SRC-DBM S.B. 956 76(R) BILL ANALYSIS
Senate Research Center S.B. 956
76R6460 PB-FBy: Madla
Economic Development
4/11/1999
As Filed
DIGEST
Currently, Article 21.15-7, Insurance Code, requires the commissioner of
insurance to review and evaluate the current agents' licensing statutes and
make recommendations to the legislature to reduce the number and type of
agency licences, determine which statutory provisions should apply
uniformly to all insurance licenses, address new marketing methods, and to
address any other problems which may exist. S.B. 956 consolidates agent
licenses and promotes uniformity in the regulation of agents.
PURPOSE
As proposed, S.B. 956 sets forth provisions regulating certain insurance
agents; consolidating insurance agents licenses; and providing penalties.
RULEMAKING AUTHORITY
Rulemaking authority is granted to the commissioner of insurance in
SECTIONS 1.01, 1.02, 1.06, 1.11, and 2.01 (Section 4, Article 21.01,
Insurance Code; Sections 3(c),(d), (e), and (f), Article 21.01-1, Insurance
Code; Section 5A(a), Article 21.01-2, Insurance Code, Section 2, Article
21.07, Insurance Code; and Section 5(c), Chapter 21A, Insurance Code) of
this bill.
SECTION BY SECTION ANALYSIS
ARTICLE 1. GENERAL PROVISIONS APPLICABLE TO ALL INSURANCE AGENTS
SECTION 1.01. Amends Article 21.01, Insurance Code, as follows:
Art. 21.01. New heading: PURPOSE; CONSOLIDATION OF LICENSES; APPLICATION;
CERTIFICATE OF AUTHORITY OR LICENSE REQUIRED; RULEMAKING AUTHORITY
Sec. 1. PURPOSE. Provides that it is the intent of the legislature to
simplify and reform the regulation of insurance agents in this state by
consolidating the types of licenses issued to insurance agents under this
subchapter. Provides that this chapter is also intended to promote
uniformity in the licensing, examination, continuing education, and
disciplinary requirements for agents.
Sec. 2. CERTIFICATE OF AUTHORITY OR LICENSE REQUIRED. Prohibits any
person from acting as an agent or otherwise, in soliciting or receiving
applications for insurance of any kind whatever in this state, or in any
manner to aid in the transaction of the business of any insurance company
incorporated in this state, or out of it, without first procuring a license
for certificate of authority from the Texas Department of Insurance
(department), rather than the State Board of Insurance (board).
Sec. 3. APPLICATION. Provides that, except as otherwise provided by this
code, this subchapter applies to each person licensed in accordance with
certain chapters, articles, sections, and subsections. Provides that
except as otherwise provided by law, each reference in this code and other
laws of this state to a particular type of license authorizing an agent to
engage in the business of insurance in this state means a license
designation as made by amendment, enactment, or reenactment of or to
Chapter 21A, of this code by the 76th Legislature, Regular Session, 1999,
or subsequent amendments to that subchapter. Provides that a reference in
this chapter to a satisfactory provision applies to all reenactments,
revisions, or amendments of that provision.
Sec. 4. RULES. Authorizes the commissioner of insurance (commissioner) to
adopt rules as necessary to implement this subchapter and to meet the
minimum requirements of federal law and regulations.
SECTION 1.02. Amends Article 21.01-1, Insurance Code, as follows:
Art. 21.01-1. New heading: AGENTS' QUALIFYING EXAMINATION; CONTINUING
EDUCATION REQUIREMENTS FOR AGENTS
Sec. 1. EXAMINATION ADMINISTRATION. Authorizes the commissioner, rather
than the State Board of Insurance, to accept examinations administered by a
testing service as satisfying the examination requirements of persons
seeking license as agents, counselors, or adjusters under this code.
Requires the commissioner to hold a public hearing in accordance with
Chapter 2001, Government Code and to adopt rules and standards as may be
deemed appropriate by the commissioner, rather than board, to implement the
authority granted in this article. Requires the department, rather than
the State Board of Insurance, to administer any required qualifying
examination in accordance with this article. Authorizes the commissioner
to adopt rules relating to the scope, type, and conduct of the written
examinations and the times and places in this state at which the
examinations will be conducted. Authorizes the commissioner's rules to
designate textbooks, manuals, and other materials to be studied by
applicants in preparation for examinations conducted under this subsection.
Authorizes those textbooks, manuals, or other materials to consist of
material available to an applicant by purchase for the publisher or of
material prepared at the direction of the commissioner and distribute to an
applicant on request and on payment of the reasonable cost of the material.
Requires all examination questions to be prepared from the contents of the
textbooks, manuals, and other materials designated or prepared by the
commissioner under this subsection. Deletes text regarding the provisions
of Section 5 of the Administrative Procedure of the Texas Register Act
(Article 6252-13a, V.T.C.S., and the provisions of the respective statutes
governing the issuance of the license sought by the applicant. Makes
conforming and nonsubstantive changes.
Sec. 2. EXAMINATION OF LICENSE APPLICANT. Requires each applicant for a
license to act as an insurance agent in this state to submit a personal
written examination that is prescribed by the department and administered
in the English or Spanish language, and must pass the examination to the
satisfaction of the department. Requires the examination to determine
certain applicant competencies. Requires the department to charge each
applicant an examination fee in an amount determined by the department as
necessary for administration of the examination. Requires the fee to
accompany each application to take the examination. Provides that the fee
is nonrefundable other than for failure of an applicant to appear and take
the examination after an applicant has given at least 24 hours notice of an
emergency situation to the department and received the department's
approval of refund of the fee. Requires the commissioner to prescribe a
limited written licensing examination for applicants for a limited license
under Article 21.07-1 or Article 21.14 of this code. Requires a limited
examination to be administered according to the provisions of this article.
Requires determination of certain applicant competencies and
understandings. Prohibits the department from requiring a person to take
an examination under this article under certain conditions.
Sec. 3. CONTINUING EDUCATION REQUIREMENTS. Provides that the department
has exclusive jurisdiction for all matters relating to the continuing
education of insurance agents who are licensed under this code. Requires
each individual, except as provided by Subsection (d) of this section, who
holds a license issued by the department to complete continuing education.
Requires all continuing education hours to be completed before the
expiration date of an individual's license. Requires a person who holds a
life, accident, or a property and casualty license to complete 15 hours of
continuing education annually. Prohibits an agent from being required to
complete more than 15 continuing education hours annually, including an
agent who holds more than one license for which continuing education is
required. Requires an individual who holds a limited life, accident, and
health license, or a limited property and casualty license to complete five
hours of continuing education annually. Requires each individual who holds
a license issued by the department to complete 10 hours of continuing
education in ethics during each license renewal period. Requires at least
50 percent of all required continuing education hours to be completed in a
classroom setting or a classroom equivalent setting approved by the
department. Authorizes the department to grant reciprocity to license
holders who complete continuing education requirements in other professions
or in associations with professional designations in an insurance-related
field. Authorizes the department, on a timely written request of an agent,
to extend the time for an agent to comply with the continuing education
requirements of this section or may exempt an agent from some or all of the
requirements for a licensing period if the department finds that the agent
is unable to comply with the requirements because of illness, medical
disability, or another extenuating circumstance beyond the control of the
agent. Requires the commissioner, by rule, to prescribe the criteria for
an exemption or extension under this subsection. Provides that an
individual who has continuously held a license issued under this code to
operate as an insurance agent for the 20 years preceding September 1, 1999,
is exempt from the continuing education requirements of this section.
