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SUBCHAPTER G. LICENSING OF INSURANCE ADJUSTERS

28 TAC §19.603

SUBCHAPTER H. LICENSING OF PUBLIC INSURANCE ADJUSTERS

28 TAC §§19.701 ­ 19.712

SUBCHAPTER I. LICENSING FEES

28 TAC §19.802

SUBCHAPTER K. CONTINUING EDUCATION AND

ADJUSTER PRELICENSING EDUCATION PROGRAMS

28 TAC §19.1002

The Texas Department of Insurance proposes amending §§19.603, 19.802, and 19.1002, and adopting new §§19.701-19.712 concerning public insurance adjusters. The proposed amendments and new sections are necessary to implement the public insurance adjuster license type added by the enactment of Insurance Code Article 21.07-5 by Senate Bill 127, 78th Legislature. The department has proposed for repeal existing §§19.701 ­ 19.709 elsewhere in this issue of the Texas Register.

The proposed sections are necessary to implement Article 21.07-5 and provide effective regulation of public insurance adjusters. Senate Bill 127 added, for the first time, licensing requirements for public insurance adjusters and a structure to regulate the activities of such adjusters, who are defined in the law as those persons who, for direct, indirect or other compensation, take certain actions, including negotiating or settling claims on behalf of insureds for loss or damage under policies of insurance covering real or personal property. The proposed sections provide further guidance to enhance the requirements of Article 21.07-5, consistent with the new law's public protection goals, by establishing requirements for: registering public insurance adjuster trainees and licensing resident and nonresident corporations, partnerships, and individuals; maintaining and demonstrating financial responsibility; setting license and certificate fees; completing continuing education; reporting criminal history and providing fingerprints; prescribing contract terms; and defining the term "advertisement" as used in Article 21.07-5.

The proposed amendments to §19.603 remove an obsolete reference to public insurance adjusters and update references to the department.

Proposed §19.701 references definitions of terms used in the proposed new subchapter. Proposed §19.702 establishes the type of public insurance adjuster license. Proposed §19.703 establishes the criteria for registering and renewing temporary training certificates. Proposed §19.704 references statutory licensing criteria for individuals and establishes the criteria for licensing corporations and partnerships as public insurance adjusters.

Proposed §19.705 establishes the financial responsibility requirement for public insurance adjusters. The requirement is based on the perils that the financial responsibility must cover under Article 21.07-5, other Insurance Code financial responsibility requirements, and the type and amount of financial responsibility required in other states that license public insurance adjusters. Proposed §19.706 establishes financial responsibility reporting requirements for public insurance adjusters. Proposed §19.707 establishes the acceptable type of financial responsibility. These two proposed sections are based on the department's current procedures and requirements for other license types that maintain financial responsibility through surety bonds.

Proposed §19.708 establishes public insurance adjuster contract requirements. Proposed §19.709 establishes criminal history filing requirements for nonresident public insurance adjuster applicants and clarifies the timing of the annual nonresident affidavit. Proposed §19.710 establishes criminal history filing requirements for nonresident persons required to file biographical information under §19.704. Proposed §19.711 establishes fingerprint requirements for public insurance adjuster applicants. Proposed §19.712 defines the term "advertisement."

The proposed amendments to §19.802 (b)(20) and (21) establish licensing and renewal fees for public insurance adjusters and temporary certificate holders. The proposed amendment to §19.1002 (16) incorporates public insurance adjusters into the department´s existing licensee continuing education program.

The department will consider the adoption of the proposed amendments to §§19.603, 19.802, 19.1002, and new 19.701-19.712 in a public hearing under Docket No. 2557 on September 18, 2003 at 10:30 a.m. in Room 100 of the William P. Hobby Jr. State Office Building, 333 Guadalupe, Austin, Texas.

