A.R.S. § 20-431 — Arizona Code / Title 20 / Chapter 2 / Article 5.1 / Section 431
20-431 Definitions
Status: in_force

20-431. Definitions

In this article, unless the context otherwise requires:

1. "Actuarial standards board" means the board that is established by the American academy of actuaries to develop and adopt standards of actuarial practice.

2. "Basic illustration" means a ledger or proposal that is used in the sale of a life insurance policy and that shows both guaranteed and nonguaranteed elements.

3. "Contract premium":

(a) Means the gross premium that is required to be paid under a fixed premium policy.

(b) Includes the premium for a rider for which benefits are shown in an illustration.

4. "Currently payable scale" means a scale of nonguaranteed elements in effect for a policy form as of the preparation date of the illustration or declared to become effective within the next ninety-five days.

5. "Disciplined current scale":

(a) Means a scale of nonguaranteed elements that constitutes a limit on illustrations currently being illustrated by an insurer and that is reasonably based on recent, actual historical experience as certified annually by an illustration actuary designated by the insurer.

(b) Includes reliance on further guidance in determining the disciplined current scale as contained in standards by the actuarial standards board if the standards comply with all of the following:

(i) Are consistent with this article.

(ii) Limit a disciplined current scale to reflect only actions that have already been taken or events that have already occurred.

(iii) Do not allow a disciplined current scale to include any projected trends of improvements in experience or any assumed improvements in experience beyond the illustration date.

(iv) Do not allow assumed expenses to be less than the minimum-assumed expenses.

6. "Generic name" means a short title descriptive of the policy being illustrated such as "whole life", "term life" or "flexible premium adjustable life".

7. "Guaranteed elements" means the premiums, benefits, values, credits or charges under a policy of life insurance that are guaranteed and that are determined when the policy is issued.

8. "Illustrated scale" means a scale of nonguaranteed elements currently being illustrated that is not more favorable to the policyowner than the lesser of either of the following:

(a) The disciplined current scale.

(b) The currently payable scale.

9. "Illustration" means a presentation or depiction that includes nonguaranteed elements of a life insurance policy over a period of years and that is a basic illustration, supplemental illustration or in-force illustration.

10. "Illustration actuary" means an actuary who meets the requirements prescribed in section 20-431.08 and who certifies the illustrations based on the standard of practice adopted by the actuarial standards board.

11. "In-force illustration" means an illustration that is furnished at any time after the life insurance policy that it depicts has been in force for one year or more.

12. "Lapse-supported illustration" means an illustration of a policy form that fails to meet the definition of self-supporting illustration under a modified persistency rate assumption that uses persistency rates underlying the disciplined current scale for the first five years and one hundred percent policy persistency thereafter.

13. "Minimum-assumed expenses" means the minimum expenses that may be used in calculating the disciplined current scale for a policy form and for which the insurer may annually designate one of the following methods to determine assumed expenses for all policy forms:

(a) Fully allocated expenses, which must be used if a generally recognized expense table is not approved.

(b) Marginal expenses, which may be used only if the marginal expenses are greater than a generally recognized expense table.

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

14. "Nonguaranteed elements" means the premiums, benefits, values, credits or charges under a policy of life insurance that are not guaranteed or not determined at issue.

15. "Nonterm group life" means a group policy or individual policies of life insurance that are issued to members of an employer group or other allowed group to which all of the following apply:

(a) The employer or other group representative selects every plan of coverage.

(b) Some portion of the premium is paid by the group or through payroll deduction.

(c) Group underwriting or simplified underwriting is used.

16. "Policyowner" means the owner who is named in the policy or the certificate holder in the case of a group policy.

17. "Policyowner value" includes the cash surrender values and other illustrated benefit amounts that are available at the policyowner's election.

18. "Premium outlay" means the amount of premium that is assumed to be paid by the policyowner or other premium payor out of pocket.

19. "Self-supporting illustration" means an illustration of a policy form for which it can be demonstrated that when using experience assumptions underlying the disciplined current scale for all illustrated points in time on or after the fifteenth policy anniversary or the twentieth policy anniversary for second-or-later-to-die policies, or on policy expiration if sooner, the accumulated value of all policy cash flows equals or exceeds the total policyowner value available.

20. "Supplemental illustration" means an illustration that is furnished in addition to a basic illustration and that may be presented in a different format from the basic illustration but that may depict only a scale of nonguaranteed elements as provided in the basic illustration.
A.R.S. § 20-463 — Arizona Code / Title 20 / Chapter 2 / Article 6 / Section 463
20-463 Fraud; injunction; penalties; restitution; definitions
Status: in_force

20-463. Fraud; injunction; penalties; restitution; definitions

A. It is a fraudulent practice and unlawful for a person to knowingly:

1. Present, cause to be presented or prepare with the knowledge or belief that it will be presented an oral or written statement, including computer generated documents, to or by an insurer, reinsurer, purported insurer or reinsurer, insurance producer or agent of a reinsurer that contains untrue statements of material fact or that fails to state any material fact with respect to any of the following:

(a) An application for the issuance or renewal of an insurance policy.

(b) The rating of an insurance policy.

(c) A claim for payment or benefit pursuant to an insurance policy.

(d) Premiums paid on any insurance policy.

(e) Payments made pursuant to the terms of any insurance policy.

(f) An application for a certificate of authority.

(g) The financial condition of an insurer, reinsurer or purported insurer or reinsurer.

(h) The acquisition of an insurer or reinsurer or the concealing of any information concerning any fact material to the acquisition.

2. Solicit or accept new or renewal insurance risks by or for any insolvent insurer, reinsurer or other entity licensed to transact insurance business in this state.

3. Conceal or attempt to conceal from the department or remove or attempt to remove from the home office, place of safekeeping or other place of business of any insurer, reinsurer or other entity licensed to transact insurance business in this state part or all of the assets or records of the assets, transactions and affairs.

4. Divert or attempt or conspire to divert the monies of an insurer, reinsurer, entity licensed to transact insurance business in this state or other person in connection with:

(a) The transaction of insurance or reinsurance.

(b) The conduct of business activities by any insurer, reinsurer or other entity licensed to transact insurance business in this state.

(c) The formation, acquisition or dissolution of any insurer, reinsurer or other entity licensed to transact insurance business in this state.

5. Assist, abet, solicit or conspire with another person to violate paragraph 1 of this subsection.

6. Employ, use or act as a runner, capper or steerer for the purposes of violating paragraph 1 of this subsection.

B. A person who acts without malice, fraudulent intent or bad faith is not subject to liability for filing reports or furnishing orally or in writing other information concerning suspected, anticipated or completed fraudulent insurance acts if the reports or information is provided to or received from:

1. The director or the department.

2. Law enforcement officials and their agents and employees.

3. The national association of insurance commissioners, other state insurance departments, a federal or state agency or bureau established to detect and prevent fraudulent insurance acts, and the agency's or bureau's agents, employees or designees, or an organization established by insurers to assist in the detection and prevention of fraudulent insurance acts, and the organization's agents, employees or designees.

C. A person, or an officer, employee or agent of the person acting within the scope of employment or agency of that officer, employee or agent, identified under subsection B, paragraph 1, 2 or 3 when performing authorized activities without malice, fraudulent intent or bad faith is not subject to civil liability for libel, slander or another relevant tort. No civil cause of action may be brought against the person or entity.

D. A person or entity under subsection B or C is entitled to an award of attorney fees and costs if the person or entity is a prevailing party in a civil cause of action for libel, slander or other relevant tort and the action is not substantially justified. For purposes of this subsection, "substantially justified" means a proceeding that has a reasonable basis in law or fact at the time that it is initiated.

E. Nothing in this section limits any common law right of the person or entity.

F. Nothing in this section is intended to prohibit contact or communication with clients or patients for any lawful purpose, including communication by and between insurers, the insurers' policyholders and claimants under policies issued to the insurers' policyholders regarding the investigation or settlement of any claim.

G. For the purposes of this section:

1. "Runner", "capper" or "steerer" means a person who procures clients at the direction of, or in cooperation with, a person who intends to perform or obtain services or benefits under a contract of insurance or who intends to assert a claim against an insured.

2. "Statement" includes any notice, proof of injury, bill for services, payment for services, hospital or doctor records, x-rays, test reports, medical or legal expenses, or other evidence of loss or injury, or other expense or payment.
A.R.S. § 20-356 — Arizona Code / Title 20 / Chapter 2 / Article 4 / Section 356
20-356 Making of rates
Status: in_force

20-356. Making of rates

All rates subject to this article shall be made in accordance with the following provisions:

1. Rates shall not be excessive, inadequate or unfairly discriminatory.  No rate shall be held to be inadequate unless the director finds that the loss experience of the insurer in the classification covered by the rate has been adverse for a continuous period of not less than two years immediately preceding the date of such finding.

2. Due consideration shall be given to past and prospective loss experience within and outside this state, to catastrophe hazards, if any, to a reasonable margin for underwriting profit and contingencies, to dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers, to past and prospective expenses within and outside this state and to all other relevant factors within and outside this state.

3. The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.

4. Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.

5. Nothing in this article shall be construed to prohibit payment of dividends by insurers issuing policies on the participating plan, or by mutual or reciprocal insurers, but in the payment of such dividends there shall be no unfair discrimination between policyholders.

6. Except to the extent necessary to meet the provisions of paragraph 1, uniformity among insurers in any matters within the scope of this section is neither required nor prohibited.
A.R.S. § 20-235 — Arizona Code / Title 20 / Chapter 2 / Article 1 / Section 235
20-235 Insurers; financial disclosure; requirements
Status: in_force

20-235. Insurers; financial disclosure; requirements

A. The director may adopt rules which require each insurer licensed to write property or casualty insurance in this state to report its loss and expense experience, investment income, administrative expenses and other data, as he may require, for classes of risks which he may designate. Such reports shall be in addition to the annual statement required by section 20-223.

B. The department may designate one or more rate service organizations or advisory organizations to gather and compile the experience and data.

C. The director by order may require an insurer authorized to transact insurance in this state to submit statistical and other financial data including the information prescribed in subsection A of this section in a form and content consistent with rules adopted pursuant to subsection A, with any model guideline, regulation, rule or act adopted by the national association of insurance commissioners or with the classification basis used by the insurer. The director shall prescribe the time period and form in which the data shall be submitted.

D. An insurer who fails to provide the information required under subsection C of this section is subject to payment of a late fee of not more than one hundred dollars for each day of delinquency. The director shall notify an insurer of late fees that it will incur as a result of noncompliance with this section at least ten days prior to the date any such late fees become due.
A.R.S. § 20-1384 — Arizona Code / Title 20 / Chapter 6 / Article 4 / Section 1384
20-1384 Short-term limited duration insurance; notice; definitions
Status: in_force

20-1384. Short-term limited duration insurance; notice; definitions

A. All policies or certificates issued, delivered or renewed in this state for short-term limited duration insurance shall display on the policy's fact page and in any application materials provided in connection with enrollment in such coverage the following federal disclosure in at least fourteen-point type:

Notice

This coverage is not required to comply with certain federal market requirements for health insurance, principally those contained in the affordable care act.  Be sure to check your policy carefully to make sure you are aware of any exclusions or limitations regarding coverage of preexisting conditions or health benefits (such as hospitalization, emergency services, maternity care, preventive care, prescription drugs and mental health and substance use disorder services). Your policy might also have lifetime or annual dollar limits on health benefits, or both. If this coverage expires or you lose eligibility for this coverage, you might have to wait until an open enrollment period to get other health insurance coverage.

B. A health care insurer shall provide notice to the insured before expiration that the policy needs to be renewed or is expiring.

C. For the purposes of this section:

1. "Health care insurer" has the same meaning prescribed in section 20-1379.

2. "Short-term limited duration insurance" means health insurance coverage that is offered by a health care insurer, that is not subject to state health coverage mandates in this title, that has an expiration date specified in the contract that is less than twelve months after the original effective date of the contract and, taking into account renewals or extensions, that has a duration of not longer than thirty-six months.
A.R.S. § 20-701 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 701
20-701 Scope of article
Status: in_force

20-701. Scope of article

A. This article shall apply to domestic stock insurers and domestic mutual insurers only, except that subsection B of section 20-715 and subsection C of section 20-719 shall apply also to foreign and alien mutual insurers.

