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Texas 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 14 questions on rules common to life and health on the Texas state-law portion of the Life and Health agent exam. Updated 2026-11-04.

Quick study guide

Most questions here turn on a Texas Insurance Code (TIC) number (days, hours, years) or on who must do what.

The commissioner and the department

The Texas Department of Insurance (TDI) regulates the business of insurance. The commissioner is its chief executive, appointed by the governor with the senate's consent for a two-year term (TIC 31.021–.022). TDI must examine each carrier at least once every five years and has free access to its books (TIC 401.052, 401.054). An insurer or agent must answer a written TDI inquiry within 15 days, with a 10-day extension on request (TIC 38.001). After notice and hearing, the commissioner may revoke an authorization, suspend it for up to one year, order it to cease and desist, or impose a penalty or restitution (TIC 82.051–.052). In an emergency the commissioner may issue a cease and desist order ex parte; it becomes final on the 61st day unless the person asks for a hearing within 60 days (TIC 83.051, 83.053).

Insurers

Term	Meaning in Texas
Domestic	Organized under Texas law
Foreign	Organized under the law of another U.S. state
Alien	Organized under the law of a foreign country
Fraternal benefit society	Lodge system, representative government, not for profit, no capital stock

An insurer needs a certificate of authority, which lists the kinds of insurance it may write and lasts until suspended or revoked (TIC 801.052–.053). Taking an application, collecting a premium or delivering a policy in Texas is the business of insurance (TIC 101.051).

Getting and keeping a license

An individual must be at least 18 and have passed the exam within the past 12 months (TIC 4001.105). A temporary license needs no exam, requires a sponsoring agent, insurer or HMO, lasts 180 days, and comes with at least 40 hours of training within 30 days, 10 of them in a classroom (TIC 4001.152, .155, .160). A nonresident licensed in a reciprocal home state gets a Texas license without the exam, and it falls with the home license (TIC 4056.052). A CLU is exempt from the life, accident and health exam (TIC 4002.003).

A licensed agent may act only once appointed by an insurer; appointments last until ended (TIC 4001.201–.203). Individual licenses run two years, expiring on the holder's birthday (TIC 4003.001). Most agents need 24 hours of continuing education per license period, at least half in a classroom or classroom equivalent, including three hours of ethics (TIC 4004.051, .053, .054). An agent must report address changes, felony convictions and regulatory actions monthly (TIC 4001.252) and keep insurance records separate from other businesses (TIC 4001.255). After a denial or revocation, an individual must wait five years to reapply (TIC 4005.105).

