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Senate Engrossed House Bill |
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State of Arizona House of Representatives Fifty-first Legislature Second Regular Session 2014
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HOUSE BILL 2508 |
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AN ACT
Amending section 13‑3714, Arizona Revised Statutes; Transferring title 20, chapter 2, article 3.4, Arizona Revised Statutes, for placement in title 20, chapter 2, Arizona Revised Statutes, as article 3.5; Amending title 20, chapter 2, Arizona Revised Statutes, by adding a new article 3.4; Amending sections 32‑1004 and 41‑624, Arizona Revised Statutes; relating to Insurance business; providing for conditional repeal.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 13-3714, Arizona Revised Statutes, is amended to read:
13-3714. Aggravated or multiple violations of insurance code; classification
A person who knowingly performs any act for which the person is required to be licensed under title 20, chapter 2, article 3, 3.1, 3.2, 3.3 or 3.4 3.5 to lawfully perform and the person has been previously licensed pursuant to title 20, chapter 2, article 3, 3.1, 3.2, 3.3 or 3.4 3.5, but whose license was suspended or revoked at the time of the act or has been convicted of violating any provision of title 20, chapter 2, article 3, 3.1, 3.2, 3.3 or 3.4 3.5, and who is not licensed at the time of the act, is guilty of a class 5 felony.
Sec. 2. Transfer
Title 20, chapter 2, article 3.4, Arizona Revised Statutes, is transferred for placement in title 20, chapter 2, Arizona Revised Statutes, as article 3.5.
Sec. 3. Title 20, chapter 2, Arizona Revised Statutes, is amended by adding a new article 3.4, to read:
ARTICLE 3.4. NAVIGATORS AND CERTIFIED APPLICATION COUNSELORS
20-336. Definitions
In this article, unless the context otherwise requires:
1. "Certified application counselor" means an individual who is licensed pursuant to this article and who is authorized by the United States department of health and human services to perform the activities and duties of a certified application counselor as described by 45 Code of Federal Regulations section 155.225.
2. "Exchange" means a health benefit exchange that is established or operated by the secretary of the United States department of health and human services pursuant to 42 United States Code section 18031.
3. "Health benefit plan":
(a) Means a hospital and medical service corporation policy or certificate, a health care services organization contract or certificate of coverage, an individual or group or blanket disability policy or certificate of coverage, a certificate of insurance of a group disability policy that is not issued in this state, a multiple employer welfare arrangement or any other arrangement under which health services or health benefits are provided to one or more individuals.
(b) Does not include:
(i) An insurance policy that is designed, advertised and marketed to supplement major medical insurance, which includes accident only, vision only, disability income only, fixed or hospital indemnity, specified disease insurance, credit insurance or Taft‑Hartley trusts.
(ii) Coverage that is issued as a supplement to liability insurance.
(iii) Medicare supplemental insurance.
(iv) Workers' compensation insurance.
(v) Automobile medical payment insurance.
(vi) Long-term care insurance.
4. "Issuer" means a disability insurer, group disability insurer, blanket disability insurer, health care services organization, hospital service corporation, medical service corporation, dental service corporation, prepaid dental plan organization or hospital, medical, dental and optometric service corporation.
5. "Navigator" means a person who is licensed pursuant to this article and who is certified or compensated by the United States department of health and human services to perform the activities and duties described by 42 United States Code section 18031 and 45 Code of Federal Regulations section 155.215.
20-336.01. Scope and application of article
A. Beginning October 1, 2014, this article applies to a person who acts or claims to be a navigator or certified application counselor.
B. A person who holds a license as an accident and health or sickness insurance producer pursuant to article 3 of this chapter is exempt from the requirements of this article.
C. A person who is working as a navigator or certified application counselor only on tribal lands in this state and who as a condition of employment was required to complete a security background investigation for federal service, including a criminal history records check and fingerprinting, is exempt from the requirements of this article.
20-336.02. License required
A person may not act as or claim to be a navigator or certified application counselor unless the person is licensed pursuant to this article.
20-336.03. Navigators; licensing
A. A person who applies for a navigator license shall apply to the director on a form prescribed by the director and shall declare under penalty of license denial, suspension or revocation that the statements made in the application are true, correct and complete to the best of the knowledge and belief of the applicant or the applicant's duly authorized representative. The applicant shall provide information concerning the applicant's identity, personal history, business record and experience in insurance and any other pertinent fact the director requires.
B. Before the director approves an individual's navigator application, the director shall find that the individual:
1. Is at least eighteen years of age.
2. Has not committed any act that is a ground for license denial, suspension or revocation as prescribed in section 20‑295 and has not been convicted of a misdemeanor involving fraud or dishonesty.
3. Has provided evidence of navigator certification from the United States department of health and human services.
4. Has submitted a full set of fingerprints to the director and successfully completed a criminal history records check in a manner prescribed by the director.
