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AN ACT
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relating to certain certifications, professional designations, and |
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education requirements regarding the sale of life insurance and |
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annuities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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ARTICLE 1. AGENT EDUCATION REQUIREMENTS |
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SECTION 1.001. Subchapter B, Chapter 1115, Insurance Code, |
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is amended by adding Section 1115.056 to read as follows: |
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Sec. 1115.056. AGENT EDUCATION REQUIREMENTS. (a) A |
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resident agent that intends to sell, solicit, or negotiate a |
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contract for an annuity in this state or to represent an insurer in |
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relation to such an annuity must submit evidence satisfactory to |
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the department of completion of at least four hours of training |
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relating to annuities before soliciting individual consumers for |
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the purpose of selling annuities. |
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(b) The training required under Subsection (a) may be used |
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to satisfy the continuing education requirements imposed under this |
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code and rules adopted under this code for issuance of a license |
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under this code. |
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SECTION 1.002. Chapter 4004, Insurance Code, is amended by |
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adding Subchapter E to read as follows: |
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SUBCHAPTER E. CONTINUING EDUCATION REQUIREMENTS FOR SALE OF |
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ANNUITIES |
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Sec. 4004.201. DEFINITION. In this subchapter, "annuity" |
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has the meaning assigned by Section 1115.002. |
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Sec. 4004.202. REQUIRED CONTINUING EDUCATION REGARDING |
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ANNUITIES. (a) This section applies to a resident agent who: |
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(1) sells, solicits, or negotiates a contract for an |
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annuity in this state; or |
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(2) represents or purports to represent an insurer in |
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relation to such an annuity. |
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(b) Each agent described by Subsection (a) must complete |
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four hours of continuing education annually that specifically |
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relates to annuities. The annual period under this section must be |
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based on the agent's license expiration date or another date |
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specified by the commissioner by rule, and the education |
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requirement under this subsection must be met within that annual |
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period, notwithstanding Section 4004.051(b). |
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(c) The continuing education required under this section |
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may be used to satisfy the continuing education requirements under |
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Subchapter B. |
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Sec. 4004.203. PROGRAM CERTIFICATION REQUIREMENTS. (a) |
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The commissioner by rule shall adopt criteria for continuing |
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education programs used to satisfy the requirements of Section |
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4004.202. Those criteria must include: |
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(1) topics related specifically to annuities; |
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(2) state laws and rules related to annuities, |
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including requirements adopted under Chapter 1115; |
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(3) prohibited sales practices regarding annuities; |
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(4) recognition of indicators that a prospective |
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insured may lack the short-term memory or judgment to knowingly |
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purchase an annuity; and |
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(5) fraudulent and unfair trade practices regarding |
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the sale of annuities. |
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(b) Subject matter determined by the commissioner to be |
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primarily intended to promote the sale or marketing of annuities |
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does not qualify as continuing education for purposes of this |
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subchapter. |
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(c) Subchapter C applies to continuing education programs |
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described by Subsection (a) and training under Section 1115.056. |
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Any training program disapproved under Subsection (b) shall be |
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presumed invalid for certification under Subchapter C unless the |
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program is approved in writing by the commissioner. |
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SECTION 1.003. The commissioner of insurance shall adopt |
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rules as required by Section 4004.203, Insurance Code, as added by |
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this article, not later than December 1, 2009. |
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SECTION 1.004. Subchapter E, Chapter 4004, Insurance Code, |
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as added by this article, applies to continuing education |
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requirements for insurance agents for a license issued or renewed |
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on or after April 1, 2010. |
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SECTION 1.005. Section 1115.056, Insurance Code, as added |
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by this article, applies to training requirements for insurance |
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agents for a license issued or renewed on or after April 1, 2010. |
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ARTICLE 2. USE OF SENIOR-SPECIFIC CERTIFICATIONS OR |
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PROFESSIONAL DESIGNATIONS |
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SECTION 2.001. Subtitle A, Title 7, Insurance Code, is |
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amended by adding Chapter 1117 to read as follows: |
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CHAPTER 1117. USE OF SENIOR-SPECIFIC CERTIFICATIONS OR |
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PROFESSIONAL DESIGNATIONS |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 1117.001. PURPOSE. The purpose of this chapter is to |
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establish standards to protect consumers from misleading and |
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fraudulent marketing practices with respect to the use of certain |
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senior-specific certifications and professional designations in |
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soliciting the sale or purchase of, or providing advice made |
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concerning, life insurance or annuity products. |
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Sec. 1117.002. DEFINITIONS. In this chapter: |
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(1) "Insurance agent" means an agent licensed under |
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this code to sell, solicit the sale of, or negotiate a life |
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insurance or annuity product. |
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(2) "Senior-specific certification or professional |
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designation" means a certification or designation that implies that |
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an insurance agent holds a special certification or has specialized |
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training in advising or servicing seniors regarding purchasing or |
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selling a life insurance or annuity product. |
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Sec. 1117.003. APPLICABILITY OF CHAPTER; CONSTRUCTION WITH |
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OTHER LAW. (a) This chapter applies to any solicitation, sale or |
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purchase of, or advice made in connection with, a life insurance or |
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annuity product by an insurance agent. |
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(b) Nothing in this chapter may be construed to limit the |
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commissioner's authority to enforce any other provision of this |
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code or another law. |
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[Sections 1117.004-1117.050 reserved for expansion] |
