Bill Text: AZ SB1227 | 2011 | Fiftieth Legislature 1st Regular | Introduced
Bill Title: Insurance; unfair discrimination; motorcycles
Spectrum: Slight Partisan Bill (Republican 6-3)
Status: (Introduced - Dead) 2011-02-14 - Referred to Senate RULES Committee [SB1227 Detail]
Download: Arizona-2011-SB1227-Introduced.html
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REFERENCE TITLE: insurance; unfair discrimination; motorcycles |
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State of Arizona Senate Fiftieth Legislature First Regular Session 2011
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SB 1227 |
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Introduced by Senators Nelson: Gallardo, Gray, Pierce S; Representatives Fann, Gowan, Pancrazi, Pratt, Tovar
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AN ACT
Amending sections 20-448 and 20-461, Arizona Revised Statutes; relating to unfair discrimination.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-448, Arizona Revised Statutes, is amended to read:
20-448. Unfair discrimination; definitions
A. A person shall not make or permit any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any contract of life insurance or of life annuity or in the dividends or other benefits payable or in any other of the terms and conditions of the contract.
B. A person shall not make or permit any unfair discrimination respecting hemophiliacs or between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees or rates charged for any policy or contract of disability insurance or in the benefits payable or in any of the terms or conditions of the contract, or in any other manner whatever. The provisions of this subsection regarding hemophiliacs do not apply to any policy or subscription contract which provides only benefits for specific diseases or for accidental injuries or which provides only indemnity for blood transfusion services or replacement of whole blood products, fractions or derivatives.
C. As to kinds of insurance other than life and disability, a person shall not make or permit any unfair discrimination in favor of particular persons or between insureds or subjects of insurance having substantially like insuring, risk and exposure factors, or expense elements, in the terms or conditions of any insurance contract, or in the rate or amount of premium charged.
D. An insurer shall not refuse to consider an application for life or disability insurance on the basis of a genetic condition, developmental delay or developmental disability.
E. The rejection of an application or the determining of rates, terms or conditions of a life or disability insurance contract on the basis of a genetic condition, developmental delay or developmental disability constitutes unfair discrimination, unless the applicant's medical condition and history and either claims experience or actuarial projections establish that substantial differences in claims are likely to result from the genetic condition, developmental delay or developmental disability.
F. In addition to the provisions in subsection E of this section, the rejection of an application or the determination of rates, terms or conditions of a disability insurance contract on the basis of a genetic condition constitutes unfair discrimination in the absence of a diagnosis of the condition related to information obtained as a result of a genetic test.
G. An insurer that offers life, disability, property or liability insurance contracts shall not deny a claim incurred or deny, refuse, refuse to renew, restrict, cancel, exclude or limit coverage or charge a different rate for the same coverage solely on the basis that the insured or proposed insured is or has been a victim of domestic violence or is an entity or individual that provides counseling, shelter, protection or other services to victims of domestic violence. If an insurer that offers life, disability, property or liability insurance contracts denies a claim incurred or denies, refuses, refuses to renew, restricts, cancels, excludes or limits coverage or charges a different rate for the same coverage on the basis of a mental or physical condition and the insured or the proposed insured is or has been a victim of domestic violence, the insurer shall submit a written explanation to the insured or proposed insured of the reasons for the insurer's actions, in accordance with section 20‑2110. The fact that an insured or proposed insured is or has been the victim of domestic violence is not a mental or physical condition. Nothing contained in this subsection is intended to provide any private right or cause of action to or on behalf of any applicant or insured. It is the specific intent of this subsection to provide solely an administrative remedy to the director for any violation of this section. Nothing in this subsection prevents an insurer from refusing to issue a life insurance policy insuring a person who has been the victim of domestic violence if either of the following is true:
1. The family or household member who commits the act of domestic violence is the applicant for or prospective owner of the policy or would be the beneficiary of the policy and any of the following is true:
(a) The applicant or prospective beneficiary of the policy is known, on the basis of police or court records, to have committed an act of domestic violence.
(b) The insurer has knowledge of an arrest or conviction for a domestic violence related offense by the family or household member.
