Bill Text: AZ HB2121 | 2014 | Fifty-first Legislature 2nd Regular | Chaptered
Bill Title: Insurers; licensure; director examination
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2014-04-15 - Chapter 29 [HB2121 Detail]
Download: Arizona-2014-HB2121-Chaptered.html
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House Engrossed |
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State of Arizona House of Representatives Fifty-first Legislature Second Regular Session 2014
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CHAPTER 29
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HOUSE BILL 2121 |
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AN ACT
Amending sections 20‑156, 20‑287, 20‑288, 20‑340.01 and 20‑415, Arizona Revised Statutes; amending title 20, chapter 2, article 13, Arizona Revised Statutes, by adding section 20-489.01; relating to insurance.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-156, Arizona Revised Statutes, is amended to read:
20-156. Examination of insurers; financial surveillance fund; definition
A. The director shall examine the affairs, transactions, accounts, records and assets of each authorized insurer as often as the director deems advisable. The director shall so examine each domestic insurer, domestic life and disability reinsurer as defined in section 20‑1082, service company as defined in section 20‑1095 and mechanical reimbursement reinsurer as defined in section 20‑1096 at least once every five years. Examination of an alien insurer shall be limited to its insurance transactions in the United States. The director may examine the business transactions and affairs of each domestic life and disability reinsurer as defined in section 20‑1082, service company as defined in section 20‑1095 and mechanical reimbursement reinsurer as defined in section 20‑1096.
B. The director shall in like manner examine each insurer applying for an initial certificate of authority to do business in this state.
C. In lieu of making an examination, the director may accept a full report of the last recent examination of a foreign or alien insurer, certified to by the insurance supervisory official of another state, territory, commonwealth or district of the United States.
D. The expenses of the examinations conducted under this section shall be paid by the insurance examiners' revolving fund as provided in section 20‑159. Such expenses shall be limited to preexamination selection and preparation costs, examination costs, postexamination costs and other such costs of evaluations of compliance required by law.
E. The financial surveillance fund is established consisting of monies collected pursuant to subsection F of this section. The fund is a special state fund pursuant to section 35‑142, subsection A, paragraph 8. The department shall administer the fund. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.
F. The director shall annually assess and collect from each domestic insurer, other than a domestic life and disability reinsurer as defined in section 20‑1082, a service company as defined in section 20‑1095, and a mechanical reimbursement reinsurer as defined in section 20‑1096, an amount within the ranges provided in this subsection and on a uniform percentage basis among all fee categories, to pay the costs of employing financial analysts who shall assist the department in conducting financial surveillance of domestic insurers. The director shall deposit all collected monies in the financial surveillance fund. The director shall base the amount of each insurer's assessment on the total admitted assets of the insurer as shown in its annual statement for the calendar year preceding the year in which the assessment is made, according to the following schedule:
Minimum Maximum
Assessment Amount Assessment Amount
Insurers with total admitted
assets of greater than
$1,000,000,000 $15,000 $22,500
Insurers with total admitted
assets of at least $200,000,000
but not more than $1,000,000,000 $ 5,000 $ 7,500
Insurers with total admitted
assets of at least $100,000,000
but not more than $199,999,999 $ 3,000 $ 4,500
Insurers with total admitted assets
of at least $50,000,000 but not
more than $99,999,999 $ 1,500 $ 2,250
Insurers with total admitted assets
of at least $25,000,000 but not
more than $49,999,999 $ 500 $ 750
Insurers with total admitted
assets of not more than
$24,999,999 $ 250 $ 375
G. For the purposes of this section, "insurer" includes health care services organizations, prepaid dental plan organizations, hospital service corporations, medical service corporations, dental service corporations and hospital, medical, dental and optometric service corporations incorporated in this state.
