• Increase Text Icon
  • Decrease Text Icon
  • Email Icon
  • Print this page
You are here: Home . rules . 2002 . 1217-059
Archived File – for Reference Use.
Links and contact information may be outdated.

Subchapter G. Licensing of Insurance Adjusters

28 TAC §19.602

Subchapter K. Continuing Education and Adjuster Prelicensing Education Programs

28 TAC §§19.1001-19.1019

The Commissioner of Insurance adopts amendments to §§19.602, 19.1001 - 19.1006 and new §§19.1007 - 19.1019 concerning the licensing of adjusters, the continuing education program for agents, adjusters, and full-time home office salaried employees, and adjuster prelicensing education program requirements. Sections 19.1004 and 19.1017 is adopted with changes to the proposed text as published in the September 13, 2002 issue of the Texas Register (27 TexReg 8704). Section 19.602 and §§19.1001 - 19.1003, 19.1005 - 19.1016 and §§19.1018 and 19.1019 are adopted without changes to the proposed text and will not be republished.

The amended §19.602 is necessary to maintain effective regulation of adjusters by ensuring that adjuster license applicants have demonstrated within a reasonable time period the specific knowledge required for licensure. The amended §§19.1001 - 19.1006 and new §§19.1007 - 19.1019 are necessary to maintain and expand the quality,variety, and accessibility of continuing education and adjuster prelicensing education programs.

Section 19.602 (b)(3) and (f) set forth the requirement that adjusters must be licensed within 12 months of successfully completing a department administered examination or certified prelicensing education course and examination. Section 19.602 (b)(4) and (c) - (f) clarify that Insurance Code Article 21.01-2 §1A (c) - (e), regarding renewal of licenses as authorized by Insurance Code Article 21.07-4 §16, apply to adjusters. These adopted sections will not affect emergency or temporary adjusters or adjuster applicants licensed in other states.

Amended §§19.1001 - 19.1006 and new §§19.1007 - 19.1019 generally reorganize, restate, revise, and clarify existing requirements; add requirements for classroom equivalent and adjuster prelicensing courses; set course and course provider fees; and set automatic fines. Section 19.1001 establishes the effective date of the adopted amendments and new sections. Section 19.1002 revises and deletes some definitions, and adds new definitions. Section 19.1003 revises and clarifies the number of continuing education hours each licensee must complete and sets forth the number and type of hours required for an adjuster prelicensing course. Section 19.1004 clarifies and sets forth the available continuing education exemptions and extensions. Section 19.1005 revises and clarifies the course provider application and registration process, establishes a single course provider designation for both continuing education and adjuster prelicensing education courses, and sets forth the requirements for instructors and speakers. Section 19.1006 revises and clarifies continuing education and adjuster prelicensing course criteria.

New §§19.1007 - 19.1015 substantially restate and reorganize existing §19.1006 (d) - (k) and §§19.1007 - 19.1013, which have been repealed elsewhere in this issue of the Texas Register.

Section 19.1007 clarifies course certification application requirements, course expirations and resubmissions. Section 19.1008 sets forth requirements for advertising courses, recording and modifying existing courses, and assigning courses. Section 19.1009 sets forth the requirements for classroom, classroom equivalent, self study, one-time-event, qualifying, and adjuster prelicensing education courses. Section 19.1010 sets forth the method of determining hours of course credit for classroom, classroom equivalent, self study, and qualifying courses. Section 19.1011 clarifies and sets forth the minimum standards for the successful completion of certified continuing education classroom, classroom equivalent, self study, and qualifying courses, but allows the course provider to implement increased standards at the course provider's discretion. Section 19.1012 restates existing language on obtaining department forms, and sets the fees for the registration of course providers and continuing education courses.

Section 19.1013 restates and clarifies existing licensee record keeping requirements. Section 19.1014 restates and clarifies existing course provider record maintenance requirements. Section 19.1015 restates and clarifies disciplinary action available to the department in the case of non-compliance by a licensee or course provider. Section 19.1016 establishes a series of automatic fines as authorized under Insurance Code Article 21.01-2 §5A.

Section 19.1017 establishes adjuster prelicensing education course content and examination requirements and is adopted with a grammatical change to §19.1017(f). Section 19.1018 establishes the areas that must be tested in an adjuster prelicensing education course final examination.

Section 19.1019 clarifies how full-time home office salaried employees and the insurers that employ them shall meet continuing education requirements that were amended by Senate Bill 414, and replaces existing §19.3006, which has been repealed elsewhere in this issue of the Texas Register.

Summary of Comments and Agency Response.

General and Section 19.1005(e). A commentor suggests that insurance companies be granted an exemption from these rules when providing continuing education programs for their own personnel since insurance companies have a vested interest in having well trained personnel. Another commentor requests that insurance companies acting as providers be granted an extended registration period.

Response: The department declines to grant such an exemption or extended registration period. Since the legislature first directed the department to establish a continuing education program for agents and adjusters, the department has included insurance companies within the scope of regulated providers. These rules were in effect when the legislature adopted changes to the continuing education system in Senate Bill 414, 77th Legislature, 2001. The legislature did not direct the department to treat insurance companies differently from other providers. Further, the department is not aware of any state in which insurance companies are granted such an exemption or extended registration period.

§19.602(b). A commentor requests that in making these amendments the department also create an examination exemption for members of the Society of Professional Adjusters (SPRA).

Response: The department declines to make this change. The purpose and scope of these amendments is to clarify existing examination and exemption requirements, particularly with regard to recent statutory changes and does not include expansion of existing examination exemptions.

§19.1002(21).A commentor requests that the department state in the rule that SPRA sponsored courses are qualifying courses. Another commentor is in favor of recognizing courses approved by the State Bar of Texas as qualifying courses but is less in favor of allowing courses approved by other state bar associations due to a concern that the department will have difficulty in determining the relevancy of the out-of-state courses.

Response: The department disagrees that a specific recognition is necessary or appropriate. SPRA courses may be qualifying courses if they meet the standards set forth in §19.1002(21). The department disagrees with the commentor's concern regarding out-of-state courses. This addition is based on the legislature's guidance in Article 21.01-2 §3(b). That guidance was not limited to courses accepted by in-state associations. The department does not believe that monitoring the content of such courses will be a greater problem than determining the content of State Bar of Texas accepted courses or other types of qualifying courses that have been accepted in the past. Further, the department believes that non-resident licensees subject to these rules may need such sources to earn classroom course credits. The department is particularly concerned about adjusters who may reside in a non-licensing state.

§§19.1002(21) and 19.1013. A commentor is concerned with how licensees will obtain and present evidence of course completion and whether these types of courses are open to the general public.

Response: The department appreciates the commentor's concern and notes that any licensee completing a qualifying course will have an additional duty to maintain and demonstrate both that the course met the requirements of a qualifying course and that the licensee completed the course. In general, the department will continue to determine if a course meets the definition of a qualifying course, as it has in the past with unregistered courses, by requiring the licensee to submit documentation of the course content and documentation that the licensee has completed the course. Types of documentation are described in §19.1013 of the rule. Generally, courses approved by the State Bar of Texas are offered either by the State Bar or other providers accepted by the State Bar and, in many cases, are open to the public in a similar fashion to courses offered by insurance continuing education providers. For licensees completing its courses, the State Bar of Texas can provide a course completion receipt as it does for out-of-state attorneys. Other bar associations, as well as private providers, offering courses to the public should be able to offer similar course completion documentation. Licensees should confirm this before taking the course.

§19.1003(d). A commentor notes that licensees may not complete hours in a subsequent licensing period to correct a shortage of hours in a previous reporting period and requests clarification of how a licensee can come into compliance for a particular reporting period if a sufficient number of credit hours has not been completed.

Response: The department agrees that the rules specify that a licensee may not complete hours in a subsequent licensing period to correct a shortage of hours in a previous reporting period. The penalty for not completing the required number of hours in a reporting period is an automatic fine as set forth in §19.1016(b)(1). The statute is very specific regarding the number of credit hours required per reporting period and states that failure to obtain the required number of credit hours is a violation that is subject to an automatic fine.

§19.1005(A)(6). A commentor asks for clarification of the phrase "all names used by the provider to provide insurance related education courses in this state," and specifically if it includes listing all persons that are instructors, course preparers, or the name of the entity presenting the class.

