A.R.S. § 20-371 — Arizona Code / Title 20 / Chapter 2 / Article 4 / Section 371
20-371 Rate administration
Status: in_force

20-371. Rate administration

A. The director shall adopt reasonable rules and statistical plans that are reasonably adapted to each of the rating systems on file with the director and that may be modified from time to time.  An insurer shall use the rules and statistical plans to record and report its loss and countrywide expense experience in order that the experience of all insurers may be made available, at least annually, in sufficient form and detail to aid the director in determining whether rating systems comply with the standards set forth in this article. The rules and plans may also provide for the recording and reporting of expense experience items that are especially applicable to this state and that are not susceptible to determination by prorating of countrywide expense experience.

B. In adopting the rules and plans, the director shall give due consideration to the rating systems on file with the director, and, in order that the rules and plans may be as uniform as is practicable among the several states, to the rules and to the form of plans used for comparable rating systems in other states.

C. An insurer is not required to record or report its loss experience on a classification basis that is inconsistent with the uniform classification plan.

D. The director may designate an organization the director deems qualified, other than an insurer that has outstanding obligations under a policy of workers' compensation insurance in this state, to act as the director's statistical agent. The statistical agent shall assist the director in gathering and compiling workers' compensation experience and performing other related services as the director may specify. The compilations shall be made available subject to reasonable rules adopted by the director, to insurers and rating organizations, but no insurer shall be required to file its experience with an organization of which it is not a member.

E. Every insurer shall report its loss and expense experience to the rating organization of which it is a member.  The rating organization shall report the insurer's experience to the designated statistical agent.  If the rating organization is unable to report the experience of its member insurers to the designated statistical agent, every insurer that is a member of the rating organization shall directly report its experience to the designated statistical agent.

F. If there is more than one licensed rating organization that meets the requirements of section 20-363, subsection E, the director shall designate one of the organizations as the designated rating organization for the purpose of annually making and filing with the director statewide workers' compensation insurance rates that become effective on January 1.

G. The designated rating organization shall annually file its rate filing with the director on or before August 1 for rates that become effective on January 1.  The director shall disapprove the filing if it does not meet the standards of section 20-356, paragraph 1. An insurer transacting workers' compensation insurance in this state shall adhere to the expected loss ratios, ballast factors and other experience rating factors and to the statewide rates and other rating values made by the designated rating organization for the uniform rate filing, except that an insurer may deviate from the statewide rate portion of the uniform rate filing according to section 20-359, subsections A and B.

H. The director may allow the designated statistical agent and designated rating organization to charge licensed rating organizations that operate in this state a reasonable fee for their services. The licensed rating organizations shall pay the fees on a ratable basis.

I. To further the uniform administration of rate regulatory laws, the director and every insurer and rating organization may exchange information and experience data with insurance supervisory officials, insurers and rating organizations in other states and may consult with them with respect to rate making and the application of rating systems.

J. If more than one rating organization meets the requirements of section 20-363, subsection E, the director shall designate the statistical plan, classification plan or experience rating plan adopted by the designated rating organization or any other rating organization, or the plans of another state, as the uniform statistical plan, the uniform classification plan or the uniform experience rating plan.

K. If the director does not designate a uniform statistical plan, a uniform classification plan or a uniform experience rating plan pursuant to this section, each insurer shall adhere to the statistical plan, classification plan, and experience rating plan adopted by the rating organization of which the insurer is a member in this state.
A.R.S. § 20-1621.08 — Arizona Code / Title 20 / Chapter 6 / Article 10.1 / Section 1621.08
20-1621.08 Claims
Status: in_force

20-1621.08. Claims

A. A creditor shall promptly report all claims to the insurer or its designated claim representative.

B. All claims shall be paid either by draft drawn on the insurer, by electronic funds transfer, by check of the insurer to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions or on direction of the claimant to the party specified by the claimant.

C. A person shall not authorize a person, firm or corporation, other than the insurer or its designated claim representative, to settle or adjust claims.  The creditor shall not be designated as claim representative for the insurer in adjusting claims, except that once the amount is determined, a group policyholder, by arrangement with the group insurer, may draw drafts, checks or electronic transfers in payment of claims due to the group policyholder subject to audit and review by the insurer.

D. A person shall not deny a claim because the debtor was ineligible for coverage later than ninety days after the initiation of coverage unless the debtor misrepresented a material fact.  If a claim is denied because the debtor was ineligible for coverage within ninety days of initiation of coverage or because the debtor misrepresented a material fact for coverage, the insurer shall refund to the debtor all premiums paid and the creditor shall refund any finance charge paid on the premiums.
A.R.S. § 20-165 — Arizona Code / Title 20 / Chapter 1 / Article 2 / Section 165
20-165 Order on hearing
Status: in_force

20-165. Order on hearing

A. In conducting any hearing the director shall sit as a quasi-judicial officer.

B. Within thirty days after termination of the hearing or of any rehearing thereof or reargument thereon, the director shall make his order on the hearing, covering matters involved in such hearing and in any rehearing or reargument thereof, and shall give a copy of such order to the same persons given notice of the hearing.

C. The order shall contain a concise statement of the facts as found by the director, a concise statement of his conclusions therefrom, and the effective date of the order.

D. The order may affirm, modify or nullify action theretofore taken or may constitute the taking of new action within the scope of the notice of hearing.
A.R.S. § 20-735 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 735
20-735 Distribution of assets of mutual insurer on liquidation
Status: in_force

20-735. Distribution of assets of mutual insurer on liquidation

A. On any liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness, policy obligations, repayment of contributed or borrowed surplus, if any, and expenses of administration, shall be distributed to existing persons who were its members at any time within thirty-six months next preceding the date the liquidation was authorized or ordered, or the date of last termination of the insurer's certificate of authority, whichever date is the earliest.

B. The distributive share of each such member shall be in the proportion that the aggregate premiums earned by the insurer on the policies of the member during the combined periods of the member's membership bear to the aggregate of all premiums so earned on the policies of all such members. The insurer may, and if the insurer is a life insurer shall, make a reasonable classification of its policies so held by such members and a formula based on such classification for determining the equitable distributive share of each such member. Such classification and formula shall be subject to the approval of the director of the department of insurance and financial institutions.
A.R.S. § 20-1084 — Arizona Code / Title 20 / Chapter 4 / Article 10 / Section 1084
20-1084 Articles of incorporation
Status: in_force

20-1084. Articles of incorporation

A. Five or more individuals aged eighteen years or more may incorporate a domestic life and disability reinsurer. Not less than two-thirds of the incorporators shall be citizens of the United States residing in this state.

B. In addition to the requirements of title 10, chapter 2, article 1, the articles of incorporation shall state:

1. The limitation upon the powers of the corporation consistent with this article.

2. The number of directors, not less than five nor more than fifteen, who shall conduct the affairs of the corporation, and the names and addresses of the corporation's first directors and officers for stated terms of office of not less than two months or more than one year.

3. The time of the annual meeting of shareholders.

4. The city or town in this state in which the principal place of business is to be located, and the counties, states and countries in which business may be transacted.

5. The limitations, if any, on the corporation's indebtedness.

6. The extent, if any, to which stock of the corporation shall be liable to assessment.
A.R.S. § 20-398 — Arizona Code / Title 20 / Chapter 2 / Article 4.1 / Section 398
20-398 Policy forms; approval or disapproval; exemption
Status: in_force

20-398. Policy forms; approval or disapproval; exemption

A. Except for fidelity, surety or guaranty bonds or industrial insurance as provided in section 20-400.10, except for any portion of a property insurance policy that contains wildfire protection services, and except as to inland marine risks that by general custom of the business are not written according to manual rates or rating plans, a policy form applying to insurance on risks or operations covered by this article may not be delivered or issued for delivery unless the form has been filed with the director and either the director has issued, within thirty days, an order affirmatively approving or disapproving the form or the thirty-day period has elapsed and the director has not disapproved the form as ambiguous, misleading or deceptive. On written notice given within the thirty-day period to the person making the filing, the director may extend the period for up to fifteen additional days to enable the director to complete the review of the filing.

B. The director, by order, may exempt from the requirements of this section, for as long as the director deems proper, any insurance document 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.

C. Any property insurance policy containing wildfire protection services, including wildfire mitigation and wildfire suppression services conducted by a private entity, that is issued for delivery to an insured in this state shall contain a conspicuously stamped or written notice in bold-faced type that states that the wildfire protection services are not subject to review by the department.
A.R.S. § 20-491.05 — Arizona Code / Title 20 / Chapter 2 / Article 15 / Section 491.05
20-491.05 ORSA summary report
Status: in_force

20-491.05. ORSA summary report

A. Subject to the requirements of subsection B of this section, the ORSA summary report shall be prepared consistent with the ORSA guidance manual.  Documentation and supporting information shall be maintained and made available on examination or on the request of the director.

B. The review of the ORSA summary report and any additional requests for information shall be made using similar procedures currently used in the analysis and examination of multistate or global insurers and insurance groups.
A.R.S. § 20-431.02 — Arizona Code / Title 20 / Chapter 2 / Article 5.1 / Section 431.02
20-431.02 Group and individual life insurance policy forms; identification for illustrations
Status: in_force

20-431.02. Group and individual life insurance policy forms; identification for illustrations

A. Each insurer that markets policies shall notify the director whether a policy form will be marketed with or without an illustration.  For all policy forms that are actively marketed on January 1, 2026, the insurer shall identify those policy forms and whether an illustration will be used. For all policy forms that are filed after January 1, 2026, the insurer shall make this identification at the time of filing.  An insurer may change an identification by providing notice to the director.

B. If the insurer identifies a policy form as one to be marketed without an illustration, any use of an illustration for any policy using that form before the first policy anniversary is prohibited.

C. If the insurer identifies a policy form as one to be marketed with an illustration, a basic illustration shall be prepared and delivered in accordance with this article, except that a basic illustration does not need to be provided to individual members of a group or to individuals who are insured under multiple lives coverage that is issued to a single applicant unless the coverage is marketed to these individuals. For a group life insurance policy or a policy issued to a single applicant on multiple lives, the insurer may furnish either an individual or composite illustration representing coverage on the lives of members of the group or the multiple lives covered.

D. The insurer shall include a quote with the enrollment materials that are provided to potential enrollees of nonterm group life insurance policies that are subject to this article. The quote shall show potential policy values for sample ages and policy years on a guaranteed and nonguaranteed basis appropriate to the group and the coverage. This quote is not considered an illustration for the purposes of this article, but all information provided shall be consistent with the illustrated scale. The insurer shall provide a basic illustration at the delivery of the certificate to enrollees for nonterm group life insurance who have enrolled in more than the minimum premium necessary to provide pure death benefit protection and shall make the basic illustration available to any nonterm group life enrollee on request.
A.R.S. § 20-697 — Arizona Code / Title 20 / Chapter 3 / Article 9 / Section 697
20-697 Property and casualty actuarial opinions; limitation of liability
Status: in_force

20-697. Property and casualty actuarial opinions; limitation of liability

A. Every property and casualty insurance company doing business in this state annually shall file a statement of actuarial opinion that is made by an appointed actuary. The statement of actuarial opinion shall be filed with the annual financial statement required by section 20-223 in accordance with the appropriate national association of insurance commissioners property and casualty annual statement instructions.  The statement of actuarial opinion is a public document.

B. Every property and casualty insurance company that is domiciled in this state and that is required to submit a statement of actuarial opinion annually shall submit an actuarial opinion summary that is written by the company's appointed actuary. This actuarial opinion summary shall be filed in accordance with the appropriate national association of insurance commissioners property and casualty annual statement instructions and shall be considered a document supporting the actuarial opinion required by subsection A of this section.  A company that is licensed but not domiciled in this state shall provide the actuarial opinion summary on the director's request.

C. Every property and casualty insurance company that is domiciled in this state and that is required to submit a statement of actuarial opinion annually shall require its appointed actuary to prepare an actuarial report in support of the actuarial opinion that is in compliance with the requirements contained in the national association of insurance commissioners property and casualty annual statement instructions.  If the insurance company fails to provide a supporting actuarial report or work papers at the request of the director or the director determines that the supporting actuarial report or work papers are otherwise unacceptable, the director may engage a qualified actuary at the company's expense to review the opinion and the basis for the opinion and to prepare the supporting actuarial report or work papers.

D. The appointed actuary is not liable for damages to any person other than the insurance company and the director for any act, error, omission, decision or conduct with respect to the actuary's opinion, unless the actuary engaged in fraud or wilful misconduct.
A.R.S. § 20-311 — Arizona Code / Title 20 / Chapter 2 / Article 3.1 / Section 311
20-311 Definition of managing general agent; exceptions; adjustment or payment of claims
Status: in_force

20-311. Definition of managing general agent; exceptions; adjustment or payment of claims

A. In this article, unless the context otherwise requires, "managing general agent" means any person, firm, association or corporation that manages all or part of the insurance business of an insurer, including the management of a separate division, department or underwriting office, and that, with or without authority and either separately or together with affiliates, directly or indirectly produces and underwrites an amount of gross direct written premium that is at least five per cent of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year and that either:

1. Engages in the adjustment or payment of claims in excess of ten thousand dollars per claim.

2. Negotiates reinsurance on behalf of the insurer.

B. Notwithstanding subsection A of this section, for the purposes of this article the following persons are not managing general agents:

1. An employee of the insurer.

2. A United States manager of the United States branch of an alien insurer.

3. An underwriting manager who, pursuant to contract, manages all of the insurance operations of the insurer other than those operations that are managed by the insurer, who is under common control with the insurer, subject to the holding company regulatory act, and whose compensation is not based on the volume of premiums written.

4. The attorney-in-fact who is authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney.

5. A reinsurance intermediary broker or a reinsurance intermediary manager as defined in section 20-486, who provides administrative services for an insurer and whose compensation consists only of remuneration not related directly or indirectly to direct written premium. For the purposes of this paragraph, reinsurance commissions shall not be considered remuneration related to direct written premium.

C. The director shall establish by rule the dollar amount of adjusted or paid claims that constitutes engaging in the adjustment or payment of claims.
A.R.S. § 20-1032 — Arizona Code / Title 20 / Chapter 4 / Article 8 / Section 1032
20-1032 Revocation of license
Status: in_force

20-1032. Revocation of license

If any attorney-in-fact or underwriter of a Lloyd's association shall violate any of the provisions of this title, or any of the other laws of the state of Arizona which are applicable to them, the certificate of authority issued to such attorney shall be revoked and the right to do business in Arizona shall be cancelled.
A.R.S. § 20-682 — Arizona Code / Title 20 / Chapter 3 / Article 7 / Section 682
20-682 Coverage; limitations
Status: in_force

20-682. Coverage; limitations

A. This article provides coverage for the policies and contracts specified in subsection B of this section to:

1. A person who, regardless of the state where the person resides, is a beneficiary, assignee or payee, including health care providers rendering services covered under the health insurance policies or certificates, of a person covered under paragraph 2 of this subsection, except for a nonresident certificate holder under a group policy or contract.

