Tennessee Life & Health Insurance Exam — Study Guide

How to use this chapter

Everything before this point is national material. This chapter is the Tennessee half of your exam: a scored Tennessee-specific section appended to the general-knowledge section on the Pearson VUE exam. The content outline splits it into laws common to all lines (powers of the Commissioner, definitions, license requirements, suspension and revocation, unfair practices, guaranty association) and laws pertinent to your line only (for Life: required policy provisions, the solicitation rule, the replacement rule, annuity suitability). Nearly every question comes from Tennessee Code Annotated, Title 56 or Chapter 0780-01 of the Rules of the Tennessee Department of Commerce and Insurance.

A word about numbers. Hour counts, fees, dollar limits, and filing windows change often. Read this chapter with one convention in mind: a figure followed by a dated citation was read from that named source on that date, and a figure still carrying a bracketed verify-current flag was not confirmed from a primary source — treat it as unverified and check it with the Tennessee Department of Commerce and Insurance before you rely on it. A dated citation records one reading; it is not a promise the number has not moved since. The rules — that Tennessee has a guaranty association, a replacement regulation, an unfair trade practices act — are stable and stated plainly. It is the digits you check.

1. The Department, the Commissioner, and enforcement

Tennessee regulates insurance through the Tennessee Department of Commerce and Insurance (TDCI) and its Insurance Division, headed by the Commissioner of Commerce and Insurance (a Director/Assistant Commissioner runs the Division). "The Commissioner" in a statute means the Commissioner or a delegee.

Rulemaking. The Commissioner may promulgate rules to carry out Title 56, Chapter 6 (§§ 56-6-107 through 56-6-112). That authority produced Chapter 0780-01: the licensing, life solicitation, replacement, annuity suitability, unfair claims, Medicare supplement, and long-term care rules.

Investigations and examinations. Under § 56-6-120 the Commissioner may investigate licensees, take testimony, gather evidence, and share information with the NAIC, other regulators, and law enforcement. Tennessee also requires periodic examination of insurers: as often as once in five (5) years the Commissioner, personally or through a deputy or an appointee, must visit each insurance company licensed in the state (Tenn. Code Ann. §56-1-408; checked 2026-09-05). Costs are generally borne by the company examined, and another state's report may be accepted for a foreign insurer.

Hearings, review, and penalties. Discipline proceeds under § 56-6-112: notice consistent with § 4-5-320(c) and the opportunity for a contested case hearing under the Tennessee Uniform Administrative Procedures Act (Title 4, Chapter 5), with judicial review of the final order. Discipline is administrative first — the same conduct may also be prosecuted criminally — and no license is revoked without notice and a chance to be heard. Instead of or in addition to suspension or revocation, the Commissioner may levy a monetary penalty of not more than $1,000 for each violation, not to exceed an aggregate penalty of $100,000, and each day of continued violation is a separate violation (Tenn. Code Ann. §56-6-112(g)(2); checked 2026-09-05); penalty authority as to insurers is at § 56-2-305.

Continuing jurisdiction. A favorite exam point: the Commissioner retains authority to investigate and penalize even after a license is surrendered or lapses. You cannot escape enforcement by dropping your license.

2. Producer licensing

The prohibition and key definitions

Tenn. Code Ann. § 56-6-103: a person shall not sell, solicit, or negotiate insurance in Tennessee for any class of insurance unless licensed for that line of authority. Those three verbs also define an insurance producer in § 56-6-102.

Other tested definitions: business entity (may hold a license; must designate a licensed individual responsible for compliance); limited lines producer (§§ 56-6-102, 56-6-110); unauthorized insurer (§ 56-6-114 — no Tennessee certificate of authority; placing business with one is a violation and can make the producer personally liable on the contract); fiduciary (§ 56-6-116); domestic / foreign / alien insurer (§ 56-1-102 — organized under Tennessee law / another state's law / another country's law).

Licenses issue by line of authority: Life; Accident and Health or Sickness; Property; Casualty; Personal Lines; Variable Life and Variable Annuity Products; Credit; Title. Variable products require the Tennessee variable line plus FINRA registration.

Getting and keeping the license

Resident license. Be at least 18 years of age, be a Tennessee resident or qualify by principal place of business, and not be disqualified under § 56-6-112 (TDCI, "Insurance Producer Licensing Procedure with Exams"; checked 2026-09-05).

Prelicensing education — the two official sources disagree, so do not guess. The currently compiled rule, 0780-01-56-.06, requires an approved online or classroom prelicensing course of study before the examination and sets it at 20 hours for each of Life, Accident and Health, Property, Casualty, Personal Lines and Title (Rule 0780-01-56-.06(1), (3), effective September 10, 2020; checked 2026-09-05), with exemptions for named designations (CLU for life; CPCU for property, personal lines and casualty; CIC; ChFC, CFP, FLMI, LUTCF or CEBS for life; RHU, REBC or HIA for health; AAI or ARM for property/casualty; an insurance degree for all lines). TDCI's own current licensing-procedure page, however, states a prelicensing course requirement only for the title line, and at 30 hours, and lists no course-hour step at all for Life or Accident and Health (TDCI, "Insurance Producer Licensing Procedure with Exams"; checked 2026-09-05). The rule and the Department's operational page cannot both be right, so the number of prelicensing hours a Tennessee Life or Accident and Health candidate must actually complete is [verify current with the Tennessee Department of Commerce and Insurance] — call Agent Licensing before you register and pay. Note that "Pre-licensing education" is itself a listed topic on the Tennessee-specific content outline, so the exam can ask about it.

