After a hearing under TIC Chapter 541, the department determines that a Texas insurer engaged in an unfair or deceptive act or practice. Which statement correctly describes both the department's duty and the policyholder's separate right?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under TIC 541.107 and TIC 541.108, after a hearing the department determines whether the method of competition, act, or practice is an unfair or deceptive one and whether the charged person engaged in it; on determining that a violation occurred, the department shall make written findings and issue and serve on the person an order requiring the person to cease and desist from that conduct. Independently, TIC 541.151 authorizes a person who sustains actual damages to bring an action against another person for damages caused by an act or practice defined as unfair or deceptive. The exam point is that the regulatory remedy and the consumer's private damages remedy are separate tracks that run in parallel.
Why the other options are wrong
- A) Revocation is not automatic under Chapter 541, and regulatory action would not extinguish the private right of action.
- C) The department issues the cease and desist order administratively; no court order is required.
- D) The department does not award damages to consumers; that recovery comes through a private action under TIC 541.151.
Memory hook
TDI says stop; the consumer sues for damages on a separate track.