CHAPTER 4102. PUBLIC INSURANCE ADJUSTERS - Texas Statutes

INSURANCE CODE

TITLE 13. REGULATION OF PROFESSIONALS

SUBTITLE C. ADJUSTERS

CHAPTER 4102. PUBLIC INSURANCE ADJUSTERS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 4102.001. DEFINITIONS. In this chapter:

(1) "License holder" means a person licensed under this chapter

as a public insurance adjuster.

(2) "Person" includes an individual, firm, company, association,

organization, partnership, limited liability company, or

corporation.

(3) "Public insurance adjuster" means:

(A) a person who, for direct, indirect, or any other

compensation:

(i) acts on behalf of an insured in negotiating for or effecting

the settlement of a claim or claims for loss or damage under any

policy of insurance covering real or personal property; or

(ii) on behalf of any other public insurance adjuster,

investigates, settles, or adjusts or advises or assists an

insured with a claim or claims for loss or damage under any

policy of insurance covering real or personal property; or

(B) a person who advertises, solicits business, or holds himself

or herself out to the public as an adjuster of claims for loss or

damage under any policy of insurance covering real or personal

property.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.002. GENERAL EXEMPTIONS. This chapter does not apply

to:

(1) an officer or employee of the federal or state government or

of a political subdivision of the state government while the

officer or employee is engaged in the performance of official

duties;

(2) an attorney engaged in the performance of the attorney's

professional duties;

(3) insurers admitted to do business in the state and agents

licensed by this state, engaged in the performance of their

duties in connection with insurance transactions;

(4) the legal owner of personal property that has been sold

under a conditional sales agreement or a mortgagee under the

terms of a chattel mortgage;

(5) a salaried office employee who performs exclusively clerical

or administrative duties attendant to the disposition of the

business regulated by this chapter;

(6) a photographer, estimator, appraiser, engineer, or

arbitrator employed by a public insurance adjuster exclusively

for the purpose of furnishing technical assistance to the

licensed public insurance adjuster;

(7) a private investigator licensed under Chapter 1702,

Occupations Code, while acting within the scope of that license;

or

(8) a full-time salaried employee of a property owner or a

property management company retained by a property owner who:

(A) does not hold the employee out as:

(i) a public insurance adjuster; or

(ii) a building, roofing, or other restoration contractor;

(B) has not been hired to handle a specific claim resulting from

a fire or casualty loss; and

(C) acts at the sole discretion of the property owner or

management company regarding a claim related to the owner's

property.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.003. CERTAIN CONSTRUCTION REGARDING PRACTICE OF LAW

PROHIBITED. This chapter may not be construed as entitling a

person who is not licensed by the Supreme Court of Texas to

practice law in this state.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.004. RULES. The commissioner may adopt reasonable and

necessary rules to implement this chapter, including rules

regarding:

(1) the qualifications of license holders, in addition to those

prescribed by this chapter, that are necessary to promote and

protect the public interest;

(2) the regulation of the conduct of license holders;

(3) the prescription of fees required by Section 4102.066; and

(4) the regulation of advertisements under Section 4102.113 and

the definition of "advertisement" as the term is used in that

section.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.005. CODE OF ETHICS. The commissioner, with guidance

from the public insurance adjusters examination advisory

committee, by rule shall adopt:

(1) a code of ethics for public insurance adjusters that fosters

the education of public insurance adjusters concerning the

ethical, legal, and business principles that should govern their

conduct;

(2) recommendations regarding the solicitation of the adjustment

of losses by public insurance adjusters; and

(3) any other principles of conduct or procedures that the

commissioner considers necessary and reasonable.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.006. NOTICE TO LAST ADDRESS. Notice by registered

mail, return receipt requested, sent to the last known address of

an applicant for a license, a license holder, or another person

to whom notice is required to be sent under this chapter, as

reflected by the records of the department, constitutes

sufficient notice under this chapter.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

SUBCHAPTER B. LICENSE REQUIREMENTS

Sec. 4102.051. LICENSE REQUIRED; EXEMPTION. (a) A person may

not act as a public insurance adjuster in this state or hold

himself or herself out to be a public insurance adjuster in this

state unless the person holds a license or certificate issued by

the commissioner under Section 4102.053, 4102.054, or 4102.069.

(b) A license is not required for:

(1) an attorney licensed to practice law in this state who has

complied with Section 4102.053(a)(6); or

(2) a person licensed as a general property and casualty agent

or personal lines property and casualty agent under Chapter 4051

while acting for an insured concerning a loss under a policy

issued by that agent.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Amended by:

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

548, Sec. 2.31, eff. September 1, 2007.

Sec. 4102.052. APPLICATION. (a) An application for a license

under this chapter must be on a form prescribed by the

commissioner.

