Source: http://www.tdi.texas.gov/rules/2008/1-501-1-503.html
Timestamp: 2018-04-20 06:49:22
Document Index: 250633918

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28 TAC §1.501 and §1.503
1. INTRODUCTION. The Commissioner of Insurance adopts amendments to §1.501 and §1.503, concerning the effect of criminal conduct on licenses. The amendments to §1.501 and §1.503 are adopted with updated Insurance Code references in the proposed text published in the August 8, 2008 issue of the Texas Register (33 TexReg 6334).
2. REASONED JUSTIFICATION. The adopted amendments to §1.501 and §1.503 are necessary to: (i) implement the Occupations Code Chapter 53; (ii) implement HB 472, enacted by the 80th Legislature, Regular Session, effective September 1, 2007, which amends the Insurance Code Chapter 4151; (iii) clarify an existing non-substantive inconsistency within §1.501(b)(1); (iv) clarify the applicability of the Department's existing guidelines in §1.502 to certain persons from whom biographical information is required; and (v) clarify the applicability of the Department's existing fingerprint requirements in §1.504(a) to certain persons from whom biographical information is required. The Department posted an informal working draft of the proposed amendments on the Department's internet website from November 26 to December 14, 2007, and invited public input. The Department received no comments regarding the informal working draft of the proposed amendments. The Department formally proposed the amendments in the August 8, 2008 issue of the Texas Register (33 TexReg 6334). The Department received no requests for a hearing on the proposal. In response to comments received on the published proposal, the Department has made non-substantive statutory reference updates. The Department has updated the reference to the Insurance Code Articles 21.58A and 21.58C in §1.501(b)(1)(A) and (B) to reference the Insurance Code Chapters 4201 and 4202, respectively. This update is necessary to reflect the non-substantive revised Insurance Code. Further, although amendments to §1.503(1)(A) and (B) were not proposed, the Department has also updated the references to the Insurance Code Articles 21.58A and 21.58C in §1.503(1)(A) and (B) for consistency with the changes made to §1.501(b)(1)(A) and (B). None of these changes, however, materially alter issues raised in the proposal, introduce new subject matter, or affect persons other than those previously on notice.
Implementation of the Occupations Code Chapter 53 and HB 472
The adopted amendments to §1.501 and §1.503, particularly §1.503(1), are necessary to implement the Occupations Code Chapter 53 and HB 472. HB 472 was enacted by the 80th Legislature, Regular Session, effective September 1, 2007, and amends the Insurance Code Chapter 4151. The Insurance Code §4151.051 prohibits a person from acting as or holding itself out as an administrator, as that term is defined under the Insurance Code Chapter 4151, unless the person holds a certificate of authority under the Insurance Code Chapter 4151. For a person submitting an application for a certificate of authority under the Insurance Code Chapter 4151, the Insurance Code §4151.053 requires the Commissioner to determine the fitness of the applicant to hold the authorization, including determining whether granting the authorization would violate a state or federal law. This statutory requirement requires the Department to consider the provisions of 18 U. S. C. §§1033 and 1034. These federal provisions prohibit an individual who has been convicted of a state or federal felony involving dishonesty or breach of trust from (i) engaging in the business of insurance that affects interstate commerce or (ii) participating in such business unless the individual is specifically authorized to do so by an insurance regulatory official. An individual may be in violation of federal law and may be subject to the penalties prescribed in 18 U. S. C. §§1033 and 1034 if he or she: (i) has been convicted of a state or federal felony involving dishonesty or breach of trust; (ii) engages in the business of insurance that affects interstate commerce or participates in such business; and (iii) does not hold the authorization required under 18 U. S. C. §1033 and §1034. Such activity is directly relevant to the statutorily required determination under the Insurance Code §4151.053. Further, HB 472 enacts the Insurance Code §4151.301, which authorizes the Department to deny an application for a certificate of authority under Chapter 4151 if the Department determines that an applicant, individually, or through an officer, director, or shareholder, has been convicted of a felony. The Insurance Code §4001.103 also permits the Department to deny an application for an authorization if the applicant fails to provide a complete set of fingerprints on request by the Department. The Insurance Code §4001.103 is made applicable to administrators that are regulated under the Insurance Code Chapter 4151 through the Insurance Code §4001.002. The Insurance Code §4001.002 provides that the Insurance Code Title 13 applies to each person licensed under Title 13 Subtitle B, C, or D. Chapter 4151 administrators are licensed under Subtitle D. Further, the