1. A. Scope.

   1. 1. This Section applies to any solicitation, negotiation, or procurement of life insurance occurring in Arizona. This Section applies to any issuer of life insurance contracts, including fraternal benefit societies.

   2. 2. Unless otherwise specifically included, the Section does not apply to:

      1. a. Annuities;
      2. b. Credit life insurance;
      3. c. Group life insurance except for disclosures relating to preneed funeral contracts or prearrangements, which shall extend to the issuance or delivery of certificates as well as to the master policy;
      4. d. Life insurance policies issued in connection with a pension and welfare plan as defined by and subject to the federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. as amended; or
      5. e. Variable life insurance under which the amount or duration of the life insurance varies according to the investment experience of a separate account.

2. B. In addition to the definitions provided in A.R.S. § 20-431, the following terms apply to this Section:

   1. 1. “Buyer’s Guide” means the 2018 version of the Life Insurance Buyer’s Guide adopted by the National Association of Insurance Commissioners (NAIC) and incorporated for use in accordance with subsection (F) of this Section or language approved by the Director.
   2. 2. “Current scale of nonguaranteed elements” means a formula or other mechanism that produces values for an illustration as if there is no change in the basis of those values after the time of illustration.
   3. 3. “Policy data” means a display or schedule of numerical values, both guaranteed and nonguaranteed for each policy year or a series of designated policy years of the following information: illustrated annual, other periodic, and terminal dividends; premiums; death benefits; cash surrender values and endowment benefits.

   4. 4. “Policy summary” means a written statement describing elements of the policy, including, but not limited to:

      1. a. The following prominently placed title: Statement of Policy Cost and Benefit Information.
      2. b. The name and address of the insurance producer, or if no producer is involved, a statement of the procedure to be followed to receive responses to inquiries regarding the policy summary.
      3. c. The full name and home office or administrative office address of the company by which the life insurance policy is to be or has been written.
      4. d. The generic name of the basic policy and each rider.

      5. e. The following amounts, where applicable, for the first five policy years and representative policy years thereafter sufficient to clearly illustrate the premium and benefit patterns, including at least one age from 60 through 65 and maturity:

         1. i. The annual premium for the basic policy;
         2. ii. The annual premium for each optional rider;
         3. iii. The amount payable upon death at the beginning of the policy year regardless of the cause of death except for suicide, or other specifically enumerated exclusions provided by the basic policy and each optional rider, with benefits provided under the basic policy and each rider shown separately;
         4. iv. Total guaranteed cash surrender values at the end of the year with values shown separately for the basic policy and each rider;
         5. v. Any endowment amounts payable under the policy that are not included under guaranteed cash surrender values in subsection (iv);
      6. f. The effective policy loan annual percentage interest rate, if the policy contains this provision, specifying whether the rate is applied in advance or in arrears. If the policy loan interest rate is adjustable, the policy summary shall also indicate that the annual percentage rate will be determined by the company in accordance with the provisions of the policy and the applicable law; and
      7. g. The date on which the policy summary is prepared.
   5. 5. “Preneed funeral contract or prearrangement” means an agreement by or for an individual before that individual’s death relating to the purchase or provision of specific funeral or cemetery merchandise or services.

3. C. Duties of Insurers.

   1. 1. Requirements Applicable Generally.

      1. a. The insurer shall provide a Buyer’s Guide to all prospective purchasers, prior to accepting the applicant’s initial premium or premium deposit. However, if the policy for which application is made contains an unconditional refund provision of at least 10 days, the Buyer’s Guide may be delivered with the policy or prior to delivery of the policy.
      2. b. The insurer shall provide a policy summary to prospective purchasers where the insurer had identified the policy form as one that will not be marketed with an illustration. The policy summary shall show guarantees only. It shall consist of a separate document with all required information set out in a manner that does not minimize or render any portion of the summary obscure. Any amounts that remain level for two or more years of the policy may be represented by a single number if it is clearly indicated what amounts are applicable for each policy year. Amounts in subsection (B)(4)(e) shall be listed in total, not on a per thousand or per unit basis. If more than one insured is covered under one policy or rider, death benefits shall be displayed separately for each insured or for each class of insureds if death benefits do not differ within the class. Zero amounts shall be displayed as a blank space. Delivery of the policy summary shall be consistent with the time for delivery of the Buyer’s Guide as specified in subsection (C)(1)(a).

   2. 2. Requirements Applicable to Existing Policies.

      1. a. Upon request by the policyholder, the insurer shall furnish either policy data or an in-force illustration as follows:

         1. i. For policies issued prior to January 1, 2026, the insurer shall furnish policy data, or at its option, an in-force illustration meeting the requirements of A.R.S. §§ 20-431.03 and 20-431.04.
         2. ii. For policies issued on or after January 1, 2026 that were declared not to be used with an illustration, the insurer shall furnish policy data, limited to guaranteed values, if it has not chosen to furnish an in-force illustration meeting the requirements of A.R.S. §§ 20-431.03 and 20-431.04.
         3. iii. If the insurer issued the policy on or after January 1, 2026 and declared it to be used with an illustration, an in-force illustration shall be provided.
         4. iv. Unless otherwise requested, the policy data shall be provided for 20 consecutive years beginning with the previous policy anniversary. The statement of policy data shall include nonguaranteed elements according to the current scale, the amount of outstanding policy loans, and the current policy loan interest rate. Policy values shown shall be based on the current application of nonguaranteed elements in effect at the time of the request. The insurer may charge a nominal fee, not to exceed $10.00, for the preparation of the statement.
      2. b. If a life insurance company changes its method of determining scales of nonguaranteed elements on existing policies; it shall, no later than when the policyowner makes the first payment on the new basis, advise each affected policyowner residing in Arizona of this change and of its implication on affected policies. This requirement shall not apply to policies for which the amount payable upon death under the basic policy as of the date when advice would otherwise be required does not exceed $5,000.
      3. c. If the insurer makes a material revision in the terms and conditions under which it will limit its right to change any nonguaranteed factor; it shall, no later than the first policy anniversary following the revision, advise each affected policyowner residing in Arizona.