Response: The department does not believe that it is necessary to further clarify this subsection in the rule. The phrase refers only to names used by the provider to provide courses and does not require or imply a listing of instructors or course preparers. The term "provider" is defined in §19.1002.

§19.1005(c)(2). Commentor requests that the department adds language clarifying that a person exempt under §19.1004 qualifies as an instructor "subject to continuing education."

Response: The department disagrees that further clarification is necessary. For the purposes of this subsection, the department will continue to consider persons who have an exemption listed in this subchapter as being subject to continuing education for the purpose of this subsection.

§§19.1005(e) A commentor requests that the department implement an automated message for sending provider or course renewal notices.

Response: The department appreciates the comment and will take it under advisement for the future. Currently the department does not have the resources to provide such notices nor are such notices required by statute. The rule does not prohibit such notices, so if in the future resources do become available the department can implement a notice system.

§19.1007(a)(3). A commentor stated that it will sometimes be difficult to obtain detailed course content outlines, especially from "speakers" at one-time-event continuing education courses, far enough in advance to submit them to the department for approval. The commentor suggests course providers not be required to submit course outlines together with applications for course approval, but rather to maintain outlines of presentations as has been done in the past.

Response: The department appreciates the commentor's concern; however, the department declines to change this requirement. As in the past, the department will handle specific situations by working with providers on a case-by-case basis.

§19.1014(c). A commentor suggests that the department publicize the form requirements of electronic submissions in advance of implementing an electronic course submission system to assist providers in compliance with that system.

Response:The department appreciates the comment and will take it under advisement if such a system is to be developed and implemented.

§19.1015(a)(1) and (b)(1). A commentor asserts that Texas Insurance Code Chapter 82, Article 21.01-2 Section 3A indicates that TDI can discipline a license holder who has willfully violated any insurance laws. Further, Texas Insurance Code 21.07-4 Section 17 indicates that the Texas Department of Insurance may specify rules for discipline that are comparable to grounds for discipline of other license holders. The commentor requests that the department change these paragraphs to add a willful requirement.

Response: The department disagrees and declines to make a change to the section since it correctly states the standard under Chapter 82 for which a licensee can be disciplined for violating a provision of the Insurance Code and the rules of the department. As provided in §82.051, the "commissioner may cancel or revoke an authorization if the holder of the authorization is found to be in violation of, or failed to comply with, this code or a rule of the commissioner." This section does not have a willful requirement. Section 82.052 states other available sanctions for violations under §82.051. Section 82.001 defines authorization in a manner that would include agents, adjusters and providers.

Article 21.01-2 §3A(a) provides that the provisions of Article 21.02-2 §3A are in addition to any remedy provided under Chapter 82. The code does not state that the violations and acts listed are in substitution for those listed in Chapter 82. This rule does not change the requirements for violations of these statutes or their associated penalties under the Insurance Code.

The department also disagrees with the commentor's assertion that the department, by rule, is creating a disciplinary structure for adjusters that is not comparable to that of other license holders. The legislature created both Chapter 82 and Article 21.01-2 §3A to apply to all license holders, including agents and adjusters. This is shown in the language of those statutes as well as the provisions of Articles 21.01 §3 and 21.07-4 §17, and §82.001. These statutes apply to adjusters without the necessity of a rule, but are stated here to assist licensees in identifying improper conduct and the disciplinary remedies available to the department. In this subchapter, adjusters are included within the term "licensees," as are agents, counselors, and other license holders subject to continuing education. The disciplinary effect of §19.1015(a) and this subchapter is directed at all licensees. The department believes that this is comparable treatment.

§19.1015(a)4 and (b)(15).A commentor requests that in addition to referring to "unauthorized materials" in these paragraphs, specific reference to §§19.1011(d)(11) and 19.1017(e) should be included to clarify what are "unauthorized materials."

Response: The department disagrees that further clarification is necessary since the request is to reference provisions already contained within the subchapter. Further, the department is concerned that the addition of such language might confuse providers that require monitored final examinations or set higher course completion standards as authorized in §19.1011(d)(2).

For with changes: American Insurance Association, Hammerman & Gainer, and

State Farm Insurance Companies.

Against: None.

These sections are adopted under Insurance Code Articles 21.01; 21.01-1; 21.01-2; 21.07-1; 21.07-2; 21.07-4; 21.11; 21.14; 21.14-2; and §36.001. Insurance Code Article 21.01 §§3(1) and 4 make Insurance Code Chapter 21, Subchapter A, applicable to all agent and adjuster license types and authorizes the commissioner to adopt rules necessary to implement the subchapter. Article 21.01-1 §§1-3 establish examination standards and requirements and a continuing education requirement for license holders and authorize the commissioner to set by rule extensions of time to complete continuing education, exemptions from continuing education, and standards and fees for certification of courses and course providers. Article 21.01-2 establishes license expirations and provides for license renewals, prohibited activities, license revocation, agent discipline, automatic fines, and judicial review of department actions. Article 21.07-1 §§5, 5B, and 6 provide for continuing education requirements and exemptions for funeral prearrangement and life insurance not exceeding $15,000 agents. Article 21.07-2 §§9 and 10 apply continuing education requirements to life and health insurance counselors and authorize the commissioner to adopt rules. Article 21.07-4 §§7, 7A, 10, 12, 14, 16 and 24 establish licensing and continuing education requirements for adjusters and authorize the commissioner to adopt rules. Article 21.11 §§2 and 5 provide continuing education standards for nonresidents and authorize the commissioner to adopt rules. Article 21.14 §§7, 8 and 9 establish a continuing education requirement for full-time home office salaried employees, insurance service representatives, and county mutual agents. Article 21.14 - 2 §§2 and 5 concern the acceptance of continuing education hours certified under the guidelines of the Federal Crop Insurance Corporation and authorize the commissioner to adopt rules. Section 36.001 provides that the Commissioner o f Insurance may adopt rules to execute the duties and functions of the Texas Department of Insurance only as authorized by statute.

§19.602. Types of Adjuster´s Licenses.

(a) Any references to the Act in this subchapter are references to Insurance Code Article 21.07-4. The following types of adjuster's licenses are approved for issuance:

(1) all lines (issuance of "all lines" adjuster's license for those adjusters who qualify in paragraphs (2) and (3) of this subsection);

(2) property, casualty, and surety; and

(3) workers' compensation, employer's liability, USL&H (U.S. Longshoremen's and Harbor Workers' Compensation Insurance).

(b) Pursuant to Insurance Code Article 21.07-4, the following are exempted from the requirement of an adjuster's license examination or reexamination administered by the department or the department's authorized testing service:

(1) those persons holding CPCU designation;

(2) those persons who have received the Associate in Claims (AIC) designation;

(3) those persons who have a certificate of completion showing that within the past 12 months the applicant has completed a certified adjuster prelicensing education program and passed an examination in compliance with Insurance Code Article 21.07-4 §10(4) and §19.1006(b) of this title (relating to Course Criteria); and

(4) those persons who have an adjuster´s license that has been expired for a period of more than 90 days but less than one year.

(c) Each adjuster´s license expires on the second anniversary of the date it was issued unless suspended or revoked by the commissioner.

(d) Adjusters shall renew their licenses in the manner set forth in §19.801 of this title (relating to General Provisions Regarding Licensing Fees and License Renewal).

(e) Adjusters may only renew a license that has not expired or has not been expired for more than 90 days; otherwise, the adjuster must apply to the department for a new license.

(f) If an adjuster's license has been expired for one year or more, the adjuster applicant must submit to reexamination. The reexamination must be completed within the 12 months preceding the application unless the adjuster applicant can show that the applicant is exempt from the reexamination as set forth in subsection (b) of this section.

§19.1001. General Provisions.

(a) Purpose. The purpose of this subchapter is to:

(1) set forth procedures and requirements for certification of continuing education courses and licensee continuing education requirements as authorized under the Insurance Code; and

(2) set forth the procedures and requirements for certification and approval of adjuster prelicensing education courses and adjuster examinations as authorized under Insurance Code Article 21.07-4 §10.

(b) Severability. Where any terms or provisions of this subchapter are determined by a court of competent jurisdiction to be inconsistent with any statutes of this state or to be unconstitutional, the remaining terms and provisions of this subchapter shall remain in effect.

