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You are here: Home . rules . 2007 . 1105b-059

SUBCHAPTER I. LICENSING FEES 28 TAC §§19.801 AND 19.802 SUBCHAPTER K. CONTINUING EDUCATION AND ADJUSTER PRELICENSING EDUCATION PROGRAMS 28 TAC§19.1002

1. INTRODUCTION. The Commissioner of Insurance adopts amendments to §§19.801, 19.802, and 19.1002, concerning the licensing, registration, examination, and appointment fees, and continuing education requirements for the newly created personal lines property and casualty agent license and the life agent license. The amendments are adopted without changes to the proposed text published in the September 7, 2007 issue of the Texas Register (32 TexReg 6039). The Commissioner's adoption of the repeal of §19.803 of this title (relating to License Renewal Fees), concerning license renewal fees for agents, adjusters, and other licensees, is also published in this issue of the Texas Register. Although both adoptions concern Chapter 19, Subchapter I, of this title, this adoption is not affected by the adopted repeal.

2. REASONED JUSTIFICATION. These amendments are necessary to implement SB 1263, 80th Legislature, Regular Session, effective September 1, 2007, which establishes the personal lines property and casualty agent license and the life agent license to increase uniformity in insurance agent licensing criteria among the various states. The adopted amendments to §§19.801 and 19.802 are necessary to maintain effective regulation of insurance licensees by establishing fees for persons applying for and holding personal lines property and casualty insurance agent and life only insurance agent licenses. Pursuant to §4001.006, the fees must be sufficient to cover the Department's administrative costs, which include licensure and enforcement of disciplinary requirements, among other regulatory protections. The adopted amendment to §19.1002 is necessary to incorporate the new license types created by SB 1263 into the Department's existing continuing education rule. The adopted amendments are also necessary to update the Insurance Code references throughout the sections in accordance with the nonsubstantive revisions of the Insurance Code enacted by the 77th Legislature, effective June 1, 2003, and 79th Legislature, effective September 1, 2005. Adopted amendments to §19.801(c) are necessary to clarify the use of the subagent appointment in relation to the general agent, and the newly created personal lines property and casualty agent and life agent license types, and also consolidate in this subsection existing provisions from §19.802(d) relating to appointment of subagents by general lines agents. Prior to the enactment of SB 1263, only general agents could appoint another general agent as a subagent under §4001.205 of the Insurance Code. SB 1263 extends this authority by authorizing general agents, personal lines property and casualty agents, and life agents to appoint other general agents, personal lines property and casualty agents, and life agents as subagents.

Insurance agents are prohibited under the Insurance Code from writing a line of business for which the agent is not licensed by the Department. Therefore, under the Insurance Code §4001.109, subagents are not required to hold each license of the appointing agent, but the subagent is required to be licensed to write each line that the subagent is employed to write. Thus, an appointing agent may only write a line of business that the appointing agent is licensed to write; and a subagent may only write a line of business that both the subagent and appointing agent are licensed to write.

For example, a general agent appointed as a subagent by a personal lines property and casualty or life agent is limited to personal lines property and casualty or life agent products through that appointment. To write products in addition to personal lines or life products, that general agent is required to have a direct appointment from the insurance company issuing the additional products. Conversely, a personal lines property and casualty agent or life agent appointed as a subagent by a general agent remains limited to those lines authorized under personal lines property and casualty or life agent license.

Adopted amendments to §19.802(b) are necessary to add new paragraphs (22) and (23) to include personal lines property and casualty agents and life agent license types created by SB 1263 and set application, renewal, appointment, and Department administered examination fees for these license types. Under existing law, including Insurance Code §4001.006, the Department is required to set fees in amounts that are reasonable and necessary to implement and enforce Insurance Code Title 13. SB 1263 establishes the personal lines property and casualty license and the life agent license types in Insurance Code Title 13, Subtitle B. The Department anticipates no cost difference in administering the two new license types and other agent license types already regulated by the Department. Therefore, the Department is adopting the same fees for these license types as other agent license types because these previously adopted fees have already been determined to comply with the statutory requirements of reasonable and necessary.

