reglab/statecodes huggingface dataset:
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-481.31 - Supervisory colleges

20-481.31.
Supervisory colleges
A. With respect to any insurer registered under section 20-481.09 and in accordance with subsection C of this section,  in order to determine compliance by the insurer with this title,  the director may participate in a supervisory college for any domestic insurer that is part of an insurance holding company system with international operations. The director,  with respect to supervisory colleges,  may:
1. Initiate the establishment of a supervisory college.
2. Clarify the membership and participation of other supervisors in the supervisory college.
3. Clarify the functions of the supervisory college and the role of other regulators,  including the establishment of a group-wide supervisor.
4. Coordinate the ongoing activities of the supervisory college,  including planning meetings,  supervisory activities and processes for information sharing.
5. Establish a crisis management plan.
B. Each registered insurer subject to this section shall be liable for and shall pay the reasonable expenses of the director's participation in a supervisory college in accordance with subsection C of this section,  including reasonable travel expenses. The director may establish a regular assessment to the insurer for the payment of these expenses. For the purposes of this section,  a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates.
C. The director may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates,  including other state,  federal and international regulatory agencies. In order to assess the business strategy,  financial position,  legal and regulatory position,  risk exposure,  risk management and governance processes,  and as part of the examination of individual insurers in accordance with section 20-481.20,  the director may enter into agreements in compliance with section 20-481.21 providing the basis for cooperation between the director and the other regulatory agencies and the activities of the supervisory college. This section does not delegate to the supervisory college the authority of the director to regulate or supervise the insurer or its affiliates within its jurisdiction.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-481.32 - Management of domestic insurers subject to registration

20-481.32.
Management of domestic insurers subject to registration
A. Notwithstanding the control of a domestic insurer by any person,  the officers and directors of an insurer may not be relieved of any obligation or liability to which they are subject by law and the insurer shall be managed so as to assure its separate operating identity consistent with this article.
B. This section does not preclude a domestic insurer from having or sharing a common management or the cooperative or joint use of personnel,  property or services with one or more other persons under arrangements meeting the standards of section 20-481.12.
C. At least one-third of the directors of a domestic insurer and at least one-third of the members of each committee of the board of directors of any domestic insurer must be composed of persons who are not officers or employees of the insurer or of any entity controlling,  controlled by or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or entity. At least one person must be included in any quorum for the transaction of business at any meeting of the board of directors or any committee.
D. The board of directors of a domestic insurer shall establish one or more committees composed solely of directors who are not officers or employees of the insurer or of any entity controlling,  controlled by or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or any such entity. The committee or committees shall have responsibility for nominating candidates for director for election by shareholders or policyholders,  evaluating the performance of officers deemed to be principal officers of the insurer and recommending to the board of directors the selection and compensation of the principal officers.
E. Subsections C and D of this section do not apply to a domestic insurer if the person controlling the insurer,  including an insurer,  a mutual insurance holding company or a publicly held corporation,  has a board of directors and committees that meet the requirements of subsections C and D of this section.
F. An insurer may make application to the director for a waiver from the requirements of this section if the insurer's annual direct written and assumed premium excluding premiums reinsured with the federal crop insurance corporation and federal flood program is less than three hundred million dollars. An insurer may also make application to the director for a waiver from the requirements of this section based on unique circumstances. The director may consider various factors including the type of business entity,  volume of business written,  availability of qualified board members and the ownership or organizational structure of the entity.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-482.03 - Required plan contents