(c) Licensee continuing education compliance date. Licensees renewing a license prior to January 1, 2003 shall comply with the continuing education requirements set forth in §19.1003 of this title (relating to Licensee Requirements) that were in effect as of August 31, 2001.

(d) Provider compliance date. Currently registered providers shall bring their registrations into compliance with this subchapter on or before the later of the date that their current registration expires or one year from the effective date of this subchapter. Providers shall bring their currently certified course topics and criteria into compliance with this subchapter on or before the later of the date that the course´s current certification expires or one year from the effective date of this subchapter. All course instructors and new applicants for provider registration and course certification shall comply with this subchapter on the effective date of the relevant sections. To the extent that any provider or course does not otherwise have a compliance date under this subsection, those providers and courses must be in compliance with this subchapter on or before December 31, 2003. A provider may elect to comply with this subchapter before it is required to do so, including re-evaluating the number of contact hours awarded for a classroom or classroom equivalent course, or for ethics course designations, by submitting a written request to the department.

§19.1002. Definitions.

(a) Words and terms defined in Insurance Code Article 21.07 §1A shall have the same meaning when used in this subchapter.

(b) The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Adjuster -- An individual licensed under Insurance Code Article 21.07-4.

(2) Application level -- Demonstration of the ability to use learned materials in a new situation, usually involving the application of rules, policies, methods, computations, laws, theories, or any other relevant and available information.

(3) Assignee -- Any provider which is authorized as set forth in §19.1008(f) of this title (relating to Certified Course Advertising, Modification, and Assignment).

(4) Authorized provider representative -- The individual a provider designates as the contact individual responsible for all of the provider's communications and filings with the department.

(5) Business of insurance -- Has the same meaning as set forth in Insurance Code, §101.051.

(6) Classroom course -- A course complying with §19.1009(c) of this title (relating to Types of Courses).

(7) Classroom equivalent course -- A course complying with §19.1009(d) of this title.

(8) Certificate of completion -- A document complying with §19.1007(a)(7) of this title (relating to Course Certification Submission Applications, Course Expirations, and Resubmissions).

(9) Certified course -- A classroom, classroom equivalent, or self-study course offered by a registered provider that the department or its designee has determined meets the requirements of this subchapter.

(10) Department -- Texas Department of Insurance.

(11) Disinterested third party -- An individual who is:

(A) not related to a student by blood, adoption, or marriage as a parent, child, grandparent, sibling, niece, nephew, aunt, uncle, or first cousin; or

(B) not an employee or subordinate of the student.

(12) Ethics course -- A course that deals with usage and customs among members of the insurance profession, involving their moral and professional duties toward one another, toward clients, toward insureds, and toward insurers.

(13) Insurance course -- A course primarily focused on teaching subjects related to the business of insurance.

(14) Interactive inquiries -- An interactive electronic component that complies with §19.1009(d)(2) of this title.

(15) Knowledge level -- Recall of specific facts, patterns, methods, rules, dates, or other information that must be committed to memory.

(16) Licensee -- An adjuster or individual holding a license under the authority of Insurance Code Articles 21.07-1 §§2, 4 or 6 (general lines - life, accident, and health agent, limited lines agent, or life insurance not exceeding $15,000 agent); 21.07-2 (life and health insurance counselor); 21.07-3 (managing general agent); or 21.14 §§2, 6, 8, or 9 (general lines - property and casualty agent, limited lines agent, insurance service representative or county mutual agent).

(17) National designation certification -- A professional designation which is:

(A) nationally recognized in the insurance industry; and

(B) issued by an entity that maintains a not-for-profit status and has been in existence for at least five years.

(18) One-time-event -- A type of classroom course complying with §19.1009(f) of this title.

(19) Provider -- An individual or organization including a corporation, partnership, depository institution, insurance company, or entity chartered by the Farm Credit Administration as defined in Insurance Code Article 21.07 §2(v), registered with the department to offer continuing education courses for licensees and/or prelicensing instruction for adjusters.

(20) Provider registration -- The process of a provider seeking permission to offer continuing education courses for licensees and prelicensing education for adjusters.

(21) Qualifying course -- Insurance courses for which a licensee may receive continuing education credit and are:

(A) offered for credit by accredited colleges, universities, or law schools;

(B) part of a national designation certification program;

(C) approved for classroom, classroom equivalent, or participatory credit by the continuing education approval authority of a state bar association or state board of public accountancy; or

(D) certified or approved for continuing education credit under the guidelines of the Federal Crop Insurance Corporation.

(22) Reporting period -- The period from the issue date or last renewal date of the license to the expiration date of the license, generally a two-year period.

(23) Self study -- A course complying with §19.1009(e) of this title.

(24) Speaker -- An individual who shall be speaking from special knowledge regarding the business of insurance obtained through experience and position in professional or social organizations, industry, or government.

(25) Student -- A licensee or adjuster applicant enrolled in and attending a certified course for credit.

(26) TDI license number ­ An identification number the department assigns to the licensee and found on the license certificate.

(27) Visually monitored environment -- An environment permitting visual identification of students and visual confirmation of attendance, including observation by camera.

§19.1003. Licensee Requirements.

(a) Licensees shall complete 30 hours of continuing education within each reporting period, except that licensees holding only a license issued under Insurance Code Articles 21.07-1 §§4 and 6 (limited lines and life insurance not exceeding $15,000) and 21.14 §§6 and 9 (limited lines and county mutual agent) shall complete 10 hours of continuing education during each reporting period. Licensees shall complete at least two hours of the continuing education requirement in certified ethics and/or consumer protection courses. Licensees may satisfy the remainder of the continuing education requirement by completing certified courses applicable to any license type.

(b) Licensees holding more than one license issued under the Insurance Code shall not be required to complete more than 30 hours of continuing education courses, two hours of which must be in certified ethics or consumer protection courses, within each reporting period.

(c) Adjuster applicants seeking an examination exemption under Insurance Code Article 21.07-4 §10(4) shall complete both a certified adjuster prelicensing education course of not less than 40 hours and pass the course examination testing the applicant's knowledge and qualifications as set forth in this subchapter. Adjuster applicants shall complete at least 30 hours of the course requirement through classroom or classroom equivalent course work.

(d) Licensees shall not count any education course credit they receive before the date the permanent license is issued by the department as complying with applicable continuing education requirements. Licensees must complete all continuing education hours during the reporting period. A licensee may not carry forward excess hours completed in one reporting period to a subsequent reporting period and a licensee may not complete hours in any subsequent period to correct a shortage of hours in a previous reporting period.

(e) Licensees holding a license subject to continuing education which is prorated by the department to coincide with the renewal of another license and those licensees that are resident licensees of other states or jurisdictions but become residents of Texas between renewals of the Texas license shall complete continuing education on a prorated schedule. The total credit hours required shall be determined at the rate of one hour for each whole month between the issue or last renewal date of the license or the date of Texas residency to the next actual renewal date of the license up to the maximum number of hours required for the licensee during the reporting period. A licensee shall not be required to complete continuing education for a reporting period on a prorated basis if the dates between which the prorated schedule would begin and end are less than six complete months. Licensees completing prorated schedules must complete at least two of the required hours in certified ethics or consumer protection courses.

(f) Licensees must complete at least 50% of their required continuing education hours in certified classroom or classroom equivalent courses, regardless of any other license type held by the licensee.

§19.1004. Licensee Exemption from and Extension of Time for Continuing Education.

(a) Any exemption or extension granted to a licensee under subsections (b) ­ (f) of this section shall apply to all license types held by the licensee. Nothing within this subchapter shall be construed as preventing the department from auditing a licensee to confirm the continued existence of circumstances supporting the exemption or extension.

(b) Agents holding a Texas license issued under Insurance Code Articles 21.07-1, as Group I, legal reserve life insurance agents and general lines - life, accident and health insurance agents; 21.07-3, as managing general agents; and/or 21.14, as local recording agents, solicitors, general lines - property and casualty agents, and insurance service representatives, for at least 20 years or more as of December 31, 2002, are exempt from the requirements of this subchapter. Agents shall register and confirm that they qualify for this exemption by submitting a written request to the department indicating that they have met the longevity requirement. Agents must satisfy the continuing education requirements through the end of the 20th year of licensure. The number of credit hours for the final reporting period is calculated at the rate of one hour for each whole month between the last renewal date and the effective date of the exemption. Agents that have previously qualified for the longevity exemption authorized under the Insurance Code as in effect prior to September 1, 2001, shall remain qualified and do not have to reapply for this exemption.