2. A person who is the owner or enrollee of, or a certificate holder under, a policy or contract other than a structured settlement annuity and who is either:

(a) A resident.

(b) Not a resident and all of the following apply:

(i) The member insurer that issued the policy or contract is domiciled in this state.

(ii) The state in which the person resides has a fund similar to the fund established under this article.

(iii) The person is not eligible for coverage by a fund in any other state because the insurer or health care services organization was not licensed in that state at the time required by the applicable law.

3. Subject to any other limitations provided by this section, a person who is a payee or a beneficiary of a deceased payee under a structured settlement annuity specified in subsection B of this section if the payee is either:

(a) A resident, regardless of where the contract owner resides.

(b) Not a resident and all of the following apply:

(i) The contract owner of the structured settlement annuity is a resident, or the contract owner of the structured settlement annuity is not a resident but the insurer that issued the structured settlement annuity is domiciled in this state, and the state in which the contract owner resides has a fund similar to the fund established by this article.

(ii) The payee, the beneficiary and the contract owner are not eligible for coverage by the fund of the state in which they reside.

B. This article provides coverage to the persons specified in subsection A of this section for policies or contracts of direct nongroup life insurance, disability insurance, which for the purposes of this article includes health care services organization subscriber contracts and certificates, or annuities, and for certificates under direct group policies and contracts, and for supplemental contracts to any of these, that are issued by member insurers, except as limited by this article. Annuity contracts and certificates under group annuity contracts include allocated funding agreements, structured settlement annuities and any immediate or deferred annuity contracts.

C. This article does not provide coverage to:

1. A person who is a payee or beneficiary of a contract owner who is a resident of this state if the payee is afforded coverage by the fund of another state.

2. A person who would otherwise receive coverage under this article but who is provided coverage under the laws of any other state.  This article shall be construed to avoid duplicate coverage and to result in coverage by only one state.

3. A person who acquires rights to receive payments through a structured settlement factoring transaction as defined in 26 United States Code section 5891(c)(3)(A), regardless of whether the transaction occurred before or after that section became effective.

D. Except as otherwise provided in paragraph 14 of this subsection, this article does not provide coverage for:

1. Any policy or contract, or any part of any policy or contract, not guaranteed by the member insurer or under which the risk is borne by the policyholder or contract owner.

2. Any policy or contract, or any part of any policy or contract, assumed by the impaired insurer or insolvent insurer under a contract of reinsurance other than bulk reinsurance or reinsurance for which assumption certificates have been issued.

3. Any policy or contract issued by mutual assessment companies or other persons that operate on an assessment basis, fraternal benefit societies, hospital, medical, dental and optometric service corporations or plans, prepaid dental plan organizations, mandatory state pooling plans, a reciprocal insurance exchange and any entity similar to any of the entities described in this paragraph.

4. A part of a policy or contract to the extent that the rate of interest on which it is based, or the interest rate, crediting rate or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value:

(a) Averaged over the period of four years before the date on which the member insurer becomes an impaired insurer or insolvent insurer under this article, whichever is earlier, exceeds the rate of interest determined by subtracting two percentage points from Moody's corporate bond yield average averaged for that same four-year period or for a lesser period if the policy or contract was issued less than four years before the member insurer becomes an impaired insurer or insolvent insurer under this article, whichever is earlier.

(b) On and after the date on which the member insurer becomes an impaired insurer or insolvent insurer under this article, whichever is earlier, exceeds the rate of interest determined by subtracting three percentage points from Moody's corporate bond yield average as most recently available.

5. A part of a policy or contract issued to a plan or program of an employer, association or other person to provide life, disability or annuity benefits to its employees, members or others, to the extent that the plan or program is self-funded or uninsured, including benefits payable by an employer, association or other person under any of the following:

(a) A multiple employer welfare arrangement as defined in section 3(40) of the employee retirement income security act of 1974.

(b) A minimum premium group insurance plan.

(c) A stop-loss group insurance plan.

(d) An administrative services only contract.

6. A part of a policy or contract to the extent that it provides for dividend or experience rating credits, voting rights or payment of any fees or allowances to any person, including the policy or contract owner, in connection with the service or administration of the policy or contract.

7. A policy or contract issued in this state by a member insurer at a time when it did not have a certificate of authority to issue the policy or contract in this state.

8. A part of a policy or contract to the extent that the assessments required by section 20-686 with respect to the policy or contract are preempted or prohibited by federal or state law.

9. An obligation that does not arise under the express written terms of the policy or contract issued by the member insurer to the enrollee, certificate holder, contract owner or policy owner, including:

(a) Claims based on marketing materials.

(b) Claims based on side letters, riders or other documents that were issued by the member insurer without meeting applicable policy or contract form filing or approval requirements.

(c) Misrepresentations of or regarding policy or contract benefits.

(d) Extra-contractual claims, including claims relating to bad faith in the payment of claims, punitive or exemplary damages or attorney fees and costs.

(e) Claims for penalties or consequential or incidental damages.

10. A contractual agreement that establishes the member insurer's obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer.

11. An unallocated annuity contract.

12. A part of a policy or contract to the extent it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policy or contract owner's rights are subject to forfeiture, as of the date the member insurer becomes an impaired insurer or insolvent insurer under this article, whichever is earlier.  If a policy's or contract's interest or changes in value are credited less frequently than annually, for purposes of determining the values that have been credited and are not subject to forfeiture under this subsection, the interest or change in value determined by using the procedures defined in the policy or contract will be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture.

13. A policy or contract providing any hospital, medical, prescription drug or other health care benefits pursuant to 42 United States Code chapter 7, subchapter XVIII, part C or part D or 42 United States Code chapter 7, subchapter XIX, or any applicable regulations.

14. Structured settlement annuity benefits to which a payee or beneficiary has transferred the payee's or beneficiary's rights in a structured settlement factoring transaction as defined in 26 United States Code section 5891(c)(3)(A), regardless of whether the transaction occurred before or after that section became effective.

15. The exclusion from coverage referenced in paragraph 4 of this subsection does not apply to any portion of a policy or contract, including a rider, that provides long-term care or any other health insurance benefits.

E. The benefits that the fund becomes or may become obligated to cover shall not exceed the lesser of:

1. The contractual obligations for which the member insurer is liable or would have been liable if it were not an impaired insurer or insolvent insurer.

2. With respect to one life, regardless of the number of policies or contracts:

(a) Three hundred thousand dollars in life insurance death benefits, but not more than one hundred thousand dollars in net cash surrender and net cash withdrawal values for life insurance.

(b) For disability insurance benefits:

(i) One hundred thousand dollars for coverages not defined as disability income insurance or health benefit plans or long-term care insurance.

(ii) Three hundred thousand dollars for disability income insurance and three hundred thousand dollars for long-term care insurance.

(iii) Five hundred thousand dollars for health benefit plans.

(c) Two hundred fifty thousand dollars in the present value of annuity benefits, including net cash surrender and net cash withdrawal values.

3. With respect to each payee of a structured settlement annuity, or the beneficiary of a deceased payee, an aggregate of two hundred fifty thousand dollars in present value annuity benefits, including net cash surrender and net cash withdrawal values, if any.

F. Notwithstanding subsection E of this section, the fund is not obligated to cover more than either:

1. An aggregate of three hundred thousand dollars in benefits with respect to any one individual under subsection E of this section except with respect to benefits for health benefit plans under subsection E, paragraph 2, subdivision (b) of this section, in which case the aggregate liability of the fund shall not exceed five hundred thousand dollars with respect to any one individual.

2. With respect to one owner of multiple nongroup policies of life insurance, whether the policy or contract owner is an individual, firm, corporation or other person, and whether the persons insured are officers, managers, employees or other persons, more than five million dollars in benefits, regardless of the number of policies and contracts held by the owner.

G. The limitations set forth in this section are limitations on the benefits for which the fund is obligated, before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired insurer or insolvent insurer attributable to covered policies.  The costs of the fund's obligations under this article may be met by the use of assets attributable to covered policies or reimbursed to the fund pursuant to its subrogation and assignment rights.

H. For the purposes of this article, benefits provided by a long-term care rider to a life insurance policy or annuity contract shall be considered the same type of benefits as the base life insurance policy or annuity contract to which it relates.
A.R.S. § 20-771 — Arizona Code / Title 20 / Chapter 4 / Article 2 / Section 771
20-771 Power of attorney
Status: reserved

20-771. Power of attorney

A. The rights and powers of the attorney of a reciprocal insurer shall be as provided in the power of attorney given it by the subscribers.

B. The power of attorney shall set forth:

1. The powers of the attorney.

2. That the attorney is empowered to accept service of process on behalf of the insurer.

3. The general services to be performed by the attorney.

4. The maximum amount to be deducted from advance premiums or deposits to be paid to the attorney and the general items of expense in addition to losses, to be paid by the insurer.

5. Except as to nonassessable policies, a provision for a contingent several liability of each subscriber in a specified amount which amount shall be not less than one nor more than ten times the premium or premium deposit stated in the policy.

C. The power of attorney may:

1. Provide for the right of substitution of the attorney and revocation of the power of attorney and rights thereunder.

2. Impose such restrictions upon the exercise of the power as are agreed upon by the subscribers.

3. Provide for the exercise of any right reserved to the subscribers directly or through their advisory committee.

4. Contain other lawful provisions deemed advisable.

D. The terms of any power of attorney or agreement collateral thereto shall be reasonable and equitable, and no such power or agreement shall be used or be effective in this state until approved by the director.
A.R.S. § 20-1342.08 — Arizona Code / Title 20 / Chapter 6 / Article 4 / Section 1342.08
20-1342.08 Organ harvesting; insurance coverage limitations
Status: in_force

20-1342.08. Organ harvesting; insurance coverage limitations

A. A 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 disability insurer from denying coverage for any valid reason.
A.R.S. § 20-821 — Arizona Code / Title 20 / Chapter 4 / Article 3 / Section 821
20-821 Scope of article; rules; authority of director
Status: in_force

20-821. Scope of article; rules; authority of director

A. Hospital service corporations, medical service corporations, dental service corporations, optometric service corporations and hospital, medical, dental and optometric service corporations incorporated in this state are governed by this article and are exempt from all other provisions of this title, except as expressly provided by this article and any rule adopted by the director pursuant to section 20-143 relating to contracts of such service corporations. No insurance law enacted after January 1, 1955 applies to such corporations unless the law specifically refers to corporations.

B. Chapter 2, articles 8 and 12 of this title, sections 20-223, 20-234, 20-261, 20-1133, 20-1377, 20-1408, 20-1692, 20-1692.01, 20-1692.02 and 20-1692.03 and chapters 15, 17, 20 and 30 of this title and any rules adopted to implement these provisions apply to all corporations governed by this article.

C. Chapter 21 of this title applies to a hospital service corporation, a medical service corporation or a hospital and medical service corporation.
A.R.S. § 20-400.07 — Arizona Code / Title 20 / Chapter 2 / Article 4.2 / Section 400.07
20-400.07 Report of examination
Status: in_force

20-400.07. Report of examination

The director shall make a full written report of each examination under this article in accordance with section 20-158.
A.R.S. § 20-1095.05 — Arizona Code / Title 20 / Chapter 4 / Article 11 / Section 1095.05
20-1095.05 Contracts not in compliance; validity
Status: in_force

20-1095.05. Contracts not in compliance; validity

Any service company contract issued in violation of this article is an enforceable and valid contract unless invalidated for other reasons.
A.R.S. § 20-842 — Arizona Code / Title 20 / Chapter 4 / Article 3 / Section 842
20-842 Prohibition against excluding coverage because of previous tests for a condition
Status: in_force

20-842. Prohibition against excluding coverage because of previous tests for a condition

An insurance contract offered by a hospital, medical, dental or optometric service corporation shall not exclude coverage of a condition if the insured person has previously had tests for the condition and the condition was not found to exist. There must be evidence that a condition actually existed before the insurance contract was entered into in order to exclude coverage of the condition.
A.R.S. § 20-120 — Arizona Code / Title 20 / Chapter 1 / Article 1 / Section 120
20-120 Payment bonds for third party intermediary entities; contract provisions; definitions
Status: in_force

20-120. Payment bonds for third party intermediary entities; contract provisions; definitions

A. A health care insurer shall not contract with a third party intermediary entity for the delivery or provision of health benefits or services by or through that entity to a group or panel of covered persons, unless the third party intermediary entity at its own expense secures a payment bond or posts a cash deposit pursuant to this section.

B. The following apply to a payment bond required by this section:

1. The payment bond shall be in a face amount that is at least equal to the average monthly payment amount that the third party intermediary entity is entitled to receive under the terms of its contract with the health care insurer.

2. The payment bond shall be executed by a surety company or companies holding a certificate of authority to transact surety business in this state issued by the director pursuant to chapter 2, article 1 of this title.

3. The payment bond serves solely as a source of payment of claims for covered health benefits or services provided by subcontracted health care professionals to the group or panel of covered persons under the contract between the third party intermediary entity and the health care insurer.

4. A subcontracted health care professional who has provided covered health care benefits or services to one or more covered persons under a subcontract with a third party intermediary entity, and who has not been paid in full for the covered benefits or services provided pursuant to the subcontract within ninety days after the date on which the last of the benefits or services were provided, may sue on the payment bond for the unpaid amount owed under the subcontract, may prosecute the action to final judgment and may execute on the judgment against the payment bond.  The suit shall commence within one year after the date on which the last of the benefits or services sued for were provided.

5. A health care insurer that pays claims of subcontracted health care professionals for covered health care benefits or services that were the contractual responsibility of a third party intermediary entity may sue on the payment bond for the claims amounts paid, may prosecute the action to final judgment and may execute on the judgment against the payment bond.  The suit shall commence within one year after the date on which the last of the claims sued for were paid.

6. The payment bond shall include a provision allowing the prevailing party in a suit on the bond to recover as a part of the judgment a reasonable attorney fee as determined by the court.

7. A health care insurer shall review annually a payment bond secured pursuant to this section to determine whether the face amount of the payment bond needs to be adjusted.

C. The following apply to cash deposits required by this section:

1. A cash deposit posted pursuant to this section shall be in an amount that is at least equal to the average monthly payment amount that the third party intermediary entity is entitled to receive under the terms of its contract with the health care insurer and shall be deposited with and held in trust by the state treasurer.

2. Instead of requiring a third party intermediary to post the entire cash deposit at the outset, for a six month period beginning with the initial contract payment, the health care insurer may withhold from the monthly contract payment to be made to the third party intermediary entity an amount that is equal to one-sixth of the cash deposit required to be posted pursuant to this subsection.  The health care insurer shall transfer the monies withheld pursuant to this subsection for deposit with the state treasurer to be held in trust as provided in this section.  Monies withheld and not yet deposited with the state treasurer pursuant to this subsection are held in trust for the purposes described in this section and are not the monies of the health care insurer.

