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Senate Engrossed |
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State of Arizona Senate Fifty-first Legislature First Regular Session 2013
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SENATE BILL 1243 |
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AN ACT
Amending sections 20‑108 and 20-681, Arizona Revised Statutes; relating to insurance.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-108, Arizona Revised Statutes, is amended to read:
20-108. Types of insurers excepted
No provision of This title applies does not apply with respect to:
1. Hospital and medical service corporations, except as stated in chapter 4, article 3 of this title.
2. Fraternal benefit societies, except as stated in chapter 4, article 4 of this title.
3. The sale of life insurance and annuities by 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. 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."
3. 4. Extended warranty insurers who comply with the bond requirements of section 20‑108.01. For the purposes of this paragraph "extended warranty insurer" means any insurer as otherwise defined by this title that does not manufacture, sell or service radio, television or sound reproduction equipment and that:
(a) For a premium charged, not greater than twenty dollars per annum, nor greater than a three‑year term, provides a nonrenewable warranty, guaranty or service contract on radio, television or sound reproduction equipment in addition to, or as an extension of, any warranty, guaranty or service provided by the manufacturer of such equipment.
(b) Is not otherwise authorized to transact property or casualty insurance business in this state or any other governmental jurisdiction.
(c) Is not owned or controlled in any degree nor to any extent by a person, persons or business otherwise authorized to transact property or casualty insurance business in this state or any other state or jurisdiction.
(d) Has gross sales in this state not exceeding one hundred thousand dollars annually.
(e) Has maximum contractual contingent liability not exceeding three hundred thousand dollars in this state.
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.