84R11363 PMO-F
By: Hancock S.B. No. 1164
A BILL TO BE ENTITLED
AN ACT
relating to insurance agents' ownership and use of certain
information related to general property and casualty insurance
policies; authorizing administrative penalties; adding provisions
that may be subject to a criminal penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 4051, Insurance Code, is amended by
adding Subchapter J to read as follows:
SUBCHAPTER J. AGENTS' OWNERSHIP INTERESTS
Sec. 4051.451. DEFINITIONS. In this subchapter:
(1) "Expiration" means policy information and records
related to a property and casualty insurance policy or an
application for a property and casualty insurance policy,
including:
(A) the name and address of the applicant or
insured;
(B) the location and description of any property
referenced in the application or covered by the policy;
(C) the value, inception date, renewal date, and
expiration date of the policy;
(D) the premium, policy limits, and description
of the terms and coverage of the policy; and
(E) information or records that may be:
(i) necessary for placing insurance
coverage, insurance products, or insurance services; or
(ii) used to solicit, sell, or negotiate
the renewal or sale of insurance coverage, insurance products, or
insurance services.
(2) "Person" means an individual, partnership,
corporation, limited liability company, or depository institution.
(3) "Record" has the meaning assigned by Section
322.002, Business & Commerce Code.
Sec. 4051.452. APPLICABILITY OF SUBCHAPTER. (a) This
subchapter applies with respect to expirations concerning coverage
of a risk located in this state, or an application for such
coverage, issued by or placed with an insurer engaged in the
business of property and casualty insurance in this state,
including:
(1) a stock fire or casualty company;
(2) a mutual fire or casualty company;
(3) a Mexican casualty company;
(4) a Lloyd's plan;
(5) a reciprocal or interinsurance exchange;
(6) a county mutual insurance company;
(7) a farm mutual insurance company;
(8) a risk retention group;
(9) the Medical Liability Insurance Joint
Underwriting Association under Chapter 2203;
(10) the Texas Windstorm Insurance Association under
Chapter 2210;
(11) the Texas Automobile Insurance Plan Association
under Chapter 2151; and
(12) an eligible surplus lines insurer.
(b) This subchapter applies only to ownership and use of an
expiration by an agent who:
(1) holds a contract with the insurer to whom the
relevant application was submitted or that issued the relevant
insurance policy; or
(2) has the authority to contract with or submit an
application for coverage to that insurer.
Sec. 4051.453. EXCLUSIVE OWNERSHIP AND USE. (a) Except as
provided by Section 4051.454, an agent or surplus lines agent
exclusively owns and has exclusive use of an expiration directly
related to an insurance application submitted by or an insurance
policy written through the agent for the purpose of soliciting,
selling, or negotiating the renewal or sale of property and
casualty insurance coverage, a property and casualty insurance
product, or a property and casualty insurance service.
(b) Nothing in this subchapter may be construed to modify or
amend or require modification or amendment of a contract between an
insurer and an agent or the authority of the insurer or agent with
respect to each other.
Sec. 4051.454. EXCEPTIONS; INSURER OR MANAGING GENERAL
AGENT. Notwithstanding Section 4051.453, an insurer or the
insurer's managing general agent may use an expiration:
(1) to solicit, sell, or negotiate the sale or renewal
of property and casualty insurance coverage, a property and
casualty insurance product, or a property and casualty insurance
service with the written consent of the agent who owns the
expiration;
(2) in the normal course of business, including
underwriting, handling claims, and negotiating reinsurance; or
(3) if the insured or a property and casualty agent on
behalf of the insured requests that the insurer renew a policy or
issue other insurance coverage to the insured.
Sec. 4051.455. EXCEPTIONS; CERTAIN AGENTS. (a) This
subchapter does not apply to an expiration related to an insurance
policy placed or an application for an insurance policy received by
an agent who:
(1) has agreed by contract to act exclusively for one
insurer or group of affiliated insurance companies;
(2) has agreed in writing with an insurer that all
expirations, insurance policies, and insurance business is owned by
the insurer and not the agent;
(3) is in default for nonpayment of premium or other
money due under the agent's contract or other agreement with the
insurer or group of affiliated insurance companies unless a bona
fide, good faith dispute exists concerning the money due;
(4) has a suspended, revoked, surrendered, or
terminated license; or
(5) has misappropriated, converted to the agent's own
use, or illegally withheld money belonging to an insurer, an
insured, or an applicant for insurance.
(b) The rights of an agent described by Subsection (a)(1)
with respect to expirations are determined by the agent's contract
with the insurer or group of affiliated insurance companies.
Sec. 4051.456. PRIVACY RIGHT OF APPLICANT OR INSURED NOT
IMPAIRED. An applicant's or insured's right to privacy related to
an expiration is not impaired or affected by an agent's ownership of
the expiration.
Sec. 4051.457. COMPLAINT RESOLUTION PROGRAM. The
department shall establish a program to resolve complaints of
violations of this subchapter.
Sec. 4051.458. ENFORCEMENT; SANCTIONS AND PENALTIES
AUTHORIZED. (a) The commissioner may impose sanctions as provided
by Chapter 82 against a person who the commissioner finds violated
this subchapter.
(b) The commissioner may use the cease and desist procedures
authorized by Chapter 83 against a person who the commissioner
finds violated this subchapter.
(c) In addition to a sanction authorized by this subchapter,
the commissioner may impose an administrative penalty in accordance
with Chapter 84 against a person who the commissioner finds
violated this subchapter.
SECTION 2. This Act applies only to an expiration related to
an insurance policy placed or an application for an insurance
policy received by an agent on or after the effective date of this
Act. A policy placed or an application received before the
effective date of this Act is governed by the law as it existed
immediately before that date, and that law is continued in effect
for that purpose.
SECTION 3. This Act takes effect September 1, 2015.