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Florida Insurance Regulation and Agent Licensing: Practice Questions

20 free practice questions with explanations. Pick an answer for each, then check your score.

Exam weight: Part of the 13% on Florida rules common to all lines on the Florida-law portion of the Florida 2-15 Life, Health and Annuities exam. Updated 2026-11-04.

Quick study guide

Florida splits insurance oversight between two bodies, and many questions turn on knowing which one does what. Licensing questions test the numbers in Chapter 626: coursework hours, deadlines and continuing education.

Who regulates what

The Chief Financial Officer (CFO) is elected statewide as a Cabinet member and heads the Department of Financial Services (DFS) (F.S. 20.121). The Financial Services Commission (the Governor, the Attorney General, the CFO and the Commissioner of Agriculture) sits within DFS but is not controlled by it, and appoints the directors of two offices.

Body	Regulates	Examples of its work
DFS (headed by the CFO)	Agents, agencies and consumers	Licensing and disciplining agents; consumer complaints; insurance fraud investigations; acting as receiver of insolvent insurers; unclaimed property
Office of Insurance Regulation (OIR)	Insurers	Certificates of authority; rates and policy forms; solvency examinations; market conduct examinations
Office of Financial Regulation (OFR)	Banks and securities	Banks, credit unions, finance companies and the securities industry

Policy forms must be filed with OIR at least 30 days before use and are deemed approved after 30 days unless OIR acts first or extends its review by up to 15 days (F.S. 627.410).

Key definitions (F.S. Chapter 624)

Insurance is a contract to indemnify another or pay a specified amount or determinable benefit on determinable contingencies. Transacting covers solicitation, preliminary negotiations, effectuating the contract and later matters arising from it. A domestic insurer is formed in Florida, a foreign insurer in another US state or territory, and an alien insurer outside the United States. An authorized (admitted) insurer holds a certificate of authority from OIR; an unauthorized (non-admitted) insurer does not, and an agent who knew or should have known that can be personally liable for its unpaid claims. A stock insurer's capital is divided into shares owned by stockholders; a mutual insurer has no permanent capital stock. A fraternal benefit society is a nonprofit, lodge-system society with a representative government.

Getting and keeping a license

An agent needs both a license from DFS and an appointment, usually from an insurer (F.S. 626.112). A life agent applicant needs 30 hours of approved coursework (health: 40), including 3 hours of ethics, completed within 4 years before applying, must pass the exam (valid for 1 year) and must submit fingerprints. An unaffiliated agent is self-appointed and charges a contract fee instead of taking insurer commissions.

Every 2 years, an agent licensed under 6 years needs a 4-hour update course plus 20 elective CE hours (16 elective hours after 6 years). Tell DFS in writing within 30 days of a change of name, address, phone or email, of a felony plea or finding of guilt, and of the final disposition of an administrative action.

