Conflict of Interest Prohibition

[Guest Jerry Mathis]

We are an independent agency that does business with several small non-profit and for-profit firms that provide social services funded partly by Medicaid and other public funding. One of our client companies has informed us that a member of their board of directors who is an insurance agent wants to become agent of record on the medical, dental, life, std, and ltd plans. Granted this doesn't pass a smell test, but can anyone cite specific prohibitions in Texas code or Federal code or regs?