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2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1542 - Capital and surplus

20-1542.
Capital and surplus
A. A mortgage guaranty insurance company shall not transact the business of mortgage guaranty insurance unless:
1. If a stock insurance company,  it has paid in capital of at least one million dollars and paid in surplus of at least one million dollars.
2. If a mutual insurance company,  it has a minimum initial surplus of two million dollars.
B. A stock company or a mutual company shall at all times thereafter maintain a minimum policyholders' surplus of at least one million five hundred thousand dollars.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1543 - Limitation on geographic concentration

20-1543.
Limitation on geographic concentration
A. A mortgage guaranty insurance company shall not:
1. Insure loans secured by a single risk in excess of ten per cent of the company's aggregate capital,  surplus and contingency reserve.
2. Have more than twenty per cent of its total insurance in force in any one standard metropolitan statistical area,  as defined by the United States department of commerce.
B. The provisions of this section shall not apply to a mortgage guaranty insurance company until it has possessed a certificate of authority in this state for three years.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1544 - Limitation on advertising

20-1544.
Limitation on advertising
A mortgage guaranty insurance company or any agent or representative of a mortgage guaranty insurance company shall not prepare or distribute or assist in preparing or distributing any brochure,  pamphlet,  report or any form of advertising to the effect that the real estate investments of any financial institution are " insured investments" ,  unless the brochure,  pamphlet,  report or advertising clearly states that the loans are insured by mortgage guaranty insurance companies possessing a certificate of authority to transact mortgage guaranty insurance in this state or are insured by an agency of the federal government.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1545 - Limitation on investment

20-1545.
Limitation on investment
A mortgage guaranty insurance company shall not invest in notes or other evidences of indebtedness secured by mortgage or other lien upon real property. This section shall not apply to obligations secured by real property,  or contracts for the sale of real property,  which are acquired in the course of the good faith settlement of claims under policies of insurance issued by the mortgage guaranty insurance company or in the good faith disposition of real property so acquired.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1547 - Mortgage guaranty insurance as monoline

20-1547.
Mortgage guaranty insurance as monoline
A. A mortgage guaranty insurance company that anywhere transacts any class of insurance other than mortgage guaranty insurance is not eligible for the issuance or renewal of a certificate of authority to transact mortgage guaranty insurance in this state.
B. A mortgage guaranty insurance company that anywhere transacts the classes of insurance defined in section 20-1541,  paragraph 4,  subdivision (b) or (c) is not eligible for a certificate of authority to transact in this state the class of mortgage guaranty insurance defined in section 20-1541,  paragraph 4,  subdivision (a). A mortgage guaranty insurance company that transacts a class of insurance defined in section 20-1541,  paragraph 4,  subdivision (a) may write up to five per cent of its insurance in force on residential property designed for occupancy by five or more families.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1548 - Underwriting discrimination

20-1548.
Underwriting discrimination
A. Nothing in this article shall be construed as limiting the right of any mortgage guaranty insurance company to impose reasonable requirements upon the lender with regard to the terms of any note or bond or other evidence of indebtedness secured by a mortgage or deed of trust,  such as requiring a stipulated down payment by the borrower.
B. A mortgage guaranty insurance company shall not discriminate in the issuance or extension of mortgage guaranty insurance on the basis of the applicant's sex,  marital status,  race,  color,  creed or national origin.
C. No policy of mortgage guaranty insurance,  excluding policies of reinsurance,  shall be written unless the insurer shall have conducted a reasonable and thorough examination of:
1. The evidence supporting credit worthiness of the borrower.
2. The appraisal report reflecting market evaluation of the property and shall have determined that prudent underwriting standards have been met.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1549 - Policy forms and premium rates filed

20-1549.
Policy forms and premium rates filed
A. A mortgage guaranty insurer shall file all policy forms,  endorsements and rates a mortgage guaranty insurer proposes to use with the director pursuant to chapter 2,  article 4.1. With respect to owner-occupied,  single-family dwellings,  the mortgage guaranty insurance policy shall provide that the borrower shall not be liable to the insurance company for any deficiency arising from a foreclosure sale.
B. Each mortgage guaranty insurance company shall adopt,  print and make available a schedule of premium charges for mortgage guaranty insurance policies. Premium charges made pursuant to the provisions of this article shall not be deemed to be interest or other charges under any other provision of law limiting interest or other charges in connection with mortgage loans. The schedule shall show the entire amount of premium charge for each type of mortgage guaranty insurance policy issued by the insurance company.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1552 - Compensating balances prohibited

