State RegulationsTX specificDifficulty 2/5
An unlicensed person operating from an office in Texas solicits insurance by mail and the solicitation affects a resident of another state. Under TIC 101.051, does the Texas definition of the business of insurance apply?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
TIC 101.051(c) provides that an act described in subsection (b) by an unlicensed or unauthorized person or insurer that occurs in this state and affects a person in another state or jurisdiction constitutes the business of insurance in this state. The focus is where the act occurs, not where the affected person resides, so cross-border solicitation conducted from Texas remains subject to Texas regulation. The practical consequence is that an agent cannot escape the licensing requirement by directing solicitations at out-of-state prospects from a Texas office.
Why the other options are wrong
- A) Licensure in the other state is irrelevant; the absence of Texas authority is what triggers Chapter 101.
- B) No request or referral from the other state is required for Texas law to apply.
- D) Subsection (c) expressly extends the definition to acts occurring in Texas that affect persons elsewhere.
Memory hook
If the act happens in Texas, Texas regulates it, whoever is affected.