State RegulationsTX specificDifficulty 2/5
A Texas policyholder complains to the department that her insurer has repeatedly misquoted her health premium. Which statement best describes the department's statutory duty when it handles her complaint?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under TIC 31.002, in addition to other duties, the department shall regulate the business of insurance in this state, ensure that this code and other laws regarding insurance and insurance companies are executed, protect and ensure the fair treatment of consumers, and ensure fair competition in the insurance industry. TIC 31.021 vests the commissioner as the department's chief executive to carry out those duties. In practice the department investigates the complaint and, if it finds a violation, pursues regulatory sanctions rather than representing the consumer in court.
Why the other options are wrong
- B) The department is a regulator, not the consumer's private attorney, and does not sue on a policyholder's behalf for contract damages.
- C) No judgment is required before the department may investigate a complaint or act on what it finds.
- D) Referral to the attorney general for prosecution is not the required response to every consumer complaint.
Memory hook
TDI regulates and protects consumers; it does not litigate for them.