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Arizona Insurance Producer License Exam -Casualty
ACTUAL QUESTIONS AND ANSWERS LATEST
UPDATE THIS YEAR
Arizona Insurance Producer License Exam – Casualty
SUMMARIZED EXAM COVERAGE (point form)
• Arizona Statutes & Regulations (20% of exam): Producer licensing and appointment –
qualifications (18+ years, residency, fingerprinting, exam pass, no felony within 5 years of
application unless waived), license renewal (biennial, 24 CE hours with 3 hours ethics).
Continuing education exemptions for non-resident producers with home-state CE compliance,
age 65+ with 25+ years licensed, or military exemption. Termination of appointment notification
to Director within 30 days. Unfair claims settlement practices (15 days to acknowledge, 30 days
to accept/deny, 45 days for payment after settlement). Controlled business: cannot exceed 10%
of total written premium per year (or last 2 years if not in business 1 year). False statements on
application – penalty up to $10,000 per violation.
• General Insurance Concepts: Risk (pure vs. speculative), peril vs. hazard (physical, moral,
morale), indemnity, subrogation, insurable interest (at time of loss for property, at time of
application for life), utmost good faith, representation vs. warranty, waiver and estoppel, parol
evidence rule, aleatory vs. commutative contracts, unilateral vs. bilateral.
• Liability & Casualty Basics: Negligence (duty, breach, causation, damages), tort liability, joint
and several liability, vicarious liability (scope of employment, family purpose doctrine, imputed
negligence, dram shop, parental liability), comparative negligence (pure vs. modified),
assumption of risk, strict liability (abnormally dangerous activities, products liability).
• Personal Lines Auto Insurance (Arizona): Bodily Injury (BI) and Property Damage (PD) liability
limits (split limits 25/50/10 typical – 25kperpersonBI,25kperpersonBI,50k per accident BI, $10k
PD), uninsured motorist (UM) and underinsured motorist (UIM) coverage (required offer; may
reject in writing), medical payments (Med Pay), physical damage coverages (comprehensive,
collision, specified perils). Named insured vs. permissive user, covered auto definitions, proof of
financial responsibility (SR-22), Arizona Financial Responsibility Law (1-800-55).
• Homeowners & Dwelling Insurance (Arizona): HO-3 (special form – open perils for dwelling,
named perils for personal property), HO-4 (renters), HO-6 (condo), DP-1/2/3 (dwelling).
Exclusions: ordinance or law, flood, earthquake (optional), neglect, intentional loss, war, nuclear
hazard. Additional coverages: debris removal, reasonable repairs, fire department service
charge (up to $500 or more). Liability coverage (exclusions: business pursuits, auto, intentional
acts). Personal liability and medical payments to others.
• Commercial General Liability (CGL): Coverage A – Bodily Injury and Property Damage Liability
(occurrence vs. claims-made), Coverage B – Personal and Advertising Injury (false arrest, libel,
slander, invasion of privacy, copyright infringement), Coverage C – Medical Payments.
Exclusions: expected/intended injury, contractual liability (insured contract exception), liquor
liability, employment-related practices (EPLI excluded, separate policy), mobile equipment.
• Commercial Auto: Business Auto Coverage Form (BACF) – covered autos symbols (1–9, 21, 22,
etc.), liability, physical damage, hired and non-owned auto coverage. Who is an insured?
“Employee” vs. “fellow employee” distinction.
, Page 2 of 120
• Workers’ Compensation (Arizona): Required for businesses with one or more employees
(including corporate officers unless exempt per AZ statutes), employers liability (Part Two),
waivers of subrogation, foreign voluntary compensation endorsements, Jones Act (maritime
employees), Longshore and Harbor Workers’ Compensation Act, Defense Base Act.
• Professional Liability (E&O): Claims-made vs. occurrence triggers, retroactive date, extended
reporting period (tail coverage), prior acts coverage, hammer clause.
• Umbrella/Excess Liability: Personal umbrella (underlying limits typically 250/500/100 for auto;
300k for homeowners), commercial umbrella (retention/self-insured retention), difference in
conditions (DIC) coverage.
• Ocean Marine & Inland Marine: Nationwide Marine Definition, inland marine (Bailees’
Customer Policy, Motor Truck Cargo, Installation Floater, Builders’ Risk, Equipment Dealers
Policy), time element coverages, open policy vs. specific voyage.
