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Texas Property and Casualty Exam
2026/2027 Actual Exam | Verified Questions
with Correct Detailed Answers | A Graded |
Pass Guaranteed - A+ Graded
Section 1: Texas Insurance Regulations and Laws (30 Questions)
Q1: According to Texas law, how many hours of prelicensing education are required before
taking the Texas Property and Casualty insurance examination?
A. 20 hours
B. 40 hours [CORRECT]
C. 60 hours
D. No prelicensing education required
Correct Answer: B
Rationale: Texas Insurance Code §4004.103 requires 40 hours of prelicensing education for the
Property and Casualty license, including specific hour allocations for property and casualty
content. This must be completed through a TDI-approved provider. Option A (20 hours) is
insufficient. Option C (60 hours) exceeds the requirement. Option D is incorrect—prelicensing
education is mandatory.
Q2: A Texas-licensed insurance agent is renewing their license. What are the continuing
education (CE) requirements for license renewal?
A. 20 hours biennially, including 3 hours of ethics [CORRECT]
B. 30 hours biennially, including 5 hours of ethics
C. 40 hours biennially, including 3 hours of ethics
D. No CE required
Correct Answer: A
Rationale: Texas Insurance Code §4004.105 requires 20 hours of continuing education every two
years for license renewal, including 3 hours of ethics. Agents must complete CE before the
expiration date to avoid license lapse. Options B and C exceed requirements. Option D is
incorrect—CE is mandatory for renewal.
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Q3: Under Texas law, what is the maximum number of hours of continuing education that can be
completed in one day?
A. 4 hours
B. 6 hours [CORRECT]
C. 8 hours
D. 10 hours
Correct Answer: B
Rationale: Texas Administrative Code Title 28, Part 1, Chapter 5, Rule §5.100 limits CE
completion to 6 hours per day to ensure effective learning and retention. Options A, C, and D
exceed the daily limit.
Q4: The Texas Property and Casualty Insurance Guaranty Association provides protection to
residents in the event of:
A. Investment losses
B. Insurer insolvency [CORRECT]
C. Policy lapse due to nonpayment
D. Disputes with agents
Correct Answer: B
Rationale: The Texas Property and Casualty Insurance Guaranty Association (TPCIGA),
established under Texas Insurance Code Chapter 462, protects policyholders and claimants if a
member insurer becomes insolvent. Coverage limits apply: $25,000 for unearned premium,
$25,000 for return premium, and statutory limits for covered claims. Option A is incorrect—
guaranty associations do not cover investment losses. Option C is the policyholder's
responsibility. Option D is handled through TDI complaints or professional liability.
Q5: Who has the authority to regulate insurance in Texas under the McCarran-Ferguson Act?
A. Federal government exclusively
B. State government [CORRECT]
C. Local municipalities
D. Insurance companies self-regulate
Correct Answer: B
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Rationale: The McCarran-Ferguson Act (1945) affirms that states have primary authority to
regulate insurance. In Texas, the Texas Department of Insurance (TDI) regulates the insurance
industry under Texas Insurance Code. The federal government regulates only when state
regulation is inadequate (solvency, antitrust).
Q6: An applicant for a Texas Property and Casualty license must pass the state examination with
a minimum score of:
A. 60%
B. 70% [CORRECT]
C. 75%
D. 80%
Correct Answer: B
Rationale: Texas requires a passing score of 70% on the Property and Casualty licensing
examination. The exam consists of two parts: general knowledge (national) and state-specific
Texas laws and regulations. Both sections must be passed to obtain licensure.
Q7: Under Texas Insurance Code, an insurance agent has a fiduciary responsibility to:
A. The insurance company only
B. The insured only
C. Both the insurance company and the insured [CORRECT]
D. Neither party
Correct Answer: C
Rationale: An insurance agent acts as a fiduciary to both the insurer (principal) and the insured
(client). To the insurer, the agent owes duties of loyalty, accounting, and obedience. To the
insured, the agent owes duties of care, disclosure, and suitability in recommendations.
Q8: The Texas Department of Insurance (TDI) Commissioner is appointed by:
A. The Texas Legislature
B. The Governor with Senate confirmation [CORRECT]
C. Popular vote
D. Insurance industry appointment
Correct Answer: B
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Rationale: The Texas Insurance Commissioner is appointed by the Governor with the advice and
consent of the Texas Senate for a two-year term. The Commissioner oversees all insurance
regulation in Texas, including company licensing, agent licensing, rate regulation, and consumer
protection.
Q9: Under Texas law, which of the following is considered an unfair trade practice?
A. Charging actuarially sound rates
B. Misrepresentation of policy terms [CORRECT]
C. Paying valid claims promptly
D. Providing accurate policy illustrations
Correct Answer: B
Rationale: Texas Insurance Code Chapter 541 prohibits unfair trade practices including
misrepresentation, false advertising, twisting (inducing policy replacement through
misrepresentation), churning, and defamation of insurers. Options A, C, and D are proper
insurance practices.
Q10: An agent in Texas must report administrative actions or criminal convictions to TDI within:
A. 10 days
B. 30 days [CORRECT]
C. 60 days
D. 90 days
Correct Answer: B
Rationale: Texas Insurance Code §4002.105 requires licensees to report any administrative
action, criminal conviction, or judgment involving insurance fraud within 30 days to TDI.
Failure to report is grounds for license suspension or revocation.
