State Insurance exam
If an insurance company violates Texas law, the Insurance Commissioner may: Select one: a.bring criminal charges against the insurer. b.fine the insurance company up to $100,000 per violation. c.issue a cease and desist order. d.imprison the company executives.
Page TX-1C, paragraph 10. Note that the maximum Commissioner fine Criminal charges are filed by the District Attorney, not by the Commissioner (See Page 1N, paragraph 7). The maximum Commissioner fine is $25,000 per violation (See Page 1O, paragraph 4). The correct answer is: issue a cease and desist order.
An alien Insurer: Select one: a.is formed under the laws of another country. b.is one that is not permitted to do business in Texas.
Page TX-1C, paragraph 3. The correct answer is: is formed under the laws of another country.
An Insurer wanting to transact insurance in Texas must obtain a certificate of: Select one: a.authority. b.completion. c.insurance. d.insurability.
Page TX-1C, paragraph 7. The correct answer is: authority.
The Insurance Commissioner must inspect the records of each authorized insurance company at least every: Select one: a.year. b.2 years. c.5 years. d.10 years.
Page TX-1D, paragraph 1. The correct answer is: 5 years.
The purpose of the Guaranty Fund is to guarantee that: Select one: a.the Commissioner will faithfully conduct all assigned responsibilities. b.the disadvantaged will have a reasonable portion of their premiums paid in times of financial need. c.the claims of policyholders will be paid even if the Insurer is insolvent. d.the agent's commissions will be paid.
Page TX-1D, paragraph 5. The correct answer is: the claims of policyholders will be paid even if the Insurer is insolvent.
The maximum Guaranty Fund premium assessment to pay for the claims of an insolvent Insurer is: Select one: a.2% b.4% c.6% d.10%
Page TX-1D, paragraph 9. The correct answer is: 2%
The Guaranty Association has authority to: Select one: a.guarantee that Insureds will pay premiums. b.suspend an agent's license after the opportunity for a hearing. c.issue assessments to solvent insurers to pay claims of insolvent insurers. d.determine whether the provisions of a policy are fair to consumers.
Page TX-1D, paragraph 9. The correct answer is: issue assessments to solvent insurers to pay claims of insolvent insurers.
The Insurance Commissioner is authorized under Texas law to: Select one: a.regulate insurance policy forms and premium rates. b.create regulations which contradict state statutes if necessary to protect the public. c.imprison those agents whose activities jeopardize the public's health, safety, and welfare. d.determine which statutes are in violation of the Texas Constitution.
Page TX-1E, paragraph 1. The correct answer is: regulate insurance policy forms and premium rates.
The Insurance Commissioner may: Select one: a.regulate rates through an approval process. b.set rates.
Page TX-1E, paragraph 1. Although rates must be filed with the Commissioner, and the Commissioner may disapprove of rates, the Commissioner cannot actually "set" rates. The correct answer is: regulate rates through an approval process.
The Commissioner may: Select one: a.arrest and imprison those who violate the insurance laws. b.set the amount of bail and prison time for insurance law violations. c.when reasonably necessary, revise the insurance code as adopted by the Texas legislature. d.enforce the insurance laws.
Page TX-1E, paragraph 1. Obviously the Commissioner may enforce the code adopted by the legislature and the Commissioner's administrative rules and regulations. However, the other answers are simply not in the list of powers given to the Commissioner by the legislature. The correct answer is: enforce the insurance laws.
The Texas Insurance Commissioner is: Select one: a.appointed by the Governor. b.elected. c.appointed by a judicial panel.
Page TX-1E, paragraph 3. The correct answer is: appointed by the Governor.
A "Home Office Employee" is required under Texas law to: Select one: a.be registered rather than be licensed. b.pass the licensing examination. c.represent a local insurance agency rather than represent an Insurer. d.receive continuing education annually.
Page TX-1F, paragraph 1. The correct answer is: be registered rather than be licensed.
Who does NOT need an agent's license? Select one: a.an insurance office receptionist who advises applicants regarding the appropriate type of insurance needed. b.an insurance office receptionist who answers the office phone and then refers applicants to the appropriate agent.
Page TX-1F, paragraph 5. The correct answer is: an insurance office receptionist who answers the office phone and then refers applicants to the appropriate agent.
Transacting insurance involves: Select one: a.applying for an agent's license. b.hiring underwriters. c.filing rates. d.accepting applications.
Page TX-1G, paragraph 1. I agree that this is a bit of a cheap shot, but an agent's license is needed to "transact insurance." The only activity in the list that requires an agent's license is accepting an application. Understand this! The correct answer is: accepting applications.
An applicant for a Texas insurance agent license must have passed the licensing exam within the prior: Select one: a.30 days. b.60 days. c.90 days. d.1 year.
Page TX-1G, paragraph 4. The correct answer is: 1 year.
The 2-year duration of a Texas insurance agent's license is set by the: Select one: a.insurance carrier. b.Department of Insurance. c.Insurance Commissioner. d.legislature.
Page TX-1H, paragraph 4. The correct answer is: legislature.
An agent who has multiple licenses (such as Life and General Property and Casualty) must complete: Select one: a.24 hours of continuing education within each license period. b.30 hours of continuing education within each license year. c.48 hours of continuing education every 2 calendar years. d.60 hours of continuing education every 2 license years.
Page TX-1H, paragraph 7. The 24 hours is required regardless of the number of licenses an agent holds. The continuing education requirement is now 24 hours (the former requirement was 30 hours). The correct answer is: 24 hours of continuing education within each license period.