Sec. 2. Section 20-287, Arizona Revised Statutes, is amended to read:
20-287. Nonresident licensing
A. Unless the director denies a license pursuant to section 20‑295, the director shall issue a nonresident person a nonresident Insurance producer license if all of the following apply:
1. The person is currently licensed as a resident and in good standing in the person's home state.
2. The person has submitted the proper request for licensure and has paid the fees prescribed in section 20‑167.
3. The person has submitted the application for licensure as an insurance producer that the person submitted to the person's home state or a completed uniform application on a form prescribed by the national association of insurance commissioners.
4. The person's home state issues nonresident insurance producer licenses to residents of this state on the same basis.
B. A nonresident insurance producer who moves from one state to another state or To remain continuously licensed in this state, a resident insurance producer who moves from this state to another state shall file, within thirty days after requesting a clearance letter, a change of address form as prescribed in section 20‑286, subsection C and provide apply for licensure from the new resident state. After receiving the license from the new resident state, the insurance producer shall immediately notify the director with certification of licensure from the new resident state within thirty days after receiving of the new resident license. A fee or license application is not required.
C. Notwithstanding any other provision of this chapter, the director shall issue:
1. A nonresident surplus lines broker license pursuant to subsection A of this section to a person who is licensed as a surplus lines producer or broker in the person's home state. Except as provided in subsection A of this section, this section does not amend or supersede article 5 of this chapter.
2. A nonresident insurance producer license pursuant to subsection A of this section to a person who is licensed in the person's home state to transact limited lines insurance. The license shall grant the person the same scope of authority granted under the license issued by the person's home state. For the purposes of this paragraph, limited lines insurance is any authority that is granted by the home state and that restricts the authority of the license to less than the total authority prescribed in the associated major line insurance.
D. Except as otherwise provided in this title, a nonresident licensee is subject to this title as though the licensee were licensed as a resident.
Sec. 3. Section 20-288, Arizona Revised Statutes, is amended to read:
20-288. Exemption from examination
A. An individual who applies for an insurance producer license in this state and who was previously licensed for the same lines of authority in another state is not required to take an examination if either:
1. The applicant is currently licensed in the other state.
2. The application is received within ninety days after the cancellation of the applicant's previous resident license that the applicant held in another state and the other state issues a certification that, at the time of cancellation, the applicant was in good standing in that state, or other reliable information available to the director indicates that the applicant is or was licensed in good standing for the line of authority requested. This paragraph does not apply to an applicant who fails an examination administered by this state for a specific line of authority four times within a twelve‑month period, who becomes licensed as a resident in another state for the specific line of authority and who cancels the license in the other state and applies for a resident license in this state within one year of the last examination administered to the applicant by this state for the specific line of authority.
B. The following applicants are not required to take an examination:
1. An applicant for timely renewal of a license.
2. An applicant for the same type of license that covers the same lines of authority for which the applicant was licensed in this state, other than under a temporary license, within the twelve months preceding the date of application.
3. An applicant who is a ticket selling agent or any other representative of a common carrier for a limited line license that covers the sale of travel accident ticket policies or baggage insurance.
4. An applicant for a license as a nonresident insurance producer who meets the requirements of section 20‑287, subsection A.
5. An applicant for a rental car agent license that is issued pursuant to section 20‑331.
6. An applicant for a self‑service storage agent license that is issued pursuant to section 20‑332.
Sec. 4. Section 20-340.01, Arizona Revised Statutes, is amended to read:
20-340.01. Bail bond agents; licensure; business entities; place of business; receipt; maintenance of records
A. A person shall not act as a bail bond agent in this state unless the person is licensed by the director in accordance with this article. An applicant for a bail bond agent license shall submit an affidavit attesting to the applicant's residency in this state for at least one year immediately preceding the date of application.
B. Each applicant for A bail bond agent license shall submit a full set of fingerprints to the department of insurance for the purpose of obtaining a state and federal criminal records check pursuant to section 41‑1750 and Public Law 92‑544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation. The department of insurance shall not issue a license until it receives the state and federal criminal history records check and the applicant is qualified for licensure.
C. The director shall not license a resident business entity as a bail bond agent unless each owner and shareholder is individually licensed as a bail bond agent.