20-482.03.
Required plan contents
A plan of reorganization of a domestic mutual insurer shall include all of the following:
1. A statement of the reasons for the proposed action.
2. A description of how the plan will be carried out,  including any transaction included within the plan and a description of any mutual holding company,  intermediate stock holding company or other corporation organized pursuant to the plan.
3. A description of all significant terms of the reorganization.
4. New or revised intercompany agreements.
5. A description of the overall effect of the plan on policies issued by the converting mutual insurer. The description must show that policyholder interests collectively are properly preserved and protected and that the plan is fair and equitable to the policyholders.
6. The record date for determining whether a member of the converting mutual insurer is an eligible member.
7. The proposed effective date of the reorganization or the manner in which the proposed effective date of the reorganization is established.
8. The proposed amendments to or restatement of the articles of incorporation and bylaws of the converting mutual insurer and the proposed articles of incorporation and bylaws of any mutual holding company,  intermediate stock holding company or other corporation organized pursuant to the plan.
9. A description of any plans for the initial sale of voting stock to third parties by the converted stock insurer or any intermediate stockholding company,  or a statement that the converted stock insurer or intermediate stock holding company has no current plans for the sale of voting stock.
10. The intention,  if any,  that a director or officer of the converting mutual insurer,  mutual holding company,  intermediate stock holding company or other corporation organized pursuant to the plan,  within the six-month period following the effective date of the conversion or reorganization,  may purchase or acquire shares of capital stock or other securities of an issuer to be issued pursuant to the plan.
11. A provision that all policies in force on the effective date of the conversion or reorganization will remain in force under the terms of those policies and that on the effective date of the reorganization,  any voting rights of the members provided for under the policies or under this title are extinguished.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-482.04 - Plan review and approval; general provisions; hearing

20-482.04.
Plan review and approval;  general provisions;  hearing
A. The director shall review a plan of reorganization that is submitted to the director. On review,  the director shall approve the plan if the director finds all of the following:
1. The applicable provisions of this article,  and other applicable provisions of law,  have been fully met.
2. The plan protects the rights of policyholders.
3. The plan is fair and equitable to the members and the plan does not prejudice the interests of the members.
4. The converted stock insurer has capital or surplus,  or any combination thereof,  that is required of a domestic stock insurer on initial authorization to transact like kinds of insurance,  and otherwise is able to satisfy the requirements of this state for transacting its insurance business.
5. The plan does not substantially reduce the security of the policyholders and the service to be rendered to the policyholders.
6. The financial condition of the mutual holding company or any subsidiary of the mutual holding company does not jeopardize the financial stability of the converted stock insurer.
7. The financial condition of the converting mutual insurer is not jeopardized by the conversion or reorganization,  and the conversion or reorganization does not jeopardize the financial stability of the mutual holding company or any subsidiary of the mutual holding company.
8. The competence,  experience and integrity of those persons who control the operation of the converted stock insurer are not contrary to the interests of policyholders of the converted stock insurer and of the public in allowing the plan to proceed.
B. To the extent the plan contains a provision that allows for the acquisition or merger of other insurance companies,  the director shall apply the standards for scrutinizing mergers and acquisitions provided in section 20-481.07,  subsection A,  paragraph 3. The director may not approve a plan that fails to meet these standards.
C. An approval of a plan by the director expires if the plan is not carried out within one year after the date of the approval,  unless the director extends the time period for good cause on written application for such extension.
D. The director may retain,  at the expense of the converting mutual insurer,  qualified experts not otherwise a part of the staff of the department to assist in reviewing the plan and supplemental documents.
E. The director may hold a hearing as prescribed in section 20-161 for the purposes of receiving comments on whether a plan should be approved and on any other matter relating to the reorganization. The hearing,  if held,  shall be held within sixty days after the director receives a completed filing of the plan and all information required by the director.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-482.06 - Concurrent reorganization with a domestic or foreign mutual insurer

20-482.06.
Concurrent reorganization with a domestic or foreign mutual insurer
The concurrent reorganization of a domestic mutual insurer with one or more mutual insurers,  domestic or foreign,  into a single mutual insurance holding company,  whether domestic or foreign,  may be accomplished by a joint application and a joint plan of reorganization and may be approved by the director by complying with the requirements of this article. The director may determine that such other procedures are unnecessary to avoid duplicative costs and efforts in satisfying the requirements of this article and effectuating the reorganization.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-482.07 - Foreign mutual insurer reorganization; definition

20-482.07.
Foreign mutual insurer reorganization;  definition
A. A foreign mutual insurer organized under the laws of any other state,  that,  if a domestic corporation,  would be organized under section 20-709,  may reorganize by merging its policyholders' membership interests into an existing domestic mutual holding company in accordance with the requirements of any other law or regulation that applies to the foreign mutual insurer. The reorganization shall continue the corporate existence of the converting mutual insurer as a foreign stock insurance company subsidiary of the existing domestic mutual holding company or as a foreign stock insurance company subsidiary of an intermediate stock holding company. The reorganizing foreign mutual insurer may remain a foreign insurer after the restructuring and may be admitted to do business in this state if it meets the applicable requirements of this title. A foreign mutual insurer that is a party to the reorganization may at the same time redomesticate to this state by complying with the applicable requirements of this state and the foreign mutual insurer's state of domicile.
B. For the purposes of this section,  " existing domestic mutual holding company"  means a mutual holding company formed under this article.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-485.01 - Written agreement; provisions; maintenance of records

20-485.01.
Written agreement;  provisions;  maintenance of records
A. No person may act as an administrator and no administrator may collect a premium without a written agreement between the person as administrator and the insurer for whom the services are rendered. Such written agreement shall be retained as part of the official records of both the insurer and the administrator for the duration of the agreement and for five years thereafter.
B. The written agreement shall contain provisions which include the requirements of sections 20-485.03 through 20-485.10 except as those requirements do not apply to the functions performed by the administrator. The agreement shall include a provision that the insurer shall provide thirty days' written notice to the administrator of termination or cancellation of the agreement. The agreement shall also include a provision that the insurer shall provide fifteen days' written notice to the director of termination or cancellation or any other change in the agreement.
C. If a policy is issued to a trustee or trustees,  a copy of the trust agreement and any amendments to such agreement shall be furnished to the insurer by the administrator and shall be retained as part of the official records of both the insurer and the administrator for the duration of the policy and for five years thereafter.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-485.02 - Administrator as intermediary between insurer and insured; right of action preserved

20-485.02.
Administrator as intermediary between insurer and insured;  right of action preserved
If an insurer utilizes the services of an administrator under the terms of a written agreement as required in section 20-485.01,  the payment to the administrator of any premiums or charges for insurance by or on behalf of the insured shall be deemed to have been received by the insurer,  and the payment of return premiums or claims by the insurer to the administrator shall not be deemed payment to the insured or claimant until such payments are received by the insured or claimant. Nothing in this article shall limit any right of the insurer against the administrator resulting from such administrator's failure to make payments to the insurer,  insureds or claimants.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-485.06 - Charges or premiums collected held in fiduciary capacity; establishment of account; disbursements

20-485.06.
Charges or premiums collected held in fiduciary capacity;  establishment of account;  disbursements
A. All insurance charges or premiums collected by an administrator on behalf of or for an insurer or insurers,  and return premiums received from such insurer or insurers,  shall be held by the administrator in a fiduciary capacity. Such funds shall be immediately remitted to the person or persons entitled to such funds or shall be deposited promptly in a fiduciary bank account established and maintained by the administrator.
B. If charges or premiums deposited in a fiduciary account have been collected on behalf of or for more than one insurer,  the administrator shall keep records clearly recording the deposits in and withdrawals from such account on behalf of or for each insurer. The administrator shall,  upon request of an insurer,  furnish such insurer with copies of such records pertaining to deposits and withdrawals on behalf of or for such insurer.
C. The administrator shall not pay any claim by withdrawals from a fiduciary account. Withdrawals from such account shall be made,  as provided in the written agreement between the administrator and the insurer required by section 20-485.01,  for any of the following:
1. Remittance to an insurer entitled to such remittance.
2. Deposit in an account maintained in the name of such insurer.
3. Transfer to and deposit in a claims-paying account,  with claims to be paid as provided by section 20-485.07.
4. Payment to a group policyholder for remittance to the insurer entitled to such remittance.
5. Payment to the administrator of such administrator's commission,  fees or charges.
6. Remittance of return premiums to the person or persons entitled to such return premiums.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-485.09 - Adjustment or settlement of claims or charges; compensation

20-485.09.
Adjustment or settlement of claims or charges;  compensation
A. Compensation to an administrator for any policies where such administrator adjusts or settles claims shall not be contingent on claim experience. This subsection does not prevent the compensation of an administrator from being based on premiums or charges collected or number of claims paid or processed.
B. An administrator may collect charges in accordance with the written agreement between the administrator and the insurer. The written agreement must prescribe the applicable standards for the permissible collection of charges by the administrator. Unless the administrator is licensed as a collection agency pursuant to title 32,  chapter 9,  the administrator may not collect charges that have remained unpaid on an account that has been inactive for more than twelve months.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-485.10 - Deposit or surety bond of administrators; amount; purpose

20-485.10.
Deposit or surety bond of administrators;  amount;  purpose
Every administrator shall possess and maintain a deposit in favor of this state to be held in trust for the benefit and protection of insureds and insurers whose monies the administrator handles consisting of cash,  securities eligible for investment pursuant to chapter 3,  articles 1 and 2 of this title,  or a surety bond in a form acceptable to the director and issued by a corporate surety authorized to transact business in this state. The amount of the deposit shall be ten per cent of the amount of total funds handled unless the director determines that a lesser amount is adequate for the protection of the public but in no case shall the bond be less than five thousand dollars. The amount of the deposit shall be determined by the total funds handled by the administrator during the preceding year,  or if no funds were handled during the preceding year,  the amount of funds reasonably estimated to be handled during the current calendar year by the administrator. The amount of such deposit is payable on the failure of the administrator to pay benefits it is legally obligated to pay and shall provide protection to the insurers and insureds against loss by reason of acts of fraud or dishonesty and may include individual bonds or schedule or blanket forms of bonds.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-485.11 - Notice to insureds; statement of charge or premium for coverage; conflict of interest prohibited

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.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-486.02 - Required contract provisions; reinsurance intermediary brokers

20-486.02.
Required contract provisions;  reinsurance intermediary brokers
A reinsurance intermediary broker and the insurer it represents as a reinsurance intermediary shall enter into a written contract that specifies the responsibilities of each party. The contract at a minimum shall provide that:
1. The insurer may terminate the reinsurance intermediary broker's authority at any time.
2. The reinsurance intermediary broker shall render accounts to the insurer that accurately detail all material transactions,  including information necessary to support all commissions,  charges and other fees received by or owed to the reinsurance intermediary broker,  and shall remit all monies due to the insurer within thirty days of receipt.
3. All monies collected for the insurer's account be held in a fiduciary capacity by the reinsurance intermediary broker in a bank that is a qualified United States financial institution as defined in section 20-486.
4. The reinsurance intermediary broker comply with the provisions of section 20-486.03.
5. The reinsurance intermediary broker comply with the written standards that are established by the insurer for the cession or retrocession of all risks.
6. The reinsurance intermediary broker disclose to the insurer a relationship it has with a reinsurer to which business will be ceded or retroceded.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-486.03 - Books and records; reinsurance intermediary brokers

20-486.03.
Books and records;  reinsurance intermediary brokers
A. For at least ten years after a contract of reinsurance transacted by the reinsurance intermediary broker expires,  the reinsurance intermediary broker shall maintain a complete record for each transaction that shows:
1. The type of contract,  limits,  underwriting restrictions,  classes or risks and territory.
2. The period of coverage,  including effective and expiration dates,  cancellation provisions and notice required of cancellation.
3. The reporting and settlement requirements of balances.
4. The rate used to compute the reinsurance premium.
5. The names and addresses of assuming reinsurers.
6. The rates of all reinsurance commissions,  including the commissions on any retrocessions that are handled by the reinsurance intermediary broker.
7. Related correspondence and memoranda.
8. Proof of placement.
9. Details regarding retrocessions that are handled by the reinsurance intermediary broker including the identity of persons who receive retrocessions and the percentage of each contract that is assumed or ceded.
10. The financial records,  including premium and loss accounts.
11. If the reinsurance intermediary broker procures directly from any assuming reinsurer a reinsurance contract on behalf of a licensed ceding insurer,  written evidence that the assuming reinsurer has agreed to assume the risk.
12. If the reinsurance intermediary broker procures through a representative of the assuming reinsurer,  other than an employee,  a reinsurance contract on behalf of a licensed ceding insurer,  written evidence that the reinsurer has delegated binding authority to the representative.
B. The insurer shall have access to and the right to copy and audit all accounts and records related to its business that are maintained by the reinsurance intermediary broker in a form usable by the insurer.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-486.04 - Duties of insurers utilizing the services of a reinsurance intermediary broker

20-486.04.
Duties of insurers utilizing the services of a reinsurance intermediary broker
A. An insurer shall not engage the services of a person,  firm,  association or corporation to act as a reinsurance intermediary broker on its behalf unless the person is licensed as required by section 20-486.01.
B. An insurer may not employ an individual who is employed by the reinsurance intermediary broker with which it transacts business,  unless the reinsurance intermediary broker is under common control with the insurer and is subject to the holding company act.
C. The insurer annually shall obtain a copy of the statements on the financial condition of each reinsurance intermediary broker with which it transacts business.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-486.06 - Books and records; reinsurance intermediary managers

20-486.06.
Books and records;  reinsurance intermediary managers
A. For at least ten years after a contract of reinsurance transacted by the reinsurance intermediary manager expires,  the reinsurance intermediary manager shall maintain a complete record for each transaction that shows:
1. The type of contract,  limits,  underwriting restrictions,  classes or risks and territory.
2. The period of coverage,  including effective and expiration dates,  cancellation provisions,  notice required of cancellation and disposition of outstanding reserves on covered risks.
3. The reporting and settlement requirements of balances.
4. The rate used to compute the reinsurance premium.
5. The names and addresses of reinsurers.
6. The rates of all reinsurance commissions,  including the commissions on any retrocessions that are handled by the reinsurance intermediary manager.
7. Related correspondence and memoranda.
8. Proof of placement.
9. Details regarding retrocessions that are handled by the reinsurance intermediary manager pursuant to section 20-486.08,  subsection D including the identity of persons who receive retrocessions and the percentage of each contract that is assumed or ceded.
10. The financial records,  including premium and loss accounts.
11. If the reinsurance intermediary manager procures directly from any assuming reinsurer a reinsurance contract on behalf of a licensed ceding insurer,  written evidence that the assuming reinsurer has agreed to assume the risk.
12. If the reinsurance intermediary broker procures through a representative of the assuming reinsurer,  other than an employee,  a reinsurance contract on behalf of a licensed ceding insurer,  written evidence that the reinsurer has delegated binding authority to the representative.
B. The reinsurer shall have access to and the right to copy all accounts and records related to its business that are maintained by the reinsurance intermediary manager in a form usable by the reinsurer.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-486.07 - Prohibited acts; reinsurance intermediary managers

20-486.07.
Prohibited acts;  reinsurance intermediary managers
The reinsurance intermediary manager shall not:
1. Cede retrocessions on behalf of the reinsurer,  except that the reinsurance intermediary manager may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for retrocessions. The guidelines shall include a list of reinsurers with whom the automatic agreements are in effect,  the coverages and amounts or percentages for each reinsurer that may be reinsured and commission schedules.
2. Commit the reinsurer to participation in reinsurance syndicates.
3. Appoint a producer without assuring that the producer is lawfully licensed to transact the type of reinsurance for which he is appointed.
4. Without prior approval of the reinsurer,  pay or commit the reinsurer to pay a claim,  net of retrocessions,  that exceeds the lesser of an amount specified by the reinsurer or one per cent of the reinsurer's policyholder's surplus as of December 31 of the last complete calendar year.
5. Without prior approval of the reinsurer,  collect any payment from a person who receives a retrocession or commit the reinsurer to any claim settlement with a person who receives a retrocession. If prior approval is given,  a report shall be forwarded promptly to the reinsurer.
6. Employ jointly an individual who is employed by the reinsurer unless the reinsurance intermediary manager is under common control with the reinsurer subject to the holding company act.
7. Appoint a sub-reinsurance intermediary manager.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-486.08 - Duties of reinsurers utilizing the services of a reinsurance intermediary manager

20-486.08.
Duties of reinsurers utilizing the services of a reinsurance intermediary manager
A. A reinsurer shall not engage the services of a person,  firm,  association or corporation to act as a reinsurance intermediary manager on its behalf unless the person is licensed as required by section 20-486.01.
B. The reinsurer annually shall obtain a copy of the statements on the financial condition of each reinsurance intermediary manager that the reinsurer has engaged. The statements shall be prepared by an independent certified accountant in a form acceptable to the director.
C. If a reinsurance intermediary manager establishes loss reserves,  the reinsurer annually shall obtain the opinion of an actuary attesting to the adequacy of loss reserves that are established for losses incurred and outstanding on business produced by the reinsurance intermediary manager. The actuary's opinion is in addition to any other required loss reserve certification.
D. An officer of the reinsurer who is not affiliated with the reinsurance intermediary manager has binding authority for all retrocessional contracts or participation in reinsurance syndicates.
E. Within thirty days of termination of a contract with a reinsurance intermediary manager,  the reinsurer shall provide written notification to the director of the termination.
F. A reinsurer shall not appoint to its board of directors an officer,  director,  employee,  controlling shareholder or subproducer of its reinsurance intermediary manager. This subsection does not apply to relationships that are governed by the holding company act or,  if applicable,  the broker controlled insurer act.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-486.09 - Examination authority

20-486.09.
Examination authority
A. A reinsurance intermediary is subject to examination by the director. The director shall have access to all books,  bank accounts and records of the reinsurance intermediary in a form usable to the director.
B. A reinsurance intermediary manager may be examined as if it is the reinsurer.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-486.10 - Penalties and liabilities

20-486.10.
Penalties and liabilities
A. A reinsurance intermediary,  insurer or reinsurer that after a hearing is found by the director to be in violation of this article:
1. For each separate violation,  shall pay a penalty in an amount of not to exceed five thousand dollars.
2. Is subject to revocation or suspension of its license.
3. If a violation was committed by the reinsurance intermediary,  the reinsurance intermediary shall make restitution to the insurer,  reinsurer,  rehabilitator or liquidator of the insurer or reinsurer for the net losses incurred by the insurer or reinsurer that are attributable to the violation.
B. This section does not affect the right of the director to impose any other penalty provided for by law.
C. This section does not limit or restrict the rights of policyholders,  claimants,  creditors or other third parties or confer any rights to these persons.
D. Except as provided in section 41-1092.08,  subsection H,  the final decision,  determination or order of the director pursuant to subsection A of this section is subject to judicial review pursuant to title 12,  chapter 7,  article 6.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-487 - Definitions

20-487.
Definitions
In this article,  unless the context otherwise requires:
1. " Accredited state"  means a state in which the insurance department or other regulatory agency has qualified as meeting the minimum financial regulatory standards that are adopted and established by the national association of insurance commissioners.
2. " Control"  or " controlled"  has the same meaning prescribed in section 20-481.
3. " Controlled insurer"  means a licensed insurer who is controlled by a producer.
4. " Controlling producer"  means a producer who controls,  directly or indirectly,  an insurer.
5. " Licensed insurer"  or " insurer"  means a person,  firm,  association or corporation that is duly licensed to transact property or casualty insurance business in this state. For the purposes of this article,  licensed insurer or insurer does not include a:
(a) Residual market pool and joint underwriting authority or association.
(b) Captive insurer. For the purposes of this subdivision,  " captive insurer"  means an insurance company,  other than a risk retention group as defined in section 20-1098 or 20-2401,  that is owned by another organization and whose exclusive purpose is to insure risks to member organizations or group members and their affiliates.
6. " Producer"  means an insurance producer or any other person,  firm,  association or corporation when,  for any compensation,  commission or other thing of value,  the person,  firm,  association or corporation acts or aids in any manner in soliciting,  negotiating or procuring the making of an insurance contract on behalf of an insured other than the person,  firm,  association or corporation.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-487.01 - Applicability

20-487.01.
Applicability
This article applies to licensed insurers that are domiciled in this state or are domiciled in a state that is not an accredited state but that has a similar law in effect. Unless superseded by this article,  chapter 2,  article 8 of this title applies to all parties within holding company systems that are subject to this article.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-487.03 - Disclosure

20-487.03.
Disclosure
Before the effective date of the policy,  the controlling producer shall deliver written notice to the prospective insured disclosing the relationship between the producer and the controlled insurer,  except that if the business is placed through a subproducer who is not a controlling producer the controlling producer shall retain in his records a signed commitment from the subproducer that the subproducer is aware of the relationship between the insurer and the producer and that the subproducer has or will notify the insured.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-487.04 - Penalties

