State RegulationsTX specificDifficulty 2/5
A Texas resident with no insurance license collects renewal premiums from her neighbors and forwards the money to the insurer. Which statement is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
TIC 101.051(b)(4) makes receiving or collecting any consideration for insurance - including a premium, a commission, a membership fee, an assessment, or dues - one of the acts that constitute the business of insurance in this state. A person who performs any of the listed acts here must hold the required license, whether or not she ever took an application or delivered a policy.
Why the other options are wrong
- A) Taking an application is only one of the listed acts; collecting the consideration is another.
- C) Delivery is not required; collecting the consideration is itself enough to bring her within the list.
- D) The insurer's authorization does not license the individual who handles the premiums.
Memory hook
Touch the premium and you need a license.