A Texas insurance agent has failed to renew his license. Fortunately, Texas law permits renewal without retaking the licensing exam by paying the normal renewal fee plus a 50% penalty. However, state law requires that such a renewal be completed within a maximum of less than: Select one: a.90 days. b.6 months. c.1 year. d.18 months.
Page TX-1I, paragraph 8. The correct answer is: 1 year.
If a group of agents refuse to deal with a particular applicant or insurance company, this is an example of: Select one: a.boycotting. b.defamation. c.misrepresentation. d.twisting.
Page TX-1K, paragraph 6. The correct answer is: boycotting.
Disparagement involves making a statement about another Insurer's: Select one: a.claims payments. b.hiring practices. c.marketing campaign. d.financial condition.
Page TX-1L, paragraph 4. The correct answer is: marketing campaign.
Discrimination involves: Select one: a.using different rates for persons of the same rate and hazard classification. b.using different rates for the elderly. c.refusing to insure risky individuals. d.charging higher rates to high risk applicants.
Page TX-1L, paragraph 5. The correct answer is: using different rates for persons of the same rate and hazard classification.
If it is shown to be based on sound underwriting principles, it is not permissible to discriminate under Texas insurance law on the basis of each of the following EXCEPT: Select one: a.disability or partial disability involving physical or mental issues. b.religion. c.an individual's status as a victim of family violence. d.national origin.
Page TX-1L, paragraph 6. The correct answer is: disability or partial disability involving physical or mental issues.
If the Insurer's actuary can show a sound underwriting reason, it is legal for an Insurer to discriminate based on: Select one: a.a person's status as a victim of family violence. b.religion. c.marital status. d.national origin.
Page TX-1L, paragraph 6. The correct answer is: marital status.
An underwriter may always consider which of the following: Select one: a.age or race. b.vocation (job) or avocation (hobby). c.marital status or mental disability. d.geographic location or religion.
Page TX-1L, paragraph 6. Vocation and avocation are not covered by the discrimination rules. The correct answer is: vocation (job) or avocation (hobby).
Unsophisticated clients often desire to simply give an insurance agent a power of attorney with full authority to handle all of the client's insurance issues, including buying policies and settling claims. Under Texas law, the agent's use of such a power of attorney is legal only if the client is: Select one: a.over the age of majority of 65. b.under the age of majority of 18. c.a relative or member of the agent's household. d.of limited physical or mental capacity.
Page TX-1N, paragraph 1. The correct answer is: a relative or member of the agent's household.
An Insurer may revoke an agent's: Select one: a.appointment. b.license.
Page TX-1N, paragraph 2. The correct answer is: appointment.
The maximum administrative penalty that may be assessed against an agent by the Department of Insurance is: Select one: a.$1,000. b.$25,000. c.$500. d.$10,000.
Page TX-1N, paragraph 7. The correct answer is: $25,000.
The Insurance Commissioner: Select one: a.place an insurance agent on probation. b.may prosecute act as a district attorney and bring criminal charges against any agent where there is reasonable suspicion that the agent has violated any of the state's insurance laws. c.may revoke an agent's license for being found guilty of any crime, including any misdemeanor. d.may revoke an agent's license for merely being charged with a serious crime, such as a felony.
Page TX-1N, paragraph 7. Obviously the Commissioner can't revoke a license for being found guilty of "any" misdemeanor - that would include such minor crimes as parking tickets. The correct answer is: place an insurance agent on probation.
The Department of Insurance may revoke an agent's: Select one: a.appointment. b.license
Page TX-1N, paragraph 7. Texas law uses the "Commissioner" and the "Department of Insurance" interchangeably when it refers to suspending or revoking an agent's license. If a questions gives you both answers, I think that the "best" answer is the "Commissioner." The correct answer is: license.
A nonresident agent must appoint which of the following as a representative for purpose of receiving service of process in a lawsuit? Select one: a.a resident lawyer licensed to practice law in Texas b.the Insurance Commissioner c.the insurer d.the Attorney General
Page TX-1O, paragraph 9. The correct answer is: the Insurance Commissioner
A subagent is one licensed to work for: Select one: a.a Managing General Agent (MGA). b.a foreign Insurer. c.a licensed agent. d.the Insurance Commissioner.
Page TX-1P, paragraph 5. The correct answer is: a licensed agent.
Which of the following agents may sell insurance without being appointed by an insurance company? Select one: a.a Subagent b.a General Lines Property and Casualty agent c.a Life agent d.a Personal Lines Property and Casualty agent
Page TX-1P, paragraphs 5-8. The correct answer is: a Subagent
Which of the following may obtain an agent license without taking the licensing examination? Select one: a.General Lines Property and Casualty Agent b.Temporary Agent c.Life Agent d.General Lines Life, Accident and Health Agent
Page TX-1Q, paragraph 5. The correct answer is: Temporary Agent
Which of the following refers to an agent licensed for a brief period while the person is preparing to take the insurance licensing exam? Select one: a.a Temporary Agent b.a Preliminary Agent c.a Probationary Agent d.an Interim Agent
Page TX-1Q, paragraph 5. The correct answer is: a Temporary Agent
The Department of Insurance can't simply sit on written complaints without communicating with the parties. Texas law requires the Department to advise the parties of the status of a written complaint at least: Select one: a.weekly. b.monthly. c.quarterly. d.annually.
Page TX-1R, paragraph 5. The correct answer is: quarterly.
A surplus line agent must keep records for how: Select one: a.1 year. b.2 years. c.3 years. d.5 years.