20-1552.
Compensating balances prohibited
A. Except for commercial checking accounts and normal deposits in support of an active bank line of credit,  a mortgage guaranty insurance company,  its holding company or any affiliate of either such companies shall not maintain funds on deposit with the lender for which the mortgage guaranty insurance company has insured loans.
B. Any deposit account bearing interest at rates less than what is currently being paid other depositors on similar deposits or any deposit in excess of amounts insured by an agency of the federal government shall be presumed to be an account in violation of this section. A mortgage guaranty insurance company shall not use compensating balances,  special deposit accounts or engage in any practice which unduly delays its receipt of monies due or which involves the use of its financial resources for the benefit of any owner,  mortgagee of the real property or any interest in such property or any person who is acting as agent,  representative,  attorney or employee of such owner,  purchaser or mortgagee as a means of circumventing any part of this section.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1553 - Conflict of interest

20-1553.
Conflict of interest
A. If it is a member of a holding company system,  a mortgage guaranty insurance company licensed to transact business in this state shall not,  as a condition of its certificate of authority,  knowingly underwrite mortgage guaranty insurance on mortgages originated by the holding company system or an affiliate or on mortgages originated by any mortgage lender to which credit is extended,  directly or indirectly,  by the holding company system or any affiliate unless such insurance is underwritten on the same basis,  for the same consideration and subject to the same insurability requirements as insurance provided to nonaffiliated lenders.
B. A mortgage guaranty insurance company,  the holding company system of which it is a part or any affiliate shall not,  as a condition of the mortgage guaranty insurance company's certificate of authority,  pay any commissions,  remuneration,  rebates or engage in activities proscribed in sections 20-1551 and 20-1552.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1555 - Loss reserve

20-1555.
Loss reserve
A mortgage guaranty insurance company shall compute and maintain adequate case basis and other loss reserves which accurately reflect loss frequency and loss severity and shall include components for claims reported and unpaid,  and for claims incurred but not reported,  including estimated losses on:
1. Insured loans which have resulted in the conveyance of property which remains unsold.
2. Insured loans in the process of foreclosure.
3. Insured loans in default for four months or for any lesser period which is defined as default for such purposes in the policy provisions.
4. Insured leases in default for four months or for any lesser period which is defined as default for such purposes in policy provisions.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1556 - Contingency reserve

20-1556.
Contingency reserve
A. In addition to the paid in capital and surplus provided in section 20-1542 each mortgage guaranty insurer shall establish a contingency reserve after establishing the unearned premium reserve. The mortgage guaranty insurer shall annually contribute to the contingency reserve an amount that in the aggregate is the greater of either fifty percent of the net earned premium or the minimum policyholder position required by section 20-1550 divided by ten. The annual contributions to the contingency reserve made during each calendar year shall be maintained for a period of one hundred twenty months,  except that the insurer may make withdrawals in any year in which the actual incurred losses and loss expenses exceed thirty-five percent of the corresponding net earned premiums,  and these releases shall not be made without prior approval by the insurance director or commissioner of the insurer's state of domicile.
B. In addition to withdrawals made pursuant to subsection A of this section,  with the prior approval of the insurance director or commissioner of the insurer's state of domicile,  the mortgage guaranty insurer may withdraw from the contingency reserve an amount that is not more than the amount by which the policyholder position exceeds the minimum policyholder position prescribed in section 20-1550. The mortgage guaranty insurer shall provide or identify any information,  analysis and other necessary documentation that supports the request submitted to the director or commissioner.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1556.01 - Premium deficiency reserve

20-1556.01.
Premium deficiency reserve
If the mortgage guaranty insurance company's anticipated losses,  loss adjustment expenses,  commissions and other acquisition costs and maintenance costs are more than the recorded unearned premium reserve,  contingency reserve and estimated future renewal premiums on existing policies,  the company shall establish a premium deficiency reserve by recording an additional liability for the deficiency according to the accounting practices and procedures manual adopted by the national association of insurance commissioners.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1558 - Miscellaneous reserves

20-1558.
Miscellaneous reserves
A. If the laws of any other jurisdiction in which a mortgage guaranty insurance company,  subject to the requirement of this article is also licensed to transact mortgage guaranty insurance,  require a larger unearned premium reserve or contingency reserve in the aggregate than that set forth in this article,  the establishment of such larger unearned premium reserve or contingency reserve in the aggregate shall be deemed to be in compliance with this article.
B. Unearned premium reserves and contingency reserves shall be computed and maintained on risks insured after the effective date of this article as required by sections 20-1554 and 20-1556. Unearned premium reserves and contingency reserves on risks insured before the effective date of this article may be computed and maintained as required previously.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1559 - Mortgage guaranty insurers; dividend payment