(b) The completed application must be notarized and be

accompanied by a nonrefundable license application fee, as

provided by Section 4102.066, for each application submitted.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.053. ISSUANCE OF LICENSE TO RESIDENT. (a) The

commissioner shall issue a public insurance adjuster license to

an applicant on determining that the application meets the

requirements of this chapter, the license application fee has

been paid, and the applicant is an individual who:

(1) is at least 18 years of age;

(2) is a citizen of the United States or has complied with all

federal laws pertaining to employment or to the transaction of

business in the United States;

(3) is a resident of this state;

(4) is trustworthy and of a moral character that reasonably

ensures that the applicant will conduct the business of a public

insurance adjuster fairly and in good faith without detriment to

the public;

(5) has not been convicted of a felony in the 10 years preceding

filing an application under this chapter or, if convicted of a

felony in the 10 years preceding filing an application under this

chapter, has received a full pardon from that conviction and is

otherwise relieved from any disabilities connected with that

conviction;

(6) has sufficient experience or training relating to the

assessment of:

(A) real and personal property values; and

(B) physical loss of or damage to real or personal property that

may be the subject of insurance and claims under insurance;

(7) is sufficiently informed as to the terms and effects of the

types of insurance contracts that provide coverage on real and

personal property;

(8) possesses knowledge and experience adequate to enable the

applicant to engage in the business of a public insurance

adjuster fairly and without injury to the public or any member of

the public with whom the applicant may have business as a public

insurance adjuster;

(9) has successfully passed the license examination prescribed

under Section 4102.057 or is exempt from the examination

requirement under this chapter;

(10) has complied with the financial responsibility requirements

imposed under Section 4102.105; and

(11) has complied with any other requirements under applicable

state law, including provision of a complete set of fingerprints

on request, as provided by Section 4001.103.

(b) The commissioner may issue a resident public insurance

adjuster license to an applicant who has been convicted of a

felony 11 or more years before filing an application under this

chapter if the commissioner determines that the applicant is

qualified to act as a public insurance adjuster and that the

circumstances surrounding the applicant's conviction do not

warrant the denial of a license issued under this chapter.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.054. ISSUANCE OF LICENSE TO NONRESIDENT. (a) The

commissioner may issue a nonresident license to an applicant for

a public insurance adjuster license who is not a permanent

resident of this state on determining that the application meets

the requirements of this chapter, the nonresident license

application fee has been paid, and the applicant is an individual

who:

(1) is at least 18 years of age;

(2) except as provided by Section 4102.058, has passed, to the

satisfaction of the commissioner, an examination approved by the

commissioner and of sufficient scope as prescribed by Section

4102.057;

(3) is self-employed as a public insurance adjuster or

associated with or employed by a public insurance adjusting firm

or other public insurance adjuster;

(4) is trustworthy and of a moral character that reasonably

ensures that the applicant will conduct the business of a public

insurance adjuster fairly and in good faith without detriment to

the public;

(5) has never been convicted of a felony or, if convicted of a

felony, has received a full pardon from that conviction and is

otherwise relieved from any disabilities connected with that

conviction;

(6) has sufficient experience or training relating to the

assessment of:

(A) real and personal property values; and

(B) physical loss of or damage to real or personal property that

may be the subject of insurance and claims under insurance;

(7) is sufficiently informed as to the terms and effects of the

types of insurance contracts that provide coverage on real and

personal property;

(8) possesses knowledge and experience adequate to enable the

applicant to engage in the business of a public insurance

adjuster fairly and without injury to the public or any member of

the public with whom the applicant may have business as a public

insurance adjuster;

(9) if currently licensed as a resident public insurance

adjuster in the applicant's state of residence, provides with the

application a certificate or letter of authorization from the

licensing authority of the applicant's state of residence that:

(A) states that the applicant holds a current or comparable

license to act as a public insurance adjuster; and

(B) meets the requirements of Subsection (b);

(10) if the applicant's state of residence does not require

licensure as a resident public insurance adjuster and the

applicant has been licensed as an adjuster, agent, broker, or

other insurance representative in the applicant's state of

residence or any other state within the past three years,

provides with the application a certificate or letter of

authorization from the licensing authority that:

(A) states that the applicant holds or has held a license to act

as an adjuster, agent, broker, or other insurance representative;

and

(B) meets the requirements of Subsection (c);

(11) files proof of financial responsibility in accordance with

Section 4102.105; and

(12) complies with any other requirements under applicable state

law, including provision of a complete set of fingerprints on

request, as provided by Section 4001.103.

(b) A certificate or letter required by Subsection (a)(9) must:

(1) be signed by the appropriate licensing official of the

applicant's state of residence; and

(2) disclose whether the applicant has ever had any license or

eligibility to hold any license declined, denied, suspended, or

revoked and whether the applicant has ever been placed on

probation and whether an administrative fine or penalty has been

levied against the applicant and, if so, the reason for the

action.

