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You are here: Home . rules . 2005 . 1229C-059

SUBCHAPTER K. Continuing Education and Adjuster Prelicensing Education Programs

28 TAC §§19.1011, 19.1020 and 19.1021

1. INTRODUCTION. The Commissioner of Insurance adopts amendments to §19.1011 and new §19.1020, concerning continuing education credit for licensees who are active members of state and national insurance associations, and new §19.1021, concerning national flood insurance education training. The amendments and new sections are adopted with changes to correct formatting in the proposed text published in the November 11, 2005 issue of the Texas Register (30 TexReg 7357).

2. REASONED JUSTIFICATION These amendments and new sections are necessary to implement the continuing education credits for agents who are active members of state and national insurance associations as directed by SB 265 enacted by the 79th Legislature, Regular Session; to authorize similar continuing education credits for life and health insurance counselors, insurance adjusters and public insurance adjusters; and to establish certified course requirements for course providers offering minimum flood insurance training under the federal Flood Insurance Reform Act of 2004.

Under SB 265, the Commissioner is authorized to adopt rules allowing the department to grant not more than four hours of continuing education credit to an agent who is an active member of a state or national insurance association. As required by SB 265, this adoption specifies acceptable state and national insurance associations, the number of hours of credit that agents who are active members of such associations may obtain for certain activities, and the procedure for agent members to claim credit for completing these activities. This adoption also authorizes the same continuing education credit for holders of national designation certifications. Additionally, this adoption authorizes the same continuing education credit for life and health insurance counselors, insurance adjusters, and public insurance adjusters pursuant to authority granted to the Commissioner in the applicable statutes related to continuing education for those license types.

This adoption also establishes the criteria for certified courses that course providers may develop to comply with the minimum training and education requirements established by the Federal Emergency Management Agency (FEMA) to implement the Flood Insurance Reform Act of 2004 for insurance agents who sell Standard Flood Insurance Policies issued through the National Flood Insurance Program. Additionally, the numbering in §19.1021(g)(7) was revised to the required format.

3. HOW THE SECTIONS WILL FUNCTION. Amendments to §19.1011 specify the information that state or national insurance association members or national designation certification holders are required to submit to claim credit for the continuing education hours authorized in this adoption and the procedure for claiming those continuing education credit hours. Section 19.1020 describes the associations that qualify as a state or national insurance association for the purposes of continuing education credit under SB 265, the activities for which this credit may be claimed, and the maximum number of credit hours that may be claimed. Section 19.1021 establishes the criteria for certified courses that course providers may develop for persons who intend to write or insurance agents who currently write flood insurance to comply with FEMA's minimum training and education requirements implementing the Flood Insurance Reform Act of 2004.

4. SUMMARY OF COMMENTS. The department received no comments on the proposed amended or new sections.

5. STATUTORY AUTHORITY. The amendments and new sections are adopted under the Insurance Code Chapters 4001, 4004, 4052, 4101, and 4102. Section 4004.101 authorizes the commissioner to adopt rules establishing the criteria for continuing education courses for license holders. Section 4004.0535 authorizes the commissioner by rule to allow the department to grant not more than four hours of continuing education credit to an agent who is an active member of a state or national insurance association, to adopt rules specifying the types of associations that constitute state or national insurance associations, the reasonable requirements for active participation in the association, and the manner of providing this information to the department. Section 4052.003 provides that, except as provided in Chapter 4052, Life and Health Insurance Counselors are licensed and regulated in the same manner as agents. Section 4101.059 authorizes the commissioner to certify a continuing education program for insurance adjusters. Section 4102.109 authorizes the commissioner to prescribe continuing education course requirements for public insurance adjusters. Section 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.

6. TEXT.

§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.

