Public Insurance Adjuster Law

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§PUBLIC INSURANCE ADJUSTERS LAW§

Public Insurance adjusting in Texas is governed by 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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Sec. 4102.005. CODE OF ETHICS.

The commissioner 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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2011, 82nd Leg., R.S., Ch. 1147 (H.B. 1951), Sec. 2.006, eff. September 1, 2011.


Sec. 4102.001. DEFINITIONS.

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 (H.B. 2018), 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 issued by the commissioner under Section 4102.053 or 4102.054.


(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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2007, 80th Leg., R.S., Ch. 548 (S.B. 1263), Sec. 2.31, eff. September 1, 2007.


Acts 2015, 84th Leg., R.S., Ch. 1178 (S.B. 1060), Sec. 1, eff. September 1, 2015.


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 (H.B. 2018), 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 (H.B. 2018), 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)   files proof of financial responsibility in accordance with Section 4102.105; and


(10)  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)  Repealed by Acts 2021, 87th Leg., R.S., Ch. 355 (H.B. 4030), Sec. 22(8), eff. September 1, 2021.


(c)  Repealed by Acts 2021, 87th Leg., R.S., Ch. 355 (H.B. 4030), Sec. 22(8), eff. September 1, 2021.



Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2021, 87th Leg., R.S., Ch. 355 (H.B. 4030), Sec. 21, eff. September 1, 2021.


Acts 2021, 87th Leg., R.S., Ch. 355 (H.B. 4030), Sec. 22(8), eff. September 1, 2021.


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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Sec. 4102.062. EXPIRATION.

 A license issued under this chapter expires as provided by Chapter 4003 unless suspended or revoked by the commissioner.



Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2015, 84th Leg., R.S., Ch. 1172 (S.B. 876), Sec. 17, eff. September 1, 2015.


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 (H.B. 2018), 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 application 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 application 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, a renewal application 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;(2)  the license is not renewed under Section 4004.055; or(3)  the commissioner issues an order revoking the license.

Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.Amended by: Acts 2015, 84th Leg., R.S., Ch. 1172 (S.B. 876), Sec. 18, eff. September 1, 2015.


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 eligibility for renewal under Section 4004.055; and


(2)  paying to the department the required renewal application fee and an additional fee that is equal to one-half of the renewal application fee for the license.


(b)  Except as provided by Section 4004.055, 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 application fee; and


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


(1)  submitting to reexamination, if examination is required for original issuance of the license;


(2)  complying with the requirements and procedures for obtaining an original license; and


(3)  if applicable, submitting evidence of completion of any outstanding continuing education requirement and payment of any associated fine related to the expired 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 application fee.



Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2015, 84th Leg., R.S., Ch. 1172 (S.B. 876), Sec. 19, eff. September 1, 2015.


Sec. 4102.066. FEES.

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 (H.B. 2018), 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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.

SUBCHAPTER C. POWERS AND DUTIES


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; and


(3)  for each public insurance adjuster examination, a fee in an amount to be determined by rule by the commissioner.


(b)  The amount of the fee for the renewal of a license 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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2015, 84th Leg., R.S., Ch. 1178 (S.B. 1060), Sec. 2, eff. September 1, 2015.



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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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.


(d)  A license holder may not enter into a contract with an insured and collect a commission as provided by Section 4102.104 without the intent to actually perform the services customarily provided by a licensed public insurance adjuster for the insured.



Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2015, 84th Leg., R.S., Ch. 1178 (S.B. 1060), Sec. 3, eff. September 1, 2015.


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 the provisions of this section.


(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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2015, 84th Leg., R.S., Ch. 1178 (S.B. 1060), Sec. 4, eff. September 1, 2015.



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 (H.B. 2018), 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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.





Sec. 4102.109.  CONTINUING EDUCATION.  (a)  Each license holder must complete at least 24 hours of continuing education during the license period.  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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2015, 84th Leg., R.S., Ch. 1172 (S.B. 876), Sec. 20, eff. September 1, 2015.


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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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)  Repealed by Acts 2021, 87th Leg., R.S., Ch. 355 (H.B. 4030), Sec. 22(9), eff. September 1, 2021.


(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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2021, 87th Leg., R.S., Ch. 355 (H.B. 4030), Sec. 22(9), eff. September 1, 2021.


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 (H.B. 2018), 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 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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 (H.B. 2018), 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, having a financial interest in, or deriving any direct or indirect financial benefit from, any salvage firm, repair firm, construction 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.


(d)  A license holder may not directly or indirectly solicit, as described by Chapter 38, Penal Code, employment for an attorney or enter into a contract with an insured for the primary purpose of referring an insured to an attorney and without the intent to actually perform the services customarily provided by a licensed public insurance adjuster.  This section may not be construed to prohibit a license holder from recommending a particular attorney to an insured.


(e)  A license holder may not act on behalf of an attorney in having an insured sign an attorney representation agreement.


(f)  A license holder must become familiar with and at all times act in conformance with the criminal barratry statute set forth in Section 38.12, Penal Code.



Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2015, 84th Leg., R.S., Ch. 1178 (S.B. 1060), Sec. 5, eff. September 1, 2015.



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 (H.B. 2018), 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; or


(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 for purposes of the insured entering into a contract with that public insurance adjuster or for any other purpose.



Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2015, 84th Leg., R.S., Ch. 1178 (S.B. 1060), Sec. 6, eff. September 1, 2015.


Sec. 4102.160. CERTAIN PAYMENTS PROHIBITED.

A license holder may not:


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


(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 for purposes of the insured entering into a contract with that public insurance adjuster or for any other purpose.



Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2015, 84th Leg., R.S., Ch. 1178 (S.B. 1060), Sec. 6, eff. September 1, 2015.


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 (H.B. 2018), 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 (H.B. 2018), 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 unless the name is used under a valid assumed name certificate as provided by Chapter 71, Business & Commerce Code.



Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.082(a), eff. September 1, 2005.


Amended by: 


Acts 2019, 86th Leg., R.S., Ch. 836 (H.B. 2659), Sec. 1, eff. September 1, 2019.


Sec. 4102.163. CERTAIN CONTRACTOR BUSINESS PROHIBITED.

(a)  A contractor may not act as a public adjuster or advertise to adjust claims for any property for which the contractor is providing or may provide contracting services, regardless of whether the contractor:


(1)  holds a license under this chapter; or


(2)  is authorized to act on behalf of the insured under a power of attorney or other agreement.


(b)  The commissioner shall adopt rules necessary to implement and enforce this section.



Added by Acts 2013, 83rd Leg., R.S., Ch. 903 (H.B. 1183), Sec. 2, eff. September 1, 2013.


Amended by: 


Acts 2019, 86th Leg., R.S., Ch. 1100 (H.B. 2103), Sec. 1, eff. September 1, 2019.


Acts 2019, 86th Leg., R.S., Ch. 1100 (H.B. 2103), Sec. 2, eff. September 1, 2019.