By: Smithee, Frullo, Sheets H.B. No. 2145
        (Senate Sponsor - Creighton)
         (In the Senate - Received from the House April 20, 2015;
  April 23, 2015, read first time and referred to Committee on
  Business and Commerce; May 11, 2015, reported adversely, with
  favorable Committee Substitute by the following vote:  Yeas 7,
  Nays 1; May 11, 2015, sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR H.B. No. 2145 By:  Creighton
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to provisional authority for certain individual insurance
  license applicants to act as insurance agents; authorizing a fee;
  requiring an occupational provisional permit; adding provisions
  that may be subject to a criminal penalty.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 4001, Insurance Code, is amended by
  adding Subchapter H to read as follows:
  SUBCHAPTER H. PROVISIONAL PERMIT
         Sec. 4001.351.  APPLICABILITY. This subchapter applies only
  to an applicant for a license as an agent under:
               (1)  Subchapters B and E, Chapter 4051; and
               (2)  Subchapters B, D, and E, Chapter 4054.
         Sec. 4001.352.  AUTHORITY TO ISSUE PROVISIONAL PERMIT. The
  department may, in conjunction with a license application under
  Section 4001.102, issue a provisional permit to an applicant who is
  being considered for appointment as an agent by another agent, an
  insurer, or a health maintenance organization.
         Sec. 4001.353.  APPLICATION FOR AND ISSUANCE OF PROVISIONAL
  PERMIT. (a)  The department may issue a provisional permit under
  this subchapter on receipt of:
               (1)  a written application for a provisional permit;
               (2)  a properly completed license application,
  nonrefundable fee, and each other item required for a license under
  this chapter and Subchapter B or E, Chapter 4051, or Subchapter B,
  D, or E, Chapter 4054, as applicable;
               (3)  the nonrefundable fee in an amount authorized by
  Subsection (c); and
               (4)  a certificate signed by the appointing agent,
  insurer, or health maintenance organization stating that:
                     (A)  the applicant completed the training, if any,
  and passed the examination required for the issuance of the license
  for which the application is submitted;
                     (B)  the appointing agent, insurer, or health
  maintenance organization completed a background check on the
  applicant that shows that the applicant has not been convicted of:
                           (i)  a felony; or 
                           (ii)  an act that requires the applicant to
  receive written consent under 18 U.S.C. Section 1033 to engage in
  the business of insurance;
                     (C)  the applicant has not responded
  affirmatively to any question on the license application that
  indicates the applicant has a criminal conviction or has been
  involved in an administrative action that may disqualify the
  applicant from receiving a license; and
                     (D)  the appointing agent, insurer, or health
  maintenance organization will supervise the work of the applicant.
         (b)  An applicant is not qualified to receive a provisional
  permit if the applicant has not taken and passed the examination
  required for the issuance of the permanent license for which the
  applicant applied under Section 4001.102.
         (c)  The nonrefundable fee described by Subsection (a) shall
  be set by the department in an amount that:
               (1)  is reasonable and necessary to implement this
  subchapter; and
               (2)  may not exceed the amount of the fee required for
  an application for a permanent license.
         Sec. 4001.354.  AUTHORITY TO ACT AS AGENT UNDER PROVISIONAL
  PERMIT. (a)  An applicant may proceed to act as an agent if:
               (1)  a provisional permit is not received from the
  department before the eighth day after the date the application,
  nonrefundable fee, and other items required under Section
  4001.353(a) are delivered or mailed to the department; and
               (2)  the applicant or appointing agent, insurer, or
  health maintenance organization has not been notified that the
  application for the permit is incomplete or is or may be denied.
         (b)  An applicant may act as an agent only for the appointing
  agent, insurer, or health maintenance organization except that an
  appointing insurer may include appointments for one or more
  affiliated insurers that are part of the same insurance holding
  company group.
         Sec. 4001.355.  TERM OF PROVISIONAL PERMIT. (a)  Except as
  provided by Subsection (b), a provisional permit expires on the
  earlier of:
               (1)  the 90th day after the date the permit is issued;
  or
               (2)  the date a license is issued or the license
  application is denied.
         (b)  If the license, or a notice that the license is denied,
  is not received from the department on or before the 90th day after
  the date the application, nonrefundable fee, and other items
  required under Section 4001.353(a) are delivered or mailed to the
  department, the authority of the applicant to act as an agent under
  this subchapter automatically extends until the earlier of the date
  the license is issued or the license application is denied or the
  90th day after the expiration of the 90-day period under Subsection
  (a).
         Sec. 4001.356.  NOTIFICATION REGARDING LICENSE. (a)  The
  department may notify the applicant or appointing agent, insurer,
  or health maintenance organization that the license application is
  incomplete or is or may be denied at any time before the issuance or
  denial of a license.
         (b)  An applicant who receives a notice under Subsection (a)
  shall immediately cease acting as an agent under this subchapter.  
  An appointing agent, insurer, or health maintenance organization
  that receives notice under Subsection (a) shall immediately notify
  the applicant of the notice.
         (c)  An applicant acting as an agent under this subchapter
  before receiving a notice under Subsection (a), if applicable, is
  not engaged in the unauthorized business of insurance and any
  transaction entered into by the applicant before receiving the
  notice, if applicable, is presumed lawful.
         (d)  A notification under this section applies only to a
  provisional permit, and the department shall continue to process an
  application for a license unless the license has been denied.
         Sec. 4001.357.  DENIAL OR REVOCATION OF LICENSE. If the
  applicant's license application is denied or the applicant's
  license is revoked, an applicant is subject to Section 4005.105
  with respect to an application for a provisional permit under this
  subchapter.
         Sec. 4001.358.  COMPLIANCE WITH OTHER LAW. (a) A
  provisional permit holder who is acting under the authority of that
  permit is subject to all provisions of this code regulating the
  solicitation and sale of insurance that relate to the type of
  permanent license for which the provisional permit holder applied.
         (b)  A provisional permit holder that applied for a life and
  annuity license must comply with Chapter 1114 with respect to the
  replacement of life insurance policies and annuities.
         (c)  A person who holds a permanent license may not
  circumvent or attempt to circumvent the intent of this section by
  acting for or with a provisional permit holder.
         Sec. 4001.359. SUPERVISORY RESPONSIBILITY. An appointing
  agent, insurer, or health maintenance organization that allows a
  permit holder to act as an agent under a provisional permit has
  supervisory responsibility over the permit holder.
         SECTION 2.  The change in law made by this Act applies only
  to an applicant who files a license application on or after the
  effective date of this Act.
         SECTION 3.  This Act takes effect September 1, 2015.
 
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