BILL ANALYSIS
Senate Research Center C.S.S.B. 964
By: Ellis
Committee Report (Substituted)
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Insurance carriers often compensate agents for sales of Medicare-related products with large, immediate commissions. This legislation would give the commissioner of insurance (commissioner) the authority to compel carriers to change their payment schedules if such payments incentivize sales behavior that is inappropriate or places undue pressure on the buyer.
C.S.S.B. 964 prohibits the payments and authorizes the commissioner to order an issuer to change commission payment schedules for an agent authorized to sell Medicare-related products if such payments operate as an incentive to encourage false, deceptive, or misleading sales behavior. C.S.S.B. 964 requires an insurance agent that intends to sell, solicit, or negotiate contracts for Medicare-related products to complete eight hours of Medicare-related education initially, and eight hours of continuing education annually.
RULEMAKING AUTHORITY
Rulemaking authority is expressly granted to the commissioner of insurance in SECTION 1 (Section 1654.003, Insurance Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subtitle I, Title 8, Insurance Code, by adding Chapter 1654, as follows:
CHAPTER 1654. REQUIREMENTS RELATING TO SALE OF CERTAIN
MEDICARE-RELATED PRODUCTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1654.001. DEFINITIONS. Defines "Medicare advantage plan," "Medicare program," "Medicare-related product," and "Medicare supplement benefit plan."
Sec. 1654.002. APPLICABILITY. Provides that this chapter applies only to insurers and insurance agents that solicit, negotiate, or sell Medicare-related products.
Sec. 1654.003. RULES. Requires the commissioner of insurance (commissioner) to adopt rules as necessary to implement this chapter.
[Reserves Sections 1654.004-1654.050 for expansion.]
SUBCHAPTER B. COMPENSATION RESTRICTIONS
Sec. 1654.051. COMPENSATION RESTRICTIONS. (a) Prohibits an insurer from paying or offering to pay an insurance agent, and prohibits an insurance agent from accepting, a payment for Medicare-related products that operates as an incentive for sales behavior that may violate Chapter 541 (Unfair Methods of Competition and Unfair or Deceptive Acts or Practices) or is otherwise false, deceptive, or misleading.
(b) Authorizes the commissioner to order an insurer to change the insurer's Medicare-related agent commission payment schedules if the commissioner determines that the schedules operate as an incentive for sales behavior that may violate Chapter 541 or is otherwise false, deceptive, or misleading.
[Reserves Sections 1654.052-1654.100 for expansion.]
SUBCHAPTER C. AGENT REQUIREMENTS
Sec. 1654.101. AGENT EDUCATION REQUIREMENTS. (a) Requires an insurance agent that intends to sell, solicit, or negotiate a contract for a Medicare-related product in this state or to represent an insurer in relation to such a product to submit evidence satisfactory to the Texas Department of Insurance of completion of at least eight hours of professional training relating to Medicare-related products before selling, soliciting, or negotiating such a contract.
(b) Provides that the requirement imposed under Subsection (a) is in addition to any other education or training requirements imposed under this code and rules adopted under this code for issuance of a license.
Sec. 1654.102. CONTINUING EDUCATION. (a) Requires each agent subject to this chapter to complete eight hours of continuing education annually that specifically relates to Medicare-related products.
(b) Authorizes each hour of education completed in accordance with Subsection (a) to be used to satisfy an hour of a continuing education requirement otherwise applicable to the agent under this title.
SECTION 2. Requires the commissioner to adopt rules as required by Chapter 1654, Insurance Code, as added by this Act, not later than December 1, 2009.
SECTION 3. Provides that Section 1654.102, Insurance Code, as added by this Act, applies to requirements for an insurance agent license issued or renewed on or after January 1, 2010.
SECTION 4. Effective date: September 1, 2009.