CHAPTER 4101. INSURANCE ADJUSTERS - Texas Statutes

INSURANCE CODE

TITLE 13. REGULATION OF PROFESSIONALS

SUBTITLE C. ADJUSTERS

CHAPTER 4101. INSURANCE ADJUSTERS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 4101.001. DEFINITIONS. (a) In this chapter, "adjuster"

means an individual who:

(1) investigates or adjusts losses on behalf of an insurer as an

independent contractor or as an employee of:

(A) an adjustment bureau;

(B) an association;

(C) a general property and casualty agent or personal lines

property and casualty agent;

(D) an independent contractor;

(E) an insurer; or

(F) a managing general agent;

(2) supervises the handling of claims; or

(3) investigates, adjusts, supervises the handling of, or

settles workers' compensation claims, including claims arising

from services provided through a certified workers' compensation

health care network as authorized under Chapter 1305, on behalf

of an administrator, as defined by Chapter 4151, or on behalf of

an insurance carrier, as defined by Section 401.011, Labor Code.

(b) For purposes of this chapter, "insurer" includes a

self-insured.

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. 2.30, eff. September 1, 2007.

Acts 2007, 80th Leg., R.S., Ch.

1176, Sec. 2.04, eff. September 1, 2007.

Sec. 4101.002. GENERAL EXEMPTIONS. (a) This chapter does not

apply to:

(1) an attorney who:

(A) adjusts insurance losses periodically and incidentally to

the practice of law; and

(B) does not represent that the attorney is an adjuster;

(2) a salaried employee of an insurer who is not regularly

engaged in the adjustment, investigation, or supervision of

insurance claims;

(3) a person employed only to furnish technical assistance to a

licensed adjuster, including:

(A) an attorney;

(B) an engineer;

(C) an estimator;

(D) a handwriting expert;

(E) a photographer; and

(F) a private detective;

(4) an agent or general agent of an authorized insurer who

processes an undisputed or uncontested loss for the insurer under

a policy issued by the agent or general agent;

(5) a person who performs clerical duties and does not negotiate

with parties to disputed or contested claims;

(6) a person who handles claims arising under life, accident,

and health insurance policies;

(7) a person:

(A) who is employed principally as:

(i) a right-of-way agent; or

(ii) a right-of-way and claims agent;

(B) whose primary responsibility is the acquisition of

easements, leases, permits, or other real property rights; and

(C) who handles only claims arising out of operations under

those easements, leases, permits, or other contracts or

contractual obligations;

(8) an individual who is employed to investigate suspected

fraudulent insurance claims but who does not adjust losses or

determine claims payments; or

(9) a public insurance adjuster licensed under Chapter 4102.

(b) A nonresident adjuster is not required to hold a license

under this chapter to:

(1) adjust a single loss in this state;

(2) adjust losses arising out of a catastrophe common to all

those losses; or

(3) act as a temporary substitute for a licensed adjuster.

(c) For purposes of Subsection (a)(6), claims arising under

workers' compensation insurance policies, including claims

relating to services provided through a certified workers'

compensation health care network authorized under Chapter 1305,

do not constitute claims arising under life, accident, or health

insurance policies.

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

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.081(a), eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch.

1176, Sec. 2.05, eff. September 1, 2007.

Sec. 4101.003. TEMPORARY EXEMPTION. An individual who is

undergoing training as an adjuster under the supervision of a

licensed adjuster may act as an adjuster for a period not to

exceed 12 months without having a license issued under this

chapter if, at the beginning of the period, the individual has

been registered with the commissioner as a trainee.

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

2005.

Sec. 4101.004. RECIPROCITY. The department may waive any

license requirement imposed under this chapter for an applicant

who holds a valid license from another state if the state has

license requirements substantially equivalent to the requirements

for a license issued under this chapter.

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

2005.

Sec. 4101.005. 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. 4101.006. ADVISORY BOARD. (a) An advisory board shall

make recommendations to the commissioner regarding:

(1) the scope, time, and conduct of written examinations under

Subchapter B;

(2) the times and locations in this state where the examinations

are held; and

(3) any other matter the commissioner submits to the advisory

board for a recommendation.

(b) The advisory board is composed of nine members appointed by

the commissioner as follows:

(1) the presiding officer of the unauthorized practice of law

committee of the State Bar of Texas;

(2) three members who represent the public;

(3) two members with knowledge and experience in the profession

of insurance adjusting;

(4) one member from a domestic insurer authorized to engage in

business in this state;

(5) one member from a foreign insurer authorized to engage in

business in this state; and

(6) one member who is an independent adjuster.

(c) A member who represents the public may not be:

(1) an officer, director, or employee of:

(A) an adjuster;

(B) an agent;

(C) a broker;

(D) an insurance agency;

(E) an insurer; or

(F) any other business entity regulated by the department;

(2) a person required to register as a lobbyist under Chapter

305, Government Code; or

(3) a person related to a person described by Subdivision (1) or

(2) within the second degree of affinity or consanguinity.

(d) A member of the advisory board serves without compensation.

