Texas General Lines — Life, Accident, Health and HMOTexas Statutes and Rules Common to Life, Accident, Health and HMOHard
A life insurance agent is found to have induced a client to replace an existing policy with a new one through misrepresentations and incomplete comparisons. The Commissioner of Insurance has determined that the agent's actions were unethical and harmful to the client. What is the maximum administrative penalty the Commissioner can impose per violation?
- A$500
- B$10,000
- C$1,000
- D$5,000
Show answer & explanationAnswer & explanation
Correct answer: B. $10,000
For violations of the Texas Insurance Code, including unfair trade practices like twisting or churning, the Commissioner may impose an administrative penalty of up to $10,000 per violation.
Why the other options are wrong
- A. $500 is too low for a serious violation like this.
- C. $1,000 is also too low for the maximum administrative penalty.
- D. $5,000 is a common penalty amount, but not the maximum for many violations, including this one.
TDI Administrative Penalties
Monetary fines imposed by the Texas Department of Insurance for violations of the Texas Insurance Code or TDI rules.
- Can be imposed in addition to license suspension/revocation
- Maximum penalty often applies per violation
- Used to deter unethical and illegal conduct
Memory trick: A 'ten thousand' dollar lesson for a 'twisting' agent.