CHAPTER 4055. SPECIALTY AGENTS - Texas Statutes

INSURANCE CODE

TITLE 13. REGULATION OF PROFESSIONALS

SUBTITLE B. AGENTS

CHAPTER 4055. SPECIALTY AGENTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 4055.001. DEFINITION. In this chapter, "specialty license

holder" means a person who holds a license issued under this

chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.002. APPLICABILITY OF CHAPTER TO CERTAIN AGENTS. (a)

A person who holds a general property and casualty license issued

under Chapter 4051 or a general life, accident, and health

license issued under Chapter 4054 or who holds a substantially

equivalent license under this code, as determined by the

commissioner, is not required to obtain a specialty license.

(b) A person described by Subsection (a) is subject to the other

requirements of this chapter in the solicitation, sale, or

delivery of an insurance product that is subject to this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.003. RULES. The commissioner may adopt rules

necessary to implement this chapter and to meet the minimum

requirements of federal law, including regulations.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.004. APPLICATION. To obtain a specialty license an

applicant must:

(1) submit to the commissioner:

(A) a written application:

(i) signed by the applicant;

(ii) on a form and supplements to the form prescribed by the

commissioner; and

(iii) containing the information prescribed by the commissioner;

(B) a certification by an insurer authorized to engage in

business in this state:

(i) signed and sworn to by an officer of the insurer;

(ii) stating that the insurer is satisfied that the applicant is

trustworthy and competent to act as the insurer's agent for a

limited purpose authorized by this chapter; and

(iii) stating that if the specialty license applied for is

issued by the department the insurer will appoint the applicant

to act as an agent for a kind of insurance that is subject to

this chapter; and

(C) a nonrefundable license fee set by the department in an

amount necessary to administer this chapter; and

(2) comply with the other requirements of this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.005. LICENSE ISSUANCE. The commissioner may issue a

specialty license to an applicant who complies with Section

4055.004 and the other requirements of this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.006. EXAMINATION AND CONTINUING EDUCATION NOT

REQUIRED. (a) An examination is not required for issuance of a

specialty license.

(b) A person is not required to comply with continuing education

requirements to hold a specialty license.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.007. APPOINTMENT AS AGENT BY INSURER. An insurer that

appoints an agent under this chapter shall:

(1) submit a certification of the appointment signed by an

officer of the insurer; and

(2) affirm that the insurer is satisfied that the specialty

license holder is trustworthy and competent to act as an agent on

behalf of the insurer.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.008. GENERAL POWERS AND DUTIES. (a) A specialty

license holder may act as an agent for the kinds of insurance

that are subject to this chapter for any insurer authorized to

engage in the business of those kinds of insurance in this state.

(b) Except as otherwise provided by this chapter, a specialty

license holder acting under this chapter shall comply with this

title.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.009. CERTAIN REPRESENTATIONS PROHIBITED. A specialty

license holder may not advertise, represent, or otherwise hold

out the license holder or an employee of the license holder as an

agent licensed under another chapter unless the entity or

individual holds the applicable license.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.010. TREATMENT OF CERTAIN PREMIUMS. Notwithstanding

any other provision of this title or any rule adopted by the

commissioner, a specialty license holder is not required to treat

as money received in a fiduciary capacity premiums collected from

a consumer who purchases insurance coverage when completing a

consumer transaction associated with the coverage if:

(1) the insurer represented by the license holder has consented

in writing, signed by an officer of the insurer, that premiums

are not required to be segregated from money received by the

license holder because of the consumer transaction associated

with the insurance coverage; and

(2) the charges for insurance coverage are itemized but not

billed to the consumer separately from the charges for the

associated consumer transaction.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.011. AUTHORITY OF EMPLOYEE OF SPECIALTY LICENSE

HOLDER. An employee of a specialty license holder may act as an

agent with respect to the kinds of insurance the license holder

is authorized to offer under this chapter only if the employee:

(1) is trained under Section 4055.012 to act individually on

behalf of the license holder;

(2) acts on behalf of and under the supervision of the license

holder; and

(3) is not compensated based primarily on the amount of

insurance sold by the employee under this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.012. TRAINING REQUIRED TO ACT ON BEHALF OF SPECIALTY

LICENSE HOLDER. (a) A specialty license holder may not allow an

individual to act on the license holder's behalf with respect to

a kind of insurance that the license holder is authorized to

offer unless the individual has completed an approved training

program.

(b) The materials for the training program must be provided to

the specialty license holder by an insurer that writes the kind

of insurance authorized under the specialty license.

(c) An insurer that provides training program materials under

Subsection (b) must submit the training program to the

commissioner for approval before the training program is used.