B. Any domestic stock or mutual insurer which as of September 1, 1954, had duly filed its articles of incorporation and was lawfully in process of completing its organization, shall complete its organization according to such procedures as were provided by laws in force immediately prior to January 1, 1955. Any other domestic stock or mutual insurer in process of organization on January 1, 1955 shall be governed by such provisions of this article as the director deems to be practicably applicable, and otherwise according to laws in force immediately prior to January 1, 1955.

C. Existing domestic stock and mutual insurers are governed by the applicable provisions of this article.
A.R.S. § 20-491 — Arizona Code / Title 20 / Chapter 2 / Article 15 / Section 491
20-491 Definitions
Status: in_force

20-491. Definitions

In this article, unless the context other requires:

1. "Insurance group" means for the purposes of conducting an ORSA those insurers and affiliates that are included within an insurance holding company system as defined in section 20-481.

2. "Insurer":

(a) Means every person engaged in the business of making contracts of insurance.

(b) Does not include agencies, authorities or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia or a state or political subdivision of a state.

3. "ORSA guidance manual" means the own risk and solvency assessment guidance manual that is developed and adopted by the national association of insurance commissioners.

4. "ORSA summary report" means a confidential high-level ORSA summary of an insurer or insurance group.

5. "Own risk and solvency assessment" or "ORSA" means a confidential internal assessment, appropriate to the nature, scale and complexity of an insurer or insurance group, that is conducted by that insurer or insurance group of the material and relevant risks associated with the insurer's or insurance group's current business plan and the sufficiency of capital resources to support those risks.
A.R.S. § 20-218.02 — Arizona Code / Title 20 / Chapter 2 / Article 1 / Section 218.02
20-218.02 Change of known place of business or statutory agent
Status: in_force

20-218.02. Change of known place of business or statutory agent

A. A domestic insurer may change its known place of business in this state or its statutory agent in this state, or both, upon filing with the director a statement setting forth:

1. The name of the insurer.

2. The address of its then known place of business.

3. If the address of its known place of business is to be changed, the address to which it is to be changed.

4. The name and address of its then statutory agent.

5. If its statutory agent or his address is to be changed, the name and address of its successor statutory agent, or the new address.

6. That such change was duly authorized by the insurer.

B. If a domestic insurer's statutory agent is changed or resigns, a new statutory agent shall be appointed by the insurer. The termination of an existing statutory agent shall not take effect until the insurer has appointed a new valid statutory agent.
A.R.S. § 20-3103 — Arizona Code / Title 20 / Chapter 20 / Article 1 / Section 3103
20-3103 Denial of claims; review of claims
Status: in_force

20-3103. Denial of claims; review of claims

(Eff. 7/1/26)

Before a health care insurer may deny a claim that was submitted by a provider on the basis of 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. § 20-1907 — Arizona Code / Title 20 / Chapter 9 / Article 1 / Section 1907
20-1907 Application of chapter
Status: in_force

20-1907. Application of chapter

The provisions of this chapter shall not be construed to affect or repeal any local ordinance relating to fire prevention or the control of arson.
A.R.S. § 20-481.20 — Arizona Code / Title 20 / Chapter 2 / Article 8 / Section 481.20
20-481.20 Examination of registered insurers; powers; limits; expense
Status: in_force

20-481.20. Examination of registered insurers; powers; limits; expense

A. In addition to the powers that the director has under sections 20-156 to 20-160, inclusive, relating to the examination of insurers, the director shall also have the power to examine any insurer registered under section 20-481.09 and its affiliates to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by the ultimate controlling party or by any entity or combination of entities within the insurance holding company system or by the insurance holding company system on a consolidated basis.

B. To determine compliance with this article, the director may order any insurer registered under section 20-481.09 to produce:

1. All records, books or other information papers in the possession of the insurer or its affiliates insofar as the records, books or other information papers in the possession of any affiliate relate to any transactions between or among the insurer and any of its affiliates.

2. Information not in the possession of the insurer if the insurer has the right to access the information pursuant to contractual relationships, statutory obligations or any other method.

C. If the insurer cannot obtain the information requested under subsection B of this section, the insurer shall provide the director with a detailed explanation of the reason that the insurer cannot obtain the information and the identity of the holder of the information. If the director determines that the detailed explanation is without merit, the director, after notice and a hearing pursuant to section 20-161, may order that the insurer pay a penalty of not more than two hundred dollars for each day's delay or that the insurer's certificate of authority be suspended or revoked.

D. The director shall exercise his examination power under subsection A of this section only if the examination of the insurer under sections 20-156 through 20-160, inclusive, is inadequate or the interests of the policyholders of such insurer may be adversely affected.

E. Each registered insurer shall be liable for and shall pay the expenses of such examination in accordance with section 20-159.

F. If an insurer fails to comply with an order under subsection C of this section, the director may examine records, books or other information papers in the possession of any affiliate of the insurer insofar as such records, books or other information papers in the possession of any affiliate relate to any transactions between or among the insurer and any of its affiliates. The director may also issue subpoenas, administer oaths and examine under oath any person for purposes of determining compliance with this section.  If a person fails or refuses to obey a subpoena, the director may petition a court of competent jurisdiction seeking relief from the court. The court may enter an order compelling the witness to appear and testify or produce documentary evidence. Each witness is entitled to the same fees and mileage, if claimed, as if the person was a witness in superior court pursuant to section 12-303 and the costs of those fees and mileage and any actual expense necessarily incurred in securing the attendance of witnesses shall be itemized and charged against and paid by the company being examined.
A.R.S. § 20-788 — Arizona Code / Title 20 / Chapter 4 / Article 2 / Section 788
20-788 Distribution of savings
Status: in_force

20-788. Distribution of savings

A reciprocal insurer may from time to time return to its subscribers any unused premiums, savings or credits accruing to their accounts. Any such distribution shall not unfairly discriminate between classes of risks, or policies, or between subscribers, but this shall not prevent retrospective rating, nor distribution on a retrospective plan.
A.R.S. § 20-776 — Arizona Code / Title 20 / Chapter 4 / Article 2 / Section 776
20-776 Service of legal process; liabilities under judgment on such service
Status: in_force

20-776. Service of legal process; liabilities under judgment on such service

A. Legal process shall be served on a domestic reciprocal insurer by serving the insurer's attorney at the attorney's principal offices or by serving the director of the department of insurance and financial institutions as the insurer's attorney-in-fact.

B. Any judgment based on legal process so served shall be binding on each of the insurer's subscribers as their respective interests may appear, but in an amount not exceeding their respective contingent liabilities, if any, the same as though personal service of process was had on each such subscriber.
A.R.S. § 20-1208 — Arizona Code / Title 20 / Chapter 6 / Article 1 / Section 1208
20-1208 Policy loan on old policies
Status: in_force

20-1208. Policy loan on old policies

A. In the case of policies issued prior to the operative date of section 20-1231, there shall be a provision that after three full years premiums have been paid, the insurer at any time while the policy is in force will advance on proper assignment or pledge of the policy and on the sole security thereof at a specified rate of interest not to exceed six per cent per annum, an amount equal to, or at the option of the owner of the policy less than, the reserve at the end of the current policy year on the policy and on any dividend addition thereto, computed according to any mortality table, rate of interest and the method of valuation permitted by the provisions of this title, the policy specifying the mortality table and rate of interest adopted for computing such reserve, less an amount not more than two and one-half per cent of the amount insured by the policy and of any dividend additions thereto, and that the insurer shall deduct from such loan value any existing indebtedness on the policy and any unpaid balance of the premium for the current policy year, and may collect interest in advance on the loan to the end of the current policy year. An insurer may, in lieu of the provisions permitted by this section for the deduction from a loan on the policy of an amount not more than two and one-half per cent of the amount insured by the policy and of any dividend additions thereto, insert in the policy a provision that one fifth of the entire reserve may be deducted in case of a loan under the policy, or may provide therein that the deduction may be the two and one-half per cent or the one fifth of the entire reserve at the option of the insurer. The policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for six months after application therefor is made. The policy, at the insurer's option, may provide for an automatic premium loan, subject to an election of the party entitled to elect.

B. The provision provided for in subsection A of this section shall not be required in term insurance, nor shall it apply to temporary insurance or pure endowment insurance, issued or granted in exchange for lapsed or surrendered policies.

C. In ascertaining the indebtedness due from policy loans, the interest, if not paid when due, shall be added to the principal of the loans and shall bear interest at the rate specified in the note or loan agreement.
A.R.S. § 20-1218 — Arizona Code / Title 20 / Chapter 6 / Article 1 / Section 1218
20-1218 Standard provisions required in annuity and pure endowment contracts
Status: in_force

20-1218. Standard provisions required in annuity and pure endowment contracts

A. No annuity or pure endowment contract, other than reversionary annuities, survivorship annuities or group annuities, and except as stated in this section, shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions specified in sections 20-1219 to 20-1224, inclusive. Any such provisions not applicable to single premium annuities or single premium pure endowment contracts shall not, to that extent, be incorporated therein.

B. This section shall not apply to contracts for deferred annuities included in, or upon the lives of beneficiaries under, life insurance policies.
A.R.S. § 20-507 — Arizona Code / Title 20 / Chapter 3 / Article 1 / Section 507
20-507 Unearned premium reserve for marine insurance
Status: in_force

20-507. Unearned premium reserve for marine insurance

With reference to marine insurance, premiums on trip risks not terminated shall be deemed unearned, and the director may require the insurer to carry a reserve thereon equal to one hundred per cent on trip risks written during the month ended as of the date of statement.
A.R.S. § 20-2403 — Arizona Code / Title 20 / Chapter 14 / Article 1 / Section 2403
20-2403 Risk retention groups not chartered and licensed in this state
Status: in_force

20-2403. Risk retention groups not chartered and licensed in this state

A. Before offering insurance in this state, a risk retention group shall submit to the director all of the following:

1. Evidence that the group meets the criteria of a risk retention group.

2. A statement identifying the state or states in which the risk retention group is chartered and licensed as a liability insurance company, the date of chartering and its principal place of business.

3. A copy of its plan of operations or a feasibility study and revisions of the plan or study submitted to its state of domicile.

4. A statement of registration which designates the director as its agent for the purpose of receiving service of legal documents or process. The director shall determine the filing fee for the statement of registration.

B. A risk retention group doing business in this state shall submit to the director all of the following:

1. A copy of the group's financial statement submitted to the state in which the risk retention group is chartered and licensed, which is certified by an independent public accountant and contains a statement of opinion on loss and loss adjustment expense reserves made by a member of the American academy of actuaries or a qualified loss reserve specialist under criteria established by the director.

2. A copy of each examination of the risk retention group as certified by the director or public official conducting the examination.

3. On request by the director, a copy of any audit performed with respect to the risk retention group.

4. Information required to verify it continues to meet the criteria as a risk retention group under section 20-2401, paragraph 10.

C. Each risk retention group is liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located in this state and shall report to the director the net premiums written for risks resident or located in this state. The risk retention group is subject to taxation and any applicable fines and penalties related to the taxation on the same basis as a foreign admitted insurer. To the extent licensed insurance producers are used pursuant to this chapter, they shall report to the director the premiums for direct business for risks resident or located in this state which the licensees have placed with or on behalf of a risk retention group which is not chartered and licensed in this state. To the extent that insurance producers are used pursuant to this chapter, the insurance producer shall keep a complete and separate record of all policies procured from each risk retention group. The record shall be open to examination by the director. These records, for each policy and each kind of insurance provided under each policy, shall include all of the following:

1. The limit of liability.

2. The time period covered.

3. The effective date.

4. The name of the risk retention group which issued the policy.

5. The gross premium charged.

6. The amount of return premium, if any.

D. A risk retention group and its agents and representatives shall comply with section 20-461 pertaining to unfair claims settlement practices.

E. A risk retention group shall comply with chapter 2, article 6 of this title. However, if the director seeks an injunction regarding such conduct, the injunction shall be obtained from a court of competent jurisdiction.

