State RegulationsAZ specificDifficulty 2/5
An Arizona advertisement states that a life policy has been 'approved by the federal government,' which is untrue. How is the advertisement classified under Arizona insurance law?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
A false claim of government approval is a misleading statement about insurance, and A.R.S. 20-444 prohibits circulating false or misleading statements to induce the purchase of insurance. The untrue approval claim deceives consumers about the product's standing, so the advertisement is actionable false advertising enforceable by the Director of the Arizona Department of Insurance and Financial Institutions.
Why the other options are wrong
- A) Wrong because the absence of disparagement does not save the ad; a false statement about the insurance itself is what A.R.S. 20-444 prohibits.
- B) Wrong because the advertising medium is irrelevant; mailed, televised, or spoken, a misleading statement violates A.R.S. 20-444.
- D) Wrong because enforcing Arizona's false advertising prohibition is precisely within the Director's authority; the state statute applies.
Memory hook
Fake government approval = false advertising under 20-444.