Texas General Lines — Property and CasualtyTexas Laws and RegulationsHard
A Texas-licensed producer is found guilty of insurance fraud. In addition to criminal penalties, what administrative action is the Commissioner of Insurance mandated to take regarding the producer's license?
- APlace the producer on probation for 1 year with strict oversight.
- BRevoke the producer's license.
- CRequire the producer to pay a civil penalty and complete additional CE.
- DSuspend the license for a period of 6 months.
Show answer & explanationAnswer & explanation
Correct answer: B. Revoke the producer's license.
Under the Texas Insurance Code, if a licensee is found guilty of insurance fraud, the Commissioner of Insurance is mandated to revoke the producer's license. Insurance fraud is considered a severe offense that warrants permanent removal from the industry.
Why the other options are wrong
- A. Probation is not an option for a conviction of insurance fraud; revocation is required.
- C. While civil penalties and CE might apply to other violations, fraud conviction mandates license revocation.
- D. Suspension is insufficient for a conviction of insurance fraud; revocation is mandated.
Administrative Action for Insurance Fraud (Texas)
The mandatory administrative penalty imposed by the TDI upon a producer convicted of insurance fraud.
- Mandatory license revocation.
- In addition to any criminal penalties (fines, imprisonment).
- Reflects the severe impact of fraud on public trust and the industry.
Memory trick: Fraud's conviction means the license is gone, forever forlorn.