State RegulationsTX specificDifficulty 3/5
An agent tells TDI examiners that the only copy of her business records is abroad and offers to make it available at the end of the month. Under TIC 4001.254-255, what is the likely consequence?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
TIC 4001.254-255 require a licensee to maintain the records of the business transacted and to produce them for examination by the Commissioner. Keeping the only copy abroad and offering delayed access is a failure to produce, which is itself a violation subject to TDI sanction under the Insurance Code; neither convenience nor the location of the records is a defense. Agents should keep records, or duplicates, in a place from which they can be produced promptly.
Why the other options are wrong
- A) The location of the records does not limit TDI's examination authority; the records must still be produced.
- B) The agent is an independent custodian with a personal records duty; the insurer's files do not discharge it.
- D) TDI is not required to defer to the agent's convenience; the duty to produce runs from the request.
Memory hook
Wherever you keep them, you must be able to produce them now.