A.R.S. § 20-552.01 — Arizona Code / Title 20 / Chapter 3 / Article 2 / Section 552.01
20-552.01 Canadian investments; definition
Status: in_force

20-552.01. Canadian investments; definition

A. An insurer may make investments in securities of or in Canada possessing characteristics and of a quality similar to those required pursuant to this article for investments in the United States.

B. Subject to subsections C, D and E of this section, an insurer shall not acquire, directly or indirectly through an investment subsidiary, a Canadian investment otherwise permitted under this article, if after giving effect to the investment, the aggregate amount of Canadian investments then held by the insurer would exceed twenty-five per cent of its admitted assets.

C. As to an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of subsection B of this section shall be increased by the greater of:

1. The amount the insurer is required by applicable Canadian law to invest in Canada or to be denominated in Canadian currency.

2. One hundred fifteen per cent of the amount of the insurer's reserves and other obligations under contracts on lives or risks resident or located in Canada.

D. An insurer shall not acquire an investment in Canadian common stock, or shares of any solvent institution created or existing under the laws of Canada, any province of Canada, or any political subdivision of Canada or a province of Canada if, after giving effect to the investment, the aggregate amount of the investments then held by the insurer would exceed twenty per cent of its admitted assets.

E. An insurer shall not acquire an investment in bonds, notes or other evidences of indebtedness that are secured by second mortgages or deeds of trust on improved real property located in Canada if, after giving effect to the investment, the aggregate amount of such investments then held by the insurer would exceed twenty per cent of its admitted assets.

F. For the purposes of this section, unless the context otherwise requires, "investment subsidiary" means a subsidiary of an insurer engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer if each subsidiary agrees to limit its investment in any asset so that its investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations or avoid any other provisions of this article applicable to the insurer.  For the purposes of this subsection, "total investment of the insurer" includes:

1. Direct investment by the insurer in an asset.

2. The insurer's proportionate share of an investment in an asset by an investment subsidiary of the insurer, which shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the insurer's ownership interest in the subsidiary.
A.R.S. § 20-1493 — Arizona Code / Title 20 / Chapter 6 / Article 6 / Section 1493
20-1493 Group excess liability insurance policy; premiums; cancellation; requirements
Status: in_force

20-1493. Group excess liability insurance policy; premiums; cancellation; requirements

A. The group policyholder may pay the premium for a group excess liability insurance policy from monies contributed wholly by the group policyholder, wholly by the certificate holders or jointly by the group policyholder and the certificate holders.

B. The group excess liability insurance policy shall provide separate limits of coverage for each certificate holder.

C. The insurer or, if authorized by the insurer and agreed to by the insurance producer, the group policyholder's insurance producer shall deliver a copy of the group policy and any endorsement or amendment to the group policyholder. If authorized by the insurer and agreed to by the group policyholder or the group policyholder's insurance producer, the group policyholder or the group policyholder's insurance producer may send the certificate of insurance and any endorsement or amendment to the certificate holders on behalf of the insurer.

D. The certificate of insurance shall contain all material terms and conditions of coverage that are afforded to the certificate holder, including a disclosure in clear and easily understandable language of any limitation, exclusion or required underlying coverage, or a copy of the group policy shall be delivered to the certificate holder within a reasonable period of time after the certificate of insurance is delivered to the certificate holder.

E. The insurer may not disclose claims-related information about any certificate holder to the group policyholder other than the existence of a claim.

F. The following requirements apply to the cancellation, nonrenewal or conditional renewal of coverage under a group excess liability insurance policy:

1. Except as provided in paragraph 5 of this subsection, an insurer may nonrenew the group policy or any certificate of insurance issued under the policy if the insurer complies with the requirements of this article.  The insurer shall send notice of nonrenewal to the group policyholder and the certificate holders at least thirty days before the effective date of the nonrenewal. If authorized by the insurer and agreed to by the group policyholder, the group policyholder may send notice of nonrenewal to the certificate holders at least thirty days before the effective date of the nonrenewal on behalf of the insurer.

2. Except as provided in paragraph 5 of this subsection, after a group policy or certificate of insurance has been in effect for sixty days, or if the group policy or certificate of insurance is a renewal, effective immediately, an insurer may cancel the group policy or any certificate of insurance issued under the policy after the effective date of the group policy or certificate of insurance based on any of the following:

(a) The nonpayment of the premium.

(b) The conviction of the group policyholder or certificate holder of a crime that arose out of acts that increased any of the hazards insured against.

(c) Any acts or omissions by the group policyholder, the group policyholder's representative or the certificate holder that constitute fraud or material misrepresentation in obtaining or continuing the group policy or certificate of insurance or in presenting a claim under the group policy or certificate of insurance.

(d) A substantial change in the risk assumed by the insurer since the group policy or certificate of insurance was issued, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk in writing the contract.

(e) A determination by the director that continuing the group policy or certificate of insurance would place the insurer in violation of the insurance laws of this state or would jeopardize the solvency of the insurer.

(f) The loss of reinsurance that applies to the risk insured against, but only if the absence of reinsurance resulted from the termination of treaty reinsurance or facultative reinsurance initiated or implemented by the reinsurer or reinsurers of the insurer issuing the group policy.

(g) The discovery of grossly negligent acts by the group policyholder, the group policyholder's representative or the certificate holder that materially increased any of the hazards insured against.

3. The insurer shall send notice of cancellation to the group policyholder and the certificate holders if the group policy is being canceled or to affected certificate holders if one or more certificates of insurance are being canceled at least thirty days before the effective date of the cancellation. If authorized by the insurer and agreed to by the group policyholder, the group policyholder may send notice of cancellation to the certificate holders if the group policy is being canceled or to affected certificate holders if one or more certificates of insurance are being canceled at least thirty days before the effective date of the cancellation on behalf of the insurer.

4. The group policy shall set forth the conditions and timing on which a certificate holder's coverage will terminate following the termination of a certificate holder's employment with the group policyholder.

5. An act or omission by a certificate holder may not constitute the basis for cancellation of the group policy.

6. The notice of cancellation and any refund of unearned premium may be sent separately, but both must be sent within thirty days before the effective date of the cancellation.

G. With thirty days' written notice to the insurer and each certificate holder, a group policyholder may cancel or nonrenew the group policy for any reason.

H. If a certificate holder sustains a loss that would be covered by the group policy and that occurs before the effective date of the cancellation, nonrenewal or conditional renewal of the group policy or the certificate holder's certificate of insurance, whether initiated by the insurer, group policyholder or certificate holder, the loss remains covered as provided under the group policy notwithstanding the cancellation, nonrenewal or conditional renewal.
A.R.S. § 20-540 — Arizona Code / Title 20 / Chapter 3 / Article 2 / Section 540
20-540 Governmental revenue bonds and obligations; limitation; definitions
Status: in_force

20-540. Governmental revenue bonds and obligations; limitation; definitions

A. An insurer may invest in bonds, notes or evidences of indebtedness of any state, any political subdivision of a state or any political subdivision of the United States that are payable from revenues or earnings specifically pledged for the payment of the principal and interest on such obligations, and for which a sinking fund or reserve fund has been established and is being maintained, but only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of the investment, or if such obligations were issued less than five years prior to the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased nor on any other obligations of the issuer within five years of such investment.

B. An insurer shall not invest directly or indirectly in any medium grade or lower grade obligation pursuant to this section if after giving effect to that investment the aggregate amount of all medium grade and lower grade obligations held by the insurer exceeds twenty per cent of its admitted assets and if both of the following apply:

1. No more than ten per cent of the insurer's admitted assets consist of obligations that are rated as class 4, 5 or 6 by the securities valuation office of the national association of insurance commissioners.

2. No more than one per cent of the insurer's admitted assets consist of obligations that are rated as class 5 or 6 by the securities valuation office of the national association of insurance commissioners.

C. For purposes of this section:

1. "Lower grade obligation" means any bond, note or evidence of indebtedness that is rated as class 4, 5 or 6 by the securities valuation office of the national association of insurance commissioners.

2. "Medium grade obligation" means any bond, note or evidence of indebtedness that is rated as class 3 by the securities valuation office of the national association of insurance commissioners.
A.R.S. § 20-1723 — Arizona Code / Title 20 / Chapter 7 / Article 2 / Section 1723
20-1723 Exemption from mandatory participation in certain plans and associations
Status: in_force

20-1723. Exemption from mandatory participation in certain plans and associations

A. Until October 1, 1980, health care insurers shall be exempted from mandatory participation in any joint underwriting plan and the Arizona insurance guaranty association and their successor plans or associations.

B. Prior to October 1, 1980, if the insurer wishes to participate in any joint underwriting plan, the Arizona insurance guaranty association or their successor plans or associations, such insurer shall notify the director on forms prescribed by the director within ninety days of receipt of its certificate of authority.
A.R.S. § 20-1350 — Arizona Code / Title 20 / Chapter 6 / Article 4 / Section 1350
20-1350 Claim forms
Status: in_force

20-1350. Claim forms

There shall be a provision as follows: "Claim forms: The insurer, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If such forms are not furnished within fifteen days after the giving of such notice the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made."
A.R.S. § 20-1059.01 — Arizona Code / Title 20 / Chapter 4 / Article 9 / Section 1059.01
20-1059.01 Admitted assets; health care delivery assets
Status: in_force

20-1059.01. Admitted assets; health care delivery assets

A. This section applies to reporting entities that directly provide health care services to enrollees.

B. In addition to the assets allowed by section 20-501, the following are admitted assets to the extent the assets conform with the accounting practices and procedures manual adopted by the national association of insurance commissioners:

1. Furniture, medical equipment and fixtures and leasehold improvements that are used for the direct delivery of health care services.

2. Pharmaceuticals, surgical supplies and durable medical equipment that are used for the direct delivery of health care services.
A.R.S. § 20-1097.12 — Arizona Code / Title 20 / Chapter 4 / Article 13 / Section 1097.12
20-1097.12 Annual statement and information; penalty
Status: in_force

20-1097.12. Annual statement and information; penalty

Any corporation licensed pursuant to this article shall file an annual statement and information and shall be subject to the same administrative action and civil and criminal penalties as prescribed by sections 20-223 and 20-233.
A.R.S. § 20-409 — Arizona Code / Title 20 / Chapter 2 / Article 5 / Section 409
20-409 Recognized surplus lines
Status: in_force

20-409. Recognized surplus lines

A. If after a hearing the director finds that a particular insurance coverage or type, class or kind of coverage is not readily procurable from authorized insurers, the director may by order declare such coverage or coverages to be recognized surplus lines until the director's further order.

B. The order is subject to modification by the director. The director shall modify any coverage if the director determines that the coverage is no longer entitled to recognition as surplus lines after a hearing held on the director's initiative or on the request of any insurance producer, surplus lines broker, broker, insurer, rating or advisory organization, or other person.
A.R.S. § 20-1099.01 — Arizona Code / Title 20 / Chapter 4 / Article 15 / Section 1099.01
20-1099.01 Vehicle protection products; exemption from insurance code
Status: in_force

20-1099.01. Vehicle protection products; exemption from insurance code

A vehicle protection product that is sold or offered for sale in this state and that meets the requirements of section 20-1099.02 is not subject to this title.  Vehicle protection product warrantors and related vehicle protection product sellers and administrators that comply with section 20-1099.02 are not required to comply with and are not subject to this title. The vehicle protection products' written warranties are express warranties and not insurance.
A.R.S. § 20-1409 — Arizona Code / Title 20 / Chapter 6 / Article 5 / Section 1409
20-1409 Right to open enrollment period; insureds; definition
Status: in_force

20-1409. Right to open enrollment period; insureds; definition

A. With respect to insureds who are members of a group with more than one carrier, if there is an insolvency of an insurer, all other carriers that participated in an open enrollment with the insolvent insurer at a group's last regular open enrollment period shall offer insureds of the insolvent insurer who are members of that group a thirty day open enrollment period beginning on the date the insolvency is declared. Each carrier shall offer these insureds the same coverages and rates that it currently offers to other insureds in the group without any waiting periods or preexisting conditions, exclusions, limitations or restrictions. On declaration of insolvency, the insurer shall notify the remaining carrier or carriers of the insolvency and notify its members of their right to open enrollment as provided in this section.

B. Entitlement to continuation of benefits under subsection A is contingent on timely payment of the premium by the insured or by the insured's representative to the carrier selected through the open enrollment.

C. For purposes of this section, "carrier" means an insurer, a health care services organization, a hospital service corporation, a medical service corporation, a dental service corporation, an optometric service corporation or a hospital, medical, dental and optometric service corporation or any combination.
A.R.S. § 20-364 — Arizona Code / Title 20 / Chapter 2 / Article 4 / Section 364
20-364 Technical services
Status: in_force

20-364. Technical services

A. Any rating organization may provide for the examination of policies, daily reports, binders, renewal certificates, endorsements or other evidence of insurance, or the cancellation thereof, and may make reasonable rules governing their submission. Such rules shall contain a provision that in the event any insurer does not within sixty days furnish satisfactory evidence to the rating organization of the correction of any error or omission previously called to its attention by the rating organization, it shall be the duty of the rating organization to notify the director thereof. All information so submitted shall be confidential.

B. Any rating organization may subscribe for or purchase actuarial, technical or other services, and such services shall be available to all members and subscribers without discrimination.
A.R.S. § 20-492.04 — Arizona Code / Title 20 / Chapter 2 / Article 16 / Section 492.04
20-492.04 Confidentiality
Status: in_force

20-492.04. Confidentiality

A. Documents, materials or other information, including the CGAD, that are in the possession or control of the department and that are obtained by, created by or disclosed to the director or any other person under this article are recognized by this state as being proprietary and containing trade secrets. All such documents, materials or other information are confidential by law and privileged, are not subject to title 39, chapter 1, article 2, are not subject to subpoena and are not subject to discovery or admissible in evidence in any private civil action.  The director is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the director's official duties.  The director may not otherwise make the documents, materials or other information public without the prior written consent of the insurer.  This section does not require written consent of the insurer before the director shares or receives confidential documents, materials or other CGAD-related information pursuant to subsection C of this section.

B. The director or a person who receives documents, materials or other CGAD-related information, through examination or otherwise, while acting under the authority of the director or with whom the documents, materials or other information are shared pursuant to this article is not allowed or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection A of this section.

C. In order to assist in the performance of the director's regulatory duties, the director may:

1. On request, share documents, materials or other CGAD-related information, including the confidential and privileged documents, materials or information subject to subsection A of this section, including proprietary and trade secret documents and materials, with other state, federal and international financial regulatory agencies, including members of a supervisory college as defined in section 20-481, with the national association of insurance commissioners and with third-party consultants pursuant to section 20-492.05, if the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials or other information and verifies in writing the legal authority to maintain confidentiality.

2. Receive documents, materials or other CGAD-related information, including otherwise confidential and privileged documents, materials or information, including proprietary and trade­-secret information or documents, from regulatory officials of other state, federal and international financial regulatory agencies, including members of a supervisory college as defined in section 20-481, and from the national association of insurance commissioners and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information.

D. The sharing of information and documents by the director pursuant to this article does not constitute a delegation of regulatory authority or rulemaking, and the director is solely responsible for the administration, execution and enforcement of this article.

E. The disclosure of CGAD-related information or documents to the director or as a result of sharing the information and documents as authorized in this article does not constitute a waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade­-secret materials or other CGAD-related information.
A.R.S. § 20-2101 — Arizona Code / Title 20 / Chapter 11 / Article 1 / Section 2101
20-2101 Scope
Status: in_force

20-2101. Scope

A. This chapter applies to insurance institutions, insurance producers or insurance support organizations that:

1. In the case of life, health or disability insurance either:

(a) Collect, receive or maintain information in connection with insurance transactions that pertain to natural persons who are residents of this state.

(b) Engage in insurance transactions with applicants, individuals or policyholders who are residents of this state.

2. In the case of property or casualty insurance:

(a) Collect, receive or maintain information in connection with insurance transactions involving policies, contracts or certificates of insurance delivered, issued for delivery or renewed in this state.

(b) Engage in insurance transactions involving policies, contracts or certificates of insurance delivered, issued for delivery or renewed in this state.

B. The rights granted by this chapter extend to:

1. In the case of life, health or disability insurance, the persons who are residents of this state, including natural persons who are the subject of information collected, received or maintained in connection with insurance transactions, and applicants, individuals or policyholders who engage in or seek to engage in insurance transactions.

2. In the case of property or casualty insurance, the persons, including natural persons who are the subject of information collected, received or maintained in connection with insurance transactions involving policies, contracts or certificates of insurance delivered, issued for delivery or renewed in this state, and applicants, individuals or policyholders who engage in or seek to engage in insurance transactions involving policies, contracts or certificates of insurance delivered, issued for delivery or renewed in this state.

