A.R.S. § 20-289 — Arizona Code / Title 20 / Chapter 2 / Article 3 / Section 289
20-289 Expiration; surrender; renewal
Status: in_force

20-289. Expiration; surrender; renewal

A. Any license that is issued pursuant to this article, other than a temporary license, continues in force until it expires or the director suspends, revokes or terminates the license.  The license is also subject to renewal pursuant to this section.

B. A license that is issued or renewed pursuant to this article or a license that is issued or renewed pursuant to chapter 6, article 9 of this title expires quadrennially as follows:

1. If the licensee is an individual, on the last day of the month of the licensee's birthday, but not less than three years and not more than four years after the last day of the month in which the license is issued or is required to be renewed.

2. If the licensee is a business entity, on the last day of the same month four years after the issuance or renewal due date of the license as provided pursuant to this article.

C. The director may renew a license if the director receives from the licensee all of the following on or before the license expiration date:

1. An application on a form approved by the director.

2. The license fee prescribed in section 20-167.

3. Evidence that the licensee has complied with the continuing education requirements prescribed in chapter 18 of this title.

D. Before renewing a license, the director may require the applicant to:

1. Provide all documents that are reasonably necessary to verify the information that is contained in the application and any other information including prior criminal records.

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

E. Any license for which the director does not receive timely application for renewal and full payment of fees expires at midnight on the renewal date.  During the year after the expiration of a license under this section, a person who otherwise meets the qualifications for a license may renew an expired license by filing with the director a renewal application, the quadrennial license fee and an additional $100 as a late renewal fee.  Any application that is received during this one-year period for the same license that expired under this section is deemed a renewal application.  Any application that is received after the one-year period for the same license that expired under this section is deemed a new application.

F. On the written request of a person who is licensed pursuant to this article, the director may accept the voluntary surrender of the person's authority to transact one or more lines of insurance or of the person's entire license.  A person who surrenders an authority or a license under this subsection may obtain the same authority or license only if the person complies with the requirements that apply to a person who has not previously held the authority or license.
A.R.S. § 20-1078 — Arizona Code / Title 20 / Chapter 4 / Article 9 / Section 1078
20-1078 Rules
Status: in_force

20-1078. Rules

The director may adopt rules pursuant to title 41, chapter 6 to carry out this article.
A.R.S. § 20-112 — Arizona Code / Title 20 / Chapter 1 / Article 1 / Section 112
20-112 Existing actions or violations
Status: in_force

20-112. Existing actions or violations

Repeal by this title of any law shall not affect or abate any right accrued, action or proceeding commenced, or any unlawful act committed under such law, prior to January 1, 1955, and punishment or deprivation of license or authority as a consequence thereof as provided by such laws, but all proceedings taken on or after January 1, 1955 with respect thereto shall conform to the applicable provisions of this code insofar as possible. All such laws shall be deemed to continue in force to the extent made necessary by this provision.
A.R.S. § 20-1531 — Arizona Code / Title 20 / Chapter 6 / Article 8 / Section 1531
20-1531 Sole surety on official bonds
Status: in_force

20-1531. Sole surety on official bonds

When any bond, recognizance or undertaking is required or permitted to be made for the security or protection of any person or municipality, the state, or any department thereof, or organization, conditioned for the doing or not doing of anything therein specified, any such board, court, organization or officer required or permitted to accept or approve the sufficiency of the bond, recognizance or undertaking, may accept and approve it when executed, or when the conditions thereof are guaranteed, solely by an insurer authorized to transact a surety business in this state in accordance with the requirements of this title. When any such bond, recognizance or undertaking is required to be made with one surety or with two or more sureties, the execution of the bond, recognizance or undertaking, or the guarantee of the performance of the conditions thereof, shall be sufficient when so executed or guaranteed solely by one such insurer, and shall be a full compliance with every requirement of every law, ordinance or regulation relating thereto, and no justification by such insurer shall be necessary.
A.R.S. § 20-2205 — Arizona Code / Title 20 / Chapter 12 / Article 1 / Section 2205
20-2205 Plan of operation; contents
Status: in_force

20-2205. Plan of operation; contents

Within forty-five days after the effective date of the initial order of the director issued pursuant to section 20-2202, the directors of the association shall submit to the director for his review a proposed plan of operation consistent with the provisions of this chapter. The plan of operation shall provide for economic, fair and nondiscriminatory administration and for the prompt and efficient provision of liability insurance coverage in designated lines. The plan shall contain provisions pertaining to preliminary assessment of all members for initial expenses necessary to commence operations, establishment of necessary facilities, management of the association, assessment of members or surcharging of insureds to defray losses and expenses, commission arrangements, reasonable and objective underwriting standards, acceptance and cession of reinsurance, retention of servicing carriers or other servicing arrangements, procedures for determining amounts of insurance to be provided by the association and retention of persons necessary to effectuate the purposes of this chapter. The plan shall contain a provision for a system or program of reasonable loss control efforts.
A.R.S. § 20-488.01 — Arizona Code / Title 20 / Chapter 2 / Article 12 / Section 488.01
20-488.01 Risk-based capital reports
Status: in_force

20-488.01. Risk-based capital reports

A. On or before the later of March 1 or its annual statement filing due date, each domestic insurer shall annually prepare and submit to the director a report of the insurer's RBC levels as of the end of the previous calendar year.  The RBC report shall be in a form and shall contain that information that is required by the RBC instructions.  Each domestic insurer shall file its RBC report with both:

1. The national association of insurance commissioners in accordance with the RBC instructions.

2. The insurance director in any state in which the insurer is authorized to transact insurance business on the written request of the insurance director.  The insurer shall file its RBC report not later than fifteen days after receiving notice to file its RBC report with that state or the filing date specified in this subsection, whichever is later.

B. A life or health insurer's RBC shall be determined according to the formula set forth in the RBC instructions.  The formula shall take into account and may adjust for the covariance between the following risks that are determined in each case by applying the factors in the manner set forth in the RBC instructions:

1. The risk with respect to the insurer's assets.

2. The risk of adverse insurance experience with respect to the insurer's liabilities and obligations.

3. The interest rate risk with respect to the insurer's business.

4. All other business risks and any other relevant risks that are set forth in the RBC instructions.

C. A property or casualty insurer's RBC shall be determined according to the formula set forth in the RBC instructions. The formula shall take into account and may adjust for the covariance between the following risks that are determined in each case by applying the factors in the manner set forth in the RBC instructions:

1. Asset risk.

2. Credit risk.

3. Underwriting risk.

4. All other business risks and any other relevant risks that are set forth in the RBC instructions.

D. A health organization's RBC shall be determined according to the formula set forth in the RBC instructions.  The formula shall take into account and may adjust for the covariance between the following risks that are determined in each case by applying the factors in the manner set forth in the RBC instructions:

1. Asset risk.

2. Credit risk.

3. Underwriting risk.

4. All other business risks and any other relevant risks that are set forth in the RBC instructions.

E. If the director determines that an RBC report filed by a domestic insurer is inaccurate, the director shall adjust the RBC report to correct the inaccuracy and shall notify the insurer of the adjustment.  The notice shall state the reason for the adjustment.  An RBC report that has been adjusted shall be referred to as an adjusted RBC report.

F. Insurers shall maintain capital above the RBC levels required by this article.
A.R.S. § 20-420 — Arizona Code / Title 20 / Chapter 2 / Article 5 / Section 420
20-420 Exemptions from surplus lines provisions
Status: in_force

20-420. Exemptions from surplus lines provisions

A. The sections of this article relating to surplus lines coverages do not apply to reinsurance or to the following classes of insurance placed by licensed insurance producers of this state:

1. Ocean marine and foreign trade insurance.

2. Insurance on subjects that are located, resident or to be performed wholly outside this state, or on vehicles or aircraft owned and principally garaged outside this state.

3. Insurance for an insured that is a federally recognized Indian tribe or who is a member of a federally recognized Indian tribe on subjects of insurance that are located, resident or to be performed wholly within the boundaries of a federally recognized Indian reservation.

4. Insurance on property or operations of railroads engaged in interstate commerce.

B. Any insurance producer that places any of the classes of insurance prescribed in subsection A of this section with an unauthorized insurer shall keep a record of each coverage in detail as required of surplus lines insurance pursuant to section 20-414. The insurance producer shall preserve the record for not less than three years after the expiration or cancellation date of the insurance policy and shall make the record available in this state and open to the examination of the director.
A.R.S. § 20-1575 — Arizona Code / Title 20 / Chapter 6 / Article 9 / Section 1575
20-1575 Foreign title insurers; resident agent required
Status: in_force

20-1575. Foreign title insurers; resident agent required

A.  A title insurer that is not incorporated under the laws of this state, but is authorized to transact business herein, shall not make, write, place or cause to be made, written or placed any policy or contract of insurance covering real property in this state except:

1. Through a title insurance agent as defined in section 20-1562.

2. Through a bona fide branch office located in this state and under the direction and control of such title insurer, all expenses of which branch office, including compensation of all employees, are paid by such title insurer.

3. Through a subsidiary title insurer.

B. This section does not apply to contracts of reinsurance or excess coinsurance.
A.R.S. § 20-3302 — Arizona Code / Title 20 / Chapter 24 / Article 1 / Section 3302
20-3302 Insurance compliance audit privilege; requirements
Status: in_force

20-3302. Insurance compliance audit privilege; requirements

A. Except as provided in subsections E and F of this section, an insurance compliance audit document is privileged information and is not discoverable or admissible as evidence in any legal action in any civil or administrative proceeding other than a regulatory or legal action brought as part of the director's duties. This privilege is a matter of substantive law of this state and is not merely a procedural matter governing civil proceedings in the courts of this state. The following provisions apply to the privilege:

1. If any company, person or entity performs or directs the performance of an insurance compliance audit, an officer, employee or agent involved with the insurance compliance audit or any consultant who is hired for the purpose of performing the insurance compliance audit may not be examined in any civil or administrative proceeding as to the insurance compliance audit or any insurance compliance audit document.

2. In connection with examinations conducted under this title, an insurer may submit an insurance compliance audit document to the director or the director's designee as a confidential document without waiving the privilege set forth under this subsection to which the insurer would otherwise be entitled.  Any insurance compliance audit document furnished to the director may not be provided by the director to any other person or entity and shall be accorded the same privilege provided under this subsection.

3. If an insurer submits an insurance compliance audit document to the director, the document remains confidential and privileged and:

(a) Is subject to all applicable statutory or common law privileges, including the insurance compliance audit privilege, the work product doctrine, the attorney-client privilege or the subsequent remedial measures exclusion.

(b) Is not subject to any further disclosure or production.

(c) Is not subject to title 39, chapter 1, article 2, not subject to subpoena and not subject to discovery or admissible in a private administrative proceeding or in a private civil action, other than in an administrative proceeding conducted by the director.

4. Disclosure of an insurance compliance audit document to a governmental agency, whether voluntary or pursuant to compulsion of law, does not constitute a waiver of the privilege set forth under this subsection with respect to any other person or governmental agency.

5. The director may obtain insurance compliance audit documents at any time.  The director may use the insurance compliance audit documents in the furtherance of any regulatory or legal action brought as part of the director's duties.  The insurer shall comply with any compliance dates set by the director with respect to the insurance compliance audit. Notwithstanding any other law, the director shall provide an insurer with copies of all documents that the director believes support a violation of this title or that justify any regulatory or other action against the insurer.  A disclosure pursuant to this paragraph is not a waiver of any applicable privilege or claim of confidentiality in the disclosed documents.

6. In order to facilitate identification, audit documents produced as a result of an insurance compliance audit shall be labeled "compliance report: privileged document".

7. A person who conducts or participates in the preparation of an insurance compliance audit and who has observed physical events may testify regarding those events, but may not be compelled to testify or produce documents related to any privileged part of the insurance compliance audit or any insurance compliance audit document.

8. The insurance compliance audit does not prevent the discovery of a document or other evidence, otherwise discoverable, that is maintained by an insurer and that was not developed for the insurance compliance audit pursuant to this article.

B. The privilege described in this article does not apply to:

1. A document, communication, data or report or other information required by the department or other regulatory agency to be collected, developed, maintained or reported under applicable law.

2. Information obtained by observation, sampling or monitoring by the department or other regulatory agency.

3. Information obtained from a source not involved in the preparation of the insurance compliance audit report.

4. Documents, communications, data, spreadsheets, reports, memoranda, drawings, photographs, exhibits, computer records, maps, charts, graphs, recordings and surveys kept or prepared in the ordinary course of business.

C. If an insurance compliance audit document is obtained, reviewed or used in a criminal proceeding, the privilege described in this article is not waived or eliminated for any other purpose.

D. This article does not provide civil or criminal immunity to an organization or affect any other privilege that may be available by law.

E. The privilege set forth under subsection A of this section does not apply under the following circumstances:

1. To the extent that it is expressly waived by the insurer that prepared or caused to be prepared the insurance compliance audit document.

2. If, after an in camera review, a court of record in a civil or administrative proceeding other than in a regulatory or legal action brought as part of the director's duties determines one of the following:

(a) The privilege is asserted for a fraudulent purpose.

(b) The document is not subject to the privilege.

(c) The privileged document shows evidence of noncompliance with applicable state or federal laws, rules, regulations or orders of the department and the insurer, person or entity fails to undertake corrective action or eliminate the noncompliance within the compliance date set by the director.

F. Within sixty days after an insurer is served a written request by certified mail for disclosure of an insurance compliance audit document, the insurer may file with the appropriate court a petition requesting a hearing on whether the insurance compliance audit document or portions of the document are privileged under this section or subject to disclosure.  The court shall conduct an in camera review of the insurance compliance audit document and shall determine whether all or a portion of the insurance compliance audit document is privileged or subject to disclosure. The insurer's failure to file a petition for a hearing does not waive the privilege in connection with any other request for disclosure of the insurance compliance audit document. If an insurer files a petition for an in camera hearing pursuant to this subsection, the following apply:

1. The petition shall include all of the information set forth in paragraph 3 of this subsection.

2. After conducting an in camera review, the court may require disclosure of all or a portion of the insurance compliance audit document if the court determines, based on its in camera review, that any one of the conditions set forth in subsection E, paragraph 2 of this section applies. On making this determination, the court may only compel the disclosure of those portions of an insurance compliance audit document that are relevant to issues in dispute in the underlying proceeding.  Any compelled disclosure will not be considered to be a public document or be deemed to be a waiver of the privilege for any other civil or administrative proceeding. An insurer unsuccessfully opposing disclosure may apply to the court for an appropriate order protecting the document from further disclosure.

