Florida 2-20 General Lines Exam - Complete Study
Guide with Questions, Verified Correct Answers
and Detailed Rationales || Latest Update 2026
Question 1
All of the following are grounds for compulsory refusal, suspension, or revocation
EXCEPT:
A. Unlawfully rebating
B. Fraudulent submission of a Workers' Comp app
C. Lack of reasonably adequate knowledge
D. Soliciting insurance in other areas of the state
Correct Answer: D
Rationale: Soliciting insurance in other areas of the state is NOT a ground for
compulsory refusal, suspension, or revocation. Agents are generally allowed to solicit
insurance throughout the state as long as they are properly licensed. Unlawfully
rebating, fraudulent submission of Workers' Comp applications, and lack of reasonably
adequate knowledge are all valid grounds for disciplinary action.
Question 2
How long is a temporary license good for?
A. 12 months
B. 6 months
C. 4 months
D. 2 months
Correct Answer: B
Rationale: A temporary license is good for 6 months. Temporary licenses are issued to
allow individuals to work in insurance while completing licensing requirements. They
are not renewable and expire after 6 months.
Question 3
Which of the following can a licensed agent share commissions with?
pg. 1
,A. A non-resident agent
B. A customer representative
C. A car dealer
D. A real estate agent
Correct Answer: A
Rationale: A licensed agent may share commissions with a non-resident agent.
Commissions may only be shared with licensed individuals. Customer representatives,
car dealers, and real estate agents are not licensed insurance professionals and cannot
receive commissions.
Question 4
Jim and Glenda go to the local branch of their bank for a home loan. The loan officer
tells them that in order to qualify for the loan they must purchase insurance from the
bank. This is an example of:
A. Misrepresentation
B. Coercion
C. Twisting
D. Rebating
Correct Answer: B
Rationale: Coercion is the use of force or threat to compel someone to purchase
insurance. The loan officer is coercing the customers by making insurance a condition of
the loan. Misrepresentation involves false statements. Twisting involves replacing
insurance policies. Rebating involves giving something of value as an inducement.
Question 5
Knowingly using an incomplete comparison of insurance policies in order to get the
insured to buy a policy from you is called:
A. Misrepresentation
B. Coercion
C. Twisting
D. Rebating
Correct Answer: C
Rationale: Twisting is the act of making misleading or incomplete comparisons of
insurance policies to induce a person to lapse, cancel, or replace an existing policy.
pg. 2
,Misrepresentation is making false statements. Coercion is using force or threats.
Rebating is giving something of value as an inducement.
Question 6
Charging an applicant for a specific ancillary coverage in addition to the cost of the auto
insurance coverage applied for without his consent is called:
A. Misrepresentation
B. Churning
C. Sliding
D. Coercion
Correct Answer: C
Rationale: Sliding is the practice of charging for coverage without the applicant's
knowledge or consent. This is a prohibited practice. Misrepresentation involves false
statements. Churning involves excessive replacement of policies. Coercion involves force
or threats.
Question 7
An insurance company formed under the laws of Florida is called:
A. Foreign
B. Alien
C. Domestic
D. Captive
Correct Answer: C
Rationale: A domestic insurer is formed under the laws of the state in which it is
domiciled (Florida). Foreign insurers are formed in another state. Alien insurers are
formed in another country. Captive insurers are formed to insure the risks of a parent
company.
Question 8
An insurance company formed under the laws of another state is called:
A. Foreign
B. Alien
pg. 3
, C. Domestic
D. Captive
Correct Answer: A
Rationale: A foreign insurer is formed under the laws of another state (not Florida).
Domestic insurers are formed in Florida. Alien insurers are formed in another country.
Captive insurers are formed to insure a parent company's risks.
Question 9
An insurance company formed in Zurich, Switzerland is called:
A. Foreign
B. Alien
C. Domestic
D. Captive
Correct Answer: B
Rationale: An alien insurer is formed under the laws of another country. Foreign
insurers are formed in another state. Domestic insurers are formed in Florida. Captive
insurers are formed to insure a parent company's risks.
Question 10
An insurance company that is licensed to do business in Florida is called:
A. A licensed insurance company
B. An authorized insurance company
C. An unauthorized insurance company
D. A captive insurance company
Correct Answer: B
Rationale: An authorized insurance company is licensed to do business in Florida.
"Licensed" is not the correct technical term for insurers (agents are licensed, insurers
are authorized). Unauthorized insurers are not licensed. Captive insurers are formed to
insure a parent company's risks.
