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2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1218 - Standard provisions required in annuity and pure endowment contracts

20-1218.
Standard provisions required in annuity and pure endowment contracts
A. No annuity or pure endowment contract,  other than reversionary annuities,  survivorship annuities or group annuities,  and except as stated in this section,  shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions specified in sections 20-1219 to 20-1224,  inclusive. Any such provisions not applicable to single premium annuities or single premium pure endowment contracts shall not,  to that extent,  be incorporated therein.
B. This section shall not apply to contracts for deferred annuities included in,  or upon the lives of beneficiaries under,  life insurance policies.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1219 - Grace period in annuities

20-1219.
Grace period in annuities
In an annuity or pure endowment contract,  other than a reversionary,  survivorship or group annuity,  there shall be a provision that there shall be a period of grace of one month,  but not less than thirty days,  within which any stipulated payment to the insurer falling due after the first may be made,  subject at the option of the insurer to an interest charge thereon at a rate to be specified in the contract but not exceeding six per cent per annum for the number of days of grace elapsing before payment,  during which period of grace the contract shall continue in full force,  but in case a claim arises under the contract on account of death prior to expiration of the period of grace before the overdue payment to the insurer or the deferred payments of the current contract year,  if any,  are made,  the amount of the payments,  with interest on any overdue payments,  may be deducted from any amount payable under the contract in settlement.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1220 - Incontestability in annuities

20-1220.
Incontestability in annuities
If any statements,  other than those relating to age,  sex and identity are required as a condition to issuing an annuity or pure endowment contract,  other than a reversionary,  survivorship or group annuity,  and subject to section 20-1222,  there shall be a provision that the contract shall be incontestable after it has been in force during the lifetime of the person or of each of the persons as to whom such statements are required,  for a period of two years from its date of issue,  except for nonpayment of stipulated payments to the insurer. At the option of the insurer the contract may also except any provisions relative to benefits in the event of disability and any provisions which grant insurance specifically against death by accident or accidental means.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1221 - Application and contract as entire contract in annuities

20-1221.
Application and contract as entire contract in annuities
In an annuity or pure endowment contract,  other than a reversionary,  survivorship or group annuity,  there shall be a provision that the contract shall constitute the entire contract between the parties or,  if a copy of the application is endorsed upon or attached to the contract when issued,  a provision that the contract and the application therefor shall constitute the entire contract between the parties.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1222 - Misstatement of age in annuities

20-1222.
Misstatement of age in annuities
In an annuity or pure endowment contract,  other than a reversionary,  survivorship or group annuity,  there shall be a provision that if the age of the person or persons upon whose life or lives the contract is made,  or of any of them,  has been misstated,  the amount payable or benefits accruing under the contract shall be such as the stipulated payment or payments to the insurer would have purchased according to the correct age,  and that if the insurer makes or has made any overpayment or overpayments on account of such misstatement,  the amount thereof,  with interest at the rate to be specified in the contract but not exceeding six per cent per annum,  may be charged against the current or next succeeding payment or payments to be made by the insurer under the contract.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1223 - Dividends on annuities

20-1223.
Dividends on annuities
If an annuity or pure endowment contract,  other than a reversionary,  survivorship or group annuity,  is participating,  there shall be a provision that the insurer shall annually ascertain and apportion any divisible surplus accruing on the contract.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1224 - Reinstatement of annuities

20-1224.
Reinstatement of annuities
In an annuity or pure endowment contract,  other than a reversionary,  survivorship or group annuity,  there shall be a provision that the contract may be reinstated at any time within one year from the default in making stipulated payments to the insurer,  unless the cash surrender value has been paid,  but all overdue stipulated payments and any indebtedness to the insurer on the contract shall be paid or reinstated with interest thereon at a rate to be specified in the contract but not exceeding six per cent per annum payable annually,  and in cases where applicable the insurer may also include a requirement of evidence of insurability satisfactory to the insurer.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1225 - Standard provisions required in reversionary annuities