Matt Ray, deputy commissioner, licensing division , has determined that for the first five years the proposed sections will be in effect, there will be an increase in revenue to state government in the approximate amount of $67,500 annually as a result of the enforcement and administration of these rules due to the initial licensing and biennial license renewal of public insurance adjusters. Based on an average of licensed adjusters to public insurance adjusters in other states that have both license types, Mr. Ray anticipates that approximately 1,250 biennial public insurance adjuster licenses will be issued during each of the first two years this proposal is in effect with an application fee of $50 generating $62,500 in annual revenue. During the third through fifth year the license type is in effect, Mr. Ray anticipates that the number of original licenses issued by the department will fall to approximately 500 annually and that renewals will be approximately 750 annually. This will result in an estimated 1,250 licenses being issued or renewed annually and generating $62,500 in annual revenue. Mr. Ray further anticipates that the department will annually issue and renew 100 temporary training certificates during each year of the first five years this proposal is in effect with an application and renewal fee of $50 generating $5,000 in annual revenue. As required by the Texas OnLine Project, a $3 Texas OnLine subscription fee has been included in the proposed renewal fee, which the department will transfer to the Texas OnLine Authority for each license renewed. Mr. Ray has determined that for each year of the first five years the proposed sections will be in effect, there will be no fiscal impact to local governments as a result of the enforcement or administration of these rules. There will be no measurable effect on local employment or the local economy as a result of the proposal.

Mr. Ray has determined that for each year of the first five years the proposed sections are in effect, the anticipated public benefit as a result of adopting and administering the sections will be the effective regulation of public insurance adjusters and protection of persons who contract with a public insurance adjuster. The anticipated public benefit of the licensing fees assessed in the proposed rule will be the sufficient coverage of department administration costs, which include licensure, enforcement of statutory and rule requirements, disciplinary actions, and market conduct examinations, among other regulatory protections. The anticipated public benefit of the Texas Online Subscription fees placed on each renewal will be increased access to state government over the internet for the public and licensees. The anticipated public benefit of maintaining financial responsibility is to provide consumers with a potential source of recovery for a public insurance adjuster's malfeasance, error or omission. The anticipated public benefit of requiring fingerprint and criminal history information is that the department will be able to more effectively evaluate a person's fitness for licensure or to be involved in the management or control of a licensee.

The probable economic cost to persons required to comply with these sections will be application and renewal fees for licenses and training certificates, costs of maintaining and demonstrating financial responsibility, and costs related to producing fingerprints and criminal history information.

The probable economic costs to comply with the proposed sections establishing original application, registration, renewal, and examination fees result from the legislative enactment of Insurance Code Article 21.07-5 and its requirement that the department adopt fees sufficient to cover the cost of license administration. Following adoption, the cost for each separate public insurance adjuster license and each temporary training certificate would be $50 per original application in each year of the first five years the sections are in effect. The cost of renewing each public insurance adjuster license would be $50 per biennial renewal. The cost of renewing each temporary training certificate would be $50. A portion, $3, of the license renewal fee results from Government Code Sec. 2054.252, concerning the Texas Online Project, and not the adoption, enforcement, or administration of the proposed sections. The cost of each department-administered public insurance adjuster examination or reexamination would be $50, except where the department contracts with a designated testing service to administer examinations, in which case the fee shall be the amount authorized to be charged pursuant to the department's agreement with the testing contractor.

The probable economic costs to comply with the proposed sections establishing financial responsibility requirements result from the legislative requirements of Insurance Code Article 21.07-5 that directs the department to determine the amount and type of financial responsibility that will cover all of the perils set forth in Article 21.07-5 §6. The department's bond section estimates that the annual cost of a surety bond described in the proposal is 2% of the total bond amount, which is $200 for a $10,000 surety bond.

The probable economic costs to comply with the proposed sections establishing fingerprint and criminal history reporting requirements result from the legislative requirements in Insurance Code Article 21.07-5 that require the department to determine that the applicant is trustworthy and has not been convicted of a felony. Fingerprint cards are available from the department at no charge. The department estimates the fee for completion of the cards by a local law enforcement agency to be $10. Further, the department's testing contractor will make a set of fingerprints for an applicant at a testing center for the sum of $17.50. The department estimates that a nonresident may obtain a copy of his criminal history report for a fee less than $20.