3. At the time of filing a request for a hearing, the insurer shall provide all of the following information:

(a) The date of the insurance compliance audit document.

(b) The identity of the entity conducting the insurance compliance audit.

(c) The general nature of the activities covered by the insurance compliance audit.

(d) An identification of the portions of the insurance compliance audit document for which the privilege is being asserted.

G. An insurer asserting the insurance compliance privilege set forth under subsection A of this section has the burden of demonstrating the applicability of the privilege. Once an insurer has established the applicability of the privilege, the party seeking disclosure has the burden of proving the inapplicability of the privilege.

H. At any time, the parties to a civil or administrative proceeding other than a regulatory or legal action brought as a part of the director's duties may stipulate to entry of an order directing that specific information contained in an insurance compliance audit document is or is not subject to the privilege provided under subsection A of this section. The stipulation may be limited to the instant proceeding and, absent specific language to the contrary, is not applicable to any other proceeding.

I. This section or the release of any insurance compliance audit document under this section does not limit, waive or abrogate the scope or nature of any statutory or common law privilege including the work product doctrine, the attorney-client privilege or the subsequent remedial measures exclusion.

J. This article does not limit the director's authority under sections 20-156, 20-157, 20-157.01, 20-160 and 20-466.
A.R.S. § 20-1098.01 — Arizona Code / Title 20 / Chapter 4 / Article 14 / Section 1098.01
20-1098.01 Licensing; authority
Status: in_force

20-1098.01. Licensing; authority

A. If allowed by its articles of incorporation, bylaws or other organizational document, an applicant may apply to the director for a license to transact captive insurance, except that:

1. A pure captive insurer shall not insure risks other than the risks of its affiliates and controlled unaffiliated business.

2. A group captive insurer, other than a risk retention group, shall not insure risks other than the risks of its group members, its affiliates and controlled unaffiliated business.  A risk retention group shall insure only the risks of its group members.

3. An agency captive insurer shall not:

(a) Insure any risks other than those placed by or through its owners.

(b) Directly insure life or disability insurance risks without the approval of the director. The insurance risks that the director may approve are limited to employer group term life insurance, employer group disability income insurance and reimbursement of employer health plan deductibles. The director may require the business written by an agency captive insurer to be any of the following:

(i) Fronted by an insurer that holds a certificate of authority under the laws of any state.

(ii) Reinsured by a reinsurer authorized, accredited or approved by the director.

(iii) Secured by a trust fund in the United States for the benefit of policyholders and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the director. The director may require the agency captive insurer to increase the funding of any security arrangement established under this item. If the form of security is a letter of credit, the letter of credit shall be issued or confirmed by a bank approved by the director. A trust maintained pursuant to this item shall be established in a form and on terms approved by the director.

4. A protected cell captive insurer shall not insure any risks other than those prescribed in its participant contracts.

B. The following apply to the transaction of insurance by a captive insurer on a direct basis:

1. A captive insurer shall not directly insure any of the following types of insurance business:

(a) Hospital service corporations, medical service corporations, dental service corporations, optometric service corporations or hospital, medical, dental and optometric service corporations as defined in section 20-822.

(b) Health care services organizations as defined in section 20-1051.

(c) Prepaid dental plan organizations as defined in section 20-1001.

(d) Prepaid legal insurance contracts as defined in section 20-1097.

(e) Business of title insurance as defined in section 20-1562.

(f) Personal motor vehicle or homeowner's insurance coverage or any component of that insurance coverage.

(g) Mortgage guaranty insurance as defined in section 20-1541.

(h) Workers' compensation or employers' liability insurance policies except in connection with a self-insurance program as prescribed in this subsection.

2. A pure captive insurer shall not provide direct coverage of workers' compensation or employers' liability in this state unless the coverage is provided under a self-insurance program that is approved by the industrial commission of Arizona pursuant to section 23-961. A captive insurance program that is authorized by section 23-961 is subject to and shall comply with all requirements of title 23, chapter 6 that are applicable to self-insurance.

3. A pure captive insurer shall not provide direct coverage of workers' compensation or employers' liability insurance in another state unless the coverage is provided under a self-insurance program that is qualified as a self-insurance program under the applicable state or federal law, as determined by the agency or other entity that has jurisdiction over the self-insurance program.

4. An agency captive insurer directly insuring life or disability income insurance risk as specified in subsection A, paragraph 3 of this section:

(a) Shall mark each policy and certificate with a conspicuously stamped or written notice in bold-faced type that states the following:

This policy is issued by an insurer that is not a member of an Arizona insurance guaranty fund.  If the insurer that issued this policy becomes insolvent, insureds or claimants will not be eligible for insurance guaranty fund protection pursuant to title 20, Arizona Revised Statutes.

(b) May insure only life and disability income insurance risks as specified in subsection A, paragraph 3 of this section for employers that maintain their principal place of business within this state.

(c) May not be owned or controlled by an insurer that is granted authority by the director to transact insurance in this state.

(d) Shall have its financial statements audited by an independent certified public accountant pursuant to section 20-1098.07, subsection B.

(e) May not directly insure life or disability income insurance risks as specified in subsection A, paragraph 3 of this section in this state unless all of the following apply:

(i) An insurance producer or managing general agent that owns the agency captive insurer remains in regulatory good standing in all states in which it is licensed.

(ii) The agency captive insurer insures only the risks of employer group term life insurance, employer group disability income insurance and reimbursement of employer health plan deductibles that are placed by or through an insurance producer or managing general agent that owns the agency captive insurer and, if required by the director, provides the director the form of such policies.

(iii) The agency captive insurer discloses to the original policyholder or policyholders, in a form or manner approved by the director, all limitations, rights and obligations held by the agency captive insurer as a result of its affiliation with an insurance producer or managing general agent.

5. This subsection does not prohibit a captive insurer from directly insuring deductible reimbursement risk.

6. This subsection does not prohibit a captive insurer from directly insuring employment practices liability risk.

C. A captive insurer shall not accept or cede reinsurance except as provided in section 20-1098.11.

D. A captive insurer that writes life insurance or disability insurance shall comply with all applicable state and federal laws.

E. A captive insurer shall:

1. Hold at least one meeting of its board of directors or its board of managers or, for reciprocal insurers, its subscribers' advisory committee each year in this state.

2. Maintain its principal place of business in this state.

3. Appoint a resident statutory agent to accept service of process and to otherwise act on its behalf in this state and shall file the appointment with the director.  In the case of a captive insurer formed as a reciprocal insurer, if the statutory agent cannot with reasonable diligence be found at the registered office of the captive insurer, the director is an agent of the captive insurer on whom any process, notice or demand may be served.

F. Before receiving a license, an applicant for a captive insurer license shall file with the director the following:

1. If formed as a corporation, a certified copy of its articles of incorporation, articles of organization or other organizational document, a copy of its duly adopted bylaws or other governance rules, a statement under oath of its president and secretary showing its financial condition and any other statement or document required by the director.

2. If formed as a reciprocal insurer, a copy of the power of attorney of its attorney-in-fact, a copy of its subscribers' agreement, a copy of its duly adopted bylaws or other governance rules, a statement under oath of its attorney-in-fact showing its financial condition and any other statement or document required by the director.

G. In addition to the information required by subsection F of this section, each applicant for a captive insurer license shall file with the director evidence of all of the following:

1. The amount and liquidity of its assets relative to the risks to be assumed.

2. The adequacy of the expertise, experience and character of the directors and officers of the captive insurer.

3. The overall soundness of its plan of operation.

4. The adequacy of the loss prevention programs of its insureds.

5. The engagement of a competent manager that does business at a location in this state.

6. The establishment of business relationships with any accountants, banks, attorneys and other professionals that are acceptable to the department.

7. The ability of the captive insurer's owners or members to pay claims to third parties if the captive insurer is unable to pay those claims.

8. Other factors deemed relevant by the director in ascertaining whether the proposed captive insurer will be able to meet its policy obligations.

H. In addition to the information required by subsections F and G of this section, if the applicant is seeking authority as a protected cell captive insurer, the applicant shall file:

1. A business plan that demonstrates, in a manner acceptable to the director, how the applicant will account for the loss and expense experience of each protected cell and report that information to the director.

2. A statement acknowledging that all financial records of the protected cell captive insurer, including records pertaining to protected cells, shall be available for inspection or examination by the director or the director's designee.

3. Its form for all participant contracts.

4. Evidence that the protected cell captive insurer will allocate expenses fairly and equitably to each protected cell.

I. Before the issuance of a license, an applicant shall promptly notify the director of any material change in the information filed pursuant to this section.

J. An applicant for a captive insurer license shall pay to the director a nonrefundable fee for the issuance of a captive insurance license pursuant to section 20-167. The captive insurer shall pay the license renewal fee pursuant to section 20-167 not earlier than July 1 and not later than September 1 of each year.

K. If the director is satisfied that the documents and statements that the applicant has filed comply with this article, the director may grant the applicant a captive insurer license that authorizes the captive insurer to transact captive insurance business in this state.

L. The director shall approve or deny an application for a license to transact captive insurance business within thirty days after the director deems the application complete.
A.R.S. § 20-1106 — Arizona Code / Title 20 / Chapter 5 / Article 1 / Section 1106
20-1106 Capacity to contract for insurance; minors
Status: in_force

20-1106. Capacity to contract for insurance; minors

A. Any person of competent legal capacity may contract for insurance.

B. A minor who is at least fifteen years of age as of the minor's nearest birthday may contract, notwithstanding the minor's minority, for life or disability insurance on the minor's own life or body, for the minor's own benefit or for the benefit of the minor's father or mother, spouse, child, brother, sister or grandparents.

C. A minor who is at least sixteen years of age as of the minor's nearest birthday, who is a foster child as defined in section 8-501 or a youth participating in the independent living program pursuant to section 8-521 and who has completed a driver education program may contract, notwithstanding the minor's minority, for motor vehicle liability insurance that satisfies the requirements of section 28-4009 and that covers the minor.

D. A minor described in subsection B or C of this section, notwithstanding the minor's minority, shall be deemed competent to exercise all rights and powers with respect to or under any contract of life or disability insurance on the minor's own life or body or contract of motor vehicle liability insurance pursuant to this section, as though of full legal age, and may surrender the minor's interest in the contract and give a valid discharge for any benefit accruing or money payable under the contract. The minor, by reason of his minority, may not rescind, avoid or repudiate the contract, nor rescind, avoid or repudiate any exercise of a right or privilege under the contract, except that the minor, not otherwise emancipated, may not be bound by any unperformed agreement to pay, by promissory note or otherwise, any premium on such an insurance contract.
A.R.S. § 20-1228 — Arizona Code / Title 20 / Chapter 6 / Article 1 / Section 1228
20-1228 Policy settlements
Status: in_force

20-1228. Policy settlements

Any life insurer may hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries, and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy, in the event the policyholder has made no such agreement, the insurer may hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate the funds so held but may hold them as part of its general assets.
A.R.S. § 20-149 — Arizona Code / Title 20 / Chapter 1 / Article 2 / Section 149
20-149 Prohibition on certain activities by employees; conflict of interest
Status: in_force

20-149. Prohibition on certain activities by employees; conflict of interest

A. The director, or any deputy, examiner, assistant or employee of the director shall not be financially interested, directly or indirectly, in any insurer, agency or any entity regulated under this title except as a policyholder or claimant under a policy. As to such matters wherein a conflict of interests does not exist on the part of any such individual, the director may employ from time to time insurance actuaries or other technicians who are independently practicing their professions even though similarly employed by insurers and others.

B. The director or any deputy, examiner, assistant or employee of the director shall not be given nor receive any fee, compensation, loan, gift or other thing of value in addition to the compensation provided by law for any service rendered or to be rendered as such director, deputy or employee or in connection therewith.

C. This section shall not be deemed to prohibit employment by the director of retired or pensioned personnel of insurers or insurance organizations.

D. The director, or any deputy, examiner, assistant or employee of the department whose relative is an owner, partner, director, officer, holder of a beneficial interest of more than five per cent whether as a shareholder or otherwise or a salaried employee of any entity regulated under this title shall be subject to the conflict of interest and disclosure requirements set forth in title 38, chapter 3, article 8.

E. For purposes of subsection D, the term "relative" shall include all persons set forth in section 38-502, paragraph 9.
A.R.S. § 20-1083 — Arizona Code / Title 20 / Chapter 4 / Article 10 / Section 1083
20-1083 Law applicable to domestic life and disability reinsurers
Status: in_force

20-1083. Law applicable to domestic life and disability reinsurers

A. All other provisions of this title that are not inconsistent with the provisions of this article apply to domestic life and disability reinsurers.

B. Notwithstanding section 20-223, an unaffiliated credit life and disability reinsurer shall submit an annual statement in a form acceptable to the director and the annual statement of the reinsurer is due August 1 if the reinsurer's fiscal year ends on the preceding December 31 or November 1 if the reinsurer's fiscal year ends on a preceding date other than the preceding December 31.

C. Notwithstanding section 20-223, subsection A, an unaffiliated credit life and disability reinsurer is exempt from the management discussion and analysis requirements prescribed in the accounting practices and procedures manual adopted by the national association of insurance commissioners.

D. Notwithstanding section 20-731 and any rule that requires a hearing on the withdrawal of an insurer from this state, a hearing on a merger with or on withdrawal from this state by an unaffiliated credit life and disability reinsurer is not required, unless the requirement of a hearing applies to another party to the transaction.

E. The following do not apply to unaffiliated credit life and disability reinsurers:

1. The requirement of an examination at least once every five years pursuant to section 20-156, subsection A.

2. Any rule adopted pursuant to section 20-223, subsection A relating to audited financial statements.

3. Chapter 2, article 12 of this title.

4. The quantitative restrictions or limitations imposed on the investments of insurers by this title.

5. Chapter 3, article 8 of this title.

6. Section 20-722.
A.R.S. § 20-155 — Arizona Code / Title 20 / Chapter 1 / Article 2 / Section 155
20-155 Expenses of administration
Status: in_force

20-155. Expenses of administration

All salaries, compensation and other expenses involved in the operation of the office of the director shall not exceed the amount from time to time appropriated or otherwise made available therefor by the legislature, including travel expense incurred by the director, his deputies and assistants within or outside this state in connection with official duties, dues assessed by the national association of insurance commissioners and travel expense incurred by the director and any one or more deputies or assistants designated by him in attendance upon meetings or committee meetings of such association.
A.R.S. § 20-845 — Arizona Code / Title 20 / Chapter 4 / Article 3 / Section 845
20-845 Suspension or revocation of certificate of authority; civil penalties
Status: in_force

20-845. Suspension or revocation of certificate of authority; civil penalties

A. The director may suspend or revoke a certificate of authority issued to a corporation pursuant to this article if the director finds that any of the following conditions exist:

1. The corporation is operating significantly in contravention of its basic organizational documents or in a manner contrary to that described in, and reasonably inferred from, any other information submitted pursuant to sections 20-824 and 20-825.

