State RegulationsAZ specificDifficulty 1/5
Under A.R.S. 20-1207, apportionment of divisible surplus (dividends) under a life policy must begin no later than:
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Answer & full 3-part explanation (select an option above, or peek)
Why A 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. Insurers cannot defer dividends indefinitely, and policyholders need not request them.
Why the other options are wrong
- B) The statute sets the latest start at the end of the third policy year; it does not require first-year dividends.
- C) Dividend timing is fixed by statute, not by discretionary market-gain declarations.
- D) Dividends are not contingent on a written request from the policyholder.
Memory hook
Dividends start by year three, come what may.