State RegulationsAZ specificDifficulty 2/5
An Arizona life settlement provider pays a producer a referral fee for sending the names of potential settlement applicants, without the applicants' knowledge or consent. Under Arizona life settlement law, this practice is:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Arizona's life settlement regulation, A.R.S. 20-3204 together with the unfair-practice provisions of A.R.S. 20-3210, governs disclosure and compensation in settlement transactions. Providers may not compensate persons for referrals of settlement applicants unless the required disclosures and consents are observed, and undisclosed referral compensation is treated as an unfair practice. Violations expose the provider and the producer to action by the Director.
Why the other options are wrong
- A) No statutory ceiling legitimizes hidden referral fees; the defect is the absence of required disclosure and consent, not the payment amount.
- B) Referral compensation is part of the settlement transaction and is squarely regulated by A.R.S. 20-3204 and 20-3210.
- D) The disclosure duties run to the applicant and the transaction parties; telling the issuing insurer does not cure an undisclosed referral arrangement.
Memory hook
No secret referral fees — settlement deals demand disclosure and consent first.