A.R.S. § 20-1261 — Arizona Code / Title 20 / Chapter 6 / Article 2 / Section 1261
20-1261 Attachment of application to policy; statements of persons insured as representations
Status: in_force

20-1261. Attachment of application to policy; statements of persons insured as representations

In group life policies there shall be a provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued, that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties, and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to such person or to his beneficiary.
A.R.S. § 20-481.03 — Arizona Code / Title 20 / Chapter 2 / Article 8 / Section 481.03
20-481.03 Contents of statement
Status: in_force

20-481.03. Contents of statement

A. The statement to be filed with the director as provided in section 20-481.02 shall be made under oath or affirmation and shall contain the following:

1. The name and address of each person by whom or on whose behalf the tender offer, merger or other acquisition of control referred to in section 20-481.02 is to be effected.

2. If the acquiring party is an individual, the individual's principal occupation and all offices and positions held during the past five years and any convictions of crimes other than minor traffic violations during the past ten years.

3. If the acquiring party is not an individual:

(a) A report of the nature of its business operations during the past five years or for such lesser period as such person and any predecessors thereof shall have been in existence.

(b) An informative description of the business intended to be done by such person and such person's subsidiaries.

(c) A list of all individuals who are or who have been selected to become directors or executive officers of such person, or who perform or will perform functions appropriate to such positions. Such list shall include for each such individual the information required by paragraph 2 of this subsection.

4. The source, nature and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for any such purpose including a pledge of the insurer's stocks or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing such consideration, provided that if a source of such consideration is a loan made in the lender's ordinary course of business, the identity of the lender shall remain confidential, if the person filing such statement so requests.

5. Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five fiscal years of each such acquiring party or for such lesser period as such acquiring party and any predecessors thereof have been in existence and similar unaudited information as of a date not earlier than ninety days before the filing of the statement. If audited financial information is unavailable, unaudited financial information may be substituted if such information is acceptable to the director.

6. Any plans or proposals that each acquiring party may have to liquidate such insurer, to sell its assets or merge or consolidate it with any person or to make any other material change in its business or corporate structure or management.

7. The number of shares of any security referred to in section 20-481.02 that each acquiring party proposes to acquire, and the terms of the offer, request, invitation, agreement or acquisition referred to in section 20-481.02 and a statement as to the method by which the fairness of the proposal was arrived at.

8. The amount of each class of any security referred to in section 20-481.02 that is beneficially owned or about which there is a right to acquire beneficial ownership by each acquiring party or that each acquiring party has the right to acquire.

9. A full description of any contracts, arrangements or understandings with respect to any security referred to in section 20-481.02 in which any acquiring party is involved, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits or the giving or withholding of proxies. Such description shall identify the persons with whom such contracts, arrangements or understandings have been entered into.

10. A description of the purchase of any security referred to in section 20-481.02 during the twelve calendar months preceding the filing of the statement, by any acquiring party, including the dates of purchases, names of the purchasers and consideration paid or agreed to be paid therefor.

11. A description of any recommendations to purchase any security referred to in section 20-481.02 made during the twelve calendar months preceding the filing of the statement, by any acquiring party, or by anyone based on interviews or at the suggestion of such acquiring party.

12. Copies of all tender offers for, requests or invitations for tenders of exchange offers for and agreements to acquire or exchange any securities referred to in section 20-481.02 and any additional soliciting material relating thereto.

13. The terms of any proposed or executed agreement, contract or understanding made with any broker-dealer as to solicitation of securities referred to in section 20-481.02 for tender, and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto.

14. An agreement by the person required to file the statement referred to in section 20-481.02 that the person will file with the director the annual enterprise risk report pursuant to section 20-481.10, subsection D, paragraph 1 while in control of the insurer.

15. An acknowledgement by the person required to file the statement referred to in section 20-481.02 that the person and all subsidiaries in its control in the insurance holding company system will provide all information requested by the director for the director to evaluate enterprise risk to the insurer.

16. Such additional information as the director may by rule prescribe as necessary or appropriate for the protection of policyholders and security holders of the insurer or in the public interest.

B. The director may require each statement to be accompanied by the fingerprints of any individual named in such statement as an acquiring party or as directors or executive officers of an acquiring party. Such fingerprints shall be taken in an approved manner and certified by a municipal police department, a sheriff's office or another recognized authority acceptable to the director.
A.R.S. § 20-1109 — Arizona Code / Title 20 / Chapter 5 / Article 1 / Section 1109
20-1109 Statements as representation; effect of misrepresentation upon policy
Status: in_force

20-1109. Statements as representation; effect of misrepresentation upon policy

All statements and descriptions in any application for an insurance policy or in negotiations therefor, by or in behalf of the insured, shall be deemed to be representations and not warranties. Misrepresentations, omissions, concealment of facts and incorrect statements shall not prevent a recovery under the policy unless:

1. Fraudulent.

2. Material either to the acceptance of the risk, or to the hazard assumed by the insurer.

3. The insurer in good faith would either not have issued the policy, or would not have issued a policy in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or otherwise.
A.R.S. § 20-2804 — Arizona Code / Title 20 / Chapter 17 / Article 1 / Section 2804
20-2804 Utilization review; medically necessary emergency services
Status: in_force

20-2804. Utilization review; medically necessary emergency services

A. A health care services plan engaging in utilization review to determine whether any emergency services rendered by a provider were medically necessary and in accordance with this chapter shall consider the following factors:

1. Current emergency medical literature and standards of care.

2. Clinical information reasonably available to the provider at the time of the services.

B. A health care services plan shall not deny a claim for emergency services on the basis that the services were not medically necessary without review by a physician of the plan's choosing.

C. For the purpose of claims payment and utilization review of emergency services, a health care services plan shall have the right to require as a condition of payment that each treating provider produce all of the following:

1. Copies of all medical records pertaining to the emergency services provided to the enrollee.

2. Copies of records pertaining to any prior authorization and specialty consultation requests made by the provider.

3. A detailed and itemized billing statement.

D. If a health care services plan pays any portion of a provider's claim for services rendered to an enrollee, the plan shall not be permitted to recover all or part of that payment from the enrollee, except for:

1. The cost of an initial medical screening examination and related charges where the examination determined that emergency services were not medically necessary.

2. Payments made as a result of misrepresentation, fraud or clerical error.

3. Copayment, coinsurance or deductible amounts that are the responsibility of the enrollee.
A.R.S. § 20-1406.06 — Arizona Code / Title 20 / Chapter 6 / Article 5 / Section 1406.06
20-1406.06 Cancer treatment medications; cost sharing; definition
Status: in_force

20-1406.06. Cancer treatment medications; cost sharing; definition

A. A group or blanket disability policy that is issued, delivered or renewed by a group or blanket 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 group or blanket 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 group or blanket 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. § 20-488.06 — Arizona Code / Title 20 / Chapter 2 / Article 12 / Section 488.06
20-488.06 Hearings
Status: in_force

20-488.06. Hearings

A. An insurer has the right to a hearing to challenge any determination or action made or taken by the director on the occurrence of any of the following:

1. The notification by the director to the insurer of an adjusted RBC report.

2. The notification by the director to the insurer that both:

(a) The insurer's RBC plan or revised RBC plan is unsatisfactory.

(b) The notice constitutes a regulatory action level event with respect to the insurer.

3. The notification by the director to the insurer that the insurer has failed to adhere to its RBC plan or revised RBC plan and that the insurer's failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event with respect to the insurer in accordance with its RBC plan or revised RBC plan.

4. The notification by the director to an insurer of a corrective order.

B. The underlying decision or action that is the subject of any notification made by the director pursuant to subsection A of this section is an appealable agency action as defined in section 41-1092.

C. A hearing demanded by an insurer that is aggrieved by a decision or an action by the director pursuant to subsection A of this section is closed to the public, unless a principal party to the hearing requests the hearing to be open to the public pursuant to section 20-164, subsection A.

D. The insurer shall request a hearing within five days after receiving notice by the director under subsection A of this section.  On receipt of the request for a hearing, the director shall set a date for the hearing at least ten days but not more than thirty days after the date of receipt of the request.
A.R.S. § 20-2307 — Arizona Code / Title 20 / Chapter 13 / Article 1 / Section 2307
20-2307 Eligibility; annual open enrollment period
Status: in_force

20-2307. Eligibility; annual open enrollment period

A. Except as otherwise provided in this section or section 20-2308 or 20-2309, an accountable health plan may not exclude from coverage any employee or a spouse or a dependent child of the employee if the person meets the eligibility requirements established by the employer.

B. Subsection A of this section does not apply to a period in which an employee is excluded from coverage under the health benefits plan pursuant to an employer requirement that imposes a minimum period of service before the employee and the employee's dependents are eligible for coverage.

C. An accountable health plan may deny enrollment to employees or family members of an employer if the employees or family members are located outside the service area of the accountable health plan and if the denial is applied uniformly without regard to health status-related factors or insurability.

D. An accountable health plan that provides an annual open enrollment period of at least thirty-one days may deny enrollment to a late enrollee until the next annual open enrollment period or may require acceptable evidence of insurability.
A.R.S. § 20-1342.03 — Arizona Code / Title 20 / Chapter 6 / Article 4 / Section 1342.03
20-1342.03 Disability insurance; clinical trials; cancer; definitions
Status: in_force

20-1342.03. Disability insurance; clinical trials; cancer; definitions

A. A disability insurer is not obligated to pay any costs, other than covered patient costs, that are directly associated with a cancer clinical trial that is offered in this state and in which the insured participates voluntarily.  A cancer clinical trial is a course of treatment in which all of the following apply:

1. The treatment is part of a scientific study of a new therapy or intervention that is being conducted at an institution in this state, that is for the treatment, palliation or prevention of cancer in humans and in which the scientific study includes all of the following:

(a) Specific goals.

(b) A rationale and background for the study.

(c) Criteria for patient selection.

(d) Specific directions for administering the therapy and monitoring patients.

(e) A definition of quantitative measures for determining treatment response.

(f) Methods for documenting and treating adverse reactions.

2. The treatment is being provided as part of a study being conducted in a phase I, phase II, phase III or phase IV cancer clinical trial.

3. The treatment is being provided as part of a study being conducted in accordance with a clinical trial approved by at least one of the following:

(a) One of the national institutes of health.

(b) A national institutes of health cooperative group or center.

(c) The United States food and drug administration in the form of an investigational new drug application.

(d) The United States department of defense.

(e) The United States department of veterans affairs.

(f) A qualified research entity that meets the criteria established by the national institutes of health for grant eligibility.

(g) A panel of qualified recognized experts in clinical research within academic health institutions in this state.

4. The proposed treatment or study has been reviewed and approved by an institutional review board of an institution in this state.

5. The personnel providing the treatment or conducting the study:

(a) Are providing the treatment or conducting the study within their scope of practice, experience and training and are capable of providing the treatment because of their experience, training and volume of patients treated to maintain expertise.

(b) Agree to accept reimbursement as payment in full from the insurer at the rates that are established by the insurer and that are not more than the level of reimbursement applicable to other similar services provided by health care providers with the insurer's provider network.

6. There is no clearly superior, noninvestigational treatment alternative.

7. The available clinical or preclinical data provide a reasonable expectation that the treatment will be at least as efficacious as any noninvestigational alternative.

B. Pursuant to the patient informed consent document, no party is liable for damages associated with the treatment provided during any phase of a cancer clinical trial.

C. Each contract delivered or issued for delivery in this state shall provide benefits under the contract, and those benefits shall not supplant any portion of the clinical trial that is customarily paid for by government, biotechnical, pharmaceutical or medical device industry sources.

D. This section does not create any private right or cause of action for or on behalf of any patient against the insurer.  This section provides solely an administrative remedy to the director for any violation of this section or any related rule.

E. Nothing in this section prohibits the insurer from imposing deductibles, coinsurance or other cost sharing measures in relation to benefits provided pursuant to this section.

F. For the purposes of this section:

1. "Cooperative group" means a formal network of facilities that collaborates on research projects and that has an established national institutes of health approved peer review program operating within the group, including the national cancer institute clinical cooperative group and the national cancer institute community clinical oncology program.

2. "Institutional review board" means any board, committee or other group that is both:

(a) Formally designated by an institution to approve the initiation of and to conduct periodic review of biomedical research involving human subjects and in which the primary purpose of such review is to assure the protection of the rights and welfare of the human subjects and not to review a clinical trial for scientific merit.

(b) Approved by the national institutes of health office for protection from research risks.

3. "Multiple project assurance contract" means a contract between an institution and the United States department of health and human services that defines the relationship of the institution to the United States department of health and human services and that sets out the responsibilities of the institution and the procedures that will be used by the institution to protect human subjects.

4. "Patient" means the insured or the insured's covered dependent.

5. "Patient cost" means any fee or expense that is covered under the contract and that is for a service or treatment that would be required if the patient were receiving usual and customary care.  Patient cost does not include the cost:

(a) Of any drug or device provided in a phase I cancer clinical trial.

(b) Of any investigational drug or device.

(c) Of nonhealth services that might be required for a person to receive treatment or intervention.

(d) Of managing the research of the clinical trial.

(e) That would not be covered under the patient's contract.

(f) Of treatment or services provided outside this state.
A.R.S. § 20-2404 — Arizona Code / Title 20 / Chapter 14 / Article 1 / Section 2404
20-2404 Compulsory associations
Status: in_force

20-2404. Compulsory associations

A. No risk retention group is required or permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in this state, and no risk retention group, or its insureds or claimants against its insureds, may receive any benefit from any fund for claims arising under the insurance policies issued by the risk retention group.

B. If a purchasing group obtains insurance covering its members' risks from an insurer that is not authorized in this state or a risk retention group, no risks wherever resident or located may be covered by any insurance guaranty fund or similar mechanism in this state.

C. If a purchasing group obtains insurance covering its members' risks from an authorized insurer, only risks resident or located in this state may be covered by the state guaranty fund.

D. A risk retention group shall participate in this state's joint underwriting associations and mandatory liability pools as provided by this title.
A.R.S. § 20-388 — Arizona Code / Title 20 / Chapter 2 / Article 4.1 / Section 388
20-388 Disapproval of rates
Status: in_force

20-388. Disapproval of rates

If the director finds that a rate is not in compliance with section 20-383, the director shall issue an order specifying in what respects it so fails and stating that, within thirty days after the order is issued, the rate is no longer effective.  The order does not affect any contract or policy made or issued prior to the effective date of the order. The order shall be served immediately pursuant to section 20-151.  Any insurer, rate service organization or advisory organization may request a hearing pursuant to title 41, chapter 6, article 10, and the request for a hearing stays the effectiveness of the order as provided in section 20-162.
A.R.S. § 20-1404 — Arizona Code / Title 20 / Chapter 6 / Article 5 / Section 1404
20-1404 Blanket disability insurance; definitions
Status: in_force

20-1404. Blanket disability insurance; definitions

A. Blanket disability insurance is that form of disability insurance covering special groups of persons as enumerated in one of the following paragraphs:

1. Under a policy or contract issued to any common carrier or to any operator, owner or lessee of a means of transportation, which shall be deemed the policyholder, covering a group defined as all persons who may become passengers on such common carrier or means of transportation.

2. Under a policy or contract issued to an employer, who shall be deemed the policyholder, covering all employees or any group of employees defined by reference to hazards incident to an activity or activities or operations of the policyholder.  Dependents of the employees and guests of the employer or employees may also be included where exposed to the same hazards.

3. Under a policy or contract issued to a college, school or other institution of learning or to the head or principal thereof, who or which shall be deemed the policyholder, covering students, teachers, employees or volunteers.

4. Under a policy or contract issued in the name of any volunteer fire department or any first aid, civil defense or other such volunteer group, or agency having jurisdiction thereof, which shall be deemed the policyholder, covering all or any group of the members, participants or volunteers of the fire department or first aid, civil defense or other group.

5. Under a policy or contract issued to a creditor, who shall be deemed the policyholder, to insure debtors of the creditor.

6. Under a policy or contract issued to a sports team or to a camp or sponsor thereof, which team or camp or sponsor thereof shall be deemed the policyholder, covering members, campers, employees, officials, supervisors or volunteers.

7. Under a policy or contract issued to an incorporated or unincorporated religious, charitable, recreational, educational or civic organization, or branch thereof, which organization shall be deemed the policyholder, covering any group of members, participants or volunteers defined by reference to hazards incident to an activity or activities or operations sponsored or supervised by or on the premises of the policyholder.

8. Under a policy or contract issued to a newspaper or other publisher, which shall be deemed the policyholder, covering its carriers.

9. Under a policy or contract issued to a restaurant, hotel, motel, resort, innkeeper or other group with a high degree of potential customer liability, which shall be deemed the policyholder, covering patrons or guests.

10. Under a policy or contract issued to a health care provider or other arranger of health services, which shall be deemed the policyholder, covering patients, donors or surrogates provided that the coverage is not made a condition of receiving care.

11. Under a policy or contract issued to a bank, financial vendor or other financial institution, or to a parent holding company or to the trustee, trustees or agent designated by one or more banks, financial vendors or other financial institutions, which shall be deemed the policyholder, covering account holders, debtors, guarantors or purchasers.

12. Under a policy or contract issued to an incorporated or unincorporated association of persons having a common interest or calling, which association shall be deemed the policyholder, formed for purposes other than obtaining insurance, covering members of such association.

