Texas Statutes and Rules Common to Life and Health Insurance — Texas exam
25% of the scored questions — about 20 of 80. This section is Texas law, the part national study material covers least.
1 / 8
A beneficiary asks in writing why her claim was denied, and the insurer never explains. How does Texas law treat that silence?
Answer and explanation
Answer: D. Failing to provide a prompt, reasonable explanation of the basis for a denial or a compromise offer is listed among the unfair settlement practices.Source: Texas Insurance Code — Tex. Ins. Code ch. 541, subch. B, explanation of denial
2 / 8
A consumer buys life insurance from an unauthorised insurer that later refuses to pay a valid claim. What protection does Texas law give?
Answer and explanation
Answer: D. Texas courts have jurisdiction over unauthorised insurers doing business in the state. But guaranty association coverage extends only to policies of licensed member insurers, so the consumer loses that safety net.Source: Texas Insurance Code — Tex. Ins. Code ch. 463, guaranty association coverage limited to member insurers
3 / 8
A domestic insurer keeps claim files electronically and says paper files are unavailable. What does TDI's examination authority require?
Answer and explanation
Answer: A. Examination authority is directed at the insurer's relevant records and affairs; electronic storage does not remove the duty to provide access.Source: Texas Insurance Code Chapter 401 — §§ 401.051-.056, access to records during examination
4 / 8
A licensed Texas agent is convicted of a felony in another state. What must the agent do?
Answer and explanation
Answer: A. The reporting duty covers a felony conviction in any jurisdiction, not only Texas and not only insurance-related offences.Source: Texas Insurance Code — Tex. Ins. Code ch. 4001, notice of felony conviction
5 / 8
A licensed Texas agent lets an unlicensed assistant take applications and quote rates while the agent is away. What is the consequence?
Answer and explanation
Answer: C. Soliciting and quoting are licensed activities. A licensee who permits an unlicensed person to perform them exposes both parties to enforcement, and the licensee to licence discipline.Source: Texas Insurance Code — Tex. Ins. Code ch. 4005, grounds for disciplinary action including aiding unlicensed activity
6 / 8
A licensed Texas life agent wants to split a commission with a friend who referred the client but holds no insurance licence. What does Texas law allow?
Answer and explanation
Answer: D. Commission may be paid only to a person licensed for the line of insurance involved. Paying an unlicensed referrer is prohibited and exposes the agent to discipline.Source: Texas Insurance Code — Tex. Ins. Code ch. 4005, payment of commissions to licensed persons
7 / 8
A life insurance company wants to begin writing business in Texas. What must it obtain from the Texas Department of Insurance first?
Answer and explanation
Answer: D. An insurer must hold a certificate of authority issued by TDI before transacting insurance in Texas. The certificate states the lines the insurer is authorised to write.Source: Texas Department of Insurance — TDI company licensing: certificate of authority to transact insurance in Texas
8 / 8
A life insurer asks which Texas official may issue orders needed to carry out the state's insurance laws. Which answer best identifies that official?
Answer and explanation
Answer: B. The Commissioner has general authority to administer the Insurance Code and act through orders authorized by Texas insurance law.Source: Texas Insurance Code Chapter 31 — §§ 31.002 and 31.021-.022, general powers and duties
All 134 texas statutes and rules common to life and health insurance questions
- A life insurer chartered in Ohio is admitted to do business in Texas. What is its classification in Texas?
- A life insurer organised under the laws of Canada is admitted to transact insurance in Texas. How is it classified?
- A newly licensed Texas agent wants to sell policies for a particular life insurer. What must happen before she may act for that insurer?
- A nonresident Texas licensee has her home state licence revoked for misconduct. What is the effect on the Texas licence?
- A nonresident Texas licensee moves permanently from Louisiana to Texas. What must the licensee do?
- A person selling fraternal benefit society certificates in Texas asks about licensing. What does Texas law generally require?
- A policy sold in Texas is described as participating. What does that tell the buyer?
- A regulated insurer receives a final cease-and-desist order but continues the same prohibited practice. What is the best compliance conclusion?
