or a registered limited
79-26 liability partnership domiciled in Texas.]
79-27 [(f) In this Article, the term "corporation" or
80-1 "corporations" shall mean a corporation organized under the Texas
80-2 Business Corporation Act, The Texas Professional Corporation Act
80-3 (Article 1528e, Vernon's Texas Civil Statutes), or a Texas
80-4 domiciled limited liability company organized or existing under the
80-5 Texas Limited Liability Company Act (Article 1528n, Vernon's Texas
80-6 Civil Statutes) having its principal place of business in this
80-7 state and having as one of its purposes the authority to act as an
80-8 insurance agent. Each officer, manager, and member of a limited
80-9 liability company must be licensed under this Article. The
80-10 licensing and regulation of a limited liability company shall be
80-11 subject to the same provisions and requirements of this Article
80-12 that are applicable to corporations licensed under this Article.]
80-13 [(g) In this article, the term "bank" means a national
80-14 banking association organized and existing under the National Bank
80-15 Acts (12 U.S.C. Section 21 et seq.), a state bank organized and
80-16 existing under Subtitle A, Title 3, Finance Code, a state savings
80-17 bank organized and existing under Subtitle C, Title 3, Finance
80-18 Code, a bank branch, or a bank operating subsidiary, as defined by
80-19 state or federal law, that is located and doing business in this
80-20 state in a place with a population of 5,000 or less. A bank
80-21 operating subsidiary, as defined by state or federal law, located
80-22 and doing business in a place in this state with a population of
80-23 5,000 or less may own a licensed corporate agent that is also
80-24 located and doing business in a place with a population of 5,000 or
80-25 less, and is subject to Section 3a(5) of this Article.]
80-26 [Sec. 3a. PERSONS OTHER THAN LICENSED LOCAL RECORDING AGENTS
80-27 WHO MAY SHARE IN PROFITS OF LOCAL RECORDING AGENT. (1) Upon the
81-1 death of a duly licensed local recording agent who is a member of
81-2 an agency partnership, the surviving spouse and children, if any,
81-3 of such deceased partner, or a trust for such surviving spouse and
81-4 children, may share in the profits of such agency partnership
81-5 during the lifetime of such surviving spouse or such children, as
81-6 the case may be, if and as provided by a written partnership
81-7 agreement, or in the absence of any written agreement, if and as
81-8 agreed by the surviving partner or partners and the surviving
81-9 spouse, the trustee, and the legal representative of the surviving
81-10 child or children. Such surviving spouse and any such surviving
81-11 children or trusts shall not be required to qualify as local
81-12 recording agents to participate in such profits, but shall not do
81-13 or perform any act of a local recording agent on behalf of such
81-14 partnership without having qualified as a local recording agent;
81-15 provided, however, that a duly licensed local recording agent who
81-16 is a member of an agency partnership may, with the approval of the
81-17 other members of the partnership, transfer an interest in the
81-18 agency partnership to his children or a trust for same, and may
81-19 operate such interest for their use and benefit; and such children
81-20 or trusts may share in the profits of such agency partnership.
81-21 Such child or children or trusts shall not be required to qualify
81-22 as a local recording agent to participate in such profits, but
81-23 shall not do or perform any act of a local recording agent on
81-24 behalf of such partnership without having qualified as a local
81-25 recording agent.]
81-26 [(2) Upon the death of a duly licensed local recording
81-27 agent, who is a sole proprietorship, unless otherwise provided by
82-1 the last will of such deceased agent, the surviving spouse and
82-2 children, if any, of such deceased agent, or a trust for such
82-3 spouse or children, may share in the profits of the continuance of
82-4 the agency business of said deceased agent, provided such agency
82-5 business is continued by a duly licensed local recording agent.
82-6 Said surviving spouse, trusts or children, may participate in such
82-7 profits during the lifetime of such surviving spouse and said
82-8 children. Said surviving spouse, trusts or children shall not be
82-9 required to qualify as local recording agents in order to
82-10 participate in the profits of such agency, but shall not do or
82-11 perform any act of a local recording agent in connection with the
82-12 continuance of such agency business without first having been duly
82-13 licensed as a local recording agent; provided, however, that a
82-14 duly licensed local recording agent who is a sole proprietorship
82-15 may transfer an interest in his agency to his children, or a trust
82-16 for same, and may operate such interest for their use and benefit;
82-17 and such children may share in the profits of such local recording
82-18 agency during their lifetime, and during such time shall not be
82-19 required to qualify as a local recording agent in order to
82-20 participate in such profits, but shall not do or perform any act of
82-21 a local recording agent in connection with such agency business
82-22 without first having been duly licensed as a local recording agent.]
82-23 [(3) Upon the death of a shareholder in a corporate licensed
82-24 local recording agency, the surviving spouse and children, if any,
82-25 of such deceased shareholder, or a trust for such surviving spouse
82-26 and children, may share in the profits of such corporate agency
82-27 during the lifetime of such surviving spouse or children, as the
83-1 case may be, if and as provided by a contract entered into by and
83-2 between all of the shareholders and the corporation. Any such
83-3 surviving spouse, surviving children, or trusts shall not be
83-4 required to individually qualify as a local recording agent in
83-5 order to participate in such profits, but shall not do or perform
83-6 any act of a local recording agency on behalf of such corporation
83-7 without having qualified as a local recording agent; provided,
83-8 however, that a shareholder in a corporate licensed local recording
83-9 agent, may, if provided by a contract entered into by and between
83-10 all of the shareholders and the corporation, transfer an interest
83-11 in the agency to his children or a trust for same, and such
83-12 children or trusts may share in the profits of such agency to the
83-13 extent of such interest during their lifetime. Such children or
83-14 trusts shall not be required to qualify as a local recording agent
83-15 to participate in such profits, but shall not do or perform any act
83-16 of a local recording agent on behalf of such corporation without
83-17 having qualified as a local recording agent.]
83-18 [(4) Except as provided in Subsections (1), (2), and (3)
83-19 above, and as may be provided in Section 6a, Article 21.14 of the
83-20 Insurance Code, no person shall be entitled to perform any act of a
83-21 local recording agent nor in any way participate as a partner or
83-22 corporate shareholder in the profits of any local recording agent,
83-23 without first having qualified as a duly licensed local recording
83-24 agent and having successfully passed the examination required by
83-25 the Insurance Code; provided, however, that all persons, or trusts
83-26 for any person, that received licenses before March 1, 1963, as
83-27 silent, inactive, or non-active partners, or who are silent,
84-1 inactive, or non-active partners in an agency which was so
84-2 qualified before such date, shall continue to receive licenses, or
84-3 renewals thereof, as partners in such agency or in any successor
84-4 agency, providing: (a) that such persons are members of an agency
84-5 in which there is at least one partner who has qualified as a duly
84-6 licensed local recording agent; (b) that such non-active partner
84-7 or partners do not actively solicit insurance; and (c) that such
84-8 agency is not a limited partnership.]
84-9 [(5) Notwithstanding any provision of this article or this
84-10 code to the contrary, a bank located and doing business in a place
84-11 with a population of 5,000 or less that owns a licensed bank
84-12 operating subsidiary, as defined by state or federal law, that is
84-13 also located and doing business in a place with a population of
84-14 5,000 or less may receive profits from the licensed bank operating
84-15 subsidiary. To advertise under the bank name or participate in the
84-16 insurance operation other than by receiving profits from the
84-17 insurance business, the bank must hold an agent license. Nothing
84-18 in this section permits a bank or any affiliate to pay commissions
84-19 or other valuable consideration to any nonlicensed employees, and a
84-20 bank may not pay, credit, or otherwise reward particular
84-21 nonlicensed units or geographic locations of the bank or any of its
84-22 affiliates with a portion of the commission.]
84-23 [Sec. 4. ACTING WITHOUT LICENSE FORBIDDEN. (a) It shall be
84-24 unlawful for any person, firm, partnership, corporation or bank, or
84-25 any partner, officer, director, employee, or shareholder of a
84-26 corporation, or any officer, director, or employee of a bank to act
84-27 as a local recording agent or solicitor in procuring business for
85-1 any insurance company, corporation, interinsurance exchange,
85-2 mutual, reciprocal, association, Lloyds or other insurance carrier,
85-3 until that person or entity shall have in force the license
85-4 provided for herein.]
85-5 [(b) No insurer doing business in this state shall pay
85-6 directly or indirectly any commission, or other valuable
85-7 consideration, to any person, firm, partnership, corporation, or
85-8 bank for services as a local recording agent within this state,
85-9 unless such person, firm, partnership, corporation, or bank shall
85-10 hold a currently valid license and appointment to act as a local
85-11 recording agent as required by the laws of this state; nor shall
85-12 any person, firm, partnership, corporation, or bank other than a
85-13 duly licensed and appointed local recording agent accept any such
85-14 commission or other valuable consideration; provided, however,
85-15 that nothing contained in this subsection shall prohibit an
85-16 assigned risk pool or assigned risk plan, duly authorized to
85-17 operate by the laws of this state, from paying commissions, or
85-18 other valuable consideration, to a duly licensed person, firm,
85-19 partnership, corporation, or bank for services as a local recording
85-20 agent.]
85-21 [(c) No licensed local recording agent, managing general
85-22 agent, or surplus lines agent doing business in this state shall
85-23 pay directly or indirectly any commission, or other valuable
85-24 consideration, to any person, firm, partnership, corporation, or
85-25 bank for services as a local recording agent within this state,
85-26 unless such person, firm, partnership, corporation, or bank shall
85-27 hold a currently valid license to act as a local recording agent as
86-1 required by the laws of this state; nor shall any person, firm,
86-2 partnership, corporation, or bank other than a duly licensed local
86-3 recording agent accept any such commission or other valuable
86-4 consideration.]
86-5 [(d) No local recording agent doing business in this state
86-6 shall pay directly or indirectly any commission, or other valuable
86-7 consideration, to any person for services as a solicitor within
86-8 this state, unless such person shall hold a currently valid license
86-9 and appointment to act as a solicitor for such local recording
86-10 agent as required by the laws of this state; nor shall any person
86-11 other than a duly licensed and appointed solicitor accept any such
86-12 commission or other valuable consideration.]
86-13 [Sec. 5. ACTIVE AGENTS OR SOLICITORS ONLY TO BE LICENSED.
86-14 No license shall be granted to any person, firm, partnership,
86-15 corporation, or bank as a local recording agent or to a person as a
86-16 solicitor, for the purpose of writing any form of insurance, unless
86-17 it is found by the department that such person, firm, partnership,
86-18 corporation, or bank is or intends to be, actively engaged in the
86-19 soliciting or writing of insurance for the public generally; that
86-20 each person or individual of a firm is a resident of Texas and is
86-21 to be actively engaged in good faith in the business of insurance,
86-22 and that the application is not being made in order to evade the
86-23 laws against rebating and discrimination either for the applicant
86-24 or for some other person, firm, partnership, corporation, or bank.
