Texas Marketing Practices

Question 1

Term: Rebating

Answer 1

The practice of offering a customer something of value as an inducement or incentive to purchase an insurance policy

Question 2

Term: Misrepresentation

Answer 2

A statement about the terms of a policy, its benefits or its dividends, which is untrue, deceptive or misleading.

It is also a misrepresentation to omit material facts, or to state them in a misleading way.

Question 3

False information and advertising

Answer 3

Involves an advertisement, announcement, or statement containing an untrue, deceptive, or misleading statement regarding the business of insurance.

Can include:
* In a newspaper, magazine, or other publication
* In a notice, circular, pamphlet, letter, or poster
* Over a radio or television station
* Through the Internet
* In any other manner

Question 4

Term: Defamation

Answer 4

Making false statements about an insurer or person engaged in the insurance business that are derogatory and intended to harm that person.

Question 5

Can an applicant’s credit be threatened to coerce him/her into buying life insurance?

Answer 5

NO

Question 6

Term: Commingling

Answer 6

Insurance agents may not commingle premiums belonging to insurers and insureds with their personal funds

Question 7

Is it ok to file, publish, or provide the public or a public official with false financial statements about an insurer to deceive the recipient

Answer 7

NO

Question 8

What is the maximum value of promotional advertising or educational items an insurer or agent can give a customer?

Answer 8

$25

Question 9

Is charging different individuals different premiums reflecting their individual risk profiles, based on valid underwriting criteria considered unfair Discrimination?

Answer 9

NO

Question 10

How much is the administrative penalty for Unfair Trade Practices

Answer 10

Up to $1000 per violation

Question 11

If a producer believes or suspects that a fraudulent insurance act has been or is about to be committed, how must he or she report to the TDI insurance fraud unit?

Answer 11

30 days, in writing

Question 12

Is it legal to offer nonlicensed person any of the following?
* premium rebates
* employment offers
* service contracts
* or any other fee in exchange for referring a customer

Answer 12

NO

Question 13

Under what condition is controlled business acceptable

Answer 13

If at least 25% of the total volume of the agent’s premiums is derived from persons other than the agent or the agent’s property, work associates, or family

Question 14

Notify TDI within 30 days

Answer 14

• Change of address
• Conviction of a felony
• Administrtative action taken against you

Question 15

How long do you need to keep records of information from consumers and material used when recommending the sale of variable annuity of life insurance products

Answer 15

5 years after the sale

Question 16

Can an agent recieve a commission and a fee from the same transaction?

Answer 16

NO

Question 17

Can a temporary licensee recieve a commission?

Answer 17

NO

Question 18

What is the purpose of the Texas Life and Health Guaranty Association?

Answer 18

To protect the insured when an insurance company becomes insolvent

Question 19

Who must be a member of the Texas Life and Health Guaranty Association?

Answer 19

All insrance companies licensed to sell insurance in Texas

Question 20

Can you use the existence of the guaranty association to sell, solicit, or induce the purchase insurance covered by the association?

Answer 20

NO