There is no difference in the costs of compliance between a large and small business as a result of the proposed sections as the costs set forth in these proposed sections, with the exception of nonresident criminal history information, apply equally to each licensee.

In addition, the cost of labor per hour is not affected by the proposed sections and thus there is no disproportionate economic impact on small or micro-businesses. Further, it is anticipated that substantially all, if not all, persons affected by the probable economic costs of complying with this rule will be small businesses or micro-businesses. It is neither legal nor feasible to waive the requirements of the sections for small or micro-businesses because doing so would eliminate substantially all of the public benefits of licensing public insurance adjusters under Article 21.07-5.

To be considered, written comments on the proposal must be submitted no later than 5 p.m. on September 22, 2003 to Gene C. Jarmon, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box 149104 , Austin , Texas 78714-9104 . An additional copy of the comments must be simultaneously submitted to Matt Ray, Deputy Commissioner, Licensing Division, Mail Code 107-1A, Texas Department of Insurance, P.O. Box 149104 , Austin , Texas 78714-9104 .

These sections are proposed under Insurance Code Articles 21.01, 21.01-1, 21.01-2, and 21.07-5, and §§36.001 and 801.056, and Government Code §2054.252. Article 21.01 §3 provides that Insurance Code Chapter 21, Subchapter A applies to the listed licensees and §4 authorizes the commissioner to adopt rules to implement the subchapter. Article 21.01-1 §1 authorizes the commissioner to require applicants to take examinations through a department-designated vendor. Article 21.01-1 §3 authorizes the commissioner to develop a continuing education program for licensees. Article 21.01-2 §3A authorizes the commissioner to refuse, deny, revoke or suspend a license or license application. Article 21.07-5 §29 authorizes the department to adopt rules necessary to implement Article 21.07-5 and define the term advertisement. Insurance Code §801.056 authorizes the commissioner to require applicants to submit a complete set of fingerprints prior to licensure. Government Code §2054.252 (g) requires the department to increase licensing fees in an amount sufficient to cover the Texas OnLine Authority subscription fee cost. Insurance Code § 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.

The following statutes are affected by the proposal: Insurance Code Articles 21.07-5, 21.01, 21.01-1, 21.01-2, 21.07-5, and §801.056 Government Code §2054.252

SUBCHAPTER G. LICENSING OF INSURANCE ADJUSTERS

§19.603. Interpretations of the Act.

(a) (No change.)

[(b) Public adjusters are not subject to licensing under the Act, as they do not regularly investigate, adjust, or supervise losses on behalf of an insurer or a self-insured.]

(b) [(c)] Marine surveyors, as usually and customarily defined, are not subject to licensing under the Act, unless they regularly investigate, adjust, or supervise losses on behalf of an insurer or self-insured.

(c) [(d)] The department [State Board of Insurance] recognizes that certain risks are commonly referred to as "self-insured" or "self-handlers" in reference to insurance claims and losses. For the purposes of administration of the Act and in reference to those entities operating as such, the department [State Board of Insurance] interprets that any individual specifically employed for the purpose of supervision, investigation, or adjusting of losses is subject to the provisions of the Act, and the individual or individuals who have the primary responsibility for the supervision, investigation, or adjustment of losses is subject to the provisions of the Act.

SUBCHAPTER H. LICENSING OF PUBLIC INSURANCE ADJUSTERS

§19.701. 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) Corporation ­ A legal entity that is organized under the business corporations laws or limited liability company laws of this state, another state, or a territory of the United States . The licensing and regulation of a limited liability company is subject to all provisions of this subchapter that apply to a corporation licensed under this subchapter.

(2) Partnership ­ An association of two or more persons organized under the partnership laws or limited liability partnership laws of this state, another state, or a territory of the United States . The term includes a general partnership, limited partnership, limited liability partnership, and limited liability limited partnership.

(3) Public Insurance Adjuster ­ A person licensed under Insurance Code Article 21.07-5 §§5, 5A, 15 or 15A or §19.704 of this subchapter (relating to Public Insurance Adjuster Licensing).