Practice questions

How is the Texas commissioner of insurance selected?
1. A.Appointed by the governor, with the advice and consent of the senate, for a two-year term
2. B.Chosen by the Texas Legislature from candidates nominated by insurers
3. C.Appointed by the attorney general to serve until removed
4. D.Elected by Texas voters at each general election for a four-year term
Show answer
Answer: A. TIC 31.022 says the governor appoints the commissioner with the advice and consent of the senate, for a two-year term that expires on February 1 of each odd-numbered year. Some states elect their insurance commissioners, but Texas does not, and neither the legislature nor the attorney general makes the choice. Under TIC 31.021 the commissioner is TDI's chief executive and administers and enforces the Insurance Code.
Source: Texas content outline I.A.1; Texas Insurance Code 31.022
TDI examiners arrive at an insurer's principal office to examine its financial condition. Which statement is true under TIC Chapter 401?
1. A.An examination may take place only after a policyholder files a written complaint.
2. B.Examiners have free access to the insurer's books and papers and may question its officers and agents under oath.
3. C.The insurer may limit examiners to the reports it has already filed with the department.
4. D.Examiners may review records only after giving the insurer one year's notice.
Show answer
Answer: B. TIC 401.054 gives the department or its examiner free access to all books and papers of the carrier and its agents, and the power to summon and examine officers, agents and employees under oath. No complaint is needed: TIC 401.052 requires TDI to examine each carrier as often as it considers necessary and at least once every five years. Nothing in the statute lets the insurer restrict examiners to its filed reports.
Source: Texas content outline I.A.2; Texas Insurance Code 401.052; Texas Insurance Code 401.054
TDI sends a licensed agent a written inquiry about one of the agent's transactions. Under TIC 38.001, the agent must respond in writing:
1. A.Within 10 days after receiving it, extendable only by a court order
2. B.Within 30 days after receiving it, with no extension available
3. C.Within 15 days after receiving it, with a 10-day extension if the agent gives written notice that more time is needed
4. D.Within 60 days after receiving it, or by the next license renewal date if sooner
Show answer
Answer: C. TIC 38.001 lets TDI address a reasonable inquiry to an insurer, agent or other authorization holder about its business or transactions. The response is due in writing within 15 days of receipt, and TDI must grant a 10-day extension if it receives written notice that more time is needed. The 30-, 10- and 60-day versions do not match the statute.
Source: Texas content outline I.A.3; Texas Insurance Code 38.001
After notice and a hearing, the commissioner finds that a license holder violated a commissioner rule. Which sanction does TIC Chapter 82 allow?
1. A.Revoking the licenses of every agent appointed by the same insurer
2. B.Suspending the authorization for a specified time of not more than one year
3. C.Sentencing the license holder to up to one year in county jail
4. D.Suspending the authorization indefinitely without any hearing
Show answer
Answer: B. TIC 82.051 and 82.052 let the commissioner, after notice and opportunity for a hearing, cancel or revoke an authorization, suspend it for a specified time not exceeding one year, order the holder to cease and desist, impose an administrative penalty, order restitution, or combine these. Jail is a criminal penalty imposed by a court, not an administrative sanction. The sanctions apply to the holder who violated the law, not to unrelated agents, and they follow notice and an opportunity for a hearing.
Source: Texas content outline I.A.4; Texas Insurance Code 82.052
The commissioner issues an emergency cease and desist order, without a prior hearing, against an unauthorized person selling insurance in Texas. If the person takes no action after being served, the order:
1. A.Becomes final on the 61st day after service, because a hearing must be requested within 60 days
2. B.Is void, because the commissioner must hold a hearing before issuing any order
3. C.Has no effect until the department holds a hearing on the charges
4. D.Expires automatically after 30 days unless a court extends it
Show answer
Answer: A. TIC 83.051 lets the commissioner issue an emergency cease and desist order ex parte (without a prior hearing), including against an unauthorized person engaging in the business of insurance. Under TIC 83.053 the person may request a hearing in writing within 60 days of service, and under TIC 83.051(b) the order becomes final on the 61st day unless a hearing is requested. The order takes effect immediately, so it is neither void nor on hold pending a hearing.
Source: Texas content outline I.A.5; Texas Insurance Code 83.051; Texas Insurance Code 83.053
Which statement about an insurer's Texas certificate of authority is correct?
