A Fictional Texas Trial: Can an Insurer Aid Unlicensed Adjusting?

Thu, 17 Sep 2026 00:14:48 +0000

A note before you read: What follows is a fictional closing argument in an imaginary criminal case. “No Indemnity For You Insurance Company” is a made-up name. It does not refer to any real insurer, and nothing here describes a real case, a real prosecution, or a finding against any company or person. This is not a statement of how any court has ruled. I wrote it as a thought experiment to show how the party-liability rules in Chapter 7 of the Texas Penal Code might be argued alongside the public adjuster licensing law in Chapter 4102 of the Texas Insurance Code.

The real statutes quoted in the argument are summarized accurately below, with links in the Sources list. The facts, the parties, and the proceeding are invented.

The Fictional Proceeding: Closing Argument for the State

May it please the Court. Counsel. Ladies and gentlemen of the jury,

Nobody is above the law. That includes the defendant.

This case is not complicated. It is not abstract. It is statutory.

The underlying offense is unlicensed public adjusting: acting on behalf of an insured in negotiating a property insurance claim, for compensation, without a license, in violation of Texas Insurance Code Chapter 4102. Chapter 4102 defines a public insurance adjuster to include a person who, for compensation, “acts on behalf of an insured in negotiating for or effecting the settlement of a claim” under a property insurance policy. It says a person may not act as a public insurance adjuster in Texas without a license, and it makes a violation of the chapter a Class B misdemeanor.

You have heard the definition. You have seen the conduct. The only real question left is responsibility.

And Texas law answers that question in Chapter 7 of the Penal Code.

The Defendant Cannot Claim It Was a Bystander

Penal Code § 7.01 abolishes the traditional distinctions between principals and accomplices.

It says plainly:

“A person is criminally responsible as a party to an offense if the offense is committed by his own conduct, by the conduct of another for which he is criminally responsible, or by both.”

There are no sidelines in criminal participation. There is no “I was just there.” There is no “I didn’t start it.”

If you aid it with the intent to help it happen, you own it.

Section 7.02(a)(2) Makes This Even Clearer

A person is criminally responsible for another’s conduct if, acting with intent to promote or assist the commission of the offense, he:

solicits,
encourages,
directs,
aids, or
attempts to aid

the other person to commit the offense.

Now apply that to the conduct you heard about.

Negotiation requires a proposal. A counterproposal. A response. A revision.

It requires participation.

If a contractor sends a proposal and no one responds, the negotiation dies. If an adjuster responds, counters, revises, and continues the exchange, the negotiation lives.

The adjuster’s participation is not passive. It is the oxygen that allows the offense to breathe.

Without the adjuster’s counter, there is no negotiation. Without negotiation, there is no violation.

The State’s position is that when an adjuster knows the other side is unlicensed and responds, counters, and keeps the exchange going for the purpose of reaching a settlement through that person, the adjuster is doing what § 7.02(a)(2) describes: aiding and encouraging the very act the statute prohibits, with the intent that it be carried out. That intent is an element the State must prove. Knowledge alone is not enough.

The Defense Will Say, “We Couldn’t Commit the Offense Ourselves”

You may hear the argument:

“Chapter 4102 targets unlicensed public adjusters. We’re not public adjusters. We can’t commit that offense ourselves.”

Texas anticipated that defense.

Penal Code § 7.03 says that, in a prosecution where the actor’s responsibility is based on the conduct of another, it is no defense:

“that the actor belongs to a class of persons that by definition of the offense is legally incapable of committing the offense in an individual capacity.”

Read that again.

Even if the statute is aimed at one class of actor, another person who is a party to the offense under Chapter 7 can still be held criminally responsible.

You cannot stand behind statutory drafting and claim immunity while intentionally facilitating the prohibited conduct.

The Legislature closed that door.

The Defense Will Say the Company Is Not Responsible for Its Adjuster

Now consider the corporate structure.

Penal Code § 7.22(a) provides that when conduct constituting an offense is performed by an agent acting on behalf of a corporation or other business entity and within the scope of the agent’s office or employment, the entity is criminally responsible for certain categories of offenses. For an offense defined outside the Penal Code, like this one, that means an offense where a legislative purpose to impose criminal responsibility on business entities plainly appears, or a strict-liability offense where a legislative purpose not to impose that responsibility does not plainly appear.

The State must show the offense fits one of those categories. If it does, look at the evidence.

The adjuster was acting within the scope of employment.

The responses were sent in the company’s name.

The counterproposals were issued under corporate authority.

The negotiation, the reciprocal exchange, was conducted as corporate business.

In that situation, the company answers for its agent’s conduct. There is no insulation in delegation.

Here Is the Logic

The defense wants you to believe this offense was unilateral.

It was not.

The statute prohibits unlicensed negotiation on behalf of an insured.

Negotiation cannot occur alone.

If it occurred, it occurred because both sides engaged.

And if one side engaged with the intent to promote or assist that unlicensed negotiation, Chapter 7 assigns responsibility.

This is not about expanding the law. This is about applying it as written.

When you participate in conduct that completes an offense, with the intent to promote or assist it, you are a party to that offense.

When your agent does so within the scope of employment, and the offense is one the law allows to be charged against a business entity, the company answers for it.

Ladies and gentlemen, Texas law does not allow someone to intentionally help complete a prohibited act and then step back and say, “That wasn’t mine.”

If the unlawful negotiation occurred, it occurred through reciprocal participation. And reciprocal participation intended to aid the offense is responsibility under Chapter 7.

The statutes are clear. Apply them.

Thank you.

Stepping Out of the Courtroom

Again, this was a fictional argument. Whether a prosecutor would ever bring a case like this, and whether a court would accept the theory, are open questions. Party liability under § 7.02(a)(2) requires proof of intent to promote or assist the offense, and corporate liability under § 7.22 is limited to the categories the statute lists. Those are real hurdles.

The practical point for contractors is real, though. Texas requires a license to act on behalf of an insured in negotiating a property insurance claim for compensation, and the licensing statute carries criminal penalties. If you are a contractor, talk scope and pricing for your own work, but be careful about stepping into the role of negotiating the policyholder’s claim.

Key takeaways

This article is a fictional, illustrative closing argument. The insurer named in it is made up, and no real company or case is described.
Texas Insurance Code Chapter 4102 requires a license to act as a public insurance adjuster, and a violation of the chapter is a Class B misdemeanor.
Under Penal Code § 7.02(a)(2), a person can be criminally responsible for another’s offense if, with intent to promote or assist it, the person solicits, encourages, directs, aids, or attempts to aid it.
Penal Code § 7.03 says it is no defense that the actor belongs to a class of persons legally incapable of committing the offense individually.
Penal Code § 7.22 makes business entities criminally responsible for their agents’ conduct only for the categories of offenses the statute lists.
Contractors should avoid negotiating a policyholder’s insurance claim unless they hold the required license.

Sources

If you are a contractor or public adjuster with questions about where the licensing lines fall on a Texas property insurance claim, or a policyholder with questions about your claim, contact The Claim Attorney for a free case review. Attorneys interested in co-counsel on Texas property insurance matters are welcome to reach out as well.

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