State RegulationsAZ specificDifficulty 1/5
Under A.R.S. 20-1207, divisible surplus on a participating life policy must begin to be apportioned no later than the end of which policy year?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
A.R.S. 20-1207 requires divisible surplus to be apportioned annually, beginning not later than the end of the third policy year. Participating policyholders therefore cannot be made to wait beyond year three for the first dividend apportionment, and insurers that drift past that deadline are out of step with the statute.
Why the other options are wrong
- A) the second year is earlier than the statutory ceiling; the deadline is the third year.
- C) the fourth year is later than the statute permits.
- D) the statute fixes the deadline; board discretion does not extend it.
Memory hook
Dividends debut by year three.