Commissioner

Boycott, Coercion, or Intimidation

A person may not enter into any agreement that may result in the unreasonable restraint of or monopoly in the business of insurance.

License Term

All new licenses will have a term of two years, expiring two years for the date of issue.

Transacting Insurance

Broadly defined, generally any activity related to the negotiation, sale or purchase of insurance comes under the jurisdiction of the Texas Insurance Code, including handling claims, inspecting risks and collecting premiums.

Fair Credit Reporting Act

Protects consumers by requiring certain types of notification and by establishing provisions for the removal of outdated and incorrect information.

Telemarketing Sales Rules

Provides guidelines for telemarketing standard of conduct in addition to outlining deceptive telemarketing acts or practices.

Rates

Rates may not be too high, too low or unfairly discriminatory. Rates should be sufficient to assure that the insurer earns a fair and reasonable profit.

Pre-Notification

Requires that the insurer notify the customer in writing that a consumer investigative report may be ordered.

Appointment

The Commissioner will suspend an agent's license if he does not have a valid appointment with an insurance company.

Certificate of Authority

The authority granted by the Commissioner to an insurer to transact business in this state.

Surplus Lines and Reinsurance Companies

This are the only companies that can transact business within the state without a Certificate of Authority.

Insurers receiving a Certificate of Authority:

This insurers are also called authorized or admitted insurers and they must participate in the State Guaranty Fund.

False or Deceptive Advertising

A person may not make any advertisement that is untrue, deceptive or misleading.

Unfair Discrimination

A person may not make any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any life insurance or annuity contract, or the dividends or other benefits payable, or in any other terms of the policy.

False Financial Statements

A person may not publish any false statements of the financial condition of an insurer with the intent to deceive.

Unfair Claims Settlement Practices

A person shall not commit or perform the following: Misrepresenting facts or policy provisions. Failing to act promptly on claim communications. Refusing to pay claims without conducting a reasonable investigation.

Annual Financial Statements

All foreign, domestic and alien insurers must file annual financial statements with the Commissioner to prove that they have adequate "legal reserves" in order to meet future obligations to their policyholders.

Continuing Education

An individual must complete 30 hours (including two hours of ethics) of continuing education every two years to renew an expiring license.

Payment of Commission

An insurer may only pay commissions to licensed agents in connection with insurance transacted in Texas.

Commissioner's General Duties and Powers

Appointed by the Governor for two years to enforce the Texas Insurance Code and preside over the Texas Department of Insurance.

Cease and Desist Orders:

If the Commissioner finds that a licensee has engaged in prohibited act, he may order such licensee to cease and desist from such practices.

Penalties

If the Commissioner finds that any licensee has failed to perform a duty, discharge and obligation, or has violated any insurance law, rule, regulation or order, the Commissioner may impose a maximum civil penalty up to $25,000.

Unfair Trade Practices and Frauds

Misrepresentation, false or deceptive advertising, defamation, boycott, coercion, or intimidation, false financial statements, unfair discrimination, unfair sex discrimination, rebating and illegal inducements.

Misrepresentation

Misrepresenting the terms or benefits of a policy. Making false statements regarding dividends previously paid. Making false statements about the financial conditions of any insurer.

Defamation

No one may make any oral or written statement that is false or maliciously critical of the financial condition of an insurer.

Rebating and Illegal Inducements

No person may offer as an inducement to the sale any rebate of commissions or advantage in dividends not specified in the policy.

Policy Forms

No policy form may be used by any insurer in this state until it has been files with the Commissioner.

Expresses and Implied Powers

The Commissioner has both expressed and implies powers to conduct audits and investigations pertaining to insurance matters to protect the public, including the power to subpoena witness and records.

Renewal Application

The Commissioner may accept a renewal application up to 90 days late if accompanied by a late renewal fee.

Examination of Records

The Commissioner may conduct examinations of insurance matters to determine whether a person has violated state insurance laws.

Refusal to Renew, Suspension or Revocation of Licenses

The Commissioner may suspend, revoke permanently or refuse to renew any license after a hearing.

Examination of Authorized Insurer

The Commissioner shall examine each authorized insurer not less than once every five years.

On Revocation of a License

The Commissioner shall not reissue any revoked license for at least five years, and then only if the applicant has re-qualified.

Unfair Sex Discrimination

The availability of any insurance contract shall not be denied on the basis of gender or marital status.

Reporting Change of Address

The licensee shall notify the commissioner in writing monthly basis (within 30 days) of any change of address.

Penalty for violating Cease and Desist order

The maximum penalty for violating a cease and desist order is $1,000 per violation and a total of $5,000 for all violations.

How to obtain a Certificate of Authority:

To obtain a Certificate of Authority, insurers must file for approval their rates and policy forms and post initial required legal reserves to pay future claims.

Insurer Insolvency

Upon examination (audit), if the Commissioner determines that an insurer is insolvent or if the continuing of its business is hazardous to the public, the Commissioner will place the insurer under the supervision of the Department of Insurance.

Reasons for Non-renewal, Suspension or Revocation of Licenses:

Willful violation of the insurance code, incompetence or false license application. Misrepresentation, fraud, misappropriation or conversion of money. Conviction of a felony or suspension or revocation in another state.

Report of Actions

With in 30 days, an agent shall report to the Commissioner any administrative action or criminal prosecution take against the agent in this or any other jurisdiction.