State RegulationsAZ specificDifficulty 2/5
To win over a prospect, a Chandler producer circulates a flyer claiming that a competing insurer 'is insolvent and about to be seized by regulators,' knowing the claim is untrue. Under A.R.S. 20-445, this conduct is:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
A.R.S. 20-445 prohibits defamation — making or circulating false, maliciously critical statements about a competitor's financial condition or business. Publishing an untrue insolvency claim to divert business is a textbook defamation violation under Arizona's unfair trade practices article.
Why the other options are wrong
- A) Belief that the sale benefits the prospect does not excuse knowingly false disparagement under A.R.S. 20-445.
- B) Rebating under A.R.S. 20-449 concerns returning premiums or giving favors, not disparaging competitors.
- C) False advertising under A.R.S. 20-444 concerns misleading statements about one's own insurance business or status; disparaging a competitor is defamation under A.R.S. 20-445.
Memory hook
Trash their solvency, lose your license — that's defamation, A.R.S. 20-445.