5. Has identified the entity with which it is affiliated and supervised.
C. A business entity that acts as a navigator, supervises the activities of individual navigators or receives funding to perform navigator activities shall obtain a navigator entity license. Before the director approves a business entity's navigator application, the director shall find that the business entity:
1. Has not committed any act that is a ground for license denial, suspension or revocation as prescribed in section 20‑295 and has not been convicted of a misdemeanor involving fraud or dishonesty.
2. Has designated an individually licensed navigator who is responsible for the business entity's compliance with the insurance laws of this state.
D. A business entity's navigator application shall also include the names of all members, officers and directors of the business entity. For any individual who is identified pursuant to this subsection, the director may require the applicant to provide the information required for a license as an individual.
E. The department of insurance shall submit the fingerprints received pursuant to subsection B of this section to the department of public safety 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 the fingerprint data it receives pursuant to this subsection with the federal bureau of investigation.
F. Unless the person is licensed for that line of authority pursuant to this title, a navigator may not:
1. Sell, solicit or negotiate insurance in this state for any class or classes of insurance.
2. Recommend, endorse or Offer opinions about the benefits, terms and features of a particular health benefit plan or offer an opinion about which health benefit plan is better or worse for a particular individual or employer.
3. Provide any information or services related to a health benefit plan or another product not offered in the exchange.
4. Engage in any unfair method of competition or any fraudulent, deceptive or dishonest act or practice.
G. The expiration date for a navigator license issued to a person who also holds a license pursuant to this title is the same as the expiration date for the insurance producer license.
20-336.04. Certified application counselors; licensing
A. An individual who applies for a certified application counselor license shall apply to the director on a form prescribed by the director and shall declare under penalty of license denial, suspension or revocation that the statements made in the application are true, correct and complete to the best of the knowledge and belief of the applicant or the applicant's duly authorized representative. The applicant shall provide information concerning the applicant's identity, personal history, business record and experience in insurance and any other pertinent fact the director requires.
B. Before the director approves an individual's certified application counselor application, the director shall find that the individual:
1. Is at least eighteen years of age.
2. Has not committed any act that is a ground for license denial, suspension or revocation as prescribed in section 20‑295 and has not been convicted of a misdemeanor involving fraud or dishonesty.
3. Has met the standards and provided evidence of certification as prescribed by 45 Code of Federal Regulations section 155.225.
4. Has submitted a full set of fingerprints to the director and successfully completed a criminal history records check in a manner prescribed by the director.
5. Has identified the entity with which the individual is affiliated and supervised.
C. The department of insurance shall submit the fingerprints received pursuant to subsection B of this section to the department of public safety 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 the fingerprint data it receives pursuant to this subsection with the federal bureau of investigation.
D. Unless the person is licensed for that line of authority pursuant to this title, a certified application counselor may not:
1. Sell, solicit or negotiate insurance in this state for any class or classes of insurance.
2. Recommend, endorse or Offer opinions about the benefits, terms and features of a particular health benefit plan or offer an opinion about which health benefit plan is better or worse for a particular individual or employer.
3. Provide any information or services related to a health benefit plan or another product not offered in the exchange.
4. Engage in any unfair method of competition or any fraudulent, deceptive or dishonest act or practice.
E. The expiration date for a certified application counselor license issued to a person who also holds a license pursuant to this title is the same as the expiration date for the insurance producer license.
20-336.05. Enforcement; rules
A. The director may examine and investigate the business affairs and records of any navigator or certified application counselor to determine whether the individual or entity has engaged or is engaging in any violation of this title.
B. The director may adopt rules pursuant to title 41, chapter 6 to carry out this article.
20-336.06. Application of other laws
To the extent permitted by this article, section 20‑281, section 20‑286, subsections B, C and D, sections 20-289, 20-289.01, 20-292, 20-295, 20-296, 20-297, 20-299, 20-301, 20-302 and 20-452, article 6 of this chapter and chapter 11, article 1 of this title apply to navigators and certified application counselors.
Sec. 4. Section 32-1004, Arizona Revised Statutes, is amended to read:
32-1004. Exemptions
A. The following persons are exempt from the provisions of this chapter when engaged in the regular course of their respective businesses but shall comply with the requirements of section 32‑1051, paragraphs 2 through 7 and section 32‑1055, subsection C and subsection D, paragraphs 1, 2, 3 and 5:
1. Attorneys‑at‑law.
2. A person regularly employed on a regular wage or salary in the capacity of credit person or a similar capacity, except as an independent contractor.
3. Banks, including trust departments of a bank, fiduciaries and financing and lending institutions.
4. Common carriers.
5. Title insurers, title insurance agents and abstract companies while doing an escrow business.
6. Licensed real estate brokers.
7. Employees of licensees under this chapter.
8. Substation payment offices employed by or serving as independent contractors or public utilities.
9. A person licensed pursuant to title 6, chapter 7.
10. A person licensed pursuant to title 6, chapter 9.
11. A person licensed pursuant to title 6, chapter 14, article 1.
12. A participant in a finance transaction in which a lender receives the right to collect commercial claims due the borrower by assignment, by purchase or by the taking of a security interest in those commercial claims.
13. An accounting, bookkeeping or billing service provider that complies with all of the following:
(a) Does not accept accounts that are contractually past due at the time of receipt.