3. A cash deposit made pursuant to this section serves solely as a source of payment of claims for covered health benefits or services provided by subcontracted health care professionals to the group or panel of covered persons under the contract between the third party intermediary entity and the health care insurer.

4. A subcontracted health care professional who has provided covered health care benefits or services to one or more covered persons under a subcontract with a third party intermediary entity and who has not been paid in full for the provided benefits or services pursuant to the subcontract within ninety days after the date on which the last of the benefits or services were provided, may sue on the cash deposit for the unpaid amount owed under the subcontract, may prosecute the action to final judgment and may execute on the judgment against the cash deposit.  The suit shall commence within one year after the date on which the last of the benefits or services sued for were provided.

5. A health care insurer that pays claims of subcontracted health care professionals for covered health care benefits or services that were the contractual responsibility of a third party intermediary entity may sue on the cash deposit for the claims amounts paid, may prosecute the action to final judgment and may execute on the judgment against the cash deposit. The suit shall not commence before one year after the date on which the last of the claims sued for were paid.

6. Out of monies held on deposit by the state treasurer for a specific third party intermediary entity pursuant to this section, monies may be awarded and paid to the prevailing party in a suit on the cash deposit.  The court may award as a part of the judgment on that cash deposit a reasonable attorney fee as determined by the court.

7. A health care insurer shall review annually a cash deposit posted pursuant to this section to determine whether the face amount needs to be adjusted.

D. The following apply to contracts between a third party intermediary entity and a health care insurer:

1. The contract shall require the third party intermediary entity to submit a quarterly report on the timeliness of payments made to all subcontracted health care professionals to the health care insurer to measure compliance with payment timeliness standards.

2. The contract shall require the third party intermediary entity to pay its subcontracted health care professionals within the time period specified under section 20-3102.

E. This section does not:

1. Authorize any entity that does not hold a certificate of authority to engage in the business of insurance in this state.

2. Require a third party intermediary entity to post a payment bond or cash deposit if the entity holds a certificate of authority as an administrator, disability insurer, service corporation or health care services organization.

3. Create any new private right or cause of action for or on behalf of any person, other than a right to sue on a payment bond or cash deposit under subsection B or C of this section.  A general creditor or judgment creditor or any other claimant of a third party intermediary entity shall not levy on any payment bond or cash deposit secured or held pursuant to this section.

4. Require a third party intermediary entity that serves as a provider network for an affiliated staff or group model health care services organization under a common line of ownership or control to post a payment bond or cash deposit to that health care services organization. Notwithstanding that a payment bond or cash deposit is not required under this paragraph, the health care services organization may require the third party intermediary entity to meet other payment bond or cash deposit requirements established by the health care services organization.  If the health care services organization does not require the third party intermediary entity to post a payment bond or cash deposit, the health care services organization is responsible for payment of claims for covered health benefits or services that are provided by subcontracted health care professionals to covered persons if the third party intermediary entity fails to make payment pursuant to the subcontracts.

5. Require one or more persons who are licensed health care professionals, hospitals or other institutional health care providers to post a payment bond or cash deposit under a contract where the assumption of business risk is limited to benefits or services that may be lawfully furnished within the lawful scope of practice by that person or persons.

6. Limit the ability of a health care insurer to impose additional financial requirements on a third party intermediary entity.

7. Require a third party intermediary entity to post a payment bond or cash deposit if the entity has not been delegated responsibility to process and pay the claims of the health care providers for which the entity has assumed the business risk.

F. Any bond that is secured or deposit that is posted under this section shall be released and returned:

1. To the third party intermediary entity on extinguishment by reinsurance or otherwise of substantially all liability of the insurer for the security of which the bond or deposit is held.

2. To the third party intermediary entity to the extent the bond or deposit is more than the amount required.

3. On proper order of a court of competent jurisdiction to the receiver, conservator, rehabilitator or liquidator of the third party intermediary entity or to any other properly designated official or officials who succeed to the management and control of the third party intermediary entity's assets.

G. A surety shall not terminate a bond issued pursuant to this section unless the surety files a written notice of termination with the director at least thirty days before terminating the bond.

H. A release of deposited monies shall not be made except on application to and the written order of the director.  The director is not personally liable for the good faith release of all or any part of a deposit.

I. A third party intermediary entity shall approve or deny claims in the manner prescribed in chapter 20 of this title.

J. This section applies to all contracts between third party intermediary entities and health care insurers that are entered into or renewed from and after December 31, 2000.

K. For the purposes of this section:

1. "Administrator" means an entity that holds a certificate of authority pursuant to chapter 2, article 9 of this title.

2. "Covered persons" means enrollees, insureds, members, subscribers, dependents or other persons who are covered by a contract of disability insurance, subscription contract, evidence of coverage or other prepaid plan or arrangement with a health care insurer.

3. "Health care insurer" means a disability insurer, service corporation or health care services organization.

4. "Health care professional" has the same meaning prescribed in section 20-3151.

5. "Health care services organization" means an entity that holds a certificate of authority pursuant to chapter 4, article 9 of this title.

6. "Service corporation" means an entity that holds a certificate of authority pursuant to chapter 4, article 3 of this title.

7. "Third party intermediary entity" means an entity that assumes business risk through a written contract with a disability insurer, service corporation or health care services organization for the cost of providing covered health care benefits or services to a group or panel of covered persons if not all of those benefits or services will be provided by the entity or by licensed health care professionals who are subcontracted to the entity.
A.R.S. § 20-1096.08 — Arizona Code / Title 20 / Chapter 4 / Article 12 / Section 1096.08
20-1096.08 Nonrenewal, revocation or suspension of certificate of authority
Status: in_force

20-1096.08. Nonrenewal, revocation or suspension of certificate of authority

The director may refuse to renew or may revoke or suspend any certificate of authority issued to a mechanical reimbursement reinsurer pursuant to this article if, after notice and a hearing, the director finds any of the following:

1. In the opinion of the director the policy and loss reserves maintained by the mechanical reimbursement reinsurer are insufficient to cover future losses.

2. In the opinion of the director, the mechanical reimbursement reinsurer is insolvent.

3. The mechanical reimbursement reinsurer has not filed its annual report or paid its renewal fee on a timely basis.

4. The mechanical reimbursement reinsurer has violated any provisions of this article.
A.R.S. § 20-481.25 — Arizona Code / Title 20 / Chapter 2 / Article 8 / Section 481.25
20-481.25 Acquisitions involving insurers not otherwise covered; anticompetitive considerations; civil penalty; definitions
Status: in_force

20-481.25. Acquisitions involving insurers not otherwise covered; anticompetitive considerations; civil penalty; definitions

A. Except as provided in subsection B of this section, this section applies to any acquisition in which there is a change in control of an insurer authorized to do business in this state.

B. This section does not apply to the following, except as provided under subsections C and D of this section:

1. A purchase of securities solely for investment purposes as long as the securities are not used by voting or otherwise to cause or attempt to cause the substantial lessening of competition in any insurance market in this state. If a purchase of securities results in a presumption of control as defined in section 20-481, the purchase of securities is not solely for investment purposes unless the insurance director of the insurer's state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer action or affirmative finding is communicated by the domiciliary insurance director to the director of the department of insurance and financial institutions of this state.

2. The acquisition of a person by another person if both persons are neither directly nor through affiliates primarily engaged in the business of insurance and if preacquisition notification is filed with the director pursuant to subsection C of this section thirty days before the proposed effective date of the acquisition. Preacquisition notification is not required if the acquisition would otherwise be excluded from this section by any other provision of this subsection.

3. The acquisition of already affiliated persons.

4. If, as an immediate result of an acquisition, the combined market share of the involved insurers in any market would not exceed five percent of the total market, there would not be an increase in any market share or the combined market share of the involved insurers in any market would not exceed twelve percent of the total market and the market share increases by more than two percent of the total market. For the purposes of this paragraph, "market" means direct written insurance premiums in this state for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in this state.

5. An acquisition for which a preacquisition notification is required pursuant to this section because of the resulting effect on the ocean marine insurance line of business.

6. An acquisition of an insurer whose domiciliary insurance director finds that the insurer is failing, that there is no feasible alternative to improve the insurer's condition and that the public benefits that would result from improving the insurer's condition through the acquisition exceed the public benefits that would result from not lessening competition and the domiciliary insurance director communicates these findings to the director of the department of insurance and financial institutions of this state.

C. An acquisition under subsection B of this section may be subject to an order pursuant to subsection F of this section unless the acquiring person files a preacquisition notification and the waiting period has expired. The acquired person may file a preacquisition notification.  Information submitted under this subsection is confidential. The preacquisition notification shall be in a form and contain the information that is prescribed by the national association of insurance commissioners relating to those markets that are not exempt from the provisions of this section.  The director may require additional material and information that the director deems necessary in order to determine if the proposed acquisition, if consummated, would lessen competition or tend to create a monopoly. The information may include an economist's opinion on the competitive impact of the acquisition in this state and a summary of the economist's education and experience that indicates the economist's ability to render an informed opinion. The waiting period begins on the date the director receives a preacquisition notification and ends thirty days after the date of receipt or on termination of the waiting period by the director, whichever is earlier. Before the waiting period ends, the director on a one-time basis may require the submission of additional information that is relevant to the proposed acquisition. The waiting period shall end thirty days after the director receives the additional information or terminates the waiting period, whichever is earlier.

D. An acquisition subject to the provisions of this section shall not substantially lessen competition in any line of insurance in this state or tend to create a monopoly. The director may enter a cease and desist order under subsection F of this section if there is substantial evidence that the effect of the acquisition may be to substantially lessen competition in any line of insurance in this state or may tend to create a monopoly or if the insurer fails to file adequate information pursuant to subsection C of this section. The director has the burden of showing prima facie evidence of a violation of this subsection. In determining if a proposed acquisition would lessen competition or tend to create a monopoly, the director shall consider the following:

1. An acquisition covered under subsection B of this section that involves two or more insurers competing in the same market is prima facie evidence of a violation of this subsection if:

(a) The market is highly concentrated and the involved insurers possess the following market shares:

Insurer A     Insurer B

(i) four percent four percent or more

(ii) ten percent two percent or more

(iii) fifteen percent  one percent or more

(b) The market is not highly concentrated and the involved insurers possess the following market shares:

Insurer A     Insurer B

(i) five percent five percent or more

(ii) ten percent four percent or more

(iii) fifteen percent  three percent or more

(iv) nineteen percent  one percent or more

A highly concentrated market is a market in which the share of the four largest insurers is seventy-five percent or more of the market. Percentages not shown in the tables are interpolated proportionately to the percentages that are shown. If more than two insurers are involved, exceeding the total of the two columns in the table is prima facie evidence of a violation of this subsection. For the purposes of this paragraph, the insurer with the largest market share is deemed to be insurer A.

2. A significant trend toward increased concentration exists if the aggregate market share of any grouping of the largest insurers in the market, from the two largest to the eight largest, has increased by seven percent or more of the market over a period of time that extends from a base year five to ten years before the acquisition up to the time of the acquisition. Any acquisition or merger under subsection B of this section that involves two or more insurers competing in the same market is prima facie evidence of a violation of this subsection if:

(a) There is a significant trend toward increased concentration in the market.

(b) One of the insurers involved is one of the insurers in a grouping of large insurers whose market share has increased by seven percent or more.

(c) Another involved insurer's market is two percent or more.

E. If an acquisition is not prima facie evidence of a violation of subsection D of this section, the director may establish the requisite anticompetitive effect based on other substantial evidence. If an acquisition is prima facie evidence of a violation of subsection D of this section, a party may establish the absence of the requisite anticompetitive effect based on other substantial evidence. Relevant factors in making a determination under this subsection include market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry and ease of entry into and exit from the market.

F. If an acquisition violates this section, the director may enter an order:

1. Requiring an involved insurer to cease and desist from doing business in this state with respect to the line or lines of insurance involved in the violation.

2. Denying the application of an acquired or acquiring insurer for a license to do business in this state.

G. The director shall not enter an order pursuant to subsection F of this section unless a hearing is held and notice of the hearing is issued before the end of the waiting period prescribed in subsection C of this section and not less than fifteen days before the hearing. The hearing shall be concluded and the order shall be issued not later than sixty days after the end of the waiting period. The director shall include with each order a written decision setting forth the director's findings of fact and conclusions of law. The order does not become final earlier than thirty days after it is issued. Before the order becomes final the involved insurer may submit a plan to remedy within a reasonable time the anticompetitive impact of the acquisition. Based on the submitted plan or other information, the director shall specify the conditions, if any, that would remedy the aspects of the acquisition causing the violation and shall vacate or modify the order. An order does not apply if the acquisition is not consummated.

H. An order shall not be entered under subsection F of this section if:

1. The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be achieved feasibly in any other way and the public benefits that would arise from the economies exceed the public benefits that would arise from not lessening competition.

2. The acquisition will increase substantially the availability of insurance and the public benefits of the increase exceed the public benefits that would arise from not lessening competition.

I. The director, after notice and a hearing, may impose one or more of the following civil penalties against a person who violates a cease and desist order that is in effect:

1. Up to and including $10,000 for every day of violation.

2. Suspension or revocation of the person's license.

J. An insurer or other person who fails to make a filing required by this section and who fails to demonstrate a good faith effort to comply with the filing requirement is subject to a civil penalty of not more than $50,000.

K. For the purposes of subsection D of this section:

1. "Insurer" means a company or group of companies under common management, ownership or control.

2. "Market" means the relevant product and geographical markets.  In determining the relevant product and geographical markets, the director shall consider the definitions or guidelines adopted by the national association of insurance commissioners and information submitted by the parties to the acquisition. In the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business that is used in the annual statement required to be filed by insurers doing business in this state.  The relevant geographical market is this state.

L. For the purposes of this section:

1. "Acquisition" means any agreement, arrangement or activity that results in a person acquiring directly or indirectly the control of another person, including the acquisition of voting securities, assets, bulk reinsurance and mergers.

2. "Involved insurer" means an insurer that acquires or is acquired, is affiliated with an acquirer or acquired or is the result of a merger.
A.R.S. § 20-551 — Arizona Code / Title 20 / Chapter 3 / Article 2 / Section 551
20-551 Investments or deposits in financial institutions
Status: in_force

20-551. Investments or deposits in financial institutions

A. An insurer may invest or deposit any of its funds in share, checking or savings accounts, in certificates of deposit or in any other deposit or account in solvent banks or in foreign branches of such banks, credit unions or savings and loan associations which are insured by an agency of the federal government. Branches of foreign banks located in the United States are deemed banks for the purposes of this subsection as long as they are in compliance with applicable state and federal banking laws and regulations.

