State RegulationsAZ specificDifficulty 1/5
A lender tells an Arizona borrower that the loan will be approved only if the borrower buys insurance from a particular producer. Under A.R.S. 20-446, this is:
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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. Conditioning a loan approval on buying insurance from a particular source forces the borrower's choice and is classic coercion under the unfair trade practices article.
Why the other options are wrong
- A) Conditioning credit on a required insurance purchase is not a marketing arrangement; A.R.S. 20-446 forbids it.
- B) Misrepresentation under A.R.S. 20-443 involves false statements about policy terms, not forcing a purchase.
- D) Defamation under A.R.S. 20-445 involves disparaging a competitor, which is not present here.
Memory hook
Buy from me or no loan — that's coercion, A.R.S. 20-446.