Page TX-6C, paragraph 3. You remember that all other insurance agents in Texas keep records for only 3 years. The correct answer is: 5 years.
An Insurer must file which of the following with the Commissioner for approval? Select one: a.forms only b.both rates and forms c.rates only d.neither rates nor forms
Page TX-6D, paragraph 3. The correct answer is: both rates and forms
If an Insurer decides to cancel or nonrenew a homeowner policy, the Insured must be given how much written notice? Select one: a.30 days b.45 days c.60 days d.90 days
Page TX-6E, paragraph 3. 3 (I know, it is nearly impossible to remember all of these numbers - fortunately, there usually aren't more than 4 or 5 "number" questions on the typical exam. The correct answer is: 30 days
The purpose of the Texas FAIR Plan is to provide: Select one: a.health insurance to those unable to obtain health insurance in the normal market. b.commercial property in hurricane zones. c.automobile insurance for those who have had their policies cancelled. d.residential property insurance in high risk areas.
Page TX-6E, paragraph 7. The correct answer is: residential property insurance in high risk areas.
Reapplication is required under the FAIR Plan after the residential property has been insured for: Select one: a.1 year. b.2 years. c.3 years. d.5 years.
Page TX-6F, paragraph 9. . I have a tough time remembering this: A FAIR Plan residential policy requires reapplication every 2 years but a Texas Medical Liability Insurance Underwriting Association policy requires reapplication every year. Here is my memory device: The homeowner isn't sophisticated enough to be asked to reapply every year. But the doctors have lots of CPAs, lawyers, and office staff members who can process the reapplication every year. The correct answer is: 2 years.
If TWIA is financially unable to pay windstorm claims in the 14 county region, the claims will be paid by: Select one: a.the Texas taxpayers through legislative appropriation. b.all property insurers in Texas. c.The Department of Insurance. d.the Guaranty Association.
Page TX-6G, paragraph 10. The correct answer is: all property insurers in Texas.
The Texas motor vehicle Financial Responsibility laws require insurance in the amount of at least: Select one: a.25/50/15 b.25/50/10 c.30/60/30 d.30/60/25
Page TX-6H, paragraph 1. The correct answer is: 30/60/25
Texas law requires Uninsured Motorist and Underinsured Motorist to be purchased along with: Select one: a.towing insurance. b.physical damage insurance. c.collision insurance. d.liability insurance.
Page TX-6H, paragraph 5. The correct answer is: liability insurance.
Under Texas law, an automobile must be covered for both Uninsured and Underinsured Motorist UNLESS: Select one: a.the vehicle is more than 5 years old. b.the coverage is waived in writing. c.the driver has had no moving violation tickets in the past 5 years. d.the driver is under age 40.
Page TX-6H, paragraph 5. This is also true for PIP. The correct answer is: the coverage is waived in writing.
Under Texas law, Uninsured Motorist and Underinsured Motorist cover: Select one: a.bodily injury and property damage to the insured and the insured's vehicle. b.bodily injury and property damage to the other party and the other party's vehicle.
Page TX-6H, paragraph 6. The correct answer is: bodily injury and property damage to the insured and the insured's vehicle.
What happens if a worker is injured but the employer was a nonsubscriber who did not provide workers compensation insurance? Select one: a.the worker may bring a common law lawsuit against the employer. b.the employer is subject to the common law defenses.
Page TX-6M, paragraph 3. The correct answer is: the worker may bring a common law lawsuit against the employer.
Under the Texas Medical Liability Insurance Underwriting Association program, if the Association issues a medical liability policy, it MAY also issue: Select one: a.health insurance covering the physician and employees. b.a fire insurance policy covering the medical complex. c.a premises liability policy only. d.a general liability policy.
Page TX-6P, paragraph 4. The correct answer is: a general liability policy.
The Texas Medical Liability Insurance Underwriting Association requires its policyholders to reapply as new applicants every: Select one: a.year. b.2 years. c.3 years. d.5 years.
Page TX-6P, paragraph 6. The policyholder must reapply every year and prove eligibility by showing rejected by at least 2 medical liability insurers. I have a tough time remembering this: A FAIR Plan residential policy requires reapplication every 2 years but a Texas Medical Liability Insurance Underwriting Association policy requires reapplication every year. Here is my memory device: The homeowner isn't sophisticated enough to be asked to reapply every year. But the doctors have lots of CPAs, lawyers, and office staff members who can process the reapplication every year. The correct answer is: year.
Under the Texas comparative negligence law, a defendant will not be liable if the claimant's negligence is: Select one: a.less than the defendant's negligence. b.equal to the defendant's negligence. c.greater than the defendant's negligence.
Page TX-6Q, paragraphs 6-8. Under the Texas law, a claimant (plaintiff) who is over 50% responsible for the cause of the accident will be unable to recover any compensation from the defendant. The correct answer is: greater than the defendant's negligence.
A General Lines Property Casualty agent may do which of the following? Select one: a.Place a policy directly with a surplus lines insurer. b.Receive a commission split from a Surplus Lines Broker for referring a client to the Surplus Lines Broker. c.Refer a client to a Surplus Lines Broker. d.Act as a Surplus Lines Broker without the need for obtaining a Surplus Lines Broker license if the General Lines Property Casualty agent has been licensed for 20 or more years.
"A" is false because a Surplus Lines license is needed to place policies with a surplus lines insurer. "B" is false because Texas permits agents to split commissions only if both agents have the same type of license. "C" is the correct answer - any agent may refer a client to any other agent regardless of the licenses held by each "D" is false - there is no such provision in Texas law. The correct answer is: Refer a client to a Surplus Lines Broker.