B. An insurer may invest in obligations issued, assumed or guaranteed by those multinational development banks in which the United States is a member nation, including the international bank for reconstruction and development, the African development bank, the Asian development bank and the Inter-American development bank.

C. An insurer may invest or deposit its funds in any deposit, account or obligation of a foreign bank that has been determined by the securities valuation office of the national association of insurance commissioners to meet the credit standards for issuing letters of credit in support of the liability of a reinsurer to a ceding insurer or has demonstrated to the director that it meets or exceeds both the following standards:

1. Is domiciled in a country with a sovereign debt rating of "Aaa" or "AAA" for its long-term debt or P1 or A1 for its short-term debt by Moody's investors service or Standard and Poor or an equivalent rating by any other nationally recognized statistical rating organization.

2. Either of the following:

(a) For investment issues with maturities in excess of three hundred sixty-five days, has a long-term debt service rating of "Aa" by Moody's investor service or "AA" by Standard and Poor or an equivalent rating by any other nationally recognized statistical rating organization.

(b) For investment issues with maturities of three hundred sixty-five days or less, has a short-term debt service rating of P1 or A1 by Moody's investors service or Standard and Poor or an equivalent rating by any other nationally recognized statistical rating organization.

D. An insurer may invest or deposit its funds in any deposit, account or obligation of a solvent foreign bank that does not meet the requirements of subsection C of this section, if the amount of the investments or deposits do not exceed one hundred five per cent of the insurer's obligations to policyholders in the foreign country as denominated in the currency of the foreign country and the investments or deposits in the aggregate do not exceed ten per cent of the insurer's surplus as regards policyholders.

E. An investment or deposit made pursuant to subsections C and D of this section shall also be applied to the limitation of the amount of an insurer's assets that may be invested pursuant to section 20-552.
A.R.S. § 20-556 — Arizona Code / Title 20 / Chapter 3 / Article 2 / Section 556
20-556 Real property
Status: in_force

20-556. Real property

An insurer, including for the purposes of this section a reciprocal insurer, may invest in real property only if acquired or used for the following purposes and in the following manner:

1. The land and the building thereon in which it has its principal office, and such other real property as shall be requisite for its convenient accommodation in the transaction of its business, but no such investments shall aggregate more than an amount equal to the excess of the insurer's assets over its required policy reserves plus fifty per cent of the surplus to policyholders required under this title for initial authorization for the kinds of insurance it is transacting at the time the investment is made.

2. Such real property as has been acquired in satisfaction of loans, mortgages, liens, judgments, decrees or debts previously owing to the insurer in the course of its business.

3. Such real property as has been acquired in part payment of the consideration on the sale of real property owned by it, if each transaction effected a net reduction in the insurer's investment in real property.

4. Such real property, or any interest therein, as may be acquired as an investment for the production of income, or as may be acquired to be improved or developed for such investment purpose, pursuant to an existing program therefor. An insurer shall not, except with the director's consent, have at any one time over twenty per cent of its assets invested in all its investments pursuant to this paragraph, nor more than five per cent of its assets so invested in any single parcel or related parcels of real property.

5. The seller's interest in real property subject to an agreement of purchase or sale, but the sum invested in any such parcel of real property shall not exceed two-thirds of the market value of the parcel.

6. Additional real property and equipment incident to real property, if necessary or convenient for the purpose of enhancing the sale or other value of real property previously acquired or held by it, pursuant to the provisions of paragraph 2, 3 or 4 of this section. An insurer shall not, except with the director's consent, have at any time invested in excess of ten per cent of its assets in the investments authorized by this paragraph.
A.R.S. § 20-340.05 — Arizona Code / Title 20 / Chapter 2 / Article 3.5 / Section 340.05
20-340.05 Rules
Status: in_force

20-340.05. Rules

The director shall adopt rules relating to collateral received by bail bond agents, the issuance of contracts and other matters relating to the business of bail bond agents.
A.R.S. § 20-1131 — Arizona Code / Title 20 / Chapter 5 / Article 1 / Section 1131
20-1131 Exemption of life insurance proceeds and cash values from creditors
Status: in_force

20-1131. Exemption of life insurance proceeds and cash values from creditors

A. If a policy of life insurance is effected by any person on the person's own life or on another life in favor of another person having an insurable interest in the policy, or made payable by assignment, change of beneficiary or other means to a third person, the lawful beneficiary or such third person, other than the person effecting the insurance or the person's legal representatives, is entitled to its proceeds against the creditors and representatives of the person effecting the insurance.

B. Subject to the statute of limitations, the amount of any premiums for insurance paid in fraud of creditors, with interest, shall inure to their benefit from the proceeds of the policy, but the insurer issuing the policy shall be discharged of all liability on the policy by payment of the proceeds in accordance with its terms, unless before payment the insurer received written notice by or in behalf of some creditor, with specification of the amount claimed, claiming to recover for certain premiums paid in fraud of creditors.

C. For the purposes of subsection A, a policy shall also be deemed to be payable to a person other than the insured if and to the extent that a facility-of-payment clause or similar clause in the policy permits the insurer to discharge its obligation after the death of the individual insured by paying the death benefits to a person as permitted by the clause.

D.  If, for a continuous, unexpired period of two years, a policy of life insurance has named as beneficiary the insured's surviving spouse, child, parent, brother, sister or any other dependent family member, then, in event of bankruptcy or in any proceeding before any court in this state, the cash surrender value of the insurance, in the proportion that the policy names any such beneficiary, shall be exempt from claims and demands of all creditors, other than a creditor to whom the policy has been pledged or assigned, and except that, subject to the statute of limitations, the amount of any premiums which are recoverable or avoidable by a creditor pursuant to title 44, chapter 8, article 1, with interest, shall inure to their benefit from the cash surrender value.  For the purposes of this subsection, "dependent" means a family member who is dependent on the insured for not less than half support.
A.R.S. § 20-3207 — Arizona Code / Title 20 / Chapter 22 / Article 1 / Section 3207
20-3207 Conduct of examinations; examination reports; confidentiality
Status: in_force

20-3207. Conduct of examinations; examination reports; confidentiality

A. The director may investigate suspected fraudulent life settlement acts and persons engaged in the business of life settlements.

B. After determining that an examination should be conducted, the director shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination.  In conducting the examination, the examiner shall use methods common to the examination of any life settlement licensee and should use those guidelines and procedures set forth in an examiners' handbook adopted by a national organization.

C. Every licensee or person from whom information is sought and the officers, directors and agents of the licensee or person shall provide to the examiners timely, convenient and free access during reasonable hours at its offices to all examined licensee's books, records, accounts, papers, documents, assets and computer or other records relating to the property, assets, business and affairs.  The officers, directors, employees and agents of the licensee or person shall facilitate and aid in the examination.  The director may suspend, revoke or nonrenew a licensee's license or authority to engage in the life settlement business or other business that is subject to the director's jurisdiction if the licensee, by its officers, directors, employees or agents, fails to submit to an examination or to comply with any reasonable written request of the director.

D. The director may issue subpoenas, administer oaths and examine under oath any person as to any matter pertinent to the examination.  If a person fails or refuses to obey a subpoena, the director may petition a court of competent jurisdiction and, on proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence.

E. When making an examination under this chapter, the director may retain attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as examiners, the reasonable cost of which shall be borne by the licensee that is the subject of the examination.

F. The provisions of this section do not limit the director's authority to terminate or suspend an examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state. Findings of fact and conclusions made pursuant to any examination constitute prima facie evidence in any legal or regulatory action.

G. The provisions of this section do not limit the director's authority to use and, if appropriate, make public any final or preliminary examination report, any examiner or licensee work papers or other documents or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action that the director deems appropriate.

H. Examination reports shall include only the facts appearing on the licensee's books or from the testimony of the licensee's officers or agents or other persons examined concerning the licensee's affairs and the conclusions and recommendations the examiner finds reasonably warranted from the facts.

I. Within sixty days after the examination is completed, the examiner in charge shall file with the director a verified written report of examination under oath. On receipt of the verified report, the director shall transmit the report to the examined licensee together with a notice that gives the examined licensee a reasonable opportunity of not more than thirty days to make a written submission or rebuttal with respect to any matters contained in the examination report, and that shall become part of the report, or to request a hearing on any matter in dispute.

J. On finding that a person has violated this chapter or a rule adopted pursuant to this chapter, the director may issue an order directing that the person cease and desist from committing the violation.  On the issuance of an order to cease and desist, the person may request a hearing pursuant to section 20-161 and title 41, chapter 6, article 10.

K. The names and individual identification data for all owners, purchasers and insureds is confidential information and shall not be disclosed by the director unless the disclosure is to another regulator or is required by law.

L. Except as otherwise provided in this chapter, all examination reports, working papers, recorded information, documents and copies produced by, obtained by or disclosed to the director or any other person in the course of an examination made under this chapter, or in the course of an analysis or investigation by the director of the licensee's financial condition or market conduct are confidential and privileged and are not public records.  This information is not subject to subpoena or discovery and is not admissible in evidence in any private civil action.  The director is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as part of the director's official duties.  The examined licensee may access all documents used to make the report.

M. All examination and examination related expenses shall be borne by the provider and shall be paid by the insurance examiners' revolving fund pursuant to section 20-159.
A.R.S. § 20-888 — Arizona Code / Title 20 / Chapter 4 / Article 4 / Section 888
20-888 Admission of foreign or alien societies
Status: in_force

20-888. Admission of foreign or alien societies

A foreign or alien society shall not transact business in this state unless the director issues a certificate of authority to the foreign or alien society pursuant to sections 20-215 and 20-216. A foreign or alien society applying for a certificate of authority shall substantially comply with this article.
A.R.S. § 20-2117 — Arizona Code / Title 20 / Chapter 11 / Article 1 / Section 2117
20-2117 Civil penalty
Status: in_force

20-2117. Civil penalty

A. In any case in which a hearing results in the finding of a knowing violation of this chapter, the director may, in addition to the issuance of a cease and desist order as prescribed in section 20-2116, order payment of a civil penalty of not more than five hundred dollars for each violation but not to exceed ten thousand dollars in the aggregate for multiple violations.

B. After notice and a hearing, the director may subject any person who violates a cease and desist order of the director under section 20-2116 to one or more of the following penalties:

1. A civil penalty of not more than ten thousand dollars for each violation.

2. A civil penalty of not more than fifty thousand dollars if the director finds that violations have occurred with such frequency as to constitute a general business practice.

3. Suspension or revocation of an insurance institution's or agent's license.

C. The director shall deposit all civil penalties pursuant to this section for deposit in the state general fund.
A.R.S. § 20-1533 — Arizona Code / Title 20 / Chapter 6 / Article 8 / Section 1533
20-1533 Surety companies; arrest bond certificates issued by motor clubs; definition
Status: in_force

20-1533. Surety companies; arrest bond certificates issued by motor clubs; definition

A. A domestic or foreign surety company that has qualified to transact surety business in this state may become surety in an amount of not more than three hundred dollars with respect to a guaranteed arrest bond certificate issued by a motor club by filing with the director an undertaking to become surety.

B. The undertaking shall both:

1. Be in a form prescribed by the director.

2. State the following:

(a) The name and address of the motor club with respect to the guaranteed arrest bond certificates of which the surety company undertakes to be surety.

(b) The unqualified obligation of the surety company to pay the forfeiture in an amount of not more than three hundred dollars of a person who, after posting a guaranteed arrest bond certificate with respect to which the surety company has undertaken to be surety, fails to make the appearance for which the guaranteed arrest bond certificate was posted.

C. An undertaking filed by a domestic or foreign surety company with the director pursuant to this section expires on December 31 of each year.

D. Motor clubs may issue guaranteed arrest bond certificates that are guaranteed by a domestic or foreign surety company for the year covered by the undertaking filed with the director pursuant to this section.

E. For the purposes of this section "motor club" means an individual, firm, partnership, company, association or corporation engaged in selling, furnishing or procuring for consideration any one or a combination of the following for a member pursuant to an agreement:

1. "Bail bond service", which means furnishing or procuring for the member accused of a violation of any law a cash deposit, a bond, a guaranteed arrest bond certificate or any other undertaking.

2. "Buying and selling service", which means any act by which the member is aided in any way in the purchase or sale of a motor vehicle.

3. "Discount service", which means any act resulting in giving special discounts, rebates or reductions to the member.

4. "Emergency road service", which means any act consisting of the adjustment, repair or replacement of the equipment, tires or mechanical parts of a motor vehicle to permit it to be operated under its own power by or for the member.

5. "Financial service", which means any act by which loans or other advances of money are made to the member.

6. "Insurance service", which means any act consisting of selling or giving, with the agreement or as a result of membership in or affiliation with a motor club, a policy of insurance.

7. "Map service", which means furnishing road maps without cost to the member.

8. "Safety service", which means examining and testing motor vehicles and giving advice in connection with the safe and proper operation of the motor vehicles to the member.

9. "Theft service", which means any act the purpose of which is to locate, identify or recover a motor vehicle for the member, or to detect or apprehend the person guilty of the theft.

10. "Touring service", which means furnishing touring information without cost to the member.

11. "Towing service", which means any act consisting of moving for or on behalf of the member a motor vehicle from one place to another other than under its own power.
A.R.S. § 20-211 — Arizona Code / Title 20 / Chapter 2 / Article 1 / Section 211
20-211 Surplus required
Status: in_force

20-211. Surplus required

A. In addition to the minimum required capital stock, if a stock insurer, or minimum required basic surplus, if mutual or reciprocal insurers, as required by sections 20-210 and 20-212 as to all stock insurers and foreign and alien mutual and reciprocal insurers, by sections 20-768 and 20-212 as to domestic reciprocal insurers, and section 20-711, subsection B and section 20-212 as to domestic mutual insurers, except as stated in subsection C of this section, any foreign or alien insurer, any title insurer, and any domestic insurer shall possess at the time of original authorization in this state initial free surplus as stated in section 20-210, and shall maintain free surplus funds in an amount of not less than one-half such initial free surplus. No other insurer shall be so initially authorized in this state unless it then possesses surplus of not less than initial free surplus as stated in section 20-210, in addition to the minimum required capital stock, if a stock insurer, or minimum required basic surplus, if mutual or reciprocal insurers, otherwise required.

B. In addition to the minimum required capital stock if the insurer is a stock insurer or in addition to the minimum required basic surplus if the insurer is a mutual or reciprocal insurer under this article and chapter 4, article 1 of this title, a domestic, foreign or alien insurer shall possess and maintain any additional free surplus that the director may require based on the type, volume or nature of its business as a necessary condition to avoid rendering its transaction of insurance hazardous to its policyholders or the people of this state. The director may adopt rules to implement this subsection.