F. A risk retention group shall submit to an examination by the director to determine its financial condition if the director of the jurisdiction in which the group is chartered and licensed has not initiated an examination or does not initiate an examination within sixty days after a request by the director of this state. Any examination shall be coordinated to avoid unjustified repetition and conducted in an expeditious manner and in accordance with rules established by the director.

G. A policy issued by a risk retention group shall contain in ten point type on the front page and the declaration page the following notice:

Notice

This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.

H. The following acts by a risk retention group are prohibited:

1. The solicitation or sale of insurance by a risk retention group to a person who is not eligible for membership in the group.

2. The solicitation or sale of insurance by, or operation of, a risk retention group that is in a hazardous financial condition or is financially impaired.

I. No risk retention group may do business in this state if an insurance company is directly or indirectly a member or owner of the risk retention group, other than a risk retention group whose members are insurance companies.

J. A risk retention group which is not chartered and licensed in this state and is doing business in this state must comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by a state insurance director if there has been a finding of financial impairment after an examination under subsection F of this section.

K. The director, in establishing criteria for loss and loss adjustment reserves under subsection B, paragraph 1 of this section and in conducting examinations under subsection F of this section, for purposes of uniformity, shall consider any nationally adopted criteria or procedure.

L. In addition to complying with the requirements of this section applicable to risk retention groups doing business in this state, any risk retention group operating in this state before August 18, 1987 shall comply with subsection A of this section within thirty days after August 18, 1987.

M. A risk retention group which violates any provision of this chapter is subject to fines and penalties applicable to licensed insurers generally, including revocation of its license or the right to do business in this state.
A.R.S. § 20-1404.05 — Arizona Code / Title 20 / Chapter 6 / Article 5 / Section 1404.05
20-1404.05 Contracts; optometrists; covered services; definition
Status: in_force

20-1404.05. Contracts; optometrists; covered services; definition

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

1. Require the optometrist to provide a service to an individual covered under a blanket disability insurance policy based on a fee set by the blanket disability insurer unless the service for which the fee applies is a covered service under the individual's blanket disability insurance policy.

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

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

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

C. This section does not prohibit the ability of a blanket disability insurer to enter into a contract for an optometrist to participate in a discount program sponsored by the blanket disability insurer for services that are not covered if:

1. Participation in the blanket disability insurer network is not contingent on participation in the sponsored discount program.

2. The blanket disability insurer offers equal treatment to an optometrist who does not participate in a blanket disability insurer sponsored discount program, regarding:

(a) Promotional treatment.

(b) Marketing benefits.

(c) Materials.

(d) Contract terms for providing a covered service.

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

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

F. For the purposes of this section, "covered service" means a service for which any reimbursement is available under a blanket 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. § 20-283 — Arizona Code / Title 20 / Chapter 2 / Article 3 / Section 283
20-283 Exceptions to insurance producer licensing
Status: in_force

20-283. Exceptions to insurance producer licensing

A. An insurer is not required to obtain an insurance producer license. In this section, insurer does not include an insurer's officers, directors, employees, subsidiaries or affiliates.

B. The following persons are not required to obtain a license as an insurance producer:

1. An officer, director or employee of an insurer or of an insurance producer, if the officer, director or employee does not receive any commission on policies written or sold to insurer risks residing, located or to be performed in this state and either:

(a) The activities of the officer, director or employee are executive, administrative, managerial, clerical or a combination of these and are only indirectly related to the sale, solicitation or negotiation of insurance.

(b) The functions of the officer, director or employee relate to underwriting, loss control, inspection or the processing, adjusting, investigating or settling of a claim on a contract of insurance.

(c) The officer, director or employee either:

(i) Acts as a special agent or agency supervisor assisting insurance producers and engages in activities that are limited to providing technical advice and assistance to licensed insurance producers and that do not include the sale, solicitation or negotiation of insurance.

(ii) Responds to requests from existing policyholders to transact matters after effectuation of the policy and arising out of the policy and does not engage in negotiation or solicitation, other than to confer with the policyholders regarding the policyholders' requests.

2. A person who does not receive any commission, but who secures and provides information for the purpose of either:

(a) Group life insurance, group annuities, group or blanket accident and health or sickness insurance.

(b) Enrolling individuals under plans, issuing certificates under plans or otherwise assisting in administering plans or performing administrative services related to mass-marketed property and casualty insurance.

3. An employer or association or its officers, directors or employees or the trustees of an employee trust plan, to the extent that the employer or association or officers, directors, employees or trustees are engaged in the administration or operation of a program of employee benefits for the employer's or association's own employees or the employees of its subsidiaries or affiliates and the program involves the use of insurance issued by an insurer, if the employer or association or officers, directors, employees or trustees are not directly or indirectly compensated in any manner by the company that issues the contracts.

4. Employees of insurers or organizations employed by insurers who engage in the inspection, rating or classification of risks or the supervision of the training of insurance producers and who are not individually engaged in the sale, solicitation or negotiation of insurance.

5. A person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the state, if the person does not sell, solicit or negotiate insurance that would insure risks residing, located or to be performed in this state.

6. A person who is not a resident of this state and who sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks that are located in more than one state insured under that contract, if that person is otherwise licensed as an insurance producer to sell, solicit or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state.

7. A salaried full-time employee who counsels or advises the employee's employer regarding the insurance interests of the employer or its subsidiaries or business affiliates, if the employee does not sell or solicit insurance or receive a commission.

8. A person whose activities in this state are limited to providing a website or other electronic platform for insurers or insurance producers to sell insurance.

9. A person that processes payments or charges for insurance premiums if the person does not sell, solicit or negotiate insurance.
A.R.S. § 20-2331 — Arizona Code / Title 20 / Chapter 13 / Article 1 / Section 2331
20-2331 Accountable health plans; varying copayments and deductibles allowed
Status: in_force

20-2331. Accountable health plans; varying copayments and deductibles allowed

A. Except as provided in sections 20-1379 and 20-2304, an accountable health plan may offer one or more health benefits plans that contain a choice of deductibles, coinsurance, copayments, out-of-pocket and any other cost sharing levels.  Plans offered under this section shall clearly disclose in marketing materials, certificates of coverage and contracts the insured’s financial responsibilities.  An accountable health plan that offers such a health benefit plan shall continue to provide any mandated health coverage that is required by this state or by federal law.

B. This section does not prohibit a health benefits plan that is intended to qualify as a high deductible health plan as defined by 26 United States Code section 223(c)(2) from requiring the application of deductibles, copayments or coinsurance to benefits provided under the health benefits plan.
A.R.S. § 20-259.02 — Arizona Code / Title 20 / Chapter 2 / Article 2 / Section 259.02
20-259.02 Coverage to include car pool operators and car pool vehicles; definitions
Status: in_force

20-259.02. Coverage to include car pool operators and car pool vehicles; definitions

A. A policy of private passenger vehicle insurance shall not be delivered or issued for delivery in this state unless coverage is provided for the protection of any person insured under such policy while such person is acting as a car pool operator, and for the protection of any vehicle insured under such policy while such vehicle is, or while it is being operated as, a car pool vehicle. Such car pool coverage shall not entail a premium higher than the premium would otherwise have been for such private passenger vehicle.

B. For the purposes of this section:

1. "Car pool operator" has the same meaning prescribed in section 28-4032.

2. "Car pool vehicle" means any motor vehicle when operated by a car pool operator.

3. "Private passenger vehicle" includes a vehicle accommodating no more than fifteen passengers and owned by a commercial organization but used exclusively as a car pool vehicle. Private passenger vehicle does not include vehicles accommodating more than fifteen passengers, vehicles used for commercial purposes or motorcycles.
A.R.S. § 20-1231 — Arizona Code / Title 20 / Chapter 6 / Article 1 / Section 1231
20-1231 Standard nonforfeiture law for life insurance
Status: in_force

20-1231. Standard nonforfeiture law for life insurance

A. This section may be cited as the standard nonforfeiture law for life insurance.

B. Nonforfeiture provisions--Life. In the case of policies issued on or after the operative date of this section as defined in subsection J of this section, no policy of life insurance, except as set forth in subsection I of this section, shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the director are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements specified in this section and are essentially in compliance with subsection H of this section:

1. That in the event of default in any premium payment, the insurer will grant, upon proper request not later than sixty days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as is specified by this section.  Instead of the stipulated paid-up nonforfeiture benefit, the insurer may substitute, upon proper request not later than sixty days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits.

2. That upon surrender of the policy within sixty days after the due date of any premium payment in default after premiums have been paid for at least three full years in the case of ordinary insurance, and five full years in the case of industrial insurance, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as is specified by this section.

3. That a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than sixty days after the due date of the premium in default.

4. That if the policy has become paid up by completion of all premiums payments, or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance, or the fifth policy anniversary in the case of industrial insurance, the insurer will pay, upon surrender of the policy within thirty days after any policy anniversary, a cash surrender value of such amount as is specified by this section.

5. In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary, either during the first twenty policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy.

6. A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of this state, an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy, if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein, a statement that such method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered, and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy.

C. Any of the provisions or portions of the provisions set forth in subsection B, paragraphs 1 through 6 of this section which are not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The insurer shall reserve the right to defer the payment of any cash surrender value for a period of six months after demand therefor with surrender of the policy.

D. Cash surrender value--Life.

1. Any cash surrender value available under the policy in the event of default in the premium payment due on any policy anniversary, whether or not required by subsection B of this section, shall be an amount not less than the excess, if any, of the present value on such anniversary of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions if there had been no default, over the sum of the then present value of the adjusted premiums as defined in subsection F of this section and in section 20-1231.01, corresponding to premiums which would have fallen due on and after such anniversary, and the amount of any indebtedness to the insurer on account of or secured by the policy.

2. For any policy issued on or after the operative date as provided in section 20-1231.01 which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in paragraph 1 of this subsection is in an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such rider or supplemental policy provision and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision.

3. For any family policy issued on or after the operative date as provided in section 20-1231.01 which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse's age seventy-one, the cash surrender value referred to in paragraph 1 of this subsection is in an amount not less than the sum of the cash surrender value as defined in that paragraph for an otherwise similar policy issued at the same age without term insurance on the life of the spouse and the cash surrender value as defined in that paragraph for a policy which provides only the benefits otherwise provided by term insurance on the life of the spouse.

4. Any cash surrender value available within thirty days after any policy anniversary under any policy paid up by completion of all premium payments, or any policy continued under any paid-up nonforfeiture benefits, whether or not required by subsection B of this section, shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on account of or secured by the policy.

E. Paid-up nonforfeiture benefits--Life. Any paid-up nonforfeiture benefit available under the policy in the event of default in the premium payment due on any policy anniversary shall be such that its present value as of such anniversary shall be at least equal to the cash surrender value then provided for by the policy, or, if none is provided for, that cash surrender value which would have been required by this section in the absence of the conditions that premiums shall have been paid for at least a specified period.

F. The adjusted premiums--Life.

1. Paragraphs 1 through 4 and paragraph 5, subdivision (a) of this subsection do not apply to policies issued on or after the operative date as provided in section 20-1231.01. Except as provided in paragraph 3 of this subsection, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding extra premiums on a substandard policy, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of:

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

(b) Two per cent of the amount of the insurance if the insurance is uniform in amount, or of the equivalent uniform amount, as defined by this section, if the amount of insurance varies with the duration of the policy.

(c) Forty per cent of the adjusted premium for the first policy year.

(d) Twenty-five per cent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less.

2. In applying the percentages specified in subdivisions (c) and (d) of paragraph 1 of this subsection, no adjusted premiums shall be deemed to exceed four per cent of the amount of insurance or uniform amount equivalent thereto.  When the plan or term of a policy has been changed, either by request of the insured or automatically in accordance with the provisions of the policy, the date of inception of the changed policy for the purposes of determining a nonforfeiture benefit or cash surrender value shall be the date as of which the age of the insured is determined for the purposes of the changed policy.

3. The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provisions shall be equal to the sum of:

(a) The adjusted premiums for an otherwise similar policy issued at the same age without such term insurance benefits.

