State RegulationsAZ specificDifficulty 1/5
Under A.R.S. 20-442, what conduct is prohibited in the business of insurance in Arizona?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
A.R.S. 20-442 is Arizona's umbrella unfair-trade-practices statute: it declares that unfair methods of competition and unfair or deceptive acts or practices in the business of insurance are prohibited. The specific prohibitions that follow in the article, such as misrepresentation, defamation, boycott, and false financial statements, are the named species of conduct this umbrella section condemns.
Why the other options are wrong
- A) Wrong because advertising is regulated, not banned outright; A.R.S. 20-442 targets unfair and deceptive conduct, not advertising generally.
- B) Wrong because commission arrangements between insurers are not what A.R.S. 20-442 addresses; the statute targets unfair competition and deception.
- D) Wrong because choosing independent agents over employees is a distribution decision, not an unfair method of competition under A.R.S. 20-442.
Memory hook
20-442 is the umbrella — unfair competition and deceptive acts stay under it.