13. Under a policy or contract issued to a travel agency or other organization that provides travel-related services, which agency or organization shall be deemed the policyholder, to cover all persons for whom travel-related services are provided.

14. Under a policy or contract issued to a qualified marketplace platform, which is deemed the policyholder, covering qualified marketplace contractors that have executed a written contract with the qualified marketplace platform.  For the purposes of this paragraph, "qualified marketplace contractor" and "qualified marketplace platform" have the same meanings prescribed in section 20-485.

15. Under a policy or contract that is issued to any other substantially similar group and that, in the discretion of the director, may be subject to the issuance of a blanket disability policy or contract.  The director may exercise discretion on an individual risk basis or class of risks, or both.

B. An individual application need not be required from a person covered under a blanket disability policy or contract, nor shall it be necessary for the insurer to furnish each person with a certificate.

C. All benefits under any blanket disability policy shall be payable to the person insured, or to the insured's designated beneficiary or beneficiaries, or to the insured's estate, except that if the person insured is a minor, such benefits may be made payable to the insured's parent or guardian or any other person actually supporting the insured, and except that the policy may provide that all or any portion of any indemnities provided by any such policy on account of hospital, nursing, medical or surgical services, at the insurer's option, may be paid directly to the hospital or person rendering such services, but the policy may not require that the service be rendered by a particular hospital or person.  Payment so made shall discharge the insurer's obligation with respect to the amount of insurance so paid.

D. This section does not affect the legal liability of policyholders for the death of or injury to any member of the group.

E. Any policy or contract, except accidental death and dismemberment, applied for that provides family coverage, as to such coverage of family members, shall also provide that the benefits applicable for children shall be payable with respect to a newly born child of the insured from the instant of such child's birth, to a child adopted by the insured, regardless of the age at which the child was adopted, and to a child who has been placed for adoption with the insured and for whom the application and approval procedures for adoption pursuant to section 8-105 or 8-108 have been completed to the same extent that such coverage applies to other members of the family. The coverage for newly born or adopted children or children placed for adoption shall include coverage of injury or sickness including necessary care and treatment of medically diagnosed congenital defects and birth abnormalities. If payment of a specific premium is required to provide coverage for a child, the policy or contract may require that notification of birth, adoption or adoption placement of the child and payment of the required premium must be furnished to the insurer within thirty-one days after the date of birth, adoption or adoption placement in order to have the coverage continue beyond the thirty-one day period.

F. Each policy or contract shall be so written that the insurer shall pay benefits:

1. For performance of any surgical service that is covered by the terms of such contract, regardless of the place of service.

2. For any home health services that are performed by a licensed home health agency and that a physician has prescribed in lieu of hospital services, as defined by the director, providing the hospital services would have been covered.

3. For any diagnostic service that a physician has performed outside a hospital in lieu of inpatient service, providing the inpatient service would have been covered.

4. For any service performed in a hospital's outpatient department or in a freestanding surgical facility, providing such service would have been covered if performed as an inpatient service.

G. A blanket disability insurance policy that provides coverage for the surgical expense of a mastectomy shall also provide coverage incidental to the patient's covered mastectomy for the expense of reconstructive surgery of the breast on which the mastectomy was performed, surgery and reconstruction of the other breast to produce a symmetrical appearance, prostheses, treatment of physical complications for all stages of the mastectomy, including lymphedemas, and at least two external postoperative prostheses subject to all of the terms and conditions of the policy.

H. A contract that provides coverage for surgical services for a mastectomy shall also provide coverage for preventive mammography screening and diagnostic imaging performed on dedicated equipment for diagnostic purposes on referral by a patient's physician, subject to all of the terms and conditions of the policy, including:

1. A mammogram.

2. Digital breast tomosynthesis, magnetic resonance imaging, ultrasound or other modality and at such age and intervals as recommended by the national comprehensive cancer network.  This includes patients at risk for breast cancer who have a family history with one or more first or second degree relatives with breast cancer, prior diagnosis of breast cancer, positive testing for hereditary gene mutations or heterogeneously or dense breast tissue based on the breast imaging reporting and data system of the American college of radiology.

I. Any contract that is issued to the insured and that provides coverage for maternity benefits shall also provide that the maternity benefits apply to the costs of the birth of any child legally adopted by the insured if all the following are true:

1. The child is adopted within one year of birth.

2. The insured is legally obligated to pay the costs of birth.

3. All preexisting conditions and other limitations have been met by the insured.

4. The insured has notified the insurer of his acceptability to adopt children pursuant to section 8-105, within sixty days after such approval or within sixty days after a change in insurance policies, plans or companies.

J. The coverage prescribed by subsection I of this section is excess to any other coverage the natural mother may have for maternity benefits except coverage made available to persons pursuant to title 36, chapter 29. If such other coverage exists the agency, attorney or individual arranging the adoption shall make arrangements for the insurance to pay those costs that may be covered under that policy and shall advise the adopting parent in writing of the existence and extent of the coverage without disclosing any confidential information such as the identity of the natural parent.  The insured adopting parents shall notify their insurer of the existence and extent of the other coverage.

K. Any contract that provides maternity benefits shall not restrict benefits for any hospital length of stay in connection with childbirth for the mother or the newborn child to less than forty-eight hours following a normal vaginal delivery or ninety-six hours following a cesarean section.  The contract shall not require the provider to obtain authorization from the insurer for prescribing the minimum length of stay required by this subsection. The contract may provide that an attending provider in consultation with the mother may discharge the mother or the newborn child before the expiration of the minimum length of stay required by this subsection.  The insurer shall not:

1. Deny the mother or the newborn child eligibility or continued eligibility to enroll or to renew coverage under the terms of the contract solely for the purpose of avoiding the requirements of this subsection.

2. Provide monetary payments or rebates to mothers to encourage those mothers to accept less than the minimum protections available pursuant to this subsection.

3. Penalize or otherwise reduce or limit the reimbursement of an attending provider because that provider provided care to any insured under the contract in accordance with this subsection.

4. Provide monetary or other incentives to an attending provider to induce that provider to provide care to an insured under the contract in a manner that is inconsistent with this subsection.

5. Except as described in subsection L of this section, restrict benefits for any portion of a period within the minimum length of stay in a manner that is less favorable than the benefits provided for any preceding portion of that stay.

L. Subsection K of this section does not:

1. Require a mother to give birth in a hospital or to stay in the hospital for a fixed period of time following the birth of the child.

2. Prevent an insurer from imposing deductibles, coinsurance or other cost sharing in relation to benefits for hospital lengths of stay in connection with childbirth for a mother or a newborn child under the contract, except that any coinsurance or other cost sharing for any portion of a period within a hospital length of stay required pursuant to subsection K of this section shall not be greater than the coinsurance or cost sharing for any preceding portion of that stay.

3. Prevent an insurer from negotiating the level and type of reimbursement with a provider for care provided in accordance with subsection K of this section.

M. Any contract that provides coverage for diabetes shall also provide coverage for equipment and supplies that are medically necessary and that are prescribed by a health care provider including:

1. Blood glucose monitors.

2. Blood glucose monitors for the legally blind.

3. Test strips for glucose monitors and visual reading and urine testing strips.

4. Insulin preparations and glucagon.

5. Insulin cartridges.

6. Drawing up devices and monitors for the visually impaired.

7. Injection aids.

8. Insulin cartridges for the legally blind.

9. Syringes and lancets including automatic lancing devices.

10. Prescribed oral agents for controlling blood sugar that are included on the plan formulary.

11. To the extent coverage is required under medicare, podiatric appliances for prevention of complications associated with diabetes.

12. Any other device, medication, equipment or supply for which coverage is required under medicare from and after January 1, 1999. The coverage required in this paragraph is effective six months after the coverage is required under medicare.

N. Subsection M of this section does not prohibit a blanket disability insurer from imposing deductibles, coinsurance or other cost sharing in relation to benefits for equipment or supplies for the treatment of diabetes.

O. Any contract that provides coverage for prescription drugs shall not limit or exclude coverage for any prescription drug prescribed for the treatment of cancer on the basis that the prescription drug has not been approved by the United States food and drug administration for the treatment of the specific type of cancer for which the prescription drug has been prescribed, if the prescription drug has been recognized as safe and effective for treatment of that specific type of cancer in one or more of the standard medical reference compendia prescribed in subsection P of this section or medical literature that meets the criteria prescribed in subsection P of this section.  The coverage required under this subsection includes covered medically necessary services associated with the administration of the prescription drug.  This subsection does not:

1. Require coverage of any prescription drug used in the treatment of a type of cancer if the United States food and drug administration has determined that the prescription drug is contraindicated for that type of cancer.

2. Require coverage for any experimental prescription drug that is not approved for any indication by the United States food and drug administration.

3. Alter any law with regard to provisions that limit the coverage of prescription drugs that have not been approved by the United States food and drug administration.

4. Require reimbursement or coverage for any prescription drug that is not included in the drug formulary or list of covered prescription drugs specified in the contract.

5. Prohibit a contract from limiting or excluding coverage of a prescription drug, if the decision to limit or exclude coverage of the prescription drug is not based primarily on the coverage of prescription drugs required by this section.

6. Prohibit the use of deductibles, coinsurance, copayments or other cost sharing in relation to drug benefits and related medical benefits offered.

P. For the purposes of subsection O of this section:

1. The acceptable standard medical reference compendia are the following:

(a) The American hospital formulary service drug information, a publication of the American society of health system pharmacists.

(b) The national comprehensive cancer network drugs and biologics compendium.

(c) Thomson Micromedex compendium DrugDex.

(d) Elsevier gold standard's clinical pharmacology compendium.

(e) Other authoritative compendia as identified by the secretary of the United States department of health and human services.

2. Medical literature may be accepted if all of the following apply:

(a) At least two articles from major peer reviewed professional medical journals have recognized, based on scientific or medical criteria, the drug's safety and effectiveness for treatment of the indication for which the drug has been prescribed.

(b) No article from a major peer reviewed professional medical journal has concluded, based on scientific or medical criteria, that the drug is unsafe or ineffective or that the drug's safety and effectiveness cannot be determined for the treatment of the indication for which the drug has been prescribed.

(c) The literature meets the uniform requirements for manuscripts submitted to biomedical journals established by the international committee of medical journal editors or is published in a journal specified by the United States department of health and human services as acceptable peer reviewed medical literature pursuant to section 186(t)(2)(B) of the social security act (42 United States Code section 1395x(t)(2)(B)).

Q. Any contract that is offered by a blanket disability insurer and that contains a prescription drug benefit shall provide coverage of medical foods to treat inherited metabolic disorders as provided by this section.

R. The metabolic disorders triggering medical foods coverage under this section shall:

1. Be part of the newborn screening program prescribed in section 36-694.

2. Involve amino acid, carbohydrate or fat metabolism.

3. Have medically standard methods of diagnosis, treatment and monitoring including quantification of metabolites in blood, urine or spinal fluid or enzyme or DNA confirmation in tissues.

4. Require specially processed or treated medical foods that are generally available only under the supervision and direction of a physician who is licensed pursuant to title 32, chapter 13 or 17 or a registered nurse practitioner who is licensed pursuant to title 32, chapter 15, that must be consumed throughout life and without which the person may suffer serious mental or physical impairment.

S. Medical foods eligible for coverage under this section shall be prescribed or ordered under the supervision of a physician licensed pursuant to title 32, chapter 13 or 17 or a registered nurse practitioner who is licensed pursuant to title 32, chapter 15 as medically necessary for the therapeutic treatment of an inherited metabolic disease.

T. An insurer shall cover at least fifty percent of the cost of medical foods prescribed to treat inherited metabolic disorders and covered pursuant to this section.  An insurer may limit the maximum annual benefit for medical foods under this section to $5,000, which applies to the cost of all prescribed modified low protein foods and metabolic formula.

U. Any blanket disability policy that provides coverage for:

1. Prescription drugs shall also provide coverage for any prescribed drug or device that is approved by the United States food and drug administration for use as a contraceptive. A blanket disability insurer may use a drug formulary, multitiered drug formulary or list but that formulary or list shall include oral, implant and injectable contraceptive drugs, intrauterine devices and prescription barrier methods. The blanket disability insurer may not impose deductibles, coinsurance, copayments or other cost containment measures for contraceptive drugs that are greater than the deductibles, coinsurance, copayments or other cost containment measures for other drugs on the same level of the formulary or list.

2. Outpatient health care services shall also provide coverage for outpatient contraceptive services. For the purposes of this paragraph, "outpatient contraceptive services" means consultations, examinations, procedures and medical services provided on an outpatient basis and related to the use of approved United States food and drug administration prescription contraceptive methods to prevent unintended pregnancies.

V. Notwithstanding subsection U of this section, a religiously affiliated employer may require that the insurer provide a blanket disability policy without coverage for specific items or services required under subsection U of this section because providing or paying for coverage of the specific items or services is contrary to the religious beliefs of the religiously affiliated employer offering the plan. If a religiously affiliated employer objects to providing coverage for specific items or services required under subsection U of this section, a written affidavit shall be filed with the insurer stating the objection. On receipt of the affidavit, the insurer shall issue to the religiously affiliated employer a blanket disability policy that excludes coverage for specific items or services required under subsection U of this section. The insurer shall retain the affidavit for the duration of the blanket disability policy and any renewals of the policy. This subsection shall not exclude coverage for prescription contraceptive methods ordered by a health care provider with prescriptive authority for medical indications other than for contraceptive, abortifacient, abortion or sterilization purposes.  A religiously affiliated employer offering the policy may state religious beliefs in its affidavit and may require the insured to first pay for the prescription and then submit a claim to the insurer along with evidence that the prescription is not for a purpose covered by the objection.  An insurer may charge an administrative fee for handling these claims under this subsection.

W. Subsection V of this section does not authorize a religiously affiliated employer to obtain an employee's protected health information or to violate the health insurance portability and accountability act of 1996 (P.L. 104-191; 110 Stat. 1936) or any federal regulations adopted pursuant to that act.

X. Subsection V of this section shall not be construed to restrict or limit any protections against employment discrimination that are prescribed in federal or state law.

Y. For the purposes of:

1. This section:

(a) "Inherited metabolic disorder" means a disease caused by an inherited abnormality of body chemistry and includes a disease tested under the newborn screening program prescribed in section 36-694.

(b) "Medical foods" means modified low protein foods and metabolic formula.

(c) "Metabolic formula" means foods that are all of the following:

(i) Formulated to be consumed or administered enterally under the supervision of a physician who is licensed pursuant to title 32, chapter 13 or 17 or a registered nurse practitioner who is licensed pursuant to title 32, chapter 15.

(ii) Processed or formulated to be deficient in one or more of the nutrients present in typical foodstuffs.

(iii) Administered for the medical and nutritional management of a person who has limited capacity to metabolize foodstuffs or certain nutrients contained in the foodstuffs or who has other specific nutrient requirements as established by medical evaluation.

(iv) Essential to a person's optimal growth, health and metabolic homeostasis.

(d) "Modified low protein foods" means foods that are all of the following:

(i) Formulated to be consumed or administered enterally under the supervision of a physician who is licensed pursuant to title 32, chapter 13 or 17 or a registered nurse practitioner who is licensed pursuant to title 32, chapter 15.

(ii) Processed or formulated to contain less than one gram of protein per unit of serving, but does not include a natural food that is naturally low in protein.

(iii) Administered for the medical and nutritional management of a person who has limited capacity to metabolize foodstuffs or certain nutrients contained in the foodstuffs or who has other specific nutrient requirements as established by medical evaluation.

(iv) Essential to a person's optimal growth, health and metabolic homeostasis.

2. Subsection E of this section, the term "child", for purposes of initial coverage of an adopted child or a child placed for adoption but not for purposes of termination of coverage of such child, means a person who is under eighteen years of age.

3. Subsections V and W of this section, "religiously affiliated employer" means either:

(a) An entity for which all of the following apply:

(i) The entity primarily employs persons who share the religious tenets of the entity.

(ii) The entity serves primarily persons who share the religious tenets of the entity.

(iii) The entity is a nonprofit organization as described in section 6033(a)(3)(A)(i) or (iii) of the internal revenue code of 1986, as amended.

(b) An entity whose articles of incorporation clearly state that it is a religiously motivated organization and whose religious beliefs are central to the organization's operating principles.
A.R.S. § 20-1269 — Arizona Code / Title 20 / Chapter 6 / Article 2 / Section 1269
20-1269 Notice of conversion right
Status: in_force

20-1269. Notice of conversion right

If any individual insured under a group life insurance policy delivered after January 1, 1955 in this state becomes entitled under the terms of the policy to have an individual policy of life insurance issued to him without evidence of insurability, subject to the making of application and payment of the first premium within a period specified in the policy, and if the individual is not given notice of the existence of such right at least fifteen days prior to the expiration date of such period, then notwithstanding the terms of the policy the individual shall have an additional period within which to exercise the right. The additional period shall expire fifteen days next after the individual is given such notice, but in no event shall the additional period extend beyond sixty days next after the expiration date of the period provided in the policy. Written notice presented to the individual or mailed by the policyholder to the last known address of the individual or mailed by the insurer to the last known address of the individual as furnished by the policyholder shall constitute notice for the purpose of this section, and nothing contained in this section shall be construed to continue any insurance beyond the period provided in the policy.
A.R.S. § 20-491.07 — Arizona Code / Title 20 / Chapter 2 / Article 15 / Section 491.07
20-491.07 Civil penalties
Status: in_force

20-491.07. Civil penalties

An insurer who fails to file without just cause the ORSA summary report required by this article after notice and a hearing shall pay a penalty of five hundred dollars for each day's delay in filing, not to exceed one hundred thousand dollars.  The director may reduce the penalty if the insurer demonstrates that the imposition of the penalty would constitute a financial hardship to the insurer.  The director shall deposit, pursuant to sections 35-146 and 35-147, the penalties collected in the state general fund.
A.R.S. § 20-488 — Arizona Code / Title 20 / Chapter 2 / Article 12 / Section 488
20-488 Definitions
Status: in_force

20-488. Definitions

In this article, unless the context otherwise requires:

1. "Adjusted RBC report" means a report that has been adjusted by the director in accordance with section 20-488.01.