(b) The adjusted premiums for such term insurance benefits during the period for which premiums for such term insurance benefits are payable.  Such subdivisions (a) and (b) shall be calculated separately and as specified in paragraphs 1 and 2 of this subsection except that, for the purposes of subdivisions (b), (c) and (d) of paragraph 1 of this subsection, the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in this subdivision shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in subdivision (a) of this paragraph.

4. In the case of a policy providing an amount of insurance varying with the duration of the policy, the equivalent uniform amount thereof for the purpose of paragraphs 1, 2 and 3 of this subsection shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy, but in the case of a policy for a varying amount of insurance issued on the life of a child under age ten, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age ten were the amount provided by the policy at age ten.

5. Tables for calculating adjusted premiums shall be as follows:

(a) Except as otherwise provided in subdivisions (b) and (d) of this paragraph, all adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the commissioners 1941 standard ordinary mortality table provided that, for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not in excess of three years younger than the actual age of the insured. Such calculations for all policies of industrial insurance shall be made on the basis of the 1941 standard industrial mortality table. All calculations shall be made on the basis of the rate of interest, not exceeding three and one-half per cent per annum, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, but in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than one hundred thirty per cent of the rates of mortality according to such applicable table. For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the director.

(b) This subdivision does not apply to ordinary policies issued on or after the operative date as provided in section 20-1231.01. In the case of ordinary policies issued on or after the operative date defined in subdivision (c) of this paragraph, all adjusted premiums and present values referred to in this section shall be calculated on the basis of the commissioners 1958 standard ordinary mortality table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, provided that such rate of interest shall not exceed three and one-half per cent per annum except that a rate of interest not exceeding four per cent per annum may be used for policies issued on or after July 1, 1974 and prior to January 1, 1979, and a rate of interest not exceeding five and one-half per cent per annum may be used for policies issued on or after January 1, 1979, except that for any single premium whole life or endowment insurance policy a rate of interest not exceeding six and one-half per cent per annum may be used, and provided that:

(i) For any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not in excess of six years younger than the actual age of the insured.

(ii) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not in excess of those shown in the commissioners 1958 extended term insurance table.

(iii) For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the director.

(c) Any insurer may file with the director a written notice of its election to comply with the provisions of subdivision (b) of this paragraph, either as to designated ordinary policies or as to all ordinary policies issued by it, after a specified date before January 1, 1966. After the filing of such notice, then upon such specified date, which shall be the operative date of such subdivision (b) as to such policies for such insurer, such subdivision (b) shall become operative with respect to such policies thereafter issued by such insurer. If an insurer makes no such election, or so elects to have such subdivision (b) apply as to certain of its ordinary policies only, the operative date thereof as to all of the ordinary policies issued by such insurer, other than those policies as to which the insurer has elected an earlier operative date, shall be January 1, 1966.

(d) This subdivision does not apply to industrial policies issued on or after the operative date provided in section 20-1231.01. In the case of industrial policies issued on or after the operative date of this subdivision as defined herein, all adjusted premiums and present values referred to in this subdivision shall be calculated on the basis of the commissioners 1961 standard industrial mortality table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits provided that such rate of interest shall not exceed three and one-half per cent per annum except that a rate of interest not exceeding four per cent per annum may be used for policies issued on or after July 1, 1974 and prior to January 1, 1979, and a rate of interest not exceeding five and one-half per cent per annum may be used for policies issued on or after January 1, 1979, except that for any single premium whole life or endowment insurance policy a rate of interest not exceeding six and one-half per cent per annum may be used. But, in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the commissioners 1961 industrial extended term insurance table and, for insurance issued on a substandard basis, the calculations of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the director.  After the effective date of this subdivision, an insurer may file with the director a written notice of its election to comply with the provisions of this subdivision, either as to designated industrial policies or as to all industrial policies issued by it, after a specified date before January 1, 1968. After the filing of such notice, then upon such specified date, which shall be the operative date of this subdivision for such insurer, this subdivision shall become operative with respect to the industrial policies thereafter issued by such insurer. If an insurer makes no such election, the operative date of this subdivision for such insurer shall be January 1, 1968.

(e) For any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or for any plan of life insurance which is of such a nature that minimum values cannot be determined by the methods described in subsection B, C, D or E of this section, paragraph 1 of this subsection, subdivision (b), (c) or (d) of this paragraph or section 20-1231.01, then:

(i) The director must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by subsection B, C, D or E of this section, paragraph 1 of this subsection, subdivision (b), (c) or (d) of this paragraph or section 20-1231.01.

(ii) The director must be satisfied that the benefits and the pattern of premiums of the plan are not such as to mislead prospective policyholders or insureds.

(iii) The cash surrender values and paid-up nonforfeiture benefits provided by the plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this standard nonforfeiture law for life insurance, as determined by rules adopted by the director.

G. Calculation of values--Life.

1. Any cash surrender value and any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in subsections D, E and F of this section and section 20-1231.01 may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide such additions.

2. Notwithstanding such provisions of subsection D of this section, additional benefits payable and premiums for all such additional benefits shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this section, and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits:

(a) In the event of death or dismemberment by accident or accidental means.

(b) In the event of total and permanent disability.

(c) As reversionary annuity or deferred reversionary annuity benefits.

(d) As term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply.

(e) As term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child's age is twenty-six, is uniform in amount after the child's age is one, and has not become paid-up by reason of the death of a parent of the child.

(f) As other policy benefits additional to life insurance and endowment benefits.

H. This subsection, in addition to all other applicable subsections of this section, applies to all policies issued on or after January 1, 1986:

1. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than two-tenths of one per cent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years, from the sum of:

(a) The greater of zero and the basic cash value hereinafter specified.

(b) The present value of any existing paid-up additions less the amount of any indebtedness to the insurer under the policy.

2. The basic cash value shall be equal to the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the insurer, if there had been no default, less the then present value of the nonforfeiture factors, corresponding to premiums which would have fallen due on and after such anniversary, except that the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in subsection D or F of this section, whichever is applicable, shall be the same as are the effects specified in subsection D or F of this section, whichever is applicable, on the cash surrender values defined in that subsection.

3. The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in subsection F of this section or section 20-1231.01, whichever is applicable.  Except as is required by the next succeeding sentence of this paragraph, such percentage:

(a) Must be the same percentage for each policy year between the second policy anniversary and the latter of:

(i) The fifth policy anniversary.

(ii) The first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two-tenths of one per cent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years.

(b) Must be such that no percentage after the later of the two policy anniversaries specified in subdivision (a) may apply to fewer than five consecutive policy years.

4. No basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in subsection F of this section or section 20-1231.01, whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value.

5. All adjusted premiums and present values referred to in this subsection shall for a particular policy be calculated on the same mortality and interest bases as are used in demonstrating the policy's compliance with the other subsections of this section. The cash surrender values referred to in this subsection shall include any endowment benefits provided for by the policy.

6. Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in subsections B, C, D, E and G of this section and section 20-1231.01. The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed in subsection G, paragraph 2 of this section shall conform with the principles of this subsection.

I. Exceptions. This section and section 20-1231.01 do not apply to any of the following:

1. Reinsurance.

2. Group insurance.

3. Pure endowment.

4. Annuity or reversionary annuity contract.

5. A term policy of uniform amount which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of twenty years or less expiring before age seventy-one, for which uniform premiums are payable during the entire term of the policy.

6. A term policy of decreasing amount, which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in subsection F of this section and section 20-1231.01, is less than the adjusted premiums so calculated on a term policy of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance and for a term of twenty years or less expiring before age seventy-one, for which uniform premiums are payable during the entire term of the policy.

7. Any policy which is delivered outside this state through an insurance producer or other representative of the insurer issuing the policy.

8. A policy, which provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in subsections D, E and F of this section and section 20-1231.01, exceeds two and one-half per cent of the amount of insurance at the beginning of the same policy year. For the purposes of determining the applicability of this section, the age at expiry for a joint term life insurance policy is the age at expiry of the oldest life.

J. Operative date. Except as is otherwise provided in subsection F of this section, after January 1, 1955, any insurer may file with the director a written notice of its election to comply with the provisions of this section after a specified date before July 1, 1956. After the filing of such notice, then upon such specified date, which shall be the operative date for such insurer, this section shall become operative with respect to the policies thereafter issued by the insurer. If an insurer makes no such election, the operative date of this section for the insurer shall be July 1, 1956.
A.R.S. § 20-1554 — Arizona Code / Title 20 / Chapter 6 / Article 8.1 / Section 1554
20-1554 Unearned premium reserve
Status: in_force

20-1554. Unearned premium reserve

A mortgage guaranty insurance company shall compute and maintain an unearned premium reserve that is according to the method approved by the director and that is consistent with the accounting practices and procedures manual adopted by the national association of insurance commissioners.
A.R.S. § 20-342 — Arizona Code / Title 20 / Chapter 2 / Article 4 / Section 342
20-342 Scope and application of article
Status: in_force

20-342. Scope and application of article

A. This article does not apply to:

1. Life insurance.

2. Disability insurance.

3. Reinsurance, except joint reinsurance as provided in section 20-369.

4. Mortgage guaranty insurance.

5. Insurance against loss of or damage to aircraft, their hulls, accessories and equipment, or against liability, other than employers' liability, arising out of the ownership, maintenance or use of aircraft.

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

7. Insurance risks described in section 20-382, subsection A, paragraph 8.

B. Rates for the types of insurance included in section 20-382 are only subject to sections 20-381 through 20-399.

C. This section and sections 20-341 and 20-356 through 20-374 apply to workers' compensation and employers' liability insurance incident to and written in connection with workers' compensation on risks or operations in this state.

D. This section and sections 20-341 and 20-361 through 20-379 apply to title insurance on risks located in this state and to escrow services performed by a title insurer or title insurance agent as defined in section 20-1562.  Those sections are designated as the title insurance rate regulatory provisions of this article and are the only sections of this article that apply to title insurance.
A.R.S. § 20-615 — Arizona Code / Title 20 / Chapter 3 / Article 4 / Section 615
20-615 Grounds for rehabilitation of domestic insurers
Status: in_force

20-615. Grounds for rehabilitation of domestic insurers

The director may apply to the court for an order appointing the director as receiver of and directing the director to rehabilitate a domestic insurer upon one or more of the following grounds:

1. That the insurer is impaired or insolvent.

2. That the insurer has refused to submit its books, records, accounts or affairs to reasonable examination by the director.

3. That the insurer has failed to comply with an order of the director to make good an impairment of capital or surplus, or both.

4. That the insurer has transferred or attempted to transfer substantially its entire property or business, or has entered into any transaction the effect of which is to merge substantially its entire property or business in that of any other insurer without having first obtained the written approval of the director.

5. That the insurer has wilfully violated its charter or any law of this state.

6. That the insurer has an officer, director or manager who has refused to be examined under oath concerning its affairs, for which purpose the director is authorized to conduct and to enforce by all appropriate and available means any such examination under oath in any other state or territory of the United States, in which any such officer, director or manager may then presently be, to the full extent permitted by the laws of such other state or territory, this special authorization considered.

7. That the insurer has been the subject of an application for the appointment of a receiver, trustee, custodian or sequestrator of the insurer or its property otherwise than pursuant to the provisions of this title, but only if such appointment has been made or is imminent and its effect is or would be to oust the courts of this state of jurisdiction under this section.

8. That the insurer has consented to such an order through a majority of its directors, stockholders, members or subscribers.

9. That the insurer has failed to pay a final judgment rendered against it in this state upon any insurance contract issued or assumed by it, within thirty days after the judgment became final or within thirty days after the time for taking an appeal has expired, or within thirty days after dismissal of an appeal before final termination, whichever date is later.

