Texas Department of Insurance Commission Bomer, in response to consumer complaints and in an attempt to curb unfair and deceptive practices by some licensed agents, adopted effective 8/29/96 a rule prohibiting agents from obtaining powers of attorney from insurance applicants.
The only exceptions permitted by the rule are powers of attorney obtained for:
- Activities for which the Texas Insurance Code expressly authorizes a person to obtain a power of attorney.
- Purposes related to personal lines coverages for an agent's relatives or household members.
- Premium financing where the power of attorney is in favor of a licensed premium finance company
Violations of the rule constitute an unfair practice subject to provision of Chapter 541 of the Insurance Code.
(Other references: RULE §21.901 Prohibition Against Solicitation or Acceptance of Power of Attorney- Texas Administrative Code)
