By: Smithee, Frullo, Sheets H.B. No. 2145
(Senate Sponsor - Creighton)
(In the Senate - Received from the House April 20, 2015;
April 23, 2015, read first time and referred to Committee on
Business and Commerce; May 11, 2015, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 7,
Nays 1; May 11, 2015, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR H.B. No. 2145 By: Creighton
A BILL TO BE ENTITLED
AN ACT
relating to provisional authority for certain individual insurance
license applicants to act as insurance agents; authorizing a fee;
requiring an occupational provisional permit; adding provisions
that may be subject to a criminal penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 4001, Insurance Code, is amended by
adding Subchapter H to read as follows:
SUBCHAPTER H. PROVISIONAL PERMIT
Sec. 4001.351. APPLICABILITY. This subchapter applies only
to an applicant for a license as an agent under:
(1) Subchapters B and E, Chapter 4051; and
(2) Subchapters B, D, and E, Chapter 4054.
Sec. 4001.352. AUTHORITY TO ISSUE PROVISIONAL PERMIT. The
department may, in conjunction with a license application under
Section 4001.102, issue a provisional permit to an applicant who is
being considered for appointment as an agent by another agent, an
insurer, or a health maintenance organization.
Sec. 4001.353. APPLICATION FOR AND ISSUANCE OF PROVISIONAL
PERMIT. (a) The department may issue a provisional permit under
this subchapter on receipt of:
(1) a written application for a provisional permit;
(2) a properly completed license application,
nonrefundable fee, and each other item required for a license under
this chapter and Subchapter B or E, Chapter 4051, or Subchapter B,
D, or E, Chapter 4054, as applicable;
(3) the nonrefundable fee in an amount authorized by
Subsection (c); and
(4) a certificate signed by the appointing agent,
insurer, or health maintenance organization stating that:
(A) the applicant completed the training, if any,
and passed the examination required for the issuance of the license
for which the application is submitted;
(B) the appointing agent, insurer, or health
maintenance organization completed a background check on the
applicant that shows that the applicant has not been convicted of:
(i) a felony; or
(ii) an act that requires the applicant to
receive written consent under 18 U.S.C. Section 1033 to engage in
the business of insurance;
(C) the applicant has not responded
affirmatively to any question on the license application that
indicates the applicant has a criminal conviction or has been
involved in an administrative action that may disqualify the
applicant from receiving a license; and
(D) the appointing agent, insurer, or health
maintenance organization will supervise the work of the applicant.
(b) An applicant is not qualified to receive a provisional
permit if the applicant has not taken and passed the examination
required for the issuance of the permanent license for which the
applicant applied under Section 4001.102.
(c) The nonrefundable fee described by Subsection (a) shall
be set by the department in an amount that:
(1) is reasonable and necessary to implement this
subchapter; and
(2) may not exceed the amount of the fee required for
an application for a permanent license.
Sec. 4001.354. AUTHORITY TO ACT AS AGENT UNDER PROVISIONAL
PERMIT. (a) An applicant may proceed to act as an agent if:
(1) a provisional permit is not received from the
department before the eighth day after the date the application,
nonrefundable fee, and other items required under Section
4001.353(a) are delivered or mailed to the department; and
(2) the applicant or appointing agent, insurer, or
health maintenance organization has not been notified that the
application for the permit is incomplete or is or may be denied.
(b) An applicant may act as an agent only for the appointing
agent, insurer, or health maintenance organization except that an
appointing insurer may include appointments for one or more
affiliated insurers that are part of the same insurance holding
company group.
Sec. 4001.355. TERM OF PROVISIONAL PERMIT. (a) Except as
provided by Subsection (b), a provisional permit expires on the
earlier of:
(1) the 90th day after the date the permit is issued;
or
(2) the date a license is issued or the license
application is denied.
(b) If the license, or a notice that the license is denied,
is not received from the department on or before the 90th day after
the date the application, nonrefundable fee, and other items
required under Section 4001.353(a) are delivered or mailed to the
department, the authority of the applicant to act as an agent under
this subchapter automatically extends until the earlier of the date
the license is issued or the license application is denied or the
90th day after the expiration of the 90-day period under Subsection
(a).
Sec. 4001.356. NOTIFICATION REGARDING LICENSE. (a) The
department may notify the applicant or appointing agent, insurer,
or health maintenance organization that the license application is
incomplete or is or may be denied at any time before the issuance or
denial of a license.
(b) An applicant who receives a notice under Subsection (a)
shall immediately cease acting as an agent under this subchapter.
An appointing agent, insurer, or health maintenance organization
that receives notice under Subsection (a) shall immediately notify
the applicant of the notice.
(c) An applicant acting as an agent under this subchapter
before receiving a notice under Subsection (a), if applicable, is
not engaged in the unauthorized business of insurance and any
transaction entered into by the applicant before receiving the
notice, if applicable, is presumed lawful.
(d) A notification under this section applies only to a
provisional permit, and the department shall continue to process an
application for a license unless the license has been denied.
Sec. 4001.357. DENIAL OR REVOCATION OF LICENSE. If the
applicant's license application is denied or the applicant's
license is revoked, an applicant is subject to Section 4005.105
with respect to an application for a provisional permit under this
subchapter.
Sec. 4001.358. COMPLIANCE WITH OTHER LAW. (a) A
provisional permit holder who is acting under the authority of that
permit is subject to all provisions of this code regulating the
solicitation and sale of insurance that relate to the type of
permanent license for which the provisional permit holder applied.
(b) A provisional permit holder that applied for a life and
annuity license must comply with Chapter 1114 with respect to the
replacement of life insurance policies and annuities.
(c) A person who holds a permanent license may not
circumvent or attempt to circumvent the intent of this section by
acting for or with a provisional permit holder.
Sec. 4001.359. SUPERVISORY RESPONSIBILITY. An appointing
agent, insurer, or health maintenance organization that allows a
permit holder to act as an agent under a provisional permit has
supervisory responsibility over the permit holder.
SECTION 2. The change in law made by this Act applies only
to an applicant who files a license application on or after the
effective date of this Act.
SECTION 3. This Act takes effect September 1, 2015.
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