Texas Insurance Regulations: Comprehensive Notes

Transacting insurance includes solicitation, negotiations, sale, and advising on policies or claims.

Actions Constituting the Business of Insurance in Texas

• Making/Proposing Contracts: Negotiating contracts.

• Accepting Applications: Handling applications.

• Collecting Payments: Handling premiums and fees.

• Issuing Policies: Delivering insurance documents.

• Acting as an Agent: Representing insurers.

• Indemnification: Offering medical expense coverage.

Types of Insurance Companies

• Insurer (Principal): The entity issuing policies.

  • Domestic Insurers: Incorporated in Texas.

  • Foreign Insurers: Other U.S. states.

  • Alien Insurers: Outside the U.S.

• Classification by Ownership:

  • Stock Insurance Companies: Owned by stockholders, nonparticipating.

  • Mutual Insurance Companies: Owned by policyholders, participating.

Certificate of Authority in Texas

• Required to operate; unauthorized insurers must use licensed brokers.

Texas Commissioner of Insurance

• Regulates operations, oversees agents, and ensures consumer protection.

Examination of Insurance Companies

• Insurers examined every five years at their expense.

Consumer Complaints & Investigations

• Complaints can be filed with TDI; insurers respond within 15 days.

Penalties for Violations

• Includes cease and desist orders, fines, and license revocation, with fines up to $25,000.

Responsibilities and Duties of Agents

• Act ethically, cannot pay unlicensed commissions, rebating is illegal.

Continuing Education Requirements

• 24 hours every two years, including ethics training; exemptions may apply.

Important Dates & Fees

• License renewal every two years; maximum licensing fee is $50.

Key Regulations Summary

• Adherence to ethical and legal standards is critical for agents' operation in Texas insurance market.