What is the process for a licensee to report a violation or suspected fraud?

What is the process for a licensee to report a violation or suspected fraud?

• A. Ignore it.
• B. File a complaint with the Texas Department of Insurance and cooperate with investigations.
• C. Notify the insurer only.
• D. File a complaint with the Secretary of State.

Answer: (B)

Reporting suspected insurance fraud is a professional duty to protect the public and maintain trust in the market. In Texas, licensees must file a complaint with the Texas Department of Insurance and cooperate with any investigations. The Department’s Fraud Unit handles such matters, so submitting to TDI ensures there’s an official, formal review that can lead to enforcement if warranted. Cooperation means providing all relevant information, documents, and testimony the investigators request and making yourself available as needed. Merely notifying the insurer isn’t the same as starting a formal investigation, and it may leave potential fraud unaddressed or create conflicts of interest. The Secretary of State isn’t the proper channel for insurance fraud reporting, so the correct path is to go to the Texas Department of Insurance and work with them through the investigation process.

Reporting suspected insurance fraud is a professional duty to protect the public and maintain trust in the market. In Texas, licensees must file a complaint with the Texas Department of Insurance and cooperate with any investigations. The Department’s Fraud Unit handles such matters, so submitting to TDI ensures there’s an official, formal review that can lead to enforcement if warranted. Cooperation means providing all relevant information, documents, and testimony the investigators request and making yourself available as needed.

Merely notifying the insurer isn’t the same as starting a formal investigation, and it may leave potential fraud unaddressed or create conflicts of interest. The Secretary of State isn’t the proper channel for insurance fraud reporting, so the correct path is to go to the Texas Department of Insurance and work with them through the investigation process.