86-25 Nothing herein contained shall prohibit an applicant insuring
86-26 property which the applicant owns or in which the applicant has an
86-27 interest; but it is the intent of this Section to prohibit coercion
87-1 of insurance and to preserve to each citizen the right to choose
87-2 that individual's own agent or insurance carrier, and to prohibit
87-3 the licensing of an individual, firm, partnership, corporation, or
87-4 bank to engage in the insurance business principally to handle
87-5 business which the applicant controls only through ownership,
87-6 mortgage or sale, family relationship or employment, which shall be
87-7 taken to mean that an applicant who is making an original
87-8 application for license shall show the department that the
87-9 applicant has a bona fide intention to engage in business in which,
87-10 in any calendar year, at least twenty-five per cent (25%) of the
87-11 total volume of premiums shall be derived from persons or
87-12 organizations other than applicant and from property other than
87-13 that on which the applicant shall control the placing of insurance
87-14 through ownership, mortgage, sale, family relationship or
87-15 employment. Nothing herein contained shall be construed to
87-16 authorize a partnership, corporation, or bank to receive a license
87-17 as a solicitor.]
87-18 [Sec. 5a. REQUIREMENTS AS TO KNOWLEDGE OR INSTRUCTION FOR
87-19 LOCAL RECORDING AGENT'S LICENSE. (a) Every applicant for local
87-20 recording agent's license from and after October 1, 1971, shall
87-21 upon the successful passage of the examination for local recording
87-22 agent's license as promulgated by the State Board of Insurance
87-23 pursuant to the provisions of this Article 21.14 be issued a
87-24 temporary local recording agent's license. The holder of a
87-25 temporary local recording agent's license shall have the same
87-26 authority and be subject to the same provisions of the law as local
87-27 recording agents until such temporary license shall expire. Each
88-1 such temporary license so issued shall expire upon the happening of
88-2 any one of the following, whichever shall first occur, to wit:]
88-3 [(i) The issuance of a local recording agent's license
88-4 to such person;]
88-5 [(ii) One year from date of issuance of the temporary
88-6 local recording agent's license.]
88-7 [Each such person receiving a temporary license as set out
88-8 above shall within one (1) year from the issue date of such
88-9 temporary license complete to the satisfaction of the State Board
88-10 of Insurance one of the following courses of study:]
88-11 [(i) Classroom courses in insurance satisfactory to
88-12 the State Board of Insurance at a school, college, junior college
88-13 or extension thereof; or]
88-14 [(ii) An insurance company or agents' association
88-15 school approved by the State Board of Insurance; or]
88-16 [(iii) A correspondence course in insurance approved
88-17 by the State Board of Insurance.]
88-18 [Upon the successful completion of any one of the above
88-19 courses of study within the one year period, the temporary agent
88-20 shall then be entitled to receive from the State Board of Insurance
88-21 his local recording agent's license.]
88-22 [(b) Provided, however, none of the provisions of this
88-23 section shall apply to the following:]
88-24 [(1) To any person holding a license as a local
88-25 recording agent upon the effective date of this Act.]
88-26 [(2) To any person applying for an emergency local
88-27 recording agent's license under the provisions of Section 6a of
89-1 Article 21.14 of the Insurance Code of Texas.]
89-2 [(3) To any person who holds the designation Chartered
89-3 Property and Casualty Underwriter (C.P.C.U.) from the American
89-4 Institute for C.P.C.U., the designation Certified Insurance
89-5 Counselor (C.I.C.) from the national Society of Certified Insurance
89-6 Counselors, or the designation Accredited Adviser in Insurance
89-7 (A.A.I.) from the Insurance Institute of America.]
89-8 [(4) To any person who has a bachelor's degree from a
89-9 four-year accredited college or university with a major in
89-10 insurance.]
89-11 [(5) To any person who within two (2) years
89-12 immediately preceding the filing of an application was a licensed
89-13 agent in good standing in the state from which the person moved to
89-14 Texas, provided such state makes similar provision for those agents
89-15 who may move from Texas to such state.]
89-16 [(6) To any person desiring to apply for a license to
89-17 solicit and write exclusively all forms of insurance authorized to
89-18 be solicited and written in Texas covering the ownership,
89-19 operation, maintenance or use of any motor vehicle, its accessories
89-20 and equipment, designed for use upon the public highways, including
89-21 trailers and semitrailers. Such person shall continue to apply for
89-22 and qualify to be licensed under the other provisions of Article
89-23 21.14 of the Insurance Code of Texas. Provided, such applicant
89-24 shall be required to take and pass, to the satisfaction of the
89-25 Texas Department of Insurance, an examination, promulgated by said
89-26 department, covering only those forms of insurance referred to in
89-27 this paragraph. Provided, when such a person so applies and
90-1 qualifies, the person shall be issued a license which shall contain
90-2 on the face of said license the following language: "Motor vehicle
90-3 insurance only." An agent holding such a limited license hereby
90-4 created shall solicit only those forms of insurance hereinabove
90-5 provided, but shall be subject to all other laws relating to local
90-6 recording agents.]
90-7 [(c) There is hereby created an Agents' Education Advisory
90-8 Board whose duties shall be to advise with and make recommendations
90-9 to the State Board of Insurance concerning the curriculum, course
90-10 content and schools to be approved under Subsection (a) above. The
90-11 members of said Advisory Board shall be appointed by the chairman
90-12 of the State Board of Insurance and shall serve for one year, from
90-13 September 1 to August 31, or until their successors are appointed.
90-14 Said Advisory Board shall be composed of the following persons:
90-15 Two (2) members, each of whom shall be a resident of Texas and have
90-16 a minimum of ten (10) years' experience as an executive of a fire
90-17 and casualty company doing business in Texas and whose company
90-18 operates an agents' school; two (2) members, each of whom shall be
90-19 a licensed local recording agent in Texas with a minimum of ten
90-20 (10) years' experience as an agent; and one (1) member who shall be
90-21 a teacher of insurance at a four-year accredited college or
90-22 university in Texas. Said Advisory Board shall meet at the offices
90-23 of the State Board of Insurance upon call of the chairman of the
90-24 State Board of Insurance and the members of said Advisory Board
90-25 shall be paid out of the Recording Agents License Fund for their
90-26 actual and necessary expenses incurred in connection with their
90-27 attendance at said meetings.]
91-1 [Sec. 5b. CONTINUING EDUCATION. (a) The State Board of
91-2 Insurance shall adopt a procedure for certifying and shall certify
91-3 continuing education programs for agents. Participation in the
91-4 programs is mandatory for all agents licensed under this article.
91-5 The State Board of Insurance shall exempt agents who have been
91-6 licensed for 20 years or more on or after September 1, 1992, and
91-7 shall have the rulemaking authority to provide for other reasonable
91-8 exemptions. No agent shall be required to complete more than 15
91-9 hours of continuing education per year. An agent licensed under
91-10 both Articles 21.07-1 and 21.14 of this code and any subsequent
91-11 amendments may elect to satisfy the continuing education
91-12 requirements of either article and shall not be required to
91-13 complete a total of more than 15 hours of continuing education per
91-14 year.]
91-15 [(b) On written request of the agent, the State Board of
91-16 Insurance may extend the time for the agent to comply with the
91-17 continuing education requirements of this section or may exempt the
91-18 agent from some or all of the requirements for a licensing period
91-19 if the board finds that the agent is unable to comply with the
91-20 requirements because of illness, medical disability, or another
91-21 extenuating circumstance beyond the control of the agent. The
91-22 criteria for such exemptions and extensions shall be established by
91-23 rule.]
91-24 [Sec. 5c. ADVISORY COUNCIL. (a) An advisory council of
91-25 nine members shall be appointed by the State Board of Insurance to
91-26 furnish the Board with information and assistance in the conduct of
91-27 the continuing education program for agents licensed under Articles
92-1 21.07-1 and 21.14.]
92-2 [(b) Four of the members of the advisory council must be
92-3 representatives of the general public. A public representative may
92-4 not be:]
92-5 [(1) an officer, director, or employee of an insurance
92-6 company, insurance agency, agent, broker, solicitor, adjuster, or
92-7 any other business entity regulated by the State Board of
92-8 Insurance;]
92-9 [(2) a person required to register with the secretary
92-10 of state under Chapter 305, Government Code; or]
92-11 [(3) related to a person described by Subdivision (1)
92-12 or (2) of this subsection within the second degree of affinity or
92-13 consanguinity.]
92-14 [Sec. 5d. JURISDICTION FOR CONTINUING EDUCATION.
92-15 Notwithstanding the rules or regulations of any other state agency,
92-16 the board has sole jurisdiction for all matters relating to the
92-17 continuing education of insurance agents who are licensed under
92-18 this Article.]
92-19 [Sec. 6. EXAMINATION REQUIRED; EXCEPTIONS. (a) If
92-20 applicant for a local recording agent's license has not prior to
92-21 date of such application, been licensed as a local recording agent,
92-22 or if the applicant for a solicitor's license has not been licensed
92-23 as a local recording agent or as a solicitor prior to date of such
92-24 application, the Board shall require such applicant to submit to a
92-25 written examination covering all kinds of insurance or contracts,
92-26 which license if granted, will permit the applicant to solicit.]
92-27 [(b) Any applicant for local recording agent's license who
93-1 has prior to the date of such application been licensed as a local
93-2 recording agent, shall be entitled to a local recording agent's
93-3 license without examination, provided the other requirements of
93-4 this article are met. Any applicant for solicitor's license who
93-5 has been licensed as a local recording agent or as a solicitor
93-6 prior to date of such application, shall be entitled to a
93-7 solicitor's license without an examination, provided the other
93-8 requirements of this article are met.]
93-9 [(c) The Board by rule shall apply different examination
93-10 standards to a solicitor employed as an insurance service
93-11 representative than those applied to other solicitors.]
93-12 [Sec. 6a. DEATH, DISABILITY OR INSOLVENCY; EMERGENCY LICENSE
93-13 WITHOUT EXAMINATION. In event of death or disability of a local
93-14 recording agent or in event a local recording agent is found to be
93-15 insolvent and unable to pay for premiums coming to his hands as
93-16 such local recording agent, the Board may issue to an applicant for
93-17 local recording agent's license an emergency local recording
93-18 agent's license for a period of ninety (90) days in any twelve (12)
93-19 consecutive months and at the Board's option, an additional period
93-20 up to ninety (90) days without an examination provided the other
93-21 requirements of this article are met and if it is established to
93-22 the satisfaction of the Board that such emergency license is
93-23 necessary for the preservation of the agency assets of a deceased
93-24 or disabled local recording agent or of an insolvent local
93-25 recording agent.]
93-26 [Sec. 7. CONDUCT OF EXAMINATIONS; NOTICE; MANUAL OF
93-27 QUESTIONS AND ANSWERS. Unless the State Board of Insurance accepts
94-1 a qualifying examination administered by a testing service, as
94-2 provided under Article 21.01-1, Insurance Code, as amended, all
94-3 examinations provided by this article shall be conducted by the
94-4 State Board of Insurance, and shall be held not less frequently
94-5 than one each sixty (60) days every year at times and places
94-6 prescribed by the State Board of Insurance, of which applicants
94-7 shall be notified by the State Board of Insurance in writing ten
94-8 (10) days prior to the date of such examinations, and shall be
94-9 conducted in writing in either the English or Spanish language.
