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Agent and Company AlertZero Premium Life InsuranceIt has come to the attention of the Texas Department of Insurance ("Department") that a nontraditional product is being offered in the Stranger-Owned Life Insurance (STOLI) market. Texas agents are being solicited to assist in the sale of what are frequently called "estate maximization plans," "zero premium life insurance" or "no cost to the insured" policies to consumers, most commonly elderly persons between the ages of 65 and 85. Maintenance TaxesNew information concerning proposed maintenance taxes and assessments for Calendar Year 2008 (Collected during Fiscal Year 2009) is now available. The Department is investigating and gathering details regarding these offerings. This bulletin is to alert you as a Texas insurance agent to exercise caution with respect to these transactions. Life insurance helps protect the people who depend on the insured for financial support. It can help pay final expenses and other expenses that the insured would have paid for through earnings, including mortgage payments, bills, dependent or child care and college tuition. Insurance agents and companies must be licensed by the Department to legally sell life insurance in the state. Section OverviewLearn more about insurance industry licensing and regulatory requirements, as well as the latest Life & Health rules, Property & Casualty form and rate filing approvals and disapprovals, compliance workshops and other key industry information. Texas law provides that an individual may consent to another person purchasing insurance on his or her life. Texas law also allows owners of life insurance policies to sell existing life insurance policies to entities called viatical or life settlement providers. Viatical or life settlement providers and brokers are required to hold a certificate of registration issued by the Department in order to do business in Texas. If, as a Texas agent, you are considering:
the Department offers the following suggestions:
The Texas Insurance Code gives insurers and agents an affirmative duty to report suspicion of fraud, and provides certain immunities from civil liability for reporting suspected fraud to the Department. Insurance companies have an obligation to notify the Department if they terminate an agent for cause. Texas law also provides for the assessment of various administrative penalties, including the revocation of an insurance agent's license, for failure to comply with any specific provision of the Texas Insurance Code, including, but not limited to, those regarding:
HighlightsTexas is a member of the new Interstate Insurance Product Regulation Compact, created to improve the efficiency and effectiveness of the insurance marketplace for regulators, consumers and the industry. More information is available at the Compact's web site. Hurricane season officially begins in Texas on June 1 and runs through the end of November. Weather forecasters have predicted an increase in hurricane activity this year, with an above-average likelihood of a major hurricane striking along the Texas Gulf Coast. Subscribe to Property & Casualty Bulletins via eNews. eNews is a free opt-in email newsletter available for viewing online or by subscription. Signing up is quick, easy and free. More Highlights: Compact with Texans | Services Offered | Help by Service | More On TDI Insurance Industry Resource
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