(c) Licensees who on or after January 1, 2003, have been continuously licensed by the department for at least 20 years may apply for an exemption from the requirements of this subchapter. For purposes of this subsection "continuously licensed" means that the licensee has held a department-issued license for the entire period of time without any lapse in excess of 90 days in which the licensee was not licensed or failed to renew a license. Licensees shall apply for this exemption by submitting a written request to the department indicating that they have met the longevity requirement. Licensees must satisfy the continuing education requirements through the end of the 20th year of licensure. The number of credit hours for the final reporting period is calculated at the rate of one hour for each whole month between the last renewal date and the effective date of the exemption.

(d) Nonresident licensees who are in compliance with their resident state's continuing education requirements shall be exempt from this subchapter. Licensees shall qualify for this exemption based on the state of residence claimed in the licensee's initial application or by sending written notification to the department or its designee stating that the licensee is a resident of another state with a certificate of good standing, or by sending any other document acceptable to the department, showing that the licensee has a resident license in good standing in that state. A nonresident licensee that becomes a resident of Texas between renewals of the Texas license shall:

(1) be immediately subject to the continuing education requirements set forth in this subchapter;

(2) complete a prorated continuing education schedule as required in §19.1003(e) of this title (relating to Licensee Requirements); and

(3) not count hours completed prior to becoming a Texas resident towards completion of the prorated continuing education requirement.

(e) Licensees who meet the criteria of illness, medical disability, or circumstances beyond the control of the licensee may apply for an extension of time to complete their continuing education requirement or a waiver, in whole or in part, of the continuing education requirement. Business reasons do not constitute circumstances beyond the control of the licensee. The department shall establish the duration of the extension when it is granted. If the circumstances supporting the extension continue beyond the granted extension period, the licensee may reapply for an extension. The licensee must request the extension prior to the end of the reporting period for which it applies and must include at least the information set forth in paragraphs (1) - (6) of this subsection:

(1) Statement of the exact nature of the illness, medical disability or other extenuating circumstances beyond the control of the licensee that have prevented or will prevent the licensee from completing the required hours within the two year reporting period.

(2) Evidence in the form of medical reports from attending physician(s) and insurance claims regarding the illness or medical disability of the licensee or evidence through insurance claims and/or other documentation as determined regarding circumstances beyond the control of the licensee.

(3) Assessment of the condition of the licensee whether it is temporary, permanent or unknown.

(4) Statement as to whether the licensee will or will not be able to perform activities including any acts of an agent or adjuster.

(5) Estimated date when the licensee will be able to perform any activities including any acts of an agent or adjuster in accordance with the medical reports or other documents pertaining to circumstances beyond the control of the licensee.

(6) Any other information that may be requested by the department.

(f) Licensees called to active military service in a combat theater, as provided for in Insurance Code Article 1.10-1, may apply to the department for an exemption from or an extension of time for meeting the continuing education requirements or extending their license renewal. The licensee must request the exemption or extension prior to the end of the reporting period for which it applies and must include:

(1) a copy of the order to active duty status, service in a combat theater, or other positive documentation of military service that shall prevent the licensee from compliance;

(2) a clear request for either an extension or exemption, or both;

(3) the expected duration of the assignment;

(4) and any other information the licensee believes may assist the department or that the department requests on a case by case basis.

(g) Any individual who qualifies as specified in Insurance Code Article 21.07-1 §5B is exempt from the continuing education requirements in this subchapter.

§19.1005.Provider Registration, Instructor, and Speaker Criteria.

(a) A provider applicant seeking initial registration or renewal registration from the department as a continuing education and/or adjuster prelicensing education provider shall submit to the department or its designee, an application on forms provided by the department and all applicable fees as set forth in §19.1012 of this title (relating to Forms and Fees). The department may require the following items in order to approve or disapprove a provider's registration request:

(1) The name, physical address, and mailing address of the provider applicant;

(2) The name of the provider applicant's designated authorized provider representative;

(3) A description of the provider's student record system including a description of the methods for documenting attendance;

(4) The method used by the provider for evaluating instructors;

(5) If the provider applicant is a corporation, partnership, limited liability company, or other legal entity not otherwise licensed or regulated by the department, the provider applicant must furnish:

(A) the name of its state of incorporation, domicile, or residence; and

(B) if required to pay franchise taxes, a certificate of good standing from the Texas Comptroller of Public Accounts;

(6) All names used by the provider applicant to provide insurance related education courses in this state;

(7) A statement as to whether or not the provider applicant has had any certification or approval for a professional continuing education course or prelicensing education course revoked, suspended, or placed on probation, whether by agreement or as ordered in an administrative or judicial proceeding, by a court, financial or insurance regulator, or other agency of this state, another state, or the United States;

(8) A statement certifying that the provider shall comply with all provider and course requirements set forth in this subchapter; and

(9) Other information as specified by the department.

(b) Providers shall have a single registration and may, but are not required to, certify and offer both continuing education and adjuster prelicensing education courses.

(c) Providers shall certify that course instructors are experienced and qualified in the subject to be taught, and certify that the instructors meet at least one of the following instructor criteria:

(1) has been in the practice of teaching insurance courses for at least the last three years and has the knowledge and experience in the subject the instructor will teach;

(2) has been properly licensed as a licensee subject to continuing education under the Insurance Code or similar statutes of another state or jurisdiction for at least five years;

(3) is the holder of a national designation certification recognized by the department which relates directly to the subject the instructor shall teach; or

(4) has been engaged in a recognized profession that is pertinent to the subject areas to be taught, including, but not limited to: licensed or certified medical professionals, Certified Public Accountants, and members of a state bar.

(d) Providers shall maintain as a part of the providers´ records a written statement from each instructor certifying that the instructor is qualified as an instructor, the basis of qualification, and that the instructor shall comply with all course requirements as outlined in these sections.

(e) All provider registrations are valid for two years at which time the registration shall expire. Providers shall timely renew their registrations whether or not a notice of expiration is sent by the department. The provider may submit a registration renewal application up to 90 days in advance of the expiration date. Providers that are already registered upon the effective date of these sections shall provide the required registration information at the request of the department.

(f) Providers may use speakers only in conjunction with one-time-event continuing education courses. Providers may not use speakers in conjunction with other continuing education or adjuster prelicensing courses unless the speaker qualifies as an instructor.

(g) Providers shall maintain all information described or required under this section for a period of not less than four years.

§19.1006.Course Criteria.

(a) To be certified as a continuing education course, the course content shall be designed to enhance the knowledge, understanding, and/or professional competence of the student as to one or more of the following topics: insurance principles and coverages; applicable laws, and rules; recent and prospective changes in coverages; technical policy provisions and underwriting guidelines and standards; law and the duties and responsibilities of the licensee; consumer protection; or insurance ethics. The course content may also include instruction on management of the licensee's insurance agency. Ethics and consumer protection course credit shall apply equally to all license types and the content for ethics and consumer protection topics shall be designed to relate to the business of insurance and provide instruction consistent with one or more of the following topics:

(1) Article 21.21, Insurance Code;

(2) The Unauthorized Insurers False Advertising Process Act (Article 21.21-1, Insurance Code);

(3) The Unfair Claim Settlement Practices Act (Article 21.21-2, Insurance Code);

(4) The Deceptive Trade Practices-Consumer Protection Act (Subchapter E, Chapter 17, Business and Commerce Code);

(5) Analogous laws as specified by the department, including:

(A) Repair of Motor Vehicles: Disclosure of Consumer Information (Article 5.07-1, Insurance Code);

(B) Prompt Payment of Claims (Article 21.55, Insurance Code);

(C) Notice of Settlement of Liability Claims (Article 21.56, Insurance Code);

(D) Action for Amount of Deductible (Article 21.79G, Insurance Code);

(E) §5.501 of this title (relating to Notice Requirements to Claimants Regarding Motor Vehicle Repairs); and

(F) Insurance Fraud (Penal Code Chapter 35);

(6) Corporate ethics;

(7) Ethical challenges of licensees;

(8) Ethical behavior of an insurance company;

(9) Ethical behavior of an agent or adjuster;

(10) Duties of the licensee to company, client, and customer;

(11) Duties of insurer/HMO to agents/clients;

(12) Fiduciary responsibility;

(13) Unfair marketing practices;

(14) Difference between ethics and laws;

(15) Confidentiality, privacy, and ethics;

(16) Ethical analysis of the licensee's job;

(17) Philosophical approaches to ethics; or

(18) Business ethics.