(f) Notwithstanding subsections (a) - (e) of this section, licensees must claim continuing education under §19.1020 of this chapter (relating to State and National Association Credit) by sending to the department, or its designee, upon request, an affirmation acceptable to the department containing:

(1) the licensee's name, address, telephone number, and licensee's department license number;

(2) the name of the national designation or state or national insurance association providing educational materials or sponsoring educational presentations;

(3) the cumulative number of hours of credit claimed for reviewing the educational materials;

(4) the cumulative number of hours of credit claimed for attending the educational presentations;

(5) a statement that the licensee currently holds the national designation or is a member in good standing of the state or national insurance association; and

(6) A statement that the licensee completed at least the number of hours in these activities the licensee is claiming for continuing education credit.

(g) In addition to the affirmation provided under subsection (f) of this section, the department may request a licensee claiming hours under §19.1020 of this chapter to submit a sworn written affirmation to the department confirming under oath the information in subsection (f) of this section. Failure to submit a sworn affirmation will result in denial of the claimed hours and may result in disciplinary action under §19.1015 of this subchapter (relating to Failure to Comply) or the Insurance Code.

§19.1020. State and National Insurance Association Credit.

(a) For the purposes of this section the following definitions apply:

(1) Educational material--Printed or electronic materials with content intended to enhance the recipient's knowledge of insurance-related topics.

(2) Educational presentation--A live presentation allowing for questions or discussion given to a group of three or more licensees and that provides information intended to enhance the recipient's knowledge of insurance-related topics.

(3) State or national insurance association--A membership organization:

(A) organized as an association or corporation under state law;

(B) based on paid memberships renewable annually or biennially for an additional membership fee; and

(C) organized for the express purpose of promoting the interests of insurance licensees or a class of insurance licensees, including those classes based on license type or regional, gender, religious, or minority interests .

(b) Licensees who currently hold a national designation certification or are members in good standing of a state or national insurance association may receive up to four hours of self study continuing education credit per reporting period as follows:

(1) by accumulating up to two hours for reviewing educational materials provided by the national designation sponsor or state or national insurance association in which they hold a designation or are members; and

(2) by accumulating up to four hours for attending educational presentations sponsored by the national designation sponsor or state or national association in which they hold a designation or are members.

(c) A licensee may accumulate hours from different national designations or state or national insurance associations in which they hold a designation or membership to reach the four-hour limit, but regardless of the number of designations or association memberships or hours accumulated, the licensee may not claim more than four hours of credit under this section towards completing the licensee's continuing education requirement for any reporting period.

(d) Continuing education hours under this section shall apply only as self study credit and shall not count towards the licensee's ethics, classroom, or classroom equivalent continuing education requirements.

(e) A licensee claiming hours under this section may claim the actual time, up to an accumulated total of four hours, that the licensee needed to review the educational material or the duration of the educational presentation.

§19.1021. Flood Insurance Education Course.

(a) Pursuant to §207 of the Flood Insurance Reform Act of 2004, the Federal Emergency Management Agency on September 1, 2005 published minimum training and education standards for persons that intend to write or currently write flood insurance ( Federal Register, Vol. 70, No. 169, pp. 52117-52119). This section establishes these standards for a department-certified continuing education course.

(b) The course shall:

(1) be submitted for approval in compliance with §19.1007 of this subchapter (relating to Course Certification Submission Applications, Course Expirations, and Resubmissions);

(2) be at least three hours in length;

(3) and cover the topics listed in subsection (g) of this section.

(c) Providers may offer the course as a classroom, classroom equivalent, or self study course.

(d) The course may be taken after the department has issued a license or within 12 months preceding the license issue date.

(e) Licensees may count up to three hours towards completion of their initial continuing education requirement for successful completion of a certified flood insurance training course prior to issuance of their license. The licensee shall maintain proof of completion of the flood insurance training course prior to licensure for four years or through the second renewal of the license, whichever is longer. Upon request, the licensee shall provide the proof of course completion to the department or the department's designee.