1. A.It is issued by the Texas Secretary of State when the insurer incorporates.
2. B.It must be renewed every two years on the anniversary of the insurer's incorporation.
3. C.It states the kinds of insurance the insurer may write and stays in effect until suspended or revoked.
4. D.It allows the insurer's sales representatives to sell without individual agent licenses.
Show answer
Answer: C. TDI issues the certificate of authority under its seal once the applicant complies with the law (TIC 801.051). The certificate authorizes the insurer to engage in the business of insurance and must state the specific kinds of insurance authorized (TIC 801.052), and it remains effective until suspended or revoked (TIC 801.053), so it has no two-year renewal. The insurer's certificate does not license its agents; agents need their own licenses and appointments.
Source: Texas content outline I.B.1; Texas Insurance Code 801.052; Texas Insurance Code 801.053
Under TIC 101.051, which of these acts, done in Texas, constitutes the business of insurance?
1. A.Taking or receiving an application for insurance
2. B.Paying the premium on a policy one already owns
3. C.Buying a life insurance policy on one's own life
4. D.Filing a claim under one's own health insurance policy
Show answer
Answer: A. TIC 101.051 lists acts that constitute the business of insurance in Texas, including taking or receiving an insurance application, receiving a premium, commission, membership fee, assessment or dues, issuing or delivering a policy, and soliciting or negotiating insurance for an insurer. Buying a policy, paying its premium and filing a claim are things a consumer does, not acts of an insurer or its representative. Doing the listed acts without authority is prohibited by TIC 101.102.
Source: Texas content outline I.B.2; Texas Insurance Code 101.051
An insurance company organized under the laws of Oklahoma holds a Texas certificate of authority. In Texas it is classified as a(n):
1. A.Foreign insurance company
2. B.Alien insurance company
3. C.Domestic insurance company
4. D.Unauthorized insurance company
Show answer
Answer: A. TIC 982.001 defines a foreign insurance company as one organized under the laws of another U.S. state, so an Oklahoma company is foreign in Texas. A domestic company is organized under Texas law, and an alien company is organized under the laws of a foreign country. Because it holds a Texas certificate of authority, it is authorized, not unauthorized.
Source: Texas content outline I.B.3; Texas Insurance Code 982.001
A life insurer incorporated under the laws of Canada sells policies in Texas through its United States branch. Under the Texas Insurance Code, it is a(n):
1. A.Domestic insurance company
2. B.Foreign insurance company
3. C.Alien insurance company
4. D.Fraternal benefit society
Show answer
Answer: C. TIC 982.001 defines an alien insurance company as one organized under the laws of a foreign country, and TIC 841.001 uses the same idea for alien life, accident and health companies. Foreign means organized in another U.S. state, and domestic means organized under Texas law. Having a U.S. branch does not change where the company is organized, and nothing in the facts suggests a lodge-based fraternal society.
Source: Texas content outline I.B.3; Texas Insurance Code 982.001; Texas Insurance Code 841.001
Which feature is required for an organization to be a fraternal benefit society under TIC 885.051?
1. A.A lodge system with a representative form of government, operated not for profit
2. B.Profits distributed to outside investors each year
3. C.A certificate of authority from its home state only
4. D.Capital stock owned by its officers and directors
Show answer
Answer: A. Under TIC 885.051, a fraternal benefit society has a lodge system and a representative form of government (or limits membership to a secret fraternity that has them), operates solely for the mutual benefit of its members and their beneficiaries and not for profit, has no capital stock, and pays benefits allowed by TIC 885.301. Capital stock and profits for outside investors describe a stock company, the opposite of a fraternal. A fraternal operating in Texas is governed by Chapter 885 and must meet its requirements, not just its home state's.
Source: Texas content outline I.B.5; Texas Insurance Code 885.051
Maria, age 19, passed the Texas life, accident and health exam 14 months ago but never applied for her license. Under TIC 4001.105, what is her situation?
1. A.She cannot be licensed yet, because the minimum age is 21.
2. B.She can apply now if she pays a late fee equal to half the license fee.
3. C.She must pass the exam again, because the exam must have been passed within the past 12 months.
4. D.She can apply now, because Texas exam results do not expire.
Show answer
Answer: C. TIC 4001.105 requires an individual applicant to be at least 18 and to have passed the licensing exam within the past 12 months, so at 19 Maria is old enough but her exam result is too old. TDI's licensing page likewise says to apply within one year of passing or retake the exam. The half-fee late charge in TIC 4003.007 applies to renewing an expired license, not to a first application.
