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Texas Property and Casualty Exam 2026/2027
Actual Exam - Complete Questions with Detailed
Rationales | 100% Verified Graded A+ Pass
Guaranteed - A+ Graded
Section 1: Texas Insurance Regulations & State-Specific Laws
Q1: Under the Texas Insurance Code, which entity has the primary authority to enforce state
laws regarding the organization, conduct, and supervision of the insurance business in Texas?
A. The Texas Attorney General
B. The Governor's Office of Consumer Protection
C. The Texas Department of Insurance (TDI)
D. The State Board of Insurance
C. The Texas Department of Insurance (TDI) [CORRECT]
Correct Answer: C
Rationale: The Texas Insurance Code designates the Texas Department of Insurance (TDI),
headed by the Commissioner of Insurance, as the primary regulatory authority over the insurance
industry in Texas. The Attorney General assists in legal matters but does not hold primary
regulatory authority, and the State Board of Insurance was dissolved and replaced by TDI.
Q2: An insurance agent in Texas offers a client a $50 gift card for purchasing a homeowners
insurance policy. Under Texas regulations, this action is considered:
A. A legal marketing promotion if disclosed in the policy
B. An acceptable practice known as a promotional allowance
C. Rebating, which is strictly prohibited
D. A permitted practice under the Texas Insurance Code Section 541
C. Rebating, which is strictly prohibited [CORRECT]
Correct Answer: C
Rationale: Texas Insurance Code §541.061 strictly prohibits rebating, which is defined as
offering any valuable consideration or inducement not specified in the policy as a condition of
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the sale. Offering a $50 gift card constitutes illegal rebating, whereas a promotional allowance
permitted by law must be offered to the public uniformly.
Q3: How many hours of continuing education (CE) are Texas-licensed property and casualty
agents required to complete during each 24-month licensing period?
A. 12 hours
B. 24 hours
C. 30 hours
D. 48 hours
C. 30 hours [CORRECT]
Correct Answer: C
Rationale: Per TDI rules, property and casualty agents in Texas must complete 30 hours of
continuing education every 24-month licensing period, which must include 2 hours of ethics
education. Failing to meet this requirement can result in the non-renewal of the license.
Q4: Which area in Texas is specifically served by the Texas Windstorm Insurance Association
(TWIA) for windstorm and hail coverage?
A. The entire state of Texas
B. Only coastal counties south of Corpus Christi
C. Designated seacoast territory, including parts of Harris County and all 14 first-tier coastal
counties
D. The Panhandle region known for severe windstorms
C. Designated seacoast territory, including parts of Harris County and all 14 first-tier coastal
counties [CORRECT]
Correct Answer: C
Rationale: TWIA provides windstorm and hail coverage to properties located in Texas's
designated seacoast territory. This specifically includes all 14 first-tier coastal counties and
specified parts of Harris County (east of Highway 146), not the entire state or just the
southernmost tip.
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Q5: A property owner in a Texas county covered by TWIA cannot find private market windstorm
coverage. Before applying for a TWIA policy, what must the property owner certify?
A. That they have been denied coverage by at least one admitted carrier
B. That they have rejected coverage from two non-admitted surplus lines carriers
C. That they have exhausted the voluntary market and been rejected by at least two authorized
insurers
D. That the property is worth less than $1 million
C. That they have exhausted the voluntary market and been rejected by at least two authorized
insurers [CORRECT]
Correct Answer: C
Rationale: To obtain a TWIA policy, an applicant must demonstrate that they cannot obtain
adequate coverage from the voluntary market. Texas law requires the applicant to provide a
certification of rejection from at least two authorized insurers writing windstorm coverage in the
area.
Q6: Under Texas law, what is the statute of limitations for filing a lawsuit against an insurance
company for an unfair claim settlement practice?
A. One year from the date of the loss
B. Two years from the date the cause of action accrues
C. Four years from the date the claim was denied
D. Six months from the date of the loss
C. Two years from the date the cause of action accrues [CORRECT]
Correct Answer: C
Rationale: According to the Texas Insurance Code §541.162, an action under the chapter
regarding unfair claim settlement practices must be commenced not later than the second
anniversary of the date the cause of action accrues. This aligns with the standard statute of
limitations for many civil actions in Texas.
