Which of the following licensees works for a person who is licensed as a property and casualty agent
and explains coverage, describes insurance products and quotes premium rates? - ANSWER -
Insurance service representative
Steven was having lunch with a group of agents when he made some false statements about a
competitor's financial condition in order to hurt their reputation. In this case, Steven has committed
which of the following acts? - ANSWER -Defamation
Which of the following protects policyholders and claimants of impaired or insolvent insurers that
cannot pay their claims or benefits? - ANSWER -Texas Property and Casualty Insurance Guaranty
Association
Janet has been continuously licensed as an agent in Texas for the past 25 years. Her friend Steven is a
nonresident licensee in Texas and every year completes his state's continuing education
requirements. When they ask you for advice on meeting the Texas continuing education
requirements, you inform them that: - ANSWER -Neither Steve nor Janet needs to comply with
Texas's continuing education requirements
Which of the following statements BEST describes the transfer of risk via an insurance contract? -
ANSWER -Not all risks are transferable via insurance contracts
Angela cannot obtain a homeowners insurance policy from a licensed insurance company in Texas.
From which entity will she likely be able to obtain coverage? - ANSWER -Fair Housing Plan
Kent stated on his application for property insurance that the roof of the building being insured had
been recently replaced. In fact, the replacement occurred 12 years ago. Kent made a false statement
of a material fact, which is also known as a - ANSWER -Misrepresentation
The Texas Department of Insurance receives a written complaint about an insurer that prompts an
investigation. The Department uncovers evidence of an elaborate money-laundering operation and
determines that an undercover investigation is necessary to obtain enough evidence to pursue a
conviction of the company's officers. Which of the following statements is true? - ANSWER -TDI can
withhold any notices to the complaining party until the investigation is completed
Alex asks your advice seeking objective information about the financial reliability of an insurance
company from which he is considering the purchase of insurance. You might suggest that he -
ANSWER -Check the company's financial rating from an established rating organization
Many large organizations self-insure up to a specific limit but buy insurance to cover losses beyond
that limit. Setting up a self-insurance program is an example of which method of handling risk? -
ANSWER -Risk retention
Esther has just bought an expensive painting as an addition to her art collection.Considering the high
price she paid for it, she wants to be sure there will be no dispute with the insurer in the event it is
damaged or stolen. What type of policy would you recommend Esther purchase? - ANSWER -Valued
policy
Main Street Corp. owns a shopping center. It buys liability and property insurance to cover losses
stemming from its business. It also requires tenants of the shopping center to hold Main Street
harmless from injuries sustained on tenant property. This is an example of which method of handling
risk? - ANSWER -Risk transfer
, Final Exam Questions Property
and Casualty | Questions and
answers| Latest version 2024/2025
Which of the following is NOT an unfair claims settlement practice if committed by an insurance
company in Texas? - ANSWER -Failing to promptly settle a claim for which liability is uncertain
Flo is an insurance agent who suspects her client isn't eligible for insurance with her standard
insurers because the client has an unusual exposure. Flo knows that insurers like to have a sizeable
pool of exposure units before issuing insurance because it enables them to more accurately predict
losses. What mathematical principle is Flo thinking about? - ANSWER -Law of large numbers
Which of the following licensees writes property and casualty insurance that is used primarily for
personal or household purposes by individuals? - ANSWER -Personal lines agent
A party to a contract may not enforce a right it has voluntarily waived by its past conduct. This is
known as - ANSWER -estoppel
Which of the following is NOT a requirement to obtain an agent's license? - ANSWER -Being
appointed by at least two insurers
Mary Beth is employed by the JKL Insurance Company to market its insurance policies. She is
employed by what type of marketing system or arrangement? - ANSWER -Direct marketing system
Geraldo had been working at his own property and casualty agency when he died suddenly from a
massive heart attack. The Department of Insurance issued an emergency property and casualty agent
license to his surviving spouse to wrap up the agency's business. How long will the license be valid? -
ANSWER -90 days
Tom, Henry, Stacey, and Allison are licensed agents in Texas. Given the following circumstances,
which of them will NOT be subject to disciplinary action by the Texas Department of Insurance? -
ANSWER -Allison, who was convicted of a misdemeanor traffic violation
How many days' notice must an insurance company give to a policyholder before it will not renew a
liability insurance policy? - ANSWER -60
Harold's property insurance policy is a contract of indemnity because - ANSWER -The benefit payable
is related to the amount of loss
Milton argued with his insurer over a third party claim. They disagreed as to whether Milton was
engaged in a business pursuit and therefore not covered under his homeowner's policy. The terms of
the exclusion were ambiguous, and could be interpreted in Milton's favor. Who will likely prevail,
Milton or his insurer? - ANSWER -Milton, because ambiguities in policy language are interpreted in
favor of the party that did not draft the contract.