§19.702. Type of Public Insurance Adjuster Licenses. The department shall issue a single public insurance adjuster license pursuant to Insurance Code Article 21.07-5 and the provisions of this subchapter.

§19.703. Temporary Training Certificates.

(a) A temporary training certificate applicant must file with the department a fully completed application, on a form as required by the commissioner, that is accompanied by the temporary certificate application fee, proof of financial responsibility and any other information the commissioner deems necessary.

(b) An individual may not hold more than two 180-day temporary training certificates, including renewals, during an 18 month period.

(c) Except as prohibited in subsection (b) of this section, an individual may renew a temporary training certificate by filing with the department 30 days prior to the expiration of an existing temporary training certificate a fully completed application, on a form as required by the commissioner, that is accompanied by the temporary certificate renewal fee, proof of financial responsibility and any other information the commissioner deems necessary.

§19.704. Public Insurance Adjuster Licensing.

(a) Any individual that desires a public insurance adjuster license must file with the department a fully completed license application, on a form as required by the commissioner, and otherwise meet the licensing qualification requirements of Insurance Code Article 21.07-5 §§5 or 15 and this subchapter.

(b) Any corporation or partnership that desires a public insurance adjuster license must file with the department a fully completed license application on a form as required by the commissioner.

(c) The department shall issue a license to a resident or nonresident corporation or partnership if the department finds that:

(1) the corporation or partnership is:

(A) organized under the laws of this state or any other state or territory of the United States ;

(B) admitted to conduct business in this state by the secretary of state, if required; and

(C) authorized by its articles of incorporation or its partnership agreement to act as a public insurance adjuster;

(2) the corporation or partnership meets the definition of that entity adopted under Insurance Code Article 21.07 §1A;

(3) at least one officer of the corporation or one active partner of the partnership and all other persons performing any acts of a public insurance adjuster on behalf of the corporation or partnership in this state are individually licensed by the department separately from the corporation or partnership;

(4) the corporation or partnership intends to be actively engaged in the business of public insurance adjusting;

(5) the corporation or partnership has filed a separate registration with the department for each location from which it will conduct business as a public insurance adjuster;

(6) the corporation or partnership has submitted the application, appropriate fees, proof of financial responsibility, and any other information required by the department;

(7) each officer, director, member, manager, partner, or any other person who has the right or ability to control the license holder meets the qualifications for licensure set forth in Insurance Code Article 21.07-5 §§5 and 15; and

(8) no officer, director, member, manager, partner, or any other person who has the right or ability to control the license holder has:

(A) had a license suspended or revoked or been the subject of any other disciplinary action by a financial or insurance regulator of this state, another state, or the United States;

(B) committed an act for which a license may be denied under Insurance Code Article 21.01-2 or 21.07-5.

(d) Nothing contained in this section shall be construed to permit any unlicensed employee or representative of any corporation or partnership to perform any act of a public insurance adjuster without obtaining a public insurance adjuster license.

(e) Each corporation or partnership applying for a public insurance adjuster license shall file, under oath, on a form developed by the department, biographical information for each of its executive officers and directors or unlicensed partners who administer the entity's operations in this state, and shareholders who are in control of the corporation, or any other partners who have the right or ability to control the partnership. If any corporation or partnership is owned, in whole or in part, by another entity, a biographical form is required for each individual who is in control of the parent entity.

(f) Each corporation or partnership shall notify the department not later than the 30th day after the date of:

(1) a felony conviction of a licensed public insurance adjuster of the entity or any individual associated with the corporation or partnership who is required to file biographical information with the department;

(2) an event that would require notification under Insurance Code §81.003; and

(3) the addition or removal of an officer, director, partner, member, or manager.