20-1225.
Standard provisions required in reversionary annuities
A. Except as stated herein,  no contract for a reversionary annuity shall be delivered or issued for delivery in this state unless it contains in substance each of the following provisions:
1. The reversionary annuity contract shall contain the provisions specified in sections 20-1219,  20-1220,  20-1221,  20-1222 and 20-1223,  except that under section 20-1219 the insurer may at its option provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue or deferred payment in lieu of providing for deduction of such payments from an amount payable upon settlement under the contract.
2. In reversionary annuity contracts there shall be a provision that the contract may be reinstated at any time within three years from the date of default in making stipulated payments to the insurer,  upon production of evidence of insurability satisfactory to the insurer,  and upon condition that all overdue payments and any indebtedness to the insurer on account of the contract be paid,  or,  within the limits permitted by the then cash values of the contract,  reinstated,  with interest as to both payments and indebtedness at a rate to be specified in the contract but not exceeding six per cent per annum compounded annually.
B. This section shall not apply to group annuities or to annuities included in life insurance policies,  and any such provisions not applicable to single premium annuities shall not to that extent be incorporated therein.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1226 - Limitation of liability

20-1226.
Limitation of liability
A. No life insurance policy shall be delivered or issued for delivery in this state if it contains a provision that excludes or restricts liability for death caused in a certain specified manner or occurring while the insured has a specified status,  except that a policy may contain provisions excluding or restricting coverage as specified therein in the event of death under any one or more of the following circumstances:
1. Death as a result,  directly or indirectly,  of war,  declared or undeclared,  or of action by military forces,  or of any act or hazard of such war or action,  or of service in the military,  naval or air forces or in civilian forces auxiliary thereto,  or from any cause while a member of such military,  naval or air forces of any country at war,  declared or undeclared,  or of any country engaged in such military action.
2. Death as a result of aviation.
3. Death as a result of a specified hazardous occupation or occupations.
4. Death while the insured is outside the continental United States and Canada.
B. A life insurance policy that is delivered or issued for delivery in this state may include an exclusion for death resulting from suicide that occurs within two years after the issue or reinstatement of the policy. If the owner applies for an increase in death benefits after the policy issue date,  the policy may provide an exclusion for suicide that occurs within one year after any increase in death benefits only to the extent of the increased death benefits.
C. A policy that contains any exclusion or restriction pursuant to this section shall also provide that in the event of death under the circumstances to which the exclusion or restriction is applicable,  the insurer will pay an amount not less than a reserve determined according to the commissioners reserve valuation method upon the basis of the mortality table and interest rate specified in the policy for the calculation of nonforfeiture benefits,  or if the policy provides for no such benefits,  computed according to a mortality table and interest rate determined by the insurer and specified in the policy,  with adjustment for indebtedness or dividend credit.
D. This section shall not apply to group life insurance,  disability insurance,  reinsurance or annuities,  or to any provision in a life insurance policy relating to disability benefits or to additional benefits in the event of death by accident or accidental means.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1227 - Incontestability after reinstatement

20-1227.
Incontestability after reinstatement
The reinstatement of any policy of life insurance or annuity contract delivered or issued for delivery in this state after January 1,  1955 may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides with respect to contestability after original issuance.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1228 - Policy settlements

20-1228.
Policy settlements
Any life insurer may hold under agreement the proceeds of any policy issued by it,  upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries,  and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy,  in the event the policyholder has made no such agreement,  the insurer may hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate the funds so held but may hold them as part of its general assets.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1229 - Authorized deductions from insurance proceeds

20-1229.
Authorized deductions from insurance proceeds
In determining the amount due under any life insurance policy issued,  deduction may be made of:
1. Any unpaid premiums or installments thereof for the current policy year due under the terms of the policy.
2. The amount of principal and accrued interest of any policy loan or other indebtedness against the policy then remaining unpaid.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1233 - Free look; annuity contracts

