TEXAS INSURANCE LICENSE QUIZ REVIEW
EXAM 2026 QUESTIONS AND CORRECT
SOLUTIONS GRADED A+
⩥ The Texas Department of Insurance regulates the state's insurance
industry. Which of the following is not one of TDIs responsibilities?
Answer: 1. Licensing Producers
2. Overseeing the marketing practices of insurers
3. Issuing certificates of authority to insurers.
4. Imposing civil and criminal penalties on producers who violate the
state's insurance laws.
⩥ Who does TDI license? Answer: 1. Insurance companies
2. Agents
3. Third-Party Administrators
4. HMOs
5. Premium finance companies
6. Continuing care retirement communities
7. Insurance Adjustors
8. Public insurance adjusters
⩥ What must a Certificate of Authority contain? Answer: The specific
kinds of insurance authorized.
,⩥ What is the required notice for TDI to modify or revoke a Certificate
of Authority? Answer: At least 10 days notice.
⩥ How often must TDI inspect insurers and can they inspect before that
period? Answer: 5 years and they can inspect whenever needed.
⩥ What does TDI do to insure the Insurer is sound? How do they inform
citizens? Answer: They financial monitor the insurer.
TDI publishes company profiles that show a company's complaint
record and other useful information, including enforcement actions taken
against the company and company history.
⩥ Who must get an independent financial audit and how often? When is
it due? Answer: Every insurer and HMO must receive an independent
financial audit once a year and submit the report to the commissioner by
June 30th
⩥ What is an examination of records? Answer: At any time, TDI may
ask an insurer or agent for information about its financial condition or
any matter involving its business transactions. The insurer or agent is
required to reply within 10 days.
⩥ By December 31 every year (or asap) TDI will compute the
reinsurance reserve necessary for all risks that an authorized health
,insurer is covering in the state. Does not apply to life insurance
companies. Answer: Reinsurance reserves
⩥ An insurer may voluntarily deposit funds with TDI as a condition to
transacting business in Texas if it is required to do so in its home state.
Answer: Deposits for Protection of Insured and Creditors
⩥ Selling insurance without a license.
Filing illegal claims
misrepresenting insurance policies and coverages for financial gain.
Answer: Insurance Fraud
⩥ Insurance Fraud Regulation Answer: If fraud is suspected it must be
reported to TDI within 30 days.
⩥ TDI may fine or penalize agents or companies that: Answer: 1. Delay
payment of claims
2. Misrepresent policies.
3. Fail to provide required discounts to policy holders
4. Engage in unfair or unlawful practices
⩥ What happens when a written complaint is filed with TDI? Answer:
Each party is notified unless an undercover mission is taking place.
Notification must be made once a quarter.
, ⩥ If a person engages in ANY of this behavior then they are a :
1. Solicits insurance
2. Receives or transmits ( other than on the person's own behalf)
insurance or policy to or from that insurer
3. Advertises for insurance
4. Receives, collects, or transmits an insurance premium
5. Takes any other action in the making of an insurance contract that is
not on their behalf. Answer: That person is an agent.
⩥ A license must be issued in the agents Answer: real name
⩥ If an agent uses an assumed name to conduct business that name
cannot: Answer: imply that the agent is an insurer, motor club, hospital
service plan, HMO, prepaid legal service, continuing care retirement
community or any other entity entitled to engage in insurance activities
⩥ Why would a name not be approved? Answer: The name is the same
as, closely resembles, or implies affiliation with or sponsorship by a
federal state, local government authority or program
The name fails to state clearly that the applicant or licensee is an
insurance agent or the name suggest that the agent is involved in a
EXAM 2026 QUESTIONS AND CORRECT
SOLUTIONS GRADED A+
⩥ The Texas Department of Insurance regulates the state's insurance
industry. Which of the following is not one of TDIs responsibilities?
Answer: 1. Licensing Producers
2. Overseeing the marketing practices of insurers
3. Issuing certificates of authority to insurers.
4. Imposing civil and criminal penalties on producers who violate the
state's insurance laws.
⩥ Who does TDI license? Answer: 1. Insurance companies
2. Agents
3. Third-Party Administrators
4. HMOs
5. Premium finance companies
6. Continuing care retirement communities
7. Insurance Adjustors
8. Public insurance adjusters
⩥ What must a Certificate of Authority contain? Answer: The specific
kinds of insurance authorized.
,⩥ What is the required notice for TDI to modify or revoke a Certificate
of Authority? Answer: At least 10 days notice.
⩥ How often must TDI inspect insurers and can they inspect before that
period? Answer: 5 years and they can inspect whenever needed.
⩥ What does TDI do to insure the Insurer is sound? How do they inform
citizens? Answer: They financial monitor the insurer.
TDI publishes company profiles that show a company's complaint
record and other useful information, including enforcement actions taken
against the company and company history.
⩥ Who must get an independent financial audit and how often? When is
it due? Answer: Every insurer and HMO must receive an independent
financial audit once a year and submit the report to the commissioner by
June 30th
⩥ What is an examination of records? Answer: At any time, TDI may
ask an insurer or agent for information about its financial condition or
any matter involving its business transactions. The insurer or agent is
required to reply within 10 days.
⩥ By December 31 every year (or asap) TDI will compute the
reinsurance reserve necessary for all risks that an authorized health
,insurer is covering in the state. Does not apply to life insurance
companies. Answer: Reinsurance reserves
⩥ An insurer may voluntarily deposit funds with TDI as a condition to
transacting business in Texas if it is required to do so in its home state.
Answer: Deposits for Protection of Insured and Creditors
⩥ Selling insurance without a license.
Filing illegal claims
misrepresenting insurance policies and coverages for financial gain.
Answer: Insurance Fraud
⩥ Insurance Fraud Regulation Answer: If fraud is suspected it must be
reported to TDI within 30 days.
⩥ TDI may fine or penalize agents or companies that: Answer: 1. Delay
payment of claims
2. Misrepresent policies.
3. Fail to provide required discounts to policy holders
4. Engage in unfair or unlawful practices
⩥ What happens when a written complaint is filed with TDI? Answer:
Each party is notified unless an undercover mission is taking place.
Notification must be made once a quarter.
, ⩥ If a person engages in ANY of this behavior then they are a :
1. Solicits insurance
2. Receives or transmits ( other than on the person's own behalf)
insurance or policy to or from that insurer
3. Advertises for insurance
4. Receives, collects, or transmits an insurance premium
5. Takes any other action in the making of an insurance contract that is
not on their behalf. Answer: That person is an agent.
⩥ A license must be issued in the agents Answer: real name
⩥ If an agent uses an assumed name to conduct business that name
cannot: Answer: imply that the agent is an insurer, motor club, hospital
service plan, HMO, prepaid legal service, continuing care retirement
community or any other entity entitled to engage in insurance activities
⩥ Why would a name not be approved? Answer: The name is the same
as, closely resembles, or implies affiliation with or sponsorship by a
federal state, local government authority or program
The name fails to state clearly that the applicant or licensee is an
insurance agent or the name suggest that the agent is involved in a