Practice questions

Who heads the Florida Department of Financial Services, and how is that official chosen?
1. A.The Attorney General, who runs DFS in addition to other duties
2. B.The Director of the Office of Insurance Regulation, who is chosen by the Legislature
3. C.The Chief Financial Officer, who is elected statewide as a member of the Cabinet
4. D.The Insurance Commissioner, who is appointed by the Governor acting alone
Show answer
Answer: C. F.S. 20.121(1) makes the Chief Financial Officer the head of DFS, and Article IV, section 5 of the Florida Constitution has voters elect the Cabinet members, including the CFO, for four-year terms. The director of OIR (who may be called the Commissioner of Insurance Regulation) is appointed by the Financial Services Commission and runs OIR, not DFS. The Attorney General sits on the Cabinet and the commission but does not head DFS.
Source: Florida content outline I.A.1; Florida Statutes 20.121; Florida Constitution, Art. IV, s. 5
The Florida Financial Services Commission is made up of:
1. A.The Governor, the Attorney General, the Chief Financial Officer and the Commissioner of Agriculture
2. B.The directors of the Office of Insurance Regulation and the Office of Financial Regulation
3. C.Five members appointed by the Chief Financial Officer for staggered four-year terms
4. D.The Governor, the Chief Financial Officer and three insurance industry members confirmed by the Senate
Show answer
Answer: A. Under F.S. 20.121(3), the commission is composed of the Governor, the Attorney General, the CFO and the Commissioner of Agriculture, and it acts by majority vote with at least three votes in favor. It is the agency head for rulemaking for OIR and OFR and appoints their directors, so the directors answer to the commission rather than sitting on it. No industry members or CFO appointees serve on it.
Source: Florida content outline I.A.2; Florida Statutes 20.121
A life insurer needs authority to do business in Florida and wants approval to sell a new policy form. Which agency handles both matters?
1. A.The Office of Financial Regulation
2. B.The Division of Consumer Services
3. C.The Office of Insurance Regulation
4. D.The Division of Insurance Agent and Agency Services
Show answer
Answer: C. F.S. 20.121(3)(a)1. makes OIR responsible for activities concerning insurers, including rates, policy forms, market conduct, claims, certificates of authority and solvency. The Division of Insurance Agent and Agency Services and the Division of Consumer Services are DFS divisions that deal with licensees and consumers. OFR regulates banks, credit unions, finance companies and the securities industry, not insurers.
Source: Florida content outline I.C.1; Florida Statutes 20.121
Which of these is a duty of the Department of Financial Services rather than the Office of Insurance Regulation?
1. A.Licensing and disciplining insurance agents
2. B.Reviewing insurers' rates and policy forms
3. C.Examining insurers' financial condition
4. D.Issuing certificates of authority to insurers
Show answer
Answer: A. DFS includes the Division of Insurance Agent and Agency Services (F.S. 20.121(2)), and Chapter 626 requires agents to be licensed by "the department" (F.S. 626.112), which also denies, suspends and revokes licenses under F.S. 626.611. Certificates of authority, rates and forms, and financial examinations of insurers belong to OIR under F.S. 20.121(3)(a)1. Other DFS divisions handle consumer services, criminal investigations such as insurance fraud, rehabilitation and liquidation of insolvent insurers, and unclaimed property.
Source: Florida content outline I.B.1; Florida Statutes 20.121; Florida Statutes 626.112; Florida Statutes 626.611
An insurer files a new health policy form with OIR. If OIR neither approves nor disapproves it and does not extend the review period, the form is deemed approved:
1. A.60 days after it was filed
2. B.30 days after it was filed
3. C.Only when OIR issues a written approval
4. D.15 days after it was filed
Show answer
Answer: B. F.S. 627.410(2) requires a form to be filed at least 30 days before it is used and says it is deemed approved when the 30 days end unless OIR has approved or disapproved it by order. OIR can extend its review by up to 15 days if it gives notice before the 30 days run out, so 15 days is the extension, not the review period. No written approval is needed once the period expires, although OIR may later withdraw an approval for cause.
Source: Florida content outline I.C.1.b; Florida Statutes 627.410
OIR conducts a market conduct examination of an authorized insurer. Who pays the reasonable cost of the examination?
1. A.The state guaranty association
2. B.The State of Florida, out of general revenue
3. C.The insurer being examined
4. D.The insurer's policyholders, through a special assessment
Show answer