94-10 Provided, further, that printed copies of a manual of questions and
94-11 answers thereto pertaining to the examination published under the
94-12 direction of the State Board of Insurance shall be made available
94-13 to all companies, general agents, and managers for the use of their
94-14 prospective agents, to all agents for the use of their prospective
94-15 solicitors in preparing for such examination. The questions to be
94-16 asked on such examination shall be based upon the questions and
94-17 answers contained in the manual.]
94-18 [Sec. 8. EXPIRATION OF LICENSE; RENEWAL. Except as may be
94-19 provided by a staggered renewal system adopted under Article
94-20 21.01-2 of this code, every license issued to a local recording
94-21 agent or a solicitor shall expire two years from the date of its
94-22 issue, unless a completed application to qualify for the renewal of
94-23 any such license shall be filed with the State Board of Insurance
94-24 and a nonrefundable fee paid on or before such date, in which event
94-25 the license sought to be renewed shall continue in full force and
94-26 effect until renewed or renewal is denied.]
94-27 [Sec. 9. FEES PAYABLE BEFORE EXAMINATION. Unless the State
95-1 Board of Insurance accepts a qualifying examination administered by
95-2 a testing service, as provided under Article 21.01-1, Insurance
95-3 Code, as amended, applicants required to be examined shall, at time
95-4 and place of examination, pay prior to being examined the following
95-5 fees: For a local recording agent's license a fee in an amount not
95-6 to exceed $50 as determined by the State Board of Insurance and for
95-7 a solicitor's license a fee in an amount not to exceed $20 as
95-8 determined by the State Board of Insurance. The fees paid under
95-9 this section shall not be returned for any reason other than
95-10 failure to appear and take the examination after the applicant has
95-11 given at least 24 hours' notice of an emergency situation to the
95-12 State Board of Insurance and received board approval. A new fee
95-13 shall be paid before each and every examination.]
95-14 [Sec. 10. RENEWAL FEES. (a) An applicant for the renewal
95-15 of a local recording agent's license shall pay, at the time the
95-16 renewal application is filed, a fee in an amount not to exceed $50
95-17 as determined by the State Board of Insurance. An applicant for
95-18 the renewal of a solicitor's license shall pay, at the time the
95-19 renewal application is filed, a fee in an amount not to exceed $20
95-20 as determined by the State Board of Insurance.]
95-21 [Sec. 11. ISSUANCE OF LICENSE. (a) Whenever the provisions
95-22 of this article have been complied with, the Board shall issue to
95-23 any applicant the license applied for where such applicant shall
95-24 have satisfactorily passed the examination prescribed by the State
95-25 Board of Insurance, and who shall possess the other qualifications
95-26 required by this article.]
95-27 [(b) The Commissioner of Insurance shall collect in advance
96-1 from agents requesting duplicate licenses a fee not to exceed $20.
96-2 The State Board of Insurance shall determine the amount of the fee.]
96-3 [Sec. 12. NOTICE TO COMMISSIONER OF INSURANCE OF APPOINTMENT
96-4 OF LOCAL RECORDING AGENT BY INSURANCE COMPANY. (a) After a person
96-5 or firm shall be granted a license as a local recording agent in
96-6 this state, that person or firm shall be authorized to act as such
96-7 local recording agent in this state, only after and during the time
96-8 such person or firm has been authorized so to do, by an insurance
96-9 company having a permit to do business in this state; and when so
96-10 authorized each company or carrier or its general or state or
96-11 special agent making the appointment shall immediately notify the
96-12 Commissioner of Insurance, on such form as the Commissioner may
96-13 require, of the appointment. If approval of an additional
96-14 appointment is not received from the Commissioner before the eighth
96-15 day after the date on which the completed application and fee were
96-16 received by the Commissioner, the agent and the insurance company
96-17 may assume that the Commissioner approves the application, and the
96-18 agent may act for the insurance company. The agent shall be
96-19 required to pay a nonrefundable fee of $16.00 for each appointment
96-20 applied for, which fee shall accompany the notice, and such person
96-21 or firm shall be presumed to be the agent for such company in this
96-22 state until such company or its general or state or special agent
96-23 shall have delivered written notice to the Commissioner of
96-24 Insurance that such appointment has been withdrawn.]
96-25 [(b) Every insurance carrier shall, upon termination for
96-26 cause of the appointment of any agent, immediately file with the
96-27 State Board of Insurance a statement of the facts relative to the
97-1 termination of the appointment and the date and cause thereof. The
97-2 Board shall thereupon record the termination of the appointment of
97-3 such agent to represent such insurance carrier in this state. The
97-4 agent terminated for cause shall receive from the insurance carrier
97-5 a copy of the notice sent to the State Board of Insurance.]
97-6 [(c) Any information, document, record or statement required
97-7 to be made or disclosed to the Board pursuant to this Article shall
97-8 be deemed confidential and privileged unless or until introduced as
97-9 evidence in an administrative hearing.]
97-10 [(d) No liability may be imposed on any insurance carrier,
97-11 its employees or agents, or any other person, acting without
97-12 malice, providing the information required to be disclosed pursuant
97-13 to this section.]
97-14 [Sec. 13. APPLICATION FOR SOLICITOR'S LICENSE. When any
97-15 local recording agent who has been appointed by an insurance
97-16 carrier having a permit to do business in this State shall desire
97-17 to appoint a solicitor in the operation of his business, he and a
97-18 company jointly shall make application for a license for such
97-19 solicitor to the Board of Insurance Commissioners, in such form as
97-20 the Board may require.]
97-21 [Sec. 14. NOTICE TO INSURANCE COMMISSIONERS OF SOLICITOR'S
97-22 APPOINTMENT; AUTHORITY TO SOLICIT. (a) No solicitor shall be
97-23 authorized to solicit insurance until after the State Board of
97-24 Insurance shall have been notified by a local recording agent of
97-25 his appointment, and no local recording agent shall accept business
97-26 tendered by a solicitor until such local recording agent has given
97-27 notice to the State Board of Insurance of such solicitor's
98-1 appointment as such, and until such solicitor has been licensed by
98-2 the State Board of Insurance. No solicitor shall have outstanding
98-3 at any time a notification of appointment from more than one local
98-4 recording agent, and a solicitor shall solicit insurance only in
98-5 the name of and for the account of the local recording agent by
98-6 whom he has been appointed.]
98-7 [(b) If approval of an appointment of a currently licensed
98-8 solicitor is not received from the Commissioner before the eighth
98-9 day after the date on which the completed application and
98-10 nonrefundable fee were received by the Commissioner, the solicitor
98-11 and local recording agent may assume that the Commissioner approves
98-12 the application, and the solicitor may act for the local recording
98-13 agent.]
98-14 [(c) A licensed solicitor's appointment may be terminated
98-15 either by the local recording agent who appointed the solicitor or
98-16 by the solicitor on the filing of notice with the Board of the
98-17 termination.]
98-18 [(d) Upon termination for cause of the appointment of any
98-19 solicitor, the local recording agent shall immediately file with
98-20 the State Board of Insurance a statement of the facts relative to
98-21 the termination of the appointment and the date and cause thereof.
98-22 The Board shall thereupon record the termination of the appointment
98-23 of such solicitor to represent such local recording agent. The
98-24 solicitor terminated for cause shall receive from the local
98-25 recording agent a copy of the notice sent to the State Board of
98-26 Insurance.]
98-27 [(e) Any information, document, record or statement required
99-1 to be made or disclosed to the Board pursuant to this Article shall
99-2 be deemed privileged and confidential unless or until introduced
99-3 into evidence in an administrative hearing.]
99-4 [(f) No liability may be imposed on any insurance carrier,
99-5 its employees or agents, or any other person, acting without
99-6 malice, providing the information required to be disclosed pursuant
99-7 to this section.]
99-8 [Sec. 15. FIRE INSURANCE IN EXCESS OF VALUE, WRITING OF
99-9 FORBIDDEN. It shall be unlawful for any local recording agent or
99-10 solicitor for an insurance company or insurance carrier knowingly
99-11 to grant, write or permit a greater amount of insurance against
99-12 loss by fire than the reasonable value of the subject of insurance.]
99-13 [Sec. 16. SUSPENSION OR REVOCATION OF LICENSE. (a) The
99-14 license of any local recording agent shall be suspended during a
99-15 period in which the agent does not have outstanding a valid
99-16 appointment to act as an agent for an insurance company. The Board
99-17 shall end the suspension on receipt of evidence satisfactory to the
99-18 board that the agent has a valid appointment. The Board shall
99-19 cancel the license of a solicitor if the solicitor does not have
99-20 outstanding a valid appointment to act as a solicitor for a local
99-21 recording agent, and shall suspend the license during a period that
99-22 the solicitor's local recording agent does not have outstanding a
99-23 valid appointment to act as an agent under this Article.]
99-24 [(b) The department may discipline any local recording agent
99-25 or solicitor or deny an application under Section 5, Article
99-26 21.01-2, of this code if it finds that the applicant, individually
99-27 or through any officer, director, or shareholder, for or holder of
100-1 such license:]
100-2 [(1) Has wilfully violated any provision of the
100-3 insurance laws of this state;]
100-4 [(2) Has intentionally made a material misstatement in
100-5 the application for such license;]
100-6 [(3) Has obtained, or attempted to obtain, such
100-7 license by fraud or misrepresentation;]
100-8 [(4) Has misappropriated or converted to the
100-9 applicant's or licensee's own use or illegally withheld money
100-10 belonging to an insurer or an insured or beneficiary;]
100-11 [(5) Has been guilty of fraudulent or dishonest acts;]
100-12 [(6) Has materially misrepresented the terms and
100-13 conditions of any insurance policies or contracts;]
100-14 [(7) Has made or issued, or caused to be made or
100-15 issued, any statement misrepresenting or making incomplete
100-16 comparisons regarding the terms or conditions of any insurance
100-17 contract legally issued by an insurance carrier for the purpose of
100-18 inducing or attempting to induce the owner of such contract to
100-19 forfeit or surrender such contract or allow it to expire for the
100-20 purpose of replacing such contract with another;]
100-21 [(8) Is convicted of a felony;]
100-22 [(9) Is guilty of rebating any insurance premium or
100-23 discriminating as between insureds;]
100-24 [(10) Is not engaged in the soliciting or writing of
100-25 insurance for the public generally as required by Section 5 of this
100-26 Article; or]
100-27 [(11) Is afflicted with a disability as that term is
101-1 defined by Subsection (a) of Article 21.15-6 of this code.]
101-2 [(c) The State Board of Insurance may order that a local
101-3 recording agent or solicitor who is afflicted with a disability be
101-4 placed on disability probation under the terms and conditions
101-5 specified under Article 21.15-6 of this code instead of taking
101-6 disciplinary action under Subsection (b) of this section.]
