1|Page
CALIFORNIA INSURANCE AGENT
AND BROKER LICENSING &
AUTHORITY TYPES EXAM 2026 ALL
QUESTIONS AND VERIFIED ANSWERS
| RATED A + | NEW AND REVISED
What types of coverage can a property and casualty licensee transact? -
ANSWER- Automobile insurance, residential property, inland marine
insurance, and umbrella liability insurance.
What is the ethical obligation of a broker regarding compensation? -
ANSWER- It could be unethical for a broker to accept both a fee from
the client and a commission from the insurer.
What must agents not do with premiums collected from applicants? -
ANSWER- They must not commingle premiums with their own
personal funds.
What is the importance of the agency contract? - ANSWER- It details
the authority an agent has within the company and binds the principal.
What is the consequence of an agent acting outside their authority? -
ANSWER- The insurer may not be bound by the agent's actions if they
exceed their authority.
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What is an insurance broker? - ANSWER- A licensee who transacts
insurance on behalf of a person other than an insurer, excluding life,
disability, or accident and health insurance.
What types of insurance transactions are completed by agents? -
ANSWER- Life, disability, and accident and health insurance
transactions.
Can a person be a life broker? - ANSWER- No, there is no license for
'life broker' or 'health broker.'
What is a life licensee authorized to do? - ANSWER- Act as a life agent
on behalf of a life insurer or disability insurer to transact life insurance
and related products.
What types of benefits can life agents in California transact? -
ANSWER- Endowments, annuities, death or dismemberment by
accident, and disability income.
What types of insurance can accident and health agents transact? -
ANSWER- Sickness, bodily injury, accidental death, disability income,
and 24-hour coverage.
What is a Life and Disability Insurance Analyst? - ANSWER- A person
who advises on life or disability insurance contracts for a fee from
sources other than an insurance company.
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What are the eligibility requirements for a life and disability analyst
license? - ANSWER- Must be a California resident, knowledgeable
about insurance, of good reputation, and have been licensed as a life and
accident and health insurance agent for at least 5 years.
What must a life and disability analyst do before charging fees? -
ANSWER- Have a signed written agreement with the client detailing the
services and fees.
What is the primary difference between a life agent and a life analyst? -
ANSWER- A life agent receives commissions from insurers, while a life
analyst does not.
What is a Certified Insurance Agent? - ANSWER- An agent certified to
transact in the individual and Small Business Health Options Program
(SHOP) Exchanges.
What are the responsibilities of a Certified Insurance Agent? -
ANSWER- Assist enrollees with applications, evaluate healthcare needs,
recommend plans, and provide ongoing support.
What is a life settlement? - ANSWER- A financial transaction where the
owner of a life insurance policy sells it to a third party for compensation.
What does 'Business of Life Settlement' refer to? - ANSWER- Activities
related to the solicitation and sale of life settlement contracts to third
parties without insurable interest.
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Who is considered the owner in a life settlement contract? - ANSWER-
The policy owner seeking to enter into a life settlement contract,
excluding insurance providers and related entities.
What is life expectancy in the context of life settlements? - ANSWER-
A calculation of the average number of months the insured is projected
to live based on medical history and mortality factors.
What does a Life Settlement Contract establish? - ANSWER- Terms
under which a life settlement provider pays compensation to the policy
owner for the assignment or sale of the policy.
What conditions apply to premium finance loans in life settlement
contracts? - ANSWER- Loans must not solely pay premiums, guarantee
future life settlement value, or require the owner to sell the policy in
case of default.
What is a producer in the context of insurance? - ANSWER- An
individual licensed to sell, solicit, or negotiate insurance contracts on
behalf of the principal (insurer).
Who does a producer represent? - ANSWER- The producer represents
the insurer, not the insured.
CALIFORNIA INSURANCE AGENT
AND BROKER LICENSING &
AUTHORITY TYPES EXAM 2026 ALL
QUESTIONS AND VERIFIED ANSWERS
| RATED A + | NEW AND REVISED
What types of coverage can a property and casualty licensee transact? -
ANSWER- Automobile insurance, residential property, inland marine
insurance, and umbrella liability insurance.
What is the ethical obligation of a broker regarding compensation? -
ANSWER- It could be unethical for a broker to accept both a fee from
the client and a commission from the insurer.
What must agents not do with premiums collected from applicants? -
ANSWER- They must not commingle premiums with their own
personal funds.
What is the importance of the agency contract? - ANSWER- It details
the authority an agent has within the company and binds the principal.
What is the consequence of an agent acting outside their authority? -
ANSWER- The insurer may not be bound by the agent's actions if they
exceed their authority.
,2|Page
What is an insurance broker? - ANSWER- A licensee who transacts
insurance on behalf of a person other than an insurer, excluding life,
disability, or accident and health insurance.
What types of insurance transactions are completed by agents? -
ANSWER- Life, disability, and accident and health insurance
transactions.
Can a person be a life broker? - ANSWER- No, there is no license for
'life broker' or 'health broker.'
What is a life licensee authorized to do? - ANSWER- Act as a life agent
on behalf of a life insurer or disability insurer to transact life insurance
and related products.
What types of benefits can life agents in California transact? -
ANSWER- Endowments, annuities, death or dismemberment by
accident, and disability income.
What types of insurance can accident and health agents transact? -
ANSWER- Sickness, bodily injury, accidental death, disability income,
and 24-hour coverage.
What is a Life and Disability Insurance Analyst? - ANSWER- A person
who advises on life or disability insurance contracts for a fee from
sources other than an insurance company.
,3|Page
What are the eligibility requirements for a life and disability analyst
license? - ANSWER- Must be a California resident, knowledgeable
about insurance, of good reputation, and have been licensed as a life and
accident and health insurance agent for at least 5 years.
What must a life and disability analyst do before charging fees? -
ANSWER- Have a signed written agreement with the client detailing the
services and fees.
What is the primary difference between a life agent and a life analyst? -
ANSWER- A life agent receives commissions from insurers, while a life
analyst does not.
What is a Certified Insurance Agent? - ANSWER- An agent certified to
transact in the individual and Small Business Health Options Program
(SHOP) Exchanges.
What are the responsibilities of a Certified Insurance Agent? -
ANSWER- Assist enrollees with applications, evaluate healthcare needs,
recommend plans, and provide ongoing support.
What is a life settlement? - ANSWER- A financial transaction where the
owner of a life insurance policy sells it to a third party for compensation.
What does 'Business of Life Settlement' refer to? - ANSWER- Activities
related to the solicitation and sale of life settlement contracts to third
parties without insurable interest.
, 4|Page
Who is considered the owner in a life settlement contract? - ANSWER-
The policy owner seeking to enter into a life settlement contract,
excluding insurance providers and related entities.
What is life expectancy in the context of life settlements? - ANSWER-
A calculation of the average number of months the insured is projected
to live based on medical history and mortality factors.
What does a Life Settlement Contract establish? - ANSWER- Terms
under which a life settlement provider pays compensation to the policy
owner for the assignment or sale of the policy.
What conditions apply to premium finance loans in life settlement
contracts? - ANSWER- Loans must not solely pay premiums, guarantee
future life settlement value, or require the owner to sell the policy in
case of default.
What is a producer in the context of insurance? - ANSWER- An
individual licensed to sell, solicit, or negotiate insurance contracts on
behalf of the principal (insurer).
Who does a producer represent? - ANSWER- The producer represents
the insurer, not the insured.
