State RegulationsAZ specificDifficulty 1/5
May an Arizona life settlement broker pay compensation to another person solely for referring a policyholder to the broker, under A.R.S. 20-3204?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under A.R.S. 20-3204, a life settlement broker may not pay compensation to anyone for referring a policyholder in connection with a life settlement. The ban protects applicants from steerage-driven transactions, and violating the settlement rules exposes the broker to discipline by the Director.
Why the other options are wrong
- B) No capped referral compensation exists; the statute prohibits referral compensation outright.
- C) The source of the referral does not matter; paying for referrals is prohibited regardless of licensure.
- D) The policyholder's written approval cannot cure a prohibition aimed at the broker's own conduct.
Memory hook
No paying for settlement referrals.