HEALTH INSURANCE FLORIDA 2-40 PRACTICE EXAM | GRADED A 2026/2027 Page 1
HEALTH INSURANCE FLORIDA 2-40
PRACTICE EXAM
QUESTIONS AND ANSWERS | GRADED A 2026/2027
A Comprehensive Practice Examination for the Florida Department of Financial Services
(DFS) 2-40 Health Insurance Agent Licensing Examination, Aligned with the Florida
Statutes (Chapters 624-632) and Florida Administrative Code (Chapter 69B), 2026/2027
Edition.
Total Questions 150 (across 8 sections)
Cognitive Mix 25% Recall | 50% Application | 25% Analysis
Question Style 70% Scenario-based | 30% Direct Knowledge
Coverage Florida Statutes 624-632 | FAC Chapter 69B | NAIC Models
Passing Reference 70% (60 of 85 scored) on Official Pearson VUE Exam
Edition 2026/2027 — Florida DFS Aligned
Examination Instructions: This practice examination is designed to mirror the structure, content, and cognitive
complexity of the official Florida 2-40 Health Insurance Agent Licensing Examination administered by Pearson VUE
on behalf of the Florida Department of Financial Services. Each question presents a scenario or direct knowledge item
drawn from the DFS exam content outline. Select the single best answer from options A through D. The correct answer
is identified with the [CORRECT] marker, followed by a brief rationale citing the relevant Florida Statute (Chapters
624-632), Florida Administrative Code (Chapter 69B), Office of Insurance Regulation (OIR) rule, or NAIC model law.
Use this exam for self-assessment and remediation of weak content areas before sitting for the official state
examination.
Section Breakdown:
# Section Questions
1 Section 1: General Insurance Principles & Concepts Q1 – Q20 (20)
2 Section 2: Accident and Health Insurance Principles Q21 – Q45 (25)
3 Section 3: Florida Health Insurance Laws and Regulations Q46 – Q70 (25)
4 Section 4: Major Medical & Comprehensive Health Insurance Q71 – Q90 (20)
5 Section 5: Disability Income & Long-Term Care Insurance Q91 – Q105 (15)
Florida DFS 2-40 Health Insurance Agent Licensing Exam Practice | Pearson VUE Aligned 150 Questions | 70% Passing Score Required
,HEALTH INSURANCE FLORIDA 2-40 PRACTICE EXAM | GRADED A 2026/2027 Page 2
6 Section 6: Medicare, Medicaid, & Government Programs Q106 – Q120 (15)
7 Section 7: Group Health Insurance & COBRA Q121 – Q135 (15)
8 Section 8: Ethics, Unfair Trade Practices, & Consumer Protections Q136 – Q150 (15)
TOTAL 150 Questions
Florida DFS 2-40 Health Insurance Agent Licensing Exam Practice | Pearson VUE Aligned 150 Questions | 70% Passing Score Required
,HEALTH INSURANCE FLORIDA 2-40 PRACTICE EXAM | GRADED A 2026/2027 Page 3
Section 1: General Insurance Principles & Concepts
Q1: An insurance applicant owns a commercial building worth $500,000 and insures it for $750,000.
When a partial loss of $100,000 occurs, the insurer investigates and discovers the applicant recently
sold the building to a third party two weeks prior to the loss. Under Florida insurance law, what is the
most likely outcome of this claim?
A. The insurer pays $100,000 because the policy limit was $750,000.
B. The insurer denies the claim because the applicant no longer has an insurable interest in the property
at the time of loss. [CORRECT]
C. The insurer pays a pro-rata share based on the building's replacement cost.
D. The insurer pays the claim because the policy was in force when the loss occurred.
Correct Answer: B
Rationale: Insurable interest must exist at the time of loss for property insurance. Since the applicant sold the
building before the loss occurred, they no longer have an insurable interest, and the claim must be denied under
Florida Statutes Chapter 627 and common law principles. The other options incorrectly focus on policy limits or
policy being in force, none of which overcome the lack of insurable interest.
Q2: A Florida agent is explaining the law of large numbers to a client. Which statement best describes
how this principle supports the underwriting process in health insurance?
A. It guarantees that no individual policyholder will experience a loss.
B. It allows insurers to predict the average frequency and severity of losses across a large group,
enabling stable premium calculations. [CORRECT]
C. It eliminates the need for individual underwriting of each applicant.
D. It ensures that premiums will decrease as the policyholder ages.
Correct Answer: B
Rationale: The law of large numbers states that as the pool of insureds grows larger, actual losses will more
closely approximate expected losses, enabling insurers to set actuarially sound premiums. It does not eliminate
individual losses (A), remove individual underwriting (C), or guarantee premium decreases (D). This principle is
foundational to all insurance underwriting per NAIC model laws adopted in Florida.
