By: Madla S.B. No. 414
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
1-25 [Board].
2-1 Sec. 3. APPLICATION. Except as otherwise provided by this
2-2 code, this subchapter applies to each person licensed in accordance
2-3 with:
2-4 (1) Section 4, Article 1.14-2, of this code;
2-5 (2) Section 7, Article 3.75, of this code;
2-6 (3) Subsection (c), Article 5.13-1, of this code;
2-7 (4) Article 10.37-3 of this code;
2-8 (5) Article 16.24A of this code;
2-9 (6) Section 9, Article 17.25, of this code;
2-10 (7) Article 21.07 of this code;
2-11 (8) Article 21.07-1 of this code;
2-12 (9) Chapter 29, Acts of the 54th Legislature, Regular
2-13 Session, 1955 (Article 21.07-2, Vernon's Texas Insurance Code);
2-14 (10) the Managing General Agents' Licensing Act
2-15 (Article 21.07-3, Vernon's Texas Insurance Code);
2-16 (11) Chapter 407, Acts of the 63rd Legislature,
2-17 Regular Session, 1973 (Article 21.07-4, Vernon's Texas Insurance
2-18 Code);
2-19 (12) Article 21.07-6 of this code;
2-20 (13) Article 21.07-7 of this code;
2-21 (14) Article 21.09 of this code;
2-22 (15) Article 21.11 of this code;
2-23 (16) Article 21.14 of this code;
2-24 (17) Article 21.14-1 of this code;
2-25 (18) Article 21.14-2 of this code; or
2-26 (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
4-1 agreement with any testing service as authorized hereby, the
4-2 commissioner [State Board of Insurance] shall hold a public hearing
4-3 [thereon] in accordance with Chapter 2001, Government Code [the
4-4 provisions of Section 5 of the Administrative Procedure and Texas
4-5 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)],
4-6 and shall adopt such rules[, regulations,] and standards as may be
4-7 deemed appropriate by the commissioner [Board] to implement the
4-8 authority granted in this article [Article].
4-9 (b) The commissioner may appoint advisory boards consisting
4-10 of any of the following persons: persons holding a license for
4-11 which the respective examinations are intended, persons who are
4-12 employed by insurance companies appointing such licensees, persons
4-13 acting as general agents or managers, persons teaching insurance at
4-14 an accredited college or university in Texas, persons who are
4-15 citizens of the State of Texas but who are not of any of the
4-16 preceding descriptions, or any combination of such persons. The
4-17 function of such advisory boards will be to make recommendations to
4-18 the commissioner [State Board of Insurance] or the testing service
4-19 with respect to the scope, type, and conduct of such examinations
4-20 and the times and places within the state where they shall be held.
4-21 The members of such advisory boards shall serve without pay but
4-22 shall be reimbursed for their reasonable expenses in attending
4-23 meetings of their respective advisory boards.
4-24 (c) In the absence of an agreement with a testing service,
4-25 the department [State Board of Insurance] shall administer any
4-26 required qualifying examination in accordance with this article
5-1 [the provisions of the respective statutes governing the issuance
5-2 of the license sought by the applicant]. The commissioner may
5-3 adopt rules relating to the scope, type, and conduct of the written
5-4 examinations and the times and places in this state at which the
5-5 examinations will be conducted. The commissioner's rules may
5-6 designate textbooks, manuals, and other materials to be studied by
5-7 applicants in preparation for examinations conducted under this
5-8 subsection. Those textbooks, manuals, or other materials may
5-9 consist of material available to an applicant by purchase from the
5-10 publisher or of material prepared at the direction of the
5-11 commissioner and distributed to an applicant on request and on
5-12 payment of the reasonable cost of the material. All examination
5-13 questions shall be prepared from the contents of the textbooks,
5-14 manuals, and other materials designated or prepared by the
5-15 commissioner under this subsection.
5-16 (d) Not later than the 30th day after the date on which a
5-17 licensing examination is administered under this code, the
5-18 department shall notify each examinee of the results of the
5-19 examination. However, if an examination is graded or reviewed by a
5-20 testing service, the department shall notify each examinee
5-21 [examinees] of the results of the examination not later than the
5-22 14th day after the date on which the department receives the
5-23 results from the testing service. If the notice of examination
5-24 results graded or reviewed by a testing service will be delayed for
5-25 longer than 90 days after the examination date, the department
5-26 shall notify the examinee of the reason for the delay before the
6-1 90th day. The department may require a testing service to notify
6-2 examinees of the results of an examination.
6-3 (e) If requested in writing by a person who fails a
6-4 licensing examination administered under this code, the department
6-5 shall furnish the person with an analysis of the person's
6-6 performance on the examination.
6-7 Sec. 2. EXAMINATION OF LICENSE APPLICANT. (a) Except as
6-8 otherwise provided by this code, each applicant for a license to
6-9 act as an insurance agent in this state must submit to a personal
6-10 written examination that is prescribed by the commissioner and must
6-11 pass the examination to the satisfaction of the department. The
6-12 examination shall determine the applicant's competence with respect
6-13 to:
6-14 (1) the type of insurance contracts for which the
6-15 applicant seeks a license;
6-16 (2) the laws of this state regulating the business of
6-17 insurance; and
6-18 (3) the ethical obligations and duties of an insurance
6-19 agent.
6-20 (b) The department shall charge each applicant an
6-21 examination fee in an amount determined by the department as
6-22 necessary for administration of the examination. The fee must
6-23 accompany each application to take the examination. The fee is
6-24 nonrefundable other than for failure of the applicant to appear and
6-25 take the examination after the applicant has given at least 24
6-26 hours' notice of an emergency situation to the department and
7-1 received the department's approval of refund of the fee.
7-2 (c) The commissioner shall prescribe a limited written
7-3 licensing examination for applicants for a limited license under
7-4 Article 21.07-1 or 21.14 of this code. A limited examination shall
7-5 be administered according to the provisions of this article and
7-6 shall determine the applicant's competence and understanding of:
7-7 (1) the basic principles of insurance contracts;
7-8 (2) the basic laws of this state regulating the
7-9 business of insurance; and
7-10 (3) the ethical obligations and duties of an insurance
7-11 agent.
7-12 (d) The department may not require a person to take an
7-13 examination under this article if the person is:
7-14 (1) an applicant for the renewal of an unexpired
7-15 license issued by the department;
7-16 (2) an applicant whose license issued by the
7-17 department expired less than one year before the date of the
7-18 application, if the previous license was not denied, revoked, or
7-19 suspended by the commissioner;
7-20 (3) a partnership, corporation, or depository
7-21 institution;
7-22 (4) an applicant for a life, accident, and health
7-23 license who has attained the designation of chartered life
7-24 underwriter (CLU);
7-25 (5) an applicant for a life and health insurance
7-26 counselor license who has attained the designation of chartered
8-1 life underwriter (CLU), chartered financial consultant (ChFC), or
8-2 certified financial planner (CFP);
8-3 (6) an applicant for a property and casualty license
8-4 who has attained the designation of chartered property and casualty
8-5 underwriter (CPCU);
8-6 (7) an applicant for a specialty license issued under
8-7 Article 21.09 of this code;
8-8 (8) a nonresident individual who is exempt from the
8-9 examination requirement under Article 21.11 of this code; or
8-10 (9) an applicant for a general life, accident, and
8-11 health license who was authorized to solicit or procure insurance
8-12 on behalf of a fraternal benefit society on September 1, 1999, if
8-13 the applicant:
8-14 (A) solicited or procured insurance on behalf of
8-15 the fraternal benefit society for at least 24 months preceding
8-16 September 1, 1999;
8-17 (B) does not solicit or procure insurance for
8-18 any other insurer or a different fraternal benefit society on or
8-19 after September 1, 1999;
8-20 (C) does not solicit or procure an insurance
8-21 contract on or after September 1, 1999, except from a person who is
8-22 eligible for membership in the fraternal benefit society; and
8-23 (D) does not solicit or procure an
8-24 interest-sensitive life insurance contract that exceeds $35,000 of
8-25 coverage on an individual life on or after September 1, 1999,
8-26 unless the applicant has obtained the designation of "Fraternal
9-1 Insurance Counselor" at the time the contract is solicited or
9-2 procured.
9-3 (e) A license to which the exemption authorized under
9-4 Subsection (d)(9) of this section applies must be held by the
9-5 applicant in an individual capacity and is not transferable.
9-6 (f) Each examination administered under this article shall
9-7 be offered in English and Spanish.
9-8 Sec. 3. CONTINUING EDUCATION REQUIREMENTS. (a) The
9-9 department has exclusive jurisdiction for all matters relating to
9-10 the continuing education of insurance agents who are licensed under
9-11 this code.
9-12 (b) Except as provided by Subsection (d) of this section,
9-13 each individual who holds a license issued by the department shall
9-14 complete continuing education. All required continuing education
9-15 hours must be completed before the expiration date of the
9-16 individual's license. An individual who holds a general life,
9-17 accident, and health license, a life and health insurance counselor
9-18 license, or a general property and casualty license shall complete
9-19 15 hours of continuing education annually. The agent may not be
9-20 required to complete more than 15 continuing education hours
9-21 annually as a result of holding more than one license for which
9-22 continuing education is required. An individual who holds a
9-23 limited life, accident, and health license or a limited property
9-24 and casualty license shall complete five hours of continuing
9-25 education annually. Each individual who holds a license issued by
9-26 the department shall complete four hours of continuing education in
10-1 ethics during each license renewal period. At least 50 percent of
10-2 all required continuing education hours must be completed in a
10-3 classroom setting or a classroom equivalent setting approved by the
10-4 department. The department may accept continuing education hours
10-5 completed in other professions or in association with professional
10-6 designations in an insurance-related field.
10-7 (c) On a timely written request of an agent, the department
10-8 may extend the time for the agent to comply with the continuing
10-9 education requirements of this section or may exempt the agent from
10-10 some or all of the requirements for a licensing period if the
10-11 department finds that the agent is unable to comply with the
10-12 requirements because of illness, medical disability, or another
10-13 extenuating circumstance beyond the control of the agent. The
10-14 commissioner by rule shall prescribe the criteria for an exemption
10-15 or extension under this subsection.
10-16 (d) An individual who has continuously held a license issued
10-17 under this code to operate as an insurance agent for at least 20
10-18 years is exempt from the continuing education requirements of this
10-19 section. The commissioner by rule may provide for other reasonable
10-20 exemptions.
10-21 (e) The department shall certify continuing education
10-22 programs for agents. Only a program that satisfies the criteria
10-23 established by rule by the commissioner may receive certification.
10-24 The certification criteria shall be designed to ensure that
10-25 continuing education programs enhance the knowledge, understanding,
10-26 and professional competence of the license holder. A nonrefundable
11-1 certification fee, in an amount set by the commissioner as
11-2 necessary for administering this section, must accompany each
11-3 application for certification of a continuing education program.
11-4 The fee shall be established by rule and based on a graduated scale
11-5 according to the number of hours required to complete the program.
11-6 (f) Each continuing education program provider shall
11-7 register with the department as a course provider. The department
11-8 shall assess a registration fee for each application for
11-9 registration as a provider, set by the commissioner in an amount
11-10 necessary for the proper administration of this section. The
11-11 commissioner may adopt rules establishing the requirements for
11-12 continuing education program providers. The department may enter
11-13 into agreements with independent contractors under which the
11-14 independent contractor certifies and registers continuing education
11-15 programs and providers. The department may require those
11-16 independent contractors to correspond directly with providers with
11-17 regard to the administration of continuing education programs, and
11-18 the contractors may collect fees from the providers for
11-19 administration of the courses. The department retains the
11-20 authority to establish the scope and type of continuing education
11-21 requirements for each type of license.
11-22 (g) The commissioner may appoint an advisory council to
11-23 provide the commissioner with information and assistance in the
11-24 conduct of the continuing education program for agents licensed
11-25 under this subchapter. If an advisory council is appointed, it
11-26 must be composed of nine members, four of whom must be public
12-1 members. A public member is entitled to reimbursement for the
12-2 member's travel expenses as provided by Chapter 660, Government
12-3 Code, and the General Appropriations Act. A public member may not:
12-4 (1) be an officer, director, or employee of an
12-5 insurance company, insurance agency, agent, broker, adjuster, or
12-6 any other business entity regulated by the department;
12-7 (2) be a person required to register with the Texas
12-8 Ethics Commission under Chapter 305, Government Code; or
12-9 (3) be related to a person described by Subdivision
12-10 (1) or (2) of this subsection within the second degree by affinity
12-11 or consanguinity, as determined under Chapter 573, Government Code.
12-12 SECTION 1.03. Section 2, Article 21.01-2, Insurance Code, is
12-13 redesignated as Section 1A, Article 21.01-2, Insurance Code, and
12-14 amended to read as follows:
12-15 Sec. 1A [2]. EXPIRATION AND RENEWAL OF LICENSES.
12-16 (a) Except as provided by a staggered renewal system adopted under
12-17 Subsection (j) of this section, each agent license issued by the
12-18 department expires on the second anniversary of the date of
12-19 issuance unless suspended or revoked by the commissioner. The
12-20 commissioner by rule may change the two-year expiration period if
12-21 the commissioner finds that the change is necessary to promote a
12-22 uniform license period among this state and the other states. A
12-23 person may renew a [an unexpired] license that has not expired or
12-24 has not been suspended or revoked by filing a properly completed
12-25 renewal application with the department in the form prescribed by
12-26 the department and paying to the department before the expiration
13-1 date of the license the required renewal fee. A renewal fee paid
13-2 under this section is nonrefundable.
13-3 (b) On the filing of a completed renewal application not
13-4 later than the expiration date of the license accompanied by the
13-5 renewal fee set by the commissioner, the original license continues
13-6 in force until:
13-7 (1) the department issues the renewal license; or
13-8 (2) the commissioner issues an order revoking the
13-9 license.
13-10 (c) If a person's license has been expired for 90 days or
13-11 less, the person may renew the license by filing a renewal
13-12 application with the department in the form prescribed by the
13-13 department and paying to the department the required renewal fee
13-14 and an additional [a] fee that is equal to one-half of the renewal
13-15 [license] fee[, if any,] for the license.
13-16 (d) If a person's license has been expired for more than 90
13-17 days but less than one year, the person may not renew the license,
13-18 but is entitled to a new license without taking the applicable
13-19 examination if the person submits to the department a new
13-20 application, the license fee, and an additional fee equal to
13-21 one-half of the license fee.
13-22 (e) [(c)] If a person's license has been expired for one
13-23 year or more [longer than 90 days], the person may not renew the
13-24 license. The person may obtain a new license by submitting to
13-25 reexamination, if examination is required for original issuance of
13-26 the license, and complying with the requirements and procedures for
14-1 obtaining an original license.
14-2 (f) The [However, the] department may renew without
14-3 reexamination an expired license of a person who was licensed in
14-4 this state, moved to another state, and is currently licensed and
14-5 has been in continual practice in the other state [for the two
14-6 years] preceding the date of the application. The person must pay
14-7 to the department a fee that is equal to the license fee.
14-8 (g) Not later than the 30th day after moving from one state
14-9 to another state, a nonresident or resident agent licensed in this
14-10 state shall file with the department:
14-11 (1) the agent's new address; and
14-12 (2) proof of authorization to engage in the business
14-13 of insurance in the new state of residence.
14-14 (h) The department may not charge a fee or require a license
14-15 application under Subsection (g) of this section.
14-16 (i) [(d)] At least 30 days before the expiration of a
14-17 person's license, the department shall send written notice of the
14-18 impending license expiration to the person at the person's last
14-19 known mailing address according to the records of the department.
14-20 (j) [(e)] The commissioner by rule may adopt a system under
14-21 which licenses expire on various dates during a licensing period.
14-22 For the licensing period in which the license expiration is
14-23 changed, license fees shall be prorated [on a monthly basis] so
14-24 that each license holder shall pay only that portion of the license
14-25 fee that is allocable to the period [number of months] during which
14-26 the license is valid. On renewal of the license on the new
15-1 expiration date, the total license renewal fee is payable. The
15-2 commissioner shall adopt a system under which a person who holds
15-3 more than one license may renew all the licenses held in a single
15-4 process.
15-5 (k) [(f)] This section is not applicable to a license issued
15-6 under Article 21.07-6 of this code.
15-7 SECTION 1.04. Article 21.01-2, Insurance Code, is amended by
15-8 adding Section 2A to read as follows:
15-9 Sec. 2A. PROHIBITED ACTIVITIES. (a) A person licensed
15-10 under this code who receives a commission or other consideration
15-11 for services as an insurance agent may not receive an additional
15-12 fee for those services provided to the same client except for a fee
15-13 described by Article 21.35A or 21.35B of this code.
15-14 (b) An insurer or licensed insurance agent engaged in the
15-15 business of insurance in this state may not pay, directly or
15-16 indirectly, and may not accept, any commission or other valuable
15-17 consideration to or from any person for services performed by that
15-18 person as an insurance agent in this state unless the person holds
15-19 a license to act as an insurance agent as required by the laws of
15-20 this state. This subsection does not prevent the payment or
15-21 receipt of renewal or other deferred commissions to or by any
15-22 person solely because the person has ceased to hold a license to
15-23 act as an insurance agent.
15-24 (c) An insurance agent licensed under this code may not pay,
15-25 allow, or give, or offer to pay, allow, or give, directly or
15-26 indirectly, to any person who is not a licensed insurance agent,
16-1 any rebate of premiums payable, commission, paid employment, or
16-2 contract for service, or any other valuable consideration or
16-3 inducement, that is not specified in the policy or contract of
16-4 insurance for or on account of the solicitation or negotiation of
16-5 contracts of insurance.
16-6 (d) In addition to any other penalty imposed under this
16-7 code, a person who is determined by the department to have
16-8 committed conduct described by this subsection is barred from
16-9 receiving a license as an insurance agent before the fifth
16-10 anniversary of the date of the determination. This subsection
16-11 applies to a person who:
16-12 (1) acts as an insurance agent without holding a
16-13 license under this code;
16-14 (2) solicits a contract of insurance or acts as an
16-15 insurance agent without having been appointed or designated by an
16-16 authorized insurance company, association, or organization to do so
16-17 as provided by this code;
16-18 (3) solicits any contract of insurance or acts as an
16-19 agent for a person, including an insurance company, association, or
16-20 organization, not authorized to engage in the business of insurance
16-21 in this state without holding a license issued under Article 1.14-2
16-22 of this code; or
16-23 (4) as an officer or representative of an insurance
16-24 company, knowingly contracts with or appoints as an agent a person
16-25 who does not hold a valid and outstanding license.
16-26 (e) A person who has had an insurance license revoked in
17-1 this state or any other state may not solicit or otherwise transact
17-2 business under Chapter 10 of this code unless it is determined by
17-3 the department to be in the public interest, for good cause shown,
17-4 to allow the person to act in that capacity.
17-5 (f) A person who has had an insurance license revoked in
17-6 this state or any other state may not act as an officer, director,
17-7 member, manager, or partner, or as a shareholder with a controlling
17-8 interest, of an entity licensed under this subchapter unless it is
17-9 determined by the department to be in the public interest, for good
17-10 cause shown, to allow the person to act in that capacity.
17-11 (g) A property and casualty agent may not knowingly grant,
17-12 write, or permit a greater amount of insurance against loss by fire
17-13 than the reasonable value of the subject of the insurance.
17-14 (h) An insurance agent licensed under this code may not pay,
17-15 allow, or give, or offer to pay, allow, or give, directly or
17-16 indirectly, to a person who is not a licensed insurance agent, a
17-17 fee or other valuable consideration for the referral of a customer
17-18 who seeks to purchase, or seeks an opinion on or advice regarding
17-19 an insurance product, based on the purchase of insurance by that
17-20 customer.
17-21 (i) This section does not apply to a person who is licensed
17-22 under or holds a certificate of authority issued under Chapter 9 of
17-23 this code.
17-24 SECTION 1.05. Section 5, Article 21.01-2, Insurance Code, is
17-25 redesignated as Section 3A, Article 21.01-2, Insurance Code, and
17-26 amended to read as follows:
18-1 Sec. 3A [5]. DENIAL OR REFUSAL OF LICENSE APPLICATION;
18-2 SUSPENSION OR REVOCATION OF LICENSES; DISCIPLINE OF LICENSE
18-3 HOLDERS. (a) In addition to any other remedy available under
18-4 Chapter 82 of this code, the [The] department may [shall] refuse to
18-5 issue an original license, revoke, suspend, or refuse to renew a
18-6 license, place on probation a person whose license has been
18-7 suspended, assess an administrative penalty, or reprimand a license
18-8 holder for a violation of this code, another insurance law of this
18-9 state, or a rule of the commissioner [or the board]. If a license
18-10 suspension is probated, the commissioner may require the person to:
18-11 (1) report regularly to the department on matters that
18-12 are the basis of the probation;
18-13 (2) limit the person's practice to the areas
18-14 prescribed by the department; or
18-15 (3) continue or review professional education until
18-16 the person attains a degree of skill satisfactory to the
18-17 commissioner in those areas that are the basis of the probation.
18-18 (b) If the department proposes to refuse to issue an
18-19 original license, or to suspend, revoke, or refuse to renew a
18-20 license, the person affected is entitled to a hearing conducted by
18-21 the State Office of Administrative Hearings in accordance with
18-22 Chapter 40 [Article 1.33B] of this code. Notice of the hearing
18-23 shall be provided to the person and to any insurance carrier
18-24 appearing on the application as desiring that the license be
18-25 issued.
18-26 (c) The department may discipline a license holder or deny a
19-1 license application under this article if the department determines
19-2 that the applicant or license holder, individually or through any
19-3 officer, director, or shareholder:
19-4 (1) has wilfully violated any provision of the
19-5 insurance laws of this state;
19-6 (2) has intentionally made a material misstatement in
19-7 the license application;
19-8 (3) has obtained, or attempted to obtain, a license by
19-9 fraud or misrepresentation;
19-10 (4) has misappropriated, converted to the applicant's
19-11 or license holder's own use, or illegally withheld money belonging
19-12 to:
19-13 (A) an insurer;
19-14 (B) a health maintenance organization; or
19-15 (C) an insured, enrollee, or beneficiary;
19-16 (5) has engaged in fraudulent or dishonest acts or
19-17 practices;
19-18 (6) has materially misrepresented the terms and
19-19 conditions of an insurance policy or contract, including a contract
19-20 relating to membership in a health maintenance organization;
19-21 (7) has made or issued, or caused to be made or
19-22 issued, any statement misrepresenting or making incomplete
19-23 comparisons regarding the terms or conditions of an insurance or
19-24 annuity contract legally issued by an insurer or a membership
19-25 issued by a health maintenance organization to induce the owner of
19-26 the contract or membership to forfeit or surrender the contract or
20-1 membership or allow it to lapse for the purpose of replacing the
20-2 contract or membership with another;
20-3 (8) is convicted of a felony;
20-4 (9) has offered or given a rebate of an insurance
20-5 premium or commission to an insured or enrollee;
20-6 (10) is not actively engaged in the soliciting or
20-7 writing of insurance for the public generally as required by
20-8 Section 2(c), Article 21.07, of this code; or
20-9 (11) has obtained or attempted to obtain a license,
20-10 not for the purpose of holding the license holder or applicant out
20-11 to the general public as an agent, but primarily for the purpose of
20-12 soliciting, negotiating, or procuring insurance or annuity
20-13 contracts or memberships covering:
20-14 (A) the applicant or license holder;
20-15 (B) a member of the applicant's or license
20-16 holder's family; or
20-17 (C) a business associate of the applicant or
20-18 license holder.
20-19 (d) An individual whose license application is denied or
20-20 whose license has been revoked under this article may not apply for
20-21 any license as an insurance agent before the fifth anniversary of:
20-22 (1) the effective date of the denial or revocation; or
20-23 (2) if the applicant or license holder seeks judicial
20-24 review of the department's action, the date of the final court
20-25 order or decree affirming that action.
20-26 (e) The commissioner may deny a timely application filed
21-1 under Subsection (d) of this section if the applicant does not show
21-2 good cause why the denial or revocation of the previous license
21-3 application or license should not be considered a bar to the
21-4 issuance of a new license. This subsection does not apply to an
21-5 applicant whose license application was denied for failure to:
21-6 (1) pass a required written examination; or
21-7 (2) submit a properly completed license application.
21-8 (f) Instead of or in addition to taking disciplinary action
21-9 under this section, the department may order that a license holder
21-10 who is currently afflicted with a disability be placed on
21-11 disability probation under the terms and conditions specified under
21-12 Article 21.15-6 of this code and department rules.