(c) A certificate or letter required by Subsection (a)(10) must:

(1) be signed by the appropriate licensing official; and

(2) disclose whether the applicant has ever had any license or

eligibility to hold any license declined, denied, suspended, or

revoked and whether the applicant has ever been placed on

probation and whether an administrative fine or penalty has been

levied against the applicant and, if so, the reason for the

action.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.055. ISSUANCE OF LICENSE TO BUSINESS ENTITY ORGANIZED

IN THIS STATE. (a) The commissioner shall adopt rules necessary

to issue a public insurance adjuster license to a business entity

organized under the laws of this state.

(b) Rules adopted by the commissioner under Subsection (a) must:

(1) be analogous to the provisions of Chapter 4001 that relate

to licensure of corporations and partnerships; and

(2) contain qualifications for the issuance of a public

insurance adjuster license analogous to the qualifications

described by Section 4102.053.

(c) The commissioner may not issue a public insurance adjuster

license to a business entity described by Subsection (a) unless

at least one officer, active partner, or other managing

individual of the business entity, and each individual performing

acts of a public insurance adjuster on behalf of the business

entity in this state, are individually licensed by the department

under Section 4102.053 separately from the business entity.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.056. ISSUANCE OF LICENSE TO BUSINESS ENTITY NOT

ORGANIZED IN THIS STATE. (a) The commissioner shall adopt rules

necessary to issue a public insurance adjuster license to a

business entity organized under the laws of another state or the

United States.

(b) Rules adopted by the commissioner under Subsection (a) must:

(1) be analogous to the provisions of Chapter 4001 that relate

to issuance of licenses to business entities; and

(2) contain:

(A) qualifications for the issuance of a public insurance

adjuster license analogous to the qualifications described by

Section 4102.054; and

(B) requirements for the performance of the duties and powers of

a public insurance adjuster analogous to the requirements

described by Section 4102.054.

(c) The department may not issue a public insurance adjuster

license to a business entity described by Subsection (a) unless

at least one officer, active partner, or other managing

individual of the business entity, and each individual performing

acts of a public insurance adjuster on behalf of the business

entity in this state, are individually licensed by the department

under Section 4102.054 separately from the business entity.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.057. EXAMINATION REQUIRED. (a) Except as otherwise

provided by this chapter, each applicant for a license as a

public insurance adjuster must, before the issuance of the

license, take and pass an examination to the satisfaction of the

commissioner.

(b) The examination required by this section must be prescribed

by the commissioner and must be of sufficient scope to reasonably

test the applicant's:

(1) knowledge of basic insurance theory, essential elements of

contracts, and claims ethics;

(2) technical competence in the handling of the types of claims

for which the applicant is being tested; and

(3) knowledge of:

(A) Chapter 541;

(B) Subchapters A and B, Chapter 542;

(C) Chapter 547;

(D) the Deceptive Trade Practices-Consumer Protection Act

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

(E) analogous laws as specified by the commissioner;

(F) statutory provisions related to the unauthorized practice of

law contained in Subchapter G, Chapter 81, Government Code; and

(G) the duties and responsibilities of public insurance

adjusters under the law.

(c) The commissioner shall, within a reasonable period not to

exceed 30 days after the date of the examination, transmit the

results of the examination and the action taken on the

application to the applicant.

(d) An examination is not required for the renewal of a license

issued under this chapter.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.058. EXEMPTION FROM EXAMINATION REQUIREMENT. The

examination requirement imposed by Section 4102.057 does not

apply to:

(1) an applicant who is licensed as a resident public insurance

adjuster in the applicant's state of residence, if the state

requires the passing of a written examination in order to obtain

the license and a reciprocal agreement with the appropriate

official of that state has been entered into by the department;

or

(2) an applicant who is licensed as a nonresident public

insurance adjuster in a state other than the applicant's state of

residence, if the state of licensure requires the passing of a

written examination in order to obtain the license and a

reciprocal agreement with the appropriate official of the state

of licensure has been entered into by the department.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.059. EXAMINATION ADVISORY COMMITTEE. (a) The

commissioner may appoint a public insurance adjusters examination

advisory committee composed of at least five members to assist in

developing the examination required by Section 4102.057. At

least three members must be eligible for licensure as public

insurance adjusters. At least one member must be a person from

the insurance industry who is not a public insurance adjuster,

and at least one member must represent consumer interests.

(b) A member of the advisory committee is not entitled to

compensation for service on the committee. A member is entitled

to reimbursement for reasonable and necessary expenses incurred

in performing services for the committee, subject to any

limitation in the General Appropriations Act.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.060. EXAMINATION FORM AND TIME. (a) The answers of

an examinee to an examination required under this chapter shall

be made by the examinee in writing. A written examination may be

supplemented by oral examination.

