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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
prepaid legal insurance contracts; definition
Purpose
Defines prepaid legal insurance contract as a contractual obligation to pay or reimburse for specific legal services rendered.
Background
Current statute defines prepaid legal insurance contract as a contractual obligation to indemnify for specific legal services rendered in the normal and ordinary course of business by an active member of the State Bar of Arizona (A.R.S. § 20-1097).
Contracts must contain: 1) a list and description of the legal service payments promised or the legal matters for which expenses are to be reimbursed and any limits on the amounts to be paid or reimbursed; 2) a clear statement of the name of the corporation issuing the contract and the full address of its principal place of business; and 3) a statement that the individual beneficiary may retain at the beneficiary's own expense, except if the policy provides otherwise, any attorney authorized to practice law in Arizona. The contract must be approved by the Department of Insurance before being issued (A.R.S. § 20-1097.04).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Defines prepaid legal insurance contract as a contractual obligation to pay or reimburse, instead of indemnify, for specific legal services rendered in the normal and ordinary course of business by an active member of the State Bar of Arizona.
2. Excludes payment of an administrative fee only from consideration as a specific legal service.
3. Makes technical and conforming changes.
4. Becomes effective on the general effective date.
Prepared by Senate Research
February 4, 2019
CS/LC/kja