Which of the following is required to post a $10,000 bond? Select one: a.an Emergency Agent b.a Risk Manager c.a General Lines Property and Casualty Agent d.a Public Adjuster
Page TX-6S, paragraph 8. The correct answer is: a Public Adjuster
The management officials for a Texas mutual are selected by the: Select one: a.policyholders. b.shareholders.
As you recall from the "national" material in the big book, mutual are owned by the policyholders who select the management team. The correct answer is: policyholders.
An Emergency License may be effective for: Select one: a.30 days subject to a 30 day extension. b.60 days subject to a 60 day extension. c.90 days, subject to a 90 day extension. d.one year.
Page TX-6R, paragraph 5. If an agent dies, becomes disabled, or is insolvent, an applicant may, without passing the licensing exam, get an Emergency License for 90 days subject to a 90 day extension. The correct answer is: 90 days, subject to a 90 day extension.
A licensed adjuster represents the: Select one: a.Department of Insurance. b.Insurer. c.Insurance Commissioner. d.Policyholder.
Page TX-6S, paragraph 7. The "adjuster" represents the insurer; it is a "public adjuster" represents the policyholder. The correct answer is: Insurer.
A surplus lines agent: Select one: a.may be compensated for a policy placed with an eligible out of state insurer. b.is not required to be licensed in Texas. c.must be licensed in more than one state. d.cannot keep records for longer than 3 years.
Surplus lines agents are licensed in Texas, keep records for 5 years, and are not required to be licensed in any other state. However, they are paid to place policies eligible out of state insurers The correct answer is: may be compensated for a policy placed with an eligible out of state insurer.
Which must be stated in a participating individual policy? Select one: a.The policy may be returned for a full refund within 30 days. b.Dividends are not guaranteed.
As you recall from the national portion of the video and the "big" book, mutual insurers are owned by the policyholders and the policyholders "participate" in the mutuals' dividends. Thus, a mutual's policy is known as a participating policy. Under the laws of all states, it is illegal to guarantee that dividends will be paid. As you recall from the national material and the big book, every individual life or health policy must provide a 10 day Free Look provision rather than the 30 day time stated in this question. The correct answer is: Dividends are not guaranteed.
The Texas Department of Insurance would refer to an Insurer organized under the laws of Oklahoma as a/an: Select one: a.alien Insurer. b.foreign Insurer. c.out-of-state Insurer. d.nonresident Insurer.
Page TX-1C, paragraph 2. The correct answer is: foreign Insurer.
Inducing an applicant to purchase insurance by giving the applicant consideration not stated in the policy that has been filed with the Commissioner is known as: Select one: a.rebating (unfair inducement). b.wholesaling (fronting). c.twisting (discounting).
Page TX-1J, paragraphs 5-9. The correct answer is: rebating (unfair inducement).
An agent's license may be revoked by the: Select one: a.Texas Insurance Commissioner. b.Insurer.
Page TX-1N, paragraph 5. The correct answer is: Texas Insurance Commissioner.
The Insurance Commissioner may: Select one: a.subpoena witnesses and documents. b.revoke licenses of salespersons who fail to meet company sales quotas. c.disapprove and reject code changes adopted by the Texas legislature. d.revoke an agent's license without a hearing.
Page TX-1N, paragraph 6. When the Commissioner holds a hearing on license suspension or revocation, the Commissioner has the authority to issue subpoenas. The correct answer is: subpoena witnesses and documents.
A Work Comp. policy may pay each of the following EXCEPT: Select one: a.a claim due to intoxication. b.a claim for temporary partial disability. c.a claim for temporary total disability. d.less than the state's average weekly wage.
Page TX-6N, paragraph 9. The correct answer is: a claim due to intoxication.
Who is licensed to provide property or casualty insurance advice for a fee? Select one: a.an advisor b.a risk manager c.a counselor d.an agent
Page TX-6R, paragraph 7. The correct answer is: a risk manager
A "Domestic Insurance Company" is: Select one: a.organized for the purpose of selling insurance only to U.S. citizens. b.licensed to do business in any state in the U.S. c.organized under Texas law. d.prohibited from doing business in other states.
Page TX-1C, paragraph 1. The correct answer is: organized under Texas law.
An Insurer which sells insurance only to its members is: Select one: a.a stock insurer. b.an alien insurer. c.a resident insurer. d.a fraternal.
Page TX-1C, paragraph 4. The correct answer is: a fraternal.
An Insurer which sells insurance only to its members and is operated on a lodge-system basis is known as a/an: Select one: a.mutual. b.fraternal. c.alien Insurer. d.stock Insurer.
Page TX-1C, paragraph 4. The correct answer is: fraternal.
An insurance company that has been granted permission to do business in Texas must hold a Certificate of: Select one: a.Permission. b.Licensure. c.Registration. d.Authority.
Page TX-1C, paragraph 7. The correct answer is: Authority.
The Commissioner must examine the records of each Insurer authorized in Texas (whether resident, nonresident, or alien) every: Select one: a.year. b.2 years. c.3 years. d.5 years.
Page TX-1D, paragraph 1. The correct answer is: 5 years.
A life or health Insurer may advertise each of the following EXCEPT: Select one: a.its financial statements. b.the continuing education courses completed by its agents. c.that it belongs to the Guaranty Association. d.its premium rates.
Page TX-1D, paragraph 11. The correct answer is: that it belongs to the Guaranty Association.