- A respondent receives a TDI hearing notice alleging an unfair insurance practice. Which right best describes the respondent's position at the hearing?
- A retired Texas agent whose licence has lapsed continues receiving renewal commissions on policies she wrote while licensed. Is this generally permitted?
- A TDI examiner asks a Texas agency to produce transaction records, and the agency refuses. What may follow?
- A Texas agency keeps client premium in a properly designated trust account but uses part of it to cover payroll during a slow month, replacing it later. How is this viewed?
- A Texas agent accurately reports that a competing insurer has been placed in receivership by its home state regulator. Is that defamation under Chapter 541?
- A Texas agent argues that no report is needed because he received probation rather than prison time. Is that correct?
- A Texas agent changes her legal surname after marriage. What is required?
- A Texas agent deposits premium collected from clients into his personal checking account, intending to forward it to the insurer later. What has he done?
- A Texas agent fails to complete the required continuing education by the end of the licence period. What is the usual consequence?
- A Texas agent licence expires because the agent did not renew it on time. What is the agent's status?
- A Texas agent moves her office to a new street address. What does the Insurance Code require?
- A Texas agent tells a client that surrendering an existing whole life policy to buy a new one carries no disadvantage, when a new contestable period will begin. How is this classified?
- A Texas agent tells a prospect that a universal life policy's illustrated non-guaranteed values are amounts the insurer is obliged to pay. What violation is this?
- A Texas insurer charges higher life premiums to applicants with a documented history of heart disease. Is this unfair discrimination?
- A Texas insurer ends its relationship with an appointed agent. What is the insurer's obligation?
- A Texas insurer has a clear liability on a life claim but refuses to settle until the beneficiary hires a lawyer and sues. Which unfair practice is this?
- A Texas insurer routinely offers beneficiaries substantially less than the policy face amount, hoping some will accept. What does this practice violate?
- A Texas licensee fails to report an out-of-state administrative action, and TDI later discovers it. What exposure does the licensee face?
- A Texas life agent changes their legal name after marriage. What documentation does TDI’s FIN533 name-change form require?
- A Texas life agent completes 24 hours of continuing education but none of it addresses ethics. What is the result?
- A Texas life agent has not completed required CE and has no applicable exemption or extension. What must happen before TDI will renew the license?
- A Texas resident life agent moves to another state. According to TDI’s FIN533 instructions, what is required before Texas can change the license to nonresident status?
- After a hearing, the Commissioner finds that an insurer is engaging in an unfair insurance practice. What is the core function of a cease-and-desist order?
- After a TDI hearing on an alleged unfair practice, what should support the Commissioner's final administrative order?
- After notice and hearing, TDI finds a regulated person violated the Insurance Code. Which result is an administrative penalty-type response?
- An agent circulates a flyer falsely stating that a competing insurer is close to insolvency. Which Texas unfair practice is that?
- An agent circulates false statements calculated to injure a competing insurer’s financial reputation and induce a customer to surrender a policy. Which Texas provisions apply?
- An agent offers to pay $500 cash to a client as an inducement to buy a $500,000 whole life policy. What illegal trade practice under TIC § 541.056 has occurred?
- An agent offers to pay the first month's premium out of her own commission if the client buys the policy today. How does Texas law treat this?
- An agent repeatedly violates Texas insurance law after prior regulatory warning. Which action fits the Commissioner's disciplinary powers?
- An agent runs an advertisement emphasizing guaranteed dividend returns on whole life policies. How is this ad classified under 28 TAC § 21.108?
- An annuity advertisement uses a testimonial from a customer who is not a spokesperson. What must the testimonial reflect?
- An applicant's Texas agent licence application is denied. What recourse does the applicant have?
- An individual holds an active home-state life-agent license in good standing with the required authority. Which Texas license should the individual apply for to act as a life agent in Texas while remaining a resident of the home state?
- An insurance company is incorporated under the laws of the State of Texas. From the Texas point of view, how is it classified?
- An insurer refuses to respond to a lawful TDI directive about its Texas insurance business. Which Commissioner power is most directly involved?