Authorizes the commissioner, by rule, to provide for other reasonable
exemptions. Requires the department to certify continuing education
programs for agents. Authorizes only a program that satisfies the criteria
established by rule by the commissioner to receive designation. Requires
the certification criteria to be designed to ensure that continuing
education programs enhance the knowledge, understanding, and professional
competence of the license holder. Requires a nonrefundable certification
fee, in an amount set by the commissioner as necessary for administering
the program, to accompany each application for certification of a
continuing education program. Requires the fee to be established by rule
and based on a graduated scale according to the number of hours required to
complete the program. Requires each continuing education program provider
to register with the department as a course provider. Requires the
department to assess a registration fee for each application for
registration as a provider, set by the commissioner in an amount necessary
for the proper administration of this section. Authorizes the commissioner
to adopt rules establishing the requirements for continuing education
program providers. Authorizes the department to negotiate agreements with
independent contractors under which the independent contractor certifies
and registers continuing education programs and providers. Authorizes the
department to require those independent contractors to correspond directly
with providers with regard to the administration of continuing education
programs, and the contractors may collect fees from the providers for
administration of the programs. Provides that the department retains the
authority to establish the scope and type of continuing education
requirements for each type of license. Authorizes the commissioner to
appoint an advisory council to furnish the commissioner with information
and assistance in the conduct of the continuing education program for
agents licensed under this subchapter. Requires an advisory council, if
appointed, to be composed of nine members, four of whom must be public
members. Provides that the public members are entitled to reimbursement
for their reasonable travel expenses in attending meetings of the advisory
council, subject to any applicable limit in the General Appropriations Act.
Sets forth public member prohibitions.
SECTION 1.03. Redesignates Section 2, Article 21.01-2, Insurance Code, as
Section 1A, Article 21.01-2, Insurance Code, and amends Section 1A, Article
21.01-2, as follows:
Sec. 1A. New heading: EXPIRATION AND RENEWAL OF LICENSES. Provides that
except as provided by this section, each agent license issued by the
department expires on the fifth anniversary of the date of issuance unless
suspended or revoked by the commissioner. Authorizes a person to renew a
license, rather than an unexpired license, that has not expired or has not
been suspended or revoked by filing a properly completed renewal
application with the department. Provides that on filing of a completed
renewal application not later than the expiration date of the license
accompanied by the renewal fee set by the commissioner, the original
license continues in force until the department issues the renewal license;
or the commissioner issues an order revoking the license. Authorizes a
person to renew a license by filing a renewal application with the
department and paying the department the required renewal fee and an
additional fee that is equal to one-half of the renewal fee, rather than
license fee, for the license, if a person's license has been expired for 90
days or less. Prohibits a person from renewing a license, if a person's
license has been expired for more than 90 days but less than one year, but
is entitled to a new license without taking the applicable examination, if
the person submits a new application, the license fee, and an additional
fee equal to one-half of the license fee to the department. Prohibits a
person from renewing a license, if a person's license has been expired for
one year or more, rather than 90 days. Authorizes the department to renew
without reexamination an expired license of a person who was licensed in
this state, moved to another state, and is currently licensed and has been
in continual practice in the other state for the two years preceding
application. Requires the department, at least 30 days before the
expiration of a person's license, to send written notice of the impending
license expiration to the person at the person's last known mailing address
according to the records of the department. Requires license fees, for the
licensing period in which the license expiration is changed, to be prorated
so that each license holder shall pay only that portion of the license fee
that is allocable to the period, rather than the number of months, during
which the license is valid. Provides that this section is not applicable to
a license issued under Article 21.07-6 or 21.077 of this code. Makes
conforming changes.
SECTION 1.04. Amends Article 21.02-2, Insurance Code, by adding Section
2A, as follows:
Sec. 2A. PROHIBITED ACTIVITIES. Prohibits a person licensed under this
code who receives a commission or other consideration for services as an
insurance agent from receiving an additional fee for those services
provided to the same client except for a fee described by Article 21.35A or
21.35B of this code. Prohibits an insurer or licensed insurance agent
engaged in the business of insurance in this state from paying, directly or
indirectly, and from accepting, any commission or other valuable
consideration to or from any person for services performed by that person
as an insurance agent as required by the laws of this state. Provides that
this subsection does not prevent the payment or receipt of renewal or other
deferred commissions to or by any person solely because the person ceased
to hold a license to act as an insurance agent. Prohibits an insurance
agent licensed under this code from paying, allowing, or giving, or
offering to pay, allowing, or giving, directly or indirectly, to any person
who is not a licensed insurance agent, any rebate of premiums payable,
commission, paid employment, or contract for service, or any other valuable
consideration or inducement, that is not specified in the policy or
contract of insurance for or on account of the solicitation or negotiation
of insurance contracts. Provides that, in addition to any other penalty
imposed under this code, a person who is determined by the department to
have committed conduct described by this subsection is barred from
receiving a license as an insurance agent before the fifth anniversary of
the date of the determination. Sets forth who this subsection applies to.
Prohibits a person who has had an insurance license revoked in this state
or any other state from soliciting or otherwise transacting business under
Chapter 10 of this code, unless it is determined by the department to be in
the public interest to allow the person to act in that capacity. Prohibits
a person who has had an insurance license revoked in this state or any
other state from acting as an officer, director, member, manager, or
partner, or as a shareholder with a controlling interest, of an entity
licensed under this subchapter unless it is determined by the department to
be in the public interest, to allow the person to act in that capacity.
Prohibits a property and casualty agent from knowingly granting, writing,
or permitting a greater amount of insurance against loss by fire than the
reasonable value of the subject of insurance.
SECTION 1.05. Redesignates Section 5, Article 21.01-2, Insurance Code, as
Section 3A, Article 21.01-2, Insurance Code, and amends Section 3A, Article
21.02-2, Insurance Code, as follows:
Sec. 3A. New heading: DENIAL OR REFUSAL OF LICENSE APPLICATION;
SUSPENSION OR REVOCATION OF LICENSES; DISCIPLINE OF LICENSE HOLDERS.
