Texas P&C Exam Flashcards

Q: Does Texas require pre-license education before the P&C exam?

No. Texas does not require pre-license education for the permanent General Lines Property and Casualty license. Candidates may self-study, schedule the Pearson VUE exam, pass it, complete fingerprinting, and then apply for the license.

Q: What is the Texas P&C exam retake wait?

The Texas insurance candidate handbook does not impose a waiting period after a failed licensing exam. Candidates must make a new reservation and pay another exam fee, so this flashcard set records both retake wait fields as 0 days.

Q: Which Texas-specific insurance topics are most important?

High-yield Texas topics include TDI authority, file-and-use rate regulation, Texas auto minimum limits, TWIA coastal wind and hail coverage, Texas FAIR Plan, voluntary workers' compensation, TPCIGA, and unfair claims practices.

Q: How does Texas workers' compensation differ from most states?

Texas generally allows private employers to choose whether to subscribe to workers' compensation. Employers that opt out are non-subscribers and lose important common-law defenses in employee injury lawsuits.

Question 1

Texas Department of Insurance (TDI)

Accepted Answer

The state agency that regulates Texas insurance activity. For P&C, TDI handles licensing oversight, market conduct, rate review, consumer complaints, and enforcement under the Texas Insurance Code.

Question 2

Texas Commissioner of Insurance

Accepted Answer

The head of TDI. The Commissioner administers and enforces insurance laws, can investigate violations, issue orders, review filings, and discipline insurers or producers.

Question 3

Texas Insurance Code

Accepted Answer

The main statutory source for Texas insurance law. TDI rules in the Texas Administrative Code implement and interpret those statutes, but the Insurance Code is the core legal framework.

Question 4

File-and-use rate regulation

Accepted Answer

For many Texas P&C lines, insurers file rates with TDI and may use them without waiting for prior approval. TDI can still review and act against rates that are excessive, inadequate, or unfairly discriminatory.

Question 5

Excessive, inadequate, or unfairly discriminatory rates

Accepted Answer

Texas rate filings must avoid these three defects: too high for the risk, too low to support solvency, or unfairly different for risks that are not meaningfully different.

Question 6

General Lines Property and Casualty license

Accepted Answer

The Texas producer license for the broad P&C authority. It is different from personal lines, surplus lines, adjuster, or life and health licensing.

Question 7

Texas pre-license education rule

Accepted Answer

Texas does not require pre-license education for the permanent General Lines P&C license. Study is still necessary, but a mandatory classroom or online hour requirement is not a prerequisite for the exam.

Question 8

Texas P&C exam structure

Accepted Answer

The current exam combines general P&C knowledge with Texas-specific law. The full appointment includes 145 questions total: 130 scored and 15 pretest questions.

Question 9

Passing score for the Texas P&C exam

Accepted Answer

A 70% score is required. Pretest questions are mixed into the exam and are not identified, so every question should be treated as if it counts.

Question 10

Fingerprinting for Texas insurance applicants

Accepted Answer

Resident applicants generally submit fingerprints through the approved electronic fingerprinting process so TDI can receive criminal history reports before completing licensing review.

Question 11

License application timing after passing

Accepted Answer

A candidate who passes a required Texas insurance exam must complete the license application process within 12 months, or the exam must be retaken.

Question 12

CPCU exam exemption

Accepted Answer

A Chartered Property Casualty Underwriter designation can exempt an applicant from the Texas General Lines Property and Casualty licensing exam when proper documentation is submitted.

Question 13

Texas temporary insurance license

Accepted Answer

A temporary license lets an otherwise eligible applicant operate before passing the exam when sponsored. It is not renewable and requires company-provided training within the required timeframe.

Question 14

Texas license renewal cycle

Accepted Answer

Individual Texas insurance licenses are generally renewed every 2 years. Renewal depends on meeting CE requirements, paying fees, and keeping the license in good standing.

Question 15

Texas P&C continuing education

Accepted Answer

A Texas P&C producer must complete 24 hours of CE each 2-year renewal period, including required ethics training approved for Texas credit.

Question 16

Reporting address changes

Accepted Answer

A Texas insurance licensee must keep TDI informed of address changes. Missing regulatory notices because the address is stale can create avoidable compliance problems.

Question 17

Company appointment timing

Accepted Answer

Texas allows an insurer appointment to be filed after the producer's first transaction within the allowed window. The producer still must be properly licensed and act within granted authority.

Question 18

Premium fiduciary responsibility

Accepted Answer

Premiums collected from clients are not the producer's personal funds. They must be handled, recorded, and remitted according to law and the producer's agreement with the insurer.

Question 19

Commingling premiums

Accepted Answer

Mixing client or insurer premium funds with personal funds is improper. Separate handling protects clients, insurers, and the producer's license.

Question 20

Producer record retention

Accepted Answer

Texas producers should maintain required client, policy, premium, correspondence, and transaction records so they can respond to TDI inquiries and prove compliant conduct.

Question 21

Texas homeowners forms: HO-A, HO-B, HO-C

Accepted Answer

Texas homeowners forms differ from standard ISO labels. HO-A is more basic, HO-B is broader, and HO-C is the broadest of the three commonly referenced Texas forms.

Question 22

Named storm deductible

Accepted Answer

A homeowners policy may apply a separate deductible for named storm losses. Producers should explain when it applies and how it differs from the standard all-other-perils deductible.

Question 23

Texas homeowners cancellation versus nonrenewal

Accepted Answer

Cancellation ends coverage before the policy term expires; nonrenewal means the insurer will not continue coverage into the next term. Texas rules treat notice and permitted reasons as consumer-protection issues.

