CHAPTER 4054. LIFE, ACCIDENT, AND HEALTH AGENTS
INSURANCE CODE
TITLE 13. REGULATION OF PROFESSIONALS
SUBTITLE B. AGENTS
CHAPTER 4054. LIFE, ACCIDENT, AND HEALTH AGENTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 4054.001. APPLICABILITY OF CHAPTER. (a) This chapter
applies to each agent of an insurer authorized to provide life,
accident, and health insurance coverage in this state.
(b) This chapter applies to each person who:
(1) performs the acts of an agent, as described by Section
4001.051, whether through an oral, written, electronic, or other
form of communication by soliciting, negotiating, procuring, or
collecting a premium on an insurance or annuity contract offered
by any type of insurer authorized to engage in the business of
life, accident, and health insurance in this state; or
(2) represents or purports to represent a health maintenance
organization in soliciting, negotiating, procuring, or effecting
membership in the health maintenance organization.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
SUBCHAPTER B. GENERAL LIFE, ACCIDENT, AND HEALTH LICENSE
Sec. 4054.051. LICENSE REQUIRED. Except as provided by
Subchapter G, a person is required to hold a general life,
accident, and health license if the person acts as:
(1) an agent who represents a health maintenance organization;
(2) an industrial life insurance agent for an insurer that
writes only weekly premium life insurance on a debit basis under
Chapter 1151;
(3) an agent who writes life, accident, and health insurance for
a life insurance company;
(4) an agent who writes only accident and health insurance;
(5) an agent who writes fixed or variable annuity contracts or
variable life contracts;
(6) an agent who writes for a stipulated premium company:
(A) only life insurance in excess of $25,000 on any one life;
(B) only accident and health insurance; or
(C) both kinds of insurance described by Paragraphs (A) and (B);
(7) an agent who writes life, accident, and health insurance for
any type of authorized life insurance company that is domiciled
in this state, including a legal reserve life insurance company,
and who represents the company:
(A) in a foreign country or territory; and
(B) on a United States military installation or with United
States military personnel;
(8) an agent who writes life, accident, and health insurance for
a fraternal benefit society except as provided by Section
885.352; or
(9) an agent who writes any other kind of insurance as required
by the commissioner for the protection of the insurance consumers
of this state.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
548, Sec. 2.27, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
1309, Sec. 7, eff. September 1, 2009.
Sec. 4054.052. COMBINATION LIFE INSURANCE AGENT. (a) In this
section, a "combination company" means an insurer that writes
weekly premium life insurance or monthly ordinary life insurance
on a debit basis.
(b) A person may not act as a combination life insurance agent
for a combination company unless the person holds a general life,
accident, and health license or a life agent license.
(c) A combination company and a combination life insurance agent
may also write ordinary life insurance contracts.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
548, Sec. 2.28, eff. September 1, 2007.
Sec. 4054.053. AUTHORITY TO WRITE ADDITIONAL LINES. A person
who holds a general life, accident, and health license may,
without obtaining an additional license, write the kinds of
insurance contracts described by:
(1) Subchapter C, D, or E; or
(2) Chapter 4055.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
SUBCHAPTER C. LIMITED LIFE, ACCIDENT, AND HEALTH LICENSE
Sec. 4054.101. LICENSE REQUIRED. Except as provided by Section
4054.053, an agent is required to hold a limited life, accident,
and health license if the agent writes:
(1) a policy or rider to a policy that provides only:
(A) lump-sum cash benefits in the event of accidental death or
dismemberment; or
(B) ambulance expense benefits in the event of accident or
sickness;
(2) a prepaid legal services contract under Article 5.13-1 or
Chapter 961;
(3) credit insurance, except as otherwise provided by Chapter
4055; or
(4) any other kind of insurance, if holding a limited life,
accident, and health license to write that kind of insurance is
determined necessary by the commissioner for the protection of
the insurance consumers of this state.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.102. DESIGNATION OF KINDS OF INSURANCE. A person who
holds a limited life, accident, and health license may write only
the kind of insurance designated on the license.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.103. TEMPORARY LICENSE. An applicant for a limited
life, accident, and health license is eligible for a temporary
license under Subchapter D, Chapter 4001.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
SUBCHAPTER D. FUNERAL PREARRANGEMENT LIFE INSURANCE LICENSE
Sec. 4054.151. FUNERAL PREARRANGEMENT LIFE INSURANCE AGENT. A
funeral prearrangement life insurance agent is a life insurance
agent who, subject to the limitations of this subchapter, writes
only life insurance policies and fixed annuity contracts to
secure the delivery of funeral services and merchandise under
prepaid funeral contracts regulated by the Texas Department of
Banking under Chapter 154, Finance Code.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.152. LICENSE ISSUANCE. The department shall issue a
license to an individual applicant to act as a funeral
prearrangement life insurance agent on receipt of certification
from an insurer authorized to write life insurance policies and
fixed annuity contracts in this state that the applicant has:
(1) completed a course of study and instruction in compliance
with this subchapter; and
(2) passed without aid a written examination administered by the
insurer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.153. COURSE. (a) To be eligible to receive a license
under this subchapter, an applicant must complete a course of
study and instruction offered by an insurer under this section on
life insurance policies and fixed annuity contracts.
