Insurance Regulation and Licensing

Types of Licensees: Temporary License (ARS § 20-294)

• Issued for up to 180 days to allow business continuity after death, disability, or military deployment of a licensed producer.

• Issued for a period of 90 days to allow for temporary business operations during renovations.

• Issued indefinitely to allow for ongoing business operations without restrictions.

• Issued for 30 days to allow for business continuity during a change of ownership.

Disciplinary Actions: Denial, Suspension, Revocation, Civil Penalties (ARS §§ 20-295, 296)

• The Director may only deny a license for violations.

• The Director may deny, suspend, revoke, or refuse to renew a license for violations, with civil penalties up to $15,000.

• The Director can only impose civil penalties without affecting the license.

• The Director may only suspend a license for violations.

Identification of Producer (ARS § 20-229)

• Producers must identify themselves and their insurer when soliciting or selling insurance.

• Producers can choose not to identify themselves if they have a valid license.

• Producers are required to identify only their insurer, not themselves.

• Producers must identify themselves only when selling life insurance.

Types of Licensees: Life Settlement Broker (ARS § 20-3202)

• A licensed life producer who negotiates life settlement contracts on behalf of policyowners. Must notify the Department within 30 days of acting as a broker.

• A financial advisor who provides investment advice on life insurance policies.

• An insurance agent who sells life insurance policies without any additional qualifications.

• A legal representative who handles claims for life insurance policies.

Sell (ARS § 20-281(14))

• Exchanging an insurance contract for money or equivalent on behalf of an insurer.

• Offering an insurance policy to potential clients without any financial transaction.

• Providing advice on insurance policies without selling them.

• Collecting premiums from policyholders for insurance coverage.

Maintenance and Duration: Inactive License During Military Service (ARS § 20-289.01)

• A licensee called to active duty may request inactive status and is exempt from CE and renewal requirements during service.

• A licensee must continue to meet CE requirements even when called to active duty.

• A licensee can only maintain active status while serving in the military.

• A licensee is required to renew their license every year regardless of military service.

Acts Constituting Insurance Transaction (ARS §§ 20-106, 282, 401.01)

• Includes solicitation, negotiation, issuance, and servicing of insurance contracts.

• Only involves the issuance of insurance contracts.

• Covers only the negotiation of insurance contracts.

• Involves the collection of premiums only.

Negotiate (ARS § 20-281(10))

• Conferring with or advising a client about insurance terms or benefits.

• Drafting legal documents for insurance policies.

• Evaluating the financial stability of an insurance company.

• Selling insurance products to clients.

Types of Licensees: Nonresidents (ARS § 20-281(11))

• A nonresident is licensed in another state but may apply for an Arizona license if their home state offers reciprocity.

• A nonresident cannot apply for an Arizona license under any circumstances.

• A nonresident must have lived in Arizona for at least six months to apply for a license.

• A nonresident is automatically granted an Arizona license without any application process.

Certificate of Authority (ARS § 20-217(A))

What must insurers have to transact insurance in Arizona?

• A license to operate in multiple states.

• A certificate of authority.

• An insurance bond.

• Approval from the state governor.