Free Arizona Life practice questions

Answer: D. Issue a cease and desist order and, through the attorney general, sue in Maricopa county, with a right to appeal any final order.

Ariz. Rev. Stat. Sec. 20-292 hands the director two tools the moment he has cause to believe that someone is breaking, or is about to break, one of the sections it lists — among them Sec. 20-282, Sec. 20-298, Sec. 20-331, Sec. 20-332 and Sec. 20-411. He may issue a cease and desist order against that person. He may also go through the attorney general to have a complaint filed in Maricopa county's superior court, asking the court to enjoin and restrain the violation, or any act taken in furtherance of it. The court the section names is Maricopa county's, and the prosecuting channel is the attorney general rather than a county attorney, so the referral answer is wrong on both counts. Review is preserved expressly: somebody ordered to stop may file a notice of appeal and take any final order up under title 41, chapter 6, article 10, which is why calling the order unappealable is wrong. And the injunction does not wait on a finished administrative proceeding, because the trigger the section writes is the director's cause to believe and nothing more.

Answer: D. Both inside thirty days, the Nevada action from its final disposition and the conviction from its filing date.

Ariz. Rev. Stat. Sec. 20-301 sets a single deadline and two different starting dates. Subsection (A) covers discipline: inside thirty days of a matter's final disposition, a producer must tell the director about an administrative action that another jurisdiction, or another Arizona governmental agency, took against him, and must enclose the order, the consent to order or whatever other dispositive document the matter produced. Subsection (B) covers convictions, and runs the same thirty-day clock from a different point: a producer convicted anywhere must report it inside thirty days of the date the conviction was filed, enclosing the indictment, information or complaint that opened the case, the court's final judgment, and the rest of the relevant legal papers. Both events are therefore on a thirty-day clock, which is what the correct answer says, and neither clock starts where the other does. Ten days is a figure the section does not contain. Treating the out-of-state report as something the director has to request misreads a duty the section lays directly on the producer. And renewal is later than both deadlines, so it is not an alternative the section offers.

Answer: B. Those of the same class who are of equal expectation of life.

Ariz. Rev. Stat. Sec. 20-448(A) makes it unlawful to discriminate unfairly between two people who sit in the same class and share an equal expectation of life — in what they are charged for a life insurance contract or a life annuity, in the dividends or other benefits payable to them, or in any of the contract's other terms and conditions. Two of the wrong comparators are genuine Arizona standards lifted from neighboring subsections, which is what makes them plausible. Subsection (B) is the disability standard and asks whether two individuals are of the same class and of essentially the same hazard. Subsection (C) governs the kinds of insurance that are neither life nor disability and asks whether insureds or subjects of insurance have substantially like insuring, risk and exposure factors. Each governs a different line, and only the expectation-of-life test governs life insurance and life annuities. A shared rating territory is not a comparator the section uses in any of its subsections at all.

Answer: D. She is not liable for furnishing the information, and may recover fees and costs if she prevails and the suit was not substantially justified.

Ariz. Rev. Stat. Sec. 20-463(B) shields a person who acts without malice, fraudulent intent or bad faith from liability for filing a report, or for giving other information orally or in writing, about a fraudulent insurance act that is suspected, anticipated or already complete — provided the information passes to or from one of the recipients the subsection lists. Those are the director or the department, law enforcement officials together with their agents and employees, and the bodies in its third paragraph, which take in the national association of insurance commissioners, other states' insurance departments, and organizations insurers set up to help detect and prevent insurance fraud. The department and law enforcement officials are two separate paragraphs of one list, so a report to either sits inside the shield and the answer that pits them against each other does not state the section. Subsection (D) adds fee shifting: a person covered by subsection (B) or (C) who is the prevailing party in a civil action for libel, slander or another relevant tort is entitled to fees and costs where the action was not substantially justified, which the subsection defines as a proceeding that lacked a reasonable basis in law or fact when it began. That is why the each-party-bears-its-own answer is wrong. Nothing in the section makes the shield depend on the department acting on what it was told.

Answer: A. A date five mail days before receipt is presumed, which puts the payment on or before the due date.

Ariz. Rev. Stat. Sec. 20-191(A) treats a premium as paid on the day the mail postmarked it, provided the policyholder deposited it in an official United States mail depository, properly addressed and with postage prepaid, on or before the day the premium fell due. An insurer may prove that postmark by keeping the envelope. Where it has not kept the envelope, or the postmark on it cannot be read, the subsection supplies a presumption instead: payment is taken to have been made five mail days before the insurer got it, counting only days the postal service delivers as usual. Five such days before receipt is earlier than the four that passed here, so the presumed date lands on or before the due date and the premium is timely. A record made in the regular course of business is what the subsection lets an insurer use to pin down the date of RECEIPT, which feeds the presumption rather than being the date of payment. The answer resting on receipt ignores the presumption written for exactly this gap, and the answer that makes any mailed premium timely drops the on-or-before-the-due-date condition that brings the postmark rule into play at all.