C. For purposes of this section, a person is considered a resident of this state if the person's last known mailing address, as shown in the records of the insurance institution, insurance producer or insurance support organization, is located in this state.

D. Notwithstanding subsections A and B, this chapter does not apply to information collected from the public records of a governmental authority and maintained by an insurance institution or its representatives for the purpose of insuring the title to real property located in this state.
A.R.S. § 20-1003 — Arizona Code / Title 20 / Chapter 4 / Article 7 / Section 1003
20-1003 Application for certificate of authority
Status: in_force

20-1003. Application for certificate of authority

A. An application for a certificate of authority to operate as a prepaid dental plan organization shall be filed with the director in a form prescribed by the director, shall be verified by an officer or authorized representative of the applicant and shall set forth, or be accompanied by, the following:

1. A copy of any basic organizational document of the applicant such as the articles of incorporation, articles of association, partnership agreement, trust agreement or other applicable documents and all amendments to the documents.

2. A copy of any bylaws, rules and regulations or similar document regulating the conduct of the internal affairs of the applicant.

3. A list of the names, addresses and official positions of the persons who are responsible for the conduct of the affairs of the applicant, including all members of the board of directors, board of trustees, executive committee or other governing board or committee, the principal officers in the case of a corporation and the partners of members in the case of a partnership or association.

4. If the prepaid dental plan organization is a corporation, evidence that the board of directors of the corporation includes:

(a) Dentists who are duly licensed pursuant to title 32, chapter 11 and who have contracted with the corporation to render dental service to members.

(b) Members of the prepaid dental plan, who shall comprise at least one-third of the members of the board.

5. A copy of any contract made or to be made between any providers or persons listed in paragraph 3 and the applicant.

6. A statement generally describing the prepaid dental plan organization and its dental plan or plans, facilities and personnel, as approved by the director.

7. A copy of the form of membership coverage that is to be issued to the members.

8. A copy of the form of any group contract that is to be issued to employers, unions, trustees or other applicants.

9. Financial statements showing the applicant's assets, liabilities and sources of financial support. If the applicant's financial affairs are audited by independent certified public accountants, a copy of the applicant's most recent regular certified financial statement shall satisfy this requirement unless the director determines that additional or more recent financial information is required for the proper administration of this article.

10. A description of the proposed method of marketing the plan, a financial plan that includes a three-year projection of the initial operating results anticipated and a statement as to the sources of working capital as well as any other sources of funding.

11. A power of attorney duly executed by the applicant, if not domiciled in this state, appointing the director, the director's successors in office and duly authorized deputies as the true and lawful attorney of the applicant in and for this state, on whom all lawful process in any legal action or proceeding against the prepaid dental plan organization on a cause of action arising in this state may be served.

12. A statement reasonably describing the geographic area or areas to be served, as approved by the director.

13. The fee prescribed in section 20-167 for issuance of a certificate of authority.

14. Any other information the director may require.

B. Within ten days after any significant modification of information previously furnished pursuant to subsection A of this section, a prepaid dental plan organization shall file notice of that modification with the director.
A.R.S. § 20-1088 — Arizona Code / Title 20 / Chapter 4 / Article 10 / Section 1088
20-1088 Limit of risk
Status: in_force

20-1088. Limit of risk

Domestic life and disability reinsurers may be formed, with capital and surplus as specified in sections 20-1085 and 20-1086 to accept any risk as a reinsurer under which the maximum possible benefits payable on the death or on the disability of any one insured shall not exceed five thousand dollars if the excess over three thousand dollars is reinsured by noncancellable reinsurance authorized under section 20-261. When the reinsurer's paid-in capital reaches one hundred thousand dollars, the reinsurer may reinsure risks without the restrictions of this section and may reinsure as otherwise provided for pursuant to this title. Any risk accepted pursuant to this section shall be a risk under which the ceding life or disability insurer remains liable for the payment of all policyholder claims.
A.R.S. § 20-1201 — Arizona Code / Title 20 / Chapter 6 / Article 1 / Section 1201
20-1201 Scope of article
Status: in_force

20-1201. Scope of article

This article applies to contracts of life insurance and annuities, other than reinsurance, group life insurance, group annuities and industrial life insurance. Section 20-1217 (contestability as to excluded or restricted coverage), section 20-1226 (limitation of liability), section 20-1227 (incontestability after reinstatement), section 20-1230 (dual pay policies) and sections 20-1231 and 20-1231.01 (standard nonforfeiture law) shall apply to industrial life insurance also.
A.R.S. § 20-1231.01 — Arizona Code / Title 20 / Chapter 6 / Article 1 / Section 1231.01
20-1231.01 Standard nonforfeiture law for life insurance; table for calculating adjusted premiums; definitions
Status: in_force

20-1231.01. Standard nonforfeiture law for life insurance; table for calculating adjusted premiums; definitions

A. Except as provided in paragraph 7 of this section, on a policy issued on or after the operative date as provided in this section:

1. The adjusted premiums for any policy shall be calculated on an annual basis and shall be such a uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of:

(a) The then present value of the future guaranteed benefits provided for by the policy.

(b) One per cent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years.

(c) One hundred twenty-five per cent of the nonforfeiture net level premium. In applying the percentage specified in subdivision (c) of this paragraph no nonforfeiture net level premium shall be deemed to exceed four per cent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years. The date of issue of a policy for the purpose of this section is the date as of which the rated age of the insured is determined.

2. The nonforfeiture net level premium is equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of the policy on which a premium falls due.

3. In the case of policies that cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or that provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of such a change in the benefits or premiums, the future adjusted premiums, nonforfeiture net level premiums and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.

4. Except as otherwise provided in paragraph 7 of this section, the recalculated future adjusted premiums for any such policy are the uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums shall be equal to the excess of the sum of the then present value of the then future guaranteed benefits provided for by the policy and the additional expense allowance, if any, over the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.

5. The additional expense allowance, at the time of the change to the newly defined benefits or premiums, is the sum of:

(a) One per cent of the excess, if positive, of the average amount of insurance at the beginning of each of the first ten policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first ten policy years subsequent to the time of the most recent previous change or, if there has been no previous change, the date of issue of the policy.

(b) One hundred twenty-five per cent of the increase, if positive, in the nonforfeiture net level premium.

6. The recalculated nonforfeiture net level premium is equal to the result obtained by dividing (a) by (b) where:

(a) (a) equals the sum of:

(i) The nonforfeiture net level premium applicable prior to the change times the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred.

(ii) The present value of the increase in future guaranteed benefits provided for by the policy.

(b) (b) equals the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due.

7. Notwithstanding any other provisions of this section, in the case of a policy issued on a substandard basis that provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis that provides higher uniform amounts of insurance, adjusted premiums and present values for the substandard policy may be calculated as if it were issued to provide higher uniform amounts of insurance on the standard basis.

8. All adjusted premiums and present values referred to in this section shall, for all policies of ordinary insurance, be calculated on the basis of either the commissioners 1980 standard ordinary mortality table, or at the election of the insurer for any one or more specified plans of life insurance, the commissioners 1980 standard ordinary mortality table with ten year select mortality factors, for all policies of industrial insurance, be calculated on the basis of the commissioners 1961 standard industrial mortality table, and for all policies issued in a particular calendar year, be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate for policies issued in that calendar year. However:

(a) At the option of the insurer, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as prescribed in this section, for policies issued in the immediately preceding calendar year.

(b) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by section 20-1231, subsection B, shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of such paid-up nonforfeiture benefit and paid-up dividend additions, if any.

(c) An insurer may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values.

(d) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the commissioners 1980 extended term insurance table for policies of ordinary insurance and not more than the commissioners 1961 industrial extended term insurance table for policies of industrial insurance.

(e) For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on appropriate modifications of the tables prescribed in this section and section 20-1231.

(f) For policies issued before the operative date of the valuation manual, any commissioners standard ordinary mortality tables, adopted after 1980 by the national association of insurance commissioners, that are approved by the director for use in determining the minimum nonforfeiture standard may be substituted for the commissioners 1980 standard ordinary mortality table with or without ten year select mortality factors or for the commissioners 1980 extended term insurance table.  For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the commissioners standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the commissioners 1980 standard ordinary mortality table with or without ten-year select mortality factors or for the commissioners 1980 extended term insurance table. If the director approves by rule any commissioners standard ordinary mortality table adopted by the national association of insurance commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual.

(g) For policies issued before the operative date of the valuation manual, any industrial mortality tables, adopted after 1980 by the national association of insurance commissioners, that are approved by the director for use in determining the minimum nonforfeiture standard may be substituted for the commissioners 1961 standard industrial mortality table or the commissioners 1961 industrial extended term insurance table.  For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the commissioners standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the commissioners 1961 standard industrial mortality table or the commissioners 1961 industrial extended term insurance table.  If the director approves by rule any commissioners standard industrial mortality table adopted by the national association of insurance commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual.

9. The nonforfeiture interest rate is as follows:

(a) For policies issued before the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be equal to one hundred twenty-five per cent of the calendar year statutory valuation interest rate for such policy as defined in the standard valuation law, rounded to the nearer one-quarter of one per cent.

(b) For policies issued on or after the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be provided by the valuation manual.

10. Notwithstanding any other provision in this title, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form that involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.

11. After July 24, 1982 any insurer may file with the director a written notice of its election to comply with the provisions of this section after a specified date before January 1, 1989, which is the operative date of this section for the insurer. If an insurer makes no such election, the operative date of this section for the insurer is January 1, 1989.

B. For the purposes of this section:

1. "Operative date of the valuation manual" has the same meaning prescribed in section 20-510, subsection R, paragraph 2.

2. "Valuation manual" has the same meaning prescribed in section 20-510, subsection B.
A.R.S. § 20-1606 — Arizona Code / Title 20 / Chapter 6 / Article 10 / Section 1606
20-1606 Maximum amount of credit disability insurance and credit unemployment insurance
Status: in_force

20-1606. Maximum amount of credit disability insurance and credit unemployment insurance

A. The total amount of periodic indemnity payable by credit disability insurance in the event of disability, as defined in the policy, or credit unemployment insurance, in the event of unemployment, as defined in the policy, shall not exceed the aggregate of the periodic scheduled unpaid installments of the gross debt or, with respect to group insurance where the indebtedness is repayable in installments, the maximum sum permitted by section 20-1401. The amount of each periodic indemnity payment shall not exceed the original gross debt divided by the number of periodic installments.

B. Notwithstanding subsection A of this section:

1. For credit disability insurance or credit unemployment insurance written in connection with an open-end credit agreement, the amount of insurance shall not exceed the gross debt which would accrue on that amount using the periodic indemnity.  Subject to any policy maximums, the periodic indemnity shall not be less than the creditor's minimum repayment schedule.

2. An insurer may offer credit disability insurance with a periodic or lump sum indemnity that exceeds the creditor's minimum repayment schedule if no single indemnity exceeds the net debt.
A.R.S. § 20-1691.02 — Arizona Code / Title 20 / Chapter 6 / Article 15 / Section 1691.02
20-1691.02 Adoption of rules
Status: in_force

20-1691.02. Adoption of rules

The director may adopt reasonable rules to implement this article, including rules that:

1. Establish specific standards for policy provisions of long-term care insurance policies, including terms of renewability, initial and subsequent conditions of eligibility, nonduplication of coverage, coverage of dependents, preexisting conditions, termination of insurance, continuation, conversion, probationary periods, limitations, exceptions, reductions, elimination periods, replacement, recurrent conditions and definitions.

2. Establish loss ratio standards for long-term care insurance policies provided that a specific reference to long-term care insurance policies is contained in the rule.

3. Promote premium adequacy and protect policyholders in the event of substantial rate increases.

4. Establish standards for the manner, content and required disclosure for the sale of long-term care insurance policies, including disclosure of policy provisions, conditions and limitations.

5. Prescribe a standard format, including style, arrangement and overall appearance, and the content of an outline of coverage.

6. Establish minimum standards for marketing practices, insurance producer testing and reporting practices relating to long-term care insurance and penalties for violating the standards.

7. Specify the type or types of nonforfeiture benefits to be offered as part of a long-term care insurance policy and certificate, the standards for nonforfeiture benefits and the requirements for contingent benefit on lapse, including a determination of the specified period of time during which a contingent benefit on lapse will be available and the substantial premium rate increase that triggers a contingent benefit on lapse as described in section 20-1691.11.
A.R.S. § 20-1242.01 — Arizona Code / Title 20 / Chapter 6 / Article 1.2 / Section 1242.01
20-1242.01 Applicability and scope
Status: in_force

20-1242.01. Applicability and scope

A. This article applies to all group and individual annuity contracts and certificates except:

1. Registered or nonregistered variable annuities or other registered products.

2. Immediate and deferred annuities that contain no nonguaranteed elements.

3. Annuities used to fund:

(a) An employee pension plan that is covered by the employee retirement income security act of 1974 (29 United States Code section 1001 through 1461).

(b) A plan described by sections 401(a), 401(k) or 403(b) of the internal revenue code, where the plan, for purposes of the employee retirement income security act of 1974, is established or maintained by an employer.

(c) A governmental or church plan as defined in section 414 of the internal revenue code or a deferred compensation plan of a state or local government or a tax exempt organization pursuant to section 457 of the internal revenue code.

(d) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor.

4. Structured settlement annuities.

B. Notwithstanding subsection A of this section, this article applies if:

1. Annuities are used to fund a plan or arrangement that is funded solely by contributions an employee elects to make on a pretax or after tax basis.

2. The insurer has been notified that plan participants may choose from among two or more fixed annuity providers.

3. There is a direct solicitation of any individual employee by an insurance producer for the purchase of an annuity contract.  For the purposes of this paragraph, direct solicitation does not include any meeting held by an insurance producer solely for the purpose of educating or enrolling employees in the plan or arrangement.
A.R.S. § 20-488.03 — Arizona Code / Title 20 / Chapter 2 / Article 12 / Section 488.03
20-488.03 Regulatory action level event
Status: in_force

20-488.03. Regulatory action level event

A. If a regulatory action level event occurs, the director shall:

1. Require the insurer to submit an RBC plan or, if applicable, a revised RBC plan.

2. Perform an examination or analysis, as the director deems necessary, of the assets, liabilities and operations of the insurer, including a review of the insurer's RBC plan or revised RBC plan.

3. After conducting the examination or analysis, issue a corrective order specifying any corrective actions that the director determines are required.

B. In determining what corrective actions may be required, the director may consider any factors that the director deems relevant with respect to the insurer based on the director's examination or analysis of the insurer's assets, liabilities and operations, including but not limited to the results of any sensitivity tests undertaken pursuant to the RBC instructions.  The RBC plan or revised RBC plan shall be submitted within one of the following:

1. Forty-five days after the regulatory action level event occurs.

2. If the insurer challenges an adjusted RBC report pursuant to section 20-488.06 and the director does not consider the challenge to be frivolous, forty-five days after the insurer is notified that the director, after a hearing, has rejected the insurer's challenge.

3. If the insurer challenges a revised RBC plan pursuant to section 20-488.06, forty-five days after the insurer is notified that the director, after a hearing, has rejected the insurer's challenge.

C. The director may retain actuaries, investment experts and other consultants to review the insurer's RBC plan or revised RBC plan, to examine or analyze the assets, liabilities and operations of the insurer and to formulate the corrective order with respect to the insurer.  The affected insurer or another party if ordered by the director shall pay the fees, costs and other expenses relating to any retained consultants.
A.R.S. § 20-1541 — Arizona Code / Title 20 / Chapter 6 / Article 8.1 / Section 1541
20-1541 Definitions
Status: reserved

20-1541. Definitions

In this article, unless the context otherwise requires:

1. "Authorized real estate security" means either:

(a) Any amortized note, bond or other evidence of indebtedness that is secured by both a mortgage, deed of trust or other instrument that constitutes or is equivalent to a first lien or charge on real estate and the balance on any pledged cash account or collateralized guaranty agreement that is contracted for by a parent, blood relative, employer or nonprofit corporation for the benefit of the borrower if all of the following apply:

(i) The loan amount does not exceed one hundred three per cent of the fair market value of the combined security at the time that the loan is made where any percentage greater than one hundred per cent is used to finance fees and closing costs on the indebtedness.

(ii) The pledged cash account or collateralized guaranty agreement does not exceed thirty-five per cent of the fair market value of the real estate at the time the loan is made.

(iii) The lender has a first position lien on the pledged cash account or collateralized guaranty agreement.

(iv) The loan amount does not exceed the fair market value of the real estate at the time the loan is made plus three per cent for financing fees and closing costs.

