State RegulationsAZ specificDifficulty 1/5
An out-of-state insurer plans to enter the Arizona market. Before transacting insurance business, what must it obtain?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under A.R.S. 20-217(A), no insurer may transact the business of insurance in Arizona until it has been granted a certificate of authority by the Director of the Arizona Department of Insurance and Financial Institutions. The certificate is the insurer's entry ticket to the Arizona market; doing business without one exposes the company to enforcement action by the Department.
Why the other options are wrong
- B) Wrong because producer licenses belong to individual producers under A.R.S. 20-282, not to an insurer's officers; the company itself needs the certificate of authority under A.R.S. 20-217(A).
- C) Wrong because counties do not license insurers; the certificate of authority comes from the Director under A.R.S. 20-217(A).
- D) Wrong because a secretary of state filing creates a business entity but does not authorize transacting insurance; only the certificate of authority does under A.R.S. 20-217(A).
Memory hook
Insurers get certificates, producers get licenses — 20-217(A) is the insurer's door key.