QUESTION 1: A prospective producer in Arizona has a felony conviction from 6 years ago. Under Arizona
law, can this person obtain an insurance producer license?
A) Yes, provided the felony is not related to the business of insurance
B) No, any felony conviction within the past 10 years disqualifies the applicant
C) No, any felony conviction within the past 5 years disqualifies the applicant
D) Yes, convictions over 5 years old are automatically waived
Answer: C – The Director shall not issue a license to a person who has been convicted of a felony within
five years before the date of application .
QUESTION 2: An applicant for an Arizona insurance producer license must be at least:
A) 18 years of age
B) 21 years of age
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C) 25 years of age
D) Any age with parental consent
Answer: A – The minimum age for licensure is 18 .
QUESTION 3: A producer writes a controlled business policy for his brother-in-law. Under Arizona law,
controlled business is limited to what percentage of the producer’s total annual premium?
A) 5%
B) 10%
C) 15%
D) 20%
Answer: B – A producer may not place controlled business exceeding 10% of total annual premiums
written .
QUESTION 4: An Arizona insurance producer is licensed for property and casualty but wishes to also sell
life insurance. The producer must:
A) Apply for an additional line of authority
B) Simply begin selling life insurance – the property/casualty license covers life
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C) Obtain a separate life license from a different state
D) Wait 2 years before selling life insurance
Answer: A – The producer must apply for an additional line of authority (life, accident/health, variable,
etc.) with the Department.
QUESTION 5: What is the maximum penalty for making a false material statement on an insurance
license application in Arizona?
A) 1,000penaltyB)1,000penaltyB)5,000 penalty
C) 10,000penaltyperviolationD)Licenserevocationonly,nofine∗∗Answer:C∗∗–
TheDirectormayorderacivilpenaltyofupto10,000penaltyperviolationD)Licenserevocationonly,nofine∗∗Ans
wer:C∗∗–TheDirectormayorderacivilpenaltyofupto10,000 per violation for making a false material
statement .
QUESTION 6: A producer terminates their appointment with an insurer. Under Arizona law, the
producer must notify the Director within:
A) 15 days
B) 30 days
Arizona Insurance Producer License Exam -Casualty
ACTUAL QUESTIONS AND ANSWERS LATEST
UPDATE THIS YEAR
Arizona Insurance Producer License Exam – Casualty
SUMMARIZED EXAM COVERAGE (point form)
• Arizona Statutes & Regulations (20% of exam): Producer licensing and appointment –
qualifications (18+ years, residency, fingerprinting, exam pass, no felony within 5 years of
application unless waived), license renewal (biennial, 24 CE hours with 3 hours ethics).
Continuing education exemptions for non-resident producers with home-state CE compliance,
age 65+ with 25+ years licensed, or military exemption. Termination of appointment notification
to Director within 30 days. Unfair claims settlement practices (15 days to acknowledge, 30 days
to accept/deny, 45 days for payment after settlement). Controlled business: cannot exceed 10%
of total written premium per year (or last 2 years if not in business 1 year). False statements on
application – penalty up to $10,000 per violation.
• General Insurance Concepts: Risk (pure vs. speculative), peril vs. hazard (physical, moral,
morale), indemnity, subrogation, insurable interest (at time of loss for property, at time of
application for life), utmost good faith, representation vs. warranty, waiver and estoppel, parol
evidence rule, aleatory vs. commutative contracts, unilateral vs. bilateral.
• Liability & Casualty Basics: Negligence (duty, breach, causation, damages), tort liability, joint
and several liability, vicarious liability (scope of employment, family purpose doctrine, imputed
negligence, dram shop, parental liability), comparative negligence (pure vs. modified),
assumption of risk, strict liability (abnormally dangerous activities, products liability).
• Personal Lines Auto Insurance (Arizona): Bodily Injury (BI) and Property Damage (PD) liability
limits (split limits 25/50/10 typical – 25kperpersonBI,25kperpersonBI,50k per accident BI, $10k
PD), uninsured motorist (UM) and underinsured motorist (UIM) coverage (required offer; may
reject in writing), medical payments (Med Pay), physical damage coverages (comprehensive,
collision, specified perils). Named insured vs. permissive user, covered auto definitions, proof of
financial responsibility (SR-22), Arizona Financial Responsibility Law (1-800-55).