(v) The requirements of subdivision (b) of this paragraph are met.

(b) Any amortized note, bond or other evidence of indebtedness that does not exceed one hundred three per cent of the fair market value of the real estate and that is secured by any mortgage, deed of trust or other instrument that constitutes, or is equivalent to, a first lien or charge on real estate if:

(i) The real estate loan secured in such manner is one of a type which a bank, a savings and loan association or an insurance company, which is supervised and regulated by a department of this state or an agency of the federal government, is authorized to make, or would be authorized to make, disregarding any requirement applicable to such an institution that the amount of the loan not exceed a certain percentage of the value of the real estate.

(ii) The improvement on such real estate is a building or buildings designed for occupancy as specified by paragraph 4, subdivisions (a) and (b) of this section.

(iii) The lien on such real estate may be subject to and subordinate to the lien of any public bond, assessment or tax, when no installment, call or payment of or under such bond, assessment or tax is delinquent, or to any outstanding mineral, oil, water or timber rights, rights-of-way, easements or rights-of-way of support, sewer rights, building restrictions or other restrictions or covenants, conditions or regulations of use or outstanding leases upon such real property under which rents or profits are reserved to the owner of such real property.

2. "Contingency reserve" means an additional premium reserve established to protect policyholders against the effect of adverse economic cycles.

3. "Minimum policyholder position" means the amount computed pursuant to section 20-1550.

4. "Mortgage guaranty insurance" means insurance against financial loss by reason of nonpayment of:

(a) Principal, interest or other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust or other instrument constituting a lien or charge on real estate if the improvement on such real estate is a residential building or a condominium unit or buildings designed for occupancy by not more than four families.

(b) Principal, interest or other sums agreed to be paid under the terms of any note, bond or other evidence of indebtedness secured by a mortgage, deed of trust or other instrument constituting a lien or charge on real estate if the improvement on such real estate is a building or buildings designed for occupancy by five or more families or designed to be occupied for industrial or commercial purposes.

(c) Rent or other sums agreed to be paid under the terms of a written lease for the possession, use or occupancy of real estate if the improvement on such real estate is a building or buildings designed to be occupied for industrial or commercial purposes.

5. "Policyholder position" means the contingency reserve prescribed in section 20-1556 and surplus as regards policyholders.
A.R.S. § 20-491.02 — Arizona Code / Title 20 / Chapter 2 / Article 15 / Section 491.02
20-491.02 ORSA requirement
Status: in_force

20-491.02. ORSA requirement

Subject to section 20-491.04, an insurer or the insurance group of which the insurer is a member shall regularly conduct an ORSA consistent with a process comparable to the ORSA guidance manual.  The ORSA shall be conducted annually but also at any time when there are significant changes to the risk profile of the insurer or the insurance group of which the insurer is a member.
A.R.S. § 20-382 — Arizona Code / Title 20 / Chapter 2 / Article 4.1 / Section 382
20-382 Scope of application
Status: in_force

20-382. Scope of application

A. This article applies to all insurance on risks or on operations in this state, except:

1. Reinsurance, other than joint reinsurance to the extent stated in section 20-391.

2. Any policy of insurance against loss or damage to or legal liability in connection with property located outside this state, any motor vehicle or aircraft principally garaged and used outside this state or any activity wholly carried on outside this state.

3. Insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity or other risks commonly insured under marine, as distinguished from inland marine, insurance policies.

4. Disability or life insurance.

5. Annuities.

6. Workers' compensation and employers' liability insurance written in connection with workers' compensation.

7. Title insurance.

8. Rates developed by an insurer to be applied individually to the insurance policies of risks, other than medical malpractice risks and industrial insured risks pursuant to section 20-400.10, for which no rate service organization has published a rate or loss costs in this or any other state and for which insufficient similar exposure units and loss experience data exist to develop statistically credible rates for the risk and no homogeneous rating class exists in which the risk could reasonably be placed. With respect to each type of risk covered by this subsection, the insurer shall annually certify by January 30 to the director for the preceding calendar year, on a form acceptable to the director, that the insurer did not have when the risks were written credible experience to establish a rating class for the specific types of risks.  The insurer or rate service organization on the insurer's behalf shall file a rate for the specific risks with the director pursuant to section 20-385 when either of the following occurs:

(a) The insurer's written premiums for any specific risk covered by this subsection exceed twenty-five per cent of the insurer's total annual written premium in this state and the insurer has issued contracts for five or more homogeneous risks covered by this subsection in this state in any consecutive three year period, unless an insurer demonstrates to the director that its experience under this subsection does not produce sufficient data to satisfy the requirements of subdivision (b) of this paragraph.

(b) The number of specific risks covered by this subsection and written by the insurer in a specific class meet the standards set forth in the actuarial standard of practice 25 applying to credibility for rate making purposes as adopted by the actuarial standards board as of January 1, 1997.

B. This article does not apply to hospital service or medical service corporations, investment companies, mutual benefit associations or fraternal beneficiary associations.
A.R.S. § 20-2104 — Arizona Code / Title 20 / Chapter 11 / Article 1 / Section 2104
20-2104 Notice of insurance information practices
Status: in_force

20-2104. Notice of insurance information practices

A. An insurance institution or insurance producer shall provide a notice of information practices to applicants and policyholders in connection with insurance transactions as prescribed in this section.

B. The insurance institution or insurance producer shall provide the notice at the following times:

1. In the case of an application for insurance, not later than when the insurance institution or insurance producer either:

(a) Delivers the insurance policy or certificate, if personal information is collected only from the applicant or from public records.

(b) First collects personal information from a source other than the applicant or public records.

2. In the case of a policy renewal, at least annually during the continuation of the relationship with the policyholder, except that an insurance institution or insurance producer is not required to provide the notice described in subsection C of this section annually if the insurance institution or insurance producer meets both of the following requirements:

(a) Provides personal information in accordance with section 20-2113.

(b) Has not changed the policies and practices related to disclosing personal information since the customer was last notified pursuant to this section.

3. In the case of a policy reinstatement or change in insurance benefits, not later than the time when the insurance institution receives a request for a policy reinstatement or change in insurance benefits except that a notice is not required if a notice was already given within the immediately preceding twelve months or the insurance institution or insurance producer meets both of the following requirements:

(a) Provides personal information in accordance with section 20-2113.

(b) Has not changed the policies and practices related to disclosing personal information since the customer was last notified pursuant to this section.

C. The notice shall be in writing or, if the applicant or policyholder agrees, in an electronic form and shall either contain the information required for compliance with the notice requirements established under section 503 of the Gramm-Leach-Bliley act (15 United States Code section 6803) or shall state:

1. Whether personal information may be collected from persons other than the individual or individuals proposed for coverage.

2. The types of personal information that may be collected and the types of sources and investigative techniques that may be used to collect the information.

3. The types of disclosures identified in section 20-2113, paragraphs 2 through 6, 9, 11, 12 and 14 and the circumstances under which the disclosures may be made without prior authorization, except only those circumstances need be described that occur with such a frequency as to indicate a general business practice.

4. A description of the rights established under sections 20-2108 and 20-2109 and the manner in which those rights may be exercised.

5. That information obtained from a report prepared by an insurance support organization may be retained by the insurance support organization and disclosed to other persons.

D. Instead of the notice prescribed in subsection C of this section, the insurance institution or insurance producer may provide an abbreviated notice informing the applicant that:

1. Personal information may be collected from persons other than the individual or individuals proposed for coverage.

2. The information as well as other personal or privileged information subsequently collected by the insurance institution or insurance producer may in certain circumstances be disclosed to third parties without authorization.

3. A right of access and correction exists with respect to all personal information collected.

4. The notice prescribed in subsection C of this section will be provided to the applicant on request.

E. The obligations imposed by this section on an insurance institution or insurance producer may be satisfied by another insurance institution or insurance producer authorized to act on its behalf.

F. If an insurance institution, insurance producer or insurance support organization that is required to give notice under this section gives the notice to the sponsor of an employee benefit plan, a group or blanket insurance policyholder or group annuity contract holder or a workers' compensation plan participant and does not disclose personal information about any of the individuals described in paragraph 1, 2 or 3 of this subsection except as otherwise allowed under section 20-2113, the insurer, producer or insurance support organization is not required to provide the notice to:

1. A participant or a beneficiary of an employee benefit plan that the insurer administers or sponsors or for which the insurer acts as trustee, insurer or fiduciary.

2. An individual who is covered under a group or blanket insurance policy or group annuity contract issued by the insurer.

3. A beneficiary in a workers' compensation plan.

G. An insurance institution or insurance producer is not required to give notice under this section to a policyholder whose policy is lapsed, expired or otherwise inactive if the insurance institution or insurance producer has not communicated with the policyholder for at least twelve consecutive months, other than to provide annual privacy notices, material required by law or order of a state or federal regulatory authority or promotional materials.

H. An insurance institution or insurance producer is not required to give notice under this section to a policyholder whose last known address of record is invalid. An address is deemed invalid under this subsection if mail sent to that address by the insurance institution or insurance producer has been returned by the postal authorities as undeliverable and if subsequent attempts by the insurance institution or insurance producer to obtain a valid address for the individual have been unsuccessful.
A.R.S. § 20-487.02 — Arizona Code / Title 20 / Chapter 2 / Article 11 / Section 487.02
20-487.02 Minimum standards
Status: in_force

20-487.02. Minimum standards

A. A controlled insurer shall not accept business from a controlling producer and a controlling producer shall not place business with a controlled insurer unless there is a written contract between the controlling producer and the controlled insurer that specifies the responsibilities of each party, that has been approved by the board of directors of the insurer and that contains the following minimum provisions:

1. The controlled insurer may terminate the contract for cause on written notice to the controlling producer. The controlled insurer shall suspend the authority of the controlling producer to write business during the pendency of any dispute regarding the cause for the termination.

2. The controlling producer shall render accounts to the controlled insurer detailing all material transactions, including information that is necessary to support all commissions, charges and other fees that are received by or owed to the controlling producer.

3. The controlling producer shall remit at least monthly all monies due under the terms of the contract to the controlled insurer. The due date shall be fixed so that the premiums and installments that are collected are to be remitted no later than ninety days after the effective date of any policy placed with the controlled insurer under the contract.

4. The controlling producer shall hold all monies that are collected for the controlled insurer's account in a fiduciary capacity. Pursuant to law, the monies shall be held in one or more appropriately identified bank accounts in banks that are members of the federal reserve system in accordance with any applicable provisions of this title, except that the monies of a controlling producer that is not required to be licensed in this state shall be maintained in compliance with the requirements of the controlling producer's domiciliary jurisdiction.

5. The controlling producer shall maintain separately identifiable records of business written for the controlled insurer.

6. The controlling producer shall not assign the contract in whole or in part.

7. The controlled insurer shall provide the controlling producer with its underwriting standards, rules and procedures and manuals setting forth the rates to be charged and the conditions for the acceptance or rejection of risks. The controlling producer shall adhere to the standards, rules, procedures, rates and conditions. The standards, rules, procedures, rates and conditions shall be the same as those that are applicable to comparable business placed with the controlled insurer by a producer other than the controlling producer. For the purposes of this paragraph, "comparable business" includes the same lines or kinds of insurance, the same kinds of risks, similar policy limits and similar quality of business.

8. The controlling producer's rates and terms for commissions, charges or other fees and the purposes for those charges or fees. The rates of the commissions, charges and other fees shall not be greater than those that are applicable to comparable business placed with the controlled insurer by producers other than controlling producers. For the purposes of this paragraph, "comparable business" includes the same lines or kinds of insurance, the same kinds of risks, similar policy limits and similar quality of business.

9. If on insurance business placed with the insurer the contract provides that the controlling producer shall be compensated based on the insurer's profits on that business, the controlling producer's compensation shall not be determined and paid until at least five years after the premiums on liability insurance are earned and at least one year after the premiums are earned on any other insurance. The commissions shall not be paid until the adequacy of the controlled insurer's reserves on remaining claims has been independently verified pursuant to subsection C.

10. A limit shall be placed on the controlling producer's writing in relation to the controlled insurer's surplus and total writings. The insurer may establish a different limit for each line or subline of business. The controlled insurer shall notify the controlling producer when the applicable limit is approached and shall not accept business from the controlling producer if the limit is reached. If the controlling producer has been notified by the controlled insurer that the limit has been reached, the controlling producer shall not place business with the controlled insurer.

11. The controlling producer may negotiate but may not bind reinsurance on behalf of the controlled insurer on business that the controlling producer places with the controlled insurer, except that the controlling producer may bind a facultative reinsurance contract pursuant to an obligatory facultative agreement if the contract with the controlled insurer contains underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers for which the obligatory agreements are in effect, the coverages and amounts or percentages that may be reinsured and commission schedules.

B. Each controlled insurer shall have an audit committee of the board of directors that is composed of independent directors. The audit committee shall meet annually with management, the insurer's independent certified public accountants and an independent casualty actuary or other independent loss reserve specialist who is acceptable to the director to review the adequacy of the insurer's loss reserves.

C. In addition to any other required loss reserve certification, on April 1 of each year the controlled insurer shall file with the director an opinion of an independent casualty actuary or other independent loss reserve specialist who is acceptable to the director. The opinion shall report loss ratios for each line of business written and shall attest to the adequacy of loss reserves that are established for losses incurred and outstanding as of the end of the year on business placed by the producer.

D. The controlled insurer shall report annually to the director the amount of commissions paid to the producer, the percentage that the amount represents of the net premiums written and comparable amounts and percentages paid to noncontrolling producers for placements of the same kinds of insurance.

E. This section applies if in any calendar year the aggregate amount of gross written premiums on business placed with a controlled insurer by a controlling producer is equal to or greater than five per cent of the admitted assets of the controlled insurer, as reported in the controlled insurer's quarterly statement that is filed by September 30 of the previous year.

F. Notwithstanding subsection E, this section does not apply if both:

1. The controlling producer does all of the following:

(a) Places insurance only with the controlled insurer, the controlled insurer and a member or members of the controlled insurer's holding company system or the controlled insurer's parent, affiliate or subsidiary and the controlling producer receives no compensation based on the amount of premiums written in connection with that insurance.

(b) Accepts insurance placements only from nonaffiliated subproducers and does not accept insurance placements directly from the insured.

2. Except for insurance business written through a residual market facility, the controlled insurer accepts insurance business only from a controlling producer, a producer that is controlled by the controlled insurer or a producer that is a subsidiary of the controlled insurer.
A.R.S. § 20-487.01 — Arizona Code / Title 20 / Chapter 2 / Article 11 / Section 487.01
20-487.01 Applicability
Status: in_force

20-487.01. Applicability

This article applies to licensed insurers that are domiciled in this state or are domiciled in a state that is not an accredited state but that has a similar law in effect. Unless superseded by this article, chapter 2, article 8 of this title applies to all parties within holding company systems that are subject to this article.
A.R.S. § 20-209 — Arizona Code / Title 20 / Chapter 2 / Article 1 / Section 209
20-209 Kinds of insurance an insurer may transact
Status: in_force

20-209. Kinds of insurance an insurer may transact

A. An insurer which otherwise qualifies therefor may be authorized to transact any one kind or combination of kinds of insurance as defined in article 2 of this chapter, except that:

1. A life insurer shall not be authorized to transact any other kind of insurance except disability, but if immediately prior to January 1, 1955 any life insurer lawfully held a subsisting certificate of authority granting it the right to transact in this state additional kinds of insurance other than disability, as long as the insurer is otherwise in compliance with this title the director may continue to authorize such insurer to transact the same kinds of insurance as those specified in such prior certificate of authority.

2. A reciprocal insurer shall not transact life insurance.

3. A title insurer shall not transact any other kind of insurance.

B. A life insurer authorized to transact life insurance in this state may issue guaranteed investment contracts. An insurer authorized to issue guaranteed investment contracts may offer an annuity option as a feature of a guaranteed investment contract.
A.R.S. § 20-832 — Arizona Code / Title 20 / Chapter 4 / Article 3 / Section 832
20-832 Limitation on salaries
Status: in_force

20-832. Limitation on salaries

A corporation shall not:

1. Pay to any officer of the corporation any salary, compensation or emolument amounting in any year to more than $5,000, unless the board of directors of the corporation first authorizes the salary, compensation or emolument.

2. Make any agreement with any officer whereby the corporation agrees that for any services rendered or to be rendered the officer will receive a salary, compensation or emolument for a period of more than three years from the date of the agreement.