20-1233.
Free look;  annuity contracts
A. Each annuity contract delivered or issued for delivery in this state and each annuity application shall contain a notice prominently printed on or attached to the first page stating that,  on written request,  an insurer is required to provide within a reasonable time reasonable factual information regarding the benefits and provisions of the annuity contract to the contract holder and that if for any reason the contract holder is not satisfied with the annuity contract the contract holder may return the annuity contract within ten days,  or within thirty days if the contract holder is sixty-five years of age or older on the date of the application for the annuity contract,  after the contract is delivered and receive a refund of all monies paid.
B. Notwithstanding subsection A,  for variable annuity contracts,  the refund under subsection A shall equal the sum of the difference between the premiums paid,  including any policy or contract fees or other charges,  and the amounts allocated to any separate accounts under the policy or contract,  and the value of the amounts allocated to any separate accounts under the policy or contract on the date the returned policy is received by the insurer or its insurance producer.
C. The ten or thirty day return and refund provision provided in subsection A does not apply to an annuity contract supplemental to a settled annuity contract that provides for payments in consideration of accumulations from the original annuity contract and that is issued only to holders of the original contract.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1241.02 - Policy summary requirements

20-1241.02.
Policy summary requirements
A. Any policy summary required under this article shall be in writing and shall satisfy the requirements of this section.
B. A summary of a policy or contract other than a universal life policy shall contain,  to the extent applicable,  at least the following information:
1. Current death benefit.
2. Annual contract premium.
3. Current cash surrender value.
4. Current dividend.
5. Application of current dividend.
6. Amount of outstanding loan.
C. A summary of a universal life policy shall contain at least the following information:
1. The beginning and end date of the current report period.
2. The policy value at the end of the previous report period and at the end of the current report period.
3. The total amounts that have been credited or debited to the policy value during the current report period,  identifying each by type.
4. The current death benefit at the end of the current report period on each life covered by the policy.
5. The net cash surrender value of the policy as of the end of the current report period.
6. The amount of outstanding loans,  if any,  as of the end of the current report period.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1241.03 - Duties of insurance producers

20-1241.03.
Duties of insurance producers
A. An insurance producer who initiates an application shall submit to the insurer,  with or as part of the application,  a statement signed by both the applicant and the insurance producer as to whether the applicant has an existing policy or contract.
B. If the answer is " no"  to the question under subsection A of this section regarding existing coverage,  the insurance producer has no further replacement duties.
C. If the answer is " yes"  to the question under subsection A of this section regarding existing coverage,  the insurance producer shall present and read to the applicant,  not later than the time of taking the application,  a notice regarding replacements that is in a form that the director has approved or prescribed by rule.
D. The applicant and the insurance producer shall sign the notice required under subsection C of this section. The insurance producer shall leave the signed notice with the applicant. If the notice is presented electronically,  the insurer shall send the applicant a copy of the notice within three business days after the application is submitted to the insurer. In the notice the insurance producer and the applicant shall attest that the insurance producer either read the notice aloud or that the applicant did not wish the notice to be read aloud,  in which case the producer need not have read the notice aloud.
E. The notice prescribed in subsection C of this section shall:
1. Identify each policy and contract proposed to be replaced by:
(a) Name of the insurer.
(b) Name of the insured or annuitant.
(c) Policy or contract number if available.
(d) Application or receipt number if the policy or contract number is not available.
2. Include a statement as to whether each policy or contract will be replaced or whether a policy will be used as a source of financing for the new policy or contract.
F. If the application for a new policy or contract is completed in any replacement transaction,  the insurance producer shall give the applicant the original or a copy of all sales material at the time of the application for the new policy or contract. The insurance producer or insurer shall provide the applicant with a printed copy of any electronically presented sales material not later than at the time of policy or contract delivery.
G. Except as provided in section 20-1241.05,  subsection G,  in connection with any replacement transaction,  an insurance producer shall submit to the insurer to which an application for a policy or contract is presented a copy of:
1. Each document required by this section.
2. A statement identifying any preprinted or electronically presented company approved sales materials used.
3. Any individualized sales materials,  including any illustrations related to the specific policy or contract purchased.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1241.06 - Duties of existing insurer