(b) To be certified as an adjuster prelicensing education course or program, the course content must enhance the student's knowledge, understanding, and/or professional competence regarding the subjects set forth in §§19.1017 and 19.1018 of this title (relating to Adjuster Prelicensing Education Course Content and Examination Requirements and Adjuster Prelicensing Examination Topics). Unless specifically stated otherwise, this subchapter shall apply equally to courses certified for continuing education and adjuster prelicensing purposes.

(c) The following course content shall not be considered applicable to a licensee´s continuing education requirements:

(1) Meetings held in conjunction with the regular business of the licensee or courses or training relating to the marketing and business practices of a specific company;

(2) Course content teaching general accounting, speed reading, other general business skills, computer use, or computer software application use;

(3) Course content teaching motivation, goal-setting, time management, communication, sales, or marketing skills;

(4) Course content providing for prelicensing training qualifying examination preparation;

(5) Course content that does not meet the requirement of subsection (a) of this section; and

(6) Course content that is substantially:

(A) a glossary, dictionary, or index of insurance terms without independent distinction as to the application of these terms to the business of insurance through case studies or analysis based on actual or hypothetical factual situations that apply to the business of insurance; or

(B) a recitation of statutes, rules, legal principles, or theories without independent distinction as to the application of these issues to the business of insurance through case studies or analysis based on actual or hypothetical factual situations that apply to the business of insurance.

(d) A single continuing education course may include both ethics and consumer protection credit topics with other topics meeting the requirements of subsection (a) of this section.

§19.1007. Course Certification Submission Applications, Course Expirations, and Resubmissions.

(a) The provider shall submit the course certification application to the department or its designee and include the following information:

(1) A certification by the provider that the course meets the minimum requirements as defined in this subchapter;

(2) A statement identifying the knowledge, skills, or abilities the licensee is expected to obtain through completion of the course;

(3) A detailed course content outline showing the approximate times for major topics;

(4) For one-time-event continuing education courses, the provider's certification that all speakers, if any, are qualified under this subchapter;

(5) The method of evaluation by which the provider measures how effectively the course meets its objectives and provides for student input;

(6) The total number of course hours requested for approval, including:

(A) the method the applicant is using to determine the number of course hours;

(B) the number of hours included in the total number of course hours requested for approval that are:

(i) sales and marketing topics; and

(ii) ethics and consumer protection topics; and

(C) for applicants determining classroom equivalent or self study course hours by using the average of approval times in other states, a list of all course approval times and states in which the course is approved.

(7) A sample of the certificate of completion which shall be used when licensees or adjuster applicants successfully complete the certified course for approval by the department or its designee. The certificate of completion must contain, at a minimum, the following information:

(A) a statement that the course is for continuing education credit or adjuster prelicensing training;

(B) provider name and number;

(C) assignee's name and number (if applicable);

(D) course name, and if applicable, TDI course number(s);

(E) total number of credit hours and the number of included ethics and consumer protection topics;

(F) date of course completion;

(G) for continuing education courses, TDI license number and name of student completing the course; and

(H) for adjuster prelicensing training, the name of the student completing the course;

(8) A statement that the course is intended for:

(A) continuing education classroom, classroom equivalent, or self study credit and whether the course is primarily intended to be open to all licensees or shall have a restricted enrollment; or

(B) adjuster prelicensing education and whether the course is primarily intended to be open to all adjuster applicants or shall have a restricted enrollment;

(9) A copy of the provider's refund policy; and

(10) Any other information requested by the department.

(b) Failure to submit a completed application and all of the requested items shall result in rejection of the application.

(c) The provider's information supporting the certification application shall be:

(1) maintained by the provider for four years;

(2) subject to review and audit by the department or its designee; and

(3) provided to the department or its designee upon request.

(d) All course certifications are valid for two years at which time the course certification shall expire. The provider shall review and update each course every two years to remain in compliance with this subchapter prior to resubmission for certification. If more than 25% of the course is changed, or if any change shall affect the course content breakdown as previously certified by the department, the department shall consider the course revised and the provider must submit the course to the department for certification as a new course.

(e) If a course is not certified by the department, the provider may request re-evaluation, supplying specifics on how each portion of the course meets the minimum requirements for certification.

§19.1008. Certified Course Advertising, Modification, and Assignment.

(a) The provider may provide courses open to all licensees or restrict enrollment to licensees of its choice. Restricted enrollment courses shall not be included on lists of courses available to the public. In addition to public offerings, a provider may offer the open registration courses to restricted audiences.

(b) Providers may advertise their courses subject to the following guidelines:

(1) Providers may not advertise that their course has been certified by the department until they have received written confirmation from the department or its designee of the certification of their course, except that providers may advertise submitted courses as "Pending certification by the Texas Department of Insurance."

(2) Advertisements that include references to course certification by the department must also include the provider's name and TDI provider number.

(3) Advertisements may not be misleading as to the course content or requirements for successful completion, and must clearly state:

(A) whether the provider is offering the course for classroom, classroom equivalent, or self study credit;

(B) any equipment or software that is required to take the course; and

(C) the requirements for successful completion of the course, including whether the course shall require a monitored final examination.

(c) Providers shall not allow the presentation of advertising of any type in any manner during course instruction or examination periods. Use of company logos and references to specific company products during a course shall not be considered advertising if they are the subject of the course or are actually affixed to items being used, are incidental to the presentation, and do not interfere with or distract from the instruction.

(d) A provider may make a written request for classroom credit certification of a recording of the provider's certified classroom or one-time-event course. The certification shall be for the same number of credit hours. The recorded version must present the program in its entirety and may be edited only to remove gaps between presentations. This shall not be considered as a new course application for the purpose of fees. A provider making a presentation of a recorded certified classroom or one-time-event course must maintain a record of the name, qualifications, and certification of all instructors that present the recorded course.

(e) Providers modifying certified courses or one-time-events as to the number of credit hours or changing the course to qualify as a classroom equivalent or self study course, must submit the modified course for certification.

(f) The department shall not grant credit for any assigned courses except as provided under this subsection.

(1) Both the assignee and assignor must be authorized providers.

(2) The course may not be modified:

(A) by changing more than 25% of the certified course content;

(B) to change the number of certified course credit hours;

(C) to change the type of course credit hours; or

(D) by using an examination other than that prepared by the originating assignor.

(3) The assignee must submit to the department or its designee an assignment form provided by the department designating the assignment of the course, bearing an original signature of the assignor's authorized provider representative, and detailing:

(A) the original course certification number;

(B) the actual calendar date the assignment is effective;

(C) the actual calendar date the assignment terminates; and

(D) any other information which may be requested by the department or its designee.

(4) The assignor shall deliver all information required for certification of a course as set forth in §19.1007(a) of this title (relating to Course Certification Submission Applications, Course Expirations, and Resubmissions) to the assignee. The assignee shall maintain all information required under §19.1007(a) of this title and shall submit to the department or its designee such information on request.

(5) Assignment of any course shall not affect the certification period of the course or work to extend the course certification termination date.

(6) Assigned courses shall be considered as courses of the assignee for purposes of this subchapter and the assignee shall comply with all parts of this subchapter in relation to the assigned course, except that assignees may not assign an assigned course.

(7) The department shall not act on behalf of, or at the request of, any party in any dispute over an assignment.

(8) The department shall consider an assignment terminated only upon the following events:

(A) the date the assignment terminates as specified in the assignment application;

(B) the written and signed request of both the assignor and assignee, which may be granted or given to an assignor by the assignee in advance or as a condition of assignment;

(C) termination of assignee's registration as a provider;

(D) expiration of the course certification; or

(E) the order of a court of competent jurisdiction finding that the assignee is not authorized to present the course or that the assignment agreement is terminated.

(9) Assignees may not offer an assigned course after the course's certification termination date unless the originating assignor re-certifies the course.

§19.1009. Types of Courses.

(a) Continuing education courses may be qualifying courses and certified classroom, classroom equivalent, and self study courses offered by registered providers.

