Texas Life & Health: Group Health, Federal Regulation & Texas Statutes — Common to L&H

Correct

The answer is B: 3 hours of ethics within the 24-hour biennial CE requirement.

A 2021 amendment to Insurance Code §4004.054 raised the ethics CE requirement from 2 hours to 3 hours within the biennial 24-hour CE total, for each renewal period. The 2-hour figure is a common distractor: the old rule is no longer current, even for producers licensed before the change. Agents exempt from CE altogether, such as those continuously licensed for at least 20 years (§4004.052(b)), are the exception; Maria owes 24 hours, so she is not one of them. A 4-hour figure overstates the rule, and ethics hours cannot be replaced by other CE.

Source: Insurance Code §4004.054 · Insurance Code §4004.052(b)

Correct

The answer is C: Texas does not state-mandate pre-licensing education for the permanent direct license pathway.

Texas requires no pre-licensing education for a general lines license: an applicant qualifies by age, passing the exam, and submitting the application and fees (Insurance Code §4001.105). The 40-hour figure is training that the agent or insurer considering a temporary-license applicant for appointment must provide (§4001.160), so it applies only to the optional temporary license. Most candidates still take a prep course voluntarily, but it is not a legal requirement for permanent licensure.

Source: Insurance Code §4001.105 · Insurance Code §4001.160

Correct

The answer is B: Health plans, healthcare providers, and clearinghouses.

Under HIPAA, 'covered entities' are health plans, healthcare providers who transmit health information electronically, and healthcare clearinghouses (45 CFR §160.103). Business associates that handle protected health information for them are a separate category: they work under business associate contracts and, since HHS's 2013 rules under the HITECH Act, must also comply directly with the Security Rule and parts of the Privacy Rule (45 CFR §§164.104(b), 164.302). They are still not covered entities.

Source: §160.103 · 45 CFR 160.103 · §164.104(b)

Correct

The answer is D: Yes, bona fide wellness discounts like this are generally permitted.

Texas law expressly allows wellness incentives. An employer health benefit plan issuer may offer premium discounts, rebates or reduced cost sharing for participation in programs promoting disease prevention, wellness and health (Insurance Code §1501.107), and for policies delivered, issued or renewed from January 1, 2026, §1702.155 allows the same in accident and health policies and says such an incentive is not a prohibited rebate or an unfair practice. Federal HIPAA rules for group health plans likewise permit health-contingent rewards that meet their conditions, including a reasonable alternative standard like the one here. A bona fide program like this is therefore not unfair discrimination.

Source: Insurance Code §1501.107 · Insurance Code §1702.155

Correct

The answer is B: At least 12 hours, which is half of the requirement

At least 50 percent of the required hours must be certified classroom or classroom-equivalent courses, which is 12 of the 24 (Insurance Code §4004.051(c); 28 TAC 19.1003). Do not confuse this with the separate 3-hour ethics minimum: ethics is about the subject of the course, the 50 percent rule is about how it is delivered, and both apply at the same time.

Source: Insurance Code §4004.051(c)