Arizona - Exam FX - Health - Insurance Regulation /
Laws, Rules and Regulations Common to All Lines
What type of licensee represents the insured? Correct Answer: Broker
When can the Commissioner or Director examine insurers? Correct Answer: Whenever deemed
necessary, but at least once every few years (please check your state regulations for specific time
requirement)
Who must be a member of insurance guaranty associations? Correct Answer: Any authorized
insurer within a state
What is controlled business? Correct Answer: Insurance on the producer's own life or property,
or the lives or property of the producer's family or business associates
To whom may a certificate of authority be issued? Correct Answer: To an insurer authorized to
transact business in this state
Who is considered a nonresident agent? Correct Answer: An agent who resides and is licensed
in another state, but who is authorized to transact insurance in this state
Two individuals who are in the same risk and age class are charged different rates for their
insurance policies due to an insignificant factor. What is this called? Correct Answer:
Discriminiation
What type of licensee represents the insurance company? Correct Answer: The Agent
What illegal act does a producer commit when the producer represents a policy in a more
favorable light than the policy really is? Correct Answer: Misrepresentation
The requirement that agents must account for and promptly remit all insurance funds collected is
known as what type of agent responsibility? Correct Answer: Fiduciary
If the Commissioner/Superintendent finds a licensee engaging in an unfair method of
competition or an unfair practice, what order will be issued? Correct Answer: Cease and desist
order
What is the purpose of cease and desist order? Correct Answer: To prevent a producer or insurer
from further violating laws for transacting insurance
What is the purpose of insurance quarterly associations? Correct Answer: To protect
policyowners, insureds and beneficiaries from financial losses caused by insolvent insurers
If an insurer meets the state's financial requirements and is approved to transact business in the
state, it is considered what type of insurer? Correct Answer: Authorized or admitted
Laws, Rules and Regulations Common to All Lines
What type of licensee represents the insured? Correct Answer: Broker
When can the Commissioner or Director examine insurers? Correct Answer: Whenever deemed
necessary, but at least once every few years (please check your state regulations for specific time
requirement)
Who must be a member of insurance guaranty associations? Correct Answer: Any authorized
insurer within a state
What is controlled business? Correct Answer: Insurance on the producer's own life or property,
or the lives or property of the producer's family or business associates
To whom may a certificate of authority be issued? Correct Answer: To an insurer authorized to
transact business in this state
Who is considered a nonresident agent? Correct Answer: An agent who resides and is licensed
in another state, but who is authorized to transact insurance in this state
Two individuals who are in the same risk and age class are charged different rates for their
insurance policies due to an insignificant factor. What is this called? Correct Answer:
Discriminiation
What type of licensee represents the insurance company? Correct Answer: The Agent
What illegal act does a producer commit when the producer represents a policy in a more
favorable light than the policy really is? Correct Answer: Misrepresentation
The requirement that agents must account for and promptly remit all insurance funds collected is
known as what type of agent responsibility? Correct Answer: Fiduciary
If the Commissioner/Superintendent finds a licensee engaging in an unfair method of
competition or an unfair practice, what order will be issued? Correct Answer: Cease and desist
order
What is the purpose of cease and desist order? Correct Answer: To prevent a producer or insurer
from further violating laws for transacting insurance
What is the purpose of insurance quarterly associations? Correct Answer: To protect
policyowners, insureds and beneficiaries from financial losses caused by insolvent insurers
If an insurer meets the state's financial requirements and is approved to transact business in the
state, it is considered what type of insurer? Correct Answer: Authorized or admitted