101-7 [(d) A license applicant or licensee whose license
101-8 application or license has been denied, refused, or revoked under
101-9 this section may not apply for any license as an insurance agent
101-10 before the first anniversary of the effective date of the denial,
101-11 refusal, or revocation, or, if the applicant or licensee seeks
101-12 judicial review of the denial, refusal, or revocation before the
101-13 first anniversary of the date of the final court order or decree
101-14 affirming that action. The Commissioner may deny an application
101-15 timely filed if the applicant does not show good cause why the
101-16 denial, refusal, or revocation of the previous license application
101-17 or license should not be considered a bar to the issuance of a new
101-18 license. This subsection does not apply to an applicant whose
101-19 license application was denied for failure to pass a required
101-20 written examination.]
101-21 [Sec. 18. APPEAL. If the Commissioner refuses an
101-22 application for license as provided by this article, or suspends,
101-23 revokes, or refuses to renew any license at a hearing as provided
101-24 by this article, and if the applicant or accused is dissatisfied
101-25 with the action of the Commissioner, the applicant or accused may
101-26 appeal from the action in accordance with Article 1.04 of this
101-27 Code.]
102-1 [Sec. 19. NOTICE TO LAST ADDRESS. Where notice to the
102-2 applicant or accused is provided for in any part of this article,
102-3 notice by registered mail to his last known address shall be
102-4 sufficient.]
102-5 [Sec. 20. LIFE, HEALTH AND ACCIDENT INSURANCE, INAPPLICABLE
102-6 TO; OTHER EXCEPTIONS. The provisions of this article do not apply
102-7 to the Life, Health and Accident Insurance business or the Life,
102-8 Health and Accident Department of the companies engaged therein,
102-9 nor shall it apply to any of the following, namely:]
102-10 [(a) Any actual full-time home office salaried
102-11 employee of any insurance carrier licensed to do business in Texas,
102-12 other than an employee who solicits or receives an application for
102-13 the sale of insurance through an oral, written, or electronic
102-14 communication in accordance with Section 20A of this article.]
102-15 [(b) Any actual attorney in fact and its actual
102-16 traveling salaried representative as to business transacted through
102-17 such attorney in fact or salaried representative of any reciprocal
102-18 exchange or interinsurance exchange admitted to do business in
102-19 Texas.]
102-20 [(c) Any adjuster of losses, and/or inspector of
102-21 risks, for an insurance carrier licensed to do business in Texas.]
102-22 [(d) Any General Agent or State Agent or Branch
102-23 Manager representing an admitted and licensed insurance company or
102-24 carrier, or insurance companies or carriers, in a supervisory
102-25 capacity.]
102-26 [(e) The actual attorney in fact for any Lloyds.]
102-27 [(f) All incorporated or unincorporated mutual
103-1 insurance companies, their agents and representatives, organized
103-2 and/or operating under and by authority of Chapters 16 and 17 of
103-3 this code.]
103-4 [(g) Nothing in this entire article shall ever be
103-5 construed to apply to any member, agent, employee, or
103-6 representative of any county or farm mutual insurance company as
103-7 exempted under Chapters 16 and 17 of this code.]
103-8 [(h) Nothing in this article shall apply to the group
103-9 motor vehicle insurance business or the group motor vehicle
103-10 department of the companies engaged in that business.]
103-11 [(i) Salaried employees not involved in solicitation
103-12 or negotiation of insurance in the office of a local recording
103-13 agent who devote their full time to clerical and administrative
103-14 services, including the incidental taking of information from
103-15 customers and receipt of premiums in the office of a local
103-16 recording agent, provided the employees do not receive any
103-17 commissions and their compensation is not varied by the volume of
103-18 premiums taken and received.]
103-19 [Sec. 20A. FULL-TIME HOME OFFICE SOLICITORS: MANDATORY
103-20 REGISTRATION, CONTINUING EDUCATION, AND NOTIFICATION TO CONSUMERS;
103-21 DISCIPLINARY ACTIONS. (a) Any actual full-time home office
103-22 salaried employee of any insurance carrier licensed to do business
103-23 in Texas who solicits or receives an application for the sale of
103-24 insurance through an oral, written, or electronic communication
103-25 shall register with the commissioner.]
103-26 [(b) Any insurance carrier licensed to do business in Texas
103-27 whose general plan of operation includes the use of employees
104-1 described in Subsection (a) of this section shall certify to the
104-2 commissioner that such employees receive continuing education of
104-3 not less than 15 hours per year designed to give such employees:]
104-4 [(1) reasonable familiarity with the broad principles
104-5 of insurance, with licensing and regulatory laws, and with
104-6 provisions, terms, and conditions of the insurance which the
104-7 registrant transacts; and]
104-8 [(2) a fair and general understanding of the
104-9 obligations and duties of an insurer to an insured, including
104-10 training in ethical considerations.]
104-11 [(c) The registration of any actual full-time home office
104-12 salaried employee shall be suspended and the employer insurance
104-13 carrier may be disciplined in accordance with the insurance laws of
104-14 this state, if the commissioner finds that the registrant:]
104-15 [(1) has wilfully violated any provision of this code,
104-16 the laws of this state, or a rule of the commissioner;]
104-17 [(2) has been guilty of fraudulent or dishonest acts;]
104-18 [(3) has materially misrepresented the terms and
104-19 conditions of any insurance policies or contracts;]
104-20 [(4) has made or issued, or caused to be made or
104-21 issued, any statement misrepresenting or making incomplete
104-22 comparisons regarding the terms or conditions of any insurance
104-23 contract legally issued by an insurance carrier for the purpose of
104-24 inducing or attempting to induce the owner of such contract to
104-25 forfeit or surrender such contract or allow it to expire for the
104-26 purpose of replacing such contract with another;]
104-27 [(5) is guilty of rebating any insurance premium or
105-1 discriminating as between insureds; or]
105-2 [(6) has been convicted of a felony involving fraud or
105-3 breach of fiduciary duty.]
105-4 [(d) Registrants under this section shall disclose such
105-5 registration when making an oral, written, or electronic
105-6 communication to solicit or receive an application for the sale of
105-7 insurance.]
105-8 [(e) The commissioner shall adopt rules to implement the
105-9 provisions of this section.]
105-10 [Sec. 21. FEES, DISPOSITION OF; APPROPRIATIONS. The fees
105-11 herein provided for, when collected, shall be deposited in the
105-12 State Treasury to the credit of the State Board of Insurance
105-13 operating fund; provided that no expenditures shall be made from
105-14 said fund except under authority of the Legislature as set forth in
105-15 the General Appropriation Bill; provided further that no
105-16 appropriation shall ever be made out of the General Revenue Fund
105-17 for the purpose of administering this article or any provision
105-18 thereof.]
105-19 [Sec. 22. REBATES OR INDUCEMENTS FORBIDDEN. It shall be
105-20 unlawful for any local recording agent to pay, allow, give or offer
105-21 to pay, allow or give, directly or indirectly, any rebate of
105-22 premiums payable, any commission, or any paid employment or
105-23 contract for service of any kind or anything of value whatsoever,
105-24 or any valuable consideration or inducement whatever, not specified
105-25 in the policy or contract of insurance for or on account of the
105-26 solicitation or negotiation of contracts of insurance on property
105-27 or risks in this State to any person, firm or corporation, other
106-1 than a duly licensed solicitor appointed by such local recording
106-2 agent, or to another local recording agent.]
106-3 [It shall be unlawful for any solicitor to pay, allow or give
106-4 or offer to pay, allow or give, directly or indirectly, any rebate
106-5 of premiums payable, any commission, or any paid employment or
106-6 contract for service of any kind, or anything of value whatsoever,
106-7 or any valuable consideration or inducement whatever, not specified
106-8 in the policy or contract of insurance, for or on account of the
106-9 solicitation or negotiation of contracts of insurance on property
106-10 or risks in this State to any person, firm or corporation.]
106-11 [Sec. 23. REPEAL; LAWS NOT IN CONFLICT NOT AFFECTED; ACT
106-12 CUMULATIVE. All laws or parts of laws pertaining to any phase of
106-13 the insurance business, which are in conflict with this article,
106-14 shall be and the same are hereby repealed; but all laws, Civil and
106-15 Criminal, affecting insurance agents, and/or insurance companies or
106-16 insurance carriers or the insurance business, which are not in
106-17 conflict herewith, shall not be affected by the provisions of this
106-18 article; but this article shall be deemed cumulative of such laws.]
106-19 [Sec. 24. VIOLATION OF ACT. Any person or any member of any
106-20 firm, or any corporation or bank, or any officer, director,
106-21 shareholder or employee of any corporation or bank who violates any
106-22 of the provisions of Sections 4, 15 and 22 of this Article shall be
106-23 guilty of a misdemeanor, and on conviction in a court of competent
106-24 jurisdiction, shall be punished by a fine of not less than One
106-25 Dollar ($1.00) nor more than One Hundred Dollars ($100.00).]
106-26 [Sec. 25. ENFORCEMENT OF ARTICLE. The Attorney General, or
106-27 any District or County Attorney, or the Board of Insurance
107-1 Commissioners, may institute any injunction proceeding or such
107-2 other proceeding to enforce the provisions of this article, and to
107-3 enjoin any person, firm or corporation from engaging or attempting
107-4 to engage in any of the business in violation of this article or
107-5 any of the provisions thereof. The provisions of this section are
107-6 cumulative of the other penalties or remedies provided for in this
107-7 article.]
107-8 [Sec. 26. ADMINISTRATION OF ARTICLE. The administration of
107-9 the provision of this article shall be vested in the Board of
107-10 Insurance Commissioners, and of the administrative officer of the
107-11 various counties in which the violation of any provision of this
107-12 article may occur; and the personnel charged with the direct
107-13 supervision of the article, except the regularly elected law
107-14 enforcement officers and their appointees, shall be responsible to
107-15 and serve at the will of the Board of Insurance Commissioners. It
107-16 shall be the duty of the Board of Insurance Commissioners and the
107-17 Attorney General, and of the District and County Attorneys in
107-18 counties where violations of this article may occur, to see that
107-19 its provisions are at all times obeyed, and to make such
107-20 investigations as will prevent or detect the violation of any
107-21 provision thereof. The Board of Insurance Commissioners shall at
107-22 once lay before the District or County Attorney of the proper
107-23 county, any evidence which shall come to its knowledge, of
107-24 criminality or threatened criminality under this article. In the
107-25 event of the neglect or refusal of such Attorney to institute and
107-26 prosecute such violation, or to enforce the other remedies provided
107-27 by this article, the Board shall submit such evidence to the
108-1 Attorney General, who is hereby authorized to proceed therein with
108-2 all the rights, privileges and powers conferred by law upon
108-3 District or County Attorneys. Provided, any person having
108-4 knowledge of the violation of the provisions of this article may
108-5 file a complaint for such violation with the proper officers as in
108-6 other misdemeanor cases. The Board of Insurance Commissioners is
108-7 given the power and authority, as a requisite for granting or
108-8 renewing a license to insurance companies or insurance carriers,
108-9 their local recording agents or solicitors, to require answers
108-10 under oath to any questions propounded by the said Board or under
108-11 its authority, and touching any phase of insurance business in the
108-12 State of Texas in which said insurance company or insurance
108-13 carrier, or such person or firm, shall be engaged, and to require
108-14 such person or firm seeking appointment as local recording agent to
108-15 submit his books, records, and accounts, insofar as they may be
108-16 material to any phase of insurance business, to examination and
108-17 inspection by the Board or any person acting under its authority.]
