CHAPTER 4054. LIFE, ACCIDENT, AND HEALTH AGENTS - Texas Statutes

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.