When examining an Insurer's financial records, the Insurance Department may examine under oath: Select one: a.only the company's executive officers. b.only those employees responsible for developing company financial records. c.only the owners of the insurance company. d.any company employee.
Page TX-1D, paragraph 4. "The Department may summon and examine under oath any person regarding the carrier's finances." The correct answer is: any company employee.
The Guaranty fund will pay the claims of insolvent insurance companies by obtaining funds from: Select one: a.a special legislative appropriation. b.premiums paid by other insurance company's policyholders. c.taxes assessed by the Commissioner on all policies sold in Texas. d.the state's general fund.
Page TX-1D, paragraph 9. The correct answer is: premiums paid by other insurance company's policyholders.
Insurance regulations adopted by the Insurance Commissioner may: Select one: a.repeal the code. b.revise the code. c.overrule the code. d.implement the code.
Page TX-1E, paragraph 1. The Commissioner may adopt rules to carry out (implement) the statutes in the legislature's code, but the Commissioner cannot do anything which contradicts the code. The correct answer is: implement the code.
To be eligible to be appointed by the Governor as Insurance Commissioner, one must: Select one: a.have 5 years' experience in administration or as a lawyer or CPA. b.be currently licensed as an agent. c.have been a resident of Texas for at least 5 years. d.be currently licensed as an agent or have been an agent within the past 5 years.
Page TX-1E, paragraph 4. The correct answer is: have 5 years' experience in administration or as a lawyer or CPA.
Under Texas law, insurance agents represent: Select one: a.both clients and the insurance company. b.the Texas Insurance Commissioner. c.the insurance company only. d.clients only.
Page TX-1G, paragraph 3. The correct answer is: the insurance company only.
A Texas insurance licensee must: Select one: a.have been a resident of Texas for at least 6 months. b.be at least 18.
Page TX-1G, paragraph 4. The correct answer is: be at least 18.
An applicant for a Texas insurance agent license must: Select one: a.have been a resident for at least 1 year. b.be bonded. c.be at least age 18. d.have a Texas driver's license.
Page TX-1G, paragraph 4. The correct answer is: be at least age 18.
To be licensed as a Texas agent, an applicant must: Select one: a.post a bond in the amount of $25,000. b.have passed the licensing examination. c.have at least 6 months experience in some aspect of the insurance industry. d.be a college graduate.
Page TX-1G, paragraph 4. The correct answer is: have passed the licensing examination.
To get an agent's license, one must: Select one: a.have been a Texas resident for at least 6 months. b.have a valid Texas driver's license. c.have a high school diploma or GED certificate. d.pass the licensing exam within the prior 12 months.
Page TX-1G, paragraph 4. Although agents are required to pass the licensing within the 12 month period prior to applying for a license, the other statements are all false and not even mentioned in the Texas laws. The correct answer is: pass the licensing exam within the prior 12 months.
An insurance office partnership or corporation may be licensed if: Select one: a.all of the owners have an agent license regardless of whether they are involved in the sale of insurance. b.at least one officer or partner has an agent license.
Page TX-1G, paragraph 6. The correct answer is: at least one officer or partner has an agent license.
An insurance office partnership or corporation can be licensed only if: Select one: a.the office has both Errors and Omissions liability insurance and a bond. b.the office has either a bond or Errors and Omissions liability insurance.
Page TX-1G, paragraph 6. Individual Texas insurance agents are not required to be either bonded or have Errors and Omissions liability insurance. The bond/liability insurance requirement only applies if the office is licensed. The correct answer is: the office has either a bond or Errors and Omissions liability insurance.
An agent must obtain an appointment from: Select one: a.the Insurance Commission. b.an authorized insurance company.
Page TX-1H, paragraph 1. The correct answer is: an authorized insurance company.
Texas insurance agents must be appointed by: Select one: a.each insurance carrier the agent represents. b.The Texas Insurance Commissioner. c.The Texas Department of Insurance. d.not more than one insurance company.
Page TX-1H, paragraph 1. The correct answer is: each insurance carrier the agent represents.
An agent's license expires: Select one: a.on June 1st of the second year after issuance. b.on the agent's next birth date two years after license issuance. c.on December 31st of the second year after issuance. d.on the 2nd anniversary of the date the license was issued.
Page TX-1H, paragraph 5. SEE UPDATES The correct answer is: on the agent's next birth date two years after license issuance.
If an agent has a single insurance license (such as a life license), the agent must complete: Select one: a.12 hours of continuing education within each calendar year. b.15 hours of continuing education within each license year. c.24 hours of continuing education every 2 calendar years. d.24 hours of continuing education every 2 license years.
Page TX-1H, paragraph 7. The 24 hours is required regardless of the number of licenses an agent holds. The continuing education requirement is now 24 hours (the former requirement was 30 hours). The correct answer is: 24 hours of continuing education every 2 license years.
As part of the 24 hours of continuing education required every 2 years, Texas includes a requirement of 2 hours of: Select one: a.ethics (consumer protection). b.state law update. c.technology refresher coursework. d.NAIC regulatory reform.
Page TX-1H, paragraph 8. The correct answer is: ethics (consumer protection).
What percentage of the 24 hour continuing education requirement must be completed in a classroom equivalent setting? Select one: a.0% b.50% c.75% d.100%
Page TX-1I, paragraph 2. The correct answer is: 50%
The percentage of the required continuing education hours that must be taken in a "live" classroom setting is: Select one: a.0%. b.25%. c.50%. d.100%.
Page TX-1I, paragraph 2. The correct answer is: 50%.
