Texas Life Agent Practice Exam

What happens to an agent's accounts if their license is suspended or revoked?

1. All accounts must be transferred

2. Accounts are canceled immediately

3. Accounts continue in force

4. Only health accounts remain active

The correct answer is: Accounts continue in force

When an agent's license is suspended or revoked, accounts that were previously established remain in force. This situation generally means that the contracts or policies linked to those accounts are not automatically canceled or voided simply due to the agent's change in status regarding their licensing. In practical terms, this continuity allows for the clients to maintain their coverage, despite the agent's inability to further engage in insurance transactions. Clients can still rely on their established protections, ensuring they are not left without coverage during the transition period that follows a license suspension or revocation. Other choices suggest actions that would not generally occur automatically. For instance, transferring all accounts might imply that an agent has to find another licensed individual to take over, which is not necessary given the accounts remain in force. Immediate cancellation of accounts lacks fairness, as clients should not lose their coverage due to the agent's licensing status. Lastly, the suggestion that only health accounts remain active disregards the continuity that applies to all accounts regardless of their type.