State RegulationsAZ specificDifficulty 3/5
During a sales visit in Glendale, a producer makes a false statement that a policy's dividends are guaranteed at a fixed amount each year, and also calls a competing insurer 'unable to pay its claims.' The first statement is best classified as which violation?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
A.R.S. 20-443 prohibits misrepresenting the terms, benefits, or advantages of a policy, and A.A.C. R20-6-801(D) treats such misleading statements as misrepresentation. A false assurance about guaranteed dividends misstates the policy itself; the remark about a competitor would instead implicate A.R.S. 20-445 defamation.
Why the other options are wrong
- A) Defamation under A.R.S. 20-445 concerns false, disparaging statements about a competitor — that is the second statement, not the dividend claim.
- B) Boycott, coercion, or intimidation under A.R.S. 20-446 involves forcing or restraining trade, not describing policy benefits.
- D) Unfair claims settlement practices under A.R.S. 20-461 govern claim handling after a loss, not sales statements.
Memory hook
Lies about your policy = misrepresentation (20-443); lies about their company = defamation (20-445).