Question 24

Flood insurance and Texas property policies

Accepted Answer

Standard homeowners policies generally do not cover flood. Texas property owners in flood-prone areas usually need separate flood coverage, often through the National Flood Insurance Program or private flood insurers.

Question 25

Commercial property business income

Accepted Answer

Business income coverage addresses lost income from a covered property loss that interrupts operations. It is an indirect-loss coverage, not payment for the damaged property itself.

Question 26

TWIA

Accepted Answer

The Texas Windstorm Insurance Association is a residual market for windstorm and hail coverage in designated coastal areas when eligible property cannot obtain that coverage in the voluntary market.

Question 27

TWIA coverage focus

Accepted Answer

TWIA is about windstorm and hail in eligible coastal territory. It should not be described as a substitute for a complete homeowners policy or flood policy.

Question 28

TWIA eligibility concept

Accepted Answer

Eligibility depends on property location, inability to obtain comparable wind and hail coverage in the admitted market, and compliance with applicable construction or inspection requirements.

Question 29

Texas FAIR Plan Association (TFPA)

Accepted Answer

TFPA is a residual market for eligible property owners who cannot obtain basic property insurance through the standard voluntary market. It is distinct from TWIA's coastal wind and hail role.

Question 30

TAIPA

Accepted Answer

The Texas Automobile Insurance Plan Association is the residual market mechanism for eligible drivers who cannot obtain required auto liability coverage through ordinary insurers.

Question 31

Texas auto minimum liability limits

Accepted Answer

Texas minimum financial responsibility limits are commonly remembered as 30/60/25: bodily injury per person, bodily injury per accident, and property damage per accident.

Question 32

Texas at-fault auto system

Accepted Answer

Texas is an at-fault state. A driver who causes an accident can be legally responsible for injury and property damage, subject to the policy terms and liability limits.

Question 33

Modified comparative negligence in Texas

Accepted Answer

A claimant's recovery can be reduced by their share of fault. If the claimant reaches the Texas bar for responsibility, they cannot recover from the other party.

Question 34

Personal Injury Protection (PIP) in Texas

Accepted Answer

Texas auto insurers must offer PIP, but the insured may reject it in writing. PIP is first-party coverage for certain injury-related losses regardless of fault.

Question 35

UM/UIM coverage in Texas

Accepted Answer

Uninsured and underinsured motorist coverage must be offered and can be rejected as allowed by Texas law. It protects the insured when the at-fault driver has no insurance or too little insurance.

Question 36

TexasSure

Accepted Answer

TexasSure is the electronic verification system used to help confirm whether vehicles have required insurance. It supports enforcement of financial responsibility laws.

Question 37

Workers' compensation in Texas

Accepted Answer

Texas is unusual because most private employers may choose whether to carry workers' compensation. Employers that carry it are subscribers; those that do not are non-subscribers.

Question 38

Non-subscriber employer

Accepted Answer

A Texas employer that does not carry workers' compensation. Non-subscribers face greater lawsuit exposure because they lose several traditional defenses in employee injury suits.

Question 39

Exclusive remedy protection

Accepted Answer

Workers' compensation can limit an injured employee to statutory benefits instead of a negligence lawsuit. That protection is a major reason Texas employers choose to subscribe.

Question 40

Texas Division of Workers' Compensation (DWC)

Accepted Answer

The DWC, within the Texas insurance regulatory framework, oversees workers' compensation issues such as claims, disputes, compliance, and self-insurance requirements.

Question 41

CGL bodily injury and property damage liability

Accepted Answer

Commercial general liability coverage responds to covered third-party claims for bodily injury or property damage, subject to exclusions, limits, and conditions.

Question 42

Occurrence versus claims-made liability coverage

Accepted Answer

Occurrence coverage keys off when the injury or damage happens. Claims-made coverage keys off when a claim is made, often with retroactive-date and reporting requirements.

Question 43

Umbrella or excess liability

Accepted Answer

These policies sit above underlying liability limits. An umbrella may also broaden coverage in limited ways, while excess coverage generally follows the underlying terms more closely.

Question 44

Surplus lines placement

Accepted Answer

Surplus lines insurance is used when coverage cannot be placed with admitted insurers after the required market effort. It involves non-admitted insurers and special producer responsibilities.

Question 45

Misrepresentation

Accepted Answer

A false or misleading statement about policy terms, benefits, exclusions, insurer status, or a competitor. It is an unfair practice because it can distort the buyer's decision.

Question 46

Rebating

Accepted Answer

Offering something of value that is not stated in the insurance contract to induce a purchase. Texas treats rebating as a prohibited unfair trade practice.

Question 47

Twisting

Accepted Answer

Using misleading comparisons or false statements to induce a policy replacement. The issue is not replacement itself; it is replacement driven by deception.

Question 48

Prompt claim acknowledgment

Accepted Answer

Texas claim rules require insurers to respond promptly after receiving notice of a claim. Delays, poor communication, or denial without reasonable investigation can become unfair claims practices.

Question 49

Texas Property and Casualty Insurance Guaranty Association (TPCIGA)

Accepted Answer

TPCIGA protects covered Texas P&C policyholders and claimants when an admitted insurer becomes insolvent. It is funded by insurer assessments and applies only within statutory limits.

Question 50

Using guaranty protection as a sales tool

Accepted Answer

A producer should not use TPCIGA protection to sell a policy or imply that coverage is guaranteed like a bank deposit. Guaranty association protection is a backstop, not a marketing feature.

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