3. Pay any bonus, commission or dividend to any director of the corporation.
A.R.S. § 20-1556.01 — Arizona Code / Title 20 / Chapter 6 / Article 8.1 / Section 1556.01
20-1556.01 Premium deficiency reserve
Status: in_force

20-1556.01. Premium deficiency reserve

If the mortgage guaranty insurance company's anticipated losses, loss adjustment expenses, commissions and other acquisition costs and maintenance costs are more than the recorded unearned premium reserve, contingency reserve and estimated future renewal premiums on existing policies, the company shall establish a premium deficiency reserve by recording an additional liability for the deficiency according to the accounting practices and procedures manual adopted by the national association of insurance commissioners.
A.R.S. § 20-367.01 — Arizona Code / Title 20 / Chapter 2 / Article 4 / Section 367.01
20-367.01 Appeals procedure
Status: in_force

20-367.01. Appeals procedure

A. Within a reasonable time after receiving a written request and on payment of a reasonable fee, every rating organization and insurer shall give to any insured affected by a rate that is made or applied by the organization or insurer, or to the insured's authorized representative, all pertinent information related to the rate.

B. If a person is aggrieved by the application of a rating system, the person may send a written request to the workers' compensation appeals board established by section 20-367 to review the manner in which the rating system has been applied to the insurance afforded the aggrieved person.  The aggrieved person or that person's representative may present the grievance before the board. A representative of the rating organization whose rating system is the subject of the appeal shall attend any hearing before the board pursuant to this section to explain that application of the rating system to the aggrieved person.

C. If the board does not act on the aggrieved person's request for review within thirty days after receiving the request, the aggrieved person may proceed as if the board had rejected the request for review.

D. The appellant shall pay the cost to record the board's proceedings.

E. The board shall mail a written notice of its decision to the aggrieved person.  Within thirty days after the date the board mails the written notice of its decision, the aggrieved person may appeal the action to the director.  After a hearing held on at least ten days' written notice to the person and the rating organization or insurer, the director shall affirm, modify or reverse the board's decision. The person appealing the board's decision shall pay the costs of the transcript and record of the appeal to the director.
A.R.S. § 20-376 — Arizona Code / Title 20 / Chapter 2 / Article 4 / Section 376
20-376 Filing of title insurance rates; approval or disapproval
Status: in_force

20-376. Filing of title insurance rates; approval or disapproval

A. Every title insurer shall file with the director its schedules of fees, every manual of classifications, rules and plans pertaining thereto, and every modification of any of the foregoing that it proposes to use concerning its title insurance forms and products in this state.  Every filing shall include a proposed effective date and shall indicate the character and extent of the coverage or service contemplated.

B. A title insurer may satisfy its obligations to make filings by becoming a member of, or a subscriber to, a licensed title insurance rating organization that makes filings, and by authorizing the director to accept the rating organization's filings on its behalf. The filings may, at the option of the insurer, govern all of its or certain designated agents in this state.  The insurer may also elect to permit all or certain of its agents to make rate filings directly or to subscribe to a licensed title insurance rating organization that makes filings.

C. The director shall review the filings as necessary to carry out the provisions of this article.

D. Subject to the provisions of subsection F of this section, each filing shall be on file for a period of at least thirty days before it becomes effective.  The director may, on written notice given within the thirty day waiting period to the person making the filing, extend the waiting period for up to fifteen additional days, to enable the director to complete the review of the filing.  The director may grant further extensions of the waiting period only with the consent of the person making the filing. On written application by the person making the filing, the director may authorize all or part of a filing that has been reviewed to become effective before the expiration of the waiting period or any extension of the waiting period.

E. Except in the case of rates filed under subsection F, a filing that has become effective shall be deemed to meet the requirements of this article.

F. When the director finds that any rate for a particular kind or class of risk cannot practicably be filed before it is used, or that any contract or kind of title insurance, by reason of rarity or peculiar circumstances, does not lend itself to advance determination and filing of rates, the director may permit the rate to be used without a previous filing and waiting period.

G. The director shall not have the power to regulate, or require the filing of, rates or fees for reinsurance policies, contracts or agreements, for policies, contracts or agreements of excess coinsurance or for account servicing and subdivision trust services.
A.R.S. § 20-703 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 703
20-703 "Stock" insurer defined
Status: in_force

20-703. "Stock" insurer defined

A "stock" insurer is an incorporated insurer with capital divided into shares and owned by its shareholders.
A.R.S. § 20-103 — Arizona Code / Title 20 / Chapter 1 / Article 1 / Section 103
20-103 Definition of insurance; exceptions
Status: in_force

20-103. Definition of insurance; exceptions

A. For the purposes of this title, except as otherwise provided, "insurance" is a contract by which one undertakes to indemnify another or to pay a specified amount on determinable contingencies.

B. Private ambulance service contracts or private fire protection service contracts are not insurance, and this title does not apply to those contracts.

C. Charitable gift annuities that are issued pursuant to section 20-119 are not insurance and, except as provided in section 20-119, this title does not apply to agreements for those annuities.

D. Collision damage waivers are not insurance, and this title does not apply to those waivers.

E. Direct primary care agreements as defined in section 44-1799.91 are not insurance, and this title does not apply to those agreements.

F. Guaranteed asset protection waivers are not insurance, and this title does not apply to those waivers. For the purposes of this subsection, "guaranteed asset protection waiver" means a contractual agreement that is a part of or an addendum to a borrower's finance agreement wherein a creditor agrees for a separate charge to cancel or waive all or part of the amount due on the borrower's finance agreement in the event of a total physical damage loss or unrecovered theft of a motor vehicle.
A.R.S. § 20-707 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 707
20-707 Amendment of articles
Status: in_force

20-707. Amendment of articles

A. The articles of incorporation of a stock insurer increasing or reducing authorized capital or for other purposes may be amended in accordance with the general laws of this state applying to corporations formed for profit. No amendment shall reduce authorized capital below the amount required by this title for the kinds of insurance thereafter to be transacted.

B. The articles of incorporation of a mutual insurer may be amended by the affirmative vote of two thirds of its members present in person or by proxy at a regular or special meeting of members of which notice in writing setting forth the proposed amendment was mailed to all members at least thirty days in advance. A certificate of the amendments, signed and acknowledged by the president and attested by the secretary of the corporation, shall be filed, recorded and published, as required of the original articles of incorporation.
A.R.S. § 20-762 — Arizona Code / Title 20 / Chapter 4 / Article 2 / Section 762
20-762 "Reciprocal insurer" defined
Status: in_force

20-762. "Reciprocal insurer" defined

A "reciprocal insurer" means an unincorporated aggregation of subscribers operating individually and collectively through an attorney-in-fact to provide reciprocal insurance among themselves.
A.R.S. § 20-1903 — Arizona Code / Title 20 / Chapter 9 / Article 1 / Section 1903
20-1903 Immunity from liability for disclosure of information
Status: in_force

20-1903. Immunity from liability for disclosure of information

Any insurer, its employees or agents or an authorized agency that releases information in good faith pursuant to this chapter is immune from civil liability or criminal penalty based upon the release of the information.
A.R.S. § 20-1570 — Arizona Code / Title 20 / Chapter 6 / Article 9 / Section 1570
20-1570 Maintenance of the unearned premium reserve
Status: in_force

20-1570. Maintenance of the unearned premium reserve

If by reason of any cause, other than depreciation in the market value of investments, the amount of the assets of a title insurer held as investments of its unearned premium reserve should on any date be less than the amount required to be maintained by law in such reserve, and the deficiency shall not be promptly cured, such title insurer shall forthwith give written notice thereof to the director and shall issue no further title insurance policies, whether of policy insurance, reinsurance or coinsurance, until the deficiency shall have been eliminated and until it shall have received written approval from the director authorizing it again to issue such policies.
A.R.S. § 20-213 — Arizona Code / Title 20 / Chapter 2 / Article 1 / Section 213
20-213 Deposit requirements
Status: in_force

20-213. Deposit requirements

The director shall not issue a certificate of authority to any insurer unless it has deposited in trust with the state treasurer through the director's office cash or securities eligible for the investment of capital funds of domestic insurers under this title in an amount not less than the minimum required capital stock, if a stock insurer, or minimum required basic surplus, if a mutual or reciprocal insurer, required pursuant to this article to be maintained for authority to transact the kinds of insurance to be transacted, except:

1. As to life and disability carriers there shall be maintained with the state treasurer or a trustee approved by the director, a deposit in cash, surety bond or securities as described in sections 20-537 through 20-548 and sections 20-551 through 20-556, in an amount equal to the greatest of:

(a) Minimum required capital stock or minimum required basic surplus pursuant to section 20-210.

(b) Two-thirds of the aggregate reserves as computed under section 20-510.

(c) Twenty-five per cent of the earned premium of the prior year.

2. As to title insurers, the deposit shall be in such amount as is required by article 9 of chapter 6 of this title.

3. As to foreign insurers, in lieu of such deposit or part thereof in this state, the director shall accept the current certificate in proper form of the public official having supervision over insurers in any other state to the effect that a like deposit or part thereof by such insurer is being maintained in public custody in such state in trust for the purpose, among other reasonable purposes of protection of policyholders in this state.

4. As to alien insurers, in lieu of such deposit or part thereof in this state, the director shall accept evidence satisfactory to him that the insurer maintains within the United States by way of deposits with public depositaries, or in trust institutions within the United States approved by the director, assets available for discharge of its United States insurance obligations which assets shall be in amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States, together with, in the case of title insurers, the sum required by article 9 of chapter 6 of this title, and, in the case of all other insurers, together with the larger of the following sums:

(a) The largest deposit required by this title to be made in this state by any type of domestic insurer transacting like kinds of insurance, or

(b) Three hundred thousand dollars.

5. No deposit requirement for any insurer provided by this section shall exceed five hundred thousand dollars.
A.R.S. § 20-453 — Arizona Code / Title 20 / Chapter 2 / Article 6 / Section 453
20-453 Programs for purchase by policyholders of securities of insurance companies
Status: in_force

20-453. Programs for purchase by policyholders of securities of insurance companies

Notwithstanding the provisions of section 20-452 and notwithstanding any other provision of law, domestic life insurers, whether of the stock, mutual, fraternal or limited capital stock type, shall not be prohibited from engaging in a program whereby the holders of their life insurance policies are offered the right from time to time to buy for cash or to exchange dividends on such policies or other policy values resulting therefrom for securities in domestic corporations engaged in or organized to engage in the insurance business, but no such insurer shall engage in any such program unless the right to buy or the dividends or other policy values subject to exchange result from ownership of or are payable on account of a policy that from its inception is or that, within a period of not to exceed six years from its issue date, becomes a life insurance policy on a permanent plan other than term.  From and after being placed on such permanent plan, every such policy shall be in full compliance with sections 20-1231 and 20-1231.01 (standard nonforfeiture law) computed as from the date of being placed on such permanent plan.  No such offering shall be deemed to be exempt from title 44, chapter 12.
A.R.S. § 20-311.02 — Arizona Code / Title 20 / Chapter 2 / Article 3.1 / Section 311.02
20-311.02 Requirements for managing general agent agreements
Status: in_force

20-311.02. Requirements for managing general agent agreements

A. A person, firm, association or corporation acting in the capacity of a managing general agent shall not place business with an insurer unless there is in force a written contract between the parties that sets forth the responsibilities of each party and, if both parties share responsibility for a particular function, specifies the division of the responsibilities.  The contract shall contain the following minimum provisions:

1. The insurer may terminate the contract for cause on written notice to the managing general agent.  The insurer may suspend the underwriting authority of the managing general agent during the pendency of a dispute regarding the cause for termination.

2. At least each month the managing general agent shall render accounts to the insurer detailing all transactions and remit all monies due under the contract to the insurer.

3. The managing general agent shall hold in a fiduciary capacity all monies that are collected for the account of an insurer in a bank that is an institution that is insured by the federal deposit insurance corporation.  The account shall be used for all payments on behalf of the insurer.  The managing general agent may retain no more than three months' estimated claims payments and allocated loss adjustment expenses.

4. The managing general agent shall maintain separate records of business that is written by the managing general agent. The insurer shall have access to and the right to copy all accounts and records related to its business in a form usable by the insurer.  The director shall have access to all books, bank accounts and records of the managing general agent in a form usable to the director.

5. The managing general agent may not assign the contract in whole or in part.

6. Appropriate underwriting guidelines, including:

(a) The maximum annual premium volume.

(b) The basis of the rates to be charged.

(c) The types of risks that may be written.

(d) Maximum limits of liability.

(e) Applicable exclusions.

(f) Territorial limitations.

(g) Policy cancellation provisions.

(h) The maximum policy period.

7. The insurer may cancel or refuse to renew an insurance policy subject to applicable laws and rules.

8. If the contract permits the managing general agent to settle claims on behalf of the insurer:

(a) All claims shall be reported to the company in a timely manner.

(b) A copy of the claim file shall be sent to the insurer on request or as soon as it becomes known that the claim:

(i) May exceed an amount determined by the director or exceeds the limit set by the company, whichever is less.

(ii) Involves a coverage dispute.

(iii) May exceed the managing general agent's claims settlement authority.

(iv) Is open for more than six months.

(v) Is closed by payment of an amount set by the director or an amount set by the company, whichever is less.

(c) All claim files are the joint property of the insurer and the managing general agent.  On an order of liquidation of the insurer the files become the sole property of the insurer or its estate.  The managing general agent shall have reasonable access to and the right to copy the files on a timely basis.

(d) Any settlement authority that is granted to the managing general agent may be terminated for cause on the insurer's written notice to the managing general agent or on the termination of the contract. The insurer may suspend the settlement authority during the pendency of a dispute regarding the cause for termination.

9. If electronic claims files exist, provisions on the timely transmission of the data.

10. If the contract provides for the sharing of interim profits by the managing general agent, and the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves, controlling claim payments or any other manner, interim profits shall not be paid to the managing general agent until one year after the interim profits are earned for property insurance business or five years after the interim profits are earned on casualty business and the interim profits have been verified pursuant to subsection B of this section.

11. The managing general agent shall not:

(a) Bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with whom the automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured and commission schedules.

(b) Commit the insurer to participation in insurance or reinsurance syndicates.

(c) Appoint a producer without assuring that the producer is lawfully licensed to transact the type of insurance for which the producer is appointed.

(d) Without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, that does not exceed one per cent of the insurer's policyholder's surplus as of December 31 of the last completed calendar year.

(e) Without prior approval of the insurer, collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer.  If prior approval is given, a report shall be forwarded promptly to the insurer.

(f) Permit its subproducer to serve on the insurer's board of directors.

(g) Employ jointly an individual who is employed by the insurer.

(h) Appoint a submanaging general agent.

12. The managing general agent may use only advertising material pertaining to the business issued by an insurer that has been approved in writing by the insurer in advance of its use.

B. With respect to its managing general agent, an insurer shall:

1. Require the managing general agent to obtain and maintain a surety bond for the protection of the insurer.  The amount of the surety bond shall be ten per cent of the managing general agent's total annual written premium nationwide produced by the managing general agent for the insurer in the prior calendar year, except that the surety bond shall not be in an amount less than one hundred thousand dollars or more than five hundred thousand dollars.  The insurer shall make the bond available for inspection by the director.

2. Have on file an independent audited annual financial statement or report for the two most recent fiscal years that prove that the managing general agent has a positive net worth.  If the managing general agent has been in existence for less than two fiscal years, the managing general agent shall include financial statements or reports that are certified by an officer of the managing general agent and that are prepared in accordance with generally accepted accounting principles for any completed fiscal years and for any month during the current fiscal year for which the financial statements or reports have been completed.  For an audited financial report prepared on a consolidated basis, a managing general agent shall provide to the insurer with the financial report a columnar consolidating worksheet that includes amounts shown on the consolidated audited financial report, amounts for each entity stated separately and explanations of consolidating and eliminating entries.

3. Notwithstanding any other required loss reserve certification, if the managing general agent establishes loss reserves, annually obtain an actuary's opinion attesting to the adequacy of the loss reserves established for losses incurred and outstanding on business that is produced by the managing general agent.

4. Conduct semiannually an on-site review of the managing general agent's underwriting and claims processing operations.

5. Give to an officer of the insurer who is not affiliated with the managing general agent binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates.

6. Within thirty days of entering into or terminating a contract with a managing general agent, provide to the director written notification of the appointment or termination. A notice of appointment of a managing general agent shall include a statement of the duties that the applicant shall perform on behalf of the insurer, the lines of insurance for which the applicant shall be authorized to act and any other information the director may request.

7. Review its books and records each quarter to determine if a producer has become, by operation, a managing general agent.  If the insurer determines that a producer has become a managing general agent, the insurer promptly shall notify the producer and the director of the determination. The insurer and the producer shall comply with this section within thirty days.

