Free AZ Life & Health Exam Flashcards

The Arizona state agency responsible for regulating the business of insurance and financial institutions. Created on July 1, 2020, through the merger of the Department of Insurance and the Department of Financial Institutions.

Appointed by the Governor and confirmed by the State Senate. Serves at the pleasure of the Governor and holds the power to enforce Arizona Revised Statutes (A.R.S.) Title 20.

The primary body of Arizona state statutory law governing the insurance industry, including licensing, policy provisions, and trade practices.

The Director can adopt rules to implement and interpret A.R.S. Title 20 (compiled in the Arizona Administrative Code Chapter 6). Rules carry the force of law but cannot exceed statutory authority.

The Director's authority to audit insurers' sales, claims, and underwriting practices to ensure compliance with Arizona law. Expenses are generally paid by the insurer being examined.

An administrative order issued by the Director directing an insurer or producer to immediately stop a prohibited or unlawful insurance activity.

A license issued by DIFI authorizing an insurance company (admitted insurer) to transact insurance business within the state of Arizona.

Admitted insurers hold a Certificate of Authority from DIFI and are backed by the Guaranty Fund. Non-admitted (surplus lines) insurers do not hold a Certificate of Authority and are not backed by the Guaranty Fund.

None. Arizona does not mandate pre-licensing education classroom hours for insurance producers, though candidates must still pass the licensing exam.

A score of 70% or higher is required on BOTH the general (national) and state-law sections. The scores are not averaged, and each section must be passed independently.

An applicant must submit their NIPR license application and fees within 12 months (1 year) of passing the exam, or the exam results expire.

Valid for 4 years, expiring on the last day of the licensee's birth month.

Resident producers with a major line of authority must complete 48 hours of approved CE every 4 years, aligned with their license term.

At least 6 hours of the required 48 continuing education hours must be dedicated to ethics training.

Excess CE hours cannot be carried forward to the next 4-year license cycle, and producers cannot repeat the same course for credit within a single compliance period.

Producers must report a change of address, legal name, administrative action by another state, or criminal prosecution/conviction within 30 days of the event.

10 days from policy delivery. The policyowner can return the policy for a full refund of all premiums paid, voiding the contract from the start.

2 years. After a life insurance policy has been in force during the insured's lifetime for 2 years, the insurer cannot void it or deny claims based on application misrepresentations.

A maximum of 2 years from policy issue. If the insured dies by suicide within this window, the insurer's liability is limited to a refund of premiums paid.

The policy is NOT voided. Instead, the insurer adjusts the death benefit to what the premiums paid would have purchased at the correct age or sex.

Typically 31 days. If the insured dies during this period, the death benefit is paid to the beneficiary, minus the unpaid premium.

The right to restore a lapsed policy (usually within 3 years) by providing evidence of insurability and paying back premiums plus interest. Reinstatement starts a new 2-year contestability period for application statements.

Specifies that the policy, including the attached application and any riders, constitutes the entire agreement between the parties. No outside documents can be incorporated by reference.

Under A.R.S. 20-1243.03, effective January 1, 2021, producers recommending annuities must act in the consumer's best interest and cannot prioritize their own financial gain over the client's.

1. Care (diligence in matching needs), 2. Disclosure (producer role and compensation), 3. Conflict of Interest (managing material conflicts), and 4. Documentation (written basis of recommendation).

Financial and personal information a producer must collect before recommending an annuity, including age, income, financial objectives, time horizon, liquidity needs, and risk tolerance.

Producers must complete a one-time 4-hour annuity best-interest training course, plus company product-specific training, before soliciting or selling annuities in the state.

Producers and insurers must retain records of annuity recommendations, suitability profiles, and disclosures for at least 5 years.

Producers who comply with comparable federal standards (e.g., SEC's Regulation Best Interest or Investment Advisers Act fiduciary duties) are deemed to satisfy Arizona's best-interest rules.

Producers must deliver a detailed product disclosure document and the NAIC Buyer's Guide to Annuities at or before the time of application.

A feature in some fixed/indexed annuities that adjusts the surrender value up or down depending on interest rate changes since the policy was issued.

A transaction where new life insurance or an annuity is purchased, causing an existing policy to be lapsed, surrendered, reduced in value, or borrowed against.

Twisting is using misrepresentation to induce a client to replace a policy with a different insurer. Churning is repeatedly and needlessly replacing policies (often internally) to generate new producer commissions.

A mandatory, signed disclosure document that the producer must present and leave with the applicant when a replacement is proposed, explaining the risks and restarts of the new policy.

The replacing insurer must notify the existing insurer of the proposed replacement within 5 business days of receiving the application, allowing the existing insurer to attempt conservation.

Both producers and replacing insurers must retain copies of all replacement notices, comparisons, and documentation for at least 5 years.

The existing insurer's right to contact their policyholder and provide a comparison or explanation to encourage keeping the current policy in force rather than replacing it.

Arizona does not run a state exchange. Residents purchase ACA-compliant individual policies through the federal exchange at HealthCare.gov.

10 days under A.C.C. R20-6-501, allowing the policyholder to return the policy for a full premium refund.

Written notice of a claim must be given to the insurer within 20 days of the occurrence of any covered loss, or as soon as reasonably possible.

The insurer must furnish claim forms within 15 days of receiving notice. The claimant must submit written proof of loss within 90 days of the loss.

A policyholder cannot bring legal action against the insurer sooner than 60 days after submitting proof of loss, nor later than 3 years after proof of loss is required.

A state safety net that pays covered claims for insolvent member insurers. Funded post-insolvency by assessing remaining solvent insurers in proportion to their premium volume.

Life insurance death benefits: up to $300,000 per life; cash surrender value: up to $100,000 per life; annuity present value: up to $250,000 per contract owner.

Major medical/hospital: up to $500,000; Disability income & Long-Term Care: up to $300,000; other health benefits: up to $100,000.

Under A.R.S. 20-685.01, it is an unfair trade practice to use the existence of the Guaranty Fund to solicit, induce, or promote the sale of insurance.

Under A.R.S. 20-1233 (annuity contracts), annuity contracts sold to seniors (age 65+) have an extended 30-day free look (10 days otherwise). Many Arizona prep sources also describe an extended 20-day free look on life insurance policies sold to seniors age 65+.

Offering or giving any inducement, premium discount, or valuable consideration to purchase insurance that is not specified in the policy contract. It is a prohibited unfair trade practice.

Under A.R.S. 20-456: up to $1,000 per act (aggregate $10,000 limit) for non-intentional violations; up to $5,000 per act (aggregate $50,000 per 6-month period) for intentional violations.

Federal COBRA applies to employers with 20 or more employees (18-36 months coverage). Arizona state continuation (mini-COBRA) applies to small employers with fewer than 20 employees.