The department believes an unauthorized person is engaging in the business of insurance in Texas and that the conduct is fraudulent. What may the Commissioner do under TIC 83.051?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under TIC 83.051, the commissioner may issue an emergency cease and desist order ex parte if the commissioner believes an authorized person engaging in the business of insurance is committing an unfair act or is in a hazardous or hazardous financial condition, or that an unauthorized person is engaging in the business of insurance in violation of Chapter 101 and does not meet a statutory exception or exemption, and the conduct appears fraudulent, hazardous, or likely to cause irreparable public injury. TIC 83.052 then requires the department to serve an order containing a statement of the charges and requiring the person to cease and desist immediately. The ex parte character is the key point: the order comes first and the hearing right follows under TIC 83.053.
Why the other options are wrong
- A) The department cannot impose criminal sentences; prosecution runs through the attorney general and the courts.
- C) The defining feature of an emergency order is that it issues before a hearing, not after one.
- D) The Guaranty Association protects policyholders of insolvent member insurers and has no role in policing unauthorized persons.
Memory hook
Emergency order: ex parte first, hearing on request after.