State RegulationsAZ specificDifficulty 2/5
Under Arizona's prohibitions on rebating and prohibited inducements, the core test for an unlawful inducement is whether the offered advantage is:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Arizona insurance law, A.R.S. 20-449, prohibits special favors and advantages not specified in the policy; anything the policy itself provides, such as dividends or contractual policy features, falls outside the prohibition and is lawful to highlight.
Why the other options are wrong
- A) Home-office approval is not the statutory test for an unlawful inducement.
- B) Public advertising does not legalize an advantage the policy does not provide.
- C) Timing relative to application approval is irrelevant to whether the advantage is prohibited.
Memory hook
If it is not in the policy, it is not in the sale.