20-1241.06.
Duties of existing insurer
A. An existing insurer shall comply with the following requirements for any replacement transaction:
1. The insurer shall retain and be able to provide the director with all notifications received,  indexed by replacing insurer,  for at least five years or until the conclusion of its next examination by the insurance regulatory authority of its state of domicile,  whichever is later.
2. Within five business days of receiving a replacement notice,  the insurer shall send the policy or contract owner a letter advising the owner of the right to receive information about the existing policy or contract values including,  if available,  an in-force illustration or a policy summary if an in-force illustration cannot be produced. The insurer shall provide the policy or contract owner with this information within five business days of the receipt of a request from the policy or contract owner.
3. On receipt of a request to borrow,  surrender or withdraw any policy values,  the insurer shall send a notice advising the policy owner that a release of policy values may affect the guaranteed elements,  nonguaranteed elements,  face amount or surrender value of the policy from which the values are released.
B. The insurer shall send the notice required by subsection A,  paragraph 3 separate from the check if the check is sent to anyone other than the policy owner. In the case of consecutive automatic premium loans,  the insurer shall send the notice only at the time of the first loan.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1241.07 - Duties of insurers with respect to direct response solicitations

20-1241.07.
Duties of insurers with respect to direct response solicitations
A. If a person applies for a policy or contract in response to a direct response solicitation,  the insurer shall require,  with or as part of each completed application for a policy or contract,  a statement asking whether the applicant,  by applying for the proposed policy or contract,  intends to replace,  discontinue or change an existing policy or contract. If the applicant indicates a replacement or change is not intended or if the applicant fails to respond to the statement,  the insurer shall send the applicant,  with the policy or contract,  a notice that the director has approved or prescribed by rule.
B. If the insurer has proposed the replacement or if the applicant indicates a replacement is intended and the insurer continues with the replacement,  the insurer shall:
1. Comply with the requirements of section 20-1241.05,  subsections C and D if the applicant furnishes the names of the existing insurer,  and the requirements of section 20-1241.05,  subsections E and F.
2. With the policy or contract,  provide the applicant or prospective applicant with a notice as required under section 20-1241.05.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1241.08 - Violations; penalties; intent

20-1241.08.
Violations;  penalties;  intent
A. Any person who does not comply with the applicable requirements of this article is subject to penalties prescribed under sections 20-220,  20-295 and 20-456. Violations include:
1. Any deceptive or misleading information set forth in sales material.
2. When completing an application,  failing to ask the applicant the pertinent questions regarding the possibility of financing or replacement.
3. The intentional incorrect recording of an answer.
4. Advising an applicant to respond negatively to any question regarding replacement in order to prevent notice to the existing insurer.
5. Advising a policy or contract owner to write directly to the company in such a way as to attempt to obscure the identity of the replacing insurance producer or company.
B. A policy or contract owner may replace existing life insurance or annuities after indicating in or as part of an application for new coverage that replacement is not intended. A pattern of such action by a policy or contract owner who buys new coverage from the same producer is deemed prima facie evidence of the insurance producer's knowledge that replacement was intended in connection with the transaction and of the insurance producer's intent to violate this article.
C. If the requirements of this article have not been met,  the replacing insurer shall provide the policy owner an in-force illustration,  if available,  a policy summary for the replacement policy or the available disclosure document for the replacement contract and the appropriate notice regarding replacements prescribed in section 20-1241.03.
D. The director may impose the following penalties for a violation of this article either separately or in combination:
1. Revocation or suspension of an insurance producer's or company's license.
2. Civil monetary penalties.
3. Forfeiture of any commissions or compensation paid to an insurance producer as a result of the transaction in connection with which the violations occurred.
4. If the director has determined that the violations were material to the sale,  the insurer may be required to make restitution,  restoration of policy or contract values and interest at the maximum lawful rate on the amount refunded in cash.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1241.09 - Rules; exemption from rule making procedures

20-1241.09.
Rules;  exemption from rule making procedures
A. The director may adopt rules necessary to implement the requirements of this article.
B. The department is exempt from title 41,  chapter 6,  articles 3 and 5 for the purposes of adopting rules that establish the form and content of any consumer notices,  disclosure forms,  buyer's guides and other forms required by this article. The requirements adopted by rule for any such notices,  forms and guides shall substantially conform to those adopted in model regulations adopted by the national association of insurance commissioners.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1242 - Definitions