(b) The course of study and instruction must:
(1) be at least five hours in duration; and
(2) include instruction on:
(A) the life insurance policies and fixed annuity contracts to
be sold; and
(B) the laws relating to funeral prearrangement.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.154. EXAMINATION. (a) The commissioner shall
prescribe a uniform examination for applicants that fairly tests
knowledge of the information contained in the course under
Section 4054.153.
(b) The department shall authorize an insurer to administer the
examination as provided by this section after approval by the
department of a complete outline and explanation of the course
and the manner of conducting the examination.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.155. INVESTIGATION BY DEPARTMENT. The department may
investigate as necessary the manner of instruction and the
examination administered by an insurer under this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.156. WITHDRAWAL OF INSURER'S AUTHORITY. The
department may withdraw from an insurer the authority under this
subchapter to offer instruction and administer an examination.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.157. LIMIT ON AGENT'S AUTHORITY. A funeral
prearrangement life insurance agent licensed under this
subchapter may not write any coverage or combination of coverages
with an initial guaranteed death benefit that exceeds $15,000 on
any life.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.158. REVOCATION; NOTIFICATION. (a) A license issued
under this subchapter to act as an agent for an insurer is
revoked if the license holder ceases to act as an agent for the
insurer.
(b) Not later than the 15th day after the date on which the
license holder ceases to act as an agent for an insurer, the
insurer or agent shall send written notification to the
department.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.159. CONTINUING EDUCATION EXEMPTION. (a)
Notwithstanding any other provision of this code, a funeral home
employee or other person who holds a funeral prearrangement life
insurance agent license and who writes only life insurance
policies and fixed annuity contracts to secure the delivery of
funeral services and merchandise under prepaid funeral contracts
regulated by the Texas Department of Banking under Chapter 154,
Finance Code, is not required to comply with any continuing
education requirements to maintain the license, except that the
appointing insurer must educate its appointed agents about any
new products sold by the agent to fund prepaid funeral contracts.
(b) A license holder to whom this section applies may be
appointed by more than one insurer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.160. APPLICABILITY OF LIMITED LICENSE LAWS. Except as
specifically provided by this subchapter, the provisions of this
title that apply to the holder of a limited license apply to the
holder of a license issued under this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
SUBCHAPTER E. LIFE INSURANCE NOT
EXCEEDING $25,000
Sec. 4054.201. LICENSE ISSUANCE; EXCEPTION. (a) The department
shall issue a license to an individual applicant to act as an
agent who writes only life insurance policies in an amount that
does not exceed $25,000 on any one life on receipt of
certification from a stipulated premium company, a statewide
mutual assessment company, a local mutual aid association, or a
local mutual burial association, that the applicant has:
(1) completed a course of study and instruction in compliance
with this subchapter; and
(2) passed without aid a written examination administered by the
insurer.
(b) A license is not required under this subchapter for an agent
who, in the preceding calendar year, wrote policies that
generated, in the aggregate, less than $20,000 in direct premium.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1309, Sec. 9, eff. September 1, 2009.
Sec. 4054.202. COURSE. (a) To be eligible to receive a license
under this subchapter, an applicant must complete a course of
study and instruction offered by an insurer under this section on
life insurance and fixed annuities.
(b) The course of study and instruction must:
(1) be at least five hours in duration; and
(2) include instruction on:
(A) the policies to be sold; and
(B) the laws relating to the regulation of insurance in this
state.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.203. EXAMINATION. (a) The commissioner shall
prescribe a uniform examination for applicants that fairly tests
knowledge of the information contained in the course provided
under Section 4054.202.
(b) The department shall authorize an insurer described by
Section 4054.201 to administer the examination as provided by
this section after approval by the department of a complete
outline and explanation of the course and the manner of
conducting the examination.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.204. INVESTIGATION BY DEPARTMENT. The department may
investigate as necessary the manner of instruction and the
examination administered by an insurer under this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.205. WITHDRAWAL OF INSURER'S AUTHORITY. The
department may withdraw from an insurer the authority under this
subchapter to offer instruction and administer an examination.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.206. LIMIT ON AGENT'S AUTHORITY. An insurance agent
licensed under this subchapter may not write any coverage or
combination of coverages with an initial guaranteed death benefit
that exceeds $25,000 on any life.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1309, Sec. 10, eff. September 1, 2009.