108-18 [Sec. 27. RULES. In addition to other rules required or
108-19 authorized by this article, the commissioner may adopt rules in
108-20 accordance with federal law applicable to the regulation of the
108-21 sale of insurance that are necessary and proper to carry out the
108-22 provisions of this article.]
108-23 ARTICLE 4. NONRESIDENT AGENT LICENSE
108-24 SECTION 4.01. Section 1, Article 21.11, Insurance Code, is
108-25 amended to read as follows:
108-26 Sec. 1. NONRESIDENT AGENT LICENSE. (a) The
108-27 [Notwithstanding Sections 3(a) and (b), Article 21.14, of this
109-1 code, the] department shall license a person who is not a resident
109-2 of this state to act as a nonresident agent if:
109-3 (1) the applicant for the nonresident license has
109-4 submitted to the department:
109-5 (A) an application on a form as prescribed by
109-6 the department; and
109-7 (B) the nonrefundable license application fee;
109-8 and
109-9 (2) the department finds that the applicant for the
109-10 nonresident license:
109-11 (A) holds a license in good standing as an agent
109-12 in the applicant's state of residence and that state will grant a
109-13 nonresident agent's license on a reciprocal basis to a resident
109-14 agent of this state; or
109-15 (B) has:
109-16 (i) passed the examination for an agent's
109-17 license required under this code;
109-18 (ii) met the eligibility requirements
109-19 under Subsection (e) of this section;
109-20 (iii) satisfied the requirements for a
109-21 license for an individual under this code, including Section 2,
109-22 Article 21.07; and
109-23 (iv) satisfied the requirements for a
109-24 license for a corporation or partnership under Section 2, Article
109-25 21.07, of this code.
109-26 (b) The commissioner may enter into an agreement with the
109-27 appropriate official of another state as necessary to implement the
110-1 reciprocal licensing of nonresident agents [in accordance with
110-2 Article 21.14 of this code, subject to the limitations of this
110-3 article].
110-4 (c) The [(b) An applicant for issuance of a license under
110-5 this section must meet the requirements for issuance of a license
110-6 under Article 21.14 of this code, except that the] department may
110-7 [shall] waive any [of those] license requirements for an applicant
110-8 with a valid license from another state or jurisdiction if:
110-9 (1) that state or jurisdiction has license
110-10 requirements substantially equivalent to those of this state; or
110-11 (2) the waiver is necessary to promote reciprocal
110-12 licensing of nonresident agents among a majority of the states.
110-13 (d) The commissioner is the agent for service of process in
110-14 the manner provided by Section 3, Article 1.36, of this code in a
110-15 legal proceeding against a nonresident agent licensed to transact
110-16 business in this state if:
110-17 (1) the nonresident agent fails to appoint or maintain
110-18 an agent for service in this state;
110-19 (2) an agent for service is appointed but cannot with
110-20 reasonable diligence be found; or
110-21 (3) the license of the nonresident agent is revoked.
110-22 (e) An applicant for a nonresident agent's license from this
110-23 state who does not hold an insurance agent's license in the
110-24 applicant's state of residence shall, through the law enforcement
110-25 agency of the state of residence, submit a copy of the applicant's
110-26 criminal history records to the department. The department shall
110-27 use the criminal history records to determine eligibility for
111-1 issuance of a license in accordance with this subchapter and other
111-2 laws of this state.
111-3 SECTION 4.02. Sections 2(a) and (b), Article 21.11,
111-4 Insurance Code, are amended to read as follows:
111-5 (a) Except as otherwise specifically provided by this code
111-6 [section], a license issued under this article to an individual who
111-7 is not a resident of this state grants the same rights and
111-8 privileges afforded to a resident license holder [under a license
111-9 issued under Article 21.14 of this code].
111-10 (b) A person who holds a license issued under this article
111-11 and who is in compliance with the continuing education requirements
111-12 of the person's state of residence is exempt from the continuing
111-13 education requirements imposed under Article 21.01-1 of this code
111-14 [may not:]
111-15 [(1) maintain an office in this state;]
111-16 [(2) solicit insurance business in this state by any
111-17 method, including an oral, written, or electronic communication; or]
111-18 [(3) employ solicitors or others to directly or
111-19 indirectly solicit insurance in this state].
111-20 SECTION 4.03. Section 2(c), Article 21.11, Insurance Code, is
111-21 amended to read as follows:
111-22 (c) A person licensed as a nonresident agent in this state
111-23 who does not hold an insurance agent's license in the person's
111-24 state of residence shall comply with the continuing education
111-25 requirements imposed under Article 21.01-1 of this code [The
111-26 commissioner shall impose on a resident of another state or
111-27 jurisdiction of the United States who is an applicant for a license
112-1 or a holder of a license issued under this article any requirement
112-2 or restriction that:]
112-3 [(1) the other state or jurisdiction of the United
112-4 States imposes on a resident of this state who is a nonresident
112-5 applicant or license holder in that state or jurisdiction; and]
112-6 [(2) is in addition to or stricter than the
112-7 requirements or restrictions imposed under the insurance law of
112-8 this state on an applicant or license holder who is not a resident
112-9 of this state].
112-10 SECTION 4.04. Section 3, Article 21.11, Insurance Code, is
112-11 amended to read as follows:
112-12 Sec. 3. LIMITATIONS. (a) The department may issue a
112-13 reciprocal nonresident license to an applicant if the authority
112-14 granted by the license issued by the applicant's state of residence
112-15 is generally comparable to the authority granted by a license
112-16 issued by this state. [This article does not permit:]
112-17 [(1) any person or firm licensed solely as a broker in
112-18 the person's or firm's state of residence to be granted a license
112-19 under this article;]
112-20 [(2) a holder of a license issued under this article
112-21 to act as a surplus lines agent under Article 1.14-2 of this code
112-22 or to perform any of the acts permitted under Article 1.14-2 of
112-23 this code, except as provided under Section 10, Article 21.54, of
112-24 this code; or]
112-25 [(3) any person or firm who holds a license issued
112-26 under this article to engage in any form of direct solicitation of
112-27 insurance within this state.]
113-1 (b) A nonresident agent licensed under the reciprocal
113-2 licensing provisions of this code may not engage in a line of
113-3 insurance business in this state for which the agent is not
113-4 authorized in the agent's state of residence.
113-5 (c) This subchapter [The commissioner shall revoke a
113-6 nonresident agent's license issued under this article if the
113-7 commissioner finds that the license was obtained or is being used
113-8 for the purpose of transacting insurance through a local recording
113-9 agent in a manner that permits the individual licensed under this
113-10 article, by subterfuge, to transact insurance as a local recording
113-11 agent.]
113-12 [(c) In the circumstances described by Subsection (b) of
113-13 this section, the commissioner shall also revoke the license of the
113-14 affected local recording agent.]
113-15 [(d) A license revoked under Subsection (b) or (c) of this
113-16 section is not subject to reissuance before the fifth anniversary
113-17 of the date the revocation is effective.]
113-18 [(e) The commissioner shall order that any insurance
113-19 transacted under an arrangement described by Subsection (b) of this
113-20 section be canceled.]
113-21 [(f) Article 21.01-2 of this code] applies to licensing of a
113-22 nonresident agent under this article.
113-23 SECTION 4.05. Sections 4 and 5, Article 21.11, Insurance
113-24 Code, are amended to read as follows:
113-25 Sec. 4. HOME OFFICE EMPLOYEE. This article does not affect
113-26 the authority established under Section 7 [20], Article 21.14, of
113-27 this code of an actual full-time home office salaried employee of
114-1 an insurance carrier licensed to do business in this state.
114-2 Sec. 5. RULES. The commissioner may adopt rules as
114-3 necessary to implement this article and to meet the minimum
114-4 requirements of federal law and regulations.
114-5 ARTICLE 5. ADJUSTER LICENSE
114-6 SECTION 5.01. Sections 1(a) and (b), Chapter 407, Acts of
114-7 the 63rd Legislature, Regular Session, 1973 (Article 21.07-4,
114-8 Vernon's Texas Insurance Code), are amended to read as follows:
114-9 (a) "Adjuster" means an individual [any person] who, as an
114-10 independent contractor, or as an employee of an independent
114-11 contractor, adjustment bureau, association, insurance company or
114-12 corporation, general property and casualty [local recording] agent,
114-13 managing general agent, or self-insured, investigates or adjusts
114-14 losses on behalf of either an insurer or a self-insured, or any
114-15 person who supervises the handling of claims.
114-16 (b) "Adjuster" shall not include:
114-17 (1) an attorney at law who adjusts insurance losses
114-18 from time to time and incidental to the practice of law, and who
114-19 does not advertise or represent that he is an adjuster;
114-20 (2) a salaried employee of an insurer who is not
114-21 regularly engaged in the adjustment, investigation, or supervision
114-22 of insurance claims;
114-23 (3) persons employed only for the purpose of
114-24 furnishing technical assistance to a licensed adjuster, including,
114-25 but not limited to, photographers, estimators, private detectives,
114-26 engineers, handwriting experts, and attorneys at law;
114-27 (4) a licensed agent or general agent of an authorized
115-1 insurer who processes undisputed and/or uncontested losses for such
115-2 insurer under policies issued by said agent or general agent;
115-3 (5) a person who performs clerical duties with no
115-4 negotiations with the parties on disputed and/or contested claims;
115-5 (6) any person who handles claims arising under life,
115-6 accident and health insurance policies; [or]
115-7 (7) a person who is employed principally as a
115-8 right-of-way agent or right-of-way and claims agent and whose
115-9 primary responsibility is the acquisition of easements, leases,
115-10 permits, or other real property rights and whose claims handling
115-11 arises out of operations under those easements, leases, permits, or
115-12 other contracts or contractual obligations; or
115-13 (8) an individual who is employed to investigate
115-14 suspected fraudulent insurance claims but who does not adjust
115-15 losses or determine claims payments.
115-16 ARTICLE 6. SURPLUS LINES
115-17 SECTION 6.01. Section 2(a)(1), Article 1.14-2, Insurance
115-18 Code, is amended to read as follows:
115-19 (1) "Surplus lines agent" means:
115-20 (A) a general property and casualty [(i) is an]
115-21 agent authorized under Article 21.14 who is granted a surplus lines
115-22 license in accordance with this Article; or
115-23 (B) [, (ii) is] a managing general agent
115-24 [(authorized to be licensed and] licensed under the Managing
115-25 General Agents' Licensing Act[, Acts, 1967, 60th Legislature,
115-26 Chapter 727, codified by Vernon as] (Article 21.07-3, Vernon's
115-27 Texas Insurance Code) who is granted a surplus lines license in
116-1 accordance with this Article and who complies with the provisions
116-2 of this Article, except it is not necessary that the managing
116-3 general agent be licensed as a general property and casualty
116-4 [recording] agent[, or (iii) is a nonresident insurance agent
116-5 authorized under Article 21.11 and who is granted a surplus lines
116-6 license for the limited purpose of acting on behalf of a purchasing
116-7 group operating in this state in the placement of liability
116-8 insurance for risks located in this state].
