Commissioner of Insurance - P&C License Section 1

Requirements of Inquires [Ins. 38.001]

1. A person receiving an inquiry shall respond to the inquiry in writing not later than the 15th day after the date the inquiry is received 2. If the department receives written notice from the person that additional time id required to respond to the inquiry, the department shall grant a 10-day extension of the time to respond to the inquiry. 3. A response made under this section that is otherwise privileged or confidential by law remains privileged or confidential until introduced into evidence at an administrative hearing or in a court. 4. The department will keep record of all inquiries.

Examination of records [Ins. 401.051 to .062]

1. Examinations analyze the insurer, its financial condition, its ability to meet its liabilities, and its compliance with state laws. 2. This examination requirement applies to the insurers authorized to transact business in Texas, including foreign insurers.

Duties of Department [Ins. 31.002]

1. Regulate the business of insurance in this state 2. Administer the workers' compensation system of this state 3. Ensure that this code and other laws regarding insurance and insurance companies are executed 4. Protect and ensure the fair treatment of consumers 5. Ensure fair competition in the insurance industry in order to foster a competitive market

Notice of penalty [Ins. 84.041, .042] - 1

After reporting a violation to the Commissioner, the department must give written notice of the report to the affected person within 14 days. The notice must include 1. The alleged violation 2. The recommended penalty 3. Notice of the affected person's right to a hearing.

Notice of penalty [Ins. 84.041, .042] - 3

During a hearing, the Commissioner may: 1. Administer oaths 2. Examine and cross-examine witnesses 3. Receive oral and documentary evidence 4. Subpoena witnesses 5. Require the production of books, papers, records, correspondence, or other documents relevant to the inquiry.

Status of Complaints [Ins. 521.003, .004]

If the Department of Insurance receives a written complaint filed against an insurer or producer, the department will, at least quarterly and until the matter is resolved, notify each party to the complain of the complaint's status unless doing to would jeopardize and undercover investigation.

Notice of penalty [Ins. 84.041, .042] - 5

If the person does not pay the administrative penalty and the enforcement of the penalty is not stayed pending review, the Commissioner may refer the matter to the attorney general for collection. In addition to imposing an administrative penalty, the Commissioner is authorized to: 1. Suspend the violator's authorization for a specified time not to exceed one year 2. Order the holder of the authorization to cease and desist from prohibited activity 3. Direct the holder of the authorization to make restitution 4. Take any combination of those actions.

Notice of penalty [Ins. 84.041, .042] - 4

If, following the hearing, the Commissioner finds that a violation did occur, the person may: 1. Pay the penalty 2. Petition for judicial review (appeal).

Reinsurance reserves for certain insurers [INS. 491.051-.052]

On December 31 every year, the Department of Insurance will compute the reinsurance reserve for all unexpired risks of every insurer (other than life insurance, fire, and lightning insurance, tornado, marine, or inland marine companies) doing business in Texas.

General Powers and Duties

The Commissioner administers, enforces, and carries out the provisions o the Texas Insurance Code (the state's insurance laws) and other applicable laws, including the calculation of insurance reserves.

Investigation/notice of hearing

The Commissioner has the power to examine and investigate the affairs of every person engaged in the insurance business in Texas to determine whether the person has engaged in an unfair method of the competition or in any unfair or deceptive trade practices or has in any other way violated the insurance code.

Penalties [Ins. 82.001 to .056, 4005.102]

The Commissioner may impose an administrative penalty on a person licensed or regulated under Texas law who violates any law, rule, or order.

Informal disposition [Ins. 82.055]

The Commissioner may informally dispose of a matter by agreement or stipulation with the party charged, or by default. The license may agree to certain sanctions without admitting guilt or that a violation has occurred.

Restitution [Ins. 82.053]

The Commissioner may order a license (whether insurer or agent) to make complete restitution to every Texas resident, every Texas insured, and every entity operating in the state that is harmed by a violation of, or a failure to comply with, the Insurance Code or a rule of the Commissioner.

Electronic Transfers [Ins. 201.004]

The Commissioner regulates the electronic transfer of any fee, guaranteed fund, or other money owed to or held for the state. The Commissioner will require the electronic transfer of any such amount that exceeds $500,000

Notice to other states [Ins. 82.056]

The Commissioner shall notify other states of any illegal actions

Examination of records [Ins. 401.051 to .062] - Powers related to examination

The department has the following powers regarding examinations: 1. Free access to all books and papers that relate to the carrier's business and affairs 2. Authority to summon and examine under oath, if necessary, an officer, agent, or employee of the carrier or any other person in relation to the carrier's affairs and condition.

Inquires [Ins. 38.001]

The department may address a reasonable inquiry to any insurance company, including a Lloyd's plan or reciprocal or interinsurance exchange, or an agent or other holder of an authorization relating to, the person's business condition or any matter that the Commissioner considers necessary for the public good regarding this department.

Examination of records [Ins. 401.051 to .062] - Frequency of Examination

The department may examine a carrier as frequently as necessary. At minimum, the department must examine a carrier at least once every five years. Examinations will cover the insurer's activities from the date of the last examination until December 31 of the year preceding the year in which the examination is occurring.

Penalty amounts [Ins. 84.022]

The penalty for a violation may not exceed $25,000 unless a greater or lesser penalty is specified by law. The amount of the penalty will be based on: 1. The seriousness of the violation 2. The economic harm to the public interest or public confidence caused by the violation 3. The history of previous violations 4. The amount necessary to deter a future violation 5. Efforts to correct the violation 6. Whether the violation was intentional 7. Any other matter that justice may require

Notice of penalty [Ins. 84.041, .042] - 2

Within 20 days after receiving the notice, the person may: 1. accept the department's determination and recommended administrative penalty 2. Request a hearing on the occurrence of the violation, the amount of the penalty, or both.