As an insurance agent or adjuster, you work hard to help your clients protect their property. However, when a client files a complaint against you, it constitutes a direct threat to your insurance license and career. In this situation, you need a strong insurance license defense lawyer to represent your interests before the Texas Department of Insurance. You need someone who will work tirelessly on your behalf to protect your license and your career.
Complaints to the Texas Department of Insurance
The Texas Department of Insurance (TDI) regulates and enforces the relevant rules and laws that govern insurance agents, adjusters, and companies. TDI also processes complaints against these professionals, whether they pertain to title, health, auto, homeowner’s, renter’s, TWIA, flood, life, annuity, or other forms of insurance coverage. In the fiscal year 2021, TDI processed 122,000 medical billing disputes, in addition to 16,543 consumer complaints.
TDI doesn’t handle some types of complaints and will simply dismiss complaints concerning issues that it doesn’t handle. More specifically, TDI doesn’t take any action on the following types of complaints:
- Complaints about service providers, such as mortgage companies, body shops, mechanics, hospitals, or doctors
- Complaints about whether a medical service or procedure is medically necessary
- Complaints about your insurance company failing to pay a claim unless it violates a law or the terms of your policy
- Complaints about another person’s insurance company, such as when you are involved in an accident, and the other person’s insurance company won’t pay for the damages to your vehicle or medical bills for your injuries
- Disputes that arise when you and your insurance company disagree about the facts, such as who caused an accident
However, TDI can and will enforce the rules and laws that govern insurance agents, adjusters, and companies in the state of Texas. Any other complaints can lead to a notice of investigation or disciplinary proceedings against your license by TDI.
TDI Disciplinary Proceedings
Disciplinary proceedings before TDI occur similarly to those before other licensing boards. If TDI determines that it has jurisdiction to investigate the complaint against you, it will forward notice of the complaint to you and ask for your response. TDI also will complete a full investigation into the complaint.
In some cases, we may informally resolve the complaint against you by reaching an agreement with TDI under Tex. Ins. Code § 82.055. We might be able to obtain a consent order, agreed settlement, or stipulation. That agreement could contain a sanction, but also could contain an express statement that the existence of a violation is in dispute and that you do not admit to any violations.
If we cannot reach an agreement, TDI may pursue formal disciplinary action. In that case, you have the right to a hearing before an administrative law judge (ALJ) at the State Office of Administrative Hearings (SOAH).
Potential TDI Sanctions
TDI can take various actions against individual agents and adjusters, as well as against insurance companies based on a rule or legal violation. Under Tex. Ins. Code § 82.051-82.054, TDI can revoke or cancel an insurance license. TDI also can impose the following sanctions:
- Suspend licenses for a definite period of no more than one year
- Issue a cease-and-desist order from the acts that violate a rule or law or failure to comply with the Insurance Code or a TDI order
- Impose an administrative penalty
- Order the payment of restitution
- Any combination of these sanctions
Imposition of Administrative Penalties
A common TDI sanction involves imposing administrative penalties, which generally may not exceed $25,000 under Tex. Ins. Code §84.022, unless authorized by another law. In determining the amount of the penalty, TDI considers the following factors:
- The seriousness of the violation including:
- The nature, circumstances, extent, and gravity of the violation, and
- The hazard or potential hazard created to the health, safety, or economic welfare of the public
- The economic harm to the public interest or public confidence caused by the violation
- The history of previous violations
- The amount necessary to deter a future violation
- Efforts to correct the violation
- Whether the violation was intentional, and
- Any other matter that justice may require
Once TDI gives the license holder notice of an administrative penalty, the license holder has 20 days to either accept TDI’s determination and recommended penalty or request a hearing on the occurrence of the violation, the amount of the penalty, or both. If the person or company fails to timely respond, TDI also will set the matter for hearing before an administrative law judge (ALJ) at the State Office of Administrative Hearings (SOAH).
Following the hearing, the ALJ will issue findings of fact and conclusions of law, along with a proposal for a decision to TDI, which can then accept or reject the decision and issue a final order. This order is subject to judicial review.
Get Help Defending Your Insurance License Today
A disciplinary complaint to the Texas Department of Insurance can have significant adverse effects on your career that often will become a permanent part of your licensing record. A disciplinary action against you may even result in the loss of your license. However, you may be able to avoid these damaging consequences with the right type of defense from the outset of your case. Contact the experienced insurance license defense attorneys at Bertolino LLP, so that we can begin investigating your case. You can call our office at (512) 515-9518 or visit us online to get more information about the services we can offer you.