Bill
Number: S.B. 1243
Melvin Floor Amendment
Amendment drafted by: David Fernandez
FLOOR AMENDMENT EXPLANATION
The Melvin Floor Amendment narrows the scope of the exemption to life insurance and annuities, defines “Associations and orders” in statute and requires notification the policies issued under this exemption are not eligible for state guaranty fund protection.
MELVIN FLOOR AMENDMENT
SENATE AMENDMENTS TO S.B. 1243
(Reference to printed bill)
Page 1, line 10, after the period insert "the sale of life insurance and annuities by"
Line 14, after the period insert "ANY POLICY THAT IS ISSUED PURSUANT TO THIS paragraph SHALL CONTAIN A CONSPICUOUSLY STAMPED OR WRITTEN NOTICE IN BOLD-FACED TYPE THAT STATES 'THIS POLICY IS ISSUED BY AN INSURER THAT DOES NOT POSSESS A CERTIFICATE OF AUTHORITY FROM THE DIRECTOR OF THE ARIZONA DEPARTMENT OF INSURANCE. IF THE INSURER THAT ISSUED THIS POLICY BECOMES INSOLVENT, INSUREDS OR CLAIMANTS WILL NOT BE ELIGIBLE FOR INSURANCE GUARANTY FUND PROTECTION PURSUANT TO TITLE 20, ARIZONA REVISED STATUTES.'”
After line 33, insert:
"Sec. 2. Section 20-681, Arizona Revised Statutes, is amended to read:
20-681. Definitions
In this article, unless the context otherwise requires:
1. "Account" means any of the three accounts established pursuant to section 20‑683.
2. “ASSOCIATIONS AND ORDERS” MEANS THOSE ASSOCIATIONS AND ORDERS THAT WERE ORGANIZED BEFORE 1880, WHOSE MEMBERS ARE OFFICERS OR ENLISTED, REGULAR OR RESERVE, ACTIVE, RETIRED OR HONORABLY DISCHARGED MEMBERS OF THE ARMED FORCES OR SEA SERVICES OF THE UNITED STATES, AND A PRINCIPAL PURPOSE OF WHICH IS TO PROVIDE INSURANCE AND OTHER BENEFITS TO ITS MEMBERS AND THEIR DEPENDENTS OR BENEFICIARIES.
2. 3."Fund" means the life and disability insurance guaranty fund.
3. 4. "Impaired insurer" means either:
(a) An insurer which becomes insolvent and is placed under a final order of liquidation, rehabilitation or conservation by a court of competent jurisdiction.
(b) An insurer deemed by the director to be unable or potentially unable to fulfill its contractual obligations.
4. 5. "Member insurer" means a person authorized to transact any kind of insurance to which this article applies.
5. 6. "Premiums" means direct gross insurance premiums and annuity considerations written on policies, less return premiums and considerations and dividends paid or credited to policyholders on such direct business, except dividends, refunds, savings coupons and other similar returns paid or credited to policyholders which are reapplied as premiums for new, additional or extended insurance. "Premiums" does not include premiums and considerations on contracts between insurers and reinsurers. As used in section 20‑686 "premiums" are those for the calendar year preceding the determination of impairment.
6. 7. "Resident" means a person who resides in this state at the time impairment is determined and to whom contractual obligations are owed."
Amend title to conform