State RegulationsAZ specificDifficulty 1/5
A producer exaggerates the benefits of a life policy to a prospect, describing terms the contract does not contain. Under A.R.S. 20-443, how is this conduct treated?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
A.R.S. 20-443 prohibits misrepresentations in the sale of insurance, including false statements about the terms, benefits, or advantages of a policy. Exaggerating benefits that the contract does not provide is a deceptive act that can induce a purchase the consumer would not otherwise make, and it exposes the producer to discipline by the Director.
Why the other options are wrong
- A) Wrong because the deception occurs at the point of sale; later correction does not undo the misrepresentation prohibited by A.R.S. 20-443.
- B) Wrong because a prospect's waiver cannot legalize a prohibited misrepresentation; A.R.S. 20-443 forbids the conduct itself.
- C) Wrong because the type of life policy does not matter; misrepresenting terms is prohibited for every product under A.R.S. 20-443.
Memory hook
Promise what the policy lacks and 20-443 calls it deception.