For insurance purchasing purposes, the Texas age of majority is: Select one: a.14 b.15 c.16 d.18
Page TX-1J, paragraph 2. The correct answer is: 14
If an insurance company advertises by using a comparison to another company's policy, the advertisement must: Select one: a.state that the comparison was not furnished by the other company. b.be approved by an independent rating association. c.be approved by the Department of Insurance. d.state that the comparison has not been approved by the Department of Insurance.
Page TX-1J, paragraph 4. The correct answer is: state that the comparison was not furnished by the other company.
Giving the applicant a part of the agent's commission is: Select one: a.defamation (unfair inducement). b.discounting (unfair inducement). c.rebating (unfair inducement). d.favoritism (unfair inducement).
Page TX-1J, paragraph 5. The correct answer is: rebating (unfair inducement).
Some insurance agents get licensed solely for the purpose of saving money on their personal or business insurance purchases. This is known as engaging in "controlled business." Under Texas law, an insurance agent is presumed to be engaged in illegal "controlled business" if the agent doesn't intend to collect commissions from the sale of insurance to others fails to meet what percentage of the agent's commissions? Select one: a.25% b.33% c.50% d.90%
Page TX-1K, paragraph 4. The correct answer is: 25%
Each is a method of advertising EXCEPT: Select one: a.audio visual. b.rate schedules filed with the Commissioner. c.radio. d.marketing brochure.
Page TX-1K, paragraph 7. The filing of proposed rate schedules with the Commissioner does not constitute advertising to the public. The public is not informed when proposed rate schedules are filed with the Commissioner. The correct answer is: rate schedules filed with the Commissioner.
Under Texas law, a mutual insurer may do which of the following regarding the payment of dividends to policyholders: Select one: a.pay dividends and advertise that dividends are paid on at least an annual basis. b.pay dividends only if the company's history of dividend payments is prominently disclosed along with a guarantee that a dividends will be paid for the life of the policy. c.pay dividends but may not state in advertising that dividends have or will be paid. d.pay dividends only if the insurer guarantees that dividends will be paid.
Page TX-1L, paragraph 1. The correct answer is: pay dividends but may not state in advertising that dividends have or will be paid.
Under Texas law, defamation is defined as making a false statement about an insurer's: Select one: a.policy coverage. b.financial condition. c.underwriting process. d.claims payments.
Page TX-1L, paragraph 3. The correct answer is: financial condition.
Using different policy rates or terms for persons of the same rate and hazard classification is known as: Select one: a.an unfair inducement. b.discounting. c.rebating. d.unfair discrimination.
Page TX-1L, paragraph 3. The correct answer is: unfair discrimination.
An insurance company charges different premiums to persons of approximately the same rate and hazard classification. This practice is illegal: Select one: a.Commingling. b.Boycotting. c.Twisting. d.Unfair Discrimination.
Page TX-1L, paragraph 5. The correct answer is: Unfair Discrimination.
Even if it is based on actuarially sound principles, it is always illegal to discriminate on the basis of: Select one: a.age. b.marital status. c.a person's status as a victim of family violence. d.gender (sex).
Page TX-1L, paragraph 6. The correct answer is: a person's status as a victim of family violence.
Under Texas law, it is illegal to cancel or nonrenew an insurance policy based solely on the fact that the policyholder is: Select one: a.a police officer. b.an elected official. c.a firefighter. d.an ambulance paramedic or other first responder.
Page TX-1L, paragraph 7. The correct answer is: an elected official.
An agent may accept referrals from an unlicensed person if the unlicensed person: Select one: a.has registered with the Department of Insurance. b.is employed by the agent. c.is not compensated. d.is paid a reasonable fee of not more than 50% of the agent's commission.
Page TX-1M, paragraph 2. The correct answer is: is not compensated.
It is legal for an insurance agent to split a commission with: Select one: a.an unlicensed person. b.an agent in another firm if the agent has the same type of license. c.another agent in the same office if the agent has a different type of license. d.a client.
Page TX-1M, paragraph 6. Sharing the commission with a client would be rebating, that is, paying an illegal inducement. The correct answer is: an agent in another firm if the agent has the same type of license.
An agent's appointment may be revoked by the: Select one: a.Texas Department of Insurance. b.Insurer. c.Texas Attorney General. d.Texas Insurance Commissioner.
Page TX-1N, paragraph 2. The correct answer is: Insurer.
An Insurer may revoke an agent's appointment: Select one: a.only if the Insurer has a signed acknowledgment from the agent that all due commissions have been paid. b.only after a Commissioner determination of wrongdoing. c.only after 30 days' notice and a hearing. d.at any time without advance notice or a hearing.
Page TX-1N, paragraph 2. The correct answer is: at any time without advance notice or a hearing.
If an Insurer desires to terminate an agent's appointment, it may do so: Select one: a.only after giving notice and affording the agent the opportunity for a hearing. b.without prior notice to the agent.
Page TX-1N, paragraph 2. Unlike the Insurance Commissioner, the Insurer is not governed by the Constitution which provides due process and a hearing if the Commissioner tries to revoke or suspend a license. The Insurer may terminate an appointment at any time without needing a specific reason or a hearing. The correct answer is: without prior notice to the agent.
The Department of Insurance is required to terminate the license of an agent who: Select one: a.is a prison inmate who has been convicted of a felony. b.has committed the crime of homicide. c.has committed a crime related to the duties of a licensed insurance professional. d.has been involved in a crime involving moral turpitude.
