HBA-ATS H.B. 3274 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3274
By: Averitt
Insurance
3/25/1999
Introduced



BACKGROUND AND PURPOSE 

Under Texas law, insurance agents are classified as local recording agents
or solicitors.  A local recording agent (agent) is a person who engages in
soliciting and writing insurance on behalf of an insurance company or
insurance carrier and maintains an office.  Agents are typically
independent contractors.  To obtain a contract from an insurer, an agent is
often required to join an organization sponsored by the insurer.  Usually,
the agent and the sponsoring organization share office space. Employees of
a local recording agent who perform clerical functions are not required to
be licensed, but those employees that perform assigned duties must be
licensed.  Assigned duties, including binding insurance risks, may be
performed only with the express prior approval of the local recording agent
for whom an insurance service representative works.  Sometimes these duties
are not performed by the employees of the agent but by personnel from the
sponsoring organization with whom the agent shares office space. 

H.B. 3274 redefines the statutory definition of "insurance service
representative" to provide that an insurance service representative may
perform assigned duties only with the express prior approval of the local
recording agent who supervises the representative.  In addition, this bill
includes the condition that salaried individuals, rather than employees,
not involved in solicitation or negotiation of insurance must be supervised
while performing their clerical duties in the office of a local recording
agent. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 2(a)(5), Article 21.14, Insurance Code, to
redefine "insurance service representative" by providing that an insurance
service representative may perform assigned duties only with the express
prior approval of the local recording agent who supervises the
representative. 

SECTION 2.  Amends Section 20(i), Article 21.14, Insurance Code, to include
the condition that salaried individuals, rather than employees, not
involved in solicitation or negotiation of insurance must be supervised
while performing their clerical duties in the office of a local recording
agent. 

SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Emergency clause.
  Effective date: upon passage.