Answer: C. F.S. 624.3161(4) says the reasonable cost of a market conduct examination is paid by the person examined. These examinations check compliance with the Insurance Code, including Chapters 626 and 627, rather than solvency, and OIR may accept a similar examination made by another state's regulator instead. Guaranty associations pay claims of insolvent insurers and do not fund examinations, and the statute provides no policyholder assessment.
Source: Florida content outline I.C.2; Florida Statutes 624.3161
Florida law defines "insurance" as:
1. A.A lender's promise to cancel the remaining balance of a debt if the borrower suffers a covered loss
2. B.A contract to indemnify another or pay a specified amount or determinable benefit upon determinable contingencies
3. C.Any agreement in which a person pays money in exchange for a guaranteed rate of return on an investment
4. D.A state program that pools tax revenue to pay for property losses caused by natural disasters
Show answer
Answer: B. F.S. 624.02 defines insurance as a contract whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies. The key elements are a contract and a payment triggered by a defined contingency, such as death or illness. A guaranteed investment return, a tax-funded program and a debt-cancellation promise do not match the statutory definition.
Source: Florida content outline I.E.1; Florida Statutes 624.02
After a life policy is issued, an agent helps the policyowner complete a change of beneficiary. Under F.S. 624.10, this activity is:
1. A.Outside the definition of transacting insurance, because the policy is already in force
2. B.Part of transacting insurance, because it arises out of the contract after it was effectuated
3. C.Transacting insurance only if the agent charges a separate service fee
4. D.Transacting insurance only if an additional premium is collected
Show answer
Answer: B. F.S. 624.10(5) says "transact" includes solicitation or inducement, preliminary negotiations, effectuation of the contract, and transaction of matters subsequent to effectuation and arising out of it. Servicing an in-force policy therefore still counts as transacting insurance. Neither a fee nor an extra premium is needed for the definition to apply.
Source: Florida content outline I.E.2; Florida Statutes 624.10
An insurer organized under the laws of Georgia sells life insurance in Florida. In Florida it is classified as a:
1. A.Fraternal insurer
2. B.Alien insurer
3. C.Foreign insurer
4. D.Domestic insurer
Show answer
Answer: C. F.S. 624.06 defines a domestic insurer as one formed under Florida law, a foreign insurer as one formed under the laws of another US state, district, territory or commonwealth, and an alien insurer as any other insurer, meaning one formed outside the United States. A Georgia company is therefore foreign in Florida. Fraternal status depends on how a society is organized, not on where it was formed.
Source: Florida content outline I.E.5–7; Florida Statutes 624.06
What makes an insurer an "authorized" (admitted) insurer in Florida?
1. A.It is incorporated under Florida law and keeps its home office in the state
2. B.It holds a subsisting certificate of authority issued by the Office of Insurance Regulation
3. C.It has appointed at least one licensed Florida agent to sell its policies
4. D.It is a member of the National Association of Insurance Commissioners
Show answer
Answer: B. Under F.S. 624.09, an authorized insurer is one authorized by a subsisting certificate of authority issued by OIR, and an unauthorized insurer is one without it. F.S. 624.401 bars anyone from acting as an insurer or transacting insurance in Florida without a certificate of authority, and doing so is a third-degree felony. Foreign and alien insurers can be authorized, so Florida incorporation is not the test; appointing agents does not substitute for the certificate; and the NAIC is an association of state regulators, not of insurers.
Source: Florida content outline I.E.9 and I.E.12; Florida Statutes 624.09; Florida Statutes 624.401
An agent knowingly places a client's life policy with an insurer that is not authorized in Florida, and the insurer later fails to pay a covered claim. Under F.S. 626.901, the agent:
1. A.Is liable only if the insured reported the insurer to DFS before the loss
2. B.Has no liability, because the contract is void and only premiums are refunded
3. C.Is liable only for the commission earned on the sale
4. D.Is personally liable to the insured for the unpaid amount of the claim
Show answer
Answer: D. F.S. 626.901(1) prohibits acting for or aiding an insurer not authorized in Florida, and 626.901(2) makes a person who knew or reasonably should have known of the violation, and who solicited, negotiated, took the application for or effectuated the contract, liable to the insured for the full unpaid claim. Under 626.901(3), the contract is not invalid because of the violation, so it is not void. Liability is not capped at the commission and does not depend on any report to DFS.
