State RegulationsTX specificDifficulty 2/5
During an examination under TIC 401.051-.056, TDI asks a Texas agency for books and papers relating to the business of an insurer the agency represents. What is the agency's obligation?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under TIC 401.054, the department or an examiner appointed by the department has free access, and may require the carrier or the carrier's agent to provide free access, to all books and papers of the carrier or the carrier's agent that relate to the carrier's business and affairs. Practical consequence: an agency's books are within reach whenever they relate to the business of a carrier under examination, and obstructing the examiner is itself a violation independent of what the examination was opened to look for.
Why the other options are wrong
- B) TIC 401.054 expressly reaches the books and papers of the carrier's agent, so TDI does not need a subpoena and the agency may not refuse on that ground.
- C) The test under TIC 401.054 is whether the books and papers relate to the carrier's business and affairs, not where the policy was delivered.
- D) The examination power is not limited to records already filed for the agency's own license; it reaches business records never filed with TDI.
Memory hook
Examiners can reach the agent's books when they relate to the carrier's business.