State RegulationsAZ specificDifficulty 2/5
Before a life settlement contract is entered into in Arizona, what does A.R.S. 20-3204 require of the life settlement broker with respect to the policyholder?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
A.R.S. 20-3204 imposes disclosure and consent rules on life settlement transactions: the broker must make the required disclosures to the policyholder and obtain the policyholder's written consent before the settlement proceeds. This ensures the policyowner understands the transaction before giving up the policy.
Why the other options are wrong
- A) A commission statement alone does not satisfy the statutory disclosure and consent requirements.
- B) The policy's age does not remove the disclosure and written-consent duties under A.R.S. 20-3204.
- D) The statute requires disclosure and consent; it does not condition discussions on prior approval by the Director.
Memory hook
Disclose first, get written consent, then settle.