The examination. Tennessee's exams are administered by Pearson VUE. The Life exam is 50 scoreable general-knowledge questions plus 5 unscored pretest questions, together with the Tennessee-specific section of 18 scoreable questions plus 4 pretest questions, in 1 hour and 45 minutes; Accident and Health has the same structure and the same time (Pearson VUE, Tennessee Insurance Licensing Candidate Handbook #124300, and Content Outlines #124301 effective October 15, 2025; checked 2026-09-05). Exam fees are $55 for Life alone, $55 for Accident and Health alone, and $80 for the two together (same handbook).

Trap — the passing score is not a percentage. The Department "has selected 70 as the passing score for reporting purposes," and the handbook says in terms that "the scaled score that is reported is neither the number of questions answered correctly (the raw score) nor the percentage of questions answered correctly": raw scores are equated across forms and converted to a scaled score running 0 to 100. (Rule 0780-01-56-.07(4) still words the standard as "seventy percent (70%)"; the number you are actually reported against is scaled.) Passing candidates see only "pass" and no number — only failing candidates get a score, with diagnostics by content area. After a first failure you must wait 10 days to retest, and 30 days after each later attempt (Pearson VUE handbook #124300; checked 2026-09-05 — note that Rule 0780-01-56-.07(4)(a) words the wait as 30 days for any retake, and §(4)(b) requires prelicensing courses to be retaken if you have not passed within 6 months of the first attempt).

Apply electronically through NIPR with the $50 filing fee (Tenn. Code Ann. §56-6-121; TDCI licensing procedure; checked 2026-09-05); you must wait 48 hours after testing before submitting. The application requires disclosure of criminal history and of administrative actions by any regulator, and a fingerprint-based background check is required — finish fingerprinting at least 2 business days before you apply.

Exceptions (§§ 56-6-104, 56-6-105, 56-6-109): officers, directors, and employees who do not sell, solicit, or negotiate and whose pay is not tied to volume; clerical support; employers administering their own benefit plans; persons who only furnish information for group insurance; plus certain exam waivers.

Nonresidents (§§ 56-6-106, 56-6-108) get reciprocity: a producer licensed and in good standing at home may obtain a Tennessee nonresident license without taking the Tennessee exam where the home state reciprocates. Section 56-6-118 permits waiver of nonresident requirements and provides CE reciprocity.

Temporary licenses (§ 56-6-111) issue without examination, for a period not to exceed 180 days (Tenn. Code Ann. §56-6-111; checked 2026-09-05), to the surviving spouse or court-appointed personal representative of a producer who dies or becomes disabled; a designee of a business entity whose designated licensed individual dies or becomes disabled; the designee of a producer entering military service; and any other case serving the public interest. The Commissioner may require a sponsor responsible for the licensee's acts, impose conditions, or limit authority; the license ends once the business is disposed of.

Appointments. A license lets you hold yourself out; an appointment lets you write for a particular insurer. Under § 56-6-115 the insurer files the appointment notice within fifteen (15) days from the date the agency contract is executed or the first insurance application is submitted (Tenn. Code Ann. §56-6-115; checked 2026-09-05), and pays the $15 appointment (or termination-of-appointment) fee under § 56-6-121 (Tenn. Code Ann. §56-6-121; checked 2026-09-05). That section also makes a producer who solicits or negotiates an application the agent of the insurer, not of the insured or beneficiary. On termination (§ 56-6-117) the insurer must notify the Commissioner and state the cause; insurers and officers have immunity for good-faith statements in those reports, which is what makes termination-for-cause reporting meaningful.

Renewal and lapse. Under § 56-6-107 an individual license remains in effect for twenty-four (24) months from the last day of the licensee's birth month (a business-entity licence expires biennially on March 1). Renewal requires the $60 renewal fee (Rule 0780-01-56-.09(1)(c); Tenn. Code Ann. §56-6-121), the filing, and completed CE. A renewal fee received after the due date carries a penalty of double the unpaid renewal fee; a lapsed licensee may reinstate without retaking the exam within twelve (12) months of the renewal fee's due date, paying that doubled fee, and after that must qualify as a new applicant. A licensee must notify the Commissioner of an address change within thirty (30) days of the change (Tenn. Code Ann. §56-6-107; checked 2026-09-05). File about 30 days before the end of your birth month so the Department can process the renewal in time (Rule 0780-01-56-.09(3)).