(b) Does not initiate any contact with individual debtors except for the initial written notice of the amount owing and one written follow‑up notice.
(c) Does not give or send to any debtor a written communication that requests or demands payment.
(d) Does not receive or have access to monies paid by debtors or their insurers.
(e) All communications with the debtors are done in the name of the creditor.
14. A person collecting claims owed, due or asserted to be owed or due to a financial institution the deposits of which are insured by an agency of the federal government, or any affiliate of the financial institution, if the person is related by common ownership or affiliated by corporate control with the financial institution and collects the claims only for the financial institution or any affiliate of the financial institution.
15. A person who is licensed pursuant to title 20, chapter 2, article 3, 3.1, 3.2, 3.3 or 3.4 3.5 and who is authorized to collect premiums under an insurance policy financed by a premium finance agreement as defined in section 6‑1401.
B. For the purposes of subsection A, paragraph 12 of this section:
1. A transaction shall not be deemed a finance transaction if the primary purpose is to facilitate the collection of claims.
2. "Commercial claim" does not include an account arising from the purchase of a service or product intended for personal, family or household use.
C. For the purposes of subsection A, paragraph 13, subdivision (b) of this section, the initial written notice and follow‑up notice may contain only the following information:
1. The name, address, and telephone and telefacsimile numbers of the creditor.
2. The amount due and an itemization of that amount.
3. The date payment is due.
4. The address or place where payment is to be made.
5. If the payment is past due, that payment is past due.
D. For a person who is exempt under subsection A, paragraph 14 of this section, the superintendent shall investigate complaints of residents of this state relating to any violations of section 32‑1051, paragraphs 2 through 7 or section 32‑1055, subsection C or subsection D, paragraph 1, 2, 3 or 5 and may examine the books, accounts, claims and files of a person that relate to the complaint. A person who is exempt and who violates the provisions of section 32‑1051, paragraphs 2 through 7 or section 32‑1055, subsection C or subsection D, paragraph 1, 2, 3 or 5 is subject to the provisions of sections 6‑132, 6‑136 and 6‑137.
Sec. 5. Section 41-624, Arizona Revised Statutes, is amended to read:
41-624. Definitions; commissions on sales of insurance to the state; violation; classification
A. In this section, unless the context otherwise requires:
1. "Bidder" or "offeror" means a person who has submitted a bid or proposal for the sale of insurance to the state in response to a request for a proposal from the department of administration.
2. "Commissions" means any contingent commission, excess profits commission or other commission that may be based upon on losses or experience or other compensation which that a successful contractor for the sale of insurance to the state may be eligible to receive from insurance carriers or underwriters.
3. "Solicitation" means all documents whether attached or incorporated by reference which that are utilized for soliciting bids or proposals.
B. Only a contractor or persons who have performed actual services for a contractor in connection with a bid shall be eligible to receive directly or indirectly any commissions.
C. A contractor may pay commissions directly or indirectly only to persons who have performed actual services for the contractor in connection with the solicitation.
D. Any contractor who pays commissions in violation of subsection C of this section or any person who receives commissions in violation of subsection B of this section shall be subject to the following penalties:
1. The contractor or the person who receives commissions, or both, shall be guilty of a class 2 misdemeanor.
2. The contractor or the person who receives the commissions, or both, shall be liable under section 20‑295 for suspension, revocation or denial of renewal of any licenses issued under title 20, chapter 2, article 3, 3.1, 3.2, 3.3 or 3.4 3.5.
3. The contractor and the person who receives commissions shall be jointly and severally liable to the state for the amount of the commissions paid in violation of subsection B or C of this section.
4. The contractor and the person who receives the commissions shall be jointly and severally liable to competing bidders or offerors under the same solicitation for the amount of the commissions paid in violation of subsection B or C of this section as well as for reasonable attorney's attorney fees of the competing bidders or offerors in recovering the penalty. Where there is more than one competing bidder or offeror, the contractor and the person who receives commissions shall be subject only to one liability under this subsection and the competitors who have joined in or intervened before judgment in the first action under this subsection to proceed to final judgment shall be entitled to equal shares in the penalty recovered.
Sec. 6. Criminal history records check; attestation
A navigator or a certified application counselor, as defined in section 20‑336, Arizona Revised Statutes, as added by this act, who was required to undergo a criminal history records check as a condition of employment as a navigator or a certified application counselor on or after August 1, 2010 and before the effective date of this act is not required to complete a criminal history records check pursuant to title 20, chapter 2, article 3.4, Arizona Revised Statutes, as added by this act, if the navigator or certified application counselor and the person's employer attest that the person passed the criminal history records check.
Sec. 7. Conditional repeal; notice
A. Title 20, chapter 2, article 3.4, Arizona Revised Statutes, as added by this act, is repealed if, on or before January 1, 2024, 42 United States Code section 18031 relating to health benefit exchanges is declared unconstitutional by the United State supreme court or is repealed by the United States congress.
B. The director of the department of insurance shall notify in writing the director of the Arizona legislative council of the date on which the condition is met or if the condition is not met.