Key Takeaways
- The Arizona Department of Insurance and Financial Institutions (DIFI) regulates all P&C insurance activities in the state
- The Director of Insurance is appointed by the Governor and serves at the Governor's pleasure
- Arizona uses a file and use rate system for most P&C lines, with prior approval required for some lines
- DIFI has authority over licensing, rate review, market conduct, and consumer protection
- Arizona requires fingerprinting for all insurance license applicants as part of the background check
Arizona Department of Insurance and Financial Institutions (DIFI)
Important: This study guide covers Arizona state-specific Property & Casualty insurance content only. You should complete the national Property & Casualty exam preparation first, as it covers the foundational insurance concepts tested on your exam.
The Arizona Department of Insurance and Financial Institutions (DIFI) is the state agency responsible for regulating the Property & Casualty insurance industry in Arizona.
The Director of Insurance
The Director of Insurance is:
- Appointed by the Governor
- Serves at the Governor's pleasure (no fixed term)
- Responsible for enforcing the Arizona Insurance Code (Title 20)
- Authorized to adopt regulations, review rates, investigate violations, and discipline licensees
Director Powers for P&C Insurance
| Power | Description |
|---|---|
| Licensing | Issue, suspend, and revoke producer licenses |
| Rate Review | File and use or prior approval depending on line |
| Market Conduct | Examine insurer business practices |
| Enforcement | Investigate and prosecute violations |
| Consumer Protection | Handle complaints and protect policyholders |
| Rulemaking | Adopt rules interpreting the Insurance Code |
Arizona Rate Regulation
Arizona uses different rate systems for different lines:
Rate Systems by Line
| Line of Insurance | Rate System |
|---|---|
| Personal Auto | Competitive rating (file and use) |
| Homeowners | File and use |
| Commercial Lines | File and use |
| Workers' Compensation | File and use |
| Title Insurance | Prior approval |
File and Use
Under Arizona file and use:
- Rates can be used immediately upon filing
- DIFI reviews rates after implementation
- Rates must not be excessive, inadequate, or unfairly discriminatory
- DIFI can disapprove rates after review
Exam Tip: Arizona uses file and use for most P&C lines. Know that the Director is appointed by the Governor with no fixed term.
How is the Arizona Director of Insurance selected?
What rate system does Arizona use for personal auto insurance?
Which Arizona agency regulates Property & Casualty insurance?