The Texas Department of Insurance ("the Department") is continuing its efforts to promote higher standards in connection with market conduct activities of licensed life insurers, fraternal benefit societies, and their agents and representatives. As part of this process, the Department is reviewing existing marketing and sales standards, underwriting guidelines and practices, complaint handling, and claims practices.
The Department will be reaching out to the life insurance industry to obtain its input related to: the sources of meaningful market conduct data for effective analysis and the means by which to collect such data; the development of a market conduct analysis function; potential changes and improvements to current market conduct regulatory processes; ongoing and emerging market conduct issues and trends; and the potential role and effect of "best practice organizations".
The Department recognizes the value of utilizing and reviewing the work performed by best practice organizations within the regulatory framework. The Department also encourages life insurance companies to become members of such organizations in an effort to promote higher market conduct standards and to facilitate the regulatory examination process. As part of the current examination process carried out pursuant to Texas Insurance Code article 1.15, the Department examiners routinely inquire as to whether companies are members of best practice organizations. The Department examiners currently utilize information and data obtained from certain best practices organizations, such as the Insurance Marketplace Standards Association (IMSA), as they examine licensees that are members of such organizations (IMSA is named as an example of an acceptable best practices organization and should not be interpreted as an endorsement). Consideration may be given to the documentation in determining the frequency of examinations; the scope of an ongoing examination, and/or the marketing and sales practices of a company, including such areas as; agent licensing, training, replacements, and advertising. The examiners may also make use of the documentation required by a best practices organization in reviews of other areas such as consumer complaint handling.
If you have additional questions, please contact Danny Saenz at 512-305-7258, or via e-mail at Danny.Saenz@tdi.state.tx.us.
Sincerely, Jose Montemayor