2. "Authorized control level event" means any of the following events:

(a) The filing of an RBC report by the insurer indicating that the insurer's total adjusted capital is more than or equal to its mandatory control level RBC but less than its authorized control level RBC.

(b) The notification by the director to the insurer of an adjusted RBC report that indicates the event under subdivision (a) of this paragraph, unless the insurer challenges the adjusted RBC report under section 20-488.06.

(c) If the insurer challenges an adjusted RBC report that indicates the event under subdivision (a) of this paragraph, the notification by the director to the insurer that the director, after a hearing, has rejected the insurer's challenge.

(d) The failure of the insurer to satisfactorily respond to a corrective order, unless the insurer has challenged the corrective order under section 20-488.06.

(e) If the insurer challenges a corrective order and, after a hearing, the director rejects the challenge or modifies the corrective order, the failure of the insurer to satisfactorily respond to the corrective order after its modification or the rejection of the challenge by the director.

3. "Authorized control level RBC" means the number determined under the risk-based capital formula in accordance with the RBC instructions.

4. "Company action level event" means any of the following:

(a) The filing of an RBC report by an insurer indicating either that:

(i) The insurer's total adjusted capital is more than or equal to its regulatory action level RBC but less than its company action level RBC.

(ii) The insurer's total adjusted capital is more than or equal to its company action level RBC but less than the product of its authorized control level RBC and 3.0 and has a negative trend.

(b) The notification by the director to the insurer of an adjusted RBC report that indicates any of the events under subdivision (a) of this paragraph, unless the insurer challenges the adjusted RBC report under section 20-488.06.

(c) If the insurer challenges an adjusted RBC report that indicates either of the events under subdivision (a) of this paragraph, the notification by the director to the insurer that the director, after a hearing, has rejected the insurer's challenge.

5. "Company action level RBC" means, with respect to any insurer, the product of 2.0 and its authorized control level RBC.

6. "Corrective order" means an order that is issued by the director and that specifies corrective actions that the director has determined are required.

7. "Domestic insurer" means a life or health insurer, or both, a property or casualty insurer, or both, or a health organization that is authorized to transact insurance business in this state and that is organized in this state.

8. "Foreign insurer" means a life or health insurer, or both, a property or casualty insurer, or both, or a health organization that is authorized to transact insurance business in this state but that is not domiciled in this state.

9. "Health organization" means a hospital service corporation, medical service corporation, dental service corporation or optometric service corporation or a hospital, medical, dental and optometric service corporation that has a certificate of authority pursuant to chapter 4, article 3 of this title, a prepaid dental plan organization that has a certificate of authority pursuant to chapter 4, article 7 of this title or a health care services organization that has a certificate of authority pursuant to chapter 4, article 9 of this title.

10. "Life or health insurer" means an insurer authorized to transact life insurance, annuities or accident and health insurance in this state, a fraternal benefit society or an authorized property or casualty insurer writing only accident and health insurance, but does not include a health organization.

11. "Mandatory control level event" means any of the following:

(a) The filing of an RBC report by the insurer indicating that the insurer's total adjusted capital is less than its mandatory control level RBC.

(b) The notification by the director to the insurer of an adjusted RBC report that indicates the event under subdivision (a) of this paragraph, unless the insurer challenges the adjusted RBC report under section 20-488.06.

(c) If the insurer challenges an adjusted RBC report that indicates the event under subdivision (a) of this paragraph, the notification by the director to the insurer that the director, after a hearing, has rejected the insurer's challenge.

12. "Mandatory control level RBC" means the product of .70 and the authorized control level RBC.

13. "Negative trend" means, with respect to an insurer, a negative trend over a period of time as determined in accordance with the trend test calculation included in the RBC instructions.

14. "Property or casualty insurer" means an insurer licensed to transact insurance as described in section 20-256 or 20-252, respectively, but does not include monoline mortgage guaranty insurers, financial guaranty insurers and title insurers.

15. "RBC" means risk-based capital.

16. "RBC instructions" means the RBC report, including risk-based capital instructions adopted by the national association of insurance commissioners.

17. "RBC level" means an insurer's company action level RBC, regulatory action level RBC, authorized control level RBC or mandatory control level RBC.

18. "RBC plan" means a comprehensive financial plan containing the elements specified in section 20-488.02, subsection A.  If the director rejects the RBC plan and the insurer revises the plan, regardless of the director's recommendation, the plan shall be called the revised RBC plan.

19. "RBC report" means the report required under section 20-488.01.

20. "Regulatory action level event" means, with respect to any insurer, any of the following events:

(a) The filing of an RBC report by the insurer indicating that the insurer's total adjusted capital is more than or equal to its authorized control level RBC but less than its regulatory action level RBC.

(b) The notification by the director to the insurer of an adjusted RBC report that indicates the event under subdivision (a) of this paragraph, unless the insurer challenges the adjusted RBC report under section 20-488.06.

(c) If the insurer challenges an adjusted RBC report that indicates the event under subdivision (a) of this paragraph, the notification by the director to the insurer that the director, after a hearing, has rejected the insurer's challenge.

(d) The failure by the insurer to file an RBC report by the filing date, unless the insurer provides the director with a satisfactory explanation for the failure and cures the failure within ten days after the filing date.

(e) The failure by the insurer to submit an RBC plan to the director within the time period prescribed in section 20-488.02, subsection B.

(f) Notification by the director to the insurer that both:

(i) The RBC plan or revised RBC plan that the insurer submitted is, in the judgment of the director, unsatisfactory.

(ii) If the insurer has not challenged a determination pursuant to section 20-488.06, the notification constitutes a regulatory action level event.

(g) If the insurer challenges pursuant to section 20-488.06 a determination made by the director pursuant to subdivision (f) of this paragraph, the notification by the director to the insurer that the director, after a hearing, has rejected the insurer's challenge.

(h) If the insurer has not challenged the determination pursuant to section 20-488.06, the notification by the director to the insurer that the insurer has failed to adhere to the insurer's RBC plan or revised RBC plan and that states that failure has a substantial adverse effect on the insurer's ability to eliminate the regulatory action level event in accordance with its RBC plan or revised RBC plan.

(i) If the insurer challenges pursuant to section 20-488.06 a determination made by the director pursuant to subdivision (h) of this paragraph, the notification by the director to the insurer that the director, after a hearing, has rejected the insurer's challenge, unless the insurer's failure to adhere to its RBC plan or revised RBC plan does not have a substantial adverse effect on the insurer's ability to eliminate the regulatory action level event.

21. "Regulatory action level RBC" means the product of 1.5 and an insurer's authorized control level RBC.

22. "Total adjusted capital" means the sum of:

(a) An insurer's statutory capital and surplus.

(b) Any other items that the RBC instructions may provide.
A.R.S. § 20-690 — Arizona Code / Title 20 / Chapter 3 / Article 7 / Section 690
20-690 Financial provisions
Status: in_force

20-690. Financial provisions

A. Nothing in this article shall be construed to reduce the liability for unpaid assessments of the insureds of an impaired insurer or insolvent insurer operating under a plan with assessment liability.

B. Records shall be kept of all negotiations and meetings in which the fund or its representatives are involved to discuss the activities of the fund in carrying out its powers and duties. Records of such negotiations or meetings shall be made public only on the termination of a liquidation, rehabilitation or conservation proceeding involving the impaired insurer or insolvent insurer, on the termination of the impairment or insolvency of the insurer or on the order of a court of competent jurisdiction.

C. For the purpose of carrying out its obligations pursuant to this article, the board shall be deemed to be a creditor of the impaired insurer or insolvent insurer to the extent of assets attributable to policies reduced by any amounts to which the board is entitled as subrogee. All assets of the impaired insurer or insolvent insurer attributable to policies shall be used to continue all policies and pay all contractual obligations of the impaired insurer or insolvent insurer. As used in this subsection, "assets attributable to policies" means that proportion of the assets which the reserves that should have been established for such policies or contracts bear to the reserve that should have been established for all policies of insurance or health benefit plans written by the impaired insurer or insolvent insurer.

D. Before the termination of any liquidation, rehabilitation or conservation proceeding, the court may take into consideration the contributions of the respective parties including the board, the shareholders, contract owners, certificate holders, enrollees and policyowners of the impaired insurer or insolvent insurer and any other party with a bona fide interest in making an equitable distribution of the ownership rights of such impaired insurer or insolvent insurer. In such a determination, consideration shall be given to the welfare of the policyholders, contract owners, certificate holders and enrollees of the continuing or successor member insurer. No distribution to stockholders of the assets of an impaired insurer or insolvent insurer may be made until and unless the total amount of valid claims of the fund with interest thereon for monies expended in carrying out its powers and duties under section 20-685 with respect to such insurer is fully recovered by the fund.

E. If an order for liquidation or rehabilitation of a member insurer domiciled in this state has been entered, the receiver appointed under such order may recover on behalf of the member insurer, from any affiliate that controlled it, the amount of distributions, other than stock dividends paid by the member insurer on its capital stock, made at any time during the five years preceding the petition for liquidation or rehabilitation subject to the following limitations:

1. No such dividend shall be recoverable if the member insurer shows that when paid the distribution was lawful and reasonable and that the member insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the member insurer to fulfill its contractual obligations.

2. Any person who as an affiliate that controlled the member insurer at the time the distributions were paid shall be liable up to the amount of distributions the person received. Any person who was an affiliate that controlled the member insurer at the time the distributions were declared shall be liable up to the amount of distributions the person would have received if they had been paid immediately. If two persons are liable with respect to the same distributions, they are jointly and severally liable.

3. The maximum amount recoverable pursuant to this subsection shall be the amount needed in excess of all other available assets of the impaired insurer or insolvent insurer to pay the contractual obligations of the impaired insurer or insolvent insurer.

4. If any person liable pursuant to paragraph 2 is insolvent, all its affiliates that controlled it at the time the dividend was paid are jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate.

F. The receiver, conservator, liquidator or statutory successor of an impaired insurer or insolvent insurer is bound by a settlement of covered claims by the fund or a similar organization in another state.
A.R.S. § 20-148 — Arizona Code / Title 20 / Chapter 1 / Article 2 / Section 148
20-148 Deputies and other employees; special services
Status: in_force

20-148. Deputies and other employees; special services

A. Subject to title 41, chapter 4, article 4, the director shall appoint such other deputies, assistants and clerks, as necessary properly to discharge the duties imposed upon the director under this title.

B. The director may from time to time contract for and procure, on a fee or part time basis, or both, such actuarial, technical and other professional services as he may require for the operation of his office.

C. The compensation of each deputy, actuary, assistant and clerk shall be as determined pursuant to section 38-611.
A.R.S. § 20-1404.06 — Arizona Code / Title 20 / Chapter 6 / Article 5 / Section 1404.06
20-1404.06 Organ harvesting; insurance coverage limitations
Status: in_force

20-1404.06. Organ harvesting; insurance coverage limitations

A. A group or blanket disability insurance policy may limit coverage to an insured for a human organ transplant or posttransplant care if either of the following applies:

1. The transplant operation is performed in the People's Republic of China or the Hong Kong special administrative region.

2. The human organ to be transplanted was procured by a sale or donation originating in the People's Republic of China or the Hong Kong special administrative region.

B. This section does not:

1. Require coverage for human organ transplants.

2. Limit a group or blanket disability insurer from denying coverage for any valid reason.
A.R.S. § 20-1621.07 — Arizona Code / Title 20 / Chapter 6 / Article 10.1 / Section 1621.07
20-1621.07 Cancellation and refund of unearned premium
Status: in_force

20-1621.07. Cancellation and refund of unearned premium

On cancellation for any reason, the debtor is entitled to a refund of unearned premiums calculated on a daily pro rata basis, except that an insurer is not required to make any refund of less than five dollars.
A.R.S. § 20-732 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 732
20-732 Acceptance of reinsurance by stock insurers; definition
Status: in_force

20-732. Acceptance of reinsurance by stock insurers; definition

A. A domestic stock insurer or a domestic limited stock insurer may accept reinsurance for the same kinds of insurance and within the same limits as it is authorized to transact directly, unless the reinsurance is prohibited by its articles of incorporation.  If a reinsurance contract constitutes all or substantially all of the insurance business, the reinsuring agreement shall not become effective unless filed with and approved in writing by the director.  If not acted upon within thirty days, the agreement shall be deemed approved unless the director notifies the parties to the agreement that a thirty day extension to the time period has been imposed.  Any person may request a hearing regarding the decision of the director pursuant to title 41, chapter 6, article 10.

B. A domestic stock insurer or limited stock insurer may reinsure all or substantially all its business in force, or substantially all of a major class thereof, with another insurer by an agreement of reinsurance, but no agreement shall become effective unless filed with and approved in writing by the director.

C. The director shall approve the agreement within a reasonable time after filing unless the director finds that it is inequitable to the stockholders of the domestic insurer or would substantially reduce the protection or service to its policyholders.  If the director does not approve the agreement the director shall notify the insurer in writing specifying the reasons for the disapproval of the agreement.

D. For the purposes of this section, "reinsurance" means a contract by which an insurer procures a third person to insure the insurer against loss or liability by reason of original insurance, or a contract that one insurer makes with another insurer to protect the latter from a risk already assumed.
A.R.S. § 20-1057.02 — Arizona Code / Title 20 / Chapter 4 / Article 9 / Section 1057.02
20-1057.02 Prescription drug formulary; definitions
Status: in_force

20-1057.02. Prescription drug formulary; definitions

A. A health care services organization with a prescription drug benefit that uses a drug formulary as a component of the evidence of coverage shall provide to its enrollees notice in the evidence of coverage regarding the applicable drug formulary.  The health care services organization shall write the notice so that the language and format are easy to understand.  The notice shall include an explanation of what a drug formulary is, how the health care services organization determines which prescription drugs are included or excluded and how often the health care services organization reviews the contents of the drug formulary.

B. A health care services organization described in subsection A of this section shall:

1. Develop and maintain a process by which health care professionals may request authorization for a medically necessary formulary or nonformulary prescription drug during nonbusiness hours.  If the health care services organization does not maintain that process, the health care services organization shall reimburse an enrollee for the enrollee's out-of-pocket expense minus any deductible or copayment for a prescription drug that was purchased by the enrollee without preauthorization but that was later approved by the health care services organization.

2. Develop and maintain a process by which health care professionals may request authorization for medically necessary nonformulary prescription drugs.  The health care services organization shall approve an alternative prescription drug when either of the following conditions is met:

(a) The equivalent prescription drug on the formulary has been ineffective in the treatment of the enrollee's disease or condition.

(b) The equivalent prescription drug on the formulary has caused an adverse or harmful reaction in the enrollee.

C. If the health care services organization's pharmacy benefit plan does not require authorization, subsection B, paragraph 2 of this section does not apply.

D. If the enrollee's treating health care professional makes a determination that the enrollee meets any of the conditions described in subsection B of this section, any denial to cover the nonformulary prescription drug by the health care services organization shall be made in writing by a licensed pharmacist or medical director.  The written denial shall contain an explanation of the denial, including the medical or pharmacological reasons why the authorization was denied, and the licensed pharmacist or medical director who made the denial shall sign it.  The health care services organization shall send a copy of the written denial to the enrollee's treating health care professional who requested the authorization. The health care services organization shall maintain copies of all written denials and shall make the copies available to the department for inspection during regular business hours.

E. Any evidence of coverage that is issued, amended or renewed by a health care services organization and that includes prescription drug benefits shall not limit or exclude coverage for at least sixty days after the health care services organization's notice or the pharmacy's notice pursuant to subsection F of this section to the enrollee, whichever occurs first, for a prescription drug for an enrollee to refill a previously prescribed drug if the prescription drug was previously approved for coverage under the drug formulary or pharmacy benefit plan for the enrollee's medical condition and the health care professional continues to prescribe the prescription drug for the same medical condition.  The limitation or exclusion prohibited by this subsection applies if the prescription drug is appropriately prescribed and is considered safe and effective for treating the enrollee's medical condition.  This subsection does not prohibit the health care professional from prescribing another prescription drug that is covered by the drug formulary and that is medically appropriate for the enrollee, including generic drug substitutions.

