State RegulationsAZ specificDifficulty 2/5
In an Arizona life insurance transaction, who may lawfully accept payment of the premium from an applicant?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Premium payments belong to the insurance transaction, and under Arizona law the parties who may accept them are the insurer itself or a producer properly licensed under A.R.S. 20-282. An unlicensed person collecting premiums is participating in transacting insurance, which exposes the person to cease and desist action under A.R.S. 20-292 and discipline through the Director.
Why the other options are wrong
- A) Wrong because handling money generally does not authorize handling premium payments; the collector must be the insurer or a licensee under A.R.S. 20-282.
- B) Wrong because banks and credit unions are not authorized by the insurance code to accept premiums as part of transacting insurance.
- D) Wrong because an attorney's representation of the applicant confers no authority to collect insurance premiums under Arizona insurance law.
Memory hook
Premiums flow to the insurer or a licensee — nobody else touches them.