(b) The examination shall be given at times and places within

the state as the commissioner considers necessary to reasonably

serve the convenience of both the commissioner and examinees.

(c) The commissioner may require a waiting period of reasonable

duration before an examinee who fails the examination, but who is

otherwise qualified, may be reexamined.

(d) The scheduling and administration of examinations required

under Section 4102.057 shall be effected by persons approved by

the commissioner.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.061. LICENSE FORM. The commissioner shall prescribe

the form of the licenses issued under this chapter. Each license

must contain:

(1) the name of the public insurance adjuster and the address of

the public insurance adjuster's place of business;

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

license; and

(3) if applicable, the name of the firm with which the public

insurance adjuster is employed at the time the license is issued.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.062. EXPIRATION. A license issued under this chapter

expires on the second anniversary of the date of issuance unless

suspended or revoked by the commissioner.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.063. NOTICE OF EXPIRATION. At least 30 days before

the expiration of a license, the department shall send written

notice of the impending license expiration to the license holder

at the license holder's last known mailing address according to

the records of the department.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.064. RENEWAL OF UNEXPIRED LICENSE. (a) A license

holder may renew a license that has not expired and has not been

suspended or revoked by filing with the department a properly

completed renewal application, in the form prescribed by the

commissioner, that demonstrates continued compliance with the

license requirements imposed under this chapter or adopted by

rule by the commissioner. The completed renewal application must

be accompanied by:

(1) a renewal fee in the amount determined by the commissioner

under Section 4102.066(b); and

(2) evidence of compliance with the continuing education

requirements imposed under Section 4102.109.

(b) A license holder must submit the completed renewal

application, evidence of compliance with the continuing education

requirements, and the renewal fee to the commissioner not later

than the 30th day before the second anniversary date of the

license.

(c) On the filing of a completed renewal application, renewal

fee, and, if applicable, evidence of compliance with the

continuing education requirements, the original license continues

in force until:

(1) the department issues the renewal license; or

(2) the commissioner issues an order revoking the license.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.065. RENEWAL OF EXPIRED LICENSE. (a) A person whose

license has been expired for 90 days or less may renew the

license by:

(1) submitting to the department:

(A) a completed renewal application in the form prescribed by

the commissioner; and

(B) evidence of compliance with the continuing education

requirements; and

(2) paying to the department the required renewal fee and an

additional fee that is equal to one-half of the renewal fee for

the license.

(b) A person whose license has been expired for more than 90

days but less than one year may not renew the license but is

entitled to a new license without taking the applicable

examination if the person submits to the department:

(1) a new application;

(2) evidence of compliance with the continuing education

requirements;

(3) the license fee; and

(4) an additional fee equal to one-half of the license fee.

(c) A person whose license has been expired for one year or more

may not renew the license. The person may obtain a new license

by submitting to reexamination, if examination is required for

original issuance of the license, and by complying with the

requirements and procedures for obtaining an original license.

(d) The department may renew without reexamination an expired

license of a person who was licensed in this state, moved to

another state, and is currently licensed and has been in

continual practice in the other state up to and including the

date of the application. The person must pay to the department a

fee that is equal to the license fee.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.066. FEES. (a) The commissioner shall collect in

advance the following nonrefundable fees:

(1) for a public insurance adjuster license, an application fee

in an amount to be determined by rule by the commissioner;

(2) for a nonresident public insurance adjuster license, an

application fee in an amount to be determined by rule by the

commissioner;

(3) for each public insurance adjuster examination, a fee in an

amount to be determined by rule by the commissioner; and

(4) for a public insurance adjuster trainee certificate under

Section 4102.069, a registration fee in an amount to be

determined by rule by the commissioner.

(b) The amount of the fee for the renewal of a license or a

certificate issued under this chapter shall be determined by rule

by the commissioner.

(c) The commissioner shall set the fees in amounts reasonable

and necessary to implement this chapter.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.067. USE OF FEES. (a) When collected, the fees

authorized by this chapter shall be deposited with the

comptroller to the credit of the Texas Department of Insurance

operating account.

(b) The department may use any portion of the fees collected to:

(1) enforce this chapter;

(2) employ persons as the department considers necessary to

investigate and make reports regarding alleged violations of this

code and misconduct on the part of public insurance adjusters;

and

(3) pay the salaries and expenses of persons and office

employees and other expenses necessary to enforce this chapter.

(c) A person employed by the department under this section may

examine under oath any person for the purpose of gathering

information and evidence and may have the information and

evidence reduced to writing.

