State RegulationsAZ specificDifficulty 1/5
Under A.R.S. 20-445, which conduct is prohibited for producers and insurers in Arizona?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
A.R.S. 20-445 is Arizona's anti-defamation provision: no person engaged in the business of insurance may make or circulate false or maliciously critical statements about a competitor's financial condition. The provision protects insurers and the public from panic and unfair harm caused by fabricated attacks on a company's solvency.
Why the other options are wrong
- A) Wrong because vigorous advertising of one's own policies is lawful competition; A.R.S. 20-445 targets attacks on competitors, not self-promotion.
- B) Wrong because rate reductions are business decisions, not the disparagement that A.R.S. 20-445 prohibits.
- C) Wrong because the choice of distribution channels has nothing to do with defamation under A.R.S. 20-445.
Memory hook
20-445: no trashing a rival's balance sheet — false and malicious is defamation.