21-13 (g) The department may institute a disciplinary proceeding
21-14 against a license holder for conduct that the license holder
21-15 committed before the effective date of a voluntary surrender or
21-16 automatic forfeiture of the license. In the proceeding, the fact
21-17 that the license holder has surrendered or forfeited the license
21-18 does not affect the license holder's culpability for that conduct.
21-19 (h) Subsections (c)-(f) of this section do not apply to a
21-20 person who is licensed under or holds a certificate of authority
21-21 issued under Chapter 9 of this code. [The commissioner shall
21-22 prescribe procedures by which all decisions to deny, suspend, or
21-23 revoke a license, or to refuse to renew a license, are made by or
21-24 are appealable to the commissioner.]
21-25 SECTION 1.06. Article 21.01-2, Insurance Code, is amended by
21-26 adding Sections 4A, 5A, and 6A to read as follows:
22-1 Sec. 4A. JUDICIAL REVIEW. A license applicant or license
22-2 holder may appeal as provided by Chapter 36 of this code if:
22-3 (1) the commissioner:
22-4 (A) refuses an application for a license as
22-5 provided by this article; or
22-6 (B) suspends, revokes, or refuses to renew a
22-7 license at a hearing as provided by this article; and
22-8 (2) the applicant or license holder is dissatisfied
22-9 with the action of the commissioner.
22-10 Sec. 5A. AUTOMATIC FINES. (a) To expedite the department's
22-11 processing of certain violations of this code, the commissioner may
22-12 establish by rule monetary fines for certain violations.
22-13 Violations for which the fines may be assessed include a failure
22-14 to:
22-15 (1) obtain the total number of continuing education
22-16 hours before the renewal date of the license;
22-17 (2) timely report a change of address to the
22-18 department; or
22-19 (3) notify the department of an administrative action
22-20 taken against the agent by another state or federal financial or
22-21 insurance regulator.
22-22 (b) This section does not limit the department's authority
22-23 to take any other disciplinary action against a license holder as
22-24 provided under another provision of this code.
22-25 (c) If a person disputes the assessment of a fine under this
22-26 section, the matter is a contested case subject to Chapter 2001,
23-1 Government Code.
23-2 Sec. 6A. ENFORCEMENT OF SUBCHAPTER. The attorney general, a
23-3 district or county attorney, or the department acting through the
23-4 commissioner may institute an injunction proceeding or any other
23-5 proceeding to enforce this subchapter and to enjoin any person,
23-6 firm, corporation, or depository institution from engaging or
23-7 attempting to engage in the business of insurance in violation of
23-8 this code or any other insurance law of this state. The provisions
23-9 of this section are cumulative of the other penalties or remedies
23-10 provided by this article.
23-11 SECTION 1.07. Article 21.02, Insurance Code, is amended to
23-12 read as follows:
23-13 Art. 21.02. WHO ARE AGENTS. (a) Any person who solicits
23-14 insurance on behalf of any insurance company, whether incorporated
23-15 under the laws of this or any other state or foreign government, or
23-16 who takes or transmits other than for himself any application for
23-17 insurance or any policy of insurance to or from such company, or
23-18 who advertises or otherwise gives notice that he will receive or
23-19 transmit the same, or who shall receive or deliver a policy of
23-20 insurance of any such company, or who shall examine or inspect any
23-21 risk, or receive, or collect, or transmit any premium of insurance,
23-22 or make or forward any diagram of any building or buildings, or do
23-23 or perform any other act or thing in the making or consummating of
23-24 any contract of insurance for or with any such insurance company
23-25 other than for himself, or who shall examine into, or adjust, or
23-26 aid in adjusting, any loss for or on behalf of any such insurance
24-1 company, whether any of such acts shall be done at the instance or
24-2 request, or by the employment of such insurance company, or of, or
24-3 by, any broker or other person, shall be held to be the agent of
24-4 the company for which the act is done, or the risk is taken, as far
24-5 as relates to all the liabilities, duties, requirements and
24-6 penalties set forth in this chapter. This article does not
24-7 authorize an agent to orally, in writing, or otherwise alter,
24-8 amend, modify, waive, or change a term or condition of an insurance
24-9 policy or application for an insurance policy. The provisions of
24-10 this subchapter shall not apply to citizens of this State who
24-11 arbitrate in the adjustment of losses between the insurers and
24-12 insured, nor to the adjustment of particular or general average
24-13 losses of vessels or cargoes by marine adjusters who had paid an
24-14 occupation tax of $200 [Two Hundred ($200.00) Dollars] for the year
24-15 in which the adjustment is made, nor to practicing attorneys at law
24-16 in the State of Texas, acting in the regular transaction of their
24-17 business as such attorneys at law, and who are not local agents,
24-18 nor acting as adjusters for any insurance company. Any person who
24-19 shall do any of the acts mentioned in this article for or on behalf
24-20 of any insurance company without such company having first complied
24-21 with the requirements of the laws of this State, shall be
24-22 personally liable to the holder of any policy of insurance in
24-23 respect of which such act was done for any loss covered by the
24-24 same.
24-25 (b) The referral by an unlicensed person of a customer or
24-26 potential customer to a licensed insurance agent is not an act of
25-1 an agent under this article, unless the unlicensed person discusses
25-2 specific insurance policy terms or conditions with the customer or
25-3 potential customer.
25-4 SECTION 1.08. Article 21.04, Insurance Code, is amended to
25-5 read as follows:
25-6 Art. 21.04. LICENSE HOLDER [SOLICITOR] DEEMED COMPANY'S
25-7 AGENT. Any person who solicits an application for life, accident,
25-8 or health insurance, or property or casualty insurance, shall, in
25-9 any controversy between the insured or the insured's beneficiary
25-10 and the company issuing any policy upon such application or between
25-11 the insured or the insured's dependents and that company, be
25-12 regarded as the agent of the company, and not the agent of the
25-13 insured, but such agent shall not have the power to waive, change
25-14 or alter any of the terms or conditions of the application or
25-15 policy.
25-16 SECTION 1.09. Section 1, Article 21.07, Insurance Code, is
25-17 amended to read as follows:
25-18 Sec. 1. APPLICABILITY OF ARTICLE [ACT]. (a) No person[,
25-19 corporation, or bank] shall act as an agent of any insurance
25-20 company, health maintenance organization, or [(i) local mutual aid
25-21 association, (ii) local mutual burial association, (iii) statewide
25-22 mutual assessment corporation, (iv) stipulated premium company, (v)
25-23 county mutual insurance company, (vi) casualty company writing
25-24 accident and health insurance, or (vii) any] other type of
25-25 insurance carrier licensed to do business in the State of Texas and
25-26 which insurance carrier's agents are required to be licensed under
26-1 the provisions of this code [Article, on the date that this Act
26-2 shall become effective,] unless that person [individual or entity]
26-3 shall have first procured a license from the department as [in this
26-4 Article is] provided by this subchapter, and no such insurance
26-5 carrier shall appoint any person[, corporation, or bank] to act as
26-6 its agent unless such person[, corporation, or bank] shall have
26-7 obtained a license under the provisions of this subchapter
26-8 [Article], and no such person[, corporation, or bank] who obtains a
26-9 license shall engage in business as an agent until that person
26-10 [individual or entity] shall have been appointed to act as an agent
26-11 by some duly authorized insurance carrier designated by the
26-12 provisions of this code [Article] and authorized to do business in
26-13 the State of Texas. [Any person, corporation, or bank desiring to
26-14 act as an agent of any insurance carrier licensed to do business in
26-15 the State of Texas and writing health and accident insurance may
26-16 obtain a separate license as an agent to write health and accident
26-17 insurance provided such person, corporation, or bank complies with
26-18 the provisions of this Article and has been appointed to act as an
26-19 agent by some duly authorized insurance carrier authorized to do
26-20 health and accident insurance business in the State of Texas.]
26-21 (b) This subchapter does not apply to:
26-22 (1) an actual full-time home office salaried employee
26-23 of an insurance carrier licensed to do business in this state,
26-24 other than an employee who solicits or receives an application for
26-25 the sale of insurance through an oral, written, or electronic
26-26 communication in accordance with Article 21.14 of this code;
27-1 (2) an actual attorney in fact or the actual traveling
27-2 salaried representative of a reciprocal exchange or interinsurance
27-3 exchange admitted to do business in this state as to business
27-4 transacted through the attorney in fact or salaried representative;
27-5 (3) the actual attorney in fact for a Lloyd's plan
27-6 insurer;
27-7 (4) the group motor vehicle insurance business or the
27-8 group motor vehicle department of companies engaged in that
27-9 business; or
27-10 (5) a salaried employee who is not involved in the
27-11 solicitation or negotiation of insurance in the office of a
27-12 licensed agent who devotes the employee's full time to clerical and
27-13 administrative services, including the incidental taking of
27-14 information from customers and receipt of premiums in the office of
27-15 a licensed agent, if the employee does not receive any commissions
27-16 and the employee's compensation is not varied by the volume of
27-17 premiums taken and received. [No insurer or licensed insurance
27-18 agent doing business in this State shall pay directly or indirectly
27-19 any commission, or other valuable consideration, to any person,
27-20 corporation, or bank for services as an insurance agent within this
27-21 State, unless such person, corporation, or bank shall hold a
27-22 currently valid license to act as an insurance agent as required by
27-23 the laws of this State; nor shall any person, corporation, or bank
27-24 other than a duly licensed insurance agent, accept any such
27-25 commission or other valuable consideration; provided, however, that
27-26 the provisions of this Section shall not prevent the payment or
28-1 receipt of renewal or other deferred commissions to or by any
28-2 person solely because such person, corporation, or bank has ceased
28-3 to hold a license to act as an insurance agent.]
28-4 [(c) A person who has had a license revoked under Section 10
28-5 of this article may not solicit or otherwise transact business
28-6 under Chapter 10 of this code.]
28-7 SECTION 1.10. Section 1A, Article 21.07, Insurance Code, is
28-8 amended to read as follows:
28-9 Sec. 1A. DEFINITIONS. Unless the context clearly indicates
28-10 otherwise, in [In] this subchapter:
28-11 (1) "Agent" means a person who is an authorized agent
28-12 of an insurance company or health maintenance organization, any
28-13 person who is a subagent of an agent, and any other person who
28-14 performs the acts of an agent, whether through an oral, written, or
28-15 electronic communication or otherwise, in the solicitation of,
28-16 negotiation for, procurement of, or collection of premiums on an
28-17 insurance or annuity contract, or who represents or purports to
28-18 represent a health maintenance organization, including a health
28-19 maintenance organization offering only a single health care service
28-20 plan, in the solicitation of, negotiation for, procurement of, or
28-21 effectuation of membership in the health maintenance organization.
28-22 The term does not include:
28-23 (A) a regular salaried officer or employee of an
28-24 insurance company, health maintenance organization, or insurance
28-25 agent who:
28-26 (i) devotes substantially all of the
29-1 officer's or employee's time to activities other than the
29-2 solicitation of applications for insurance, annuity contracts, or
29-3 memberships;
29-4 (ii) does not receive a commission or
29-5 other compensation directly dependent on the business obtained; and
29-6 (iii) does not solicit or accept from the
29-7 public applications for insurance, annuity contracts, or
29-8 memberships;
29-9 (B) an employer or an employer's officers or
29-10 employees or the trustees of an employee benefit plan, to the
29-11 extent that those employers, officers, employees, or trustees are
29-12 engaged in the administration or operation of any program of
29-13 employee benefits involving the use of insurance or annuities
29-14 issued by an insurance company or memberships issued by a health
29-15 maintenance organization, if those employers, officers, employees,
29-16 or trustees are not compensated, directly or indirectly, by the
29-17 insurance company or health maintenance organization issuing the
29-18 insurance or annuity contracts or memberships;
29-19 (C) except as otherwise provided by this code, a
29-20 depository institution, or the officers and employees of a
29-21 depository institution, to the extent that the depository
29-22 institution or officers and employees collect and remit premiums or
29-23 charges by charging those premiums or charges against accounts of
29-24 depositors on the orders of those depositors; or
29-25 (D) a person or the employee of a person who has
29-26 contracted to provide administrative, management, or health care
30-1 services to a health maintenance organization and who is
30-2 compensated for those services by the payment of an amount computed
30-3 as a percentage of the revenues, net income, or profit of the
30-4 health maintenance organization, if that method of compensation is
30-5 the sole basis for subjecting that person or the employee of the
30-6 person to this article.
30-7 (2) "Control" means the power to direct or cause the
30-8 direction of the management and policies of a license holder,
30-9 whether directly or indirectly. For the purposes of this
30-10 subchapter, a person is considered to control:
30-11 (A) a corporate license holder if the person,
30-12 individually or acting with others, directly or indirectly, holds
30-13 with the power to vote, owns, or controls, or holds proxies
30-14 representing, at least 10 percent of the voting stock or voting
30-15 rights of the corporate license holder; or
30-16 (B) a partnership if the person through a right
30-17 to vote or through any other right or power exercises rights in the
30-18 management, direction, or conduct of the business of the
30-19 partnership.
30-20 (3) "Corporation" means a legal entity that is
30-21 organized under the business corporations laws or limited liability
30-22 company laws of this state, another state, or a territory of the
30-23 United States and that has as one of its purposes the authority to
30-24 act as an insurance agent. The licensing and regulation of a
30-25 limited liability company is subject to all provisions of this
30-26 subchapter that apply to a corporation licensed under this
31-1 subchapter.
31-2 (4) "Depository institution" means:
31-3 (A) a bank or savings association as defined by
31-4 12 U.S.C. Section 1813, as amended;
31-5 (B) a foreign bank that maintains a branch,
31-6 agency, or commercial lending company in the United States;
31-7 (C) a federal or state credit union as defined
31-8 by 12 U.S.C. Section 1752, as amended;
31-9 (D) a bank branch; or
31-10 (E) a bank subsidiary, as defined by state or
31-11 federal law.
31-12 (5) "Individual" means a natural person. The term
31-13 includes a resident or a nonresident of this state.
31-14 (6) "Insurance company," "insurance carrier," or
31-15 "insurer" means an insurance company regulated by the department.
31-16 The term includes:
31-17 (A) any domestic or foreign, stock and mutual,
31-18 life, health, or accident insurance company;
31-19 (B) any domestic or foreign, stock and mutual,
31-20 fire and casualty insurance company;
31-21 (C) a Mexican casualty company;
31-22 (D) a domestic or foreign Lloyd's plan insurer;
31-23 (E) a domestic or foreign reciprocal or
31-24 interinsurance exchange;
31-25 (F) a domestic or foreign fraternal benefit
31-26 society;
32-1 (G) a stipulated premium insurance company;
32-2 (H) a nonprofit or for-profit legal service
32-3 corporation;
32-4 (I) a statewide mutual assessment company;
32-5 (J) a local mutual aid association;
32-6 (K) a local mutual burial association;
32-7 (L) an exempt association under Article 14.17 of
32-8 this code;
32-9 (M) a nonprofit hospital, medical, or dental
32-10 service corporation, including a company subject to Chapter 20 of
32-11 this code;
32-12 (N) a health maintenance organization;
32-13 (O) a county mutual insurance company; or
32-14 (P) a farm mutual insurance company.
32-15 (7) "Partnership" means an association of two or more
32-16 persons organized under the partnership laws or limited liability
32-17 partnership laws of this state, another state, or a territory of
32-18 the United States. The term includes a general partnership,
32-19 limited partnership, limited liability partnership, and limited
32-20 liability limited partnership.
32-21 (8) "Person" means an individual, partnership,
32-22 corporation, or depository institution.
32-23 (9) "Subagent" means any person engaging in activities
32-24 described under Subdivision (1) of this section who acts for or on
32-25 behalf of an agent, whether through an oral, written, or electronic
32-26 communication or otherwise, in the solicitation of, negotiation
33-1 for, or procurement of an insurance or annuity contract or health
33-2 maintenance organization membership, or the collection of premiums
33-3 or charges on an insurance or annuity contract or health
33-4 maintenance organization membership, whether or not the subagent is
33-5 designated by the agent as a subagent or by any other title. A
33-6 subagent is an agent, for all purposes of this subchapter, and
33-7 wherever the term "agent" is used in this chapter, it includes
33-8 subagents whether or not a subagent is specifically mentioned
33-9 [Article, "person" means an individual or a general partnership
33-10 composed of two or more individuals or a limited liability
33-11 partnership registered with the Secretary of State under Section
33-12 3.08, Texas Revised Partnership Act (Article 6132b-3.08, Vernon's
33-13 Texas Civil Statutes). The term "partnership" or "agency
33-14 partnership" as used in this Article means a general partnership or
33-15 a registered limited liability partnership].
33-16 SECTION 1.11. Section 2, Article 21.07, Insurance Code, is
33-17 amended to read as follows:
33-18 Sec. 2. APPLICATION FOR LICENSE; TO WHOM LICENSE MAY BE
33-19 ISSUED. (a) Any person[, corporation, or bank] that desires to
33-20 become an agent for an [a local mutual aid association, a local
33-21 mutual burial association, a statewide mutual assessment
33-22 corporation, a stipulated premium company, a county mutual]
33-23 insurance company or health maintenance organization[, a casualty
33-24 company writing accident and health insurance, or any other type of
33-25 insurance carrier licensed to do business in the State of Texas],
33-26 the agents of which are required to be licensed under this
34-1 subchapter [Article], shall submit to the department an application
34-2 for a license in the form required by the department.
34-3 (b) Each applicant for a license to act as an insurance
34-4 agent in this state shall file with the department a completed
34-5 application in the format prescribed by the department. The
34-6 commissioner shall establish by rule the requirements for a
34-7 properly completed application.
34-8 (c) The department may not grant a license as an insurance
34-9 agent to write any form of insurance unless the department finds
34-10 that:
34-11 (1) the applicant is or intends to be actively engaged
34-12 in the soliciting or writing of insurance for the public generally
34-13 and is to be actively engaged in the business of insurance; and
34-14 (2) the application is not made to evade the laws
34-15 against rebating and discrimination, either for the applicant or
34-16 for some other person.
34-17 (d) This section does not prohibit an applicant from
34-18 insuring property that the applicant owns or in which the applicant
34-19 has an interest, but it is the intent of this section to prohibit
34-20 coercion of insurance and to preserve to each individual the right
34-21 to choose that individual's own agent or insurance company, and to
34-22 prohibit the licensing of a person to engage in the insurance
34-23 business principally to handle business that the applicant controls
34-24 only through ownership, mortgage or sale, family relationship, or
34-25 employment. An applicant for an original license must have a bona
34-26 fide intention to engage in business in which, in any calendar
35-1 year, at least 25 percent of the total volume of premiums is
35-2 derived from persons other than the applicant and from property
35-3 other than that on which the applicant controls the placing of
35-4 insurance through ownership, mortgage, sale, family relationship,
35-5 or employment.
35-6 (e) The department may not deny a license application solely
35-7 on the ground that the applicant will act only part-time as an
35-8 agent.
35-9 (f) [The application must bear a signed endorsement by an
35-10 officer or properly authorized representative of the insurance
35-11 carrier that the individual applicant or each member of the
35-12 partnership or each officer, director, and shareholder of the
35-13 corporation or the responsible officer and employee of the bank is
35-14 qualified to hold that individual or the partnership, the
35-15 corporation, or the bank out in good faith to the general public as
35-16 an insurance agent, and that the insurance carrier desires that the
35-17 applicant act as an insurance agent to represent it in this State.]
35-18 [(c)] The department shall issue a license to an individual
35-19 to engage [or to a general partnership engaging] in the business of
35-20 insurance if the department finds that the individual:
35-21 (1) is at least 18 years of age;
35-22 (2) has passed the licensing examination required
35-23 under this code within the past 12 months;
35-24 (3) has not committed an act for which a license may
35-25 be denied under Article 21.01-2 of this code; and
35-26 (4) has submitted the application, appropriate fees,
36-1 and any other information required by the department.
36-2 (g) An individual engaging in the business of insurance as a
36-3 sole proprietorship under the authority of a license issued under
36-4 this subchapter may incorporate, but the corporation does not have
36-5 greater license authority than that granted to the license holder
36-6 in the holder's individual capacity.
36-7 (h) Each individual license holder shall notify the
36-8 department on a monthly basis of:
36-9 (1) a change of the license holder's mailing address;
36-10 (2) a conviction of the license holder of a felony; or
36-11 (3) an administrative action taken against the license
36-12 holder by a financial or insurance regulator of this state, another
36-13 state, or the United States [partner in the partnership must be
36-14 licensed individually as an agent under this Article].
36-15 (i) [(d)] The department shall issue a license to a
36-16 corporation or partnership if the department finds that:
36-17 (1) [That] the corporation or partnership is:
36-18 (A) organized under the laws of this state or
36-19 any other state or territory of the United States;
36-20 (B) admitted to conduct business in this state
36-21 by the secretary of state, if so required; and
36-22 (C) authorized by its articles of incorporation
36-23 or its partnership agreement to act as an insurance agent [a Texas
36-24 corporation organized or existing under the Texas Business
36-25 Corporation Act or the Texas Professional Corporation Act (Article
36-26 1528e, Vernon's Texas Civil Statutes) having its principal place of
37-1 business in the State of Texas and having as one of its purposes
37-2 the authority to act as an agent covered by this Article];
37-3 (2) the corporation or partnership meets the
37-4 definition of that entity adopted under Section 1A of this article;
37-5 [That every officer, director, and shareholder of the corporation
37-6 is individually licensed under the provisions of this Article, or
37-7 that every officer and director of the corporation is individually
37-8 licensed under this Article, that the corporation is a wholly owned
37-9 subsidiary of a parent corporation that is licensed under this
37-10 Article, and that every shareholder of the parent corporation is
37-11 individually licensed under this Article; and]
37-12 (3) at least one officer of the corporation or one
37-13 active partner of the partnership and all other persons performing
37-14 any acts of an agent on behalf of the corporation or partnership in
37-15 this state are individually licensed by the department separately
37-16 from the corporation or partnership;
37-17 (4) the [That such] corporation or partnership will
37-18 have the ability to pay any sums up to $25,000 which it might
37-19 become legally obligated to pay on account of any claim made
37-20 against it by any customer and caused by any negligent act, error,
37-21 or omission of the corporation or partnership or any person for
37-22 whose acts the corporation or partnership is legally liable in the
37-23 conduct of its business under this code [Article]. The term
37-24 "customer" means any person, firm, or corporation to whom such
37-25 corporation or partnership sells or attempts to sell a policy of
37-26 insurance, or from whom such corporation or partnership accepts an
38-1 application for insurance. Such ability shall be maintained
38-2 [proven] in one of the following ways:
38-3 (A) an errors and omissions policy insuring such
38-4 corporation or partnership against errors and omissions in at least
38-5 the sum of $250,000 [$100,000] with [no more than] a [$10,000]
38-6 deductible of not more than 10 percent of the full amount of the
38-7 policy [feature] issued by an insurance company licensed to do
38-8 business in this state [the State of Texas] or, if a policy cannot
38-9 be obtained from a company licensed to do business in this state
38-10 [Texas], a surplus lines insurance policy issued under Article
38-11 1.14-2 of this code [by a company not licensed to do business in
38-12 Texas on filing an affidavit with the department stating the
38-13 inability to obtain coverage and receiving the commissioner's
38-14 approval]; or
38-15 (B) a bond executed by such corporation or
38-16 partnership as principal and a surety company authorized to do
38-17 business in this state [State], as surety, in the principal sum of
38-18 $25,000, payable to the department for the use and benefit of
38-19 customers of such corporation or partnership, conditioned that such
38-20 corporation or partnership shall pay any final judgment recovered
38-21 against it by any customer[; or]
38-22 [(C) a deposit of cash or securities of the
38-23 class authorized by Articles 2.08 and 2.10, Insurance Code, as
38-24 amended, having a fair market value of $25,000 with the
38-25 comptroller. The comptroller is directed to accept and receive
38-26 such deposit and hold it exclusively for the protection of any
39-1 customer of such corporation recovering a final judgment against
39-2 such corporation. Such deposit may be withdrawn only upon filing
39-3 with the department evidence satisfactory to it that the
39-4 corporation has withdrawn from business and has no unsecured
39-5 liabilities outstanding, or that such corporation has provided for
39-6 the protection of its customers by furnishing an errors and
39-7 omissions policy or a bond as provided. Securities so deposited
39-8 may be exchanged from time to time for other qualified securities].