F. A health care services organization shall provide written notice of the removal of any prescription drug from the health care services organization's drug formulary to each pharmacy vendor with which the health care services organization has a contract.  On notice from the health care services organization, the contracted pharmacy vendor at the point of dispensing a prescription drug that has been removed from the drug formulary shall notify the enrollee by means of a verbal consultation or other direct communication with an enrollee that the enrollee may be required to consult with a health care professional to obtain a new prescription for a replacement drug after the sixty day period prescribed in subsection E of this section.  The notice prescribed in this subsection is not required if the pharmacy vendor is a pharmacy that is owned by a health care services organization or a corporate affiliate of that health care services organization.

G. This section does not:

1. Prohibit a health care services organization from applying deductibles, coinsurance or other cost containment or quality assurance measures.

2. Apply to a health care services organization that provides a multitiered benefit plan that allows access to prescription drugs without authorization by the health care services organization.

H. For the purposes of this section:

1. "Health care professional" means a person who has an active nonrestricted license pursuant to title 32 and who is authorized to write drug prescriptions to treat medical conditions.

2. "Prescription drug" means any prescription medication as defined in section 32-1901 that is prescribed by a health care professional to an enrollee to treat the enrollee's condition.
A.R.S. § 20-1566 — Arizona Code / Title 20 / Chapter 6 / Article 9 / Section 1566
20-1566 Taxation of title insurers
Status: in_force

20-1566. Taxation of title insurers

A. In lieu of the premium tax provisions of section 20-224, title insurers shall be subject to taxation on income as other private corporations.

B. The income tax required to be paid by title insurers by the provisions of subsection A of this section shall be payment in full of all demands for all state, county, district, municipal and school taxes and licenses of whatever kind or character, excepting only the fees prescribed by article 2 of chapter 1 of this title and taxes on real and tangible personal property located within this state.

C. If the provisions of section 20-230 shall operate to require any foreign title insurer to pay premium tax in this state, such tax shall be computed on total risk premiums received by the insurer during the preceding calendar year on account of title insurance on real property in this state. The provisions of section 20-230 shall operate to require such foreign title insurer to pay only the amount of such net premium tax which is in excess of the net income tax actually paid to this state for the same calendar year by such foreign title insurer. For the purposes of this section only, every foreign title insurer which may be required to pay premium tax in this state may file with the director as a part of or as an amendment to its schedule of fees under subsection A of section 20-376 a statement of the risk premium included in its schedule of fees.
A.R.S. § 20-1057 — Arizona Code / Title 20 / Chapter 4 / Article 9 / Section 1057
20-1057 Evidence of coverage by health care services organizations; renewability; definitions
Status: in_force

20-1057. Evidence of coverage by health care services organizations; renewability; definitions

A. Every enrollee in a health care plan shall be issued an evidence of coverage by the responsible health care services organization.

B. Any contract, except accidental death and dismemberment, applied for that provides family coverage shall also provide, as to such coverage of family members, that the benefits applicable for children shall be payable with respect to a newly born child of the enrollee from the instant of such child's birth, to a child adopted by the enrollee, regardless of the age at which the child was adopted, and to a child who has been placed for adoption with the enrollee and for whom the application and approval procedures for adoption pursuant to section 8-105 or 8-108 have been completed to the same extent that such coverage applies to other members of the family. The coverage for newly born or adopted children or children placed for adoption shall include coverage of injury or sickness including necessary care and treatment of medically diagnosed congenital defects and birth abnormalities. If payment of a specific premium is required to provide coverage for a child, the contract may require that notification of birth, adoption or adoption placement of the child and payment of the required premium must be furnished to the insurer within thirty-one days after the date of birth, adoption or adoption placement in order to have the coverage continue beyond the thirty-one day period.

C. Any contract, except accidental death and dismemberment, that provides coverage for psychiatric, drug abuse or alcoholism services shall require the health care services organization to provide reimbursement for those services in accordance with the terms of the contract without regard to whether the covered services are rendered in a psychiatric special hospital or general hospital.

D. An evidence of coverage or amendment to the coverage shall not be issued or delivered to any person in this state until a copy of the form of the evidence of coverage or amendment to the coverage has been filed with and approved by the director.

E. An evidence of coverage shall contain a clear and complete statement if a contract, or a reasonably complete summary if a certificate of contract, of:

1. The health care services and the insurance or other benefits, if any, to which the enrollee is entitled under the health care plan.

2. Any limitations of the services, kind of services, benefits or kind of benefits to be provided, including any deductible or copayment feature.

3. Where and in what manner information is available as to how services may be obtained.

4. The enrollee's obligation, if any, respecting charges for the health care plan.

F. An evidence of coverage shall not contain provisions or statements that are unjust, unfair, inequitable, misleading or deceptive, that encourage misrepresentation or that are untrue.

G. The director shall approve any form of evidence of coverage if the requirements of subsections E and F of this section are met.  It is unlawful to issue such form until approved.  If the director does not disapprove any such form within forty-five days after the filing of the form, it is deemed approved. If the director disapproves a form of evidence of coverage, the director shall notify the health care services organization.  In the notice, the director shall specify the reasons for the director's disapproval.  The director shall grant a hearing on such disapproval within fifteen days after a request for a hearing in writing is received from the health care services organization.

H. A health care services organization shall not cancel or refuse to renew an enrollee's evidence of coverage that was issued on a group basis without giving notice of the cancellation or nonrenewal to the enrollee and, on request of the director, to the department of insurance and financial institutions. A notice by the organization to the enrollee of cancellation or nonrenewal of the enrollee's evidence of coverage shall be mailed to the enrollee at least sixty days before the effective date of such cancellation or nonrenewal. The notice shall include or be accompanied by a statement in writing of the reasons as stated in the contract for such action by the organization.  Failure of the organization to comply with this subsection shall invalidate any cancellation or nonrenewal except a cancellation or nonrenewal for nonpayment of premium, for fraud or misrepresentation in the application or other enrollment documents or for loss of eligibility as defined in the evidence of coverage. A health care services organization shall not cancel an enrollee's evidence of coverage issued on a group basis because of the enrollee's or dependent's age, except for loss of eligibility as defined in the evidence of coverage, sex, health status-related factor, national origin or frequency of utilization of health care services of the enrollee. An evidence of coverage issued on a group basis shall clearly delineate all terms under which the health care services organization may cancel or refuse to renew an evidence of coverage for an enrollee or dependent. Nothing in this subsection prohibits the cancellation or nonrenewal of a health benefits plan contract issued on a group basis for any of the reasons allowed in section 20-2309. A health care services organization may cancel or nonrenew an evidence of coverage issued to an individual on a nongroup basis only for the reasons allowed by subsection N of this section.

I. A health care plan that provides coverage for surgical services for a mastectomy shall also provide coverage incidental to the patient's covered mastectomy for surgical services for reconstruction of the breast on which the mastectomy was performed, surgery and reconstruction of the other breast to produce a symmetrical appearance, prostheses, treatment of physical complications for all stages of the mastectomy, including lymphedemas, and at least two external postoperative prostheses subject to all of the terms and conditions of the policy.

J. A contract that provides coverage for surgical services for a mastectomy shall also provide coverage for preventive mammography screening and diagnostic imaging performed on dedicated equipment for diagnostic purposes on referral by a patient's physician, subject to all of the terms and conditions of the policy, including:

1. A mammogram.

2. Digital breast tomosynthesis, magnetic resonance imaging, ultrasound or other modality and at such age and intervals as recommended by the national comprehensive cancer network.  This includes patients at risk for breast cancer who have a family history with one or more first or second degree relatives with breast cancer, prior diagnosis of breast cancer, positive testing for hereditary gene mutations or heterogeneously or dense breast tissue based on the breast imaging reporting and data system of the American college of radiology.

K. Any contract that is issued to the enrollee and that provides coverage for maternity benefits shall also provide that the maternity benefits apply to the costs of the birth of any child legally adopted by the enrollee if all the following are true:

1. The child is adopted within one year of birth.

2. The enrollee is legally obligated to pay the costs of birth.

3. All preexisting conditions and other limitations have been met and all deductibles and copayments have been paid by the enrollee.

4. The enrollee has notified the insurer of the enrollee's acceptability to adopt children pursuant to section 8-105 within sixty days after such approval or within sixty days after a change in insurance policies, plans or companies.

L. The coverage prescribed by subsection K of this section is excess to any other coverage the natural mother may have for maternity benefits except coverage made available to persons pursuant to title 36, chapter 29. If such other coverage exists the agency, attorney or individual arranging the adoption shall make arrangements for the insurance to pay those costs that may be covered under that policy and shall advise the adopting parent in writing of the existence and extent of the coverage without disclosing any confidential information such as the identity of the natural parent. The enrollee adopting parents shall notify their health care services organization of the existence and extent of the other coverage. A health care services organization is not required to pay any costs in excess of the amounts it would have been obligated to pay to its hospitals and providers if the natural mother and child had received the maternity and newborn care directly from or through that health care services organization.

M. Each health care services organization shall offer membership to the following in a conversion plan that provides the basic health care benefits required by the director:

1. Each enrollee including the enrollee's enrolled dependents leaving a group.

2. Each enrollee and the enrollee's dependents who would otherwise cease to be eligible for membership because of the age of the enrollee or the enrollee's dependents or the death or the dissolution of marriage of an enrollee.

N. A health care services organization shall not cancel or nonrenew an evidence of coverage issued to an individual on a nongroup basis, including a conversion plan, except for any of the following reasons and in compliance with the notice and disclosure requirements contained in subsection H of this section:

1. The individual has failed to pay premiums or contributions in accordance with the terms of the evidence of coverage or the health care services organization has not received premium payments in a timely manner.

2. The individual has performed an act or practice that constitutes fraud or the individual made an intentional misrepresentation of material fact under the terms of the evidence of coverage.

3. The health care services organization has ceased to offer coverage to individuals that is consistent with the requirements of sections 20-1379 and 20-1380.

4. If the health care services organization offers a health care plan in this state through a network plan, the individual no longer resides, lives or works in the service area served by the network plan or in an area for which the health care services organization is authorized to transact business but only if the coverage is terminated uniformly without regard to any health status-related factor of the covered individual.

5. If the health care services organization offers health coverage in this state in the individual market only through one or more bona fide associations, the membership of the individual in the association has ceased but only if that coverage is terminated uniformly without regard to any health status-related factor of any covered individual.

O. A conversion plan may be modified if the modification complies with the notice and disclosure provisions for cancellation and nonrenewal under subsection H of this section.  A modification of a conversion plan that has already been issued shall not result in the effective elimination of any benefit originally included in the conversion plan.

P. Any person who is a United States armed forces reservist, who is ordered to active military duty on or after August 22, 1990 and who was enrolled in a health care plan shall have the right to reinstate such coverage on release from active military duty subject to the following conditions:

1. The reservist shall make written application to the health plan within ninety days of discharge from active military duty or within one year of hospitalization continuing after discharge.  Coverage shall be effective on receipt of the application by the health plan.

2. The health plan may exclude from such coverage any health or physical condition arising during and occurring as a direct result of active military duty.

Q. The director shall adopt emergency rules that are applicable to persons who are leaving active service in the armed forces of the United States and returning to civilian status consistent with subsection P of this section and that include:

1. Conditions of eligibility.

2. Coverage of dependents.

3. Preexisting conditions.

4. Termination of insurance.

5. Probationary periods.

6. Limitations.

7. Exceptions.

8. Reductions.

9. Elimination periods.

10. Requirements for replacement.

11. Any other conditions of evidences of coverage.

R. Any contract that provides maternity benefits shall not restrict benefits for any hospital length of stay in connection with childbirth for the mother or the newborn child to less than forty-eight hours following a normal vaginal delivery or ninety-six hours following a cesarean section.  The contract shall not require the provider to obtain authorization from the health care services organization for prescribing the minimum length of stay required by this subsection.  The contract may provide that an attending provider in consultation with the mother may discharge the mother or the newborn child before the expiration of the minimum length of stay required by this subsection.  The health care services organization shall not:

1. Deny the mother or the newborn child eligibility or continued eligibility to enroll or to renew coverage under the terms of the contract solely for the purpose of avoiding the requirements of this subsection.

2. Provide monetary payments or rebates to mothers to encourage those mothers to accept less than the minimum protections available pursuant to this subsection.

3. Penalize or otherwise reduce or limit the reimbursement of an attending provider because that provider provided care to any insured under the contract in accordance with this subsection.

4. Provide monetary or other incentives to an attending provider to induce that provider to provide care to an insured under the contract in a manner that is inconsistent with this subsection.

5. Except as described in subsection S of this section, restrict benefits for any portion of a period within the minimum length of stay in a manner that is less favorable than the benefits provided for any preceding portion of that stay.

S. Subsection R of this section does not:

1. Require a mother to give birth in a hospital or to stay in the hospital for a fixed period of time following the birth of the child.

2. Prevent a health care services organization from imposing deductibles, coinsurance or other cost sharing in relation to benefits for hospital lengths of stay in connection with childbirth for a mother or a newborn child under the contract, except that any coinsurance or other cost sharing for any portion of a period within a hospital length of stay required pursuant to subsection R of this section shall not be greater than the coinsurance or cost sharing for any preceding portion of that stay.

3. Prevent a health care services organization from negotiating the level and type of reimbursement with a provider for care provided in accordance with subsection R of this section.

T. Any contract or evidence of coverage that provides coverage for diabetes shall also provide coverage for equipment and supplies that are medically necessary and that are prescribed by a health care provider including:

1. Blood glucose monitors.

2. Blood glucose monitors for the legally blind.

3. Test strips for glucose monitors and visual reading and urine testing strips.

4. Insulin preparations and glucagon.

5. Insulin cartridges.

6. Drawing up devices and monitors for the visually impaired.

7. Injection aids.

8. Insulin cartridges for the legally blind.

9. Syringes and lancets including automatic lancing devices.

10. Prescribed oral agents for controlling blood sugar that are included on the plan formulary.

11. To the extent coverage is required under medicare, podiatric appliances for prevention of complications associated with diabetes.

12. Any other device, medication, equipment or supply for which coverage is required under medicare from and after January 1, 1999. The coverage required in this paragraph is effective six months after the coverage is required under medicare.

U. Subsection T of this section does not:

1. Entitle a member or enrollee of a health care services organization to equipment or supplies for the treatment of diabetes that are not medically necessary as determined by the health care services organization medical director or the medical director's designee.

2. Provide coverage for diabetic supplies obtained by a member or enrollee of a health care services organization without a prescription unless otherwise allowed pursuant to the terms of the health care plan.

3. Prohibit a health care services organization from imposing deductibles, coinsurance or other cost sharing in relation to benefits for equipment or supplies for the treatment of diabetes.

V. Any contract or evidence of coverage that provides coverage for prescription drugs shall not limit or exclude coverage for any prescription drug prescribed for the treatment of cancer on the basis that the prescription drug has not been approved by the United States food and drug administration for the treatment of the specific type of cancer for which the prescription drug has been prescribed, if the prescription drug has been recognized as safe and effective for treatment of that specific type of cancer in one or more of the standard medical reference compendia prescribed in subsection W of this section or medical literature that meets the criteria prescribed in subsection W of this section. The coverage required under this subsection includes covered medically necessary services associated with the administration of the prescription drug.  This subsection does not:

1. Require coverage of any prescription drug used in the treatment of a type of cancer if the United States food and drug administration has determined that the prescription drug is contraindicated for that type of cancer.

2. Require coverage for any experimental prescription drug that is not approved for any indication by the United States food and drug administration.

3. Alter any law with regard to provisions that limit the coverage of prescription drugs that have not been approved by the United States food and drug administration.

4. Notwithstanding section 20-1057.02, require reimbursement or coverage for any prescription drug that is not included in the drug formulary or list of covered prescription drugs specified in the contract or evidence of coverage.

5. Notwithstanding section 20-1057.02, prohibit a contract or evidence of coverage from limiting or excluding coverage of a prescription drug, if the decision to limit or exclude coverage of the prescription drug is not based primarily on the coverage of prescription drugs required by this section.

6. Prohibit the use of deductibles, coinsurance, copayments or other cost sharing in relation to drug benefits and related medical benefits offered.

W. For the purposes of subsection V of this section:

1. The acceptable standard medical reference compendia are the following:

(a) The American hospital formulary service drug information, a publication of the American society of health system pharmacists.

(b) The national comprehensive cancer network drugs and biologics compendium.

(c) Thomson Micromedex compendium DrugDex.

(d) Elsevier gold standard's clinical pharmacology compendium.

(e) Other authoritative compendia as identified by the secretary of the United States department of health and human services.

2. Medical literature may be accepted if all of the following apply:

(a) At least two articles from major peer reviewed professional medical journals have recognized, based on scientific or medical criteria, the drug's safety and effectiveness for treatment of the indication for which the drug has been prescribed.

(b) No article from a major peer reviewed professional medical journal has concluded, based on scientific or medical criteria, that the drug is unsafe or ineffective or that the drug's safety and effectiveness cannot be determined for the treatment of the indication for which the drug has been prescribed.

(c) The literature meets the uniform requirements for manuscripts submitted to biomedical journals established by the international committee of medical journal editors or is published in a journal specified by the United States department of health and human services as acceptable peer reviewed medical literature pursuant to section 186(t)(2)(B) of the social security act (42 United States Code section 1395x(t)(2)(B)).