D. A person who is licensed as a bail bond agent in this state is not authorized in this state to transact civil bonds in connection with contracts, administrative proceedings or other noncriminal matters on behalf of a surety insurer unless the bail bond agent is also licensed as a property and casualty producer in this state.
E. Each bail bond agent shall have and maintain a place of business in this state that is accessible to the public and where the bail bond agent principally conducts transactions under the agent's license.
F. As a minimum requirement for permanent office records, each bail bond agent and general lines agent who is engaged in the bail bond business shall maintain a daily bond register that is the original and permanent record of all bonds or undertakings executed by the licensee and that states the:
1. Number of the power of attorney form.
2. Date the bond was executed.
3. Name of the principal.
4. Amount of the bond.
5. Premium charged.
6. Premium reported to the surety company.
7. Security or collateral received.
8. Date the security or collateral was received and the date released.
9. Indemnity agreements.
10. Disposition of the bond.
11. Date of disposition.
G. Each bail bond agent and general lines agent who is engaged in the bail bond business and who accepts monies or any other consideration for any bail bond undertaking shall for each payment received give to the person paying the monies or giving the consideration a prenumbered receipt as evidence of payment. The receipt must state the date, the name of the principal, a description of the consideration or amount of monies received and the purpose for which received, the number of the power of attorney form attached to the bond, the penal sum of the bond, the name of the person making the payment or giving the consideration and the terms under which the monies or other consideration shall be released. Each bail bond agent shall retain a duplicate copy of each receipt issued as part of the agent's records.
H. The bail bond agent shall keep at the agent's place of business the usual and customary records pertaining to transactions made under the license. The licensee shall keep all the records as to any particular transaction available and open to the inspection of the director at any business time during the three years immediately after the date of completion of the transaction.
I. The director may examine the business practices, books and records of any bail bond agent as often as the director deems appropriate. The bail bond agent shall pay the costs incurred for the examination.
Sec. 5. Section 20-415, Arizona Revised Statutes, is amended to read:
20-415. Statement of surplus lines insurance business transacted by broker; reporting periods
A. Each surplus lines broker shall file semiannually with the director a statement of all surplus lines insurance business covering Arizona single‑state risks transacted by the broker during the period for which the statement is being filed. The statement shall be on a form prescribed by the director and shall show:
1. Gross amount of each kind of insurance transacted.
2. Aggregate gross premiums charged.
3. Aggregate of return premiums paid to insureds.
4. Aggregate of net premiums.
5. Such additional information as may reasonably be required by the director.
B. The statement required by subsection A of this section is due on or before February 15 of each year for the preceding July through December and on or before August 15 of each year for the preceding January through June for business covering Arizona single‑state risks, except that for multistate transactions occurring on or before December 31, 2014, the statement shall be due on or before the date specified in subsection d of this section.
C. If a clearinghouse is established, is in operation and if the director enters into a multistate agreement or compact pursuant to section 20-416.01, each surplus lines broker shall file quarterly, with the clearinghouse responsible for administering the compact or multistate agreement entered into by the director pursuant to section 20‑416.01, a notarized statement of all surplus lines insurance business covering multistate risks transacted by the broker on behalf of insureds whose home state is Arizona during the calendar quarter for which the statement is being filed. The statement shall be on a form prescribed by the clearinghouse and shall include all information required by the clearinghouse. A facsimile of the original notarized statement may be submitted in lieu of the original notarized statement. The broker shall maintain the original notarized statement for a period of six years after the calendar year in which the statement was filed.
D. The statement required by subsection C of this section is due on or before February 15 for the quarter ending the preceding December 31, May 15 for the quarter ending the preceding March 31, August 15 for the quarter ending the preceding June 30 and November 15 for the quarter ending the preceding September 30.
Sec. 6. Title 20, chapter 2, article 13, Arizona Revised Statutes, is amended by adding section 20-489.01, to read:
20-489.01. Application of other laws
To the extent permitted by this article, section 20‑142, subsection E applies to this article.
APPROVED BY THE GOVERNOR APRIL 15, 2014.
FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 15, 2014.