2. The corporation has issued subscription contracts that do not comply with the requirements of section 20-826.

3. The corporation can no longer be expected to meet its obligations to subscribers.

4. The corporation, or any authorized person on its behalf, has advertised or merchandised its services in a materially untrue, misleading, deceptive or unfair manner.

5. The corporation has failed to substantially comply with this article or any rule adopted pursuant to this article.

6. The corporation is in an unsound condition or in such a condition as to render its further transaction of business in this state hazardous to its subscribers or to the residents of this state.

B. If the certificate of authority of a corporation is suspended, the corporation shall not accept, during the period of the suspension, any additional subscribers except newborn children or other newly acquired dependents of existing subscribers and shall not engage in any advertising or marketing.

C. If the certificate of authority of a corporation is revoked, the corporation shall proceed, immediately following the effective date of the order of revocation, to conclude its affairs and shall conduct no further business except as may be essential to the orderly conclusion of business. The director, by written order, may permit any further operation of the corporation as the director finds to be in the best interest of subscribers to the end that subscribers shall be afforded the greatest practical opportunity to obtain continuing hospital, medical, dental or optometric coverage as applicable.

D. Notwithstanding subsections B and C of this section, a corporation that has had its certificate of authority suspended or revoked, or that is subject to an adverse action by the director, is entitled to a hearing pursuant to title 41, chapter 6, article 10 and, except as provided in section 41-1092.08, subsection H, is entitled to judicial review pursuant to title 12, chapter 7, article 6.

E. If, after a hearing, the director finds grounds pursuant to subsection A of this section to suspend or revoke a corporation's certificate of authority, the director may impose, in lieu of or in addition to that suspension or revocation, the following civil penalties that shall be remitted to the state treasurer for deposit, pursuant to sections 35-146 and 35-147, in the state general fund:

1. For an unintentional violation, not more than one thousand dollars for each violation and not more than an aggregate of ten thousand dollars in any six month period.

2. For an intentional violation, not more than five thousand dollars for each violation and not more than an aggregate of fifty thousand dollars in any six month period.
A.R.S. § 20-685 — Arizona Code / Title 20 / Chapter 3 / Article 7 / Section 685
20-685 Powers and duties of the fund
Status: in_force

20-685. Powers and duties of the fund

A. If a member insurer is an impaired insurer, the fund, subject to any conditions imposed by the fund that do not impair the contractual obligations of the impaired insurer, with the approval of the director, may:

1. Guarantee, assume, reissue or reinsure, or cause to be guaranteed, assumed, reissued or reinsured, any or all of the policies or contracts of the impaired insurer.

2. Provide monies, pledges, loans, notes, guarantees or other means as are proper to effectuate paragraph 1 of this subsection and assure payment of the contractual obligations of the impaired insurer pending action pursuant to paragraph 1 of this subsection.

B. If a member insurer is an insolvent insurer, the fund, with the approval of the director, shall either:

1. Guarantee, assume, reissue or reinsure, or cause to be guaranteed, assumed, reissued or reinsured, the policies or contracts of the insolvent insurer or assure payment of the contractual obligations of the insolvent insurer, and provide monies, pledges, loans, notes, guarantees or other means reasonably necessary to discharge the fund's obligations.

2. Provide benefits and coverage as follows:

(a) With respect to policies and contracts, assure payment of benefits that would have been payable under the policies or contracts of the insolvent insurer, for claims incurred:

(i) With respect to group policies and contracts, not later than the earlier of the next renewal date under those policies or contracts or forty-five days, but not less than thirty days, after the date on which the fund becomes obligated with respect to the policies and contracts.

(ii) With respect to nongroup policies, contracts and annuities, not later than the earlier of the next renewal date, if any, under the policies or contracts or one year, but not less than thirty days, from the date on which the fund becomes obligated with respect to the policies or contracts.

(b) Make diligent efforts to provide thirty days' notice of a termination of benefits under subdivision (a) of this paragraph to all known insureds, enrollees or annuitants for nongroup policies and contracts, and group policy or contract owners with respect to group policies and contracts.

(c) With respect to nongroup policies and contracts covered by the fund, make available to each known insured, enrollee or annuitant, or owner if other than the insured or annuitant, and with respect to an individual who was formerly an insured, enrollee or annuitant under a group policy or contract and who is not eligible for replacement group coverage, substitute coverage on an individual basis in accordance with subdivision (d) of this paragraph, if the insureds, enrollees or annuitants had a right under law or the terminated policy, contract or annuity to convert coverage to individual coverage or to continue an individual policy, contract or annuity in force until a specified age or for a specified time, during which the insurer or health care services organization had no right unilaterally to make changes in any provision of the policy, contract or annuity or had a right only to make changes in premium by class.

(d) In providing substitute coverage under subdivision (c) of this paragraph:

(i) The fund may offer to reissue the terminated coverage or to issue an alternative policy or contract at actuarially justified rates, subject to the prior approval of the director.

(ii) Any alternative or reissued policies or contracts so offered shall be offered without requiring evidence of insurability and without any waiting period or exclusion that would not have applied under the terminated policy or contract.

(iii) The fund may reinsure any alternative or reissued policy or contract.

(e) Any alternative policy or contract adopted by the fund is subject to approval by the director. The fund may adopt alternative policies or contracts of various types for future issuance without regard to any particular impairment or insolvency.  Any alternative policy or contract shall:

(i) Contain at least the minimum statutory provisions required in this state and provide benefits that are reasonable in relation to the premium charged. The fund shall set the premium in accordance with a table of rates that the fund shall adopt.  The premium shall reflect the amount of insurance to be provided and the age and class of risk of each insured, but shall not reflect any changes in the health of the insured after the original policy or contract was last underwritten.

(ii) Provide coverage of a type similar to that of the policy or contract issued by the impaired insurer or insolvent insurer, as determined by the fund.

(f) If the fund elects to reissue terminated coverage at a premium rate different from that charged under the terminated policy or contract, the premium shall be actuarially justified and shall be set by the fund in accordance with the amount of insurance or coverage provided and the age and class of risk, subject to prior approval of the director.

(g) The fund's obligations with respect to coverage under any policy or contract of the impaired insurer or insolvent insurer or under any reissued or alternative policy or contract shall cease on the date the coverage or policy or contract is replaced by another similar policy or contract by the policy or contract owner, the insured, the enrollee or the fund.

(h) When proceeding under this paragraph with respect to a policy or contract carrying guaranteed minimum interest rates, the fund shall assure the payment or crediting of a rate of interest consistent with subdivision (c) of this paragraph.

C. The fund is not liable pursuant to this section for any covered policy of an impaired insurer or insolvent insurer whose domiciliary jurisdiction or state of entry provides by statute or regulation for residents of this state protection substantially similar to that provided by this article for residents of other states.

D. The fund may render assistance and advice to the director, on the director's request, concerning rehabilitation, payment of claims, continuations of coverage or the performance of other contractual obligations of any impaired insurer or insolvent insurer.

E. The fund shall have standing to appear or intervene before any court with jurisdiction over an impaired insurer or insolvent insurer concerning which the fund is or may become obligated, or over any person or property against which the fund may have rights, pursuant to this article. Such standing shall extend to all matters germane to the powers and duties of the fund, including proposals for reinsuring, reissuing, modifying or guaranteeing the covered policies or contracts of the impaired insurer or insolvent insurer and the determination of the covered policies or contracts and contractual obligations.

F. Any persons receiving benefits pursuant to this article shall be deemed to have assigned their rights under, and any causes of action against any person for losses arising under, resulting from or otherwise relating to, the covered policy or contract to the fund to the extent of the benefits received whether the benefits are payments of contractual obligations, continuation of coverage or provision of substitute or alternative policies, contracts or coverages. The fund may require an assignment to the fund of such rights by any enrollee, payee, policy or contract owner, beneficiary, insured or annuitant as a condition precedent to the receipt of any rights or benefits conferred on such person pursuant to this article. The subrogation rights of the fund under this subsection shall have the same priority against the assets of any impaired insurer or insolvent insurer as that possessed by the person who is entitled to receive the benefits under this article.  The fund shall have all common law rights of subrogation and any other equitable or legal remedy that would have been available to the impaired insurer or insolvent insurer or owner, beneficiary, enrollee or payee of a policy or contract with respect to the policy or contract.  If the preceding provisions of this subsection are ineffective with respect to any person or claim for any reason, the amount payable by the fund with respect to the related covered obligations shall be reduced by the amount attributable to the policies or contracts, or any part of the policies or contracts, covered by the fund that is realized by any other person with respect to the person or claim. If the fund has provided benefits with respect to a covered obligation and a person recovers amounts as to which the fund has rights under this subsection, the person shall pay to the fund the part of the recovery attributable to the policies or contracts, or any part of the policies or contracts, covered by the fund.

G. Notwithstanding any other law, the fund is not obligated to pay any amount that does not constitute a payment of a contractual obligation, including taxable costs or attorney fees that could be awarded or any additional liabilities or obligations as might otherwise exist or accrue against the impaired insurer if the insurer had not become impaired.

H. The fund may:

1. Enter into such contracts as are necessary or proper to carry out the provisions and purposes of this article.

2. Sue and be sued, including taking any legal actions that are necessary and proper for recovery of any unpaid assessments pursuant to section 20-686.

3. Borrow money to effect the purposes of this article. Any notes or other evidence of indebtedness of the fund that are not in default shall be legal investments for domestic member insurers and may be carried as admitted assets.

4. Employ and retain such persons as are necessary to handle the financial transactions of the fund and perform such other functions as become necessary or proper.

5. Negotiate and contract with any liquidator, rehabilitator, conservator or ancillary receiver to carry out the powers and duties of the fund.

6. Join an organization comprised of one or more other similar state funds in order to further the administration of the fund's powers and duties under this article.

7. Take such legal action as may be necessary to avoid payment of improper claims.

8. Exercise, for the purposes of this article and to the extent approved by the director, the powers of a domestic life insurer, disability insurer or health care services organization. In no case may the fund issue policies or contracts other than those issued to perform the contractual obligations of the impaired insurer or insolvent insurer.

9. Unless prohibited by law, in accordance with the terms and conditions of the policy or contract, file for actuarially justified rate or premium increases for any policy or contract for which the fund provides coverage under this article.

I. At any time within one hundred eighty days after the date of the order of liquidation, the fund, by written notice to the affected reinsurers, may elect to assume the rights and obligations of a ceding member insurer that relate to policies or annuities covered in whole or in part by the fund under any one or more reinsurance contracts entered into by the insolvent insurer, subject to the following:

1. The assumption shall be effective as of the date of the order of liquidation.

2. The receiver and each reinsurer of the ceding member insurer shall make available on request to the fund after commencement of formal delinquency proceedings:

(a) Copies of in-force reinsurance contracts and all related records relevant to the determination whether to assume such contracts.

(b) Notices of any defaults under the reinsurance contracts or any known event or condition that may presently or subsequently constitute a default under the reinsurance contracts.

3. With respect to reinsurance contracts assumed by the fund under this subsection:

(a) The fund shall be responsible for all unpaid premiums due under the reinsurance contracts for periods both before and after the date of the order of liquidation, and for performance of all other obligations after the date of the order of liquidation that relate to policies, contracts or annuities covered in whole or in part by the fund.  The fund may charge policies, contracts or annuities covered in part by the fund, through reasonable allocation methods, for the costs for reinsurance in excess of the fund's obligations and shall provide notice and an accounting of these charges to the receiver.

(b) The fund shall be entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur after the date of the order of liquidation and that relate to policies, contracts or annuities covered in whole or in part by the fund, provided that on receipt of any such amounts, the fund shall pay to the beneficiary under the policy, contract or annuity an amount equal to the lesser of:

(i) The amount received by the fund.

(ii) The excess of the amount received by the fund over the amount equal to the benefits paid by the fund on account of the policy, contract or annuity less the retention of the impaired insurer or insolvent insurer applicable to the loss or event.

(c) Within thirty days after the fund's election, the fund and each reinsurer under contracts assumed by the fund shall calculate the net balance due to or from the fund under each reinsurance contract as of the date of the fund's election with respect to policies, contracts or annuities covered in whole or in part by the fund, giving full credit to all items paid by the member insurer or its receiver or the reinsurer before the date of the fund's election.  The reinsurer shall pay the receiver any amounts due for losses or events before the date of the order of liquidation, subject to any setoff for premiums unpaid for periods before the date of the order of liquidation, and the fund or reinsurer shall pay any remaining balance due the other within five days after the completion of the calculation.  Any disputes over the amounts due shall be resolved in accordance with the reinsurance contract. If the receiver has received any amounts due to the fund pursuant to subdivision (b) of this paragraph, the receiver shall promptly remit the amount to the fund.

(d) If the fund or receiver, within sixty days after the election, pays the unpaid premiums due for periods both before and after the election date that relate to policies, contracts and annuities covered in whole or in part by the fund, the reinsurer shall not be entitled to terminate the reinsurance contracts for failure to pay premium to the extent the reinsurance contracts related to policies, contracts or annuities covered in whole or in part by the fund, and shall not be entitled to set off any unpaid amounts due under other contracts or due from parties other than the fund, against amounts payable to the fund.

4. Provided that the parties rights and obligations shall be governed by paragraph 3 of this subsection, if the fund elects to assume a reinsurance contract, during the period from the date of the order of liquidation until the earlier of the election date or one hundred eighty days after the date of the order of liquidation:

(a) The fund and the reinsurer shall not have any rights or obligations under reinsurance contracts that the fund has the right to assume under paragraph 3 of this subsection, whether for periods before or after the date of the order of liquidation.

(b) The reinsurer, receiver and fund shall provide each other data and records reasonably requested, to the extent practicable.

5. If the fund does not elect to assume a reinsurance contract by the election date pursuant to paragraph 3 of this subsection, the fund shall have no rights or obligations with respect to the reinsurance contract for periods before and after the date of the order of liquidation.

6. If the fund transfers policies, contracts or annuities, or covered obligations with respect to policies, contracts or annuities, to an assuming insurer, reinsurance on the transferred policies, contracts or annuities may also be transferred by the fund, in the case of contracts assumed under paragraph 3 of this subsection, subject to the following:

(a) Unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred shall not cover any policies, contracts or annuities other than those transferred.

(b) The obligations described in paragraph 3 of this subsection do not apply with respect to matters arising after the date of the transfer.

