State RegulationsAZ specificDifficulty 2/5
During an investigation, the Arizona Department of Insurance and Financial Institutions finds a producer engaging in what appears to be an unlawful insurance practice. Before deciding on license discipline, what immediate step may the Director take?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
A.R.S. 20-292 allows the Director to issue a cease and desist order to stop conduct that appears to violate Arizona insurance laws. The order halts the practice right away while the Department continues its proceedings, such as license discipline or civil penalties under A.R.S. 20-295. It is the Director's fastest regulatory tool against ongoing misconduct.
Why the other options are wrong
- A) Wrong because discipline under A.R.S. 20-295 requires the prescribed process; the immediate interim tool is the cease and desist order under A.R.S. 20-292.
- B) Wrong because insurance regulation in Arizona is enforced by the Arizona Department of Insurance and Financial Institutions, not by federal banking regulators.
- D) Wrong because the cease and desist power under A.R.S. 20-292 is directed at the person engaged in the unlawful practice, not used to punish an insurer in the producer's place.
Memory hook
Investigation first, discipline later — meanwhile, 20-292 hits the brakes.