Property and Casualty Insurance Sales Test Guide

Sales agents who solicit, sell or negotiate insurance products must have a license given by the state.  Each state has different licensure requirements but some require insurance-related coursework and the passing of several exams. Once licensed, there are professional organizations that offer certification programs to obtain advanced designations and training in specialty areas that also may require exams.   

Many insurance companies and independent agencies typically hire those who have graduated from college with degrees in economics, business and finance.  Those who have only a high school diploma may be considered for a sales position but only if they have a proven ability in sales or success in other types of work.  Courses in insurance are offered by many colleges and universities and a bachelor’s degree in the field is offered by a few schools.  

Licensure.  State law and regulations require that insurance sales agents selling property and casualty insurance obtain a license before working within the state. Typically, a license will only be issued after an applicant completes pre-licensing courses and passes a State examination covering insurance fundamentals and State insurance laws.  Different licenses are needed for property and casualty insurance sales and life and health insurance sales. 

The property part of the exam typically covers eight categories:

-          Insurance regulation

-          General insurance knowledge

-          Property insurance basics

-          Dwellings

-          Homeowners

-          Commercial package policy

-          Business owners and other types of insurance

The casualty part of the exam typically covers nine categories:

-          Insurance regulation

-          General insurance

-          Casualty insurance basics

-          Homeowners

-          Auto

-          Commercial package policy

-          Business owners and other types of insurance coverage

 The exam is taken on a personal computer at an examination testing center.  All of the questions are multiple choice and the questions will either be direct questions, incomplete sentence, or “all of the following except.”

Scores will be given to candidates immediately after completion of the exam. To pass, candidates must answer at least 70 percent of the questions correctly. The score card will comprise of the overall score, how many questions were answered correctly, and a declaration of if you have passed or failed. A summary of the performance in each section will also be provided.

The exam is administered by Thompson Prometric. To register for the test please visit the Prometric website to find a date and location for the exam.

There are many different resources available for preparing for the casualty and property insurance examination. A multitude of classes, flashcards, study guides and practice exams are available online and in book stores for purchase.

After getting the proper securities license, insurance agents may also sell securities and other financial products. To get licensed to sell such products requires the passing of additional exams, the Series 6 or Series 7 licensing exam, both of which are administered by the National Association of Securities Dealers (NASD). The Series 6 exam deals with the sale of mutual funds and variable annuities. The Series 7 exam qualifies agents as general securities sales representatives.  To get more information about the Series 7 exam, see The Securities Test Guide.

Certification.  There are professional organizations in insurance sales that offer agent certification and designation in specialized areas of insurance and financial consulting. To become certified and obtain the designation, and to retain it, agents may be required to pass exams.

For instance, The National Alliance for Insurance Education and Research (http://www2.scic.com/) offers many different courses in health, life and property and casualty insurance for insurance agents. The programs are voluntary and offer an agent a designation to assure clients and employers that an agent has a thorough understanding of the relevant specialty. 

Beyond insurance, in the field of financial planning, an agent may earn a certified financial planner designation to demonstrate competency as a financial planner.  The Certified Financial Planner Board of Standards offers the Certified Financial Planner credential.  To get certified, a candidate must have relevant experience, complete education requirements, pass a comprehensive examination and adhere to a code of ethics. The CFP exam evaluates a candidate's knowledge of the financial planning process, insurance and risk management, employee benefits planning, taxes and retirement planning and investment and estate planning.  To learn more about the CFP exam, see the CFP Exam Guide.

To find test preparation materials, see our Property and Casualty Test Directory.

Sources: United States Bureau of Labor Statistics, http://www.bls.gov/oco/ocos118.htm