California Life & Health Insurance Exam — All Questions

The California Department of Insurance is headed by an Insurance Commissioner who is:

• a.Appointed by the Governor to a six-year term
• b.Appointed by the President and confirmed by the U.S. Senate
• c.Chosen by a vote of the state's licensed insurers
• d.Elected by California voters to a four-year term✓

California is one of the few states where the Insurance Commissioner is elected directly by voters, serving a four-year term. The Commissioner leads the California Department of Insurance (CDI), which licenses agents and enforces the Insurance Code.

Before taking the California life and health agent exam, an applicant for a combined life and accident-and-health license must complete prelicensing education that includes how many hours devoted specifically to ethics and the California Insurance Code?

• a.12 hours✓
• b.40 hours
• c.0 hours
• d.4 hours

California requires a 12-hour course on ethics and the California Insurance Code (including one hour on insurance fraud) as prelicensing education for life and accident-and-health applicants. Effective January 1, 2026, the former 20-hour-per-line prelicensing courses were repealed, leaving the 12-hour ethics and Code course as the distinctive California prelicensing requirement.

How much continuing education must a California resident life and health licensee complete each two-year license term?

• a.24 hours, including at least 3 hours of ethics✓
• b.36 hours, including at least 6 hours of ethics, every two years
• c.40 hours, including 8 hours of ethics
• d.12 hours, including at least 1 hour of ethics, every two years

California requires 24 hours of continuing education every two-year term, including at least 3 hours of ethics. Additional product-specific training applies to annuities and long-term care.

Under California law, before an agent may sell annuity products, the agent must first complete:

• a.An 8-hour annuity training course approved by the Commissioner✓
• b.A 12-hour annuity training course approved by the Commissioner
• c.A property and casualty license issued by the Commissioner
• d.Nothing beyond the basic life license and the insurer's own product briefing

California requires an agent to complete an 8-hour annuity training course approved by the Commissioner before selling annuities, plus ongoing refresher training. This is in addition to the standard continuing education requirement.

Effective January 1, 2026, Assembly Bill 943 changed California's prelicensing education. Under the current rule, before sitting for the life and/or accident-and-health exam, an applicant must complete:

• a.20 hours of prelicensing education for each separate line of authority
• b.No prelicensing education at all
• c.40 hours of prelicensing combined for the life and health lines
• d.A single 12-hour course on Ethics and the California Insurance Code✓

AB 943 (Stats. 2025, Ch. 566), operative January 1, 2026, repealed the old per-line prelicensing HOUR requirements. The only prelicensing education that remains is a single 12-hour course on Ethics and the California Insurance Code (Cal. Ins. Code § 1749(a)(1)), and that one course satisfies the requirement for multiple license lines. Answering '20 hours per line' or '40 hours' reflects the superseded pre-2026 rule; some prelicensing education is still required, so 'none' is also wrong. Source: AB 943; Cal. Ins. Code §§ 1749, 1749.1 (leginfo, verified 2026-08-04).

Under California Insurance Code § 1626, which license authorizes a producer to sell annuities?

• a.A property broker-agent license
• b.No license is needed to sell annuities
• c.The Life-Only (Life Agent) license✓
• d.The Accident and Health Agent license

Cal. Ins. Code § 1626(a)(1) defines the Life Agent license as authorizing coverage on human lives, 'including the incidents of life insurance and the granting of endowment and annuity benefits' — so annuities ride on the LIFE license. The Accident and Health Agent license under § 1626(a)(2) covers sickness, bodily injury, and accidental death (health and disability), not annuities. A property license is unrelated, and a license is certainly required. A frequent exam trap asks which license permits annuity sales; the answer is the Life Agent license.

Under Cal. Ins. Code § 1626, a producer who wants full authority to sell BOTH life insurance and health/disability insurance in California must:

• a.Qualify for both the Life Agent line and the Accident and Health Agent line, each of which has its own qualifying exam✓
• b.Pass a single combined examination that automatically grants both the life and the accident and health lines of authority
• c.Complete two separate 12-hour Ethics and California Insurance Code courses, one for each line of authority being sought
• d.Hold only the Life Agent license, which covers both lines

California issues the Life-Only Agent and the Accident & Health Agent as separate license types under § 1626(a)(1) and (a)(2), and each line has its own qualifying examination; to transact both life and health a producer must qualify for both lines. A single Life Agent license does not authorize health sales. After AB 943, only one 12-hour Ethics and California Insurance Code course is required even for multiple lines, so 'two separate courses' is wrong. Exactly how PSI packages the exams can change, but the licensing point — qualify for both lines — does not.