(g) A person may not acquire in any manner any ownership interest in an entity licensed as a public insurance adjuster under this subchapter if the person is, or after the acquisition would be directly or indirectly in control of the license holder, or otherwise acquire control of or exercise any control over the license holder, unless the person has filed the following information with the department under oath:

(1) a biographical form for each person by whom or on whose behalf the acquisition of control is to be effected;

(2) a statement certifying that no person who is acquiring an ownership interest in or control of the license holder has been the subject of a disciplinary action taken by a financial or insurance regulator of this state, another state, or the United States;

(3) a statement certifying that, immediately on the change of control, the license holder will be able to satisfy the requirements for the issuance of the public insurance adjuster license; and

(4) any additional information that the commissioner may prescribe as necessary or appropriate to the protection of the insurance consumers of this state or as in the public interest.

(h) If a person required to file a statement under subsection (g) of this section is a partnership, limited partnership, syndicate, or other group, the commissioner may require that the information required by paragraphs (1)-(4) of that subsection for an individual be provided regarding each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. If the partner, member, or person is a corporation or the person required to file the statement under subsection (g) of this section is a corporation, the commissioner may require that the information required by paragraphs (1)-(4) of that subsection be provided regarding:

(1) the corporation;

(2) each individual who is an executive officer or director of the corporation; and

(3) each person who is directly or indirectly the beneficial owner of more than 10 percent of the outstanding voting securities of the corporation.

(i) The department may disapprove an acquisition of control if, after notice and opportunity for hearing, the commissioner determines that:

(1) immediately on the change of control the license holder would not be able to satisfy the requirements for the public insurance adjuster license;

(2) the competence, trustworthiness, experience, and integrity of the persons who would control the operation of the license holder are such that it would not be in the interest of the insurance consumers of this state to permit the acquisition of control; or

(3) the acquisition of control would violate the Insurance Code or another law of this state, another state, or the United States .

(j) Notwithstanding subsection (h) of this section, a change in control is considered approved if the department has not proposed to deny the requested change before the 61st day after the date the department receives all information required by this section.

(k) The commissioner is the corporation's or partnership's agent for service of process in the manner provided by Insurance Code Chapter 804 in a legal proceeding against the corporation or partnership if:

(1) the corporation or partnership licensed to transact business in this state fails to appoint or maintain an agent for service in this state;

(2) an agent for service cannot with reasonable diligence be found; or

(3) the license of a corporation or partnership is revoked.

(l) If a license holder does not maintain the qualifications necessary to obtain the license, the department shall revoke or suspend the license or deny the renewal of the license under Insurance Code Article 21.01-2 or 21.07-5.

(m) Each public insurance adjuster shall maintain all insurance records, including all records relating to customer complaints received from customers and the department, separate from the records of any other business in which the person may be engaged and in the manner specified in Insurance Code Article 21.07-5.

(n) The department may license a depository institution or entity chartered by the federal Farm Credit Administration under the farm credit system established under 12 U.S.C. Section 2001 et seq., as amended, to act as a public insurance adjuster in the manner provided for the licensing of a corporation under this section.

§19.705. Financial Responsibility Requirement.

(a) Each public insurance adjuster, as a condition for being licensed, and each trainee as a condition for receiving a temporary training certificate and as a condition for continuing the license or training certificate in force, must maintain proof of financial responsibility by obtaining a surety bond in the principal sum of not less than $10,000 that covers all the required perils and losses set forth under Insurance Code Article 21.07-5 §6.

(b) Each public insurance adjuster and trainee must obtain separate proof of financial responsibility and may not rely on the bond of any other public insurance adjuster or trainee to demonstrate proof of financial responsibility.

§19.706. Demonstrating Financial Responsibility.

The public insurance adjuster applicant, licensee, or trainee shall demonstrate proof of financial responsibility by providing to the department the original surety bond upon application, renewal, or replacement of the bond.

§19.707. Type of Financial Responsibility. A surety bond used to maintain and demonstrate proof of financial responsibility under §§19.705 and 19.706 of this subchapter (relating to Financial Responsibility Requirement and Demonstrating Financial Responsibility) must:

(1) be in the form specified by the department;

(2) be executed by the public insurance adjuster as principal and a surety company authorized to do business in this state as surety;

(3) be payable to the Texas Department of Insurance for the use and benefit of an insured, conditioned that the public insurance adjuster shall pay any final judgment recovered against it by an insured;

(4) provide that the surety will give no less than 30 days written notice of bond termination to the licensee and the department;

(5) be separate from any other financial responsibility obligation; and

(6) not be used to demonstrate professional responsibility for any other license, certification, or person.