20-1242.
Definitions
In this article,  unless the context otherwise requires:
1. " Contract owner"  means the owner named in the annuity contract or certificate holder in the case of a group annuity contract.
2. " Determinable elements"  means elements that are derived from processes or methods that are guaranteed at issue and that are not subject to company discretion,  but where the values or amounts cannot be determined until some point after issue. These elements include the premiums,  credited interest rates,  including any bonus,  benefits,  values,  noninterest based credits,  charges or elements of formulas used to determine any of these. These elements may be described as guaranteed but not determined at issue. An element is considered determinable if it is calculated from underlying determinable elements only or from both determinable and guaranteed elements.
3. " Generic name"  means a short title descriptive of the annuity contract being applied for or illustrated such as " single premium deferred annuity" .
4. " Guaranteed elements"  means the premiums,  credited interest rates,  including any bonus,  benefits,  values,  noninterest based credits,  charges,  or elements of formulas used to determine any of these,  that are guaranteed and determined at issue. An element is considered guaranteed if all of the underlying elements that go into its calculation are guaranteed.
5. " Insurance producer"  has the same meaning prescribed in section 20-281.
6. " Nonguaranteed elements"  means the premiums,  credited interest rates,  including any bonus,  benefits,  values,  noninterest based credits,  charges,  or elements of formulas used to determine any of these,  that are subject to company discretion and that are not guaranteed at issue. An element is considered nonguaranteed if any of the underlying nonguaranteed elements are used in its calculation.
7. " Structured settlement annuity"  means a qualified funding asset as defined in section 130(d) of the internal revenue code or an annuity that would be a qualified funding asset under section 130(d) but for the fact that it is not owned by an assignee under a qualified assignment.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1242.01 - Applicability and scope

20-1242.01.
Applicability and scope
A. This article applies to all group and individual annuity contracts and certificates except:
1. Registered or nonregistered variable annuities or other registered products.
2. Immediate and deferred annuities that contain no nonguaranteed elements.
3. Annuities used to fund:
(a) An employee pension plan that is covered by the employee retirement income security act of 1974 (29 United States Code section 1001 through 1461).
(b) A plan described by sections 401(a),  401(k) or 403(b) of the internal revenue code,  where the plan,  for purposes of the employee retirement income security act of 1974,  is established or maintained by an employer.
(c) A governmental or church plan as defined in section 414 of the internal revenue code or a deferred compensation plan of a state or local government or a tax exempt organization pursuant to section 457 of the internal revenue code.
(d) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor.
4. Structured settlement annuities.
B. Notwithstanding subsection A of this section,  this article applies if:
1. Annuities are used to fund a plan or arrangement that is funded solely by contributions an employee elects to make on a pretax or after tax basis.
2. The insurer has been notified that plan participants may choose from among two or more fixed annuity providers.
3. There is a direct solicitation of any individual employee by an insurance producer for the purchase of an annuity contract. For the purposes of this paragraph,  direct solicitation does not include any meeting held by an insurance producer solely for the purpose of educating or enrolling employees in the plan or arrangement.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1242.03 - Report to contract owners

20-1242.03.
Report to contract owners
For annuities in the payout period with changes in nonguaranteed elements and for the accumulation period of a deferred annuity,  the insurer shall provide each contract owner with a report,  at least annually,  on the status of the contract that contains at least the following information:
1. The beginning and end date of the current report period.
2. The accumulation and cash surrender value,  if any,  at the end of the previous report period and at the end of the current report period.
3. The total amounts,  if any,  that have been credited,  charged to the contract value or paid during the current report period.
4. The amount of outstanding loans,  if any,  as of the end of the current report period.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1242.05 - Rules; exemption from rule making procedures

20-1242.05.
Rules;  exemption from rule making procedures
A. The director may adopt rules that are necessary to implement the requirements of this article.
B. The department is exempt from title 41,  chapter 6,  articles 3 and 5 for the purposes of adopting rules that establish the form and content of any consumer notices,  disclosure forms,  buyer's guides and other forms required by this article. The requirements adopted by rule for any such notices,  forms and guides shall substantially conform to those adopted in model regulations adopted by the national association of insurance commissioners.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1243.01 - Scope and limitation of article