(b) Providers shall offer adjuster prelicensing courses only as a complete course of study for the particular adjuster´s license type designation that meets the requirements of §19.1003(c) of this title (relating to Licensee Requirements) and §19.1017 of this title (relating to Adjuster Prelicensing Education Course Content and Examination Requirements). The course of study may consist of classroom, classroom equivalent, and self study instruction. Providers may offer a variety of courses for each adjuster´s license designation.

(c) Classroom courses may include lectures, seminars, audio, video, computer-based instruction, and teleconferences that meet the following requirements:

(1) A disinterested third party attendant, an instructor, or a disinterested third party using visual observation technology must visually monitor attendance either inside or at all exits to the course presentation area at all times during the course presentation.

(2) At least three students and an instructor must be involved in each presentation of the course; however, in circumstances involving remote presentations, all students and the instructor do not need to be in the same location. In the case of presenting recorded or text materials, the instructor making the live course presentation does not have to be the same instructor included on the recorded presentation or who prepared the text materials.

(3) Question and answer and discussion periods must be provided by:

(A) an instructor making a live presentation of the course to licensees in the same room or via real-time live audio or audio-visual connection which shall allow for immediate student inquiries and responses with the presenting instructor; or

(B) an instructor who is present for the entire remote, recorded, or computer-based course presentation to students in the same room which shall allow for immediate inquiries and responses of students to the instructor.

(4) The course pace is set by the instructor and does not allow for independent completion of the course by students.

(d) Classroom equivalent courses may be internet, CD-ROM, DVD, or other computer-based presentations that:

(1) May not have more than one student at any one presentation of the course.

(2) Must have an interactive electronic component that:

(A) provides for at least four interactive multiple choice inquiry periods during each hour of the course, one of which shall be at the end of the course. Inquiry periods shall occur at regular and relatively evenly-spaced intervals between each period. Inquiry periods shall cover material presented in that section of the course;

(B) requires answering 70% of the inquiries for each period correctly to demonstrate mastery of the current section, including the final section, before the student is allowed by the program to proceed to the next section or complete the course;

(C) identifies all incorrect responses and informs the student of the correct response with an explanation of the correct answer;

(D) generates a different set of inquiries for the section, which may be repeated as necessary on a random or rotating basis if the student does not achieve the 70% correct response rate necessary to advance to the next section;

(E) is capable of generating at least two separate sets of inquiries for each inquiry period;

(F) provides for a method to directly transmit the final course completion results to the provider or a printed course completion receipt to be sent to the provider for issuance of a completion certificate; and

(G) has a means to reasonably authenticate the student's identity on a periodic hourly basis, including upon entering, during, and exiting the course.

(3) A comprehensive final examination is not required for classroom equivalent courses.

(e) Self study courses may include textbook, audio, video, computer-based instruction, or any combination of these in an independent study setting designed in such a manner as to insure that the course cannot be completed by the typical enrollee in less time than the period for which the course is certified to the department.

(f) One-time-event courses shall:

(1) meet the requirements of a classroom course, except that the course may be offered only in a lecture or seminar format at particular events such as conventions and organizational meetings; and

(2) be designed to be offered as a single live presentation, except that providers may offer the course as a live presentation an additional three times per year within this state.

(g) One-time-event courses may be presented by speakers or instructors.

(h) Qualifying courses shall be categorized as classroom, classroom equivalent, or self study based upon the teaching format in which the course is offered.

§19.1010. Hours of Credit.

(a) Credit hours for courses are determined by the methods set forth in paragraphs (1) - (7) of this subsection:

(1) The department shall award credit for certified classroom courses at the rate of one hour for every fifty minutes of actual instruction contact time. All classroom courses must be at least one hour of credit in length. The department shall award credit for additional partial hours of instruction contact time in half-hour increments with all periods of less than 25 minutes being awarded no additional credit and periods of less than 50 minutes being awarded one half-hour of additional credit. Instruction contact time is considered the amount of time devoted to the actual course instruction and does not include breaks, lunch, dinner, introductions of speakers, explanatory or preparatory instructions, or evaluation of the course. The department shall not certify more than 30 credit hours for any one classroom course.

(2) The department shall award credit for certified classroom equivalent and self study courses as set forth in subparagraphs (A) - (D) of this paragraph:

(A) The provider shall determine the number of course hours by using either of the methods set forth in clauses (i) or (ii) of this subparagraph.

(i) The provider shall determine the number of course hours by calculating the average completion time of the individual course completion times of at least five licensees. If the provider uses this method to determine the number of credit hours, the provider must retain the names, current insurance license numbers, and completion times of all licensees that were used by the provider. A provider using this method may, at its discretion, issue certificates of completion in the number of hours certified by the department to the licensees involved in the process and who completed the entire course.

(ii) The provider shall determine the number of course hours by calculating the average number of hours of the credit hours assigned by all other states in which the course is certified or approved. A provider may not use this method to determine the number of credit hours unless the course is approved in at least three other states. Providers may not include any hours allowed by other states for sales and marketing topics in calculating the average.

(B) All classroom equivalent and self study courses must be at least one hour of credit, fifty minutes, in length. The department shall award additional partial credit hours in half-hour increments with all periods of less than 25 minutes being awarded no additional credit and periods of less than 50 minutes being awarded one half-hour of additional credit.

(C) Providers may not use the final examination and pre-tests for determining course hours or calculating an average.

(D) The department shall not certify more than 30 credit hours for any one classroom equivalent course or 15 credit hours for any one self study course.

(3) The department shall grant continuing education classroom credit to licensees successfully completing qualifying college, law school, and university insurance classroom courses, as determined by the college, law school, or university. The number of classroom hours of continuing education credit for college, law school, and university insurance courses is the number of classroom instruction contact hours not including examinations, which shall be no more than 30 credit hours per course.

(4) The department shall grant 15 self study credit hours to licensees successfully passing qualifying national designation certification program examinations. Should the licensee also participate in and successfully complete a certified or qualifying classroom or classroom equivalent course in preparation for the national designation certification program examination, the licensee must choose either the classroom presentation or the national designation certification program examination to count as credit towards the licensee´s continuing education requirement.

(5) Licensees who teach any portion of a certified continuing education classroom course may receive hour for hour classroom credit up to the maximum number of credit hours for the course. Licensees who teach courses shall also be awarded an equal number of self study hours as credit for course preparation.

(6) The department shall grant continuing education classroom credit to licensees successfully completing qualifying courses certified or approved for classroom, classroom equivalent, or participatory credit by the continuing education authority of a state bar association or state board of public accountancy on an hour for hour basis equal to the credit hours assigned to the course by the certifying state bar association or state board of public accountancy. The state bar association or state board of public accountancy shall determine what constitutes successful completion of the course. The department shall not grant licensees self study credit for any course accepted by a state bar association or state board of public accountancy unless the self study course is offered through a registered provider in accordance with this subchapter.

(7) The department shall grant licensees continuing education credit for successfully completing courses certified or approved by the Federal Farm Credit Insurance Corporation on an hour for hour basis as assigned by the Farm Credit Insurance Corporation. The Farm Credit Insurance Corporation shall determine what constitutes successful completion of the course.

(b) A provider shall not issue certificates of completion to a licensee for partial credit of any course, except to an instructor teaching a portion of the course and who does not attend the full course.

(c) A licensee may not receive credit for teaching or completing the same continuing education course more than once within the same reporting period for compliance with the continuing education requirement.

(d) Providers may advertise and link courses as parts of a whole curriculum, but providers may not require a licensee to purchase more than one continuing education course to receive the credit hours approved for a single course.

§19.1011. Requirements for Successful Completion of Continuing Education Courses.

(a) Providers shall use, at a minimum, actual attendance rosters to certify completion of a certified classroom or one-time-event continuing education course. The department requires each student to attend at least 90% of the course. Providers shall establish a means to ensure that each student attended at least 90% of the course. Attendance records must include, at a minimum, sign-in and sign-out sheets, and the legible names, addresses, and TDI license number of each student in attendance. Providers may establish assessment measurements or any other completion requirements, in addition to attendance, for successful completion of a classroom continuing education course, but those requirements must be fully disclosed in the registration materials before the student purchases the course. Providers shall determine successful completion of these additional requirements.

(b) Providers shall use the periodic interactive inquiries to determine completion of certified classroom equivalent continuing education courses. A student must complete all inquiry sections with a minimum score of at least 70% for each section.