Occupations Code §53.021 authorizes the Department to disqualify a person from receiving a license on the grounds that the person has been convicted of a felony or misdemeanor that directly relates to the duties and responsibilities of the licensed occupation. Additionally, the Government Code §411.106 and §411.087 authorize the Department to access an applicant's criminal history information from both the Texas Department of Public Safety (DPS) and the Federal Bureau of Investigation (FBI). Collectively, these statutes require and authorize the Department to determine a person's fitness for holding an authorization under the Insurance Code Chapter 4151 or to have the ability to control, direct, or manage the affairs of an authorized entity under the Insurance Code Chapter 4151 when that person has committed a criminal offense or has engaged in fraudulent or dishonest activity. The fitness of an applicant to hold an authorization under Chapter 4151 is especially important because of the unique services offered and performed by administrators under Chapter 4151. Administrators often have control over and access to the financial accounts, claims files, books and records, and premium and contribution collections of an insurer. Additionally, administrators are authorized under the Insurance Code Chapter 4151 to hold premiums, contributions, return premiums, and return contributions in fiduciary bank accounts on behalf of insurers. Further, administrators often have access to or control over certain accounts funded by insurers for claims payment purposes. In addition to affecting the insurance business of an insurer, the actions of administrators also affect Texas consumers and the general public. Very often, consumers interact directly with administrators when discussing claims payment procedures and guidelines, premium or contribution payments, review of medical billing, and other customer service related matters. The nature of this interaction requires the public to place trust in and reliance upon these administrators due to the complex and varied nature of insurance and insurance-related products. As such, the Department considers the determination of the honesty, trustworthiness, and reliability of each of these administrators to be an essential regulatory function. For all of these reasons, the Department has determined that the use of criminal history information is the best means to assist the Department in performing its statutory duty of determining a person's fitness for holding an authorization under the Insurance Code Chapter 4151 or having the ability to control, direct, or manage the affairs of an authorized entity under the Insurance Code Chapter 4151.
The adopted amendments to §1.501 and §1.503 apply the Department's existing requirements and procedures regarding prior criminal conduct and fraudulent and dishonest activity to Chapter 4151 administrators. Applying the Department's current fingerprinting and criminal history review process to these administrators promotes stability, uniformity, and consistency in Department regulation and reduces additional costs and unnecessary use of resources. Additionally, the adopted amendments to §1.501 and §1.503 will help maintain effective regulation of the insurance industry by ensuring that persons receiving authorizations under the Insurance Code Chapter 4151 or persons having the ability to control, direct, or manage the affairs of an authorized entity under the Insurance Code Chapter 4151 are honest, trustworthy, and reliable. The adopted amended sections and existing rules in Chapter 1, Subchapter D, specify the requirements for the Department's determination of: (i) the applicant's fitness for a certificate of authority under the Insurance Code Chapter 4151; (ii) the criminal history information of each applicant; and (iii) the criminal history information of any individual who has the right to control, direct, or manage the affairs of the applicant. The Department has consulted with the DPS and, for the following reasons, has determined that fingerprint checks, and in particular, electronic fingerprint checks, provide the most effective method of identifying an individual and obtaining that individual's criminal history information. First, fingerprint checks prevent individuals with a criminal history in another state from attempting to evade detection by simply moving to Texas. Second, fingerprint collection by an independent third party vendor allows for independent verification of the identity of the individual being fingerprinted and increases confidence in the review process. Third, improvements in electronic fingerprint technology have increased the accuracy of fingerprint capture and have substantially reduced the time frame for processing the fingerprint to obtain the criminal history information. For these reasons, the existing rules in Subchapter D require affected individuals to be fingerprinted by an acceptable vendor. The individual's fingerprints will either be submitted directly to the DPS, if captured by the DPS electronic vendor, or to the Department, and then to the DPS, if captured on paper. Further, the Department understands from the DPS that all fingerprints will be processed through both the DPS and the FBI.