Page TX-1N, paragraph 3. The Department has the authority to license any criminal except one currently in prison for a felony conviction. The correct answer is: is a prison inmate who has been convicted of a felony.
Before setting a hearing date regarding an agent's license revocation or suspension, the Commissioner must: Select one: a.convene a grand jury hearing. b.determine that a violation of insurance law has occurred. c.schedule a preliminary hearing on the matter. d.notify the agent's appointing insurance company that an investigation is under way.
Page TX-1N, paragraph 5. The correct answer is: determine that a violation of insurance law has occurred.
Before holding a hearing to suspend an agent's license,the Commissioner must first: Select one: a.notify each of the agent's clients. b.provide the agent with a lawyer at Department expense. c.notify the agent's insurance company. d.determine that the agent has violated Texas insurance law.
Page TX-1N, paragraph 5. The correct answer is: determine that the agent has violated Texas insurance law.
If a hearing is held to suspend an agent's license, the hearing must be administered by the: Select one: a.District Court. b.Attorney General. c.Governor. d.Department of Insurance.
Page TX-1N, paragraph 6. The correct answer is: Department of Insurance.
If an agent violates the insurance laws, the agent may be criminally prosecuted by the: Select one: a.District Attorney. b.Department of Insurance. c.Insurance Commissioner. d.Attorney General.
Page TX-1N, paragraph 7. The correct answer is: District Attorney.
An agent whose license has been denied or revoked must wait how long before reapplying for an insurance license? Select one: a.3 years b.5 years c.7 years d.10 years
Page TX-1O, paragraph 1. The correct answer is: 5 years
If an agent's license is denied or revoked, the person may reapply only after: Select one: a.1 year. b.2 years. c.3 years. d.5 years.
Page TX-1O, paragraph 1. The correct answer is: 5 years.
The maximum time for license suspension is: Select one: a.not specified in the law b.1 year c.3 years d.5 years
Page TX-1O, paragraph 3. The Commissioner may suspend a license for whatever time the Commissioner deems appropriate. The correct answer is: not specified in the law
The Commissioner may: Select one: a.increase policy limits to reasonable coverage amounts. b.regulate the commissions paid to agents by prohibiting commissions over 10%. c.suspend an agent's license for 30 days. d.assess a maximum penalty of $100,000 for all violations within a 6 month period.
Page TX-1O, paragraph 3. There is no time period specified in the law regarding license suspensions, so 30 days is as acceptable as an answer as would be 30 years. The correct answer is: suspend an agent's license for 30 days.
A licensed Managing General Agent (MGA): Select one: a.is defined under Texas law as the individual who manages a domestic insurance company. b.is a person who owns and manages insurance offices in more than one community. c.has no power to appoint agents because the MGA may only represent a domestic insurer and the domestic insurer will appoint its own agents. d.represents a foreign or alien insurer and has the authority to appoint agents in Texas.
Page TX-1P, paragraphs 1-2. The correct answer is: represents a foreign or alien insurer and has the authority to appoint agents in Texas.
Which of the following does not need to pass the licensing examination before selling insurance? Select one: a.a Property Agent b.a Temporary Agent c.a Life Agent d.a Health Agent
Page TX-1Q, paragraph 3 . The correct answer is: a Temporary Agent
A Temporary Agent's license is valid for: Select one: a.90 days but may be renewed once. b.6 months subject to renewal once. c.up to 1 year with no renewal option. d.life.
Page TX-1Q, paragraph 6. The correct answer is: 90 days but may be renewed once.
Casualty Insurance Companies may sell each of the following EXCEPT: Select one: a.boiler. b.sprinkler leakage. c.glass. d.title.
Page TX-6A, paragraph 1. Of course, only Title Insurance companies may sell real estate Title Insurance. This is a tough question, however, because Texas strangely permits Casualty Insurance companies to sell sprinkler leakage, boiler, and glass policies (which are usually thought of as Property Insurance coverages). The correct answer is: title.
Ocean Marine policies provide ship liability coverage through: Select one: a.Protection and Indemnity (P&I). b.Cargo Coverage. c.Responsibility Coverage. d.Hull Coverage.
Page TX-6B, paragraph 1. The correct answer is: Protection and Indemnity (P&I).
Under Ocean Marine insurance, P&I refers to: Select one: a.Property and Insurability. b.Personal and Individual. c.Protection and Indemnity. d.Property and Insurance.
Page TX-6B, paragraph 1. The correct answer is: Protection and Indemnity.
A surplus lines policy: Select one: a.may only be sold if the applicant has been rejected by at least 3 authorized Texas Insurers. b.is issued by an unauthorized Insurer that may place policies in Texas subject to legal limitations.
Page TX-6C, paragraph 1. Texas follows a "diligent effort" standard rather than requiring rejection by any given number of authorized Insurers. The correct answer is: is issued by an unauthorized Insurer that may place policies in Texas subject to legal limitations.
A surplus lines policy may be placed only if the applicant has: Select one: a.has attempted to place the policy with at least 5 authorized Insurers. b.made a diligent effort to place the policy with an authorized Insurer.
Page TX-6C, paragraph 1. Texas follows a "diligent effort" standard rather than requiring rejection by any given number of authorized Insurers. The correct answer is: made a diligent effort to place the policy with an authorized Insurer.
Premium rates which endanger the solvency of the insurer are referred to under Texas law as: Select one: a.inadequate. b.illegal. c.discriminatory. d.unfair.
Page TX-6D, paragraph 7. The correct answer is: inadequate.