How often must the Texas Department of Insurance examine the financial condition of insurers who
are authorized to transact insurance in the state? - ANSWER -Every five years
and explains coverage, describes insurance products and quotes premium rates? - ANSWER -
Insurance service representative
Steven was having lunch with a group of agents when he made some false statements about a
competitor's financial condition in order to hurt their reputation. In this case, Steven has committed
which of the following acts? - ANSWER -Defamation
Which of the following protects policyholders and claimants of impaired or insolvent insurers that
cannot pay their claims or benefits? - ANSWER -Texas Property and Casualty Insurance Guaranty
Association
Janet has been continuously licensed as an agent in Texas for the past 25 years. Her friend Steven is a
nonresident licensee in Texas and every year completes his state's continuing education
requirements. When they ask you for advice on meeting the Texas continuing education
requirements, you inform them that: - ANSWER -Neither Steve nor Janet needs to comply with
Texas's continuing education requirements
Which of the following statements BEST describes the transfer of risk via an insurance contract? -
ANSWER -Not all risks are transferable via insurance contracts
Angela cannot obtain a homeowners insurance policy from a licensed insurance company in Texas.
From which entity will she likely be able to obtain coverage? - ANSWER -Fair Housing Plan
Kent stated on his application for property insurance that the roof of the building being insured had
been recently replaced. In fact, the replacement occurred 12 years ago. Kent made a false statement
of a material fact, which is also known as a - ANSWER -Misrepresentation
The Texas Department of Insurance receives a written complaint about an insurer that prompts an
investigation. The Department uncovers evidence of an elaborate money-laundering operation and
determines that an undercover investigation is necessary to obtain enough evidence to pursue a
conviction of the company's officers. Which of the following statements is true? - ANSWER -TDI can
withhold any notices to the complaining party until the investigation is completed
Alex asks your advice seeking objective information about the financial reliability of an insurance
company from which he is considering the purchase of insurance. You might suggest that he -
ANSWER -Check the company's financial rating from an established rating organization
Many large organizations self-insure up to a specific limit but buy insurance to cover losses beyond
that limit. Setting up a self-insurance program is an example of which method of handling risk? -
ANSWER -Risk retention
Esther has just bought an expensive painting as an addition to her art collection.Considering the high
price she paid for it, she wants to be sure there will be no dispute with the insurer in the event it is
damaged or stolen. What type of policy would you recommend Esther purchase? - ANSWER -Valued
policy
Main Street Corp. owns a shopping center. It buys liability and property insurance to cover losses
stemming from its business. It also requires tenants of the shopping center to hold Main Street
harmless from injuries sustained on tenant property. This is an example of which method of handling
risk? - ANSWER -Risk transfer
, Final Exam Questions Property
and Casualty | Questions and
answers| Latest version 2024/2025
Which of the following is NOT an unfair claims settlement practice if committed by an insurance
company in Texas? - ANSWER -Failing to promptly settle a claim for which liability is uncertain
Flo is an insurance agent who suspects her client isn't eligible for insurance with her standard
insurers because the client has an unusual exposure. Flo knows that insurers like to have a sizeable
pool of exposure units before issuing insurance because it enables them to more accurately predict
losses. What mathematical principle is Flo thinking about? - ANSWER -Law of large numbers
Which of the following licensees writes property and casualty insurance that is used primarily for
personal or household purposes by individuals? - ANSWER -Personal lines agent
A party to a contract may not enforce a right it has voluntarily waived by its past conduct. This is
known as - ANSWER -estoppel
Which of the following is NOT a requirement to obtain an agent's license? - ANSWER -Being
appointed by at least two insurers
Mary Beth is employed by the JKL Insurance Company to market its insurance policies. She is
employed by what type of marketing system or arrangement? - ANSWER -Direct marketing system
Geraldo had been working at his own property and casualty agency when he died suddenly from a
massive heart attack. The Department of Insurance issued an emergency property and casualty agent
license to his surviving spouse to wrap up the agency's business. How long will the license be valid? -
ANSWER -90 days
Tom, Henry, Stacey, and Allison are licensed agents in Texas. Given the following circumstances,
which of them will NOT be subject to disciplinary action by the Texas Department of Insurance? -
ANSWER -Allison, who was convicted of a misdemeanor traffic violation
How many days' notice must an insurance company give to a policyholder before it will not renew a
liability insurance policy? - ANSWER -60
Harold's property insurance policy is a contract of indemnity because - ANSWER -The benefit payable
is related to the amount of loss
Milton argued with his insurer over a third party claim. They disagreed as to whether Milton was
engaged in a business pursuit and therefore not covered under his homeowner's policy. The terms of
the exclusion were ambiguous, and could be interpreted in Milton's favor. Who will likely prevail,
Milton or his insurer? - ANSWER -Milton, because ambiguities in policy language are interpreted in
favor of the party that did not draft the contract.
How often must the Texas Department of Insurance examine the financial condition of insurers who
are authorized to transact insurance in the state? - ANSWER -Every five years
