82R10478 RWG-F
By: Carona S.B. No. 1599
A BILL TO BE ENTITLED
AN ACT
relating to the requirements for an insurance adjuster license.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 4101.001(a), Insurance Code, is amended
to read as follows:
(a) In this chapter:
(1) "Adjuster" [, "adjuster"] means a person [an
individual] who:
(A) [(1)] investigates or adjusts losses on
behalf of an insurer as an independent contractor or as an employee
of:
(i) [(A)] an adjustment bureau;
(ii) [(B)] an association;
(iii) [(C)] a general property and casualty
agent or personal lines property and casualty agent;
(iv) [(D)] an independent contractor;
(v) [(E)] an insurer; or
(vi) [(F)] a managing general agent;
(B) [(2)] supervises the handling of claims; or
(C) [(3)] investigates, adjusts, supervises the
handling of, or settles workers' compensation claims, including
claims arising from services provided through a certified workers'
compensation health care network as authorized under Chapter 1305,
on behalf of an administrator, as defined by Chapter 4151, or on
behalf of an insurance carrier, as defined by Section 401.011,
Labor Code.
(2) "Automated claims adjudication system" means a
computer program designed for the collection, data entry,
calculation, and final resolution of property insurance claims
that:
(A) a licensed independent adjuster, licensed
agent, or supervised individual uses in accordance with this
subchapter;
(B) complies with all requirements for the
payment of claims under this code; and
(C) a licensed independent adjuster that is an
officer of a licensed business entity under this chapter certifies
as compliant with this subdivision.
(3) "Business entity" means a corporation,
association, partnership, limited liability company, limited
liability partnership, or other legal entity.
(4) "Catastrophe" means an event that is declared by
the governor to be a state of disaster and that results in:
(A) a large number of deaths or injuries;
(B) extensive damage or the destruction of
critical facilities;
(C) an overwhelming demand on state and local
response services and severely affects the ability of those
services to begin and sustain response activities; or
(D) severe long-term effects on general economic
activity.
(5) "Home state," with respect to an adjuster, means:
(A) the state in which the adjuster maintains the
adjuster's principal place of residence or business and is licensed
to act as a resident adjuster; or
(B) if the state of the adjuster's principal
place of residence or business does not license adjusters for the
line of authority sought, a state in which the adjuster is licensed
and in good standing and that is designated by the adjuster as the
adjuster's home state.
(6) "Person" means an individual or business entity.
SECTION 2. Section 4101.002(a), Insurance Code, is amended
to read as follows:
(a) This chapter does not apply to:
(1) an attorney who:
(A) adjusts insurance losses periodically and
incidentally to the practice of law; and
(B) does not represent that the attorney is an
adjuster;
(2) a salaried employee of an insurer who is not
regularly engaged in the adjustment, investigation, or supervision
of insurance claims;
(3) a person employed only to furnish technical
assistance to a licensed adjuster, including:
(A) an attorney;
(B) an engineer;
(C) an estimator;
(D) a handwriting expert;
(E) a photographer; and
(F) a private detective;
(4) a licensed insurance producer, attorney-in-fact
of a reciprocal or interinsurance exchange, or managing general
agent of an insurer to whom an insurer grants claim authority [an
agent or general agent of an authorized insurer who processes an
undisputed or uncontested loss for the insurer under a policy
issued by the agent or general agent];
(5) a person who performs clerical duties and does not
negotiate with parties to disputed or contested claims;
(6) a person who handles claims arising under life,
accident, and health insurance policies;
(7) a person:
(A) who is employed principally as:
(i) a right-of-way agent; or
(ii) a right-of-way and claims agent;
(B) whose primary responsibility is the
acquisition of easements, leases, permits, or other real property
rights; and
(C) who handles only claims arising out of
operations under those easements, leases, permits, or other
contracts or contractual obligations;
(8) an individual who is employed to investigate
suspected fraudulent insurance claims but who does not adjust
losses or determine claims payments; [or]
(9) a public insurance adjuster licensed under Chapter
4102;
(10) an individual who:
(A) collects claim information from, or
furnishes claim information to, an insured or claimant and enters
data into an automated claims adjudication system; and
(B) is employed by a licensed independent
adjuster or its affiliate under circumstances in which no more than
25 individuals performing duties described by Paragraph (A) are
supervised by a single licensed independent adjuster or a single
licensed agent who is exempt from this chapter under Subdivision
(4);
(11) a person who only settles reinsurance or
subrogation claims; or
(12) an officer or director of an authorized insurer,
surplus lines insurer, or risk retention group, or an
attorney-in-fact of a reciprocal or interinsurance exchange.
