Life and Health Insurance · Texas statutes and rules common to life and health insurance · 10 min read
Keeping a Texas agent license: exemptions, appointments, continuing education and discipline
- Identify statutory examination exemptions, license term lengths, and late renewal procedures under Texas law.
- Explain Texas insurer appointment mandates, termination for cause protections, and recordkeeping requirements.
- Determine Texas continuing education requirements, reporting rules, prohibited practices, and disciplinary penalties.
Examination Exemptions and License Expiration Terms
In Texas, the department may not require an examination if you apply for the renewal of an unexpired license issued by the department (Tex. Ins. Code §4002.003(a)(1)). The department also may not require an examination if your license expired less than one year before the application date and was not denied, revoked, or suspended by the commissioner (Tex. Ins. Code §4002.003(a)(2)). In addition, the department may not require a partnership, corporation, or depository institution to take an examination (Tex. Ins. Code §4002.003(a)(3)).
Specific individual credentials also eliminate the exam requirement. An applicant for a life, accident, and health license who is designated as a chartered life underwriter (CLU) is exempt from the examination requirement (Tex. Ins. Code §4002.003(a)(4)). An applicant for a property and casualty license who is designated as a chartered property casualty underwriter (CPCU) is exempt from the examination requirement (Tex. Ins. Code §4002.003(a)(5)). Furthermore, an applicant for a specialty license issued under Chapter 4055 is exempt from testing (Tex. Ins. Code §4002.003(a)(6)), and a nonresident individual who is exempt under Chapter 4056 is not required to take an examination (Tex. Ins. Code §4002.003(a)(7)).
Unless a staggered renewal system applies, an individual license that has not been suspended or revoked generally expires on your birthday in even-numbered years if issued or renewed in an even-numbered year, or in odd-numbered years if issued or renewed in an odd-numbered year, though the statute provides exceptions for multiple license holders and permits the commissioner to change the two-year expiration period (Tex. Ins. Code §4003.001(a)(2), (b), (c)). If you hold multiple licenses, all licenses expire on the earliest expiration date of the licenses you hold (Tex. Ins. Code §4003.001(c)). For a licensee that is not an individual, such as an agency entity, the license expires on the second anniversary of its issuance or renewal, subject to the commissioner's authority to change the two-year period (Tex. Ins. Code §4003.001(a)(1), (b)).
For example, Marcus earned his CLU designation and applies for a Texas life, accident, and health agent license. Under Texas law, Marcus does not have to take the licensing exam because of his CLU credential (Tex. Ins. Code §4002.003(a)(4)). A license issued in an even-numbered year expires on Marcus’s birthday in an even-numbered year, subject to the statutory exceptions and any staggered renewal system (Tex. Ins. Code §4003.001(a)(2), (c)).
Common mistakes
- Believing that an agent whose license expired 100 days ago can file a normal renewal. Once a license has been expired for more than 90 days, it cannot be renewed; if it has been expired for less than one year, the agent may apply for a new license without an exam, but after one year, reexamination is required if an exam was required for original issuance (Tex. Ins. Code §4003.007(b), (c)).
- Assuming that completing delinquent continuing education hours after your license has expired clears you of administrative violations. Texas law states that completing continuing education after expiration is not a defense in a disciplinary action (Tex. Ins. Code §4004.055(c)).
- Thinking that an agent cannot conduct business until the department formally processes their appointment. Under Texas law, an appointed agent may act on behalf of the appointing insurer before the department receives notice of appointment (Tex. Ins. Code §4001.204).
- Assuming the five-year reapplication bar applies to all license denials. The five-year bar does not apply if your denial was solely for failing an exam, failing to complete continuing education or pay a fine, or submitting an incomplete application (Tex. Ins. Code §4005.105(d)).
Key points
- The department may not require examinations for the listed CLU and CPCU applicants, partnerships, corporations, depository institutions, applicants renewing unexpired department-issued licenses, or applicants whose department-issued licenses expired less than one year earlier if the previous license was not denied, revoked, or suspended by the commissioner (Tex. Ins. Code §4002.003(a)(1), (5)).
- Individual Texas licenses generally expire on the licensee’s birthday in the applicable even- or odd-numbered years; an expired license may be renewed within 90 days for the renewal fee plus half that fee, or replaced by a new license without an exam after more than 90 days but less than one year for the license fee plus half that fee; after one year, reexamination is required only if an exam was required for original issuance (Tex. Ins. Code §4003.001(a)(2), §4003.007).
- Agents must be appointed by an authorized insurer to write business, and the department must be notified of additional appointments within 30 days with a nonrefundable fee, though agents may act before notice is received (Tex. Ins. Code §4001.201, §4001.202(b), §4001.204).
- On termination of an appointment for cause, the insurer or agent must immediately file the required statement with the department; information required to be disclosed is privileged and confidential, and a person who provides it without malice is not liable for providing it (Tex. Ins. Code §4001.206).
- General lines life, accident, and health agents must complete 24 continuing education hours per license cycle, including three hours of ethics and at least 50 percent in approved classroom or classroom equivalent settings, unless exempt by holding a license continuously for at least 20 years (Tex. Ins. Code §4004.051(c), §4004.052(b), §4004.053(a), §4004.054).
- Individual agents must notify the department monthly of changes to their mailing addresses, their felony convictions, and administrative actions taken against them by a financial or insurance regulator of Texas, another state, or the United States; agents must keep insurance records, including complaint records, separate from other business records (Tex. Ins. Code §4001.252(a), §4001.255).
- Grounds for discipline include rebating, misappropriating specified funds, and obtaining or attempting to obtain a license primarily to procure coverage for oneself, family members, or business associates rather than to hold oneself out as an agent to the public; remedies include revocation, and a general five-year reapplication bar applies after denial or revocation under Subchapter C, subject to statutory exceptions (Tex. Ins. Code §4005.101(b), §4005.102, §4005.105).
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