Arizona Administrative Code › Title 20 - COMMERCE, FINANCIAL INSTITUTIONS, AND INSURANCE › Chapter 06 - DEPARTMENT OF INSURANCE AND FINANCIAL INSTITUTIONS - INSURANCE DIVISION › Article 14 - INSURANCE HOLDING COMPANY › Section R20-6-1407 - Transactions Subject to Prior Notice - Notice Filing

Current through Register Vol. 30, No. 28, July 12, 2024
A. An insurer
				required to give notice of a proposed transaction pursuant to A.R.S. §
									20-481.12 shall furnish the
				required information on Form D, attached hereto as Appendix D, in accordance
				with the instructions in Appendix G.
B. Agreements for cost sharing services and
				management services shall at a minimum and as applicable:
1. Identify the person providing services and
				the nature of such services;
2. Set
				forth the methods to allocate costs;
3. Require timely settlement, not less
				frequently than on a quarterly basis, and compliance with the requirements in
				the Accounting Practices and Procedures Manual;
4. Prohibit advancement of funds by the
				insurer to the affiliate except to pay for services defined in the
				agreement;
5. State that the
				insurer will maintain oversight for functions provided to the insurer by the
				affiliate and that the insurer will monitor services annually for quality
				assurance;
6. Define records and
				data of the insurer to include all records and data developed or maintained
				under or related to the agreement that are otherwise the property of the
				insurer, in whatever form maintained, including, but not limited to, claims and
				claim files, policyholder lists, application files, litigation files, premium
				records, rate books, underwriting manuals, personnel records, financial
				records, or similar records within the possession, custody, or control of the
				affiliate;
7. Specify that all
				records and data of the insurer are and remain the property of the insurer,
				and;
a. Are subject to control of the
				insurer;
b. Are identifiable;
				and
c. Are segregated from all
				other persons' records and data and are readily capable of segregation at no
				additional cost to the insurer;
8. State that all funds and invested assets
				of the insurer are the exclusive property of the insurer, held for the benefit
				of the insurer and are subject to the control of the insurer;
9. Include standards for termination of the
				agreement with and without cause;
10. Include provisions for indemnification of
				the insurer in the event of gross negligence or willful misconduct on the part
				of the affiliate providing the services and for any actions by the affiliate
				that violate the provisions of the agreement required in subsections (B)(11),
				(B)(12), (B)(13), (B)(14), and (B)(15):
11. Specify that, if the insurer is placed
				into supervision, conservatorship, or receivership by the Director pursuant to
				A.R.S. §§
										20-169(3),
				20-171(A),
				20-172, or the Arizona
				Receivership Act:
a. All of the rights of the
				insurer under the agreement extend to the receiver or Director to the extent
				permitted by the law of Arizona;
b.
				All records and data of the insurer shall be identifiable and segregated from
				all other persons' records and data or readily capable of segregation at no
				additional cost to the receiver or the Director;
c. A complete set of records and data of the
				insurer will immediately be made available to the receiver or the Director,
				shall be made available in a usable format and shall be turned over to the
				receiver or Director immediately upon the receiver or the Director's request,
				and the cost to transfer data to the receiver or Director shall be fair and
				reasonable; and
d. The affiliated
				person or persons will make available all employees essential to the operations
				of the insurer and the services associated therewith for the immediate
				continued performance of the essential services ordered or directed by the
				receiver or Director;
12.
				Specify that the affiliate has no automatic right to terminate the agreement if
				the insurer is placed into supervision, conservatorship, or receivership
				pursuant to A.R.S. §§
										20-169(3),
				20-171(A),
				20-172, or the Arizona
				Receivership Act;
13. Specify that
				the affiliate will provide the essential services for a minimum period of time
				after termination of the agreement, if the insurer is placed into supervision,
				conservatorship, or receivership pursuant to A.R.S. §§
										20-169(3),
				20-171(A),
				20-172, or the Arizona
				Receivership Act, as ordered or directed by the receiver or Director.
				Performance of the essential services will continue to be provided without
				regard to pre-receivership unpaid fees, so long as the affiliate continues to
				receive timely payment for post-receivership services rendered, and unless
				released by the receiver, Director, or supervising court;
14. Specify that the affiliate will continue
				to maintain any systems, programs, or other infrastructure notwithstanding
				supervision, conservatorship or receivership pursuant to A.R.S. §§
										20-169(3),
				20-171(A),
				20-172, or the Arizona
				Receivership Act, and will make them available to the receiver or Director as
				ordered or directed by the receiver or Director for so long as the affiliate
				continues to receive timely payment for post-receivership services rendered,
				and unless released by the receiver, Director, or supervising court;
				and
15. Specify that, in
				furtherance of the cooperation between the receiver and the affected guaranty
				association or associations and subject to the receiver's authority over the
				insurer, if the insurer is placed into supervision, conservatorship, or
				receivership pursuant to A.R.S. §§
										20-169(3),
				20-171(A),
				20-172, or the Arizona
				Receivership Act, and portions of the insurer's policies or contracts are
				eligible for coverage by one or more guaranty associations, the affiliate's
				commitments under subsections (B)(11), (B)(12), (B)(13), and (B)(14) will
				extend to those guaranty association or associations.