State RegulationsTX specificDifficulty 2/5
A Texas agent holds a current general lines license and takes applications for an insurer that has never filed an appointment for her with the department. What is the status of her authority for that insurer?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under TIC 4001.201-.206, a license qualifies the individual while an appointment authorizes that individual to represent a particular insurer, so two things are required: the personal license and the insurer's appointment filed with the department. Until the insurer files the appointment, the agent cannot lawfully transact that insurer's business, and business written in the meantime is exposed to being rejected or unwound. The remedy is straightforward: the insurer must file the appointment.
Why the other options are wrong
- A) How the agent is paid has no bearing on authority; only a filed appointment confers authority to act for that insurer.
- B) A general lines license establishes personal qualification but does not by itself create authority to represent any insurer; appointment by the insurer is the second required step.
- C) Acceptance of an application does not substitute for the statutory appointment filing; the filing with the department is the operative act.
Memory hook
The license qualifies the person; the appointment empowers the insurer relationship.