By: Eltife S.B. No. 876
(Frullo)
A BILL TO BE ENTITLED
AN ACT
relating to the licensing of insurance agents and adjusters;
providing a penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 4001.006(a) and (b), Insurance Code,
are amended to read as follows:
(a) The department shall collect from each agent of an
insurer writing insurance in this state under this code:
(1) a nonrefundable license application fee; and
(2) a nonrefundable appointment fee for each
appointment of the agent by an insurer.
(b) The department shall deposit the fees described by
Subsection (a), together with other license application fees,
examination fees, and license renewal application fees, to the
credit of the Texas Department of Insurance operating account.
SECTION 2. Section 4001.162, Insurance Code, is amended to
read as follows:
Sec. 4001.162. RESTRICTION ON APPOINTMENT OF TEMPORARY
LICENSE HOLDERS. (a) Except as provided by Subsection (b), an
[An] agent, insurer, or health maintenance organization may not
appoint more than 500 temporary license holders during a calendar
year.
(b) The commissioner shall adopt reasonable rules setting
standards for an agent, insurer, or health maintenance organization
to appoint more than 500 temporary license holders during a
calendar year. The standards must include consideration of the
ability of an agent, insurer, or health maintenance organization to
monitor appointed temporary agents.
SECTION 3. Section 4003.001, Insurance Code, is amended by
amending Subsection (a) and adding Subsections (c) and (d) to read
as follows:
(a) Unless a staggered renewal system is adopted under
Section 4003.002, each [agent] license issued or renewed by the
department under Chapter 981 or Subtitle A, B, or C and not
suspended or revoked by the commissioner expires on:
(1) the second anniversary of the date the license is
issued to or renewed by a person that is not an individual; or
(2) except as provided in Subsection (c):
(A) for a license issued or renewed in an
even-numbered year, the individual license holder's birthday each
even-numbered year; or
(B) for a license issued or renewed in an
odd-numbered year, the individual license holder's birthday each
odd-numbered year.
(c) If a person holds more than one license, all licenses
issued to the person expire on the earliest expiration date of the
licenses held. Thereafter, all licenses expire in accordance with
Subsection (a).
(d) Notwithstanding Section 4003.002(b), the commissioner
may not prorate the initial application fee for a license based on
the expiration period of the license under Subsection (c).
SECTION 4. Section 4003.006, Insurance Code, is amended to
read as follows:
Sec. 4003.006. CONTINUATION OF ORIGINAL LICENSE. The
original license of a person who has applied for license renewal in
compliance with Section 4003.004 [4003.004] remains in effect from
the date the renewal application is filed until the date:
(1) the department issues the renewal license; [or]
(2) the license is not renewed under Section 4004.055;
or
(3) the commissioner issues an order revoking the
license.
SECTION 5. Section 4003.008(b), Insurance Code, is amended
to read as follows:
(b) The person must pay to the department a fee equal to the
license application fee.
SECTION 6. Section 4004.051(a), Insurance Code, is amended
to read as follows:
(a) Except as provided by Section 4004.052 or other law,
each individual who holds a license issued by the department shall
complete, as a condition of licensure, continuing education as
provided by this chapter.
SECTION 7. Section 4004.053(a), Insurance Code, is amended
to read as follows:
(a) An individual who holds a general life, accident, and
health license, a life agent license, a life and health insurance
counselor license, an adjuster license, a managing general agent
license, a general property and casualty license, or a personal
lines property and casualty license must complete 24 [15] hours of
continuing education during the license period [annually]. If the
individual holds more than one license for which continuing
education is otherwise required, the individual is not required to
complete more than 24 [15] continuing education hours for all
licenses during the license period [annually]. An individual who
is required under rules adopted under Chapter 4008 to hold a
certificate to sell a designated product or product line may use
continuing education programs administered under Section 4004.151
to satisfy the [annual] continuing education requirements under
this subsection.
SECTION 8. Subchapter B, Chapter 4004, Insurance Code, is
amended by adding Section 4004.055 to read as follows:
Sec. 4004.055. CONSEQUENCES OF FAILURE TO COMPLETE
CONTINUING EDUCATION REQUIREMENT. (a) The department may not
renew a license issued under this title if the license holder fails
to:
(1) complete an applicable continuing education
requirement not later than the 90th day after the last day of the
licensing period; or
(2) pay an applicable fine related to the failure to
timely complete continuing education.
(b) The department may not issue a new license under this
title to an individual who was previously licensed under this title
if the individual fails to:
(1) provide evidence of completion of an applicable
continuing education requirement for the expired, nonrenewed,
canceled, or revoked license; or
(2) pay an applicable fine related to the failure to
timely complete continuing education.
(c) Completion of continuing education after expiration of
a license is not a defense in a disciplinary action under Section
4005.101, Section 4005.109, or another provision of this code
against an individual who failed to complete continuing education
as required by this chapter.