20-1559.
Mortgage guaranty insurers;  dividend payment
A. Notwithstanding section 20-722,  a domestic mortgage guaranty insurance company may pay dividends out of any available surplus monies if the mortgage guaranty insurance company continues to comply with the policyholder surplus and reserve requirements under this article.
B. The payment of a dividend by a domestic mortgage guaranty insurance company is subject to the requirements of section 20-481.19.
C. A domestic mortgage guaranty insurance company shall maintain sufficient liquidity.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1560 - Examinations; rules

20-1560.
Examinations;  rules
A. The director may use independent contractor examiners pursuant to sections 20-148 and 20-159 to conduct examinations to review compliance with this article. All examination and examination related expenses shall be borne by the mortgage guaranty insurer and shall be paid by the insurance examiners' revolving fund pursuant to section 20-159.
B. The director may adopt rules to carry out this article.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1561 - Law governing title insurers

20-1561.
Law governing title insurers
A. This article applies to all title insurers,  title insurance rating organizations,  title insurance agents,  applicants for title insurance and policyholders and to all persons and business entities engaged in the business of title insurance.
B. To the extent not modified by this article,  title insurers are subject to and governed by the other applicable sections of this title.
C. Any new insurance law enacted after January 1,  1968 does not apply to title insurers,  title insurance rating organizations,  title insurance agents,  applicants for title insurance,  title insurance policyholders or title insurance,  except by express reference therein.
D. Section 20-223 applies to title insurers.
E. Title insurance agents shall be licensed pursuant to this article. Chapter 2,  article 3 of this title does not apply to licensure of title agents except by specific reference in that article,  except that to the extent not inconsistent with this article,  section 20-285,  section 20-286,  subsections C and D and sections 20-287,  20-289,  20-289.01,  20-290,  20-291,  20-292,  20-295,  20-296,  20-297,  20-298,  20-299,  20-300 and 20-301 apply to title insurance agents.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1563 - Qualifications

20-1563.
Qualifications
A. Any foreign or domestic stock insurer authorized by its corporate charter to engage in business as a title insurer shall be entitled to the issuance of a certificate of authority as a title insurer in this state upon meeting the applicable requirements of article 1 of chapter 2 of this title,  together with the following additional requirements:
1. The insurer shall not transact any other kind of insurance.
2. The insurer shall have on deposit in public trust pursuant to section 20-213,  the sum of two hundred fifty thousand dollars,  plus fifty thousand dollars for each state or territorial subdivision of the United States,  other than the state of its domicile,  in which it shall be or become qualified to engage in the business of title insurance. When the aggregate of amounts so deposited in this or such other states or territorial subdivision has reached the sum of seven hundred fifty thousand dollars no further deposit shall be required of any domestic or foreign insurer.
3. The capital,  surplus and accumulations of every foreign insurer shall be invested in obligations,  assets and property of a kind and quality equal in value and safety to those permitted to domestic insurers by this title,  and such investments,  except with the consent of the director,  shall not exceed the limitations provided hereby with respect to domestic insurers. Subsection A of section 20-559 shall not apply to title insurers.
B. If the provisions of this title require a greater amount of capital,  surplus or deposit than the capital,  surplus or deposit of a title insurer which was the holder of a validly issued,  unexpired and unrevoked certificate of authority immediately prior to the effective date hereof,  such title insurer shall have the period ending July 1 five years after the effective date hereof within which to comply with any such increased requirement.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1565 - Additional powers

20-1565.
Additional powers
A. A title insurer may provide any other services reasonably related to the land title business and may engage in any other business which is not inconsistent with the business of issuing title insurance policies and which may be authorized by its corporate charter,  but only if such services and businesses are not prohibited to it by this title and if the title insurer qualifies for and obtains any other applicable license or certificate that is required by any other law regulating the services or business.
B. Neither a title insurer nor a title insurance agent shall engage in the business of guaranteeing the payment of the principal or the interest of bonds or other obligations.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1566 - Taxation of title insurers