(c) The transferring party shall provide written notice to the affected reinsurer not less than thirty days before the effective date of the transfer.

J. Subsection I of this section supersedes any provision of state law or of any affected reinsurance contract that provides for or requires any payment of reinsurance proceeds, on account of losses or events that occur in periods after the date of the order of liquidation, to the receiver of the insolvent insurer or any other person.  The receiver shall remain entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods before the date of the order of liquidation, subject to any applicable setoff provisions.

K. Except as otherwise provided in subsection I of this section, this section does not:

1. Alter or modify the terms and conditions of any reinsurance contract.

2. Limit any rights of any reinsurer to claim that it is entitled to rescind a reinsurance contract.

3. Provide a policy owner, contract owner, enrollee, certificate holder or beneficiary an independent cause of action against a reinsurer that is not otherwise set forth in the reinsurance contract.

4. Limit or affect the fund's rights as a creditor of the estate.

5. Apply to reinsurance contracts covering property or casualty risks.

L. In carrying out its duties in connection with guaranteeing, assuming, reissuing or reinsuring policies or contracts under subsection A or B of this section, the fund may issue substitute coverage for a policy or contract that provides an 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 by issuing an alternative policy or contract in accordance with the following provisions:

1. In lieu of the index or other external reference provided for in the original policy or contract, the alternative policy or contract provides for a fixed interest rate, or payment of dividends with minimum guarantees, or a different method for calculating interest or changes in value.

2. There is no requirement for evidence of insurability, waiting period or other exclusion that would not have applied under the replaced policy or contract.

3. The alternative policy or contract is substantially similar to the replaced policy or contract in all other material terms.

M. If the fund offers to provide the benefits of this article to a covered person under a plan or arrangement that fulfills the fund's obligations under this article, the person shall not be entitled to benefits from the fund in addition or as an alternative to those offered under the plan or arrangement.

N. Venue in a suit against the fund arising under this article shall be in the superior court of Maricopa county.  The fund shall not be required to give a bond in an appeal that relates to a cause of action arising under this article.
A.R.S. § 20-1098.06 — Arizona Code / Title 20 / Chapter 4 / Article 14 / Section 1098.06
20-1098.06 Protected cell captive insurers; sponsors; participants
Status: in_force

20-1098.06. Protected cell captive insurers; sponsors; participants

A. A risk retention group shall not be either a sponsor or a participant in a protected cell captive insurer.

B. An association, corporation, limited liability company, partnership, trust or any other business entity may be a participant in any protected cell captive insurer formed or licensed under this article.

C. A sponsor may be a participant in a protected cell captive insurer.

D. A participant need not be a shareholder of a protected cell captive insurer or any affiliate of a protected cell captive insurer.

E. Each protected cell shall comply with the restrictions prescribed in section 20-1098.01, subsection A with respect to the risks insured through the protected cell.
A.R.S. § 20-1342.06 — Arizona Code / Title 20 / Chapter 6 / Article 4 / Section 1342.06
20-1342.06 Contracts; dentists; covered services; definition
Status: in_force

20-1342.06. Contracts; dentists; covered services; definition

A. A contract, entered into or renewed on or after January 1, 2011, between a disability insurer and a dentist who is licensed to practice in this state shall not require the dentist to provide services to an individual covered under a disability insurance policy based on a fee set by the disability insurer unless the services for which the fee applies is a covered service under the individual's disability insurance policy.

B. This section does not restrict the ability of a disability insurer to establish dental benefits for services offered by plans that are administered but not insured by the disability insurer.

C. For the purposes of this section, "covered service" means a service for which any reimbursement is available under a disability insurance policy without regard to contractual limitations by a deductible, copayment, coinsurance, waiting period, annual or lifetime maximum, frequency limitation, alternative benefit payment, exclusion or other limitation.
A.R.S. § 20-1604 — Arizona Code / Title 20 / Chapter 6 / Article 10 / Section 1604
20-1604 Types of consumer credit insurance
Status: in_force

20-1604. Types of consumer credit insurance

The types of consumer credit insurance may each be written separately or in combination on an individual policy or group policy basis. The director may prohibit or limit any combination by rule.
A.R.S. § 20-486.07 — Arizona Code / Title 20 / Chapter 2 / Article 10 / Section 486.07
20-486.07 Prohibited acts; reinsurance intermediary managers
Status: in_force

20-486.07. Prohibited acts; reinsurance intermediary managers

The reinsurance intermediary manager shall not:

1. Cede retrocessions on behalf of the reinsurer, except that the reinsurance intermediary manager may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for retrocessions. The guidelines shall include a list of reinsurers with whom the automatic agreements are in effect, the coverages and amounts or percentages for each reinsurer that may be reinsured and commission schedules.

2. Commit the reinsurer to participation in reinsurance syndicates.

3. Appoint a producer without assuring that the producer is lawfully licensed to transact the type of reinsurance for which he is appointed.

4. Without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or one per cent of the reinsurer's policyholder's surplus as of December 31 of the last complete calendar year.

5. Without prior approval of the reinsurer, collect any payment from a person who receives a retrocession or commit the reinsurer to any claim settlement with a person who receives a retrocession. If prior approval is given, a report shall be forwarded promptly to the reinsurer.

6. Employ jointly an individual who is employed by the reinsurer unless the reinsurance intermediary manager is under common control with the reinsurer subject to the holding company act.

7. Appoint a sub-reinsurance intermediary manager.
A.R.S. § 20-158 — Arizona Code / Title 20 / Chapter 1 / Article 2 / Section 158
20-158 Report of examinations by director; information sharing
Status: in_force

20-158. Report of examinations by director; information sharing

A. The director shall make a full written report of each examination. The director or the examiner in charge of the examination shall certify the report.

B. The director shall provide a copy of the report to the person examined not less than ten days before filing the report. If the person makes a request in writing within the ten-day period, the director shall consider any objections the person may have to the proposed report and shall not file the report until after making any amendments the director deems proper.

C. The report, when filed, is admissible in evidence in any action or proceeding brought by the director against the person examined, or its officers or agents. The director or the director's examiners may at any time testify and offer other proper evidence as to information secured during the course of an examination, whether or not a written report of the examination has at that time been either made, served or filed in the director's office.

D. The director may withhold from public inspection any examination or investigation report for as long as the director deems prudent.

E. The director may disclose the nonpublic content of a report of examination, a preliminary report or any other matter relating to a report to the insurance department of any other state or jurisdiction, to law enforcement officials of this or any other state or jurisdiction or to an agency of the federal government if the agency or official receiving the report or information agrees in writing to hold the information confidential.

F. Except as provided in this subsection and subsections E and I of this section, documents, materials or other information, including all working papers and copies thereof, created, produced or obtained by or disclosed to the director or the director's deputies, assistants or examiners in the course of an examination or in the course of analysis of the financial condition or market conduct of an insurer are confidential and privileged, are not subject to title 39, chapter 1, article 2, are not subject to subpoena and are not subject to discovery or admissible in evidence in a private civil action. The director may 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.  Subject to the restrictions prescribed in section 20-299, the director shall provide an insurer being examined with copies of all documents, materials and other information that the director intends to rely on as evidence of an alleged violation of this title or that justifies any regulatory or other action against the insurer to allow the insurer to review the alleged findings and make any objections pursuant to subsection B of this section.  A disclosure pursuant to this subsection is not a waiver of any applicable privilege or claim of confidentiality in the disclosed documents, materials or other information.

G. Documents, materials or other information, including all working papers and copies thereof, in the possession or control of the national association of insurance commissioners or its affiliates are confidential and privileged, are not subject to title 39, chapter 1, article 2, are not subject to subpoena and are not subject to discovery or admissible in evidence in any private civil action if the documents, materials or information are either:

1. Created, produced or obtained by or disclosed to the national association of insurance commissioners or its affiliates in the course of assisting the director in the examination or analysis of the financial condition or market conduct of an insurer under this title.

2. Disclosed to the national association of insurance commissioners or its affiliates by the director under subsection E or I of this section.

H. The director, the director's deputies, assistants or examiners and representatives of the national association of insurance commissioners or its affiliates are prohibited from testifying in any private civil action concerning documents, materials or other information that are confidential and privileged pursuant to subsection F or G of this section.

I. The director may:

1. Share nonpublic documents, materials or other information with other state, federal and international regulatory agencies, with the national association of insurance commissioners and its affiliates and subsidiaries and with state, federal and international law enforcement authorities if the recipient agrees and warrants that it has the authority to maintain the confidentiality and privileged status of the documents, materials or other information.

2. Receive documents, materials and other information from the national association of insurance commissioners and its affiliates and subsidiaries and from regulatory and law enforcement officials of other jurisdictions and shall maintain as confidential or privileged any document, material or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or other information.

3. Enter into agreements that govern the sharing and use of documents, materials and other information and that are consistent with this section.

J. A disclosure to or by the director pursuant to this section or as a result of sharing information pursuant to subsection I of this section is not a waiver of any applicable privilege or claim of confidentiality in the documents, materials or other information disclosed or shared.
A.R.S. § 20-486.10 — Arizona Code / Title 20 / Chapter 2 / Article 10 / Section 486.10
20-486.10 Penalties and liabilities
Status: in_force

20-486.10. Penalties and liabilities

A. A reinsurance intermediary, insurer or reinsurer that after a hearing is found by the director to be in violation of this article:

1. For each separate violation, shall pay a penalty in an amount of not to exceed five thousand dollars.

2. Is subject to revocation or suspension of its license.

3. If a violation was committed by the reinsurance intermediary, the reinsurance intermediary shall make restitution to the insurer, reinsurer, rehabilitator or liquidator of the insurer or reinsurer for the net losses incurred by the insurer or reinsurer that are attributable to the violation.

B. This section does not affect the right of the director to impose any other penalty provided for by law.

C. This section does not limit or restrict the rights of policyholders, claimants, creditors or other third parties or confer any rights to these persons.

D. Except as provided in section 41-1092.08, subsection H, the final decision, determination or order of the director pursuant to subsection A of this section is subject to judicial review pursuant to title 12, chapter 7, article 6.
A.R.S. § 20-1559 — Arizona Code / Title 20 / Chapter 6 / Article 8.1 / Section 1559
20-1559 Mortgage guaranty insurers; dividend payment
Status: in_force

20-1559. Mortgage guaranty insurers; dividend payment

A. Notwithstanding section 20-722, a domestic mortgage guaranty insurance company may pay dividends out of any available surplus monies if the mortgage guaranty insurance company continues to comply with the policyholder surplus and reserve requirements under this article.

B. The payment of a dividend by a domestic mortgage guaranty insurance company is subject to the requirements of section 20-481.19.

C. A domestic mortgage guaranty insurance company shall maintain sufficient liquidity.
A.R.S. § 20-1608 — Arizona Code / Title 20 / Chapter 6 / Article 10 / Section 1608
20-1608 Policy provisions and disclosures
Status: in_force

20-1608. Policy provisions and disclosures

A. Before a debtor elects to purchase consumer credit insurance, the following information shall be disclosed to the debtor in the manner provided in subsection C of this section:

1. Purchase of consumer credit insurance is optional and not a condition of obtaining credit approval.

2. If more than one kind of consumer credit insurance is being made available to the debtor, whether the debtor can purchase each kind separately or the multiple coverages only as a package.

3. The conditions of eligibility.

4. If the consumer has other life or disability insurance, the consumer may not want or need credit insurance.

5. Within the first thirty days after receiving the individual policy or group certificate, the debtor may cancel the coverage and have all premiums paid by the debtor refunded or credited.

6. A description of:

(a) The amount.

(b) The term if less than the term of the loan or extension of credit.

(c) The premium rate for each coverage or for all coverages in a package.

7. If the premium or insurance charge is financed, it will be subject to finance charges at the rate applicable to the credit transaction.

B. A person may combine the disclosures required by subsection A of this section with other disclosures required by the laws of this state or the federal government.

C. The disclosures required under subsection A of this section shall be provided in the following manner:

1. For consumer credit insurance offered contemporaneously with the extension of credit or offered through direct mail advertisements, the disclosures shall be made in writing and presented to the consumer in a clear and conspicuous manner.

2. For consumer credit insurance offered after the extension of credit by other than direct mail advertisements, the disclosures required by subsection A, paragraphs 1, 6 and 7 of this section may be provided orally or electronically if both of the following occur:

(a) The following oral disclosure is also made to a debtor who elects to purchase any consumer credit insurance:

You will be receiving important written information about the insurance you have chosen to purchase and your rights.  We recommend that you read and carefully review this information as soon as you receive it.

(b) Written disclosure of all information required by subsection A of this section is provided to the debtor no later than the earlier of either:

(i) Ten days after the debtor elects coverage.

(ii) The date any other written material is provided to the debtor.

D. All consumer credit insurance shall be evidenced by an individual policy or a group certificate of insurance that shall be delivered to the debtor.

E. In addition to other requirements of law, the individual policy or group certificate shall state all of the following:

1. The name and home office address of the insurer.

2. The name of the debtor, or, in the case of a group certificate, the identity by name or otherwise of the debtor.

3. The premium or amount of payment by the debtor separately for each kind of coverage or for all coverages in a package, except that, for open-end loans, the premium rate and the basis of the premium calculation, such as average daily balance and prior monthly balance, shall be specified.

4. A full description of the coverage or coverages, including the amount and term and any exceptions, limitations and exclusions.

5. A statement that the benefits shall be paid to the creditor to reduce or extinguish the unpaid debt and, whenever the amount of insurance benefit exceeds the unpaid debt, that any excess shall be payable to a beneficiary, other than the creditor, named by the debtor or to the debtor's estate.

6. If the scheduled term of insurance is less than the scheduled term of the credit transaction, a statement to that effect on the face of the individual policy or group certificate in not less than ten point bold face type.

F. Unless the individual policy or group certificate of insurance is delivered to the debtor at the time the debt is incurred, or at such other time that the debtor elects to purchase coverage, a copy of the application for the policy that is signed by the debtor or a notice of proposed insurance that sets forth the name and home office address of the insurer, the name of the debtor, the premium rate or amount of payment by the debtor for the insurance and the amount, term and a brief description of the coverage provided shall be delivered to the debtor at the time the debt is incurred or the election to purchase coverage is made.  The copy of the application for, or notice of proposed insurance, shall also refer exclusively to insurance coverage and shall be separate and apart from the loan, sale or other credit statement of account, instrument or agreement, unless the information required by this subsection is prominently set forth therein. On acceptance of the insurance by the insurer and within thirty days of the date on which the debt is incurred or the election to purchase coverage is made, the insurer shall cause the individual policy or group certificate of insurance to be delivered to the debtor.  The application or notice of proposed insurance shall state that on acceptance by the insurer, the insurance shall become effective as provided in section 20-1607.

