The Texas Department of Insurance (TDI) licenses and regulates different types of insurance agents, adjusters, and brokers. These professionals can face disciplinary proceedings concerning their licenses if TDI receives complaints against them and finds that they have violated the rules or laws that apply to them. Since the repercussions of these proceedings can be severe, contacting an experienced Texas insurance license defense lawyer should be your first step if you receive notice of a complaint against you.
Licensed Insurance Agents
TDI licenses and regulates all types of insurance agents, including the following:
- County mutual
- Escrow officer
- Funeral pre-arrangement life
- General lines – life, accident, health, and HMO
- General lines – property and casualty
- Life agent
- Life insurance not exceeding $25,000
- Limited lines
- Managing general agent
- Personal lines property and casualty
- Risk manager
- Surplus lines
- Title insurance
TDI also issues licenses for some specialty insurance agents, including:
- Credit
- Portable electronic vendor
- Rental car company
- Self-service storage facility
- Travel
Licensed Insurance Adjusters
TDI also licenses and regulates various types of insurance adjusters, including the following:
- All lines
- Designated home state – all lines
- Emergency (catastrophe)
- Property and casualty
- Public Insurance
- Trainee
- Workers’ compensation
Brokers and Other Professionals
TDI licenses and regulates some types of brokers and related professionals, including:
- Life settlement broker / expectancy estimator
- Life settlement provider
- Reinsurance – broker
- Reinsurance – manager
- Continuing education course provider
Finally, TDI offers certifications in the following areas:
- Small employer health benefit plans
- Medicare-related products
- Long-term care insurance
- Annuity products
- Discount healthcare program operators
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Grounds for Disciplinary Actions Against Insurance License Holders
Tex. Ins. Code §4005.101 outlines the grounds for disciplinary actions by TDI against insurance agents, adjusters, and other professionals, which include:
- Violating state insurance laws;
- Intentionally making a material misstatement in the license application;
- Obtaining or attempting to obtain the license by fraud or misrepresentation;
- Misappropriating or converting to the escrow officer’s use or illegally withholding money belonging to an insurer, HMO, or an insured, enrollee, or beneficiary;
- Engaging in fraudulent or dishonest acts or practices;
- Materially misrepresenting the terms and conditions of an insurance policy or contract, including an HMO membership contract;
- Being convicted of a felony;
- Offering or giving a rebate of an insurance premium or commission to an insured or enrollee;
- Not being actively engaged in soliciting or writing insurance for the public generally as required;
- Obtaining or attempting to obtain a license, not for the purpose of holding the applicant or license holder out to the general public as an agent, but primarily for the purpose of soliciting, negotiating, or procuring an insurance or annuity contract or membership covering:
- the applicant or license holder;
- a member of the applicant’s or license holder’s family; or
- a business associate of the applicant or license holder.
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Disciplinary Proceedings Against Insurance License Holders
If TDI seeks to suspend, revoke, or decline to renew an insurance license, the license holder is entitled to a hearing before the State Office of Administrative Hearings (SOAH). An administrative law judge (ALJ) will hear evidence from the license holder and TDI and submit a proposal for a decision.
Some laws governing specific types of insurance licenses outline additional procedures for handling disciplinary proceedings. For example, Tex. Ins. Code §2652.203, which governs disciplinary proceedings for escrow officers, specifies that TDI shall notify the license holder of a disciplinary or enforcement action within 30 days after processing the complaint, with some exceptions. Likewise, complaints are automatically dismissed with prejudice unless TDI serves a notice of hearing on the license holder within 60 business days of the date that it receives a hearing request from the license holder.
Potential Sanctions for Disciplinary Actions Against Insurance License Holders
If TDI finds that disciplinary action against an insurance license holder is warranted, TDI can seek various remedies or sanctions. Potential sanctions may include suspension, revocation, or denial of a license or certificate renewal. If TDI chooses to suspend a license, it also may place the license holder on probation. Furthermore, TDI can assess an administrative penalty, a fine, or issue a reprimand to the license holder. Finally, TDI can require the license holder to qualify or requalify for a certificate to sell a product or product line as required by the rule.
If TDI places an individual whose license has been suspended on probation, TDI can require them to take any or all the following actions:
- regularly report to the department on any matter that is the basis of the probation;
- limit the license holder’s practice to the areas prescribed by the department; or
- continue or review professional education until the license holder attains a degree of skill satisfactory to the commissioner in each area that is the basis of the probation.
TDI reserves the assessment of fines for minor violations, such as failing to change your address with the Department or obtain the required number of continuing education hours before the expiration date of your license. A fine may also be assessed if you fail to notify the Department of an administrative action against you by another state or federal government’s financial or insurance regulator. However, TDI is not limited to assessing a fine for these violations.
Defend Yourself Against Disciplinary Proceedings Involving Your Insurance Agent or Adjuster License
Don’t allow an isolated complaint to wreak havoc on your career. Losing your license or certification can be highly detrimental to your business. If you are facing the loss of your insurance license certification, we can help you take the steps necessary to challenge the allegations against you in your disciplinary proceedings. First, contact an insurance license defense attorney at Bertolino LLP today. Then, make an appointment by calling (512) 515-9518 or contact us online to see how we can help.
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