Clarification of §1.501(b ) Inconsistency
The adopted amendment to §1.501(b)(1) is necessary to clarify a non-substantive inconsistency in the introductory paragraph of §1.501(b)(1). The existing introductory paragraph of §1.501(b)(1) applies the provisions of §1.502 to an applicant for, or a holder of, a license, registration, permit, authorization, or certification issued by the Department under certain Insurance Code provisions enumerated in existing §1.501(b)(1)(A) - (U). Section 1.502 contains the Department's current guidelines relating to the matters the Department will consider in determining whether to grant, deny, suspend, or revoke any license or authorization under its jurisdiction. Additionally, §1.502 prescribes the crimes which the Department considers to be of such a serious nature that they are of prime importance in determining an applicant's fitness for licensure or authorization. While existing §1.501(b)(1)(R) refers to the Insurance Code Chapter 4151 as an applicable Insurance Code provision under which the Department may issue an authorization, existing §1.501(b)(1), which specifies the various types of applicants and holders of a license, registration, permit, authorization, or certification under the Insurance Code, does not specifically refer to administrators. Administrators are authorized under the Insurance Code Chapter 4151. This omission creates an internal inconsistency between existing §1.501(b)(1) and existing §1.501(b)(1)(R). The adopted amendment to §1.501(b)(1) is necessary to include the term administrator in the introductory paragraph of §1.501(b)(1) to make it consistent with existing §1.501(b)(1)(R).
Clarification of the Applicability of §1.502
Existing §1.501(b)(3) enumerates the individuals by organization title that are subject to the provisions of §1.502. Section 1.502 contains the Department's current guidelines relating to the matters the Department will consider in determining whether to grant, deny, suspend, or revoke any license or authorization under its jurisdiction. Additionally, §1.502 prescribes the crimes which the Department considers to be of such a serious nature that they are of prime importance in determining an applicant's fitness for licensure or authorization. Under existing §1.501(b)(3), the provisions of §1.502 apply to those who are or become partners or 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 §1.501(b)(1) and (2) and from whom biographical information is required. The adopted amendment to §1.501(b)(3) clarifies the applicability of §1.502 to include, in addition to those specified under the existing rule, those who are or become principals and those who 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 §1.501(b)(1) and (2) and from whom biographical information is required. This change is necessary because the existing rule causes uncertainty and confusion for individuals holding organization titles other than those specifically enumerated. For example, existing §1.501(b)(3) refers to officers, directors, controlling shareholders, and limited liability company members and managers but does not refer to a principal. If an individual is a principal and performs the same functions as an individual who holds one or more of the enumerated organization titles, it is unclear if the provisions of §1.502 apply to the individual who is a principal. Additionally, organizations will continue to evolve and will necessarily use different organization titles to describe different individuals involved in the operation of their organizations. An officer of a large organization may perform similar functions as the principal of a smaller organization or sole proprietorship. Therefore, to remove the uncertainty and confusion in existing §1.501(b)(3), the adopted amendment to §1.501(b)(3) adds the term principal to the list of enumerated organization titles and adds to existing §1.501(b)(3) the phrase or have similar responsibilities to. This imposes the requirements of §1.502 on any individual who is or becomes a principal and to any individual who has similar responsibilities to any individual holding any of the enumerated organization titles in §1.501(b)(3), including the organization title of principal. The purpose of existing §1.501(b)(3) is to require the key individuals of an organization with management, discretionary, or decision making authority to comply with the requirements of §1.502 of the subchapter. The adopted amendment is consistent with this purpose. The adopted amendment is authorized under the Occupations Code Chapter 53, the Labor Code Chapter 407A, and the Insurance Code Chapters 801, 822, 823, 841, 843, 844, 846, 981, 1111, 1305, 2551, 2552, 2651, 2652, 4001, 4005, 4051, 4052, 4053, 4054, 4055, 4056, 4101, 4102, 4151, 4152, 4153, 4201, and 4202. Lastly, the adopted amendment to §1.501(b)(5) is necessary to clarify the applicability of §1.502 to persons regulated under §5.6403 of this title (relating to Application for Initial Certificate of Approval).
