Subpoena Insurance Agent by lov24872

VIEWS: 28 PAGES: 29

More Info
									Property
& Casualty
2008
Compliance
Conference
Enforcement
Hot Topics
Pursuant to Tex. Ins. Code Ann. § 31.002,
  TDI must:
  • Regulate the business of insurance in Texas
  • Ensure the Texas Insurance Code and other
    laws regarding insurance and insurance
    companies are executed.
A person, including an insurer, may not
   directly or indirectly do an act that
       constitutes the business of
  insurance…except as authorized by
                  statute.
         TEX. INS. CODE ANN. § 101.102
How does TDI learn of violations of the
insurance code or agent misconduct?
• Complaints
     • Consumer
     • Agent
     • Company
     • Anonymous
• Internal Discovery
     • Examination
     • Failure to File
     • Failure to Respond to TDI Inquiry
• Sister Agency
• Law Enforcement
             Investigations

The Texas Department of Insurance may
 investigate and make reports regarding
 alleged violations of the insurance code
  and misconduct on the part of agents.
         TEX. INS. CODE ANN. § 4001.007
    What area of TDI is responsible for
disciplinary action based upon violations
of the insurance code and misconduct on
            the part of agents?


    Enforcement Division
            Enforcement Division
                   Teams

•   Health, HMO, Life and Viatical
•   Licensing
•   P&C, Windstorm and Fire Marshal
•   Rate, Title and Financial
   Organizational Structure

                                           Catherine Reyer

                                        Associate Commissioner



                  Compliance Intake Unit
                                                                 Support Staff
                     Robert Gutierrez




                      6 Intake Staff




 Health/HMO                                                  P&C/Windstorm
                        Agent Licensing                                          Rate/Title/Financial
 Life/Viatical                                                Fire Marshal
                        Deea Western                                               Michael Rigby
 Leah Gillum                                                  Lorrie Ensley




  7 Attorneys            12 Attorneys                          5 Attorneys           5 Attorneys
7 Investigators         9 Investigators                      4 Investigators       3 Investigators
              Pending Enforcement Cases
                                      As of 3/31/2008
                               Total number of Cases 1347                               Advertising
                                                                                        AG Referrals
                                        Unauthorized, 3.56%
                                                                                        Agent-Application
       Workers Comp, 0.22%                                Advertising, 2.08%            Agent-Cont. Ed
        Windstorm Engineers,
                                                                                        Agent-Disciplinary
               1.04%                                      AG Referrals, 4.38%
                                                                                        Agent-Medicare Advantage
             Title, 12.77%                                    Agent-Application,        Financial
                                                                    9.43%               Fire Marshal
           Rate, 2.38%                                                                  Life/Health/HMO
                                                                                        P&C
                                                                Agent-Cont. Ed, 8.39%
       P&C, 9.21%                                                                       Rate
                                                                                        Title
Life/Health/HMO, 6.09%                                                                  Windstorm Engineers
                                                              Agent-Disciplinary,       Workers Comp
                                                                   29.10%
        Fire Marshal, 4.9%                                                              Unauthorized
                                                  Agent-Medicare
                         Financial, 1.71%        Advantage, 4.75%
 Who is subject to the Commissioner’s
              Authority?
Holder of
  •   Permit
  •   License
  •   Certificate of Authority
  •   Certificate of Registration
  •   Other Authorization Issued or Existing
   Additional Regulatory Authority

TEX. INS. CODE ANN. Chapter 82 applies to:
• an individual or
• a corporation, association, or partnership
• or other artificial person
• who is engaged in the business of insurance
  or is regulated by the Commissioner
• Making or proposing to make, as an insurer, an insurance contract;
• Taking or receiving an insurance application;
• Receiving or collecting any consideration for insurance, including:
    • a premium
    • a commission
• Issuing or delivering an insurance contract
• Directly or indirectly acting as an agent for or otherwise representing
  or assisting an insurer or person in:
    •   Soliciting, negotiating, procuring or effecting insurance
    •   Disseminating information relating to coverage or rates
    •   Forwarding an insurance application
    •   Inspecting a risk
    •   Setting a rate
(1)   TIC § 38.001 Inquiry
(2)   TIC § 101.104 Inquiry
(3)   Subpoena
(4)   Witness Statements
(5)   Under Cover
     TEX. INS. CODE ANN. § 38.001
TDI may address a reasonable inquiry to
       • any insurance company, including a Lloyd’s
         plan or reciprocal or interinsurance exchange
       • an agent
       • or other holder of an authorization
Relating to
       • the person’s business condition
       • any matter connected with the person’s
         transactions that the Department considers
         necessary for the public good or for the proper
         discharge of the Department’s duties
Written response due the 10th day after the
         date the inquiry is received
     Can the 10 days be extended?
     Commissioner’s Bulletin No. B-0040-00
 Grant Extensions Under Appropriate Circumstances