Grounds for denial, suspension, revocation, probation

Section 56-6-112 is the most testable licensing statute in Tennessee. The Commissioner may place on probation, suspend, revoke, refuse to issue or renew, and/or levy a civil penalty for: materially untrue or misleading information in an application; violating any insurance law, rule, subpoena, or order (Tennessee's or another state's); obtaining a license by misrepresentation or fraud; improperly withholding, misappropriating, or converting money received in the insurance business; misrepresenting contract terms; felony conviction; committing any insurance unfair trade practice or fraud; fraudulent, coercive, or dishonest practices, or incompetence, untrustworthiness, or financial irresponsibility; having a license denied, suspended, or revoked in another state; forgery; improperly using reference material during a licensing examination; knowingly accepting business from an unlicensed person; failing to comply with a child support order (§ 36-5-706); selling for an unauthorized company; and violating § 56-6-125.

3. Marketing and sales conduct

Tennessee has an unfair trade practices and unfair claims settlement act — Tenn. Code Ann. Title 56, Chapter 8.

Section 56-8-104 — unfair methods of competition and deceptive acts

• Misrepresentation and false advertising of policies — any estimate, illustration, circular, or statement misrepresenting benefits, conditions, or terms; misrepresenting dividends or share of surplus; misstating an insurer's financial condition; or using a policy name that misrepresents its true nature. This is the home of twisting (inducing a policyholder to lapse, forfeit, surrender, retain, or convert by misrepresentation) and it reaches churning, the same abuse using policies of the same insurer, typically funded by stripping values from an in-force contract.
• False information and advertising generally — untrue, deceptive, or misleading statements about an insurer or the business of insurance, in any medium.
• Defamation — false, maliciously critical statements calculated to injure a person in the insurance business or damage an insurer's financial reputation. Defamation targets a competitor; misrepresentation targets the consumer's understanding of a policy.
• Boycott, coercion, and intimidation; false financial statements; and stock operations (issuing stock or special favors as an inducement to purchase insurance).
• Unfair discrimination — between individuals of the same class and equal expectation of life in life/annuity rates, dividends, or benefits, and of the same class and essentially the same hazard in accident and health terms.
• Rebating — offering or giving, as an inducement to buy, any rebate of premium, special favor in dividends, valuable consideration, or inducement not specified in the policy. Narrow exceptions exist (bonuses from the surplus of nonparticipating business; group premium adjustments based on actual loss experience). Accepting a rebate is likewise improper for the insured.

Violations reach producers and insurers alike and are independently disciplinable under § 56-6-112.

Section 56-8-105 — unfair claims settlement practices

Section 56-8-105, supplemented by Rule 0780-01-05, prohibits knowingly misrepresenting facts or policy provisions relating to the coverage at issue; failing to acknowledge and act reasonably promptly on claim communications; failing to adopt reasonable standards for prompt investigation, or refusing to pay without one; failing to affirm or deny coverage within a reasonable time after proof of loss; failing to attempt in good faith a prompt, fair, equitable settlement where liability is reasonably clear; compelling insureds to litigate by offering substantially less than amounts ultimately recovered; requiring duplicative submissions; failing to give a reasonable explanation of the basis for a denial; and, in response to a request for claim forms, failing to provide the forms necessary to present claims within fifteen (15) calendar days of the request, with reasonable explanations of their use (Tenn. Code Ann. §56-8-105(13); checked 2026-09-05). Practical point: you are usually the first person a beneficiary calls. Report promptly, forward requested proofs, and never characterize coverage beyond the contract.

Producer conduct, pay, and advertising

Section 56-6-125. A producer may not hold out to the public as a financial planner, investment adviser, financial counselor, consultant, or similar specialist while in fact only selling insurance, unless the credential implied is actually held, and must disclose beforehand when doing financial planning for a fee that they are an insurance salesperson who will also receive commissions. A producer may not charge a fee for the sale, solicitation, negotiation, or servicing of insurance unless authorized by written agreement with the insurer and, where applicable, incorporated in the rate filing. For services not connected to the sale of insurance there must be a written agreement signed in advance specifying the services and the fee and stating the client is under no obligation to buy; retain a copy for not less than three (3) years after completion of the services, available to the Commissioner on request (Tenn. Code Ann. §56-6-125; checked 2026-09-05). Subsection (b) permits a fee for assisting with an individual major medical policy for which the insurer pays no commission.

Section 56-6-113. No insurer or producer may pay commission or other valuable consideration for selling, soliciting, or negotiating insurance in Tennessee to a person required to be licensed who is not, and no such person may accept it. Renewal or deferred commissions may be paid to a person no longer licensed if that person was licensed at the time of the sale. An unlicensed person who merely refers a prospect may be paid only a fixed dollar amount per referral not exceeding $25.00, and that payment must not depend on whether the referred customer buys (Tenn. Code Ann. §56-6-113; checked 2026-09-05).

Section 56-6-116. Money received for soliciting, negotiating, or selling insurance is held in a fiduciary capacity and must not be misappropriated, converted, or improperly withheld. Never commingle premium with personal funds.

Advertising rests on § 56-8-104, the Department's advertising and solicitation rules, and the life solicitation rule below. Two Tennessee traps: never use the guaranty association in advertising or as an inducement, and never imply endorsement by a government agency or the Department.