TX General Lines P&C Pt.3 Law

The maximum penalty for violating a cease and desist order is

$1,000 per violation not to exceed $5,000 for all violations.

The maximum fine for an individual guilty of multiple intentional violations is

$25,000.

The maximum penalty for violation of the Insurance Code is

$25,000.

The minimum limits for Uninsured Motorist coverage for injury to one person is

$30,000.

An insurer must acknowledge receipt of a notice of claim within

10 days.

Property insurance companies may cancel or non-renew for poor maintenance as long as they give the insured at least

30 days to remedy the problem.

If a Fire or Homeowners policy is canceled or non-renewed, the company must give the insured

30 days' advance notice.

Property insurance companies may reduce coverage by adding policy limitations at renewal as long as they give the insured at least

30 days' advance notice.

Agents must notify the Commissioner of any change in address, felony conviction, or adverse administrative action taken against them within

30 days.

You must notify the state upon change of address within

30 days.

You must wait before you can apply to reinstate a revoked license at least

5 years.

Insurance companies have a underwriting period of

60 days, during which they may cancel or reject an application for any valid reason.

Proof of loss on fire insurance must be submitted within

60 days.

Temporary licenses are available for up to

90 days without an exam.

Managing General Agent (MGA)

A person who exercises general supervision over the business of an insurance company, including hiring, training and firing agents in a particular territory.

Limited lines licenses are available to sell

AD&D, credit insurance, and funeral insurance.

Continued Education Credits Requirement

Agents must earn 24 hours of continuing education credits every two years, including two hours of ethics.

These are required to get a Texas license.

Fingerprints

Defamation

Making oral or written statements that are false or maliciously critical of the financial condition of an insurer or agent.

This must be shown to the Commissioner upon his request.

Records

The maximum time period the Commissioner may revoke your license for.

Unlimited

Insurance licenses are "conditional" upon

a FBI background check.

False advertising is

a form of misrepresentation.

Your license cannot be suspended or revoked without

a hearing.

A cease and desist order may be issued without

a prior hearing.

Coercion is considered to be

a restraint of trade and is illegal.

Auto Financial Responsibility may be achieved by

acquiring adequate Liability Insurance, depositing cash of $85,000 with the State Treasurer or posting a $85,000 Surety Bond.

It is legal to

advertise honest differences in insurance contracts.

It is not unfair to deny a claim that occurred

after coverage terminated.

Rates may vary based upon

age of the applicant.

A policy includes

all endorsements added by mutual consent of the parties.

The owners policy is

always primary in auto liability.

Misrepresenting facts or policy provisions is an example of

an Unfair Claim Practice.

If a license has been expired for one year or more,

an applicant must retake the state exam.

Refusing to pay claims without conducting a reasonable investigation is

an example of an Unfair Claim Practice.

You can only share commissions with other agents who

are licensed for the same lines of insurance that you are.

Under the FCRA, reporting agencies

are not required to send a credit report to anyone who requests it, but may furnish reports to persons entitled to receive them.

The Commissioner may audit/examine a company's books

as often as necessary.

Under the Telemarketing Sales Rules telemarketing calls may begin

at 8 AM in the time zone in which the call is received.

Under the Telemarketing Sales Rules telemarketing calls must end

at 9 PM in the time zone in which the call is received.

Telemarketing solicitations may only occur

between the hours of 8 am and 9 pm in the time zone where the customer is located.

"Transacting" insurance includes

both buying and selling insurance.

You can satisfy the auto Financial Responsibility Law by

buying auto insurance from any authorized insurance company.

After an auto policy has been in effect for 60 days, the company may not

cancel except for certain reasons such as driver's license suspension.

Fire policies may be canceled after 60 days in force only for

certain things, such as a substantial change in the risk assumed by the company since the policy was issued.

Forcing a client to buy insurance from a certain Agent as a condition to granting a loan is

coercion (Unfair Trade Practice).

Transacting insurance includes

collecting premiums and handling claims.

If an agent's contract is terminated by an insurer, his or her accounts

continue in force.

Your license cannot be suspended or revoked for

declaring bankruptcy.

