Tips for Working with Texas FAIR Plan

We are nearing the end of the year and thought it a good time to educate you about the Texas FAIR Plan Association’s (TFPA) agent compliance audit process.

Every quarter TFPA randomly selects a minimum of 10 agents to be audited.

We understand that TFPA operates differently than your voluntary market carriers, so we use the audit process as an educational tool to see how we can help you better in addition to making sure you are in compliance with specific FAIR Plan requirements. The following information outlines our audit process and some ways you can ensure you are in compliance with TFPA standards.

Why does TFPA perform compliance audits?

The purpose of the audit is to certify your compliance with the Texas FAIR Plan Producer Requirements and Performance Standards (“Producer Requirements”), which is a document all agents must read and sign upon enrollment with TFPA. It contains requirements an agent authorized to do business with TFPA must meet. In addition to verifying that agents maintain the required documentation, we will also request information to verify that policyholders do or did not have an active policy or available coverage in the voluntary market. We are an insurer of last resort, so we only insure people that cannot get insurance in the voluntary market.

What happens once I’m audited?

If your agency is selected for an audit, you will receive this linked Notification of Agency Compliance Audit letter, which lists the documentation TFPA requires for its review. A minimum of ten policies are selected at random for audit, and you will have 15 days to respond to the request for information. Non-responsive agents may have their authority and access to writing business with TFPA suspended. Upon completion of our review, the results will be communicated to you with any recommendations. Non-compliance issues discovered during the audit may result in a suspension of your authority to submit TFPA applications. TFPA would provide guidance about any corrective action that may be taken to enable suspended agents to re-enroll.

What are resources for me to remain in compliance?

Again, the goal of a TFPA audit is to help you understand and meet FAIR Plan requirements, and the Agent section of the TFPA website provides informational resources including the TFPA Producer Requirements and Underwriting Manual.

If you have any questions about the compliance audit process, please contact TFPA at sallen@twia.org or (512) 637-2967.