Clarification of the Applicability of §1.504(a)
Existing §1.503(2)(A) and (B) enumerate the individuals by organization title that are subject to the provisions of §1.504(a) of the subchapter. Section 1.504(a) contains the Department's current requirements relating to the submission of an individual's complete set of fingerprints and related processing fees and additional identifying information required by the DPS and the FBI for processing the complete set of fingerprints. Under existing §1.501(2)(A), the provisions of §1.504(a) apply to those who are partners or officers, directors, or controlling shareholders, including limited liability company members and managers, of entities that are applicants for a license, certification, permit, registration, or authorization under provisions specified in §1.503(1) and from whom biographical information is required. Under existing §1.501(2)(B), the provisions of §1.504(a) apply to those who become partners or officers, directors, or controlling shareholders, including limited liability company members and managers, of entities that are holders of a license, authorization, permit, certification, or registration under provisions specified in §1.503(1) and from whom biographical information is required. The adopted amendment to §1.503(2)(A) clarifies the applicability of §1.504(a) to those from whom fingerprints are required. This includes, in addition to those specified under the existing rule, those who are principals and those who have similar responsibilities to principals, partners, officers, directors, or controlling shareholders, including limited liability company members and managers, of entities that are applicants for a license, certification, permit, registration, or authorization under provisions specified in §1.503(1) and from whom biographical information is required. The adopted amendment to §1.503(2)(B) also clarifies the applicability of §1.504(a) to those from whom fingerprints are required. This includes, in addition to those specified under the existing rule, those who become principals and those who have similar responsibilities to principals, partners, officers, directors, or controlling shareholders, including limited liability company members and managers, of entities that are holders of a license, authorization, permit, certification, or registration under provisions specified in §1.503(1) and from whom biographical information is required. These changes are necessary because the existing rules cause uncertainty and confusion for individuals holding organization titles other than those specifically enumerated. For example, existing §1.503(2)(A) and (B) refer to officers, directors, controlling shareholders, and limited liability company members and managers but do not refer to a principal. If an individual is a principal and performs the same functions as an individual who holds one or more of the enumerated organization titles, it is unclear if the provisions of §1.503(2)(A) and (B) apply to the individual who is a principal. Additionally, organizations will continue to evolve and will necessarily use different organization titles to describe different individuals involved in the operation of their organizations. An officer of a large organization may perform similar functions as the principal of a smaller organization or sole proprietorship. Therefore, to remove the uncertainty and confusion in existing §1.503(2)(A) and (B), the adopted amendment to §1.503(2)(A) adds the term principal to the list of enumerated organization titles and adds to existing §1.503(2)(A) the phrase or have similar responsibilities to. Additionally, the adopted amendment to §1.503(2)(B) adds the term principal to the list of enumerated organization titles and adds to existing §1.503(2)(B) the phrase or have similar responsibilities to. These adopted amendments impose the requirements of §1.504(a) on any individual who is or becomes a principal and on any individual who has similar responsibilities to any individual holding any of the enumerated organization titles in §1.503(2)(A) or (B), including the organization title of principal. The purpose of existing §1.503(2)(A) and (B) is to require the key individuals of an organization with management, discretionary, or decision making authority to comply with the requirements of §1.504(a) of the subchapter. The adopted amendment is consistent with this purpose. The adopted amendment is authorized under the Government Code §§411.083, 411.087 and 411.106, the Labor Code Chapter 407A, and the Insurance Code Chapters 801, 822, 823, 841, 843, 844, 846, 981, 1111, 1305, 2551, 2552, 2651, 2652, 4001, 4005, 4051, 4052, 4053, 4054, 4056, 4101, 4102, 4152, 4153, 4201, and 4202. Lastly, the adopted amendment to §1.503(4) is necessary to clarify the applicability of §1.504(a) to persons regulated under §5.6403 of this title (relating to Application for Initial Certificate of Approval).