10. That an authorized control level event or mandatory control level event has occurred with respect to the insurer as prescribed in chapter 2, article 12 of this title.
A.R.S. § 20-1315 — Arizona Code / Title 20 / Chapter 6 / Article 3 / Section 1315
20-1315 Conversion of monthly premium policies
Status: in_force

20-1315. Conversion of monthly premium policies

There shall be a provision, in the case of monthly premium industrial policies, granting, upon proper written request and upon presentation of evidence of insurability satisfactory to the insurer, the privilege of converting a monthly premium industrial insurance policy to any form of ordinary life insurance regularly issued by the insurer, in accordance with terms and conditions agreed upon with the insurer. The privilege of making the conversion need be granted only if the insurer's monthly premium industrial policies on the life insured, in force as premium paying insurance and on which conversion is requested, grant benefits in event of death, exclusive of additional accidental death benefits and exclusive of any dividend additions, in an amount not less than the minimum amount of ordinary insurance issued by the insurer at the age of the insured on the plan of ordinary insurance desired.
A.R.S. § 20-727 — Arizona Code / Title 20 / Chapter 4 / Article 1 / Section 727
20-727 Management and exclusive agency contracts
Status: in_force

20-727. Management and exclusive agency contracts

A. A domestic stock or mutual insurer shall not make any contract whereby any person or persons are granted or are to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors, or are to have the controlling or preemptive right to produce substantially all insurance business for the insurer, unless the contract is filed with the director of the department of insurance and financial institutions and is subject to the director's approval.  The contract shall be deemed approved unless disapproved by the director within twenty days after date of filing, subject to such reasonable extension of time as the director may require by notice given within such twenty days. Any disapproval shall be delivered to the insurer in writing, stating the grounds for the disapproval.

B. The director shall disapprove any such contract if the director finds that it:

1. Subjects the insurer to excessive charges.

2. Is to extend for an unreasonable length of time.

3. Does not contain fair and adequate standards of performance.

4. Contains other inequitable provisions or provisions that impair the proper interests of stockholders or members of the insurer.
A.R.S. § 20-485.11 — Arizona Code / Title 20 / Chapter 2 / Article 9 / Section 485.11
20-485.11 Notice to insureds; statement of charge or premium for coverage; conflict of interest prohibited
Status: in_force

20-485.11. Notice to insureds; statement of charge or premium for coverage; conflict of interest prohibited

A. If the services of an administrator are utilized, such administrator shall provide a written notice approved by the insurer to insured individuals advising them of the identity of and relationship among the administrator, the policyholder and the insurer.

B. If an administrator collects monies, the administrator shall identify and state separately in writing to the person paying to the administrator any charge or premium for insurance coverage the amount of any such charge or premium specified by the insurer for such insurance coverage.

C. The administrator or any employee of the administrator shall not directly or through control of any other person have an ownership interest in any insurer except as a shareholder of less than one per cent of the shares of any publicly owned insurer.  The administrator or a principal of the administrator may not receive from an insurer, for the placement of insurance administered by the administrator, a commission whether in monetary or nonmonetary form directly dependent upon the amount of such insurance.

D. Subject to subsection C of this section, before entering into a written agreement pursuant to section 20-485.01 with an unaffiliated insurer, an administrator shall provide written notice to the unaffiliated insurer of the identity of each insurer with which the administrator is affiliated and the nature of the affiliation.

E. If an administrator or an employee of the administrator acts directly or indirectly as an insurance producer with respect to a policy it administers in this state, the administrator shall provide the policyholder and the person insured under that policy with written notice of that relationship.

F. If an administrator or an employee of the administrator acts directly or indirectly as an insurance producer with respect to an insurance policy available in this state that has substantially the same type of coverage as a policy it administers in this state, the administrator shall provide the insurer for which it acts with written notice of the identity of the other insurer and its relationship to it.
A.R.S. § 20-488.09 — Arizona Code / Title 20 / Chapter 2 / Article 12 / Section 488.09
20-488.09 Foreign insurers
Status: in_force

20-488.09. Foreign insurers

A. On request of the director, a foreign insurer shall submit an RBC report to the director as of the end of the previous calendar year within the later of:

1. The date that an RBC report would be required to be filed by a domestic insurer.

2. Fifteen days after the foreign insurer receives the request.

B. On the written request of the director, a foreign insurer shall submit to the director a copy of any RBC plan that is filed with the insurance director in any other state.

C. The director may require a foreign insurer to file an RBC plan if under the RBC laws applicable in the insurer's domiciliary state or if the domiciliary state does not have any applicable RBC laws, as determined under this article, both:

1. A company action level event occurs with respect to the foreign insurer.

2. The insurance director in the domiciliary state fails to require the foreign insurer to file an RBC plan.

D. If the director requires a foreign insurer to file an RBC plan pursuant to subsection C of this section, the failure of the foreign insurer to file an RBC plan with the director is grounds for the director to suspend the foreign insurer's certificate of authority.

E. The director may apply to the superior court pursuant to chapter 1, article 2 and chapter 3, article 4 of this title for the liquidation of the property of a foreign insurer found in this state if a mandatory control level event occurs with respect to a foreign insurer and if a domiciliary receiver has not been appointed with respect to the foreign insurer under the rehabilitation and liquidation laws applicable in the foreign insurer's domiciliary state. The occurrence of the mandatory control level event shall be considered to be adequate grounds for the application.
A.R.S. § 20-619 — Arizona Code / Title 20 / Chapter 3 / Article 4 / Section 619
20-619 Grounds for ancillary liquidation of foreign insurers
Status: in_force

20-619. Grounds for ancillary liquidation of foreign insurers

The director may apply to the court for an order appointing the director as ancillary receiver of and directing the director to liquidate the business of a foreign insurer having assets, business or claims in this state upon the occurrence of either:

1. The appointment in the domiciliary state of the insurer of any receiver, liquidator, conservator, rehabilitator or other officer by whatever name called for the purpose of liquidating the business of the insurer.

2. A mandatory control level event as prescribed by chapter 2, article 12 of this title, if any receiver, liquidator, conservator, rehabilitator or other officer by whatever name called is not appointed in the insurer's domiciliary state.
A.R.S. § 20-1505 — Arizona Code / Title 20 / Chapter 6 / Article 7 / Section 1505
20-1505 Policy description of insurer
Status: in_force

20-1505. Policy description of insurer

There shall be printed on the first or front page at the head of the standard fire insurance policy the name of the insurer or insurers issuing the policy, the location of the home office or United States office of the insurer or insurers, a statement whether the insurer or insurers are stock corporations, mutual corporations, reciprocal insurers, Lloyd's underwriters or otherwise, and there may be added thereto such device or emblem as the insurer or insurers issuing the policy may desire. Any insurer organized under special charter provisions may so indicate upon its policy, and may add a statement of the plan under which it operates in this state. If the policy is issued by a mutual or reciprocal insurer having special regulations with respect to the payment of assessments by the policyholder or subscriber, such regulations shall be printed on the policy, and any such insurer may print upon the policy such regulations as may be appropriate to or required by its form of organization. There may be substituted for the word "company" a more accurate descriptive term for the type of insurer. There may also be added a statement of the group of insurers with which the insurer is financially affiliated. In lieu of the facsimile signatures of the president and secretary of the insurer there may be used the name or names of the officers or managers authorized to execute the contract.
A.R.S. § 20-2505 — Arizona Code / Title 20 / Chapter 15 / Article 1 / Section 2505
20-2505 Application for certification
Status: in_force

20-2505. Application for certification

A utilization review agent applying for a certificate shall submit the following information to the department:

1. A signed and notarized application on a form prescribed by the director.

2. A utilization review plan that includes a summary description of review guidelines, protocols and procedures, standards and criteria to be used in evaluating inpatient hospital care, inpatient medical care, outpatient surgical care and any medical, surgical and health care services that may be covered by a health care insurer and the provisions by which patients, providers or hospitals may seek reconsideration or appeal of decisions made by the utilization review agent.

3. The professional qualifications of the personnel either employed or under contract to perform the utilization review. Personnel conducting utilization review shall have current licenses that are in good standing and without restrictions from a state health care professional licensing agency in the United States and may be a member of a profession that practices inpatient hospital or outpatient surgical care.

4. A description of the policies and procedures that ensure that a representative of the utilization review agent is available to receive and send the notice and acknowledgments prescribed in article 2 of this chapter and is reasonably accessible to patients and providers in this state and the department by a toll free telephone line or by acceptance of long-distance collect calls for forty hours each week during normal business hours.

5. A description of the policies and procedures that ensure that the utilization review agent will follow applicable state and federal laws to protect the confidentiality of individual medical records.

6. A copy of the materials or a description of the procedure designed to inform patients and providers, as appropriate, of the requirements of the utilization review plan.
A.R.S. § 20-367 — Arizona Code / Title 20 / Chapter 2 / Article 4 / Section 367
20-367 Workers' compensation appeals board; composition
Status: in_force

20-367. Workers' compensation appeals board; composition

A. A workers' compensation appeals board is established in the department.

B. The director shall appoint at least nine but not more than eleven members to the board.  The members shall serve three-year terms.  A member shall not serve more than two consecutive terms.

C. The board shall be comprised of at least:

1. The following voting members:

(a) Five representatives of insurers, one of which is the insurer with the largest Arizona workers' compensation market share as reported by the department of insurance and financial institutions in its latest annual report. Any licensed rating organization that meets the requirements prescribed in section 20-363, subsection E may nominate from its membership in this state one representative for each complete twenty percent share of the total statewide workers' compensation net written premium for the preceding calendar year attributable to its membership. The director shall appoint any remaining insurer representatives needed to constitute five members as ratably as possible based on distribution of the total statewide workers' compensation net written premium for the preceding calendar year.

(b) Four representatives of the public.  At least two shall be representatives of employers and the remaining public members shall be persons who are knowledgeable about workers' compensation insurance.

2. One representative from any designated statistical agent who shall serve as a nonvoting advisory member.

D. The board members shall select a chairperson who shall call meetings as needed to consider requests made pursuant to section 20-367.01 or on request of the director.

E. The board shall submit to the director a plan of operation and all amendments that are necessary or suitable to ensure the fair, reasonable and equitable administration of the appeals process.  The plan of operation and all amendments are effective on approval by the director.

F. Subject to the powers of the director, the board shall review appeals that are filed pursuant to section 20-367.01. The board may affirm the action of the rating organization or insurer or direct any rating organization or insurer to modify or reverse its application of the rating system that resulted in the appeal.

G. Members of the board are not eligible to receive compensation or travel expenses under title 38, chapter 4, article 2.
A.R.S. § 20-673 — Arizona Code / Title 20 / Chapter 3 / Article 6 / Section 673
20-673 Nonduplication of recovery; exhausting all other applicable coverages; rights of fund and member insurer; definition
Status: in_force

20-673. Nonduplication of recovery; exhausting all other applicable coverages; rights of fund and member insurer; definition

A. Any person having a claim against an insurer under any provision in an insurance policy that is also a covered claim shall be required to exhaust first all rights under that policy. Any amount payable on a covered claim pursuant to this article shall be reduced by the amount of the recovery under the claimant's insurance policy. Any recovery pursuant to this article shall be reduced by the amount of the recovery under the claimant's insurance policy. A member insurer or other insurer, which pays the insurer's own policy, shall have no right of subrogation or recovery against the insured of an insolvent insurer. A claimant for workers' compensation benefits shall have all rights and obligations conferred under title 23, chapter 6.

B. Any person having a claim that may be recovered under more than one insurance guaranty fund or its equivalent or who is insured under more than one policy shall first exhaust coverage from the fund of the place of residence of the insured or, if it is a first-party claim for damage to property with a permanent location, shall first exhaust coverage from the fund of the location of the property, or shall first exhaust coverage under the other policy, and if it is a workers' compensation claim, recovery shall be sought from the guaranty fund or its equivalent of the place of residence of the claimant. Any recovery pursuant to this article shall be reduced by the amount of the recovery from any other insurance guaranty fund or its equivalent or under another policy. Covered claims by subscribers of an insolvent reciprocal insurer shall not be paid until all subscribers have been assessed pursuant to section 20-791.

C. Where more than one policy may be applicable, a policy issued by the insolvent insurer shall be deemed to be excess coverage. The claimant shall be required to exhaust all rights under other applicable coverage or coverages. Any recovery pursuant to this article shall be reduced by the amount of the recovery under the claimant's insurance policy. Any amount payable on a covered claim shall be reduced by the amount of the recovery under other applicable insurance.