G. The application, notice of proposed insurance or certificate may be used to fulfill all of the requirements of subsection A of this section and subsection E of this section if it contains all of the information required by those subsections.

H. The debtor has thirty days from the date that the debtor receives either the individual policy or the group certificate to review the coverage purchased.  At any time within the thirty-day period, the debtor may contact the creditor or insurer issuing the policy or certificate and request that the coverage be cancelled.  The individual policy or group certificate may require the request to be in writing or that the policy or certificate be returned to the insurer, or both.  Within thirty days of the request, the debtor shall receive a full refund or credit of all premiums or insurance charges paid by the debtor.

I. If the insurer is not willing to insure the particular risk, another insurer may agree to accept the risk and be substituted for the original insurer.  A substitute insurer shall provide the debtor with a policy or certificate of insurance stating the name and home office address of the substituted insurer and the amount of the premium to be charged.  If the amount of premium is less than that stated in the notice of proposed insurance, an appropriate refund shall be made within thirty days.  If no insurer accepts the risk, then all premiums paid shall be refunded or credited within thirty days of application to the person entitled to the refund.

J. For the purpose of subsection F of this section, an individual policy or group certificate delivered in conjunction with an open-end consumer credit agreement or any consumer credit insurance requested by the debtor after the date of the debt is deemed to be delivered at the time the debt is incurred or election to purchase coverage is made if the delivery occurs within thirty days of the date the insurance is effective.

K. An individual policy or group certificate delivered in conjunction with an open-end credit agreement continues from its effective date through the term of the agreement unless the individual policy or group certificate is terminated according to its terms at an earlier date.
A.R.S. § 20-1621.02 — Arizona Code / Title 20 / Chapter 6 / Article 10.1 / Section 1621.02
20-1621.02 Amount; term; coverage; prohibited practices
Status: in_force

20-1621.02. Amount; term; coverage; prohibited practices

A. For credit property insurance sold in conjunction with a closed-end transaction, an insurer shall not:

1. Issue credit property insurance coverage unless the amount financed exceeds one hundred dollars.

2. Issue credit property insurance in an amount that exceeds the amount of the underlying credit transaction unless otherwise required by the laws of this state.

3. Sell credit property insurance with a term that exceeds in duration the scheduled term of the underlying credit transaction.

B. At a minimum, credit property insurance coverage shall include the coverages in the standard fire policy prescribed in section 20-1503 with coverage attachment and extended coverage endorsement.

C. Credit property insurance shall cover the possibility of an actual and substantial risk of loss of or damage to the property related to the credit transaction.

D. An insurer may not require the bundling of any other consumer credit insurance coverage with the purchase of credit property insurance coverage.  A debtor may choose to purchase credit property insurance coverage separate from any other consumer credit insurance coverage.

E. An insurer shall not use gross debt as an exposure rating base in determining credit property insurance premiums.
A.R.S. § 20-3407 — Arizona Code / Title 20 / Chapter 26 / Article 1 / Section 3407
20-3407 Denial of prior authorization; review of prior authorization
Status: in_force

20-3407. Denial of prior authorization; review of prior authorization

(Eff. 7/1/26)

Before a health care insurer may issue a direct denial of a prior authorization of a service that was requested by a provider and that involves medical necessity, the medical director shall individually review the denial. During each individual review, the medical director shall exercise independent medical judgment and may not rely solely on recommendations from any other source.
A.R.S. § 20-171 — Arizona Code / Title 20 / Chapter 1 / Article 2 / Section 171
20-171 Conservatorship; liquidation
Status: in_force

20-171. Conservatorship; liquidation

A. If, after notice, and after hearing, at the conclusion of the sixty day period, it is determined that such insurance company has failed to comply with the lawful requirements of the director or upon consent by an insurance company, the director may appoint a conservator, who shall immediately take charge of such insurance company and all of the property, books, records, and effects thereof, and conduct the business thereof, and take such steps toward the removal of the causes and conditions, which have necessitated such order, as the director may direct. During the pendency of conservatorship, the conservator shall make such reports to the director from time to time as may be required by the director and shall be empowered to take all necessary measures to preserve, protect, and recover any assets or property of such insurance company, including claims or causes of action belonging to or which may be asserted by such insurance company, and to deal with the same in his own name as conservator, and shall be empowered to file, prosecute, and defend any suit or suits which have been filed or which may thereafter be filed by or against such insurance company which are deemed by the conservator to be necessary to protect all of the interested parties or any property affected thereby. If at the time of appointment of a conservator or at any time during the pendency of such conservatorship it appears that the interest of the policyholders or certificate holders of such insurance company can best be protected by reinsuring the same, the conservator may, with the approval of or at the direction of the director:

1. Reinsure all or any part of such insurance company's policies or certificates of insurance with some solvent insurance company authorized to transact business in this state, and

2. To the extent that such insurance company in conservatorship is possessed of reserves attributable to such policies or certificates of insurance, the conservator may transfer to the reinsuring company such reserves or any portion thereof as may be required to consummate the reinsurance of such policies, and any such reserves so transferred shall not be deemed a preference of creditors.

B. If the director is satisfied that such insurance company is not in condition to continue business in the interest of its policy or certificate holders, under the conservator as above provided, the director shall give notice to the attorney general who shall thereupon apply to any court in Arizona having jurisdiction thereof for leave to file a suit in the nature of quo warranto to forfeit the certificate of authority of such insurance company or to require it to comply with the law or to satisfy the director as to its solvency, and to satisfy the requirement that its condition is such as to render the continuance of its business not hazardous to the public or to the holders of its policies or certificates of insurance. It shall be in the discretion of the director to determine whether or not he will operate the insurance company through a conservator, or report it to the attorney general. When all the policies of an insurance company are reinsured or terminated, and all of its affairs concluded, the director shall report the same to the attorney general, who shall take such action as may be necessary to effect the forfeiture or cancellation of the certificate of authority of the insurance company so reinsured and liquidated. Where the director lends his approval to the merger, consolidation or reinsurance of all the policies of one insurance company with that of another, the same shall be reported to the attorney general who shall proceed to effect the forfeiture or cancellation of the certificate of authority of the insurance company from which the policies were merged, consolidated or reinsured, in the same manner as is provided for the charters of companies totally reinsured or liquidated.

C. The cost incident to the supervisor's and conservator's service shall be fixed and determined by the director and shall be a charge against the assets and funds of the insurance company to be allowed and paid as the director may determine.
A.R.S. § 20-780 — Arizona Code / Title 20 / Chapter 4 / Article 2 / Section 780
20-780 Subscribers
Status: in_force

20-780. Subscribers

Individuals, partnerships and corporations of this state may make application, enter into agreement for and hold policies or contracts in or with and be a subscriber of any domestic, foreign or alien reciprocal insurer. Any corporation organized under the laws of this state shall, in addition to the rights, powers and franchises specified in its articles of incorporation, have full power and authority as a subscriber to exchange insurance contracts through such reciprocal insurance. The right to exchange such contracts is declared to be incidental to the purposes for which such corporations are organized and to be as fully granted as the rights and powers expressly conferred upon such corporations. Government or governmental agencies, state or political subdivisions thereof, boards, associations, estates, trustees or fiduciaries are authorized to exchange nonassessable reciprocal inter-insurance contracts with each other and with individuals, partnerships and corporations to the same extent that individuals, partnerships and corporations are authorized to exchange reciprocal inter-insurance contracts. Any officer, representative, trustee, receiver or legal representative of any such subscriber shall be recognized as acting for or on its behalf for the purpose of the contract but shall not be personally liable upon the contract by reason of acting in such representative capacity.
A.R.S. § 20-878 — Arizona Code / Title 20 / Chapter 4 / Article 4 / Section 878
20-878 Benefit contract
Status: in_force

20-878. Benefit contract

A. A society shall issue to each owner of a benefit contract a certificate that specifies the amount of benefits provided under the certificate. The certificate shall state that it constitutes the benefit contract as of the date of issuance of the certificate, together with any riders or endorsements attached to the certificate, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any, signed by the applicant and all amendments to any of these. A copy of the application for insurance and declaration of insurability, if any, shall be endorsed on or attached to the certificate. All statements on the application are representations and not warranties. Any waiver of this provision is void.

B. Any amendments to the laws of the society that are made or enacted after the certificate is issued are binding on the owner and beneficiaries and govern and control the benefit contract in all respects as if the amendments were made and in force before the time of the application for insurance. An amendment does not destroy or diminish any benefits that the society contracted to give the owner as of the date of issuance.

C. A person on whose life a benefit contract is issued before the person attains the age of majority is bound by the terms of the application.

D. The laws of the society shall provide that if the society's reserves as to any or all classes of certificates become impaired, the board of directors or other corresponding body may require that the owner pay to the society the amount of the owner's equitable proportion of the deficiency as ascertained by the board or other corresponding body. If the payment is not made the payment stands as an indebtedness against the certificate and draws interest in an amount not exceeding the rate specified for certificate loans under the certificate or the owner may accept a proportionate reduction in benefits under the certificate, or both. The society may specify the manner of the election and which alternative is presumed if no election is made.

E. Copies of any documents under this section that are certified by the secretary or other corresponding officer of the society shall be received in evidence on the terms and conditions of those documents.

F. A certificate shall not be delivered or issued for delivery in this state unless a copy of the form is filed with and approved by the director in the manner provided for like policies issued by life and disability insurers in this state. Every life, accident and sickness, health or disability insurance certificate and every annuity certificate that is issued on or after January 1, 1996 shall be filed with and approved by the director and shall meet the standard contract provision requirements that are not inconsistent with this title for like policies issued by life and disability insurers in this state. A society may provide a grace period for the payment of premiums of one full month in its certificates. The certificate shall state the amount of premiums that are payable under the certificate and shall recite or prescribe the substance of any of the society's laws or rules in effect at the time of issuance of the certificate that, if violated, will result in the termination of or reduction of benefits payable under the certificate. If the laws or rules of the society provide for the expulsion or suspension of a member, the certificate shall state that a member who is expelled or suspended may maintain the certificate in force by continuing to pay the required premium, unless the member was expelled or suspended for the nonpayment of premium or during the contestable period for material misrepresentation in the application for membership or insurance.

G. Benefit contracts that are issued on the lives of persons who are under the society's minimum age for adult membership may provide for the transfer of control of ownership to the insured at an age specified in the certificate. The society may require that an application for membership be approved in order to effect this transfer and may provide for the regulation, government and control of the certificates and all rights, obligations and liabilities incident to and connected with the certificate. The certificate shall specify ownership rights before the transfer.

H. A society may specify the terms and conditions on which benefit contracts may be assigned.
A.R.S. § 20-2214 — Arizona Code / Title 20 / Chapter 12 / Article 1 / Section 2214
20-2214 Member participation in writings, expenses, servicing allowance, management fees and losses
Status: in_force

20-2214. Member participation in writings, expenses, servicing allowance, management fees and losses

All members of the association shall participate in its writings, expenses, servicing allowance, management fees and losses in the proportion that the net direct premium of each member, excluding that portion of a premium attributable to the operation of the association, written during the preceding calendar year bears to the aggregate net direct premium written in this state by all members of the association.  Each member's participation in the association shall be determined annually on the basis of the net direct premium written during the preceding calendar year.
A.R.S. § 20-1553 — Arizona Code / Title 20 / Chapter 6 / Article 8.1 / Section 1553
20-1553 Conflict of interest
Status: in_force

20-1553. Conflict of interest

A. If it is a member of a holding company system, a mortgage guaranty insurance company licensed to transact business in this state shall not, as a condition of its certificate of authority, knowingly underwrite mortgage guaranty insurance on mortgages originated by the holding company system or an affiliate or on mortgages originated by any mortgage lender to which credit is extended, directly or indirectly, by the holding company system or any affiliate unless such insurance is underwritten on the same basis, for the same consideration and subject to the same insurability requirements as insurance provided to nonaffiliated lenders.

B. A mortgage guaranty insurance company, the holding company system of which it is a part or any affiliate shall not, as a condition of the mortgage guaranty insurance company's certificate of authority, pay any commissions, remuneration, rebates or engage in activities proscribed in sections 20-1551 and 20-1552.
A.R.S. § 20-537 — Arizona Code / Title 20 / Chapter 3 / Article 2 / Section 537
20-537 Investment of funds in United States obligations; accounting
Status: in_force

20-537. Investment of funds in United States obligations; accounting

A. An insurer may invest any of its funds in:

1. Bonds or other evidences of indebtedness of the United States or any of its agencies or instrumentalities when such obligations are guaranteed as to principal and interest by the United States or any agency or instrumentality of the United States.

2. Bonds or other evidences of indebtedness which are guaranteed as to principal and interest by the United States or by any agency or instrumentality of the United States.

3. Bonds, debentures or other obligations issued by the federal land banks, the federal intermediate credit banks or the banks for cooperatives and the federal farm credit banks consolidated systemwide bonds.

B. This title does not prohibit the acquisition by an insurer licensed in this state of United States government securities, the purchase of which is permitted by statute, in accordance with the federal reserve system program of book entry accounting.
A.R.S. § 20-725 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 725
20-725 Borrowed surplus
Status: in_force

20-725. Borrowed surplus

A. A domestic stock or mutual insurer may borrow money to defray the expenses of its organization, provide it with surplus funds or for any purpose required by its business, on a written agreement that the money is required to be repaid only out of the insurer's surplus in excess of that stipulated in the agreement.  The agreement may provide for interest at the rate agreed on, but not exceeding twelve per cent per year.  This interest only constitutes a liability of the insurer if the director has approved payment of the interest.

B. The surplus note shall provide that the holder's interest is subordinate to the claims of policyholders, claimants and beneficiaries and to all other classes of creditors other than surplus noteholders and that interest payments and principal payments require prior approval of the director.

C. Money so borrowed, together with the interest if so stipulated in the agreement, shall not form a part of the insurer's legal liabilities or be the basis of any setoff until the director approves repayment.  Until the money and interest are repaid, financial statements filed or published by the insurer shall show as a footnote the amount remaining unpaid plus any accrued, unpaid interest, pursuant to the accounting practices and procedures manual adopted by the national association of insurance commissioners.

D. Before entering a loan transaction as described in this section, a domestic mutual insurer shall file with the director a statement of the purposes of the loan and a copy of the proposed loan agreement, which shall be subject to the director's approval. The loan and agreement shall be deemed approved unless within fifteen days after the date of filing the insurer is notified in writing of the director's disapproval and the reasons for the disapproval.  The director shall disapprove any proposed loan or agreement if the director finds that the loan is reasonably unnecessary or excessive for the purpose intended, that the terms of the loan agreement are not fair and equitable to the parties and to other similar lenders, if any, or to the insurer or that the information so filed by the insurer is inadequate, specifying the inadequacies.

