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A BILL TO BE ENTITLED
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AN ACT
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relating to insurance agents' ownership and use of certain |
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information related to general property and casualty insurance |
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policies; authorizing administrative penalties; adding provisions |
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that may be subject to a criminal penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 4051, Insurance Code, is amended by |
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adding Subchapter J to read as follows: |
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SUBCHAPTER J. AGENTS' OWNERSHIP INTERESTS |
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Sec. 4051.451. DEFINITIONS. In this subchapter: |
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(1) "Expiration" means policy information and records |
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related to a property and casualty insurance policy or an |
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application for a property and casualty insurance policy, |
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including: |
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(A) the name and address of the applicant or |
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insured; |
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(B) the location and description of any property |
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referenced in the application or covered by the policy; |
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(C) the value, inception date, renewal date, and |
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expiration date of the policy; |
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(D) the premium, policy limits, and description |
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of the terms and coverage of the policy; and |
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(E) information or records that may be: |
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(i) necessary for placing insurance |
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coverage, insurance products, or insurance services; or |
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(ii) used to solicit, sell, or negotiate |
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the renewal or sale of insurance coverage, insurance products, or |
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insurance services. |
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(2) "Person" means an individual, partnership, |
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corporation, limited liability company, or depository institution. |
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(3) "Record" has the meaning assigned by Section |
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322.002, Business & Commerce Code. |
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Sec. 4051.452. APPLICABILITY OF SUBCHAPTER. (a) This |
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subchapter applies with respect to expirations concerning coverage |
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of a risk located in this state, or an application for such |
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coverage, issued by or placed with an insurer engaged in the |
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business of property and casualty insurance in this state, |
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including: |
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(1) a stock fire or casualty company; |
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(2) a mutual fire or casualty company; |
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(3) a Mexican casualty company; |
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(4) a Lloyd's plan; |
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(5) a reciprocal or interinsurance exchange; |
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(6) a county mutual insurance company; |
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(7) a farm mutual insurance company; |
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(8) a risk retention group; |
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(9) the Medical Liability Insurance Joint |
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Underwriting Association under Chapter 2203; |
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(10) the Texas Windstorm Insurance Association under |
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Chapter 2210; |
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(11) the Texas Automobile Insurance Plan Association |
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under Chapter 2151; and |
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(12) an eligible surplus lines insurer. |
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(b) This subchapter applies only to ownership and use of an |
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expiration by an agent who: |
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(1) holds a contract with the insurer to whom the |
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relevant application was submitted or that issued the relevant |
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insurance policy; or |
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(2) has the authority to contract with or submit an |
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application for coverage to that insurer. |
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Sec. 4051.453. EXCLUSIVE OWNERSHIP AND USE. (a) Except as |
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provided by Section 4051.454, an agent or surplus lines agent |
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exclusively owns and has exclusive use of an expiration directly |
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related to an insurance application submitted by or an insurance |
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policy written through the agent for the purpose of soliciting, |
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selling, or negotiating the renewal or sale of property and |
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casualty insurance coverage, a property and casualty insurance |
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product, or a property and casualty insurance service. |
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(b) Nothing in this subchapter may be construed to modify or |
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amend or require modification or amendment of a contract between an |
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insurer and an agent or the authority of the insurer or agent with |
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respect to each other. |
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Sec. 4051.454. EXCEPTIONS; INSURER OR MANAGING GENERAL |
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AGENT. Notwithstanding Section 4051.453, an insurer or the |
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insurer's managing general agent may use an expiration: |
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(1) to solicit, sell, or negotiate the sale or renewal |
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of property and casualty insurance coverage, a property and |
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casualty insurance product, or a property and casualty insurance |
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service with the written consent of the agent who owns the |
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expiration; |
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(2) in the normal course of business, including |
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underwriting, handling claims, and negotiating reinsurance; or |
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(3) if the insured or a property and casualty agent on |
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behalf of the insured requests that the insurer renew a policy or |
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issue other insurance coverage to the insured. |
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Sec. 4051.455. EXCEPTIONS; CERTAIN AGENTS. (a) This |
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subchapter does not apply to an expiration related to an insurance |
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policy placed or an application for an insurance policy received by |
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an agent who: |
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(1) has agreed by contract to act exclusively for one |
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insurer or group of affiliated insurance companies; |
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(2) has agreed in writing with an insurer that all |
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expirations, insurance policies, and insurance business is owned by |
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the insurer and not the agent; |
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(3) is in default for nonpayment of premium or other |
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money due under the agent's contract or other agreement with the |
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insurer or group of affiliated insurance companies unless a bona |
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fide, good faith dispute exists concerning the money due; |
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(4) has a suspended, revoked, surrendered, or |
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terminated license; or |
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(5) has misappropriated, converted to the agent's own |
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use, or illegally withheld money belonging to an insurer, an |
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insured, or an applicant for insurance. |
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(b) The rights of an agent described by Subsection (a)(1) |
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with respect to expirations are determined by the agent's contract |
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with the insurer or group of affiliated insurance companies. |
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Sec. 4051.456. PRIVACY RIGHT OF APPLICANT OR INSURED NOT |
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IMPAIRED. An applicant's or insured's right to privacy related to |
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an expiration is not impaired or affected by an agent's ownership of |
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the expiration. |
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Sec. 4051.457. COMPLAINT RESOLUTION PROGRAM. The |
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department shall establish a program to resolve complaints of |
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violations of this subchapter. |
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Sec. 4051.458. ENFORCEMENT; SANCTIONS AND PENALTIES |
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AUTHORIZED. (a) The commissioner may impose sanctions as provided |
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by Chapter 82 against a person who the commissioner finds violated |
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this subchapter. |
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(b) The commissioner may use the cease and desist procedures |
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authorized by Chapter 83 against a person who the commissioner |
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finds violated this subchapter. |
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(c) In addition to a sanction authorized by this subchapter, |
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the commissioner may impose an administrative penalty in accordance |
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with Chapter 84 against a person who the commissioner finds |
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violated this subchapter. |
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SECTION 2. This Act applies only to an expiration related to |
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an insurance policy placed or an application for an insurance |
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policy received by an agent on or after the effective date of this |
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Act. A policy placed or an application received before the |
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effective date of this Act is governed by the law as it existed |
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immediately before that date, and that law is continued in effect |
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for that purpose. |
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SECTION 3. This Act takes effect September 1, 2015. |