The Commissioner is responsible for

determining if an insurance company is insolvent.

The Texas Auto Insurance Plan offers coverage to

drivers not able to obtain coverage through the normal market. All auto insurers must participate.

Insurance licenses expire

every two years, on the licensee's birthday.

Farm tractors are

exempt from the auto Financial Responsibility Law.

Insurable interest in Property and Casualty insurance must

exist at the time of loss.

Under the Unfair Claims Settlement Practices Act, the denial of an unsubstantiated claim is

fair.

A licensee whose license has been revoked must wait

five years to file a new license application.

The Commissioner must audit all authorized insurers no less frequently than once every

five years.

The Commissioner will suspend an agent's license if he does not

have at least one valid appointment.

You can get a Texas nonresident license if you

have passed your exam in your home state.

Notice of Claim on property insurance is required

immediately.

Uninsured motorists (UM) coverage includes

injuries caused by a hit and run motorist.

Texas Auto Insurance Plan

is the Assigned Risk Pool for auto insurance, where all authorized auto insurance companies take turns insuring high risk clients.

A rate is not unfairly discriminatory if

it reflects equitably the differences in expected losses and expenses.

A measurement of an insurers liabilities to policyholders is called

legal reserves.

Under the federal Fair Credit Reporting Act, reporting agencies must

make a report available to anyone whose insurance was denied as a result of information contained in the report.

Unlicensed clerical employees cannot

make coverage change recommendations.

The purpose of agent licensing is to

make sure the agents have adequate knowledge of insurance when selling insurance to customers on behalf of insurers in this state.

The availability or amount of coverage may not be denied or reduced based upon

marital status.

You must give up your Texas resident license if you

move out of the state.

Policyholders might receive dividends from a

mutual insurer.

A clerical person who occasionally writes up a new application, but does not receive any commission,

need not be licensed.

An agent showing competitor information to a client is

not a violation of the Unfair Trade Practices regulation.

The insurance company attempting to use arbitration to settle the claim is

not an example of an Unfair Claim Practice.

Readjusting group premiums based on loss/expense experience is

not prohibited.

Misrepresentation, fraud, concealment in connection with a new application or claim may have the effect

of "rescinding" or voiding the contract.

A licensed agent may be appointed by more than

one insurer.

The Guaranty Fund's purpose is to

pay claims, up to $300,000, and unearned premium refunds up to $25,000, of more than $25.00 of insolvent companies, funded by assessments on members. All Property and Casualty companies must join in order to get their certificate of authority.

Giving part of your commission to a client as an inducement to a sale is

rebating.

The Fair Credit Reporting Act

regulates consumer credit reports.

After a hearing, the Commissioner may

revoke, suspend, refuse to renew, or placed on probation a licensee who has violated the Insurance Code.

It is not unlawful to

sell insurance out of state with a nonresident license.

When an independent agent is terminated by the insurer he represents, his clients must

stay with the terminated agent and receive customary services.

Shareholders might receive dividends from a

stock insurance company.

The Do Not Call list contains

telephone numbers.

Everyone transacting insurance comes under the jurisdiction of

the Insurance Code (law).

Hearings are held at

the Insurance Department, not in a court of law.

All authorized auto insurers must participate in

the Texas Auto Insurance Plan/Assigned Risk Pool.

Agents represent

the insurer.

Applicants can still obtain a new license without exam if

the license has been expired for less than one year.

Privacy protection notices must be given out no later than

the time a new policy is delivered and annually thereafter.

An insurer may not appoint any person to act as their agent unless

they are licensed.

The federal Fraud and False Statements law applies to

those who engage in false financial reporting.

The Do Not Call list was created

to help prevent calls from telemarketers.

Rates cannot be

too high, too low, or unfairly discriminatory.

Licenses must be renewed every

two years.

The Commissioner is appointed by the Governor for

two years.

Insurance laws are not required to be

uniform from one state to another.

Even though you pass your exam,

you cannot sell insurance until your license is actually issued.

Under the Fair Credit Reporting Act,

you do not need to file a lawsuit to get incorrect data corrected.

To obtain a license:

you must be 18, be fingerprinted, and pass the exam, if required.