C. Subsection A of this section does not apply to a domestic mutual insurer that qualifies on the basis of applications for insurance as provided in section 20-711, or to reinsurers that qualify pursuant to chapter 4, article 10 of this title and that do not within such five year period transact any kind of insurance in addition to that for which initially authorized.
A.R.S. § 20-639 — Arizona Code / Title 20 / Chapter 3 / Article 4 / Section 639
20-639 Allowance of certain claims
Status: in_force

20-639. Allowance of certain claims

A. No contingent claim shall share in a distribution of the assets of an insurer which has been adjudicated to be insolvent by an order made pursuant to this article, except that such claim shall be considered, if properly presented, and may be allowed to share where either:

1. Such claim becomes absolute against the insurer on or before the last day for filing proof of claims against the assets of such insurer.

2. There is a surplus and the liquidation is thereafter conducted upon the basis that such insurer is solvent.

B. Where an insurer has been so adjudicated to be insolvent any person who has a cause of action against an insured of such insurer under a liability insurance policy issued by such insurer shall have the right to file a claim in the liquidation proceeding, regardless of the fact that the claim may be contingent, and the claim may be allowed if all of the following requirements are met:

1. If it may be reasonably inferred from the proof presented upon the claim that the person would be able to obtain a judgment upon the cause of action against the insured.

2. If the person furnishes suitable proof, unless the court for good cause shown otherwise directs, that no further valid claim against the insurer arising out of his cause of action other than those already presented can be made.

3. If the total liability of the insurer to all claimants arising out of the same act of its insured shall be no greater than its maximum liability would be were it not in liquidation.

C. No judgment against such an insured taken after the date of entry of the liquidation order shall be considered in the liquidation proceedings as evidence of liability, or of the amount of damages, and no judgment against an insured taken by default or by collusion prior to the entry of the liquidation order shall be considered as conclusive evidence in the liquidation proceedings, either of the liability of the insured to such person upon the cause of action or of the amount of damages to which the person is therein entitled.

D. No claim of any secured claimant shall be allowed at a sum greater than the difference between the value of the claim without security and the value of the security itself as of the date of the entry of the order of liquidation or such other date set by the court for determining rights and liabilities as provided in section 20-635 unless the claimant surrenders the claimant's security to the receiver, in which event the claim shall be allowed in the full amount for which it is valued.
A.R.S. § 20-3115 — Arizona Code / Title 20 / Chapter 20 / Article 2 / Section 3115
20-3115 Conduct of arbitration proceedings
Status: in_force

20-3115. Conduct of arbitration proceedings

A. The department shall develop a simple, fair, efficient and cost-effective arbitration procedure for surprise out-of-network bill disputes and specify time frames, standards and other details of the arbitration proceeding, including procedures for scheduling and notifying the parties of the settlement teleconference required by subsection E of this section. The department shall contract with one or more entities to provide arbitrators who are qualified under section 20-3116 for this process.  Department staff may not serve as arbitrators.

B. An enrollee may request arbitration of a surprise out-of-network bill by submitting a request for arbitration to the department on a form prescribed by the department, which shall include contact, billing and payment information regarding the surprise out-of-network bill and any other information the department believes is necessary to confirm that the bill qualifies for arbitration. The form shall be made available on the department's website.

C. Within fifteen days after receipt of a request for arbitration, the department shall do one of the following:

1. Determine that the surprise out-of-network bill qualifies for arbitration under this article and notify the enrollee, health insurer and health care provider that the request qualifies.

2. Determine that the surprise out-of-network bill does not qualify for arbitration under this article and notify the enrollee that the surprise out-of-network bill does not qualify and state the reason for the determination.

3. If the department cannot determine whether the surprise out-of-network bill qualifies for arbitration, request in writing any additional information from the enrollee, health insurer or health care provider or its billing company that is needed to determine whether the surprise out-of-network bill qualifies for arbitration and all of the following apply:

(a) The enrollee, health insurer or health care provider or its billing company shall respond to the department's request for additional information within fifteen days after the date of the department's request.

(b) Within seven days after receipt of the additional requested information, the department shall determine whether the surprise out-of-network bill qualifies for arbitration and send the notices required under this subsection.

(c) If the health insurer or health care provider or its billing company fails to respond within the time frame specified in subdivision (a) of this paragraph to a department request for information, the department shall deem the request for arbitration as eligible for arbitration. If the enrollee fails to respond within the time frame specified in subdivision (a) of this paragraph, the request for arbitration is denied.

D. The determination by the department of whether a surprise out-of-network bill qualifies for arbitration is a final and binding decision with no right of appeal to the department. The department's determination is solely an administrative remedy and does not bar any private right or cause of action for or on behalf of any enrollee, health care provider or other person. The court shall decide the matter, including any interpretation of statute or rule, without deference to any previous determination that may have been made on the question by the department.

E. In an effort to settle the surprise out-of-network bill before arbitration, the department shall arrange an informal settlement teleconference within thirty days after the department sends the notices required by this section.  The department is not a party to and may not participate in the informal settlement teleconference. As part of the settlement teleconference the health insurer shall provide to the parties the enrollee's cost sharing requirements under the enrollee's health plan based on the adjudicated claim. The health insurer shall notify the department whether the informal settlement teleconference resulted in settlement of the disputed surprise out-of-network bill and, if settlement was reached, notify the department of the terms of the settlement within seven days.

F. If after proper notice from the department or contracted entity either the health insurer or health care provider or the provider's representative fails to participate in the teleconference, the other party may notify the department to immediately initiate arbitration and the nonparticipating party shall be required to pay the total cost of the arbitration.

G. On receipt of notice that the dispute has not settled or that a party has failed to participate in the teleconference, the department shall appoint an arbitrator and shall notify the parties of the arbitration and the appointed arbitrator. The department's notice shall specify whether one party is responsible for the total cost of the arbitration pursuant to subsection F of this section.  The health insurer and health care provider must agree on the arbitrator and may mutually agree to use an arbitrator who is not on the department's list. If either the health insurer or health care provider objects to the arbitrator, and the parties are unable to agree on a mutually acceptable alternative arbitrator, the department or contracted entity shall randomly assign three arbitrators. The health insurer and the health care provider shall each strike one arbitrator, and the last arbitrator shall conduct the arbitration unless there are two arbitrators remaining, in which case the department or contracted entity shall randomly assign the arbitrator.

H. Before the arbitration:

1. The enrollee shall pay or make arrangements in writing to pay the health care provider the total amount of the enrollee's cost sharing requirements that is due for the health care services that are the subject of the surprise out-of-network bill as stated by the health insurer in the settlement teleconference.

2. The enrollee shall pay any amount that has been received by the enrollee from the enrollee's health insurer as payment for the out-of-network health care services that were provided by the health care provider.

3. If a health insurer pays for out-of-network health care services directly to a health care provider, the health insurer that has not remitted its payment for the out-of-network health care services shall remit the amount due to the health care provider.

I. Arbitration of any surprise out-of-network bill shall be conducted telephonically unless otherwise agreed by all of the required participants.

J. Arbitration of the surprise out-of-network bill shall take place with or without the enrollee's participation.

K. The arbitrator shall determine the amount the health care provider is entitled to receive as payment for the health care services. The arbitrator shall allow each party to provide information the arbitrator reasonably determines to be relevant in evaluating the surprise out-of-network bill, including the following information:

1. The average contracted amount that the health insurer pays for the health care services at issue in the county where the health care services were performed.

2. The average amount that the health care provider has contracted to accept for the health care services at issue in the county where the services were performed.

3. The amount that medicare and medicaid pay for the health care services at issue.

4. The health care provider's direct pay rate for the health care services at issue, if any, under section 32-3216.

5. Any information that would be evaluated in determining whether a fee is reasonable under title 32 and not excessive for the health care services at issue, including the usual and customary charges for the health care services at issue performed by a health care provider in the same or similar specialty and provided in the same geographic area.

6. Any other reliable databases or sources of information on the amount paid for the health care services at issue in the county where the services were performed.

L. Except on the agreement of the parties participating in the arbitration, the arbitration shall be conducted within one hundred twenty days after the department's notice of arbitration.

M. Except on the agreement of the parties participating in the arbitration, the arbitration may not last more than four hours.

N. The arbitrator shall issue a final written decision within ten business days following the arbitration hearing.  The arbitrator shall provide a copy of the decision to the enrollee, the health insurer and the health care provider or its billing company or authorized representative.

O. All pricing information provided by health insurers and health care providers in connection with the arbitration of a surprise out-of-network bill is confidential and may not be disclosed by the arbitrator or any other party participating in the arbitration or used by anyone, other than the providing party, for any purpose other than to resolve the surprise out-of-network bill.

P. All information received by the department or contracted entity in connection with an arbitration is confidential and may not be disclosed by the department or contracted entity to any person other than the arbitrator.

Q. A claim that is the subject of an arbitration request is not subject to article 1 of this chapter during the pendency of the arbitration. A health insurer shall remit its portion of the payment resulting from the informal settlement teleconference or the amount awarded by the arbitrator within thirty days after resolution of the claim.

R. A claim that is reprocessed by a health insurer as a result of a settlement, arbitration decision or other action under this article is not in violation of section 20-3102, subsection N.

S. Notwithstanding any informal settlement or the arbitrator's decision under this article, the enrollee is responsible for only the amount of the enrollee's cost sharing requirements and any amount received by the enrollee from the enrollee's health insurer as payment for the out-of-network health care services that were provided by the health care provider, and the health care provider may not issue, either directly or through its billing company, any additional balance bill to the enrollee related to the health care service that was the subject of the informal settlement teleconference or arbitration.

T. Unless all the parties otherwise agree or unless required by subsection F of this section, the health insurer and the health care provider shall share the costs of the arbitration equally, and the enrollee is not responsible for any portion of the cost of the arbitration. The health insurer and health care provider shall make payment arrangements with the arbitrator for their respective share of the costs of the arbitration.
A.R.S. § 20-259.03 — Arizona Code / Title 20 / Chapter 2 / Article 2 / Section 259.03
20-259.03 Uninsured and underinsured motorist coverages; insured; wrongful death recovery
Status: in_force

20-259.03. Uninsured and underinsured motorist coverages; insured; wrongful death recovery

Notwithstanding any other law, in the case of the death of an insured who is covered under the uninsured and underinsured motorist coverages of a motor vehicle liability policy, recovery for wrongful death is limited to any party who is qualified to bring a wrongful death action pursuant to section 12-612 and who is also a surviving insured under the same coverages of the policy. If there are no surviving insureds who qualify to bring a wrongful death action pursuant to section 12-612, the estate of the deceased insured maintains the right of recovery against the uninsured and underinsured motorist coverages of the motor vehicle policy.
A.R.S. § 20-889 — Arizona Code / Title 20 / Chapter 4 / Article 4 / Section 889
20-889 Injunction; delinquency or dissolution proceedings
Status: in_force

20-889. Injunction; delinquency or dissolution proceedings

A court in this state shall not hear an application or petition for injunction against a domestic, foreign or alien society or lodge, any delinquency or other proceeding for dissolution of a society or the appointment of a conservator or receiver unless the application or petition is filed in the name of this state on the relation of the director pursuant to chapter 3, article 4 of this title.
A.R.S. § 20-555 — Arizona Code / Title 20 / Chapter 3 / Article 2 / Section 555
20-555 Security agreements; definition
Status: in_force

20-555. Security agreements; definition

A. In connection with a mortgage loan on the security of real property designed and used primarily for residential purposes only, which mortgage loan was acquired pursuant to section 20-553, an insurer may lend or invest an amount not exceeding twenty per cent of the amount loaned on or invested in such real property mortgage in a security agreement for a term of not more than five years, representing a first and prior lien, except for taxes not then delinquent, on personal property constituting durable equipment owned by the mortgagor and kept and used in the mortgaged premises.

B. For the purposes of this section, the term "durable equipment" shall include only mechanical refrigerators, air conditioning equipment, mechanical laundering machines, heating and cooking stoves and ranges, and in addition, in the case of apartment houses and hotels, room furniture and furnishings.

C. Prior to the acquisition of a security interest under this section, items of property to be included therein shall be separately appraised by a qualified appraiser and the fair market value thereof determined. No such security interest may exceed in amount the same ratio of loan to the value of the property as is applicable to the companion loan on the real property.
A.R.S. § 20-1583 — Arizona Code / Title 20 / Chapter 6 / Article 9 / Section 1583
20-1583 Title insurance agencies; use of corporate names
Status: in_force

20-1583. Title insurance agencies; use of corporate names

A title insurer may authorize the use of its corporate name or a portion of the name to a title insurance agency.
A.R.S. § 20-3502 — Arizona Code / Title 20 / Chapter 28 / Article 1 / Section 3502
20-3502 Compliance with federal law; report
Status: in_force

20-3502. Compliance with federal law; report

A. Each health care insurer that issues a health plan in this state shall comply with the mental health parity and addiction equity act.

B. After January 1, 2022, on a date specified by the director, each health care insurer that issues a health plan in this state shall submit a report to the department for each fully insured product network type the health care insurer issues. If the health care insurer determines that the information to be reported varies by network or plan, or varies in the individual, small group or large group market, the health care insurer must submit a report for each variation. Each report must do the following:

1. Describe the process that is used to develop or select the medical necessity criteria for mental health and substance use disorder benefits and the process used to develop or select the medical necessity criteria for medical and surgical benefits.

2. Identify all nonquantitative treatment limits that are applied to mental health and substance use disorder benefits and all nonquantitative treatment limits that are applied to medical and surgical benefits within each classification of benefits.

3. Demonstrate through analysis that for any nonquantitative treatment limit applied to mental health and substance use disorder benefits in a classification of benefits, as written and in operation, any process, strategy, evidentiary standard or other factor used in applying the nonquantitative treatment limit to mental health and substance use disorder benefits in the classification are comparable to, and applied not more stringently than, any process, strategy, evidentiary standard or other factor used in applying the treatment limit for medical and surgical benefits in the classification.

C. In addition to analyzing the reports prescribed in subsection B of this section, the department shall also evaluate health plan compliance with the standards related to financial requirements and quantitative treatment limits described in this section. The department shall perform this analysis during its review of required health care insurer form filings, but may also require a health care insurer to submit additional data relating to its methods for complying with financial requirements and quantitative treatment limit standards. The department may collect and analyze data for each health care insurer's large group plans through a separate, consolidated report.

D. The health plan may not apply any financial requirement or quantitative treatment limit to mental health and substance use disorder benefits in any classification that is more restrictive than the predominant financial requirement or quantitative treatment limit of that type applied to substantially all medical and surgical benefits in the same classification, unless the requirement or treatment limit is modified by one of the following exceptions:

1. Multitiered prescription drug benefits. If a health plan applies different levels of financial requirements to different tiers of prescription drug benefits that are based on reasonable factors determined in accordance with the requirements for nonquantitative treatment limits and without regard to whether a drug is generally prescribed with respect to medical and surgical benefits or with respect to mental health or substance use disorder benefits, the health plan satisfies the parity requirements of this section with respect to prescription drug benefits.  For the purposes of this paragraph, "reasonable factors" include cost, efficacy, generic versus brand name and mail order versus pharmacy pick up.