20-1566.
Taxation of title insurers
A. In lieu of the premium tax provisions of section 20-224,  title insurers shall be subject to taxation on income as other private corporations.
B. The income tax required to be paid by title insurers by the provisions of subsection A of this section shall be payment in full of all demands for all state,  county,  district,  municipal and school taxes and licenses of whatever kind or character,  excepting only the fees prescribed by article 2 of chapter 1 of this title and taxes on real and tangible personal property located within this state.
C. If the provisions of section 20-230 shall operate to require any foreign title insurer to pay premium tax in this state,  such tax shall be computed on total risk premiums received by the insurer during the preceding calendar year on account of title insurance on real property in this state. The provisions of section 20-230 shall operate to require such foreign title insurer to pay only the amount of such net premium tax which is in excess of the net income tax actually paid to this state for the same calendar year by such foreign title insurer. For the purposes of this section only,  every foreign title insurer which may be required to pay premium tax in this state may file with the director as a part of or as an amendment to its schedule of fees under subsection A of section 20-376 a statement of the risk premium included in its schedule of fees.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1567 - Determination of insurability required

20-1567.
Determination of insurability required
A. No policy or contract of title insurance shall be written on any risk located in this state except by a title insurer authorized to do business in this state,  nor unless and until the title insurer has caused to be conducted a reasonable examination of the title and has caused to be made a determination of insurability of title in accordance with sound underwriting practices for title insurers.
B. No title insurer shall write title insurance in,  nor issue any title insurance policy with respect to risks located in,  any county of this state with a population,  as shown by the latest decennial census,  in excess of one hundred thousand persons,  unless the title insurer or its agent in that county maintains a title insurance plant covering title records of such county,  or unless the insurer issues its policy based on a policy issued to it by another title insurance company,  or its agent,  who meets the requirements of this section provided,  however,  that for the purposes of this subsection a title insurer or title insurance agent shall be deemed to maintain a title insurance plant if it is a lessee thereof or joint owner or has a beneficial interest in such a plant.
C. This section shall not apply to a reinsurer or an excess coinsurer,  provided the originating insurer complies with subsections A and B.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1568 - Unearned premium reserve

20-1568.
Unearned premium reserve
A. Every title insurer shall,  in addition to other reserves,  establish and maintain a reserve to be known as the " unearned premium reserve"  for title insurance on real estate,  which shall,  at all times and for all purposes,  be deemed and shall constitute the unearned portions of premiums due or received on account of such insurance and shall be charged as a reserve liability of such title insurer in determining its financial condition. A foreign title insurer doing business in this state may establish an unearned premium reserve for title insurance on real estate in accordance with the laws of its domiciliary state,  provided an unearned premium reserve is mandatory under the law of its domiciliary state and such law is substantially equivalent to the requirements of this title.
B. The unearned premium reserve for title insurance on real estate shall be retained and held by such title insurer for the protection of the policyholders' interest in policies on real estate which have not expired. Except as provided in section 20-1571,  assets equal to the amount of such reserve shall not be subject to distribution among other creditors or stockholders of such title insurer until all claims of policyholders or holders of title insurance contracts or agreements of such title insurer have been paid in full and all liability on the policies or title insurance contracts or agreements,  whether contingent or actual,  has been discharged or lawfully reinsured. Income from the investment of the amount of such reserve shall be the unrestricted property of the title insurer.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1569 - Amount of unearned premium reserve; release

20-1569.
Amount of unearned premium reserve;  release
A. The unearned premium reserve of every title insurer shall consist of:
1. The amount of the unearned premium reserve held as of January 1,  1968.
2. The amount of all additions required to be made to the reserve by this section,  less withdrawals permitted by this section.
B. Every title insurer shall add to its unearned premium reserve in respect to each title insurance policy,  whether primary insurance,  reinsurance or coinsurance,  issued by it on real estate a sum of money out of the fees due or received for the title insurance and deemed to be unearned portions of fees and a sum equal to ten cents for each one thousand dollars of the face amount of net retained liability,  as defined in section 20-1562,  and shall separately record the aggregate amounts set aside and reserved with respect to policies,  contracts or agreements written in each calendar year.
C. The amounts set aside as additions to the unearned premium reserve shall be deducted in determining net profits of any title insurer.
D. For the purpose of determining the amounts of the unearned premium reserve that may be withdrawn pursuant to subsection E of this section,  and the interest of the policyholders under section 20-1571,  all policies of title insurance shall be considered as dated on July 1 in the year of issue.
E. The aggregate of the amounts set aside in unearned premium reserve in any calendar year pursuant to subsection B of this section shall be released from the reserve and restored to income in the year of release pursuant to the formula prescribed in the accounting practices and procedures manual adopted by the national association of insurance commissioners.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1570 - Maintenance of the unearned premium reserve