39-9 A binding commitment to issue such a policy or bond[, or the tender
39-10 of such securities,] shall be sufficient in connection with any
39-11 application for license;
39-12 (5) the corporation or partnership intends to be
39-13 actively engaged in the business of insurance as required under
39-14 Subsection (c) of this section;
39-15 (6) each location from which the corporation or
39-16 partnership will conduct its business in this state under authority
39-17 of an insurance license is separately registered with the
39-18 department;
39-19 (7) the corporation or partnership has submitted the
39-20 application, appropriate fees, and any other information required
39-21 by the department; and
39-22 (8) an officer, director, member, manager, partner, or
39-23 any other person who has the right or ability to control the
39-24 license holder has not:
39-25 (A) had a license suspended or revoked or been
39-26 the subject of any other disciplinary action by a financial or
40-1 insurance regulator of this state, another state, or the United
40-2 States; or
40-3 (B) committed an act for which a license may be
40-4 denied under Article 21.01-2 of this code.
40-5 (j) Nothing contained in this section [herein] shall be
40-6 construed to permit any unlicensed employee or agent of any
40-7 corporation or partnership to perform any act of an agent under
40-8 this subchapter [Article] without obtaining a license.
40-9 (k) [If at any time, any corporation holding an agent's
40-10 license does not maintain the qualifications necessary to obtain a
40-11 license, the license of such corporation to act as an agent shall
40-12 be cancelled or denied in accordance with the provisions of
40-13 Sections 10 and 11 of this Article; provided, however, that should
40-14 any person who is not a licensed agent under this Article acquire
40-15 shares in such a corporation by devise or descent, that person
40-16 shall have a period of 90 days from date of acquisition within
40-17 which to obtain a license or to dispose of the shares to a person
40-18 licensed under this Article.]
40-19 [Should such an unlicensed person acquire shares in a
40-20 corporation and not dispose of them within a period of 90 days to a
40-21 licensed agent, then they must be purchased by the corporation for
40-22 their book value, that is, the value of said shares of stock as
40-23 reflected by the regular books and records of said corporation, as
40-24 of the date of the acquisition of said shares by said unlicensed
40-25 person. Should the corporation fail or refuse to so purchase such
40-26 shares, its license shall be cancelled.]
41-1 [Any such corporation shall have the power to redeem
41-2 the shares of any shareholder, or the shares of a deceased
41-3 shareholder, upon such terms as may be agreed upon by the board of
41-4 directors and such shareholder or such shareholder's personal
41-5 representative, or at a price and upon such terms as may be
41-6 provided in the articles of incorporation, the bylaws, or an
41-7 existing contract entered into between the shareholders of the
41-8 corporation.]
41-9 Each corporation or partnership licensed as an agent
41-10 under this subchapter [Article] shall file, under oath, on a form
41-11 developed by the department, biographical information for each [a
41-12 list of the names and addresses of all] of its executive officers
41-13 and[,] directors or unlicensed partners who administer the entity's
41-14 operations in this state, and shareholders who are in control of
41-15 the corporation, or any other partners who have the right or
41-16 ability to control the partnership. If any corporation or
41-17 partnership is owned, in whole or in part, by another entity, a
41-18 biographical form is required for each individual who is in control
41-19 of the parent entity[, and shareholders with its application for
41-20 renewal license].
41-21 (l) Each corporation or partnership shall notify the
41-22 department not later than the 30th day after the date of:
41-23 (1) a felony conviction of a licensed agent of the
41-24 entity or any individual associated with the corporation or
41-25 partnership who is required to file biographical information with
41-26 the department;
42-1 (2) an event that would require notification under
42-2 Section 81.003 of this code; and
42-3 (3) the addition or removal of an officer, director,
42-4 partner, member, or manager.
42-5 (m) The department shall issue a license to a depository
42-6 institution in the manner provided for the licensing of a
42-7 corporation under this section.
42-8 (n) A person may not acquire in any manner any ownership
42-9 interest in an entity licensed as an agent under this subchapter if
42-10 the person is, or after the acquisition would be, directly or
42-11 indirectly, in control of the license holder, or otherwise acquire
42-12 control of or exercise any control over the license holder, unless
42-13 the person has filed the following information with the department
42-14 under oath:
42-15 (1) a biographical form for each person by whom or on
42-16 whose behalf the acquisition of control is to be effected;
42-17 (2) a statement certifying that no person who is
42-18 acquiring an ownership interest in or control of the license holder
42-19 has been the subject of a disciplinary action taken by a financial
42-20 or insurance regulator of this state, another state, or the United
42-21 States;
42-22 (3) a statement certifying that, immediately on the
42-23 change of control, the license holder will be able to satisfy the
42-24 requirements for the issuance of the license to solicit the line or
42-25 lines of insurance for which it is licensed; and
42-26 (4) any additional information that the commissioner
43-1 may by rule prescribe as necessary or appropriate to the protection
43-2 of the insurance consumers of this state or as in the public
43-3 interest.
43-4 (o) If a person required to file a statement under
43-5 Subsection (n) of this section is a partnership, limited
43-6 partnership, syndicate, or other group, the commissioner may
43-7 require that the information required by Subdivisions (1)-(4) of
43-8 that subsection for an individual be provided regarding each
43-9 partner of the partnership or limited partnership, each member of
43-10 the syndicate or group, and each person who controls the partner or
43-11 member. If the partner, member, or person is a corporation or the
43-12 person required to file the statement under Subsection (n) of this
43-13 section is a corporation, the commissioner may require that the
43-14 information required by Subdivisions (1)-(4) of that subsection be
43-15 provided regarding:
43-16 (1) the corporation;
43-17 (2) each individual who is an executive officer or
43-18 director of the corporation; and
43-19 (3) each person who is directly or indirectly the
43-20 beneficial owner of more than 10 percent of the outstanding voting
43-21 securities of the corporation.
43-22 (p) The department may disapprove an acquisition of control
43-23 if, after notice and opportunity for hearing, the commissioner
43-24 determines that:
43-25 (1) immediately on the change of control the license
43-26 holder would not be able to satisfy the requirements for the
44-1 issuance of the license to solicit the line or lines of insurance
44-2 for which it is presently licensed;
44-3 (2) the competence, trustworthiness, experience, and
44-4 integrity of the persons who would control the operation of the
44-5 license holder are such that it would not be in the interest of the
44-6 insurance consumers of this state to permit the acquisition of
44-7 control; or
44-8 (3) the acquisition of control would violate this code
44-9 or another law of this state, another state, or the United States.
44-10 (q) Notwithstanding Subsection (o) of this section, a change
44-11 in control is considered approved if the department has not
44-12 proposed to deny the requested change before the 61st day after the
44-13 date of receipt by the department of all information required by
44-14 this section.
44-15 (r) The commissioner is the corporation's or partnership's
44-16 agent for service of process in the manner provided by Section 3,
44-17 Article 1.36, of this code in a legal proceeding against the
44-18 corporation or partnership if:
44-19 (1) the corporation or partnership licensed to
44-20 transact business in this state fails to appoint or maintain an
44-21 agent for service in this state;
44-22 (2) an agent for service cannot with reasonable
44-23 diligence be found; or
44-24 (3) the license of a corporation or partnership is
44-25 revoked.
44-26 (s) If a license holder does not maintain the qualifications
45-1 necessary to obtain the license, the department shall revoke or
45-2 suspend the license or deny the renewal of the license under
45-3 Article 21.01-2 of this code.
45-4 (t) A person licensed under this subchapter shall maintain
45-5 all insurance records, including all records relating to customer
45-6 complaints, separate from the records of any other business in
45-7 which the person may be engaged.
45-8 (u) A subagent must be licensed to write each type of
45-9 insurance that the subagent is employed to write, but the subagent
45-10 is not required to hold each type of license issued to the agent
45-11 for whom the subagent acts.
45-12 [Each corporation shall notify the department upon any
45-13 change in its officers, directors, or shareholders not later than
45-14 the 30th day after the date on which the change becomes effective.]
45-15 [Except as provided by Subdivision (2) of this
45-16 subsection, a corporation may not own any interest in another
45-17 corporation licensed under this Article, and each owner of an
45-18 interest in a corporation licensed under this Article shall be a
45-19 natural person who holds a valid license issued under this Article.]
45-20 [(e) The department shall issue a license to a bank if the
45-21 department finds that:]
45-22 [(1) the bank satisfies the definition of Section 1C
45-23 of this Article;]
45-24 [(2) at least one officer of the bank and each
45-25 individual who will be performing any acts as an agent for the bank
45-26 are individually licensed under this Article; and]
46-1 [(3) the bank will have the ability to pay any sums up
46-2 to $25,000 that it might become legally obligated to pay on account
46-3 of any claim made against it by a customer and caused by a
46-4 negligent act, error, or omission of the bank or any person for
46-5 whose acts the bank is legally liable in the conduct of its
46-6 business under this Article. The term "customer" means any person,
46-7 firm, or corporation to whom the bank sells or attempts to sell a
46-8 policy of insurance or from whom the bank accepts an application
46-9 for insurance. That ability shall be proven through:]
46-10 [(A) an errors and omissions policy insuring the
46-11 bank against errors and omissions in at least the sum of $100,000
46-12 with not more than a $10,000 deductible feature, issued by an
46-13 insurance company licensed to do business in this state or, if a
46-14 policy cannot be obtained from a company licensed to do business in
46-15 this state, a policy issued by a company not licensed to do
46-16 business in this state on filing an affidavit with the department
46-17 stating the inability to obtain coverage and receiving the
46-18 department's approval;]
46-19 [(B) a bond executed by the bank as principal
46-20 and a surety company authorized to do business in this state, as
46-21 surety, in the principal sum of $25,000, payable to the department
46-22 for the use and benefit of customers of the bank, conditioned that
46-23 the bank shall pay any final judgment recovered against it by a
46-24 customer; or]
46-25 [(C) a deposit with the comptroller of cash or
46-26 securities of the class authorized by Articles 2.08 and 2.10 of
47-1 this code, with a fair market value of $25,000. The comptroller
47-2 shall accept and receive the deposit and hold it exclusively for
47-3 the protection of a customer of the bank who recovers a final
47-4 judgment against the bank. The deposit may be withdrawn only on
47-5 filing with the department satisfactory evidence that the bank has
47-6 withdrawn from the business of insurance and has no unsecured
47-7 liabilities outstanding or that the bank has provided for the
47-8 protection of its customers by furnishing an errors and omissions
47-9 policy or a bond as provided by this subdivision. Securities so
47-10 deposited may be exchanged from time to time for other qualified
47-11 securities.]
47-12 [A binding commitment to issue such a policy or bond,
47-13 or the tender of applicable securities, is sufficient in connection
47-14 with an application for license.]
47-15 [Nothing in this subsection permits an unlicensed
47-16 employee or agent of a bank to perform any act of an agent under
47-17 this Article without obtaining a license.]
47-18 [A bank licensed as an agent under this Article may
47-19 have additional offices from which the business of insurance is
47-20 conducted only in a place with a population of 5,000 or less and
47-21 must comply with the department's regulations regarding additional
47-22 offices.]
47-23 [A bank licensed as an agent under this Article must
47-24 maintain the insurance records of the bank, including all files
47-25 relating to customer complaints, separate from records relating to
47-26 the banking transactions of the bank.]
48-1 [If at any time, a bank that holds an agent's license
48-2 does not maintain the qualifications necessary to obtain a license,
48-3 the license of that bank to act as an agent shall be canceled or
48-4 denied in accordance with Sections 10 and 11 of this Article.]
48-5 [Each bank licensed as an agent under this Article
48-6 shall file under oath with its application for license renewal a
48-7 list of the name and address of each individual who will be acting
48-8 as an agent on behalf of the bank and of each officer and director
48-9 of the bank, as defined by Article 21.02 of this code, and other
48-10 biographical information as required by the department.]
48-11 [Each bank shall notify the department of any change in
48-12 its officers and directors, and any change in other persons who
48-13 will be acting as agents, as defined by Article 21.02 of this code,
48-14 and submit biographical information on those officers, directors,
48-15 and persons as required by the department not later than the 30th
48-16 day after the date on which the change takes effect.]
48-17 SECTION 1.12. Article 21.07, Insurance Code, is amended by
48-18 adding Section 3A to read as follows:
48-19 Sec. 3A. TEMPORARY LICENSE. (a) The department may issue a
48-20 temporary agent's license to an applicant for a license under
48-21 Section 2 of this article who is being considered for appointment
48-22 as an agent by another license holder, an insurer, or a health
48-23 maintenance organization. An applicant for a temporary license is
48-24 not required to pass a written examination. A temporary license is
48-25 valid for the 90 days after the date of issuance. The department
48-26 shall issue a temporary license immediately on receipt by the
49-1 department of a properly completed application executed by the
49-2 person in the form required by Section 2 of this article,
49-3 accompanied by the nonrefundable filing fee set by the department
49-4 and a certificate signed by an officer or properly authorized
49-5 representative of the agent, insurer, or health maintenance
49-6 organization stating that:
49-7 (1) the applicant is being considered for appointment
49-8 by the agent, insurer, or health maintenance organization as its
49-9 full-time agent;
49-10 (2) the agent, insurer, or health maintenance
49-11 organization desires that the applicant be issued a temporary
49-12 license; and
49-13 (3) the applicant will complete, under the agent's,
49-14 insurer's, or health maintenance organization's supervision, at
49-15 least 40 hours of training as prescribed by Subsection (h) of this
49-16 section not later than the 14th day after the date on which the
49-17 application, certificate, and nonrefundable fee are delivered or
49-18 mailed to the department.
49-19 (b) If the temporary license is not received from the
49-20 department before the eighth day after the date on which the
49-21 application, certificate, and nonrefundable fee are delivered or
49-22 mailed to the department and the agent, insurer, or health
49-23 maintenance organization has not been notified that the application
49-24 is denied, the agent, insurer, or health maintenance organization
49-25 may assume that the temporary license will be issued and the
49-26 applicant may proceed to act as an agent.
50-1 (c) A temporary license may not be renewed or issued more
50-2 than once in a consecutive six-month period to the same applicant.
50-3 (d) A temporary license may not be granted to a person who
50-4 does not intend to apply for a license to sell insurance or
50-5 memberships to the public generally.
50-6 (e) A temporary license may not be used to obtain
50-7 commissions from sales made to persons who have family, employment,
50-8 or business relationships with the temporary license holder. An
50-9 agent, insurer, or health maintenance organization may not
50-10 knowingly pay, directly or indirectly, to the holder of a temporary
50-11 license under this section, and a temporary license holder may not
50-12 receive or accept, a commission on the sale of a contract of
50-13 insurance or membership covering:
50-14 (1) the temporary license holder;
50-15 (2) a person related to the temporary license holder
50-16 by consanguinity or affinity;
50-17 (3) a person who is or has been during the past six
50-18 months the temporary license holder's employer, either as an
50-19 individual or as a member of a partnership, association, firm, or
50-20 corporation; or
50-21 (4) a person who is or who has been during the past
50-22 six months the employee of the temporary license holder.
50-23 (f) A person who has been issued a temporary license under
50-24 this section and is acting under the authority of the temporary
50-25 license may not engage in any insurance solicitation, sale, or
50-26 other agency transaction that results in or is intended to result
51-1 in the replacement of any existing individual life insurance policy
51-2 form or annuity contract that is in force, or receive, directly or
51-3 indirectly, any commission or other compensation that may or does
51-4 result from such a solicitation, sale, or other agency transaction.
51-5 A person who holds a permanent license may not circumvent or
51-6 attempt to circumvent the intent of this subsection by acting for
51-7 or with a person holding a temporary license. As used in this
51-8 subsection, "replacement" means a transaction in which a new life
51-9 insurance or annuity contract is to be purchased, and it is known
51-10 or should be known to the temporary agent that by reason of the
51-11 solicitation, sale, or other transaction the existing life
51-12 insurance or annuity contract has been or is to be:
51-13 (1) lapsed, forfeited, surrendered, or otherwise
51-14 terminated;
51-15 (2) converted to reduced paid-up insurance, continued
51-16 as extended term insurance, or otherwise reduced in value by the
51-17 use of nonforfeiture benefits or other policy values;
51-18 (3) amended so as to effect either a reduction in
51-19 benefits or in the term for which coverage would otherwise remain
51-20 in force or for which benefits would be paid;
51-21 (4) reissued with any reduction in cash value; or
51-22 (5) pledged as collateral or subjected to borrowing,
51-23 whether in a single loan or under a schedule of borrowing over a
51-24 period of time, for amounts in the aggregate exceeding 25 percent
51-25 of the loan value set forth in the policy.
51-26 (g) The department may cancel, suspend, or revoke the
52-1 temporary appointment powers of an agent, insurer, or health
52-2 maintenance organization if, after notice and opportunity for
52-3 hearing, the commissioner finds that that agent, insurer, or health
52-4 maintenance organization has abused the temporary appointment
52-5 powers. An appeal from the department's decision is subject to
52-6 Chapter 36 of this code. In considering whether abuse has
52-7 occurred, the department may consider:
52-8 (1) the number of temporary appointments made;
52-9 (2) the percentage of appointees sitting for
52-10 examination as agents under this article, as provided by Subsection
52-11 (j) of this section; and
52-12 (3) the number of appointees who pass the examination.
52-13 (h) The agent, insurer, or health maintenance organization
52-14 shall administer at least 40 hours of training to each applicant
52-15 for a temporary license not later than the 14th day after the date
52-16 on which the application, certificate, and nonrefundable fee are
52-17 delivered or mailed to the department. At least 10 hours must be
52-18 taught in a classroom setting, including an accredited college,
52-19 university, junior college, or community college, a business
52-20 school, or a private institute or classes sponsored by the agent,
52-21 insurer, or health maintenance organization and especially
52-22 established for this purpose. The training program must be
52-23 designed to provide an applicant with basic knowledge of:
52-24 (1) the broad principles of insurance, including the
52-25 licensing and regulatory laws of this state;
52-26 (2) the broad principles of health maintenance
53-1 organizations, including membership requirements and related
53-2 licensing and regulatory laws of this state; and
53-3 (3) the ethical obligations and duties of an agent.
53-4 (i) If the commissioner finds under Subsection (g) of this
53-5 section that an abuse of temporary appointment powers has occurred,
53-6 the commissioner may require the affected agent, insurer, or health
53-7 maintenance organization to file with the department a description
53-8 of the agent's, insurer's, or health maintenance organization's
53-9 training program and may require the agent, insurer, or health
53-10 maintenance organization to obtain the approval of the department
53-11 before continuing to use the training program.
53-12 (j) Each agent, insurer, or health maintenance organization
53-13 shall ensure that, during any two consecutive calendar quarters, at
53-14 least 70 percent of the agent's, insurer's, or health maintenance
53-15 organization's applicants for temporary licenses sit for the
53-16 required licensing examination. At least 50 percent of the
53-17 applicants taking the examination must pass during that period.
53-18 (k) An agent, insurer, or health maintenance organization
53-19 may not make more than 250 appointments of temporary license
53-20 holders during a calendar year.
53-21 SECTION 1.13. Section 6, Article 21.07, Insurance Code, is
53-22 amended to read as follows:
53-23 Sec. 6. FILING OF [AGENT MAY BE LICENSED TO REPRESENT]
53-24 ADDITIONAL APPOINTMENTS [INSURERS]. (a) Except as specifically
53-25 prohibited by another provision of this code, an [Any] agent
53-26 licensed under this subchapter [Article] may represent and act as
54-1 an agent for more than one insurance carrier at any time while the
54-2 agent's license is in force, if the agent so desires. Any such
54-3 agent and the insurance carrier involved shall notify the
54-4 department, in a form prescribed by the department, of [must give
54-5 notice to the State Board of Insurance of] any additional
54-6 appointment [or appointments] authorizing the agent to act as agent
54-7 for an additional insurance carrier or carriers not later than the
54-8 30th day after the effective date of the appointment. The filing
54-9 [Such notice] must include [be accompanied by a certificate from
54-10 each insurance carrier to be named in each additional appointment,
54-11 and must state that said insurance company desires to appoint the
54-12 applicant as its agent. This notice shall also contain such other
54-13 information as the State Board of Insurance may require. The agent
54-14 shall be required to pay] a nonrefundable fee in an amount [not to
54-15 exceed $16 as] determined by the commissioner [State Board of
54-16 Insurance] for each additional appointment for which the insurance
54-17 carrier applies [applied for, which fee shall accompany the notice.
54-18 If approval of the additional appointment is not received from the
54-19 State Board of Insurance before the eighth day after the date on
54-20 which the completed application and fee were received by the Board,
54-21 the agent and the insurance carrier, in the absence of notice of
54-22 disapproval, may assume that the Board approves the application,
54-23 and the agent may act for the insurance carrier].
54-24 (b) An appointment made under this Article to authorize an
54-25 agent to act as an agent for an insurance carrier continues in
54-26 effect without the necessity of renewal until it is terminated or
55-1 [and] withdrawn by the insurance carrier or agent. If the agent is
55-2 terminated for cause, the insurance carrier shall follow the
55-3 procedures established under Section 6B of [as provided by this
55-4 section or is otherwise terminated in accordance with] this
55-5 Article. Each renewal license issued to the agent authorizes the
55-6 agent to represent and act for the insurance carriers for which the
55-7 agent holds an appointment until the appointment is terminated or
55-8 withdrawn, and that agent is considered to be the agent of the
55-9 appointing insurance carriers for the purposes of this code
55-10 [Article].
55-11 (c) An agent appointed under this section may act on behalf
55-12 of the appointing carrier before the department receives the filing
55-13 made under this section.
55-14 (d) If a general life, accident, and health agent or general
55-15 property and casualty agent who has been appointed by an insurance
55-16 carrier authorized to engage in the business of insurance in this
55-17 state appoints a subagent, the general agent shall notify the
55-18 department about the appointment in writing on a form prescribed by
55-19 the department. The notice must be accompanied by a nonrefundable
55-20 fee in an amount determined by the commissioner.
55-21 (e) An insurance carrier is not required to separately
55-22 appoint a subagent who has been designated in writing to the
55-23 department as a subagent by an agent.
55-24 (f) If an agent terminates a subagent for any reason other
55-25 than for cause, the agent shall promptly report the termination to
55-26 the department. The termination ends the subagent's authority to
56-1 act for the licensed agent or the insurance carrier for whom the
56-2 agent is acting. If the subagent is terminated for cause, Section
56-3 6B of this article applies.
56-4 SECTION 1.14. Article 21.07, Insurance Code, is amended by
56-5 adding Sections 6B and 6C to read as follows:
56-6 Sec. 6B. INSURANCE CARRIER TO NOTIFY DEPARTMENT OF
56-7 TERMINATION OF CONTRACT FOR CAUSE; COMMUNICATION PRIVILEGED.
56-8 (a) Each insurance carrier or agent shall, on termination of the
56-9 appointment of an agent for cause, immediately file with the
56-10 department a statement of the facts relating to the termination of
56-11 the appointment and the date and cause of the termination. On
56-12 receipt of the statement the department shall record the
56-13 termination of the appointment of that agent to represent the
56-14 insurance carrier in this state.
56-15 (b) A document, record, statement, or other information
56-16 required to be made or disclosed to the department under this
56-17 section is a privileged and confidential communication and is not
56-18 admissible in evidence in any court action or proceeding except
56-19 under a subpoena issued by a court of record.
56-20 (c) An insurance agent, insurance carrier, an employee or
56-21 agent of the carrier, or any other person, acting without malice,
56-22 is not liable for providing the information required to be
56-23 disclosed under this section.
56-24 Sec. 6C. FEES; USE OF FUNDS. (a) The department shall
56-25 collect from each agent of an insurance carrier writing insurance
56-26 in this state under this code a nonrefundable license fee and a
57-1 nonrefundable appointment fee for each appointment by an insurance
57-2 carrier. These fees, together with examination fees, license fees,
57-3 and license renewal fees, shall be deposited to the credit of the
57-4 Texas Department of Insurance operating fund.
57-5 (b) The department may use any portion of the fees collected
57-6 to enforce this subchapter, may employ persons as it considers
57-7 necessary to investigate and make reports regarding alleged
57-8 violations of this code and misconduct on the part of agents, and
57-9 may pay the salaries and expenses of those persons and office
57-10 employees and other expenses necessary to enforce this subchapter
57-11 from the fees collected. A person employed by the department under
57-12 this section may administer the oath and examine under oath any
57-13 person considered necessary in gathering information and evidence
57-14 and may have that information and evidence reduced to writing if
57-15 considered necessary, and all related expenses shall be paid from
57-16 the fees.
57-17 (c) The department shall set the fees in amounts reasonable
57-18 and necessary to implement this subchapter.