2. Multiple network tiers. If a health plan provides benefits through multiple tiers of in-network providers, including an in-network tier of preferred providers with more generous cost sharing to participants than a separate in-network tier of participating providers, the health plan may divide its benefits provided on an in-network basis into subclassifications that reflect network tiers, if the tiering is based on reasonable factors determined in accordance with the requirements for nonquantitative treatment limits and without regard to whether a provider provides services with respect to medical and surgical benefits or mental health or substance use disorder benefits in any subclassification that is more restrictive than the predominant financial requirement or treatment limit that applies to substantially all medical and surgical benefits in the subclassification.

3. Subclassifications allowed for office visits that are separate from other outpatient services. For the purposes of applying the financial requirements and treatment limits prescribed by this section, a health plan may divide its benefits provided on an outpatient basis into the two subclassifications described in this paragraph. After the subclassifications are established, the health plan or health care insurer may not impose any financial requirement or quantitative treatment limit on mental health or substance use disorder benefits in any subclassification that is more restrictive than the predominant financial requirement or quantitative treatment limit that applies to substantially all medical and surgical benefits in the subclassification.  Subclassifications for generalists and specialists are prohibited.  Only the following two subclassifications are allowed under this paragraph:

(a) Office and physician visits.

(b) All other outpatient items and services, including outpatient surgery, facility charges for day treatment centers, laboratory charges or other similar medical items.

E. A health insurer shall file the report required by subsection B of this section once every three years.  In years in which the report required by subsection B of this section is not required to be filed, the health care insurer shall file a summary of changes made to the medical necessity criteria and nonquantitative treatment limits and a written attestation that specifies that the health care insurer is in compliance with the mental health parity and addiction equity act.  The department may require the health care insurer to respond to additional questions that are related to the summary of changes or to supply additional data to verify compliance. Three years after the health care insurer submits an original report required by subsection B of this section or an updated or refiled report described in this subsection, the health care insurer may either:

1. File an updated report.

2. Resubmit the health care insurer's currently filed report if the health care insurer files a written attestation to the department that specifies that there have been no changes.

F. Except as otherwise provided in this section, if a health care insurer provided the information required by this section in an existing filing or report, the department may not require the health care insurer to submit any additional filing or report. The department is not prohibited from otherwise requesting information or data that is necessary to verify compliance with the mental health parity and addiction equity act or this chapter. The department shall analyze the information required by this section that the health care insurer previously submitted in an existing filing or report to determine compliance with the report required by this section.  The department may establish by rule the terms regarding any required resubmittal of information.

G. All documents, reports or other materials provided to the director pursuant to this section are confidential and are not subject to disclosure. Section 20-157.01, subsection B applies to this section.
A.R.S. § 20-286 — Arizona Code / Title 20 / Chapter 2 / Article 3 / Section 286
20-286 Licensure; lines of authority
Status: in_force

20-286. Licensure; lines of authority

A. Unless the director denies a license pursuant to section 20-295, the director shall issue a resident insurance producer license to any person who meets the requirements prescribed in sections 20-284 and 20-285. An insurance producer may qualify for a license in one or more of the following lines of authority:

1. Life. Life insurance is coverage on human lives, including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income.

2. Accident and health or sickness. Accident and health or sickness insurance is coverage for sickness, bodily injury or accidental death and may include benefits for disability income.

3. Property. Property insurance is coverage for the direct or consequential loss or damage to property of every kind.

4. Casualty. Casualty insurance is coverage against legal liability, including liability for death, injury, disability or damage to real or personal property.

5. Variable life and variable annuity products.  Variable life and variable annuity is insurance coverage that is provided under a variable life insurance contract or a variable annuity.

6. Personal lines. Personal lines is property and casualty insurance coverage that is sold to individuals and families for primarily noncommercial purposes.

7. Credit.  Credit insurance is limited line credit insurance.

8. Crop. Crop insurance is limited line crop insurance.

9. Any other line of insurance allowed under state law or rules adopted by the director.

B. The license shall contain the licensee's name, address and identification number, the date of issuance, the lines of authority, the expiration date and any other information the director deems necessary.  The director may make the information prescribed by this section available electronically.

C. A licensee shall inform the director in writing within thirty days of any change in the licensee's:

1. Residential, business or e-mail address.

2. Members, directors, officers or designated producer. The director may require that a licensee who notifies the director of a change pursuant to this paragraph submit a full set of fingerprints of each new member, director, officer or designated producer to the director 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.

3. Name.

D. In order to assist in the performance of the director's duties, the director may contract with a third party to perform any ministerial functions that are related to producer licensing and that the director deems appropriate, including the collection of fees.
A.R.S. § 20-781 — Arizona Code / Title 20 / Chapter 4 / Article 2 / Section 781
20-781 Subscribers' advisory committee
Status: in_force

20-781. Subscribers' advisory committee

A. The advisory committee of a domestic reciprocal insurer exercising the subscribers' rights shall be selected under such rules as the subscribers adopt.

B. Not less than two thirds of the committee shall be subscribers other than the attorney, or any person employed by, representing or having a financial interest in the attorney.

C. The committee shall:

1. Supervise the finances of the insurer.

2. Supervise the insurer's operations to such extent as to assure conformity with the subscribers' agreement and power of attorney.

3. Procure the audit of the accounts and records of the insurer and of the attorney at the expense of the insurer.

4. Have such additional powers and functions as may be conferred by the subscribers' agreement.
A.R.S. § 20-1359 — Arizona Code / Title 20 / Chapter 6 / Article 4 / Section 1359
20-1359 Misstatement of age
Status: in_force

20-1359. Misstatement of age

There may be a provision as follows: "Misstatement of age: If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age."
A.R.S. § 20-481.16 — Arizona Code / Title 20 / Chapter 2 / Article 8 / Section 481.16
20-481.16 Alternative registration for an affiliate
Status: in_force

20-481.16. Alternative registration for an affiliate

The director may allow an insurer which is authorized to do business in this state and which is part of an insurance holding company system to register on behalf of any affiliated insurer which is required to register under section 20-481.09 and to file all information and material required.
A.R.S. § 20-481.12 — Arizona Code / Title 20 / Chapter 2 / Article 8 / Section 481.12
20-481.12 Standards
Status: in_force

20-481.12. Standards

A. Transactions within an insurance holding company system to which an insurer subject to registration is a party are subject to the following standards:

1. The terms are fair and reasonable.

2. Agreements for cost sharing or management services and management must include provisions that are required by rule.

3. Charges or fees for services performed are reasonable.

4. Expenses incurred and payment received are allocated to the insurer in conformity with customary insurance accounting practices consistently applied.

5. The books, accounts and records of each party to all transactions clearly and accurately disclose the nature and details of the transactions including any accounting information that is necessary to support the reasonableness of the charges or fees to the respective parties.

6. The insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates is reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.

7. If the director deems that an insurer subject to this article is in a hazardous financial condition pursuant to section 20-220.01 or that a condition exists that constitutes grounds for supervision, conservation or a delinquency proceeding, the director may require the insurer to submit a deposit, held by the director, or a bond to protect the insurer for the duration of any outstanding contract or agreement.  In determining whether to require a deposit or bond, the director shall consider whether an affiliated person would be able to fulfill the contract or agreement if the insurer were to be placed into liquidation. The director may determine the amount of the deposit or bond, not to exceed the value of the contract or agreement in any one year, and whether the deposit or bond should be required for a single contract, multiple contracts or a contract with a specific person.

8. All records and data of the insurer that are held by an affiliate are the property of the insurer and are subject to the insurer's control. The records and data must be maintained in an identifiable manner and must be segregated or readily capable of being segregated at no additional cost to the insurer. At the request of the insurer, the affiliate shall allow the receiver to obtain a complete set of all records of any type that pertain to the insurer's business, obtain access to the operating systems on which the data is maintained, obtain the software that runs those systems and restrict the use of the data by the affiliate if it is not operating the insurer's business.  Notwithstanding any other law, the affiliate shall provide a waiver of any landlord lien or other encumbrance to give the insurer access to all records and data in the event of the affiliate's default under a lease or other agreement.  For the purposes of this paragraph, "all records and data" includes claims and claim files, policyholder lists, application files, litigation files, premium records, rate books, underwriting manuals, personnel records, financial records or similar records within the possession, custody or control of the affiliate.

9. Premiums or other funds that belong to the insurer and that are collected by or held by an affiliate are the exclusive property of the insurer and are subject to the control of the insurer. If an insurer is placed into receivership, any right of offset is subject to chapter 3, article 4 of this title.

B. The following transactions involving a domestic insurer and any person in its insurance holding company system, including amendments and modifications of affiliate agreements previously filed pursuant to this section that are subject to any materiality standards contained in paragraphs 1, 2, 3, 4 and 5 of this subsection, may not be entered into unless the insurer notifies the director in writing not less than thirty days before entering the transaction, unless the director permits a shorter notification period, of its intention to enter into the transaction and the director does not disapprove the transaction within that period:

1. Sales, purchases, exchanges, loans or extensions of credit, guarantees or investments if the transactions equal or exceed, with respect to nonlife insurers, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders as of December 31 next preceding or, with respect to life insurers, three percent of the insurer's admitted assets as of December 31 next preceding.

2. Loans or extensions of credit to any person who is not an affiliate if the insurer makes the loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of or to make investments in any affiliate of the insurer making such loans or extensions of credit if the transactions equal or exceed, with respect to nonlife insurers, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders as of December 31 next preceding or, with respect to life insurers, three percent of the insurer's admitted assets as of December 31 next preceding.

3. Reinsurance agreements or modifications to reinsurance agreements, including:

(a) All reinsurance pooling agreements.

(b) Agreements in which the reinsurance premium or a change in the insurer's liabilities, or the projected reinsurance premium or a change in the insurer's liabilities in any of the next three years, equals or exceeds five percent of the insurer's surplus as regards policyholders as of December 31 next preceding, including those agreements that may require as consideration the transfer of assets from an insurer to a nonaffiliate if an agreement or understanding exists between the insurer and the nonaffiliate that any portion of the assets will be transferred to one or more affiliates of the insurer.

4. All management agreements, service contracts, tax allocation agreements, guarantees and cost sharing arrangements.

5. Guarantees at the time executed by a domestic insurer, provided that a guarantee that is quantifiable as to amount is not subject to the notice requirements of this subsection unless the guarantee exceeds the lesser of one-half of one percent of the insurer's admitted assets or ten percent of the insurer's surplus as regards policyholders as of December 31 next preceding the execution of the guarantee. All guarantees that are not quantifiable as to amount are subject to the notice requirements of this subsection.

6. Direct or indirect acquisitions or investments in a person that controls the insurer or in an affiliate of the insurer in an amount that, together with its present holding in such investments, exceeds two and one-half percent of the insurer's surplus to policyholders.  Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to section 20-481.01, or in nonsubsidiary insurance affiliates that are subject to this article, are exempt from this requirement.

7. Any material transaction that is specified by rule and that the director determines may adversely affect the interests of the insurer's policyholders.

C. The notice prescribed in subsection B of this section for amendments or modifications must include the reasons for the change and the financial impact on the domestic insurer. Informal notice shall be given within thirty days after a termination of a previously filed agreement to the director for determination of the type of filing required, if any.

D. Subsection B of this section does not authorize or allow any transactions that would be otherwise contrary to law.

E. A domestic insurer shall not enter into transactions that are part of a plan or series of like transactions with persons within the holding company system if the purpose of those separate transactions is to avoid the statutory threshold amount and thereby avoid the review that otherwise would occur. If the director determines that separate transactions were entered into during any twelve month period for that purpose, the director may order the insurer to cease and desist under section 20-481.26.

F. In reviewing transactions pursuant to subsection B of this section, the director shall consider if the transactions comply with the standards set forth in subsection A of this section and if they adversely affect the interests of policyholders.

G. Within thirty days after an investment of a domestic insurer in any one corporation the director shall be notified of the investment if the total investment in the corporation by the insurance holding company system exceeds ten percent of the corporation's voting securities.

H. The director may adopt rules to exempt transactions involving nonmaterial amounts from the notice requirements of this section.

I. For the purposes of supervision, seizure, conservatorship or receivership proceedings:

1. An affiliate that is a party to an agreement or contract with a domestic insurer that is subject to subsection B, paragraph 4 of this section is subject to the jurisdiction of any supervision, seizure, conservatorship or receivership proceedings against the insurer and to the authority of any supervisor, conservator, rehabilitator or liquidator for the insurer that is appointed pursuant to chapter 3, article 4 of this title for the purpose of interpreting, enforcing and overseeing the affiliate's obligations under the agreement or contract to perform services for the insurer that either:

(a) Are an integral part of the insurer's operations, including management, administrative, accounting, data processing, marketing, underwriting, claims handling, investment or other similar functions.

(b) Are essential to the insurer's ability to fulfill its obligations under insurance policies.

2. The director may require that an agreement or contract pursuant to subsection B, paragraph 4 of this section for the provision of services described in paragraph 1 of this subsection specify that the affiliate consents to the jurisdiction prescribed in this subsection.
A.R.S. § 20-618 — Arizona Code / Title 20 / Chapter 3 / Article 4 / Section 618
20-618 Grounds for conservation of alien insurers
Status: in_force

20-618. Grounds for conservation of alien insurers

The director may apply to the court for an order appointing him as receiver or ancillary receiver, and directing him to conserve the assets within this state, of any alien insurer upon any of the following grounds:

1. Upon any of the grounds specified in sections 20-615 or 20-616.

2. Upon the ground that the insurer has failed to comply, within the time designated by the director, with an order made by him to make good an impairment of its trusteed funds.

3. Upon the ground that the property of the insurer has been sequestrated in its domiciliary sovereignty or elsewhere.
A.R.S. § 20-373 — Arizona Code / Title 20 / Chapter 2 / Article 4 / Section 373
20-373 Commissions and fees
Status: in_force

20-373. Commissions and fees

Nothing in this article shall abridge or restrict the freedom of contract of insurers, agents or brokers with reference to the amount of commissions or fees to be paid to agents or brokers by insurers, and such payments are expressly authorized.
A.R.S. § 20-269 — Arizona Code / Title 20 / Chapter 2 / Article 2 / Section 269
20-269 Motor vehicle insurer; claims process; electronic communications; acknowledgment of receipt; definition
Status: in_force

20-269. Motor vehicle insurer; claims process; electronic communications; acknowledgment of receipt; definition

A. For communications related to a motor vehicle insurance policy's claims process and in addition to other forms of communication, an insurer that conducts business in this state shall accept electronic content submissions and communications through a method that is designated by the insurer as an acceptable form of communication between the insurer and the claimant or the claimant's authorized representative. Electronic content submissions and communications may include time-sensitive documents and demands.  The insurer shall respond with an acknowledgment of receipt within ten business days.

