State RegulationsTX specificDifficulty 2/5
Marcus holds no Texas license. He takes life insurance applications from his co-workers and forwards them to a licensed agent who completes each sale. Under TIC 4001.003, what is Marcus's position?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under TIC 4001.003, a person may not act as an insurance agent, or hold himself out as one, in Texas without holding the required license, and under TIC 101.051 taking or receiving an application for insurance is part of transacting the business of insurance rather than a clerical act. Practically, Marcus is exposed to a cease and desist order under Chapter 83 and to other sanctions, and the insurer whose products he places is also exposed if it knowingly permits an unlicensed person to solicit on its behalf.
Why the other options are wrong
- A) Compensation is not the test; soliciting or taking an application without a license violates the Code even when nothing is paid.
- B) Having a licensed agent finish and sign the sale does not excuse the unlicensed person's own solicitation and application-taking.
- D) There is no incidental-to-employment exception for taking applications from the public; the narrow exemptions in Chapter 4002 do not reach this conduct.
Memory hook
Touch the application and you need the license.