Source: Texas content outline I.C.1.a; Texas Insurance Code 4001.105; TDI: General lines (life, accident, health and HMO) license
An insurer sponsors an applicant for a Texas temporary agent license, which needs no exam and is valid for 180 days. Under TIC 4001.160, what training must the insurer provide?
1. A.At least 10 hours within 30 days after the license is issued, all of which may be online
2. B.At least 40 hours within 180 days after the license is issued, with no classroom requirement
3. C.At least 40 hours within 30 days after the application is filed, with at least 10 hours in a classroom
4. D.At least 24 hours within 90 days after the application is filed, all of which may be self-study
Show answer
Answer: C. TIC 4001.160 requires the sponsoring agent, insurer or HMO to give a temporary license applicant at least 40 hours of training no later than the 30th day after the application, fee and certificate are filed, with at least 10 hours taught in a classroom setting. The temporary license itself needs no exam (TIC 4001.152) and is valid for 180 days (TIC 4001.155); TDI says it is issued only once and cannot be renewed. The 24-hour figure is the continuing education requirement for licensed agents, not temporary license training.
Source: Texas content outline I.C.1.c; Texas Insurance Code 4001.160; Texas Insurance Code 4001.155; TDI: General lines (life, accident, health and HMO) license
A Louisiana resident holds a Louisiana life and health agent license in good standing, and Louisiana grants nonresident licenses to Texas agents on a reciprocal basis. Under TIC 4056.052, which is true?
1. A.Texas will license her, but she must meet Texas CE rules even if she is current in Louisiana.
2. B.She must move to Texas, because Texas does not license agents who live in other states.
3. C.She must pass the Texas licensing exam before Texas can issue her a nonresident license.
4. D.Texas will issue her a nonresident license, which ends automatically if Louisiana revokes her resident license.
Show answer
Answer: D. TIC 4056.052 requires Texas to issue a nonresident license to an applicant licensed in good standing in a home state that reciprocates, and the Texas license is automatically suspended, canceled or revoked if the home state takes that action on the resident license. Only a nonresident without a home-state license must pass the Texas exam (TIC 4056.053). Under TIC 4056.057, a nonresident who complies with home-state continuing education is exempt from Texas CE.
Source: Texas content outline I.C.1.b; Texas Insurance Code 4056.052; Texas Insurance Code 4056.057
Which applicant for a Texas life, accident and health license is exempt from the licensing exam under TIC 4002.003?
1. A.An applicant who holds a bachelor's degree in finance or economics
2. B.An applicant who holds the Chartered Property Casualty Underwriter designation
3. C.An applicant whose previous Texas license was revoked two years ago
4. D.An applicant who holds the Chartered Life Underwriter (CLU) designation
Show answer
Answer: D. TIC 4002.003 exempts an applicant for a life, accident and health license who is designated a CLU. The CPCU exemption applies to a property and casualty license, not a life and health license. A college degree is not on the list, and the exemption for a recently expired license applies only if the prior license was not denied, revoked or suspended.
Source: Texas content outline I.C.2; Texas Insurance Code 4002.003; TDI: General lines (life, accident, health and HMO) license
Which statement about agent appointments in Texas is correct?
1. A.Appointments expire with the agent's license and must be refiled at every renewal.
2. B.An agent may hold an appointment from only one insurer at a time.
3. C.A licensed agent may sell for any insurer without being appointed by it.
4. D.An appointment stays in effect without renewal until the insurer or the agent terminates it.
Show answer
Answer: D. TIC 4001.203 says an appointment continues without renewal until the insurer or the agent terminates or withdraws it, and a renewed license carries the existing appointments forward. TIC 4001.201 bars a licensee from acting as an agent unless appointed by an authorized insurer. TIC 4001.202 lets an agent represent more than one insurer; the agent and insurer must notify TDI of an additional appointment within 30 days after it takes effect.
Source: Texas content outline I.C.3; Texas Insurance Code 4001.201; Texas Insurance Code 4001.203
A Texas agent holds a general lines life, accident and health license. What continuing education does TIC Chapter 4004 require for each license period?
1. A.24 hours, but only for the first license period after the agent passes the exam
2. B.30 hours, which may be completed up to one year after the license expires
3. C.24 hours, at least half in a classroom or approved classroom-equivalent setting, finished before the license expires