57-19 ARTICLE 2. LIFE, ACCIDENT, AND HEALTH LICENSES
57-20 SECTION 2.01. Subchapter A, Chapter 21, Insurance Code, is
57-21 amended by adding Article 21.07-1 to read as follows:
57-22 Art. 21.07-1. TEXAS LIFE, ACCIDENT, AND HEALTH AGENTS
57-23 LICENSE ACT
57-24 Sec. 1. SHORT TITLE; APPLICATION. (a) This article may be
57-25 cited as the Texas Life, Accident, and Health Agents License Act.
57-26 (b) Each agent of an insurance company authorized to provide
58-1 life, accident, and health insurance coverage in this state is
58-2 subject to this article. This article applies to each person who:
58-3 (1) performs the acts of an agent, as defined by
58-4 Article 21.02 of this code, whether through oral, written, or
58-5 electronic communications or otherwise, by the solicitation of,
58-6 negotiation for, procurement of, or collection of premiums on an
58-7 insurance or annuity contract offered by any type of insurance
58-8 carrier authorized to sell life, accident, and health insurance
58-9 products in this state; or
58-10 (2) represents or purports to represent a health
58-11 maintenance organization in the solicitation, negotiation,
58-12 procurement, or effectuation of membership in the health
58-13 maintenance organization.
58-14 Sec. 2. GENERAL LIFE, ACCIDENT, AND HEALTH LICENSE; LICENSE
58-15 REQUIRED. (a) A general life, accident, and health license is
58-16 required for each person who acts as:
58-17 (1) an agent writing life, accident, and health
58-18 insurance for a life insurance company;
58-19 (2) an agent writing only accident and health
58-20 insurance;
58-21 (3) an agent representing a health maintenance
58-22 organization;
58-23 (4) an agent writing fixed or variable annuity
58-24 contracts or variable life contracts;
58-25 (5) an industrial life insurance agent for an
58-26 industrial company that writes only weekly premium life insurance
59-1 on a debit basis under Article 3.52 of this code;
59-2 (6) an agent writing:
59-3 (A) only life insurance in excess of $15,000 on
59-4 any one life for a stipulated premium insurance company;
59-5 (B) only accident and health insurance for a
59-6 stipulated premium insurance company; or
59-7 (C) both types of insurance described by
59-8 Paragraphs (A) and (B) of this subdivision;
59-9 (7) an agent writing life, accident, and health
59-10 insurance for any type of authorized life insurance company,
59-11 including a legal reserve life insurance company, domiciled in this
59-12 state, representing the insurer in a foreign country or territory
59-13 and either on a United States military installation or with United
59-14 States military personnel;
59-15 (8) an agent writing life, accident, and health
59-16 insurance for a fraternal benefit society except as provided by
59-17 Article 10.37-3 of this code; or
59-18 (9) an agent writing any other type of insurance as
59-19 required by the commissioner for the protection of the insurance
59-20 consumers of this state.
59-21 (b) For the purposes of this subsection, a "combination
59-22 company" is an insurer that writes weekly premium life insurance or
59-23 monthly ordinary life insurance on a debit basis. A general life,
59-24 accident, and health license is required for each person who acts
59-25 as a combination life insurance agent for a combination company. A
59-26 combination company and a combination life insurance agent may also
60-1 write ordinary contracts of life insurance.
60-2 Sec. 3. AUTHORITY TO WRITE ADDITIONAL PRODUCT LINES. A
60-3 person who holds a general life, accident, and health license
60-4 issued under the requirements of this subchapter may, without
60-5 obtaining an additional license, write additional types of
60-6 insurance contracts as provided under:
60-7 (1) Sections 4, 5, and 6 of this article; or
60-8 (2) Article 21.09 of this code.
60-9 Sec. 4. LIMITED LIFE, ACCIDENT, AND HEALTH LICENSE. (a) An
60-10 agent must hold a limited life, accident, and health license if the
60-11 agent writes:
60-12 (1) a policy or rider to a policy that provides only:
60-13 (A) lump-sum cash benefits in the event of
60-14 accidental death, death by accidental means, or dismemberment; or
60-15 (B) ambulance expense benefits in the event of
60-16 accident or sickness;
60-17 (2) a prepaid legal services contract under Article
60-18 5.13-1 or Chapter 23 of this code;
60-19 (3) credit insurance except as otherwise provided
60-20 under Article 21.09 of this code; or
60-21 (4) any other type of insurance, if determined
60-22 necessary by the commissioner to protect insurance consumers in
60-23 this state.
60-24 (b) A person who holds a limited life, accident, and health
60-25 license issued under this section may write only the types of
60-26 insurance products designated on the license by the department.
61-1 (c) An applicant for a limited life, accident, and health
61-2 license is eligible for a temporary license under Section 3A,
61-3 Article 21.07, of this code.
61-4 Sec. 5. FUNERAL PREARRANGEMENT LIFE INSURANCE AGENT.
61-5 (a) In this section, "funeral prearrangement life insurance agent"
61-6 means a life insurance agent who, subject to the limitations of
61-7 this section, writes only life insurance policies and fixed annuity
61-8 contracts to secure the delivery of funeral services and
61-9 merchandise under prepaid funeral contracts regulated by the Texas
61-10 Department of Banking under Chapter 154, Finance Code.
61-11 (b) The department shall issue a license to act as a funeral
61-12 prearrangement life insurance agent to an individual after
61-13 receiving certification from an insurance company authorized to
61-14 write life insurance and annuities in this state that the applicant
61-15 has completed a course of study and instruction on life insurance
61-16 and fixed annuities for applicants offered by the insurance company
61-17 and passed without aid a written examination administered by the
61-18 insurance company. The course of study and instruction must be at
61-19 least a five-hour course and must include instruction on:
61-20 (1) the policies to be sold; and
61-21 (2) the laws relating to funeral prearrangement.
61-22 (c) The commissioner shall authorize an insurance company to
61-23 administer a funeral prearrangement life insurance agent
61-24 examination as provided by Subsection (b) of this section after
61-25 approval by the commissioner of a complete outline and explanation
61-26 of the course of study and instruction and the nature and manner of
62-1 conducting the examination for applicants. The commissioner shall
62-2 prescribe a uniform examination for applicants that fairly
62-3 addresses the information contained in the approved course of study
62-4 and instruction.
62-5 (d) The commissioner may investigate as necessary the manner
62-6 of instruction and the examination administered by an insurance
62-7 company under this section. The commissioner may withdraw from an
62-8 insurance company the authority under this section to offer
62-9 instruction and administer an examination.
62-10 (e) A funeral prearrangement life insurance agent licensed
62-11 under this section may not:
62-12 (1) write any coverage or combination of coverages
62-13 with an initial guaranteed death benefit that exceeds $15,000 on
62-14 any life; or
62-15 (2) act as an agent for more than one insurance
62-16 company.
62-17 (f) A license issued under this section to act as an agent
62-18 for an insurance company is canceled when the license holder ceases
62-19 to act as an agent for an insurance company. Not later than the
62-20 15th day after the date on which the license holder ceases to act
62-21 as an agent for an insurance company, the insurance company or
62-22 agent shall send written notification to the department.
62-23 (g) Except as specifically provided by this section, the
62-24 provisions of this subchapter that apply to a limited license apply
62-25 to a license issued under this section.
62-26 Sec. 6. LIFE INSURANCE NOT EXCEEDING $15,000. (a) The
63-1 department shall issue a license to act as an agent to an
63-2 individual who writes only life insurance not to exceed $15,000 on
63-3 any one life after receiving certification from a stipulated
63-4 premium insurance company, a statewide mutual assessment company, a
63-5 local mutual aid association, or a local mutual burial association,
63-6 that the applicant has completed a course of study and instruction
63-7 on life insurance and fixed annuities offered by the insurer and
63-8 passed without aid a written examination administered by the
63-9 insurer. The course of study and instruction must be at least a
63-10 five-hour course and must include instruction on:
63-11 (1) the policies to be sold; and
63-12 (2) the laws relating to the regulation of insurance
63-13 in this state.
63-14 (b) The commissioner shall authorize an insurer described by
63-15 Subsection (a) of this section to administer an agent examination
63-16 as provided by Subsection (a) of this section after approval by the
63-17 commissioner of a complete outline and explanation of the course of
63-18 study and instruction and the nature and manner of conducting the
63-19 examination for applicants. The commissioner shall prescribe a
63-20 uniform examination for applicants that fairly addresses the
63-21 information contained in the approved course of study and
63-22 instruction.
63-23 (c) The commissioner may investigate as necessary the manner
63-24 of instruction and the examination administered by an insurer under
63-25 this section. The commissioner may withdraw from an insurer the
63-26 authority under this section to offer instruction and administer an
64-1 examination.
64-2 (d) An insurance agent licensed under this section may not
64-3 write any coverage or combination of coverages with an initial
64-4 guaranteed death benefit that exceeds $15,000 on any life.
64-5 (e) A license is not required under this section for an
64-6 agent who, in the preceding calendar year, wrote policies that
64-7 generated, in the aggregate, less than $20,000 in direct premium.
64-8 (f) Except as specifically provided by this section, the
64-9 provisions of this subchapter that apply to a limited license apply
64-10 to a license issued under this section.
64-11 ARTICLE 3. PROPERTY AND CASUALTY LICENSES
64-12 SECTION 3.01. Article 21.14, Insurance Code, is amended to
64-13 read as follows:
64-14 Art. 21.14. TEXAS PROPERTY AND CASUALTY AGENTS LICENSE ACT
64-15 Sec. 1. SHORT TITLE; APPLICATION. (a) This article may be
64-16 cited as the Texas Property and Casualty Agents License Act.
64-17 (b) Each agent of an insurance company authorized to provide
64-18 property and casualty insurance coverage in this state is subject
64-19 to this article. This article applies to each person who performs
64-20 the acts of an agent, as defined by Article 21.02 of this code,
64-21 whether through oral, written, or electronic communications or
64-22 otherwise, by the solicitation of, negotiation for, procurement of,
64-23 or collection of premiums on an insurance contract offered by any
64-24 type of insurance carrier authorized to sell property and casualty
64-25 insurance products in this state, including:
64-26 (1) a fidelity or surety company;
65-1 (2) an inter-insurance exchange;
65-2 (3) a mutual company, including a farm mutual or a
65-3 county mutual;
65-4 (4) a reciprocal exchange; or
65-5 (5) a Lloyd's plan insurer.
65-6 Sec. 2. GENERAL PROPERTY AND CASUALTY LICENSE; LICENSE
65-7 REQUIRED. A general property and casualty license is required for
65-8 each person who acts as:
65-9 (1) an agent writing property and casualty insurance
65-10 for an insurance carrier authorized to provide property and
65-11 casualty insurance coverage in this state;
65-12 (2) a subagent of a person licensed as an agent under
65-13 this article who solicits and binds insurance risks on behalf of
65-14 that agent; or
65-15 (3) an agent writing any other type of insurance as
65-16 required by the commissioner for the protection of the insurance
65-17 consumers of this state.
65-18 Sec. 3. AUTHORITY TO WRITE ADDITIONAL PRODUCT LINES. A
65-19 person who holds a general property and casualty license issued
65-20 under this subchapter may write additional types of insurance
65-21 contracts as provided under:
65-22 (1) Sections 6 and 9 of this article; or
65-23 (2) Article 21.09 of this code.
65-24 Sec. 4. AUTHORITY TO WRITE ACCIDENT AND HEALTH INSURANCE. A
65-25 person who holds a general property and casualty license issued
65-26 under this subchapter may write health and accident insurance for a
66-1 property and casualty insurer authorized to sell those insurance
66-2 products in this state without holding a license issued under
66-3 Article 21.07-1 of this code.
66-4 Sec. 5. EMERGENCY LICENSE WITHOUT EXAMINATION. In the event
66-5 of the death or disability of a property and casualty agent or if a
66-6 property and casualty agent is found to be insolvent and unable to
66-7 pay for premiums as they become due to an insurer, the department
66-8 may issue to an applicant for a property and casualty license an
66-9 emergency property and casualty license without examination if it
66-10 is established to the satisfaction of the department that the
66-11 emergency license is necessary for the preservation of the agency
66-12 assets of a deceased, disabled, or insolvent property and casualty
66-13 agent. An emergency license is valid for 90 days in any 12
66-14 consecutive months and may be renewed by the department for an
66-15 additional 90 days during the 12-month period if the other
66-16 requirements of this subchapter are met.
66-17 Sec. 6. LIMITED PROPERTY AND CASUALTY LICENSE. (a) A
66-18 limited property and casualty license is required for each person
66-19 who desires to act as an agent writing:
66-20 (1) job protection insurance as defined by Article
66-21 25.01 of this code;
66-22 (2) insurance only on growing crops under Article
66-23 21.14-2 of this code;
66-24 (3) any form of insurance authorized under Chapter 16
66-25 of this code for a farm mutual insurance company;
66-26 (4) exclusively all forms of insurance authorized to
67-1 be solicited and written in this state that cover the ownership,
67-2 operation, maintenance, or use of a motor vehicle that is designed
67-3 for use on the public highways, including a trailer or semitrailer,
67-4 and the motor vehicle's accessories or equipment;
67-5 (5) exclusively all forms of insurance authorized to
67-6 be solicited and written in this state that relate to the
67-7 ownership, occupancy, maintenance, or use of a manufactured home
67-8 that is classified as personal property under Section 2.001,
67-9 Property Code;
67-10 (6) prepaid legal services contracts under Article
67-11 5.13-1 or Chapter 23 of this code;
67-12 (7) only industrial fire insurance policies covering
67-13 dwellings, household goods, and wearing apparel written on a
67-14 weekly, monthly, or quarterly basis on a continuous premium payment
67-15 plan and written for an insurance company whose business is devoted
67-16 exclusively to that business as described by Article 17.02 of this
67-17 code;
67-18 (8) credit insurance, except as otherwise provided by
67-19 Article 21.09 of this code; or
67-20 (9) any other type of insurance as required by the
67-21 commissioner for the protection of the insurance consumers of this
67-22 state.
67-23 (b) Subsection (a)(2) of this section applies to a
67-24 production credit association or bank for a cooperative, as
67-25 provided under the farm credit system under 12 U.S.C. 2001 et seq.,
67-26 as amended.
68-1 (c) A person who holds a limited property and casualty
68-2 license issued under this subchapter may write only the types of
68-3 insurance products designated on the license by the department.
68-4 (d) This section does not apply to a person who wrote:
68-5 (1) policies, authorized under Chapter 16 of this code
68-6 for a farm mutual insurance company, that generated, in the
68-7 aggregate, less than $50,000 in direct premium for the previous
68-8 calendar year; or
68-9 (2) industrial fire insurance policies that generated,
68-10 in the aggregate, less than $20,000 in direct premium for the
68-11 previous calendar year.
68-12 Sec. 7. FULL-TIME HOME OFFICE EMPLOYEES: MANDATORY
68-13 REGISTRATION, CONTINUING EDUCATION REQUIREMENTS, AND NOTIFICATION
68-14 TO CONSUMERS; DISCIPLINARY ACTIONS. (a) Each actual full-time
68-15 home office salaried employee of an insurance carrier licensed to
68-16 do business in this state who solicits or receives an application
68-17 for the sale of insurance through an oral, written, or electronic
68-18 communication shall register with the department.
68-19 (b) An insurance carrier licensed to do business in this
68-20 state whose general plan of operation includes the use of employees
68-21 described by Subsection (a) of this section shall certify to the
68-22 department that each of those employees receives at least 15 hours
68-23 of continuing education annually. Each continuing education course
68-24 provided by the insurance carrier shall be submitted to the
68-25 department for approval as provided by Section 3, Article 21.01-1,
68-26 of this code. A person registered under this section shall comply
69-1 with the continuing education requirements adopted under Section 3,
69-2 Article 21.01-1, of this code, as if the person were a licensed
69-3 agent. The continuing education must be designed to give the
69-4 employee:
69-5 (1) reasonable familiarity with:
69-6 (A) the broad principles of insurance;
69-7 (B) insurance licensing and regulatory laws; and
69-8 (C) the terms and conditions of the insurance
69-9 that the registrant transacts; and
69-10 (2) a fair and general understanding of the duties of
69-11 an insurer to an insured, including training in ethical
69-12 considerations.
69-13 (c) The registration of an actual full-time home office
69-14 salaried employee shall be suspended and the employer insurance
69-15 carrier may be disciplined for any act for which an agent may be
69-16 disciplined under Article 21.01-2 of this code.
69-17 (d) Each registrant under this section shall disclose the
69-18 fact of the registration when making an oral, written, or
69-19 electronic communication to solicit or receive an application for
69-20 the sale of insurance.
69-21 (e) Each person who registers under this section shall
69-22 submit a nonrefundable registration fee in an amount determined by
69-23 the department.
69-24 Sec. 8. INSURANCE SERVICE REPRESENTATIVE LICENSE. (a) An
69-25 insurance service representative license is required for each
69-26 person who is employed on a salaried basis to perform assigned
70-1 duties only in the office of a property and casualty agent,
70-2 including explaining insurance coverage, describing an insurance
70-3 product, quoting insurance premium rates, and issuing insurance
70-4 binders only with the express approval of the property and casualty
70-5 agent who supervises the insurance service representative.
70-6 (b) The provisions of this subchapter that apply to a
70-7 general license apply to a license issued under this section,
70-8 except that proof of financial responsibility is not required of a
70-9 person licensed only as an insurance service representative.
70-10 Sec. 9. COUNTY MUTUAL AGENT LICENSE. (a) The department
70-11 shall issue a license to act as an agent for a county mutual
70-12 insurance company under Chapter 17 of this code to an individual
70-13 applicant after receiving certification from the insurance company
70-14 that the applicant has:
70-15 (1) completed a course of study and instruction on
70-16 motor vehicle insurance and insurance covering dwellings offered by
70-17 the insurance company; and
70-18 (2) passed without aid a written examination
70-19 administered by the insurance company.
70-20 (b) The course completed under Subsection (a) of this
70-21 section must be at least a five-hour course and must include
70-22 instruction on:
70-23 (1) the policies to be sold; and
70-24 (2) the laws relating to the regulation of insurance
70-25 in this state.
70-26 (c) The commissioner shall authorize a county mutual
71-1 insurance company to administer an agent examination as provided by
71-2 Subsection (a) of this section after approval by the commissioner
71-3 of a complete outline and explanation of the course of study and
71-4 instruction and the nature and manner of conducting the examination
71-5 for applicants. The commissioner shall prescribe a uniform
71-6 examination for applicants that fairly addresses the information
71-7 contained in the approved course of study and instruction.
71-8 (d) The department may investigate as necessary the manner
71-9 of instruction and the examination administered by an insurance
71-10 company under this section. The department may withdraw from an
71-11 insurance company the authority under this section to offer
71-12 instruction and administer an examination.
71-13 (e) Except as specifically provided by this section, the
71-14 provisions of this subchapter that apply to a limited license apply
71-15 to a license issued under this section. [LICENSING OF LOCAL
71-16 RECORDING AGENTS AND SOLICITORS; LIFE, HEALTH AND ACCIDENT
71-17 INSURANCE EXCEPTED; OTHER EXCEPTIONS]
71-18 [Sec. 1. CLASSES OF AGENTS. Insurance agents, as that term
71-19 is defined in the laws of this State, shall for the purpose of this
71-20 article be divided into two classes: Local Recording Agents and
71-21 Solicitors.]
71-22 [Sec. 2. DEFINITIONS; CERTAIN ORDERS, SOCIETIES OR
71-23 ASSOCIATIONS NOT AFFECTED. (a) In this article:]
71-24 [(1) "Local Recording Agent" means a person or firm
71-25 engaged in soliciting and writing insurance, being authorized by an
71-26 insurance company or insurance carrier, including fidelity and
72-1 surety companies, to solicit business and to write, sign, execute,
72-2 and deliver policies of insurance, and to bind companies on
72-3 insurance risks, and who maintain an office and a record of such
72-4 business and the transactions which are involved, who collect
72-5 premiums on such business and otherwise perform the customary
72-6 duties of a local recording agent representing an insurance carrier
72-7 in its relation with the public; or a person or firm engaged in
72-8 soliciting and writing insurance, being authorized by an insurance
72-9 company or insurance carrier, including fidelity and surety
72-10 companies, to solicit business, and to forward applications for
72-11 insurance to the home office of the insurance companies and
72-12 insurance carriers, where the insurance company's and insurance
72-13 carrier's general plan of operation in this State provides for the
72-14 appointment and compensation of agents for insurance and for the
72-15 execution of policies of insurance by the home office of the
72-16 insurance company or insurance carrier, or by a supervisory office
72-17 of such insurance company or insurance carrier, and who maintain an
72-18 office and a record of such business and the transactions which are
72-19 involved, and who collect premiums on such business and otherwise
72-20 qualify and perform the customary duties of a local recording agent
72-21 representing an insurance carrier in its relation with the public.]
72-22 [(2) "Solicitor" means a person who is a bona fide
72-23 solicitor and engaged in the business of soliciting and binding
72-24 insurance risks on behalf of a local recording agent, and who
72-25 offices with such local recording agent, and who does not sign and
72-26 execute policies of insurance, and who does not maintain company
73-1 records of such transactions. This shall not be construed to make
73-2 a solicitor of a local recording agent, who places business of a
73-3 class which the rules of the company or carrier require to be
73-4 placed on application or to be written in a supervisory office. A
73-5 solicitor may bind insurance risks only with the express prior
73-6 approval of the local recording agent for whom the solicitor works.]
73-7 [(3) "Board" means the State Board of Insurance.]
73-8 [(4) "Company" or "Carrier" means any insurance
73-9 company, corporation, inter-insurance exchange, mutual, reciprocal,
73-10 association, Lloyds or other insurance carrier licensed to transact
73-11 business in the State of Texas other than as excepted herein.]
73-12 [(5) "Insurance service representative" means a
73-13 solicitor employed on a salaried basis who performs assigned duties
73-14 only within the office of a local recording agent, which may
73-15 include binding insurance risks, but only with the express prior
73-16 approval of the local recording agent for whom the representative
73-17 works.]
73-18 [(b) Nothing contained in this article shall be so construed
73-19 as to affect or apply to orders, societies, or associations which
73-20 admit to membership only persons engaged in one or more crafts or
73-21 hazardous occupations in the same or similar lines of business, and
73-22 the ladies' societies, or ladies' auxiliary to such orders,
73-23 societies or associations, or any secretary of a Labor Union or
73-24 organization, or any secretary or agent of any fraternal benefit
73-25 society, which does not operate at a profit, except that a person
73-26 who has had a license revoked under Section 16 of this article may
74-1 not solicit or otherwise transact business under Chapter 10 of this
74-2 code.]
74-3 [Sec. 3. APPLICATION FOR LICENSE; TO WHOM LICENSE MAY BE
74-4 ISSUED. (a) When any person, partnership, registered limited
74-5 liability partnership, limited liability company, corporation, or
74-6 bank shall desire to engage in business as a local recording agent
74-7 for an insurance company, or insurance carrier, that person or
74-8 entity shall make application for a license to the Texas Department
74-9 of Insurance, in such form as the Department may require. Such
74-10 application shall bear a signed endorsement by a general, state or
74-11 special agent of a qualified insurance company, or insurance
74-12 carrier that applicant or each member of the partnership or each
74-13 stockholder of the corporation or each member of the limited
74-14 liability company is a resident of this state.]
74-15 [(b) The Department shall issue a license to an individual
74-16 or a general partnership or a limited liability partnership
74-17 registered with the Secretary of State under Section 3.08, Texas
74-18 Revised Partnership Act (Article 6132b-3.08, Vernon's Texas Civil
74-19 Statutes), engaging in the business of insurance. The Department
74-20 may not issue a license to a partnership if an inactive partner who
74-21 is not subject to Section 3a of this article has an interest in the
74-22 partnership principally to have written and be compensated therefor
74-23 for insurance on property controlled through ownership, mortgage or
74-24 sale, family relationship, or employment; and provided further,
74-25 that all licensed agents must be residents of Texas. Provided,
74-26 that a person who resides in a town through which the state line
75-1 runs and whose residence is in the town in the adjoining state may
75-2 be licensed, if the person's business office is being maintained in
75-3 this state. All persons acting as agent or solicitor for health
75-4 and accident insurance within the provisions hereof, and who
75-5 represent only fire and casualty companies, and not life insurance
75-6 companies, shall be required to procure only one license, and such
75-7 license as is required under the provisions of this article.]