§19.708. Public Insurance Adjuster Contracts.

(a) A public insurance adjuster may not, directly or indirectly, act within this state as a public insurance adjuster without having first entered into a written contract executed in duplicate by the licensee and the insured or the insured's duly authorized representative.

(b) A public insurance adjuster's written contract with an insured must contain:

(1) the name, address, and license number of the public insurance adjuster negotiating the contract and, if applicable, the name, address, and license number of the public insurance adjuster's employing public insurance adjuster;

(2) the public insurance adjuster's telephone and fax number, including area code;

(3) the mailing and physical addresses to which notice of cancellation and all communications to the public insurance adjuster may be delivered;

(4) if any part of the contract or solicitation is made via the internet, the e-mail and website address to which notice of contract cancellation and all communications to the public insurance adjuster may be delivered;

(5) the date and time the contract was signed;

(6) for each nonresident public insurance adjuster named in the contract, the name and address of the nonresident public insurance adjuster's agent for service of process;

(7) the following separate statements in 12 point bold faced type on the signature page of the contract:

(A) "NOTICE: THE INSURED MAY CANCEL THIS CONTRACT WITHIN 72 HOURS OF SIGNATURE FOR ANY REASON.";

(B) "WE REPRESENT THE INSURED ONLY." and;

(C) "YOU ARE ENTERING INTO A SERVICE CONTRACT. YOU ARE BEING CHARGED A FEE FOR THIS SERVICE. YOU DO NOT HAVE TO ENTER INTO THIS CONTRACT TO MAKE A CLAIM FOR LOSS OR DAMAGE ON A POLICY OF INSURANCE.";

(8) the statement: "If the insurance carrier pays or commits in writing to pay to the insured the policy limits of the insurance policy in accordance with Insurance Code Article 6.13 or §862.053 within 72 hours of the loss being reported to the insurer, the public insurance adjuster is not entitled to compensation based on a percentage of the insurance settlement, but is entitled to reasonable compensation for the public insurance adjuster's time and expenses provided to the insured before the claim was paid or the written commitment to pay was received.";

(9) the statement: "NOTICE: A public insurance adjuster may not participate directly or indirectly in the reconstruction, repair, or restoration of damaged property that is the subject of a claim adjusted by the public insurance adjuster or engage in any other activities that may reasonably be construed as presenting a conflict of interest, including soliciting or accepting any remuneration from, or having a financial interest in, any salvage firm, repair firm, or other firm that obtains business in connection with any claim the public insurance adjuster has a contract or agreement to adjust.";

(10) on the first or second page of the contract, the following English and Spanish notices in 10 point bold faced type:

(A) "IMPORTANT NOTICE: You may contact the Texas Department of Insurance to obtain information on public insurance adjusters, your rights and complaints at: 1-800-252-3439 or you may write the Texas Department of Insurance at P. O. Box 149104, Austin, Texas 78714-9104, Fax # (512) 475-1771.";

(B) "ADVISO IMPORTANTE: Puede comunicarse con el Departamento de Seguros de Texas para obtener informaciaon acera ajustores publicos de seguros, o sus derechos o quejas al: 1-800-252-3439 o puede escribir al Departamento de Seguros de Texas P. O. Box 149104, Austin, Texas 78714-9104, Fax # (512) 475-1771."; and

(11) a clear statement of the public insurance adjuster´s commission including:

(A) the method of calculating compensation for the public insurance adjuster, either hourly, flat fee, or percentage of settlement; and

(B) a statement that under any method of compensation the total commission payable to the public insurance adjuster may not exceed 10% of the amount of the insurance settlement.

(c) The contract may not contain any terms or conditions which have the effect of limiting or nullifying any requirements of the Insurance Code, this subchapter, or other rules of the department.