20-1570.
Maintenance of the unearned premium reserve
If by reason of any cause,  other than depreciation in the market value of investments,  the amount of the assets of a title insurer held as investments of its unearned premium reserve should on any date be less than the amount required to be maintained by law in such reserve,  and the deficiency shall not be promptly cured,  such title insurer shall forthwith give written notice thereof to the director and shall issue no further title insurance policies,  whether of policy insurance,  reinsurance or coinsurance,  until the deficiency shall have been eliminated and until it shall have received written approval from the director authorizing it again to issue such policies.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1571 - Use of the unearned premium reserve on liquidation, dissolution or insolvency

20-1571.
Use of the unearned premium reserve on liquidation,  dissolution or insolvency
A. If an order of rehabilitation or of liquidation shall have been entered with respect to a title insurer in accordance with the provisions of article 4 of chapter 3 of this title,  then,  and notwithstanding the provisions of such article:
1. Such amount of the assets of such title insurer equal to the unearned premium reserve then remaining as is necessary may be used to pay for reinsurance of the liability of such title insurer upon all outstanding policies of title insurance,  as to which claims for losses by the holders are not then pending,  the balance,  if any,  of assets equal to the unearned premium reserve fund then remaining,  then to be transferred to the general assets of the title insurer.
2. The assets other than the unearned premium reserve shall be available to pay claims for losses sustained by holders of policies then pending or arising up to the time reinsurance is effected. In the event that claims for losses are in excess of such other assets of the title insurer,  such claims,  when established,  shall be paid pro rata out of the surplus assets attributable to the unearned premium reserve,  to the extent of such surplus,  if any.
B. In the event that reinsurance is not obtained,  the unearned premium reserve and assets constituting minimum capital,  or so much as remains thereof after outstanding claims have been paid,  shall constitute a trust fund to be held by the director for twenty years,  out of which claims of policyholders shall be paid as they arise. The balance,  if any,  of such fund shall,  at the expiration of twenty years,  revert to the general assets of the title insurer.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1572 - Reserve for unpaid losses and loss expense

20-1572.
Reserve for unpaid losses and loss expense
A. Each title insurer shall at all times establish and maintain,  in addition to other reserves,  a reserve against unpaid losses,  and against loss expense,  and shall calculate the reserves by making a careful estimate in each case of the loss and loss expense likely to be incurred,  by reason of every claim presented,  pursuant to notice from or on behalf of the insured,  of a title defect in or lien or adverse claim against the title insured,  that may result in a loss or cause expense to be incurred for the proper disposition of the claim. The sums of the items estimated pursuant to this section shall be the total amounts of the reserves against unpaid losses and loss expenses of the title insurer.
B. In combination with the reserves prescribed in section 20-1569 and subsection A of this section,  each title insurer shall establish a supplemental reserve that consists of all other reserves that are necessary to cover the insurer's liabilities for all losses,  claims and loss adjustment expenses.
C. The amounts estimated pursuant to this section may be revised from time to time as circumstances warrant,  but shall be redetermined at least once each year.
D. The amounts set aside in the reserves in any year shall be deducted in determining the net profits of any title insurer for that year.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1573 - Net retained liability

20-1573.
Net retained liability
A. The net retained liability of any title insurer under any single insurance risk as defined in section 20-1562,  paragraphs 4 and 7 shall not exceed fifty per cent of the net amount remaining after deducting from the sum of its capital,  surplus,  unearned premium reserve and voluntary reserves the value,  if any,  assigned in such summation to its title insurance plants,  all as shown in its most recent report on file with the director. The same limitation shall apply to any secondary risk assumed by means of reinsurance or coinsurance except,  whenever the primary retained liability of a ceding company shall equal or exceed ten per cent of the single insurance risk liability,  the net retained or assumed liability limit of this section may be increased by an additional two hundred fifty thousand dollars,  but in no event above one hundred per cent of the net amount remaining after deducting from the sum of its capital and surplus the value,  if any,  assigned in such summation to its title insurance plants,  all as shown by its most recent report on file with the director.
B. Nothing in this section is intended to limit the amount of a single insurance risk,  as defined in section 20-1562,  paragraph 7,  that may be written or assumed by a title insurer,  provided,  however,  that every title insurer shall cede,  to one or more other title insurers,  on or before the effective date of such writing or assumption,  such portion,  or portions,  of any risk as shall be sufficient to bring its net retained liability thereunder within the limits set forth in this section;  and provided further that each such cession of risk shall also be within the limits of this section as applied to the sum of the capital,  surplus,  unearned premium reserve and voluntary reserves,  less the value,  if any,  assigned in such summation to the title insurance plants of the assuming and reinsuring title insurer,  as shown by its most recent report on file with the supervisory agency in the state of its domicile.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1574 - Power to reinsure