C. An insurer shall not appoint to its board of directors an officer, director, employee, subproducer or controlling shareholder of its managing general agents.  This subsection does not apply to relationships that are governed by the insurance holding company act or, if applicable, the producer controlled insurer act.

D. The acts of the managing general agent are considered to be the acts of the insurer on whose behalf the managing general agent is acting.  A managing general agent may be examined by the director as if the managing general agent were the insurer and the insurer shall bear all expenses of the examination as prescribed by sections 20-156 and 20-159.

E. If after a hearing the director finds that a person has violated this section, the director may order:

1. For each separate violation, a civil penalty in an amount of up to one thousand dollars.

2. Revocation or suspension of the producer's license.

3. The managing general agent to reimburse the insurer or the rehabilitator or liquidator of the insurer for any losses that are incurred by the insurer and that are caused by an act that is committed by the managing general agent in violation of this section.

F. Nothing contained in this section affects the right of the director to impose any other penalties pursuant to this title.

G. Nothing contained in this section limits or restricts the rights of policyholders, claimants and auditors.

H. The director may adopt rules for the implementation and administration of this section.

I. Except as provided in section 41-1092.08, subsection H, the final decision, determination or order of the director pursuant to subsection E of this section is subject to judicial review pursuant to title 12, chapter 7, article 6.
A.R.S. § 20-2113 — Arizona Code / Title 20 / Chapter 11 / Article 1 / Section 2113
20-2113 Disclosure limitations and conditions
Status: in_force

20-2113. Disclosure limitations and conditions

An insurance institution, insurance producer or insurance support organization shall not disclose any personal or privileged information about an individual collected or received in connection with an insurance transaction unless the disclosure is:

1. With the written authorization of the individual except that:

(a) If the authorization is submitted by another insurance institution, insurance producer or insurance support organization, the authorization shall meet the requirements prescribed in section 20-2106.

(b) If the authorization is submitted by a person other than an insurance institution, insurance producer or insurance support organization, the authorization shall be dated, signed by the individual and obtained one year or less before the date a disclosure is sought pursuant to this section.

2. To a person other than an insurance institution, insurance producer or insurance support organization, if the disclosure is reasonably necessary:

(a) To enable the person to perform a business, professional or insurance function for the disclosing insurance institution, insurance producer or insurance support organization and the person agrees not to disclose the information further without the individual's written authorization unless the further disclosure either:

(i) Would otherwise be permitted by this section if made by an insurance institution, insurance producer or insurance support organization.

(ii) Is reasonably necessary for the person to perform the individual's function for the disclosing insurance institution, insurance producer or insurance support organization.

(b) To enable the person to provide information to the disclosing insurance institution, insurance producer or insurance support organization for the purpose of determining an individual's eligibility for an insurance benefit or payment or detecting or preventing criminal activity, fraud, material misrepresentation or material nondisclosure in connection with an insurance transaction.

3. To an insurance institution, insurance producer, insurance support organization or self-insurer if the information disclosed is limited to that which is reasonably necessary either:

(a) To detect or prevent criminal activity, fraud, material misrepresentation or material nondisclosure in connection with insurance transactions.

(b) For the disclosing or receiving insurance institution, insurance producer or insurance support organization to perform its function in connection with an insurance transaction involving the individual.

4. To a medical care institution or medical professional for the purpose of verifying insurance coverage or benefits, informing an individual of a medical problem of which the individual may not be aware or conducting an operations or service audit, if only the information that is reasonably necessary to accomplish the purposes prescribed by this paragraph is disclosed.

5. To an insurance regulatory authority.

6. To a law enforcement or other governmental authority to protect the interests of the insurance institution, insurance producer or insurance support organization in preventing or prosecuting the perpetration of fraud upon it, or if the insurance institution, insurance producer or insurance support organization reasonably believes that illegal activities have been conducted by the individual.

7. Otherwise permitted or required by law.

8. In response to a valid administrative or judicial order, including a search warrant or subpoena.

9. Made for the purpose of conducting actuarial or research studies, except that no individual may be identified in any actuarial or research report, materials allowing the individual to be identified shall be returned or destroyed as soon as they are no longer needed and the actuarial or research organization shall agree not to disclose the information unless the disclosure would otherwise be permitted by this section if made by an insurance institution, insurance producer or insurance support organization.

10. To a party or a representative of a party to a proposed or consummated sale, transfer, merger or consolidation of all or part of the business of the insurance institution, insurance producer or insurance support organization, except that before the consummation of the sale, transfer, merger or consolidation only the information is disclosed that is reasonably necessary to enable the recipient to make business decisions about the purchase, transfer, merger or consolidation and the recipient agrees not to disclose the information unless the disclosure would otherwise be permitted by this section if made by an insurance institution, insurance producer or insurance support organization.

11. To a person whose only use of the information will be in connection with the marketing of a product or service if:

(a) No medical record information, privileged information or personal information relating to an individual's character, personal habits, mode of living or general reputation is disclosed and no classification derived from the information is disclosed.

(b) The individual has been given an opportunity to indicate that the individual does not want personal information disclosed for marketing purposes and has given no indication that the individual does not want the information disclosed.

(c) The person receiving the information agrees not to use it except in connection with the marketing of a product or service.

12. To an affiliate whose only use of the information will be in connection with an audit of the insurance institution or insurance producer or the marketing of an insurance or financial product or service, if the affiliate agrees not to disclose the information for any other purpose or to an unaffiliated person, except that no medical record information may be disclosed for marketing purposes without the individual's written consent.

13. By a consumer reporting agency if the disclosure is to a person other than an insurance institution or insurance producer.

14. To a group insurance policyholder for the purpose of reporting claims experience or conducting an audit of the insurance institution's or insurance producer's operations or services if the information disclosed is reasonably necessary for the recipient to conduct the review or audit.

15. To a professional peer review organization for the purpose of reviewing the service or conduct of a medical care institution or medical professional.

16. To a governmental authority for the purpose of determining the individual's eligibility for health benefits for which the governmental authority may be liable.

17. To a certificate holder or policyholder for the purpose of providing information regarding the status of an insurance transaction.
A.R.S. § 20-1355 — Arizona Code / Title 20 / Chapter 6 / Article 4 / Section 1355
20-1355 Legal actions
Status: in_force

20-1355. Legal actions

There shall be a provision as follows: "Legal actions: No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of two years after the time written proof of loss is required to be furnished."
A.R.S. § 20-1572 — Arizona Code / Title 20 / Chapter 6 / Article 9 / Section 1572
20-1572 Reserve for unpaid losses and loss expense
Status: in_force

20-1572. Reserve for unpaid losses and loss expense

A. Each title insurer shall at all times establish and maintain, in addition to other reserves, a reserve against unpaid losses, and against loss expense, and shall calculate the reserves by making a careful estimate in each case of the loss and loss expense likely to be incurred, by reason of every claim presented, pursuant to notice from or on behalf of the insured, of a title defect in or lien or adverse claim against the title insured, that may result in a loss or cause expense to be incurred for the proper disposition of the claim.  The sums of the items estimated pursuant to this section shall be the total amounts of the reserves against unpaid losses and loss expenses of the title insurer.

B. In combination with the reserves prescribed in section 20-1569 and subsection A of this section, each title insurer shall establish a supplemental reserve that consists of all other reserves that are necessary to cover the insurer's liabilities for all losses, claims and loss adjustment expenses.

C. The amounts estimated pursuant to this section may be revised from time to time as circumstances warrant, but shall be redetermined at least once each year.

D. The amounts set aside in the reserves in any year shall be deducted in determining the net profits of any title insurer for that year.
A.R.S. § 20-290 — Arizona Code / Title 20 / Chapter 2 / Article 3 / Section 290
20-290 Insurance producer records; individual licensees
Status: in_force

20-290. Insurance producer records; individual licensees

A. An insurance producer shall keep at the insurance producer's principal place of business the usual and customary records that pertain to transactions under the insurance producer's license. The insurance producer shall keep all records for any transaction for three years immediately after the date of completion of the transaction and shall make them available and open to the inspection of the director at any business time during those three years.

B. A business entity insurance producer shall have at least one insurance producer individually licensed for the appropriate lines of authority in each office or place of business in which the business entity transacts insurance in this state.
A.R.S. § 20-146 — Arizona Code / Title 20 / Chapter 1 / Article 2 / Section 146
20-146 Supervisor
Status: in_force

20-146. Supervisor

A. The director shall appoint a supervisor of insurance rates.

B. The supervisor of insurance rates shall be a person versed in insurance rating procedure and familiar with the operation of insurance companies and rating organizations.

C. The supervisor shall be subject to removal for cause.

D. The supervisor of insurance rates shall receive compensation as determined pursuant to section 38-611.
A.R.S. § 20-1722 — Arizona Code / Title 20 / Chapter 7 / Article 2 / Section 1722
20-1722 Deposit; surplus requirements
Status: in_force

20-1722. Deposit; surplus requirements

A. Until October 1, 1985, the provisions of subsection A of section 20-260 shall not apply to primary coverage issued by health care insurers established pursuant to this article.

B. A health care insurance company established pursuant to the provisions of this article shall maintain three hundred thousand dollars as a statutory deposit pursuant to section 20-213 and such deposit shall be held by the state treasurer in accordance with the provisions of chapter 3, article 3 of this title.

C. In addition to the statutory deposit required in subsection B, a health care insurance company shall maintain additional surplus funds in the following amounts:

1. Seven hundred thousand dollars throughout the first year of operation,

2. One million seven hundred thousand dollars throughout the second year of operation, and

3. Two million seven hundred thousand dollars throughout the third year of operation and each subsequent year of operation.

D. The director shall not issue a certificate of authority to an insurer established pursuant to this article until the deposit requirement specified in subsection B and the surplus requirement specified in subsection C for the first year of operation are satisfied.
A.R.S. § 20-1086 — Arizona Code / Title 20 / Chapter 4 / Article 10 / Section 1086
20-1086 Surplus
Status: in_force

20-1086. Surplus

A. A life and disability reinsurer shall have on organization initial surplus in an amount not less than one-half of its minimum required capital stock and shall thereafter maintain one-half of such initial surplus.

B. This section does not apply to unaffiliated credit life and disability reinsurers.
A.R.S. § 20-772 — Arizona Code / Title 20 / Chapter 4 / Article 2 / Section 772
20-772 Modifications of agreement
Status: in_force

20-772. Modifications of agreement

Modification of the terms of the subscribers' agreement or of the power of attorney of a domestic reciprocal insurer shall be made jointly by the attorney and the subscribers' advisory committee. No such modification shall be effective retroactively, nor effective as to any insurance contract issued prior thereto.
A.R.S. § 20-2633 — Arizona Code / Title 20 / Chapter 16 / Article 2 / Section 2633
20-2633 Separate account; annuities
Status: in_force

20-2633. Separate account; annuities

A. A domestic company that issues variable annuities shall establish one or more separate accounts pursuant to section 20-651.

B. Except pursuant to subsection C of this section:

1. The company may invest and reinvest amounts that are allocated to a separate account and accumulations on the allocated amounts without regard to any requirements or limitations that are prescribed by the laws of this state governing the investments of life insurance companies.

2. The company shall not consider the investments in the separate account or accounts in applying the investment limitations that otherwise apply to the investments of the company.

C. The company may retain its reserves for benefits that are guaranteed as to the dollar amount and duration and for funds that are guaranteed as to the principal amount or stated rate of interest in a separate account if a portion of the assets of the separate account in an amount that is at least equal to the reserve liability is invested according to the laws of this state governing the investments of life insurance companies. The company shall not consider the portion of the assets in applying the investment limitations that otherwise apply to the investments of the company.

D. With respect to seventy-five per cent of the market value of the total assets in a separate account, a company shall not, unless otherwise approved by the director on a showing that the approval will not be hazardous to the public or policyholders in this state, purchase or otherwise acquire the securities of any issuer, other than securities that are issued or guaranteed as to principal or interest by the United States, if immediately after the purchase or acquisition the market value of the investment, together with prior investments of the separate account in the security taken at market, would exceed ten per cent of the market value of the assets of the separate account.

E. Unless otherwise permitted by law or approved by the director, a company shall not purchase or otherwise acquire for its separate accounts the voting securities of any issuer if as a result of the acquisition the insurance company and its separate accounts, in the aggregate, will own more than ten per cent of the total issued and outstanding voting securities of the issuer. This limitation does not apply to securities that are held in separate accounts, the voting rights in which are exercisable only according to instructions from those persons who have an interest in the accounts.

F. The limitations under subsections D and E of this section do not apply to the investment with respect to a separate account in the securities of an investment company that is registered under the investment company act of 1940 (15 United States Code sections 80a-1 through 80a-64) if the investments of the investment company substantially comply with subsections D and E of this section.

G. Unless the director otherwise approves, assets that are allocated to a separate account shall be valued at their market value on the date of valuation. If there is no readily available market, the assets shall be valued under the terms of the contract or the rules or other written agreement that applies to the separate account. Unless the director otherwise approves, the portion, if any, of the assets of the separate account that is equal to the company's reserve liability with regard to the benefits and funds under subsection C of this section shall be valued according to the rules that otherwise apply to the company's assets.

H. Except as provided under the applicable contracts, that portion of the assets of any separate account that is equal to the reserves and other contract liabilities with respect to the account shall not be charged with liabilities arising out of any other business the company may conduct.

I. Notwithstanding any law to the contrary, a company may either:

1. With respect to a separate account that is registered with the securities and exchange commission as a unit investment trust, exercise voting rights in connection with any securities of a regulated investment company registered under the investment company act of 1940 and held in the separate accounts according to instructions from those persons who have an interest in the accounts ratably as determined by the company.

2. With respect to a separate account that is registered with the securities and exchange commission as a management investment company, establish for the account a committee, a board or any other body. The members of the committee, board or other body may or may not be affiliated with the company and may be elected to the membership by the vote of those persons who have an interest in the accounts ratably as determined by the company. This committee, board or other body, alone or in conjunction with others, may manage the separate account and the investment of its assets. Subject to approval of the director on a showing that the approval will not be hazardous to the public or policyholders of this state any company, committee, board or other body may make such other provisions in respect to any such separate account as may be deemed appropriate to facilitate compliance with the requirements of any federal or state law.

J. A company may not sell, exchange or otherwise transfer assets between any of its separate accounts or between any other investment account and one or more of its separate accounts unless either:

1. The director approves the sale, transfer or exchange based on a showing that the sale, transfer or exchange is equitable to current policyholders.

2. Both of the following occur:

(a) If the transfer is into a separate account, the transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made.

(b) If the transfer is into or from a separate account, the transfer is made either:

(i) By a transfer of cash.

(ii) By a transfer of securities having a valuation that can be readily determined in the marketplace, if the director approves the transfer of the securities.

K. Except as otherwise approved by the director, the company shall maintain in each separate account assets with a value in an amount that is at least equal to the reserves and other contract liabilities with respect to the account.

L. Any law that relates to conflicts of interest and that applies to the officers and directors of insurance companies also applies to the members of any separate accounts committee, board or other body that is established pursuant to subsection I of this section. An officer or director of the company or a member of the committee, board or body of a separate account shall not receive, directly or indirectly, any commission or other compensation with respect to the purchase or sale of any assets of the separate account.
A.R.S. § 20-223 — Arizona Code / Title 20 / Chapter 2 / Article 1 / Section 223
20-223 Annual statement; payment of fees; penalty for failure to file or pay
Status: in_force

20-223. Annual statement; payment of fees; penalty for failure to file or pay

A. Each authorized domestic insurer shall annually on or before March 31 and each other authorized insurer shall annually on or before March 1 file with the director, or a repository designated by the director, a true statement of its financial condition, transactions and affairs as of the December 31 preceding. The statement shall be completed pursuant to the instructions and accounting practices and procedures that are approved by the national association of insurance commissioners. The statement shall be in such general form and context as approved by the national association of insurance commissioners for the kinds of insurance to be reported upon, and as supplemented for additional information required by the director. Coincident with the filing of its annual statement, each such insurer shall pay such fees prescribed by section 20-167 for filing the annual statement and renewal of its certificate of authority.

B. The statement of an alien insurer shall relate only to its transactions and affairs in the United States unless the director requires otherwise. The statement shall be verified by the insurer's United States manager or other officer duly authorized.

C. The director may refuse to renew, or may suspend or revoke, the certificate of authority of any insurer failing to file its annual statement or pay its fees when due or within any extension of time therefor which the director, for good cause, may have granted.