Florida DFS 2-40 Health Insurance Agent Licensing Exam Practice | Pearson VUE Aligned 150 Questions | 70% Passing Score Required
, HEALTH INSURANCE FLORIDA 2-40 PRACTICE EXAM | GRADED A 2026/2027 Page 4
Q3: An insurer cedes a portion of its Florida health insurance risk to another insurer. The ceding
insurer retains the first $50,000 of every loss and transfers losses above that amount. This
arrangement is best described as:
A. Coinsurance between two insurers
B. Facultative reinsurance with a surplus-share treaty
C. Excess-of-loss reinsurance [CORRECT]
D. Reinsurance with a participation clause
Correct Answer: C
Rationale: Excess-of-loss reinsurance indemnifies the ceding insurer for losses that exceed a specified retention
amount, here $50,000. Coinsurance (A) involves the policyholder sharing losses with the insurer, not
insurer-to-insurer risk transfer. Facultative reinsurance (B) is negotiated case-by-case but typically describes
proportional sharing. This structure protects the ceding company from catastrophic losses per Florida OIR
reinsurance guidelines.
Q4: Sarah applies for an individual health insurance policy in Florida, pays her first premium with
the agent on Monday, and receives the policy on Wednesday. The policy includes a 14-day free-look
period. If Sarah returns the policy on the 16th day, what is the insurer's obligation?
A. Refund only the unearned portion of the premium after deducting underwriting costs.
B. Refund the full premium paid because Sarah returned the policy within the free-look period if counted from
receipt, but she is outside the 14 days, so no refund is required.
C. Refund the full premium paid, no questions asked, if the free-look period is calculated from receipt of
the policy and she is within 14 days; otherwise deny the refund. [CORRECT]
D. Charge Sarah a cancellation fee equal to 10% of the premium.
Correct Answer: C
Rationale: Florida law provides a 14-day free-look period for individual health insurance policies, calculated from
the date the insured receives the policy. If returned within 14 days, the insurer must refund the full premium with no
questions asked. Sarah returned it on day 16, so technically she is outside the free-look window. Option C correctly
frames the analysis; the other options either invent fees or partial refunds not authorized by Florida Statutes
§627.64815.
Florida DFS 2-40 Health Insurance Agent Licensing Exam Practice | Pearson VUE Aligned 150 Questions | 70% Passing Score Required
HEALTH INSURANCE FLORIDA 2-40
PRACTICE EXAM
QUESTIONS AND ANSWERS | GRADED A 2026/2027
A Comprehensive Practice Examination for the Florida Department of Financial Services
(DFS) 2-40 Health Insurance Agent Licensing Examination, Aligned with the Florida
Statutes (Chapters 624-632) and Florida Administrative Code (Chapter 69B), 2026/2027
Edition.
Total Questions 150 (across 8 sections)
Cognitive Mix 25% Recall | 50% Application | 25% Analysis
Question Style 70% Scenario-based | 30% Direct Knowledge
Coverage Florida Statutes 624-632 | FAC Chapter 69B | NAIC Models
Passing Reference 70% (60 of 85 scored) on Official Pearson VUE Exam
Edition 2026/2027 — Florida DFS Aligned
Examination Instructions: This practice examination is designed to mirror the structure, content, and cognitive
complexity of the official Florida 2-40 Health Insurance Agent Licensing Examination administered by Pearson VUE
on behalf of the Florida Department of Financial Services. Each question presents a scenario or direct knowledge item
drawn from the DFS exam content outline. Select the single best answer from options A through D. The correct answer
is identified with the [CORRECT] marker, followed by a brief rationale citing the relevant Florida Statute (Chapters
624-632), Florida Administrative Code (Chapter 69B), Office of Insurance Regulation (OIR) rule, or NAIC model law.
Use this exam for self-assessment and remediation of weak content areas before sitting for the official state
examination.
Section Breakdown:
# Section Questions
1 Section 1: General Insurance Principles & Concepts Q1 – Q20 (20)
2 Section 2: Accident and Health Insurance Principles Q21 – Q45 (25)
3 Section 3: Florida Health Insurance Laws and Regulations Q46 – Q70 (25)
4 Section 4: Major Medical & Comprehensive Health Insurance Q71 – Q90 (20)
5 Section 5: Disability Income & Long-Term Care Insurance Q91 – Q105 (15)
Florida DFS 2-40 Health Insurance Agent Licensing Exam Practice | Pearson VUE Aligned 150 Questions | 70% Passing Score Required
,HEALTH INSURANCE FLORIDA 2-40 PRACTICE EXAM | GRADED A 2026/2027 Page 2
6 Section 6: Medicare, Medicaid, & Government Programs Q106 – Q120 (15)
7 Section 7: Group Health Insurance & COBRA Q121 – Q135 (15)
8 Section 8: Ethics, Unfair Trade Practices, & Consumer Protections Q136 – Q150 (15)
TOTAL 150 Questions
Florida DFS 2-40 Health Insurance Agent Licensing Exam Practice | Pearson VUE Aligned 150 Questions | 70% Passing Score Required
,HEALTH INSURANCE FLORIDA 2-40 PRACTICE EXAM | GRADED A 2026/2027 Page 3
Section 1: General Insurance Principles & Concepts
Q1: An insurance applicant owns a commercial building worth $500,000 and insures it for $750,000.