(d) The training program must meet the following minimum

standards:

(1) each trainee must receive basic instruction about the kinds

of insurance the specialty license holder is authorized to offer

for purchase by prospective consumers;

(2) each trainee must be instructed to inform a prospective

consumer that, except as may be specifically provided by another

law of this state or the United States, the purchase of the kind

of insurance offered is not required to complete the associated

consumer transaction; and

(3) each trainee must be instructed with respect to the

disclosures required to be made to consumers.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.013. ASSIGNMENT AND TRANSFER OF COMPENSATION BY

CERTAIN AGENTS. A person who is licensed as a general life,

accident, and health agent, life insurance agent, general

property and casualty agent, or personal lines property and

casualty agent or who holds a substantially equivalent license

under this code, as determined by the commissioner, and who

enters into a contract with an insurer to act as the insurer's

agent in soliciting or writing policies or certificates of

insurance that are subject to this chapter may assign and

transfer to the agent's employer any commission, fee, or other

compensation to be paid to the agent under the agent's contract

with the insurer only if the sale of the insurance product occurs

within the scope of the agent's employment.

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. 2.29, eff. September 1, 2007.

Sec. 4055.014. DISCLOSURES REQUIRED BEFORE ISSUANCE OF

INSURANCE. Except as provided by Section 4055.105, insurance

coverage may not be issued under this chapter unless:

(1) at each location at which sales of the coverage occur,

brochures or other written materials are prominently displayed

and readily available to a prospective consumer that:

(A) summarize, clearly and correctly, the material terms of the

coverage offered to consumers, including the identity of the

insurer;

(B) disclose that the coverage offered by the specialty license

holder may duplicate coverage already provided by a consumer's

personal auto insurance policy, homeowner's insurance policy,

personal liability insurance policy, or another source of

coverage;

(C) state that, except as specifically provided by another law

of this state or the United States, the purchase by the consumer

of the kind of insurance offered is not required to complete the

associated consumer transaction;

(D) describe the process for filing a claim for benefits; and

(E) contain any additional information required by the

commissioner by rule regarding the price, benefits, exclusions,

conditions, or other limitations of the coverage; and

(2) evidence of coverage is provided to each consumer who

purchases the coverage.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.015. VIOLATION BY SPECIALTY LICENSE HOLDER; PENALTIES.

If a specialty license holder violates this title, the

commissioner may:

(1) impose any disciplinary action authorized by Subchapter C,

Chapter 4005; or

(2) after notice and opportunity for hearing, impose other

penalties, including suspending the transaction of insurance at

specific locations where a violation of this title has occurred,

as the commissioner considers necessary or appropriate to

implement the purposes of this title.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

SUBCHAPTER B. RENTAL CAR COMPANY LICENSE

Sec. 4055.051. DEFINITIONS. In this subchapter:

(1) "Rental agreement" means a written agreement that states the

terms and conditions governing the use of a vehicle or vehicle

equipment provided by a rental car company.

(2) "Rental car company" means a person engaged in the business

of providing leased or rented vehicles or vehicle equipment to

the public.

(3) "Renter" means a person who obtains the use of a vehicle or

vehicle equipment from a rental car company under the terms of a

rental agreement.

(4) "Vehicle" means:

(A) a private passenger motor vehicle, including passenger vans

and minivans that are primarily intended for the transport of

persons;

(B) a motor home;

(C) a motorcycle;

(D) a trailer with a gross vehicle weight rating of 10,000

pounds or less; or

(E) a truck with a gross vehicle weight rating of 26,000 pounds

or less and the operation of which does not require a commercial

driver's license.

(5) "Vehicle equipment" means a cartop carrier, tow bar, or tow

dolly specifically designed for use with a vehicle.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.052. ISSUANCE OF LICENSE. Notwithstanding any other

provision of this chapter or this code, the commissioner shall

issue a specialty license to a rental car company, or to the

franchisee of a rental car company, that complies with this

subchapter. The specialty license may be issued only for the

limited purposes specified by this subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.053. AUTHORITY OF RENTAL CAR COMPANY OR FRANCHISEE.

(a) A rental car company or franchisee licensed under this

chapter may act as an agent for an authorized insurer only:

(1) in connection with the rental of vehicles or vehicle

equipment; and

(2) with respect to:

(A) excess liability insurance that provides coverage in excess

of the standard liability limits provided by the rental car

company in the rental agreement to the rental car company or

franchisee and to renters and other authorized drivers of rental

vehicles for liability arising from the negligent operation or

use of the rental vehicle or vehicle equipment;

(B) accident and health insurance that provides coverage to

renters and other rental vehicle occupants for accidental death

or dismemberment and for medical expenses resulting from an

accident involving the vehicle or vehicle equipment that occurs

during the rental period;

(C) personal effects insurance that provides coverage to renters

and other rental vehicle occupants for the loss of or damage to

personal effects or household belongings that occurs during the

rental period; or

(D) any other coverage the commissioner approves as meaningful

and appropriate in connection with the rental of vehicles or

vehicle equipment.