B. A motor vehicle insurer may accept a fax as a form of communication if another form of electronic communication is also available.

C. For the purposes of this section, "claimant" includes a third-party claimant.
A.R.S. § 20-224.03 — Arizona Code / Title 20 / Chapter 2 / Article 1 / Section 224.03
20-224.03 Premium tax credit for new employment
Status: in_force

20-224.03. Premium tax credit for new employment

A. For taxable years beginning from and after June 30, 2011, a credit is allowed against the premium tax liability imposed pursuant to section 20-224, 20-837, 20-1010, 20-1060 or 20-1097.07 for net increases in full-time employees residing in this state and hired in qualified employment positions in this state as computed and certified by the Arizona commerce authority pursuant to section 41-1525. For the purposes of this section and section 41-1525:

1. A tax credit is not allowed against the portion of the tax payable to the fire fighters' relief and pension fund pursuant to section 20-224 or the portion of the tax payable to the public safety personnel retirement system pursuant to section 20-224.01.

2. A reciprocal insurer and its attorney-in-fact are considered to be the same entity for the purposes of calculating the tax credit under this section.

B. Subject to subsection F of this section, the amount of the tax credit is equal to:

1. $3,000 for each full-time employee hired in a qualified employment position in the first year or partial year of employment.  Employees hired in the last ninety days of the taxable year are excluded for that taxable year and are considered to be new employees in the following taxable year.

2. $3,000 for each full-time employee in a qualified employment position for the full taxable year in the second year of continuous employment.

3. $3,000 for each full-time employee in a qualified employment position for the full taxable year in the third year of continuous employment.

C. The capital investment and the new qualified employment positions requirements of section 41-1525, subsection B must be accomplished within twelve months after the start of the required capital investment.  A credit may not be claimed until both requirements are met. A business that meets the requirements of section 41-1525, subsection B for a location is eligible to claim first year credits for three years beginning with the taxable year in which those requirements are completed. Employees hired at the location before the beginning of the taxable year but during the twelve-month period allowed in this subsection are considered to be new employees for the taxable year in which all of those requirements are completed. The employees that are considered to be new employees for the taxable year under this subsection shall not be included in the average number of full-time employees during the immediately preceding taxable year until the taxable year in which all of the requirements of section 41-1525, subsection B are completed. An employee working at a temporary worksite in this state while the designated location is under construction is considered to be working at the designated location if all of the following occur:

1. The employee is hired after the start of the required investment at the designated location.

2. The employee is hired to work at the designated location after it is completed.

3. The payroll for the employees destined for the designated location is segregated from other employees.

4. The employee is moved to the designated location within thirty days after its completion.

D. To qualify for a credit under this section, the insurer and the employment positions must meet the requirements prescribed by section 41-1525.

E. A credit is allowed for employment in the second and third year only for qualified employment positions for which a credit was claimed and allowed in the first year.

F. The net increase in the number of qualified employment positions is the lesser of the total number of filled qualified employment positions created at the designated location or locations during the taxable year or the difference between the average number of full-time employees in this state in the current taxable year and the average number of full-time employees in this state during the immediately preceding taxable year.  The net increase in the number of qualified employment positions computed under this subsection may not exceed the difference between the average number of full-time employees in this state in the current taxable year and the average number of full-time employees in this state during the immediately preceding taxable year.

G. If the allowable tax credit exceeds the state premium tax liability, the amount of the claim not used as an offset against the state premium tax liability may be carried forward as a tax credit against subsequent years' state premium tax liability for a period not exceeding five taxable years.

H. If the business is sold or changes ownership through reorganization, stock purchase or merger, the new taxpayer may claim first year credits only for the qualified employment positions that it created and filled with an eligible employee after the purchase or reorganization was complete. If a person purchases a taxpayer that had qualified for first or second year credits or if an insurance business changes ownership through reorganization, stock purchase or merger, the new taxpayer may claim the second or third year credits if it meets other eligibility requirements of this section. Credits for which a taxpayer qualified before the changes described in this subsection are terminated and lost at the time the changes are implemented.

I. An insurer that claims a tax credit against state premium tax liability is not required to pay any additional retaliatory tax imposed pursuant to section 20-230 as a result of claiming that tax credit.

J. A failure to timely report and certify to the Arizona commerce authority the information prescribed by section 41-1525, subsection E and in the manner prescribed by section 41-1525, subsection F disqualifies the insurer from the credit under this section. The department of insurance and financial institutions shall require written evidence of the timely report to the Arizona commerce authority.

K. A tax credit under this section is subject to recovery for a violation described in section 41-1525, subsection H.

L. The department may adopt rules necessary for the administration of this section.

M. For the purposes of subsection B, paragraphs 2 and 3 of this section, if a full-time employee in the qualified employment position leaves during the taxable year, the employee may be replaced with another new full-time employee in the same employment position and the new employee will be treated as being in the employee's second or third full year of continuous employment for the purposes of the credit under this section if both of the following apply:

1. The total time the position was vacant from the date the employment position was originally filled to the end of the current tax year totals ninety days or less.

2. The new employee meets all of the same requirements as the original employee was required to meet.
A.R.S. § 20-489 — Arizona Code / Title 20 / Chapter 2 / Article 13 / Section 489
20-489 Violent crime control and law enforcement act; insurance business; rules
Status: in_force

20-489. Violent crime control and law enforcement act; insurance business; rules

A. The department shall enforce sections 1033 and 1034 of the violent crime control and law enforcement act of 1994 (P.L. 103-322; 18 United States Code sections 1033 and 1034) relating to crimes by or affecting persons who are engaged in the business of insurance and whose activities affect interstate commerce.

B. The director may adopt rules pursuant to title 41, chapter 6 to carry out this section.
A.R.S. § 20-1233 — Arizona Code / Title 20 / Chapter 6 / Article 1 / Section 1233
20-1233 Free look; annuity contracts
Status: in_force

20-1233. Free look; annuity contracts

A. Each annuity contract delivered or issued for delivery in this state and each annuity application shall contain a notice prominently printed on or attached to the first page stating that, on written request, an insurer is required to provide within a reasonable time reasonable factual information regarding the benefits and provisions of the annuity contract to the contract holder and that if for any reason the contract holder is not satisfied with the annuity contract the contract holder may return the annuity contract within ten days, or within thirty days if the contract holder is sixty-five years of age or older on the date of the application for the annuity contract, after the contract is delivered and receive a refund of all monies paid.

B. Notwithstanding subsection A, for variable annuity contracts, the refund under subsection A shall equal the sum of the difference between the premiums paid, including any policy or contract fees or other charges, and the amounts allocated to any separate accounts under the policy or contract, and the value of the amounts allocated to any separate accounts under the policy or contract on the date the returned policy is received by the insurer or its insurance producer.

C. The ten or thirty day return and refund provision provided in subsection A does not apply to an annuity contract supplemental to a settled annuity contract that provides for payments in consideration of accumulations from the original annuity contract and that is issued only to holders of the original contract.
A.R.S. § 20-698 — Arizona Code / Title 20 / Chapter 3 / Article 10 / Section 698
20-698 Annual audited financial reports
Status: in_force

20-698. Annual audited financial reports

A. For the year ending December 31, 2010 and for each year thereafter, every insurer is subject to the requirements of the national association of insurance commissioners annual financial reporting model regulation for that calendar year. Only insurers having direct premiums written of less than one million dollars nationwide in any calendar year and less than one thousand policyholders or certificate holders of direct written policies nationwide at the end of the calendar year are exempt from the requirements of the national association of insurance commissioners annual financial reporting model regulation for that calendar year, unless the director makes a specific finding that compliance is necessary for the director to carry out statutory responsibilities.  Insurers that assumed premiums pursuant to contracts or treaties of reinsurance of one million dollars or more are not exempt.

B. The director may determine whether, consistent with the requirements of the national association of insurance commissioners annual financial reporting model regulation:

1. A foreign or alien insurer may be exempt from compliance with any or all of the annual financial reporting requirements if the director finds its domiciliary jurisdiction has a substantially similar law in effect and the insurer has filed its audited financial report and other required communications with the director as otherwise required by this article.

2. An insurer is required to file an audited financial report earlier than June 1, with ninety days' advanced notice to the insurer.

3. An extension of the June 1 filing date will be granted for thirty-day periods.

4. An exception will be granted to the rotation requirement for a lead audit partner for an insurer.

5. An individual meets the qualifications as an independent certified public accountant for the purposes of this article.

6. A financial or organizational hardship exemption will be granted to allow a qualified independent certified public accountant to perform nonaudit services for an insurer having direct written and assumed premiums of less than one hundred million dollars in any calendar year.

7. An insurer may file consolidated or combined audited financial statements in lieu of a separate annual audited financial statement if the insurer is part of a group of insurance companies that uses a pooling or one hundred per cent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer cedes all of its direct and assumed business to the pool.

8. An insurer will be granted a hardship waiver of the audit committee requirements regarding independent audit committee members.

9. An insurer will be granted a financial or organizational hardship exemption from compliance with any or all of the annual financial reporting requirements.
A.R.S. § 20-1098.16 — Arizona Code / Title 20 / Chapter 4 / Article 14 / Section 1098.16
20-1098.16 Captive manager
Status: in_force

20-1098.16. Captive manager

A captive insurer shall engage a manager who shall maintain the books and records of the captive insurer’s business, transactions and affairs at a location that is in this state and that is accessible to the director.  The captive manager shall promptly notify the director of any failure of the captive insurer to comply with this article.  The director may require a captive insurer to discharge a captive manager for failure to substantively fulfill the captive manager’s duties under this article.
A.R.S. § 20-1507 — Arizona Code / Title 20 / Chapter 6 / Article 7 / Section 1507
20-1507 Riders; endorsements; additional perils
Status: in_force

20-1507. Riders; endorsements; additional perils

A. Appropriate forms of additional contracts, riders or endorsements, insuring against indirect or consequential loss or damage, or against any one or more perils other than those of fire and lightning, or providing coverage which the insurer issuing the policy is authorized by charter and by the laws of this state to assume or issue, may be used in connection with the standard fire policy.

B. Such other perils or coverages may include those excluded in the standard fire insurance policy, and may include any of the perils or coverages permitted to be insured against or issued by property and casualty insurers. Such forms of contracts, riders and endorsements may contain provisions and stipulations inconsistent with such standard fire insurance policy, if such provisions and stipulations are applicable only to such additional coverage or to the additional peril or perils insured against.
A.R.S. § 20-766 — Arizona Code / Title 20 / Chapter 4 / Article 2 / Section 766
20-766 Name of insurer; designation by name as party in action
Status: in_force

20-766. Name of insurer; designation by name as party in action

A reciprocal insurer shall have and use a business name which shall include the word "reciprocal," "inter-insurer," "inter-insurance," "exchange," "underwriters" or "underwriting," and shall sue and be sued in its own name.
A.R.S. § 20-118 — Arizona Code / Title 20 / Chapter 1 / Article 1 / Section 118
20-118 Prohibition; definitions
Status: in_force

20-118. Prohibition; definitions

A. A person subject to this title shall not restrict or prohibit, by means of a policy or contract, whether written or otherwise, a licensed health care professional's good faith communication with the health care professional's patient concerning the patient's health care or medical needs, treatment options, health care risks or benefits.

B. A person subject to this title shall not terminate a contract with or refuse to renew a contract with a health care professional solely because the health care professional in good faith does any of the following:

1. Advocates in private or in public on behalf of a patient.

2. Assists a patient in seeking reconsideration of a decision made by the person to deny coverage for a health care service.

3. Reports a violation of law to an appropriate authority.

C. For the purposes of this section:

1. "Contract" means a written contract under which a licensed health care professional agrees to provide specified health care services to covered persons.  Contract does not include a contract of salaried employment.

2. "Health care professional" has the same meaning prescribed in section 20-3151.

3. "Person" includes a service corporation subject to chapter 4, article 3 of this title and a health care services organization subject to chapter 4, article 9 of this title.
A.R.S. § 20-824 — Arizona Code / Title 20 / Chapter 4 / Article 3 / Section 824
20-824 Application for certificate; fee
Status: in_force

20-824. Application for certificate; fee

Such a corporation may issue contracts to its subscribers only when the director has, by certificate of authority, authorized it so to do. Application for a certificate of authority shall be made on forms supplied or approved by the director containing such information as the director deems necessary. Each application for a certificate of authority shall be accompanied by the fee prescribed by chapter 1, article 2 of this title for medical, hospital, dental and optometric service corporations and copies of the following documents:

1. Articles of incorporation.

2. Bylaws.

3. Proposed contracts between the applicant and participating hospitals, physicians, dentists or optometrists showing the terms under which service is to be furnished to subscribers.

4. Proposed contracts to be issued to subscribers.

5. A table of rates to be charged to subscribers.

6. Financial statement of the corporation, including the amounts of contributions paid or agreed to be paid to the corporation for working capital, and the name or names of each contributor and the terms of each contribution.

7. A statement of the area in which the corporation proposes to operate.
A.R.S. § 20-1096.09 — Arizona Code / Title 20 / Chapter 4 / Article 12 / Section 1096.09
20-1096.09 Cease and desist order; violation of article
Status: in_force

20-1096.09. Cease and desist order; violation of article

If a hearing is held pursuant to the provisions of this title, and if the director determines that the provisions of this article have been violated, the director shall, in addition to the authority to revoke or suspend a certificate of authority, issue an order requiring the person violating the provisions of this article to cease and desist from such method, act or practice. The director shall make a written record of his findings.
A.R.S. § 20-1014 — Arizona Code / Title 20 / Chapter 4 / Article 7 / Section 1014
20-1014 Examination
Status: in_force

20-1014. Examination

The director may conduct an examination of the affairs of any prepaid dental plan organization as often as the director deems it necessary for the protection of the interests of the people of this state.
A.R.S. § 20-1402 — Arizona Code / Title 20 / Chapter 6 / Article 5 / Section 1402
20-1402 Provisions of group disability policies; definitions
Status: in_force

20-1402. Provisions of group disability policies; definitions

A. Each group disability policy shall contain in substance the following provisions:

1. A provision that, in the absence of fraud, all statements made by the policyholder or by any insured person shall be deemed representations and not warranties, and that no statement made for the purpose of effecting insurance shall avoid such insurance or reduce benefits unless contained in a written instrument signed by the policyholder or the insured person, a copy of which has been furnished to the policyholder or to the person or beneficiary.

