The rules regulating and governing inusrance agents in the State of Texas are found in the Texas Insurance Code. A source for information on a particular agent is the Texas Department of Insurance.
What exactly is an agent? An “agent” is defined in Section 4001.003 of the Texas Insurance Code, in part, as a person who is an authorized agent of an insurance company and any other person who performs the acts of an agent, whether through an oral, written, electronic, or other form of communication, by soliciting, negotiating, procuring, or collecting a premium on an insurance contract. This would include the people you are dealing with on the internet or through the mail when trying to buy insurance.
To become an insurance agent in Texas, a person must be licensed by the State. In order to be licensed by the State of Texas, a person must submit a completed application to the State with fingerprints. They must also take and pass a test showing their knowledge of the basic principles of insurance contracts, the basic laws of Texas regulating the business of insurance, and the ethical obligations and duties of an agent. Further, there are continueing education requirements.
In order to sell insurance for a company a person must receive an appointment from an insurer or insurance company. To do this a fee is paid to the Texas Department of Insurance. At this point a person has for the most part, met their requirments to sell insurance in the State of Texas.
Section 4001.051 of the Texas Insurance Code describes “Acts Constituting Acting as Agent”. Basically a person acts as an agent of an insurance company if the person, (1) solicits insurance on behalf of a company, (2) receives or transmits an application for insurance or an insurance policy to or from the company, (3) receives or transmits an insurance policy of a company, (4) examines or inspects a risk, (5) receives, collects, or transmits an insurance premium, (5) takes any action in the making or consummation of an insurance contract for or with the company.
Too often, people who work in offices of insurance agents, are not themselves licensed insurance agents, even though they are doing some of the above described actions. Not only do these people make mistakes but the agents themselves make mistakes. No one is perfect, but if their mistakes cost you, the consumer, it is important to know what the laws are regulating these people in order for you, the insurance customer, to get justice.
The reason for this writing is let the consumer know that sometimes the insurance company itself did not commit a wrong in their way of dealing with the consumer. In other words, it is the action of the agent and or their employees which was wrong. If this is the case the consumer still has recourse and needs to seek the advice of an experienced Insurance Law Attorney for further advice and assistance.