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.
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.