D. Any insurer failing to file an annual statement or to pay its fees pursuant to this section is subject to payment of a penalty fee not to exceed twenty-five dollars for each day of delinquency.
A.R.S. § 20-2313 — Arizona Code / Title 20 / Chapter 13 / Article 1 / Section 2313
20-2313 Marketing practices
Status: in_force

20-2313. Marketing practices

A. An accountable health plan or its insurance producer shall not:

1. Discourage an employer from filing an application for a health benefits plan because of the health status-related factors, industry, occupation or geographic location of the employer.

2. Encourage or direct an employer to seek a health benefits plan from another insurer because of the health status-related factors, industry, occupation or geographic location of the employer.

B. This section does not prohibit an accountable health plan from providing information regarding the geographic service area of the accountable health plan.

C. Notwithstanding any law to the contrary, an accountable health plan may market health benefits plans to groups of small employers from the same or different industries that elect to pool their risks on a voluntary basis.
A.R.S. § 20-1098.02 — Arizona Code / Title 20 / Chapter 4 / Article 14 / Section 1098.02
20-1098.02 Names of companies
Status: in_force

20-1098.02. Names of companies

A. A captive insurer shall not adopt a name that is the same, deceptively similar to or likely to be confused with or mistaken for any other existing business name registered in this state.

B. The name of a captive insurer that is a mutual company shall contain the word "mutual".
A.R.S. § 20-343 — Arizona Code / Title 20 / Chapter 2 / Article 4 / Section 343
20-343 Definitions
Status: in_force

20-343. Definitions

In this article, unless the context otherwise requires:

1. "Board" means the workers' compensation appeals board established by section 20-367.

2. "Classification plan" means the plan or system that groups industries, occupations or operations with a similar exposure to loss into rate classifications for workers' compensation rating, rate making and statistical reporting purposes.

3. "Designated rating organization" means the rating organization selected by the director pursuant to section 20-371, subsection F.

4. "Designated statistical agent" means the organization designated by the director under section 20-371, subsection D.

5. "Experience rating plan" means a mandatory rating plan for all eligible insureds that establishes a workers' compensation rating procedure that compares the actual loss experience of individual insureds to the industry average for the same classification with differences reflected in the insured's premium.

6. "Schedule rating plan" means a rating plan by which an insurer increases or decreases workers' compensation rates to reflect the individual risk characteristics or the loss ratios of the subject of insurance.

7. "Statistical plan" means the plan, system or arrangement used in collecting workers' compensation data.

8. "Uniform plan" means a workers' compensation statistical plan, classification plan or experience rating plan designated by the director pursuant to section 20-371, subsection J.

9. "Uniform rate filing" means the rate filing that is made by the designated rating organization and that includes all of the workers' compensation rates to which insurers transacting workers' compensation insurance in this state shall adhere except as provided in section 20-359, subsections A and B. Uniform rate filing also includes the expected loss ratios, ballast factors and other factors promulgated by the designated rating organization for the uniform experience rating plan.

10. "Workers' compensation rates" means rates for workers' compensation and employers' liability insurance incident to and written in connection with workers' compensation.
A.R.S. § 20-1051 — Arizona Code / Title 20 / Chapter 4 / Article 9 / Section 1051
20-1051 Definitions
Status: in_force

20-1051. Definitions

In this article, unless the context otherwise requires:

1. "Enrollee" means an individual who has been enrolled in a health care plan.

2. "Evidence of coverage" means any certificate, agreement or contract issued to an enrollee and setting out the coverage to which the enrollee is entitled.

3. "Genetic information" means information about genes, gene products and inherited characteristics that may derive from the individual or a family member, including information regarding carrier status and information derived from laboratory tests that identify mutations in specific genes or chromosomes, physical medical examinations, family histories and direct analysis of genes or chromosomes.

4. "Health care plan" means any contractual arrangement whereby any health care services organization undertakes to provide directly or to arrange for all or a portion of contractually covered health care services and to pay or make reimbursement for any remaining portion of the health care services on a prepaid basis through insurance or otherwise. A health care plan shall include those health care services required in this article or in any rule adopted pursuant to this article.

5. "Health care services" means services for the purpose of diagnosing, preventing, alleviating, curing or healing human illness or injury.

6. "Health care services organization" means any person that undertakes to conduct one or more health care plans. Unless the context otherwise requires, health care services organization includes a provider sponsored health care services organization.

7. "Health status-related factor" means any factor in relation to the health of the individual or a dependent of the individual enrolled or to be enrolled in a health care services organization including:

(a) Health status.

(b) Medical condition, including physical and mental illness.

(c) Claims experience.

(d) Receipt of health care.

(e) Medical history.

(f) Genetic information.

(g) Evidence of insurability, including conditions arising out of acts of domestic violence as defined in section 20-448.

(h) The existence of a physical or mental disability.

8. "Network plan" means health care services that are provided by a health care services organization under which the financing and delivery of health care services are provided, in whole or in part, through a defined set of providers under contract with the health care services organization.

9. "Person" means any natural or artificial person including individuals, partnerships, associations, providers of health care, trusts, insurers, hospital or medical service corporations or other corporations, prepaid group practice plans, foundations for medical care and health maintenance organizations.

10. "Provider" means any physician, hospital or other person that is licensed or otherwise authorized to furnish health care services in this state.

11. "Provider sponsored health care services organization" means a provider sponsored organization that provides at least one health care plan only to medicare beneficiaries under the medicare-plus-choice program established under the balanced budget act of 1997 (42 United States Code sections 1395w-21 through 1395w-28 and title XVIII, part C of the social security act, sections 1851 through 1859).

12. "Provider sponsored organization" means an entity that:

(a) Is a legal aggregation of providers that operate collectively to provide health care services to medicare beneficiaries under the medicare-plus-choice program established under the balanced budget act of 1997 (42 United States Code sections 1395w-21 through 1395w-28 and title XVIII, part C of the social security act, sections 1851 through 1859).

(b) Acts through a licensed firm or corporation that has authority over the entity's activities and responsibility for satisfying the requirements of this article relating to the operation of a provider sponsored health care services organization.

(c) Provides a substantial proportion of the health care services required to be provided under the medicare-plus-choice program established under the balanced budget act of 1997 (42 United States Code sections 1395w-21 through 1395w-28 and title XVIII, part C of the social security act, sections 1851 through 1859) directly through providers or affiliated groups of providers.

13. "Registered nurse practitioner" has the same meaning prescribed in section 32-1601.
A.R.S. § 20-849 — Arizona Code / Title 20 / Chapter 4 / Article 3 / Section 849
20-849 Contracts; optometrists; covered services; definition
Status: in_force

20-849. Contracts; optometrists; covered services; definition

A. Except as provided in subsection C of this section, a contract, entered into or renewed on or after January 1, 2022, between an optometric service corporation and an optometrist who is licensed to practice in this state shall not:

1. Require the optometrist to provide a service to an individual covered under a subscription contract based on a fee set by the optometric service corporation unless the service for which the fee applies is a covered service under the individual's subscription contract.

2. Prohibit an optometrist from offering or providing a vision service that is not a covered service to a covered individual at a fee determined by the optometrist or by the optometrist and the covered individual.

3. Require an optometrist to use one or more specific vendors to replenish the optometrist's inventory of spectacle lenses after the optometrist dispenses the optometrist's inventory to eligible members of the vision plan as a covered vision service.

B. This section applies to an administrator providing third-party administration services or a provider network for a vision plan.

C. This section does not restrict the ability of an optometric service corporation to enter into a contract for an optometrist to participate in a discount program sponsored by the optometric service corporation for services that are not covered if:

1. Participation in the optometric service corporation network is not contingent on participation in the sponsored discount program.

2. The optometric service corporation offers equal treatment to an optometrist who does not participate in a sponsored discount program, regarding:

(a) Promotional treatment.

(b) Marketing benefits.

(c) Materials.

(d) Contract terms for providing a covered service.

D. Notwithstanding subsection C, paragraph 2, subdivision (d) of this section, an optometric service corporation, when providing a typically formatted list of optometrists in the optometric service corporation network, may identify whether an optometrist participates in a discount program for services not covered by the optometric service corporation if all lists state that other discounts may be available with individual optometrists.

E. All contracts shall be in compliance with this section by the first renewal period on or after January 1, 2022, but not later than December 31, 2022.

F. For the purposes of this section, "covered service" means a service for which any reimbursement is available under a subscription contract without regard to contractual limitations by a deductible, copayment, coinsurance, waiting period, annual or lifetime maximum, frequency limitation, alternative benefit payment, exclusion or other limitation.
A.R.S. § 20-2221 — Arizona Code / Title 20 / Chapter 12 / Article 1 / Section 2221
20-2221 Dissolution
Status: in_force

20-2221. Dissolution

Dissolution of the association, including its assets and liabilities, shall be accomplished under the supervision of the director.
A.R.S. § 20-458 — Arizona Code / Title 20 / Chapter 2 / Article 6 / Section 458
20-458 Fraudulent statement in application; classification
Status: in_force

20-458. Fraudulent statement in application; classification

Any life insurance producer, examining physician or other person who knowingly makes a false or fraudulent statement or representation in or relative to an application for life or disability insurance, or who makes any such statement to obtain a fee, commission, money or benefit is guilty of a class 2 misdemeanor.
A.R.S. § 20-294 — Arizona Code / Title 20 / Chapter 2 / Article 3 / Section 294
20-294 Temporary licensing
Status: in_force

20-294. Temporary licensing

A. The director may issue a temporary insurance producer license for not more than one hundred eighty days without requiring an examination if the director deems that the temporary license is necessary for the servicing of an insurance business in the following cases:

1. To the surviving spouse or court appointed personal representative of a licensed insurance producer who dies or becomes a person with a mental or physical disability to allow adequate time for the sale of the insurance business owned by the producer, for the recovery of the producer and return of the producer to the business or to provide for the training and licensing of new personnel to operate the producer's business.

2. To a member or employee of a business entity that is licensed as an insurance producer on the death or disability of an individual who is the designated producer on the business entity application or license.

3. To the designee of a licensed insurance producer who enters active service in the armed forces of the United States.

B. By order the director may impose conditions or limitations on the authority of any temporary licensee in any way the director deems necessary to protect insureds and the public, including requiring the temporary licensee to have a suitable sponsor who is a licensed insurance producer or insurer and who assumes responsibility for all acts of the temporary licensee.  Unless the director imposes conditions or limitations pursuant to this subsection, a temporary licensee has the same rights and privileges prescribed in this article for an insurance producer.

C. By order the director may summarily revoke a temporary license if the interests of insureds or the public are endangered.  A temporary license may not continue after the owner or the personal representative disposes of the business.
A.R.S. § 20-731 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 731
20-731 Merger or consolidation of stock insurers; hearings; notice
Status: in_force

20-731. Merger or consolidation of stock insurers; hearings; notice

A. Any domestic stock insurer except a title insurer may merge or consolidate with another domestic or foreign stock insurer by complying with the provisions of general law governing the merger or consolidation of stock corporations formed for profit, but subject to subsection B of this section.

B. A merger or consolidation is not effective under this section unless in advance of the merger or consolidation the plan and agreement have been filed with and approved in writing by the director. The director may hold a public hearing on the plan and agreement as prescribed in section 20-161, and the director shall approve the merger or consolidation unless the director finds the plan or agreement:

1. Is contrary to law.

2. Is unfair in the terms and conditions of the issuance and exchange of securities.

3. Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state or elsewhere.

C. Any public hearing referred to in subsection B of this section shall be held within thirty days after the plan and agreement of merger is filed, and at least twenty-five days' written notice thereof shall be given by the director to the insurer corporations involved. Not less than ten days' written notice of the hearing shall be given by the insurer corporations to their shareholders. The insurers filing the plan and agreement, shareholders, any person to whom written notice of hearing was sent and any other person whose interest may be affected thereby shall have the right to present evidence, examine and cross-examine the witnesses and offer oral and written arguments at the hearing. The director shall make a determination within thirty days after the conclusion of the hearing. Except as otherwise provided in this subsection, title 41, chapter 6, article 10 shall apply to hearings, orders and appeals.

D. A domestic title insurer may merge or consolidate with another domestic or foreign title insurer by complying with section 20-1576.
A.R.S. § 20-1372 — Arizona Code / Title 20 / Chapter 6 / Article 4 / Section 1372
20-1372 Effect of policy containing nonconforming provisions
Status: in_force

20-1372. Effect of policy containing nonconforming provisions

No policy provision which is not subject to this article shall cause a policy, or any portion thereof to be less favorable in any respect to the insured or the beneficiary than the provisions thereof which are subject to this article. A policy delivered or issued for delivery to any person in this state in violation of this article shall be held valid but shall be construed as provided in this article. When any provision in a policy subject to this article is in conflict with any provision of this article, the rights, duties and obligations of the insurer, the insured and the beneficiary shall be governed by the provisions of this article.
A.R.S. § 20-538 — Arizona Code / Title 20 / Chapter 3 / Article 2 / Section 538
20-538 Securities of states, territories, counties, municipalities, school districts, political subdivisions, public districts or civil divisions thereof
Status: in_force

20-538. Securities of states, territories, counties, municipalities, school districts, political subdivisions, public districts or civil divisions thereof

An insurer may invest any of its funds in bonds or other evidences of indebtedness not in default as to principal or interest, which are valid and legally authorized securities or obligations issued, assumed, or guaranteed by the state of Arizona or any counties, municipalities, school districts, or political subdivisions of any type organized pursuant to the Constitution or statutes of the state of Arizona, or issued, assumed, or guaranteed by any other state or territory of the United States or by any counties, incorporated cities, towns, villages, municipalities, school districts, public districts of any type organized pursuant to statute or constitution in other states or territories where any of the foregoing political subdivisions are so designated, or by a political subdivision thereof, or by any civil division or public instrumentality of one or more of the foregoing, if, by statutory or other legal requirements applicable thereto, such obligations are or may become payable, as to both principal and interest, from taxes levied or required to be levied upon all taxable property or all taxable income within the jurisdiction of such governmental unit. No investment authorized by this section shall include any security issued by any such governmental unit if any default on any other security issued by such governmental unit has occurred within five years of such investment.
A.R.S. § 20-1097.07 — Arizona Code / Title 20 / Chapter 4 / Article 13 / Section 1097.07
20-1097.07 Fees and taxes
Status: in_force

20-1097.07. Fees and taxes

A. Any prepaid legal insurance corporation licensed pursuant to this article shall pay those fees prescribed by section 20-167 and those taxes prescribed by section 20-224.

B. A prepaid legal insurance corporation may claim a premium tax credit if the corporation qualifies for a credit pursuant to section 20-224.03.
A.R.S. § 20-446 — Arizona Code / Title 20 / Chapter 2 / Article 6 / Section 446
20-446 Acts tending to result in unreasonable restraint or monopoly of insurance business
Status: in_force

20-446. Acts tending to result in unreasonable restraint or monopoly of insurance business

No person shall enter into any agreement to commit, or by any concerted action commit, any act of boycott, coercion or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance.
A.R.S. § 20-170 — Arizona Code / Title 20 / Chapter 1 / Article 2 / Section 170
20-170 Prohibited acts during sixty day period of supervision
Status: in_force

20-170. Prohibited acts during sixty day period of supervision

During the period of supervision, the director may appoint a supervisor to supervise such insurance company and may provide that the insurance company may not do any of the following things, during the period of supervision, without the prior approval of the director or his supervisor:

1. Dispose of, convey or encumber any of its assets or its business in force;

2. Withdraw any of its bank accounts;

3. Lend any of its funds;

4. Invest any of its funds;

5. Transfer any of its property;

6. Incur any debt, obligation or liability;

7. Merge or consolidate with another company; or

8. Enter into any new reinsurance contract or treaty.
A.R.S. § 20-2102 — Arizona Code / Title 20 / Chapter 11 / Article 1 / Section 2102
20-2102 Definitions
Status: in_force

20-2102. Definitions

In this chapter, unless the context otherwise requires:

1. "Adverse underwriting decision" means any of the following actions involving insurance coverage which is individually underwritten:

(a) A declination of insurance coverage.

(b) A termination of insurance coverage.

(c) Failure of an insurance producer to apply for insurance coverage with a specific insurance institution which the insurance producer represents and which is requested by an applicant.

(d) In the case of property or casualty insurance coverage, placement by an insurance institution or insurance producer of a risk with a residual market mechanism, an unauthorized insurer or an insurance institution which specializes in substandard risks, or the charging of a higher rate on the basis of information which differs from that which the applicant or policyholder furnished.

(e) In the case of life, health or disability insurance coverage, an offer to insure at higher than standard rates.

(f) In the case of property or casualty insurance, assigning an applicant or policyholder to a higher rating tier or failing to apply a premium discount or credit based on any credit related information derived from the applicant's or policyholder's consumer report, insurance score or lack of credit history.