(d) All expenses incurred under this section shall be paid from

the fees collected under this chapter.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.068. LICENSE NOT ASSIGNABLE. A license issued under

this chapter is not assignable.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.069. REGISTRATION PROGRAM FOR TRAINEES. (a) A public

insurance adjuster trainee must register with the department for

a temporary certificate under this section. An applicant for a

temporary certificate as a trainee must apply to the commissioner

on a form prescribed by the commissioner. The form must be

accompanied by a nonrefundable registration fee as prescribed by

Section 4102.066(a)(4).

(b) A temporary certificate may be issued under this section

only for educational and training purposes. The holder of a

temporary certificate may practice only under the direction and

sponsorship of a license holder of this state.

(c) The sponsor of a public insurance adjuster trainee shall

attest, on a form prescribed by the commissioner, that the

trainee is under the supervision and control of the sponsor and

that the sponsor has met the financial responsibility

requirements of Section 4102.105.

(d) A temporary certificate expires on the 180th day after the

date of issuance and may be renewed once on application to the

commissioner. An individual is not entitled to hold more than

two consecutive temporary certificates.

(e) Each individual who holds a temporary certificate under this

section must comply with the financial responsibility

requirements imposed under Section 4102.105.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

SUBCHAPTER C. POWERS AND DUTIES

Sec. 4102.101. GENERAL AUTHORITY. (a) A license issued under

this chapter authorizes the adjusting of claims on behalf of

insureds for fire and allied coverages, burglary, flood, and all

other property claims, both real and personal, including loss of

income, but only when the client is an insured under the

insurance policy.

(b) This chapter does not limit or diminish the authority of a

license holder to investigate or adjust a loss to less than the

authority for that purpose that may be exercised by an adjuster

licensed under Chapter 4101.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.102. COMPLIANCE WITH INSURANCE CONTRACT. A license

holder shall prepare each claim for an insured represented by the

license holder in accordance with the terms and conditions of the

contract of insurance under which recovery is sought.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.103. CONTRACT FOR SERVICES REQUIRED. (a) A license

holder may not, directly or indirectly, act within this state as

a public insurance adjuster without having first entered into a

contract, in writing, on a form approved by the commissioner,

executed in duplicate by the license holder and the insured or

the insured's duly authorized representative. A license holder

may not use any form of contract that is not approved by the

commissioner.

(b) The contract must contain a provision allowing the client to

rescind the contract by written notice to the license holder

within 72 hours of signature, and must include a prominently

displayed notice in 12-point boldface type that states "WE

REPRESENT THE INSURED ONLY." The commissioner by rule may

require additional prominently displayed notice requirements in

the contract as the commissioner considers necessary.

(c) One copy of the contract shall be kept on file in this state

by the license holder and must be available at all times for

inspection, without notice, by the commissioner or the

commissioner's duly authorized representative.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.104. COMMISSIONS. (a) Except as provided by

Subsection (b), a license holder may receive a commission for

service provided under this chapter consisting of an hourly fee,

a flat rate, a percentage of the total amount paid by an insurer

to resolve a claim, or another method of compensation. The total

commission received may not exceed 10 percent of the amount of

the insurance settlement on the claim.

(b) A license holder may not receive a commission consisting of

a percentage of the total amount paid by an insurer to resolve a

claim on a claim on which the insurer, not later than 72 hours

after the date on which the loss is reported to the insurer,

either pays or commits in writing to pay to the insured the

policy limit of the insurance policy in accordance with Section

862.053. The license holder is entitled to reasonable

compensation from the insured for services provided by the

license holder on behalf of the insured, based on the time spent

on a claim that is subject to this subsection and expenses

incurred by the license holder, until the claim is paid or the

insured receives a written commitment to pay from the insurer.

(c) Except for the payment of a commission by the insured, all

persons paying any proceeds of a policy of insurance or making

any payment affecting an insured's rights under a policy of

insurance must:

(1) include the insured as a payee on the payment draft or

check; and

(2) require the written signature and endorsement of the insured

on the payment draft or check.

(d) A public insurance adjuster may not accept any payment that

violates Subsection (c).

(e) Notwithstanding any authorization the insured may have given

to a public insurance adjuster, a public insurance adjuster may

not sign and endorse any payment draft or check on behalf of an

insured.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.105. FINANCIAL RESPONSIBILITY. (a) As a continuing

condition of licensure, a public insurance adjuster must file

proof of financial responsibility with respect to transactions

with insureds under this chapter in an amount determined by the

commissioner by rule. The financial responsibility must include

the ability to pay sums the public insurance adjuster is

obligated to pay under any judgment against the public insurance

adjuster by an insured, based on an error, omission, fraud,

negligent act, or unfair practice of the public insurance

adjuster or any person for whose acts the public insurance

adjuster is legally liable in the transaction of the public

insurance adjuster's business under this code.