116-9 SECTION 6.02. Section 2(a)(2), Article 1.14-2, Insurance
116-10 Code, is amended to read as follows:
116-11 (2) A [Each "]surplus lines agent,["] as a condition
116-12 of being licensed as a surplus lines agent and as a condition of
116-13 continuing to be licensed as a surplus lines agent, shall offer the
116-14 proof of financial responsibility [solvency and demonstrate
116-15 capacity in respect of responsibility to insureds under policies of
116-16 surplus lines insurance, or in the alternative show proof of
116-17 adequate bond and surety] in respect of [his] transactions with
116-18 insureds under policies of surplus lines insurance [and] as
116-19 required by [the] reasonable rules [and regulations] of the
116-20 commissioner [State Board of Insurance shall provide].
116-21 SECTION 6.03. Section 2(a)(3), Article 1.14-2, Insurance
116-22 Code, is amended to read as follows:
116-23 (3) Any surplus lines license granted to an agency
116-24 authorized under the Managing General Agents' Licensing Act
116-25 (Article 21.07-3, Vernon's Texas Insurance Code), but[, Acts, 1967,
116-26 60th Legislature, Chapter 727, that is] not [also] licensed under
116-27 Article 21.14 of this code, [the Insurance Code] shall be limited
117-1 to the acceptance of business originating through a regularly
117-2 licensed general property and casualty [recording] agent and does
117-3 [shall] not authorize the [such] surplus lines agency to transact
117-4 business directly with the applicant for insurance.
117-5 SECTION 6.04. Section 3(a), Article 1.14-2, Insurance Code,
117-6 is amended to read as follows:
117-7 (a) If insurance coverages of subjects resident, located or
117-8 to be performed in this state cannot be procured from licensed
117-9 insurers after diligent effort, such coverages, hereinafter
117-10 designated as surplus line insurance, may be procured from eligible
117-11 surplus lines insurers subject to the following conditions:
117-12 1. The insurance must be eligible for surplus lines
117-13 under Section 5.
117-14 2. The insurer must be an eligible surplus lines
117-15 insurer under Section 8.
117-16 3. The insurance must be placed through a licensed
117-17 Texas surplus lines agent [resident in this state].
117-18 4. The other applicable provisions of this section
117-19 must be complied with.
117-20 SECTION 6.05. Section 3A, Article 1.14-2, Insurance Code, is
117-21 amended to read as follows:
117-22 Sec. 3A. AUTHORITY OF COMMISSIONER [STATE BOARD OF
117-23 INSURANCE]. (a) The commissioner [State Board of Insurance] may
117-24 adopt [promulgate] rules necessary to:
117-25 (1) implement [enforce] this article; or
117-26 (2) satisfy requirements under federal law or
117-27 regulations.
118-1 (b) The commissioner [board] shall monitor the activities of
118-2 surplus lines agents to the extent necessary to protect the public
118-3 interest.
118-4 SECTION 6.06. Section 4(b), Article 1.14-2, Insurance Code,
118-5 is amended to read as follows:
118-6 (b) The department [Texas Department of Insurance] may issue
118-7 a surplus lines license to an applicant if the applicant submits a
118-8 properly completed license application and an application fee as
118-9 determined by the department and the department determines that the
118-10 applicant [an agent as defined by Subdivision (1) of Subsection (a)
118-11 of Section 2 of this article after the agent has]:
118-12 (1) is an individual who:
118-13 (A) is currently licensed as a general property
118-14 and casualty agent under Article 21.14 of this code or as a
118-15 managing general agent under the Managing General Agents' Licensing
118-16 Act (Article 21.07-3, Vernon's Texas Insurance Code);
118-17 (B) has passed the surplus lines license
118-18 examination administered under Article 21.01-1 of this code and
118-19 department rules; and
118-20 (C) provides proof of financial responsibility
118-21 as required under Section 2 of this article [remitted the
118-22 application fee set by the Texas Department of Insurance in an
118-23 amount not to exceed $50]; or
118-24 (2) is a corporation, limited liability company, or
118-25 partnership that:
118-26 (A) has at least one officer or director or at
118-27 least one active partner who has passed the surplus lines license
119-1 examination required under this article;
119-2 (B) is currently licensed as a general property
119-3 and casualty agent under Article 21.14 of this code or as a
119-4 managing general agent under the Managing General Agents' Licensing
119-5 Act (Article 21.07-3, Vernon's Texas Insurance Code);
119-6 (C) provides proof of financial responsibility
119-7 as required under Section 2 of this article; and
119-8 (D) conducts insurance activities under this
119-9 article only through an individual licensed under this subsection
119-10 [submitted a completed license application on a form approved by
119-11 the Texas Department of Insurance; and]
119-12 [(3) passed a qualifying examination approved by the
119-13 Texas Department of Insurance. If the agent is a general
119-14 partnership or a registered limited liability partnership, this
119-15 examination must be met by each natural person acting as a partner
119-16 in that partnership. If the agent is a corporation, this
119-17 examination requirement must be met by each natural person acting
119-18 as an officer, director, or shareholder of that corporation. If
119-19 the agent is a limited liability company, this examination
119-20 requirement must be met by each natural person acting as an
119-21 officer, manager, and member of that limited liability company].
119-22 SECTION 6.07. Section 4(c), Article 1.14-2, Insurance Code,
119-23 is amended to read as follows:
119-24 (c) In addition to the requirements of this article, the
119-25 administration and regulation of a surplus lines agent's license
119-26 is governed by Subchapter A, Chapter 21, of this code, except that
119-27 Article 21.07 of this code does not apply to a license issued under
120-1 this article. [Unless the State Board of Insurance adopts a system
120-2 for staggered renewal of licenses, as provided by Article 21.01-2
120-3 of this code, each license issued under this section is for a
120-4 two-year term that expires on December 31; however, the term of the
120-5 initial licensing period shall expire on December 31 of the year
120-6 following the year in which the license is issued. A license may
120-7 be renewed for periods of two years.]
120-8 SECTION 6.08. Section 4(d), Article 1.14-2, Insurance Code,
120-9 is amended to read as follows:
120-10 (d) If a license holder does not maintain the qualifications
120-11 necessary to obtain the license, the department may revoke or
120-12 suspend the license or deny the renewal of that license in
120-13 accordance with Article 21.01-2 of this code. [By filing a
120-14 completed written application in the form prescribed by the State
120-15 Board of Insurance and paying the nonrefundable renewal fee set by
120-16 the board in an amount not to exceed $50, an unexpired license may
120-17 be renewed on or before the expiration date of the license.]
120-18 SECTION 6.09. Section 15(a), Article 1.14-2, Insurance Code,
120-19 is amended to read as follows:
120-20 (a) Each surplus lines agent shall maintain [keep in his
120-21 office in this state] a full and true record of each surplus lines
120-22 contract procured by the agent [him], including a copy of the daily
120-23 report, if any, and showing such of the following items as may be
120-24 applicable:
120-25 1. Amount of the insurance and perils insured against;
120-26 2. Brief general description of property insured and
120-27 where located;
121-1 3. Gross premium charged;
121-2 4. Return premium paid, if any;
121-3 5. Rate of premium charged upon the several items of
121-4 property;
121-5 6. Effective date of the contract, and the terms
121-6 thereof;
121-7 7. Name and post office address of the insured;
121-8 8. Name and home office address of the insurer;
121-9 9. Amount collected from the insured; and
121-10 10. Other information as may be required by the
121-11 department [State Board of Insurance].
121-12 ARTICLE 7. CONFORMING AMENDMENTS
121-13 SECTION 7.01. Section 1, Article 3.71, Insurance Code, is
121-14 amended to read as follows:
121-15 Sec. 1. Notwithstanding any contrary or inconsistent
121-16 provision of any law, two or more insurance companies authorized to
121-17 separately do such an insurance business in this state, including
121-18 stock companies, reciprocals, or inter-insurance exchanges, Lloyds'
121-19 associations, fraternal benefit societies and mutual companies of
121-20 all kinds, including state-wide mutual assessment corporations and
121-21 local mutual aid associations, and stipulated premium companies,
121-22 may join together to offer, sell and administer hospital, surgical
121-23 and medical expense insurance plans under a group policy covering
121-24 residents of this state who are sixty-five (65) years of age and
121-25 older and their spouses on which policy each insurance carrier
121-26 shall be severally liable, and such companies may agree with
121-27 respect to premium rates, policy provisions, sales, administrative,
122-1 technical and accounting procedures and other matters within the
122-2 scope of this Article. Such companies may issue such insurance
122-3 policies in their own names or in the name of an unincorporated
122-4 association, trust, or other organization formed for the sole
122-5 purposes of this Article and evidenced by a contract in writing
122-6 executed by the participating insurance companies, and any
122-7 unincorporated associations, trusts, or other organizations
122-8 heretofore formed for the sole purpose of this Article and
122-9 evidenced by a contract in writing executed by the participating
122-10 insurance companies is hereby ratified, confirmed and approved and
122-11 validated from the date of its formation. Any such policy may be
122-12 executed on behalf of the insurance companies by a duly authorized
122-13 person and need not be countersigned on behalf of any such company
122-14 by a resident agent. Any person who is licensed as a general life,
122-15 accident, and health [insurance] agent or as a general property and
122-16 casualty [local recording] agent [or as a solicitor] under Article
122-17 [the provisions of Articles 21.07,] 21.07-1[,] or [Article] 21.14
122-18 of this code [the Insurance Code of the State of Texas,] may act as
122-19 such agent in connection with policies of insurance or certificates
122-20 of insurance issued by any unincorporated association, trust or
122-21 other organization formed for the sole purposes of this Article
122-22 without the necessity of notifying the department [State Board of
122-23 Insurance] that such person is appointed to so act.
122-24 SECTION 7.02. Section 7, Article 3.75, Insurance Code, is
122-25 amended to read as follows:
122-26 Sec. 7. VARIABLE CONTRACT AGENTS LICENSE. (a)
122-27 Notwithstanding any other law of this state, no person shall sell
123-1 or offer for sale within this state a variable contract or do or
123-2 perform any act or thing in the sale, negotiation, making, or
123-3 consummating of any variable contract other than for himself,
123-4 unless such person shall have a valid and current license issued
123-5 under Article 21.07-1 of this code [certificate from the State
123-6 Board of Insurance] authorizing such person to act within this
123-7 state as a general life, accident, and health [variable] agent.
123-8 [No such certificate shall be issued unless and until said board is
123-9 satisfied, after examination, that such person is by training,
123-10 knowledge, ability, and character qualified to act as such agent.
123-11 Any such certificate may be withdrawn and canceled by said board,
123-12 after notice and hearing, if it shall find that the holder thereof
123-13 does not then have the qualifications required for issue of such
123-14 certificate.]