Answer: B. False or deceptive advertising, because a person that is not an insurer may not use a name deceptively suggesting it is one.

Ariz. Rev. Stat. Sec. 20-444 has two subsections and the second is the one that bites here. Subsection (A) catches an untrue, deceptive or misleading claim about the insurance business that somebody puts in front of the public — through a newspaper, a notice, a circular, a pamphlet, a letter, a poster, radio, television, or any other route. Subsection (B) is shorter and more direct. If a person is not an insurer, that person may not take or trade under a name whose effect is to imply or hint that it is one. Because subsection (B) turns on the name alone and not on any act of publication, the argument that a trade name is none of the forms subsection (A) lists does not rescue the company. Defamation under Sec. 20-445 needs a statement false or maliciously critical of an insurer's financial condition, calculated to injure someone in the insurance business, and a company's own name is not that. Misrepresentation under Sec. 20-443(A)(4) covers the name or title given to a policy, or to a class of policies, where that title misrepresents what the policy really is — so it is aimed at what a product is called rather than at what a company calls itself.

Answer: C. For everything except an original it holds in a custodial or fiduciary capacity, so long as the stored data stays easily accessible to the department in readable form.

Ariz. Rev. Stat. Sec. 20-157(D) lets an insurer, or any other person licensed under the insurance title, reproduce the accounts, records, documents and files named in subsection (A) by a long list of processes that includes microfilm, optical disk and electronic imaging. Having done so, it may destroy the paper — subject to one exception and two conditions. The exception is the original a licensee holds in a custodial or fiduciary capacity, which may not be destroyed. The conditions are that the department be able to reach the stored data easily and in readable form, and that readable reproduced copies be obtainable. An answer that allows any original to go drops the custodial carve-out, which is the real limit here. An answer forbidding all destruction inverts the subsection's evidence rule: a record stored this way may be admitted as the original whether or not the original survives, and putting the reproduction in evidence does not shut out the original. Prior written permission from the director appears nowhere in the section, so that answer describes a step Arizona does not require at all.

Answer: B. She is treated as meeting the broker licensing requirement, but must notify the director within her first thirty days as a broker.

Ariz. Rev. Stat. Sec. 20-3202(A) is the general rule: nobody may act as a provider or a broker with an owner living in Arizona without either a certificate of authority or a license issued under that section. Subsection (F) gives one group a shortcut through it. A producer who already holds an Arizona life line of authority counts as having satisfied the section's licensing requirements and may operate as a broker — but the shortcut carries conditions. Inside her first thirty days of broker activity she has to notify the director on a prescribed form, acknowledge in that notice that she will operate under the article, and pay whatever fee applies. So what she owes is notice and a fee rather than a second license, and the notice is mandatory, which is why doing nothing is wrong. The provider certificate of authority belongs to the counterparty in a settlement and is what carries the plan of operation and the antifraud plan that subsection (E) requires; neither is asked of a life producer acting as a broker, and the section sets no separate broker examination for her. Her broker authority then runs out at the same time as the life line of authority, under subsection (G).

Answer: C. A prohibited rebate, because the section expressly names a drug manufacturer paying an enrollee's premium.

Ariz. Rev. Stat. Sec. 20-449(A) stops anyone from paying, allowing, giving or offering — directly or at one remove — a rebate of premium, a special favor or advantage in dividends or other benefits, or any valuable consideration the contract does not specify, as an inducement to life insurance, a life annuity or disability insurance. The same subsection then names one arrangement as a rebate outright. Where a health care provider, a health care institution or a drug manufacturer pays, itself or through someone else, an enrollee's premium or subscription fee under a health benefits plan that an Arizona health care insurer issued, that payment is a prohibited rebate. Subsection (C) ties the word enrollee to a patient of such a provider, institution or manufacturer — someone receiving health care services from it, who is neither its employee nor an employee's dependent, and whose coverage is a health benefits plan a health care insurer provides. That is the patient in the question, so standing outside the contract is not a defense and the section offers no disclosure cure. The two-hundred-dollar figure belongs to subsection (B), which presumes a customer-feedback incentive reasonable if it does not exceed $200 and forbids promoting any such effort alongside an application or a renewal, so it is a different and much narrower allowance.

Answer: A. One year after the revocation, and only if the person again qualifies under the applicable provisions of the title.

Ariz. Rev. Stat. Sec. 20-296(A) stops the director from issuing any license under the insurance title to someone whose license has been revoked until a year has run from the revocation, and even then only once that person has qualified afresh under whichever provisions of the title apply. Both halves of the sentence do work. The waiting period is fixed at one year, which is what rules out an immediate reissue on payment of a fee, and rules out the longer two-year and five-year periods the other answers offer. And time alone is not enough, because requalification is a separate condition the subsection imposes — which is why no answer that makes eligibility automatic after a period can be right. The subsection offers no shorter route past the year and no fee-based exception to either half of the test.