4. D. General rules.

   1. 1. Each insurer shall maintain, at its home office or principal office, a complete file containing one copy of each document authorized and used by the insurer pursuant to this Section. The file shall contain one copy of each authorized form for a period of at least three years after its last authorized use unless otherwise provided by this Section.
   2. 2. A producer shall inform a prospective purchaser, before commencing a life insurance sales presentation, that the producer is acting as a life insurance producer and inform the prospective purchaser of the full name of the insurance company that the producer is representing. If an insurance producer is not involved in the sale, the insurer shall inform the prospective purchaser of the insurance company’s full name.
   3. 3. An insurer or producer shall not use terms such as financial planner, investment advisor, financial consultant, or financial counseling to imply that the insurance producer is generally engaged in an advisory business in which compensation is unrelated to sales unless that is true. This subsection is not intended to preclude producers who hold some form of formal recognized financial planning or consultant designation from using this designation even when they are only selling insurance. This subsection is also not intended to preclude persons who are members of a recognized trade or professional association having such terms as part of its name from citing membership, providing that the producer citing membership, if authorized only to sell insurance products, shall disclose that fact. This subsection does not permit producers to charge an additional fee for services that are customarily associated with solicitation, negotiation, or servicing of policies.
   4. 4. Any reference to nonguaranteed elements shall include a statement that the item is not guaranteed and that it is based on the insurer’s current scale of nonguaranteed elements using the appropriate term such as “current dividend scale” or “current rate scale.” If a nonguaranteed element would be reduced by the existence of a policy loan, a statement to that effect shall be included in any reference to nonguaranteed elements. A presentation or depiction of a policy issued on or after January 1, 2026 that includes nonguaranteed elements over a period of years, shall be governed by A.R.S. § 20-431.04(12).
5. E. Failure to comply. An insurer’s failure to provide or deliver a Buyer’s Guide, an in-force illustration, a policy summary, or policy data as provided in subsection (C) constitutes an omission that misrepresents the benefits, advantages, conditions, or terms of an insurance policy.
6. F. Incorporation of Buyer’s Guide. The Department incorporates by reference the National Association of Insurance Commissioners’ Life Insurance Buyer’s Guide, 2018, and no future editions or amendments, which is on file with the Department of Insurance and Financial Institutions, 100 N. 15th Ave., Suite 261, Phoenix, AZ 85007-2630 and available on its website at https://difi.az.gov/insurance-division-rulemaking. The National Association of Insurance Commissioners’ Life Insurance Buyer’s Guide is also available from the National Association of Insurance Commissioners, Publications Department, 1100 Walnut Street, Suite 1500, Kansas City, MO 64106-2197.

7. G. Preneed Funeral Contracts or Prearrangements. For preneed funeral contracts or prearrangements that are funded or are to be funded by a life insurance policy, the following information shall be adequately disclosed at the time the application is made, prior to accepting the applicant’s initial premium or deposit:

   1. 1. The fact that a life insurance policy is involved or is being used to fund a prearrangement;
   2. 2. The nature of the relationship among the soliciting producer or producers, the provider of the funeral or cemetery merchandise or services, the administrator, or any other person;
   3. 3. The relationship of the life insurance policy to the funding of the prearrangement and the nature and existence of any guarantees relating to the prearrangement;

   4. 4. The impact of the prearrangement:

      1. a. Of any changes in the life insurance policy including, but not limited to, changes in the assignment, beneficiary designation, or use of the proceeds;
      2. b. Of any penalties to be incurred by the policyowner as a result of a failure to make premium payments;
      3. c. Of any penalties to be incurred, or monies to be received, as a result of cancellation or surrender of the life insurance policy;
   5. 5. A list of the merchandise and services which are applied or contracted for in the prearrangement and all relevant information concerning the price of the funeral services, including an indication that the purchase price is either guaranteed at the time of purchase or to be determined at the time of need;
   6. 6. All relevant information concerning what occurs and whether any entitlements or obligations arise if there is a difference between the proceeds of the life insurance policy and the amount actually needed to fund the prearrangement;
   7. 7. Any penalties or restrictions, including but not limited to geographic restrictions or the inability of the provider to perform, on the delivery of merchandise, services, or the prearrangement guarantee; and
   8. 8. If so, the fact that a sales commission or other form of compensation is being paid and the identity of the individuals or entities to whom it is paid.

Historical Note

Adopted effective June 13, 1977 (Supp. 77-3). R20-6-209 recodified from R4-14-209 (Supp. 95-1). Former R20-6-209 renumbered to R20-6-207; new R20-6-209 renumbered from R20-6-211 and amended by final rulemaking at 13 A.A.R. 2061, effective August 4, 2007 (Supp. 07-2). Section R20-6-209 amended and Appendix Life Insurance Buyers Guide repealed by final rulemaking at 32 A.A.R. 645 (March 13, 2026, Issue 11), effective April 18, 2026 (Supp. 26-1).