Under TIC 101.051, which of the following is an act that constitutes transacting the business of insurance in Texas?
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 C is correct
Under TIC 101.051, transacting the business of insurance includes soliciting or negotiating insurance, taking or receiving an application for insurance, receiving or collecting any premium or other consideration for insurance, and issuing or delivering a contract of insurance to a resident of this state. Any one of these acts can stand on its own. Practically, an unauthorized insurer or unlicensed person cannot argue that it never really did business in Texas: taking a single application or collecting a single premium is enough to bring the activity within the Code and to trigger the certificate of authority and licensing requirements.
Why the other options are wrong
- A) Distributing generic educational material that does not discuss a specific policy, quote a premium, or move the prospect toward an application is not transacting insurance.
- B) Purely clerical or administrative work that does not involve solicitation, negotiation, or taking an application is not transacting insurance.
- D) Investing company funds is investment activity by the insurer, not the transaction of insurance business with the public.
Memory hook
Take it, collect it, deliver it — each one alone is transacting insurance.