Bill Text: AZ HB2110 | 2011 | Fiftieth Legislature 1st Regular | Engrossed
Bill Title: Insurance; risk retention groups
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2011-04-18 - Governor Signed [HB2110 Detail]
Download: Arizona-2011-HB2110-Engrossed.html
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House Engrossed |
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State of Arizona House of Representatives Fiftieth Legislature First Regular Session 2011
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HOUSE BILL 2110 |
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AN ACT
Amending sections 20‑487, 20‑698 and 20‑1098.15, Arizona Revised Statutes; relating to risk retention groups.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-487, Arizona Revised Statutes, is amended to read:
20-487. Definitions
In this article, unless the context otherwise requires:
1. "Accredited state" means a state in which the insurance department or other regulatory agency has qualified as meeting the minimum financial regulatory standards that are adopted and established by the national association of insurance commissioners.
2. "Control" or "controlled" has the same meaning as provided prescribed in section 20‑481.
3. "Controlled insurer" means a licensed insurer who is controlled by a producer.
4. "Controlling producer" means a producer who controls, directly or indirectly, an insurer.
5. "Licensed insurer" or "insurer" means a person, firm, association or corporation that is duly licensed to transact property or casualty insurance business in this state. For the purposes of this article, licensed insurer or insurer does not include a:
(a) Risk retention group as defined in the superfund amendments and reauthorization act of 1986 (42 United States Code section 9601), the risk retention act (15 United States Code sections 3901, 3902, 3903, 3905 and 3906) and chapter 14, article 1 of this title.
(b) (a) Residual market pool and joint underwriting authority or association.
(c) (b) Captive insurer. For the purposes of this subdivision, "captive insurer" means an insurance company, other than a risk retention group as defined in section 20-1098 or 20-2401, that is owned by another organization and whose exclusive purpose is to insure risks to member organizations or group members and their affiliates.
6. "Producer" means an insurance producer or any other person, firm, association or corporation when, for any compensation, commission or other thing of value, the person, firm, association or corporation acts or aids in any manner in soliciting, negotiating or procuring the making of an insurance contract on behalf of an insured other than the person, firm, association or corporation.
Sec. 2. Section 20-698, Arizona Revised Statutes, is amended to read:
20-698. Annual audited financial reports
A. For the year ending December 31, 2010 and for each year thereafter, every insurer having direct premiums written in this state of one million dollars or more in any calendar year and more than one thousand policyholders or certificate holders of direct written policies nationwide at the end of the calendar year is subject to the requirements of the national association of insurance commissioners annual financial reporting model regulation for that calendar year. Every insurer Only insurers having direct premiums written in this state of less than one million dollars nationwide in any calendar year and less than one thousand policyholders or certificate holders of direct written policies nationwide at the end of the calendar year is are exempt from the requirements of the national association of insurance commissioners annual financial reporting model regulation for that calendar year, unless the director makes a specific finding that compliance is necessary for the director to carry out statutory responsibilities. Insurers that assumed premiums pursuant to contracts or treaties of reinsurance of one million dollars or more are not exempt.
B. The director may determine whether, consistent with the requirements of the national association of insurance commissioners annual financial reporting model regulation:
1. A foreign or alien insurer may be exempt from this article compliance with any or all of the annual financial reporting requirements if the director finds its domiciliary jurisdiction has a substantially similar law in effect and the insurer has filed its audited financial report and other required communications with the director as otherwise required by this article.
2. An insurer is required to file an audited financial report earlier than June 1, with ninety days' advanced notice to the insurer.
3. An extension of the June 1 filing date will be granted for thirty‑day periods.
4. An exception will be granted to the rotation requirement for a lead audit partner for an insurer.
5. An individual meets the qualifications as an independent certified public accountant for the purposes of this article.
6. A financial or organizational hardship exemption will be granted to allow a qualified independent certified public accountant to perform nonaudit services for an insurer having direct written and assumed premiums of less than one hundred million dollars in any calendar year.
7. An insurer may file consolidated or combined audited financial statements in lieu of a separate annual audited financial statement if the insurer is part of a group of insurance companies that uses a pooling or one hundred per cent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer cedes all of its direct and assumed business to the pool.
8. An insurer will be granted a hardship waiver of the audit committee requirements regarding independent audit committee members.
9. An insurer will be granted a financial or organizational hardship exemption from compliance with any or all of the annual financial reporting requirements.
Sec. 3. Section 20-1098.15, Arizona Revised Statutes, is amended to read:
20-1098.15. Applicability
A. Chapter 2, article 6 of this title relating to unfair trade practices and frauds applies to captive insurers, except to the extent the director determines the nature of captive insurance renders particular portions provisions of chapter 2, article 6 of this title inappropriate.
B. All other provisions of this title that are not inconsistent with this article apply to captive insurers, except to the extent the director determines the nature of captive insurance renders particular provisions of this title inappropriate.
C. A captive insurer that is formed as a corporation is subject to the applicable provisions of title 10, except as otherwise prescribed in this article.
D. A captive insurer that is formed as a limited liability company is subject to the applicable provisions of title 29, except as otherwise prescribed in this article.
E. The provisions of article 1 of this chapter relating to mergers, consolidations, conversions, mutualizations and redomestications apply in determining the procedures to be followed by captive insurers in carrying out those transactions, except that the director may waive or modify the requirements for a public notice and hearing prescribed in section 20‑731.
F. Chapter 2, article 8 of this title relating to insurance holding company systems applies to risk retention groups as defined in section 20‑1098 or 20‑2401.
