Texas Insurance Law Practice Questions: The 30 State Questions on the Life and Health Exam

Most people study the national half of the Texas Life and Health exam first and leave Texas law for the last few days. Then they hit 30 questions on the commissioner, licensing, rebating, and HMOs and realize their national book barely touched any of it.

This page is the Texas section in one place. I go through what the official outline says is on it, the rules that come up the most, and 10 practice questions I wrote so you can see how the state questions are worded. The answers and the reasons are right under each one.

Everything here comes from the Pearson VUE Texas content outline and the Texas Insurance Code. The links are at the bottom. I checked them in October 2026. If anything here ever disagrees with the official source, trust the official source.

How the Texas section is built

The General Lines Life, Accident and Health exam has 130 scored questions. 100 are general knowledge and 30 are Texas law. There are also 5 unscored pretest questions mixed into the Texas section, and you will not know which ones they are.

Under the outline that took effect September 1, 2026, the 30 Texas questions split like this:

Statutes and rules common to life and health: 14 questions. This is the commissioner, insurer types, licensing, continuing education, reporting to TDI, unfair trade practices, commission sharing, and the guaranty association.

Life insurance only: 6 questions. Advertising, the buyer's guide, policy provisions, group life, credit life, replacement, and nonforfeiture.

Accident and health only: 7 questions. Newborn and dependent coverage, Medicare supplement, HIV testing rules, long term care, small group, and the Affordable Care Act.

HMOs: 3 questions. Definitions, the evidence of coverage, cancellation, enrollment, and out of network claims.

So the common section is almost half of the Texas questions. That is where I would start.

Thirty questions is about 23 percent of your scored total. You do not need a separate passing score on the Texas half, but you cannot afford to give those points away either.

The commissioner and TDI

The Texas Department of Insurance is run by the commissioner of insurance. The governor appoints the commissioner with the advice and consent of the Texas Senate. The term is two years and ends on February 1 of each odd numbered year.

The exam likes to ask what the commissioner and TDI can do. The short version: examine an insurer's records, investigate, hold hearings, issue cease and desist orders, and impose penalties.

When TDI believes someone is using an unfair or deceptive practice, it serves a statement of charges and a notice of hearing. The hearing cannot be held before the sixth day after the notice is served.

If the person loses, TDI issues a cease and desist order. Violating that order can bring an administrative penalty of up to $1,000 per violation, capped at $5,000 for all violations.

Domestic, foreign, and alien insurers

This one shows up because the words do not mean what they sound like.

A domestic insurer is formed under Texas law. A foreign insurer is formed under the laws of another U.S. state. An alien insurer is formed under the laws of another country.

So a company organized in Oklahoma is a foreign insurer in Texas, even though it is American. A company organized in Canada is alien.

An insurer needs a certificate of authority from TDI to do business in Texas. Stock insurers are owned by shareholders. Mutual insurers are owned by their policyholders. Fraternal benefit societies sell insurance to members of a lodge or similar group and are regulated under their own chapter of the code.

Licensing rules that get tested

Appointment. A license alone does not let you sell. You have to be appointed by an insurer that is authorized to do business in Texas before you act as its agent.

Temporary license. It lasts 180 days, is issued once, and cannot be renewed. A temporary license holder cannot collect a commission on a sale to themselves, a relative, a current or recent employer, or a current or recent employee. Recent means within the past six months.

Reporting to TDI. An individual agent reports a change of mailing address, a felony conviction, or an administrative action by a financial or insurance regulator on a monthly basis.

Records. An agent has to keep insurance records, including complaint records, separate from the records of any other business the agent runs.

Continuing education. A Life and Health agent needs 24 hours each license period, and 3 of those hours must be ethics. At least half of the required hours must be in a classroom or a classroom equivalent setting approved by TDI. An agent who has held a license continuously for at least 20 years is exempt from the general CE requirement.

Commissions and unlicensed people. An insurer or agent cannot pay a commission to someone for agent work unless that person holds a Texas agent license. There is one exception people forget: renewal or other deferred commissions can still be paid to someone just because they no longer hold a license.

Unfair and deceptive practices

Chapter 541 of the Texas Insurance Code is where most marketing questions come from. Learn the name of each practice and one example. The exam usually describes the behavior and asks you to name it.

Misrepresentation. Misstating a policy's terms, benefits, or dividends, or the financial condition of an insurer. It also covers a misrepresentation made to get a policyholder to let a policy lapse or to surrender it. When that is done to sell a replacement policy, you will often see it called twisting.

False advertising. Any untrue, deceptive, or misleading statement about the business of insurance, in print, on radio or TV, on the internet, or any other way.

Defamation. A false or maliciously critical statement about an insurer's financial condition that is meant to hurt someone in the insurance business.

Boycott, coercion, and intimidation. Acting together, or agreeing to act together, in a way that unreasonably restrains the business of insurance or creates a monopoly.