20-1574.
Power to reinsure
A. Any title insurer authorized to engage in the business of title insurance in this state may cede reinsurance of all or any part of its liability under one or more of its title insurance policies to any title insurer authorized to engage in the business of title insurance in this or any other state,  provided,  however,  that no larger amount of reinsurance shall be ceded to any title insurer on a single policy of title insurance,  or on any single title insurance risk,  than such title insurer would be permitted to retain if authorized to engage in the business of title insurance in this state.
B. Any title insurer authorized to do business in this state may also reinsure policies of title insurance issued by other companies on risks whether located in this state or elsewhere.
C. Issuance of contracts of reinsurance by a title insurer not authorized to engage in the business of title insurance in this state,  but authorized to engage in the business of title insurance in any of the United States,  reinsuring a title insurer authorized to engage in the business of title insurance in this state on real property located in this state,  shall not of itself constitute the doing of business in this state by such reinsurer.
D. No agreement by any domestic title insurer for the reinsurance of all or substantially all its business in force shall be effective unless it shall comply with the provisions of section 20-732.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1575 - Foreign title insurers; resident agent required

20-1575.
Foreign title insurers;  resident agent required
A. A title insurer that is not incorporated under the laws of this state,  but is authorized to transact business herein,  shall not make,  write,  place or cause to be made,  written or placed any policy or contract of insurance covering real property in this state except:
1. Through a title insurance agent as defined in section 20-1562.
2. Through a bona fide branch office located in this state and under the direction and control of such title insurer,  all expenses of which branch office,  including compensation of all employees,  are paid by such title insurer.
3. Through a subsidiary title insurer.
B. This section does not apply to contracts of reinsurance or excess coinsurance.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1576 - Mergers and consolidations of title insurers

20-1576.
Mergers and consolidations of title insurers
A. A title insurer incorporated under the laws of this state may merge,  be merged by or consolidated with,  one or more title insurers whether or not so incorporated,  by complying with the provisions of general law governing the merger or consolidation of stock corporations formed for profit,  but subject to the further provisions of this section:
1. No such merger or consolidation shall be effectuated unless in advance thereof,  the plan and agreement therefor have been filed with the director. The director shall examine the terms and conditions of such merger or consolidation,  and of any exchange of shares or securities pursuant thereto,  after holding a hearing at which all persons or parties to whom it is proposed to issue shares or securities in such exchange shall have the right to appear. After such hearing,  the director shall either approve or disapprove the fairness of such terms and conditions of exchange. The director shall give such approval within a reasonable time after filing of a plan or agreement unless he finds such plan or agreement:
(a) Is contrary to law;  or
(b) Inequitable to the stockholders of such insurer;  or
(c) Would substantially reduce the security of and services to be rendered to policyholders of the domestic title insurer in this state or elsewhere.
2. Where such merger or consolidation involves a parent company absorbing a wholly-owned subsidiary,  the director may,  in his discretion,  dispense with the holding of a hearing.
B. No director,  officer,  agent or employee of any title insurer party to such acquisition shall receive any fee,  commission,  compensation or other valuable consideration whatsoever for in any manner aiding,  promoting or assisting therein except as set forth in such plan or agreement.
C. If the director does not approve any such plan or agreement,  he shall notify the title insurer in writing specifying in detail his reasons therefor.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1577 - Corporate acquisitions other than by merger or consolidation