Q7: An individual wants to obtain a temporary General Lines Property and Casualty license in
Texas to work for a specific agency. Which of the following is true regarding this temporary
license?
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A. It is valid for 12 months and can be renewed once
B. It allows the individual to sell insurance independently without supervision
C. It is valid for 90 days, non-renewable, and the individual must be under the direct supervision
of a licensed agent
D. It requires passing the state licensing examination beforehand
C. It is valid for 90 days, non-renewable, and the individual must be under the direct supervision
of a licensed agent [CORRECT]
Correct Answer: C
Rationale: Texas allows temporary licenses for General Lines agents, which are valid for 90
days, cannot be renewed, and require the temporary licensee to work under the direct supervision
of a currently licensed agent who is responsible for the temporary licensee's actions.
Q8: Which of the following acts is considered an "unfair method of competition or unfair and
deceptive act or practice" under Texas Insurance Code Chapter 541?
A. Denying a claim based on a policy exclusion
B. Failing to acknowledge communications regarding a claim within 15 business days
C. Misrepresenting the terms, benefits, or advantages of an insurance policy
D. Canceling a policy after 60 days for underwriting reasons
C. Misrepresenting the terms, benefits, or advantages of an insurance policy [CORRECT]
Correct Answer: C
Rationale: Texas Insurance Code §541.061 explicitly prohibits misrepresentations of policy
terms, benefits, or advantages. Failing to acknowledge communications within a reasonable time
(generally 15 business days) is also a violation, but misrepresenting policy terms is the classic
definition of a deceptive act. Denying a claim per policy terms and canceling per underwriting
guidelines are legal, standard practices.
Q9: What is the purpose of the Texas FAIR Plan Association?
A. To provide windstorm coverage to coastal residents
B. To provide property insurance to eligible applicants who are unable to obtain coverage in the
voluntary market
Texas Property and Casualty Exam 2026/2027
Actual Exam - Complete Questions with Detailed
Rationales | 100% Verified Graded A+ Pass
Guaranteed - A+ Graded
Section 1: Texas Insurance Regulations & State-Specific Laws
Q1: Under the Texas Insurance Code, which entity has the primary authority to enforce state
laws regarding the organization, conduct, and supervision of the insurance business in Texas?
A. The Texas Attorney General
B. The Governor's Office of Consumer Protection
C. The Texas Department of Insurance (TDI)
D. The State Board of Insurance
C. The Texas Department of Insurance (TDI) [CORRECT]
Correct Answer: C
Rationale: The Texas Insurance Code designates the Texas Department of Insurance (TDI),
headed by the Commissioner of Insurance, as the primary regulatory authority over the insurance
industry in Texas. The Attorney General assists in legal matters but does not hold primary
regulatory authority, and the State Board of Insurance was dissolved and replaced by TDI.
Q2: An insurance agent in Texas offers a client a $50 gift card for purchasing a homeowners
insurance policy. Under Texas regulations, this action is considered:
A. A legal marketing promotion if disclosed in the policy
B. An acceptable practice known as a promotional allowance
C. Rebating, which is strictly prohibited
D. A permitted practice under the Texas Insurance Code Section 541
C. Rebating, which is strictly prohibited [CORRECT]
Correct Answer: C
Rationale: Texas Insurance Code §541.061 strictly prohibits rebating, which is defined as
offering any valuable consideration or inducement not specified in the policy as a condition of
,2
the sale. Offering a $50 gift card constitutes illegal rebating, whereas a promotional allowance
permitted by law must be offered to the public uniformly.
Q3: How many hours of continuing education (CE) are Texas-licensed property and casualty
agents required to complete during each 24-month licensing period?
A. 12 hours
B. 24 hours
C. 30 hours
D. 48 hours
C. 30 hours [CORRECT]
Correct Answer: C
Rationale: Per TDI rules, property and casualty agents in Texas must complete 30 hours of
continuing education every 24-month licensing period, which must include 2 hours of ethics
education. Failing to meet this requirement can result in the non-renewal of the license.