(c) Providers shall use a written, online, or computer-based final examination as the means of completion for all certified self study continuing education courses. The department does not require providers to monitor continuing education self study examinations. Course records for each examination attempt must include, at a minimum, the date the exam was taken, the final examination score, the examination version used, the legible name, address, and the TDI license number of each student.

(d) Self study examinations and classroom equivalent interactive inquiries shall meet the criteria set forth in paragraphs (1) - (12) of this subsection:

(1) The final examination or interactive inquiries must reasonably evaluate the student´s understanding of the course content. At least 70% of the examination questions or interactive inquiries must be based at the application level. The remainder of the questions may be based at the knowledge level;

(2) The specific final examination questions and interactive inquiries may not be made available to the student until the test is administered. Providers shall effect security measures to maintain the integrity of the examination;

(3) Providers shall maintain a record of each student´s final examination in the student´s record for four years;

(4) An authorized staff member or computer program shall grade self study final examinations. The interactive inquiry computer program shall grade interactive inquiries;

(5) Providers shall allow students to retake an examination at least one time if a score of 70% or higher is not achieved;

(6) Providers shall revise and update self study final examinations and interactive inquiries consistent with the course update/revision;

(7) Providers requiring a monitored final examination shall establish the rules under which the examination shall be given;

(8) The examination or interactive inquiry periods must consist of questions that do not give or indicate an answer or correct response and are of the following types:

(A) for self study courses:

(i) short essay questions requiring a response of five or more words;

(ii) fill in the blank questions requiring a response from memory and not from an indicated list of potential alternatives; or

(iii) multiple choice questions stemming from an inquiry with at least four appropriate potential responses and for which "all of the above" or "none of the above" is not an appropriate option;

(B) for interactive inquiry periods, multiple choice questions stemming from an inquiry with at least four appropriate potential responses and for which "all of the above" or "none of the above" is not an appropriate option;

(9) Each interactive inquiry period must consist of at least five questions;

(10) Each self study final examination shall consist of at least 10 questions for each hour of credit up to a maximum requirement of 50 questions per course. Providers may, at their discretion, have a greater number of final examination questions;

(11) During examinations and interactive inquiry periods, licensees may use course materials or personal notes, but may not use another person's notes, answers, or otherwise receive assistance in answering the questions from another person; and

(12) Licensees shall mail or deliver the completed self study examination directly to the provider.

(e) Providers shall issue certificates of completion to students who successfully complete a certified course. The provider must issue the certificate in a manner which shall ensure that the student receiving the certificate is the student who took the course, issue the certificate within 30 days of completing the course, and complete the certificate to reflect the date the student took the course/examination. Providers shall not allow a student, or any person or organization other than the provider giving the course, to prepare, print, or complete a certificate of completion.

§19.1012. Forms and Fees.

(a) Application forms for provider registration, course registration, sample certificates of completion, and the list of courses can be obtained from the Texas Department of Insurance, Education Coordinator, Licensing Division, 333 Guadalupe, MC-107-1A, P.O. Box 149104, Austin, Texas 78714-9104, the department´s designee, or when available, the department´s Web site at www.tdi.state.tx.us.

(b) The department establishes the following nonrefundable fees, which are necessary to administer the continuing education program and shall apply unless the department contracts with a third party to provide continuing education services:

(1) Provider registration:

(A) Original Registration - $50; and

(B) Renewal - $50.

(2) Continuing education course certification:

(A) Initial submission - $10 for each hour of course credit requested on the application; and

(B) Resubmission - $10 for each hour of course credit requested on the application.

(3) Course assignment - $50 per assignment.

§19.1013.Licensee Record Maintenance.

(a) Licensees an d adjuster applicants shall provide evidence of completion of courses to the department or its designee upon request. Each licensee shall maintain evidence of each course completed for a period of four years from the date of completion of the course for the purpose of investigation or audit. Licensees shall continue to maintain evidence of compliance during any period in which the licensee has been notified by the department or its designee that the records and/or the licensee´s compliance is the subject of an investigation or audit.

(b) Types of course completion evidence of compliance may include:

(1) a certificate of completion from a provider;

(2) a college transcript;

(3) a passing grade report from a national designation program;

(4) a certificate or report of completed continuing education hours issued by a professional licensing authority or a provider of a course certified by a professional licensing authority; or

(5) a letter from the program sponsor's representative stating the number of hours the licensee taught.

(c) The department shall consider the filing of a properly completed renewal application with the department in the form prescribed by the department as a licensee's certification that all required continuing education hours for the reporting period have been completed, absent a timely written request or notice for extension or exemption as required under Insurance Code Article 21.01-1 §3(c) and §19.1004 (b) ­ (g) of this title (relating to Licensee Exemption from and Extension of Time for Continuing Education). The department´s renewal of any license does not relieve a licensee from compliance with the continuing education requirements for any reporting period and failure to obtain required continuing education hours without obtaining a prior exemption or extension shall subject the licensee to administrative action.

(d) It is the licensee's responsibility to comply with this subchapter and maintain evidence that the licensee has completed the required continuing education hours. A licensee should immediately report to the department or its designee any discrepancy the licensee discovers between a course taken by a licensee and the credit hours certified to the licensee by the provider.

§19.1014. Provider Compliance Records.

(a) Providers shall maintain all continuing education records, adjuster prelicensing education records, attendance records, and course materials, including final examinations for at least four years, and the department or its designee may review these materials at any time.

(b) Providers shall notify the department or its designee when a course is discontinued or no longer active, and when there is a change to the provider's information of record.

(c) At the request of the department or its designee, providers shall furnish course completion information in an acceptable electronic format.

(d) The department or its designee may conduct audits of any certified course or provider without prior notice to the provider. Department staff or its representative or designee may attend courses without identifying themselves as employees or representatives of the department.

(e) If continuing education records are audited or reviewed and the validity or completeness of the records are questioned, the provider shall have 30 days from the date of notice to correct discrepancies or submit new documentation.

(f) Registration of providers is conditioned upon the provider's compliance with this subchapter.

§19.1015. Failure To Comply.

(a) The department or its designee may at any time investigate or audit a licensee´s continuing education records and/or compliance with this subchapter. The commissioner may, after notice and opportunity for hearing, discipline a licensee under Insurance Code, Chapter 82, Articles 21.01-2 §3A and 21.07-4 §17, and this subchapter, if the commissioner determines that the license holder:

(1) is in violation of, or has failed to comply with, the Insurance Code or this subchapter;

(2) has provided, submitted, or filed any document which in whole or in part is false or deceptive for the purpose of providing evidence of complying with the continuing education statutes and this subchapter, or in responding to any inquiry from the department concerning compliance;

(3) has falsified records or participated in any activity which allows circumvention of the requirements of the Insurance Code or this subchapter;

(4) has received or used unauthorized materials or assistance or provided to another student unauthorized materials or assistance before or during an examination or interactive inquiry period; or

(5) has failed to pay within 90 days an automatic fine assessed pursuant to Insurance Code Article 21.01-2 §5A(a) and §19.1016 of this title (relating to Automatic Fines) without properly requesting a hearing.

(b) The department or its designee may at any time investigate or audit a provider´s continuing education records and/or compliance with this subchapter. The commissioner may, after notice and an opportunity for hearing, discipline a provider and/or the provider´s authorized representative, officers, directors, managers or partners, under Insurance Code, Chapter 82 and Article 21.01-2 §3A, and this subchapter, if the commissioner determines that the provider and/or its authorized representative, officer, director, manager, or partner:

(1) is in violation of, or has failed to comply with the Insurance Code or this subchapter;

(2) has represented to the public that the provider is authorized to offer certified courses prior to the approval of the provider's registration;

(3) has advertised any course in a manner not in compliance with this subchapter;

(4) has used unqualified instructors or speakers to present certified courses;

(5) has provided, submitted, or filed with the department any document which in whole or in part is false or deceptive relating to the provider´s registration application, course assignment, course approval, instructor/speaker criteria, course content, or course credit, which allows circumvention of the requirements of the Insurance Code or this subchapter;

(6) has provided, submitted, or filed falsified records relating to a student's completion of continuing education, attendance, or final examination;

(7) has issued a certificate of completion for a course which does not comply with the registration requirements of this subchapter;

(8) has issued a certificate of completion or certificate of attendance when the student has not met the minimum completion requirements;

(9) has failed to pay within 90 days an automatic fine assessed pursuant to Insurance Code Article 21.01-2 §5A(a) and §19.1016 of this title without properly requesting a hearing;

(10) has failed to notify the department of changes to any course which are required to be reported;

(11) has failed to conduct the certified course, as specified in the course application;

(12) has failed to monitor course attendance where monitoring is required;

(13) has failed to insure an appropriately monitored examination where monitoring is required;

(14) has provided or allowed the use of unauthorized materials or assistance during an examination;

(15) has failed to provide timely refunds to students when required;

(16) has failed to timely file any form or other required information; or

(17) has failed to maintain course records for the required time period.