D. Except for workers' compensation claimants, if damages against uninsured motorists are recoverable by the claimant from the claimant's own insurer, the recoverable damages shall reduce the amount of any recovery pursuant to this article if the full amount of the uninsured motorist coverage has been exhausted. The claimant shall have no claim against the insured of the insolvent carrier or the fund if the full amount of uninsured motorist coverage was not recovered by the claimant. A member insurer shall have no right of subrogation against the insured of the insolvent carrier or against the fund for any amount paid by the insurer under uninsured motorist coverage. A member insurer may file a claim for subrogation payments under uninsured motorist coverage against the ancillary or domiciliary receiver of the insolvent insurer.

E. The fund shall receive the proceeds of any amounts recoverable on reinsurance contracts or treaties entered into by the insolvent insurer that cover any of the liabilities incurred by the insolvent insurer in the category or categories involved. The proceeds shall be limited to payments on or loss adjustment expenses or defense costs actually incurred by the fund on account of claims covered in the contracts or treaties. The director, as receiver or ancillary receiver, shall receive the proceeds of any reinsurance recoverable to the extent of payment on claims, loss adjustment expenses or defense costs made before the order of liquidation.

F. If a covered claim arises out of two or more policies to which this article applies, a recovery under one policy reduces the amount that is payable under the other policy. The fund is not liable for the payment of more than one policy on a covered claim.

G. For the purposes of this article, "exhaustion of all rights under any other policy of insurance" means the payment of the applicable policy limits or an adjudication by a court of record that no benefits are owed.
A.R.S. § 20-370 — Arizona Code / Title 20 / Chapter 2 / Article 4 / Section 370
20-370 Examinations of rating organizations
Status: in_force

20-370. Examinations of rating organizations

A. The director, as often as he deems it expedient, may make or cause to be made an examination of each rating organization licensed in this state, each advisory organization referred to in section 20-368 and each group, association or other organization referred to in section 20-369. The reasonable costs of such examination shall be paid by the rating organization, advisory organization or group, association or other organization examined upon presentation to it of a detailed account of the cost.

B. The officers, managers, agents and employees of the rating organization, advisory organization or group, association or other organization may be examined at any time under oath, and shall exhibit all books, records, accounts, documents or agreements governing its method of operation.

C. The director shall furnish two copies of the examination report to the organization, group or association examined and shall notify the organization, group or association that, within twenty days thereafter, it may request a hearing on the report or on any facts or recommendations in the report. Before filing the report for public inspection, the director shall grant a hearing to the organization, group or association examined.

D. The report of the examination, when filed for public inspection, shall be admissible in evidence in any action or proceeding brought by the director against the organization, group or association examined, or its officers or agents, and shall be prima facie evidence of the facts stated in the report.

E. The director may withhold the report of the examination from public inspection for such time as the director deems proper.

F. In lieu of the examination, the director may accept the report of an examination made by the insurance supervisory official of another state, pursuant to the laws of such state.
A.R.S. § 20-1114 — Arizona Code / Title 20 / Chapter 5 / Article 1 / Section 1114
20-1114 Incorporation of charter or bylaw into policy
Status: in_force

20-1114. Incorporation of charter or bylaw into policy

No policy shall contain any provision purporting to make any portion of the charter, bylaws or other constituent document of the insurer a part of the contract unless such portion is set forth in full in the policy. Any policy provision in violation of this section shall be invalid.
A.R.S. § 20-202.04 — Arizona Code / Title 20 / Chapter 2 / Article 1 / Section 202.04
20-202.04 Reciprocal insurer's required basic surplus defined
Status: in_force

20-202.04. Reciprocal insurer's required basic surplus defined

A reciprocal insurer's required basic surplus is defined as the minimum requirement deposited with the state treasurer through the director's office to qualify for the lines of insurance authorized to be written.
A.R.S. § 20-777 — Arizona Code / Title 20 / Chapter 4 / Article 2 / Section 777
20-777 Annual statement
Status: in_force

20-777. Annual statement

A. The annual statement of a reciprocal insurer shall be made and filed by its attorney.

B. The statement shall be supplemented by such information as may be required by the director relative to the affairs and transactions of the attorney.
A.R.S. § 20-1213 — Arizona Code / Title 20 / Chapter 6 / Article 1 / Section 1213
20-1213 Reinstatement
Status: in_force

20-1213. Reinstatement

There shall be a provision that unless the policy has been surrendered for its cash surrender value or unless the paid-up term insurance, if any, has expired, the policy will be reinstated at any time within three years from the date of premium default upon written application therefor, the production of evidence of insurability satisfactory to the insurer, the payment of all premiums in arrears, and the payment or reinstatement of any other indebtedness to the insurer upon the policy, all with interest at a rate not exceeding six per cent per annum compounded annually.
A.R.S. § 20-1081 — Arizona Code / Title 20 / Chapter 4 / Article 10 / Section 1081
20-1081 Domestic life and disability reinsurer
Status: in_force

20-1081. Domestic life and disability reinsurer

This article applies only to domestic life and disability reinsurers.
A.R.S. § 20-401.05 — Arizona Code / Title 20 / Chapter 2 / Article 5 / Section 401.05
20-401.05 Certificate of exemption; definitions
Status: in_force

20-401.05. Certificate of exemption; definitions

A. On July 1 of each year, the director shall grant a certificate of exemption to any insurer, employee benefit trust or voluntary employees' beneficiary association transacting life insurance, disability insurance or annuity business, or providing other health or welfare benefits, under the laws of its domicile that:

1. Is organized and operated without profit to any person, firm, partnership, association, corporation or other entity.

2. Is organized and operated exclusively for either of the following purposes:

(a) Aiding educational or scientific institutions that are also organized and operated without profit to any person, firm, partnership, association, corporation or other entity.

(b) Aiding agricultural institutions if the grantee is subject to regulation either as an insurer, a multiple employer welfare arrangement or an employee benefit trust by its state of domicile.

3. Serves a purpose prescribed in paragraph 2 of this subsection by issuing insurance, annuity and employee benefits contracts only to or for the benefit of the educational, scientific or agricultural institutions or their respective members or to individuals engaged in the service of those institutions.

4. Appoints the secretary of state, and the secretary of state's successors in office, as its true and lawful attorney on whom may be served all lawful process in any action, suit or proceeding in any court by the director of the department of insurance and financial institutions, through the attorney general, or any action or proceeding against the insurer, employee benefit trust or voluntary employees' beneficiary association brought by someone other than the director of the department of insurance and financial institutions, which appointment is irrevocable, binds the insurer, employee benefit trust or voluntary employees' beneficiary association or any successor in interest, remains in effect as long as there is in force in this state any contract or policy made or issued by the insurer, employee benefit trust or voluntary employees' beneficiary association or any obligation arising therefrom and must be processed in accordance with sections 20-401.03 and 20-403.

5. Is fully and legally organized and qualified to do business and has been actively doing business under the laws of the state of its domicile for a period of at least twenty years before its application for a certificate of exemption.

6. Files with the director for the director's approval a copy of any policy or contract form issued to residents of this state.

7. Files with the director on or before March 1 of each year a copy of its annual statement prepared pursuant to the laws of its state of domicile, as well as any other financial material as may be requested, including the annual statement or such other financial materials as may be requested relating to any subsidiary or other legal entity operated by the insurer, employee benefit trust or voluntary employees' beneficiary association under a management contract or other form of agreement, and coincident with the filing of its annual statement, pays the filing fee prescribed in section 20-167.

8. Agrees to submit to periodic examinations as may be deemed necessary by the director.

B. On or before March 1 of each year, any insurer holding a certificate of exemption shall file with the director a form of premium tax return prescribed by the director and shall pay the premium tax imposed by section 20-224 on all policies of life insurance and disability insurance in force with residents of this state.

C. After a hearing, the director may refuse to renew, or may revoke or suspend, a certificate of exemption if the director finds that the insurer, employee benefit trust or voluntary employees' beneficiary association no longer meets the requirements of this section, or finds that the insurer, employee benefit trust or voluntary employees' beneficiary association has violated any provision of article 6 of this chapter.

D. For the purposes of this section:

1. "Agricultural institutions" means agricultural growers, shippers, packers, brokers, distributors, wholesalers, receivers and jobbers, or affiliated, associated and related suppliers, industries or firms.

2. "Voluntary employees’ beneficiary association" means an association described in 26 United States Code section 501(c)(9).
A.R.S. § 20-457 — Arizona Code / Title 20 / Chapter 2 / Article 6 / Section 457
20-457 Premature disposal of premium notes prohibited
Status: in_force

20-457. Premature disposal of premium notes prohibited

An insurer and its insurance producer shall not hypothecate, sell or dispose of a promissory note received in payment of any part of a premium on a policy of insurance applied for prior to the delivery of the policy.
A.R.S. § 20-113 — Arizona Code / Title 20 / Chapter 1 / Article 1 / Section 113
20-113 Construction of particular and general provisions
Status: in_force

20-113. Construction of particular and general provisions

Provisions of this title relative to a particular kind of insurance or a particular type of insurer or to a particular matter shall prevail over provisions relating to insurance in general or insurers in general or to such matter in general.
A.R.S. § 20-552 — Arizona Code / Title 20 / Chapter 3 / Article 2 / Section 552
20-552 Foreign securities
Status: in_force

20-552. Foreign securities

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

B. After giving effect to an investment in securities of or in a foreign country, the aggregate amount of such investments then held by an insurer under this section in a single foreign jurisdiction shall not exceed ten per cent of the insurer's admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or three per cent of the insurer's admitted assets as to any other foreign jurisdiction.  For the purposes of this subsection, "SVO" means the securities valuation office of the national association of insurance commissioners or any successor office established by the national association of insurance commissioners.

C. For the purposes of the quantitative limitations set forth in this article, investment in securities of or in a foreign country under this section shall not include a Canadian investment under section 20-552.01.
A.R.S. § 20-3211 — Arizona Code / Title 20 / Chapter 22 / Article 1 / Section 3211
20-3211 Contract requirements; execution; rescission; definition
Status: in_force

20-3211. Contract requirements; execution; rescission; definition

A. A provider entering into a life settlement contract with any owner of a policy in which the insured is terminally ill shall first obtain the following:

1. If the owner is the insured, a written statement from a licensed attending physician that the owner is of sound mind and under no constraint or undue influence to enter into a settlement contract.

2. A document in which the insured consents to the release of the insured's medical records to a provider, settlement broker or insurance producer and, if the policy was issued less than two years from the date of application for a settlement contract, to the insurance company that issued the policy.

B. The insurer shall respond to a request for verification of coverage submitted by a provider, settlement broker or life insurance producer not later than thirty calendar days from the date the request is received.  The request for verification of coverage must be made on a form approved by the director.  The insurer shall complete and issue the verification of coverage or indicate in which respects it is unable to respond. In the insurer's response, the insurer shall indicate whether, based on the medical evidence and documents provided, the insurer intends to pursue an investigation at this time regarding the validity of the insurance contract.

C. Before or at the time of execution of the settlement contract, the provider shall obtain a witnessed document in which the owner consents to the settlement contract, represents that the owner has a full and complete understanding of the settlement contract and a full and complete understanding of the benefits of the policy, acknowledges that the owner is entering into the settlement contract freely and voluntarily and, for persons with a chronic illness or terminal illness or condition, acknowledges that the insured has a chronic illness or a terminal illness or condition and that the chronic illness or the terminal illness or condition was diagnosed after the policy was issued.

D. The insurer shall not unreasonably delay effecting change of ownership or beneficiary with any life settlement contract lawfully entered into in this state or with a resident of this state.

E. If a life settlement broker or life insurance producer performs any of these activities required of the provider, the provider is deemed to have fulfilled the requirements of this section.

F. If a broker performs the verification of coverage activities required of the provider, the provider is deemed to have fulfilled the requirements of this section.

G. Within twenty days after an owner executes the life settlement contract, the provider shall give written notice to the insurer that issued the insurance policy that the policy is subject to a life settlement contract. The notice shall be accompanied by the documents required by section 20-3204, subsection C.

H. All medical information solicited or obtained by any licensee is subject to any applicable law relating to confidentiality of medical information.

I. All life settlement contracts entered into in this state shall provide that the owner may rescind the contract on or before fifteen days after the date it is executed by all parties and the owner has received all required disclosures.  Rescission, if exercised by the owner, is effective only if both notice of the rescission is given and the owner repays all proceeds and any premiums, loans and loan interest paid on account of the provider within the rescission period. If the insured dies during the rescission period, the contract shall be deemed to have been rescinded subject to repayment by the owner or the owner's estate of all proceeds and any premiums, loans and loan interest to the provider.

