Don't know the exact answer to your first question, but if the option expires in the money I imagine you would still have to inform your broker of your intent to excercise - probably the day before expiration.
To answer your second question - no. If the option expires out of the money it will expire worthless meaning you will lose 100% of your initial investment, but you will not owe anything.
AZL General Discussion, page-1615
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Change
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