(b) In determining the amount of the financial responsibility

requirement, the commissioner shall consider the nature of the

obligation, other financial security requirements under this

code, and financial security requirements adopted for public

insurance adjusters in other states. In determining the types of

financial responsibility required, the commissioner may consider

a surety bond or a professional liability policy or similar

policy or contract of professional liability coverage acceptable

to the commissioner.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.106. PLACE OF BUSINESS. (a) Each license holder who

is a resident of this state or a business entity organized under

the laws of this state shall:

(1) maintain a place of business in this state that is

accessible to the general public; and

(2) maintain in the place of business the records required by

this chapter.

(b) The address of the place of business must appear on the face

of the license.

(c) The license holder shall promptly notify the commissioner of

any change in the address of the license holder's place of

business.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.107. AGENT FOR SERVICE OF PROCESS. (a) Each

nonresident license holder shall maintain an agent in this state

for service of process.

(b) The name and address of the nonresident license holder's

out-of-state business address and the name and address of the

agent must appear on the face of the license.

(c) The nonresident license holder shall promptly notify the

department of any change in the address of the license holder's

place of business or in the agent for service of process.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.108. POSTING OF LICENSE. A license issued under this

chapter must at all times be posted in a conspicuous place in the

principal place of business of the license holder.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.109. CONTINUING EDUCATION. (a) Each license holder

must annually complete at least 15 hours of continuing education

courses. The commissioner by rule shall prescribe the

requirements for continuing education courses under this section.

(b) Notwithstanding Subsection (a), the commissioner may waive

any continuing education requirement for a nonresident public

insurance adjuster with a valid license from another state having

continuing education requirements substantially equivalent to

those of this state.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.110. RECORD MAINTENANCE. (a) A license holder shall

keep a complete record in this state of each of the license

holder's transactions as a public insurance adjuster. The

records must include each of the following:

(1) the name of the insured;

(2) the date, location, and amount of the loss;

(3) a copy of the contract between the license holder and the

insured;

(4) the name of the insurer and the amount, expiration date, and

number of each policy under which the loss is covered;

(5) an itemized statement of the recoveries by the insured from

the sources known to the license holder;

(6) the total compensation received for the adjustment; and

(7) an itemized statement of disbursements made by the license

holder from recoveries received on behalf of the insured.

(b) Records required to be kept under this section must be:

(1) maintained in this state for at least five years after the

termination of a transaction with the insured; and

(2) open to examination by the commissioner.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.111. FIDUCIARY CAPACITY. (a) All funds received as

claim proceeds by a license holder acting as a public insurance

adjuster are received and held by the license holder in a

fiduciary capacity. A license holder may not divert or

appropriate fiduciary funds received or held.

(b) An applicant for a license to act as a public insurance

adjuster must, as part of the application, endorse an

authorization for disclosure to the commissioner of all financial

records of any funds the public insurance adjuster holds as a

fiduciary. The authorization continues in force and effect for

as long as the license holder continues to be licensed under this

chapter.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.112. RELOCATION TO ANOTHER STATE. (a) Not later than

the 30th day after moving from one state to another state, a

nonresident or resident public insurance adjuster licensed in

this state shall file with the department:

(1) the license holder's new address; and

(2) proof of authorization to engage in the business of public

insurance adjuster in the new state of residence if that state

requires licensure of public insurance adjusters.

(b) The department may not charge a fee or require a license

application under Subsection (a).

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.113. ADVERTISEMENTS. Each advertisement by a license

holder soliciting or advertising business must display the

license holder's name, address, and license number as they appear

in the records of the commissioner.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.114. DUTIES OF NONRESIDENT LICENSE HOLDER. (a) A

nonresident license holder shall comply with all of the

requirements of this chapter in performing any of the activities

of a public insurance adjuster in this state, including the

requirements on record maintenance in Section 4102.110.

(b) The failure of a nonresident license holder, as determined

by the commissioner after notice and an opportunity for a

hearing, to properly maintain records in accordance with this

chapter and make them available to the department on request

constitutes grounds for the suspension of the nonresident license

issued under this chapter, in accordance with Section 4102.201.

(c) Each individual who holds a nonresident license shall comply

with all other laws and rules of this state applicable to public

insurance adjusters, including the law governing the collection

of state sales tax as appropriate for services performed under

this chapter.

(d) After licensure as a nonresident public insurance adjuster,

as a condition of doing business in this state, the license

holder must annually, not later than January 1 and on a form

prescribed by the commissioner, submit an affidavit certifying

that the licensee is familiar with and understands the laws

specified in Section 4102.057(b), the applicable rules adopted

under those laws, and the terms and conditions of the types of

insurance contracts that provide coverage on real and personal

property. Compliance with the filing requirement provided by

this subsection is necessary for the issuance, continuation,

reinstatement, or renewal of a nonresident public insurance

adjuster license.