75-8 [(c) The Department shall issue a license to a corporation
75-9 if the Department finds:]
75-10 [(1) That the corporation is a Texas corporation
75-11 organized or existing under the Texas Business Corporation Act or
75-12 the Texas Professional Corporation Act having its principal place
75-13 of business in the State of Texas and having as one of its purposes
75-14 the authority to act as a local recording agent; and]
75-15 [(2) That every officer, director and shareholder of
75-16 the corporation is individually licensed as a local recording agent
75-17 under the provisions of this Insurance Code, except as may be
75-18 otherwise permitted by this Section or Section 3a of this article,
75-19 or that every officer and director of the corporation is
75-20 individually licensed as a local recording agent under this
75-21 Insurance Code, that the corporation is a wholly owned subsidiary
75-22 of a parent corporation that is licensed as a local recording agent
75-23 under this Insurance Code, and that every shareholder of the parent
75-24 corporation is individually licensed as a local recording agent
75-25 under this Insurance Code, and except as specifically provided by
75-26 this article, that no shareholder of the corporation is a corporate
76-1 entity; and]
76-2 [(3) That such corporation will have the ability to
76-3 pay any sums up to $25,000 which it might become legally obligated
76-4 to pay on account of any claim made against it by any customer and
76-5 caused by any negligent act, error or omission of the corporation
76-6 or any person for whose acts the corporation is legally liable in
76-7 the conduct of its business as a local recording agent. The term
76-8 "customer" as used herein shall mean any person, firm or
76-9 corporation to whom such corporation sells or attempts to sell a
76-10 policy of insurance, or from whom such corporation accepts an
76-11 application for insurance. Such ability shall be proven in one of
76-12 the following ways:]
76-13 [(A) An errors and omissions policy insuring
76-14 such corporation against errors and omissions, in at least the sum
76-15 of $100,000 with no more than a $10,000 deductible feature or the
76-16 sum of at least $300,000 with no more than a $25,000 deductible
76-17 feature, issued by an insurance company licensed to do business in
76-18 the State of Texas or, if a policy cannot be obtained from a
76-19 company licensed to do business in Texas, a policy issued by a
76-20 company not licensed to do business in Texas, on filing an
76-21 affidavit with the Texas Department of Insurance stating the
76-22 inability to obtain coverage and receiving the Department's
76-23 approval; or]
76-24 [(B) A bond executed by such corporation as
76-25 principal and a surety company authorized to do business in this
76-26 state, as surety, in the principal sum of $25,000, payable to the
77-1 Texas Department of Insurance for the use and benefit of customers
77-2 of such corporation, conditioned that such corporation shall pay
77-3 any final judgment recovered against it by any customer; or]
77-4 [(C) A deposit of cash or securities of the
77-5 class authorized by Articles 2.08 and 2.10 of this Code, having a
77-6 fair market value of $25,000 with the comptroller. The comptroller
77-7 is hereby authorized and directed to accept and receive such
77-8 deposit and hold it exclusively for the protection of any customer
77-9 of such corporation recovering a final judgment against such
77-10 corporation. Such deposit may be withdrawn only upon filing with
77-11 the Department evidence satisfactory to it that the corporation has
77-12 withdrawn from business, and has no unsecured liabilities
77-13 outstanding, or that such corporation has provided for the
77-14 protection of its customers by furnishing an errors and omissions
77-15 policy or a bond as hereinbefore provided. Securities so deposited
77-16 may be exchanged from time to time for other qualified securities.]
77-17 [A binding commitment to issue such a policy or bond,
77-18 or the tender of such securities, shall be sufficient in connection
77-19 with any application for license.]
77-20 [Nothing contained herein shall be construed to permit
77-21 any unlicensed employee or agent of any corporation to perform any
77-22 act of a local recording agent without obtaining a local recording
77-23 agent's license. The Department shall not require a corporation to
77-24 take the examination provided in Section 6 of this Article 21.14.]
77-25 [If at any time, any corporation holding a local
77-26 recording agent's license does not maintain the qualifications
78-1 necessary to obtain a license, the license of such corporation to
78-2 act as a local recording agent shall be cancelled or denied in
78-3 accordance with the provisions of Sections 16, 17 and 18 of this
78-4 Article 21.14; provided, however, that should any person who is not
78-5 a licensed local recording agent acquire shares in such a
78-6 corporation by devise or descent, they shall have a period of 90
78-7 days from date of acquisition within which to obtain a license as a
78-8 local recording agent or to dispose of the shares to a licensed
78-9 local recording agent except as may be permitted by Section 3a of
78-10 this article.]
78-11 [Should such an unlicensed person, except as may be
78-12 permitted by Section 3a of this article, acquire shares in such a
78-13 corporation and not dispose of them within said period of 90 days
78-14 to a licensed local recording agent, then they must be purchased by
78-15 the corporation for their book value, that is, the value of said
78-16 shares of stock as reflected by the regular books and records of
78-17 said corporation, as of the date of the acquisition of said shares
78-18 by said unlicensed person. Should the corporation fail or refuse
78-19 to so purchase such shares, its license shall be cancelled.]
78-20 [Any such corporation shall have the power to redeem
78-21 the shares of any shareholder, or the shares of a deceased
78-22 shareholder, upon such terms as may be agreed upon by the Board of
78-23 Directors and such shareholder or his personal representative, or
78-24 at such price and upon such terms as may be provided in the
78-25 Articles of Incorporation, the Bylaws, or an existing contract
78-26 entered into between the shareholders of the corporation.]
79-1 [Each corporation licensed as a local recording agent
79-2 shall file, under oath, a list of the names and addresses of all of
79-3 its officers, directors and shareholders with its application for
79-4 renewal license.]
79-5 [Each corporation licensed as a local recording agent
79-6 shall notify the Texas Department of Insurance upon any change in
79-7 its officers, directors or shareholders not later than the 30th day
79-8 after the date on which the change became effective.]
79-9 [The term "firm" as it applies to local recording
79-10 agents in Sections 2, 12 and 16 of this Article 21.14 shall be
79-11 construed to include corporations.]
79-12 [(d) The department shall issue a license to a bank if the
79-13 department finds that:]
79-14 [(1) the bank is a national banking association
79-15 organized and existing under the National Bank Acts (12 U.S.C.
79-16 Section 21 et seq.), a state bank organized and existing under
79-17 Subtitle A, Title 3, Finance Code, a state savings bank organized
79-18 and existing under Subtitle C, Title 3, Finance Code, or a bank
79-19 operating subsidiary, as defined by state or federal law, that is
79-20 located and doing business in this state in a place with a
79-21 population of 5,000 or less;]
79-22 [(2) at least one officer of the bank and each
79-23 individual who will be performing any acts of an agent for the bank
79-24 are individually licensed under this Article; and]
79-25 [(3) the bank will have the ability to pay any sums up
79-26 to $25,000 that it might become legally obligated to pay on account
80-1 of any claim made against it by a customer and caused by a
80-2 negligent act, error, or omission of the bank or any person for
80-3 whose acts the bank is legally liable in the conduct of its
80-4 business as a local recording agent. The term "customer" means any
80-5 person, firm, or corporation to whom the bank sells or attempts to
80-6 sell a policy of insurance or from whom the bank accepts an
80-7 application for insurance. That ability shall be proven through:]
80-8 [(A) an errors and omissions policy insuring the
80-9 bank against errors and omissions, in at least the sum of $100,000
80-10 with not more than a $10,000 deductible feature, or the sum of at
80-11 least $300,000 with not more than a $25,000 deductible feature,
80-12 issued by an insurance company licensed to do business in this
80-13 state or, if a policy cannot be obtained from a company licensed to
80-14 do business in this state, a policy issued by a company not
80-15 licensed to do business in this state, on filing an affidavit with
80-16 the department stating the inability to obtain coverage and
80-17 receiving the department's approval;]
80-18 [(B) a bond executed by the bank as principal
80-19 and a surety company authorized to do business in this state, as
80-20 surety, in the principal sum of $25,000, payable to the department
80-21 for the use and benefit of customers of the bank, conditioned that
80-22 the bank shall pay any final judgment recovered against it by a
80-23 customer; or]
80-24 [(C) a deposit with the comptroller of cash or
80-25 securities of the class authorized by Articles 2.08 and 2.10 of
80-26 this code, with a fair market value of $25,000. The comptroller
81-1 shall accept and receive the deposit and hold it exclusively for
81-2 the protection of a customer of the bank who recovers a final
81-3 judgment against the bank. The deposit may be withdrawn only on
81-4 filing with the department satisfactory evidence that the bank has
81-5 withdrawn from the business of insurance and has no unsecured
81-6 liabilities outstanding or that the bank has provided for the
81-7 protection of its customers by furnishing an errors and omissions
81-8 policy or a bond as provided by this subsection. Securities so
81-9 deposited may be exchanged from time to time for other qualified
81-10 securities.]
81-11 [A binding commitment to issue such a policy or bond,
81-12 or the tender of applicable securities, is sufficient in connection
81-13 with an application for license.]
81-14 [Nothing in this subsection shall be construed to
81-15 permit an unlicensed employee or agent of a bank to perform any act
81-16 of a local recording agent without obtaining a local recording
81-17 agent's license. The department may not require a bank to take the
81-18 examination provided by Section 6 of this Article.]
81-19 [A bank licensed as an agent under this Article may
81-20 have additional offices from which the business of insurance is
81-21 conducted only in a place with a population of 5,000 or less and
81-22 must comply with the department's regulations regarding additional
81-23 offices.]
81-24 [A bank licensed as an agent under this article must
81-25 maintain its insurance records, including all files relating to and
81-26 reflecting customer complaints, separate from records relating to
82-1 banking transactions of the bank.]
82-2 [If a bank that holds a local recording agent's license
82-3 does not maintain the qualifications necessary to obtain a license,
82-4 the license of that bank to act as a local recording agent shall be
82-5 canceled or denied in accordance with Sections 16 and 18 of this
82-6 article.]
82-7 [Each bank licensed as a local recording agent shall
82-8 file under oath with its application for license renewal a list of
82-9 the name and address of each individual who will be acting as an
82-10 agent on behalf of the bank and of each officer and director of the
82-11 bank, as defined by Article 21.02 of this code, and other
82-12 biographical information as required by the department.]
82-13 [Each bank licensed as a local recording agent shall
82-14 notify the department of any change in its officers and directors
82-15 and any change in other persons who will be performing any acts of
82-16 an agent, as defined by Article 21.02 of this code, and submit
82-17 biographical information on those officers, directors, and persons
82-18 as required by the department not later than the 30th day after the
82-19 date on which the change takes effect.]
82-20 [The term "firm," as that term applies to local
82-21 recording agents in Sections 2, 12, and 16 of this article,
82-22 includes corporations and banks.]
82-23 [(e) The term "partnership" or "agency partnership" as used
82-24 in this Article means a general partnership or a registered limited
82-25 liability partnership domiciled in Texas.]
82-26 [(f) In this Article, the term "corporation" or
83-1 "corporations" shall mean a corporation organized under the Texas
83-2 Business Corporation Act, The Texas Professional Corporation Act
83-3 (Article 1528e, Vernon's Texas Civil Statutes), or a Texas
83-4 domiciled limited liability company organized or existing under the
83-5 Texas Limited Liability Company Act (Article 1528n, Vernon's Texas
83-6 Civil Statutes) having its principal place of business in this
83-7 state and having as one of its purposes the authority to act as an
83-8 insurance agent. Each officer, manager, and member of a limited
83-9 liability company must be licensed under this Article. The
83-10 licensing and regulation of a limited liability company shall be
83-11 subject to the same provisions and requirements of this Article
83-12 that are applicable to corporations licensed under this Article.]
83-13 [(g) In this article, the term "bank" means a national
83-14 banking association organized and existing under the National Bank
83-15 Acts (12 U.S.C. Section 21 et seq.), a state bank organized and
83-16 existing under Subtitle A, Title 3, Finance Code, a state savings
83-17 bank organized and existing under Subtitle C, Title 3, Finance
83-18 Code, a bank branch, or a bank operating subsidiary, as defined by
83-19 state or federal law, that is located and doing business in this
83-20 state in a place with a population of 5,000 or less. A bank
83-21 operating subsidiary, as defined by state or federal law, located
83-22 and doing business in a place in this state with a population of
83-23 5,000 or less may own a licensed corporate agent that is also
83-24 located and doing business in a place with a population of 5,000 or
83-25 less, and is subject to Section 3a(5) of this Article.]
83-26 [Sec. 3a. PERSONS OTHER THAN LICENSED LOCAL RECORDING AGENTS
84-1 WHO MAY SHARE IN PROFITS OF LOCAL RECORDING AGENT. (1) Upon the
84-2 death of a duly licensed local recording agent who is a member of
84-3 an agency partnership, the surviving spouse and children, if any,
84-4 of such deceased partner, or a trust for such surviving spouse and
84-5 children, may share in the profits of such agency partnership
84-6 during the lifetime of such surviving spouse or such children, as
84-7 the case may be, if and as provided by a written partnership
84-8 agreement, or in the absence of any written agreement, if and as
84-9 agreed by the surviving partner or partners and the surviving
84-10 spouse, the trustee, and the legal representative of the surviving
84-11 child or children. Such surviving spouse and any such surviving
84-12 children or trusts shall not be required to qualify as local
84-13 recording agents to participate in such profits, but shall not do
84-14 or perform any act of a local recording agent on behalf of such
84-15 partnership without having qualified as a local recording agent;
84-16 provided, however, that a duly licensed local recording agent who
84-17 is a member of an agency partnership may, with the approval of the
84-18 other members of the partnership, transfer an interest in the
84-19 agency partnership to his children or a trust for same, and may
84-20 operate such interest for their use and benefit; and such children
84-21 or trusts may share in the profits of such agency partnership.
84-22 Such child or children or trusts shall not be required to qualify
84-23 as a local recording agent to participate in such profits, but
84-24 shall not do or perform any act of a local recording agent on
84-25 behalf of such partnership without having qualified as a local
84-26 recording agent.]
85-1 [(2) Upon the death of a duly licensed local recording
85-2 agent, who is a sole proprietorship, unless otherwise provided by
85-3 the last will of such deceased agent, the surviving spouse and
85-4 children, if any, of such deceased agent, or a trust for such
85-5 spouse or children, may share in the profits of the continuance of
85-6 the agency business of said deceased agent, provided such agency
85-7 business is continued by a duly licensed local recording agent.
85-8 Said surviving spouse, trusts or children, may participate in such
85-9 profits during the lifetime of such surviving spouse and said
85-10 children. Said surviving spouse, trusts or children shall not be
85-11 required to qualify as local recording agents in order to
85-12 participate in the profits of such agency, but shall not do or
85-13 perform any act of a local recording agent in connection with the
85-14 continuance of such agency business without first having been duly
85-15 licensed as a local recording agent; provided, however, that a duly
85-16 licensed local recording agent who is a sole proprietorship may
85-17 transfer an interest in his agency to his children, or a trust for
85-18 same, and may operate such interest for their use and benefit; and
85-19 such children may share in the profits of such local recording
85-20 agency during their lifetime, and during such time shall not be
85-21 required to qualify as a local recording agent in order to
85-22 participate in such profits, but shall not do or perform any act of
85-23 a local recording agent in connection with such agency business
85-24 without first having been duly licensed as a local recording agent.]
85-25 [(3) Upon the death of a shareholder in a corporate licensed
85-26 local recording agency, the surviving spouse and children, if any,
86-1 of such deceased shareholder, or a trust for such surviving spouse
86-2 and children, may share in the profits of such corporate agency
86-3 during the lifetime of such surviving spouse or children, as the
86-4 case may be, if and as provided by a contract entered into by and
86-5 between all of the shareholders and the corporation. Any such
86-6 surviving spouse, surviving children, or trusts shall not be
86-7 required to individually qualify as a local recording agent in
86-8 order to participate in such profits, but shall not do or perform
86-9 any act of a local recording agency on behalf of such corporation
86-10 without having qualified as a local recording agent; provided,
86-11 however, that a shareholder in a corporate licensed local recording
86-12 agent, may, if provided by a contract entered into by and between
86-13 all of the shareholders and the corporation, transfer an interest
86-14 in the agency to his children or a trust for same, and such
86-15 children or trusts may share in the profits of such agency to the
86-16 extent of such interest during their lifetime. Such children or
86-17 trusts shall not be required to qualify as a local recording agent
86-18 to participate in such profits, but shall not do or perform any act
86-19 of a local recording agent on behalf of such corporation without
86-20 having qualified as a local recording agent.]
86-21 [(4) Except as provided in Subsections (1), (2), and (3)
86-22 above, and as may be provided in Section 6a, Article 21.14 of the
86-23 Insurance Code, no person shall be entitled to perform any act of a
86-24 local recording agent nor in any way participate as a partner or
86-25 corporate shareholder in the profits of any local recording agent,
86-26 without first having qualified as a duly licensed local recording
87-1 agent and having successfully passed the examination required by
87-2 the Insurance Code; provided, however, that all persons, or trusts
87-3 for any person, that received licenses before March 1, 1963, as
87-4 silent, inactive, or non-active partners, or who are silent,
87-5 inactive, or non-active partners in an agency which was so
87-6 qualified before such date, shall continue to receive licenses, or
87-7 renewals thereof, as partners in such agency or in any successor
87-8 agency, providing: (a) that such persons are members of an agency
87-9 in which there is at least one partner who has qualified as a duly
87-10 licensed local recording agent; (b) that such non-active partner or
87-11 partners do not actively solicit insurance; and (c) that such
87-12 agency is not a limited partnership.]
87-13 [(5) Notwithstanding any provision of this article or this
87-14 code to the contrary, a bank located and doing business in a place
87-15 with a population of 5,000 or less that owns a licensed bank
87-16 operating subsidiary, as defined by state or federal law, that is
87-17 also located and doing business in a place with a population of
87-18 5,000 or less may receive profits from the licensed bank operating
87-19 subsidiary. To advertise under the bank name or participate in the
87-20 insurance operation other than by receiving profits from the
87-21 insurance business, the bank must hold an agent license. Nothing
87-22 in this section permits a bank or any affiliate to pay commissions
87-23 or other valuable consideration to any nonlicensed employees, and a
87-24 bank may not pay, credit, or otherwise reward particular
87-25 nonlicensed units or geographic locations of the bank or any of its
87-26 affiliates with a portion of the commission.]
88-1 [Sec. 4. ACTING WITHOUT LICENSE FORBIDDEN. (a) It shall be
88-2 unlawful for any person, firm, partnership, corporation or bank, or
88-3 any partner, officer, director, employee, or shareholder of a
88-4 corporation, or any officer, director, or employee of a bank to act
88-5 as a local recording agent or solicitor in procuring business for
88-6 any insurance company, corporation, interinsurance exchange,
88-7 mutual, reciprocal, association, Lloyds or other insurance carrier,
88-8 until that person or entity shall have in force the license
88-9 provided for herein.]
88-10 [(b) No insurer doing business in this state shall pay
88-11 directly or indirectly any commission, or other valuable
88-12 consideration, to any person, firm, partnership, corporation, or
88-13 bank for services as a local recording agent within this state,
88-14 unless such person, firm, partnership, corporation, or bank shall
88-15 hold a currently valid license and appointment to act as a local
88-16 recording agent as required by the laws of this state; nor shall
88-17 any person, firm, partnership, corporation, or bank other than a
88-18 duly licensed and appointed local recording agent accept any such
88-19 commission or other valuable consideration; provided, however, that
88-20 nothing contained in this subsection shall prohibit an assigned
88-21 risk pool or assigned risk plan, duly authorized to operate by the
88-22 laws of this state, from paying commissions, or other valuable
88-23 consideration, to a duly licensed person, firm, partnership,
88-24 corporation, or bank for services as a local recording agent.]
88-25 [(c) No licensed local recording agent, managing general
88-26 agent, or surplus lines agent doing business in this state shall
89-1 pay directly or indirectly any commission, or other valuable
89-2 consideration, to any person, firm, partnership, corporation, or
89-3 bank for services as a local recording agent within this state,
89-4 unless such person, firm, partnership, corporation, or bank shall
89-5 hold a currently valid license to act as a local recording agent as
89-6 required by the laws of this state; nor shall any person, firm,
89-7 partnership, corporation, or bank other than a duly licensed local
89-8 recording agent accept any such commission or other valuable
89-9 consideration.]
89-10 [(d) No local recording agent doing business in this state
89-11 shall pay directly or indirectly any commission, or other valuable
89-12 consideration, to any person for services as a solicitor within
89-13 this state, unless such person shall hold a currently valid license
89-14 and appointment to act as a solicitor for such local recording
89-15 agent as required by the laws of this state; nor shall any person
89-16 other than a duly licensed and appointed solicitor accept any such
89-17 commission or other valuable consideration.]
89-18 [Sec. 5. ACTIVE AGENTS OR SOLICITORS ONLY TO BE LICENSED.
89-19 No license shall be granted to any person, firm, partnership,
89-20 corporation, or bank as a local recording agent or to a person as a
89-21 solicitor, for the purpose of writing any form of insurance, unless
89-22 it is found by the department that such person, firm, partnership,
89-23 corporation, or bank is or intends to be, actively engaged in the
89-24 soliciting or writing of insurance for the public generally; that
89-25 each person or individual of a firm is a resident of Texas and is
89-26 to be actively engaged in good faith in the business of insurance,
90-1 and that the application is not being made in order to evade the
90-2 laws against rebating and discrimination either for the applicant
90-3 or for some other person, firm, partnership, corporation, or bank.
90-4 Nothing herein contained shall prohibit an applicant insuring
90-5 property which the applicant owns or in which the applicant has an
90-6 interest; but it is the intent of this Section to prohibit coercion
90-7 of insurance and to preserve to each citizen the right to choose
90-8 that individual's own agent or insurance carrier, and to prohibit
90-9 the licensing of an individual, firm, partnership, corporation, or
90-10 bank to engage in the insurance business principally to handle
90-11 business which the applicant controls only through ownership,
90-12 mortgage or sale, family relationship or employment, which shall be
90-13 taken to mean that an applicant who is making an original
90-14 application for license shall show the department that the
90-15 applicant has a bona fide intention to engage in business in which,
90-16 in any calendar year, at least twenty-five per cent (25%) of the
90-17 total volume of premiums shall be derived from persons or
90-18 organizations other than applicant and from property other than
90-19 that on which the applicant shall control the placing of insurance
90-20 through ownership, mortgage, sale, family relationship or
90-21 employment. Nothing herein contained shall be construed to
90-22 authorize a partnership, corporation, or bank to receive a license
90-23 as a solicitor.]
90-24 [Sec. 5a. REQUIREMENTS AS TO KNOWLEDGE OR INSTRUCTION FOR
90-25 LOCAL RECORDING AGENT'S LICENSE. (a) Every applicant for local
90-26 recording agent's license from and after October 1, 1971, shall
91-1 upon the successful passage of the examination for local recording
91-2 agent's license as promulgated by the State Board of Insurance
91-3 pursuant to the provisions of this Article 21.14 be issued a
91-4 temporary local recording agent's license. The holder of a
91-5 temporary local recording agent's license shall have the same
91-6 authority and be subject to the same provisions of the law as local
91-7 recording agents until such temporary license shall expire. Each
91-8 such temporary license so issued shall expire upon the happening of
91-9 any one of the following, whichever shall first occur, to wit:]
91-10 [(i) The issuance of a local recording agent's license
91-11 to such person;]
91-12 [(ii) One year from date of issuance of the temporary
91-13 local recording agent's license.]
91-14 [Each such person receiving a temporary license as set out
91-15 above shall within one (1) year from the issue date of such
91-16 temporary license complete to the satisfaction of the State Board
91-17 of Insurance one of the following courses of study:]
91-18 [(i) Classroom courses in insurance satisfactory to
91-19 the State Board of Insurance at a school, college, junior college
91-20 or extension thereof; or]
91-21 [(ii) An insurance company or agents' association
91-22 school approved by the State Board of Insurance; or]
91-23 [(iii) A correspondence course in insurance approved
91-24 by the State Board of Insurance.]
91-25 [Upon the successful completion of any one of the above
91-26 courses of study within the one year period, the temporary agent
92-1 shall then be entitled to receive from the State Board of Insurance
92-2 his local recording agent's license.]
92-3 [(b) Provided, however, none of the provisions of this
92-4 section shall apply to the following:]
92-5 [(1) To any person holding a license as a local
92-6 recording agent upon the effective date of this Act.]
92-7 [(2) To any person applying for an emergency local
92-8 recording agent's license under the provisions of Section 6a of
92-9 Article 21.14 of the Insurance Code of Texas.]