20-1243.01.
Scope and limitation of article
A. This article applies to any sale or recommendation of an annuity.
B. This article does not:
1. Affect in any manner any provision of title 44,  chapters 12 and 13.
2. Create or imply a private cause of action for a violation of this article or subject a producer to civil liability under the best interest standard of care prescribed in section 20-1243.03 or under standards that govern the conduct of a fiduciary or fiduciary relationship.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1243.02 - Exemptions

20-1243.02.
Exemptions
Unless otherwise specifically included,  this article does not apply to recommendations involving:
1. Direct response solicitations if there is no recommendation based on information collected from the consumer pursuant to this article.
2. Contracts used to fund any of the following:
(a) An employee pension or welfare benefit plan that is covered by the employee retirement and income security act of 1974 (P.L. 93-406;  88 Stat. 829;  29 United States Code sections 1001 through 1461).
(b) A plan described by section 401(a),  401(k),  403(b),  408(k) or 408(p) of the internal revenue code,  if established or maintained by an employer.
(c) A government or church plan as defined in section 414 of the internal revenue code,  a government or church welfare benefit plan or a deferred compensation plan of a state or local government or tax exempt organization under section 457 of the internal revenue code.
(d) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor.
(e) Settlements of,  or assumptions of liabilities associated with,  personal injury litigation or any dispute or claim resolution process.
(f) Formal prepaid funeral contracts.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1243.05 - Compliance; enforcement; penalties

20-1243.05.
Compliance;  enforcement;  penalties
A. An insurer is responsible for compliance with this article. If a violation occurs,  either because of the action or inaction of the insurer or its producer,  the director may order:
1. The insurer to take reasonably appropriate corrective action for any consumer who is harmed by a failure to comply with this article by the insurer,  an entity contracted to perform the insurer's supervisory duties or the producer.
2. A general agency,  independent agency or the producer to take reasonably appropriate corrective action for any consumer who is harmed by the producer's violation of this article.
3. Appropriate penalties and sanctions.
B. The director may reduce or eliminate any applicable penalty under sections 20-220,  20-295 and 20-456 for a violation of this article if corrective action for the consumer was taken promptly after a violation was discovered or the violation was not part of a pattern or practice.
C. The authority to enforce compliance with article is vested exclusively with the director.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1243.06 - Recordkeeping

20-1243.06.
Recordkeeping
A. Insurers,  general agents,  independent agencies,  business entities and producers shall maintain,  or be able to make available to the director,  records of the information collected from the consumer,  disclosures made to the consumer,  including summaries of oral disclosures,  and other information used in making the recommendations that were the basis for insurance transactions for at least five years after the insurance transaction is completed by the insurer. An insurer may but is not required to maintain documentation on behalf of a producer.
B. Records required to be maintained by this article may be maintained in paper,  photographic,  microprocess,  magnetic,  mechanical or electronic media or by any process that accurately reproduces the actual document.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1251 - Requirements for group contracts

20-1251.
Requirements for group contracts
A. Except as provided in subsection C of this section,  no life insurance policy shall be delivered in this state insuring the lives of more than one individual unless to one of the groups as provided for in section 20-1251.01 and sections 20-1252 through 20-1256 and unless in compliance with the other applicable provisions of those sections.
B. Subsection A of this section shall not apply to life insurance policies:
1. Insuring only individuals related by marriage,  blood or legal adoption.
2. Insuring only individuals having a common interest through ownership of a business enterprise,  or a substantial legal interest or equity therein,  and who are actively engaged in the management thereof.
3. Insuring only individuals otherwise having an insurable interest in each other's lives.
C. A life insurance policy may be delivered or issued for delivery in this state insuring the lives of more than one individual if,  in the director's discretion,  the director determines that the group of individuals to be insured is substantially similar to a group described in section 20-1251.01 and sections 20-1252 through 20-1256.
D. Nothing in this article validates any charge or practice illegal under any rule of law or regulation governing usury,  consumer lender loans,  retail installment sales or the like,  or extends the application of any such rule of law or regulation to any transaction not otherwise subject thereto.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1251.01 - Credit union groups

