Texas P&C Insurance Law & Regulation
The state portion of the Texas property and casualty exam starts with who regulates insurance in Texas and the consumer-protection rules that sit on top of the national coverage forms. This chapter covers the Texas Department of Insurance, unfair trade practices, and the cancellation and nonrenewal protections that apply to policies delivered in the state.
The Texas Department of Insurance (TDI)
Texas regulates insurance through the Texas Department of Insurance (TDI), headed by the Commissioner of Insurance. TDI issues, denies, suspends, and revokes agent licenses, reviews policy forms and rates, investigates consumer complaints, and enforces the Texas Insurance Code (tdi.texas.gov). On the exam, remember that TDI, not the Secretary of State or DMV, licenses property and casualty agents.
Unfair Trade Practices and Agent Conduct
The Texas Insurance Code prohibits misrepresenting policy terms, false or misleading advertising, unfair discrimination between similar risks, defamation of an insurer, coercion, and unfair claim settlement practices. Rebating, giving any part of the premium or commission or other valuable consideration as an inducement to buy, is prohibited. Premiums an agent collects are held in a fiduciary capacity and must not be commingled or converted. Violations can bring fines and license suspension or revocation by TDI.
Cancellation and Nonrenewal Protections
Texas law limits how and when an insurer may cancel or nonrenew personal auto and homeowners policies and requires advance written notice so the insured can find replacement coverage. Once a policy is past its initial underwriting period, cancellation is generally allowed only for defined reasons such as nonpayment of premium or fraud. The exact notice periods are set by statute and rule and can change; confirm the current day-counts with the Texas Department of Insurance before relying on a specific number.