Rebating. Giving a premium rebate, a special favor, or anything of value not written in the contract to get someone to buy life, annuity, or health coverage. The safe harbor is small: a promotional advertising item, an educational item, or a traditional courtesy worth $25 or less.

Two smaller rules that make easy questions. A life, accident, or health policy cannot say "Approved by the Texas Department of Insurance" or anything like it. And an ad for a Medicare related product has to say, in a prominent place, that it is not connected with or endorsed by the U.S. government or the federal Medicare program, or words to that effect.

Practice questions

These are my own practice questions, not real exam items. Cover the answer, pick one, then check.

1. Who appoints the Texas commissioner of insurance? A) The Texas Senate. B) The governor, with the advice and consent of the Senate. C) The voters, in a statewide election. D) The attorney general.

Answer: B. The Senate confirms, but the governor appoints. The term is two years.

2. An insurer is organized under the laws of Louisiana and sells policies in Texas. In Texas it is: A) Domestic. B) Alien. C) Foreign. D) Fraternal.

Answer: C. Another state makes it foreign. Alien is for a company formed in another country.

3. Dana just got her license and wants to start selling right away for ABC Life. What does she still need? A) A second exam. B) An appointment from ABC Life. C) A surety bond. D) Nothing, the license is enough.

Answer: B. Texas requires an appointment by an authorized insurer before you act as its agent.

4. Marcus holds a temporary license. On which sale can he collect a commission? A) A policy on his brother. B) A policy on the employer he left two months ago. C) A policy on a neighbor he has no business or family ties with. D) A policy on himself.

Answer: C. Commissions are off limits on sales to himself, relatives, and anyone who was his employer or employee in the past six months.

5. An agent moves. How does the agent let TDI know about the new mailing address? A) Within 10 days. B) On a monthly basis. C) At the next renewal. D) Within 60 days.

Answer: B. Address changes, felony convictions, and regulator actions are reported monthly.

6. An agent tells a client her current whole life policy is "basically worthless" so she will drop it and buy a new one from him. The statement is false. This is: A) Rebating. B) Defamation. C) Misrepresentation, often called twisting. D) Coercion.

Answer: C. Misrepresenting to get someone to lapse or surrender a policy is misrepresentation. Paired with a replacement sale, it is the classic twisting example.

7. Which gift can an agent give a prospect in connection with a sale without it counting as a rebate? A) Half of the first year's premium. B) A $20 branded tumbler. C) A $100 gift card. D) Shares of the insurer's stock.

Answer: B. Promotional, educational, or courtesy items worth $25 or less are allowed. Stock as an inducement is specifically prohibited.

8. An agent spreads a false rumor that a competing insurer is about to go broke, hoping to steal its clients. This is: A) Defamation. B) Twisting. C) Boycott. D) Unfair discrimination.

Answer: A. A false, malicious statement about an insurer's financial condition is defamation.

9. A Life and Health agent needs how many CE hours per license period, and how many in ethics? A) 24 and 3. B) 30 and 2. C) 20 and 4. D) 24 and 8.

Answer: A. 24 hours with 3 hours of ethics. The 8 hour number belongs to annuity CE, which counts toward the 24.

10. An agent retires and lets her license expire. Her former agency keeps paying renewal commissions on business she wrote. Is that allowed? A) No, commissions can never go to an unlicensed person. B) Yes, renewal or deferred commissions can continue after the license ends. C) Only for 90 days. D) Only if TDI approves each payment.

Answer: B. The ban on paying unlicensed people does not stop renewal or deferred commissions just because the license ended.

How I would study the Texas section

Start with the common section. It is 14 of the 30 questions and most of it is vocabulary you can learn in a few short sessions.

Learn each unfair practice as a story, not a definition. Rebating is "I will give you part of my commission." Twisting is "your old policy is junk, switch to mine." Defamation is "that company is about to fail." The exam describes the story and you name it.

Then lock in the numbers. The temporary license, CE hours, reporting deadlines, and gift limit all live here. The cheat sheet at getlicensedtx.com/articles/texas-life-health-exam-cheat-sheet has every Texas number on one page.

Finally, practice under time. Knowing a rule on a list and picking it out of four close answers on the clock are different skills.

Practice Texas law with real exam style questions

Take the free timed practice test at getlicensedtx.com/diagnostic. It is free, needs no card, and your results break out Texas law so you can see if this section is a weak spot.

If it is, GetLicensedTX gives you Texas law drills, 1,000+ Pearson VUE style practice questions, the Full Exam Simulator (145 questions, timed), and the AI Study Tutor to explain any rule that does not click. Start 3 days free, then $12.99 a month. Plans are at getlicensedtx.com/pricing.

Want the full picture of what else is on the exam? Read getlicensedtx.com/articles/texas-life-health-exam-content-outline next.