Texas Life Agent Practice Exam

If an agent is convicted of a felony in this or another state, who do they have to notify?

1. The Client

2. The State Department of Insurance

3. The Agent's Association

4. Legal Counsel

The correct answer is: The State Department of Insurance

When an agent is convicted of a felony, they are required to notify the State Department of Insurance. This obligation stems from the regulatory framework that governs insurance agents to ensure that they operate with integrity and maintain the standards set by the state. The Department of Insurance oversees the licensing and regulation of insurance professionals, and being convicted of a felony can significantly impact an agent's ability to hold a license or continue practicing. Notifying the State Department of Insurance is crucial because they assess the circumstances surrounding the conviction and determine whether the agent should maintain their license. This process helps protect consumers by ensuring that only qualified and trustworthy individuals are allowed to conduct business in the insurance industry. While notifying clients, an agent's association, or legal counsel may be advisable in certain situations, the formal requirement lies with the State Department of Insurance. This clear channel of communication is essential for regulatory compliance and maintaining the integrity of the insurance profession.