§19.709. Nonresident Applicants and License Holders.

(a) An applicant for a nonresident public insurance adjuster license or temporary certificate must, through the law enforcement agency of the applicant's state of residence, submit a copy of the applicant's criminal history records to the department. The department shall use the criminal history records to determine eligibility for issuance of a license in accordance with this subchapter and other laws of this state.

(b) The annual nonresident affidavit required by Insurance Code Article 21.07-5 §15(d) shall be made on a form available from the department and filed one year after the date the license was issued and annually thereafter.

§19.710. Nonresidents Required to File Biographical Information. A nonresident who is required to file biographical information under §19.704 of this subchapter (relating to Public Insurance Adjuster Licensing) shall, through the law enforcement agency of the person's state of residence, submit a copy of the applicant's criminal history records to the department. The department shall use the criminal history records to determine eligibility for issuance of a license in accordance with this subchapter and other laws of this state.

§19.711. Fingerprint Requirement.

(a) Any individual who submits to the department a new application to be licensed or registered under Insurance Code Article 21.07-5 and any individual from whom biographical information is required under §19.704 of this subchapter (relating to Public Insurance Adjuster Licensing) shall attach to the application or biographical information a completed, legible fingerprint card.

(b) Fingerprints obtained under this section shall be handled in the manner set forth in §19.1807 of this chapter (relating to Confidentiality and Custody of Fingerprint Cards).

§19.712. Advertisement.

(a) As used in Insurance Code Article 21.07-5, "advertisement" includes:

(1) printed and published material, audio visual material and descriptive literature of a public insurance adjuster used in direct mail, newspapers, magazines, radio, telephone and television scripts, internet web sites, billboards, and similar displays;

(2) descriptive literature and promotional aids of all kinds issued by a public insurance adjuster for presentation to members of the public, including circulars, leaflets, booklets, depictions, illustrations, and form letters;

(3) prepared promotional talks, presentations and materials for use by a public insurance adjuster, and those representations made on a recurring basis by a public insurance adjuster to members of the public;

(4) material used to:

(A) solicit contracts from insureds; or

(B) modify existing contracts;

(5) material included with a contract when the contract is delivered and materials used in the solicitation of contract renewals, extensions or reinstatements, except those extensions or reinstatements provided for in the contract;

(6) lead card solicitations, defined as communications distributed to the public which, regardless of form, content, or stated purpose, are intended to result in the compilation or qualification of a list containing names or other personal information regarding insureds who have expressed a specific interest in obtaining assistance with having their claims settled, and which are intended to be used to solicit residents of this state for the execution of a contract for a public insurance adjuster´s services; and

(7) any other communication directly or indirectly related to a public insurance adjuster contract, and intended to result in the eventual execution of such a contract.

(b) "Advertisement" does not include:

(1) communications or materials used within a public insurance adjuster´s own organization, not used as promotional aids and not disseminated to the public;

(2) communications with insureds other than materials soliciting insureds to enter, renew, extend or reinstate a contract for a public insurance adjuster´s services; and

(3) material used solely for the recruitment, training, and education of a public insurance adjuster´s personnel and subcontractors, provided it is not also used to induce the public to enter, renew, extend or reinstate a contract for a public insurance adjuster´s services.

SUBCHAPTER I. LICENSING FEES

§19.802. Amount of Fees.

(a) (No change.)

(b) The amounts of fees are as follows:

(1) ­ (19) (No change.)

(20) Public insurance adjuster:

(A) original application -- $50;

(B) renewal -- $50;

(C) qualifying examination $50.

(21) Public insurance adjuster temporary training certificate:

(A) training certificate -- $50;

(B) renewal -- $50.

(c)-(e) (no change)

SUBCHAPTER K. CONTINUING EDUCATION AND ADJUSTER PRELICENSING EDUCATION PROGRAMS.

§19.1002. Definitions.

(a) (No change.)

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

(1) ­ (15) (No change.)

(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); 21.07-5 (public insurance adjuster); 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) ­ (27) (No change.)



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