Authorizes, rather than requires, in addition to any other remedy available
under Section 7, Article 1.10, of this code, the department to refuse issue
an original license, revoke, suspend, or refuse to renew a license, place
on probation, a person whose license has been suspended, assess an
administrative penalty, or reprimand a license holder for a violation of
this code, another insurance law of this state, or a rule of the
commissioner. Sets forth certain actions of an applicant or license
holder, individually or through any officer, director, or shareholder which
would authorize the department to discipline a license holder or deny a
license application under this article. Prohibits an individual whose
license application is denied or whose license has been revoked under this
article from applying for any license as an insurance agent before the
fifth anniversary of the effective date of the denial or revocation; or if
the applicant or license holder seeks judicial review of the department's
action, the date of the final court order or decree affirming that action.
Authorizes the commissioner to deny a timely application filed under
Subsection (d) of this section, if the applicant does not show good cause
why the denial or revocation of the previous license application should not
be considered a bar to the issuance of a new license. Provides that this
subsection does not apply to an applicant whose license application was
denied for failure to pass a required written examination; or submit a
properly completed license application. Authorizes the department, instead
of or in addition to taking disciplinary action under this section, to
order that a license holder who is currently afflicted with a disability to
be placed on disability probation under the terms and conditions specified
under Article 21.15-6 of this code and department rules. Provides that
this section applies to a person, other than a title insurance company,
licensed under Chapter 9 of this code. Deletes text requiring the
commissioner to prescribe procedures by which all decisions to deny,
suspend, or revoke a license, or to refuse to renew a license, are made by
or are appealable to the commissioner.
SECTION 1.06. Amends Article 21.01-2, Insurance Code, by adding Sections
4A, 5A, and 6A, as follows:
Sec. 4A. JUDICIAL REVIEW. Sets forth the conditions under which a license
holder may appeal as provided by Article 1.04 of this code.
Sec. 5A. AUTOMATIC FINES. Authorizes the commissioner to establish, by
rule, monetary fines for certain violations to expedite the department's
processing of certain violations of this code. Sets forth certain
violations for which fines are authorized to be assessed. Prohibits this
section from being construed to limit the department's authority to take
any other disciplinary action against a license holder as provided under
another provision of this code. Provides that if a person disputes an
assessment of a fine under this section, the matter is a contested case
subject to Chapter 2001, Government Code.
Sec. 6A. ENFORCEMENT OF SUBCHAPTER. Authorizes the attorney general, a
district or county attorney, or the department acting through the
commissioner to institute an injunction proceeding or any other proceeding
to enforce this subchapter and to enjoin any person, firm, corporation, or
bank from engaging or attempting to engage in the business of insurance in
violation of this code or any other insurance law of this state. Provides
that the provisions of this section are cumulative of the other penalties
or remedies provided by this article.
SECTION 1.07. Amends Article 21.04, Insurance Code, as follows:
Art. 21.04. New heading: LICENSE HOLDER DEEMED COMPANY'S AGENT.
SECTION 1.08. Amends Article 21.06, Insurance Code, as follows:
Art. 21.06. New heading: AUTHORITY TO APPOINT AGENTS. Requires each
foreign or domestic insurance company, by resolution of its board of
directors, to designate an officer or agent, rather than some officer or
agent, who is empowered to appoint or employ its agent in this state, and
such officer or agent shall promptly notify the department, rather than
board, in writing of the name, title, and address of each person so
appointed or employed. Provides that the authority of that designee to act
on behalf of the insurance company continues in force, unless revoked by
the commissioner, rather than board, for cause or canceled at the request
of the insurance company, until the first day of March after its issuance,
and must be renewed annually. Deletes text regarding the board being
required to issue a certificate to a person, including a copy of a
certificate of authority.
SECTION 1.09. Amends Section 1, Article 21.07, Insurance Code, as follows:
Sec. 1. New heading: APPLICABILITY OF ARTICLE. Requires no person to act
as an agent of any insurance company, health maintenance organization, or
other type of insurance carrier licensed to do business in the State of
Texas and which insurance carrier's agents are required to be licensed
under the provision of this code, rather than Article, on the date that
this Act shall become effective, unless that person, rather than individual
or entity, shall have first procured a license from the department as
provided by this subchapter, and no such insurance carrier shall appoint
any person to act as its agent unless such person shall have obtained a
license under the provisions of this subchapter, rather than article, and
no such person who obtains a license shall engage in business as an agent
until that person shall have been appointed to act as an agent by some duly
authorized insurance carrier designated by the provisions of this code,
rather than Article and authorized to do business in the State of Texas.
Deletes text authorizing any person, corporation, or bank desiring to act
as an agent of any insurance carrier licensed to do business in the State
of Texas and writing a health and accident insurance to obtain a separate
license as an agent to write health and accident insurance. Deletes
existing Subsections (b) and (c).
SECTION 1.10. Amends Section 1A, Article 21.07, Insurance Code, unless the
context clearly indicates otherwise in this subchapter, to define "agent,"
"bank," control," "corporation," "individual," "insurance company,"
"partnership," "person," and "sub-agent." Deletes the existing definition
of "person."
SECTION 1.11. Amends Section 2, Article 21.07, Insurance Code, to require
any person who desires to become an agent for an insurance company or
health maintenance organization, rather than a casualty company writing
accident and health insurance, or any other type of insurance carrier
licensed to do business in the State of Texas, the agents of which are
required to be licensed under this subchapter, to submit an application
for a license in the form required by the department to the department.
Requires each applicant for a license to act as an insurance agent in this
state to file a completed application on forms developed by the department
to the commissioner. Requires the commissioner to establish, by rule, the
requirements for a properly completed application. Prohibits the
commissioner from granting a license as an insurance agent to write any
form of insurance unless the department finds certain conditions exist.
Provides that this section does not prohibit an applicant insuring property
that the applicant owns or in which the applicant has an interest, but it
is the intent of this section to prohibit coercion of insurance and to
preserve to each individual, the right to choose the individual's own agent
or insurance company, and to prohibit the licensing of a person to engage
in the insurance business principally to handle business that the applicant
controls only through ownership, mortgage or sale, family relationship, or
employment. Requires an applicant for an original license to have a bona
fide intention to engage in business in which, in any calendar year, at
least 25 percent of the total volume of premiums is derived from persons
other than the applicant and from property other than that on which the
applicant controls the placing of insurance through ownership, mortgage,
sale, family relationship, or employment. Prohibits the department from
denying a license application solely on the ground that the applicant will
act only part-time as an agent. Requires the department, subject to
Article 21.11 of this code, to issue a license to an individual to engage,
rather than or to a general partnership engaging, in the business of
insurance, if the department finds that the individual meets certain
requirements. Authorizes an individual engaging in the insurance business
as a sole proprietorship under the authority of a license issued under this
subchpater to incorporate, but the corporation does not have greater
license authority than that granted to the license holder in the hoder's
individual capacity. Requires each individual license holder to notify the
department on a monthly basis of certain events. Requires the department
to issue a license to a corporation or partnership if the department finds
that a corporation or partnership is organized under the laws of this state
or any other state or territory of the United States; admitted to conduct
business in this state by the secretary of state, if so required; and
authorized by its articles of incorporation or its partnership agreement to
act as an insurance agent; the corporation or partnership meets the
definition of that entity adopted under Section 1A of this article; at
least one officer of the corporation or one active partner of the
partnership and all other persons performing any acts of an agent on
behalf of the corporation or partnership in this state are individually
licensed by the department separately form the corporation or partnership;
the corporation or partnership will have the ability to pay any sums up to
$25,000 which it might become legally obligated to pay on account of any
claim made against it by any customer and caused by any negligent act,
error, or omission of the corporation or partnership or any person for
whose acts the corporation or partnership is legally liable in the conduct
of its business under this code, rather than Article. Requires such
ability to be maintained, rather than proven, in certain ways. Requires a
binding commitment to issue such a policy or bond to be sufficient in
connection with any application for license; the corporation or partnership
intends to be actively engaged in the business of insurance as required
under Subsection (c) of this section; each branch location from which the
corporation or partnership will conduct its business in this state under
authority of an insurance license is separately registered with the
department; the corporation or partnership has submitted the application,
appropriate fees, and any other information required by the department; and
an officer, director, member, manager, partner, or any other person who has
the right or ability to control the license holder has not had a license
suspended or revoked or been the subject of any other disciplinary action
by the insurance regulator of this or any other state or committed an act
for which a license may be denied under Article 21.01-2 of this code.