123-15 (b) The licensing and regulation of a person acting as a
123-16 variable agent is subject to the same provisions applicable to the
123-17 licensing and regulation of other agents under Subchapter A,
123-18 Chapter 21, of this code. [The Commissioner of Insurance shall
123-19 collect in advance from variable agent applicants a nonrefundable
123-20 license fee in an amount not to exceed $50. Unless the State Board
123-21 of Insurance accepts a qualifying examination administered by a
123-22 testing service, as provided under Article 21.01-1, Insurance Code,
123-23 as amended, the Commissioner of Insurance shall collect in advance
123-24 from variable agent applicants an examination fee in an amount not
123-25 to exceed $20. The State Board of Insurance shall determine the
123-26 amount of the fees. A new examination fee shall be paid for each
123-27 and every examination. The examination fee shall not be returned
124-1 under any circumstance other than for failure to appear and take
124-2 the examination after the applicant has given at least 24 hours
124-3 notice of an emergency situation to the Commissioner of Insurance
124-4 and received the Commissioner's approval. All fees collected
124-5 pursuant to this section shall be deposited in the State Treasury
124-6 to the credit of the State Board of Insurance operating fund to be
124-7 used to administer the provisions of this section and Article
124-8 21.07-1, Insurance Code, as amended.]
124-9 [(c) Each license issued to a variable contract agent shall
124-10 expire two years following the date of issue, unless prior thereto
124-11 it is suspended or revoked by the Commissioner of Insurance.]
124-12 [(d) The Commissioner of Insurance shall suspend the license
124-13 of a variable agent during any period in which the agent does not
124-14 have an outstanding valid appointment. The Commissioner of
124-15 Insurance shall lift the suspension on receipt by the State Board
124-16 of Insurance of acceptable notice of a valid appointment.]
124-17 [(e) A license applicant or licensee whose license
124-18 application or license has been denied, refused, or revoked under
124-19 this section may not apply for any license as an insurance agent
124-20 before the first anniversary of the effective date of the denial,
124-21 refusal, or revocation, or, if the applicant or licensee seeks
124-22 judicial review of the denial, refusal, or revocation, before the
124-23 first anniversary of the date of the final court order or decree
124-24 affirming that action. The Commissioner of Insurance may deny an
124-25 application timely filed if the applicant does not show good cause
124-26 why the denial, refusal, or revocation of the previous license
124-27 application or license should not be considered a bar to the
125-1 issuance of a new license.]
125-2 [(f) Licenses which have not expired or which have not been
125-3 suspended or revoked may be renewed by filing with the State Board
125-4 of Insurance a completed renewal application and paying the
125-5 nonrefundable renewal fee set by the board in an amount not to
125-6 exceed $50 on or before the expiration date of the license in
125-7 accordance with Article 21.01-2 of this code.]
125-8 [(g) Any agent licensed under this article may represent and
125-9 act as an agent for more than one insurance carrier any time while
125-10 the license is in force, if the agent so desires. Any such agent
125-11 and the insurance carrier involved must give notice to the State
125-12 Board of Insurance of any additional appointment or appointments
125-13 authorizing the agent to act as agent for an additional insurance
125-14 carrier or carriers. Such notice shall be accompanied by a
125-15 certificate from each insurance carrier to be named in each
125-16 additional appointment that said insurance carrier desires to
125-17 appoint the applicant as its agent. This notice shall also contain
125-18 such other information as the State Board of Insurance may require.
125-19 The agent or company shall be required to pay a nonrefundable fee
125-20 in an amount not to exceed $16 as determined by the State Board of
125-21 Insurance for each additional appointment applied for, which fee
125-22 shall accompany the notice. If approval of the additional
125-23 appointment is not received from the board before the eighth day
125-24 after the date on which the completed application and fee were
125-25 received by the board, the agent and the insurance carrier, in the
125-26 absence of notice of disapproval, may assume that the board
125-27 approves the application, and the agent may act for the insurance
126-1 carrier. All fees collected pursuant to this section shall be
126-2 deposited in the State Treasury to the credit of the State Board of
126-3 Insurance operating fund to be used to administer the provisions of
126-4 this article and Article 21.07-1, Insurance Code, as amended.]
126-5 [(h) Duplicate License; Fee. The Commissioner of Insurance
126-6 shall collect in advance from agents requesting duplicate licenses
126-7 a fee not to exceed $20. The State Board of Insurance shall
126-8 determine the amount of the fee.]
126-9 SECTION 7.03. Subsection (c), Article 5.13-1, Insurance
126-10 Code, is amended to read as follows:
126-11 (c) The right of such insurers to issue prepaid legal
126-12 services contracts on individual, group, or franchise bases is
126-13 hereby recognized, and qualified agents of such insurers who are
126-14 licensed under Article 21.07-1 or [Articles 21.07 and] 21.14 of
126-15 this code [the Insurance Code, as amended, and Chapter 213, Acts of
126-16 the 54th Legislature, 1955, as amended (Article 21.07-1, Vernon's
126-17 Texas Insurance Code),] shall be authorized to write such coverages
126-18 under such rules [and regulations] as the commissioner [State Board
126-19 of Insurance] may prescribe.
126-20 SECTION 7.04. Article 10.37-3, Insurance Code, is amended to
126-21 read as follows:
126-22 Art. 10.37-3. LICENSING OF AGENTS. (a) Except as provided
126-23 by Subsection (b), a [A] person may not solicit or procure
126-24 insurance contracts for a society unless the person is licensed as
126-25 a general life, accident, and health agent under Article 21.07-1 of
126-26 this code [an agent under Chapter 213, Acts of the 54th
126-27 Legislature, Regular Session, 1955 (Article 21.07-1, Vernon's Texas
127-1 Insurance Code)].
127-2 (b) An agent, representative, or member of a fraternal
127-3 benefit society who devotes less than 50 percent of the person's
127-4 time to the solicitation and procurement of insurance contracts for
127-5 that society is exempt from the requirements of Subsection (a) of
127-6 this article.
127-7 (c) For the purposes of Subsection (b) of this article, a
127-8 person is presumed for a calendar year to have devoted at least 50
127-9 percent of the person's time to the solicitation or procurement of
127-10 insurance contracts if, in the preceding calendar year, the person
127-11 solicited or procured on behalf of a society:
127-12 (1) life insurance contracts that have generated, in
127-13 the aggregate, more than $20,000 of direct premiums for all lives
127-14 insured, provided that an interest-sensitive life insurance
127-15 contract has not been solicited or procured by a person that
127-16 exceeds $35,000 of coverage on an individual life unless that
127-17 person holds the designation of "Fraternal Insurance [Benefit]
127-18 Counselor";
127-19 (2) insurance contracts, other than life insurance
127-20 contracts, that have insured the individual lives of more than 25
127-21 persons; or
127-22 (3) variable life insurance or variable annuity
127-23 contracts.
127-24 (d) The licensing and regulation of agents for fraternal
127-25 benefit societies is subject to Subchapter A, Chapter 21, of this
127-26 code and other laws regulating those agents.
127-27 SECTION 7.05. Article 16.24A, Insurance Code, is amended to
128-1 read as follows:
128-2 Art. 16.24A. LICENSING OF AGENTS [FOR CROP INSURANCE]. (a)
128-3 No person or firm shall solicit, write, sign, execute or deliver
128-4 insurance policies, bind insurance risks, collect premiums, or
128-5 otherwise act in the capacity of an insurance agent [a local
128-6 recording agent] in the solicitation or sale of [crop] insurance
128-7 for a farm mutual insurance company unless the person or firm holds
128-8 a license issued [is licensed] under Subchapter A, Chapter 21,
128-9 [Article 21.14] of this code.
128-10 (b) A farm mutual insurance company may not appoint and act
128-11 through an agent [who qualifies for a license as an agricultural
128-12 insurance agent] under Article 21.14-2 of this code.
128-13 SECTION 7.06. Section 9, Article 17.25, Insurance Code, is
128-14 amended to read as follows:
128-15 Sec. 9. AGENTS' LICENSE. Agents [or solicitors] for such
128-16 companies shall be licensed and appointed as provided by Subchapter
128-17 A, Chapter 21, [in Article 21.07 or 21.14] of this Code.
128-18 SECTION 7.07. Sections 4, 19, and 21, Managing General
128-19 Agents' Licensing Act (Article 21.07-3, Vernon's Texas Insurance
128-20 Code), are amended to read as follows:
128-21 Sec. 4. REDEMPTION OF SHARES [APPLICATION FOR LICENSE; TO
128-22 WHOM LICENSE MAY BE ISSUED]. [(a) Each applicant for license
128-23 shall be a resident of Texas and file a written sworn application
128-24 on forms furnished by the Commissioner. The applicant shall include
128-25 in the application the names and addresses of the applicant's
128-26 officers, directors, shareholders, or partners, if applicable, and
128-27 affiliates.]
129-1 [(b) The Commissioner shall issue a license to an individual
129-2 applicant upon successful completion of the examination and
129-3 compliance with the other requirements of this Act.]
129-4 [(c) The Commissioner shall issue a license to a general
129-5 partnership, or to a limited liability partnership registered with
129-6 the Secretary of State under Section 3.08, Texas Revised
129-7 Partnership Act (Article 6132b-3.08, Vernon's Texas Civil
129-8 Statutes), engaging in the business of insurance if each of the
129-9 partners is licensed as an agent under this Act. The term
129-10 "partnership" or "agency partnership" as used in this Act means a
129-11 general partnership or a registered limited liability partnership.]
129-12 [(d) The Commissioner shall issue a license to a corporation
129-13 on finding:]
129-14 [(1) that the corporation is a Texas corporation
129-15 having its principal place of business in the State of Texas and
129-16 having as one of its purposes the authority to act as a managing
129-17 general agent; and]
129-18 [(2) that every officer, director, and shareholder of
129-19 the corporation is individually licensed as a managing general
129-20 agent under the provisions of this Insurance Code; provided,
129-21 however, that in the event ownership of the shares of such
129-22 corporation is acquired through devise or descent by an unlicensed
129-23 shareholder, the corporation shall still be entitled to a license
129-24 if such unlicensed shareholder qualifies as a licensed managing
129-25 general agent or disposes of the shares to a licensed managing
129-26 general agent within 90 days after the date of such stock
129-27 acquisition. If an unlicensed person acquires shares in such a
130-1 corporation and does not qualify to be licensed as a managing
130-2 general agent and the person does not dispose of the shares within
130-3 the 90-day period to a licensed managing general agent, the shares
130-4 must be purchased by the corporation for the value of the shares of
130-5 stock as reflected by the regular books and records of the
130-6 corporation on the date of the acquisition of the shares by the
130-7 unlicensed person. If the corporation fails or refuses to purchase
130-8 the shares, the corporation's license shall be canceled.]
130-9 [(e)] A corporation may redeem the shares of any shareholder
130-10 or the shares of a deceased shareholder, on terms agreed on by the
130-11 board of directors and the shareholder or the shareholder's
130-12 personal representative or at a price and on terms provided in the
130-13 articles of incorporation, the bylaws, or an existing contract
130-14 entered into between the shareholders of the corporation.
130-15 [(f) Nothing contained herein shall be construed to permit
130-16 any unlicensed shareholder or any employee or agent of any
130-17 corporation licensed as a managing general agent to perform any act
130-18 of a managing general agent without obtaining a managing general
130-19 agent's license.]
