Texas All Lines Adjuster License Actual Practice
Exam & State Certification Preparation
DOMAIN 1: TEXAS INSURANCE CODE & REGULATIONS (Q1-15)
1. According to Texas Insurance Code §542.056, an adjuster must acknowledge receipt
of a claim within:
A. 5 business days
B. 10 calendar days
C. 15 calendar days
D. 30 business days
Correct Answer: C
Rationale: C is correct. Texas Insurance Code §542.056 requires insurers (through their
adjusters) to acknowledge receipt of a claim within 15 calendar days. This prompt
payment law is specific to Texas. Business days are not used in this statute. This
acknowledgement must be in writing and include necessary claim forms and
instructions.
2. A Texas adjuster's license is valid for how many years before renewal is required?
A. 1 year (some states but not Texas)
B. 2 years (common misconception)
C. 3 years (correct per Texas Insurance Code)
D. 5 years (other professions but not adjusters)
Correct Answer: C
Rationale: C is correct. Per Texas Insurance Code §4101.054, an adjuster license is valid
for three years from the date of issuance. Renewal requires completing 24 hours of
continuing education (including 2 hours of ethics) and paying renewal fees. This
three-year cycle is specific to Texas adjuster licensing.
,3. Under Texas Insurance Code §542.059, an insurer has how many days to notify a
claimant of acceptance or rejection after receiving all required documentation?
A. 5 business days
B. 10 calendar days
C. 15 business days
D. 30 calendar days
Correct Answer: C
Rationale: C is correct. Texas Insurance Code §542.059 mandates insurers to notify
claimants of acceptance or rejection within 15 business days after receiving all
reasonably required documentation. If the claim is rejected, the insurer must provide
reasons. "Business days" is the specific statutory language, not calendar days,
distinguishing this from other timelines.
4. A Texas adjuster handling a first-party property claim must pay the claim within how
many days after agreement on the amount?
A. 5 business days
B. 10 calendar days
C. 5 business days (correct per §542.058)
D. Immediately upon agreement
Correct Answer: C
Rationale: C is correct. Texas Insurance Code §542.058 requires payment within 5
business days after agreement on the amount for first-party property claims. If payment
is delayed beyond this timeframe, the insurer owes interest at 18% per annum plus
attorney fees if litigation ensues. "Immediately" (D) is not the statutory standard.
5. Under Texas Administrative Code Title 28, Part 1, Chapter 5, an adjuster is required to
complete how many hours of continuing education for license renewal?
A. 12 hours
B. 15 hours
C. 24 hours
D. 30 hours
Correct Answer: C
, Rationale: C is correct. 28 TAC §5.500 requires 24 hours of continuing education for
adjuster license renewal, including 2 hours of ethics or law update. This applies to all
Texas-licensed adjusters. Failure to complete CE results in license expiration and
potential reinstatement penalties.
6. Which of the following is grounds for license suspension or revocation under Texas
Insurance Code §4101.151?
A. Failing to pay a claim within 30 days
B. Making an error in claim valuation
C. Misappropriating settlement funds or engaging in fraudulent acts
D. Disagreeing with an insured about coverage interpretation
Correct Answer: C
Rationale: C is correct. Texas Insurance Code §4101.151 specifies grounds for
disciplinary action including misappropriation of funds, fraud, material
misrepresentation, or dishonest acts. Simple claim delays (A) or valuation errors (B)
may result in administrative penalties but not necessarily revocation. Coverage
disagreements (D) are part of claims handling, not disciplinary violations.
7. A Texas adjuster may handle claims in another state without a Texas license if:
A. They are a resident of that other state
B. The claim is under $10,000
C. They hold a valid license in that state and are handling claims only in licensed
jurisdictions
D. They notify TDI within 30 days of handling the claim
Correct Answer: C
Rationale: C is correct. Texas adjusters must be licensed in each state where they
handle claims or operate under reciprocal agreements or designated home state
provisions. Texas license alone does not confer authority in other states. License
requirements are jurisdiction-specific, not based on claim amount (B) or notification (D).
