WorksheetsInsurance Regulation and Licensing
Total questions: 20
Worksheet time: 10mins
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.
Report of Actions (ARS § 20-301)
Producers must report administrative actions or criminal convictions within 30 days, including relevant legal documents.
Producers are required to submit annual financial statements to the state.
Producers must notify clients of any changes in their services within 15 days.
Producers are exempt from reporting any actions if they are resolved in court.
Types of Licensees: Business Entities (ARS § 20-281(1), 285(D, E), 290(B))
Corporations, LLCs, and partnerships must apply for licensure, designate a responsible producer, and report changes in officers or structure.
Sole proprietorships are exempt from licensure requirements and do not need to report changes.
Only corporations are required to designate a responsible producer for licensure.
Partnerships do not need to apply for licensure if they have fewer than three members.
State Regulation
Arizona regulates insurance through statutes, administrative rules, and oversight by the Department of Insurance and Financial Institutions (DIFI).
Arizona regulates insurance solely through federal laws.
Arizona has no regulations on insurance.
Arizona's insurance regulations are managed by private companies.
Cease and Desist Order (ARS § 20-292)
The Director may issue an order to stop unauthorized or unlawful insurance activity.
The Director can approve all insurance claims without review.
The Director is responsible for setting insurance premiums.
The Director must allow all insurance activities to continue without interruption.
Payment of Premiums (ARS § 20-191)
Premiums are considered paid when received by the insurer.
Premiums mailed are considered paid on the postmark date.
Premiums must be paid in cash only.
Premiums are considered paid at the end of the month.
Types of Licensees: Producers (ARS § 20-281(5), 286)
Producers are individuals or entities authorized to sell, solicit, or negotiate insurance.
Producers are only allowed to sell life insurance policies.
Producers are required to have a college degree in finance.
Producers can only work for one insurance company.
Types of Licensees: Adjusters (ARS § 20-321)
Adjusters are responsible for investigating and settling claims on behalf of insurers or insureds.
Adjusters do not need a license to operate in any circumstances.
Adjusters are only employed by the government to handle claims.
Adjusters are exempt from licensing if they are independent contractors.
Licensing Eligibility / Lawful Presence (ARS § 41-1080)
Applicants must prove lawful U.S. presence using approved documents (e.g., passport, birth certificate, visa).
Applicants are not required to provide any documentation for lawful presence.
Only residents need to prove lawful U.S. presence with documents.
Nonresidents are exempt from proving lawful U.S. presence.
Types of Licensees: Vending Machines (ARS § 20-293)
A license is required to sell travel accident insurance via vending machines.
No license is needed to sell travel accident insurance via vending machines.
Only the vending machine owner needs a license, not the insurer.
The insurer can sell travel accident insurance without any application.
Lines of Producer License Authority (ARS § 20-286(A), 321, 331, 332, 411, 411.01, 1580, 1693.01, 2662)
What lines of authority does Arizona recognize?Life, Health, Property, Casualty, Personal Lines, Credit, Variable Products, and more.
Only Life and Health insurance.
Property and Casualty only.
Variable Products and Credit only.
