State RegulationsTX specificDifficulty 2/5
A Texas agent pays clients part of the commission in cash to close sales and misstates policy benefits while soliciting. What may TDI do to the agent's license?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under TIC 4005.101-.102, TDI may suspend, revoke or refuse to renew a license when the holder violates the Insurance Code, a TDI rule or a TDI order. Rebating is prohibited by TIC 541.056 and misrepresentation by TIC 541.051-.052, so both facts support license action under TIC 4005.101-.102 and TIC 4005.053-.054. TDI is not limited to a monetary penalty or to proceeding against the insurer, and a client's consent does not make an unlawful inducement lawful.
Why the other options are wrong
- A) Returning commissions may be ordered, but it is not the ceiling on TDI's authority, and the clients' agreement is no defense.
- B) TDI's remedies against the license include suspension and revocation, not only a monetary penalty.
- C) The agent is directly responsible for the agent's own solicitations and statements; liability does not rest solely with the insurer.
Memory hook
Code violations by the agent put the license itself on the table — suspend, revoke, refuse to renew.