(c) If the commissioner proposes action against a licensee or provider, the affected licensee or provider is entitled to a hearing in accordance with Insurance Code, Chapter 40.

§19.1016. Automatic Fines.

(a) Pursuant to Insurance Code Article 21.01-2 §5A, the department establishes the following procedure for automatic fines:

(1) All automatic fines must be paid by check or money order made payable to the Texas Department of Insurance within 30 calendar days after the date of issuance of the automatic fine under this section unless the fined party disputes the assessment of the automatic fine and files a written request for contested case hearing under Chapter 2001 of the Government Code within the 30-day period.

(2) If the assessment of the fine is disputed, the department may, in its discretion, assert other matters and claims against the fined party at such hearing and also seek any disciplinary action available under Insurance Code, Chapter 82, Articles 21.01-2 §3A and 21.07-4 §17, and this subchapter including additional fine amounts in excess of the automatic fine amount.

(b) The department adopts the following automatic fines:

(1) Failure by a licensee to obtain the required number of continuing education hours -- $50 per credit hour not completed;

(2) Failing to issue a properly completed certificate of completion within 30 days following completion of course -- $100 per certificate;

(3) Providing a course to students prior to course certification -- $200 per student, per instance;

(4) Providing a course to students after course certification has expired -- $200 per student, per instance;

(5) Providing an assigned course to students prior to approval of the assignment -- $200 per student, per instance; and

(6) Providing an assigned course to students after the assignment has expired -- $200 per student, per instance.

§19.1017. Adjuster Prelicensing Education Course Content and Examination Requirements.

(a) Certified adjuster prelicensing education courses shall provide students with instruction sufficient to take and pass the course's final examination for the adjuster´s license designation as specified in this section. The course must meet the minimum 40-hour prelicensing education requirement to qualify for certification.

(b) All adjuster prelicensing examinations for compliance with Insurance Code Article 21.07-4 §10(4) may be written or computer-based and shall be designed to test applicants on the materials as specified in this section for the appropriate license designation and shall meet the criteria set forth in paragraphs (1) - (7) of this subsection:

(1) All lines adjuster. The student shall complete a 150-question examination in less than 180 minutes over the subjects and in the question percentages as set forth in §19.1018(a) of this title (relating to Adjuster Prelicensing Examination Topics).

(2) Property, casualty, and surety adjuster. The student shall complete a 150-question examination in less than 180 minutes over the subjects and in the question percentages as set forth in §19.1018(b) of this title.

(3) Workers' compensation adjuster. The student shall complete a 60-question examination in less than 90 minutes over the subjects and in the question percentages as set forth in §19.1018(c) of this title.

(4) At least 70% of the examination questions must be based on the application level or higher. The remainder of questions may be based at the knowledge level. Examination questions shall not be the same or substantially the same questions the student previously encountered in the course materials or review examinations and cannot be designed such that the correct answer is obvious by its content. The examination questions shall be multiple choice questions stemming from an inquiry with at least four appropriate potential responses and for which "all of the above" or "none of the above" is not an appropriate option.

(5) The specific examination questions may not be made available to the student until the test is administered. Security measures shall be in place to maintain the integrity of the examination and ensure that the enrolled student is the individual who took the examination.

(6) Providers must include and maintain the examination results in the student's record for four years. Providers and instructors shall not give any person answers to the examination questions at any time before, during, or after the course.

(7) An authorized staff member or a computer program shall grade the examinations.

(c) Students shall be allowed to retake a certified prelicensing examination course at least one time if a score of 70% or higher is not achieved without being required to retake the course. The retest shall consist of an alternate examination consisting of different questions from the original examination.

(d) Final examinations shall consist of at least three complete exams which are distributed alternatively to students and are revised or updated consistent with the course update/revision. The provider may distribute only one examination to any student at any one examination.

(e) A disinterested third party shall monitor the final examination in a visual environment. During the examination, students may not use course materials, personal notes, or any other written or electronic material or media that is not part of the examination, nor engage in communication of any kind with any other person except to receive instructions from the examination monitor. Upon completion of the examination, the person monitoring the examination must mail or deliver the completed examination directly to the provider.

(f) Providers shall issue certificates of completion to students who successfully pass the examination by correctly answering at least 70% of the examination questions. The provider must issue the certificate in a manner which shall ensure that the student receiving the certificate is the student who took the course, issue the certificate within 30 days of passing the examination, and complete the certificate to reflect the dates the student took the course and examination. Providers shall not allow a student, or any person or organization other than the provider giving the course, to prepare, print, or complete a certificate of completion.

§19.1018. Adjuster Prelicensing Examination Topics.

(a) All lines adjuster´s license designation examination topics:

(1) General property insurance product knowledge pertinent to adjusters:

(A) Standard fire policy - 3%;

(B) Auto liability (includes Texas PAP) - 3%;

(C) Personal lines coverage (includes ISO and TX forms HO-A, HO-B, and HO-C) - 10%;-

(D) Commercial lines coverage - 10%;

(E) Inland marine - 2%;

(F) Ocean marine - 2%;

(G) Additional coverages, exclusions, and extensions - 7%; and

(H) Bonds - 3%.

(2) Insurance terms and related concepts - 40%.

(3) Texas statutes and rules pertinent to property and casualty adjusting:

(A) Licensing requirements - 7%;

(B) Marketing practices - 7%;

(C) Adjuster practices, responsibilities, and duties - 3%; and

(D) Workers' compensation - 3%.

(b) Property, casualty, and surety adjuster´s content outline:

(1) General property insurance product knowledge pertinent to adjusters:

(A) Standard fire policy - 3%;

(B) Auto liability (include Texas PAP) - 3%;

(C) Personal lines coverage (includes ISO and TX forms HO-A, HO-B, and HO-C) - 10%;

(D) Commercial lines coverage - 10%;

(E) Inland marine - 2%;

(F) Ocean marine - 2%;

(G) Additional coverages, exclusions, and extensions - 7%; and

(H) Bonds - 3%.

(2) Insurance terms and related concepts - 40%.

(3) Texas statutes and rules pertinent to property and casualty adjusting:

(A) Licensing requirements - 6%;

(B) Marketing practices - 7%;

(C) Adjuster practices, responsibilities, and duties - 7%.

(c) Workers' compensation adjuster´s license designation examination topics:

(1) Insurance terms and related concepts - 16%.

(2) Policy provisions - 8%.

(3) Texas statutes and rules pertinent to workers' compensation adjusting:

(A) Commissioner of Insurance - 7%;

(B) Licensing requirements - 7%;

(C) Marketing practices - 7%; and

(D) Workers' compensation - 55%.

§19.1019 Full-Time Home Office Salaried Employees.

(a) Full-time home office salaried employees registered under Insurance Code Article 21.14 §7 shall comply with the hourly continuing education requirement set forth in §19.1003(a) and (f) of this title (relating to Licensee Requirements). Insurers employing full-time home office salaried employees must provide the employees with instruction regarding the disclosure required by Insurance Code Article 21.14 §7(d).

(b) An insurer employing full-time home office salaried employees may provide its employees with continuing education internally, provided the insurer registers as a provider and complies with all requirements set forth in this subchapter affecting providers and course certification, including payment of all provider and course fees.

(c) Insurers shall maintain all continuing education records and rosters documenting each employee's compliance with this subchapter for at least four years.

(d) The department or its designee may at any time investigate or audit an insurer's continuing education records and/or compliance with this subchapter. The commissioner may, after notice and opportunity for hearing, discipline an insurer or full-time home office salaried employee under Insurance Code, Chapter 82, Article 21.01-2 §3A, and this subchapter, if the commissioner determines that the insurer or full-time home office salaried employee is in violation of, or has failed to comply with, the Insurance Code or this subchapter.



For more information, contact:

Contact Information and Other Helpful Links