• Homeowners & Dwelling Insurance (Arizona): HO-3 (special form – open perils for dwelling,
named perils for personal property), HO-4 (renters), HO-6 (condo), DP-1/2/3 (dwelling).
Exclusions: ordinance or law, flood, earthquake (optional), neglect, intentional loss, war, nuclear
hazard. Additional coverages: debris removal, reasonable repairs, fire department service
charge (up to $500 or more). Liability coverage (exclusions: business pursuits, auto, intentional
acts). Personal liability and medical payments to others.
• Commercial General Liability (CGL): Coverage A – Bodily Injury and Property Damage Liability
(occurrence vs. claims-made), Coverage B – Personal and Advertising Injury (false arrest, libel,
slander, invasion of privacy, copyright infringement), Coverage C – Medical Payments.
Exclusions: expected/intended injury, contractual liability (insured contract exception), liquor
liability, employment-related practices (EPLI excluded, separate policy), mobile equipment.
• Commercial Auto: Business Auto Coverage Form (BACF) – covered autos symbols (1–9, 21, 22,
etc.), liability, physical damage, hired and non-owned auto coverage. Who is an insured?
“Employee” vs. “fellow employee” distinction.
, Page 2 of 120
• Workers’ Compensation (Arizona): Required for businesses with one or more employees
(including corporate officers unless exempt per AZ statutes), employers liability (Part Two),
waivers of subrogation, foreign voluntary compensation endorsements, Jones Act (maritime
employees), Longshore and Harbor Workers’ Compensation Act, Defense Base Act.
• Professional Liability (E&O): Claims-made vs. occurrence triggers, retroactive date, extended
reporting period (tail coverage), prior acts coverage, hammer clause.
• Umbrella/Excess Liability: Personal umbrella (underlying limits typically 250/500/100 for auto;
300k for homeowners), commercial umbrella (retention/self-insured retention), difference in
conditions (DIC) coverage.
• Ocean Marine & Inland Marine: Nationwide Marine Definition, inland marine (Bailees’
Customer Policy, Motor Truck Cargo, Installation Floater, Builders’ Risk, Equipment Dealers
Policy), time element coverages, open policy vs. specific voyage.
QUESTION 1: A prospective producer in Arizona has a felony conviction from 6 years ago. Under Arizona
law, can this person obtain an insurance producer license?
A) Yes, provided the felony is not related to the business of insurance
B) No, any felony conviction within the past 10 years disqualifies the applicant
C) No, any felony conviction within the past 5 years disqualifies the applicant
D) Yes, convictions over 5 years old are automatically waived
Answer: C – The Director shall not issue a license to a person who has been convicted of a felony within
five years before the date of application .
QUESTION 2: An applicant for an Arizona insurance producer license must be at least:
A) 18 years of age
B) 21 years of age
, Page 3 of 120
C) 25 years of age
D) Any age with parental consent
Answer: A – The minimum age for licensure is 18 .
QUESTION 3: A producer writes a controlled business policy for his brother-in-law. Under Arizona law,
controlled business is limited to what percentage of the producer’s total annual premium?
A) 5%
B) 10%
C) 15%
D) 20%
Answer: B – A producer may not place controlled business exceeding 10% of total annual premiums
written .
QUESTION 4: An Arizona insurance producer is licensed for property and casualty but wishes to also sell
life insurance. The producer must:
A) Apply for an additional line of authority
B) Simply begin selling life insurance – the property/casualty license covers life
, Page 4 of 120
C) Obtain a separate life license from a different state
D) Wait 2 years before selling life insurance
Answer: A – The producer must apply for an additional line of authority (life, accident/health, variable,
etc.) with the Department.
QUESTION 5: What is the maximum penalty for making a false material statement on an insurance
license application in Arizona?
A) 1,000penaltyB)1,000penaltyB)5,000 penalty
C) 10,000penaltyperviolationD)Licenserevocationonly,nofine∗∗Answer:C∗∗–
TheDirectormayorderacivilpenaltyofupto10,000penaltyperviolationD)Licenserevocationonly,nofine∗∗Ans
wer:C∗∗–TheDirectormayorderacivilpenaltyofupto10,000 per violation for making a false material
statement .
QUESTION 6: A producer terminates their appointment with an insurer. Under Arizona law, the
producer must notify the Director within:
A) 15 days
B) 30 days
