89R14682 SCL-F

By: Morgan H.B. No. 4074

A BILL TO BE ENTITLED

AN ACT

relating to licensing requirements for insurance umpires and appraisers; authorizing fees; providing an administrative penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle D, Title 13, Insurance Code, is amended by adding Chapter 4156 to read as follows:

CHAPTER 4156. UMPIRES AND APPRAISERS

Sec. 4156.001. DEFINITIONS. In this chapter:

(1) "Appraiser" means an individual selected by an insurer or insured to assess the value of damages or loss in an insurance dispute.

(2) "Umpire" means a neutral third-party professional selected to resolve disputes between appraisers in an insurance appraisal process.

Sec. 4156.002. RULES. The commissioner may adopt rules to implement this chapter.

Sec. 4156.003. LICENSING REQUIREMENTS. (a) An individual may not serve as an umpire or appraiser unless the individual holds a valid license issued by the department.

(b) The department shall issue an umpire or appraiser license to an applicant who:

(1) is at least 18 years old and a United States citizen or legal resident authorized to work in the United States;

(2) completes a 40-hour pre-licensing course approved by the commissioner;

(3) successfully passes a state licensing examination approved by the commissioner;

(4) submits to a fingerprint-based criminal background check;

(5) files a completed application and pays the required fees to the department not later than the first anniversary of the date the applicant passes the examination; and

(6) maintains a surety bond in an amount set by the commissioner that is not less than $10,000.

Sec. 4156.004. CONTINUING EDUCATION REQUIREMENTS. (a) To maintain a license issued under this chapter, an umpire or appraiser must complete 24 hours of continuing education every two years as required by the commissioner.

(b) The continuing education must include:

(1) ethics training of at least three hours;

(2) insurance policy interpretation and appraisal processes;

(3) alternative dispute resolution; and

(4) any other subject as determined by the commissioner.

(c) At least 12 of the 24 continuing education hours required under this section must be completed in a classroom or equivalent setting in accordance with commissioner rule.

Sec. 4156.005. LICENSE RENEWAL. (a) A license issued under this chapter is valid for two years and must be renewed before the last day of the license holder's birth month.

(b) An applicant for renewal must:

(1) demonstrate compliance with continuing education requirements; and

(2) pay the renewal fee as set by the commissioner.

Sec. 4156.006. ENFORCEMENT. (a) The department may investigate complaints, conduct audits, and enforce compliance with this chapter.

(b) Not earlier than the 90th day after the last day of a licensing period, the commissioner may impose an administrative penalty of $50 per deficient hour for failure to complete the continuing education requirements described by Section 4156.004.

(c) The commissioner may impose an administrative penalty under Chapter 84 on a person who acts as an umpire or appraiser without a valid license in an amount that does not exceed $4,500 per violation in addition to any other enforcement action authorized by this code that the commissioner considers necessary.

SECTION 2. (a) Except as provided by Subsection (b) of this section, an umpire or appraiser, as those terms are defined by Section 4156.001, Insurance Code, as added by this Act, who began operating before the effective date of this Act is not required to comply with the licensing, bonding, and educational requirements prescribed by Chapter 4156, Insurance Code, as added by this Act, until September 1, 2027.

(b) As soon as practicable after the effective date of this Act, the commissioner of insurance shall establish temporary licensing procedures for an umpire or appraiser described by Subsection (a) of this section that apply to the umpire or appraiser until September 1, 2027.

SECTION 3. This Act takes effect September 1, 2025.