20-1251.01.
Credit union groups
The lives of a group of individuals may be insured under a policy issued to a credit union organized under the laws of this state or the federal credit union act,  which shall be considered the policyholder,  to insure eligible members for amounts of insurance related to the share balance of each member,  based upon some plan which will preclude individual selection,  for the benefit of someone other than the credit union or its officials and subject to the following requirements:
1. The members eligible for insurance under the policy shall be all the members of the credit union who meet standard physical requirement conditions of the insurer,  or all of any class or classes of them determined by conditions pertaining to their age or to membership in the credit union or both.
2. The premiums for the policy shall be paid by the policyholder,  either from the credit union's funds,  or from funds contributed by the insured members specifically for their insurance,  or from both. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members or all except those whose evidence of individual insurability is not satisfactory to the insurer.
3. The policy must cover at least twenty-five members at the date of issue.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1252 - Employee groups

20-1252.
Employee groups
The lives of a group of individuals may be insured under a policy issued to an employer,  or to the trustees of a fund established by an employer,  which employer or trustees shall be deemed the policyholder,  to insure employees of the employer for the benefit of persons other than the employer,  subject to the following requirements:
1. The employees eligible for insurance under the policy shall be all of the employees of the employer,  or all of any class or classes thereof determined by conditions pertaining to their employment. The policy may provide that the term " employees"  shall include the employees of one or more subsidiary corporations,  and the employees,  individual proprietors and partners of one or more affiliated corporations,  proprietors or partnerships if the business of the employer and of such affiliated corporations,  proprietors or partnerships is under common control through stock ownership,  contract or otherwise. The policy may provide that the term " employees"  shall include the individual proprietor or partners if the employer is an individual proprietor or a partnership. The policy may provide that the term " employees"  shall include retired employees. No director of a corporate employer shall be eligible for insurance under the policy unless such person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. No individual proprietor or partner shall be eligible for insurance under the policy unless he is actively engaged in and devotes a substantial part of his time to the conduct of the business of the proprietor or partnership. A policy issued to insure the employees of a public body may provide that the term " employees"  shall include elected or appointed officials.
2. The premium for the policy shall be paid by the policyholder,  either from the employer's funds or funds contributed by him,  or from funds contributed by the insured employees,  or from both. A policy on which no part of the premium is to be derived from funds contributed by the insured employees shall insure all eligible employees,  or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.
3. The policy must cover at least two employees at date of issue.
4. The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees or by the employer or trustees.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1253 - Debtor groups

20-1253.
Debtor groups
The lives of a group of individuals may be insured under a policy issued to a creditor,  who shall be deemed the policyholder,  to insure debtors of the creditor,  subject to the following requirements:
1. The debtors eligible for insurance under the policy shall be all of the debtors of the creditor whose indebtedness is repayable in installments,  or all of any class or classes thereof determined by conditions pertaining to the indebtedness or to the purchase giving rise to the indebtedness. The policy may provide that the term " debtors"  shall include the debtors of one or more subsidiary corporations,  and the debtors of one or more affiliated corporations,  proprietors or partnerships if the business of the policyholder and of such affiliated corporations,  proprietors or partnerships is under common control through stock ownership,  contract or otherwise.
2. The premium for the policy shall be paid by the policyholder,  either from the creditor's funds,  or from charges collected from the insured debtors,  or from both. A policy on which part or all of the premium is to be derived from the collection from the insured debtors of identifiable charges not required of uninsured debtors shall not include,  in the class or classes of debtors eligible for insurance,  debtors under obligations outstanding at its date of issue without evidence of individual insurability unless at least seventy-five per cent of the then eligible debtors elect to pay the required charges. A policy on which no part of the premium is to be derived from the collection of such identifiable charges shall insure all eligible debtors,  or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.
3. The policy may be issued only if the group of eligible debtors is then receiving new entrants at the rate of at least one hundred persons yearly,  or may reasonably be expected to receive at least one hundred new entrants during the first policy year,  and only if the policy reserves to the insurer the right to require evidence of individual insurability if less than seventy-five per cent of the new entrants become insured.
4. The amount of insurance on the life of any debtor shall at no time exceed the amount of the unpaid indebtedness.
5. The insurance shall be payable to the policyholder. Such payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of such payment.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1254 - Labor union groups