- An insurer violates a claim-settlement cease-and-desist order and refuses to correct the practice. Which Commissioner response is authorized under the claim-settlement enforcement statute?
- An insurer's certificate of authority is revoked, and it continues to accept premiums from Texas consumers. How are the policies it already issued treated?
- An out-of-state company with no Texas certificate of authority mails life insurance solicitations to Texas residents and collects premiums. How does Texas law treat this?
- An unlicensed office assistant is paid a bonus for each prospect she refers who later buys a policy. How does Texas law view the arrangement?
- Another state's insurance department fines a Texas-licensed agent and suspends his licence there. What must he do in Texas?
- Before TDI proposes to revoke a Texas agent license, what hearing protection applies under Texas Insurance Code §4005.104?
- Beyond the unfair practice provisions, what additional Texas exposure does an insurer face for unreasonably delaying payment of a valid life claim?
- Does an administrative action in another state automatically revoke a licensee's Texas licence?
- During a TDI examination, an insurer is asked for underwriting files, policy records, and accounting documents. What is the proper response?
- How frequently must the Texas Department of Insurance examine the financial condition of an authorized insurance company under Texas Insurance Code § 401.052?
- How long must a replacing life insurer maintain records of replacement notices, sales proposals, and policy summary disclosures under 28 TAC § 3.1005?
- How long must an insurer maintain a complete file of all advertisements used in Texas for TDI inspection under 28 TAC § 21.120?
- If an agent uses social media platforms (such as Facebook or LinkedIn) to market life insurance products, what Texas advertising rule applies?
- If an applicant for a Texas agent license is denied a license by the Commissioner without a prior hearing under TIC § 4005.103, within how many days must the applicant request a hearing to contest the denial?
- May a Texas agent use Guaranty Association protection as an inducement to sell a covered insurance product?
- May a Texas life agent hold appointments with more than one authorised insurer at the same time?
- Of the 24 required CE hours for a Texas life agent, how many hours must specifically cover Ethics under 28 TAC § 19.1003?
- Several insurers writing in Texas agree among themselves that none will do business with an agency that also represents a new competitor. What does this describe?
- TDI investigates a complaint and believes a producer's sales presentation violated Chapter 541. What should happen before a final cease-and-desist order is based on that charge?
- TDI is examining whether a life insurer's Texas practices match its filed procedures. Which item is most appropriate for the examiner to review?
- The Commissioner has reason to believe an insurer used an unfair method of competition. What procedural step normally protects the insurer before an order is entered?
- Two insurers agree to intimidate agencies into refusing business with a competitor, tending to unreasonably restrain the insurance market. Which Texas prohibition most directly applies?
- Under 28 TAC § 19.1011, what grace period is granted to an agent to complete missing CE hours after license expiration by paying an additional fine?
- Under 28 TAC § 21.113, what restriction applies to using statistics or historical investment performance figures in life policy marketing?
- Under Tex. Ins. Code Section 4001.151, to whom may the department issue a temporary agent's licence?
- Under Tex. Ins. Code Section 4001.152, how does the written examination requirement apply to a Texas temporary agent's licence?
- Under Tex. Ins. Code Section 4001.155, how long is a Texas temporary agent's licence valid?
- Under Texas Insurance Code § 4004.055, what exemption from Continuing Education requirements applies to an agent who has maintained a Texas license continuously for 20 years or more?
- Under Texas Insurance Code §4005.109, which statement about a late report of an agent’s address change is correct?
- Under Texas Insurance Code § 463.251, what maximum benefit coverage limit is provided by the Guaranty Association for life insurance death benefits per individual insured life?
- Under Texas Insurance Code Chapter 31, how is the Texas Commissioner of Insurance appointed?
- Under Texas Insurance Code Chapter 704, what constitutes a fraudulent insurance act?
- Under Texas law, does it matter whether an agent's derogatory statement about a competitor was spoken rather than printed?
- Under Texas law, to whom may a fraternal benefit society issue life insurance certificates?
- Under Texas law, what element distinguishes unlawful boycott or coercion from ordinary hard bargaining between an insurer and an agency?