Sec. 4054.207. CONTINUING EDUCATION EXEMPTION. (a)
Notwithstanding any other provision of this code, a person who
holds a license under this subchapter and who writes only life
insurance policies and fixed annuity contracts to secure the
delivery of funeral services and merchandise under prepaid
funeral contracts regulated by the Texas Department of Banking
under Chapter 154, Finance Code, is not required to comply with
any continuing education requirements to maintain the license,
except that the appointing insurer must educate its appointed
agents about any new products sold by the agent to fund prepaid
funeral contracts.
(b) A license holder to whom this section applies may be
appointed by more than one insurer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.208. APPLICABILITY OF LIMITED LICENSE LAWS. Except as
specifically provided by this subchapter, the provisions of this
title that apply to the holder of a limited license apply to the
holder of a license issued under this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
SUBCHAPTER F. RENEWAL OR SERVICE COMMISSIONS TO AGENTS OF LIFE
INSURANCE COMPANIES DISCONTINUING BUSINESS IN STATE
Sec. 4054.251. INSURANCE COMPANY LIABILITY FOR PAYMENT OF
COMMISSIONS. A life insurance company that discontinues the
business of issuing life insurance policies on the lives of
residents of this state remains liable for the payment of renewal
or service commissions on life insurance policies previously
written by the company under the terms of the company's contracts
previously made with agents residing in this state.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.252. MONTHLY AND QUARTERLY STATEMENTS. (a) A life
insurance company shall provide to each agent who may be entitled
to receive renewal or service commissions from the company under
Section 4054.251:
(1) a monthly statement that shows the policies written by the
agent for the company that terminated during the month for which
the statement is made; and
(2) at least quarterly, a detailed statement of all policies
written by the agent for the company on the lives of residents of
this state that shows:
(A) the policies in force; and
(B) the policies that have terminated, with the reason for the
termination.
(b) A life insurance company is not required to provide an agent
with a statement under this section after the expiration of the
period during which renewal or service commissions are payable as
to all of the policies written by the agent for the company.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
Sec. 4054.253. PRESUMPTION IN LAWSUIT. In a suit against a life
insurance company for the recovery of a renewal or service
commission under this subchapter, a presumption exists that each
policy written by the company on the life of a resident of this
state by the agent bringing the suit continues in effect unless
the defendant proves the contrary by competent evidence.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,
2005.
SUBCHAPTER G. LIFE AGENT
Sec. 4054.301. LICENSE REQUIRED. (a) Except as provided by
Subsection (b), a person is required to hold a life agent license
if the person does not hold a general life, accident, and health
license under Subchapter B and the person acts as:
(1) an agent who writes insurance coverage on human lives,
including endowment benefits and annuities, benefits in the event
of death or dismemberment by accident, and benefits for
disability income;
(2) an industrial life insurance agent for an insurer that
writes only weekly premium life insurance on a debit basis under
Chapter 1151;
(3) an agent who writes fixed or variable annuity contracts or
variable life contracts;
(4) an agent who writes for a stipulated premium company only
life insurance in excess of $25,000 on any one life; or
(5) an agent who writes any other kind of insurance as required
by the commissioner for the protection of the insurance consumers
of this state.
(b) A person who holds a limited license under Subchapter C and
who engages in the business of insurance only within the scope of
that license is not required to hold a life agent license. A
person who holds a life agent license may write the insurance
described by that subchapter.
(c) A person who holds a funeral prearrangement life insurance
license under Subchapter D and who engages in the business of
insurance only within the scope of that license is not required
to hold a life agent license. A person who holds a life agent
license may write the insurance described by that subchapter.
(d) A person who holds a license to write life insurance not
exceeding $25,000 under Subchapter E and who engages in the
business of insurance only within the scope of that license is
not required to hold a life agent license. A person who holds a
life agent license may write the insurance described by that
subchapter.
(e) This subchapter does not apply to a person who holds a
specialty license under Chapter 4055 and who engages in the
business of insurance only within the scope of the specialty
license.
Added by Acts 2007, 80th Leg., R.S., Ch.
548, Sec. 1.02, eff. September 1, 2007.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1309, Sec. 11, eff. September 1, 2009.
Sec. 4054.302. AUTHORITY TO WRITE SPECIFIED COVERAGES. A person
who holds a license under this subchapter may write only
insurance described by Sections 4054.301(a)-(d).
