Texas Life Agent Practice Exam

Which condition is necessary for a corporate agency to obtain a Texas insurance agent's license?

1. Only the president needs a license

2. All active corporate officers must have licenses

3. The agency must have a physical location

4. Majority shareholders must hold licenses

The correct answer is: All active corporate officers must have licenses

To obtain a Texas insurance agent's license for a corporate agency, it is necessary that all active corporate officers must have licenses. This requirement ensures that the individuals who are responsible for the management and operations of the insurance agency are qualified and comply with the regulations set forth by the Texas Department of Insurance. Licensing all active officers helps to maintain industry standards and protects consumers by ensuring that those making decisions in the agency are knowledgeable about insurance laws and practices. This reflects the regulation’s focus on both competence and ethical conduct among those managing insurance operations. The other conditions, while important in different contexts, do not fulfill the licensing requirement for a corporate agency in Texas in the same way. For instance, it's not solely the president’s license that matters, since the entire leadership team must be qualified. Having a physical location may be necessary for practical business operations but does not directly relate to the licensing requirement itself. Similarly, while shareholders may impact the direction of the agency, it is specifically the active corporate officers who must hold licenses to ensure direct responsibility and accountability within the agency's operations.