Brown & Brown Fined $250K; Settles Case with TDI

The Texas Department of Insurance (TDI) reported that it recently imposed a $250,000 fine against a Houston insurance agency that marketed and sold workers’ compensation insurance policies in violation of state insurance rules. The disciplinary action was filed against Brown & Brown Insurance Services of Texas Inc., which signed a consent order and agreed to a settlement.

In violation of insurance rules, Brown & Brown communicated quotes, issued certificates, and collected premium for unlicensed entities and individuals. In addition, Brown & Brown acted as an agent for an authorized insurance company before being appointed by the company to serve as an agent.

Brown & Brown has agreed to cease these practices, compensate any injured workers for valid unpaid claims for benefits covered under the insurance policies in question, and pay the administrative fine. In addition and as part of the agreement, Brown & Brown will file regular reports documenting any written or verbal complaints and the amounts paid on each valid workplace injury claim.

Brown & Brown cooperated with TDI during the investigation. In addition, Brown & Brown directly incurred payments, costs and expenses well in excess of any fees or commissions earned as a result of the alleged conduct. Neither Brown & Brown nor TDI is aware of any injured worker with a valid workers’ compensation claim (who will accept workers’ compensation benefits) who has not been compensated.

“The rules regarding the licensing of insurance companies and the appointments of agents are in place to protect consumers, in this case workers who are injured on the job,” said Texas Insurance Commissioner Jose Montemayor. “We are pleased that Brown & Brown recognized the gravity of the violations and agreed to the disciplinary action.”

“We take very seriously the mandate given to us by the legislature to regulate insurance company practices,” Montemayor said. “We expect our licensees to abide by all of our rules and regulations for the protection of Texas consumers.”