Added by Acts 2007, 80th Leg., R.S., Ch.
548, Sec. 1.02, eff. September 1, 2007.
Sec. 4054.303. APPLICABILITY OF CERTAIN REQUIREMENTS. Except as
otherwise provided by this code, the provisions of this title
that apply to the holder of a general life, accident, and health
license apply to the holder of a license issued under this
subchapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
548, Sec. 1.02, eff. September 1, 2007.
Sec. 4054.304. FEES. Section 4001.006 applies to all fees
collected under this subchapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
548, Sec. 1.02, eff. September 1, 2007.
SUBCHAPTER H. SPECIALTY CERTIFICATION FOR AGENTS SERVING CERTAIN
EMPLOYER GROUPS
Sec. 4054.351. CERTIFICATION PROGRAM. The department shall
establish a voluntary specialty certification program for
individuals who market small employer health benefit plans in
accordance with Chapter 1501.
Added by Acts 2009, 81st Leg., R.S., Ch.
1338, Sec. 1, eff. September 1, 2009.
Sec. 4054.352. QUALIFICATIONS. (a) To be eligible to receive a
specialty certification under this subchapter, an individual
must:
(1) hold a general life, accident, and health license under this
chapter;
(2) satisfy the requirements of this subchapter; and
(3) submit evidence of completion of training to the department
in the manner prescribed by the commissioner.
(b) To maintain a specialty certification under this subchapter,
an individual must continue to hold a general life, accident, and
health license under this chapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
1338, Sec. 1, eff. September 1, 2009.
Sec. 4054.353. INITIAL TRAINING. (a) To be certified under
this subchapter, an individual must first complete training in
the law, including department rules, applicable to small employer
health benefit plans offered under Chapter 1501.
(b) An individual seeking specialty certification under this
subchapter must complete a course applicable to small employer
health benefit plans under Chapter 1501, as prescribed and
approved by the commissioner. Except as provided by Subsection
(c), an individual is not eligible for the specialty
certification unless, on completion of the course, it is
certified to the commissioner as required by the department that
the individual has:
(1) completed the course; and
(2) passed an examination testing the individual's knowledge and
qualification.
(c) An individual seeking specialty certification under this
subchapter is not required to complete the course and examination
required by Subsection (b) if the individual demonstrates to the
department, in the manner prescribed by the department, that the
individual holds a designation as:
(1) a Registered Health Underwriter (RHU);
(2) a Certified Employee Benefit Specialist (CEBS); or
(3) a Registered Employee Benefits Consultant (REBC).
Added by Acts 2009, 81st Leg., R.S., Ch.
1338, Sec. 1, eff. September 1, 2009.
Sec. 4054.354. RENEWAL. To renew a specialty certification
under this subchapter, the individual must complete five hours of
continuing education applicable to small employer health benefit
plans during the two-year certification period.
Added by Acts 2009, 81st Leg., R.S., Ch.
1338, Sec. 1, eff. September 1, 2009.
Sec. 4054.355. SATISFACTION OF CONTINUING EDUCATION
REQUIREMENTS. Each hour of education completed in accordance
with this subchapter to obtain or renew a specialty license may
be used to satisfy an hour of a continuing education requirement
otherwise applicable to the agent under this title.
Added by Acts 2009, 81st Leg., R.S., Ch.
1338, Sec. 1, eff. September 1, 2009.
Sec. 4054.356. OFFER OF SERVICES TO ALL GROUP SIZES. To hold a
specialty certification under this subchapter, an individual must
agree to market small employer health benefit plans to small
employers that satisfy the requirements of Chapter 1501 without
regard to the number of employees to be covered under the plan.
Added by Acts 2009, 81st Leg., R.S., Ch.
1338, Sec. 1, eff. September 1, 2009.
Sec. 4054.357. ADVERTISING. An individual who holds a specialty
certification may advertise, in the manner specified by
department rule, that the individual is specially trained to
serve small employers.
Added by Acts 2009, 81st Leg., R.S., Ch.
1338, Sec. 1, eff. September 1, 2009.
Sec. 4054.358. LIST MAINTAINED BY DEPARTMENT; WEBSITE. The
department shall maintain a list of all individuals who hold a
specialty certification under this subchapter, together with the
business address and phone number of each individual and a
general description of the individual's service area. The
department shall publish the list on the department website.
Added by Acts 2009, 81st Leg., R.S., Ch.
1338, Sec. 1, eff. September 1, 2009.
Sec. 4054.359. RULES. The commissioner, in accordance with
Section 36.001, may adopt rules as necessary to administer this
subchapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
1338, Sec. 1, eff. September 1, 2009.