Q11: The purpose of the Texas Surplus Lines Agent license is to:
A. Sell standard admitted insurance policies
B. Place coverage with non-admitted insurers when coverage is unavailable in the admitted
market [CORRECT]
C. Sell only life insurance
D. Act as an insurance adjuster
Correct Answer: B
Texas Property and Casualty Exam
2026/2027 Actual Exam | Verified Questions
with Correct Detailed Answers | A Graded |
Pass Guaranteed - A+ Graded
Section 1: Texas Insurance Regulations and Laws (30 Questions)
Q1: According to Texas law, how many hours of prelicensing education are required before
taking the Texas Property and Casualty insurance examination?
A. 20 hours
B. 40 hours [CORRECT]
C. 60 hours
D. No prelicensing education required
Correct Answer: B
Rationale: Texas Insurance Code §4004.103 requires 40 hours of prelicensing education for the
Property and Casualty license, including specific hour allocations for property and casualty
content. This must be completed through a TDI-approved provider. Option A (20 hours) is
insufficient. Option C (60 hours) exceeds the requirement. Option D is incorrect—prelicensing
education is mandatory.
Q2: A Texas-licensed insurance agent is renewing their license. What are the continuing
education (CE) requirements for license renewal?
A. 20 hours biennially, including 3 hours of ethics [CORRECT]
B. 30 hours biennially, including 5 hours of ethics
C. 40 hours biennially, including 3 hours of ethics
D. No CE required
Correct Answer: A
Rationale: Texas Insurance Code §4004.105 requires 20 hours of continuing education every two
years for license renewal, including 3 hours of ethics. Agents must complete CE before the
expiration date to avoid license lapse. Options B and C exceed requirements. Option D is
incorrect—CE is mandatory for renewal.
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Q3: Under Texas law, what is the maximum number of hours of continuing education that can be
completed in one day?
A. 4 hours
B. 6 hours [CORRECT]
C. 8 hours
D. 10 hours
Correct Answer: B
Rationale: Texas Administrative Code Title 28, Part 1, Chapter 5, Rule §5.100 limits CE
completion to 6 hours per day to ensure effective learning and retention. Options A, C, and D
exceed the daily limit.
Q4: The Texas Property and Casualty Insurance Guaranty Association provides protection to
residents in the event of:
A. Investment losses
B. Insurer insolvency [CORRECT]
C. Policy lapse due to nonpayment
D. Disputes with agents
Correct Answer: B
Rationale: The Texas Property and Casualty Insurance Guaranty Association (TPCIGA),
established under Texas Insurance Code Chapter 462, protects policyholders and claimants if a
member insurer becomes insolvent. Coverage limits apply: $25,000 for unearned premium,
$25,000 for return premium, and statutory limits for covered claims. Option A is incorrect—
guaranty associations do not cover investment losses. Option C is the policyholder's
responsibility. Option D is handled through TDI complaints or professional liability.
Q5: Who has the authority to regulate insurance in Texas under the McCarran-Ferguson Act?
A. Federal government exclusively
B. State government [CORRECT]
C. Local municipalities
D. Insurance companies self-regulate
Correct Answer: B
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Rationale: The McCarran-Ferguson Act (1945) affirms that states have primary authority to
regulate insurance. In Texas, the Texas Department of Insurance (TDI) regulates the insurance
industry under Texas Insurance Code. The federal government regulates only when state
regulation is inadequate (solvency, antitrust).
Q6: An applicant for a Texas Property and Casualty license must pass the state examination with
a minimum score of:
A. 60%
B. 70% [CORRECT]
C. 75%
D. 80%
Correct Answer: B
Rationale: Texas requires a passing score of 70% on the Property and Casualty licensing
examination. The exam consists of two parts: general knowledge (national) and state-specific
Texas laws and regulations. Both sections must be passed to obtain licensure.
Q7: Under Texas Insurance Code, an insurance agent has a fiduciary responsibility to:
A. The insurance company only
B. The insured only
C. Both the insurance company and the insured [CORRECT]
D. Neither party
Correct Answer: C
Rationale: An insurance agent acts as a fiduciary to both the insurer (principal) and the insured
(client). To the insurer, the agent owes duties of loyalty, accounting, and obedience. To the
insured, the agent owes duties of care, disclosure, and suitability in recommendations.
Q8: The Texas Department of Insurance (TDI) Commissioner is appointed by:
A. The Texas Legislature
B. The Governor with Senate confirmation [CORRECT]
C. Popular vote
D. Insurance industry appointment
Correct Answer: B
, 4
Rationale: The Texas Insurance Commissioner is appointed by the Governor with the advice and
consent of the Texas Senate for a two-year term. The Commissioner oversees all insurance
regulation in Texas, including company licensing, agent licensing, rate regulation, and consumer
protection.
Q9: Under Texas law, which of the following is considered an unfair trade practice?
A. Charging actuarially sound rates
B. Misrepresentation of policy terms [CORRECT]
C. Paying valid claims promptly
D. Providing accurate policy illustrations
Correct Answer: B
Rationale: Texas Insurance Code Chapter 541 prohibits unfair trade practices including
misrepresentation, false advertising, twisting (inducing policy replacement through
misrepresentation), churning, and defamation of insurers. Options A, C, and D are proper
insurance practices.
Q10: An agent in Texas must report administrative actions or criminal convictions to TDI within:
A. 10 days
B. 30 days [CORRECT]
C. 60 days
D. 90 days
Correct Answer: B
Rationale: Texas Insurance Code §4002.105 requires licensees to report any administrative
action, criminal conviction, or judgment involving insurance fraud within 30 days to TDI.
Failure to report is grounds for license suspension or revocation.
Q11: The purpose of the Texas Surplus Lines Agent license is to:
A. Sell standard admitted insurance policies
B. Place coverage with non-admitted insurers when coverage is unavailable in the admitted
market [CORRECT]
C. Sell only life insurance
D. Act as an insurance adjuster
Correct Answer: B