Individuals holding either a personal lines property and casualty agent license or life agent license are subject to the Department's continuing education program both specifically under Insurance Code §4004.053(a), as amended by SB 1263, and under existing §4004.051, which regulates agent continuing education requirements for all individuals who hold a license issued by the Department. The adopted amendment to §19.1002(b)(16) is necessary to revise the definition of licensee by adding the personal lines property and casualty agent and life agent license types. Under the amended definition, personal lines property and casualty agents and life agents are required to comply with the same statutory continuing education requirements as other licensees under the Insurance Code Chapter 4004 and §§19.1001 - 19.1021. These requirements include completing 15 hours of continuing education annually as required by §4004.053, as amended by SB 1263; completing at least 50 percent of course work in classroom or classroom equivalent environments as required under §4004.051(c); and completing at least two hours of ethics training per each two-year license renewal period as required by §4004.054. Under the adopted amendment to §19.1002(b)(16), for purposes of continuing education requirements, both resident and nonresident individuals holding the new license types will be treated consistently with individuals holding existing license types.

In addition, but unrelated to the new licenses, the adopted amendments to §§19.801, 19.802, and 19.1002 are necessary to make nonsubstantive revisions to references to certain agent license titles for consistency with the statute, including change of general lines property and casualty agent to general property and casualty agent; general lines life, accident, and health agent to general life accident and health agent; and, for the purpose of referring to both collectively, general lines agent to general agent.

3. HOW THE SECTIONS WILL FUNCTION. Adopted amendments to 19.801(c)(1) add the personal lines property and casualty agent and life agent license types to the existing language for consistency with the amended statute that authorizes these license types to appoint subagents. Adopted new paragraphs (2)(A) and (B) of §19.801(c) specify that only general lines agents, personal lines property and casualty agents, or life agents may appoint subagents and that only general lines agents, personal lines property and casualty agents, or life agents may be appointed as subagents. Adopted new §19.801(c)(2)(C) provides clarification within the rule of the subagent's authority by restating Insurance Code §4001.109. Adopted new §19.801(c)(3) provides clarification within the rule that agents may simultaneously have multiple subagent and insurance company appointments. Adopted amendments to subsections (e) and (f) of §19.801 add introductory titles to make the style consistent with subsections (a) - (d) of that section.

Adopted amendments to §19.802(b) set application, renewal, appointment, and Department administered examination fees for the personal lines property and casualty agent and life agent license types. The adopted amendment to §19.1002(b)(16) revises the definition of licensee by adding the personal lines property and casualty agent and life agent license types. Under the amended definition, personal lines property and casualty agents and life agents will be required to meet the same statutory continuing education requirements as other licensees under the Insurance Code Chapter 4004 and §§19.1001 - 19.1021.

4. SUMMARY OF COMMENTS AND AGENCY RESPONSE. The Department did not receive any comments on the proposed amendments.

5. STATUTORY AUTHORITY. The amendments are adopted under Insurance Code §§4001.002, 4001.003(9), 4001.005, 4001.006, 4001.109, 4001.153, 4001.202, 4002.005, 4003.004, 4003.005, 4004.051, 4004.053, 4004.054, 4051.401, 4051.404, 4054.301, 4054.304, and 36.001, and Government Code §2054.252. Section 4001.002(a)(7) applies the provisions of Title 13, including Subtitle A, to persons licensed under Title 13, Subtitle B (Chapter 4051, Subchapter I, establishing the personal lines property and casualty license and Chapter 4054, Subchapter G, establishing the life agent license, are both within Insurance Code, Title 13 , Subtitle B). Section 4001.003(9) defines subagent. Section 4001.005 authorizes the Commissioner to adopt rules necessary to implement Insurance Code, Title 13. Section 4001.006(a) authorizes the Department to collect a nonrefundable license fee and a nonrefundable appointment fee. Section 4001.006(c) requires the Department to set fees that are reasonable and necessary to implement Insurance Code, Title 13. Section 4001.109 requires a subagent to be licensed to write each line of insurance that the subagent is employed to write, but does not require the subagent to hold each kind of license issued to the agent for whom the subagent acts. Section 4001.153 authorizes the Department to charge and set temporary license fees. Section 4001.202 authorizes the Department to charge and set agent multiple insurer appointment fees. Section 4002.005 authorizes the Department to charge and set agent licensing examination fees. Section 4003.004 authorizes the Department to set license renewal fees. Section 4003.005 provides that a renewal fee collected under §4003.004 is nonrefundable. Section 4004.051(a) requires individuals holding a Department issued license to complete continuing education. Section 4004.053(a), as amended by SB 1263, requires personal lines property and casualty agents and life agents to complete 15 hours of continuing education annually. Section 4051.051 establishes the general property and casualty license. Section 4051.401 establishes the personal lines property and casualty agent license. Section 4051.404 provides that §4001.006 applies to all fees collected under Chapter 4051, Subchapter I, regulating personal lines property and casualty agent licensing. Section 4054.051 establishes the general life, accident, and health insurance agent license. Section 4054.301 establishes the life agent license. Section 4054.304 provides that §4001.006 applies to all fees collected under Chapter 4054, Subchapter G, regulating life agent licensing. 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 the state. Government Code §2054.252(g) requires the Department to increase licensing fees in an amount sufficient to cover the Department's Texas OnLine Authority subscription fee cost.

7. TEXT.

SUBCHAPTER I. LICENSING FEES

§19.801. General Provisions Regarding Licensing Fees and License Renewal.

(a) Original application.

(1) Applicants for an original license required to qualify for the license type by examination through the department's designated testing service, including temporary licenses, shall submit the required original application fee, the testing service's examination fee and, if applicable, the temporary license fee, at the time of filing an application for license and/or request for examination, to the department's designated testing service.

(2) Applicants for an original license not required to qualify for the license type by examination from the department's designated testing service, or all applicants in the event the department does not have a designated testing service, shall submit all required fees at the time of filing an application for license and/or request for examination to the department.

(3) Insurance carriers utilizing registered home office salaried employees will submit the registration fee to the department at the time of filing the registration application.

(b) Renewal of license.

(1) A "completed application" is one that provides every piece of information required of the licensee by the application form.

(2) An applicant for renewal of a license which has neither expired nor been suspended or revoked shall submit the required renewal fee and completed application for renewal.

(3) The department may designate one expiration date per licensee, to apply to all licenses held by that licensee. The designated date shall be the date on which one license would normally expire. For licenses which normally would expire after the newly designated expiration date, renewal fees shall be reduced pro rata on a monthly basis. The fee reduction shall be for the renewal immediately following the institution of the designated expiration date. On each subsequent renewal, the licensee shall pay the full renewal fee for each license.

(c) Appointment.

(1) The fee for appointment of a currently licensed general agent , personal lines property and casualty agent, or life agent as subagent by another general agent, personal lines property and casualty agent, or life agent, or for appointment of an agent to represent additional insurers, health maintenance organizations, or nonprofit legal services corporations, shall accompany the notice of appointment. An appointment fee is not required for the first appointment filed with the original license application.

(2) Subagent appointments must comply with the following requirements: (A) only general lines agents, personal lines property and casualty agents, or life agents may appoint subagents;

(B) only general lines agents, personal lines property and casualty agents, or life agents may be appointed as subagents; and

(C) as provided in Insurance Code §4001.109, a subagent must be licensed to write each line of insurance that the subagent is employed to write, but is not required to hold each kind of license issued to the agent for whom the subagent acts, as required under Insurance Code §4001.109.

(3) General agents, personal lines property and casualty agents, and life agents may simultaneously have multiple subagent and insurance company appointments.

(d) Submission of fees. All fees shall be submitted by check or money order made payable to the Texas Department of Insurance, except for applicants who must qualify by examination, where the application is to be submitted to the Department's designated testing service, as provided under Insurance Code Chapter 4002, or if the license is renewable over the internet, where the renewal application is to be submitted under the Texas OnLine Project, in which case fees shall be submitted as directed by the designated testing service or the Texas OnLine Authority. Should the Department authorize other online or electronic original applications or other transactions, persons shall submit fees with the transaction as directed by the Department, the Texas OnLine Authority, or the Department's designated service provider.

(e) Fees fully earned. All fees are fully earned at the time the application, registration, and/or appointment is filed with the department, or the department's designated testing service, and are not refundable or transferable to another application, registration or appointment whether such fee is submitted to the department or the department's designated testing service. These fees shall not be reduced for any reason, except when the term of the license is prorated as set forth under subsection (b)(3) of this section.

(f) Examination fees. All fees for examination, whether administered by the department or the department's designated testing service, are fully earned when the examination is scheduled and are not refundable or transferable to any other applicant or examination, except where approved by the department as provided under Insurance Code §4002.005(c). A separate fee is required for each new examination and reexamination. Examination fees shall not be reduced for any reason.

§19.802. Amount of Fees.

(a) With each application for original license or renewal, notice of appointment, or request for qualifying examination, the applicant or licensee shall submit the amount shown in this section. The fees for qualifying examinations and reexaminations only apply if the Texas Department of Insurance does not contract with a testing service for the provisions of these examinations.

(b) The amounts of fees are as follows:

(1) General life, accident, and health insurance agent:

(A) original application--$50;

(B) renewal--$50;

(C) additional appointment--$10;

(D) qualifying examination--$50;

(2) County mutual agent:

(A) original application--$50;

(B) renewal--$50;

(C) additional appointment--$10.

(3) Insurance adjuster:

(A) original application--$50;

(B) renewal--$50;

(C) qualifying examination--$50.

(4) Insurance adjuster (emergency license): original application--$20.

(5) General property and casualty agent:

(A) original application--$50;

(B) renewal--$50;

(C) additional appointment--$10;

(D) qualifying examination--50;

(E) emergency application for license issued under Insurance Code §4051.054--$50 (for original application with no additional charge for renewal).

(6) Full-time home office salaried employee registration: original application--$50.

(7) Insurance service representative:

(A) original application--$50;

(B) renewal--$50;

(C) qualifying examination--$50;

(D) appointment of a currently licensed insurance service representative--$10.

(8) Managing general agent:

(A) original application--$50;

(B) renewal--$50;

(C) additional appointment--$10;

(D) qualifying examination--$50;

(E) emergency application for license issued under Insurance Code §4053.052--$50.

(9) Limited lines agent (includes agents licensed under Insurance Code Chapter 4051, Subchapter C and Chapter 4054, Subchapter C):

(A) original application--$50;

(B) renewal--$50;

(C) additional appointment--$10;

(D) qualifying examination--$50.

(10) Surplus lines agent:

(A) original application--$50;

(B) renewal--$50;

(C) qualifying examination--$50.

(11) Specialty insurance agent:

(A) original application--$50 (per license authority);

(B) renewal--$50 (per license authority);

(C) additional appointment--$10.

(12) Title attorney:

(A) original application--$50;

(B) renewal--$48.

(13) Life insurance not exceeding $15,000:

(A) original application--$50;

(B) renewal--$50;

(C) additional appointment--$10.

(14) Risk manager:

(A) original application--$50;

(B) renewal--$50;

(C) qualifying examination--$50.

(15) Life and health insurance counselor:

(A) original application--$50;

(B) renewal--$50;

(C) qualifying examination--$50.

(16) Funeral prearrangement life insurance agent:

(A) original application--$50;

(B) renewal--$50;

(C) additional appointment--$10.

(17) Reinsurance intermediary:

(A) original application--$500;

(B) renewal--$500.

(18) Temporary license application--For license types authorized by Insurance Code Chapter 4001, Subchapter D to be issued on a temporary basis, $100 in addition to the original license application fee for each license type.

(19) Utilization review agent:

(A) original application--$2,150;

(B) renewal--$545.

(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.

(22) Life agent:

(A) original application--$50;

(B) renewal--$50;

(C) additional appointment--$10;

(D) qualifying examination--$50.

(23) Personal lines property and casualty agent:

(A) original application--$50;

(B) renewal--$50;

(C) additional appointment--$10;

(D) qualifying examination--$50;

(c) The limited lines agent license is a single license type that is authorized under Insurance Code Chapters 4051 and 4054. Persons licensed as limited lines agents may be appointed to sell or solicit any line authorized by Insurance Code Chapter 4051, Subchapter C and Chapter 4054, Subchapter C without payment of additional license fees or examinations other than the necessary additional company appointment fees.

(d) A general agent, personal lines property and casualty agent, or life agent appointed as subagent by another general agent, personal lines property and casualty agent, or life agent is not a separate license type. All fees are the same for a general agent, personal lines property and casualty agent, or life agent appointed as subagents, as are the fees for a general agent, personal lines property and casualty agent, or life agent appointed by insurance companies.

(e) All fees are the same for both residents and nonresidents. Insurance Code Chapter 4056 does not create an additional license type for nonresidents, but designates a procedure for licensing nonresidents under appropriate Texas license types.

SUBCHAPTER K. CONTINUING EDUCATION AND ADJUSTER PRELICENSING EDUCATION PROGRAMS

§19.1002. Definitions.

(a) Words and terms defined in Insurance Code §4001.003 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 Chapter 4101.

(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 individual licensed under one or more of the following Insurance Code provisions:

(A) Chapter 4051, Subchapters B, C, D, E, and I (general property and casualty agent, limited lines agent, insurance service representative, county mutual agent, and personal lines property and casualty agent);

(B) Chapter 4052 (life and health insurance counselor);

(C) Chapter 4053 (managing general agent);

(D) Chapter 4054, Subchapters B, C, E, and G (general lines - life, accident, and health agent, limited lines agent, life insurance not exceeding $15,000 agent, and life agent);

(E) Chapter 4101 (adjuster);

(F) Chapter 4102 (public insurance adjuster).

(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 §4001.108, 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.



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