The Texas insurance exam pass rates, and where they come from

Most pages that quote a Texas insurance pass rate do not say where it came from. This one does, because the provenance is the only reason to believe the number.

Where the figure comes from

Texas Insurance Code section 4002.008 requires the Department to report on agent and adjuster examinations. The report is prepared by Pearson VUE, filed with the Governor, and published. It runs to well over a hundred tables and it covers every insurance licensing examination the state administers, not just this one.

That is an unusually good source. It is the regulator, not a prep vendor. It counts first-time candidates rather than appointments. And because every examination is in the same document on the same definitions, the comparisons between them are real comparisons rather than numbers scraped from different places.

People, not sittings

The 26,427 are first-time candidates. Human beings, each counted once, on their first attempt at this examination.

This sounds pedantic until you see what it does elsewhere. Examination bodies frequently publish administrations, which count a person who sits three times as three. Quote an administration count as a candidate count and you can overstate the population by a factor of three or more, and quote a per-administration pass rate as a per-person one and you understate how many people eventually get licensed. Neither error is in the TDI figures, but both are in plenty of pages that cite them.

The three numbers together

A pass rate on its own tells you very little. TDI publishes three figures for this examination and they constrain each other.

Put the mean beside the pass rate and you get the closest thing to a pass mark anyone can honestly derive. We have done that arithmetic in why the mean score sits on the pass mark, and the result is ours rather than the Department's.

The standard deviation is the underrated one. 14.51 is a wide spread for a licensing examination, and a wide spread means the population contains both well-prepared candidates and people who booked an appointment on a whim. Texas requires no pre-licensing course, so both groups can walk in on the same morning.

How this examination compares

26,427 is the largest single figure in the report. The whole set of insurance licensing examinations totals 67,199 first-time candidates, so this one paper is roughly two fifths of everything TDI examines.

What the report does not tell you

• Nothing about how candidates prepared. No breakdown by course, by self-study, by employer. So no vendor can honestly publish a pass rate for its own students against this baseline, and that includes us
• Nothing about the two portions separately. The general and Texas portions are scored as one result, so there is no published figure for which half people lose marks on
• Nothing about eventual outcomes for this license. First-attempt pass rate is not the share of people who are eventually licensed, and the difference is everyone who came back and passed on a retake

That last gap is the one we would most like closed. A first-time rate of 57.7% reads as grim. The eventual rate is certainly higher, because a retake is another $49 registration with no waiting period set in the candidate handbook for this license, and we simply cannot tell you by how much.

One opinion about the number

57.7% is not evidence of a hard examination. It is evidence of an open door. Compare it with the Property and Casualty Risk Manager paper at 32.4%, which is a genuinely difficult examination sat by 105 self-selected specialists, and the contrast is not in the papers. It is in who is allowed to walk up to them.