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Which state agency is responsible for regulating insurance companies and producers in Arizona?

Arizona Insurance Commission

Arizona Department of Insurance and Financial Institutions (DIFI)

Arizona Corporation Commission

Arizona Department of Financial Services

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2026 Statistics

Key Facts: AZ Life & Health Exam

55%

First-Time Pass Rate

PSI/DIFI data

150 Q

Exam Questions

PSI Services

40 hrs

Pre-License Education

AZ DIFI requirement

48 hrs

CE Per Biennium

AZ DIFI (3 hrs ethics)

70%

Passing Score

AZ DIFI

$59

Exam Fee

PSI Services

Arizona's life and health insurance exam requires 40 hours of pre-licensing education before testing. The exam has 150 questions in 2.5 hours with a 70% passing score. Arizona is overseen by DIFI (Department of Insurance and Financial Institutions), requires 48 hours of continuing education biennially (including 3 hours ethics), and tests heavily on the Arizona Life and Health Insurance Guaranty Association, replacement regulations, annuity suitability, and long-term care partnership program.

Sample AZ Life & Health Practice Questions

Try these sample questions to test your AZ Life & Health exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 200+ question experience with AI tutoring.

1Which state agency is responsible for regulating insurance companies and producers in Arizona?

A.Arizona Insurance Commission

B.Arizona Department of Insurance and Financial Institutions (DIFI)

C.Arizona Corporation Commission

D.Arizona Department of Financial Services

Explanation: The Arizona Department of Insurance and Financial Institutions (DIFI) is the state agency that regulates all insurance activities in Arizona under Title 20 of the Arizona Revised Statutes. DIFI was formed in 2020 when the Department of Insurance merged with the Department of Financial Institutions. The Arizona Corporation Commission regulates utilities and securities, not insurance.

2How is the Director of the Arizona Department of Insurance and Financial Institutions selected?

A.Elected by popular vote in a statewide election

B.Appointed by the Governor and confirmed by the Arizona Senate

C.Appointed by the Arizona Legislature

D.Selected by a board of insurance industry representatives

Explanation: In Arizona, the Director of DIFI is appointed by the Governor and must be confirmed by the Arizona Senate. This differs from some states where the insurance commissioner is elected by popular vote. The Director serves at the pleasure of the Governor and oversees all insurance regulatory functions in the state.

3Under Arizona law, which title of the Arizona Revised Statutes governs insurance regulation?

A.Title 10 - Corporations and Associations

B.Title 20 - Insurance

C.Title 32 - Professions and Occupations

D.Title 44 - Trade and Commerce

Explanation: Title 20 of the Arizona Revised Statutes is specifically designated as the Insurance Code and contains all statutes governing insurance companies, producers, policies, and regulatory requirements in the state. Title 10 covers corporations, Title 32 covers professions, and Title 44 covers trade and commerce, but none of these govern insurance.

4What is the minimum age requirement to obtain an insurance producer license in Arizona?

A.16 years old

B.18 years old

C.21 years old

D.25 years old

Explanation: Arizona requires that insurance producer license applicants be at least 18 years of age. This is consistent with the age of majority in Arizona and ensures that licensees can legally enter into contracts on behalf of the insurers they represent. Applicants who are 16 or 17 years old are too young to be licensed.

5An Arizona resident applying for a life and health insurance producer license must complete which of the following before taking the state licensing examination?

A.A 40-hour pre-licensing education course

B.A 20-hour pre-licensing education course

C.A college degree in business or finance

D.An apprenticeship with a licensed producer

Explanation: Arizona requires resident producer applicants to complete 40 hours of approved pre-licensing education for a combined life and health insurance license. The education must cover life insurance, accident and health insurance, and Arizona insurance law. A college degree and apprenticeship are not required, and 20 hours is insufficient for the combined line of authority.

6How many hours of continuing education (CE) must an Arizona insurance producer complete per licensing period?

A.12 hours per year

B.24 hours per year

C.48 hours every two years

D.30 hours every two years

Explanation: Arizona requires insurance producers to complete 48 hours of approved continuing education every two-year licensing period. This includes specific requirements for ethics training and, for certain licensees, long-term care partnership training. 12 hours per year and 24 hours per year are insufficient, and 30 hours is below Arizona's requirement.

7An Arizona insurance producer fails to renew their license before the expiration date. What is the consequence under Arizona law?

A.The license is automatically renewed with a late fee

B.The producer may continue selling for 30 days while completing renewal

C.The producer must cease all insurance activities until the license is reinstated

D.DIFI will issue a temporary permit valid for 90 days

Explanation: Under Arizona law, a producer whose license has expired must immediately cease all insurance activities. Transacting insurance without a valid license is a violation of Title 20 and may result in penalties. There is no automatic renewal, no grace period to continue selling, and DIFI does not issue temporary permits for lapsed licenses.

8Which of the following actions would the Director of DIFI be authorized to take against a licensed producer who violates Arizona insurance law?