92-10 [(3) To any person who holds the designation Chartered
92-11 Property and Casualty Underwriter (C.P.C.U.) from the American
92-12 Institute for C.P.C.U., the designation Certified Insurance
92-13 Counselor (C.I.C.) from the national Society of Certified Insurance
92-14 Counselors, or the designation Accredited Adviser in Insurance
92-15 (A.A.I.) from the Insurance Institute of America.]
92-16 [(4) To any person who has a bachelor's degree from a
92-17 four-year accredited college or university with a major in
92-18 insurance.]
92-19 [(5) To any person who within two (2) years
92-20 immediately preceding the filing of an application was a licensed
92-21 agent in good standing in the state from which the person moved to
92-22 Texas, provided such state makes similar provision for those agents
92-23 who may move from Texas to such state.]
92-24 [(6) To any person desiring to apply for a license to
92-25 solicit and write exclusively all forms of insurance authorized to
92-26 be solicited and written in Texas covering the ownership,
93-1 operation, maintenance or use of any motor vehicle, its accessories
93-2 and equipment, designed for use upon the public highways, including
93-3 trailers and semitrailers. Such person shall continue to apply for
93-4 and qualify to be licensed under the other provisions of Article
93-5 21.14 of the Insurance Code of Texas. Provided, such applicant
93-6 shall be required to take and pass, to the satisfaction of the
93-7 Texas Department of Insurance, an examination, promulgated by said
93-8 department, covering only those forms of insurance referred to in
93-9 this paragraph. Provided, when such a person so applies and
93-10 qualifies, the person shall be issued a license which shall contain
93-11 on the face of said license the following language: "Motor vehicle
93-12 insurance only." An agent holding such a limited license hereby
93-13 created shall solicit only those forms of insurance hereinabove
93-14 provided, but shall be subject to all other laws relating to local
93-15 recording agents.]
93-16 [(c) There is hereby created an Agents' Education Advisory
93-17 Board whose duties shall be to advise with and make recommendations
93-18 to the State Board of Insurance concerning the curriculum, course
93-19 content and schools to be approved under Subsection (a) above. The
93-20 members of said Advisory Board shall be appointed by the chairman
93-21 of the State Board of Insurance and shall serve for one year, from
93-22 September 1 to August 31, or until their successors are appointed.
93-23 Said Advisory Board shall be composed of the following persons: Two
93-24 (2) members, each of whom shall be a resident of Texas and have a
93-25 minimum of ten (10) years' experience as an executive of a fire and
93-26 casualty company doing business in Texas and whose company operates
94-1 an agents' school; two (2) members, each of whom shall be a
94-2 licensed local recording agent in Texas with a minimum of ten (10)
94-3 years' experience as an agent; and one (1) member who shall be a
94-4 teacher of insurance at a four-year accredited college or
94-5 university in Texas. Said Advisory Board shall meet at the offices
94-6 of the State Board of Insurance upon call of the chairman of the
94-7 State Board of Insurance and the members of said Advisory Board
94-8 shall be paid out of the Recording Agents License Fund for their
94-9 actual and necessary expenses incurred in connection with their
94-10 attendance at said meetings.]
94-11 [Sec. 5b. CONTINUING EDUCATION. (a) The State Board of
94-12 Insurance shall adopt a procedure for certifying and shall certify
94-13 continuing education programs for agents. Participation in the
94-14 programs is mandatory for all agents licensed under this article.
94-15 The State Board of Insurance shall exempt agents who have been
94-16 licensed for 20 years or more on or after September 1, 1992, and
94-17 shall have the rulemaking authority to provide for other reasonable
94-18 exemptions. No agent shall be required to complete more than 15
94-19 hours of continuing education per year. An agent licensed under
94-20 both Articles 21.07-1 and 21.14 of this code and any subsequent
94-21 amendments may elect to satisfy the continuing education
94-22 requirements of either article and shall not be required to
94-23 complete a total of more than 15 hours of continuing education per
94-24 year.]
94-25 [(b) On written request of the agent, the State Board of
94-26 Insurance may extend the time for the agent to comply with the
95-1 continuing education requirements of this section or may exempt the
95-2 agent from some or all of the requirements for a licensing period
95-3 if the board finds that the agent is unable to comply with the
95-4 requirements because of illness, medical disability, or another
95-5 extenuating circumstance beyond the control of the agent. The
95-6 criteria for such exemptions and extensions shall be established by
95-7 rule.]
95-8 [Sec. 5c. ADVISORY COUNCIL. (a) An advisory council of
95-9 nine members shall be appointed by the State Board of Insurance to
95-10 furnish the Board with information and assistance in the conduct of
95-11 the continuing education program for agents licensed under Articles
95-12 21.07-1 and 21.14.]
95-13 [(b) Four of the members of the advisory council must be
95-14 representatives of the general public. A public representative may
95-15 not be:]
95-16 [(1) an officer, director, or employee of an insurance
95-17 company, insurance agency, agent, broker, solicitor, adjuster, or
95-18 any other business entity regulated by the State Board of
95-19 Insurance;]
95-20 [(2) a person required to register with the secretary
95-21 of state under Chapter 305, Government Code; or]
95-22 [(3) related to a person described by Subdivision (1)
95-23 or (2) of this subsection within the second degree of affinity or
95-24 consanguinity.]
95-25 [Sec. 5d. Notwithstanding the rules or regulations of any
95-26 other state agency, the board has sole jurisdiction for all matters
96-1 relating to the continuing education of insurance agents who are
96-2 licensed under this Article.]
96-3 [Sec. 6. EXAMINATION REQUIRED; EXCEPTIONS. (a) If
96-4 applicant for a local recording agent's license has not prior to
96-5 date of such application, been licensed as a local recording agent,
96-6 or if the applicant for a solicitor's license has not been licensed
96-7 as a local recording agent or as a solicitor prior to date of such
96-8 application, the Board shall require such applicant to submit to a
96-9 written examination covering all kinds of insurance or contracts,
96-10 which license if granted, will permit the applicant to solicit.]
96-11 [(b) Any applicant for local recording agent's license who
96-12 has prior to the date of such application been licensed as a local
96-13 recording agent, shall be entitled to a local recording agent's
96-14 license without examination, provided the other requirements of
96-15 this article are met. Any applicant for solicitor's license who
96-16 has been licensed as a local recording agent or as a solicitor
96-17 prior to date of such application, shall be entitled to a
96-18 solicitor's license without an examination, provided the other
96-19 requirements of this article are met.]
96-20 [(c) The Board by rule shall apply different examination
96-21 standards to a solicitor employed as an insurance service
96-22 representative than those applied to other solicitors.]
96-23 [Sec. 6a. DEATH, DISABILITY OR INSOLVENCY; EMERGENCY LICENSE
96-24 WITHOUT EXAMINATION. In event of death or disability of a local
96-25 recording agent or in event a local recording agent is found to be
96-26 insolvent and unable to pay for premiums coming to his hands as
97-1 such local recording agent, the Board may issue to an applicant for
97-2 local recording agent's license an emergency local recording
97-3 agent's license for a period of ninety (90) days in any twelve (12)
97-4 consecutive months and at the Board's option, an additional period
97-5 up to ninety (90) days without an examination provided the other
97-6 requirements of this article are met and if it is established to
97-7 the satisfaction of the Board that such emergency license is
97-8 necessary for the preservation of the agency assets of a deceased
97-9 or disabled local recording agent or of an insolvent local
97-10 recording agent.]
97-11 [Sec. 7. Unless the State Board of Insurance accepts a
97-12 qualifying examination administered by a testing service, as
97-13 provided under Article 21.01-1, Insurance Code, as amended, all
97-14 examinations provided by this article shall be conducted by the
97-15 State Board of Insurance, and shall be held not less frequently
97-16 than one each sixty (60) days every year at times and places
97-17 prescribed by the State Board of Insurance, of which applicants
97-18 shall be notified by the State Board of Insurance in writing ten
97-19 (10) days prior to the date of such examinations, and shall be
97-20 conducted in writing in either the English or Spanish language.
97-21 Provided, further, that printed copies of a manual of questions and
97-22 answers thereto pertaining to the examination published under the
97-23 direction of the State Board of Insurance shall be made available
97-24 to all companies, general agents, and managers for the use of their
97-25 prospective agents, to all agents for the use of their prospective
97-26 solicitors in preparing for such examination. The questions to be
98-1 asked on such examination shall be based upon the questions and
98-2 answers contained in the manual.]
98-3 [Sec. 8. EXPIRATION OF LICENSE; RENEWAL. Except as may be
98-4 provided by a staggered renewal system adopted under Article
98-5 21.01-2 of this code, every license issued to a local recording
98-6 agent or a solicitor shall expire two years from the date of its
98-7 issue, unless a completed application to qualify for the renewal of
98-8 any such license shall be filed with the State Board of Insurance
98-9 and a nonrefundable fee paid on or before such date, in which event
98-10 the license sought to be renewed shall continue in full force and
98-11 effect until renewed or renewal is denied.]
98-12 [Sec. 9. FEES PAYABLE BEFORE EXAMINATION. Unless the State
98-13 Board of Insurance accepts a qualifying examination administered by
98-14 a testing service, as provided under Article 21.01-1, Insurance
98-15 Code, as amended, applicants required to be examined shall, at time
98-16 and place of examination, pay prior to being examined the following
98-17 fees: For a local recording agent's license a fee in an amount not
98-18 to exceed $50 as determined by the State Board of Insurance and for
98-19 a solicitor's license a fee in an amount not to exceed $20 as
98-20 determined by the State Board of Insurance. The fees paid under
98-21 this section shall not be returned for any reason other than
98-22 failure to appear and take the examination after the applicant has
98-23 given at least 24 hours' notice of an emergency situation to the
98-24 State Board of Insurance and received board approval. A new fee
98-25 shall be paid before each and every examination.]
98-26 [Sec. 10. RENEWAL FEES. (a) An applicant for the renewal
99-1 of a local recording agent's license shall pay, at the time the
99-2 renewal application is filed, a fee in an amount not to exceed $50
99-3 as determined by the State Board of Insurance. An applicant for
99-4 the renewal of a solicitor's license shall pay, at the time the
99-5 renewal application is filed, a fee in an amount not to exceed $20
99-6 as determined by the State Board of Insurance.]
99-7 [Sec. 11. ISSUANCE OF LICENSE. (a) Whenever the provisions
99-8 of this article have been complied with, the Board shall issue to
99-9 any applicant the license applied for where such applicant shall
99-10 have satisfactorily passed the examination prescribed by the State
99-11 Board of Insurance, and who shall possess the other qualifications
99-12 required by this article.]
99-13 [(b) The Commissioner of Insurance shall collect in advance
99-14 from agents requesting duplicate licenses a fee not to exceed $20.
99-15 The State Board of Insurance shall determine the amount of the fee.]
99-16 [Sec. 12. (a) After a person or firm shall be granted a
99-17 license as a local recording agent in this state, that person or
99-18 firm shall be authorized to act as such local recording agent in
99-19 this state, only after and during the time such person or firm has
99-20 been authorized so to do, by an insurance company having a permit
99-21 to do business in this state; and when so authorized each company
99-22 or carrier or its general or state or special agent making the
99-23 appointment shall immediately notify the Commissioner of Insurance,
99-24 on such form as the Commissioner may require, of the appointment.
99-25 If approval of an additional appointment is not received from the
99-26 Commissioner before the eighth day after the date on which the
100-1 completed application and fee were received by the Commissioner,
100-2 the agent and the insurance company may assume that the
100-3 Commissioner approves the application, and the agent may act for
100-4 the insurance company. The agent shall be required to pay a
100-5 nonrefundable fee of $16.00 for each appointment applied for, which
100-6 fee shall accompany the notice, and such person or firm shall be
100-7 presumed to be the agent for such company in this state until such
100-8 company or its general or state or special agent shall have
100-9 delivered written notice to the Commissioner of Insurance that such
100-10 appointment has been withdrawn.]
100-11 [(b) Every insurance carrier shall, upon termination for
100-12 cause of the appointment of any agent, immediately file with the
100-13 State Board of Insurance a statement of the facts relative to the
100-14 termination of the appointment and the date and cause thereof. The
100-15 Board shall thereupon record the termination of the appointment of
100-16 such agent to represent such insurance carrier in this state. The
100-17 agent terminated for cause shall receive from the insurance carrier
100-18 a copy of the notice sent to the State Board of Insurance.]
100-19 [(c) Any information, document, record or statement required
100-20 to be made or disclosed to the Board pursuant to this Article shall
100-21 be deemed confidential and privileged unless or until introduced as
100-22 evidence in an administrative hearing.]
100-23 [(d) No liability may be imposed on any insurance carrier,
100-24 its employees or agents, or any other person, acting without
100-25 malice, providing the information required to be disclosed pursuant
100-26 to this section.]
101-1 [Sec. 13. APPLICATION FOR SOLICITOR'S LICENSE. When any
101-2 local recording agent who has been appointed by an insurance
101-3 carrier having a permit to do business in this State shall desire
101-4 to appoint a solicitor in the operation of his business, he and a
101-5 company jointly shall make application for a license for such
101-6 solicitor to the Board of Insurance Commissioners, in such form as
101-7 the Board may require.]
101-8 [Sec. 14. NOTICE TO INSURANCE COMMISSIONERS OF SOLICITOR'S
101-9 APPOINTMENT; AUTHORITY TO SOLICIT. (a) No solicitor shall be
101-10 authorized to solicit insurance until after the State Board of
101-11 Insurance shall have been notified by a local recording agent of
101-12 his appointment, and no local recording agent shall accept business
101-13 tendered by a solicitor until such local recording agent has given
101-14 notice to the State Board of Insurance of such solicitor's
101-15 appointment as such, and until such solicitor has been licensed by
101-16 the State Board of Insurance. No solicitor shall have outstanding
101-17 at any time a notification of appointment from more than one local
101-18 recording agent, and a solicitor shall solicit insurance only in
101-19 the name of and for the account of the local recording agent by
101-20 whom he has been appointed.]
101-21 [(b) If approval of an appointment of a currently licensed
101-22 solicitor is not received from the Commissioner before the eighth
101-23 day after the date on which the completed application and
101-24 nonrefundable fee were received by the Commissioner, the solicitor
101-25 and local recording agent may assume that the Commissioner approves
101-26 the application, and the solicitor may act for the local recording
102-1 agent.]
102-2 [(c) A licensed solicitor's appointment may be terminated
102-3 either by the local recording agent who appointed the solicitor or
102-4 by the solicitor on the filing of notice with the Board of the
102-5 termination.]
102-6 [(d) Upon termination for cause of the appointment of any
102-7 solicitor, the local recording agent shall immediately file with
102-8 the State Board of Insurance a statement of the facts relative to
102-9 the termination of the appointment and the date and cause thereof.
102-10 The Board shall thereupon record the termination of the appointment
102-11 of such solicitor to represent such local recording agent. The
102-12 solicitor terminated for cause shall receive from the local
102-13 recording agent a copy of the notice sent to the State Board of
102-14 Insurance.]
102-15 [(e) Any information, document, record or statement required
102-16 to be made or disclosed to the Board pursuant to this Article shall
102-17 be deemed privileged and confidential unless or until introduced
102-18 into evidence in an administrative hearing.]
102-19 [(f) No liability may be imposed on any insurance carrier,
102-20 its employees or agents, or any other person, acting without
102-21 malice, providing the information required to be disclosed pursuant
102-22 to this section.]
102-23 [Sec. 15. FIRE INSURANCE IN EXCESS OF VALUE, WRITING OF
102-24 FORBIDDEN. It shall be unlawful for any local recording agent or
102-25 solicitor for an insurance company or insurance carrier knowingly
102-26 to grant, write or permit a greater amount of insurance against
103-1 loss by fire than the reasonable value of the subject of insurance.]
103-2 [Sec. 16. SUSPENSION OR REVOCATION OF LICENSE. (a) The
103-3 license of any local recording agent shall be suspended during a
103-4 period in which the agent does not have outstanding a valid
103-5 appointment to act as an agent for an insurance company. The Board
103-6 shall end the suspension on receipt of evidence satisfactory to the
103-7 board that the agent has a valid appointment. The Board shall
103-8 cancel the license of a solicitor if the solicitor does not have
103-9 outstanding a valid appointment to act as a solicitor for a local
103-10 recording agent, and shall suspend the license during a period that
103-11 the solicitor's local recording agent does not have outstanding a
103-12 valid appointment to act as an agent under this Article.]
103-13 [(b) The department may discipline any local recording agent
103-14 or solicitor or deny an application under Section 5, Article
103-15 21.01-2, of this code if it finds that the applicant, individually
103-16 or through any officer, director, or shareholder, for or holder of
103-17 such license:]
103-18 [(1) Has wilfully violated any provision of the
103-19 insurance laws of this state;]
103-20 [(2) Has intentionally made a material misstatement in
103-21 the application for such license;]
103-22 [(3) Has obtained, or attempted to obtain, such
103-23 license by fraud or misrepresentation;]
103-24 [(4) Has misappropriated or converted to the
103-25 applicant's or licensee's own use or illegally withheld money
103-26 belonging to an insurer or an insured or beneficiary;]
104-1 [(5) Has been guilty of fraudulent or dishonest acts;]
104-2 [(6) Has materially misrepresented the terms and
104-3 conditions of any insurance policies or contracts;]
104-4 [(7) Has made or issued, or caused to be made or
104-5 issued, any statement misrepresenting or making incomplete
104-6 comparisons regarding the terms or conditions of any insurance
104-7 contract legally issued by an insurance carrier for the purpose of
104-8 inducing or attempting to induce the owner of such contract to
104-9 forfeit or surrender such contract or allow it to expire for the
104-10 purpose of replacing such contract with another;]
104-11 [(8) Is convicted of a felony;]
104-12 [(9) Is guilty of rebating any insurance premium or
104-13 discriminating as between insureds;]
104-14 [(10) Is not engaged in the soliciting or writing of
104-15 insurance for the public generally as required by Section 5 of this
104-16 Article; or]
104-17 [(11) Is afflicted with a disability as that term is
104-18 defined by Subsection (a) of Article 21.15-6 of this code.]
104-19 [(c) The State Board of Insurance may order that a local
104-20 recording agent or solicitor who is afflicted with a disability be
104-21 placed on disability probation under the terms and conditions
104-22 specified under Article 21.15-6 of this code instead of taking
104-23 disciplinary action under Subsection (b) of this section.]
104-24 [(d) A license applicant or licensee whose license
104-25 application or license has been denied, refused, or revoked under
104-26 this section may not apply for any license as an insurance agent
105-1 before the first anniversary of the effective date of the denial,
105-2 refusal, or revocation, or, if the applicant or licensee seeks
105-3 judicial review of the denial, refusal, or revocation before the
105-4 first anniversary of the date of the final court order or decree
105-5 affirming that action. The Commissioner may deny an application
105-6 timely filed if the applicant does not show good cause why the
105-7 denial, refusal, or revocation of the previous license application
105-8 or license should not be considered a bar to the issuance of a new
105-9 license. This subsection does not apply to an applicant whose
105-10 license application was denied for failure to pass a required
105-11 written examination.]
105-12 [Sec. 18. APPEAL. If the Commissioner refuses an
105-13 application for license as provided by this article, or suspends,
105-14 revokes, or refuses to renew any license at a hearing as provided
105-15 by this article, and if the applicant or accused is dissatisfied
105-16 with the action of the Commissioner, the applicant or accused may
105-17 appeal from the action in accordance with Article 1.04 of this
105-18 Code.]
105-19 [Sec. 19. NOTICE TO LAST ADDRESS. Where notice to the
105-20 applicant or accused is provided for in any part of this article,
105-21 notice by registered mail to his last known address shall be
105-22 sufficient.]
105-23 [Sec. 20. LIFE, HEALTH AND ACCIDENT INSURANCE, INAPPLICABLE
105-24 TO; OTHER EXCEPTIONS. The provisions of this article do not apply
105-25 to the Life, Health and Accident Insurance business or the Life,
105-26 Health and Accident Department of the companies engaged therein,
106-1 nor shall it apply to any of the following, namely:]
106-2 [(a) Any actual full-time home office salaried employee of
106-3 any insurance carrier licensed to do business in Texas, other than
106-4 an employee who solicits or receives an application for the sale of
106-5 insurance through an oral, written, or electronic communication in
106-6 accordance with Section 20A of this article.]
106-7 [(b) Any actual attorney in fact and its actual traveling
106-8 salaried representative as to business transacted through such
106-9 attorney in fact or salaried representative of any reciprocal
106-10 exchange or interinsurance exchange admitted to do business in
106-11 Texas.]
106-12 [(c) Any adjuster of losses, and/or inspector of risks, for
106-13 an insurance carrier licensed to do business in Texas.]
106-14 [(d) Any General Agent or State Agent or Branch Manager
106-15 representing an admitted and licensed insurance company or carrier,
106-16 or insurance companies or carriers, in a supervisory capacity.]
106-17 [(e) The actual attorney in fact for any Lloyds.]
106-18 [(f) All incorporated or unincorporated mutual insurance
106-19 companies, their agents and representatives, organized and/or
106-20 operating under and by authority of Chapters 16 and 17 of this
106-21 code.]
106-22 [(g) Nothing in this entire article shall ever be construed
106-23 to apply to any member, agent, employee, or representative of any
106-24 county or farm mutual insurance company as exempted under Chapters
106-25 16 and 17 of this code.]
106-26 [(h) Nothing in this article shall apply to the group motor
107-1 vehicle insurance business or the group motor vehicle department of
107-2 the companies engaged in that business.]
107-3 [(i) Salaried employees not involved in solicitation or
107-4 negotiation of insurance in the office of a local recording agent
107-5 who devote their full time to clerical and administrative services,
107-6 including the incidental taking of information from customers and
107-7 receipt of premiums in the office of a local recording agent,
107-8 provided the employees do not receive any commissions and their
107-9 compensation is not varied by the volume of premiums taken and
107-10 received.]
107-11 [Sec. 20A. FULL-TIME HOME OFFICE SOLICITORS: MANDATORY
107-12 REGISTRATION, CONTINUING EDUCATION, AND NOTIFICATION TO CONSUMERS;
107-13 DISCIPLINARY ACTIONS. (a) Any actual full-time home office
107-14 salaried employee of any insurance carrier licensed to do business
107-15 in Texas who solicits or receives an application for the sale of
107-16 insurance through an oral, written, or electronic communication
107-17 shall register with the commissioner.]
107-18 [(b) Any insurance carrier licensed to do business in Texas
107-19 whose general plan of operation includes the use of employees
107-20 described in Subsection (a) of this section shall certify to the
107-21 commissioner that such employees receive continuing education of
107-22 not less than 15 hours per year designed to give such employees:]
107-23 [(1) reasonable familiarity with the broad principles
107-24 of insurance, with licensing and regulatory laws, and with
107-25 provisions, terms, and conditions of the insurance which the
107-26 registrant transacts; and]
108-1 [(2) a fair and general understanding of the
108-2 obligations and duties of an insurer to an insured, including
108-3 training in ethical considerations.]
108-4 [(c) The registration of any actual full-time home office
108-5 salaried employee shall be suspended and the employer insurance
108-6 carrier may be disciplined in accordance with the insurance laws of
108-7 this state, if the commissioner finds that the registrant:]
108-8 [(1) has wilfully violated any provision of this code,
108-9 the laws of this state, or a rule of the commissioner;]
108-10 [(2) has been guilty of fraudulent or dishonest acts;]
108-11 [(3) has materially misrepresented the terms and
108-12 conditions of any insurance policies or contracts;]
108-13 [(4) has made or issued, or caused to be made or
108-14 issued, any statement misrepresenting or making incomplete
108-15 comparisons regarding the terms or conditions of any insurance
108-16 contract legally issued by an insurance carrier for the purpose of
108-17 inducing or attempting to induce the owner of such contract to
108-18 forfeit or surrender such contract or allow it to expire for the
108-19 purpose of replacing such contract with another;]
108-20 [(5) is guilty of rebating any insurance premium or
108-21 discriminating as between insureds; or]
108-22 [(6) has been convicted of a felony involving fraud or
108-23 breach of fiduciary duty.]
108-24 [(d) Registrants under this section shall disclose such
108-25 registration when making an oral, written, or electronic
108-26 communication to solicit or receive an application for the sale of
109-1 insurance.]
109-2 [(e) The commissioner shall adopt rules to implement the
109-3 provisions of this section.]
