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