Notwithstanding subdivisions (a) through (f) of this paragraph, the termination of an individual policy form on a class or statewide basis, a declination of insurance coverage solely because the coverage is not available on a class or statewide basis or the rescission of a policy is not considered an adverse underwriting decision, but the insurance institution or insurance producer responsible for its occurrence shall provide the applicant or policyholder with the specific reasons for its occurrence.

2. "Affiliate" or "affiliated" means a person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with another person.

3. "Applicant" means any person who seeks to contract for insurance coverage other than a person seeking group insurance that is not individually underwritten.

4. "Consumer report" means any written, oral or other communication of information that bears on a natural person's creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living and that is used or expected to be used in connection with an insurance transaction.

5. "Consumer reporting agency" means any person who does any of the following:

(a) Regularly engages, in whole or in part, in the practice of assembling or preparing consumer reports for a monetary fee.

(b) Obtains information primarily from sources other than insurance institutions.

(c) Furnishes consumer reports to other persons.

6. "Control", including the terms "controlled by" or "under common control with", means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person.

7. "Declination of insurance coverage" means a denial, in whole or in part, by an insurance institution or insurance producer of requested insurance coverage.

8. "Individual" means any natural person who:

(a) In the case of property or casualty insurance, is a past, present or proposed named insured or certificate holder.

(b) In the case of life, health or disability insurance, is a past, present or proposed principal insured or certificate holder.

(c) Is a past, present or proposed policyowner.

(d) Is a past or present applicant.

(e) Is a past or present claimant.

(f) Derived, derives or is proposed to derive insurance coverage under an insurance policy or certificate subject to this chapter.

9. "Institutional source" means any person or governmental entity that provides information about an individual to an insurance producer, insurance institution or insurance support organization, other than an insurance producer, the individual who is the subject of the information or a natural person acting in a personal capacity rather than in a business or professional capacity.

10. "Insurance institution" means any corporation, association, partnership, reciprocal insurer, inter-insurer, Lloyd's association, fraternal benefit society or other person engaged in the business of insurance, including health care service organizations and hospital, medical, dental and optometric service corporations as defined in this title.  Insurance institution does not include insurance producers or insurance support organizations.

11. "Insurance producer" means an insurance producer as defined in section 20-281.

12. "Insurance score" means, for the purpose of insurance underwriting or rating, a designation that is derived by using a variety of data sources, including an individual's consumer report in an algorithm, computer program, model or other process that reduces the data to a number, alpha character or rating that is used for insurance underwriting and rating decisions.

13. "Insurance support organization" means:

(a) Any person who regularly engages, in whole or in part, in the practice of assembling or collecting information about natural persons for the primary purpose of providing the information to an insurance institution or insurance producer for insurance transactions, including the furnishing of consumer reports or investigative consumer reports to an insurance institution or insurance producer for use in connection with an insurance transaction or the collection of personal information from insurance institutions, insurance producers or other insurance support organizations for the purpose of detecting or preventing fraud, material misrepresentation or material nondisclosure in connection with insurance underwriting or insurance claim activity.

(b) Notwithstanding subdivision (a) of this paragraph the following persons are not considered insurance support organizations for purposes of this chapter:

(i) Insurance producers.

(ii) Government institutions.

(iii) Insurance institutions.

(iv) Medical care institutions.

(v) Medical professionals.

14. "Insurance transaction" means any transaction that involves insurance primarily for personal, family or household needs rather than business or professional needs and that entails the determination of an individual's eligibility for an insurance coverage, benefit or payment or the servicing of an insurance application, policy, contract or certificate, including transfers of business.

15. "Investigative consumer report" means a consumer report or portion of a consumer report in which information about a natural person's character, general reputation, personal characteristics or mode of living is obtained through personal interviews with the person's neighbors, friends, associates, acquaintances or others who may have knowledge concerning those items of information.

16. "Medical care institution" means any facility or institution that is licensed to provide health care services to natural persons including:

(a) Health care service organizations.

(b) Home health agencies.

(c) Hospitals.

(d) Medical clinics.

(e) Public health agencies.

(f) Rehabilitation agencies.

(g) Skilled nursing facilities.

17. "Medical professional" means any person licensed or certified to provide health care services to natural persons, including a chiropractor, clinical dietitian, clinical psychologist, dentist, nurse, occupational therapist, optometrist, pharmacist, physical therapist, physician, podiatrist, psychiatric social worker or speech therapist.

18. "Medical record information" means personal information that relates to an individual's physical or mental condition, medical history or medical treatment and that is obtained from a medical professional or medical care institution, the individual or the individual's spouse, parent or legal guardian.

19. "Personal information" means any individually identifiable information gathered in connection with an insurance transaction and from which judgments can be made about an individual's character, habits, avocations, finances, occupation, general reputation, credit, health or any other personal characteristics. Personal information includes an individual's name and address and medical record information but does not include privileged information.

20. "Policyholder" means any person who:

(a) In the case of individual property or casualty insurance, is a present named insured.

(b) In the case of individual life, health or disability insurance, is a present policyowner.

(c) In the case of group insurance which is individually underwritten, is a present group certificate holder.

21. "Pretext interview" means an interview in which a person, in an attempt to obtain information about a natural person, performs one or more of the following acts:

(a) Pretends to be someone he or she is not.

(b) Pretends to represent a person he or she is not in fact representing.

(c) Misrepresents the true purpose of the interview.

(d) Refuses to identify himself or herself on request.

22. "Privileged information" means any individually identifiable information that relates to a claim for insurance benefits or a civil or criminal proceeding involving an individual and that is collected in connection with or in reasonable anticipation of a claim for insurance benefits or a civil or criminal proceeding involving an individual, except that information otherwise meeting the requirements of this paragraph is considered personal information under this chapter if it is disclosed in violation of section 20-2113.

23. "Residual market mechanism" means an agreement for the equitable apportionment among insurers of insurance afforded applicants who are in good faith entitled to but who are unable to procure insurance through ordinary methods.

24. "Termination of insurance coverage" or "termination of an insurance policy" means either a cancellation or nonrenewal of an insurance policy, in whole or in part, for any reason other than the failure to pay a premium as required by the policy.

25. "Transfer of business":

(a) Means the transfer by an insurance institution or insurance producer that owns the policy expiration of a policyholder's existing policy of insurance or the transfer of a group of policyholders' existing policies of insurance to another insurance institution.

(b) Does not include the transfer of business by an insurance producer that is under an exclusive contract or a contract requiring the insurance producer to submit all eligible business to an insurer or group of insurers under a common management.

26. "Unauthorized insurer" means an insurance institution that has not been granted a certificate of authority by the director to transact insurance in this state.
A.R.S. § 20-2412 — Arizona Code / Title 20 / Chapter 14 / Article 1 / Section 2412
20-2412 Binding effect of orders issued in United States district court
Status: in_force

20-2412. Binding effect of orders issued in United States district court

An order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance or operating in any state on a finding that such a group is in a hazardous financial condition is enforceable in the courts of this state.
A.R.S. § 20-1376.06 — Arizona Code / Title 20 / Chapter 6 / Article 4 / Section 1376.06
20-1376.06 Cancer treatment medications; cost sharing; definition
Status: in_force

20-1376.06. Cancer treatment medications; cost sharing; definition

A. A disability insurance policy that is issued, delivered or renewed by a disability insurer on or after January 1, 2016 and that provides coverage both for cancer treatment medications that are injected or intravenously administered by a health care provider and for patient-administered cancer treatment medications, including medications that are orally administered or self-injected, may not require a higher copayment, deductible or coinsurance amount for patient-administered cancer treatment medications than is required for those cancer treatment medications that are injected or intravenously administered by a health care provider, regardless of the formulation or benefit category.

B. A disability insurer may not increase copayment, deductible or coinsurance amounts for covered cancer treatment medications that are injected or intravenously administered in order to avoid compliance with subsection A of this section, but may increase copayment, deductible or coinsurance amounts for cancer treatment medications if the increase is applied generally to other medical or pharmaceutical benefits under the policy and is not done to circumvent subsection A of this section.

C. A disability insurer may not reclassify benefits with respect to cancer treatment medications in a manner that is inconsistent with this section.

D. For the purposes of this section, "cancer treatment medications" means prescription drugs and biologics that are used to kill, slow or prevent the growth of cancerous cells.
A.R.S. § 20-674 — Arizona Code / Title 20 / Chapter 3 / Article 6 / Section 674
20-674 Premium tax offset
Status: in_force

20-674. Premium tax offset

A. The fund shall issue to each insurer paying an assessment pursuant to this article a certificate of contribution, in a form prescribed by the director for the amount paid. All outstanding certificates shall be of equal priority without reference to amounts or dates of issue.

B. Except for premium taxes and assessments collected pursuant to title 23, chapter 6, a certificate of contribution issued to a member insurer may be offset against the insurer's premium tax liability to this state in the amount of twenty per cent of the assessment for the year of assessment and twenty per cent of the assessment per year for each of the succeeding four years. A member shall at its option have the right to show a certificate of contribution as an asset in the form approved by the director at percentages of the original face amount approved by the director, for calendar years as follows:

1. One hundred per cent for the calendar year of issuance.

2. Eighty per cent for the first calendar year after the year of issuance.

3. Sixty per cent for the second calendar year after the year of issuance.

4. Forty per cent for the third calendar year after the year of issuance.

5. Twenty per cent for the fourth calendar year after the year of issuance.

C. Any sums available for refund, pursuant to section 20-666, from the fund that have been written off by contributing insurers and offset against premium taxes shall be paid to the director and shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund.

D. Notwithstanding subsection B of this section, the total amount a member insurer, as defined in section 20-661, may offset against its premium tax liability pursuant to a certificate of contribution that is issued from 1987 through 1994 shall not exceed the following percentage amounts for each certificate of contribution, except that in no event may the total amount of the offset exceed one hundred per cent of each assessment:

1. For 1992, thirteen per cent.

2. For 1993, eleven per cent.

3. For 1994, thirteen per cent.

E. No insurer may offset its premium tax liability by any amount unless the assessment for which the first year credit is claimed was collected by the guaranty fund in the calendar year for which the insurer seeks to offset its taxes.

F. Beginning in 1995, the total amount that a member insurer may offset against its premium tax liability pursuant to a certificate of contribution shall be as provided in subsection B of this section, except that in no event may the total amount of the offset exceed one hundred per cent of the assessment.
A.R.S. § 20-719 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 719
20-719 Issuance of nonassessable policies by mutual insurers
Status: in_force

20-719. Issuance of nonassessable policies by mutual insurers

A. While it maintains on deposit with the state treasurer through the director surplus funds in an amount not less than the paid-in capital required of a domestic stock insurer transacting like kinds of insurance, a domestic mutual insurer may extinguish the contingent liability of its members as to all its policies in force, and may omit provisions imposing contingent liability in all its policies currently issued.

B. When such surplus funds have been so deposited and the director has so ascertained, he shall issue to the insurer at its request his certificate authorizing such extinguishment and omission of contingent liability.

C. A foreign or alien mutual insurer may issue nonassessable policies to its members in this state in accordance with its charter and the laws of its domicile.
A.R.S. § 20-868 — Arizona Code / Title 20 / Chapter 4 / Article 4 / Section 868
20-868 Waiver
Status: in_force

20-868. Waiver

The laws of the society may provide that a subordinate body or any subordinate officers or members shall not waive any provision of the laws of the society. A provision prohibiting waiver is binding on the society, its members and every member's beneficiaries.
A.R.S. § 20-431.08 — Arizona Code / Title 20 / Chapter 2 / Article 5.1 / Section 431.08
20-431.08 Illustration actuaries; annual certifications
Status: in_force

20-431.08. Illustration actuaries; annual certifications

A. The board of directors of each insurer shall appoint one or more illustration actuaries.

B. The illustration actuary shall certify that the disciplined current scale that is used in illustrations conforms with the actuarial standard of practice for compliance with the national association of insurance commissioners model regulation on life insurance illustrations that is adopted by the actuarial standards board and that the illustrated scales used in insurer authorized illustrations meet the requirements of this article.

C. The illustration actuary shall:

1. Be a member in good standing of the American academy of actuaries.

2. Be familiar with the standard of practice regarding life insurance policy illustrations.

3. After notice and a hearing, not have been found by the director to have:

(a) Violated any provision of, or any obligation imposed by, this title or any other law in the course of the individual's dealings as an illustration actuary.

(b) Been found guilty of fraudulent or dishonest practices.

(c) Demonstrated incompetence, lack of cooperation or untrustworthiness to act as an illustration actuary.

(d) Resigned or been removed as an illustration actuary within the previous five years as a result of acts or omissions indicated in any adverse report on examination or as a result of a failure to adhere to generally acceptable actuarial standards.

4. Notify the director of any action taken by the insurance director of another state for acts similar to those listed in paragraph 3 of this subsection.

5. Disclose the following in the annual certification, as applicable:

(a) Since the last annual certification, whether a currently payable scale applicable for business issued within the previous five years and within the scope of the certification was reduced for reasons other than changes in the experience factors underlying the disciplined current scale.

(b) If nonguaranteed elements illustrated for new policies are not consistent with those illustrated for similar in-force policies.

(c) If nonguaranteed elements illustrated for both new and in-force policies are inconsistent with the nonguaranteed elements actually being paid, charged or credited to the same or similar forms.

6. Disclose in the annual certification the method that is used to allocate overhead expenses for all illustrations as being one of the following:

(a) Fully allocated expenses.

(b) Marginal expenses.

(c) A generally recognized expense table that is based on fully allocated expenses representing a significant portion of insurance companies and that is approved by the director.

D. The illustration actuary shall file the annual certification with the board of directors of the insurer and with the director as follows:

1. Annually for all policy forms for which illustrations are used.

2. Before a new policy form is illustrated.

E. The illustration actuary shall promptly notify the board of directors and the director if an error is found in previous certification.

F. If an illustration actuary is unable to certify the scale for any policy form illustration that the insurer intends to use, the illustration actuary shall notify the board of directors of the insurer and the director promptly of the illustration actuary's inability to certify.

G. A responsible officer of the insurer, other than the illustration actuary, shall certify annually both of the following:

1. That the illustration formats meet the requirements of this article and that the scales used in insurer-authorized illustrations are those scales that have been certified by the illustration actuary.

2. That the company has provided its agents with information about the expense allocation method used in its illustrations as disclosed in subsection C, paragraph 6 of this section.

H. The annual certifications shall be provided to the director each year by the date determined by the director.

I. If an insurer changes the illustration actuary who is responsible for all or a portion of the company's policy forms, the insurer shall notify the director of the change promptly as well as the reason for the change.
A.R.S. § 20-1806 — Arizona Code / Title 20 / Chapter 8 / Article 1 / Section 1806
20-1806 Reserve fund escrow
Status: in_force

20-1806. Reserve fund escrow

The director shall, as a condition of the issuance of a permit pursuant to section 20-1803, require that the provider maintain on a current basis, in escrow with a bank, trust company or other escrow agent approved by the director, an amount which equals the aggregate principal and interest payments due during the next twelve months on account of any first mortgage or other long-term financing of the facility. The principal of the escrow account may be invested with the earnings thereon payable to the provider, and up to one-sixth of the total principal shall be released to the provider upon notice to the director. The escrow agreement shall provide that upon withdrawal of any such amount by the provider, the escrow agent shall provide immediate written notice of such withdrawal to the director and that any amount released to the provider shall be repaid to the escrow account within two years of the release of such amount. In the event that the provider does not repay the escrow account within such two year period, the escrow agent shall provide immediate written notice to the director.
A.R.S. § 20-491.06 — Arizona Code / Title 20 / Chapter 2 / Article 15 / Section 491.06
20-491.06 Confidentiality of ORSA documents; allowable uses
Status: in_force

20-491.06. Confidentiality of ORSA documents; allowable uses

A. Documents, materials or other information, including the ORSA summary report, that is in the director's possession or control and that is obtained by, created by or disclosed to the director or any other person under this article, is recognized by this state as being proprietary and containing trade secrets.  All such documents, materials or other information is confidential by law and privileged, is not considered a public record pursuant to title 39, chapter 1, is not subject to subpoena and is not subject to discovery or admissible in evidence in any private civil action. The director is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the director's official duties.  The director may not otherwise make the documents, materials or other information public without the prior written consent of the insurer.

B. Neither the director nor any person who received documents, materials or other ORSA-related information, through examination or otherwise, while acting under the authority of the director or with whom such documents, materials or other information is shared pursuant to this article, is allowed or required to testify in any private civil action concerning any confidential documents, materials or other information that is subject to subsection A of this section.