109-4 [Sec. 21. FEES, DISPOSITION OF; APPROPRIATIONS. The fees
109-5 herein provided for, when collected, shall be deposited in the
109-6 State Treasury to the credit of the State Board of Insurance
109-7 operating fund; provided that no expenditures shall be made from
109-8 said fund except under authority of the Legislature as set forth in
109-9 the General Appropriation Bill; provided further that no
109-10 appropriation shall ever be made out of the General Revenue Fund
109-11 for the purpose of administering this article or any provision
109-12 thereof.]
109-13 [Sec. 22. REBATES OR INDUCEMENTS FORBIDDEN. It shall be
109-14 unlawful for any local recording agent to pay, allow, give or offer
109-15 to pay, allow or give, directly or indirectly, any rebate of
109-16 premiums payable, any commission, or any paid employment or
109-17 contract for service of any kind or anything of value whatsoever,
109-18 or any valuable consideration or inducement whatever, not specified
109-19 in the policy or contract of insurance for or on account of the
109-20 solicitation or negotiation of contracts of insurance on property
109-21 or risks in this State to any person, firm or corporation, other
109-22 than a duly licensed solicitor appointed by such local recording
109-23 agent, or to another local recording agent.]
109-24 [It shall be unlawful for any solicitor to pay, allow or give
109-25 or offer to pay, allow or give, directly or indirectly, any rebate
109-26 of premiums payable, any commission, or any paid employment or
110-1 contract for service of any kind, or anything of value whatsoever,
110-2 or any valuable consideration or inducement whatever, not specified
110-3 in the policy or contract of insurance, for or on account of the
110-4 solicitation or negotiation of contracts of insurance on property
110-5 or risks in this State to any person, firm or corporation.]
110-6 [Sec. 23. REPEAL; LAWS NOT IN CONFLICT NOT AFFECTED; ACT
110-7 CUMULATIVE. All laws or parts of laws pertaining to any phase of
110-8 the insurance business, which are in conflict with this article,
110-9 shall be and the same are hereby repealed; but all laws, Civil and
110-10 Criminal, affecting insurance agents, and/or insurance companies or
110-11 insurance carriers or the insurance business, which are not in
110-12 conflict herewith, shall not be affected by the provisions of this
110-13 article; but this article shall be deemed cumulative of such laws.]
110-14 [Sec. 24. VIOLATION OF ACT. Any person or any member of any
110-15 firm, or any corporation or bank, or any officer, director,
110-16 shareholder or employee of any corporation or bank who violates any
110-17 of the provisions of Sections 4, 15 and 22 of this Article shall be
110-18 guilty of a misdemeanor, and on conviction in a court of competent
110-19 jurisdiction, shall be punished by a fine of not less than One
110-20 Dollar ($1.00) nor more than One Hundred Dollars ($100.00).]
110-21 [Sec. 25. ENFORCEMENT OF ARTICLE. The Attorney General, or
110-22 any District or County Attorney, or the Board of Insurance
110-23 Commissioners, may institute any injunction proceeding or such
110-24 other proceeding to enforce the provisions of this article, and to
110-25 enjoin any person, firm or corporation from engaging or attempting
110-26 to engage in any of the business in violation of this article or
111-1 any of the provisions thereof. The provisions of this section are
111-2 cumulative of the other penalties or remedies provided for in this
111-3 article.]
111-4 [Sec. 26. ADMINISTRATION OF ARTICLE. The administration of
111-5 the provision of this article shall be vested in the Board of
111-6 Insurance Commissioners, and of the administrative officer of the
111-7 various counties in which the violation of any provision of this
111-8 article may occur; and the personnel charged with the direct
111-9 supervision of the article, except the regularly elected law
111-10 enforcement officers and their appointees, shall be responsible to
111-11 and serve at the will of the Board of Insurance Commissioners. It
111-12 shall be the duty of the Board of Insurance Commissioners and the
111-13 Attorney General, and of the District and County Attorneys in
111-14 counties where violations of this article may occur, to see that
111-15 its provisions are at all times obeyed, and to make such
111-16 investigations as will prevent or detect the violation of any
111-17 provision thereof. The Board of Insurance Commissioners shall at
111-18 once lay before the District or County Attorney of the proper
111-19 county, any evidence which shall come to its knowledge, of
111-20 criminality or threatened criminality under this article. In the
111-21 event of the neglect or refusal of such Attorney to institute and
111-22 prosecute such violation, or to enforce the other remedies provided
111-23 by this article, the Board shall submit such evidence to the
111-24 Attorney General, who is hereby authorized to proceed therein with
111-25 all the rights, privileges and powers conferred by law upon
111-26 District or County Attorneys. Provided, any person having
112-1 knowledge of the violation of the provisions of this article may
112-2 file a complaint for such violation with the proper officers as in
112-3 other misdemeanor cases. The Board of Insurance Commissioners is
112-4 given the power and authority, as a requisite for granting or
112-5 renewing a license to insurance companies or insurance carriers,
112-6 their local recording agents or solicitors, to require answers
112-7 under oath to any questions propounded by the said Board or under
112-8 its authority, and touching any phase of insurance business in the
112-9 State of Texas in which said insurance company or insurance
112-10 carrier, or such person or firm, shall be engaged, and to require
112-11 such person or firm seeking appointment as local recording agent to
112-12 submit his books, records, and accounts, insofar as they may be
112-13 material to any phase of insurance business, to examination and
112-14 inspection by the Board or any person acting under its authority.]
112-15 [Sec. 27. RULES. In addition to other rules required or
112-16 authorized by this article, the commissioner may adopt rules in
112-17 accordance with federal law applicable to the regulation of the
112-18 sale of insurance that are necessary and proper to carry out the
112-19 provisions of this article.]
112-20 ARTICLE 4. NONRESIDENT AGENT LICENSE
112-21 SECTION 4.01. Section 1, Article 21.11, Insurance Code, is
112-22 amended to read as follows:
112-23 Sec. 1. NONRESIDENT AGENT LICENSE. (a) The
112-24 [Notwithstanding Sections 3(a) and (b), Article 21.14, of this
112-25 code, the] department shall license a person who is not a resident
112-26 of this state to act as a nonresident agent if:
113-1 (1) the applicant for the nonresident license has
113-2 submitted to the department:
113-3 (A) an application on a form as prescribed by
113-4 the department; and
113-5 (B) the nonrefundable license application fee;
113-6 and
113-7 (2) the department finds that the applicant for the
113-8 nonresident license:
113-9 (A) holds a license in good standing as an agent
113-10 in the applicant's state of residence and that state will grant a
113-11 nonresident agent's license on a reciprocal basis to a resident
113-12 agent of this state;
113-13 (B) has:
113-14 (i) passed the examination for an agent's
113-15 license required under this code;
113-16 (ii) met the eligibility requirements
113-17 under Subsection (e) of this section; and
113-18 (iii) satisfied the requirements for a
113-19 license for an individual under this code, including Section 2,
113-20 Article 21.07; or
113-21 (C) has satisfied the requirements for a license
113-22 for a corporation or partnership under Section 2, Article 21.07, of
113-23 this code.
113-24 (b) The commissioner may enter into an agreement with the
113-25 appropriate official of another state as necessary to implement the
113-26 reciprocal licensing of nonresident agents [in accordance with
114-1 Article 21.14 of this code, subject to the limitations of this
114-2 article].
114-3 (c) The [(b) An applicant for issuance of a license under
114-4 this section must meet the requirements for issuance of a license
114-5 under Article 21.14 of this code, except that the] department may
114-6 [shall] waive any [of those] license requirements for an applicant
114-7 with a valid license from another state or jurisdiction if:
114-8 (1) that state or jurisdiction has license
114-9 requirements substantially equivalent to those of this state; or
114-10 (2) the waiver is necessary to promote reciprocal
114-11 licensing of nonresident agents among a majority of the states.
114-12 (d) The commissioner is the agent for service of process in
114-13 the manner provided by Section 3, Article 1.36, of this code in a
114-14 legal proceeding against a nonresident agent licensed to transact
114-15 business in this state if:
114-16 (1) the nonresident agent fails to appoint or maintain
114-17 an agent for service in this state;
114-18 (2) an agent for service is appointed but cannot with
114-19 reasonable diligence be found; or
114-20 (3) the license of the nonresident agent is revoked.
114-21 (e) An applicant for a nonresident agent's license from this
114-22 state who does not hold an insurance agent's license in the
114-23 applicant's state of residence shall, through the law enforcement
114-24 agency of the state of residence, submit a copy of the applicant's
114-25 criminal history records to the department. The department shall
114-26 use the criminal history records to determine eligibility for
115-1 issuance of a license in accordance with this subchapter and other
115-2 laws of this state.
115-3 SECTION 4.02. Subsections (a) and (b), Section 2, Article
115-4 21.11, Insurance Code, are amended to read as follows:
115-5 (a) Except as otherwise specifically provided by this code
115-6 [section], a license issued under this article to an individual who
115-7 is not a resident of this state grants the same rights and
115-8 privileges afforded to a resident license holder [under a license
115-9 issued under Article 21.14 of this code].
115-10 (b) A person who holds a license issued under this article
115-11 and who is in compliance with the continuing education requirements
115-12 of the person's state of residence is exempt from the continuing
115-13 education requirements imposed under Article 21.01-1 of this code
115-14 [may not:]
115-15 [(1) maintain an office in this state;]
115-16 [(2) solicit insurance business in this state by any
115-17 method, including an oral, written, or electronic communication; or]
115-18 [(3) employ solicitors or others to directly or
115-19 indirectly solicit insurance in this state].
115-20 SECTION 4.03. Subsection (c), Section 2, Article 21.11,
115-21 Insurance Code, is amended to read as follows:
115-22 (c) A person licensed as a nonresident agent in this state
115-23 who does not hold an insurance agent's license in the person's
115-24 state of residence shall comply with the continuing education
115-25 requirements imposed under Article 21.01-1 of this code [The
115-26 commissioner shall impose on a resident of another state or
116-1 jurisdiction of the United States who is an applicant for a license
116-2 or a holder of a license issued under this article any requirement
116-3 or restriction that:]
116-4 [(1) the other state or jurisdiction of the United
116-5 States imposes on a resident of this state who is a nonresident
116-6 applicant or license holder in that state or jurisdiction; and]
116-7 [(2) is in addition to or stricter than the
116-8 requirements or restrictions imposed under the insurance law of
116-9 this state on an applicant or license holder who is not a resident
116-10 of this state].
116-11 SECTION 4.04. Section 3, Article 21.11, Insurance Code, is
116-12 amended to read as follows:
116-13 Sec. 3. LIMITATIONS. (a) The department may issue a
116-14 reciprocal nonresident license to an applicant if the authority
116-15 granted by the license issued by the applicant's state of residence
116-16 is generally comparable to the authority granted by a license
116-17 issued by this state. [This article does not permit:]
116-18 [(1) any person or firm licensed solely as a broker in
116-19 the person's or firm's state of residence to be granted a license
116-20 under this article;]
116-21 [(2) a holder of a license issued under this article
116-22 to act as a surplus lines agent under Article 1.14-2 of this code
116-23 or to perform any of the acts permitted under Article 1.14-2 of
116-24 this code, except as provided under Section 10, Article 21.54, of
116-25 this code; or]
116-26 [(3) any person or firm who holds a license issued
117-1 under this article to engage in any form of direct solicitation of
117-2 insurance within this state.]
117-3 (b) A nonresident agent licensed under the reciprocal
117-4 licensing provisions of this code may not engage in a line of
117-5 insurance business in this state for which the agent is not
117-6 authorized in the agent's state of residence.
117-7 (c) This subchapter [The commissioner shall revoke a
117-8 nonresident agent's license issued under this article if the
117-9 commissioner finds that the license was obtained or is being used
117-10 for the purpose of transacting insurance through a local recording
117-11 agent in a manner that permits the individual licensed under this
117-12 article, by subterfuge, to transact insurance as a local recording
117-13 agent.]
117-14 [(c) In the circumstances described by Subsection (b) of
117-15 this section, the commissioner shall also revoke the license of the
117-16 affected local recording agent.]
117-17 [(d) A license revoked under Subsection (b) or (c) of this
117-18 section is not subject to reissuance before the fifth anniversary
117-19 of the date the revocation is effective.]
117-20 [(e) The commissioner shall order that any insurance
117-21 transacted under an arrangement described by Subsection (b) of this
117-22 section be cancelled.]
117-23 [(f) Article 21.01-2 of this code] applies to licensing of a
117-24 nonresident agent under this article.
117-25 SECTION 4.05. Sections 4 and 5, Article 21.11, Insurance
117-26 Code, are amended to read as follows:
118-1 Sec. 4. HOME OFFICE EMPLOYEE. This article does not affect
118-2 the authority established under Section 7 [20], Article 21.14, of
118-3 this code of an actual full-time home office salaried employee of
118-4 an insurance carrier licensed to do business in this state.
118-5 Sec. 5. RULES. The commissioner may adopt rules as
118-6 necessary to implement this article and to meet the minimum
118-7 requirements of federal law and regulations.
118-8 ARTICLE 5. ADJUSTER LICENSE
118-9 SECTION 5.01. Subsections (a) and (b), Section 1, Chapter
118-10 407, Acts of the 63rd Legislature, Regular Session, 1973 (Article
118-11 21.07-4, Vernon's Texas Insurance Code), are amended to read as
118-12 follows:
118-13 (a) "Adjuster" means an individual [any person] who, as an
118-14 independent contractor, or as an employee of an independent
118-15 contractor, adjustment bureau, association, insurance company or
118-16 corporation, general property and casualty [local recording] agent,
118-17 managing general agent, or self-insured, investigates or adjusts
118-18 losses on behalf of either an insurer or a self-insured, or any
118-19 person who supervises the handling of claims.
118-20 (b) "Adjuster" shall not include:
118-21 (1) an attorney at law who adjusts insurance losses
118-22 from time to time and incidental to the practice of law, and who
118-23 does not advertise or represent that he is an adjuster;
118-24 (2) a salaried employee of an insurer who is not
118-25 regularly engaged in the adjustment, investigation, or supervision
118-26 of insurance claims;
119-1 (3) persons employed only for the purpose of
119-2 furnishing technical assistance to a licensed adjuster, including,
119-3 but not limited to, photographers, estimators, private detectives,
119-4 engineers, handwriting experts, and attorneys at law;
119-5 (4) a licensed agent or general agent of an authorized
119-6 insurer who processes undisputed and/or uncontested losses for such
119-7 insurer under policies issued by said agent or general agent;
119-8 (5) a person who performs clerical duties with no
119-9 negotiations with the parties on disputed and/or contested claims;
119-10 (6) any person who handles claims arising under life,
119-11 accident and health insurance policies; [or]
119-12 (7) a person who is employed principally as a
119-13 right-of-way agent or right-of-way and claims agent and whose
119-14 primary responsibility is the acquisition of easements, leases,
119-15 permits, or other real property rights and whose claims handling
119-16 arises out of operations under those easements, leases, permits, or
119-17 other contracts or contractual obligations; or
119-18 (8) an individual who is employed to investigate
119-19 suspected fraudulent insurance claims but who does not adjust
119-20 losses or determine claims payments.
119-21 ARTICLE 6. SURPLUS LINES
119-22 SECTION 6.01. Subdivision (1), Subsection (a), Section 2,
119-23 Article 1.14-2, Insurance Code, is amended to read as follows:
119-24 (1) "Surplus lines agent" means:
119-25 (A) a general property and casualty [(i) is an]
119-26 agent authorized under Article 21.14 who is granted a surplus lines
120-1 license in accordance with this Article; or
120-2 (B) [, (ii) is] a managing general agent
120-3 [(authorized to be licensed and] licensed under the Managing
120-4 General Agents' Licensing Act ([, Acts, 1967, 60th Legislature,
120-5 Chapter 727, codified by Vernon as] Article 21.07-3, Vernon's Texas
120-6 Insurance Code) who is granted a surplus lines license in
120-7 accordance with this Article and who complies with the provisions
120-8 of this Article, except it is not necessary that the managing
120-9 general agent be licensed as a general property and casualty
120-10 [recording] agent[, or (iii) is a nonresident insurance agent
120-11 authorized under Article 21.11 and who is granted a surplus lines
120-12 license for the limited purpose of acting on behalf of a purchasing
120-13 group operating in this state in the placement of liability
120-14 insurance for risks located in this state].
120-15 SECTION 6.02. Subdivision (2), Subsection (a), Section 2,
120-16 Article 1.14-2, Insurance Code, is amended to read as follows:
120-17 (2) A [Each "]surplus lines agent,["] as a condition
120-18 of being licensed as a surplus lines agent and as a condition of
120-19 continuing to be licensed as a surplus lines agent, shall offer the
120-20 proof of financial responsibility [solvency and demonstrate
120-21 capacity in respect of responsibility to insureds under policies of
120-22 surplus lines insurance, or in the alternative show proof of
120-23 adequate bond and surety] in respect of [his] transactions with
120-24 insureds under policies of surplus lines insurance [and] as
120-25 required by [the] reasonable rules [and regulations] of the
120-26 commissioner [State Board of Insurance shall provide].
121-1 SECTION 6.03. Subdivision (3), Subsection (a), Section 2,
121-2 Article 1.14-2, Insurance Code, is amended to read as follows:
121-3 (3) Any surplus lines license granted to an agency
121-4 authorized under the Managing General Agents' Licensing Act
121-5 (Article 21.07-3, Vernon's Texas Insurance Code), but[, Acts, 1967,
121-6 60th Legislature, Chapter 727, that is] not [also] licensed under
121-7 Article 21.14 of this code, [the Insurance Code] shall be limited
121-8 to the acceptance of business originating through a regularly
121-9 licensed general property and casualty [recording] agent and does
121-10 [shall] not authorize the [such] surplus lines agency to transact
121-11 business directly with the applicant for insurance.
121-12 SECTION 6.04. Subsection (a), Section 3, Article 1.14-2,
121-13 Insurance Code, is amended to read as follows:
121-14 (a) If insurance coverages of subjects resident, located or
121-15 to be performed in this state cannot be procured from licensed
121-16 insurers after diligent effort, such coverages, hereinafter
121-17 designated as surplus line insurance, may be procured from eligible
121-18 surplus lines insurers subject to the following conditions:
121-19 1. The insurance must be eligible for surplus lines
121-20 under Section 5.
121-21 2. The insurer must be an eligible surplus lines
121-22 insurer under Section 8.
121-23 3. The insurance must be placed through a licensed
121-24 Texas surplus lines agent [resident in this state].
121-25 4. The other applicable provisions of this section
121-26 must be complied with.
122-1 SECTION 6.05. Section 3A, Article 1.14-2, Insurance Code, is
122-2 amended to read as follows:
122-3 Sec. 3A. AUTHORITY OF COMMISSIONER [STATE BOARD OF
122-4 INSURANCE]. (a) The commissioner [State Board of Insurance] may
122-5 adopt [promulgate] rules necessary to:
122-6 (1) implement [enforce] this article; or
122-7 (2) satisfy requirements under federal law or
122-8 regulations.
122-9 (b) The commissioner [board] shall monitor the activities of
122-10 surplus lines agents to the extent necessary to protect the public
122-11 interest.
122-12 SECTION 6.06. Subsection (b), Section 4, Article 1.14-2,
122-13 Insurance Code, is amended to read as follows:
122-14 (b) The department [Texas Department of Insurance] may issue
122-15 a surplus lines license to an applicant if the applicant submits a
122-16 properly completed license application and an application fee as
122-17 determined by the department and the department determines that the
122-18 applicant [an agent as defined by Subdivision (1) of Subsection (a)
122-19 of Section 2 of this article after the agent has]:
122-20 (1) is an individual who:
122-21 (A) is currently licensed as a general property
122-22 and casualty agent under Article 21.14 of this code or as a
122-23 managing general agent under the Managing General Agents' Licensing
122-24 Act (Article 21.07-3, Vernon's Texas Insurance Code);
122-25 (B) has passed the surplus lines license
122-26 examination administered under Article 21.01-1 of this code and
123-1 department rules; and
123-2 (C) provides proof of financial responsibility
123-3 as required under Section 2 of this article [remitted the
123-4 application fee set by the Texas Department of Insurance in an
123-5 amount not to exceed $50]; or
123-6 (2) is a corporation, limited liability company, or
123-7 partnership that:
123-8 (A) has at least one officer or director or at
123-9 least one active partner who has passed the surplus lines license
123-10 examination required under this article;
123-11 (B) is currently licensed as a general property
123-12 and casualty agent under Article 21.14 of this code or as a
123-13 managing general agent under the Managing General Agents' Licensing
123-14 Act (Article 21.07-3, Vernon's Texas Insurance Code);
123-15 (C) provides proof of financial responsibility
123-16 as required under Section 2 of this article; and
123-17 (D) conducts insurance activities under this
123-18 article only through an individual licensed under this subsection
123-19 [submitted a completed license application on a form approved by
123-20 the Texas Department of Insurance; and]
123-21 [(3) passed a qualifying examination approved by the
123-22 Texas Department of Insurance. If the agent is a general
123-23 partnership or a registered limited liability partnership, this
123-24 examination must be met by each natural person acting as a partner
123-25 in that partnership. If the agent is a corporation, this
123-26 examination requirement must be met by each natural person acting
124-1 as an officer, director, or shareholder of that corporation. If
124-2 the agent is a limited liability company, this examination
124-3 requirement must be met by each natural person acting as an
124-4 officer, manager, and member of that limited liability company].
124-5 SECTION 6.07. Subsection (c), Section 4, Article 1.14-2,
124-6 Insurance Code, is amended to read as follows:
124-7 (c) In addition to the requirements of this article, the
124-8 administration and regulation of a surplus lines agent's license is
124-9 governed by Subchapter A, Chapter 21, of this code, except that
124-10 Article 21.07 of this code does not apply to a license issued under
124-11 this article. [Unless the State Board of Insurance adopts a system
124-12 for staggered renewal of licenses, as provided by Article 21.01-2
124-13 of this code, each license issued under this section is for a
124-14 two-year term that expires on December 31; however, the term of the
124-15 initial licensing period shall expire on December 31 of the year
124-16 following the year in which the license is issued. A license may
124-17 be renewed for periods of two years.]
124-18 SECTION 6.08. Subsection (d), Section 4, Article 1.14-2,
124-19 Insurance Code, is amended to read as follows:
124-20 (d) If a license holder does not maintain the qualifications
124-21 necessary to obtain the license, the department may revoke or
124-22 suspend the license or deny the renewal of that license in
124-23 accordance with Article 21.01-2 of this code. [By filing a
124-24 completed written application in the form prescribed by the State
124-25 Board of Insurance and paying the nonrefundable renewal fee set by
124-26 the board in an amount not to exceed $50, an unexpired license may
125-1 be renewed on or before the expiration date of the license.]
125-2 SECTION 6.09. Subsection (a), Section 15, Article 1.14-2,
125-3 Insurance Code, is amended to read as follows:
125-4 (a) Each surplus lines agent shall maintain [keep in his
125-5 office in this state] a full and true record of each surplus lines
125-6 contract procured by the agent [him], including a copy of the daily
125-7 report, if any, and showing such of the following items as may be
125-8 applicable:
125-9 1. Amount of the insurance and perils insured against;
125-10 2. Brief general description of property insured and
125-11 where located;
125-12 3. Gross premium charged;
125-13 4. Return premium paid, if any;
125-14 5. Rate of premium charged upon the several items of
125-15 property;
125-16 6. Effective date of the contract, and the terms
125-17 thereof;
125-18 7. Name and post office address of the insured;
125-19 8. Name and home office address of the insurer;
125-20 9. Amount collected from the insured; and
125-21 10. Other information as may be required by the
125-22 department [State Board of Insurance].