(c) The insurance company has other reasonable grounds to believe, and those grounds are corroborated, that the applicant or proposed beneficiary of a policy is a family or household member committing acts of domestic violence.
2. The applicant or prospective owner of the policy lacks an insurable interest in the insured.
H. Nothing in subsection G of this section prevents an insurer that:
1. Offers life or disability insurance contracts from underwriting coverage on the basis of an insured's or proposed insured's mental or physical condition if the underwriting:
(a) Does not consider whether or not the mental or physical condition was caused by an act of domestic violence.
(b) Is the same for an insured or proposed insured who is not the victim of domestic violence as it is for an insured or proposed insured who is the victim of domestic violence.
(c) Does not violate any other rule or law.
2. Offers property or liability insurance contracts from underwriting coverage on the basis of the insured's claims history or characteristics of the insured's property and using rating criteria consistent with section 20‑384.
I. A health care insurer shall not deny health care coverage to any individual based solely on that individual's casual or nonprofessional participation in the activity of motorcycling.
I. J. Any determination made pursuant to section 20‑2537 by the external independent review organization shall not be considered in connection with the evaluation of whether any person subject to this article has complied with this section.
J. K. A property or liability insurer may exclude coverage for losses caused by an insured's intentional or fraudulent act. The exclusion shall not deny an insured's otherwise covered property loss if the property loss is caused by an act of domestic violence by another insured under the policy and the insured who claims the property loss cooperates in any investigation relating to the loss and did not cooperate in or contribute to the creation of the property loss. The insurer may apply reasonable standards of proof for claims filed under this subsection. The insurer may limit the payment to the insured's insurable interest in the property minus any payment made to any mortgagee or other party with a secured interest in the property. This subsection does not require an insurer to pay any amount that is more than the amount of the loss or property coverage limits. An insurer who pays a claim under this subsection has the right of subrogation against any person except the victim of the domestic violence.
K. L. All insurers shall adopt and adhere to written policies that are consistent with chapter 11 of this title and that specify the procedures to be followed by employees, contractors, producers, agents and brokers to ensure the privacy of and to help protect the safety of a victim of domestic violence when taking an application, investigating a claim, pursuing subrogation or taking any other action relating to a policy or claim involving a victim of domestic violence. Insurers shall distribute the written policies to employees, contractors, producers, agents and brokers who have access to personal or privileged information regarding domestic violence.
L. M. For the purposes of this section:
1. "Developmental delay" means a delay of at least one and one‑half standard deviations from the norm.
2. "Developmental disability" has the same meaning prescribed in section 36‑551.
3. "Domestic violence" means any act that is a dangerous crime against children as defined in section 13-705 or an offense defined in section 13‑1201 through 13‑1204, 13‑1302 through 13‑1304, 13‑1502 through 13‑1504 or 13‑1602, section 13‑2810, section 13‑2904, subsection A, paragraph 1, 2, 3 or 6, section 13‑2916 or section 13‑2921, 13‑2921.01, 13‑2923 or 13‑3623, if any of the following applies:
(a) The relationship between the victim and the defendant is one of marriage or former marriage or of persons residing or having resided in the same household.
(b) The victim and the defendant have a child in common.
(c) The victim or the defendant is pregnant by the other party.
(d) The victim is related to the defendant or the defendant's spouse by blood or court order as a parent, grandparent, child, grandchild, brother or sister, or by marriage as a parent‑in‑law, grandparent‑in‑law, stepparent, step‑grandparent, stepchild, step‑grandchild, brother‑in‑law or sister‑in‑law.
(e) The victim is a child who resides or has resided in the same household as the defendant and is related by blood to a former spouse of the defendant or to a person who resides or has resided in the same household as the defendant.
4. "Gene products" means gene fragments, nucleic acids or proteins derived from deoxyribonucleic acids that would be a reflection of or indicate DNA sequence information.
5. "Genetic condition" means a specific chromosomal or single‑gene genetic condition.
6. "Genetic test" means an analysis of an individual's DNA, gene products or chromosomes that indicates a propensity for or susceptibility to illness, disease, impairment or other disorders, whether physical or mental, or that demonstrates genetic or chromosomal damage due to environmental factors, or carrier status for a disease or disorder.
