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TITLE 28INSURANCE
PART 1TEXAS DEPARTMENT OF INSURANCE
CHAPTER 1GENERAL ADMINISTRATION
SUBCHAPTER DEFFECT OF CRIMINAL CONDUCT
RULE §1.502Licensing Persons with Criminal Backgrounds

(a) The special nature of the relationship between licensees, insurance companies, other insurance-related entities, discount health care programs, and the public with respect to insurance and related businesses regulated by the department requires that the public place trust in and reliance upon such persons due to the complex and varied nature of insurance, insurance-related products, and discount health care programs.

(b) Fire protection systems and equipment are often technically sophisticated beyond the knowledge or understanding of the average consumer. During times of imminent personal danger, the public relies on licensees to have correctly designed, installed and serviced fire protection systems and equipment to operate the first time and each time they are needed. Additionally, licensees are often permitted to service these systems unescorted in nursing homes, schools, day care centers, and commercial facilities where children and those unable to protect themselves are present and valuables are located. Finally, the manufacturing, storing, selling and discharge of fireworks requires numerous special precautions to maintain a safe environment for the licensees and the public. Each of these factors requires the public to place trust in and reliance upon these individuals.

(c) The department considers it very important that license and authorization holders and applicants, including those regulated under the state fire marshal's office, the officers, directors, members, managers, partners and any other persons who have the right to control a license or authorization holder or applicant, and the members of boards of directors of insurance companies, be honest, trustworthy, and reliable.

(d) The department may refuse to issue an original license or authorization and may revoke, suspend or refuse to renew a license or authorization if the department determines that the applicant or holder, or any partner, officer, director, member, manager, or any other person who has the right to control the applicant or holder, has committed a felony or misdemeanor, or has engaged in fraudulent or dishonest activity that directly relates to the duties and responsibilities of the licensed occupation.

(e) In accordance with the requirements of Texas Occupations Code §53.025, the department has developed guidelines relating to the matters which the department will consider in determining whether to grant, deny, suspend, or revoke any license or authorization under its jurisdiction. Those crimes which the department considers to be of such serious nature that they are of prime importance in determining fitness for licensure or authorization include but are not limited to:

  (1) any offense for which fraud, dishonesty, or deceit is an essential element;

  (2) any criminal violation of the Texas Insurance Code or any state or federal insurance or security law regulating or pertaining to the business of insurance;

  (3) any felony involving moral turpitude or breach of fiduciary duty; or

  (4) an offense with the essential elements of:

    (A) a criminal homicide offense, as described by Penal Code, Chapter 19;

    (B) a felony offense of assault, as described by Penal Code, Chapter 22;

    (C) an arson offense, as described by Penal Code, Chapter 28;

    (D) a robbery offense, as described by Penal Code, Chapter 29;

    (E) a burglary offense, as described by Penal Code, Chapter 30;

    (F) a theft offense, as described by Penal Code, Chapter 31;

    (G) an offense relating to the manufacture, delivery, or possession with intent to manufacture or deliver, a controlled substance or a dangerous drug; and

    (H) an offense against the person as described by Penal Code §§20.03, 20.04, 21.07, 21.08, or 21.11;

    (I) an offense against the family as described by Penal Code §§25.02 or 25.07;

    (J) a stalking offense as described by Penal Code §42.072; or

    (K) an offense against public order and decency as described by Penal Code §§43.25 or 43.26.

(f) The department shall not issue a license or authorization if an applicant has committed a felony or misdemeanor, or engaged in fraudulent or dishonest activity that directly relates to the duties and responsibilities of the licensed occupation unless the commissioner finds that the matters set out in subsection (h) of this section outweigh the serious nature of the criminal offense when viewed in light of the occupation being licensed.

(g) The department may, after notice and opportunity for hearing, revoke a license or authorization if the holder has committed a felony or misdemeanor, or engaged in fraudulent or dishonest activity that directly relates to the duties and responsibilities of the licensed occupation unless the commissioner finds that the matters set out in subsection (h) of this section outweigh the serious nature of the criminal offense when viewed in light of the occupation being licensed.

(h) The department will consider the factors specified in Texas Occupations Code §§53.022 and 53.023 in determining whether to grant, deny, suspend, or revoke any license or authorization under its jurisdiction.

  (1) In determining whether a criminal offense directly relates to the duties and responsibilities of the licensed occupation, the department shall consider the following factors:

    (A) the nature and seriousness of the crime;

    (B) the relationship of the crime to the purposes for requiring a license to engage in the occupation;

    (C) the extent to which a license might offer an opportunity to engage in further criminal activity of the same type as that in which the person previously had been involved; and

    (D) the relationship of the crime to the ability, capacity, or fitness required to perform the duties and discharge the responsibilities of the licensed occupation.

  (2) In addition to the factors listed in paragraph (1) of this subsection, the department shall consider the following evidence in determining the fitness to perform the duties and discharge the responsibilities of the licensed occupation of a person who has committed a crime:

    (A) the extent and nature of the person's past criminal activity;

    (B) the age of the person when the crime was committed;

    (C) the amount of time that has elapsed since the person's last criminal activity;

    (D) the conduct and work activity of the person prior to and following the criminal activity;

    (E) evidence of the person's rehabilitation or rehabilitative effort while incarcerated or following release; and

    (F) other evidence of the person's present fitness, including letters of recommendation from:

      (i) prosecutor, law enforcement, and correctional officers who prosecuted, arrested, or had custodial responsibility for the person;

      (ii) the sheriff or chief of police in the community where the person resides; and

      (iii) any other persons in contact with the person.

    (G) In addition to the factors and evidence listed in paragraphs (1) and (2) of this subsection, an applicant or license or authorization holder shall also furnish proof that the applicant or holder has:

      (i) maintained a record of steady employment;

      (ii) supported the applicant's or holder's dependents where applicable;

      (iii) otherwise maintained a record of good conduct; and

      (iv) paid all outstanding court costs, supervision fees, fines, and restitution as may have been ordered in all criminal cases in which the applicant or holder has been convicted.

  (3) It shall be the responsibility of the applicant or holder to the extent possible to secure and provide to the commissioner the information required by paragraph (2) of this subsection.

(i) The department shall consider any specific criteria the legislature has set out for any license or authorization in considering whether to grant, deny, suspend, or revoke such license or authorization.

(j) The department shall revoke a license or authorization on the holder's imprisonment following a felony conviction, felony community supervision revocation, revocation of parole, or revocation of mandatory supervision.

(k) No person currently serving in prison for conviction of a felony under any state or federal law is eligible to obtain a license or authorization issued by the department.


Source Note: The provisions of this §1.502 adopted to be effective May 2, 2004, 29 TexReg 4185; amended to be effective September 8, 2010, 35 TexReg 8107

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