SECTION 9. Section 4004.101(a), Insurance Code, is amended
to read as follows:
(a) The department shall certify continuing education
programs for agents and adjusters. The certification criteria must
be designed to ensure that continuing education programs enhance
the knowledge, understanding, and professional competence of the
license holder.
SECTION 10. Subchapter C, Chapter 4004, Insurance Code, is
amended by adding Section 4004.105 to read as follows:
Sec. 4004.105. ADJUSTER CONTINUING EDUCATION PROGRAM
CONTENTS. A continuing education program for adjusters licensed
under Chapter 4101 must include education relating to:
(1) Chapter 541;
(2) Chapter 547;
(3) Subchapter A, Chapter 542;
(4) Subchapter E, Chapter 17, Business & Commerce
Code; and
(5) any other similar laws specified by the
department.
SECTION 11. Section 4005.105(d), Insurance Code, is amended
to read as follows:
(d) Subsections (b) and [Subsection] (c) do [does] not apply
to an applicant whose license application was denied or revoked for
failure by the applicant to:
(1) pass a required written examination; [or]
(2) complete continuing education or pay an applicable
fine under Section 4004.055(a); or
(3) submit a properly completed license application.
SECTION 12. Section 4005.109(b), Insurance Code, is amended
to read as follows:
(b) A violation for which a fine may be assessed under this
section includes a failure to:
(1) obtain the total number of continuing education
hours before the expiration [renewal] date of a license;
(2) timely report a change of address to the
department; or
(3) notify the department of an administrative action
against the agent by a financial or insurance regulator of another
state or of the federal government.
SECTION 13. Subchapter B, Chapter 4056, Insurance Code, is
amended by adding Section 4056.059 to read as follows:
Sec. 4056.059. TRANSITION TO RESIDENT AGENT LICENSE.
(a) This section applies only to an individual who is a
nonresident agent licensed under Section 4056.052 and who has moved
from the other state that licensed the individual to this state.
(b) A nonresident agent may apply to the department for a
comparable license for residents of this state. An application
must include:
(1) a notification of the agent's change of address and
contact information;
(2) a clearance letter from the state authority of the
state that issued the agent's prior resident license demonstrating
the agent's good standing with that authority; and
(3) fingerprint forms in the format prescribed by the
department, which may be electronic.
(c) If a nonresident agent submits a satisfactory
application in accordance with Subsection (b), the department shall
issue a comparable resident agent license to the agent and cancel
the agent's nonresident agent license.
SECTION 14. Sections 4101.057(a), (b), and (d), Insurance
Code, are amended to read as follows:
(a) Before issuing or renewing a license under this chapter,
the department shall set and collect a nonrefundable license
application fee in an amount not to exceed $50.
(b) An applicant for a renewal license must remit the fee
required by Subsection (a) before the expiration of the [biennially
after the issuance of the original] license being renewed. If the
applicant's license has been expired for not more than 90 days, an
applicant for a renewal license must remit, in addition to the fee
assessed under Subsection (a), a fee equal to one-half of the
original application [license] fee.
(d) Before issuing a duplicate license requested by an
adjuster, the department shall set and collect a duplicate license
application fee.
SECTION 15. Section 4101.059(a), Insurance Code, is amended
to read as follows:
(a) To renew a license under this chapter, a licensed
adjuster must participate in a continuing education program under
Chapter 4004 [relating to consumer protection]. [The program must
include education relating to consumer protection laws, including:
[(1) Chapter 541;
[(2) Chapter 547;
[(3) Subchapter A, Chapter 542;
[(4) Subchapter E, Chapter 17, Business & Commerce
Code; and
[(5) any other similar laws specified by the
department.]
SECTION 16. Section 4101.061, Insurance Code, is amended to
read as follows:
Sec. 4101.061. EXPIRATION; RENEWAL. Expiration and renewal
of a license issued under this chapter are governed by Sections
4003.001 and 4004.055, rules adopted by the commissioner, and [or]
any applicable provision of this code or another insurance law of
this state.
SECTION 17. Section 4102.062, Insurance Code, is amended to
read as follows:
Sec. 4102.062. EXPIRATION. A license issued under this
chapter expires as provided by Chapter 4003 [on the second
anniversary of the date of issuance] unless suspended or revoked by
the commissioner.
SECTION 18. Section 4102.064, Insurance Code, is amended to
read as follows:
Sec. 4102.064. RENEWAL OF UNEXPIRED LICENSE. (a) A
license holder may renew a license that has not expired and has not
been suspended or revoked by filing with the department a properly
completed renewal application, in the form prescribed by the
commissioner, that demonstrates continued compliance with the
license requirements imposed under this chapter or adopted by rule
by the commissioner. The completed renewal application must be
accompanied by:
(1) a renewal application fee in the amount determined
by the commissioner under Section 4102.066(b); and
(2) evidence of compliance with the continuing
education requirements imposed under Section 4102.109.