Requires each corporation or partnership licensed as an agent under this
subchapte to file, under oath, on a from developed by the department,
biographical information for each, rather than a list of the name for all,
of its executive officers and directors or unlicensed partners who
administer the entity's operations in this state, and shareholders who are
in control of the corporation, or any other partners who have the right or
ability to control the partnership. Requires a biographical form for each
individual who is in control of the parent entity, if any corporation or
partnership is owned, in whole or in part, by another entity. Requires
each corporation or partnership to notify the department on a monthly basis
of certain events. Requires the department to issue a license to a bank in
the manner provided for the licensing of a corporation under this section.
Prohibits a person from acquiring in any manner, any ownership interest in
an entity licensed as an agent under this subchapter if the person is, or
after the acquisition would be, directly or indirectly, in control of the
license holder, or otherwise acquire control of or exercise any control
over the license holder, unless the person has filed certain information
with the department under oath. Sets forth the information filed under
oath with the department. Authorizes the commissioner to require that the
information required by Subdivisions (1) through (4) of that subsection for
an individual be provided regarding each partner of the partnership or
limited partnership, each member of the syndicate or group, and each person
who controls the partner or member, if a person required to file a
statement under Subsection (n) of this section is a partnership, limited
partnership, syndicate, or other group. Authorizes the commissioner to
require that the information required by Subdivisions (1) through (4) of
that subsection be provided regarding the corporation; each individual who
is an executive officer or director of the corporation; and each person who
is directly or indirectly the beneficial owner of more than 10 percent of
the outstanding voting securities of the corporation, if a partner, member,
or person is a corporation or the person required to file the statement
under Subsection (n) of this section is a corporation. Authorizes the
department to disapprove an acquisition of control, if, after notice and
opportunity for hearing, the commissioner makes certain determinations.
Provides that, notwithstanding Subsection (o) of this section, a change in
control is considered approved if the department has not proposed to deny
the requested change before the 91st day after the date of receipt by the
department of all information required by this section. Requires the
commissioner to be the corporation's or partnership's attorney for service
of process on whom all lawful process, notice, or demand may be served in
any legal proceeding against the corporation or partnership under certain
conditions. Requires the department to deny, revoke, or suspend the
license of a corporation or partnership to act as an agent as provided by
Article 21.01-2 of this code, if a corporation or partnership that holds an
agent's license does not maintain the qualifications necessary for issuance
of the license. Deletes text requiring an application to bear a signed
endorsement by an office or property authorized representative of the
insurance carrier. Deletes text requiring a partner in the partnership to
be licensed individually as an agent under this article. Deletes text
regarding a Texas corporation organized or existing under the Texas
Business Corporation Act or the Texas Professional Corporation Act having
its principal place of business in the State of Texas and having as its
purposes the authority to act as an agent covered by this article. Deletes
text providing that every officer, director, and shareholder of the
corporation is individually licensed under the provisions of this article,
or that every officer and director of the corporation is individually
licensed under this article, that the corporation is a wholly owned
subsidiary of a parent corporation that is licensed under this article, and
that every shareholder of the parent corporation is individually licensed
under this article. Deletes text regarding a deposit of cash or securities
of the class authorized by Articles 2.08 and 2.10, Insurance Code, as
amended having a fair market value of $25,000 with the comptroller and its
use. Deletes text regarding the tender of such securities. Deletes text
requiring an agent's license to be canceled; an unlicensed person acquiring
shares in a corporation and not disposing of them within a period of 90
days to a licensed agent; and any such corporation being required to have
the power to redeem the shares of any shareholder under certain conditions.
Deletes text regarding shareholders with its application for renewal
license. Deletes text requiring each corporation to notify the department
upon any change in its officers, directors, or shareholders. Deletes text
prohibiting a corporation from owning any interest in another corporation
licensed under this Article and requiring each owner of an interest in a
corporation licensed under this Article to be a natural person who holds a
valid license under this article. Deletes existing subsection (e).
Deletes text regarding a binding commitment to issue such a policy or bond,
or the tender of applicable securities, being sufficient in connection with
an application for license. Deletes text regarding nothing in this
subsection permitting an unlicensed employee or agent of a bank to perform
any act of an agent under this Article without obtaining a license.
Deletes text authorizing a bank licensed as an agent under this Article
from having additional offices from which the business of insurance is
conducted only in a place with a population of 5,000 or less and being
required to comply with the department's regulations regarding additional
offices. Deletes text requiring a bank licensed as an agent under this
article from maintaining the insurance records of the bank. Deletes text
requiring the license of a bank to act as an agent to be canceled or
denied, if at any time, a bank that holds an agent's license does not
maintain the qualifications necessary to obtain a license. Deletes text
requiring each bank licensed as an agent under this article to file under
oath with its application for license renewal a list of the name and
address of the bank and of each officer and director of the bank, as
defined by Article 21.02 of this code, and other biographical information
as required by the department. Deletes text requiring each bank to notify
the department of any chang in its officers and directors, and any change
in other persons who will be acting as agents. Makes conforming and
nonsubstantive changes.
SECTION 1.12. Amends Section 6, Article 21.07, Insurance Code, as follows:
Sec. 6. New heading: FILING OF ADDITIONAL APPOINTMENTS. Authorizes an
agent, except as specifically prohibited by another provision of this code,
to represent and act as an agent for more than one insurance carrier at any
time while the agent's license is in force, if the agent so desires.
Requires any such agent and the insurance carrier involved to file with the
department, rather than must give notice to the State Board of Insurance
of, any additional appointment, rather than appointments, authorizing an
agent to act a agent for an additional insurance carrier or carriers not
later than the 30th day after the effective date of the appointment.