If authorized by the commissioner, an advisory board member is

entitled to reimbursement for reasonable expenses incurred in

attending meetings of the advisory board.

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

2005.

SUBCHAPTER B. LICENSE REQUIREMENTS

Sec. 4101.051. LICENSE REQUIRED. Except as otherwise provided

by this chapter, a person may not act as or represent that the

person is an adjuster in this state unless the person holds a

license under this chapter.

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

2005.

Sec. 4101.052. APPLICATION. (a) An applicant for a license

under this chapter must submit to the department an application

on a form prescribed and provided by the department, and include

as part of or in connection with the application any information

that the department reasonably requires, including information

about the applicant's:

(1) identity;

(2) personal history;

(3) experience; and

(4) business record.

(b) The application must be accompanied by the fee required by

Section 4101.057.

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

2005.

Sec. 4101.053. QUALIFICATIONS; ISSUANCE. (a) To qualify for a

license under this chapter, an applicant must:

(1) comply with this chapter;

(2) present evidence satisfactory to the department that the

applicant:

(A) is at least 18 years of age;

(B) resides in this state or a state or country that permits a

resident of this state to act as an adjuster in that state or

country;

(C) has complied with all federal laws relating to employment or

the transaction of business in the United States, if the

applicant does not reside in the United States;

(D) is trustworthy; and

(E) has had experience, special education, or training of

sufficient duration and extent regarding the handling of loss

claims under insurance contracts to make the applicant competent

to fulfill the responsibilities of an adjuster; and

(3) pass an examination conducted under this subchapter or

present evidence that the applicant has been exempted under

Section 4101.056.

(b) The commissioner shall issue a license to an applicant who

meets the qualifications prescribed by this section.

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

2005.

Sec. 4101.054. EXAMINATION REQUIRED. (a) To be eligible for a

license under this chapter, an applicant must personally take and

pass, to the satisfaction of the commissioner, a written

examination of the applicant's qualifications and competency.

(b) The department may supplement a written examination under

Subsection (a) with an oral examination.

(c) The commissioner shall prescribe each examination under this

section. An examination must be of sufficient scope to reasonably

test the applicant's knowledge relative to the kinds of insurance

that may be dealt with under the license and of:

(1) the duties of a licensed adjuster; and

(2) the laws of this state that apply to a licensed adjuster.

(d) The commissioner may require a reasonable waiting period

before an applicant who fails to pass an examination is eligible

to be retested on a similar examination.

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

2005.

Sec. 4101.055. EXAMINATION PROCEDURES. (a) The department

shall prepare and make available to applicants instructions

specifying in general terms the subjects that may be covered in

an examination required under Section 4101.054.

(b) An examination under this subchapter shall be given at times

and locations in this state necessary to reasonably serve the

convenience of the department and applicants.

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

2005.

Sec. 4101.056. EXEMPTION FROM EXAMINATION REQUIREMENT. (a) An

applicant for a license under this chapter is not required to

pass an examination under Section 4101.054 to receive the license

if the applicant:

(1) had been principally engaged in the investigation,

adjustment, or supervision of losses on August 27, 1973, and

during the 90-day period preceding that date;

(2) is applying for a renewal license under this chapter;

(3) is licensed as an adjuster in another state with which a

reciprocal agreement has been entered into by the commissioner;

or

(4) has completed a course in adjusting losses as prescribed and

approved by the commissioner and it is certified to the

commissioner on completion of the course that the applicant has:

(A) completed the course; and

(B) passed an examination testing the applicant's knowledge and

qualification, as prescribed by the commissioner.

(b) An applicant wishing to claim an exemption under Subsection

(a)(4) is responsible for the scheduling and administration of

the examination required under that subsection.

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

2005.

Sec. 4101.057. FEES. (a) Before issuing or renewing a license

under this chapter, the department shall set and collect a

nonrefundable license fee in an amount not to exceed $50.

(b) An applicant must remit the fee required by Subsection (a)

biennially after the issuance of the original license. If the

applicant's license has been expired for not more than 90 days,

an applicant for a renewal license must remit, in addition to the

fee assessed under Subsection (a), a fee equal to one-half of the

original license fee.

(c) Before administering an examination under this subchapter,

the department shall set and collect a nonrefundable examination

fee in an amount not to exceed $50.

(d) Before issuing a duplicate license requested by an adjuster,

the department shall set and collect a duplicate license fee.

(e) The department shall deposit a fee collected under this

chapter to the credit of the Texas Department of Insurance

operating account.

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

2005.

Sec. 4101.058. LICENSE FORM. (a) The commissioner shall

prescribe the form of a license issued under this chapter.

(b) A license must contain:

(1) the adjuster's name;

(2) the address of the adjuster's place of business;

(3) the date of issuance and the date of expiration of the

license; and

(4) the name of the firm or insurer with whom the adjuster is

employed at the time the license is issued.

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

2005.

Sec. 4101.059. CONTINUING EDUCATION: GENERAL REQUIREMENTS. (a)

To renew a license under this chapter a licensed adjuster must

participate in a continuing education program relating to

consumer protection. The program must include education relating

to consumer protection laws, including:

(1) Chapter 541;

(2) Chapter 547;

(3) Subchapter A, Chapter 542;

(4) Subchapter E, Chapter 17, Business & Commerce Code; and

(5) any other similar laws specified by the department.

