SECTION 1.501. Purpose and Application

(a) The purpose of this subchapter is to implement Chapter 53, Occupations Code, and sections and articles of the Insurance Code and Occupations Code that require and authorize the department to determine a person's fitness for holding a license, authorization, certification, permit, or registration, or a person's fitness to have the ability to control licensed, registered, permitted, certificate holding, and authorized entities, when that person has committed a criminal offense or has engaged in fraudulent or dishonest activity. This subchapter also establishes the procedure by which the department may obtain criminal history information on persons applying for a license, authorization, certification, permit, or registration, or acquiring the ability to control an entity holding or seeking a license, authorization, certificate, permit, or registration. To effect this implementation the department has developed guidelines in §1.502 of this subchapter (relating to Licensing Persons with Criminal Backgrounds) identifying the types of criminal offenses that directly relate to the duties and responsibilities of licensed and authorized insurance activities which are of such a serious nature that they are of prime importance in determining the person's fitness for licensure, authorization, certification, permit or registration, or control of a licensed, registered, permitted, certificate holding, or authorized entity.

(b) Section 1.502 of this subchapter applies to the following persons:

(1) applicants for, or holders of, any license, registration, permit, authorization, or certification, including temporary or training licenses or certificates, as agents, adjusters, public insurance adjusters, counselors, risk managers, reinsurance intermediaries, title agents, title escrow officers, title attorneys, utilization review agents, independent review organizations, viatical and life settlement registrants, workers' compensation health care networks, management contractors, and administrators, under the following Insurance Code provisions:

(A) Chapter 4201;

(B) Chapter 4202;

(C) Chapter 981;

(D) Chapter 1111;

(E) Chapter 1305;

(F) Chapter 2552;

(G) Chapter 2651 Subchapter A;

(H) Chapter 2652;

(I) Chapter 4001;

(J) Chapter 4051;

(K) Chapter 4052;

(L) Chapter 4053;

(M) Chapter 4054;

(N) Chapter 4055;

(O) Chapter 4056;

(P) Chapter 4101;

(Q) Chapter 4102;

(R) Chapter 4151;

(S) Chapter 4152;

(T) Chapter 4153; or

(U) any other provision providing for any type of license, registration, certification, permit, or authorization that the department may deny or revoke because of a criminal offense of the applicant or license holder;

(2) applicants for, or holders of, a license, registration, permit or authorization issued by the State Fire Marshal's Office, including the following provisions:

(A) Insurance Code Chapter 6001;

(B) Insurance Code Chapter 6002;

(C) Insurance Code Chapter 6003;

(D) Occupations Code Chapter 2154; or

(E) any other provision providing for any type of license, registration, or authorization that the State Fire Marshal's Office may deny or revoke because of a criminal offense of the applicant or license holder;

(3) those who are, become, or have similar responsibilities to principals, partners, officers, directors, or controlling shareholders, including limited liability company members and managers, of entities that are applicants for, or holders of, a license, authorization, permit, certification, or registration under provisions specified in paragraphs (1) and (2) of this subsection and from whom biographical information is required;

(4) with regard to insurance companies, health maintenance organizations, holding companies, and other related entities, an individual who is required to provide biographical information and who:

(A) is the applicant, if the applicant is an individual, or an officer, director, or controlling shareholder of the applicant seeking an authorization as an insurer as described in Insurance Code Chapter 801 or an authorization under Insurance Code Chapters 822, 823, 841, 843, 844, 846, 2551, or 2552;

(B) becomes an officer, director, or controlling shareholder of an entity authorized as an insurer as described in Insurance Code Chapter 801 or an entity authorized under Insurance Code Chapters 822, 823, 841, 843, 844, 846, 2551, or 2552; or

(C) is the applicant if such person is an individual, or the chairman of the board, chief executive officer, president, chief financial officer, treasurer, and controller of the applicant if the applicant is not an individual, for each applicant under §7.209 of this title (relating to Form A);

(5) each person who is required to file biographical information under §5.6403 of this title (relating to Application for Initial Certificate of Approval); and

(6) each individual whose biographical information is required to be filed with the department under the Insurance Code §7001.005(a)(2) (relating to Application for Registration and Renewal of Registration) and each individual for whom the commissioner may conduct a criminal background check under the Insurance Code §7001.008 (relating to Criminal Background Check).

(c) As used in §1.502 of this subchapter, the terms "license holder," "licensee," and "authorization holder" shall include all persons listed in subsection (b) of this section.

(d) As used in §1.502 of this subchapter, the terms "license" and "authorization" shall include all types of licenses, registrations, certificates, permits, or authorizations listed in subsection (b) of this section.

Source Note: The provisions of this §1.501 adopted to be effective May 2, 2004, 29 TexReg 4185; amended to be effective October 23, 2006, 31 TexReg 8676; amended to be effective December 21, 2008, 33 TexReg 10183; amended to be effective September 8, 2010, 35 TexReg 8107