E. A mutual insurer shall repay the loan or a substantial portion of the loan when the loan is no longer reasonably necessary for the purpose originally intended and after receiving the director's approval for repayment.

F. This section does not apply to loans obtained by the insurer in the ordinary course of business from banks and other financial institutions nor to loans secured by a pledge of assets.

G. Any eligible investment as prescribed in chapter 3, article 2 of this title may be contributed or borrowed pursuant to this section subject to any limitations provided in that article for that investment.
A.R.S. § 20-1072 — Arizona Code / Title 20 / Chapter 4 / Article 9 / Section 1072
20-1072 Nonliability of enrollees for provider or hospital charges; penalty
Status: in_force

20-1072. Nonliability of enrollees for provider or hospital charges; penalty

A. Every written contract between a health care services organization and a provider or hospital shall set forth that if the organization fails to pay for covered health care services as set forth in the enrollee's evidence of coverage or contract the enrollee is not liable to the provider or hospital for any amounts owed by the organization and the provider or hospital shall not bill or otherwise attempt to collect from the enrollee the amount owed by the organization.

B. If the written contract between the contracting provider or hospital and the organization fails to contain the required prohibition stated in subsection A, the enrollee is not liable to the contracting provider or hospital for any amounts owed by the organization.

C. No contracting provider or agent, trustee or assignee of the contracting provider or hospital may maintain an action at law against an enrollee to collect any amounts owed by the organization for which the enrollee is not liable to the contracting provider under subsection A.

D. Nothing in this section impairs the right of a provider or hospital to charge, collect from, attempt to collect from or maintain an action at law against an enrollee for any of the following:

1. Copayment or coinsurance amounts.

2. Health care services not covered by the organization, including out of area claims that are not paid by an organization on behalf of an enrollee.

3. Health care services rendered after the termination of the contract between the health care services organization and the provider or hospital, unless the health care services were rendered during confinement in an inpatient facility and the confinement began prior to the date of termination, or unless the provider has assumed post-termination treatment obligations under the contract.

E. Nothing in this section prohibits an enrollee from seeking health care services from a contracting or noncontracting provider or hospital and accepting financial responsibility for these services.

F. No provider or hospital may charge an enrollee of a health care services organization more than the amount the provider or hospital contracted to charge the enrollee pursuant to the provider's contract or hospital's contract with the health care services organization.

G. Nothing in this section prohibits any person from informing an enrollee of either the cost of health care services performed or the status of any bill submitted to an organization in connection with health care services provided to an enrollee. Any information provided to an enrollee pursuant to this subsection shall include a statement that the information is not a bill and is for the enrollee's information only. The statement shall include the following disclosure prominently displayed at the top of the page in all capital letters: "Do not pay this statement.  This is not a bill.  The information provided below is for information purposes only."

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

I. The director shall impose a penalty against any health care provider or hospital in violation of this section of up to three times the amount of the provider or hospital charges at issue.

J. The director shall investigate any complaint filed pursuant to this section and enforce the requirements of this section.
A.R.S. § 20-400.01 — Arizona Code / Title 20 / Chapter 2 / Article 4.2 / Section 400.01
20-400.01 Unjustified adjustments
Status: in_force

20-400.01. Unjustified adjustments

A. No insurer may issue a policy of insurance subject to this article with a premium developed in a manner which is not consistent with a filing made pursuant to sections 20-357 and 20-385.

B. No insurer may make any adjustment to the full manual premium developed for any risk without adequate justification for that adjustment. An adjustment will be presumed to be adequately justified if both:

1. It is applied in a manner consistent with the insurer's filed rules.

2. The insurer's files contain adequate documentation of the facts supporting the adjustment.

C. A misclassification of a risk shall be considered an adjustment without adequate justification.

D. Each insurer shall maintain reasonable records of the information collected or used by it in developing the premium charged for any risk so that such records will be available to enable the director to verify compliance with this section.
A.R.S. § 20-152 — Arizona Code / Title 20 / Chapter 1 / Article 2 / Section 152
20-152 Enforcement
Status: in_force

20-152. Enforcement

A. If the director has cause to believe that a person has violated any penal provision of this title or other laws relating to insurance, and that prosecution of the person is advisable, he shall certify the facts of such violation to the attorney general, who shall bring and prosecute such action as may be required for the purpose of punishing the violation.

B. If the director has cause to believe that any person is violating or is about to violate any provision of this title or any lawful order of the director, he may certify the facts thereof to the attorney general, who shall bring and prosecute such action as may be required for the purpose of enjoining the violation.

C. The attorney general shall prosecute or defend all proceedings brought pursuant to or resulting from enforcement of this title when requested by the director.
A.R.S. § 20-1342 — Arizona Code / Title 20 / Chapter 6 / Article 4 / Section 1342
20-1342 Scope and format of policy; definitions
Status: in_force

20-1342. Scope and format of policy; definitions

A. A policy of disability insurance shall not be delivered or issued for delivery to any person in this state unless it otherwise complies with this title and complies with the following:

1. The entire money and other considerations shall be expressed in the policy.

2. The time when the insurance takes effect and terminates shall be expressed in the policy.

3. It shall purport to insure only one person, except that a policy may insure, originally or by subsequent amendment, on the application of the policyholder or the policyholder's spouse, any two or more eligible members of that family, including husband, wife, dependent children or any children under a specified age that does not exceed nineteen years and any other person dependent on the policyholder.  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 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 the thirty-one day period.

4. The style, arrangement and overall appearance of the policy shall give no undue prominence to any portion of the text, and every printed portion of the text of the policy and of any endorsements or attached papers shall be plainly printed in light-faced type of a style in general use, the size of which shall be uniform and not less than ten point with a lower case unspaced alphabet length of not less than one hundred and twenty point.  "Text" shall include all printed matter except the name and address of the insurer, name or title of the policy, the brief description, if any, and captions and subcaptions.

5. The exceptions and reductions of indemnity shall be set forth in the policy and, other than those contained in sections 20-1345 through 20-1368, shall be printed and, at the insurer's option, either included with the benefit provision to which they apply or under an appropriate caption such as "exceptions", or "exceptions and reductions", except that if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies.

6. Each such form, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first page.

7. The policy shall contain no provision purporting to make any portion of the charter, rules, constitution or bylaws of the insurer a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks, or short-rate table filed with the director.

8. 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.

9. A 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.

10. 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.

11. 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.

12. The coverage prescribed by paragraph 11 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 contract that provides maternity benefits shall not restrict benefits for any hospital length of stay in connection with childbirth for the mother or the newborn child to less than forty-eight hours following a normal vaginal delivery or ninety-six hours following a cesarean section.  The contract shall not require the provider to obtain authorization from the insurer for prescribing the minimum length of stay required by this subsection. The contract may provide that an attending provider in consultation with the mother may discharge the mother or the newborn child before the expiration of the minimum length of stay required by this subsection.  The insurer shall not:

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

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

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

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

5. Except as described in subsection 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 contract, except that any coinsurance or other cost sharing for any portion of a period within a hospital length of stay required pursuant to subsection 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:

1. Prohibit a disability insurer from imposing deductibles, coinsurance or other cost sharing in relation to benefits for equipment or supplies for the treatment of diabetes.

2. Require a policy to provide an insured with outpatient benefits if the policy does not cover outpatient benefits.

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 disability insurer and that contains a routine outpatient 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. 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.
A.R.S. § 20-1349 — Arizona Code / Title 20 / Chapter 6 / Article 4 / Section 1349
20-1349 Notice of claim
Status: in_force

20-1349. Notice of claim

A. There shall be a provision as follows: "Notice of claim: Written notice of claim must be given to the insurer within twenty days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible.  Notice given by or on behalf of the insured or the beneficiary to the insurer at ____________ (insert the location of such office as the insurer may designate for the purpose), or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer."

B. In a policy providing a loss-of-time benefit which may be payable for at least two years, an insurer may at its option insert the following between the first and second sentences of the provision set forth in subsection A of this section:  "Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two years, he shall, at least once in every six months after having given notice of claim, give to the insurer notice of continuance of said disability, except in the event of legal incapacity. The period of six months following any filing of proof by the insured or any payment by the insurer on account of such claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of such notice shall not impair the insured's right to any indemnity which would otherwise have accrued during the period of six months preceding the date on which such notice is actually given."
A.R.S. § 20-630 — Arizona Code / Title 20 / Chapter 3 / Article 4 / Section 630
20-630 Attachment and garnishment of assets
Status: in_force

20-630. Attachment and garnishment of assets

A. During the pendency of delinquency proceedings in this or any reciprocal state, an action or proceeding in the nature of an attachment, garnishment or execution may not be commenced or maintained in the courts of this state against the delinquent insurer or its assets. Any lien obtained by any such action or proceeding within four months before the commencement of any such delinquency proceeding or at any time thereafter is void as against any rights arising in the delinquency proceeding.

B. Notwithstanding any other provision of this chapter, a federal home loan bank may not be stayed, enjoined or prohibited from exercising or enforcing any right or cause of action against collateral pledged by an insurer member under any federal home loan bank security agreement or any pledge, security, collateral or guarantee agreement or other similar arrangement or credit enhancement relating to a security agreement to which that federal home loan bank is a party.
A.R.S. § 20-172 — Arizona Code / Title 20 / Chapter 1 / Article 2 / Section 172
20-172 Possession by director of person transacting insurance prior to appointment of receiver; powers of director in possession; stay of possession order; application to title insurance
Status: in_force

20-172. Possession by director of person transacting insurance prior to appointment of receiver; powers of director in possession; stay of possession order; application to title insurance

A. The director may, upon submission of a verified petition stating that an insurer is in such an unsafe or unsound condition that it is or will become unable to meet the anticipated demands of its policyholders and that the condition cannot be corrected by the procedures of sections 20-169, 20-170 or 20-171, obtain an order from the superior court allowing the director to immediately take possession and control of the insurer pending a hearing on the appointment of a receiver. The superior court shall immediately consider the director's petition and shall immediately issue without notice to the affected party such order unless the verified petition filed by the director is faulty. After the order is granted, the director shall immediately, through the attorney general, apply to the superior court for the appointment of a receiver for the insurer. If at any time the court finds that no ground for receivership exists, the receivership shall be dissolved and the director's possession terminated.

B. When the director has taken possession of an insurer and until either the appointment and qualification of the receiver or the adjudication that no ground for the receivership exists, the director shall be vested with the full and exclusive power of management and control. The director shall have the power to continue or to discontinue the business, to stop or to limit the payment of its obligations, to employ any necessary assistants, to execute any instrument in the name of the insurer and to commence, defend and conduct in its name any action or proceeding in which the insurer may be a party.

C. An order issued by the director pursuant to this section shall not be stayed except by order of the superior court and upon the giving of security by the applicant in such sum as will be adequate to protect the insurer's policyholders.

D. The provisions of this section shall apply to all types of insurers including title insurers, hospital service corporations, medical service corporations, dental service corporations, optometric service corporations, and health care service organizations.
A.R.S. § 20-489.01 — Arizona Code / Title 20 / Chapter 2 / Article 13 / Section 489.01
20-489.01 Application of other laws
Status: in_force

20-489.01. Application of other laws

To the extent allowed by this article, section 20-142, subsection F applies to this article.
A.R.S. § 20-443.02 — Arizona Code / Title 20 / Chapter 2 / Article 6 / Section 443.02
20-443.02 Stranger originated life insurance
Status: in_force

20-443.02. Stranger originated life insurance

A. Intentionally practicing or planning to initiate a life insurance policy for the benefit of a person or entity that lacks an insurable interest and that, at the time of policy origination, has no insurable interest in the insured is a violation of section 20-1104.  Stranger originated life insurance practices include situations in which life insurance is purchased with resources or guarantees from or through a person or entity that, at the time of policy inception, could not lawfully initiate the policy himself or itself, and if, at the time of policy inception, there is an agreement to directly or indirectly transfer the ownership of the policy or the policy benefits to a person or entity that lacks an insurable interest.  Trusts that are created to give the appearance of insurable interest and that are used to initiate policies for the benefit of investors with no insurable interest violate section 20-1104 and the prohibition against wagering on life. Intentionally practicing or planning does not include a policy owner's lawful assignment of the policy owner's life insurance policy.

B. Stranger originated life insurance practices do not include:

1. A policy loan by a life insurance company pursuant to the terms of the life insurance policy or accelerated death provisions contained in the life insurance policy, whether issued with the original policy or as a rider.

2. A premium finance loan or any loan made for a policy on or before the date of issuance of the policy by a bank or other licensed financial institution if any of the following apply:

(a) Default on the loan or the transfer of the policy in connection with the default is not pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this section.

(b) The loan proceeds are used solely to pay premiums for the policy and to pay any costs or expenses incurred by the lender or the borrower in connection with the financing.

(c) The owner has not agreed on the date of the premium finance loan to sell, directly or indirectly, the policy or any portion of the policy's death benefit on any date following the issuance of the policy.

(d) The owner does not receive on the date of the premium finance loan a guarantee of the future value of the sale of the policy.

3. A collateral assignment of a life insurance policy by an owner.

4. A loan made by a lender that does not violate title 6, chapter 14, article 1, if the loan does not violate this section.

5. An agreement if all the parties:

(a) Are closely related to the insured by blood or law.

(b) Have a lawful substantial economic interest in the continued life, health and bodily safety of the person insured, or are trusts established primarily for the benefit of such parties.

6. Any designation, consent or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or trust established by the employer, of life insurance on the life of the employee.

7. A bona fide business succession planning arrangement that is between one or more of the following:

(a) Shareholders in a corporation or between a corporation and one or more of its shareholders or one or more trusts established by its shareholders.

(b) Partners in a partnership or between a partnership and one or more of its partners or one or more trusts established by its partners.

(c) Members in a limited liability company or between a limited liability company and one or more of its members or one or more trusts established by its members.

8. An agreement entered into by a service recipient, or a trust established by the service recipient, and a service provider, or a trust established by the service provider, that performs significant services for the service recipient's trade or business.

