Texas Statutes and Rules of Insurance
Fine for willful violation of the Fair Credit Reporting Act
$2,500
Maximum fine for violating Insurance Code
$25,000
Maximum agent licensing feeq
$50
After commissioner receives request, Within ____ days the commissioner to hold the hearing
10
results of licensing exam are valid
12 months
an insurer must acknowledge receipt of a notice of a claim within how many days?
15 days
minimum age for licensing
18
Min requirement for ethics training
2 hours
Commisioner's term of office
2 years
Duration of reporting period
2 years
What percent of total volume of premiums must be from business other than controlled business?
25%
____ days for an agent to request a hearing after getting a cease and desist order
30
every ____ years a commissioner must conduct examinations of authorized insurers
5
Administration, attorney, or CPA experience required to become a commissioner
5 years
How many years must you wait after revocation or denial, or felony conviction or breach of fiduciary duty before another license application
5 years
Max duration of temporary license
90 days
Who is an insurance agent?
A person authorized to sell, solicit and negotiate insurance contracts
Who is considered a nonresident agent?
An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state
Controlled business
An entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer and employees.
Foreign insurer
An insurance company that is incorporated in another state.
Alien Insurer
An insurance company that is incorporated outside the United States.
Rebating
Any inducement offered in the sale of insurance products that is not specified in the policy.
Who must be notified of a producer's change of address?
Dept of Insurance
The requirement that all agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility?
Fiduciary
Mutual companies
Insurance organizations that have no capital stock, but are owned by the policyholders. Premium paid + requested coverage= Policy features + dividends (unused premium). Dividends are not taxable as they are a return of premium paid
Who does the CE rules not apply to?
agents who have been continuously licensed for 20 years or more Agents who are licensed solely to receive residual or renewal commissions Agents who qualify for an exemption because of illness, medical disability or circumstances beyond their control out of state reasons
Surplus lines
any type of insurance not offered by an insurer licensed to do business within the state; must be given to a nonadmitted insurer
In Texas, how is the Commissioner of Insurance placed in office?
appointed by governor for a term of 2 years
A state-issued document empowering an insurance company to become an admitted insurer is called what?
certificate of authority
A producer who fails to segregate premium monies from his own personal funds is guilty of...
commingling
When must an insurance agent renew their license in Texas?
every 2 years. expiration date is your birthday. must complete 24 hours of continuing education before renewing your license, at least 50% of the hours are to be completed in a classroom
Fiduciary
held in trust; confidential
Texas Lloyds
insurance companies regulated by the Texas Insurance Code that consist of an arrangement between an attorney-in-fact and at least 10 underwriters (individual, partnership, or association of individuals) to provide property and casualty insurance
Unfair discrimination in life insurance includes
marital status race color national origin creed ancestry
an agent offers a client free tickets to a sporting game in exchange for insurance. They are guilty of
rebating
Defamation
the action of damaging the good reputation of someone; slander or libel.
Domicile
the location where an insurer is incorporated, not necessarily where the insurer conducts business
Purpose of the Cease and Desist order
to prevent a producer or insurer from further violating laws for transacting insurance
Who may share in the commission from the sale of a life insurance policy?
Only producers properly licensed for that type of insurance transaction
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?
Twisting
When is controlled business legal?
When the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state)