(b) A license holder must submit the completed renewal
application, evidence of compliance with the continuing education
requirements, and the renewal application fee to the commissioner
not later than the 30th day before the second anniversary date of
the license.
(c) On the filing of a completed renewal application, a
renewal application fee, and, if applicable, evidence of compliance
with the continuing education requirements, the original license
continues in force until:
(1) the department issues the renewal license; [or]
(2) the license is not renewed under Section 4004.055;
or
(3) the commissioner issues an order revoking the
license.
SECTION 19. Section 4102.065, Insurance Code, is amended to
read as follows:
Sec. 4102.065. RENEWAL OF EXPIRED LICENSE. (a) A person
whose license has been expired for 90 days or less may renew the
license by:
(1) submitting to the department:
(A) a completed renewal application in the form
prescribed by the commissioner; and
(B) evidence of compliance with the continuing
education requirements and eligibility for renewal under Section
4004.055; and
(2) paying to the department the required renewal
application fee and an additional fee that is equal to one-half of
the renewal application fee for the license.
(b) Except as provided by Section 4004.055, a [A] person
whose license has been expired for more than 90 days but less than
one year may not renew the license but is entitled to a new license
without taking the applicable examination if the person submits to
the department:
(1) a new application;
(2) evidence of compliance with the continuing
education requirements;
(3) the license application fee; and
(4) an additional fee equal to one-half of the license
application fee.
(c) A person whose license has been expired for one year or
more may not renew the license. The person may obtain a new license
by:
(1) submitting to reexamination, if examination is
required for original issuance of the license;
(2) [, and by] complying with the requirements and
procedures for obtaining an original license; and
(3) if applicable, submitting evidence of completion
of any outstanding continuing education requirement and payment of
any associated fine related to the expired license.
(d) The department may renew without reexamination an
expired license of a person who was licensed in this state, moved to
another state, and is currently licensed and has been in continual
practice in the other state up to and including the date of the
application. The person must pay to the department a fee that is
equal to the license application fee.
SECTION 20. Section 4102.109(a), Insurance Code, is amended
to read as follows:
(a) Each license holder must [annually] complete at least 24
[15] hours of continuing education during the license period
[courses]. The commissioner by rule shall prescribe the
requirements for continuing education courses under this section.
SECTION 21. (a) Sections 4001.006, 4003.001, 4003.008,
4101.057, 4101.061, 4102.062, 4102.064, and 4102.065, Insurance
Code, as amended by this Act, apply only to a license issued or
renewed on or after January 1, 2016. A license issued or renewed
before January 1, 2016, is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
(b) On January 1, 2016, each license held on that date under
Chapter 981, Insurance Code, and Subtitles A, B, and C, Title 13,
Insurance Code, expires as follows:
(1) each license issued to a person that is not an
individual expires on the expiration date of the license with the
longest remaining term held by that person on January 1, 2016;
(2) each license issued to an individual expires, or
may be extended to expire, on the individual's next birthday after
the expiration date of the license with the longest remaining term
held by that person on January 1, 2016; and
(3) after a license expires as described by
Subdivision (1) or (2) of this subsection, the license renews and
expires as provided by Section 4003.001, Insurance Code, as amended
by this Act.
(c) To the extent that the term of an existing license is
extended under this section, the Texas Department of Insurance may
not charge an additional fee or require a renewal application
before the renewal date established under this section.
(d) Except as provided by Subsection (e) of this section,
the change in law made by the amendments listed in Subsection (a) of
this section and the provisions of this section do not change the
continuing education requirements for a license issued or renewed
on or after January 1, 2016. Except as otherwise provided by
provisions of this Act other than this section and the amendments
listed in Subsection (a) of this section, the continuing education
requirements for a license issued or renewed before January 1,
2016, are governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
(e) A licensee may not be required to complete additional
continuing education hours for a license during any period the
license was extended under this section beyond its original
expiration date.
SECTION 22. Sections 4004.053 and 4102.109, Insurance Code,
as amended by this Act, apply only to continuing education
requirements for a license issued or renewed on or after the
effective date of this Act. Continuing education requirements for
a license issued or renewed before the effective date of this Act
are governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 23. Section 4004.055, Insurance Code, as added by
this Act, and Sections 4004.051, 4005.105, and 4005.109, Insurance
Code, as amended by this Act, apply only to completion of continuing
education requirements for a license issued or renewed on or after
November 1, 2015. Completion of continuing education requirements
for a license issued or renewed before November 1, 2015, is governed
by the law as it existed immediately before the effective date of
this Act, and that law is continued in effect for that purpose.
SECTION 24. Section 4056.059, Insurance Code, as added by
this Act, applies only to a nonresident agent who relocates to this
state on or after the effective date of this Act. An agent who
relocates to this state 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 25. This Act takes effect September 1, 2015.