(e) A nonresident license holder is subject to Section

4102.208(b), relating to failure to maintain the financial

responsibility requirements.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

SUBCHAPTER D. PROHIBITED CONDUCT

Sec. 4102.151. SOLICITATION PROHIBITED DURING NATURAL DISASTER.

A license holder may not solicit or attempt to solicit a client

for employment during the progress of a loss-producing natural

disaster occurrence.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.152. SOLICITATION PROHIBITED DURING CERTAIN HOURS.

(a) A license holder may not solicit or attempt to solicit

business on a loss or a claim in person, by telephone, or in any

other manner at any time except between the hours of 9 a.m. and 9

p.m. on a weekday or a Saturday and between noon and 9 p.m. on a

Sunday.

(b) This section does not prohibit a license holder from

accepting phone calls or personal visits during the prohibited

hours from an insured on the insured's initiation.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.153. CERTAIN REPORTS AND DISCLOSURES PROHIBITED. A

license holder may not knowingly make any false report to the

license holder's employer or client and may not divulge to any

other person, except as the law may require, any information

obtained except at the direction of the employer or the client

for whom the information is obtained.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.154. USE OF BADGE PROHIBITED. A license holder may

not use a badge in connection with the official activities of the

license holder's business.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.155. CERTAIN DELEGATION PROHIBITED. A license holder

may not permit an employee or agent, in the employee's or agent's

own name, to advertise, solicit or engage clients, furnish

reports or present bills to clients, or in any manner conduct

business for which a license is required under this chapter.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.156. PRACTICE OF LAW PROHIBITED. A license holder may

not render services or perform acts that constitute the practice

of law, including the giving of legal advice to any person in the

license holder's capacity as a public insurance adjuster.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.157. CERTAIN BUSINESS PROHIBITED. A license holder

may not solicit or attempt to solicit business, directly or

indirectly, or act in any manner on a bodily injury loss covered

by a life, health, or accident insurance policy or on any claim

for which the client is not an insured under the insurance

policy.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.158. CONFLICTS OF INTEREST PROHIBITED. (a) A license

holder may not:

(1) participate directly or indirectly in the reconstruction,

repair, or restoration of damaged property that is the subject of

a claim adjusted by the license holder; or

(2) engage in any other activities that may reasonably be

construed as presenting a conflict of interest, including

soliciting or accepting any remuneration from, or having a

financial interest in, any salvage firm, repair firm, or other

firm that obtains business in connection with any claim the

license holder has a contract or agreement to adjust.

(b) A license holder may not, without the knowledge and consent

of the insured in writing, acquire an interest in salvaged

property that is the subject of a claim adjusted by the license

holder.

(c) A license holder may not represent an insured on a claim or

charge a fee to an insured while representing the insurance

carrier against which the claim is made.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.159. MISREPRESENTATION PROHIBITED. A license holder

may not use any misrepresentation to solicit a contract or

agreement to adjust a claim.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.160. CERTAIN PAYMENTS PROHIBITED. A license holder

may not:

(1) advance money to any potential client or insured;

(2) pay, allow, or give, or offer to pay, allow, or give,

directly or indirectly, to a person who is not a licensed public

insurance adjuster a fee, commission, or other valuable

consideration for the referral of an insured to the public

insurance adjuster based on the insured entering into a contract

with that public insurance adjuster; or

(3) otherwise offer to pay a fee, commission, or other valuable

consideration exceeding $100 to a person not licensed as a public

insurance adjuster for referring an insured to the license

holder.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.161. CERTAIN REPRESENTATIONS PROHIBITED. A license

holder may not use any letterhead, advertisement, or other

printed matter, or use any other means, to represent that the

license holder is an instrumentality of the federal government,

of a state, or of a political subdivision of a state.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.162. USE OF DIFFERENT NAME PROHIBITED. A license

holder may not use a name different from the name under which the

license holder is currently licensed in an advertisement,

solicitation, or contract for business.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

SUBCHAPTER E. ENFORCEMENT

Sec. 4102.201. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE.

(a) The commissioner may deny an application for a license under

this chapter or suspend or revoke a license issued under this

chapter on the basis of:

(1) a violation of this chapter or of any rule adopted by the

commissioner under this chapter;

(2) a cause that constitutes grounds for denial of an original

license;

(3) misrepresentation or fraud in obtaining a license;

(4) failure to pass a required license examination;

(5) the misappropriation or conversion of money required to be

held in a fiduciary capacity;

(6) material misrepresentation, with intent to deceive, of the

terms of an insurance contract;

(7) engaging in a fraudulent transaction;

(8) demonstrated incompetence or untrustworthiness in the

conduct of the license holder's affairs under the license, as

determined by the commissioner;

(9) conviction of a felony by a final judgment in a court of

competent jurisdiction; or

(10) material misrepresentation, with intent to deceive, of the

person's status as a public insurance adjuster.