Sec. 2. Section 20-461, Arizona Revised Statutes, is amended to read:
20-461. Unfair claim settlement practices
A. A person shall not commit or perform with such a frequency to indicate as a general business practice any of the following:
1. Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.
2. Failing to acknowledge and act reasonably and promptly upon communications with respect to claims arising under an insurance policy.
3. Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under an insurance policy.
4. Refusing to pay claims without conducting a reasonable investigation based upon all available information.
5. Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed.
6. Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.
7. As a property or casualty insurer, failing to recognize a valid assignment of a claim. The property or casualty insurer shall have the rights consistent with the provisions of its insurance policy to receive notice of loss or claim and to all defenses it may have to the loss or claim, but not otherwise to restrict an assignment of a loss or claim after a loss has occurred.
8. Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by the insureds.
9. Attempting to settle a claim for less than the amount to which a reasonable person would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application.
10. Attempting to settle claims on the basis of an application which that was altered without notice to, or knowledge or consent of, the insured.
11. Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which the payments are being made.
12. Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.
13. Delaying the investigation or payment of claims by requiring an insured, a claimant or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information.
14. Failing to promptly settle claims if liability has become reasonably clear under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.
15. Failing to promptly provide a reasonable explanation of the basis in the insurance policy relative to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.
16. Attempting to settle claims for the replacement of any nonmechanical sheet metal or plastic part which that generally constitutes the exterior of a motor vehicle, including inner and outer panels, with an aftermarket crash part which that is not made by or for the manufacturer of an insured's motor vehicle unless the part meets the specifications of section 44‑1292 and unless the consumer is advised in a written notice attached to or printed on a repair estimate which that:
(a) Clearly identifies each part.
(b) Contains the following information in ten point or larger type:
This estimate has been prepared based on the use of replacement parts supplied by a source other than the manufacturer of your motor vehicle. Warranties applicable to these replacement parts are provided by the manufacturer or distributor of these parts rather than the manufacturer of your vehicle.
17. As an insurer subject to section 20‑826, 20‑1342, 20‑1402 or 20‑1404, or as an insurer of the same type as those subject to section 20‑826, 20‑1342, 20‑1402 or 20‑1404 that issues policies, contracts, plans, coverages or evidences of coverage for delivery in this state, failing to pay charges for reasonable and necessary services provided by any physician licensed pursuant to title 32, chapter 8, 13 or 17, if the services are within the lawful scope of practice of the physician and the insurance coverage includes diagnosis and treatment of the condition or complaint, regardless of the nomenclature used to describe the condition, complaint or service.
18. Failing to comply with chapter 15 of this title.
19. Denying liability for a claim under a motor vehicle liability policy in effect at the time of an accident without having substantial facts based on reasonable investigation to justify the denial for damages or injuries that are a result of the accident and that were caused by the insured if the denial is based solely on a medical condition that could affect the insured's driving ability.
20. Denying medical benefits under health care coverage to any covered individual based solely on that individual's casual or nonprofessional participation in the activity of motorcycling.
B. Nothing in subsection A, paragraph 17 of this section shall be construed to prohibit the application of deductibles, coinsurance, preferred provider organization requirements, cost containment measures or quality assurance measures if they are equally applied to all types of physicians referred to in this section, and if any limitation or condition placed upon payment to or upon services, diagnosis or treatment by any physician covered by this section is equally applied to all physicians referred to in subsection A, paragraph 16 17 of this section, without discrimination to the usual and customary procedures of any type of physician. A determination under this section of discrimination to the usual and customary procedures of any type of physician shall not be based on whether an insurer applies medical necessity review to a particular type of service or treatment.
C. In prescribing rules to implement this section, the director shall follow, to the extent appropriate, the national association of insurance commissioners unfair claims settlement practices model regulation.
D. Nothing contained in this section is intended to provide any private right or cause of action to or on behalf of any insured or uninsured resident or nonresident of this state. It is, however, the specific intent of this section to provide solely an administrative remedy to the director for any violation of this section or rule related to this section.
E. The director shall deposit, pursuant to sections 35‑146 and 35‑147, all civil penalties collected pursuant to this article in the state general fund.