20-1577.
Corporate acquisitions other than by merger or consolidation
A. A title insurer incorporated under the laws of this state may issue stock in exchange for all or any part of the assets or stock of a domestic or foreign title insurer,  abstract company or title insurance agent if,  in advance thereof,  a plan or agreement of acquisition shall have been filed with the director. The director shall examine the terms and conditions of such plan or agreement of acquisition,  and of any exchange of shares or securities pursuant thereto,  after holding a hearing at which all persons or parties to whom it is proposed to issue shares or securities in such exchange shall have the right to appear. After such hearing,  the director shall either approve or disapprove the fairness of such terms and conditions of such acquisition and exchange. The director shall give such approval within a reasonable time after filing of a plan or agreement unless he finds such plan or agreement either:
1. Is contrary to law.
2. Is inequitable to the stockholders of any title insurer or abstract company involved.
3. Would substantially reduce the security of and services to be rendered to policyholders of the domestic title insurer in this state or elsewhere.
B. No director,  officer,  agent or employee of any title insurer or abstract company party to such acquisition shall receive any fee,  commission,  compensation or other valuable consideration whatsoever for in any manner aiding,  promoting or assisting therein except as set forth in such plan or agreement.
C. If the director does not approve any such plan or agreement,  he shall notify the title insurer in writing specifying in detail his reasons therefor.
D. If the assets or stock to be acquired are held by a domestic corporation,  such corporation shall comply with,  and its stockholders shall have the rights set forth in title 10,  chapter 13.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1578 - Purchase or acquisition of controlling stock

20-1578.
Purchase or acquisition of controlling stock
A. In the event any person or persons propose to purchase or acquire the controlling capital stock of any domestic title insurer,  such person or persons shall first make application to the director for approval of such purchase or acquisition. The application shall contain the name and address of the proposed new owner or owners of the controlling stock,  and the director shall approve the proposed purchase or acquisition only after he has become satisfied that such purchase or acquisition will not result in violation of the anti-rebate provisions or controlled business provisions of this article,  that the proposed new owner or owners of the controlling stock are qualified by character,  experience and financial responsibility to control and operate the title insurer in a lawful and proper manner,  and that the interests of the stockholders and policyholders of the title insurer and the interests of the public generally will not be jeopardized by the proposed change in ownership and management. If the director does not,  by affirmative action,  approve or disapprove the proposed purchase or acquisition within thirty days after the date on which such application was so filed with him,  the proposed purchase or acquisition shall be deemed to be approved at the expiration of such thirty-day period.
B. No such purchase or acquisition of a domestic title insurer shall be effectuated unless approved as provided in subsection A of this section.
C. In the event the director disapproves the proposed purchase or acquisition,  he shall give written notice thereof to the person or persons so applying for approval,  setting forth in detail the reasons for disapproval.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1580 - Title insurance agents to be licensed

20-1580.
Title insurance agents to be licensed
A. Title insurance agents shall be licensed by the director. Application for license shall be made on forms approved by the director,  and the director shall issue a license upon completion and filing the application and payment of the license fee specified in section 20-167.
B. Licenses of title insurance agents shall expire quadrennially at midnight on the last day of the same month four years after the license was issued or renewed unless sooner terminated by the withdrawal by the insurer of authority in the agent,  or unless revoked by the director.
C. Title insurance agents' licenses shall be renewed quadrennially on the filing of an application containing such information as the director deems necessary.
D. The director may grant a temporary license to a corporation or limited liability company that is qualified for licensing as a title insurance agent. The license shall remain in force and effect for a period of six months. If the applicant fails to qualify for a regular title insurance agent's license as provided in this section,  no renewal or extension may be granted.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1581 - Title insurance agents; books; records; revocation of license

20-1581.
Title insurance agents;  books;  records;  revocation of license
A. Every title insurance agent shall keep books of account,  records and vouchers pertaining to the business of title insurance in such a manner that the director may readily ascertain from time to time whether the agent has complied with all applicable provisions of law.
B. A title insurance agent may engage in the business of handling escrows of real property transactions so long as it maintains a separate record of all receipts and disbursements of escrow funds and does not commingle any such funds with its own funds or with funds held by it in any other capacity.
C. If at any time the director determines that a title insurance agent has failed to comply with any applicable provision of law other than any provision of title 6,  chapter 7,  has been guilty of fraudulent conduct toward the public or any title insurer,  or has violated any applicable insurance law,  he may,  after notice and hearing,  revoke the license of such agent.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1582 - Title insurance agents; replies to inquiries by director

20-1582.
Title insurance agents;  replies to inquiries by director
Every title insurance agent shall promptly reply,  in writing,  with a copy thereof to each title insurer for which the agent is acting,  to any inquiry of the director relative to the business of title insurance,  and failure to reply shall be a ground for revocation of the agent's license. A copy of any inquiry sent by the director to any agent relative to the agent's conduct of the business of title insurance shall also be sent by the director to each title insurer for which the agent is acting.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1585 - Commissions; other considerations prohibited

