Q

Who is ultimately responsible for making sure that a policy is countersigned? The agent who produces the business or the insurer?

Texas Subscriber

A

The laws on countersignature are unclear on certain matters. One of those is who bears the ultimate responsibility for getting a policy countersigned.

Most laws do not specify whether it is up to the company or to the agent. Rather, they say that no out-of-state policy may be issued without a countersignature. It doesn't matter who arranges for the countersignature—and it doesn't matter to the state regulator. All that is important is that the policy is countersigned.

The problem from a company's viewpoint is the law of agency. If the agent fails to get the policy countersigned, it is just like the company not doing it. Many companies just arrange for someone in another state to do all of their countersigning; then the company knows that the matter is taken care of.