SECTION 3. Subchapter B, Chapter 4101, Insurance Code, is
amended by adding Section 4101.0521 to read as follows:
Sec. 4101.0521. ACCESS TO CRIMINAL HISTORY RECORD
INFORMATION: DEPARTMENT OF INSURANCE. (a) In addition to the
requirements of Section 4101.052(a), an applicant for a license
under this chapter must submit information to the department about
the applicant's administrative and criminal history.
(b) The applicant shall submit to the department a full set
of fingerprints to allow the department to obtain criminal history
record information under Section 411.106, Government Code, and from
the Federal Bureau of Investigation under Section 411.087,
Government Code. The department may contract for the collection and
transmission of fingerprints under this section and may order a
reasonable fee for the collection and transmission of fingerprints
to be paid directly to the contractor.
(c) The department shall treat fingerprints and any
personal information obtained under this section as confidential
and shall apply security measures consistent with the Federal
Bureau of Investigation's standards for the electronic storage of
fingerprints and identifying information. Any fingerprints and
personal information obtained under this section are not subject to
a subpoena, other than a subpoena issued in a criminal action or
investigation.
(d) A nonresident business entity that submits an
application under this section must submit the name, address,
social security number, criminal and administrative history,
background check, biographical statement, and fingerprints for:
(1) each of the applicant's executive officers and
directors; and
(2) each executive officer and director of an entity
that owns, and each individual that owns, directly or indirectly,
51 percent or more of the outstanding voting securities of the
applicant.
(e) A nonresident business entity applicant whose home
state requires compliance with provisions that are substantially
similar to this section is not required to submit the items and
information otherwise required by Subsection (d).
SECTION 4. Section 4101.053, Insurance Code, is amended by
amending Subsection (a) and adding Subsections (c) and (d) to read
as follows:
(a) To qualify for a license under this chapter, an
individual [applicant] must:
(1) comply with this chapter;
(2) present evidence satisfactory to the department
that the applicant:
(A) is at least 18 years of age;
(B) resides in this state or a state or country
that permits a resident of this state to act as an adjuster in that
state or country;
(C) has complied with all federal laws relating
to employment or the transaction of business in the United States,
if the applicant does not reside in the United States;
(D) is trustworthy; and
(E) has had experience, special education, or
training of sufficient duration and extent regarding the handling
of loss claims under insurance contracts to make the applicant
competent to fulfill the responsibilities of an adjuster; and
(3) pass an examination conducted under this
subchapter or present evidence that the applicant has been exempted
under Section 4101.056.
(c) To qualify for a license under this chapter, a business
entity must:
(1) comply with this chapter; and
(2) present evidence satisfactory to the department
that the applicant:
(A) is eligible to designate this state as its
home state;
(B) is trustworthy;
(C) has designated a licensed adjuster
responsible for the business entity's compliance with the insurance
laws of this state;
(D) has not committed an act that is a ground for
probation, suspension, revocation, or refusal of an adjuster's
license under Section 4101.201; and
(E) has paid the fees prescribed under Section
4101.057.
(d) An individual who is not a resident of this state may not
be licensed under this chapter and may not designate this state as
the individual's home state unless the individual has successfully
passed the adjuster examination and complied with the other
applicable portions of this section, except that the individual may
not be required to comply with Subsection (a)(2)(B) or (C).
SECTION 5. Section 4101.0521, Insurance Code, as added by
this Act, and Section 4101.053, Insurance Code, as amended by this
Act, apply only to an application for a license filed on or after
the effective date of this Act. A license application filed before
the effective date of this Act is governed by the law applicable to
the application immediately before the effective date of this Act,
and the former law is continued in effect for that purpose.
SECTION 6. This Act takes effect September 1, 2011.