Texas 2015 - 84th Regular

Texas Senate Bill SB1765 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	84R5183 MEW-F
2	2	By: Creighton S.B. No. 1765
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to provisional authority for certain individual insurance
8	8	license applicants to act as insurance agents; authorizing a fee;
9	9	requiring an occupational provisional permit.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Chapter 4001, Insurance Code, is amended by
12	12	adding Subchapter H to read as follows:
13	13	SUBCHAPTER H. PROVISIONAL PERMIT
14	14	Sec. 4001.351. APPLICABILITY. This subchapter applies only
15	15	to an applicant for a license as an agent under:
16	16	(1) Subchapters B and E, Chapter 4051; and
17	17	(2) Subchapters B, D, and E, Chapter 4054.
18	18	Sec. 4001.352. AUTHORITY TO ISSUE PROVISIONAL PERMIT. The
19	19	department may, in conjunction with a license application under
20	20	Section 4001.102, issue a provisional permit to an applicant who is
21	21	being considered for appointment as an agent by another agent, an
22	22	insurer, or a health maintenance organization.
23	23	Sec. 4001.353. APPLICATION FOR AND ISSUANCE OF PROVISIONAL
24	24	PERMIT. (a) The department may issue a provisional permit under
25	25	this subchapter on receipt of:
26	26	(1) a written application for a provisional permit;
27	27	(2) a properly completed license application,
28	28	nonrefundable fee, and each other item required for a license under
29	29	this chapter and Subchapters B or E, Chapter 4051, or Subchapters B,
30	30	D, or E, Chapter 4054, as applicable;
31	31	(3) the nonrefundable fee in an amount set by the
32	32	department for the issuance of the provisional permit; and
33	33	(4) a certificate signed by the appointing agent,
34	34	insurer, or health maintenance organization stating that:
35	35	(A) the applicant completed the training, if any,
36	36	and passed the examination required for the issuance of the license
37	37	for which the application is submitted;
38	38	(B) the appointing agent, insurer, or health
39	39	maintenance organization completed a background check on the
40	40	applicant that shows that the applicant has not been convicted of:
41	41	(i) a felony; or
42	42	(ii) an act that requires the applicant to
43	43	receive written consent under 18 U.S.C. Section 1033 to engage in
44	44	the business of insurance;
45	45	(C) the applicant has not responded
46	46	affirmatively to any question on the license application that
47	47	indicates the applicant has a criminal conviction or has been
48	48	involved in an administrative action that may disqualify the
49	49	applicant from receiving a license; and
50	50	(D) the appointing agent, insurer, or health
51	51	maintenance organization will supervise the work of the applicant.
52	52	(b) An applicant is not qualified to receive a provisional
53	53	permit if the applicant has not taken the examination required for
54	54	the issuance of the permanent license for which the applicant
55	55	applied under Section 4001.102.
56	56	Sec. 4001.354. AUTHORITY TO ACT AS AGENT PENDING RECEIPT OF
57	57	PROVISIONAL PERMIT. An applicant may proceed to act as an agent if:
58	58	(1) a provisional permit is not received from the
59	59	department before the eighth day after the date the application,
60	60	nonrefundable fee, and other items required under Section
61	61	4001.353(a) are delivered or mailed to the department; and
62	62	(2) the applicant or appointing agent, insurer, or
63	63	health maintenance organization has not been notified that the
64	64	application for the permit is incomplete or is or may be denied.
65	65	Sec. 4001.355. TERM OF PROVISIONAL PERMIT. (a) Except as
66	66	provided by Subsection (b), a provisional permit expires on the
67	67	earlier of:
68	68	(1) the 90th day after the date the permit is issued;
69	69	or
70	70	(2) the date a license is issued or the license
71	71	application is denied.
72	72	(b) If the license, or a notice that the license is denied,
73	73	is not received from the department on or before the 90th day after
74	74	the date the application, nonrefundable fee, and other items
75	75	required under Section 4001.353(a) are delivered or mailed to the
76	76	department, the authority of the applicant to act as an agent under
77	77	this subchapter automatically extends until the earlier of the date
78	78	the license is issued or the license application is denied or the
79	79	90th day after the expiration of the 90-day period under Subsection
80	80	(a).