(f) A provider-issued completion certificate in compliance with §19.1011(e) of this subchapter (relating to Requirements for Successful Completion of Continuing Education Courses) shall demonstrate proof of successful course completion.

(g) Course topics for the basic flood insurance course outline shall include:

(1) Section I - Introduction:

(A) National Flood Insurance Program (NFIP) Background;

(B) Community Participation;

(C) Emergency Program Defined;

(D) Regular Program Defined;

(E) Community Rating System;

(F) Eligible/Ineligible Buildings;

(G) Coastal Barrier Resources System and Other Protected Areas;

(H) Who Needs Flood Insurance?

(i) Mandatory Purchase of Flood Insurance in High Flood Risk Zones; and

(ii) Recommended in Moderate and Low Flood Risk Zones; and

(I ) Why Flood Insurance is Better than Disaster Assistance.

(2) Section II - Flood Maps and Zone Determinations:

(A) Flood Hazard Boundary Map (FHBM);

(B) Flood Insurance Rate Map (FIRM):

(i) Pre-FIRM/Post-FIRM Defined; and

(ii) Special Flood Hazard Area Defined;

(C) Base Flood Elevation; and

(D) Zone Determination.

(3) Section III - Policies and Products Available:

(A) Dwelling Policy - Types of Buildings Covered;

(B) General Property Policy - Types of Buildings Covered;

(C) Residential Condominium Building Association (RCBAP) Policy - Types of Buildings Covered;

(D) Preferred Risk Policy - Types of Buildings Covered;

(E) Definitions:

(i) Flood;

(ii) Basement/Enclosure; and

(iii) Elevated Buildings;

(F) Damages Not Covered:

(i) Single Peril Policy; and

(ii) Mudslides vs. Mudflow;

(G) Property Covered:

(i) Basements;

(ii) Appurtenant Structure;

(iii) Loss Avoidance Measures;

(iv) Debris Removal; and

(v) Improvements and Betterments;

(H) Property and Expenses Not Covered:

(i) Decks;

(ii) Finished Items in Basements;

(iii) Property in Enclosures; and

(iv) Additional Living Expenses;

(I) Increased Cost of Compliance Coverage.

(4) Section IV - General Rules:

(A) Statutory Coverage Limits;

(B) Deductibles:

(i) Standard Deductibles; and

(ii) Apply Separately for Building and Contents;

(C) Property Value Determination for Selecting Coverage Amount;

(D) Loss Settlement:

(i) Actual Cash Value (ACV);

(ii) Replacement Cost Value (RCV); and

(iii) Co-insurance Penalty in RCBAP;

(E) Reduction and Reformation of Coverage;

(F) No Binders;

(G) One Building per Policy - No Blanket Coverage;

(H) Building and Contents Coverage Purchased Separately;

(I) Waiting Period/Effective Date of Policy;

(J) Policy Term; and

(K) Cancellations.

(5) Section V - Rating:

(A) Types of Buildings:

(i) Elevated Buildings; and

(ii) Buildings with Basements;

(B) When to Use an Elevation Certificate; and

(C) Grandfathering.

(6) Section VI - Claims Handling Process:

(A) Helping Your Client to File a Claim;

(B) Appeals Process; and

(C) Claims Handbook;

(7) Section VII - Requirements of the Flood Insurance Reform Act of 2004; Point of Sale and Renewal Responsibilities;

(A) Notification of Coverages Being Purchased;

(B) Policy Exclusions that Apply;

(C) Explanation Regarding How Losses Will be Adjusted (ACV vs. RCV);

(D) Number and Dollar Amount of Claims for Property; and

(E) Acknowledgement Forms.

(8) Section VIII - Agent Resources:

(A) Write Your Own Company;

(B) FEMA Websites:

(i) http://www.fema.gov/nfip;

(ii) http://www.floodsmart.gov; and

(iii) http://training.nfipstat.com/; and

(C) Flood Insurance Manual.

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