TEXAS TX SBE EXAM 5 QUESTION SET WITH RATIONALES AND EDUCATION SYSTEM GOVERNANCE AND COMPLIANCE REVIEW 2026

TEXAS TX SBE EXAM 5 QUESTION SET WITH
RATIONALES AND EDUCATION SYSTEM
GOVERNANCE AND COMPLIANCE REVIEW
2026

◉ Texas Free Look Period.
Answer: Usually 10 days after policy delivery to return for full
refund


◉ Grace Period.
Answer: Time after premium due date when policy stays active
before lapse


◉ Minimum Grace Period for Life Insurance.
Answer: 31 days


◉ Contestability Period.
Answer: 2 years


◉ During the Contestability Period, insurer can.
Answer: Deny claims for material misrepresentation or fraud

,◉ Misrepresentation.
Answer: False statement on insurance application


◉ Fraud.
Answer: Intentional deception for financial gain


◉ Twisting.
Answer: Replacing policy using misleading information


◉ Rebating.
Answer: Offering inducements not in policy to persuade purchase


◉ Controlled Business.
Answer: Insurance written on producer/family/business associates


◉ Consideration in insurance contract.
Answer: Premium + truthful application statements


◉ Aleatory Contract.
Answer: Unequal exchange depending on uncertain event

, ◉ Adhesion Contract.
Answer: Contract written by insurer with no negotiation


◉ Unilateral Contract.
Answer: Only insurer makes enforceable promise


◉ Insurable Interest must exist when.
Answer: At policy issue


◉ Who regulates insurance in Texas.
Answer: Texas Department of Insurance (TDI)


◉ Purpose of underwriting.
Answer: Evaluate risk and determine premium


◉ Adverse Selection.
Answer: Higher-risk people seeking more insurance


◉ Replacement.
Answer: New policy purchased and old one lapsed/surrendered


◉ Fiduciary Responsibility.