When a partial loss of $100,000 occurs, the insurer investigates and discovers the applicant recently
sold the building to a third party two weeks prior to the loss. Under Florida insurance law, what is the
most likely outcome of this claim?
A. The insurer pays $100,000 because the policy limit was $750,000.
B. The insurer denies the claim because the applicant no longer has an insurable interest in the property
at the time of loss. [CORRECT]
C. The insurer pays a pro-rata share based on the building's replacement cost.
D. The insurer pays the claim because the policy was in force when the loss occurred.
Correct Answer: B
Rationale: Insurable interest must exist at the time of loss for property insurance. Since the applicant sold the
building before the loss occurred, they no longer have an insurable interest, and the claim must be denied under
Florida Statutes Chapter 627 and common law principles. The other options incorrectly focus on policy limits or
policy being in force, none of which overcome the lack of insurable interest.
Q2: A Florida agent is explaining the law of large numbers to a client. Which statement best describes
how this principle supports the underwriting process in health insurance?
A. It guarantees that no individual policyholder will experience a loss.
B. It allows insurers to predict the average frequency and severity of losses across a large group,
enabling stable premium calculations. [CORRECT]
C. It eliminates the need for individual underwriting of each applicant.
D. It ensures that premiums will decrease as the policyholder ages.
Correct Answer: B
Rationale: The law of large numbers states that as the pool of insureds grows larger, actual losses will more
closely approximate expected losses, enabling insurers to set actuarially sound premiums. It does not eliminate
individual losses (A), remove individual underwriting (C), or guarantee premium decreases (D). This principle is
foundational to all insurance underwriting per NAIC model laws adopted in Florida.
Florida DFS 2-40 Health Insurance Agent Licensing Exam Practice | Pearson VUE Aligned 150 Questions | 70% Passing Score Required
, HEALTH INSURANCE FLORIDA 2-40 PRACTICE EXAM | GRADED A 2026/2027 Page 4
Q3: An insurer cedes a portion of its Florida health insurance risk to another insurer. The ceding
insurer retains the first $50,000 of every loss and transfers losses above that amount. This
arrangement is best described as:
A. Coinsurance between two insurers
B. Facultative reinsurance with a surplus-share treaty
C. Excess-of-loss reinsurance [CORRECT]
D. Reinsurance with a participation clause
Correct Answer: C
Rationale: Excess-of-loss reinsurance indemnifies the ceding insurer for losses that exceed a specified retention
amount, here $50,000. Coinsurance (A) involves the policyholder sharing losses with the insurer, not
insurer-to-insurer risk transfer. Facultative reinsurance (B) is negotiated case-by-case but typically describes
proportional sharing. This structure protects the ceding company from catastrophic losses per Florida OIR
reinsurance guidelines.
Q4: Sarah applies for an individual health insurance policy in Florida, pays her first premium with
the agent on Monday, and receives the policy on Wednesday. The policy includes a 14-day free-look
period. If Sarah returns the policy on the 16th day, what is the insurer's obligation?
A. Refund only the unearned portion of the premium after deducting underwriting costs.
B. Refund the full premium paid because Sarah returned the policy within the free-look period if counted from
receipt, but she is outside the 14 days, so no refund is required.
C. Refund the full premium paid, no questions asked, if the free-look period is calculated from receipt of
the policy and she is within 14 days; otherwise deny the refund. [CORRECT]
D. Charge Sarah a cancellation fee equal to 10% of the premium.
Correct Answer: C
Rationale: Florida law provides a 14-day free-look period for individual health insurance policies, calculated from
the date the insured receives the policy. If returned within 14 days, the insurer must refund the full premium with no
questions asked. Sarah returned it on day 16, so technically she is outside the free-look window. Option C correctly
frames the analysis; the other options either invent fees or partial refunds not authorized by Florida Statutes
§627.64815.
Florida DFS 2-40 Health Insurance Agent Licensing Exam Practice | Pearson VUE Aligned 150 Questions | 70% Passing Score Required