Requires the filing, rather than such notice, to include certain items.
Provides that an appointment made under this article to authorize an agent
to act as an agent for an insurance carrier continues in effect without the
necessity of renewal until it is terminated or withdrawn by the insurance
carrier or agent. Requires the insurance carrier to follow the procedures
established under Section 6B of, rather than as provided by this section or
is otherwise terminated in accordance with, this article, if an agent is
terminated for cause. Provides that each renewal license issued to an agent
authorizes the agent to represent and act for the insurance carriers for
which the agent holds an appointment until the appointment is terminated or
withdrawn, and that agent is considered to be the agent of the appointing
insurance carriers for the purposes of this code. Authorizes an agent
appointed under this section to act on behalf of the appointing carrier
before the department receives a filing made under this section.
SECTION 1.13. Amends Article 21.07, Insurance Code, by adding Sections 6B,
6C, and 6D, as follows:
Sec. 6B. INSURANCE CARRIER TO NOTIFY DEPARTMENT OF TERMINATION OF
CONTRACT; COMMUNICATION PRIVILEGED. Requires each insurance carrier, on
termination of an agent for cause, to immediately file a statement of the
facts relating to the termination of the appointment and the date and cause
of the termination with the department. Requires the department, on
receipt of the statement, to record the termination of the appointment of
that agent to represent the insurance carrier in this state. Provides that
a document, record, statement, or other information required to be made or
disclosed to the department under this section is privileged and
confidential communication and is not admissible in evidence in any court
action or proceeding except under a subpoena issued by a court of record.
Provides that an insurance carrier, an employee or agent of the carrier, or
any other person, acting without malice, is not liable for providing the
information required to be disclosed under this section.
Sec. 6C. FEES; USE OF FUNDS. Requires the department to collect from each
agent of an insurance carrier writing insurance in this state under this
code, a non-refundable license fee and a non-refundable appointment fee for
each appointment by an insurance carrier. Requires these fees, together
with examination fee, license fees, and license renewal fees, to be
deposited to the credit of the Texas Department of Insurance operating
fund. Authorizes the department to use any portion of the fees collected
to enforce this subchapter; to employ persons as it considers necessary to
investigate and make reports regarding alleged violations of this code and
misconduct on the part of agents; and to pay the salaries and expenses of
those persons and office employees and other expenses necessary to enforce
this subchapter from the fees collected. Authorizes a person employed by
the department under this section to administer an oath and examine under
oath any person considered necessary in gathering information and evidence
and to have that information and evidence reduced to writing if considered
necessary, and all such expenses shall be paid from the fees. Requires the
department to set the fees in amounts reasonable and necessary to implement
this subchapter.
Sec. 6D. DUPLICATE LICENSE FEE. Requires the department to collect in
advance from an agent requesting a duplicate license, a fee in an amount
set by the department. Requires the fee collected under this section to be
deposited to the credit of the Texas Department of Insurance operating
fund.
ARTICLE 2. LIFE, ACCIDENT, AND HEALTH LICENSES
SECTION 2.01. Amends Chapter 21A, Insurance Code, by adding Article
21.07-1, as follows:
Art. 21.07-1. TEXAS LIFE, ACCIDENT, AND HEALTH AGENTS LICENSE ACT
Sec. 1. SHORT TITLE; APPLICATION. Authorizes this article to be cited as
the Texas Life, Accident, and Health Agents License Act. Provides that
each agent of an insurance company authorized to provide life, accident,
and health insurance coverage in this state is subject to this article.
Sets forth the persons this article applies to.
Sec. 2. GENERAL LIFE, ACCIDENT, AND HEALTH LICENSE; LICENSE REQUIRED. Sets
forth certain persons, acting in certain ways, whom are required to have a
general life, accident, and health insurance license. Defines "combination
company." Requires each person who acts as a combination life insurance
agent for a combination company to have a general life, accident, and
health license. Authorizes a combination company and a combination life
insurance agent to also write ordinary life insurance contracts. Provides
that except as otherwise provided by this subsection, a general life,
accident, and health license is required for an agent writing life,
accident, and health insurance for a fraternal benefit society under
Chapter 10 of this code. Provides that a license is not required for an
agent, representative, or member of a fraternal benefit society who devotes
less than 50 percent of the person's time to the solicitation or
procurement of insurance contracts for the society. Provides that a person
who, in the preceding calendar year, has solicited or procured certain
amounts on certain insurance contracts on behalf of a fraternal benefit
society is presumed to have devoted 50 percent or more of the person's time
to the solicitation or procurement of insurance contracts. Sets forth
certain amounts and certain contracts solicited and procured.
Sec. 3. AUTHORITY TO WRITE ADDITIONAL PRODUCT LINES. Authorizes a person
who holds a general life, accident, and health license issued under the
requirements of this subchapter to write additional types of insurance
contracts as provided under Section 5 of this article or under a specialty
license program established by the department.
Sec. 4. TEMPORARY LICENSE. Authorizes the department to issue a temporary
agent's license to an applicant for a license under Section 2 of this
article who is being considered for appointment as an agent by an insurer
or health maintenance organization. Provides that an applicant for a
temporary license is not required to pass a written examination and that a
temporary license is valid for the 90 days after the date of issuance.
Requires the department to issue a temporary license immediately on receipt
by the department of a properly completed application executed by a person
in the form required by Section 2, Article 21.07, of this code, accompanied
by the non-refundable filing fee set by the department and a certificate
signed by an officer or properly authorized representative of the insurer
or health maintenance organization stating certain considerations and
requirements. Authorizes the insurer or health maintenance organization to
assume that a temporary license will be issued in due course and the
applicant may proceed as an agent, if a temporary license is not received
from the department before the eighth day after the date on which the
application, certificate, and non-refundable fee are delivered or mailed to
the department and the insurer, or the health maintenance organization has
not been notified that the application is denied. Prohibits a temporary
license from being renewed or issued more than once in a consecutive
six-month period to the same applicant; from being granted to a person who
does not intend to apply for a license to sell insurance or memberships to
the public generally; and from being used to obtain commissions from sales
made to persons who have family, employment, or business relationships with
the temporary license holder. Prohibits an insurer or health maintenance
organization from knowingly paying, directly or indirectly, to the holder
of a temporary license under this section, and a temporary license holder
is prohibited from receiving or accepting, a commission on the sale of
insurance contracts or memberships covering certain persons. Sets forth
certain persons prohibited from receiving or accepting a commission on the
sale of insurance contracts or memberships. Prohibits a person who has
been issued a temporary license under this section and is acting under the
authority of a temporary license from engaging in any insurance
solicitation, sale, or other agency transaction that results in or is
intended to result in the replacement of any exiting individual life
insurance policy form or annuity contract that is in force, or receive,
directly or indirectly, any commission or other compensation that may or
does result form such solicitation, sale, or other agency transaction.
