State RegulationsAZ specificDifficulty 2/5
An unlicensed marketing employee of an Arizona insurer repeatedly urges prospects to apply for the insurer's life policies, though she never issues any contract herself. Has she transacted insurance?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under A.R.S. 20-281, soliciting insurance is one of the defined acts of transacting the business of insurance, and A.R.S. 20-282 requires a license to engage in those acts. The employee's urging of applications is solicitation regardless of who issues the policy or whether a sale closes, so an unlicensed person performing it is transacting insurance unlawfully.
Why the other options are wrong
- A) Wrong because transacting insurance does not require issuance; solicitation and negotiation qualify on their own under A.R.S. 20-281.
- B) Wrong because employees are not automatically exempt; a person who solicits insurance must be licensed under A.R.S. 20-282.
- D) Wrong because solicitation is complete when the prospect is urged to apply; the transaction does not hinge on whether a sale results.
Memory hook
Urging an application is soliciting — and soliciting is transacting.