A.Impose criminal penalties including imprisonment

B.Revoke, suspend, or refuse to renew the producer's license and impose civil penalties

C.Order the producer to pay restitution directly to consumers without a hearing

D.Transfer the producer's license to another state for disciplinary proceedings

Explanation: The Director of DIFI has authority to revoke, suspend, or refuse to renew a producer's license and impose civil penalties for violations of insurance laws. Criminal penalties require prosecution through the court system, not the Director's office. The Director cannot order restitution without due process, and licenses are state-specific.

9A nonresident producer wants to sell life and health insurance in Arizona. Which of the following is required?

A.The producer must establish a physical office in Arizona

B.The producer must hold a valid license in their home state and apply for a nonresident license through NIPR

C.The producer must pass the Arizona insurance producer examination

D.The producer must complete Arizona's 40-hour pre-licensing course

Explanation: Under Arizona's reciprocal licensing provisions, a nonresident producer must hold a valid license in their home state and apply for a nonresident license through the National Insurance Producer Registry (NIPR). They are generally not required to retake the licensing exam or complete Arizona's pre-licensing education, nor must they establish a physical office in Arizona.

10Under Arizona's CE requirements, how many of the 48 required biennial hours must be in ethics?

A.3 hours

B.6 hours

C.10 hours

D.12 hours

Explanation: Arizona requires that 3 of the 48 biennial continuing education hours be dedicated to ethics training. This ethics component ensures producers maintain current knowledge of ethical standards and regulatory compliance. 6 hours, 10 hours, and 12 hours exceed Arizona's minimum ethics requirement.

About the AZ Life & Health Exam

The Arizona life and health insurance exam covers DIFI licensing requirements, the role of the Director of Insurance, 40-hour pre-licensing education requirement, 48-hour biennial CE requirement, replacement regulations, annuity suitability, Medicare Supplement, long-term care partnership program, and Arizona-specific unfair trade practices provisions.

Questions

150 scored questions

Time Limit

2 hours 30 minutes

Passing Score

70%

Exam Fee

$59 (Arizona Department of Insurance and Financial Institutions (DIFI) / PSI)

AZ Life & Health Exam Content Outline

25%

AZ DIFI & Licensing

DIFI structure, Director of Insurance, 40-hour pre-licensing education, license types, appointment, CE (48 hrs/2 yrs with 3 hrs ethics)

25%

AZ Life Insurance Laws

AZ life insurance provisions, 10-day free look, 30-day grace period, 2-year incontestability, replacement regulations, annuity suitability (20-day free look for seniors)

25%

AZ Health Insurance Laws

AZ health policy requirements, 10-day free look, Medicare Supplement (30-day free look), long-term care partnership program, mental health parity

25%

AZ Ethics & Practices

Unfair trade practices, misrepresentation, twisting, churning, rebating, Arizona Life and Health Insurance Guaranty Association ($300K life, $250K annuity, $500K health), DIFI penalties

How to Pass the AZ Life & Health Exam

What You Need to Know

Passing score: 70%
Exam length: 150 questions
Time limit: 2 hours 30 minutes
Exam fee: $59

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

AZ Life & Health Study Tips from Top Performers

1Know Arizona's 40-hour pre-license education requirement and 48 hours/2 years CE (with 3 hours ethics)

2Master DIFI structure and the role of the Director of Insurance (Governor-appointed, Senate-confirmed)

3Understand Arizona Life and Health Insurance Guaranty Association limits: $300K life, $250K annuity, $500K health

4Study Arizona replacement regulations: 5-business-day notification, 3-year record retention

5Learn Arizona's free look periods: 10 days for life/health, 20 days for annuities (seniors), 30 days for Medicare Supplement

Frequently Asked Questions

How many questions are on the Arizona life and health insurance exam?

The Arizona life and health insurance exam has 150 total questions covering both general insurance concepts and Arizona state-specific regulations. You have 2 hours and 30 minutes to complete the exam and need a score of 70% to pass. The exam fee is $59 and is administered by PSI Services.

Does Arizona require pre-license education for insurance?

Yes, Arizona requires 40 hours of state-approved pre-license education for the combined life and health insurance license. This education must cover life insurance, accident and health insurance, and Arizona insurance law. After obtaining your license, Arizona requires 48 hours of continuing education every two years, including 3 hours of ethics training.

What is the Arizona Life and Health Insurance Guaranty Association?

The Arizona Life and Health Insurance Guaranty Association protects policyholders when an insurance company becomes insolvent and is unable to pay claims. It provides coverage up to $300,000 for life insurance death benefits, $250,000 for annuity benefits, and $500,000 for health insurance benefits. Producers are prohibited from using guaranty association coverage as a sales inducement.

What are Arizona replacement regulations?

Arizona replacement regulations require insurance producers to provide a Notice Regarding Replacement of Life Insurance when an existing life insurance or annuity policy is being replaced. The replacing insurer must notify the existing insurer within 5 business days. Records of replacement transactions must be maintained for 3 years. The producer must leave the applicant with the notice and all sales materials used.

What are unfair trade practices under Arizona insurance law?

Arizona insurance law prohibits unfair trade practices including misrepresentation of policy terms, twisting (inducing replacement through misrepresentation), churning (generating commissions through unnecessary replacements), rebating (offering inducements not specified in the policy), false advertising, and unfair discrimination. DIFI enforces these provisions and can impose penalties including fines, license suspension, or license revocation.