2. A provision that the insurer will furnish to the policyholder, for delivery to each employee or member of the insured group, an individual certificate setting forth in summary form a statement of the essential features of the insurance coverage of the employee or member and to whom benefits are payable. If dependents or family members are included in the coverage additional certificates need not be issued for delivery to the dependents or family members. Any policy, 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 the 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 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 such thirty-one day period.

3. A provision that to the group originally insured may be added from time to time eligible new employees or members or dependents, as the case may be, in accordance with the terms of the policy.

4. Each contract shall be so written that the corporation shall pay benefits:

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

(b) 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.

(c) 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.

(d) 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.

5. A group 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.

6. A contract, except a supplemental contract covering a specified disease or other limited benefits, 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:

(a) A mammogram.

(b) 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.

7. 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:

(a) The child is adopted within one year of birth.

(b) The insured is legally obligated to pay the costs of birth.

(c) All preexisting conditions and other limitations have been met by the insured.

(d) The insured has notified the insurer of the insured'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.

8. The coverage prescribed by paragraph 7 of this subsection 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.

B. Any policy 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 policy shall not require the provider to obtain authorization from the insurer for prescribing the minimum length of stay required by this subsection. The policy 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 policy 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 policy 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 policy in a manner that is inconsistent with this subsection.

5. Except as described in subsection C 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.

C. Subsection B 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 policy, except that any coinsurance or other cost sharing for any portion of a period within a hospital length of stay required pursuant to subsection B 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 B of this section.

D. 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.

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

F. 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 G of this section or medical literature that meets the criteria prescribed in subsection G 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.

G. For the purposes of subsection F 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)).

H. Any contract that is offered by a group 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.

I. 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.

J. 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.

K. 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.

L. Any group 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 group 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 group 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.

M. Notwithstanding subsection L of this section, a religiously affiliated employer may require that the insurer provide a group disability policy without coverage for specific items or services required under subsection L 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 L 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 group disability policy that excludes coverage for specific items or services required under subsection L of this section.  The insurer shall retain the affidavit for the duration of the group 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.

N. Subsection M 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.

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

P. 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 A 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 M and N 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. § 20-711 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 711
20-711 Initial qualification of domestic mutual insurers
Status: in_force

20-711. Initial qualification of domestic mutual insurers

A. When newly organized a domestic mutual insurer may be authorized to transact any one kind of insurance other than title insurance.

B. When applying for an original certificate of authority as an insurer, a domestic mutual insurer shall be otherwise qualified under this title, and shall have received and accepted bona fide applications with respect to substantial insurable subjects for insurance coverage of a substantial character of the kind of insurance proposed to be transacted, shall have collected in full and in cash the proper premium at a rate not less than that usually charged by stock insurers for comparable coverages, shall have surplus funds on hand as at completion of issuance of all such policies so applied for, or, in lieu of such applications, premiums and surplus, may deposit surplus, all in accordance with that portion of the following schedule which applies to the one kind of insurance the insurer then proposes to transact:

Minimum     Minimum           Minimum     Maximum

number      number            amount of   amount of

of    of    Minimum     insurance   insurance

Kind of     applicants  subjects    premium     each  each

insurance   accepted    covered     collected   subject     subject

______

Life (i)    300   300   Annual      $1,000      $20,000

Disability (ii)   300   300   Quarter     100 monthly 200 monthly

indemnity   indemnity

Property (iii)    100   250   Annual      1,000 30,000

Marine and

Transportation    100   250   Annual      1,000 30,000

Vehicle (iv)      100   250   Annual      15,000      30,000

Casualty (iv)     100   250   Annual      15,000      30,000

Surety      100   250   Annual      1,000 50,000

C. The following provisions in the schedule shall govern as to the one kind of insurance the insurer then proposes to transact:

1. Under (i). No group insurance, nor term policies for terms of less than ten years shall be included.

2. Under (ii). No group or blanket or family plans of insurance shall be included. In lieu of weekly indemnity a like premium value in medical, surgical and hospital benefits may be provided. Any accidental death or dismemberment benefit provided shall not exceed two thousand dollars.

3. Under (iii). Only insurance of the owner's interest in real property may be included, and all such coverages shall be in compliance with the provisions of subsection E of section 20-260 (two properties reasonably subject to loss from the same fire may not be insured by the same insurer if results in excess of limit of risk).

4. Under (iv). Shall include insurance of legal liability for bodily injury and property damage to which the maximum and minimum insured amounts apply.

5. Under (v). The deposit in the amount specified shall thereafter be maintained. The deposit is subject to the provisions of this title governing deposits of insurers in general.
A.R.S. § 20-1098.03 — Arizona Code / Title 20 / Chapter 4 / Article 14 / Section 1098.03
20-1098.03 Minimum capital and surplus; letter of credit; borrowed surplus
Status: in_force

20-1098.03. Minimum capital and surplus; letter of credit; borrowed surplus

A. The director shall not issue a license to a captive insurer unless the insurer possesses and thereafter maintains minimum unimpaired paid-in capital and surplus in combination as follows:

1. In the case of a pure captive insurer, at least $250,000.

2. In the case of a group captive insurer, at least $500,000.

3. In the case of an agency captive insurer, at least $500,000.

4. In the case of a protected cell captive insurer, at least $250,000.

5. In the case of a captive insurer that is organized as a reciprocal insurer, at least $500,000.

6. In the case of a pure or group captive insurer that transacts only reinsurance, one-half of the applicable amount prescribed in paragraph 1 or 2 of this subsection.

B. All minimum capital and surplus requirements shall be in the form of cash or an irrevocable and unconditional letter of credit that contains an evergreen clause, that is payable to, filed with and held by the director in trust for the protection of all policyholders, ceding insurers and related expenses and that meets the following conditions:

1. The letter of credit shall be issued or confirmed by a qualified United States financial institution as defined in section 20-3601, subsection A and shall comply with the requirements prescribed by the director.

2. The captive insurer shall not be directly or contingently liable for any letter of credit comprising its capital or surplus, and its assets shall not be pledged as security for the letter of credit.

C. The director may prescribe additional capital and surplus requirements based on the type, volume and nature of insurance. The captive insurer may pledge, with the approval of the department, any additional prescribed capital and surplus, whether in the form of cash, another allowable asset or any irrevocable and unconditional letter of credit that contains an evergreen clause.

D. Notwithstanding any other provision of this title, a written agreement under which a captive insurer borrows monies that are required to be repaid only out of the insurer’s surplus in excess of that stipulated in the agreement may provide for interest at any rate agreed on and approved by the director.

E. A captive insurer that is established solely for the purpose of reinsuring risks as part of a program filed and approved by the director to facilitate the securitization of risks ceded to the captive insurer may be a party to contracts that provide that subsequent purchasers of interests in the program assume the interests on a nonrecourse basis, both as to the captive insurer and any affiliate.
A.R.S. § 20-547 — Arizona Code / Title 20 / Chapter 3 / Article 2 / Section 547
20-547 Equipment trust certificates
Status: in_force

20-547. Equipment trust certificates

An insurer may invest in equipment trust obligations or certificates which in the opinion of the director are adequately secured, or other instruments so secured and evidencing an interest in transportation equipment, wholly or in part within the United States, which carry the right to receive determined portions of rental, purchase or other fixed obligatory payments to be made for the use or purchase of the transportation equipment.
A.R.S. § 20-332 — Arizona Code / Title 20 / Chapter 2 / Article 3.3 / Section 332
20-332 Self-service storage agents; license; definitions
Status: in_force

20-332. Self-service storage agents; license; definitions

A. The director may issue a self-service storage agent license to an operator that has complied with the requirements of this section authorizing the operator to offer or to sell the kinds of insurance prescribed in this section in connection with and incidental to the rental of space at a self-service storage facility.

B. An applicant for a self-service storage agent license shall file a written application in a form prescribed by the director.  The application shall specify all locations in this state at which the self-service storage agent may conduct business under the license. Notwithstanding section 20-290, subsection B, a self-service storage agent is not required to have an individual licensee in each self-service storage facility or place where insurance is transacted.  The self-service storage agent shall notify the director within thirty days after commencing business under the self-service storage agent's license at any additional locations in this state or of those locations in this state that cease to do business under the license.

C. A self-service storage agent may offer or sell insurance only in connection with and incidental to the rental of space at a self-service storage facility and only with respect to personal property insurance that provides coverage to occupants at the self-service storage facility where the insurance is transacted for the loss of or damage to stored personal property that occurs at that facility.

D. A self-service storage agent shall not offer or sell insurance pursuant to this section unless:

1. The self-service storage agent makes readily available to the prospective occupant brochures or other written materials that:

(a) Summarize the material terms of insurance coverage offered to occupants, including the identity of the insurer, price, benefits, exclusions and conditions.

(b) Disclose that the policies offered by the self-service storage agent may provide a duplication of coverage already provided by an occupant's homeowner's insurance policy, renter's insurance policy, vehicle insurance policy, watercraft insurance policy or other source of property insurance coverage.

(c) State that if insurance is required as a condition of rental, the requirement may be satisfied by the occupant purchasing the insurance prescribed in this section or by presenting evidence of other applicable insurance coverage.

(d) Describe the process for filing a claim.

2. All costs related to the insurance are clearly itemized in writing.

3. Evidence of coverage in a form approved by the insurer is provided to every occupant who purchases the coverage.

4. The insurance is provided by an insurer authorized to transact the applicable kinds of insurance in this state or by a surplus lines insurer pursuant to article 5 of this chapter.

E. An employee or agent of a self-service storage agent may act on behalf of and under the supervision of the self-service storage agent in matters relating to the conduct of business under the license that is issued pursuant to this section.  The conduct of an employee or agent of a self-service storage agent acting within the scope of employment or agency is deemed the conduct of the self-service storage agent for purposes of this section.

F. Each self-service storage agent shall provide a training program that gives employees and agents of the self-service storage agent basic instruction about the provisions of this section, including the kinds of insurance coverage prescribed in this section.

G. A self-service storage agent shall not:

1. Offer or sell insurance except in connection with and incidental to the rental of space at a self-service storage facility.

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 commission or other compensation dependent on the sale of insurance under the self-service storage agent license that is issued pursuant to this section.

H. Nothing in this section prohibits:

1. An insurer from paying, and a self-service storage agent from receiving, a commission, service fee or other valuable consideration dependent on the sale of insurance.

2. A self-service storage agent from paying, and its employees or agents from receiving, production payments or incentive payments if the payments are not dependent on the sale of insurance.

I. An operator is not required to be licensed pursuant to this section merely to display and make available to prospective occupants brochures and other promotional materials created by or on behalf of an authorized insurer or by a surplus lines insurer pursuant to article 5 of this chapter.

J. To the extent not inconsistent with this section, sections 20-281, 20-282, 20-283, 20-288 and 20-289, section 20-290, subsection A and sections 20-291, 20-292, 20-293, 20-295, 20-296, 20-297, 20-298, 20-299, 20-301 and 20-302 apply to self-service storage agents.  A self-service storage agent is not subject to the continuing education requirements of chapter 18 of this title.

K. For the purposes of this section:

1. "Occupant" means a person or the person's sublessee, successor or assign who is entitled to the use of a leased space or spaces at a self-service storage facility, to the exclusion of others.

2. "Operator" means the owner or owner's managing agent of a self-service storage facility.

3. "Personal property" means movable property that is not affixed to land and includes:

(a) Goods, wares, merchandise, household items and furnishings.

(b) Vehicles, motor vehicles, trailers and semitrailers as those terms are defined in section 28-101.

(c) Watercraft and motorized watercraft as those terms are defined in section 5-301.

4. "Self-service storage agent" means an operator who is licensed pursuant to this section.

5. "Self-service storage facility" means any real property that is used for renting or leasing storage space in which the occupants themselves customarily store and remove personal property on a self-service basis.
A.R.S. § 20-401.06 — Arizona Code / Title 20 / Chapter 2 / Article 5 / Section 401.06
20-401.06 Unauthorized transactions; classification
Status: in_force

20-401.06. Unauthorized transactions; classification

Any unauthorized insurer who knowingly transacts any unauthorized act of an insurance business is guilty of a class 5 felony.
A.R.S. § 20-417 — Arizona Code / Title 20 / Chapter 2 / Article 5 / Section 417
20-417 Failure to remit tax; civil penalty; exception
Status: in_force

20-417. Failure to remit tax; civil penalty; exception

A. If any surplus lines broker fails to remit the surplus lines tax provided for by section 20-416, the broker is liable for a civil penalty of not more than $25 for each additional day of delinquency. The director may collect the tax by distraint and may recover the civil penalty by an action in the name of this state against the insured and the surplus lines broker. All civil penalties are payable into the general fund of this state.

B. If the director requires the surplus lines tax to be paid electronically through a designated third-party service pursuant to section 20-416, a penalty does not accrue for any payment of tax or interest that is late due to delays caused by the third-party service.
A.R.S. § 20-1133 — Arizona Code / Title 20 / Chapter 5 / Article 1 / Section 1133
20-1133 Medicare supplement insurance; early enrollment discounts; applicability
Status: in_force

20-1133. Medicare supplement insurance; early enrollment discounts; applicability

A. The director shall adopt rules necessary to comply with the requirements of the social security disability amendments of 1980 (P.L. 96-265; 42 United States Code section 1395ss) and any federal laws or regulations pertaining to that section, so that this state may retain its full authority to regulate minimum standards for medicare supplement insurance.

B. For the purposes of this section, an insurer may file for medicare supplement rates that include an early enrollment discount that will not be considered an attained age rating structure. An early enrollment discount shall diminish over a period of time and is only available to enrollees who purchase the plan within the early enrollment period designated by the insurer. Insurers shall disclose to all applicants how the early enrollment discount will diminish over time.

C. Subject to the other limitations provided in this subsection, a benefit mandated in this title for health insurance policies does not apply to medicare supplement insurance policies unless the mandated policy benefit is set forth in rules adopted pursuant to this section or unless the statute mandating the policy benefit expressly states that it is made specifically applicable to medicare supplement insurance policies. A medicare supplement insurance policy may not contain any exclusion for services provided by any type of properly licensed health care provider if the provider's services are eligible for medicare reimbursement and if the specific services in question would be covered by medicare. The scope of benefits of a medicare supplement policy may not be less than the minimum level of benefits established by federal law.

D. Notwithstanding any other provision of this title, rules adopted pursuant to this section apply to insurance provided under disability insurance policies, under subscription contracts of hospital, medical, dental or optometric service corporations, under certificates of fraternal benefit societies, under evidences of coverage of health care services organizations and under coverages issued by any other insurer, which policies, contracts, certificates, membership coverages, evidences of coverage and coverages are delivered or issued for delivery in this state on or after the effective date of rules adopted pursuant to subsection A of this section. In adopting the rules required by subsection A of this section, the director shall prescribe an effective date of the rules that will allow insurers sufficient time to bring their forms and practices into compliance with the requirements of the rule.