125-23 ARTICLE 7. CONFORMING AMENDMENTS
125-24 SECTION 7.01. Section 1, Article 3.71, Insurance Code, is
125-25 amended to read as follows:
125-26 Sec. 1. Notwithstanding any contrary or inconsistent
126-1 provision of any law, two or more insurance companies authorized to
126-2 separately do such an insurance business in this state, including
126-3 stock companies, reciprocals, or inter-insurance exchanges, Lloyds'
126-4 associations, fraternal benefit societies and mutual companies of
126-5 all kinds, including state-wide mutual assessment corporations and
126-6 local mutual aid associations, and stipulated premium companies,
126-7 may join together to offer, sell and administer hospital, surgical
126-8 and medical expense insurance plans under a group policy covering
126-9 residents of this state who are sixty-five (65) years of age and
126-10 older and their spouses on which policy each insurance carrier
126-11 shall be severally liable, and such companies may agree with
126-12 respect to premium rates, policy provisions, sales, administrative,
126-13 technical and accounting procedures and other matters within the
126-14 scope of this Article. Such companies may issue such insurance
126-15 policies in their own names or in the name of an unincorporated
126-16 association, trust, or other organization formed for the sole
126-17 purposes of this Article and evidenced by a contract in writing
126-18 executed by the participating insurance companies, and any
126-19 unincorporated associations, trusts, or other organizations
126-20 heretofore formed for the sole purpose of this Article and
126-21 evidenced by a contract in writing executed by the participating
126-22 insurance companies is hereby ratified, confirmed and approved and
126-23 validated from the date of its formation. Any such policy may be
126-24 executed on behalf of the insurance companies by a duly authorized
126-25 person and need not be countersigned on behalf of any such company
126-26 by a resident agent. Any person who is licensed as a general life,
127-1 accident, and health [insurance] agent or as a general property and
127-2 casualty [local recording] agent [or as a solicitor] under Article
127-3 [the provisions of Articles 21.07,] 21.07-1[,] or [Article] 21.14
127-4 of this code [the Insurance Code of the State of Texas,] may act as
127-5 such agent in connection with policies of insurance or certificates
127-6 of insurance issued by any unincorporated association, trust or
127-7 other organization formed for the sole purposes of this Article
127-8 without the necessity of notifying the department [State Board of
127-9 Insurance] that such person is appointed to so act.
127-10 SECTION 7.02. Section 7, Article 3.75, Insurance Code, is
127-11 amended to read as follows:
127-12 Sec. 7. VARIABLE CONTRACT AGENTS LICENSE.
127-13 (a) Notwithstanding any other law of this state, no person shall
127-14 sell or offer for sale within this state a variable contract or do
127-15 or perform any act or thing in the sale, negotiation, making, or
127-16 consummating of any variable contract other than for himself,
127-17 unless such person shall have a valid and current license issued
127-18 under Article 21.07-1 of this code [certificate from the State
127-19 Board of Insurance] authorizing such person to act within this
127-20 state as a general life, accident, and health [variable] agent.
127-21 [No such certificate shall be issued unless and until said board is
127-22 satisfied, after examination, that such person is by training,
127-23 knowledge, ability, and character qualified to act as such agent.
127-24 Any such certificate may be withdrawn and cancelled by said board,
127-25 after notice and hearing, if it shall find that the holder thereof
127-26 does not then have the qualifications required for issue of such
128-1 certificate.]
128-2 (b) The licensing and regulation of a person acting as a
128-3 variable agent is subject to the same provisions applicable to the
128-4 licensing and regulation of other agents under Subchapter A,
128-5 Chapter 21, of this code. [The Commissioner of Insurance shall
128-6 collect in advance from variable agent applicants a nonrefundable
128-7 license fee in an amount not to exceed $50. Unless the State Board
128-8 of Insurance accepts a qualifying examination administered by a
128-9 testing service, as provided under Article 21.01-1, Insurance Code,
128-10 as amended, the Commissioner of Insurance shall collect in advance
128-11 from variable agent applicants an examination fee in an amount not
128-12 to exceed $20. The State Board of Insurance shall determine the
128-13 amount of the fees. A new examination fee shall be paid for each
128-14 and every examination. The examination fee shall not be returned
128-15 under any circumstance other than for failure to appear and take
128-16 the examination after the applicant has given at least 24 hours
128-17 notice of an emergency situation to the Commissioner of Insurance
128-18 and received the Commissioner's approval. All fees collected
128-19 pursuant to this section shall be deposited in the State Treasury
128-20 to the credit of the State Board of Insurance operating fund to be
128-21 used to administer the provisions of this section and Article
128-22 21.07-1, Insurance Code, as amended.]
128-23 [(c) Each license issued to a variable contract agent shall
128-24 expire two years following the date of issue, unless prior thereto
128-25 it is suspended or revoked by the Commissioner of Insurance.]
128-26 [(d) The Commissioner of Insurance shall suspend the license
129-1 of a variable agent during any period in which the agent does not
129-2 have an outstanding valid appointment. The Commissioner of
129-3 Insurance shall lift the suspension on receipt by the State Board
129-4 of Insurance of acceptable notice of a valid appointment.]
129-5 [(e) A license applicant or licensee whose license
129-6 application or license has been denied, refused, or revoked under
129-7 this section may not apply for any license as an insurance agent
129-8 before the first anniversary of the effective date of the denial,
129-9 refusal, or revocation, or, if the applicant or licensee seeks
129-10 judicial review of the denial, refusal, or revocation, before the
129-11 first anniversary of the date of the final court order or decree
129-12 affirming that action. The Commissioner of Insurance may deny an
129-13 application timely filed if the applicant does not show good cause
129-14 why the denial, refusal, or revocation of the previous license
129-15 application or license should not be considered a bar to the
129-16 issuance of a new license.]
129-17 [(f) Licenses which have not expired or which have not been
129-18 suspended or revoked may be renewed by filing with the State Board
129-19 of Insurance a completed renewal application and paying the
129-20 nonrefundable renewal fee set by the board in an amount not to
129-21 exceed $50 on or before the expiration date of the license in
129-22 accordance with Article 21.01-2 of this code.]
129-23 [(g) Any agent licensed under this article may represent and
129-24 act as an agent for more than one insurance carrier any time while
129-25 the license is in force, if the agent so desires. Any such agent
129-26 and the insurance carrier involved must give notice to the State
130-1 Board of Insurance of any additional appointment or appointments
130-2 authorizing the agent to act as agent for an additional insurance
130-3 carrier or carriers. Such notice shall be accompanied by a
130-4 certificate from each insurance carrier to be named in each
130-5 additional appointment that said insurance carrier desires to
130-6 appoint the applicant as its agent. This notice shall also contain
130-7 such other information as the State Board of Insurance may require.
130-8 The agent or company shall be required to pay a nonrefundable fee
130-9 in an amount not to exceed $16 as determined by the State Board of
130-10 Insurance for each additional appointment applied for, which fee
130-11 shall accompany the notice. If approval of the additional
130-12 appointment is not received from the board before the eighth day
130-13 after the date on which the completed application and fee were
130-14 received by the board, the agent and the insurance carrier, in the
130-15 absence of notice of disapproval, may assume that the board
130-16 approves the application, and the agent may act for the insurance
130-17 carrier. All fees collected pursuant to this section shall be
130-18 deposited in the State Treasury to the credit of the State Board of
130-19 Insurance operating fund to be used to administer the provisions of
130-20 this article and Article 21.07-1, Insurance Code, as amended.]
130-21 [(h) Duplicate License; Fee. The Commissioner of Insurance
130-22 shall collect in advance from agents requesting duplicate licenses
130-23 a fee not to exceed $20. The State Board of Insurance shall
130-24 determine the amount of the fee.]
130-25 SECTION 7.03. Subsection (c), Article 5.13-1, Insurance
130-26 Code, is amended to read as follows:
131-1 (c) The right of such insurers to issue prepaid legal
131-2 services contracts on individual, group, or franchise bases is
131-3 hereby recognized, and qualified agents of such insurers who are
131-4 licensed under Article 21.07-1 or [Articles 21.07 and] 21.14 of
131-5 this code [the Insurance Code, as amended, and Chapter 213, Acts of
131-6 the 54th Legislature, 1955, as amended (Article 21.07-1, Vernon's
131-7 Texas Insurance Code),] shall be authorized to write such coverages
131-8 under such rules [and regulations] as the commissioner [State Board
131-9 of Insurance] may prescribe.
131-10 SECTION 7.04. Article 10.37-3, Insurance Code, is amended to
131-11 read as follows:
131-12 Art. 10.37-3. LICENSING OF AGENTS. (a) Except as provided
131-13 by Subsection (b) of this article, a [A] person may not solicit or
131-14 procure insurance contracts for a society unless the person is
131-15 licensed as a general life, accident, and health agent under
131-16 Article 21.07-1 of this code [an agent under Chapter 213, Acts of
131-17 the 54th Legislature, Regular Session, 1955 (Article 21.07-1,
131-18 Vernon's Texas Insurance Code)].
131-19 (b) An agent, representative, or member of a fraternal
131-20 benefit society who devotes less than 50 percent of the person's
131-21 time to the solicitation and procurement of insurance contracts for
131-22 that society is exempt from the requirements of Subsection (a) of
131-23 this article.
131-24 (c) For the purposes of Subsection (b) of this article, a
131-25 person is presumed for a calendar year to have devoted at least 50
131-26 percent of the person's time to the solicitation or procurement of
132-1 insurance contracts if, in the preceding calendar year, the person
132-2 solicited or procured on behalf of a society:
132-3 (1) life insurance contracts that have generated, in
132-4 the aggregate, more than $20,000 of direct premiums for all lives
132-5 insured, provided that an interest-sensitive life insurance
132-6 contract has not been solicited or procured by a person that
132-7 exceeds $35,000 of coverage on an individual life unless that
132-8 person holds the designation of "Fraternal Insurance [Benefit]
132-9 Counselor";
132-10 (2) insurance contracts, other than life insurance
132-11 contracts, that have insured the individual lives of more than 25
132-12 persons; or
132-13 (3) variable life insurance or variable annuity
132-14 contracts.
132-15 (d) The licensing and regulation of agents for fraternal
132-16 benefit societies is subject to Subchapter A, Chapter 21, of this
132-17 code and other laws regulating those agents.
132-18 SECTION 7.05. Article 16.24A, Insurance Code, is amended to
132-19 read as follows:
132-20 Art. 16.24A. LICENSING OF AGENTS [FOR CROP INSURANCE].
132-21 (a) No person or firm shall solicit, write, sign, execute or
132-22 deliver insurance policies, bind insurance risks, collect premiums,
132-23 or otherwise act in the capacity of an insurance agent [a local
132-24 recording agent] in the solicitation or sale of [crop] insurance
132-25 for a farm mutual insurance company unless the person or firm holds
132-26 a license issued [is licensed] under Subchapter A, Chapter 21,
133-1 [Article 21.14] of this code.
133-2 (b) A farm mutual insurance company may not appoint and act
133-3 through an agent [who qualifies for a license as an agricultural
133-4 insurance agent] under Article 21.14-2 of this code.
133-5 SECTION 7.06. Section 9, Article 17.25, Insurance Code, is
133-6 amended to read as follows:
133-7 Sec. 9. AGENTS' LICENSE. Agents [or solicitors] for such
133-8 companies shall be licensed and appointed as provided by Subchapter
133-9 A, Chapter 21, [in Article 21.07 or 21.14] of this Code.
133-10 SECTION 7.07. Sections 4, 19, and 21, Managing General
133-11 Agents' Licensing Act (Article 21.07-3, Vernon's Texas Insurance
133-12 Code), are amended to read as follows:
133-13 Sec. 4. REDEMPTION OF SHARES [APPLICATION FOR LICENSE; TO
133-14 WHOM LICENSE MAY BE ISSUED]. [(a) Each applicant for license
133-15 shall be a resident of Texas and file a written sworn application
133-16 on forms furnished by the Commissioner. The applicant shall
133-17 include in the application the names and addresses of the
133-18 applicant's officers, directors, shareholders, or partners, if
133-19 applicable, and affiliates.]
133-20 [(b) The Commissioner shall issue a license to an individual
133-21 applicant upon successful completion of the examination and
133-22 compliance with the other requirements of this Act.]
133-23 [(c) The Commissioner shall issue a license to a general
133-24 partnership, or to a limited liability partnership registered with
133-25 the Secretary of State under Section 3.08, Texas Revised
133-26 Partnership Act (Article 6132b-3.08, Vernon's Texas Civil
134-1 Statutes), engaging in the business of insurance if each of the
134-2 partners is licensed as an agent under this Act. The term
134-3 "partnership" or "agency partnership" as used in this Act means a
134-4 general partnership or a registered limited liability partnership.]
134-5 [(d) The Commissioner shall issue a license to a corporation
134-6 on finding:]
134-7 [(1) that the corporation is a Texas corporation
134-8 having its principal place of business in the State of Texas and
134-9 having as one of its purposes the authority to act as a managing
134-10 general agent; and]
134-11 [(2) that every officer, director, and shareholder of
134-12 the corporation is individually licensed as a managing general
134-13 agent under the provisions of this Insurance Code; provided,
134-14 however, that in the event ownership of the shares of such
134-15 corporation is acquired through devise or descent by an unlicensed
134-16 shareholder, the corporation shall still be entitled to a license
134-17 if such unlicensed shareholder qualifies as a licensed managing
134-18 general agent or disposes of the shares to a licensed managing
134-19 general agent within 90 days after the date of such stock
134-20 acquisition. If an unlicensed person acquires shares in such a
134-21 corporation and does not qualify to be licensed as a managing
134-22 general agent and the person does not dispose of the shares within
134-23 the 90-day period to a licensed managing general agent, the shares
134-24 must be purchased by the corporation for the value of the shares of
134-25 stock as reflected by the regular books and records of the
134-26 corporation on the date of the acquisition of the shares by the
135-1 unlicensed person. If the corporation fails or refuses to purchase
135-2 the shares, the corporation's license shall be cancelled.]
135-3 [(e)] A corporation may redeem the shares of any shareholder
135-4 or the shares of a deceased shareholder, on terms agreed on by the
135-5 board of directors and the shareholder or the shareholder's
135-6 personal representative or at a price and on terms provided in the
135-7 articles of incorporation, the bylaws, or an existing contract
135-8 entered into between the shareholders of the corporation.
135-9 [(f) Nothing contained herein shall be construed to permit
135-10 any unlicensed shareholder or any employee or agent of any
135-11 corporation licensed as a managing general agent to perform any act
135-12 of a managing general agent without obtaining a managing general
135-13 agent's license.]
135-14 [(g) If at any time, any person holding a managing general
135-15 agent's license does not maintain the qualifications necessary to
135-16 obtain a license, the license of such person to act as a managing
135-17 general agent shall be cancelled or denied in accordance with the
135-18 other provisions of this Act.]
135-19 [(h) Nothing in this section shall prevent any shareholder
135-20 from selling or otherwise transferring stock in any corporation to
135-21 a company or managing general agent licensed to do business in
135-22 Texas, nor prevent any such company or managing general agent from
135-23 owning all or any portion of the stock of such corporation.]
135-24 [(i) Each corporation licensed as a managing general agent
135-25 shall notify the Commissioner of any change in its officers,
135-26 directors, or shareholders not later than the 30th day after the
136-1 date on which the change takes effect.]
136-2 [(j) In this Act the term "corporation" shall mean a
136-3 corporation organized under the Texas Business Corporation Act or a
136-4 Texas domiciled limited liability company organized or existing
136-5 under the Texas Limited Liability Company Act (Article 1528n,
136-6 Vernon's Texas Civil Statutes) having its principal place of
136-7 business in this state and having as one of its purposes the
136-8 authority to act as a managing general insurance agent. Each
136-9 officer, manager, and member of a limited liability company must be
136-10 licensed under this Act. The licensing and regulation of a limited
136-11 liability company shall be subject to the same provisions and
136-12 requirements of this Act that are applicable to corporations
136-13 licensed under this Act.]
136-14 Sec. 19. ADMINISTRATION AND REGULATION OF MANAGING GENERAL
136-15 AGENTS; VIOLATIONS OF ACT. (a) Subchapter A, Chapter 21,
136-16 Insurance Code, applies to the licensing and regulation of a person
136-17 acting as a managing general agent.
136-18 (b) Any person, firm, or corporation who violates any of the
136-19 provisions of this Act or any rule[, regulation,] or order adopted
136-20 under this Act or Subchapter A, Chapter 21, Insurance Code, is
136-21 [shall be] subject to:
136-22 (1) Sections 2A, 3A, 4A, 5A, and 6A, Article 21.01-2,
136-23 Insurance Code; and
136-24 (2) Chapter 82 [sanctions under Section 7, Article
136-25 1.10], Insurance Code.
136-26 Sec. 21. ADMINISTRATION OF ACT. The administration of this
137-1 Act shall be vested in the commissioner, [State Board of Insurance]
137-2 who may establish, and from time to time amend, reasonable rules
137-3 [and regulations] for the administration of this Act.
137-4 SECTION 7.08. Subsection (c), Section 3, Article 21.07-6,
137-5 Insurance Code, is amended to read as follows:
137-6 (c) The certificate of authority issued under this article
137-7 shall continue in effect until suspended, canceled, or revoked [in
137-8 accordance with Section 7, Article 1.10, of this code]. The
137-9 issuance, denial, suspension, cancellation, or revocation of a
137-10 certificate of authority to act as an administrator is subject to:
137-11 (1) Sections 2A, 3A, 4A, 5A, and 6A, Article 21.01-2,
137-12 of this code; and
137-13 (2) Chapter 82 of this code.
137-14 SECTION 7.09. Subdivision (2), Section 1, Article 21.21-9,
137-15 Insurance Code, as added by Chapter 596, Acts of the 75th
137-16 Legislature, Regular Session, 1997, is amended to read as follows:
137-17 (2) "Bank" means a depository institution as defined
137-18 by Article 21.07 of this code [national banking association
137-19 organized and existing under the National Bank Acts (12 U.S.C.
137-20 Section 21 et seq.), a state bank organized and existing under the
137-21 Texas Banking Act (Article 342-1.001 et seq., Vernon's Texas Civil
137-22 Statutes), a state savings bank organized and existing under the
137-23 Texas Savings Bank Act (Article 489e, Vernon's Texas Civil
137-24 Statutes), a bank branch, or a bank operating subsidiary, as
137-25 defined by state or federal law, that is located and doing business
137-26 in this state in a place with a population of 5,000 or less].
138-1 SECTION 7.10. Article 22.14, Insurance Code, is amended to
138-2 read as follows:
138-3 Art. 22.14. LICENSING OF AGENTS. All agents of stipulated
138-4 premium companies shall be licensed in accordance with the
138-5 provisions of Subchapter A [Art. 21.07] of Chapter 21 of this Code.
138-6 SECTION 7.11. Chapter 23, Insurance Code, is amended by
138-7 adding Article 23.23A to read as follows:
138-8 Art. 23.23A. REGULATION OF AGENTS. The licensing and
138-9 regulation of an agent authorized to solicit prepaid legal services
138-10 contracts for corporations complying with this chapter is subject
138-11 to Subchapter A, Chapter 21, of this code.
138-12 SECTION 7.12. Article 25.06, Insurance Code, is amended to
138-13 read as follows:
138-14 Art. 25.06. AGENTS' LICENSES. Subchapter A, Chapter 21, of
138-15 this code applies to the licensing and regulation of an agent
138-16 authorized to solicit job protection insurance for an insurance
138-17 carrier under this chapter [Any individual who solicits insurance,
138-18 as defined in Article 21.02 of this code, on behalf of an insurance
138-19 carrier operating exclusively under this chapter, must comply with
138-20 the requirements of Article 21.07 of this code, except that no
138-21 written examination is required for issuance of the license].
138-22 ARTICLE 8. REPEALER
138-23 SECTION 8.01. The following laws are repealed:
138-24 (1) Subsections (f), (g), and (h), Section 4, Article
138-25 1.14-2, Insurance Code;
138-26 (2) Section 15, Article 17.25, Insurance Code;
139-1 (3) Sections 1, 3, 4, and 6, Article 21.01-2,
139-2 Insurance Code;
139-3 (4) Article 21.02-1, Insurance Code;
139-4 (5) Article 21.05, Insurance Code;
139-5 (6) Article 21.06, Insurance Code;
139-6 (7) the following sections of Article 21.07, Insurance
139-7 Code:
139-8 (A) Sections 1B and 1C; and
139-9 (B) Sections 3, 3B, 4, 4A, 5, 6A, 7, 8, 9, 10,
139-10 10A, 11, 12, 13, 14, 15, 15A, 16, 17, 18, 19, and 20;
139-11 (8) Article 21.07A, Insurance Code;
139-12 (9) Chapter 213, Acts of the 54th Legislature, Regular
139-13 Session, 1955 (Article 21.07-1, Vernon's Texas Insurance Code);
139-14 (10) the following sections of the Managing General
139-15 Agents' Licensing Act (Article 21.07-3, Vernon's Texas Insurance
139-16 Code):
139-17 (A) Sections 4A, 4B, and 4C;
139-18 (B) Subsection (h), Section 5;
139-19 (C) Sections 6 and 6A;
139-20 (D) Sections 8, 9, and 10;
139-21 (E) Sections 12, 13, 14, and 15;
139-22 (F) Section 17; and
139-23 (G) Section 20;
139-24 (11) Subsection (d), Section 2, Article 21.11,
139-25 Insurance Code;
139-26 (12) Section 14, Article 21.14-1, Insurance Code;
140-1 (13) Article 21.15, Insurance Code;
140-2 (14) Article 21.15-2, Insurance Code;
140-3 (15) Article 21.15-3, Insurance Code;
140-4 (16) Article 21.15-4, Insurance Code;
140-5 (17) Article 21.15-7, Insurance Code;
140-6 (18) Section 10, Article 21.58A, Insurance Code; and
140-7 (19) Article 23.23, Insurance Code.
140-8 ARTICLE 9. GRANDFATHER CLAUSE; TRANSITION
140-9 SECTION 9.01. On the effective date of this Act, a person
140-10 who holds a license issued by the Texas Department of Insurance
140-11 that is in good standing is:
140-12 (1) considered licensed under the applicable licensing
140-13 law as amended by this Act;
140-14 (2) entitled to act as an agent under the new license
140-15 type, subject to this article; and
140-16 (3) subject to the provisions of the Insurance Code as
140-17 amended by this Act.
140-18 SECTION 9.02. (a) A person who, immediately before the
140-19 effective date of this Act, holds an agent license issued by the
140-20 Texas Department of Insurance and who obtained that license by
140-21 passing a written examination administered by any entity allowed by
140-22 state law, including an insurance carrier, company, or state
140-23 testing contractor, is entitled to the appropriate license as
140-24 provided by Subchapter A, Chapter 21, Insurance Code, as amended by
140-25 this Act, without further examination.
140-26 (b) A person who, immediately before the effective date of
141-1 this Act, holds an agent license issued by the Texas Department of
141-2 Insurance before January 1, 2001, and who obtained that license
141-3 without taking a written examination or who solicited insurance on
141-4 behalf of a stipulated premium company, farm mutual company, or
141-5 county mutual insurance company before January 1, 2001, is entitled
141-6 to the appropriate license as provided by Subchapter A, Chapter 21,
141-7 Insurance Code, as amended by this Act, but must pass the
141-8 appropriate license examination not later than the second
141-9 anniversary of the date of issuance to retain the license. The
141-10 license of a person who does not pass the license examination as
141-11 required by this subsection expires on the second anniversary of
141-12 the date of issuance and may not be renewed.
141-13 (c) A person who, immediately before the effective date of
141-14 this Act, holds an agent license issued by the Texas Department of
141-15 Insurance on or after January 1, 2001, and who obtained that
141-16 license without taking a written examination or who solicited
141-17 insurance on behalf of a stipulated premium company, farm mutual
141-18 company, or county mutual insurance company on or after January 1,
141-19 2001, but before the effective date of this Act, is entitled to the
141-20 appropriate license as provided by Subchapter A, Chapter 21,
141-21 Insurance Code, as amended by this Act, but must pass the
141-22 appropriate license examination not later than May 31, 2002, to
141-23 retain the license. The license of a person who does not pass the
141-24 license examination as required by this subsection expires on May
141-25 31, 2002.
141-26 (d) A person who has solicited insurance on behalf of a
142-1 stipulated premium company, farm mutual company, or county mutual
142-2 insurance company for at least 24 months before the effective date
142-3 of this Act is entitled to the appropriate license and any renewal
142-4 license as provided by Subchapter A, Chapter 21, Insurance Code, as
142-5 amended by this Act, without further examination.
142-6 (e) The continuing education requirements of Subchapter A,
142-7 Chapter 21, Insurance Code, as amended by this Act, do not apply to
142-8 a person who, immediately before the effective date of this Act,
142-9 has been licensed by the Texas Department of Insurance as a
142-10 resident insurance agent under Article 21.07-1, Insurance Code, the
142-11 Managing General Agents' Licensing Act (Article 21.07-3, Vernon's
142-12 Texas Insurance Code), or Article 21.14, Insurance Code, for at
142-13 least 20 years.
142-14 ARTICLE 10. EFFECTIVE DATE; TRANSITION
142-15 SECTION 10.01. (a) This Act takes effect September 1, 2001.
142-16 (b) Section 3, Article 21.01-1, Insurance Code, as amended
142-17 by this Act, applies to continuing education requirements for
142-18 insurance agents for a renewal of a license that occurs on or after
142-19 January 1, 2003.