(b) A rental car company or franchisee licensed under this

chapter may not issue insurance under this subchapter in

connection with a rental agreement if the rental period under the

agreement exceeds 30 consecutive days.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

SUBCHAPTER C. CREDIT INSURANCE LICENSE

Sec. 4055.101. GENERAL DEFINITIONS. In this subchapter:

(1) "Credit insurance" includes:

(A) credit life insurance;

(B) credit accident and health insurance;

(C) credit property insurance;

(D) credit involuntary unemployment insurance; and

(E) insurance that covers the difference between the actual cash

value of a motor vehicle used as security for a loan or lease and

the outstanding balance of that loan or lease if loss or damage

renders the vehicle an actual or constructive total loss while

the debt for which the vehicle serves as security exceeds the

actual cash value of the vehicle.

(2) "Credit insurance agent" means a person licensed under this

chapter to sell credit insurance as specifically provided by this

subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.102. DEFINITION OF CREDIT PROPERTY INSURANCE. (a) In

this subchapter, "credit property insurance" means insurance that

covers personal property:

(1) used as security for a personal or consumer loan; or

(2) under an installment sales agreement or through a consumer

credit transaction that is purchased in connection with or in

relation to the personal or consumer loan, installment sale, or

consumer credit transaction.

(b) "Credit property insurance" does not include insurance that:

(1) provides theft, collision, liability, property damage, or

comprehensive insurance coverage on an automobile, motorized

aircraft, motorcycle, truck, truck-tractor, traction engine, or

any other self-propelled vehicle or craft that is designed

primarily for operation in the air, or on highways, roadways,

waterways, or the sea, and the operating equipment of the

self-propelled vehicle or craft; or

(2) is necessary because of liability imposed by law for damages

arising out of the ownership, operation, maintenance, or use of a

vehicle or craft described by Subdivision (1), other than single

interest coverage on any vehicle or craft described by

Subdivision (1) that insures the interest of the creditor in the

same manner as security for a loan.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.103. ISSUANCE OF LICENSE. Notwithstanding any other

provision of this chapter or this code, the commissioner may

issue a specialty license to a retail distributor of goods, an

automobile dealer, a bank, a state or federal savings and loan, a

state or federal credit union, a finance company, a production

credit association, a manufactured home retailer, or a mobile

home retailer that complies with this subchapter. The specialty

license may be issued only for the limited purposes specified by

this subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.104. AUTHORITY OF CREDIT INSURANCE AGENT. A credit

insurance agent appointed by an insurer authorized to engage in

the business of insurance under this code may act as the agent

for the insurer in the sale of any kind of credit insurance in

the business of which the insurer is authorized to engage,

including individual or group credit insurance.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.105. EXEMPTION FROM CERTAIN DISCLOSURE REQUIREMENTS.

A specialty license holder and the license holder's

representative are not required to make the disclosures required

by Section 4055.014 as that section relates to the sale or

delivery of a credit insurance product that is subject to this

subchapter if the license holder or representative complies with

all disclosure requirements prescribed by another provision of

this code or another law of this state or the United States with

regard to the sale or delivery of that product.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

SUBCHAPTER D. TRAVEL INSURANCE LICENSE

Sec. 4055.151. DEFINITIONS. In this subchapter:

(1) "Planned trip" means any journey or travel arranged through

the services of a travel agency.

(2) "Travel agency" means an entity engaged in the business of

selling or arranging transportation or accommodations for the

public.

(3) "Traveler" means an individual who seeks the assistance of a

travel agency in connection with the planning and purchase of a

trip.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.152. ISSUANCE OF LICENSE. Notwithstanding any other

provision of this chapter or this code, the commissioner may

issue a specialty license to a travel agency, the franchisee of a

travel agency, or a public carrier that complies with this

subchapter. The specialty license may be issued only for the

limited purposes specified by this subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.153. AUTHORITY OF TRAVEL AGENCY OR FRANCHISEE. A

travel agency or franchisee licensed under this chapter may act

as an agent for an authorized insurer only:

(1) in connection with the sale or arrangement of transportation

or accommodations for travelers; and

(2) with respect to:

(A) accident and health insurance that provides coverage to a

traveler for accidental death or dismemberment and for medical

expenses resulting from an accident involving the traveler that

occurs during the planned trip;

(B) insurance that provides coverage to a traveler for expenses

incurred as a result of trip cancellation or interruption of a

planned trip;

(C) personal effects insurance that provides coverage to a

traveler for loss of or damage to personal effects during the

planned trip;

(D) life insurance not exceeding $150,000 on any one life

covering risks of travel during a planned trip; or

(E) any other coverage the commissioner approves as meaningful

and appropriate in connection with the transportation or

accommodations arranged through a travel agency.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

SUBCHAPTER E. SELF-SERVICE STORAGE FACILITY LICENSE

Sec. 4055.201. DEFINITIONS. In this subchapter:

(1) "Rental agreement" means a written agreement that states the

terms governing the use of storage space provided by a

self-service storage facility.

