State RegulationsAZ specificDifficulty 2/5
A Phoenix resident performs several kinds of work. Which activity counts as transacting the business of insurance under Arizona law?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Arizona insurance law treats soliciting, negotiating, and selling insurance as acts of transacting the business of insurance; these terms are defined at A.R.S. 20-281, with the transaction provisions at A.R.S. 20-106 and A.R.S. 20-282. Urging a prospect to apply for coverage is therefore an insurance transaction, and it may be performed only by a person holding an Arizona producer license.
Why the other options are wrong
- A) General financial planning with no insurance recommendation does not involve soliciting, negotiating, or selling insurance.
- C) Teaching a seminar is educational activity, not an insurance transaction under A.R.S. 20-281.
- D) Payroll accounting is a clerical service to the insurer and is not soliciting, negotiating, or selling insurance.
Memory hook
Solicit, negotiate, sell — that trio is the transaction test in A.R.S. 20-281.