State RegulationsAZ specificDifficulty 3/5
A life producer in Scottsdale wants to reward prospects. Under A.R.S. 20-449, which arrangement is permissible?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
A.R.S. 20-449 prohibits rebating premiums or giving any favor or advantage not specified in the policy, but it permits an incentive or feedback reward of not more than $200 in value in any twelve-month period. Prizes over $100 are prohibited, and returning commission is a rebate; the statutory exceptions are found at A.R.S. 20-450.
Why the other options are wrong
- A) Returning part of the commission is a rebate of the compensation on the sale, prohibited by A.R.S. 20-449.
- B) A prize over $100 exceeds the ceiling on prizes, which A.R.S. 20-449 prohibits.
- D) A free vacation is an advantage not specified in the policy and far exceeds the permissible reward ceiling.
Memory hook
$200 feedback reward is fine; commission back and big prizes are out — A.R.S. 20-449.