X. A health care services organization shall not issue or deliver any advertising matter or sales material to any person in this state until the health care services organization files the advertising matter or sales material with the director. This subsection does not require a health care services organization to have the prior approval of the director to issue or deliver the advertising matter or sales material.  If the director finds that the advertising matter or sales material, in whole or in part, is false, deceptive or misleading, the director may issue an order disapproving the advertising matter or sales material, directing the health care services organization to cease and desist from issuing, circulating, displaying or using the advertising matter or sales material within a period of time specified by the director but not less than ten days and imposing any penalties prescribed in this title.  At least five days before issuing an order pursuant to this subsection, the director shall provide the health care services organization with a written notice of the basis of the order to provide the health care services organization with an opportunity to cure the alleged deficiency in the advertising matter or sales material within a single five-day period for the particular advertising matter or sales material at issue.  The health care services organization may appeal the director's order pursuant to title 41, chapter 6, article 10. Except as otherwise provided in this subsection, a health care services organization may obtain a stay of the effectiveness of the order as prescribed in section 20-162. If the director certifies in the order and provides a detailed explanation of the reasons in support of the certification that continued use of the advertising matter or sales material poses a threat to the health, safety or welfare of the public, the order may be entered immediately without opportunity for cure and the effectiveness of the order is not stayed pending the hearing on the notice of appeal but the hearing shall be promptly instituted and determined.

Y. Any contract or evidence of coverage that is offered by a health care services organization and that contains a prescription drug benefit shall provide coverage of medical foods to treat inherited metabolic disorders as provided by this section.

Z. The metabolic disorders triggering medical foods coverage under this section shall:

1. Be part of the newborn screening program prescribed in section 36-694.

2. Involve amino acid, carbohydrate or fat metabolism.

3. Have medically standard methods of diagnosis, treatment and monitoring including quantification of metabolites in blood, urine or spinal fluid or enzyme or DNA confirmation in tissues.

4. Require specially processed or treated medical foods that are generally available only under the supervision and direction of a physician who is licensed pursuant to title 32, chapter 13 or 17 or a registered nurse practitioner who is licensed pursuant to title 32, chapter 15, that must be consumed throughout life and without which the person may suffer serious mental or physical impairment.

AA. Medical foods eligible for coverage under this section shall be prescribed or ordered under the supervision of a physician licensed pursuant to title 32, chapter 13 or 17 or a registered nurse practitioner who is licensed pursuant to title 32, chapter 15 as medically necessary for the therapeutic treatment of an inherited metabolic disease.

BB. A health care services organization shall cover at least fifty percent of the cost of medical foods prescribed to treat inherited metabolic disorders and covered pursuant to this section.  An organization may limit the maximum annual benefit for medical foods under this section to $5,000, which applies to the cost of all prescribed modified low protein foods and metabolic formula.

CC. Unless preempted under federal law or unless federal law imposes greater requirements than this section, this section applies to a provider sponsored health care services organization.

DD. For the purposes of:

1. This section:

(a) "Inherited metabolic disorder" means a disease caused by an inherited abnormality of body chemistry and includes a disease tested under the newborn screening program prescribed in section 36-694.

(b) "Medical foods" means modified low protein foods and metabolic formula.

(c) "Metabolic formula" means foods that are all of the following:

(i) Formulated to be consumed or administered enterally under the supervision of a physician who is licensed pursuant to title 32, chapter 13 or 17 or a registered nurse practitioner who is licensed pursuant to title 32, chapter 15.

(ii) Processed or formulated to be deficient in one or more of the nutrients present in typical foodstuffs.

(iii) Administered for the medical and nutritional management of a person who has limited capacity to metabolize foodstuffs or certain nutrients contained in the foodstuffs or who has other specific nutrient requirements as established by medical evaluation.

(iv) Essential to a person's optimal growth, health and metabolic homeostasis.

(d) "Modified low protein foods" means foods that are all of the following:

(i) Formulated to be consumed or administered enterally under the supervision of a physician who is licensed pursuant to title 32, chapter 13 or 17 or a registered nurse practitioner who is licensed pursuant to title 32, chapter 15.

(ii) Processed or formulated to contain less than one gram of protein per unit of serving, but does not include a natural food that is naturally low in protein.

(iii) Administered for the medical and nutritional management of a person who has limited capacity to metabolize foodstuffs or certain nutrients contained in the foodstuffs or who has other specific nutrient requirements as established by medical evaluation.

(iv) Essential to a person's optimal growth, health and metabolic homeostasis.

2. Subsection B of this section, "child", for purposes of initial coverage of an adopted child or a child placed for adoption but not for purposes of termination of coverage of such child, means a person who is under eighteen years of age.
A.R.S. § 20-1693.04 — Arizona Code / Title 20 / Chapter 6 / Article 17 / Section 1693.04
20-1693.04 Suspension or revocation of license
Status: in_force

20-1693.04. Suspension or revocation of license

If a vendor or its employee or authorized representative violates any provision of this article, the director may impose penalties pursuant to section 20-295, including suspending the privilege of transacting portable electronics insurance pursuant to this article at the specific business location where violations have occurred.
A.R.S. § 20-1115 — Arizona Code / Title 20 / Chapter 5 / Article 1 / Section 1115
20-1115 Void policy restrictions
Status: in_force

20-1115. Void policy restrictions

A. No policy delivered or issued for delivery in this state and covering a subject of insurance resident, located or to be performed in this state, shall contain any condition, stipulation or agreement:

1. Requiring the policy to be construed according to the laws of any other state or country, except as necessary to meet the requirements of the motor vehicle financial responsibility laws or compulsory disability benefit laws of such other state or country.

2. Preventing the bringing of an action against the insurer for more than six months after the cause of action accrues.

3. Limiting the time within which an action may be brought to a period of less than two years from the time the cause of action accrues in connection with all insurances other than property and marine and transportation insurances. In property and marine and transportation policies such time shall be one year from the date of occurrence of the event resulting in the loss except that an insurer may extend such limitation beyond one year in its policy provisions.

B. Any such condition, stipulation or agreement shall be void, but such voidance shall not affect the validity of the other provisions of the policy.
A.R.S. § 20-481.06 — Arizona Code / Title 20 / Chapter 2 / Article 8 / Section 481.06
20-481.06 Use of other statements
Status: in_force

20-481.06. Use of other statements

If any offer, request, invitation, agreement or acquisition referred to in section 20-481.02 is proposed to be made by means of a registration statement under the securities act of 1933 or in circumstances requiring the disclosure of similar information under the securities exchange act of 1934, or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in section 20-481.02 may use the documents in furnishing the information provided in that statement.
A.R.S. § 20-1301 — Arizona Code / Title 20 / Chapter 6 / Article 3 / Section 1301
20-1301 Scope of article
Status: in_force

20-1301. Scope of article

The provisions of this article apply only to industrial life insurance policies. 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 also apply to industrial life insurance.
A.R.S. § 20-336.04 — Arizona Code / Title 20 / Chapter 2 / Article 3.4 / Section 336.04
20-336.04 Certified application counselors; licensing
Status: in_force

20-336.04. Certified application counselors; licensing

A. An individual who applies for a certified application counselor license shall apply to the director on a form prescribed by the director and shall declare under penalty of license denial, suspension or revocation that the statements made in the application are true, correct and complete to the best of the knowledge and belief of the applicant or the applicant's duly authorized representative. The applicant shall provide information concerning the applicant's identity, personal history, business record and experience in insurance and any other pertinent fact the director requires.

B. Before the director approves an individual's certified application counselor application, the director shall find that the individual:

1. Is at least eighteen years of age.

2. Has not committed any act that is a ground for license denial, suspension or revocation as prescribed in section 20-295 and has not been convicted of a misdemeanor involving fraud or dishonesty.

3. Has met the standards and provided evidence of certification as prescribed by 45 Code of Federal Regulations section 155.225.

4. Has submitted a full set of fingerprints to the director and successfully completed a criminal history records check in a manner prescribed by the director.

5. Has identified the entity with which the individual is affiliated and supervised.

C. The department of insurance and financial institutions shall submit the fingerprints received pursuant to subsection B of this section to the department of public safety for the purpose of obtaining a state and federal criminal records check pursuant to section 41-1750 and Public Law 92-544.  The department of public safety may exchange the fingerprint data it receives pursuant to this subsection with the federal bureau of investigation.

D. Unless the person is licensed for that line of authority pursuant to this title, a certified application counselor may not:

1. Sell, solicit or negotiate insurance in this state for any class or classes of insurance.

2. Recommend, endorse or offer opinions about the benefits, terms and features of a particular health benefit plan or offer an opinion about which health benefit plan is better or worse for a particular individual or employer.

3. Provide any information or services related to a health benefit plan or another product not offered in the exchange.

4. Engage in any unfair method of competition or any fraudulent, deceptive or dishonest act or practice.

E. The expiration date for a certified application counselor license issued to a person who also holds a license pursuant to this title is the same as the expiration date for the insurance producer license.
A.R.S. § 20-631 — Arizona Code / Title 20 / Chapter 3 / Article 4 / Section 631
20-631 Uniform insurers liquidation act
Status: in_force

20-631. Uniform insurers liquidation act

A. Section 20-611, paragraphs 1, 4, 5, 7, 8, 10, 13, 15, 16, 17, 18 and 19 and sections 20-613, 20-614, 20-624, 20-625, 20-626, 20-627, 20-628, 20-629 and 20-630 are and may be cited as the uniform insurers liquidation act.

B. The uniform insurers liquidation act shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states that enact it. To the extent that its provisions when applicable conflict with other provisions of this article the provisions of such act shall control.
A.R.S. § 20-1061 — Arizona Code / Title 20 / Chapter 4 / Article 9 / Section 1061
20-1061 Prohibited practices; definition
Status: in_force

20-1061. Prohibited practices; definition

A. Chapter 2, article 6 of this title relating to unfair trade practices and frauds applies to health care services organizations, except to the extent the director determines that the nature of health care services organizations renders particular provisions inappropriate.

B. A contract between the health care services organization and a health care professional shall not contain a financial incentive plan that includes a specific payment made to or withheld from the health care professional as an inducement to deny, reduce, limit or delay medically necessary care that is covered by the evidence of coverage with an enrollee or group of enrollees for a specific disease or condition.  This section does not prohibit per diem or per case payments, diagnostic related grouping payments or financial incentive plans, including capitation payments or shared risk arrangements, that are not connected to specific medical decisions relating to an enrollee or a group of enrollees for a specific disease or condition. Each health care services organization shall file with its annual report a written statement with the director that certifies that the health care services organization is in compliance with this subsection.

C. Unless preempted under federal law or unless federal law imposes greater requirements than this section, this section applies to a provider sponsored health care services organization.

D. For the purposes of this section, "health care professional" has the same meaning prescribed in section 20-3151.
A.R.S. § 20-2112 — Arizona Code / Title 20 / Chapter 11 / Article 1 / Section 2112
20-2112 Previous adverse underwriting decisions
Status: in_force

20-2112. Previous adverse underwriting decisions

An insurance institution or insurance producer shall not base an adverse underwriting decision in whole or in part:

1. On the fact of a previous adverse underwriting decision or the fact that an individual previously obtained insurance coverage through a residual market mechanism, except that an insurance institution or insurance producer may base an adverse underwriting decision on further information obtained from an insurance institution or insurance producer responsible for a previous adverse underwriting decision.

2. On personal information received from an insurance support organization whose primary source of information is insurance institutions, except that an insurance institution or insurance producer may base an adverse underwriting decision on further personal information obtained as the result of information received from the insurance support organization.
A.R.S. § 20-713 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 713
20-713 Bylaws of mutual insurer
Status: in_force

20-713. Bylaws of mutual insurer

A. The initial board of directors of a domestic mutual insurer shall adopt original bylaws for the government of the corporation and conduct of its business. The bylaws shall be subject to the approval of the insurer's members at the next succeeding annual meeting of members, and no bylaw provision shall thereafter be effective that is not so approved. Bylaws shall be revoked or modified only by vote of the insurer's members at a meeting of which notice was given as provided in the bylaws.

B. The bylaws shall provide that each member of the insurer is entitled to one vote in the election of corporate directors and on all matters coming before membership meetings and that each vote may be exercised in person or by proxy.

C. The insurer shall promptly file with the director of the department of insurance and financial institutions a copy, certified by the insurer's secretary, of the bylaws and of every modification of or addition to the bylaws. The director shall disapprove any bylaw provision deemed by the director to be unlawful, inadequate, unfair or detrimental to the proper interests and protection of the insurer's members or any class of the insurer's members.  The insurer shall not, after receiving written notice of such disapproval and during the existence thereof, effectuate any disapproved bylaw provision.
A.R.S. § 20-730 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 730
20-730 Conversion of mutual insurer to stock insurer
Status: in_force

20-730. Conversion of mutual insurer to stock insurer

A. A domestic mutual insurer may become a domestic stock insurer pursuant to such plan or procedure as is approved in advance by the director.

B. The director shall not approve any such plan or procedure unless:

1. It is equitable to the insurer's members.

2. It is subject to approval by vote of not less than three-fourths of the insurer's current members voting thereon in person, by proxy or by mail at a meeting of members called for the purpose pursuant to such notice and procedure as may be approved by the director. If a life insurer, the right to vote may be limited to members whose policies have face amounts of not less than $1,000 and have been in force one year or more.

3. The equity of each policyholder in the insurer is determinable under a fair formula approved by the director, which shall be based on not less than the insurer's entire surplus, after deducting contributed or borrowed surplus funds, plus a reasonable present equity in its reserves and in all nonadmitted assets.

4. The policyholders entitled to participate in the purchase of stock or distribution of assets include all current policyholders and all existing persons who had been a policyholder of the insurer within three years before the date such plan was submitted to the director.

5. The plan gives to each policyholder of the insurer as specified in paragraph 4 of this subsection a preemptive right to acquire the policyholder's proportionate part of all of the proposed capital stock of the insurer, within a designated reasonable period, and to apply on the purchase thereof the amount of the policyholder's equity in the insurer as determined under paragraph 3 of this subsection.

6. Shares are so offered to policyholders at a price not greater than that thereafter offered to others nor at more than double the par value of the shares.

7. The plan provides for payment to each policyholder not electing to apply the policyholder's equity in the insurer for or on the purchase price of stock to which preemptively entitled, of cash in the amount of not less than fifty percent of the amount of the policyholder's equity not so used for the purchase of stock, and which cash payment together with stock so purchased, if any, shall constitute full payment and discharge of the policyholder's equity as an owner of such mutual insurer.

8. The plan, when completed, would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a domestic stock insurer transacting like kinds of insurance, together with surplus funds in amount not less than one-half of such required capital.
A.R.S. § 20-1550 — Arizona Code / Title 20 / Chapter 6 / Article 8.1 / Section 1550
20-1550 Minimum policyholder position; definitions
Status: in_force

20-1550. Minimum policyholder position; definitions

A. A mortgage guaranty insurer shall maintain at all times a minimum policyholder position in an amount not less than the amount required by this section.  The face amount of an insured mortgage shall include reinsurance assumed and shall be calculated net of reinsurance that is ceded to an insurer either:

1. Authorized to transact insurance or accredited to assume reinsurance in this state.

2. Pursuant to section 20-1557, subsection C.

3. Otherwise approved by the director.

B. If a policy of mortgage guaranty insurance insures individual loans with a percentage claim settlement option on the loans, the insurer shall maintain a minimum policyholder position based on each one hundred dollars of the face amount of an insured mortgage, the percentage coverage or claim settlement option and the loan-to-value category. The required amount of minimum policyholder position is calculated in the following manner:

1. If the total indebtedness is greater than seventy-five per cent of the value of the collateral property at the date of insurance, the following applies:

Minimum policyholder

position per one hundred

Per cent          dollars of the face

coverage            amount of an insured mortgage

5%                     $ .20

10                        .40

15                        .60

20                        .80

25                       1.00

30                       1.10

35                       1.20

40                       1.30

45                       1.35

50                       1.40

55                       1.50

60                       1.55

65                       1.60

70                       1.65

75                       1.75

80                       1.80

85                       1.85

90                       1.90

95                       1.95

100                      2.00

If the per cent coverage is between any five percentage point increment, the factor for minimum policyholder position per one hundred dollars of the face amount of an insured mortgage shall be prorated.

2. If the total indebtedness is at least fifty per cent and not more than seventy-five per cent of the value of the collateral property at the date of insurance, the required amount of minimum policyholder position is fifty per cent of the amount required by paragraph 1 of this subsection.

3. If the total indebtedness is less than fifty per cent of the value of the collateral property at the date of insurance, the required amount of minimum policyholder position is twenty-five per cent of the amount required by paragraph 1 of this subsection.

C. If a policy of mortgage guaranty insurance provides coverage on a pool of loans subject to an aggregate loss limit and if the equity:

1. Is not more than fifty per cent and not less than twenty per cent, or equity plus any prior insurance or a deductible equals twenty-five per cent of the value of the collateral property at the date of insurance, the required amount of minimum policyholder position is calculated as follows:

Minimum policyholder

position per one hundred

Per cent          dollars of the face

coverage            amount of an insured     mortgage

1%                    $ .30

5                       .50

10                       .60

15                       .65

20                       .70

25                       .75

30                       .775

40                       .80

50                       .825

60                       .85

70                       .875

75                       .90

80                       .925

90                       .95

100                1.00

If the per cent coverage is between any specified increment, the factor for minimum policyholder position per one hundred dollars of the face amount of an insured mortgage shall be prorated.