C. Nothing in this section prohibits the assignment of a life insurance policy that is not part of a stranger originated life insurance practice as prescribed by subsection A of this section.
A.R.S. § 20-558 — Arizona Code / Title 20 / Chapter 3 / Article 2 / Section 558
20-558 Investment company or trust; mutual funds
Status: in_force

20-558. Investment company or trust; mutual funds

An insurer may invest in the securities of any open end management type investment company, investment trust or mutual fund registered with the United States securities and exchange commission or in a common trust fund of a bank regulated by a federal or state agency within the limitations prescribed by this article if the investments held by the investment company or common trust fund, if added to the assets of the insurer on a basis that is in the same proportion that the shares of the investment company or investments in a common trust fund held by the insurer bear to all of the shares of the investment company or investments in a common trust fund outstanding, would not cause the insurer to exceed the limitations contained in this article.
A.R.S. § 20-452.03 — Arizona Code / Title 20 / Chapter 2 / Article 6 / Section 452.03
20-452.03 Evidence of nonviolation
Status: in_force

20-452.03. Evidence of nonviolation

In any trial, hearing or proceeding to determine a violation of section 20-452.01, a written statement or authorization signed by the person for whom any purchase is financed, to whom any money is loaned or for whom any extension, renewal or other act in connection with a loan is to be granted or performed, declaring that such person voluntarily chooses the insurer or person transacting insurance through whom the insurance or its renewal was transacted, and that the choice of such insurer or person transacting insurance was not made a condition precedent to such purchase, loan, extension, renewal or other act, shall be prima facie evidence that no violation of section 20-452.01 has occurred, if the borrower or purchaser in his own handwriting shall have written the name of his chosen insurer or person transacting insurance on a written statement or authorization of such insurer or person transacting insurance.
A.R.S. § 20-447 — Arizona Code / Title 20 / Chapter 2 / Article 6 / Section 447
20-447 False financial statements or records
Status: in_force

20-447. False financial statements or records

A. No person shall file with any public official, or make, publish, disseminate, circulate or deliver to any person, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated or delivered to any person, or placed before the public, any false statement of the financial condition of an insurer with intent to deceive.

B. No person shall make any false entry in any book, report or statement of any insurer or other person required to have records under this title, with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs, or any public official to whom the insurer or person is required by law to report, or who has authority by law to examine into its condition or into any of its affairs, or, with like intent, wilfully omit to make a true entry of any material fact pertaining to the business of the insurer or person in any book, report or statement thereof.
A.R.S. § 20-1222 — Arizona Code / Title 20 / Chapter 6 / Article 1 / Section 1222
20-1222 Misstatement of age in annuities
Status: in_force

20-1222. Misstatement of age in annuities

In an annuity or pure endowment contract, other than a reversionary, survivorship or group annuity, there shall be a provision that if the age of the person or persons upon whose life or lives the contract is made, or of any of them, has been misstated, the amount payable or benefits accruing under the contract shall be such as the stipulated payment or payments to the insurer would have purchased according to the correct age, and that if the insurer makes or has made any overpayment or overpayments on account of such misstatement, the amount thereof, with interest at the rate to be specified in the contract but not exceeding six per cent per annum, may be charged against the current or next succeeding payment or payments to be made by the insurer under the contract.
A.R.S. § 20-1545 — Arizona Code / Title 20 / Chapter 6 / Article 8.1 / Section 1545
20-1545 Limitation on investment
Status: in_force

20-1545. Limitation on investment

A mortgage guaranty insurance company shall not invest in notes or other evidences of indebtedness secured by mortgage or other lien upon real property. This section shall not apply to obligations secured by real property, or contracts for the sale of real property, which are acquired in the course of the good faith settlement of claims under policies of insurance issued by the mortgage guaranty insurance company or in the good faith disposition of real property so acquired.
A.R.S. § 20-421 — Arizona Code / Title 20 / Chapter 2 / Article 5 / Section 421
20-421 Access of director to records of person insured by unauthorized insurer
Status: in_force

20-421. Access of director to records of person insured by unauthorized insurer

Upon the director's request any person in this state who is the insured under any policy issued by an unauthorized insurer upon a subject of insurance resident, located or to be performed in this state at the time the policy was issued, shall produce for examination all policies and other documents evidencing and relating to the insurance, and shall disclose the amount of the gross premiums paid or agreed to be paid for the insurance, through whom the insurance was procured, and such other information relative to the placing of the insurance as may reasonably be required.
A.R.S. § 20-1651 — Arizona Code / Title 20 / Chapter 6 / Article 12 / Section 1651
20-1651 Application; types of risks
Status: in_force

20-1651. Application; types of risks

This article shall apply to policies of insurance, other than motor vehicle insurance and workers' compensation insurance, on risks located or resident in this state which insure any of the following contingencies:

1. Loss of or damage to real property which is used predominantly for residential purposes and which consists of not more than four dwelling units.

2. Loss of or damage to personal property in which natural persons resident in specifically described real property of the kind described in paragraph 1 have an insurable interest, except personal property used in the conduct of a commercial or industrial enterprise.

3. Legal liability of a natural person for loss, damage or injury to persons or property, but not including policies primarily insuring risks arising from the conduct of a commercial or industrial enterprise.
A.R.S. § 20-1122 — Arizona Code / Title 20 / Chapter 5 / Article 1 / Section 1122
20-1122 Assignment of policies
Status: in_force

20-1122. Assignment of policies

A policy may be assignable or not assignable, as provided by its terms. Subject to its terms relating to assignability, any life or disability policy, when issued, under the terms of which the beneficiary may be changed upon the sole request of the insured, may be assigned either by pledge or transfer of title, by an assignment executed by the insured alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Any such assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment until the insurer has received at its home office written notice of termination of the assignment or pledge, or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.
A.R.S. § 20-1068 — Arizona Code / Title 20 / Chapter 4 / Article 9 / Section 1068
20-1068 Statutory construction and relationship to other laws
Status: in_force

20-1068. Statutory construction and relationship to other laws

A. Except as they relate to an insurer or a hospital or medical service corporation, the provisions of this title are applicable to health care services organizations only as provided in this article, chapter 1 of this title, chapter 2, article 12 of this title, chapter 3, articles 1, 2 and 7 of this title, sections 20-223, 20-233, 20-234, 20-261, 20-1133, 20-1135, 20-1379 and 20-1380, section 20-1408, subsections C through K, chapter 6, article 16 of this title and chapters 11, 15, 17, 20, 21 and 30 of this title.

B. Unless preempted under federal law or unless federal law imposes greater requirements than this section, this section applies to a provider sponsored health care services organization.
A.R.S. § 20-220.01 — Arizona Code / Title 20 / Chapter 2 / Article 1 / Section 220.01
20-220.01 Hazardous financial condition; determination; order
Status: in_force

20-220.01. Hazardous financial condition; determination; order

A. The director may consider the following standards, either singly or a combination of two or more, in determining whether the continued operation of any insurer transacting an insurance business in this state may be deemed to be hazardous to its policyholders or creditors or the general public:

1. Adverse findings reported in financial condition and market conduct examination reports, audit reports and actuarial opinions, reports or summaries.

2. The national association of insurance commissioners insurance regulatory information system and its other financial analysis solvency tools and reports.

3. Whether the insurer has made adequate provision, according to presently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the insurer, when considered in light of the assets held by the insurer with respect to the reserves and related actuarial items, including investment earnings on the assets, and the considerations anticipated to be received and retained under the policies and contracts.

4. The ability of an assuming reinsurer to perform and whether the insurer's reinsurance program provides sufficient protection for the insurer's remaining surplus after taking into account the insurer's cash flow and the classes of business written as well as the financial condition of the assuming reinsurer.

5. Whether the insurer's operating loss in the last twelve-month period or any shorter period of time, including net capital gain or loss, change in nonadmitted assets and cash dividends paid to shareholders, is greater than fifty per cent of the insurer's remaining surplus as regards policyholders in excess of the minimum required.

6. Whether the insurer's operating loss in the last twelve-month period or any shorter period of time, excluding net capital gains, is greater than twenty per cent of the insurer's remaining surplus as regards policyholders in excess of the minimum required.

7. Whether a reinsurer, an obligor or any entity within the insurer's insurance holding company system is insolvent, threatened with insolvency or delinquent in payment of its monetary or other obligations and that, in the director's opinion, may affect the insurer's solvency.

8. Contingent liabilities, pledges or guaranties that either individually or collectively involve a total amount that, in the director's opinion, may affect the insurer's solvency.

9. Whether any affiliate or controlling person of an insurer is delinquent in the transmitting to or payment of net premiums to the insurer.

10. The age and collectability of receivables.

11. Whether the management of an insurer, including officers, directors or other persons who directly or indirectly control the operation of the insurer, fails to possess and demonstrate the competence, fitness and reputation deemed necessary to serve the insurer in the position.

12. Whether the management of an insurer has failed to respond to inquiries relative to the condition of the insurer or has furnished false and misleading information concerning an inquiry.

13. Whether the insurer has failed to meet financial and holding company filing requirements in the absence of a reason satisfactory to the director.

14. Whether the management of an insurer either has filed any false or misleading sworn financial statement, has released false or misleading financial statements to lending institutions or to the general public, has made a false or misleading entry or has omitted an entry of material amount in the insurer's books.

15. Whether the insurer has grown so rapidly and to an extent that the insurer lacks adequate financial and administrative capacity to meet its obligations in a timely manner.

16. Whether the insurer has experienced or will experience in the foreseeable future cash flow or liquidity problems.

17. Whether the management of an insurer has established reserves that do not comply with minimum standards established by state insurance laws, rules, statutory accounting standards, sound actuarial principles and standards of practice.

18. Whether the management of an insurer persistently engages in material under reserving that results in adverse development.

19. Whether transactions among affiliates, subsidiaries or controlling persons for which the insurer receives assets or capital gains, or both, do not provide sufficient value, liquidity or diversity to assure the insurer's ability to meet its outstanding obligations as they mature.

20. Any other finding determined by the director to be hazardous to the insurer's policyholders or creditors or the general public.

B. For the purposes of making a determination of an insurer's financial condition under this section, the director may:

1. Disregard any credit or amount receivable resulting from transactions with a reinsurer that is insolvent, impaired or otherwise subject to a delinquency proceeding.

2. Make appropriate adjustments including disallowance to asset values attributable to investments in or transactions with parents, subsidiaries or affiliates consistent with the accounting practices and procedures manual adopted by the national association of insurance commissioners, state laws and rules.

3. Refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor.

4. Increase the insurer's liability in an amount equal to any contingent liability, pledge or guarantee not otherwise included if there is a substantial risk that the insurer will be called on to meet the obligation undertaken within the next twelve-month period.

C. If the director determines that the continued operation of the insurer licensed to transact business in this state may be hazardous to its policyholders or creditors or the general public, in addition to any other action authorized by this title, the director may issue an order requiring the insurer to:

1. Reduce the total amount of present and potential liability for policy benefits by reinsurance.

2. Reduce, suspend or limit the volume of business being accepted or renewed.

3. Reduce general insurance and commission expenses by specified methods.

4. Increase the insurer's capital and surplus.

5. Suspend or limit the declaration and payment of dividends by an insurer to its stockholders or its policyholders.

6. File reports in a form acceptable to the director concerning the market value of an insurer's assets.

7. Limit or withdraw from certain investments or discontinue certain investment practices to the extent the director deems necessary.

8. Document the adequacy or premium rates in relation to the risks insured.

9. In addition to regular annual statements, file interim financial reports on the form adopted by the national association of insurance commissioners or in a format prescribed by the director.

10. Correct corporate governance practice deficiencies and adopt and use governance practices acceptable to the director.

11. Provide a business plan to the director in order to continue to transact business in this state.

12. Notwithstanding any other law limiting the frequency or amount of premium rate adjustments, adjust rates for any nonlife insurance product written by the insurer that the director considers necessary to improve the financial condition of the insurer.

D. A hearing demanded by an insurer aggrieved by an order of the director as prescribed by rule shall be closed to the public but the hearing shall be open to the public if requested according to section 20-164, subsection A.

E. This section does not limit or supersede any provision of this title or any other provision of law pertaining to the powers of the director or the regulation of the financial condition of insurers transacting insurance in this state.
A.R.S. § 20-1123.01 — Arizona Code / Title 20 / Chapter 5 / Article 1 / Section 1123.01
20-1123.01 Motor vehicle liability insurance; primary and excess coverage
Status: in_force

20-1123.01. Motor vehicle liability insurance; primary and excess coverage

A. If two or more policies affording valid and collectible automobile liability insurance apply to the same motor vehicle in an occurrence out of which a liability loss shall arise, and one of such policies affords coverage to a named insured engaged in the business of selling, repairing, servicing, delivering, testing, road testing, parking or storing motor vehicles, both of the following shall be conclusively presumed:

1. If, at the time of loss, the motor vehicle is being operated by any person engaged in any of such businesses, or by his employee or agent, the insurance afforded by the policy issued to the person engaged in such business shall be primary, and the insurance afforded by any other policy shall be excess.

2. If, at the time of loss, the motor vehicle is being operated by any person other than as described in paragraph 1, the insurance afforded by the policy issued to any person engaged in any of such businesses shall be excess over all other insurance available to such operator as a named insured or otherwise.

B. Except as provided in subsection A of this section, if two or more policies affording valid and collectible liability insurance apply to the same motor vehicle in an occurrence out of which a liability loss shall arise, it shall be conclusively presumed that the insurance afforded by that policy in which such motor vehicle is described or rated as an owned automobile shall be primary and the insurance afforded by any other policy or policies shall be excess.

C. The presumptions stated in subsection A of this section may be modified or amended only by written agreement signed by all insurers who have issued a policy or policies applicable to a loss described in such subsection and all named insureds under such policies.
A.R.S. § 20-1013 — Arizona Code / Title 20 / Chapter 4 / Article 7 / Section 1013
20-1013 Regulation of agents
Status: in_force

20-1013. Regulation of agents

The director shall, after notice and hearing, promulgate such rules and regulations as are necessary to provide for the licensing of agents which shall include provisions for examination, licensing, annual fees and disciplinary procedures similar to those provided in chapter 2, article 3 of this title.
A.R.S. § 20-726 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 726
20-726 Prohibited interests of officers and directors in certain transactions
Status: in_force

20-726. Prohibited interests of officers and directors in certain transactions

A. No director or officer of an insurer shall accept, except for the insurer, or be the beneficiary of any fee, brokerage, gift or other emolument in addition to his fixed salary or compensation, because of any investment, loan, deposit, purchase, sale, exchange, reinsurance or other similar transaction made by or for the insurer, or be pecuniarily interested therein in any capacity except on behalf of the insurer.

B. No insurer shall guarantee the financial obligation of any of its officers or directors.

C. This section shall not prohibit such a director or officer from becoming a policyholder of the insurer and enjoying thereunder the rights customarily provided therein for holders of such policies.

