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COMMISSIONER'S BULLETIN # B-0005-10

January 12, 2010


To: ALL INSURANCE COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS, RECIPROCALS, LLOYDS, AND HEALTH MAINTENANCE ORGANIZATIONS; ALL AGENTS AND REPRESENTATIVES; ALL AGENCIES; ALL BROKERS; ALL THIRD PARTY ADMINISTRATORS; TRADE ASSOCIATIONS; AND THE PUBLIC GENERALLY


Re: Unauthorized sale of workers' compensation insurance policies

The Texas Department of Insurance (Department) has recently received questions and complaints regarding the unauthorized sale of workers' compensation insurance policies. This bulletin is issued to remind individuals and entities to comply with the statutory provisions on licensure before selling workers' compensation insurance policies or when engaging in the business of insurance. The Department further reminds agents to clearly identify themselves in their advertisements.

The Texas Insurance Code §4001.101 provides that a person may not "(1) solicit or receive an application for insurance in this state; or (2) aid in the transaction of the business of an insurer" unless the person holds a license or certificate of authority issued by the Department. Under the Texas Insurance Code §4051.051, a person is required to hold a general property and casualty license if the person acts as an agent who writes property and casualty insurance for an insurer authorized to engage in the business of property and casualty insurance in this state, subject to exceptions for personal lines property and casualty agents. The Texas Insurance Code §4001.051 sets forth acts constituting acting as an agent. Additionally, directly or indirectly acting as an agent constitutes the business of insurance under the Texas Insurance Code §101.051. Under the Texas Insurance Code §101.102, a person may not directly or indirectly do an act constituting the business of insurance except as authorized by statute.

Agents and agencies must clearly identify themselves in any advertisements they make concerning the sale of insurance policies, including workers' compensation insurance policies. 28 Texas Administrative Code §21.104(a) provides that an advertisement must identify the person or entity responsible for the advertisement.

Questions regarding this bulletin should be directed to: Matt Ray, Deputy Commissioner, Licensing Division, at 512-463-8917.

________________________
Mike Geeslin
Commissioner of Insurance



Last updated: 09/07/2014

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