130-20 [(g) If at any time, any person holding a managing general
130-21 agent's license does not maintain the qualifications necessary to
130-22 obtain a license, the license of such person to act as a managing
130-23 general agent shall be canceled or denied in accordance with the
130-24 other provisions of this Act.]
130-25 [(h) Nothing in this section shall prevent any shareholder
130-26 from selling or otherwise transferring stock in any corporation to
130-27 a company or managing general agent licensed to do business in
131-1 Texas, nor prevent any such company or managing general agent from
131-2 owning all or any portion of the stock of such corporation.]
131-3 [(i) Each corporation licensed as a managing general agent
131-4 shall notify the Commissioner of any change in its officers,
131-5 directors, or shareholders not later than the 30th day after the
131-6 date on which the change takes effect.]
131-7 [(j) In this Act the term "corporation" shall mean a
131-8 corporation organized under the Texas Business Corporation Act or a
131-9 Texas domiciled limited liability company organized or existing
131-10 under the Texas Limited Liability Company Act (Article 1528n,
131-11 Vernon's Texas Civil Statutes) having its principal place of
131-12 business in this state and having as one of its purposes the
131-13 authority to act as a managing general insurance agent. Each
131-14 officer, manager, and member of a limited liability company must be
131-15 licensed under this Act. The licensing and regulation of a limited
131-16 liability company shall be subject to the same provisions and
131-17 requirements of this Act that are applicable to corporations
131-18 licensed under this Act.]
131-19 Sec. 19. ADMINISTRATION AND REGULATION OF MANAGING GENERAL
131-20 AGENTS; VIOLATIONS OF ACT. (a) Subchapter A, Chapter 21,
131-21 Insurance Code, applies to the licensing and regulation of a person
131-22 acting as a managing general agent.
131-23 (b) Any person, firm, or corporation who violates any of the
131-24 provisions of this Act or any rule[, regulation,] or order adopted
131-25 under this Act or Subchapter A, Chapter 21, Insurance Code, is
131-26 [shall be] subject to:
131-27 (1) Sections 2A, 3A, 4A, 5A, and 6A, Article 21.01-2,
132-1 Insurance Code; and
132-2 (2) Chapter 82 [sanctions under Section 7, Article
132-3 1.10], Insurance Code.
132-4 Sec. 21. ADMINISTRATION OF ACT. The administration of this
132-5 Act shall be vested in the commissioner, [State Board of Insurance]
132-6 who may establish, and from time to time amend, reasonable rules
132-7 [and regulations] for the administration of this Act.
132-8 SECTION 7.08. Section 3(c), Article 21.07-6, Insurance Code,
132-9 is amended to read as follows:
132-10 (c) The certificate of authority issued under this article
132-11 shall continue in effect until suspended, canceled, or revoked [in
132-12 accordance with Section 7, Article 1.10, of this code]. The
132-13 issuance, denial, suspension, cancellation, or revocation of a
132-14 certificate of authority to act as an administrator is subject to:
132-15 (1) Sections 2A, 3A, 4A, 5A, and 6A, Article 21.01-2,
132-16 of this code; and
132-17 (2) Chapter 82 of this code.
132-18 SECTION 7.09. Section 1(2), Article 21.21-9, Insurance Code,
132-19 as added by Chapter 596, Acts of the 75th Legislature, Regular
132-20 Session, 1997, is amended to read as follows:
132-21 (2) "Bank" means a depository institution as defined
132-22 by Article 21.07 of this code [national banking association
132-23 organized and existing under the National Bank Acts (12 U.S.C.
132-24 Section 21 et seq.), a state bank organized and existing under the
132-25 Texas Banking Act (Article 342-1.001 et seq., Vernon's Texas Civil
132-26 Statutes), a state savings bank organized and existing under the
132-27 Texas Savings Bank Act (Article 489e, Vernon's Texas Civil
133-1 Statutes), a bank branch, or a bank operating subsidiary, as
133-2 defined by state or federal law, that is located and doing business
133-3 in this state in a place with a population of 5,000 or less].
133-4 SECTION 7.10. Article 22.14, Insurance Code, is amended to
133-5 read as follows:
133-6 Art. 22.14. LICENSING OF AGENTS. All agents of stipulated
133-7 premium companies shall be licensed in accordance with the
133-8 provisions of Subchapter A [Art. 21.07] of Chapter 21 of this Code.
133-9 SECTION 7.11. Chapter 23, Insurance Code, is amended by
133-10 adding Article 23.23A to read as follows:
133-11 Art. 23.23A. REGULATION OF AGENTS. The licensing and
133-12 regulation of an agent authorized to solicit prepaid legal services
133-13 contracts for corporations complying with this chapter is subject
133-14 to Subchapter A, Chapter 21, of this code.
133-15 SECTION 7.12. Article 25.06, Insurance Code, is amended to
133-16 read as follows:
133-17 Art. 25.06. AGENTS' LICENSES. Subchapter A, Chapter 21, of
133-18 this code applies to the licensing and regulation of an agent
133-19 authorized to solicit job protection insurance for an insurance
133-20 carrier under this chapter [Any individual who solicits insurance,
133-21 as defined in Article 21.02 of this code, on behalf of an insurance
133-22 carrier operating exclusively under this chapter, must comply with
133-23 the requirements of Article 21.07 of this code, except that no
133-24 written examination is required for issuance of the license].
133-25 ARTICLE 8. REPEALER
133-26 SECTION 8.01. The following laws are repealed:
133-27 (1) Sections 4(f), (g), and (h), Article 1.14-2,
134-1 Insurance Code;
134-2 (2) Section 15, Article 17.25, Insurance Code;
134-3 (3) Sections 1, 3, 4, and 6, Article 21.01-2,
134-4 Insurance Code;
134-5 (4) Article 21.02-1, Insurance Code;
134-6 (5) Article 21.05, Insurance Code;
134-7 (6) Article 21.06, Insurance Code;
134-8 (7) the following sections of Article 21.07, Insurance
134-9 Code:
134-10 (A) Sections 1B and 1C; and
134-11 (B) Sections 3, 3B, 4, 4A, 5, 6A, 7, 8, 9, 10,
134-12 10A, 11, 12, 13, 14, 15, 15A, 16, 17, 18, 19, and 20;
134-13 (8) Article 21.07A, Insurance Code;
134-14 (9) Chapter 213, Acts of the 54th Legislature, Regular
134-15 Session, 1955 (Article 21.07-1, Vernon's Texas Insurance Code);
134-16 (10) the following sections of the Managing General
134-17 Agents' Licensing Act (Article 21.07-3, Vernon's Texas Insurance
134-18 Code):
134-19 (A) Sections 4A, 4B, and 4C;
134-20 (B) Section 5(h);
134-21 (C) Sections 6 and 6A;
134-22 (D) Sections 8, 9, and 10;
134-23 (E) Sections 12, 13, 14, and 15;
134-24 (F) Section 17; and
134-25 (G) Section 20;
134-26 (11) Section 2(d), Article 21.11, Insurance Code;
134-27 (12) Section 14, Article 21.14-1, Insurance Code;
135-1 (13) Article 21.15, Insurance Code;
135-2 (14) Article 21.15-2, Insurance Code;
135-3 (15) Article 21.15-3, Insurance Code;
135-4 (16) Article 21.15-4, Insurance Code;
135-5 (17) Article 21.15-7, Insurance Code;
135-6 (18) Section 10, Article 21.58A, Insurance Code; and
135-7 (19) Article 23.23, Insurance Code.
135-8 ARTICLE 9. GRANDFATHER CLAUSE; TRANSITION
135-9 SECTION 9.01. On the effective date of this Act, a person
135-10 who holds a license issued by the Texas Department of Insurance
135-11 that is in good standing is:
135-12 (1) considered licensed under the applicable licensing
135-13 law as amended by this Act;
135-14 (2) entitled to act as an agent under the new license
135-15 type, subject to this article; and
135-16 (3) subject to the provisions of the Insurance Code as
135-17 amended by this Act.
135-18 SECTION 9.02. (a) A person who, immediately before the
135-19 effective date of this Act, holds an agent license issued by the
135-20 Texas Department of Insurance and who obtained that license by
135-21 passing a written examination administered by any entity allowed by
135-22 state law, including an insurance carrier, company, or state
135-23 testing contractor, is entitled to the appropriate license as
135-24 provided by Subchapter A, Chapter 21, Insurance Code, as amended by
135-25 this Act, without further examination.
135-26 (b) A person who, immediately before the effective date of
135-27 this Act, holds an agent license issued by the Texas Department of
136-1 Insurance before January 1, 2001, and who obtained that license
136-2 without taking a written examination or who solicited insurance on
136-3 behalf of a stipulated premium company, farm mutual company, or
136-4 county mutual insurance company before January 1, 2001, is entitled
136-5 to the appropriate license as provided by Subchapter A, Chapter 21,
136-6 Insurance Code, as amended by this Act, but must pass the
136-7 appropriate license examination not later than the second
136-8 anniversary of the date of issuance to retain the license. The
136-9 license of a person who does not pass the license examination as
136-10 required by this subsection expires on the second anniversary of
136-11 the date of issuance and may not be renewed.
136-12 (c) A person who, immediately before the effective date of
136-13 this Act, holds an agent license issued by the Texas Department of
136-14 Insurance on or after January 1, 2001, and who obtained that
136-15 license without taking a written examination or who solicited
136-16 insurance on behalf of a stipulated premium company, farm mutual
136-17 company, or county mutual insurance company on or after January 1,
136-18 2001, but before the effective date of this Act, is entitled to the
136-19 appropriate license as provided by Subchapter A, Chapter 21,
136-20 Insurance Code, as amended by this Act, but must pass the
136-21 appropriate license examination not later than May 31, 2002, to
136-22 retain the license. The license of a person who does not pass the
136-23 license examination as required by this subsection expires on May
136-24 31, 2002.
136-25 (d) A person who has solicited insurance on behalf of a
136-26 stipulated premium company, farm mutual company, or county mutual
136-27 insurance company for at least 24 months before the effective date
137-1 of this Act is entitled to the appropriate license and any renewal
137-2 license as provided by Subchapter A, Chapter 21, Insurance Code, as
137-3 amended by this Act, without further examination.
137-4 (e) The continuing education requirements of Subchapter A,
137-5 Chapter 21, Insurance Code, as amended by this Act, do not apply to
137-6 a person who, immediately before the effective date of this Act,
137-7 has been licensed by the Texas Department of Insurance as a
137-8 resident insurance agent under Article 21.07-1, Insurance Code, the
137-9 Managing General Agents' Licensing Act (Article 21.07-3, Vernon's
137-10 Texas Insurance Code), or Article 21.14, Insurance Code, for at
137-11 least 20 years.
137-12 ARTICLE 10. EFFECTIVE DATE; TRANSITION
137-13 SECTION 10.01. (a) This Act takes effect September 1, 2001.
137-14 (b) Section 3, Article 21.01-1, Insurance Code, as amended
137-15 by this Act, applies to continuing education requirements for
137-16 insurance agents for a renewal of a license that occurs on or after
137-17 January 1, 2003.