3. HOW THE SECTIONS WILL FUNCTION. The following is a section-by-section overview of the adopted amendments.
§1.501. Purpose and Application. The adopted amendment to §1.502(b)(1) adds the term administrator to the existing introductory language of §1.502(b)(1). The adopted amendment to §1.502(b)(3) adds the term principal to the enumerated organization titles of individuals that are subject to the provisions of §1.502. Finally, the adopted amendment to §1.502(b)(5) clarifies that each person who is required to file biographical information under §5.6403 of this title (relating to Application for Initial Certificate of Approval) is also subject to the provisions of §1.502.
§1.503. Application of Fingerprint Requirement. The adopted amendment to §1.503(1) applies the fingerprinting requirements of existing §1.504(a) to administrators under the Insurance Code Chapter 4151. The adopted amendment to §1.503(2)(A) and (B) applies the fingerprinting requirements of existing §1.504(a) to certain individuals. This include individuals who: (i) are required to provide biographical information to the Department; and (ii) are 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 a license, certification, permit, registration, or authorization under provisions specified in §1.503(1). This also includes individuals who: (i) are required to provide biographical information to the Department; and (ii) become or will have similar responsibilities to principals, partners, officers, directors, or controlling shareholders, including limited liability company members and managers, of entities that are holders of a license, authorization, permit, certification or registration under provisions specified in §1.503(1). Finally, the adopted amendment to §1.503(4) applies the fingerprinting requirements of existing §1.504(a) to each person who is required to file biographical information under §5.6403 of this title (relating to Application for Initial Certificate of Approval).
4. SUMMARY OF COMMENTS AND AGENCY RESPONSE.
§1.501(b)(1)(A) and (B)
Comment: A commenter states that §1.501(b)(1)(A) and (B) contain outdated references to the Insurance Code. The reference to the Insurance Code Article 21.58A in §1.501(b)(1)(A) should be updated to reference the Insurance Code Chapter 4201. The reference to the Insurance Code Article 21.58C in §1.501(b)(1)(B) should be updated to reference the Insurance Code Chapter 4201.
Agency Response: The Department agrees and §1.501(b)(1)(A) and (B) as adopted reflect the updated Insurance Code references.
§1.503(2)(A) and (B)
Comment: The commenter states that introduction of the term principal to the list of enumerated organization titles from whom biographical information is required may extend the applicability of the sections to individuals outside the scope of the existing rule and statutes. The commenter encourages the Department to provide further clarification of the term principal by further defining individuals who are subject to this term. The commenter further asserts that inserting the language have similar responsibilities to in proposed §1.503(2)(A) and (B) is ambiguous and open to interpretation. The commenter recommends that the Department include language such as, has responsibilities the same as, or provide clarification as to the extent of the similarities.
Agency Response: The Department disagrees with both of the commenter's recommendations. The Department does not consider the amendments to §1.503 to substantively change the Department's existing interpretation and application of the requirements of §1.503. Rather, the amended language codifies the Department's existing interpretation and application of the requirements of §1.503. For example, in past situations where a particular individual has held an organizational title other than those specifically enumerated in §1.503, the Department has applied the existing requirements of §1.504(a) to the individual, provided that the individual had similar responsibilities to a partner, officer, director, or controlling shareholder for the particular organization. Further, the Department has not experienced difficulty in determining whether a particular individual holds responsibilities similar to a partner, officer, director, or controlling shareholder for a particular organization, such as management, discretionary, or decision making authority. However, the Department recognizes that some individuals have found the existing requirements to be confusing. As a result, the term principal and the phrase or have similar responsibilities to has been added to §1.503 in order to remove any uncertainty and confusion in the existing requirements.
5. NAMES OF THOSE COMMENTING FOR AND AGAINST THE PROPOSAL.
Neither for nor against, with recommended changes: United Healthcare of Texas, Incorporated; UnitedHealthcare Insurance Company.