2. Is less than twenty per cent or the equity plus prior insurance or a deductible is less than twenty-five per cent of the value of the collateral property at the date of insurance, the required amount of minimum policyholder position is two hundred per cent of the amount required by paragraph 1 of this subsection.

3. Is more than fifty per cent or the equity plus prior insurance or a deductible is more than fifty-five per cent of the value of the collateral property at the date of insurance, the required amount of minimum policyholder position is fifty per cent of the amount of minimum policyholder position required by paragraph 1 of this subsection.

D. If a policy of mortgage guaranty insurance provides for layers of coverage, deductibles or excess reinsurance, the required amount of minimum policyholder position may be computed by subtracting the required minimum policyholder position for the lower percentage coverage limits from the required minimum policyholder position for the upper or greater coverage limit.

E. If a policy of mortgage guaranty insurance provides for coverage on loans secured by second liens:

1. If the policy provides coverage on individual loans, the required amount of minimum policyholder position is calculated according to subsection B of this section after the per cent of coverage and the loan-to-value ratios have been determined as follows:

(a) Divide the insured portion of the second loan by the entire loan indebtedness on the collateral property to determine the per cent coverage.

(b) Divide the entire loan indebtedness on the property by the value of the collateral property at the date of insurance to determine loan-to-value per cent.

2. If the policy provides coverage on a group of loans subject to an aggregate loss limit, the minimum policyholder position is calculated according to subsection C of this section after the per cent of coverage and the loan-to-value ratios have been determined in accordance with this subsection.

F. If a policy of mortgage guaranty insurance provides for coverage on leases, the minimum policyholder position is four dollars for each one hundred dollars of the insured amount of the lease.

G. Among other remedial actions, the director may require a mortgage guaranty insurer to cease transacting new business until such time as the minimum policyholder position as required by this section is met.

H. A mortgage guaranty insurer shall include with its annual statement a report of its minimum policyholder position on a form approved by the director.

I. For the purposes of this section, except as otherwise provided:

1. "Equity" means the complement of the loan-to-value per cent.

2. "Face amount of an insured mortgage":

(a) Means outstanding principal balance computed without any reduction because of an insurer's option limiting its coverage, except that for the purposes of determining a minimum policyholder position under subsection E "face amount of the mortgage" means the entire loan indebtedness on the property.

(b) Does not include the outstanding principal balance of any indebtedness secured by the subject real property to the extent that the insurer has established a loss reserve for that indebtedness.
A.R.S. § 20-826.03 — Arizona Code / Title 20 / Chapter 4 / Article 3 / Section 826.03
20-826.03 Eosinophilic gastrointestinal disorder; formula
Status: in_force

20-826.03. Eosinophilic gastrointestinal disorder; formula

A. Any contract that is offered by a hospital service corporation or medical service corporation and that contains a prescription drug benefit shall cover amino acid-based formula that is ordered by a physician or a registered nurse practitioner if:

1. The subscriber has been diagnosed with an eosinophilic gastrointestinal disorder.

2. The subscriber is under the continuous supervision of a physician who is licensed pursuant to title 32, chapter 13 or 17 or a registered nurse practitioner who is licensed pursuant to title 32, chapter 15.

3. There is risk of a mental or physical impairment without the use of the formula.

B. A hospital service corporation or medical service corporation shall cover at least seventy-five per cent of the cost of the formula. The hospital service corporation or medical service corporation may limit the maximum annual benefit for formula under this section to twenty thousand dollars.

C. This section does not apply to limited benefit coverage as defined in section 20-1137.
A.R.S. § 20-394 — Arizona Code / Title 20 / Chapter 2 / Article 4.1 / Section 394
20-394 Examination of rate service organizations and joint underwriting and joint reinsurance organizations
Status: in_force

20-394. Examination of rate service organizations and joint underwriting and joint reinsurance organizations

The director, as often as considered necessary, may examine each rate service organization, each advisory organization and each group, association or other organization filing pursuant to section 20-391. The director shall examine only those activities conducted pursuant to this article. The director may examine the officers, manager, agents and employees of such organizations at any time under oath.  The organization examined shall pay the reasonable costs of the examination upon presentation to it of a detailed account of the costs.  The organization examined shall exhibit all books, records, accounts, documents or agreements governing its method of operation. In lieu of the examination the director may accept the report of an examination made by the insurance supervisory official of another state, pursuant to the laws of such state.
A.R.S. § 20-237 — Arizona Code / Title 20 / Chapter 2 / Article 1 / Section 237
20-237 Failure to provide information; penalty
Status: in_force

20-237. Failure to provide information; penalty

If after a hearing and certification by the department of transportation the director of the department of insurance and financial institutions finds that an insurer has failed to comply with section 28-4148, the director of the department of insurance and financial institutions shall impose a civil penalty for each violation of not more than $250 per day for each day the insurer is in violation of section 28-4148. The director of the department of insurance and financial institutions also may suspend the insurer's certificate of authority until the insurer complies with section 28-4148. No penalty shall be imposed pursuant to this section if noncompliance is determined by the director of the department of insurance and financial institutions to have been inadvertent or accidental. The burden of proving that the noncompliance was inadvertent or accidental shall be on the insurer.
A.R.S. § 20-875 — Arizona Code / Title 20 / Chapter 4 / Article 4 / Section 875
20-875 Benefits
Status: in_force

20-875. Benefits

A. A fraternal benefit society may provide the following contractual benefits in any form:

1. Death benefits.

2. Endowment benefits.

3. Annuity benefits.

4. Temporary or permanent disability benefits.

5. Hospital, medical or nursing benefits.

6. Monument or tombstone benefits to the memory of deceased members.

7. Any other benefits that are authorized for life insurers and that are not prescribed by this article.

B. A society shall specify by rule those persons who may be issued or covered by the contractual benefits prescribed by subsection A. The rules shall be consistent with providing benefits to members and dependents of members. On the application of an adult member, a society may provide benefits on the lives of children who are under the minimum age for adult membership.

C. Any benefit or combination of benefits authorized by this section may be provided in the same certificate, and the certificates may be participating.
A.R.S. § 20-331 — Arizona Code / Title 20 / Chapter 2 / Article 3.3 / Section 331
20-331 Rental car agents; definitions
Status: in_force

20-331. Rental car agents; definitions

A. The director may issue to a rental company that has complied with the requirements of this section a license that authorizes the rental company as a rental car agent to offer or sell insurance in connection with and incidental to rental agreements. Notwithstanding section 20-290, subsection B, a rental car agent is not required to have an individual licensee in each office or other rental site or place where insurance is transacted.

B. An applicant for a rental car agent license shall file with the director a written application that is in a form prescribed by the director and that is signed by an officer of the applicant. The application shall specify all locations at which the licensee may conduct business under the license. The licensee shall provide the director at least thirty days' prior notice before conducting business under the license at any additional location.

C. A rental car agent may offer or sell insurance at the rental company office or other rental site or process a preselection of coverage in a master, corporate, group or individual rental agreement for any of the following kinds or types of insurance, separately or in combination:

1. Accident and health or sickness insurance that provides coverage, as applicable, to renters and other rental vehicle occupants for accidental death or dismemberment and reimbursement for medical expenses that result from an accident that occurs during the rental period.

2. Liability insurance that provides coverage, as applicable, to renters and other authorized drivers of rental vehicles for liability that arises from the operation of the rental vehicles, including uninsured and underinsured motorist coverage separately or in combination with other liability insurance.

3. Personal property insurance that provides coverage, as applicable, to renters and other vehicle occupants for the loss of or damage to personal effects that occurs during the rental period.

4. Vehicle breakdown coverage.

5. Physical damage insurance that provides coverage to renters and other authorized drivers of rental vehicles for property damage liability that arises from the operation of the vehicle.

D. A rental car agent is not subject to the continuing education requirements of chapter 18 of this title.

E. A rental car agent shall not offer or sell insurance pursuant to this section unless:

1. The rental period of the rental agreement is ninety consecutive days or less.

2. The rental car agent provides brochures or other written materials to the prospective renter that:

(a) Summarize the material terms and conditions of coverage offered to renters, including the identity of the insurer.

(b) Describe the process for filing a claim.

3. The rental car agent makes the following disclosures to the renter and the renter acknowledges the disclosures in writing:

(a) That the insurance policies offered by the rental car agent may provide a duplication of coverage already provided by a renter's personal automobile insurance policy or by another source of coverage.

(b) That the purchase by the renter of the kinds of insurance prescribed in this section is not required in order to rent a vehicle.

4. Evidence of coverage is stated on the face of the rental agreement.

5. Costs for the insurance are separately itemized in the rental agreement.

6. The insurance is provided under a group or master policy issued to the rental company by an insurer authorized to transact the applicable kinds or types of insurance in this state or by a surplus lines insurer in accordance with article 5 of this chapter.

F. Any salaried employee of a rental car agent may act on behalf and under the supervision of the rental car agent in matters relating to the conduct of business under the license issued pursuant to this section. The conduct of an employee or agent of a rental car agent acting within the scope of employment or agency is deemed the conduct of the rental car agent for purposes of this article.

G. Each rental car agent licensed pursuant to this section shall conduct a training program that provides employees and agents of the rental company with basic instruction about the provisions of this section, including the kinds of coverage prescribed in this section.

H. A rental car agent shall not:

1. Offer or sell insurance except in conjunction with and incidental to rental agreements.

2. Advertise, represent or otherwise portray itself or any of its employees or agents as licensed insurers or insurance producers.

3. Pay any person any compensation, fee or commission dependent on the placement of insurance under the license issued pursuant to this section.

I. Nothing in this section prohibits production payments or incentive payments to an employee if the payments are not dependent on the sale of insurance.

J. To the extent not inconsistent with this article, section 20-281, section 20-286, subsections B, C and D, sections 20-289 and 20-289.01, section 20-290, subsection A and sections 20-291, 20-292, 20-295, 20-296, 20-297, 20-298, 20-299, 20-301 and 20-302 apply to rental car agents.

K. For the purposes of this section:

1. "Rental agreement" means any written agreement that states the terms and conditions that govern the use of a vehicle provided by the rental company for rent or lease for a rental period of ninety days or less.

2. "Rental car agent" means a rental company that is licensed pursuant to this section.

3. "Rental company" means any firm or corporation in the business of renting vehicles to renters under a rental agreement.

4. "Rental period" means the term of the rental agreement.

5. "Rental vehicle" or "vehicle" means a motor vehicle operated by a driver who is not required to possess a commercial driver license to operate the motor vehicle and the motor vehicle is either:

(a) A private passenger motor vehicle, including a passenger van, minivan or sport utility vehicle.

(b) A cargo vehicle, including a cargo van, pickup truck and truck with a gross vehicle weight of less than twenty-six thousand pounds.

6. "Renter" means any person who obtains the use of a vehicle from a rental company under the terms of a rental agreement.
A.R.S. § 20-292 — Arizona Code / Title 20 / Chapter 2 / Article 3 / Section 292
20-292 Violation; injunctive relief
Status: in_force

20-292. Violation; injunctive relief

If the director has cause to believe that any person is violating or about to violate section 20-282, 20-298, 20-311.01, 20-321.01, 20-331, 20-331.01, 20-332, 20-340.01 or 20-411, the director may order the person to cease and desist and, through the attorney general, may cause a complaint to be filed in the superior court in Maricopa county to enjoin and restrain the person from continuing the violation, engaging in the violation or doing any act in furtherance of the violation.  If the director orders the person to cease and desist, the person may file a notice of appeal and may appeal any final order pursuant to title 41, chapter 6, article 10.  If the director, through the attorney general, causes a complaint to be filed, the superior court in Maricopa county has jurisdiction of the proceeding and may make and enter an order or judgment awarding the preliminary or final relief as in its judgment is proper.
A.R.S. § 20-3456 — Arizona Code / Title 20 / Chapter 27 / Article 1 / Section 3456
20-3456 Covered services; claims; payment; disclosure
Status: in_force

20-3456. Covered services; claims; payment; disclosure

A. A provider may receive payment from a health insurer pursuant to this section for services that were provided from the date that was included on the notice of complete credentialing application to the date the provider's network participation contract is executed. A health insurer shall process a provider's claim as an in-network claim and pay the claim if all of the following apply:

1. The provider has applied for credentialing with the health insurer and renders a covered service to an individual who is an eligible health plan member on the date of service.

2. The provider renders the service on or after the date on which the health insurer notified the provider that the application was a complete credentialing application.

3. The provider does not submit the claim until after the provider has a fully executed network participation contract with the health insurer for the member's health plan network and the health insurer has approved the provider's credentials.

B. If a claim is submitted within one year after the date of service, a health insurer may not deny a provider's claim that is submitted in compliance with this section on the basis that the claim was not submitted within the contractually required time period.

C. This section does not require a health insurer to reimburse the applicant at the in-network rate for any covered medical services provided by the applicant if the applicant's credentialing application is not approved or the health care provider is unwilling to contract with the insurer on mutually acceptable terms.

D. Within a reasonable period before a health care provider provides service to a patient in a network facility, a health care provider or the health care provider's representative shall provide a written, dated disclosure that informs the patient of all of the following:

1. The name of the billing health care provider.

2. The total estimated cost to be billed by the health care provider or the health care provider's representative.

3. A statement that the health care provider is not credentialed and is not a contracted provider.
A.R.S. § 20-450 — Arizona Code / Title 20 / Chapter 2 / Article 6 / Section 450
20-450 Practices not prohibited as discrimination or rebates in life and disability insurance; wellness programs; definition
Status: in_force

20-450. Practices not prohibited as discrimination or rebates in life and disability insurance; wellness programs; definition

A. Section 20-448 or 20-449 does not include within the definition of discrimination or rebates any of the following practices:

1. In the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating policyholders' premiums in whole or part out of surplus accumulated from nonparticipating insurance, but any such bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interests of the insurer and its policyholders.

2. In the case of life insurance policies issued on the industrial debit plan, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer in an amount that fairly represents the saving in collection expense.

3. Readjustment of the rate of premium for a group insurance policy based on the loss or expense experience thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for that policy year.

4. Issuing life or disability policies on a salary savings or payroll deduction plan at a reduced rate commensurate with the savings made by the use of the plan.

5. Payments of implementation credits a life insurer, disability insurer or service corporation makes to offset expenses that a group policyholder incurs when the group policyholder initiates or changes new or existing group coverage. The life insurer, disability insurer or service corporation may either:

(a) Include implementation credits in the premium charged a policyholder and then reimburse the policyholder.

(b) Pay for the implementation credits and provide appropriate disclosure in the group policy.

B. Sections 20-448 and 20-452 do not prohibit any person from providing or offering to provide:

1. In the case of group disability insurance, rewards or incentives under a wellness program that satisfies the requirements for an exception from the general prohibition against discrimination based on a health factor under the health insurance portability and accountability act of 1996 (P.L. 104-191; 110 Stat. 1936), including any federal regulations that are adopted pursuant to that act.

2. In the case of individual disability insurance, rewards or incentives under a wellness program that satisfies the equivalent of the requirements for an exception from the general prohibition against discrimination based on a health factor under the health insurance portability and accountability act of 1996 (P.L. 104-191; 110 Stat. 1936), including any federal regulations that are adopted pursuant to that act.

3. Products or services that are ancillary or related to any policy of life or disability insurance and that are intended to minimize or prevent claims-related losses or expenses, to deter injury or death or to improve the health or enhance the financial wellness of the insured.

4. Payments of implementation credits a life insurer, disability insurer or service corporation makes to offset expenses that a group policyholder or employer incurs when the group policyholder initiates or changes new or existing group coverage. The life insurer, disability insurer or service corporation may either:

(a) Include implementation credits in the premium charged a policyholder and then reimburse the policyholder. The life insurer, disability insurer or service corporation shall disclose to the policyholder whether implementation credits were included in the premium.

(b) Pay for the implementation credits and provide appropriate disclosure in the group policy.

C. For the purposes of this section, "life insurance" includes disability income policies and supplemental benefit policies.
A.R.S. § 20-1110 — Arizona Code / Title 20 / Chapter 5 / Article 1 / Section 1110
20-1110 Approval of forms; definition
Status: in_force

20-1110. Approval of forms; definition

A. Any life or disability insurance policy form, life or disability insurance application form where written application is required and is to be made a part of the policy and printed rider or endorsement form shall not be delivered or issued for delivery in this state by a life or disability insurer unless it has been filed with and approved by the director.  The director may also require that proof of death or loss forms shall be filed with and approved by the director.

B. This section shall not apply to policies, riders, endorsements or forms of unique character designed and used for insurance on a particular subject, or that relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or disability insurance policies, and are used at the request of the individual policyholder, contract holder or certificate holder.

C. Every form filing shall be made not less than thirty days in advance of any delivery.  The form is approved thirty days after filing unless the director, within the thirty day period, has issued an order affirmatively approving or disapproving the form. The director may extend by not more than an additional fifteen days the period for review of the form, by giving notice of the extension before expiration of the initial thirty day period. The director may at any time, after notice and for cause shown, withdraw the director's approval. This subsection also applies to contracts and policy forms filed with the department under section 20-826, subsection A by a corporation holding a certificate of authority under chapter 4, article 3 of this title. This subsection does not apply to contracts or policy forms issued by a hospital service corporation, medical service corporation or hospital and medical service corporation pursuant to section 20-1063.