C. In order to assist in the performance of the director's regulatory duties, the director:

1. May share documents, materials or other ORSA-related information, including the confidential and privileged documents, materials or other information subject to subsection A of this section, including proprietary and trade secret documents and materials, with other state, federal and international regulatory agencies, including members of any supervisory college as defined in section 20-481, with the national association of insurance commissioners and with any third-party consultants designated by the director, if the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials or other information and has verified in writing the legal authority to maintain confidentiality.

2. May receive documents, materials or ORSA-related information, including otherwise confidential and privileged documents, materials or other information, including proprietary and trade secret information or documents, from regulatory officials of other foreign or domestic jurisdictions, including members of any supervisory college as defined in section 20-481, and from the national association of insurance commissioners and shall maintain as confidential or privileged any document, material or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or other information.

3. Shall enter into written agreements with the national association of insurance commissioners or a third-party consultant governing sharing and use of information provided pursuant to this article, consistent with this subsection, that do all of the following:

(a) Specify procedures and protocols regarding the confidentiality and security of information shared with the national association of insurance commissioners or a third-party consultant pursuant to this article, including procedures and protocols for sharing by the national association of insurance commissioners with other state regulators from states in which the insurance group has domiciled insurers.  The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials or other information and has verified in writing the legal authority to maintain confidentiality.

(b) Specify that ownership of information shared with the national association of insurance commissioners or a third-party consultant pursuant to this article remains with the director and that the national association of insurance commissioners' or a third-party consultant's use of the information is subject to the direction of the director.

(c) Prohibit the national association of insurance commissioners or a third-party consultant from storing the information shared pursuant to this article in a permanent database after the underlying analysis is completed.

(d) Require prompt notice to be given to an insurer whose confidential information in the possession of the national association of insurance commissioners or a third-party consultant pursuant to this article is subject to a request or subpoena to the national association of insurance commissioners or a third-party consultant for disclosure or production.

(e) Require the national association of insurance commissioners or a third-party consultant to consent to intervention by an insurer in any judicial or administrative action in which the national association of insurance commissioners or a third-party consultant may be required to disclose confidential information about the insurer shared with the national association of insurance commissioners or a third-party consultant pursuant to this article.

(f) In the case of an agreement involving a third-party consultant, provide the insurer's written consent.

D. The sharing of information by the director pursuant to this article does not constitute a delegation of regulatory authority or rulemaking, and the director is solely responsible for the administration, execution and enforcement of this article.

E. A waiver of any applicable privilege or claim of confidentiality in the documents, materials or other information does not occur as a result of disclosure to the director under this section or as a result of sharing as authorized in this article.

F. Documents, materials or other information in the possession or control of the national association of insurance commissioners or a third-party consultant pursuant to this article are confidential by law and privileged, are not considered public records pursuant to title 39, chapter 1, are not subject to subpoena and are not subject to discovery or admissible in evidence in any private civil action.
A.R.S. § 20-844 — Arizona Code / Title 20 / Chapter 4 / Article 3 / Section 844
20-844 Right to open enrollment period; subscribers; definition
Status: in_force

20-844. Right to open enrollment period; subscribers; definition

A. With respect to subscribers who are members of a group with more than one carrier, if there is an insolvency of a hospital service corporation, medical service corporation, dental service corporation, optometric service corporation or hospital, medical, dental and optometric service corporation, all other carriers that participated in an open enrollment period shall offer subscribers of the insolvent corporation who are members of that group a thirty day open enrollment period beginning on the date the insolvency is declared. Each carrier shall offer these subscribers the same coverages and rates that it currently offers to other subscribers in the group without any waiting periods or preexisting conditions, exclusions, limitations or restrictions. On declaration of insolvency, the corporation shall notify each group contract holder of the insolvency. Each group contract holder shall notify its remaining carrier or carriers of the insolvency and notify its members of their rights to open enrollment as provided in this section.

B. Sections 20-1069.01 and 20-1409 apply to all corporations within the scope of section 20-821.

C. For purposes of this section, "carrier" means an insurer, a health care services organization, a hospital service corporation, a medical service corporation, a dental service corporation, an optometric service corporation or a hospital, medical, dental and optometric service corporation or any combination.
A.R.S. § 20-488.08 — Arizona Code / Title 20 / Chapter 2 / Article 12 / Section 488.08
20-488.08 Supplemental provisions; rules; exemption
Status: in_force

20-488.08. Supplemental provisions; rules; exemption

A. This article is supplemental to any other laws of this state and does not preclude or limit any other powers or duties of the director.

B. The director may adopt rules to implement this article.

C. The director may exempt from the application of the RBC requirements of this article any domestic property and casualty insurer that does all of the following:

1. Writes direct business only in this state.

2. Writes direct annual premiums of two million dollars or less.

3. Assumes no reinsurance in excess of five per cent of the direct premiums written.

D. The director may exempt any health organization from the RBC requirements in this article if the health organization meets all of the following requirements:

1. The health organization writes direct business only in this state.

2. Not more than five per cent of the health organization's gross direct written premiums are attributable to reinsurance assumed from foreign insurers.

3. The health organization writes direct annual premiums for comprehensive medical business of two million dollars or less, or the health organization is a dental service corporation, optometric service corporation or prepaid dental plan organization that covers less than two thousand lives.
A.R.S. § 20-472 — Arizona Code / Title 20 / Chapter 2 / Article 7 / Section 472
20-472 Service charges in connection with insurance on collateral security prohibited when change of ownership
Status: in_force

20-472. Service charges in connection with insurance on collateral security prohibited when change of ownership

It is unlawful for a mortgagee to require the payment of any insurance service charge for services performed in changing of the mortgagee's records and accounts with regard to a change in ownership of the insured property held as security by the mortgagee and with regard to which the mortgagee issues a written beneficiary statement or assumption statement.
A.R.S. § 20-1309 — Arizona Code / Title 20 / Chapter 6 / Article 3 / Section 1309
20-1309 Reinstatement
Status: in_force

20-1309. Reinstatement

There shall be a provision that unless the policy has been surrendered for its cash surrender value or unless the paid-up term insurance, if any, has expired, the policy will be reinstated at any time within two years from the date of premium default upon written application therefor, the production of evidence of insurability satisfactory to the insurer, the payment of all premiums in arrears, and the payment or reinstatement of any other indebtedness to the insurer upon the policy, all with interest at a rate not exceeding six per cent per annum compounded annually.
A.R.S. § 20-481.07 — Arizona Code / Title 20 / Chapter 2 / Article 8 / Section 481.07
20-481.07 Approval and issues; notice; hearings
Status: in_force

20-481.07. Approval and issues; notice; hearings

A. The director shall approve any merger or other acquisition of control described in section 20-481.02 unless the director finds that:

1. The merger or other acquisition of control:

(a) Is contrary to law.

(b) Is inequitable to the shareholders of any domestic insurer involved.

(c) Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state or elsewhere.

2. After the change of control the domestic insurer would not be able to satisfy the requirements for the reissuance of a certificate of authority to write the line or lines of insurance for which it is presently licensed.

3. The effect of the merger or other acquisition of control would substantially lessen competition in insurance in this state or tend to create a monopoly. In applying the competitive standard in this paragraph:

(a) The informational requirements of section 20-481.25, subsection C and the standards of section 20-481.25, subsection D apply.

(b) The merger or other acquisition shall not be disapproved if the director finds that any of the situations meeting the criteria provided by section 20-481.25 exist.

(c) The director may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time.

4. The financial condition of any acquiring party might jeopardize the financial stability of the insurer or prejudice the interest of its policyholders.

5. The plans or proposals that the acquiring party has to liquidate the insurer, sell its assets or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the insurer and are not in the public interest.

6. The competence, experience and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control.

7. The acquisition is likely to be hazardous or prejudicial to the insurance buying public.

B. The director may conduct a hearing as prescribed in section 20-161 for any transaction requiring the director's approval pursuant to section 20-481.02.

C. The person filing the statement required by section 20-481.02 shall give at least ten days' written notice of the hearing to the insurer and to any other persons designated by the director. The insurer shall give the written notice to its security holders.

D. If the director does not give notice of a hearing pursuant to subsection B of this section, the person filing the statement shall give written notice of the filing on a form prescribed by the director to the insurer and to any other persons designated by the director.  The insurer shall give the written notice to its security holders. The person filing the statement, the insurer, any designated recipient of the written notice of the filing and any person whose interests may be affected by the filing have ten days from the date of the written notice to request that the director hold a hearing on the filing pursuant to this section.  The request shall specify the grounds for the hearing and the interests that would be affected by the filing.

E. If the director finds that the request is made in good faith, that the interests of the person requesting the hearing would be affected by the filing if the grounds are established and that the grounds otherwise justify holding a hearing, the director shall grant the request for a hearing and issue a notice of hearing to all persons entitled to the notice pursuant to subsection C of this section.

F. If a hearing is scheduled, the person filing the statement, the insurer, any person to whom written notice of hearing was sent and any other person whose interests may be affected shall have the right to present evidence, examine and cross-examine the witnesses and offer oral and written arguments at the hearing.

G. If the proposed acquisition of control will require the approval of other states in addition to this state, the director may hold a public hearing on a consolidated basis for the purpose of receiving public comment on a proposed agency action on request of the person filing the statement referred to in section 20-481.02. The person shall file the statement referred to in section 20-481.02 with the national association of insurance commissioners within five days after making the request for a public hearing. The director may opt out of a consolidated hearing and shall provide notice to the applicant of the opt out within ten days after receiving the statement referred to in section 20-481.02. A hearing held by the director and conducted on a consolidated basis must be public and held in the United States.

H. In connection with a change of control of a domestic insurer, the director shall make a determination that the person acquiring control of the insurer is required to maintain or restore the capital of the insurer to the level required by the laws and rules of this state within sixty days after the date of notification of the change in control that is submitted pursuant to section 20-481.03.

I. The director may retain at the acquiring person's expense attorneys, actuaries, accountants and other experts not part of the director's staff as may be reasonably necessary to assist the director in reviewing the proposed acquisition of control.

J. All statements, amendments or other material filed pursuant thereto, and all notices of public hearing held pursuant to this section, shall be mailed by the insurer to its shareholders within five business days after the insurer has received the statements, amendments, other material or notices. The person making the filing shall pay the expenses of mailing. As security for the payment of the expenses, the person shall file with the director an acceptable bond or other deposit in an amount to be determined by the director.
A.R.S. § 20-779 — Arizona Code / Title 20 / Chapter 4 / Article 2 / Section 779
20-779 Financial condition; determination
Status: in_force

20-779. Financial condition; determination

In determining the financial condition of a reciprocal insurer the director shall apply the following rules:

1. He shall charge as liabilities the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis.

2. The surplus deposits of subscribers shall be allowed as assets, except that any premium deposit delinquent for ninety days shall first be charged against the surplus deposit.

3. The surplus deposits of subscribers shall not be charged as a liability.

4. All premium deposits delinquent less than ninety days shall be allowed as assets.

5. An assessment levied upon subscribers, and not collected, shall not be allowed as an asset.

6. The contingent liability of subscribers shall not be allowed as an asset.

7. The computation of reserves shall be based upon premium deposits other than membership fees and without any deduction for the compensation of the attorney.
A.R.S. § 20-1243.04 — Arizona Code / Title 20 / Chapter 6 / Article 1.3 / Section 1243.04
20-1243.04 Standards for supervision
Status: in_force

20-1243.04. Standards for supervision

A. An insurer shall either assure that a system to supervise recommendations that is reasonably designed to achieve compliance with this article is established and maintained by complying with subsections C, D and E, or establish and maintain such a system.  Such a system includes:

1. Maintaining written procedures.

2. Conducting periodic reviews of records that are reasonably designed to assist in detecting and preventing violations of this article.

B. A managing general agent and business entity shall either adopt a system that is established by an insurer to supervise recommendations of its insurance producers and that is reasonably designed to achieve compliance with this article or establish and maintain such a system. Such a system includes:

1. Maintaining written procedures.

2. Conducting periodic reviews of records that are reasonably designed to assist in detecting and preventing violations of this article.

C. An insurer may contract with a third party, including a managing general agent or business entity, to establish and maintain a system of supervision as required by subsection A with respect to insurance producers under contract with or employed by the third party.

D. An insurer shall make reasonable inquiry to assure that the third party contracting under subsection C is performing the functions required under subsection A and shall take such action as is reasonable under the circumstances to enforce the contractual obligation to perform the functions. An insurer may comply with the obligation to make reasonable inquiry by doing both of the following:

1. Annually obtaining a certification from a third party senior manager who has responsibility for the delegated functions that the manager has a reasonable basis to represent, and does represent, that the third party is performing the required functions.

2. Based on reasonable selection criteria, periodically select third parties contracting under subsection C for a review to determine if the third parties are performing the required functions.  The insurer shall perform those procedures to conduct the review that are reasonable under the circumstances.

E. An insurer that contracts with a third party pursuant to subsection C and that complies with the requirements to supervise in subsection D fulfills its responsibilities under subsection A.

F. An insurer, managing general agent or business entity is not required pursuant to subsection A or B to:

1. Review, or provide for review of, all insurance producer solicited transactions.

2. Include in its system of supervision an insurance producer's recommendations to consumers of products other than the annuities offered by the insurer, managing general agent or business entity.

G. A managing general agent or business entity contracting with an insurer pursuant to subsection C, if requested by the insurer pursuant to subsection D, shall promptly give a certification as described in subsection D or give a clear statement that it is unable to meet the certification criteria.

H. A person shall not provide a certification under subsection D, paragraph 1 unless both of the following apply:

1. The person is a senior manager with responsibility for the delegated functions.

2. The person has a reasonable basis for making the certification.

I. Compliance with the financial industry regulatory authority conduct rules pertaining to suitability satisfies the requirements under this section for the recommendation of annuities registered under the securities act of 1933 (15 United States Code sections 77a through 77aa) or rules adopted thereunder.  However, this subsection does not limit the director's ability to enforce this article.
A.R.S. § 20-127 — Arizona Code / Title 20 / Chapter 1 / Article 1 / Section 127
20-127 Fire insurance review task force; membership; duties; annual report; public posting
Status: in_force

20-127. Fire insurance review task force; membership; duties; annual report; public posting

(Rpld. 1/1/28)

A. The fire insurance review task force is established in the department and consists of the following members:

1. The director of the department or the director's designee, who shall serve as chairperson of the task force.

2. Two members who are appointed by the director, one of whom is an employee of an insurance company that represents the homeowners insurance industry.

3. One member who is appointed by the director of the department and who represents a wildfire risk reduction organization that is informed on wildfire risk.

4. The state forester or the state forester's designee, who shall serve as vice chairperson of the task force.

5. Four members who are appointed by the state forester and who have expertise in wildfire areas and wildfire prevention and mitigation.

B. Appointed members serve two-year terms beginning and ending on the third Monday in January and may be reappointed for not more than two consecutive terms. On the expiration of a member's term, the member may continue to serve until that member is reappointed to another term or a new member is appointed.

C. Any vacancy in the membership shall be filled in the same manner as the original appointment.

D. The department shall provide the task force with both of the following:

1. The annual aggregated and deidentified insurance premium and policy coverage data reported by insurers pursuant to section 20-123.

2. The total number of consumer complaints for the calendar year that is related to nonrenewal or cancellation of homeowners policies due to risk of fire loss and related to increases in homeowners insurance premiums.

E. The task force shall:

1. Review the data received from the department.

2. Identify possible current and historic trends in homeowners coverage availability, insurance rates, nonrenewal and cancellation.

3. Review data related to fire risk mitigation science and make recommendations related to building codes, defensible space requirements and ordinances that reduce the risk of wildfire.

F. The task force may establish ad hoc work groups to carry out the purposes of this section and consult with experts in the field of wildfire risks and the impact of wildfires and wildfire risk on homeowners insurance premiums.

G. The task force shall hold at least four meetings per calendar year.

H. Task force members are eligible to receive reimbursement of expenses under title 38, chapter 4, article 2.

I. On or before December 31 of each year, the task force shall submit a report of its findings and recommendations to the governor, the speaker of the house of representatives, the president of the senate, the minority leader of the house of representatives and the minority leader of the senate and shall provide a copy of this report to the secretary of state and the department. The director shall post the report on the department's website.
A.R.S. § 20-883 — Arizona Code / Title 20 / Chapter 4 / Article 4 / Section 883
20-883 Tax exemption; exception
Status: in_force

20-883. Tax exemption; exception

Every authorized society and every society that is exempt under section 20-893 is deemed to be a charitable and benevolent institution and is exempt from all state, county, district, municipal and school taxes, including the taxes prescribed by this title, except that a society is subject to the fees prescribed by chapter 1, article 2 of this title and taxes on real and tangible personal property located in this state.