Question 11
All of the following are considered "transacting insurance" EXCEPT:
pg. 4
Guide with Questions, Verified Correct Answers
and Detailed Rationales || Latest Update 2026
Question 1
All of the following are grounds for compulsory refusal, suspension, or revocation
EXCEPT:
A. Unlawfully rebating
B. Fraudulent submission of a Workers' Comp app
C. Lack of reasonably adequate knowledge
D. Soliciting insurance in other areas of the state
Correct Answer: D
Rationale: Soliciting insurance in other areas of the state is NOT a ground for
compulsory refusal, suspension, or revocation. Agents are generally allowed to solicit
insurance throughout the state as long as they are properly licensed. Unlawfully
rebating, fraudulent submission of Workers' Comp applications, and lack of reasonably
adequate knowledge are all valid grounds for disciplinary action.
Question 2
How long is a temporary license good for?
A. 12 months
B. 6 months
C. 4 months
D. 2 months
Correct Answer: B
Rationale: A temporary license is good for 6 months. Temporary licenses are issued to
allow individuals to work in insurance while completing licensing requirements. They
are not renewable and expire after 6 months.
Question 3
Which of the following can a licensed agent share commissions with?
pg. 1
,A. A non-resident agent
B. A customer representative
C. A car dealer
D. A real estate agent
Correct Answer: A
Rationale: A licensed agent may share commissions with a non-resident agent.
Commissions may only be shared with licensed individuals. Customer representatives,
car dealers, and real estate agents are not licensed insurance professionals and cannot
receive commissions.
Question 4
Jim and Glenda go to the local branch of their bank for a home loan. The loan officer
tells them that in order to qualify for the loan they must purchase insurance from the
bank. This is an example of:
A. Misrepresentation
B. Coercion
C. Twisting
D. Rebating
Correct Answer: B
Rationale: Coercion is the use of force or threat to compel someone to purchase
insurance. The loan officer is coercing the customers by making insurance a condition of
the loan. Misrepresentation involves false statements. Twisting involves replacing
insurance policies. Rebating involves giving something of value as an inducement.
Question 5
Knowingly using an incomplete comparison of insurance policies in order to get the
insured to buy a policy from you is called:
A. Misrepresentation
B. Coercion
C. Twisting
D. Rebating
Correct Answer: C
Rationale: Twisting is the act of making misleading or incomplete comparisons of
insurance policies to induce a person to lapse, cancel, or replace an existing policy.
pg. 2
,Misrepresentation is making false statements. Coercion is using force or threats.
Rebating is giving something of value as an inducement.
Question 6
Charging an applicant for a specific ancillary coverage in addition to the cost of the auto
insurance coverage applied for without his consent is called:
A. Misrepresentation
B. Churning
C. Sliding
D. Coercion
Correct Answer: C
Rationale: Sliding is the practice of charging for coverage without the applicant's
knowledge or consent. This is a prohibited practice. Misrepresentation involves false
statements. Churning involves excessive replacement of policies. Coercion involves force
or threats.
Question 7
An insurance company formed under the laws of Florida is called:
A. Foreign
B. Alien
C. Domestic
D. Captive
Correct Answer: C
Rationale: A domestic insurer is formed under the laws of the state in which it is
domiciled (Florida). Foreign insurers are formed in another state. Alien insurers are
formed in another country. Captive insurers are formed to insure the risks of a parent
company.
Question 8
An insurance company formed under the laws of another state is called:
A. Foreign
B. Alien
pg. 3
, C. Domestic
D. Captive
Correct Answer: A
Rationale: A foreign insurer is formed under the laws of another state (not Florida).
Domestic insurers are formed in Florida. Alien insurers are formed in another country.
Captive insurers are formed to insure a parent company's risks.
Question 9
An insurance company formed in Zurich, Switzerland is called:
A. Foreign
B. Alien
C. Domestic
D. Captive
Correct Answer: B
Rationale: An alien insurer is formed under the laws of another country. Foreign
insurers are formed in another state. Domestic insurers are formed in Florida. Captive
insurers are formed to insure a parent company's risks.
Question 10
An insurance company that is licensed to do business in Florida is called:
A. A licensed insurance company
B. An authorized insurance company
C. An unauthorized insurance company
D. A captive insurance company
Correct Answer: B
Rationale: An authorized insurance company is licensed to do business in Florida.
"Licensed" is not the correct technical term for insurers (agents are licensed, insurers
are authorized). Unauthorized insurers are not licensed. Captive insurers are formed to
insure a parent company's risks.
Question 11
All of the following are considered "transacting insurance" EXCEPT:
pg. 4
