State RegulationsAZ specificDifficulty 2/5
Under Arizona law, which combination of activities constitutes transacting the business of insurance?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Arizona insurance law, through the definitions in A.R.S. 20-281, treats selling, soliciting, and negotiating insurance as the core acts of transacting the business of insurance, each of which requires a license under A.R.S. 20-282. The umbrella is deliberately broad: a person need not actually issue a policy to be transacting insurance, because influencing or beginning the sale is enough.
Why the other options are wrong
- A) Wrong because transacting insurance is not limited to issuance; under A.R.S. 20-281 the acts of solicitation and negotiation count even before a contract exists.
- C) Wrong because premium collection after issuance is not the only qualifying act; selling, soliciting, and negotiating all constitute transacting under A.R.S. 20-281.
- D) Wrong because underwriting is an insurer function; the licensing focus is on the selling, soliciting, and negotiating acts defined in A.R.S. 20-281.
Memory hook
Sell, solicit, negotiate — the three fingers of transacting insurance.