J. Within three business days after receipt from the owner of documents to effect the transfer of the insurance policy, the provider shall pay the proceeds of the settlement to an escrow or trust account managed by a trustee or escrow agent in a state or federally chartered financial institution pending acknowledgment of the transfer by the issuer of the policy.  The trustee or escrow agent shall transfer the proceeds due to the owner within three business days after acknowledgment of the transfer from the insurer.

K. Failure to tender the life settlement contract proceeds to the owner by the date disclosed to the owner renders the contract voidable by the owner for lack of consideration until the time the proceeds are tendered to and accepted by the owner.  The failure to give written notice of the right of rescission tolls the right of rescission until thirty days after the written notice of the right of rescission has been given.

L. Any fee paid by a provider, party, individual or owner to a broker in exchange for services provided to the owner pertaining to a life settlement contract shall be computed as a percentage of the offer obtained and not the face value of the policy. This section does not prohibit a broker from reducing the broker's fee below this percentage if the broker so chooses.

M. The broker shall disclose to the owner anything of value paid or given to a broker that relates to a life settlement contract.

N. At any time before or at the time of the application for or issuance of a policy or during a two-year period commencing with the date of issuance of the policy, a person shall not enter into a life settlement regardless of the date the compensation is to be provided and regardless of the date the assignment, transfer, sale, devise, bequest or surrender of the policy is to occur. This prohibition does not apply if:

1. The owner certifies to the provider that the policy was issued on the owner's exercise of conversion rights arising out of a group or individual policy if the total of the time covered under the conversion policy plus the time covered under the prior policy is at least twenty-four months. The time covered under a group policy must be calculated without regard to a change in insurance carriers if the coverage has been continuous and under the same group sponsorship.

2. The owner submits independent evidence to the provider that one or more of the following conditions have been met within the two-year period:

(a) The owner or insured is terminally ill.

(b) The owner or insured disposes of ownership interests in a closely held corporation pursuant to the terms of a buyout or other similar agreement in effect at the time the insurance policy was initially issued.

(c) The owner's spouse dies.

(d) The owner divorces the owner's spouse.

(e) The owner retires from full-time employment.

(f) The owner becomes a person with a physical or mental disability and a physician determines that the disability prevents the owner from maintaining full-time employment.

(g) On the application of a creditor of the owner, a court of competent jurisdiction enters a final order, judgment or decree adjudicating the owner bankrupt or insolvent, or approving a petition seeking reorganization of the owner or appointing a receiver, trustee or liquidator to all or a substantial part of the owner's assets.

O. The provider shall submit copies of the independent evidence required by subsection N, paragraph 2 of this section when the provider submits a request to the insurer for verification of coverage. The copies shall be accompanied by a letter of attestation from the provider that the copies are true and correct copies of the documents received by the provider. This section does not prohibit an insurer from exercising its right to contest the validity of any policy.

P. If the provider submits to the insurer a copy of independent evidence as provided in subsection N, paragraph 2, subdivision (a) of this section when the provider submits a request to the insurer to effect the transfer of the policy to the provider, the copy shall be deemed to establish that the settlement contract satisfies the requirements of this section.

Q. An insurer shall not:

1. Engage in any transaction, act or practice that restricts, limits or impairs the lawful transfer of ownership, change of beneficiary or assignment of a policy.

2. Make any false or misleading statement for the purpose of dissuading an owner or insured from a lawful life settlement contract.

R. If there is more than one owner on a single policy and the owners are residents of different states, the life settlement contract shall be governed by the law of the state in which the owner having the largest percentage ownership resides or, if the owners hold equal ownership, the state of residence of one owner agreed on in writing by all of the owners of the policy. The law of the state of the insured shall govern in the event that equal owners fail to agree in writing on a state of residence for jurisdictional purposes.

S. A provider from this state who enters into a life settlement contract with an owner who is a resident of another state that has enacted statutes or adopted rules governing life settlement contracts shall be governed in the effectuation of that life settlement contract by the statutes and rules of the owner's state of residence.  If the state in which the owner is a resident has not enacted statutes or rules governing life settlement contracts, the provider shall give the owner notice that neither state regulates the transaction on which the owner is entering.  For transactions in those states, the provider shall maintain all records required if the transactions were executed in the state of residence. The forms used in those states need not be approved by the department.

T. If there is a conflict in the laws that apply to an owner and a purchaser in any individual transaction, the laws of the state that apply to the owner shall take precedence and the provider shall comply with those laws.

U. It is a fraudulent life settlement act and a violation of this chapter for any person to do any of the following or any of the acts listed in subsection X of this section:

1. Enter into a life settlement contract if a person knows or reasonably should have known that the life insurance policy was obtained by means of a false, deceptive or misleading application for the policy.

2. Engage in any transaction, practice or course of business if a person knows or reasonably should have known that the intent was to avoid the notice requirements of this section.

3. Engage in any fraudulent act or practice in connection with any transaction relating to any settlement involving an owner who is a resident of this state.

4. Fail to provide the disclosures or file the required reports with the director as required by this chapter.

5. Issue, solicit or market the purchase of a new life insurance policy for the sole purpose of, or with a primary emphasis on, settling the policy.

6. With respect to any settlement contract or insurance policy and a broker, knowingly solicit an offer from, effectuate a life settlement contract with or make a sale to any provider, financing entity or related provider trust that is controlling, controlled by or under common control with a broker, unless the relationship has been fully disclosed to the owner.

7. With respect to any life settlement contract or insurance policy and a provider, knowingly enter into a life settlement contract with an owner if, in connection with a life settlement contract, anything of value will be paid to a broker that is controlling, controlled by or under common control with a provider or the financing entity or related provider trust that is involved in a settlement contract, unless the relationship has been fully disclosed to the owner.

8. With respect to a provider, enter into a life settlement contract unless the life settlement promotional, advertising and marketing materials, have been filed with the director as may be prescribed by rule. The marketing materials shall not expressly reference that the insurance is free for any period of time.  The inclusion of any reference in the marketing materials that would cause an owner to reasonably believe that the insurance is free for any period of time is a violation of this chapter.

9. With respect to any life insurance producer, insurance company, broker or provider, make any statement or representation to the applicant or policyholder in connection with the sale or financing of a life insurance policy to the effect that the insurance is free or without cost to the policyholder for any period of time unless provided in the policy.

V. Life settlement contracts and applications for life settlement contracts, regardless of the form of transmission, shall contain the following statement or a substantially similar statement:

Any person who knowingly presents false information in an application for insurance or for a life settlement contract may be subject to criminal or civil liability.

W. The lack of a statement as required by subsection V of this section does not constitute a defense in any prosecution for a fraudulent life settlement act.

X. For the purposes of this section, "fraudulent life settlement act" includes all of the following:

1. Acts or omissions committed by any person who, for the purpose of depriving another of property or for pecuniary gain, commits or permits his employees or agents to engage in acts, including the following:

(a) Presenting, causing to be presented or preparing with knowledge and belief that it will be presented to or by a provider, premium finance lender, broker, insurer or insurance producer or any other person, false material information, or concealing material information as part of, in support of or concerning a fact material to one or more of the following:

(i) An application for the issuance of a life settlement contract or insurance policy.

(ii) The underwriting of a life settlement contract or insurance policy.

(iii) A claim for payment or benefit pursuant to a life settlement contract or insurance policy.

(iv) Premiums paid on an insurance policy.

(v) Payments and changes in ownership or beneficiary made according to the terms of a life settlement contract or insurance policy.

(vi) The reinstatement or conversion of an insurance policy.

(vii) The solicitation, offer to enter into or effectuation of a life settlement contract or insurance policy.

(viii) The issuance of written evidence of life settlement contracts or insurance and any application for or the existence of or any payments related to a loan secured directly or indirectly by any interest in a life insurance policy.

(b) Employing any device, scheme or artifice to defraud in the business of life settlements.

(c) Entering into any intentional practice or plan that involves stranger originated life insurance as prescribed in section 20-443.02.

(d) Employing any device, scheme or artifice in violation of section 20-1104.

(e) If providing premium financing, receiving any proceeds, fees or other consideration from the policy or owner of the policy that are in addition to the amounts required to pay principal, interest and any costs or expenses incurred by the lender or borrower in connection with the premium finance agreement, except for a default, unless the default on such a loan or transfer of the policy occurs pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this chapter.  Any payments, charges, fees or other amounts received by a person providing premium financing in violation of this subdivision shall be remitted to the original owner of the policy or to the original owner's estate if the original owner is not living at the time of the determination of overpayment.

2. If a person does any of the following or permits the person's employees or agents to do any of the following, in the furtherance of a fraud or to prevent the detection of a fraud:

(a) Remove, conceal, alter, destroy or sequester from the director the assets or records of a licensee or other person engaged in the business of life settlements.

(b) Misrepresent or conceal the financial condition of a licensee, financing entity, insurer or other person.

(c) Transact the business of life settlements in violation of any law requiring a license, certificate of authority or other legal authority for the transaction of the business of life settlements.

(d) File with the director or the chief insurance regulatory official of another jurisdiction a document containing false information or otherwise conceal information about a material fact from the director.

(e) Engage in embezzlement, theft, misappropriation or conversion of moneys, funds, premiums, credits or other property of a provider, insurer, insured, owner, insurance policy owner or any other person engaged in the business of life settlements or insurance.

(f) Enter into, broker or otherwise deal in a life settlement contract that was obtained by presenting false information concerning any fact material to the policy or by concealing, for the purpose of misleading another, information requested concerning any fact material to the policy where the owner or the owner's agent intended to defraud the policy's issuer.

(g) Attempt to commit, assist, aid or abet in the commission of, or conspiracy to commit the acts or omissions specified in this paragraph.

(h) Misrepresent the state of residence of an owner to be a state or jurisdiction that does not have a law substantially similar to this chapter for the purpose of evading or avoiding the provisions of this chapter.
A.R.S. § 20-2636 — Arizona Code / Title 20 / Chapter 16 / Article 2 / Section 2636
20-2636 Nonforfeiture benefits; exceptions; definition
Status: in_force

20-2636. Nonforfeiture benefits; exceptions; definition

A. This section does not apply to the following:

1. Reinsurance.

2. Group annuity contract purchases that are made in connection with one or more retirement or deferred compensation plans that are established or maintained by or for one or more employers, including partnerships or sole proprietorships, employee organizations or any combination of partnerships, proprietorships and employee organizations. This exception does not apply to group annuity contract purchases that are made in connection with plans that provide individual retirement accounts or individual retirement annuities under section 408 of the internal revenue code.

3. A premium deposit fund.

4. An investment annuity.

5. An immediate annuity.

6. A deferred annuity contract after annuity payments begin.

7. A reversionary annuity.

8. A contract that is delivered outside this state through any insurance producer or other representative of the company issuing the contract.

B. To the extent that a variable annuity contract provides benefits that do not vary according to the investment performance of a separate account before the annuity commencement date, the contract shall contain provisions that satisfy the requirements of section 20-1232 and the contract is not subject to this section.

C. Except pursuant to subsections A and B of this section, if a contract is issued on or after January 1, 1998, a variable annuity contract shall not be delivered or issued for delivery in this state unless it contains in substance the following provisions or corresponding provisions that the director determines are at least as favorable to the contract holder:

1. That, on cessation of the payment of considerations under a contract, the company will grant a paid-up annuity benefit on a plan that is described in the contract and that complies with subsection G of this section. The description shall include a statement of the mortality table, if any, and the guaranteed or assumed interest rates that are used in calculating annuity payments.

2. If a contract provides for a lump sum settlement at maturity or at any other time, that, on the surrender of the contract at or before the commencement of any annuity payments, the company will pay in lieu of any paid-up annuity benefit a cash surrender benefit that is described in the contract and that complies with subsection H of this section. The contract may provide that the company reserves the right to defer the determination and payment of any cash surrender benefit for any period during which the New York stock exchange is closed for trading except for normal holidays or in which the securities and exchange commission determines that a state of emergency exists.

