Miles is described on an insurer's payroll as an employee. He calls prospective purchasers, explains policy benefits to induce the sale, and is paid a commission on each application he places. Under TIC 4002.003, what is the effect of his employee status?

Why B is correct

Under TIC 4002.003, the exemption turns on what the person actually does, not on the label the insurer places on the relationship. A person who solicits or negotiates insurance and is compensated by commission is acting as an agent and must be licensed, even if the insurer treats that person as an employee. Whether taxes are withheld or the person appears on a payroll is irrelevant. The practical test the department applies is whether the person induces the purchase and is paid on the business; if so, a license is required.

Why the other options are wrong

• A) Payroll and tax treatment do not determine licensing status; the controlling facts are solicitation activity and commission compensation.
• C) An employee of an insurer is exempt only when the duties are administrative or ministerial; soliciting purchasers is acting as an agent regardless of the title used.
• D) The exemption is not shaped by product line; placing limited lines contracts still involves solicitation, and a person paid commission to place them must be licensed.

Memory hook

The exemption follows the act, and never the job title: solicit for commission and you must be licensed.