An unauthorized insurer argues that it only collects renewal premiums and handles claims on Texas policies, and never solicits new business. Under TIC 101.051, what is the result?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under TIC 101.051, transacting the business of insurance covers the whole life of the contract: making or proposing a contract, taking or receiving an application, receiving or collecting any consideration for insurance, issuing or delivering a contract to a resident of this state, and transacting matters subsequent to execution of the contract that arise out of it, such as servicing the policy or handling a claim. Practically, an unauthorized insurer cannot escape the certificate of authority requirement by narrowing its role to premium collection or claims: those post-issuance acts are themselves transacting insurance in Texas.
Why the other options are wrong
- A) Delivery is only one of several triggering acts; an insurer that never delivers a contract in Texas can still be transacting insurance here.
- B) There is no exemption that lets an unauthorized insurer collect premiums in Texas; collecting consideration is one of the enumerated acts.
- C) The definition is not confined to solicitation and negotiation; collecting consideration and servicing policies after issuance are included.
Memory hook
Before, during, and after the sale — TIC 101.051 follows the whole policy.