81	81	Sec. 4001.356. NOTIFICATION REGARDING LICENSE. (a) The
82	82	department may notify the applicant or appointing agent, insurer,
83	83	or health maintenance organization that the license application is
84	84	incomplete or is or may be denied at any time before the issuance or
85	85	denial of a license.
86	86	(b) An applicant who receives a notice under Subsection (a)
87	87	shall immediately cease acting as an agent under this subchapter.
88	88	An appointing agent, insurer, or health maintenance organization
89	89	that receives notice under Subsection (a) shall immediately notify
90	90	the applicant of the notice.
91	91	(c) Unless the applicant or appointing agent, insurer, or
92	92	health maintenance organization has been notified that the
93	93	provisional permit is or may be denied, an applicant may resume
94	94	working as an agent after receiving a notice that the application is
95	95	incomplete under Subsection (a) after the applicant submits to the
96	96	department the information required to complete the application or
97	97	has the appointing agent, insurer, or health maintenance
98	98	organization submit the information.
99	99	(d) An applicant acting as an agent under this subchapter
100	100	before receiving a notice under Subsection (a), if applicable, is
101	101	not engaged in the unauthorized business of insurance and any
102	102	transaction entered into by the applicant before receiving the
103	103	notice, if applicable, is presumed lawful.
104	104	(e) An applicant may act as an agent only for the appointing
105	105	agent, insurer, or health maintenance organization except that an
106	106	appointing insurer may include appointments for one or more
107	107	affiliated insurers that are part of the same insurance holding
108	108	company group.
109	109	Sec. 4001.357. DENIAL OR REVOCATION OF LICENSE. If the
110	110	applicant's license application is denied or the applicant's
111	111	license is revoked, an applicant is subject to Section 4005.105
112	112	with respect to an application for a provisional permit under this
113	113	subchapter.
114	114	Sec. 4001.358. REPLACEMENT OF EXISTING LIFE INSURANCE OR
115	115	ANNUITY CONTRACT PROHIBITED. (a) A provisional permit holder who
116	116	is acting under the authority of that permit may not:
117	117	(1) engage in an insurance solicitation, sale, or
118	118	other agency transaction that the permit holder knows or should
119	119	know will result or is intended to result in:
120	120	(A) the purchase of a new life insurance or
121	121	annuity contract; and
122	122	(B) any of the following actions with regard to
123	123	an existing individual life insurance or annuity contract as a
124	124	result of that purchase:
125	125	(i) termination of the contract by lapse,
126	126	forfeiture, surrender, or other means;
127	127	(ii) conversion of the contract to reduced
128	128	paid-up insurance, continuation of the contract as extended term
129	129	insurance, or reduction in value of the contract by the use of
130	130	nonforfeiture benefits or other policy values;
131	131	(iii) amendment of the contract to reduce:
132	132	(a) benefits; or
133	133	(b) the term for which coverage would
134	134	otherwise remain in force or for which benefits would be paid;
135	135	(iv) reissuance of the contract with a
136	136	reduction in cash value; or
137	137	(v) pledge of the contract as collateral or
138	138	subjection of the contract to borrowing, whether in a single loan or
139	139	under a schedule of borrowing, for amounts that in the aggregate
140	140	exceed 25 percent of the loan value prescribed by the contract; or
141	141	(2) directly or indirectly receive a commission or
142	142	other compensation that results or may result from a solicitation,
143	143	sale, or other agency transaction described by Subdivision (1).
144	144	(b) A person who holds a permanent license may not
145	145	circumvent or attempt to circumvent the intent of this section by
146	146	acting for or with a provisional permit holder.
147	147	Sec. 4001.359. SUPERVISORY RESPONSIBILITY. An appointing
148	148	agent, insurer, or health maintenance organization that allows a
149	149	permit holder to act as an agent under a provisional permit has
150	150	supervisory responsibility over the permit holder.
151	151	SECTION 2. The change in law made by this Act applies only
152	152	to an applicant who files a license application on or after the
153	153	effective date of this Act.
154	154	SECTION 3. This Act takes effect September 1, 2015.