Q4: Which area in Texas is specifically served by the Texas Windstorm Insurance Association
(TWIA) for windstorm and hail coverage?
A. The entire state of Texas
B. Only coastal counties south of Corpus Christi
C. Designated seacoast territory, including parts of Harris County and all 14 first-tier coastal
counties
D. The Panhandle region known for severe windstorms
C. Designated seacoast territory, including parts of Harris County and all 14 first-tier coastal
counties [CORRECT]
Correct Answer: C
Rationale: TWIA provides windstorm and hail coverage to properties located in Texas's
designated seacoast territory. This specifically includes all 14 first-tier coastal counties and
specified parts of Harris County (east of Highway 146), not the entire state or just the
southernmost tip.
,3
Q5: A property owner in a Texas county covered by TWIA cannot find private market windstorm
coverage. Before applying for a TWIA policy, what must the property owner certify?
A. That they have been denied coverage by at least one admitted carrier
B. That they have rejected coverage from two non-admitted surplus lines carriers
C. That they have exhausted the voluntary market and been rejected by at least two authorized
insurers
D. That the property is worth less than $1 million
C. That they have exhausted the voluntary market and been rejected by at least two authorized
insurers [CORRECT]
Correct Answer: C
Rationale: To obtain a TWIA policy, an applicant must demonstrate that they cannot obtain
adequate coverage from the voluntary market. Texas law requires the applicant to provide a
certification of rejection from at least two authorized insurers writing windstorm coverage in the
area.
Q6: Under Texas law, what is the statute of limitations for filing a lawsuit against an insurance
company for an unfair claim settlement practice?
A. One year from the date of the loss
B. Two years from the date the cause of action accrues
C. Four years from the date the claim was denied
D. Six months from the date of the loss
C. Two years from the date the cause of action accrues [CORRECT]
Correct Answer: C
Rationale: According to the Texas Insurance Code §541.162, an action under the chapter
regarding unfair claim settlement practices must be commenced not later than the second
anniversary of the date the cause of action accrues. This aligns with the standard statute of
limitations for many civil actions in Texas.
Q7: An individual wants to obtain a temporary General Lines Property and Casualty license in
Texas to work for a specific agency. Which of the following is true regarding this temporary
license?
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A. It is valid for 12 months and can be renewed once
B. It allows the individual to sell insurance independently without supervision
C. It is valid for 90 days, non-renewable, and the individual must be under the direct supervision
of a licensed agent
D. It requires passing the state licensing examination beforehand
C. It is valid for 90 days, non-renewable, and the individual must be under the direct supervision
of a licensed agent [CORRECT]
Correct Answer: C
Rationale: Texas allows temporary licenses for General Lines agents, which are valid for 90
days, cannot be renewed, and require the temporary licensee to work under the direct supervision
of a currently licensed agent who is responsible for the temporary licensee's actions.
Q8: Which of the following acts is considered an "unfair method of competition or unfair and
deceptive act or practice" under Texas Insurance Code Chapter 541?
A. Denying a claim based on a policy exclusion
B. Failing to acknowledge communications regarding a claim within 15 business days
C. Misrepresenting the terms, benefits, or advantages of an insurance policy
D. Canceling a policy after 60 days for underwriting reasons
C. Misrepresenting the terms, benefits, or advantages of an insurance policy [CORRECT]
Correct Answer: C
Rationale: Texas Insurance Code §541.061 explicitly prohibits misrepresentations of policy
terms, benefits, or advantages. Failing to acknowledge communications within a reasonable time
(generally 15 business days) is also a violation, but misrepresenting policy terms is the classic
definition of a deceptive act. Denying a claim per policy terms and canceling per underwriting
guidelines are legal, standard practices.
Q9: What is the purpose of the Texas FAIR Plan Association?
A. To provide windstorm coverage to coastal residents
B. To provide property insurance to eligible applicants who are unable to obtain coverage in the
voluntary market