- Under Texas law, what must ordinarily occur before the Commissioner enters a final order revoking a producer's licence?
- Under Texas law, who owns a mutual insurance company?
- Under Texas law, who owns a stock insurance company, and who receives its distributed profits?
- Under Texas law, whose money is the premium an agent collects from an applicant before the insurer receives it?
- Under Texas Penal Code § 35.02, what criminal classification applies to committing insurance fraud involving a claim of $300,000 or more?
- Under TIC § 4001.202, how often must an insurer pay appointment renewal fees for appointed agents in Texas?
- Under TIC § 4004.053, how many total Continuing Education (CE) hours must a licensed Texas life agent complete during each 2-year license term?
- Under TIC § 4005.101, what emergency power allows the Commissioner to suspend a producer's license without prior hearing if public health or safety is endangered?
- Under TIC § 463.251, what maximum benefit limit applies to net cash surrender or cash withdrawal values for a life insurance policy?
- Under TIC § 541.059, what constitutes illegal deceptive name usage by an insurer or agent?
- Under TIC § 541.060, which insurer practice is classified as an unfair claim settlement practice?
- What administrative sanction can the Commissioner impose on a producer who fails to pay state child support obligations under Texas Family Code Chapter 232?
- What is an appointment in Texas insurance licensing?
- What is the essential test for deciding whether a rate distinction is unfair discrimination in Texas?
- What is the practical difference between an admitted insurer and a non-admitted insurer in Texas?
- What is the practical difference between suspension and revocation of a Texas agent licence?
- What is the primary statutory purpose of the Texas Life and Health Insurance Guaranty Association (TIC Chapter 463)?
- What may the Texas Commissioner of Insurance do after receiving a report of an agent's felony conviction?
- What must a licensee ordinarily include when reporting an administrative action to TDI?
- What official document issued by the Texas Department of Insurance authorizes an insurer to transact insurance business in Texas?
- What practical step best protects a Texas agency against a commingling allegation?
- What records must a Texas insurance agent keep about the business the agent transacts?
- What restriction applies to business card disclosures used by Texas General Lines agents under TDI rules?
- What restriction applies to business entity insurance agency names under Texas licensing rules?
- What type of license permits an individual to represent insurance buyers as an independent consultant charging fee-based insurance advice in Texas?
- When an agent uses an assumed name (DBA) for insurance business in Texas, what registration requirement must be satisfied under TIC § 4001.106?
- When does Texas life-insurance advertising prohibit terms such as savings, investment, or profit-sharing?
- When setting an administrative penalty, which factor is most consistent with Texas penalty provisions?
- Which activity constitutes transacting the business of insurance in Texas?
- Which conduct is a clear statutory ground for revoking a Texas agent's licence?
- Which feature identifies a fraternal benefit society under Texas law?
- Which general power and duty is granted to the Texas Insurance Commissioner under Texas Insurance Code § 31.002?
- Which person is generally NOT required to hold a Texas insurance agent licence?
- Which producer conduct most clearly supports disciplinary action under Texas licensing enforcement provisions?
- Which statement best describes the difference between a cease-and-desist order and an administrative penalty?
- Who is the chief officer responsible for administering and enforcing Texas insurance laws through the Texas Department of Insurance?
- Who pays the reasonable expenses incurred by the Texas Department of Insurance when conducting a financial or market conduct examination of an insurer?
- Why are policy dividends from a participating Texas life policy generally not taxable income to the policyowner?
- Why does Texas exempt certain salaried employees of an insurer from the agent licensing requirement?
- Why does Texas law define transacting insurance broadly rather than by where a contract is signed?
- Why does Texas law limit the percentage of controlled business an agent can write?
- Why does Texas prohibit rebating even when the client clearly benefits from it?
- Why does Texas require agents to keep a current address on file with the Department?
- Why does Texas require an agent to keep records of premium received from clients?
- Why does Texas restrict who may receive an insurance commission?
- Why does Texas single out felony convictions for a specific reporting duty by licensees?
- Why is a Texas fraternal benefit society's certificate sometimes subject to an open contract provision that an ordinary policy is not?
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