6. STATUTORY AUTHORITY. The amendments are adopted under the Occupations Code, the Government Code, and the Insurance Code. The Occupations Code Chapter 53 generally prescribes the procedures a licensing authority must employ when considering the consequences of a criminal record on granting or continuing a person's license, authorization, certificate, permit, or registration. The Occupations Code §53.021 authorizes a licensing authority to suspend or revoke a license, disqualify a person from receiving a license, or deny to a person the opportunity to take a licensing examination on the grounds that the person has been convicted of a felony or misdemeanor that directly relates to the duties and responsibilities of the licensed occupation. The Government Code §411.106 permits the Department to obtain criminal history record information from DPS that relates to a person who is an applicant for a license, permit, certificate of authority, certificate of registration, or other authorization issued by the Department. The Government Code §411.087 permits the Department to obtain through the FBI criminal history record information maintained or indexed by the FBI that pertains to that person or to obtain from any other criminal justice agency in this state criminal history record information maintained by that criminal justice agency that relates to that person. The Insurance Code §4001.002(a) provides that, except as otherwise provided by the Insurance Code, the provisions of the Insurance Code Title 13 apply to the persons licensed under Title 13 Subtitle B, C, or D. The Insurance Code §4001.005 authorizes the Commissioner to adopt rules necessary to implement the Insurance Code Title 13. The Insurance Code §4001.103 authorizes the Department to deny an application for an authorization if the applicant fails to provide a complete set of fingerprints on request by the Department. The Insurance Code §4151.006 provides that the Commissioner may adopt rules that are fair, reasonable, and appropriate to augment and implement the Insurance Code Chapter 4151. The Insurance Code §4151.051 prohibits an individual, corporation, organization, trust, partnership, or other legal entity from acting as or holding itself out as an administrator unless the entity is covered by and is engaging in business under a certificate of authority issued under the Insurance Code Chapter 4151. The Insurance Code §4151.053 prescribes the circumstances under which the Commissioner shall approve a certificate of authority under the Insurance Code Chapter 4151, including whether granting the application would violate a federal or state law. The Insurance Code §4151.211 authorizes the Department to determine the trustworthiness and integrity of a person seeking to acquire an ownership interest in an applicant holder under the Insurance Code Chapter 4151. The Insurance Code §4151.301 provides that the Department may deny an application for a certificate of authority or discipline the holder of a certificate of authority under the Insurance Code Chapter 4151 if the applicant or holder, individually, or through an officer, director, or shareholder, has been convicted of a felony. The Insurance Code §36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Department under the Insurance Code and other laws of this state.
(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;
(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); and
(5) each person who is required to file biographical information under §5.6403 of this title (relating to Application for Initial Certificate of Approval).
(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.
§1.503. Application of Fingerprint Requirement. The fingerprint requirement in §1.504(a) of this subchapter (relating to Fingerprint Requirement) applies to the following individuals:
(1) applicants for any license, registration, certification, authorization or permit, including temporary or training licenses or certificates, as agents, adjusters, public insurance adjusters, counselors, risk managers, reinsurance intermediaries, title agents, title escrow officers, viatical and life settlement registrants, workers' compensation health care networks, management contractors, and administrators, under the following Insurance Code provisions:
(F) Chapter 2651, Subchapter A;
(G) Chapter 2652;
(H) Chapter 4001;
(I) Chapter 4051;
(J) Chapter 4052;
(K) Chapter 4053;
(L) Chapter 4054;
(M) Chapter 4056;
(N) Chapter 4101;
(O) Chapter 4102;
(P) Chapter 4151;
(Q) Chapter 4152; or
(R) Chapter 4153.
(2) with the exception of those individuals associated with licenses issued to corporations and limited liability companies under Insurance Code Chapter 2651 Subchapter A, individuals who are required to provide biographical information and who:
(A) are 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 a license, certification, permit, registration, or authorization under provisions specified in paragraph (1) of this section; or
(B) become or will have similar responsibilities to principals, partners, officers, directors, or controlling shareholders, including limited liability company members and managers, of entities that are holders of a license, authorization, permit, certification or registration under provisions specified in paragraph (1) of this section.
(3) 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:
(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).
(4) each person who is required to file biographical information under §5.6403 of this title (relating to Application for Initial Certificate of Approval).