State RegulationsAZ specificDifficulty 1/5
Under Arizona insurance law, how must an insurer handle its business records and accounts?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under A.R.S. 20-157 and A.R.S. 20-290, insurers must maintain their accounts and records in a condition that allows the Director of the Arizona Department of Insurance and Financial Institutions to examine them. The examination power is a core regulatory tool: it lets the Department verify solvency, detect unfair practices, and enforce Arizona insurance law against the company.
Why the other options are wrong
- B) Wrong because the records must be readable by the regulator, not hidden from competitors; A.R.S. 20-157 and A.R.S. 20-290 exist to enable examination.
- C) Wrong because records are not destroyed after a policy's first anniversary; they must remain available for examination by the Director under A.R.S. 20-157 and A.R.S. 20-290.
- D) Wrong because shareholder reporting is a corporate matter and does not satisfy the Director's examination rights under A.R.S. 20-157 and A.R.S. 20-290.
Memory hook
Books open to the Director — 20-157 keeps records exam-ready.