D. Any order of the director disapproving the form or withdrawing a previous approval shall state the reasons for the action.

E. A life or disability insurer shall not issue or deliver any advertising matter or sales material to any person in this state until the life or disability insurer files the advertising matter or sales material with the director.  This subsection does not require a life or disability insurer to have the prior approval of the director to issue or deliver the advertising matter or sales material. If the director finds that the advertising matter or sales material, in whole or in part, is false, deceptive or misleading, the director may issue an order disapproving the advertising matter or sales material, directing the life or disability insurer to cease and desist from issuing, circulating, displaying or using the advertising matter or sales material within a period of time specified by the director but not less than ten days and imposing any penalties prescribed in this title.  At least five days before issuing an order pursuant to this subsection, the director shall provide the life or disability insurer with a written notice of the basis of the order to provide the life or disability insurer with an opportunity to cure the alleged deficiency in the advertising matter or sales material within a single five day period for the particular advertising matter or sales material at issue. The life or disability insurer may appeal the director's order pursuant to title 41, chapter 6, article 10. Except as otherwise provided in this subsection, a life or disability insurer may obtain a stay of the effectiveness of the order as prescribed in section 20-162. If the director certifies in the order and provides a detailed explanation of the reasons in support of the certification that continued use of the advertising matter or sales material poses a threat to the health, safety or welfare of the public, the order may be entered immediately without opportunity for cure and the effectiveness of the order is not stayed pending the hearing on the notice of appeal but the hearing shall be promptly instituted and determined.

F. The director, by order, may exempt from the requirements of this section for so long as the director deems proper any insurance document, advertisement or form as specified in the order, to which, in the director's opinion, this section may not practicably be applied, or the filing and approval of which are, in the director's opinion, not desirable or necessary for the protection of the public.

G. This section shall apply also to any form used by domestic insurers for delivery in a jurisdiction outside this state, if the insurance supervisory official of that jurisdiction informs the director that the form is not subject to approval or disapproval by that official, and on the director's order requiring the form to be submitted to the director for the purpose. The applicable same standards shall apply to these forms as apply to forms for domestic use.

H. For the purposes of this section and sections 20-826, 20-1018 and 20-1057, advertising matter and sales material do not include any of the following materials listed in this subsection, which are not required to be filed:

1. Materials that are designed solely to increase public awareness of an insurer's name, trademarks, service marks, slogan or brand and that do not reference specific products or benefits offered by the insurer.

2. Materials that are designed for and distributed only to large group benefit administrators and their brokers and that are not intended for distribution to group members.

3. Web pages and other materials that are published exclusively to guide current members about use of already purchased products.

4. Social media sites and social media content that do not reference products or benefits offered by the insurer or include a call to action.

5. Web banner advertisements, paid social media posts and online search engine advertisements that either do not link to advertising matter and sales material or, if linked to such content, link only to content that is filed in accordance with this section and that meets one of the following criterion:

(a) Do not reference specific products offered by the insurer.

(b) Are less than one hundred characters.

6. Educational materials that are designed to increase consumers' health insurance literacy and that do not include a call to action or reference a specific insurer, other than as the source or author of the materials.

7. Other materials and advertisements specified by the department in rule or by exemption order.

I. For the purposes of subsections H and J of this section, "insurer" means disability insurer, group disability insurer, blanket disability insurer, fraternal benefit society, prepaid dental plan organization, hospital service corporation, medical service corporation, dental service corporation, optometric service corporation and health care service organization.

J. For the purposes of this section, "call to action" means a statement or other content that invites a consumer to respond by contacting the insurer by phone, letter, e-mail or other electronic communication or attending an event so that the insurer can attempt to sell the individual a product or service.
A.R.S. § 20-153 — Arizona Code / Title 20 / Chapter 1 / Article 2 / Section 153
20-153 Records
Status: in_force

20-153. Records

A. Records of all official transactions, examinations, investigations and proceedings of the department shall be open to public inspection pursuant to section 39-121, except as otherwise provided in this title.

B. The director may destroy records pursuant to sections 41-151.15 and 41-151.19.
A.R.S. § 20-340.01 — Arizona Code / Title 20 / Chapter 2 / Article 3.5 / Section 340.01
20-340.01 Bail bond agents; licensure; business entities; place of business; receipt; maintenance of records
Status: in_force

20-340.01. Bail bond agents; licensure; business entities; place of business; receipt; maintenance of records

A. A person shall not act as a bail bond agent in this state unless the person is licensed by the director in accordance with this article.  An applicant for a bail bond agent license shall submit an affidavit attesting to the applicant's residency in this state for at least one year immediately preceding the date of application.

B. Each applicant for a bail bond agent license shall submit a full set of fingerprints to the department of insurance and financial institutions for the purpose of obtaining a state and federal criminal records check pursuant to section 41-1750 and Public Law 92-544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation. The department of insurance and financial institutions shall not issue a license until it receives the state and federal criminal history records check and the applicant is qualified for licensure.

C. The director shall not license a resident business entity as a bail bond agent unless each owner and shareholder is individually licensed as a bail bond agent.

D. A person who is licensed as a bail bond agent in this state is not authorized in this state to transact civil bonds in connection with contracts, administrative proceedings or other noncriminal matters on behalf of a surety insurer unless the bail bond agent is also licensed as a casualty producer in this state.

E. Each bail bond agent shall have and maintain a place of business in this state that is accessible to the public and where the bail bond agent principally conducts transactions under the agent's license.

F. As a minimum requirement for permanent office records, each bail bond agent and general lines agent who is engaged in the bail bond business shall maintain a daily bond register that is the original and permanent record of all bonds or undertakings executed by the licensee and that states all of the following:

1. The number of the power of attorney form.

2. The date the bond was executed.

3. The name of the principal.

4. The amount of the bond.

5. The premium charged.

6. The premium reported to the surety company.

7. The security or collateral received.

8. The date the security or collateral was received and the date released.

9. The indemnity agreements.

10. The disposition of the bond.

11. The date of disposition.

G. Each bail bond agent and general lines agent who is engaged in the bail bond business and who accepts monies or any other consideration for any bail bond undertaking shall for each payment received give to the person paying the monies or giving the consideration a prenumbered receipt as evidence of payment. The receipt must state the date, the name of the principal, a description of the consideration or amount of monies received and the purpose for which received, the number of the power of attorney form attached to the bond, the penal sum of the bond, the name of the person making the payment or giving the consideration and the terms under which the monies or other consideration shall be released. Each bail bond agent shall retain a duplicate copy of each receipt issued as part of the agent's records.

H. The bail bond agent shall keep at the agent's place of business the usual and customary records pertaining to transactions made under the license.  The licensee shall keep all the records as to any particular transaction available and open to the inspection of the director at any business time during the three years immediately after the date of completion of the transaction.

I. The director may examine the business practices, books and records of any bail bond agent as often as the director deems appropriate.  The bail bond agent shall pay the costs incurred for the examination.
A.R.S. § 20-481.27 — Arizona Code / Title 20 / Chapter 2 / Article 8 / Section 481.27
20-481.27 Recovery; liability
Status: in_force

20-481.27. Recovery; liability

A. If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under that order has a right to recover on behalf of the insurer from any parent corporation, holding company or person or affiliate that otherwise controlled the insurer the amount of distributions, other than distributions of shares of the same class of stock, paid by the insurer on its capital stock or to recover any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the insurer or its subsidiary to a director, officer or employee if the distribution or payment is made at any time during the year preceding the petition for liquidation, conservation or rehabilitation, subject to the limitations of subsections B, C and D.

B. No distribution is recoverable if the parent or affiliate shows that when paid the distribution was lawful and reasonable and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.

C. A person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time the distributions were paid is liable up to the amount of the distributions or payments the person received. A person who otherwise controlled the insurer at the time the distributions were declared is liable up to the amount of distributions he would have received if they had been paid immediately. If two or more persons are liable with respect to the same distributions, they are jointly and severally liable.

D. The maximum amount recoverable under this section is the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.

E. To the extent that a person liable under subsection C is insolvent or otherwise fails to pay claims due from it, its parent corporation or holding company or a person who otherwise controlled it at the time the distribution was paid is jointly and severally liable for a resulting deficiency in the amount recovered from the parent corporation or holding company or person who otherwise controlled it.
A.R.S. § 20-452 — Arizona Code / Title 20 / Chapter 2 / Article 6 / Section 452
20-452 Prohibited inducements
Status: in_force

20-452. Prohibited inducements

A. Except as allowed in subsection B of this section and sections 20-453 and 20-454, any insurer, insurance producer or other person, as an inducement to insurance or in connection with any insurance transaction, shall not provide in any policy for or offer, sell, buy or offer or promise to buy, sell, give, promise or allow to the insured or prospective insured or to any other person on behalf of the insured or prospective insured in any manner:

1. Any employment.

2. Any shares of stock or other securities issued or at any time to be issued or any interest therein or rights thereto.

3. Any advisory board contract, or any similar contract, agreement or understanding, offering, providing for or promising any special profits.

4. Any prizes, goods, wares, merchandise or tangible property of an aggregate value of more than $100. This paragraph does not prohibit an insurer from retaining an independent third party to conduct a customer feedback effort intended to help the insurer improve the quality of its products or services and to offer an insured business or individual a reasonable incentive to participate in the feedback effort.  An incentive is presumed reasonable if it does not exceed $200. An insurer may not offer, reference or promote an incentive or feedback effort under this paragraph in connection with an application for or renewal of insurance coverage. For the purposes of this paragraph, "feedback effort" means activities that are designed to elicit customer perceptions on a predetermined set of topics that are related to the insurer's products or services, including in-person, telephonic or online surveys, polls, focus groups, interviews, questionnaires and other recognized opinion-gathering mechanisms.

B. An insurer, insurance producer or other person may offer or provide products or services that are ancillary or related to any insurance coverage and that are intended to minimize or prevent claims-related losses or expenses or harm to the public, including fire or smoke detectors, risk audits or assessments and products or services to deter injury, death or property theft or damage. The products and services that may be offered or provided in this subsection are exempt from the prohibitions set forth in subsection A of this section.
A.R.S. § 20-114 — Arizona Code / Title 20 / Chapter 1 / Article 1 / Section 114
20-114 Violations; classification
Status: in_force

20-114. Violations; classification

In addition to any other penalty applicable thereto, either under this title or otherwise, violation of any provision of this title is a class 2 misdemeanor and shall be punishable as such where no other penalty is provided therefor.
A.R.S. § 20-684 — Arizona Code / Title 20 / Chapter 3 / Article 7 / Section 684
20-684 Life and disability insurance guaranty fund board; composition; compensation
Status: in_force

20-684. Life and disability insurance guaranty fund board; composition; compensation

A. Subject to the powers of the director, the life and disability insurance guaranty fund shall be administered by a board of eleven members. Each member of the board shall serve for a term of three years. Of the members first appointed, three shall serve for terms of one year, three shall serve for terms of two years and three shall serve for terms of three years.

B. The members of the board shall be appointed by the governor from a list of persons submitted to the governor by the director of the department of insurance and financial institutions.  In submitting selections for the board, the director shall consider whether all member insurers are fairly represented.

C. Members of the board are not entitled to receive compensation and travel expenses as authorized by title 38, chapter 4, article 2 but are entitled to be reimbursed for expenses incurred by them as members of the board from the assets of the fund.
A.R.S. § 20-228 — Arizona Code / Title 20 / Chapter 2 / Article 1 / Section 228
20-228 Exemption of insurers from general corporation reports and fees
Status: in_force

20-228. Exemption of insurers from general corporation reports and fees

Notwithstanding any other statute, no authorized insurer or surplus line insurer is required to file with the corporation commission the annual report required of corporations by section 10-1622 or the certificate of disclosure required of corporations which are exempt from filing an annual report by section 10-1622 or the statement of bankruptcy required by section 10-1623 from corporations filing for bankruptcy. Such an insurer is exempt from filing the annual report, from filing the certificate of disclosure and from payment of the annual registration fee required by section 10-1622 and from the annual report fee required by section 10-122.
A.R.S. § 20-1095 — Arizona Code / Title 20 / Chapter 4 / Article 11 / Section 1095
20-1095 Definitions
Status: in_force

20-1095. Definitions

In this article, unless the context otherwise requires:

1. "Consumer":

(a) Means a buyer other than for purposes of resale of any consumer product, any person to whom the product is transferred during the duration of an implied or written warranty or service contract applicable to the product and any other person who is entitled by the terms of the warranty or service contract or under applicable federal or state law to enforce against the warrantor or service company the obligations of the warranty or service contract.

(b) Includes a buyer, owner, lessor, lessee or seller of residential property.

2. "Consumer product" means any property that is distributed in commerce, that is normally used for personal, family or household purposes, including any such property intended to be attached to or installed in any real property without regard to whether it is so attached or installed, and that becomes part of the intended usefulness of real property or that is typically transferred with real property as an integral functioning utility appliance or system.

3. "Home warranty or home protection contract" means a service contract as defined in paragraph 7, subdivision (b), item (i) of this section.

4. "Mechanical reimbursement insurance" means an insurance policy issued to an obligor to either provide reimbursement to the obligor under the terms of the insured service contracts issued or sold by the obligor or, in the event of the obligor's nonperformance, to pay on behalf of the obligor all covered contractual obligations incurred by the obligor under the terms of the insured service contracts issued or sold by the obligor.

5. "Residential property" means a house, townhouse, condominium or other habitable structure that is used principally as a residence.

6. "Service company" or "obligor" means any person that is contractually obligated to the contract holder under the terms of the service contract. Service company does not include a service contract administrator or seller if the person is not contractually obligated to the contract holder under the terms of the service contract.

7. "Service contract":

(a) Means a written contract or agreement for a separately stated consideration for any duration to perform, in whole or in part, the repair, replacement or maintenance, or indemnification for repair, replacement or maintenance, for the operational or structural failure of a consumer product due to a defect in materials, workmanship, accidental damage from handling, a power surge or interruption or normal wear and tear, with or without additional provisions for payment of indemnity including towing, rental and emergency road service, road hazard protection or roof leak.

(b) Includes a contract or agreement that is sold for a separately stated consideration for any duration and that provides for any of the following:

(i) The service, maintenance or repair, including replacement, of all or any part of structural components, appliances, electrical, plumbing, heating, cooling or air conditioning systems of residential property or indemnification for the service, maintenance, repair or replacement.

(ii) The repair or replacement of tires or wheels on a motor vehicle damaged as a result of coming into contact with road hazards including potholes, rocks, wood debris, metal parts, glass, plastic, curbs or composite scraps.

(iii) The removal of dents, dings or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding or painting.

(iv) The replacement of a motor vehicle key or key fob if the key or key fob becomes inoperable or is lost or stolen.

(v) Other services or products approved by the director.

8. "Service contract administrator" means a person who is responsible for the administration of the service contracts or the service contracts plan or who is responsible for any submission required under this article.

9. "Warranty" means:

(a) Any written affirmation by a manufacturer or seller of fact or written promise made in connection with the sale of a consumer product that relates to the nature of the material or workmanship and affirms or promises that the material or workmanship is free of defects or will meet a specified level of performance over a specified period of time.

(b) Any undertaking by a manufacturer or seller in writing in connection with the sale of a consumer product to refund, repair, replace or take other remedial action with respect to such a product if the product fails to meet the specifications set forth in the undertaking, which written affirmation, promise or undertaking becomes part of the basis of the bargain for purposes other than resale of such product and if there is no separate identifiable charge to the consumer.
A.R.S. § 20-486.09 — Arizona Code / Title 20 / Chapter 2 / Article 10 / Section 486.09
20-486.09 Examination authority
Status: in_force

20-486.09. Examination authority

A. A reinsurance intermediary is subject to examination by the director. The director shall have access to all books, bank accounts and records of the reinsurance intermediary in a form usable to the director.

B. A reinsurance intermediary manager may be examined as if it is the reinsurer.
A.R.S. § 20-1096.06 — Arizona Code / Title 20 / Chapter 4 / Article 12 / Section 1096.06
20-1096.06 Filing of cash or alternatives to cash
Status: in_force

20-1096.06. Filing of cash or alternatives to cash

A. To assure faithful performance of its reinsurance obligations each mechanical reimbursement reinsurer shall, prior to the issuance of a certificate of authority, file with or for the benefit of the director cash or alternatives to cash which at all times have a value of at least one hundred thousand dollars.

B. The reinsurer may file alternatives to cash which shall be certificates of deposit purchased from a financial institution licensed to conduct business in this state or bonds of the United States government.

C. If alternatives to cash are made in the form of certificates of deposit or a bond, it shall be irrevocably pledged to the director. The reinsurer is entitled to any accrued interest earned from the alternatives to cash.
A.R.S. § 20-1691.07 — Arizona Code / Title 20 / Chapter 6 / Article 15 / Section 1691.07
20-1691.07 Right to return
Status: in_force

20-1691.07. Right to return

A. A person insured under a long-term care insurance policy or certificate shall have the right to return the policy or certificate within thirty days of its delivery and to have the premium refunded if, after examination, the insured person is not satisfied for any reason. Long-term care insurance policies or certificates shall have a notice prominently printed on or attached to the first page stating in substance that the insured person shall have the right to return the policy or certificate within thirty days of its delivery and to have the premium refunded if after examination the insured person is not satisfied for any reason.