(b) If the department proposes to refuse to issue an original

license under this chapter or to suspend, revoke, or refuse to

renew a license under this chapter, the person affected is

entitled to notice and hearing as provided by Section 4005.104.

(c) A final order entered as a result of a hearing under this

section may be appealed to a court of competent jurisdiction as

provided by Subchapter D, Chapter 36.

(d) An order suspending a license issued under this chapter must

specify the period of the suspension not to exceed 12 months.

(e) The holder of a license that is revoked or suspended for

cause shall surrender the license to the commissioner on demand.

(f) The commissioner may issue a license or reinstate a

suspended or revoked license on a finding that the cause for

suspension, revocation, or refusal no longer exists.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.202. APPLICATION FOR LICENSE AFTER SUSPENSION, DENIAL

OF APPLICATION, OR REVOCATION OF LICENSE. (a) A person whose

license is suspended under this chapter may apply for a new

license only after the expiration of the period of suspension.

(b) A person whose license is revoked or whose application for a

license is denied, except for a failure to submit a completed

application, may not apply for a new license until the fifth

anniversary of:

(1) the effective date of the denial or revocation; or

(2) if the applicant or license holder seeks judicial review of

the department's action, the date of the final court order or

decree affirming that action.

(c) The commissioner may deny a timely application filed under

Subsection (b) if the applicant does not show good cause why the

denial of the previous license application or the revocation of

the license should not be considered a bar to the issuance of the

new license.

(d) Subsection (c) does not apply to an applicant whose license

application was denied for failure by the applicant to:

(1) pass the required written examination; or

(2) submit a properly completed license application.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.203. DISCIPLINARY PROCEEDING FOR CONDUCT COMMITTED

BEFORE SURRENDER OR FORFEITURE OF LICENSE. (a) The department

may institute a disciplinary proceeding against a former license

holder for conduct that the license holder committed before the

effective date of a voluntary surrender or automatic forfeiture

of the license.

(b) In a proceeding under this section, the fact that the

license holder has surrendered or forfeited the license does not

affect the license holder's culpability for the conduct.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.204. ADMINISTRATIVE PENALTY. The commissioner, in

lieu of suspending or revoking a license for a violation of this

chapter or a rule adopted under this chapter, may impose on a

license holder an administrative penalty in an amount not to

exceed $2,000 per violation if the commissioner determines that

that action better serves the purposes of this chapter.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.205. AUTOMATIC FINES. Section 4005.109 applies to

violations of this chapter.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.206. CRIMINAL PENALTY; SANCTIONS. (a) A person

commits an offense if the person violates this chapter. An

offense under this subsection is a Class B misdemeanor.

(b) If conduct that constitutes an offense under Subsection (a)

also constitutes an offense under any other law, the person

committing the offense may be prosecuted under this section or

the other law.

(c) In addition to the criminal penalties imposed under

Subsection (a), a person in violation of this chapter is subject

to the sanctions provided by Sections 541.108-541.110, as if the

person had violated an order under those sections.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.207. INSURED OPTION TO VOID CONTRACT. (a) Any

contract for services regulated by this chapter that is entered

into by an insured with a person who is in violation of Section

4102.051 may be voided at the option of the insured.

(b) If a contract is voided under this section, the insured is

not liable for the payment of any past services rendered, or

future services to be rendered, by the violating person under

that contract or otherwise.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.

Sec. 4102.208. EMERGENCY CEASE AND DESIST ORDER. (a) If the

commissioner believes that a person is engaging in acts or

practices in violation of Section 4102.051, the commissioner ex

parte may issue an emergency cease and desist order, in

accordance with Subchapter B, Chapter 83, requiring the person to

immediately cease and desist from engaging further in the acts or

practices.

(b) In addition to any other remedy available under this code,

if the commissioner believes that a person is committing a

violation by failing to maintain the financial responsibility

requirements of Section 4102.105, the commissioner ex parte may

issue an emergency cease and desist order and suspend the

person's license, in accordance with Subchapter B, Chapter 83,

requiring the person to immediately cease and desist from

engaging in the activities of a public insurance adjuster.

(c) A license suspended under Subsection (b) may be reinstated

on the approval of an application for reinstatement filed with

the commissioner, in the form prescribed by the commissioner,

with proof that the financial responsibility requirements of

Section 4102.105 have been met. The commissioner may deny the

application for reinstatement:

(1) for any reason that would justify a refusal to issue, or a

suspension or revocation of, a license; or

(2) for the performance by the applicant of any practice for

which a license under this chapter is required while the

applicant is under suspension for failure to keep the financial

responsibility requirements in force.

Added by Acts 2005, 79th Leg., Ch.

728, Sec. 11.082(a), eff. September 1, 2005.