State RegulationsAZ specificDifficulty 2/5
Before an Arizona policyowner's life insurance policy may be transferred under a life settlement contract, what must the settlement provider obtain from the policyowner?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under A.R.S. 20-3204, Arizona settlement contracts require prescribed disclosures to, and the consent of, the policyowner before the policy may be transferred or assigned. The consent requirement ensures the owner understands the settlement's terms, alternatives, and consequences before giving up the policy. Proceeding without the owner's informed consent violates the statute and subjects the provider to regulatory consequences.
Why the other options are wrong
- B) The issuing insurer's approval is not the statutory gate; A.R.S. 20-3204 conditions the transfer on the owner's disclosure and consent.
- C) No court order is required for an ordinary life settlement; the statutory mechanism is owner consent under A.R.S. 20-3204.
- D) DIFI does not issue case-by-case waivers for settlement transfers; compliance with the disclosure and consent statute is the requirement.
Memory hook
No consent, no transfer — the owner signs off under A.R.S. 20-3204.