Licensing Of Insurance Agents

One of the more important questions regarding the control of life and health insurance agents revolves around the definition of an insurance agent. For regulatory purposes, an insurance agent is a person who is authorized by an insurer to solicit, negotiate, or procure life, health, accident, and annuity coverages and/or to collect premiums. Subinsurance agents (i.e., persons who engage in the above activities on behalf of a licensed insurance agent) are included in the definition.

Aside from insurance agents and their subinsurance agents, there are persons who hold themselves out as insurance counselors, advisors, or specialists. In general, these persons give advice to the insured public on various aspects of life or annuity coverages. Persons involved in such activities may or may not be insurance agents of an insurance company. Under Texas law an individual may use the title life insurance counselor or its equivalent only after he has passed a special examination.9 While this examination is also prepared and administered by the board, it is far more comprehensive than the examination required for an insurance agent’s license. Thus, if an individual wishes to use a title such as life insurance counselor, he must pass two examinations, the first to obtain an insurance agent’s license and the second to use the counselor designation.

Individuals who wish to engage in any of the described activities must apply to the board and take the appropriate examination. In the case of insurance agents, the application must be accompanied by a statement from the insurer that he is to be affiliated with concerning his background and character. If these requirements are satisfied, a license will be issued. Unless the insurance agent or counselor acts in some unlawful or improper manner, the license will be renewed each year. Once an insurance agent or counselor is licensed, another set of regulations applies. These relate to his activities as an insurance agent and are the topic of the following discussion.