Prohibits a person who holds a permanent license from circumventing or
attempting to circumvent the intent of this subsection by acting for or
with a person holding a temporary license. Defines "replacement."
Authorizes the department to cancel, suspend, or revoke the temporary
appointment powers of an insurer or health maintenance organization if,
after notice and opportunity for hearing, the commissioner finds that the
insurer of health maintenance organization has abused the temporary
appointment powers. Provides that an appeal from the department's decision
is subject to Article 1.04 of this code. Sets forth the department's
considerations concerning whether or not an abuse has occurred. Requires
the insurer or health maintenance organization to administer at least 40
hours of training to each applicant for a temporary license, not later than
the 14th day after the date on which the application, certificate, and
non-refundable fee are delivered or mailed to the department. Requires at
least 10 hours to be taught in certain classroom settings. Requires the
training program to be designed to provide an applicant with certain basic
knowledge. Authorizes the commissioner to require an affected insurer or
health maintenance organization to file a description of the insurer's or
health maintenance organization's training program with the department and
may require the insurer or health maintenance organization to obtain the
approval of the department before continuing to use the training program.
Requires each insurer or health maintenance organization to ensure that,
during any two consecutive calendar quarters, at least 70 percent of the
insurer's or health maintenance organization's applicants for temporary
licenses sit for the required licensing examination. Requires at least 50
percent of the applicants taking the examination to pass during that
period. Prohibits an insurer or health maintenance organization from
making more than 250 appointments of temporary license holders during a
calendar year.
Sec. 5. LIMITED LIFE, ACCIDENT, AND HEALTH LICENSE. Defines "funeral
prearrangement life insurance agent," and "job protection insurance." Sets
forth certain agents this section applies to. Requires a person to whom
this article applies to hold a limited life, health, and accident license
under this article. Authorizes the commissioner to adopt rules as necessary
to implement this article. Sets forth, notwithstanding this section or any
other law, prohibited actions of a funeral prearrangement life insurance
agent. Authorizes a person who holds a limited life, accident, and health
license issued under this section to write only the types of insurance
products described by this section. Provides that an applicant for a
limited life, accident, and health license is not eligible for a temporary
license under Section 4 of this article.
ARTICLE 3. PROPERTY AND CASUALTY LICENSES
SECTION 3.01. Amends Article 21.14, Insurance Code, as follows:
Art. 21.14. New heading: TEXAS PROPERTY AND CASUALTY AGENTS LICENSE ACT
Sec. 1. SHORT TITLE; APPLICATION. Authorizes this article to be cited as
the Texas Property and Casualty Agents License Act. Provides that each
agent of an insurance company authorized to provide property casualty
insurance coverage in this state is subject to this article. Provides that
this article applies to each person who performs that acts of an agent, as
defined by Article 21.02 of this code, whether through certain modes of
communication, by the solicitation of, negotiation for, procurement of, or
collection of premiums on an insurance contract offered by any type of
insurance carrier authorized to sell certain property and casualty
insurance products in this state.
Sec. 2. GENERAL LIFE, ACCIDENT, AND HEALTH LICENSE; LICENSE REQUIRED. Sets
forth certain persons acting in certain manners who are required to have a
general property and casualty license.
Sec. 3. AUTHORITY TO WRITE ADDITIONAL PRODUCT LINES. Authorizes a person
who holds a general property and casualty license issued under this chapter
to write additional types of insurance contracts as provided under Section
6 of this article or under a specialty license program established by the
department.
Sec. 4. AUTHORITY TO WRITE ACCIDENT AND HEALTH INSURANCE. Authorizes a
person who holds a general property and casualty license issued under this
subchapter to write health and accident insurance for a property and
casualty insurer authorized to sell those insurance products in this state
without holding a license issued under Article 21.07-1 of this code.
Sec. 5. EMERGENCY LICENSE WITHOUT EXAMINATION. Authorizes the department,
in the event of the death or disability of a property and casualty agent or
if a property and casualty agent is found to be insolvent and unable to pay
for premiums as they become due to an insurer, to issue to an applicant for
a property and casualty license an emergency property and casualty license
without examination, if it is established to the satisfaction of the
department that the emergency license is necessary for the preservation of
the agency assess of a deceased, disabled, or insolvent property and
casualty agent. Provides that an emergency license is valid for 90 days in
any 12 consecutive months and may be renewed by the department for an
additional 90 days during the 12-month period if the other requirements of
this subchapter are met.
Sec. 6. LIMITED PROPERTY AND CASUALTY LICENSE. Sets forth, notwithstanding
any other law, the limited property and casualty license requirement for
each person who desires to act as an agent writing certain types of
insurance and prepaid legal services contracts. Provides that Subsection
(a) (1) of this section applies to a production credit association or bank
for a cooperative, as provided under the farm credit system under 12 U.S.C.
2001 et seq., as amended. Authorizes a person who holds a limited property
and casualty license issued under this subchapter to write only the types
of insurance products designated on the license by the department.
Sec. 7. FULL-TIME HOME OFFICE EMPLOYEES: MANDATORY REGISTRATION,
CONTINUING EDUCATION REQUIREMENTS, AND NOTIFICATION TO CONSUMERS;
DISCIPLINARY ACTIONS. Requires each actual full-time home office salaried
employee of an insurance carrier licensed to do business in this state who
solicits or receives an application for the sale of insurance through
certain communication modes to register with the commissioner. Requires an
insurance carrier licensed to do business in this state whose general plan
of operation includes the use of employees described by Subsection (a) of
this section to certify to the commissioner that each of those employees
receives at least 15 hours of continuing education annually. Sets forth
the required design of an employees continuing education which will impart
certain competencies and knowledge. Requires the registration of an actual
full-time home office salaried employee to be suspended and the employer
insurance carrier may be disciplined for any act for which an agent may be
disciplined under Article 21.01-2 of this code. Requires each registrant
under this section to disclose the fact of the registration when making
certain modes of communication to solicit or receive an application for the
sale of insurance. Requires each person who registers under this section
to submit a nonrefundable registration fee in an amount determined by the
department. Deletes heading to existing Article 21.14; deletes existing
Sections 1 - 16, 18 - 27; and Sections 3a, 5a, 5b, and 5c, 6a, and 20a.
ARTICLE 4. NONRESIDENT AGENT LICENSE
SECTION 4.01. Amends Section 1, Article 21.11, Insurance Code, to require
the department to license a person who is not a resident of this state to
act as a nonresident agent if the department finds certain conditions
exist. Authorizes the commissioner to enter into a reciprocal agreement
with the appropriate official of another state waving the written
examination requirement for an applicant who is a resident if certain
conditions are met. Authorizes a person who resides in a town through
which the state line runs and whose residence is located in the town in the
adjoining state to be licensed as a resident agent if the person maintains
the person's business office in this state. Authorizes the department,
rather than requires the department, to waive any license requirement for
an applicant with a valid license from another state or jurisdiction that
has license requirements substantially equivalent to those of this state.