3. A statement that any paid-up annuity, cash surrender or death benefits that may be available under the contract are not less than the minimum benefits that are required by the laws of the state in which the contract is delivered and an explanation of the manner in which the benefits are altered by any of the following:

(a) The existence of any additional amounts the company credited to the contract.

(b) Any indebtedness to the company on the contract.

(c) Any prior withdrawals from or partial surrenders of the contract.

D. The minimum values under this section of any paid-up annuity, cash surrender or death benefits that are available under a variable annuity contract shall be based on nonforfeiture amounts that meet the following requirements:

1. The minimum nonforfeiture amount on any date before the annuity commencement date shall be an amount that is equal to the percentages of net considerations under subsection E of this section, and increased or decreased by the net investment return that is allocated to the percentages of net considerations. This amount shall be reduced to reflect the effect of:

(a) Any partial withdrawals from or partial surrenders of the contract.

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

(c) An annual contract charge that is not less than zero and that is equal to the lesser of thirty dollars or two per cent of the end of year contract value, less the amount of any annual contract charge that is deducted from any gross considerations credited to the contract during the contract year.

(d) A transaction charge of ten dollars for each transfer to another separate account or to another investment division within the same separate account.

2. The net investment return to be credited to a contract shall be determined at least monthly.

3. The annual thirty dollar contract charge and the ten dollar transaction charge under paragraph 1 of this subsection will be adjusted to reflect changes in the consumer price index pursuant to subsection F of this section.

For the purposes of this subsection, "net investment return" means the rate of investment return that is in an amount that does not exceed the actual expense not offset by other deductions and that is credited to the variable annuity contract according to the terms of the contract after deductions for tax charges, if any, for asset charges either at a rate that does not exceed the rate stated in the contract, or if the contract is issued by a nonprofit corporation under which the contract holder participates fully in the investment, for mortality and expense experience of the account.

E. The percentages of net considerations that are used to define the minimum nonforfeiture amount under subsection D of this section shall meet one of the following requirements:

1. For contracts that provide for periodic considerations, the net considerations for a given contract year that are used to define the minimum nonforfeiture amount shall be an amount not less than zero and shall be equal to the corresponding gross considerations that are credited to the contract during that contract year less an annual contract charge of thirty dollars, less a collection charge of one dollar twenty-five cents for each periodic consideration credited to the contract during that contract year, and less any charges for premium taxes. The percentages used to calculate the minimum nonforfeiture amount shall be as follows:

(a) For the first contract year, sixty-five per cent of the net considerations.

(b) For each renewal contract year, eighty-seven and one-half per cent of the net considerations, except that for any portion of the total net consideration for a renewal contract year that exceeds by not more than two times the sum of those portions of the net considerations in all prior contract years for which the percentage was sixty-five per cent, the percentage to be applied to this amount shall be sixty-five per cent.

2. For contracts that provide for a single consideration, the net consideration that is used to define the minimum nonforfeiture amount shall be the gross consideration less a seventy-five dollar contract charge and less any charges for premium taxes. The percentage of the net consideration shall be ninety per cent. The annual thirty dollar contract charge, the collection charge of one dollar twenty-five cents per collection and the seventy-five dollar single consideration contract charge will be adjusted to reflect changes in the consumer price index pursuant to subsection F of this section.

F. A demonstration that a contract's nonforfeiture amounts comply with this section shall be based on the following assumptions, unless the company demonstrates the suitability of alternative assumptions:

1. The testing of values shall occur at the end of each of the first twenty contract years.

2. A net investment return of seven per cent per year.

3. If the contract provides for transfers to another separate account or to another investment division within the same separate account, one transfer per contract year.

4. In determining the state premium tax that applies to the contract, the state of residence is the state of delivery.

5. With respect to contracts that provide for periodic considerations, monthly considerations of one hundred dollars for each of the first two hundred forty months.

6. With respect to contracts that provide for a single consideration, a ten thousand dollar single consideration.

7. The following contract charges:

(a) For contracts that are filed in 1980 or earlier, the annual thirty dollar contract charge, the charge of ten dollars per transfer, the collection charge of one dollar twenty-five cents per consideration and the seventy-five dollar contract charge.

(b) For contracts that are filed in 1981 or after, the contract charges listed in subdivision (a) of this paragraph multiplied by the ratio of the consumer price index for June of the calendar year preceding the date of filing to the consumer price index for June, 1979.

8. If the contract provides for the allocation of considerations to both fixed and variable accounts, allocate one hundred per cent of the considerations to the variable account.

G. A paid-up annuity benefit that is available under a variable annuity contract shall be in an amount so that its present value on the annuity commencement date is at least equal to the minimum nonforfeiture amount on the annuity commencement date. The insurer shall compute the present value by using the mortality table, if any, and the guaranteed or assumed interest rates that are used in calculating the annuity payments.

H. For variable annuity contracts that provide cash surrender benefits, at any time before the annuity commencement date the cash surrender benefit shall not be less than the minimum nonforfeiture amount next computed after the company receives the request for surrender. The death benefit under the contracts shall be at least equal to the cash surrender benefit.

I. A variable annuity contract that does not provide cash surrender benefits or that does not provide death benefits that are at least equal to the minimum nonforfeiture amount before the annuity commencement date shall prominently state in the contract that these benefits are not provided.

J. Notwithstanding the requirements of this section, a variable annuity contract may provide that the company may cancel the annuity and pay the contract holder its accumulated value and that on the payment of its accumulated value the company is released from any further obligation under the contract if either:

1. At the time the annuity becomes payable the accumulated value is less than two thousand dollars, or would provide an income the initial amount of which is less than twenty dollars per month.

2. Before the annuity becomes payable under a periodic payment variable annuity contract, considerations have not been received under the contract for the two full years preceding the cancellation and both:

(a) The considerations were paid before the annuity became payable and were reduced to reflect any partial withdrawals from or partial surrenders of the contract.

(b) The accumulated value amounted to less than two thousand dollars.

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

L. For the purposes of this section, "consumer price index" means the index for all urban consumers for all items that is published by the bureau of labor statistics of the United States department of labor or its successor.
A.R.S. § 20-3402 — Arizona Code / Title 20 / Chapter 26 / Article 1 / Section 3402
20-3402 Prior authorization; exceptions
Status: in_force

20-3402. Prior authorization; exceptions

A. A health care services plan or its utilization review agent may impose a prior authorization requirement for health care services provided to an enrollee, except for emergency ambulance services and emergency services as specified in section 20-2803, health care services arising after the initial medical screening examination and immediately necessary stabilizing treatment as specified in section 20-2803.

B. A health care services plan must allow at least one modality of medication-assisted treatment to be available without prior authorization.
A.R.S. § 20-826 — Arizona Code / Title 20 / Chapter 4 / Article 3 / Section 826
20-826 Subscription contracts; definitions
Status: in_force

20-826. Subscription contracts; definitions

A. A contract between a corporation and its subscribers shall not be issued unless the form of such contract is approved in writing by the director.

B. Each contract shall plainly state the services to which the subscriber is entitled and those to which the subscriber is not entitled under the plan, and shall constitute a direct obligation of the providers of services with which the corporation has contracted for hospital, medical, dental or optometric services.

C. Each contract, except for dental services or optometric services, shall be so written that the corporation shall pay benefits for each of the following:

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

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

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

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

D. Each contract for dental or optometric services shall be so written that the corporation shall pay benefits for contracted dental or optometric services provided by dentists or optometrists.

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

F. Each contract that is delivered or issued for delivery in this state after December 25, 1977 and that provides that coverage of a dependent child shall terminate on attainment of the limiting age for dependent children specified in the contract shall also provide in substance that attainment of such limiting age shall not operate to terminate the coverage of such child while the child is and continues to be both incapable of self-sustaining employment by reason of intellectual disability or physical disability and chiefly dependent on the subscriber for support and maintenance. Proof of such incapacity and dependency shall be furnished to the corporation by the subscriber within thirty-one days of the child's attainment of the limiting age and subsequently as may be required by the corporation, but not more frequently than annually after the two-year period following the child's attainment of the limiting age.

G. A corporation may not cancel or refuse to renew any subscriber's contract without giving notice of such cancellation or nonrenewal to the subscriber under such contract. A notice by the corporation to the subscriber of cancellation or nonrenewal of a subscription contract shall be mailed to the named subscriber at least forty-five days before the effective date of such cancellation or nonrenewal. The notice shall include or be accompanied by a statement in writing of the reasons for such action by the corporation.  Failure of the corporation to comply with this subsection shall invalidate any cancellation or nonrenewal except a cancellation or nonrenewal for nonpayment of premium.

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

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

1. A mammogram.

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

J. 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 of the following are true:

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

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

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

4. The insured has notified the insurer of 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.

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

L. The director may disapprove any contract if the benefits provided in the form of such contract are unreasonable in relation to the premium charged.

M. The director shall adopt emergency rules applicable to persons who are leaving active service in the armed forces of the United States and returning to civilian status including:

1. Conditions of eligibility.

2. Coverage of dependents.

3. Preexisting conditions.

4. Termination of insurance.

5. Probationary periods.

6. Limitations.

7. Exceptions.

8. Reductions.

9. Elimination periods.

10. Requirements for replacement.

11. Any other condition of subscription contracts.

N. 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 corporation 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 corporation 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 O 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.

O. Subsection N of this section does not:

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

2. Prevent a corporation 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 N of this section shall not be greater than the coinsurance or cost sharing for any preceding portion of that stay.

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

P. 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.

Q. Subsection P of this section does not prohibit a medical service corporation, a hospital service corporation or a hospital, medical, dental and optometric service corporation from imposing deductibles, coinsurance or other cost sharing in relation to benefits for equipment or supplies for the treatment of diabetes.

R. Any hospital or medical service 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 S of this section or medical literature that meets the criteria prescribed in subsection S of this section. The coverage required under this subsection includes covered medically necessary services associated with the administration of the prescription drug.  This subsection does not:

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

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

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

4. Notwithstanding section 20-841.05, 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. Notwithstanding section 20-841.05, 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.

S. For the purposes of subsection R 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)).

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

U. Any contract that is offered by a hospital service corporation or medical service corporation and that contains a prescription drug benefit shall provide coverage of medical foods to treat inherited metabolic disorders as provided by this section.

V. 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.

W. 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 as medically necessary for the therapeutic treatment of an inherited metabolic disease.

X. A hospital service corporation or medical service corporation shall cover at least fifty percent of the cost of medical foods prescribed to treat inherited metabolic disorders and covered pursuant to this section.  A hospital service corporation or medical service corporation 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.

Y. Any contract between a corporation and its subscribers is subject to the following:

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

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

3. This subsection does not apply to contracts issued to individuals on a nongroup basis.

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

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

BB. Subsection Z of this section does not restrict or limit any protections against employment discrimination that are prescribed in federal or state law.

CC. 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.

(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.

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

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

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

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

3. Subsections Z and AA of this section, "religiously affiliated employer" means either:

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

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

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

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

(b) An entity whose articles of incorporation clearly state that it is a religiously motivated organization and whose religious beliefs are central to the organization's operating principles.
A.R.S. § 20-848 — Arizona Code / Title 20 / Chapter 4 / Article 3 / Section 848
20-848 Prescriptions; cost sharing; refills; dispensing fees; definition
Status: in_force

20-848. Prescriptions; cost sharing; refills; dispensing fees; definition

A. A subscription contract that is issued or renewed on or after January 1, 2017 and that provides coverage for prescription drugs:

1. May not deny coverage and shall prorate the cost sharing rate for a prescription drug covered by the contract that is dispensed by a network pharmacy for less than the standard refill amount if the subscriber requests enrollment into a medication synchronization program and less than the standard refill amount for the purpose of synchronizing the subscriber's medications.

2. Shall accept early refill and short fill requests for prescription drugs using the submission clarification and message codes as adopted by the national council for prescription drug plans or alternative codes provided by the plan upon July 3, 2015.

B. For the purposes of this section, "medication synchronization" means the coordination of medication refills for a patient taking two or more medications for a chronic condition that are being dispensed by a single contracted pharmacy to facilitate the synchronization of the patient's medications for the purpose of improving medication adherence.