4. D.12 hours each year, all of which may be completed as self-study
Show answer
Answer: C. TIC 4004.053 requires 24 hours of CE per license period for a general life, accident and health license, TIC 4004.051 requires at least 50 percent in a classroom or approved classroom-equivalent setting and all hours to be completed before the license expires, and TIC 4004.054 requires three of the hours to be ethics. The requirement applies every license period, not just the first; only an agent continuously licensed for at least 20 years is exempt (TIC 4004.052). TDI may not renew a license if CE is not completed within 90 days after the license period ends (TIC 4004.055).
Source: Texas content outline I.C.4; Texas Insurance Code 4004.051; Texas Insurance Code 4004.053; 28 TAC 19.1003
An agent's Texas license expired 60 days ago. Under TIC 4003.007, what may the agent do?
1. A.Renew it at no extra cost, as long as continuing education was completed
2. B.Apply for a new license only after a five-year waiting period
3. C.Nothing until retaking the licensing exam, because any lapse requires reexamination
4. D.Renew it by filing a renewal application and paying the renewal fee plus an extra fee of half that amount
Show answer
Answer: D. TIC 4003.007 lets a person whose license has been expired for 90 days or less renew it with a renewal application, the renewal fee and an additional fee equal to half the renewal fee. If the license has been expired more than 90 days but less than a year, it cannot be renewed, but a new license can be obtained without the exam by paying the license fee plus half; after a year or more, the person must retest. The five-year wait in TIC 4005.105 applies after a denial or revocation, not a lapse.
Source: Texas content outline I.C.6; Texas Insurance Code 4003.007
An individual's agent license was revoked for misappropriating premiums. Under TIC 4005.105, when may the individual next apply for an agent license?
1. A.After one year, once all continuing education hours have been made up
2. B.Not before the fifth anniversary of the revocation, or of a final court order upholding it
3. C.After 90 days, by filing a late renewal application with a penalty fee
4. D.At any time, as soon as an administrative penalty has been paid
Show answer
Answer: B. TIC 4005.105 bars an individual whose license was revoked, or whose application was denied, from applying for an agent license before the fifth anniversary of the revocation or of a final court order affirming it. Even after five years, the commissioner may deny the new application if the applicant cannot show good cause. Misappropriating money belonging to an insurer or insured is a ground for denial or discipline under TIC 4005.101; the 90-day late-renewal rule applies only to lapsed licenses.
Source: Texas content outline I.C.7; Texas Insurance Code 4005.105; Texas Insurance Code 4005.101
Under TIC 4001.252, how often must an individual agent notify TDI of a change of mailing address, a felony conviction, or an administrative action taken against the agent by another state's insurance regulator?
1. A.Only when the license is renewed
2. B.Only if the department asks
3. C.Within one year of the event
4. D.On a monthly basis
Show answer
Answer: D. TIC 4001.252(a) requires an individual licensed as an agent to notify the department on a monthly basis of a change of mailing address, a felony conviction, or an administrative action by a financial or insurance regulator of Texas, another state or the United States. Waiting for renewal, waiting a year or waiting to be asked would all fall outside that rule. (The Pearson VUE candidate handbook describes address changes as due within 30 days; the statute's own wording is monthly.)
Source: Texas content outline I.C.8; Texas Insurance Code 4001.252
Under 28 TAC 1.502, what happens when a license holder is sent to prison following a felony conviction?
1. A.The agent may keep working under the supervision of an appointing insurer.
2. B.TDI will revoke the license.
3. C.The license remains active if the felony was unrelated to insurance.
4. D.The license is suspended until the sentence ends, then restored automatically.
Show answer
Answer: B. 28 TAC 1.502(h) says TDI will revoke a license on the holder's imprisonment following a felony conviction, and 1.502(i) makes anyone currently in prison for a felony ineligible for a license. For other convictions, the rule lets TDI deny, suspend, revoke or refuse to renew after weighing whether the offense relates to the occupation, and a felony conviction is also a ground for discipline under TIC 4005.101. Nothing in the rule restores the license automatically or lets an imprisoned agent keep working under supervision.
Source: Texas content outline I.C.8.b; 28 TAC 1.502; Texas Insurance Code 4005.101

Where these questions come from: Texas content outline (Pearson VUE #124401, effective 1 Sep 2026), Life and Health agent state-specific content, section I.A–C: Commissioner of Insurance, insurance definitions and licensing requirements. See how we write questions.