State RegulationsAZ specificDifficulty 1/5
An Arizona producer is engaging in practices that violate the state's insurance regulations. Who has the authority to issue a cease and desist order to stop the conduct?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under A.R.S. 20-292, the Director of the Arizona Department of Insurance and Financial Institutions (DIFI) may issue a cease and desist order against any person who violates Arizona insurance law, and continued violation after the order exposes the person to further disciplinary action. The Director — not the courts or another agency — is the enforcing official for stop orders.
Why the other options are wrong
- A) The attorney general's role in the fraud provisions is recovering civil penalties under A.R.S. 20-466.02; cease and desist authority belongs to the Director.
- B) An appointing insurer has contractual control over its agents but no statutory cease and desist power.
- D) Courts do not initiate cease and desist orders under A.R.S. 20-292; the Director's order is the administrative mechanism.
Memory hook
Stop means the Director: A.R.S. 20-292 puts the brake pedal in DIFI's office.