Source: Florida content outline I.E.11; Florida Statutes 626.901
Which statement correctly distinguishes a stock insurer from a mutual insurer under Florida law?
1. A.Stock insurers must be formed in Florida; mutual insurers must be formed in another state
2. B.Stock insurers have capital divided into shares owned by stockholders; mutual insurers have no permanent capital stock
3. C.Stock insurers may sell only life insurance; mutual insurers may sell only health insurance
4. D.Stock insurers are owned by their policyholders; mutual insurers are owned by outside investors
Show answer
Answer: B. F.S. 628.021 defines a stock insurer as an incorporated insurer with its capital divided into shares and owned by its stockholders, and F.S. 628.031 defines a mutual insurer as an incorporated insurer without permanent capital stock whose governing body is elected under the Insurance Code. The ownership option reverses the two: mutual insurers are the ones commonly described as policyholder-owned. Lines of business and state of formation are not what separates stock from mutual companies.
Source: Florida content outline I.E.10; Florida Statutes 628.021; Florida Statutes 628.031
Which feature is part of Florida's definition of a fraternal benefit society?
1. A.It operates on a lodge system with a ritualistic form of work and a representative form of government
2. B.It sells coverage to the general public with no membership or lodge requirement
3. C.It must be organized as a mutual insurer under the laws of another state
4. D.It is owned by stockholders and pays dividends to them on its capital stock each year
Show answer
Answer: A. F.S. 632.601 defines a fraternal benefit society as a society, order or supreme lodge without capital stock, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with a ritualistic form of work and a representative form of government. Because it has no capital stock and exists for its members, the stockholder and general-public options are wrong. Nothing in the definition requires it to be a mutual insurer formed elsewhere.
Source: Florida content outline I.E.8; Florida Statutes 632.601
An applicant for a Florida life agent license who is not a CLU takes the life-only prelicensing route. What coursework must the applicant have completed?
1. A.30 hours in life insurance, annuities and variable contracts, including 3 hours of ethics, within the 4 years before applying
2. B.40 hours in life and health insurance, including 4 hours of ethics, completed within the year before applying
3. C.A 4-hour update course plus 20 elective hours, within the 2 years before applying
4. D.20 hours in life insurance, including 2 hours of ethics, completed within the 2 years before applying
Show answer
Answer: A. F.S. 626.7851(1) requires 30 hours of department-approved coursework in life insurance, annuities and variable contracts, 3 hours of which must be on ethics, within the 4 years before the application is filed. Other routes include a 60-hour multi-line course, certain designations, or a reciprocal license from another state, and service members, veterans and their spouses are exempt from prelicensing coursework. The 40-hour figure is the health agent requirement under F.S. 626.8311, and the update-plus-elective pattern is continuing education for licensed agents.
Source: Florida content outline I.F.4.a; Florida Statutes 626.7851; Florida Statutes 626.8311
A candidate passes the Florida licensing exam before submitting a license application to DFS. How long does the passing grade remain valid?
1. A.4 years
2. B.2 years
3. C.6 months
4. D.1 year
Show answer
Answer: D. F.S. 626.291(3) says a passing grade on an examination is valid for 1 year, so the license must be obtained within that time or the exam retaken. The application also requires fingerprints: under F.S. 626.171(4), DFS may not approve an agent application until they have been submitted. Six months, 2 years and 4 years do not match the statute; 4 years is the window for completing prelicensing coursework.
Source: Florida content outline I.F.4.c–d; Florida Statutes 626.291; Florida Statutes 626.171
By appointing a licensed agent, an insurer certifies to the Department of Financial Services that:
1. A.The agent will sell only that insurer's products for as long as the appointment remains in force
2. B.It has investigated the agent, considers the agent fit, and will be bound by the agent's acts within the appointment
3. C.The agent has passed a second, company-administered examination on Florida insurance law
4. D.It will pay any administrative fines or penalties that DFS later imposes on the agent
Show answer