An Insurer may cancel a homeowner's policy due to either a substantial increase in the risk or the submission of a fraudulent claim - but only after giving how much written notice to the Insured? Select one: a.30 days b.45 days c.60 days d.90 days
Page TX-6E, paragraph 3. The correct answer is: 30 days
Each of the following is a reason an Insurer can use to cancel a homeowner policy EXCEPT: Select one: a.claims filed b.substantial increase in the risk c.nonpayment of premium d.fraudulent claims
Page TX-6E, paragraph 4. The correct answer is: claims filed
An application for FAIR Plan coverage is made through: Select one: a.the Department of Insurance. b.the FAIR Plan. c.a licensed agent. d.the Commissioner of Insurance.
Page TX-6F, paragraph 6. The correct answer is: a licensed agent.
TWIA is a program designed to provide coverage for: Select one: a.property in high-risk wind and hail zones. b.residential property insurance in high risk earthquake areas. c.health insurance to those unable to obtain health insurance in the normal market. d.automobile insurance for those who have had their policies cancelled.
Page TX-6G, introductory information regarding TWIA. The correct answer is: property in high-risk wind and hail zones.
A person who buys Uninsured Auto or Underinsured Auto must also buy: Select one: a.liability. b.towing insurance. c.med pay. d.collision and comprehensive.
Page TX-6H, paragraph 5. The correct answer is: liability.
When canceling an auto policy for other than nonpayment of premium, a Texas Insurer must give the Insured how much advance written notice? Select one: a.30 days b.45 days c.60 days d.90 days
Page TX-6J, paragraph 7. The correct answer is: 45 days
Under TAIPA (Texas Automobile Insurance Assistance Plan), an applicant must have: Select one: a.had 3 or more accidents in the past year. b.been turned down by two auto insurers in the past 60 days. c.evidence of being below the federal poverty level. d.evidence of having a driver's licenses suspended or revoked within the prior 6 months.
Page TX-6L, paragraph 1. The correct answer is: been turned down by two auto insurers in the past 60 days.
TAIPA will provide a MAXIMUM of how much auto liability coverage? Select one: a.25,000/50,000/15,000 b.30,000/60,000/15,000 c. 25,000/50,000/10,000 d.30,000/60,000/25,000
Page TX-6L, paragraph 2. The correct answer is: 30,000/60,000/25,000
Each of these is a common law defense for an employer when a worker presents an injury claim EXCEPT: Select one: a.Unsafe Working Conditions. b.Assumption of Risk. c.Fellow Servant. d.Contributory Negligence.
Page TX-6L, paragraph 9. Of course, an employer would almost always be liable for an unsafe working condition. The correct answer is: Unsafe Working Conditions.
Under Texas law, workers compensation insurance coverage is generally considered to be: Select one: a.optional only if an employer has fewer than 50 employees. b.compulsory only if an employer has 2 or more employees. c.compulsory for all employees. d.optional.
Page TX-6M, paragraph 1. The correct answer is: optional.
The purpose of the Texas Medical Liability Insurance Underwriting Association is to: Select one: a.require all Texas insurers to offer medical liability insurance. b.use taxpayer funds to reduce the cost of medical liability insurance in Texas. c.assist health care professionals obtain liability insurance that isn't readily available in the ordinary market. d.require all health care providers to have the minimum amount of liability insurance required by Texas code.
Page TX-6P, paragraph 1. The correct answer is: assist health care professionals obtain liability insurance that isn't readily available in the ordinary market.
Which of the following must be members of the Medical Liability Insurance Underwriting Association? Select one: a.a farm or county mutual insurer b.an automobile liability insurer c.a life insurer d.a property insurer
Page TX-6P, paragraph 5. The correct answer is: an automobile liability insurer
Each of the following must be members of the Medical Liability Insurance Underwriting Association EXCEPT: Select one: a.a Lloyd's liability plan. b.a health insurer. c.a liability insurer. d.an automobile liability insurer.
Page TX-6P, paragraph 5. Only liability insurers are members of the Medical Underwriting Association. The correct answer is: a health insurer.
Under Texas law, how long is an Emergency License valid? Select one: a.30 days subject to a 30 day extension. b.60 days subject to a 60 day extension. c.90 days, subject to a 90 day extension. d.one year.
Page TX-6R, paragraph 3. If an agent dies, becomes disabled , or is insolvent, an applicant may, without passing the licensing exam, get an Emergency License for 90 days subject to a 90 day extension. The correct answer is: 90 days, subject to a 90 day extension.
In which of the following situations would an Emergency License be appropriate? Select one: a.an agent is unable to renew the agent's license due to a natural disaster in the community where the agent resides. b.a hurricane or other natural disaster results in an Insurer being unable to deal with its policyholders in a manner. c.an agent dies or becomes disabled. d.a new Insurer desires to sell policies while waiting for approval of its application for a Certificate of Authority.
Page TX-6R, paragraph 3. If an agent dies, becomes disabled , or is insolvent, an applicant may, without passing the licensing exam, get an Emergency License for 90 days subject to a 90 day extension. The correct answer is: an agent dies or becomes disabled.
To be eligible to sell flood insurance, an agent must complete: Select one: a.an initial 3 hour course with no specific flood update continuing education requirement. b.an initial 8 hour course with a 4 hour continuing education update requirement. c.an initial 8 hour course with no specific flood update continuing education requirement. d.an initial 3 hour course with a 2 hour continuing education update requirement.
Page TX-6T, paragraph 1 . The correct answer is: an initial 3 hour course with no specific flood update continuing education requirement.