Before an agent may sell annuities in California, Cal. Ins. Code § 1749.8 requires the agent to complete an initial annuity training course of:

• a.24 hours
• b.8 hours✓
• c.40 hours
• d.1 hour

California requires an 8-hour one-time annuity training course before an agent may sell annuity products, plus a 4-hour refresher course each renewal period (Cal. Ins. Code § 1749.8). California's 8-hour initial requirement is longer than the 4-hour NAIC baseline that many other states use, so answering '4 hours' for the California initial course would be wrong. One hour is far too short and 24 or 40 hours overstate it. This product-specific training is in addition to the general continuing education requirement.

Under Cal. Ins. Code § 1729.2, a licensee who learns of a change in the background information disclosed on the license application (for example, a criminal conviction) must notify the Commissioner:

• a.Only if the matter involved an insurance transaction
• b.Within 30 days of learning of the change✓
• c.Only at the next license renewal
• d.Within 10 days of the change

Cal. Ins. Code § 1729.2 requires a producer to notify the Commissioner within 30 days of learning of a change in the background information supporting the license, such as a criminal conviction or administrative action. The event, not the renewal calendar, starts the 30-day clock, so waiting until renewal is itself a violation. The window is 30 days, not 10. And the duty is not limited to insurance-related matters — 'it wasn't insurance related' is not a defense to the reporting obligation.

Under Cal. Ins. Code § 35, which of the following activities constitutes 'transacting insurance' and therefore requires a license?

• a.Solicitation — asking or urging someone to buy a policy — even if no sale results✓
• b.Only negotiating a claim after a loss has occurred
• c.Only actually signing up a client and collecting the first premium payment, not mere solicitation
• d.Discussing insurance only with other licensed agents and brokers, never with the public

Cal. Ins. Code § 35 defines 'transact' broadly to include solicitation, negotiation, and the execution of a contract of insurance, as well as matters arising out of it. Because solicitation alone is transacting, a person who merely urges someone to buy — even if no one is signed up — is transacting insurance and needs a license; there is no 'I was just talking to them' defense. The definition is not limited to completing a sale, negotiating a claim, or conversations among agents. This broad definition is what makes licensing so important.

In California, an insurance 'agent' (life agent) legally represents:

• a.The applicant or insured only, never the insurer
• b.The California Department of Insurance, which issues the license
• c.The state guaranty association that backs the insurer
• d.The insurer on whose behalf the agent is authorized to transact✓

Under Cal. Ins. Code § 31, an insurance agent is a person authorized by and on behalf of an insurer to transact insurance, so the agent legally represents the insurer (the company). A broker, by contrast, represents the insured (shops the market on the client's behalf). The agent does not represent the CDI, which is the regulator, nor the guaranty association. This agent-represents-the-insurer principle underlies rules on appointment, authority, and the imputation of the agent's knowledge to the company.

As part of the California license application process, all new producer applicants must:

• a.Post a $100,000 surety bond with the Commissioner before licensing
• b.Submit fingerprints (Live Scan) for a background check✓
• c.Be at least 25 years old at the time of application
• d.Hold a college degree in finance, insurance, or a related field

California requires all new producer applicants to submit fingerprints through Live Scan (electronic fingerprinting) so the CDI can review criminal and disciplinary history as part of underwriting the license. There is no across-the-board $100,000 bond requirement, no minimum age of 25 (applicants must generally be at least 18), and no college-degree requirement. Fingerprinting, the application, and passing the qualifying exam(s) are the core steps; AB 943 removed only the per-line prelicensing hours, not fingerprinting.

California does NOT offer a 'life solicitor' or 'accident and health solicitor' license. What does this mean for someone who wants to sell life or health insurance in California?

• a.They may sell under another licensed agent's license as an unlicensed solicitor
• b.They must first become a licensed claims adjuster
• c.They must qualify as a licensed Life Agent or Accident and Health Agent✓
• d.They need no license if they only solicit

California licenses a solicitor role for fire and casualty lines but has no life or A&H solicitor category, so a person who wants to sell life or health insurance must qualify as a licensed Life Agent or Accident and Health Agent (Cal. Ins. Code §§ 1626, 1624, 1704). There is no lawful way to 'solicit' life or health coverage under another's license without being licensed, and, as § 35 makes clear, solicitation itself requires a license. Becoming a claims adjuster is unrelated to the authority to sell.