(b) The department may certify continuing education programs.

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

2005.

Sec. 4101.060. CONTINUING EDUCATION: EXEMPTIONS AND WAIVERS.

(a) On written request of a licensed adjuster and if the

department determines that the adjuster is unable to comply with

continuing education requirements under this subchapter because

of illness, medical disability, or another extenuating

circumstance beyond the control of the adjuster, the department

may:

(1) extend the time for the adjuster to comply with the

continuing education requirements; or

(2) exempt the adjuster from any of the requirements for a

licensing period.

(b) The commissioner by rule shall establish the criteria for an

extension or exemption under Subsection (a).

(c) The department may waive any continuing education

requirement imposed under this chapter for a nonresident adjuster

who holds a valid license from another state if the state has

continuing education requirements substantially equivalent to the

requirements for a license issued under this chapter.

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

2005.

Sec. 4101.061. EXPIRATION; RENEWAL. Expiration and renewal of a

license issued under this chapter are governed by rules adopted

by the commissioner or any applicable provision of this code or

another insurance law of this state.

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

2005.

SUBCHAPTER C. SPECIAL LICENSES

Sec. 4101.101. EMERGENCY LICENSE. (a) If a catastrophe or an

emergency arises out of a disaster, act of God, riot, civil

commotion, conflagration, or other similar occurrence, the

commissioner shall, on application, issue an emergency license to

a person if the application is certified to the commissioner not

later than the fifth day after the date on which the person

begins work as an adjuster by:

(1) a person who holds a license under this chapter; or

(2) an insurer that maintains an office in this state and holds

a certificate of authority to engage in the business of insurance

in this state.

(b) The person or insurer that certifies an application under

Subsection (a) is responsible for the loss or claims practices of

the emergency license holder whom the person or insurer

certifies.

(c) The commissioner may, after notice and hearing, revoke an

emergency license on grounds specified by Section 4101.201.

(d) An emergency license is effective for a period not to exceed

90 days. The commissioner may extend the term of the emergency

license for an additional period of 90 days.

(e) The commissioner shall establish a fee for an emergency

license in an amount not to exceed $20. A person issued an

emergency license shall remit the fee to the department not later

than the 30th day after the date on which the department issues

the license.

(f) The commissioner may issue an emergency license to an

applicant who meets the requirements of Subsection (a) regardless

of whether the applicant is:

(1) a resident of this state; or

(2) an otherwise licensed adjuster.

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

2005.

Sec. 4101.102. LIMITED LICENSE. (a) If considered necessary by

the commissioner, the department may issue a limited license to

an applicant in the manner otherwise provided for the issuance of

a license under this chapter.

(b) The license shall specifically limit the kinds of insurance

that may be handled by the person.

(c) The person may not adjust claims in a kind of insurance

other than that for which the adjuster is specifically licensed.

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

2005.

SUBCHAPTER D. POWERS AND DUTIES OF ADJUSTER

Sec. 4101.151. PLACE OF BUSINESS. (a) A licensed adjuster

shall maintain a place of business that is:

(1) located at the place at which the adjuster principally

conducts transactions under the license; and

(2) accessible to the public.

(b) A licensed adjuster shall promptly notify the commissioner

if the adjuster changes the location of the adjuster's place of

business.

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

2005.

Sec. 4101.152. REFERRAL BY INSURER. (a) An insurer may not

knowingly refer a claim or loss for adjustment in this state to a

person purporting to be or acting as an adjuster unless the

person holds a license under this chapter.

(b) Before referring a claim or loss for adjustment, an insurer

must ascertain from the commissioner whether the person

performing the adjustment holds a license under this chapter.

Once the insurer has ascertained that the person holds a license,

the insurer may refer the claim or loss to the person and may

continue to refer claims or losses to the person until the

insurer has knowledge or receives information from the

commissioner that the person no longer holds a license.

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

2005.

SUBCHAPTER E. ENFORCEMENT

Sec. 4101.201. GROUNDS FOR DISCIPLINARY ACTION. (a) The

commissioner may discipline an adjuster or deny an application

for a license under this chapter under a department rule or any

applicable insurance law of this state.

(b) Department rules may specify grounds for discipline that are

comparable to grounds for discipline of other license holders

under this title.

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

2005.

Sec. 4101.202. REINSTATEMENT OR REISSUANCE OF LICENSE. The

commissioner may not reinstate or reissue the license of a

license holder or former license holder whose license has been

suspended, revoked, or refused renewal until the commissioner

determines that the cause for a suspension, revocation, or

refusal of a license issued under this chapter no longer exists.

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

2005.

Sec. 4101.203. CRIMINAL PENALTY. A person commits an offense if

the person violates Section 4101.051 or 4101.102(c). An offense

under this section is a misdemeanor punishable by:

(1) a fine of not more than $500;

(2) confinement in the county jail for not more than six months;

or

(3) both the fine and the confinement.

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

2005.