20-1254.
Labor union groups
The lives of a group of individuals may be insured under a policy issued to a labor union,  which shall be deemed the policyholder,  to insure members of the union for the benefit of persons other than the union or any of its officials,  representatives or agents,  subject to the following requirements:
1. The members eligible for insurance under the policy shall be all of the members of the union,  or all of any class or classes thereof determined by conditions pertaining to their employment,  or to membership in the union,  or both.
2. The premium for the policy shall be paid by the policyholder,  either from the union's funds,  or from funds contributed by the insured members specifically for their insurance,  or from both. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance shall insure all eligible members,  or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.
3. The policy shall cover at least two members at date of issue.
4. The amounts of insurance under the policy shall be based upon some plan precluding individual selection either by the members or by the union.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1256 - Association groups

20-1256.
Association groups
The lives of a group of individuals may be insured under a policy issued to an association,  or to a trust or to the trustee of a fund established,  created or maintained for the benefit of one or more associations. The association,  trust or trustee shall be deemed the policyholder,  to insure members of the association or associations,  employees of the association or associations and employees of members of the association or associations for the benefit of persons other than the association or associations or any of its officials,  representatives or agents,  subject to the following requirements:
1. The association or associations must have a constitution and bylaws and must be organized and maintained in good faith for a purpose other than obtaining insurance.
2. The policy must cover at least two persons at the date of issue.
3. The policy may provide that the term " employees"  shall include retired employees.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1257 - Coverage of dependents; definition

20-1257.
Coverage of dependents;  definition
A. Insurance under any group life insurance policy that is issued pursuant to section 20-1252,  20-1254 or 20-1255 may be extended to insure the dependents,  or any class or classes of dependents,  of each insured person who so elects,  in amounts in accordance with a plan that precludes individual selection by the insured persons or by the policyholder and that on the life of any one dependent or the spouse of an insured person shall not be more than one hundred per cent of the insurance on the life of the insured person.
B. Premiums for any dependent coverage issued pursuant to this section shall be paid by the policyholder,  from the policyholder's monies,  from monies contributed by the policyholder or from monies contributed by the persons insured under the group policy or from any or all of those sources.
C. A dependent insured pursuant to this section has the same conversion right as to the insurance on the dependent insured's life as is vested by the terms of the group policy in the persons insured under the group policy.
D. For the purposes of this section,  " dependent"  means the spouse of an insured person,  the minor children of an insured person and any other children of an insured person as provided in the group life insurance policy.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1258 - Standard provisions required in group life insurance policies

20-1258.
Standard provisions required in group life insurance policies
A. Except as set forth in subsection B of this section,  no policy of group life insurance shall be delivered in this state unless it contains in substance the standard provisions as required by sections 20-1259 to 20-1268,  inclusive,  or provisions which in the opinion of the director are more favorable to the persons insured,  or at least as favorable to the persons insured and more favorable to the policyholder.
B. The provisions of sections 20-1264 to 20-1268,  inclusive,  shall not apply to policies issued to a creditor to insure debtors of the creditor. The standard provisions required for individual life insurance policies shall not apply to group life insurance policies. If the group life insurance policy is on a plan of insurance other than the term plan,  it shall contain a nonforfeiture provision or provisions which in the opinion of the director is or are equitable to the insured persons and to the policyholder,  but nothing in this section shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1259 - Grace period

20-1259.
Grace period
In group life policies there shall be a provision that the policyholder is entitled to a grace period of thirty-one days for the payment of any premium due except the first,  during which grace period the death benefit coverage shall continue in force,  unless the policyholder has given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during such grace period.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1260 - Incontestability

20-1260.
Incontestability
In group life policies there shall be a provision that the validity of the policy shall not be contested,  except for nonpayment of premiums,  after it has been in force for two years from its date of issue,  and that no statement made by any person insured under the policy relating to his insurability shall be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force prior to the contest for a period of two years during the person's lifetime nor unless it is contained in a written instrument signed by him.
2023 Arizona Revised Statutes › Title 20 - Insurance › § 20-1261 - Attachment of application to policy; statements of persons insured as representations

20-1261.
Attachment of application to policy;  statements of persons insured as representations
In group life policies there shall be a provision that a copy of the application,  if any,  of the policyholder shall be attached to the policy when issued,  that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties,  and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to such person or to his beneficiary.