(2) "Renter" means a person who obtains the use of storage space

from a self-service storage facility under a rental agreement.

(3) "Self-service storage facility" means a person engaged in

the business of providing leased or rented storage space to the

public.

(4) "Storage space" means a room, unit, locker, or open space

offered for rental to the public for temporary storage of

personal belongings or light commercial goods.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.202. ISSUANCE OF LICENSE. Notwithstanding any other

provision of this chapter or this code, the commissioner may

issue a specialty license to a self-service storage facility or

to the franchisee of a self-service storage facility that

complies with this subchapter. The specialty license may be

issued only for the limited purposes specified by this

subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Sec. 4055.203. AUTHORITY OF SELF-SERVICE STORAGE FACILITY OR

FRANCHISEE. A self-service storage facility or franchisee

licensed under this chapter may act as an agent for any

authorized insurer only:

(1) in connection with the rental of storage space; and

(2) with respect to:

(A) hazard insurance coverage provided to a renter for loss of

or damage to tangible personal property in storage or in transit

during the rental period; or

(B) any other coverage the commissioner approves as meaningful

and appropriate in connection with the rental of storage space.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

SUBCHAPTER F. PORTABLE ELECTRONIC VENDOR LICENSE

Sec. 4055.251. DEFINITIONS. In this subchapter:

(1) "Customer" means a person who purchases a portable

electronic device or a related service.

(2) "Portable electronic devices" means personal,

self-contained, easily carried by an individual, battery-operated

electronic communication, viewing, listening, recording, gaming,

computing or global positioning devices, including cell or

satellite phones, pagers, personal global positioning satellite

units, portable computers, portable audio listening, video

viewing or recording devices, digital cameras, video camcorders,

portable gaming systems, docking stations, automatic answering

devices, and other similar devices and their accessories.

(3) "Vendor" means a person or entity engaged in the business of

leasing, selling, or providing portable electronic devices or

related services to customers.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

121, Sec. 1, eff. September 1, 2009.

Sec. 4055.252. ISSUANCE OF LICENSE; LICENSE FEE. (a)

Notwithstanding any other provision of this chapter or this code,

the commissioner may issue a specialty license to a vendor who

complies with this subchapter. The specialty license may be

issued only for the limited purposes specified by this

subchapter.

(b) A specialty license issued to a vendor under this subchapter

authorizes the vendor and any employee or authorized

representative of the vendor to offer the type of coverage

specified in this subchapter at each location at which the vendor

engages in business.

(c) The commissioner shall impose an annual license fee for a

specialty license issued under this subchapter. The commissioner

shall set the license fee in an amount reasonable and necessary

to cover the costs of administering this subchapter, not to

exceed $5,000.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

121, Sec. 1, eff. September 1, 2009.

Sec. 4055.253. AUTHORITY OF VENDOR OF PORTABLE ELECTRONIC

DEVICES. A vendor licensed under this subchapter and the

vendor's employee and authorized representative may act as an

agent for an authorized insurer in connection with the sale and

use of portable electronic devices and related services only

with respect to:

(1) insurance coverage provided to customers that covers

portable electronic devices against one or more of the following:

(A) loss;

(B) theft;

(C) mechanical failure;

(D) malfunction;

(E) damage; or

(F) other applicable perils; or

(2) the provision of any other coverage the commissioner

approves as meaningful and appropriate in connection with the use

of portable electronic devices or related services.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1,

2005.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

121, Sec. 1, eff. September 1, 2009.

Sec. 4055.254. INSURANCE POLICY; REQUIREMENTS. (a) Insurance

provided under this subchapter may be issued to a licensed vendor

under a master or group policy of personal or commercial inland

marine insurance. A customer may be designated as an additional

insured or certificate holder under the policy.

(b) A licensed vendor shall provide to each customer designated

as an additional insured or certificate holder a coverage form,

certificate, or other evidence of coverage in a brochure or

separate document.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

121, Sec. 1, eff. September 1, 2009.

Sec. 4055.255. REQUIRED TRAINING. (a) Notwithstanding Section

4055.012, an agent who holds a license issued under Chapter 4051

or a substantially equivalent license issued under this code and

who is appointed by the insurer that insures a vendor may:

(1) provide the materials for the training program required

under Section 4055.012; and

(2) conduct the applicable training.

(b) An agent described by Subsection (a) shall submit the

training program materials for approval as required under Section

4055.012(c).

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

121, Sec. 1, eff. September 1, 2009.