State RegulationsTX specificDifficulty 3/5
Under TIC 4001.201-.206, what is the effect when an insurer terminates an agent's appointment?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under TIC 4001.201-.206, the appointment relationship is created and ended by the insurer, and the insurer must report the termination to the department. Termination ends the agent's authority to act for that insurer, but it has no automatic effect on the agent's license. Practically, the agent keeps the license and may be appointed by another insurer; the terminated appointment simply becomes part of the agent's record with the department, which is why a pattern of short or terminated appointments can draw scrutiny even while the license remains in force.
Why the other options are wrong
- A) The license is issued and revoked by the department, not by an insurer; ending an appointment does not revoke or suspend the license.
- B) Commissions already earned are not a condition of termination, and terminating an appointment does not require the agent to give them back.
- C) The appointment does not linger until the agent asks for cancellation; the insurer's termination, properly reported, ends the authority to act.
Memory hook
Termination ends the appointment, not the license.