8. Under Texas Insurance Code §542.057, an insurer must begin investigation of a claim
within:
Exam & State Certification Preparation
DOMAIN 1: TEXAS INSURANCE CODE & REGULATIONS (Q1-15)
1. According to Texas Insurance Code §542.056, an adjuster must acknowledge receipt
of a claim within:
A. 5 business days
B. 10 calendar days
C. 15 calendar days
D. 30 business days
Correct Answer: C
Rationale: C is correct. Texas Insurance Code §542.056 requires insurers (through their
adjusters) to acknowledge receipt of a claim within 15 calendar days. This prompt
payment law is specific to Texas. Business days are not used in this statute. This
acknowledgement must be in writing and include necessary claim forms and
instructions.
2. A Texas adjuster's license is valid for how many years before renewal is required?
A. 1 year (some states but not Texas)
B. 2 years (common misconception)
C. 3 years (correct per Texas Insurance Code)
D. 5 years (other professions but not adjusters)
Correct Answer: C
Rationale: C is correct. Per Texas Insurance Code §4101.054, an adjuster license is valid
for three years from the date of issuance. Renewal requires completing 24 hours of
continuing education (including 2 hours of ethics) and paying renewal fees. This
three-year cycle is specific to Texas adjuster licensing.
,3. Under Texas Insurance Code §542.059, an insurer has how many days to notify a
claimant of acceptance or rejection after receiving all required documentation?
A. 5 business days
B. 10 calendar days
C. 15 business days
D. 30 calendar days
Correct Answer: C
Rationale: C is correct. Texas Insurance Code §542.059 mandates insurers to notify
claimants of acceptance or rejection within 15 business days after receiving all
reasonably required documentation. If the claim is rejected, the insurer must provide
reasons. "Business days" is the specific statutory language, not calendar days,
distinguishing this from other timelines.
4. A Texas adjuster handling a first-party property claim must pay the claim within how
many days after agreement on the amount?
A. 5 business days
B. 10 calendar days
C. 5 business days (correct per §542.058)
D. Immediately upon agreement
Correct Answer: C
Rationale: C is correct. Texas Insurance Code §542.058 requires payment within 5
business days after agreement on the amount for first-party property claims. If payment
is delayed beyond this timeframe, the insurer owes interest at 18% per annum plus
attorney fees if litigation ensues. "Immediately" (D) is not the statutory standard.
5. Under Texas Administrative Code Title 28, Part 1, Chapter 5, an adjuster is required to
complete how many hours of continuing education for license renewal?
A. 12 hours
B. 15 hours
C. 24 hours
D. 30 hours
Correct Answer: C
, Rationale: C is correct. 28 TAC §5.500 requires 24 hours of continuing education for
adjuster license renewal, including 2 hours of ethics or law update. This applies to all
Texas-licensed adjusters. Failure to complete CE results in license expiration and
potential reinstatement penalties.
6. Which of the following is grounds for license suspension or revocation under Texas
Insurance Code §4101.151?
A. Failing to pay a claim within 30 days
B. Making an error in claim valuation
C. Misappropriating settlement funds or engaging in fraudulent acts
D. Disagreeing with an insured about coverage interpretation
Correct Answer: C
Rationale: C is correct. Texas Insurance Code §4101.151 specifies grounds for
disciplinary action including misappropriation of funds, fraud, material
misrepresentation, or dishonest acts. Simple claim delays (A) or valuation errors (B)
may result in administrative penalties but not necessarily revocation. Coverage
disagreements (D) are part of claims handling, not disciplinary violations.
7. A Texas adjuster may handle claims in another state without a Texas license if:
A. They are a resident of that other state
B. The claim is under $10,000
C. They hold a valid license in that state and are handling claims only in licensed
jurisdictions
D. They notify TDI within 30 days of handling the claim
Correct Answer: C
Rationale: C is correct. Texas adjusters must be licensed in each state where they
handle claims or operate under reciprocal agreements or designated home state
provisions. Texas license alone does not confer authority in other states. License
requirements are jurisdiction-specific, not based on claim amount (B) or notification (D).
8. Under Texas Insurance Code §542.057, an insurer must begin investigation of a claim
within:
