reglab/statecodes huggingface dataset:
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-718 - Enforcement of contingent liability

20-718.
Enforcement of contingent liability
A. If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required of it by this title for authority to transact the kinds of insurance being transacted,  and the deficiency is not cured from other sources,  its directors shall levy an assessment only on its members who,  at any time within the twelve months immediately preceding the date notice of such assessment was mailed to them,  held policies providing for contingent liability,  and such members shall be liable to the insurer for the amount so assessed.
B. The assessment shall be for such an amount as is required to cure such deficiency and to provide a reasonable amount of working funds above such minimum amount of surplus,  but such working funds so provided shall not exceed five percent of the insurer's liabilities as of the date on which the amount of such deficiency was determined.
C. No one policy or member as to such policy shall be assessed or charged with an aggregate of contingent liability as to obligations incurred by the insurer in any one calendar year,  in excess of the number of times the premium as stated in the policy as computed solely on premium earned on such policy during that year.
D. No member shall have an offset against any assessment for which the member is liable,  on account of any claim for unearned premium or loss payable.
E. As to life insurance,  any part of such an assessment on a member that remains unpaid following notice of assessment,  demand for payment and lapse of a reasonable waiting period as specified in such notice,  if approved by the director of the department of insurance and financial institutions as being in the best interests of the insurer and its members,  may be secured by placing a lien on the cash surrender values and accumulated dividends held by the insurer to the credit of such member.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-719 - Issuance of nonassessable policies by mutual insurers

20-719.
Issuance of nonassessable policies by mutual insurers
A. While it maintains on deposit with the state treasurer through the director surplus funds in an amount not less than the paid-in capital required of a domestic stock insurer transacting like kinds of insurance,  a domestic mutual insurer may extinguish the contingent liability of its members as to all its policies in force,  and may omit provisions imposing contingent liability in all its policies currently issued.
B. When such surplus funds have been so deposited and the director has so ascertained,  he shall issue to the insurer at its request his certificate authorizing such extinguishment and omission of contingent liability.
C. A foreign or alien mutual insurer may issue nonassessable policies to its members in this state in accordance with its charter and the laws of its domicile.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-720 - Revocation of authority to issue nonassessable policies

20-720.
Revocation of authority to issue nonassessable policies
A. The director shall revoke the authority of a domestic mutual insurer to issue policies without contingent liability if at any time the insurer's assets are less than the sum of its liabilities and the surplus required for such authority,  or if the insurer,  by resolution of its board of directors approved by a majority of its members,  requests that the authority be revoked.
B. Upon revocation of such authority for any cause the insurer shall not thereafter issue new policies without contingent liability,  nor renew or accept further premiums on old policies without endorsing them to provide for such liability.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-721 - Participating policies

20-721.
Participating policies
A. If so provided in its articles of incorporation,  a domestic stock or domestic mutual insurer may issue any or all of its policies with or without participation in profits,  savings or unabsorbed portions of premiums,  may classify policies issued on a participating or nonparticipating basis,  and may determine the right to participate and the extent of participation of any class or classes of policies. Any such classification or determination shall be reasonable,  and shall not unfairly discriminate as between policyholders within the same such classification. A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged.
B. No dividend,  otherwise earned,  shall be made contingent upon the payment of renewal premium on any policy.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-722 - Stock dividends

20-722.
Stock dividends
A. A domestic stock insurer shall not pay any cash dividend to stockholders except out of that part of its available surplus funds which is derived from realized net profits on its business.
B. A stock dividend may be paid out of any available surplus funds in excess of the aggregate amount of surplus loaned to the insurer pursuant to section 20-725.
C. A dividend otherwise proper,  may be payable out of the insurer's earned surplus even though its total surplus is then less than the aggregate of its past contributed surplus resulting from issuance of its capital stock at a price in excess of the par value thereof.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-723 - Dividends to mutual policyholders

20-723.
Dividends to mutual policyholders
A. The directors of a domestic mutual insurer may from time to time apportion and pay or credit to its members dividends only from that part of its surplus funds which represents net realized savings and net realized earnings from its business.
B. A dividend otherwise proper may be payable from such savings and earnings even though the insurer's total surplus is then less than the aggregate of its contributed surplus.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-724 - Illegal dividends; violation; classification

20-724.
Illegal dividends;  violation;  classification
A. Any director of a domestic stock or mutual insurer who knowingly votes for or concurs in declaration or payment of an illegal dividend to stockholders or members is guilty of a class 2 misdemeanor and is jointly and severally liable,  together with other such directors,  for any loss thereby sustained by the insurer.
B. The stockholders or members knowingly receiving such an illegal dividend shall be liable in the amount of the illegal dividend to the insurer.
C. The director of the department of insurance and financial institutions may revoke or suspend the certificate of authority of an insurer that has declared or paid an illegal dividend.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-725 - Borrowed surplus

20-725.
Borrowed surplus
A. A domestic stock or mutual insurer may borrow money to defray the expenses of its organization,  provide it with surplus funds or for any purpose required by its business,  on a written agreement that the money is required to be repaid only out of the insurer's surplus in excess of that stipulated in the agreement. The agreement may provide for interest at the rate agreed on,  but not exceeding twelve per cent per year. This interest only constitutes a liability of the insurer if the director has approved payment of the interest.
B. The surplus note shall provide that the holder's interest is subordinate to the claims of policyholders,  claimants and beneficiaries and to all other classes of creditors other than surplus noteholders and that interest payments and principal payments require prior approval of the director.
C. Money so borrowed,  together with the interest if so stipulated in the agreement,  shall not form a part of the insurer's legal liabilities or be the basis of any setoff until the director approves repayment. Until the money and interest are repaid,  financial statements filed or published by the insurer shall show as a footnote the amount remaining unpaid plus any accrued,  unpaid interest,  pursuant to the accounting practices and procedures manual adopted by the national association of insurance commissioners.
D. Before entering a loan transaction as described in this section,  a domestic mutual insurer shall file with the director a statement of the purposes of the loan and a copy of the proposed loan agreement,  which shall be subject to the director's approval. The loan and agreement shall be deemed approved unless within fifteen days after the date of filing the insurer is notified in writing of the director's disapproval and the reasons for the disapproval. The director shall disapprove any proposed loan or agreement if the director finds that the loan is reasonably unnecessary or excessive for the purpose intended,  that the terms of the loan agreement are not fair and equitable to the parties and to other similar lenders,  if any,  or to the insurer or that the information so filed by the insurer is inadequate,  specifying the inadequacies.
E. A mutual insurer shall repay the loan or a substantial portion of the loan when the loan is no longer reasonably necessary for the purpose originally intended and after receiving the director's approval for repayment.
F. This section does not apply to loans obtained by the insurer in the ordinary course of business from banks and other financial institutions nor to loans secured by a pledge of assets.
G. Any eligible investment as prescribed in chapter 3,  article 2 of this title may be contributed or borrowed pursuant to this section subject to any limitations provided in that article for that investment.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-726 - Prohibited interests of officers and directors in certain transactions

20-726.
Prohibited interests of officers and directors in certain transactions
A. No director or officer of an insurer shall accept,  except for the insurer,  or be the beneficiary of any fee,  brokerage,  gift or other emolument in addition to his fixed salary or compensation,  because of any investment,  loan,  deposit,  purchase,  sale,  exchange,  reinsurance or other similar transaction made by or for the insurer,  or be pecuniarily interested therein in any capacity except on behalf of the insurer.
B. No insurer shall guarantee the financial obligation of any of its officers or directors.
C. This section shall not prohibit such a director or officer from becoming a policyholder of the insurer and enjoying thereunder the rights customarily provided therein for holders of such policies.
D. This section shall not prohibit any transaction which meets the requirements of title 10,  chapter 8,  article 6.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-727 - Management and exclusive agency contracts

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.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-728 - Impairment of capital or assets

20-728.
Impairment of capital or assets
A. If the capital stock of a stock insurer becomes impaired,  or the assets of a mutual insurer are less than its liabilities and the minimum amount of surplus required of it by this title for authority to transact the kinds of insurance being transacted,  the director shall at once determine the amount of the deficiency and serve notice upon the insurer to make good the deficiency within ninety days after service of such notice.
B. The deficiency may be made good in cash or in assets eligible under this title for the investment of the insurer's funds,  or if a stock insurer,  by reduction of the insurer's capital to an amount not below the minimum required for the kinds of insurance thereafter to be transacted,  or if a mutual insurer,  by amendment of its certificate of authority to cover only such kind or kinds of insurance for which the insurer has on deposit sufficient surplus.
C. If the deficiency is not made good and proof thereof filed with the director within the ninety day period,  the insurer shall be deemed insolvent and the director shall institute delinquency proceedings against it as authorized by this title. If the deficiency exists because of increased loss reserves required by the director,  or because of disallowance by the director of certain assets or reduction of the value at which carried in the insurer's accounts,  the director may in his discretion and upon application and good cause shown,  extend for not more than an additional ninety days the period within which the deficiency may be so made good and proof thereof so filed.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-729 - Conversion of stock insurer to mutual insurer

20-729.
Conversion of stock insurer to mutual insurer
A. A domestic stock insurer other than a title insurer may become a domestic mutual insurer pursuant to such plan and procedure as may be approved in advance by the director.
B. The director shall not approve any such plan,  procedure or mutualization unless:
1. It is equitable to both stockholders and policyholders.
2. It is subject to approval by a vote of the holders of not less than three-fourths of the insurer's capital stock having voting rights and by a vote of not less than two-thirds of the insurer's policyholders who vote on such plan in person,  by proxy or by mail pursuant to such notice and procedure as may be approved by the director.
3. If a life insurer,  the right to vote thereon is limited to those policyholders whose policies have face amounts of not less than $1, 000 and have been in force for one year or more.
4. Mutualization will result in retirement of shares of the insurer's capital stock at a price not in excess of the fair market value thereof as determined by competent disinterested appraisers.
5. The plan provides for the purchase of the shares of any nonconsenting stockholder in accordance with title 10,  chapter 13 and such nonconsenting stockholders shall have all the rights and restrictions applicable under such section to stockholders of a private corporation who do not consent to the agreed manner of converting the shares of stock of such private corporation on proposal for consolidation.
6. The plan provides for definite conditions to be fulfilled by a designated early date on which such mutualization will be deemed effective.
7. The mutualization leaves the insurer with surplus funds reasonably adequate for the security of its policyholders and to continue successfully in business in the states in which it is then authorized to transact insurance,  and for the kinds of insurance included in its certificate of authority.
C. This section does not apply to mutualization under order of court pursuant to rehabilitation or reorganization of an insurer under chapter 3,  article 4 of this title.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-730 - Conversion of mutual insurer to stock insurer

20-730.
Conversion of mutual insurer to stock insurer
A. A domestic mutual insurer may become a domestic stock insurer pursuant to such plan or procedure as is approved in advance by the director.
B. The director shall not approve any such plan or procedure unless:
1. It is equitable to the insurer's members.
2. It is subject to approval by vote of not less than three-fourths of the insurer's current members voting thereon in person,  by proxy or by mail at a meeting of members called for the purpose pursuant to such notice and procedure as may be approved by the director. If a life insurer,  the right to vote may be limited to members whose policies have face amounts of not less than $1, 000 and have been in force one year or more.
3. The equity of each policyholder in the insurer is determinable under a fair formula approved by the director,  which shall be based on not less than the insurer's entire surplus,  after deducting contributed or borrowed surplus funds,  plus a reasonable present equity in its reserves and in all nonadmitted assets.
4. The policyholders entitled to participate in the purchase of stock or distribution of assets include all current policyholders and all existing persons who had been a policyholder of the insurer within three years before the date such plan was submitted to the director.
5. The plan gives to each policyholder of the insurer as specified in paragraph 4 of this subsection a preemptive right to acquire the policyholder's proportionate part of all of the proposed capital stock of the insurer,  within a designated reasonable period,  and to apply on the purchase thereof the amount of the policyholder's equity in the insurer as determined under paragraph 3 of this subsection.
6. Shares are so offered to policyholders at a price not greater than that thereafter offered to others nor at more than double the par value of the shares.
7. The plan provides for payment to each policyholder not electing to apply the policyholder's equity in the insurer for or on the purchase price of stock to which preemptively entitled,  of cash in the amount of not less than fifty percent of the amount of the policyholder's equity not so used for the purchase of stock,  and which cash payment together with stock so purchased,  if any,  shall constitute full payment and discharge of the policyholder's equity as an owner of such mutual insurer.
8. The plan,  when completed,  would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a domestic stock insurer transacting like kinds of insurance,  together with surplus funds in amount not less than one-half of such required capital.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-731 - Merger or consolidation of stock insurers; hearings; notice

20-731.
Merger or consolidation of stock insurers;  hearings;  notice
A. Any domestic stock insurer except a title insurer may merge or consolidate with another domestic or foreign stock insurer by complying with the provisions of general law governing the merger or consolidation of stock corporations formed for profit,  but subject to subsection B of this section.
B. A merger or consolidation is not effective under this section unless in advance of the merger or consolidation the plan and agreement have been filed with and approved in writing by the director. The director may hold a public hearing on the plan and agreement as prescribed in section 20-161,  and the director shall approve the merger or consolidation unless the director finds the plan or agreement:
1. Is contrary to law.
2. Is unfair in the terms and conditions of the issuance and exchange of securities.
3. Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state or elsewhere.
C. Any public hearing referred to in subsection B of this section shall be held within thirty days after the plan and agreement of merger is filed,  and at least twenty-five days' written notice thereof shall be given by the director to the insurer corporations involved. Not less than ten days' written notice of the hearing shall be given by the insurer corporations to their shareholders. The insurers filing the plan and agreement,  shareholders,  any person to whom written notice of hearing was sent and any other person whose interest may be affected thereby shall have the right to present evidence,  examine and cross-examine the witnesses and offer oral and written arguments at the hearing. The director shall make a determination within thirty days after the conclusion of the hearing. Except as otherwise provided in this subsection,  title 41,  chapter 6,  article 10 shall apply to hearings,  orders and appeals.
D. A domestic title insurer may merge or consolidate with another domestic or foreign title insurer by complying with section 20-1576.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-732 - Acceptance of reinsurance by stock insurers; definition

20-732.
Acceptance of reinsurance by stock insurers;  definition
A. A domestic stock insurer or a domestic limited stock insurer may accept reinsurance for the same kinds of insurance and within the same limits as it is authorized to transact directly,  unless the reinsurance is prohibited by its articles of incorporation. If a reinsurance contract constitutes all or substantially all of the insurance business,  the reinsuring agreement shall not become effective unless filed with and approved in writing by the director. If not acted upon within thirty days,  the agreement shall be deemed approved unless the director notifies the parties to the agreement that a thirty day extension to the time period has been imposed. Any person may request a hearing regarding the decision of the director pursuant to title 41,  chapter 6,  article 10.
B. A domestic stock insurer or limited stock insurer may reinsure all or substantially all its business in force,  or substantially all of a major class thereof,  with another insurer by an agreement of reinsurance,  but no agreement shall become effective unless filed with and approved in writing by the director.
C. The director shall approve the agreement within a reasonable time after filing unless the director finds that it is inequitable to the stockholders of the domestic insurer or would substantially reduce the protection or service to its policyholders. If the director does not approve the agreement the director shall notify the insurer in writing specifying the reasons for the disapproval of the agreement.
D. For the purposes of this section,  " reinsurance"  means a contract by which an insurer procures a third person to insure the insurer against loss or liability by reason of original insurance,  or a contract that one insurer makes with another insurer to protect the latter from a risk already assumed.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-733 - Merger or consolidation of mutual insurers

20-733.
Merger or consolidation of mutual insurers
A. A domestic mutual insurer shall not merge or consolidate with a stock insurer.
B. A domestic mutual insurer may merge or consolidate with another mutual insurer in accordance with procedures prescribed by general laws applying to corporations formed for profit,  except as provided by this section.
C. The plan and agreement for merger or consolidation shall be submitted to and approved by at least two-thirds of the members of each mutual insurer involved voting thereon at meetings called for the purpose pursuant to such reasonable notice and procedure as has been approved by the director of the department of insurance and financial institutions. If a life insurer,  the right to vote may be limited to members whose policies are in a face amount of not less than $1, 000 and have been in force one year or more.
D. A merger or consolidation shall not be effectuated unless in advance thereof the plan and agreement therefor have been filed with and approved in writing by the director of the department of insurance and financial institutions. The director shall give approval within a reasonable time after filing unless the director finds the plan or agreement:
1. Inequitable to the policyholders of any domestic insurer involved.
2. Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state or elsewhere.
E. If the director does not approve the plan or agreement the director shall so notify the insurer in writing specifying the reasons for the disapproval.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-734 - Acceptance of reinsurance by mutual insurers

20-734.
Acceptance of reinsurance by mutual insurers
A. A domestic mutual insurer may accept reinsurance for the same kinds of insurance and within the same limits as it is authorized to transact direct unless such reinsurance is prohibited by its articles of incorporation.
B. A domestic mutual insurer may reinsure all or substantially all its business in force,  or all or substantially all of a major class thereof,  with another insurer,  stock or mutual,  by an agreement of bulk reinsurance after compliance with this section.
C. In advance of such reinsurance the agreement therefor shall be filed with and be subject to the approval of the director within a reasonable time after filing. The director shall not approve the agreement unless he finds it to be fair and equitable to each domestic insurer involved,  and that such reinsurance if effectuated would not substantially reduce the protection or service to its policyholders. If the director does not so approve,  he shall so notify each insurer involved in writing specifying his reasons therefor.
D. The plan and agreement for such reinsurance shall be approved by vote of not less than two thirds of each domestic mutual insurer's members voting thereon at meetings of members called for the purpose,  pursuant to such reasonable notice and procedure as the director may approve. If a life insurer,  the right to vote may be limited to members whose policies have face amounts of not less than one thousand dollars and have been in force one year or more.
E. If for reinsurance of a mutual insurer in a stock insurer,  the agreement shall provide for payment in cash to each member of the insurer entitled thereto as upon a conversion of such insurer pursuant to paragraph 4 of subsection B of section 20-730,  of his equity in the business reinsured as determined under a fair formula approved by the director,  which equity shall be based upon the member's equity in the reserves,  assets,  whether or not admitted assets,  and surplus,  if any,  of the mutual insurer to be taken over by the stock insurer.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-735 - Distribution of assets of mutual insurer on liquidation

20-735.
Distribution of assets of mutual insurer on liquidation
A. On any liquidation of a domestic mutual insurer,  its assets remaining after discharge of its indebtedness,  policy obligations,  repayment of contributed or borrowed surplus,  if any,  and expenses of administration,  shall be distributed to existing persons who were its members at any time within thirty-six months next preceding the date the liquidation was authorized or ordered,  or the date of last termination of the insurer's certificate of authority,  whichever date is the earliest.
B. The distributive share of each such member shall be in the proportion that the aggregate premiums earned by the insurer on the policies of the member during the combined periods of the member's membership bear to the aggregate of all premiums so earned on the policies of all such members. The insurer may,  and if the insurer is a life insurer shall,  make a reasonable classification of its policies so held by such members and a formula based on such classification for determining the equitable distributive share of each such member. Such classification and formula shall be subject to the approval of the director of the department of insurance and financial institutions.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-761 - "Reciprocal" insurance defined

20-761.
" Reciprocal"  insurance defined
" Reciprocal"  insurance is that resulting from an inter-exchange among persons,  known as " subscribers, "  of reciprocal agreements of indemnity,  the inter-exchange being effectuated through an " attorney-in-fact"  common to all such persons.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-764 - Compliance by existing insurers

20-764.
Compliance by existing insurers
Existing authorized reciprocal insurers shall after January 1,  1955 comply with the provisions of this article,  and shall make such amendments to their subscribers' agreement,  power of attorney,  policies and other documents and accounts and perform such other acts as may be required for such compliance.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-765 - Powers of reciprocal insurers

20-765.
Powers of reciprocal insurers
A. A reciprocal insurer may,  upon qualifying therefor as provided for by this title,  transact any kind or kinds of insurance defined by this title,  other than life or title insurances.
B. Such an insurer may purchase reinsurance upon the risk of any subscriber,  and may grant reinsurance as to any kind of insurance it is authorized to transact directly.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-766 - Name of insurer; designation by name as party in action

20-766.
Name of insurer;  designation by name as party in action
A reciprocal insurer shall have and use a business name which shall include the word " reciprocal, "  " inter-insurer, "  " inter-insurance, "  " exchange, "  " underwriters"  or " underwriting, "  and shall sue and be sued in its own name.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-767 - Attorney-in-fact of reciprocal insurers

20-767.
Attorney-in-fact of reciprocal insurers
A. " Attorney, "  as used in this article refers to the attorney-in-fact of a reciprocal insurer. The attorney may be an individual,  firm or corporation.
B. The attorney of a foreign or alien reciprocal insurer,  which insurer is duly authorized to transact insurance in this state,  shall not,  by virtue of discharge of its duties as such attorney with respect to the insurer's transactions in this state,  be thereby deemed to be doing business in this state within the meaning of any laws of this state applying to foreign firms or corporations.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-768 - Required surplus funds

20-768.
Required surplus funds
A. A domestic reciprocal insurer formed under this article,  if it has otherwise complied with the provisions of this title,  may be authorized to transact insurance if it deposits and maintains on deposit with the state treasurer through the office of the director to transact property or vehicle insurance,  surplus funds of not less than six hundred thousand dollars.
B. A domestic reciprocal insurer may be authorized to transact additional kinds of insurance if it has otherwise complied with the provisions of this title and possesses and so maintains on deposit surplus funds in amount equal to the minimum capital required of a stock insurer for authority to transact a like combination of kinds of insurance.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-769 - Organization of reciprocal insurer

20-769.
Organization of reciprocal insurer
A. Twenty-five or more persons domiciled in this state may organize a domestic reciprocal insurer and make application to the director for a certificate of authority to transact insurance.
B. The proposed attorney shall fulfill the requirements of and shall execute and file with the director,  when applying for a certificate of authority,  a declaration setting forth:
1. The name of the insurer.
2. The location of the insurer's principal office,  which shall be the same as that of the attorney and shall be maintained within this state.
3. The kinds of insurance proposed to be transacted.
4. The names and addresses of the original subscribers.
5. The designation and appointment of the proposed attorney and a copy of the power of attorney.
6. The names and addresses of the officers and directors of the attorney,  if a corporation,  or its members,  if a firm.
7. The powers of the subscribers' advisory committee,  and the names and terms of office of the members thereof.
8. That all monies paid to the reciprocal shall,  after deducting therefrom any sum payable to the attorney,  be held in the name of the insurer and for the purposes specified in the subscribers' agreement.
9. A copy of the subscribers' agreement.
10. A statement that each of the original subscribers has in good faith applied for insurance of a kind proposed to be transacted,  and that the insurer has received from each such subscriber the full premium or premium deposit required for the policy applied for,  for a term of not less than six months at an adequate rate theretofore filed with and approved by the director.
11. A statement of the financial condition of the insurer,  a schedule of its assets and a statement that the surplus as required by section 20-768 is on hand.
12. A copy of each policy,  endorsement and application form it then proposes to issue or use.
C. The declaration shall be acknowledged by the attorney in the manner required for the acknowledgement of deeds.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-770 - Certificate of authority

20-770.
Certificate of authority
A. The certificate of authority of a reciprocal insurer shall be issued to its attorney in the name of the insurer.
B. The director may refuse,  suspend or revoke the certificate of authority,  in addition to other grounds therefor,  for failure of the attorney to comply with any provision of this title.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-771 - Power of attorney

20-771.
Power of attorney
A. The rights and powers of the attorney of a reciprocal insurer shall be as provided in the power of attorney given it by the subscribers.
B. The power of attorney shall set forth:
1. The powers of the attorney.
2. That the attorney is empowered to accept service of process on behalf of the insurer.
3. The general services to be performed by the attorney.
4. The maximum amount to be deducted from advance premiums or deposits to be paid to the attorney and the general items of expense in addition to losses,  to be paid by the insurer.
5. Except as to nonassessable policies,  a provision for a contingent several liability of each subscriber in a specified amount which amount shall be not less than one nor more than ten times the premium or premium deposit stated in the policy.
C. The power of attorney may:
1. Provide for the right of substitution of the attorney and revocation of the power of attorney and rights thereunder.
2. Impose such restrictions upon the exercise of the power as are agreed upon by the subscribers.
3. Provide for the exercise of any right reserved to the subscribers directly or through their advisory committee.
4. Contain other lawful provisions deemed advisable.
D. The terms of any power of attorney or agreement collateral thereto shall be reasonable and equitable,  and no such power or agreement shall be used or be effective in this state until approved by the director.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-773 - Bond of attorney

20-773.
Bond of attorney
A. Concurrently with the filing of the declaration provided for in section 20-769,  the attorney of a domestic reciprocal insurer shall file with the director a bond in favor of the state for the benefit of all persons damaged as a result of breach by the attorney of the conditions of his bond as set forth in subsection B of this section. The bond shall be executed by the attorney and by an authorized corporate surety,  and shall be subject to the director's approval.
B. The bond shall be in the penal sum of twenty-five thousand dollars,  aggregate in form,  conditioned that the attorney will faithfully account for all monies and other property of the insurer coming into his hands,  and that he will not withdraw or appropriate to his own use from the funds of the insurer,  any monies or property to which he is not entitled under the power of attorney.
C. The bond shall provide that it is not subject to cancellation unless thirty days advance notice in writing of cancellation is given both the attorney and the director.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-774 - Deposit in lieu of bond of attorney

20-774.
Deposit in lieu of bond of attorney
In lieu of the bond provided for in section 20-773,  the attorney may maintain on deposit with the state treasurer through the office of the director a like amount in cash or in value of securities qualified under this title as insurers' investments,  and subject to the same conditions as the bond.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-775 - Action on bond

20-775.
Action on bond
Action on the attorney's bond or to recover against any deposit made in lieu thereof may be brought at any time by one or more subscribers suffering loss through a violation of its conditions,  or by a receiver or liquidator of the insurer. Amounts recovered on the bond shall be deposited in and become part of the insurer's funds. The total aggregate liability of the surety shall be limited to the amount of the penalty of the bond.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-776 - Service of legal process; liabilities under judgment on such service

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.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-778 - Contributions to insurer

20-778.
Contributions to insurer
The attorney or other parties may advance to a domestic reciprocal insurer upon reasonable terms such funds as it may require from time to time in its operations. Amounts so advanced shall not be treated as a liability of the insurer,  and,  except upon liquidation of the insurer,  shall not be withdrawn or repaid except out of the insurer's realized earned surplus in excess of its minimum required surplus. No such withdrawal or repayment shall be made without the advance approval of the director.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-779 - Financial condition; determination

20-779.
Financial condition;  determination
In determining the financial condition of a reciprocal insurer the director shall apply the following rules:
1. He shall charge as liabilities the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis.
2. The surplus deposits of subscribers shall be allowed as assets,  except that any premium deposit delinquent for ninety days shall first be charged against the surplus deposit.
3. The surplus deposits of subscribers shall not be charged as a liability.
4. All premium deposits delinquent less than ninety days shall be allowed as assets.
5. An assessment levied upon subscribers,  and not collected,  shall not be allowed as an asset.
6. The contingent liability of subscribers shall not be allowed as an asset.
7. The computation of reserves shall be based upon premium deposits other than membership fees and without any deduction for the compensation of the attorney.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-780 - Subscribers

20-780.
Subscribers
Individuals,  partnerships and corporations of this state may make application,  enter into agreement for and hold policies or contracts in or with and be a subscriber of any domestic,  foreign or alien reciprocal insurer. Any corporation organized under the laws of this state shall,  in addition to the rights,  powers and franchises specified in its articles of incorporation,  have full power and authority as a subscriber to exchange insurance contracts through such reciprocal insurance. The right to exchange such contracts is declared to be incidental to the purposes for which such corporations are organized and to be as fully granted as the rights and powers expressly conferred upon such corporations. Government or governmental agencies,  state or political subdivisions thereof,  boards,  associations,  estates,  trustees or fiduciaries are authorized to exchange nonassessable reciprocal inter-insurance contracts with each other and with individuals,  partnerships and corporations to the same extent that individuals,  partnerships and corporations are authorized to exchange reciprocal inter-insurance contracts. Any officer,  representative,  trustee,  receiver or legal representative of any such subscriber shall be recognized as acting for or on its behalf for the purpose of the contract but shall not be personally liable upon the contract by reason of acting in such representative capacity.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-781 - Subscribers' advisory committee

20-781.
Subscribers' advisory committee
A. The advisory committee of a domestic reciprocal insurer exercising the subscribers' rights shall be selected under such rules as the subscribers adopt.
B. Not less than two thirds of the committee shall be subscribers other than the attorney,  or any person employed by,  representing or having a financial interest in the attorney.
C. The committee shall:
1. Supervise the finances of the insurer.
2. Supervise the insurer's operations to such extent as to assure conformity with the subscribers' agreement and power of attorney.
3. Procure the audit of the accounts and records of the insurer and of the attorney at the expense of the insurer.
4. Have such additional powers and functions as may be conferred by the subscribers' agreement.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-782 - Subscriber's liability

20-782.
Subscriber's liability
A. The liability of each subscriber,  other than as to a nonassessable policy,  for the obligations of the reciprocal insurer shall be an individual,  several and proportionate liability,  and not joint.
B. Except as to a nonassessable policy each subscriber shall have a contingent assessment liability,  in the amount provided for in the power of attorney or in the subscribers' agreement,  for payment of actual losses and expenses incurred while his policy was in force. Such contingent liability may be at the rate of not less than one nor more than ten times the premium or premium deposit stated in the policy,  and the maximum aggregate thereof shall be computed in the manner set forth in section 20-786.
C. Each assessable policy issued by the insurer shall contain a statement of the contingent liability,  set in type of the same prominence as the insuring clause.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-783 - Liability of subscriber on judgment against insurer

20-783.
Liability of subscriber on judgment against insurer
A. No action shall lie against any subscriber upon any obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for thirty days.
B. Any such judgment shall be binding upon each subscriber only in such proportion as his interests may appear and in an amount not exceeding his contingent liability,  if any.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-784 - Assessments

20-784.
Assessments
A. Assessments may from time to time be levied upon subscribers of a domestic reciprocal insurer liable therefor under the terms of their policies by the attorney upon approval in advance by the subscribers' advisory committee and the director,  or by the director in liquidation of the insurer.
B. Each subscriber's share of a deficiency for which an assessment is made,  but not exceeding in any event his aggregate contingent liability as computed in accordance with section 20-786,  shall be computed by applying to the premium earned on the subscriber's policy or policies during the period to be covered by the assessment,  the ratio of the total deficiency to the total premiums earned during such period upon all policies subject to the assessment.
C. In computing the earned premiums for the purposes of this section,  the gross premium received by the insurer for the policy shall be used as a base,  deducting therefrom solely charges not recurring upon the renewal or extension of the policy.
D. No subscriber shall have an offset against any assessment for which he is liable,  on account of any claim for unearned premium or losses payable.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-785 - Time limit for assessment

20-785.
Time limit for assessment
Every subscriber of a domestic reciprocal insurer having contingent liability shall be liable for,  and shall pay his share of any assessment,  as computed and limited in accordance with this article,  if:
1. While his policy is in force or within one year after its termination,  he is notified by either the attorney or the director of his intentions to levy such assessment.
2. An order to show cause why a receiver,  conservator,  rehabilitator or liquidator of the insurer should not be appointed is issued while his policy is in force or within one year after its termination.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-786 - Limitation on liability

20-786.
Limitation on liability
No one policy or subscriber as to such policy,  shall be assessed or charged with an aggregate of contingent liability as to obligations incurred by a domestic reciprocal insurer in any one calendar year,  in excess of the amount provided for in the power of attorney or in the subscribers' agreement,  computed solely upon premium earned on such policy during that year.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-787 - Nonassessable policies

20-787.
Nonassessable policies
A. If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital stock generally required of a domestic stock insurer authorized to transact like kinds of insurance,  upon application of the attorney and as approved by the subscribers' advisory committee the director shall issue his certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this state,  and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this state for so long as all such surplus remains unimpaired.
B. Upon impairment of the surplus,  the director shall forthwith revoke the certificate. The revocation shall not render subject to contingent liability any policy then in force and for the remainder of the period for which the premium has theretofore been paid,  but after such revocation no policy shall be issued or renewed without providing for contingent assessment liability of the subscriber.
C. The director shall not authorize a domestic reciprocal insurer so to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued,  unless it qualifies to and does extinguish such liability of all its subscribers and in all such policies for all kinds of insurance transacted by it,  but if required by the laws of another state in which the insurer is transacting insurance as an authorized insurer,  the insurer may issue policies providing for the contingent liability of such of its subscribers as may acquire such policies in such state,  and need not extinguish the contingent liability applicable to policies theretofore in force in such state.