Requires the commissioner to be the attorney for service of process on whom
all lawful process, notice, or demand may be served in any legal proceeding
against a nonresident agent licensed to transact business in this state if
certain conditions exist. Makes conforming and nonsubstantive changes.
SECTION 4.02. Amends Sections 2(a) and (b), Article 21.11, Insurance Code,
as follows:
(a) Provides that except as otherwise specifically provided by this code,
rather than this section, a license under this article to an individual who
is not a resident of this state grants the same rights and privileges
afforded to a resident license holder.
(b) Provides that a person who holds a license issued under this article
and who is in compliance with the continuing education requirements of the
person's state of residence is exempt from the continuing education
requirements imposed under Article 21.01-1 of this code. Deletes text
regarding under a license issued under Article 21.14 of this code; and may
not take certain actions.
SECTION 4.03. Amends Section 3, Article 21.11, Insurance Code, to provide
that this subchapter applies to licensing of a nonresident agent under this
article. Deletes existing Subdivision(3), and Subsections (b), (c), (d),
and (e). Deletes text regarding Article 21.01-2 of this code. Makes a
conforming change.
SECTION 4.04. Amends Sections 4 and 5, Article 21.11, Insurance Code, as
follows:
Sec. 4. HOME OFFICE EMPLOYEE. Provides that this article does not affect
the authority established under Section 7, rather than Section 20, Article
21.14 of this code of an actual full-time home office salaried employee of
an insurance carrier licensed to do business in this state.
Sec. 5. RULES. Authorizes the commissioner to adopt rules as necessary
to implement this article and to meet the minimum requirements of federal
law and regulations.
ARTICLE 5. CONFORMING AMENDMENTS
SECTION 5.01. Amends Section 1, Article 3.71, Insurance Code, to authorize
any person who is licensed as a general life, accident, and health agent,
rather than insurance agent, or as a general property and casualty agent,
rather than local recording agent, under Article 21.07-1, rather than the
provisions of Articles 21.07, 21.07-1, or 21.14 of this code, rather than
of the Insurance Code of the State of Texas, to act as such agent. Makes
conforming changes.
SECTION 5.02. Amends Section 7, Article 3.75, Insurance Code, to prohibit
any person from taking certain actions regarding any variable contract,
unless such person shall have a valid and current license issued under
Article 21.07-1 of this code, rather than a certificate from the State
Board of Insurance, authorizing such person to act within this state as a
general life, accident, and health, agent, rather than variable agent.
Provides that the licensing and regulation of a person acting as a variable
agent is subject to the same provisions applicable to the licensing and
regulation of other agents under Chapter 21A, of this code. Deletes text
prohibiting any such certificate from being issued unless certain
conditions are met. Deletes existing Sections (b), (c), (d), (e), (f),
(g), and (h).
SECTION 5.03. Amends Subsection (c), Article 5.13-1, Insurance Code, to
require the right of such insurers to issue prepaid legal services
contracts on certain bases is hereby recognized, and qualified agents of
such insurers who are licensed under Article 21.07-1 or 21.14, rather than
Articles 21.07 and 21.14, of this code, rather than of the Insurance Code,
as amended, and Chapter 213, Acts of the 54th Legislature, 1955, as amended
(Article 21.07-1, Vernon's Texas Insurance Code, to be authorized to write
such coverages under such rules as the commissioner may prescribe. Makes
conforming changes.
SECTION 5.04. Amends Chapter 10, Insurance Code, by adding Article
10.37-3, as follows:
Art. 10.37-3. AGENT'S LICENSE REQUIRED. Prohibits a person from
soliciting or procuring insurance contracts on behalf of a fraternal
benefit society unless the person meets certain conditions. Provides that
the licensing and regulation of agents for fraternal benefit societies
under this chapter is subject to the requirements adopted under Chapter
21A, of this code and other existing or subsequent applicable laws
governing the licensing of those agents. Provides that a provision of such
a law is applicable to a license applicant and license holder under this
chapter.
SECTION 5.05. Amends Article 16.24A, Insurance Code, as follows:
Art. 16.24A. New heading: LICENSING OF AGENTS. Prohibits any person or
firm from soliciting, writing, signing, executing, or delivering insurance
policies, binding insurance risks, collecting premiums, or otherwise acting
in the capacity of an insurance agent, rather than a local recording agent,
in the solicitation or sale of insurance for a farm mutual insurance
company unless the person or firm holds a licensed issued, rather than is
licensed, under Chapter 21A, rather than Article 21.14, of this code.
Deletes text regarding who qualifies for a license as an agricultural
insurance agent.
SECTION 5.06. Amends Section 9, Article 17.25, Insurance Code, to require
agents for such companies to be licensed and appointed as provided by
Chapter 21A, rather than in Article 21.07 or 21.14, of this code.
SECTION 5.07. Amends Sections 4, 19, and 21, Article 21.07-3, Insurance
Code (Managing General Agents' Licensing Act), as follows:
Sec. 4. New heading: REDEMPTION OF SHARES. Deletes existing Subsections
(a), (b), (c), (d), (f), (g), (h), (i), and (j). Makes a conforming
change.
Sec. 19. New heading: ADMINISTRATION AND REGULATION OF MANAGING GENERAL
AGENTS; VIOLATIONS OF ACT. Provides that the licensing and regulation of a
person acting as a managing general agent is subject to the laws and
requirements applicable to the licensing and regulation of other agents
under Chapter 21A, Insurance Code. Requires any person, firm, or
corporation who violates any of the provisions of this Act or any rule,
regulation, or order adopted under this Act or Chapter 21A, Insurance Code,
to be subject to Sections 2A, 3A, 4A, 5A, 6A, Article 21.01-2, Insurance
Code. Deletes text regarding sanctions under. Makes conforming changes.
Sec. 21. ADMINISTRATION OF ACT. Deletes text regarding regulations.
Makes conforming changes.
SECTION 5.08. Amends Article 22.14, Insurance Code, to require all agents
of stipulated premium companies to be licensed in accordance with the
provisions of Subchapter A of Chapter 21 of this code, rather than Article
21.07 of Chapter 21 of this code.
SECTION 5.09. Amends Chapter 23, Insurance Code, by adding Article 23.23A,
as follows:
Art. 23.23A. REGULATION OF AGENTS. Provides that the licensing and
regulation of an agent authorized to solicit prepaid legal services
contracts for corporations complying with this chapter is subject to
Chapter 21A, of this code.
ARTICLE 6. REPEALER
SECTION 6.01. Repealers:
(1) Section 15, Article 17.25, Insurance Code (Violation by agent).
(2) Section 20A.15, Insurance Code (Regulation of Agents).
Section 20A.15A, Insurance Code (Agent for Single Health Care
Service Plans).
