State RegulationsTX specificDifficulty 2/5
A Houston agency owner ends an agent's appointment with one insurer after that agent stops writing the insurer's business. What is the effect of the appointment ending?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under TIC 4001.201-.206, an appointment is insurer-specific: it is filed by the insurer and it is the source of the agent's authority to act for that insurer. When it ends the agent must stop soliciting and writing new business for that insurer, and the insurer must notify TDI of the termination. The agent's license itself is unaffected, because a Texas license is issued by TDI and is not owned or controlled by the appointing insurer.
Why the other options are wrong
- A) Suspension is a disciplinary action taken by TDI against a license; ending an appointment is an insurer's business decision and does not affect the license.
- B) An insurer's written consent cannot create authority that depends on an appointment being on file with TDI.
- D) Appointments never transfer between insurers; every insurer must file its own appointment for the agent.
Memory hook
The license comes from TDI; the appointment comes from the insurer, and it dies with the insurer's termination.