Texas Insurance Regulation Overview

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Questions and Answers

What does 'transacting insurance' refer to?

Making changes to existing policies without approval

Renewing policies automatically

The process of soliciting, negotiating, or executing insurance contracts (correct)

Selling policies to out-of-state customers

What term is used for an insurance company incorporated in another state but authorized to do business in Texas?

Fraternal

Domestic

Alien

Foreign (correct)

Which type of insurer is owned by policyholders and shares profits in the form of dividends?

Fraternal insurer

Alien insurer

Mutual insurer (correct)

Stock insurer

What is a temporary insurance license?

A license issued for a limited period to allow someone to operate as an agent while completing requirements Signup and view all the answers

What must an agent do if they are convicted of a felony or have administrative action taken against them?

Report the incident to the licensing authority Signup and view all the answers

How often must licensed insurance agents in Texas complete continuing education?

Every two years Signup and view all the answers

Which action could result in the denial, suspension, or revocation of an insurance license in Texas?

Conviction of a felony Signup and view all the answers

What is the difference between an agent and an agency license?

An agent license allows individuals to sell insurance, while an agency license allows a business to sell insurance Signup and view all the answers

Which type of insurer is owned by its policyholders and distributes profits as dividends?

Mutual insurer Signup and view all the answers

What is the purpose of a temporary insurance license?

To allow someone to act as an agent while completing requirements Signup and view all the answers

Which of the following is an exemption from insurance licensing requirements?

Individuals who sell travel accident insurance only Signup and view all the answers

How frequently must licensed insurance agents in Texas complete continuing education courses?

Every two years Signup and view all the answers

What action could lead to the denial, suspension, or revocation of an insurance license?

Conviction of a felony Signup and view all the answers

What must an insurance agent report to the Texas Department of Insurance within 30 days?

A felony conviction or administrative action against their license Signup and view all the answers

What constitutes false advertising in the insurance industry?

Misrepresenting policy benefits or terms Signup and view all the answers

What does rebating refer to in the context of insurance?

Offering money or incentives to encourage policy purchases Signup and view all the answers

What does "transacting insurance" encompass according to Texas law?

The process of soliciting, negotiating, and executing insurance contracts Signup and view all the answers

What is a certificate of authority in the context of the insurance industry?

A document issued by the state allowing an insurer to conduct business Signup and view all the answers

Which of the following statements correctly defines a foreign insurance company under Texas law?

An insurance company incorporated in another state but authorized to do business in Texas Signup and view all the answers

What essential documentation must the Commissioner provide before conducting a hearing for an insurance violation?

Notice of hearing to involved parties Signup and view all the answers

What authority does the Texas Commissioner of Insurance have over examining records of insurance companies?

Can examine records of any insurance company operating in Texas Signup and view all the answers

What type of penalties can the Commissioner of Insurance impose for violations?

Fines and license suspension for the offender Signup and view all the answers

What does "general powers and duties" relate to in the context of the Texas Commissioner of Insurance?

Regulating the insurance industry and enforcing state insurance laws Signup and view all the answers

What is a cease and desist order related to in Texas insurance regulation?

An order to stop a specific unlawful insurance practice Signup and view all the answers

Study Notes

Commissioner of Insurance

The Texas Commissioner of Insurance has the authority to regulate the insurance industry and enforce state insurance laws.
The Commissioner can examine the records of any insurance company operating in Texas.
The Commissioner must provide a notice of hearing before holding a hearing on an insurance violation.
The Commissioner can impose penalties such as fines and license suspension on insurance companies or agents for violations.
A cease and desist order is an order to stop a specific unlawful insurance practice.

Insurance Definitions

A certificate of authority is a document issued by the state allowing an insurer to conduct business.
Transacting insurance refers to the process of soliciting, negotiating, and executing insurance contracts.
A foreign insurance company is an insurance company incorporated in another state but authorized to do business in Texas.
A mutual insurer is owned by policyholders and distributes profits as dividends.

Licensing Requirements

A temporary insurance license is issued for a limited time to allow someone to act as an agent while completing requirements.
Individuals who sell only travel accident insurance are exempt from insurance licensing requirements.
Licensed insurance agents in Texas must complete continuing education every two years.
A felony conviction or any administrative action taken against an agent's license must be reported to the Texas Department of Insurance within 30 days.

Marketing Practices

False advertising in the insurance industry includes misrepresenting the benefits or terms of an insurance policy.
Rebating is offering money or valuable incentives to induce a customer to purchase a policy.
An unfair practice in claims methods and practices includes denying a claim without conducting a reasonable investigation.

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Description

This quiz explores the role of the Texas Commissioner of Insurance, covering their regulatory authority, examination powers, and enforcement actions within the insurance industry. You'll also learn essential insurance definitions and the distinctions between different types of insurers operating in Texas.