20-487.04.
Penalties
A. If the director believes that a controlling producer or other person has not materially complied with this article or any rule adopted under this article,  after notice and an opportunity for a hearing,  the director may order the controlling producer to cease placing business with the controlled insurer.
B. If the director finds that due to material noncompliance a controlled insurer or policyholder of the controlled insurer has suffered loss or damage,  the director may maintain a civil action or intervene in an action brought by or on behalf of the insurer or policyholder for the recovery of compensatory damages or other appropriate relief for the benefit of the insurer or policyholder.
C. If an order for the liquidation or rehabilitation of the controlled insurer is entered pursuant to chapter 3,  article 4 of this title and a receiver who is appointed under that order believes that the controlling producer or other person has not materially complied with this article or rules adopted under this article and that the insurer suffered loss or damage,  the receiver may maintain a civil action for the recovery of damages or other appropriate relief for the benefit of the insurer.
D. This section does not affect the right of the director to impose any other penalty provided for by law.
E. This section does not alter or affect the rights of policyholders,  claimants,  creditors or other third parties.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-488.01 - Risk-based capital reports

20-488.01.
Risk-based capital reports
A. On or before the later of March 1 or its annual statement filing due date,  each domestic insurer shall annually prepare and submit to the director a report of the insurer's RBC levels as of the end of the previous calendar year. The RBC report shall be in a form and shall contain that information that is required by the RBC instructions. Each domestic insurer shall file its RBC report with both:
1. The national association of insurance commissioners in accordance with the RBC instructions.
2. The insurance director in any state in which the insurer is authorized to transact insurance business on the written request of the insurance director. The insurer shall file its RBC report not later than fifteen days after receiving notice to file its RBC report with that state or the filing date specified in this subsection,  whichever is later.
B. A life or health insurer's RBC shall be determined according to the formula set forth in the RBC instructions. The formula shall take into account and may adjust for the covariance between the following risks that are determined in each case by applying the factors in the manner set forth in the RBC instructions:
1. The risk with respect to the insurer's assets.
2. The risk of adverse insurance experience with respect to the insurer's liabilities and obligations.
3. The interest rate risk with respect to the insurer's business.
4. All other business risks and any other relevant risks that are set forth in the RBC instructions.
C. A property or casualty insurer's RBC shall be determined according to the formula set forth in the RBC instructions. The formula shall take into account and may adjust for the covariance between the following risks that are determined in each case by applying the factors in the manner set forth in the RBC instructions:
1. Asset risk.
2. Credit risk.
3. Underwriting risk.
4. All other business risks and any other relevant risks that are set forth in the RBC instructions.
D. A health organization's RBC shall be determined according to the formula set forth in the RBC instructions. The formula shall take into account and may adjust for the covariance between the following risks that are determined in each case by applying the factors in the manner set forth in the RBC instructions:
1. Asset risk.
2. Credit risk.
3. Underwriting risk.
4. All other business risks and any other relevant risks that are set forth in the RBC instructions.
E. If the director determines that an RBC report filed by a domestic insurer is inaccurate,  the director shall adjust the RBC report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice shall state the reason for the adjustment. An RBC report that has been adjusted shall be referred to as an adjusted RBC report.
F. Insurers shall maintain capital above the RBC levels required by this article.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-488.03 - Regulatory action level event

20-488.03.
Regulatory action level event
A. If a regulatory action level event occurs,  the director shall:
1. Require the insurer to submit an RBC plan or,  if applicable,  a revised RBC plan.
2. Perform an examination or analysis,  as the director deems necessary,  of the assets,  liabilities and operations of the insurer,  including a review of the insurer's RBC plan or revised RBC plan.
3. After conducting the examination or analysis,  issue a corrective order specifying any corrective actions that the director determines are required.
B. In determining what corrective actions may be required,  the director may consider any factors that the director deems relevant with respect to the insurer based on the director's examination or analysis of the insurer's assets,  liabilities and operations,  including but not limited to the results of any sensitivity tests undertaken pursuant to the RBC instructions. The RBC plan or revised RBC plan shall be submitted within one of the following:
1. Forty-five days after the regulatory action level event occurs.
2. If the insurer challenges an adjusted RBC report pursuant to section 20-488.06 and the director does not consider the challenge to be frivolous,  forty-five days after the insurer is notified that the director,  after a hearing,  has rejected the insurer's challenge.
3. If the insurer challenges a revised RBC plan pursuant to section 20-488.06,  forty-five days after the insurer is notified that the director,  after a hearing,  has rejected the insurer's challenge.
C. The director may retain actuaries,  investment experts and other consultants to review the insurer's RBC plan or revised RBC plan,  to examine or analyze the assets,  liabilities and operations of the insurer and to formulate the corrective order with respect to the insurer. The affected insurer or another party if ordered by the director shall pay the fees,  costs and other expenses relating to any retained consultants.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-488.04 - Authorized control level event