(3) Sections 1, 3, 4, and 6, Article 21.01-2, Insurance Code (Application,
Licensing by endorsement, Continuing education, and Statutory references,
respectively).
(4) Article 21.02-1, Insurance Code (Penalty for Unlawfully Acting as an
Agent).
(5) Article 21.05, Insurance Code (Who May Not Be Agents).
(6) Article 21.07, Insurance Code, the following sections:
(A) Sections 1B and 1C (Licensing of limited liability companies and
Licensing of banks, respectively).
(B) Section 3, as amended by Chapters 596 and 972, Acts of the 75th
Legislature, Regular Session, 1997 (Issuance of License Under Certain
Circumstances).
(C) Sections 3B, 4, 4A, 5, 7, 8, 9, 10, 10A, 11, 12, 13, 14, 15, 15A, 16,
17, 18, 19, and 20 (Resident Status; Certain Nonresidents Maintaining
Office in the State; Exemption of Applicant for License to Write Health and
Accident Insurance; Examination of Applicant for License to Write Life
Insurance Upon Any One Life in Excess of $10,000; Failure of Applicant to
Qualify for License; Expiration and Renewal of License; Temporary License;
Insurance Carrier to notify State Board of Insurance of termination of
contract; communications privileged; Denial, Refusal, Suspension or
Revocation of License; Ineligibility based on felony conviction; Judicial
review of acts of State Board of Insurance; Penalty; Texas department of
insurance may establish rules and regulations; Fees and Use of Funds; Dual
licensing; Certain Agents for Stipulated Premium Companies; Wording on
License; Expiration of existing licenses; Assignment of Agent's
Commissions; Agent for United States Military Personnel in Foreign
Countries; and Duplicate License; Fee, respectively).
(D) Section 21, as added by Chapter 820, Acts of the 75th Legislature,
Regular Session, 1997 (Rental Car Companies).
(E) Section 21, as added by Chapter 1196, Acts of the 75th Legislature,
Regular Session, 1997 (Credit Insurance Agents).
(7) Article 21.07A, Insurance Code (Penalty for Acting As, or Employing,
Life, Health, or Accident Insurance Agent Without License).
(8) Article 21.07-1, Insurance Code (Legal Reserve Life Insurance Agents;
Examination; Licenses).
(9) Article 21.07-3, Insurance Code, the following sections:
(A) Sections 4A, 4B, and 4C (Persons other than managing general agents
who may share in profits of a managing general agent; Continuing
requirements for licensed corporations; and Security for liability,
respectively).
(B) Section 5(h) (Prohibits except as provided herein , a licensee that
qualifies under this section from being owned in whole or in part by
certain banks or holding companies. Provides that this section does not
apply to any licensee that on a certain date is owned by certain banks or
holding companies. Requires the commissioner, before renewing a license,
to require certain actions from a licensee).
(C) Sections 6 and 6A (Examination Required; Exceptions and Continuing
Education, respectively).
(D) Sections 8, 9, and 10 (Conduct of Examinations; Expiration of License;
Renewal; and Fees, respectively).
(E) Sections 12, 13, 14, and 15 (Denial, Refusal, Suspension, or
Revocation of Licenses; Notice and Hearings: Judicial review of acts of
commissioner; and Notice to last address, respectively).
(F) Section 17 (Fees Collected).
(G) Section 20 (Enforcement of Act).
(10) Section 14, Article 21.14-1, Insurance Code (Notice to Insurance
Commissioners of Solicitor's Appointment; Authority to Solicit).
(11) Article 21.15, Insurance Code (Revocation of Agent's Certificate).
(12) Article 21.15-2, Insurance Code (Penalty for Soliciting Without
Certificate of Authority).
(13) Article 21.15-3, Insurance Code (Agent Procuring by Fraudulent
Representation; Penalty).
(14) Article 21.15-4, Insurance Code (Agent or Physician Making False
Statement; Penalty).
(15) Article 21.15-7, Insurance Code (Interim Study of Agents and Agents'
Licenses Statutes by Commissioner).
(16) Section 10, Article 21.58A, Insurance Code (Unlawful and prohibited
practices; penalties).
(17) Article 23.23, Insurance Code (Regulation of Agents).
ARTICLE 7. GRANDFATHER CLAUSE; TRANSITION
SECTION 7.01. Provides that on the effective date of this Act, a person
who holds a license issued by the department that is in good standing is
considered licensed under the applicable licensing law as amended by this
Act; entitled to act as an agent under the new license type, subject to
this article; and subject to the provisions of the Insurance Code as
amended by this Act.
SECTION 7.02. (a) Provides that a person who, immediately before the
effective date of this Act, holds an agent license issued by the Texas
Department of Insurance and who obtained that license by passing a written
examination is entitled to the appropriate license as provided by Chapter
21A, Insurance Code, as amended by this Act, without further examination.
(b) Provides that a person who, immediately before the effective date of
this Act, holds an agent license issued by the department and who obtained
that license without taking a written examination, is entitled to the
appropriate license as provided by Chapter 21A, Insurance Code, as amended
by this Act, but must pass the appropriate license examination not later
than the second anniversary of the date of issuance, to retain the license.
Provides that the license of a person who does not pass the license
examinations as required by this subsection expires on the second
anniversary of the date of issuance and may not be renewed.
(c) Provides that a person who, immediately before the effective date of
this Act, holds an agent license issued by the department and who obtained
that license without taking a written examination, is entitled to the
appropriate license as provided by Chapter 21A, Insurance Code, as amended
by this Act, but must pass the appropriate license examination not later
than May 31, 2000, to retain the license. Provides that the license of a
person who does not pass the license examinations as required by this
subsection expires on May 31, 2000.
SECTION 7.03. (a) Authorizes the department to issue life, accident, and
health insurance on behalf of a fraternal benefit society immediately
before the effective date of this Act on submission to the department by
the person certain information and fee.
(b) Requires a person, to retain a license issued under Subsection (a) of
this section, who has solicited insurance on behalf of a fraternal benefit
society for less than two years as of the effective date of this Act to
pass the license examination required under Chapter 21A, Insurance Code,
not later than the 180th day after the date of issuance of the license.
Provides that the license of a person who does not pass the license
examinations as required by this subsection expires on the 180th day after
the date of issuance of the license and may not be renewed.
(c) Requires a person, to retain a license issued under Subsection (a) of
this section, who has solicited insurance on behalf of a fraternal benefit
society for two years or more as of the effective date of this Act to pass
the license examination required under Chapter 21A, Insurance Code, not
later than the second anniversary of the date of issuance of the license.
Provides that the license of a person who does not pass the license
examinations as required by this subsection expires on the second
anniversary of the date of issuance of the license and may not be renewed.
ARTICLE 8. EFFECTIVE DATE; TRANSITION; EMERGENCY
SECTION 8.01. Effective date: September 1, 1999.
Makes application of Section 3, Article 21.01-1, Insurance Code this Act
prospective to January 1, 2001.
SECTION 8.02.Emergency clause.