D. This section shall not prohibit any transaction which meets the requirements of title 10, chapter 8, article 6.
A.R.S. § 20-298 — Arizona Code / Title 20 / Chapter 2 / Article 3 / Section 298
20-298 Commissions
Status: in_force

20-298. Commissions

A. An insurer or insurance producer shall not pay a commission, service fee, brokerage or other valuable consideration to a person for selling, soliciting or negotiating insurance in this state if that person is required to be licensed under this article and is not so licensed.

B. A person shall not accept a commission, service fee, brokerage or other valuable consideration for selling, soliciting or negotiating insurance in this state if that person is required to be licensed under this article and is not so licensed.

C. Renewal or other deferred commissions may be paid to a person for selling, soliciting or negotiating insurance in this state if the person was required to be licensed under this article at the time of the sale, solicitation or negotiation and was so licensed at that time.

D. An insurer or insurance producer may pay or assign commissions, service fees, brokerages or other valuable consideration to an insurance agency or to persons who do not sell, solicit or negotiate insurance in this state, unless the payment would violate section 20-451.

E. This section does not affect payment of the regular salaries due to a licensee's employees or the distribution in the regular course of business of compensation and profits among a business entity's members or other owners.
A.R.S. § 20-1065 — Arizona Code / Title 20 / Chapter 4 / Article 9 / Section 1065
20-1065 Suspension or revocation of certificate of authority; civil penalties
Status: in_force

20-1065. Suspension or revocation of certificate of authority; civil penalties

A. The director may suspend or revoke any certificate of authority issued to a health care services organization under this article if the director finds that any of the following conditions exists:

1. The health care services organization is operating significantly in contravention of its basic organizational documents or in a manner contrary to that described in, and reasonably inferred from, any other information submitted under section 20-1053.

2. The health care services organization issues evidences of coverage that do not comply with the requirements of section 20-1057.

3. The health care plan does not constitute an appropriate mechanism to achieve an effective health care plan pursuant to this title or any rule that is adopted by the director.

4. The health care services organization can no longer be expected to meet its obligations to enrollees or prospective enrollees.

5. The health care services organization, or any authorized person on its behalf, has advertised or merchandised its services in a materially untrue, misleading, deceptive or unfair manner.

6. The health care services organization has failed to substantially comply with this article or any rule that is adopted pursuant to this article.

7. The health care services organization is in unsound condition or in such condition as to render its further transaction of business in this state hazardous to its enrollees or to the residents of this state.

B. If the certificate of authority of a health care services organization is suspended, the health care services organization shall not enroll, during the period of such suspension, any additional enrollees except newborn children or other newly acquired dependents of existing enrollees and shall not engage in any advertising or solicitation.

C. If the certificate of authority of a health care services organization is revoked, the organization shall proceed, immediately following the effective date of the order of revocation, to conclude its affairs and shall conduct no further business except as may be essential to the orderly conclusion of solicitation.  The director, by written order, may permit such further operation of the organization as the director may find to be in the best interest of enrollees to the end that enrollees shall be afforded the greatest practical opportunity to obtain continuing health care coverage.

D. Notwithstanding subsections B and C of this section, a health care services organization that has had its certificate of authority denied, suspended or revoked is entitled to a hearing pursuant to title 41, chapter 6, article 10 and, except as provided in section 41-1092.08, subsection H, is entitled to judicial review pursuant to title 12, chapter 7, article 6.

E. If, after a hearing, the director finds grounds pursuant to subsection A of this section to suspend or revoke a health care services organization's certificate of authority, the director may impose, in lieu of or in addition to that suspension or revocation, the following civil penalties that shall be remitted to the state treasurer for deposit, pursuant to sections 35-146 and 35-147, in the state general fund:

1. For an unintentional violation, not more than one thousand dollars for each violation and not more than an aggregate of ten thousand dollars in any six month period.

2. For an intentional violation, not more than five thousand dollars for each violation and not more than an aggregate of fifty thousand dollars in any six month period.

F. Unless preempted under federal law or unless federal law imposes greater requirements than this section, this section applies to a provider sponsored health care services organization.
A.R.S. § 20-1093 — Arizona Code / Title 20 / Chapter 4 / Article 10 / Section 1093
20-1093 Reciprocity
Status: in_force

20-1093. Reciprocity

The amount required to be deposited or placed in a trust or custodial account pursuant to section 20-1092 shall be reduced by any amount deposited or placed in a trust or custodial account pursuant to the laws of another state.
A.R.S. § 20-1241.03 — Arizona Code / Title 20 / Chapter 6 / Article 1.1 / Section 1241.03
20-1241.03 Duties of insurance producers
Status: in_force

20-1241.03. Duties of insurance producers

A. An insurance producer who initiates an application shall submit to the insurer, with or as part of the application, a statement signed by both the applicant and the insurance producer as to whether the applicant has an existing policy or contract.

B. If the answer is "no" to the question under subsection A of this section regarding existing coverage, the insurance producer has no further replacement duties.

C. If the answer is "yes" to the question under subsection A of this section regarding existing coverage, the insurance producer shall present and read to the applicant, not later than the time of taking the application, a notice regarding replacements that is in a form that the director has approved or prescribed by rule.

D. The applicant and the insurance producer shall sign the notice required under subsection C of this section.  The insurance producer shall leave the signed notice with the applicant.  If the notice is presented electronically, the insurer shall send the applicant a copy of the notice within three business days after the application is submitted to the insurer.  In the notice the insurance producer and the applicant shall attest that the insurance producer either read the notice aloud or that the applicant did not wish the notice to be read aloud, in which case the producer need not have read the notice aloud.

E. The notice prescribed in subsection C of this section shall:

1. Identify each policy and contract proposed to be replaced by:

(a) Name of the insurer.

(b) Name of the insured or annuitant.

(c) Policy or contract number if available.

(d) Application or receipt number if the policy or contract number is not available.

2. Include a statement as to whether each policy or contract will be replaced or whether a policy will be used as a source of financing for the new policy or contract.

F. If the application for a new policy or contract is completed in any replacement transaction, the insurance producer shall give the applicant the original or a copy of all sales material at the time of the application for the new policy or contract.  The insurance producer or insurer shall provide the applicant with a printed copy of any electronically presented sales material not later than at the time of policy or contract delivery.

G. Except as provided in section 20-1241.05, subsection G, in connection with any replacement transaction, an insurance producer shall submit to the insurer to which an application for a policy or contract is presented a copy of:

1. Each document required by this section.

2. A statement identifying any preprinted or electronically presented company approved sales materials used.

3. Any individualized sales materials, including any illustrations related to the specific policy or contract purchased.
A.R.S. § 20-698.01 — Arizona Code / Title 20 / Chapter 3 / Article 10 / Section 698.01
20-698.01 Rule making; exemption from rule making procedures
Status: in_force

20-698.01. Rule making; exemption from rule making procedures

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

B. The department is exempt from title 41, chapter 6 for the purposes of adopting rules relating to requirements of the national association of insurance commissioners annual financial reporting model regulation and the director's authority to grant extensions, exemptions and waivers consistent with those provisions and prescribed in section 20-698.
A.R.S. § 20-281 — Arizona Code / Title 20 / Chapter 2 / Article 3 / Section 281
20-281 Definitions
Status: in_force

20-281. Definitions

In this article, unless the context otherwise requires:

1. "Business entity" means any corporation, association, partnership, limited liability company, limited liability partnership or other legal entity except an individual or sole proprietorship.

2. "Designated producer" means the individual insurance producer that a business entity designates pursuant to section 20-285, subsection C, paragraph 3 as the individual responsible for the business entity's compliance with the insurance laws of this state.

3. "Health or sickness insurance" means disability insurance as defined in section 20-253.

4. "Home state" means the District of Columbia and any state or territory of the United States in which:

(a) An individual insurance producer maintains a principal place of residence or principal place of business and is licensed to act as a resident insurance producer.

(b) A business entity insurance producer maintains its principal place of business and is licensed to act as a resident insurance producer.

5. "Insurance producer" means a person required to be licensed under this article to sell, solicit or negotiate insurance.

6. "Limited line credit insurance" means any form of insurance that is offered in connection with an extension of credit and that is limited to partially or wholly extinguishing that credit obligation, including credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed asset or automobile protection insurance and any other form of insurance that is offered in connection with an extension of credit, that is limited to partially or wholly extinguishing that credit obligation and that the director determines should be designated a form of limited line credit insurance.

7. "Limited line insurance" means limited line credit insurance, limited line crop insurance, limited lines travel insurance under section  20-3553 and any other line of insurance that the director deems necessary to recognize for the purposes of complying with section 20-287, subsection C, paragraph 2.

8. "Major line insurance" means life insurance, accident and health or sickness insurance, property insurance, casualty insurance, personal lines insurance and variable insurance contracts, as described in section 20-286.

9. "Member" means, if used in reference to a business entity, a person that holds an ownership interest in the business entity, excluding any interest in publicly traded securities and any interest of less than ten percent of the voting rights.

10. "Negotiate" means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract if the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.

11. "Nonresident" means a person whose home state is not Arizona.

12. "Person" means an individual or a business entity.

13. "Resident" means a person whose home state is Arizona and who does not hold a resident insurance producer license in another state or territory of the United States or in the District of Columbia.

14. "Sell" means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurer.

15. "Solicit" means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.
A.R.S. § 20-3322 — Arizona Code / Title 20 / Chapter 25 / Article 1 / Section 3322
20-3322 Audit procedures; interest prohibition; claim payment reduction
Status: in_force

20-3322. Audit procedures; interest prohibition; claim payment reduction

A. The following procedures apply to an audit conducted by an auditing entity:

1. When conducting an in-pharmacy audit an auditing entity shall:

(a) Give a pharmacy at least fourteen days' written notice.

(b) Not conduct an audit during the first five days of the month unless the pharmacy otherwise consents.

(c) Provide the pharmacy a list of items to be audited that provides for identification of prescription number or numbers or date range that the auditing entity is seeking to audit.

(d) When conducting an in-pharmacy audit or desktop audit, limit the audit to claims that do not exceed two years from the date that the claim was adjudicated by the pharmacy benefits manager.

2. An in-pharmacy audit or desktop audit that involves clinical or professional judgment shall be conducted by or in consultation with a pharmacist.

3. The pharmacy may use the records of a hospital, physician or other authorized practitioner to validate the pharmacy records. The validated records may be obtained via electronic methods, fax, telephone or written prescription orders and do not have to be the original hard copy prescription order.

4. Each pharmacy shall be audited under the same standards and parameters as other similarly situated pharmacies in this state.

5. When conducting a wholesale invoice audit, an auditing entity shall:

(a) Not audit the pharmacy claims of another auditing entity.

(b) Reverse a finding of discrepancy if the pharmacist or pharmacy dispensed the correct quantity of the drug according to the prescription and either of the following applies:

(i) The national drug code published by the United States food and drug administration is in a quantity that is a subunit or multiple of the drug purchased by the pharmacist or pharmacy according to the supplier invoice.

(ii) The drug dispensed by the pharmacist or pharmacy shares all but the last two digits of the United States food and drug administration's national drug code of the drug reflected on the supplier invoice.

(c) As a presumption of validity of a purchase of a dispensed drug, accept any of the following to support the pharmacy's claim related to a dispensed drug:

(i) Copies of the supplier invoices in the pharmacist's or pharmacy's possession, subject to validation that includes validating the pharmacy purchase order and the payment of the supplier invoice, and including any supplier invoices that were issued before the date the drug was dispensed but not earlier than ninety days before the first day of the audit period and any other invoices and supporting documentation from a supplier that is authorized by federal or state law to transfer ownership of the drug to the pharmacist or pharmacy. The validation may also require information that is required under the drug supply chain security act (P.L. 113-54; 127 Stat. 599; 21 United States Code sections 360eee through 360eee-4).

(ii) Any reports required by a state board or agency.

(d) Not later than the tenth business day after receiving the pharmacy's request, provide any supporting documentation that the pharmacy supplier provided to the auditing entity.

B. When conducting an in-pharmacy audit or desktop audit, an auditing entity shall comply with the following requirements:

1. The auditing entity shall base a finding of overpayment or underpayment on the actual overpayment or underpayment and not on a projection based on the number of patients served who have similar diagnoses or on the number of similar orders or refills for similar drugs, unless required by federal or state law.

2. The auditing entity may not recoup monies from the pharmacy for any clerical errors identified in an audit.

3. Any finding of an overpayment may not include the dispensing fee amount unless any of the following criteria is met:

(a) A prescription was not received by the patient or the patient's designee.

(b) The prescriber denied authorization.

(c) The prescription dispensed was a medication error by the pharmacy.

(d) The identified overpayment is based solely on an extra dispensing fee.

C. Interest may not accrue during the audit period.

D. An auditing entity may not, directly or indirectly, retroactively reduce the amount of a claim payment to a pharmacist or a pharmacy after adjudication of the claim for a prescription drug unless any of the following applies:

1. The original claim was found to have been fraudulently submitted through an audit conducted in accordance with this article.

2. The claim submitted was a duplicate for which the pharmacy had already received payment.

3. The original reimbursement was incorrect due to an error that resulted in an overpayment by an insurer or a pharmacy benefit manager.

E. Subsection D of this section does not prohibit an auditing entity, insurer or pharmacy benefit manager from increasing the amount of a claim payment after adjudication of the claim.
A.R.S. § 20-541 — Arizona Code / Title 20 / Chapter 3 / Article 2 / Section 541
20-541 Improvement district obligations
Status: in_force

20-541. Improvement district obligations

An insurer may invest in bonds, notes or evidences of indebtedness issued by any local improvement district in this or any other state to finance local improvements authorized by law, if the principal and interest of such obligations is payable from assessments on real property within such local improvement district. No such investment shall be made unless the face value of all such obligations, and similar obligations outstanding do not exceed fifty per cent of the market value of the real property and improvements upon which the bonds or the assessments for the payment of principal and interest thereon are liens inferior only to the liens for general ad valorem property taxes. No such investment shall be made unless no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment therein, or if such obligations were issued less than five years prior to the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased or on any other obligation of the issuer within five years of such investment.
A.R.S. § 20-721 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 721
20-721 Participating policies
Status: in_force

20-721. Participating policies

A. If so provided in its articles of incorporation, a domestic stock or domestic mutual insurer may issue any or all of its policies with or without participation in profits, savings or unabsorbed portions of premiums, may classify policies issued on a participating or nonparticipating basis, and may determine the right to participate and the extent of participation of any class or classes of policies. Any such classification or determination shall be reasonable, and shall not unfairly discriminate as between policyholders within the same such classification. A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged.

B. No dividend, otherwise earned, shall be made contingent upon the payment of renewal premium on any policy.