State RegulationsAZ specificDifficulty 1/5
Under A.R.S. 20-446, which conduct is prohibited in the Arizona insurance business?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
A.R.S. 20-446 prohibits boycotts, coercion, and intimidation in the business of insurance. The provision keeps competition in the Arizona market free of strong-arm tactics, such as concerted refusals to deal with a competitor or forcing parties into unwanted transactions, and it is enforceable by the Director of the Arizona Department of Insurance and Financial Institutions.
Why the other options are wrong
- A) Wrong because reinsurance among affiliates is a legitimate transaction, not the boycott or coercion that A.R.S. 20-446 prohibits.
- B) Wrong because mergers between licensed insurers are lawful business combinations outside the scope of A.R.S. 20-446.
- D) Wrong because risk retention groups are a recognized alternative market mechanism, not intimidation or boycott under A.R.S. 20-446.
Memory hook
20-446 outlaws the strong arm — no boycotts, no coercion, no intimidation.