Home   l    Get this title in Audio Book format!

Stephen Hadhazi, Pubic Insurance Adjuster, Proudly presents:

INSURANCE CODE CHAPTER 4102


INSURANCE CODE CHAPTER 4102. PUBLIC INSURANCE ADJUSTERS
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.
Page -2 -
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
Page -3 -
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
Page -4 -
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.
Page -5 -
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
Page -6 -
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.
Page -7 -
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
Page -8 -
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:
Page -9 -
(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
Page -10 -
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.
Page -11 -
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
Page -12 -
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
Page -13 -
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
Page -14 -
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
Page -15 -
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
Page -16 -
(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.
Page -18 -
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
Page -19 -
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
Page -20 -
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
Page -21 -
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.
Page -22 -
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.
Page -23 -
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:
Page -24 -
(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.
Page -25 -
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
Page -26 -
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
Page -27 -
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
Page -28 -
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.
Page -29 -
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
Page -30 -
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.
Page -31 -
(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.
Page -32 -
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
Page -33 -
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
Page -34 -
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.