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SUBCHAPTER B. USE OF SENIOR-SPECIFIC CERTIFICATIONS AND |
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PROFESSIONAL DESIGNATIONS |
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Sec. 1117.051. CERTAIN USES OF SENIOR-SPECIFIC |
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CERTIFICATIONS AND DESIGNATIONS PROHIBITED. (a) An insurance |
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agent may not, directly or indirectly, use a senior-specific |
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certification or professional designation in such a way as to |
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mislead a purchaser or prospective purchaser that the agent has |
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special certification or training in advising or servicing seniors |
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in connection with the solicitation, sale, or purchase of a life |
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insurance or annuity product or in the provision of advice as to the |
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value of or the advisability of purchasing or selling a life |
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insurance or annuity product: |
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(1) through any writing or other publication; or |
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(2) by issuing or disseminating analyses or reports |
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related to a life insurance or annuity product. |
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(b) Subsection (a) prohibits the use of a senior-specific |
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certification or professional designation only by an insurance |
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agent using: |
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(1) a certification or professional designation that |
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the agent has not actually earned or for which the agent is |
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ineligible; |
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(2) a nonexistent or self-conferred certification or |
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professional designation; |
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(3) a certification or professional designation that |
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indicates or implies a level of occupational qualification obtained |
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through education, training, or experience that the agent has not |
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obtained; and |
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(4) a certification or professional designation that |
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was obtained from an organization that: |
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(A) is primarily engaged in the business of |
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instruction in sales or marketing; |
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(B) does not have reasonable standards or |
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procedures for: |
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(i) assuring the competency of individuals |
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granted a certification or designation by the organization; or |
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(ii) monitoring and disciplining |
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individuals granted a certification or designation by the |
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organization for improper or unethical conduct; or |
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(C) does not have reasonable continuing |
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education requirements in order to maintain the certification or |
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designation for individuals granted a certification or designation |
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by the organization. |
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(c) A rebuttable presumption exists that a certification or |
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professional designation granted by an organization described by |
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Subsection (b)(4) is not prohibited under Subsection (a) if the |
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certification or designation issued by the organization does not |
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primarily apply to sales or marketing and if the organization or the |
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certification or designation has been accredited by: |
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(1) the American National Standards Institute; |
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(2) the National Commission for Certifying Agencies; |
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(3) any organization that is included in "Accrediting |
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Agencies Recognized for Title IV Purposes" published by the U.S. |
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Department of Education; or |
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(4) any other national accrediting organization |
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recognized by the commissioner. |
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(d) In determining whether a word, a combination of words, |
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or an acronym constitutes a senior-specific certification or |
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professional designation, the commissioner shall consider: |
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(1) the use of one or more words such as "senior," |
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"retirement," "elder," or similar words combined with one or more |
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words such as "certified," "registered," "chartered," "advisor," |
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"specialist," "consultant," "planner," or similar words, in the |
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name of the certification or professional designation; and |
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(2) the manner in which those words are combined. |
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Sec. 1117.052. APPLICABILITY TO CERTAIN FINANCIAL |
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SERVICES. (a) Notwithstanding Section 1117.003, for purposes of |
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this chapter, a job title used within an organization that is |
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licensed or registered by a state or federal financial services |
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regulatory agency and that indicates seniority or standing within |
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the organization, or that specifies an individual's area of |
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specialization within the organization, is not a senior-specific |
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certification or professional designation unless the title is used |
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in a manner that is likely to confuse or mislead a reasonable |
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consumer. |
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(b) For purposes of Subsection (a), "financial services |
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regulatory agency" includes an agency that regulates insurers, |
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insurance producers, broker-dealers, investment advisers, or |
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investment companies, as defined by the Investment Company Act of |
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1940 (15 U.S.C. Section 80a-1 et seq.). |
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SECTION 2.002. The change in law made by this article |
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applies only to the solicitation of, sale of, or advice made in |
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connection with, a life insurance or annuity product by an |
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insurance agent on or after January 1, 2010. The solicitation of, |
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sale of, or advice made in connection with, a life insurance or |
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annuity product by an insurance agent before January 1, 2010, is |
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covered by the law in effect at the time the solicitation or sale |
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was made or the advice was given, and that law is continued in |
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effect for that purpose. |
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ARTICLE 3. EFFECTIVE DATE |
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SECTION 3.001. This Act takes effect September 1, 2009. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 1294 was passed by the House on April |
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28, 2009, by the following vote: Yeas 149, Nays 0, 1 present, not |
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voting; and that the House concurred in Senate amendments to H.B. |
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No. 1294 on May 23, 2009, by the following vote: Yeas 137, Nays 0, |
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1 present, not voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 1294 was passed by the Senate, with |
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amendments, on May 21, 2009, by the following vote: Yeas 31, Nays |
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0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: __________________ |
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Date |
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__________________ |
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Governor |