Answer: B. F.S. 626.451(2) and (3) say that by effectuating an appointment, the appointing entity certifies that it has investigated the licensee, considers the licensee of good moral character and fit for the business, and is willing to be bound by the licensee's acts within the scope of the appointment. An appointment continues until terminated, subject to renewal every 24 months in the agent's birth month (F.S. 626.381). The statute requires no second exam, guarantee of fines or exclusivity.
Source: Florida content outline I.F.3.a; Florida Statutes 626.451; Florida Statutes 626.381
Which description fits an unaffiliated insurance agent in Florida?
1. A.A nonresident agent who sells policies in Florida without holding any insurer appointment
2. B.A self-appointed agent who advises clients for a fee set in advance by a signed written contract
3. C.A salaried insurer employee who may solicit only alongside a licensed agent
4. D.An agent appointed by several insurers who is paid only by commissions on the policies sold
Show answer
Answer: B. F.S. 626.015 defines an unaffiliated insurance agent as a licensed agent (other than a limited lines agent) who is self-appointed and works as an independent consultant for a fee set in advance by a written contract signed by the parties. Under F.S. 626.311(6), such an agent may not hold an insurer appointment for any license held (except an adjuster license) or take compensation from insurers or insurer-appointed agents for later transactions. An agent appointed by several insurers and paid by commission is a regular appointed agent, and the salaried employee who may solicit only with a licensed agent is covered by F.S. 626.112(6).
Source: Florida content outline I.F.3.b; Florida Statutes 626.015; Florida Statutes 626.311
A Florida life and health agent who has been licensed for three years must complete how much continuing education in each 2-year period?
1. A.20 hours: a 4-hour update course plus 16 elective hours
2. B.10 hours of elective courses with no update course
3. C.30 hours, including 3 hours of ethics
4. D.24 hours: a 4-hour update course plus 20 elective hours
Show answer
Answer: D. F.S. 626.2815(3) requires most licensees to complete a 4-hour update course specific to their license every 2 years, plus 20 elective hours under paragraph (a). The 4-plus-16 pattern applies only after a licensee has held a license for 6 years or more, and 30 hours with 3 hours of ethics is the life prelicensing course. Excess hours may be carried forward to the next compliance period, and meeting CE is a condition of continuing an appointment.
Source: Florida content outline I.F.5.a; Florida Statutes 626.2815
A licensed agent moves to a new home address in another Florida city. Under F.S. 626.551, the agent must notify DFS in writing within:
1. A.90 days, or lose all appointments
2. B.30 days, or face a fine of up to $250 for a first offense
3. C.60 days, or face a fine of $1,000 for a first offense
4. D.10 days, or have the license automatically suspended
Show answer
Answer: B. F.S. 626.551 requires written notice to DFS within 30 days after a change of name, residence address, principal business street address, mailing address, contact phone numbers or e-mail address. Missing the deadline brings a fine of up to $250 for a first offense and a fine of at least $500, or suspension or revocation, for a later offense. A licensee who moves both residence and principal place of business out of Florida has the license and all appointments terminated immediately.
Source: Florida content outline I.F.5.b; Florida Statutes 626.551
A licensed agent pleads nolo contendere to a felony, and the court withholds adjudication. What does Florida law require of the agent?
1. A.Nothing, because a plea with adjudication withheld is not a conviction
2. B.Report the plea when the appointment is next renewed
3. C.Tell the appointing insurer, which then decides whether to inform DFS
4. D.Notify DFS in writing within 30 days, even though no judgment of conviction was entered
Show answer
Answer: D. F.S. 626.451(6) requires a licensee to advise DFS in writing within 30 days after being found guilty of, or pleading guilty or nolo contendere to, a felony or a crime punishable by a year or more in prison, whether or not a judgment of conviction is entered. The appointing entity has its own duty to tell DFS within 15 days after it learns of such a plea or finding (F.S. 626.451(4)), which does not replace the agent's duty. Separately, F.S. 626.536 requires a licensee to send DFS a copy of any final administrative action relating to insurance, securities or fraud within 30 days after final disposition.
Source: Florida content outline I.F.5.d; Florida Statutes 626.451; Florida Statutes 626.536

Where these questions come from: Florida content outline (Pearson VUE, effective 1 Jan 2026), Florida Agent's Health & Life (2-15), Florida statutes, rules and regulations, section I.A–F: Financial services regulation, DFS, OIR and OFR, definitions and licensing. See how we write questions.