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Property and Casualty Insurance Producer Exam

Residual markets and guaranty (TX): practice questions

Our Property & Casualty Insurance bank has 8 questions on this topic. Here are 3 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1 · Texas

Under Texas law, TWIA must operate so that it:

  1. Undercuts private insurers' rates in every coastal county
  2. Writes all lines of insurance
  3. Does not directly compete with the private market
  4. Replaces flood insurance
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C. Does not directly compete with the private market — Tex. Ins. Code 2210.001(1): the association shall function in such a manner as not to be a direct competitor in the private market.

Question 2 · Texas

Surplus lines coverage in Texas is allowed only for the amount of insurance that:

  1. The insured chooses
  2. Is under $100,000
  3. TDI assigns
  4. Exceeds what authorized insurers will write
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D. Exceeds what authorized insurers will write — Tex. Ins. Code 981.004(b): surplus lines insurance may be provided only in the amount that exceeds the insurance obtainable from authorized insurers.

Question 3 · Texas

The Texas P&C guaranty association pays an individual covered claim (other than workers' compensation) up to:

  1. $100,000
  2. $300,000
  3. $250,000
  4. $500,000
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B. $300,000 — Tex. Ins. Code 462.213(a): an individual covered claim may not exceed $300,000; WC claims are paid in full.

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