B. The insurer shall return any premium refund made pursuant to this section to the insured within thirty days of the insurer's receipt of the returned long-term care insurance policy or certificate.
A.R.S. § 20-1655 — Arizona Code / Title 20 / Chapter 6 / Article 12 / Section 1655
20-1655 Liability of insurer and representatives for statements in notice of cancellation, other communication or evidence given in court relating to cancellation
Status: in_force

20-1655. Liability of insurer and representatives for statements in notice of cancellation, other communication or evidence given in court relating to cancellation

There shall be no liability on the part of, and no cause of action of any nature shall arise against, any insurer or its authorized representatives, agents or employees, or any licensed insurance producer, for any statement made, unless shown to have been made in bad faith with malice in any of the following:

1. Written notice of cancellation or nonrenewal or in any other oral or written communication specifying the reasons for cancellation or nonrenewal.

2. Communication providing information pertaining to such cancellation or nonrenewal.

3. Evidence submitted at any court proceeding or informal inquiry in which such cancellation or nonrenewal is an issue.
A.R.S. § 20-2116 — Arizona Code / Title 20 / Chapter 11 / Article 1 / Section 2116
20-2116 Cease and desist order and reports
Status: in_force

20-2116. Cease and desist order and reports

If, after a hearing, the director determines that the insurance institution, insurance producer or insurance support organization charged has engaged in conduct or practices in violation of this chapter, the director shall put the director's findings in writing and shall issue and cause to be served upon the insurance institution, insurance producer or insurance support organization a copy of the findings and an order requiring the insurance institution, insurance producer or insurance support organization to cease and desist from the conduct or practices constituting a violation of this chapter.
A.R.S. § 20-1808 — Arizona Code / Title 20 / Chapter 8 / Article 1 / Section 1808
20-1808 Ratio of assets to liabilities; report; rehabilitation of provider
Status: in_force

20-1808. Ratio of assets to liabilities; report; rehabilitation of provider

A. The provider shall possess assets in the first year of operation equal to at least seventy-five percent of the unamortized endowment fees plus all other liabilities including long-term debt. The unamortized endowment fees shall be based on life expectancy of purchasers.  Thereafter, the provider shall at all times possess assets in an amount sufficient to assure full performance of the obligations of the provider pursuant to life care contracts including any reserve fund escrow required by the director pursuant to section 20-1806.

B. If revenues or funds including reserves are inadequate or projected to be inadequate pursuant to the annual report or an actuarial report or if the provider does not meet the requirements of subsection A of this section, the director may employ an independent management consultant experienced in the operation of life care facilities, at the expense of the provider, who shall examine the financial structure and operations of the provider and make recommendations on remedial action to the director. The director shall not be bound by such recommendations.

C. If at any time the director receives notice from the escrow agent that section 20-1806 has not been complied with, if at any other time when the director has reason to believe that the provider is in a financially unsound or unsafe condition or that its condition is such that it may otherwise be unable to fully perform its obligations pursuant to life care contracts, if the provider fails to implement the director's recommendations as a result of a management consultant's report or if it is obvious to the director that to obtain the services of a financial consultant under subsection B of this section would be futile, the director, through the attorney general, shall apply to the superior court in the county in which the provider's facility is located for an order directing the director to assume management and possession of the provider's facility and to rehabilitate the provider to enable it to fully perform its obligation pursuant to life care contracts. The court shall act on the application on notice to the provider, and any objection to the petition shall be filed with the court within the time prescribed by such notice.

D. If the court on hearing finds that the provider is in a financially unsound or unsafe condition or that its condition is such that it may otherwise be unable to fully perform its obligations pursuant to life care contracts, the court shall issue an order directing the director to take possession of the property of the provider and to conduct the business thereof, and to take such steps toward removal of the causes and conditions that have made rehabilitation necessary, as the court may direct. The order shall include a provision directing the issuance of a notice of the rehabilitation proceedings to the residents at such facility, to the provider's contract holders and to such other interested persons as the court shall direct.

E. Appointment of the director to rehabilitate a provider shall authorize the director to:

1. Take possession of and preserve, protect and recover any assets, books and records or property of the provider, including claims or causes of action that belong to or that may be asserted by the provider, and to deal with such property in the director's name in the capacity as director, and purchase at any sale any real estate or other asset on which the provider may hold any lien or encumbrance or in which it may have an interest.

2. File, prosecute and defend or compromise any suit or suits that have been filed or that may thereafter be filed by or against the provider and that are deemed by the director to be necessary to protect the provider or the residents or contract holders or any property affected thereby.

3. Take possession of and deposit and invest any of the provider's available funds.

4. Pay all expenses of the rehabilitation.

5. Exercise such other powers and duties as may be provided by order of the court.

6. Appoint managers, supervisors or employees necessary to properly manage and operate the provider and the provider's facility.

7. Take possession of and, with the prior approval of the court, sell, exchange, lease, mortgage or otherwise dispose of any property of the provider by public sale, bidding or otherwise.

8. With the prior approval of the court, borrow money with or without security for the purpose of facilitating the rehabilitation of the provider.

9. Perform all duties of the provider.

10. Reject any executory contract to which the provider is a party.

11. Withdraw any sums remaining in the escrow account established pursuant to section 20-1806 for the purpose of rehabilitating the provider's facility.

F. The court may at any time during a rehabilitation proceeding issue such other instructions or orders as are deemed necessary to aid the director in the rehabilitation proceeding.

G. The director, or any interested person on due notice to the director, at any time may apply to the court for an order terminating the rehabilitation proceedings and allowing the provider to resume possession of its property and the conduct of its business, but no such order shall be granted except when, after a full hearing, the court has determined that the purposes of the proceeding have been fully accomplished and that the facility can be returned to the provider's management without further jeopardy to the residents of the facility, creditors, owners of the facility and the public. An order terminating the rehabilitation proceeding shall be based on a full report and accounting by the director of the conduct of the provider's officers during the rehabilitation and of the provider's current financial condition.

H. If at any time the director deems that further efforts to rehabilitate the provider would be useless, the director may report to the court and apply for an order of liquidation and dissolution pursuant to title 10, chapter 14, article 3, if a corporation, or may apply for other appropriate relief for dissolving the provider and winding up its affairs. An order directing the liquidation or dissolution of the provider shall act as a revocation of the provider's permit issued pursuant to section 20-1803.

I. In connection with the rehabilitation proceedings, the director may appoint one or more special deputy directors of the department of insurance and financial institutions to act for the director and may employ such counsel, clerks or assistants as the director deems necessary.  The compensation of the special deputies, counsel, clerks or assistants and any expenses of taking possession of the provider's facility and of conducting the proceedings shall be set by the director, subject to approval of the court, and shall be paid out of the funds or assets of the provider.
A.R.S. § 20-3334 — Arizona Code / Title 20 / Chapter 25 / Article 2 / Section 3334
20-3334 Records retention; schedule
Status: in_force

20-3334. Records retention; schedule

A. The director shall establish a retention schedule for all records, books, documentation and other data on file with the department related to the enforcement of this article.

B. The director shall not order the destruction or other disposal of any record, book, document or other data that is:

1. Required by law to be maintained.

2. Kept on file with the department until ten years have passed.

3. Filed during the director's administration or administrations.

C. All of the following apply to the records, books, documentation and other data obtained by the department:

1. The information is considered and treated as proprietary and confidential.

2. The information is not a public record and is exempt from title 39, chapter 1.

3. The information is to be used only for the purpose of ensuring the pharmacy benefit manager's compliance with this article.
A.R.S. § 20-1232 — Arizona Code / Title 20 / Chapter 6 / Article 1 / Section 1232
20-1232 Standard nonforfeiture law for individual deferred annuities
Status: in_force

20-1232. Standard nonforfeiture law for individual deferred annuities

A. A contract of annuity, except as stated in subsection K of this section, shall not be delivered or issued for delivery in this state unless the contract contains in substance the following provisions or corresponding provisions that in the opinion of the director are at least as favorable to the contract holder on cessation of payment of considerations under the contract:

1. That on cessation of payment of considerations under a contract, or on the written request of the contract owner, the company shall grant a paid-up annuity benefit on a plan stipulated in the contract of such value as is specified in subsections D, E, F, G and I of this section.

2. If a contract provides for a lump sum settlement at maturity, or at any other time, that on surrender of the contract at or before the commencement of any annuity payments, the company shall pay in lieu of a paid-up annuity benefit a cash surrender benefit of such an amount as is specified in subsections D, E, G and I of this section.  The company, within thirty days of the date of maturity as prescribed in the contract, shall notify the annuity owner of the owner’s rights under the contract at the time of maturity of the contract, including the right to receive the cash value benefit in a lump sum, if applicable.  The company shall pay any amounts due under the contract within thirty days after the date the amount becomes payable.  The company may reserve the right to defer the payment of the cash surrender benefit for a period not to exceed one hundred eighty days after demand for such a cash surrender benefit with surrender of the contract after making written request and receiving written approval from the director.  The annuity owner shall be notified within fifteen days after the date that any request for withdrawal is received that the company has requested a deferral pursuant to this paragraph. In making its request to the director, the company shall address the necessity and equitability to all policyholders of the deferral and the reason why payment cannot take place within the time period required under this paragraph after the date the annuity benefit becomes due. Any transfer of monies to another annuity company designated by the contract owner pursuant to section 1035 of the internal revenue code shall take place within thirty days after all required forms relating to the transfer are filed with the original annuity company.

3. A statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of the benefits.

4. A statement that any paid-up annuity, cash surrender or death benefits that may be available under the contract are not less than the minimum benefits required by any statute of the state in which the contract is delivered and an explanation of the manner in which the benefits are altered by the existence of any additional amounts credited by the company to the contract, any indebtedness to the company on the contract or any prior withdrawals from or partial surrenders of the contract.

B. Notwithstanding the requirements of subsection A of this section, a deferred annuity contract may provide that if no considerations have been received under a contract for a period of two full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from prior considerations paid would be less than $20 monthly, the company, at its option, may terminate the contract by payment in cash of the then present value of the portion of the paid-up annuity benefit, calculated on the basis on the mortality table, if any, and interest rate specified in the contract for determining the paid-up annuity benefit, and by this payment shall be relieved of any further obligation under the contract.

C. The minimum values as specified in subsections D, E, F, G and I of this section of any paid-up annuity, cash surrender or death benefits available under an annuity contract shall be based on minimum nonforfeiture amounts prescribed as follows:

1. The minimum nonforfeiture amount at any time at or before the commencement of any annuity payments is equal to an accumulation up to that time at rates of interest, as prescribed in paragraph 2 of this subsection, of the net considerations paid before that time, decreased by the sum of all of the following:

(a) Any prior withdrawals from or partial surrenders of the contract accumulated at rates of interest as prescribed in paragraph 2 of this subsection.

(b) An annual contract charge of $50, accumulated at rates of interest as prescribed in paragraph 2 of this subsection.

(c) Any premium tax paid by the company for the contract, accumulated at rates of interest as prescribed in paragraph 2 of this subsection.

(d) The amount of any indebtedness to the company on the contract, including interest due and accrued.

For the purposes of this paragraph, the net considerations for a given contract year used to define the minimum nonforfeiture amount is an amount equal to eighty-seven and one-half percent of the gross considerations credited to the contract during that contract year.

2. The interest rate used in determining minimum nonforfeiture amounts is an annual rate of interest determined as the lesser of three percent per annum and the following, which shall be specified in the contract if the interest rate will be reset:

(a) The five-year constant maturity treasury rate reported by the federal reserve as of a date, or average over a period, rounded to the nearest one-twentieth of one percent, specified in the contract not longer than fifteen months before the contract issue date or redetermination date under subdivision (d) of this paragraph.

(b) Reduced by one hundred twenty-five basis points.

(c) Where the resulting interest rate is not less than fifteen-hundredths of one percent.

(d) The interest rate shall apply for an initial period and may be redetermined for additional periods.  The redetermination date, basis and period, if any, shall be stated in the contract.  The basis is the date or average over a specified period that produces the value of the five-year constant maturity treasury rate to be used at each redetermination date.

3. During the period or term that a contract provides substantive participation in an equity indexed benefit, it may increase the reduction described in paragraph 2, subdivision (b) of this subsection by up to an additional one hundred basis points to reflect the value of the equity index benefit.  The present value at the contract issue date, and at each redetermination date thereafter, of the additional reduction shall not exceed the market value of the benefit. The director may require a demonstration that the present value of the additional reduction does not exceed the market value of the benefit.  Lacking such a demonstration that is acceptable to the director, the director may disallow or limit the additional reduction.

4. The director may adopt rules to implement paragraph 3 of this subsection and to provide for further adjustments to the calculation of minimum nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit and for other contracts where the director determines that adjustments are justified.

D. Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. The present value shall be computed using the mortality table, if any, and the interest rate specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract.

E. For contracts that provide cash surrender benefits, the cash surrender benefits available before maturity shall not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit that would be provided under the contract at maturity arising from considerations paid prior to the time of cash surrender reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract, the present value being calculated on the basis of an interest rate not more than one percent higher than the interest rate specified in the contract for accumulating the net considerations to determine maturity value, decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract.  Any cash surrender benefit shall not be less than the minimum nonforfeiture amount at that time. The death benefit under such contracts shall be at least equal to the cash surrender benefit.

F. For contracts that do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time before maturity shall not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid before the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity, the present value being calculated for the period before the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine maturity value and increased by any additional amounts credited by the company to the contract.  For contracts that do not provide any death benefits before the commencement of any annuity payments, the present values shall be calculated on the basis of such interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. However, the present value of a paid-up annuity benefit shall not be less than the minimum nonforfeiture amount at that time.

G. For the purpose of determining the benefits calculated under subsections E and F of this section, in the case of annuity contracts under which an election may be made to have annuity payments commence at optional maturity dates, the maturity date shall be deemed to be the latest date for which election shall be allowed by the contract, but shall not be deemed to be later than the anniversary of the contract next following the annuitant's seventieth birthday or the tenth anniversary of the contract, whichever is later.

H. Any contract that does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount before the commencement of any annuity payments shall include a statement in a prominent place in the contract that such benefits are not provided.

I. Any paid-up annuity, cash surrender or death benefits available at any time, other than on the contract anniversary under any contract with fixed scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs.

J. For a contract that provides, within the same contract by rider or supplemental contract provision, both annuity benefits and life insurance benefits that are in excess of the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding the provisions of subsections D, E, F, G and I of this section, additional benefits payable in the event of total and permanent disability, as reversionary annuity or deferred reversionary annuity benefits or as other policy benefits additional to life insurance, endowment and annuity benefits, and considerations for all such additional benefits, shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits that may be required by this section. The inclusion of such additional benefits shall not be required in any paid-up benefits, unless the additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits.

K. This section shall not apply to any reinsurance, group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the internal revenue code, as now or hereafter amended, premium deposit fund, variable annuity, investment annuity, immediate annuity, any deferred annuity contract after annuity payments have commenced, or reversionary annuity, nor to any contract that shall be delivered outside this state through an insurance producer or other representative of the company issuing the contract.

L. The director may adopt rules to implement this section.
A.R.S. § 20-1251 — Arizona Code / Title 20 / Chapter 6 / Article 2 / Section 1251
20-1251 Requirements for group contracts
Status: in_force

20-1251. Requirements for group contracts

A. Except as provided in subsection C of this section, no life insurance policy shall be delivered in this state insuring the lives of more than one individual unless to one of the groups as provided for in section 20-1251.01 and sections 20-1252 through 20-1256 and unless in compliance with the other applicable provisions of those sections.

B. Subsection A of this section shall not apply to life insurance policies:

1. Insuring only individuals related by marriage, blood or legal adoption.

2. Insuring only individuals having a common interest through ownership of a business enterprise, or a substantial legal interest or equity therein, and who are actively engaged in the management thereof.

3. Insuring only individuals otherwise having an insurable interest in each other's lives.

C. A life insurance policy may be delivered or issued for delivery in this state insuring the lives of more than one individual if, in the director's discretion, the director determines that the group of individuals to be insured is substantially similar to a group described in section 20-1251.01 and sections 20-1252 through 20-1256.

D. Nothing in this article validates any charge or practice illegal under any rule of law or regulation governing usury, consumer lender loans, retail installment sales or the like, or extends the application of any such rule of law or regulation to any transaction not otherwise subject thereto.
A.R.S. § 20-874 — Arizona Code / Title 20 / Chapter 4 / Article 4 / Section 874
20-874 Conversion of fraternal benefit society to mutual life insurance company
Status: in_force

20-874. Conversion of fraternal benefit society to mutual life insurance company

A domestic fraternal benefit society may convert to and be licensed as a mutual life insurance company by complying with the requirements of this title relating to mutual insurers. The board of directors shall prepare a plan of conversion in writing. The plan of conversion shall prescribe the terms and conditions of conversion. The affirmative vote of two-thirds of the members of the supreme governing body at a regular or special meeting is required for approval of the plan. A plan of conversion is not effective unless it is approved by the director. The director may approve the plan of conversion if the director finds that the proposed change conforms to the law and is not prejudicial to the certificate holders of the society.