Dec. 8, 2021
Reminder: Texas House Bill 4030 Impacts Producer Licensing/Administration
Texas House Bill 4030 amended the Insurance Code as it relates to sub-agent designations. There is no longer a sub-agent designation under Insurance Code Chapter 4001. This means that insurers must now directly appoint all agents acting on their behalf.
Applies to:
- All producers or agents, including those who work for an agency or producer.
Effective date: The law applies to all new appointments beginning Sept. 1, 2021.
What’s changing: Texas no longer recognizes the classification of sub-agent. All producers or agents must be directly appointed by an insurance company with the Texas Department of Insurance.
What’s the impact to our Texas agencies: Blue Cross and Blue Shield of Texas will cover these appointment fees through the end of 2021 for all Texas sub-producers. Beginning with the January 2022 commission statements (issued in February), producers and producer agencies will see a one-time $12 fee for each new appointment.
Here’s how it will work:
- If an agency or producer appoints five new sub-agents, they will be charged the one-time $12 fee for each appointment for a total of $60.
- If there isn’t enough commission earned to offset this charge, there will be a negative balance – this can be recouped through future commissions or by sending in payment for those costs. Producers/agencies who incur negative balances will receive a letter explaining their payment options.
