Texas Life Agent Practice Exam

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Prepare for the Texas Life Agent Exam. Study with flashcards and multiple-choice questions, each with hints and explanations. Get ready for your career as a licensed life insurance agent in Texas!

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What does the Texas Life, Accident, Health and Hospital Service Insurance Guaranty Association do?

It offers loans to insurance companies
It protects customers of insolvent companies
It issues new insurance policies
It regulates insurance premium rates

The correct answer is: It protects customers of insolvent companies

The Texas Life, Accident, Health and Hospital Service Insurance Guaranty Association is designed to protect policyholders in the event that an insurance company becomes insolvent. This means that if a licensed insurance company in Texas fails to fulfill its contractual obligations due to financial difficulty, the guaranty association steps in to ensure that policyholders can still receive benefits. The association provides a safety net for consumers, instilling confidence in the insurance marketplace by ensuring that individuals and businesses do not suffer significant losses due to an insurer's inability to pay claims. By safeguarding the interests of policyholders, the association plays a crucial role in maintaining the stability and reliability of the insurance system within Texas.