20-1585.
Commissions;  other considerations prohibited
No title insurer and no title insurance agent shall pay or give to any applicant for insurance,  or to any person who is acting as agent,  representative,  attorney or employee of the owner,  lessee,  or mortgagee or of the prospective owner,  lessee or mortgagee of the real property or any interest therein,  either directly or indirectly,  any commission or any part of its fees or charges including,  but not limited to,  fees for escrow services performed by a title insurer or title insurance agent,  or any other consideration or valuable thing,  as an inducement for,  or as compensation for,  any title insurance business.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1586 - Rebates or reduced fees

20-1586.
Rebates or reduced fees
A. No title insurer nor title insurance agent shall knowingly make any rebate of any portion of the fee or charge established pursuant to section 20-376.
B. No title insurer nor title insurance agent shall knowingly quote any fee or make any charge for a title insurance policy to any person which is less than that allowable pursuant to section 20-376. The amount by which any fee or charge is less than that prescribed by section 20-376 is an unlawful rebate.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1587 - Personal or controlled insurance

20-1587.
Personal or controlled insurance
A. As used in this article " personal or controlled insurance"  means a policy of title insurance where the insured or one of the insureds under such policy is,  or the loss thereunder is payable to:
1. The title insurer issuing such policy for its own benefit rather than as a fiduciary,  or
(a) Any person directly or indirectly owning or controlling a majority of the voting stock or controlling interest in such title insurer,  or
(b) Any corporation which is directly or indirectly controlled by a person who also directly or indirectly owns or controls the title insurer,  or
(c) Any corporation making consolidated returns for United States income tax purposes with such title insurer or with any corporation which controls or is under common control with such title insurer.
2. The title insurance agent issuing such policy,  for his own benefit rather than as a fiduciary,  or
(a) Any person directly or indirectly owning or controlling a majority of the voting stock or controlling interest in such agent,  or
(b) Any corporation which is directly or indirectly controlled by a person who also controls the title insurance agent,  or
(c) Any corporation making consolidated returns for United States income tax purposes with the agent or any corporation which controls or is under common control with the agent.
B. If the fees and charges received in any one calendar year by a title insurer or by a title insurance agent for personal or controlled insurance from any single source shall exceed twenty-five per cent,  or for personal or controlled insurance from all sources shall exceed fifty per cent,  of the total fees and charges received by such title insurer or by such title insurance agent for title insurance issued in the same year in this state,  the excess shall be deemed to be unlawful rebate.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1588 - Examination of records; order; notice

20-1588.
Examination of records;  order;  notice
A. If he has reason to believe that any title insurance agent has violated or is violating any of the provisions of this article,  the director shall forthwith examine such title insurance agent's books of account,  records and vouchers pertaining to the business of title insurance,  and any title insurance agent so examined shall pay to the director the cost of such examination on demand.
B. The director's order after an examination of a title insurer and its authorized title insurance agents shall describe each violation found by the director,  the name of the title insurer or title insurance agent that caused or committed the violation and the penalty,  if any,  imposed for each violation.
C. After an examination of a title insurer and its authorized title insurance agents,  a copy of the director's order or notice to the title insurer under section 20-151 shall be provided to each title insurance agent of the title insurer affected by the order or notice.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1591 - Forms of policies and other contracts of title insurance; approval or disapproval

20-1591.
Forms of policies and other contracts of title insurance;  approval or disapproval
A. Every title insurer shall file with the director all forms of title policies and other contracts of title insurance before issuance of any policy or contract. A title insurance rating organization may make filings on behalf of all of its members or subscribers. A title insurer shall not issue any policy or contract until thirty days after the policy or contract has been filed with the director. A policy or contract is approved thirty days after filing unless the director has issued,  within the thirty day period,  an order affirmatively approving or disapproving the form. On written notice given within the thirty day period to the person making the filing,  the director may extend the period for up to fifteen additional days to enable the director to complete the review of the filing.
B. Forms of title policies and other contracts of insurance,  as used in this section,  shall specifically exclude:
1. Reinsurance contracts or agreements,
2. All specific defects in title that may be ascertained from an examination of the risk and excepted in reports,  binders or policies,  together with any affirmative assurance of the title insurer with respect to the defects whether given by endorsement or otherwise,  and
3. Further exceptions from coverage by reason of limitations on the examination of the risk imposed by an applicant for insurance or through failure of an applicant for insurance to provide the date requisite to a judgment of insurability.