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RE: Use of "Tie-in" Sales by Companies and Agents
STATE BOARD OF INSURANCE, 1110 SAN JACINTO, AUSTIN, TEXAS 78786
NED PRICE, Member
HUGH C. YANTIS, JR., Chairman
DURWOOD MANFORD, Member
MRS. PAT WAGNER, Chief Clerk
E. J. VOORHIS, Commissioner of Insurance
TO: All Insurance Companies Authorized to Write Fire and Casualty Insurance in Texas
June 1, 1978
The Texas State Board of Insurance has received numerous complaints and inquiries concerning the practice of some companies and agents in refusing to sell or renew specific insurance coverage of clients unless other types of insurance business are placed with the company or agent. An example of this practice is the refusal to write automobile insurance coverage unless homeowner's insurance coverage is also purchased by the client.
Although the practices will be evaluated on a case-by-case basis, the Attorney General's Office as well as the Board is of the opinion that the practice of tying one product to the sale of another is illegal under state law. The tying or conditioning of the sale or renewal of one policy to the sale of another policy must cease. If the Board becomes aware of any insurer or agent engaging in this practice, appropriate action will be taken against the culpable parties.
The Board believes that most insurance companies and agents do not condone or encourage the unethical tactic of "tie-in" sales; however, all companies and agents are requested to review their underwriting and solicitation programs so that they can assure the Board that they do not engage in this practice. Additionally, the Board directs each insurer receiving this directive to immediately forward a copy of all agents of the insurer who are conducting business in the State of Texas.
Hugh C. Yantis, Jr., Chairman
Ned Price, Member
Durwood Manford, Member
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Last updated: 09/06/2014