20-488.04.
Authorized control level event
If an authorized control level event occurs with respect to an insurer,  the director shall either:
1. Take those actions that are required under section 20-488.03 regarding an insurer to whom a regulatory action level event has occurred.
2. If the director deems it to be in the best interests of the policyholders and creditors of the insurer and of the public,  take any actions that are necessary to place the insurer under regulatory control pursuant to chapter 1,  article 2 and chapter 3,  article 4 of this title. If the director takes these actions,  the authorized control level event shall be deemed to be sufficient grounds for the director to take action under chapter 1,  article 2 and chapter 3,  article 4 of this title,  and the director has the rights,  powers and duties with respect to the insurer that are set forth in chapter 1,  article 2 and chapter 3,  article 4 of this title. If the director takes any action under this paragraph pursuant to an adjusted RBC report,  the insurer is entitled to the same protection that is afforded to insurers under chapter 1,  article 2 and chapter 3,  article 4 of this title.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-488.05 - Mandatory control level event

20-488.05.
Mandatory control level event
A. If a mandatory control level event occurs,  the director shall take any actions that are necessary to place the insurer under regulatory control pursuant to chapter 1,  article 2 and chapter 3,  article 4 of this title. The mandatory control level event shall be deemed to be sufficient grounds for the director to take action under chapter 1,  article 2 and chapter 3,  article 4 of this title,  and the director has the rights,  powers and duties with respect to the insurer that are set forth in chapter 1,  article 2 and chapter 3,  article 4 of this title. If the director takes any action under this subsection pursuant to an adjusted RBC report,  the insurer is entitled to the same protection that is afforded to insurers under chapter 1,  article 2 and chapter 3,  article 4 of this title.
B. Notwithstanding subsection A,  the director may forgo action for up to ninety days after the mandatory control level event if the director finds there is a reasonable expectation that the mandatory control level event may be eliminated within the ninety day period.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-488.06 - Hearings

20-488.06.
Hearings
A. An insurer has the right to a hearing to challenge any determination or action made or taken by the director on the occurrence of any of the following:
1. The notification by the director to the insurer of an adjusted RBC report.
2. The notification by the director to the insurer that both:
(a) The insurer's RBC plan or revised RBC plan is unsatisfactory.
(b) The notice constitutes a regulatory action level event with respect to the insurer.
3. The notification by the director to the insurer that the insurer has failed to adhere to its RBC plan or revised RBC plan and that the insurer's failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event with respect to the insurer in accordance with its RBC plan or revised RBC plan.
4. The notification by the director to an insurer of a corrective order.
B. The underlying decision or action that is the subject of any notification made by the director pursuant to subsection A of this section is an appealable agency action as defined in section 41-1092.
C. A hearing demanded by an insurer that is aggrieved by a decision or an action by the director pursuant to subsection A of this section is closed to the public,  unless a principal party to the hearing requests the hearing to be open to the public pursuant to section 20-164,  subsection A.
D. The insurer shall request a hearing within five days after receiving notice by the director under subsection A of this section. On receipt of the request for a hearing,  the director shall set a date for the hearing at least ten days but not more than thirty days after the date of receipt of the request.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-488.08 - Supplemental provisions; rules; exemption

20-488.08.
Supplemental provisions;  rules;  exemption
A. This article is supplemental to any other laws of this state and does not preclude or limit any other powers or duties of the director.
B. The director may adopt rules to implement this article.
C. The director may exempt from the application of the RBC requirements of this article any domestic property and casualty insurer that does all of the following:
1. Writes direct business only in this state.
2. Writes direct annual premiums of two million dollars or less.
3. Assumes no reinsurance in excess of five per cent of the direct premiums written.
D. The director may exempt any health organization from the RBC requirements in this article if the health organization meets all of the following requirements:
1. The health organization writes direct business only in this state.
2. Not more than five per cent of the health organization's gross direct written premiums are attributable to reinsurance assumed from foreign insurers.
3. The health organization writes direct annual premiums for comprehensive medical business of two million dollars or less,  or the health organization is a dental service corporation,  optometric service corporation or prepaid dental plan organization that covers less than two thousand lives.