After a producer's license is issued in California, before the producer may transact business on behalf of a particular insurer, that insurer must:

• a.Wait two years after licensing
• b.Cancel all of the producer's other insurer appointments
• c.Pay the producer a salary
• d.File a notice of appointment with the Commissioner✓

Holding a license lets a person act as an agent, but an insurer must file a notice of appointment with the Commissioner before the agent may transact business on that company's behalf; an agent may hold appointments with multiple insurers simultaneously. There is no two-year waiting period, no requirement that the insurer pay a salary (commission arrangements are typical), and no requirement to cancel other appointments — multiple appointments are permitted. The appointment links a specific insurer to the licensed agent.

California resident life and health licensees must complete continuing education each two-year license term of:

• a.40 hours, including 10 hours of ethics
• b.24 hours, including at least 3 hours of ethics✓
• c.No continuing education after the first renewal
• d.12 hours, with no ethics requirement

California requires resident life and health licensees to complete 24 hours of continuing education every two-year term, including at least 3 hours of ethics; product-specific training (such as the annuity refresher and long-term care training) applies on top of this. The figures are not 40/10 or 12/0, and CE does not disappear after the first renewal — AB 943 repealed prelicensing hours but left continuing education in force. Keeping up CE and required product training is what keeps the license and its authority active.

The California Insurance Commissioner, who leads the California Department of Insurance (CDI), is:

• a.Elected directly by California voters to a four-year term✓
• b.Chosen by a vote of the insurance industry's licensed insurers
• c.A federal official appointed in Washington
• d.Appointed by the Governor to an unlimited term, with no fixed length

California is one of the few states where the Insurance Commissioner is elected directly by the voters, serving a four-year term, rather than being appointed. The elected Commissioner heads the CDI, which licenses producers and insurers, adopts regulations to implement the Insurance Code, and takes enforcement action for violations. The Commissioner is not an unlimited-term gubernatorial appointee, not selected by the industry, and not a federal official. The elected, four-year nature of the office is a distinctive California feature.

An insurer that has received a 'certificate of authority' from the California Insurance Commissioner is best described as a(n):

• a.Non-admitted (surplus lines) insurer
• b.Fraternal benefit society exempt from the Code
• c.Reinsurer only
• d.Admitted (authorized) insurer✓

A certificate of authority is the license an insurer must obtain to transact insurance in California (Cal. Ins. Code § 700); an insurer holding one is 'admitted' or authorized. A non-admitted (surplus lines) insurer has no certificate of authority in the state and may only be accessed through special surplus-lines procedures. Holding a certificate of authority is not limited to reinsurers, and fraternal benefit societies are still regulated. The certificate of authority is what distinguishes an admitted insurer from a non-admitted one.

Under Cal. Ins. Code § 1626, a producer holding only the Accident and Health Agent license may lawfully sell:

• a.Whole life insurance and endowment contracts
• b.Disability income and health (accident and sickness) coverage✓
• c.Fixed annuities
• d.Variable life insurance and the separate-account subaccounts within it

The Accident and Health Agent license under § 1626(a)(2) authorizes coverage for sickness, bodily injury, and accidental death — health, disability income, and accident products. Selling whole life or annuities requires the Life Agent license under § 1626(a)(1), and variable life additionally requires a securities registration. So an A&H-only licensee may sell disability income and health coverage but not life insurance or annuities. Matching the product to the correct license line is a frequently tested distinction on the California exam.

California insurance producer licenses are issued for a term of:

• a.One year, and not renewable after that
• b.Two years, renewable with the required continuing education✓
• c.Ten years, with no continuing education
• d.The producer's lifetime, with no renewal or continuing education

California producer licenses run for two-year terms and are renewed by completing the required continuing education (24 hours per term, including 3 hours of ethics) and paying the renewal fee. Licenses are not one-year non-renewable, are not ten-year, and are not lifetime; renewal every two years with CE is the standard. Letting CE or the renewal lapse can cause the license — and any appointments' authority — to fall out of force, so tracking the two-year cycle is essential.