• Written Request for Extension prior to initial 10 day period
• Specific reason a response cannot be made in accordance with §
  38.001
• Provide date complete response will be submitted
Subject shall IMMEDIATELY provide
 information to the Commissioner
The Commissioner may issue a subpoena
regarding a matter the Commissioner has
   authority to consider or investigate
      TEX. INS. CODE ANN. §§ 36.151 & 36.152
What Can Be Subpoenaed?
Attendance and testimony of a witness
       Production of Records
     Is there a territorial limit on
             subpoenas?
    Throughout the State of Texas
        TEX. INS. CODE ANN. § 36.152
Sanctions for violation of or failure to comply with a specific provision of the Insurance
Code or its rules and regulations include:
     • Cancel, suspend or revoke any permit, license, certificate of authority, certificate of registration,
     or other authorization;
     • Deny an application for an original license;
     • Probated license suspension;
     • Order the possessor of such permit, license, certificate of authority or certificate of registration
     to:
           •Cease and desist from the specified activity or from failure to comply with the Insurance Code and/or its
           rules and regulations;
     • Pay an administrative penalty;
     • Make restitution to all Texas residents, Texas insureds, and entities operating in Texas harmed
     by the violation or failure to comply; and
     • A combination of the sanctions.

          TEX. INS. CODE ANN. §§ 82.001, 82.051 - 82.054, 4005.101, 4005.102, 4005.103, 4005.109.
P&C, Windstorm and Fire Marshal Team
 • On average 200 open cases
    • Approximately:
          • 65% Property & Casualty
          • 30% Fire Marshal
          • 5% Windstorm
 • Sources
    •   Amusement Rides Section
    •   Consumer Protection
    •   Financial Examinations
    •   P&C Commercial Lines
    •   P&C Personal Lines
    •   State Fire Marshal’s Office
    •   Workers’ Compensation Classification/Premium Calculation
    •   Windstorm Inspections
P&C, Windstorm and Fire Marshal Team
•   Property and Casualty (approximate percentages)
     •   40% Unauthorized
          • Unauthorized Entities (TEX. INS. CODE ch. 101)
          • Unauthorized Forms (TEX. INS. CODE ch. 2301)
     •   20% Claims Handling (TEX. INS. CODE ch. 542)
                •   Unfair Settlement Practices
                •   Prompt Payment of Claims
     •   10% Unfair, Deceptive, and Prohibited Practices
     •   10% Data Reporting and Required Filings
          • Data Reporting (TEX. INS. CODE ANN. §§ 38.151- 38.163)
                •   Quarterly Closed Claim Reports
                •   Annual Aggregate Closed Claim Reports
                •   Annual Closed Claim Reconciliation Forms
          •   Credit Scoring Models (TEX. INS. CODE ANN. § 559.151)
     •   5% Amusement Rides (TEX. OCC. CODE ANN. ch. 2151)
          • Insurance
          • Inspections
          • Schedule for Mobile Operations
     •   5% Worker’s Compensation (TEX. INS. CODE ANN. chs. 2051-2053)
          • Policy Provisions, Rates, and Forms
     •   10% Other
P&C, Windstorm and Fire Marshal Team
 • State Fire Marshal
   •   Extinguisher (TEX. INS. CODE ANN. art. 5.43-1)
   •   Alarm (TEX. INS. CODE ANN. art. 5.43-2)
   •   Sprinkler (TEX. INS. CODE ANN. art. 5.43-3)
   •   Fireworks (TEX. OCC. CODE ANN. ch. 2154)
 • Licenses, Certificates, & Permits
 • Misconduct
 • Failure to Maintain Required Insurance
P&C, Windstorm and Fire Marshal Team
 • Windstorm Inspections (TEX. INS. CODE ANN. §§ 2210.251-2210.256)
     • Professional Engineers Appointed as Qualified
       Inspectors to conduct inspections for eligibility for
       windstorm and hail insurance coverage from the
       Texas Windstorm Insurance Association.
         • Applications
         • Misconduct
         • Unauthorized
 Rate, Title and Financial Team

22 RATE CASES
169 TITLE CASES
15 FINANCIAL CASES
  Rate, Title and Financial Team
RATE CASES
• 22 cases; mainly homeowners insurance rates
    Rate, Title and Financial Team
TITLE CASES
•   71 cases escrow officer license
•   68 cases title agent (failure to file annual audit, guaranty fees)
•   23 cases unauthorized title insurance
•   15 cases illegal rebating
•   15 cases improper closing
•   1 case real property rates
•   1 case personal property (UCC) rates
    Rate, Title and Financial Team
FINANCIAL CASES
•   11 cases of agent acting without a license
•   4 cases PG-3 related issues

								
To top