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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
AMENDED
agency consolidation; department of insurance
Purpose
Consolidates the Department of Financial Institutions (DFI), the Automobile Theft Authority (ATA) and the Department of Insurance (DOI).
Background
DFI,
formerly known as the Arizona State Banking Department, was originally codified
in 1922 and enacted into law in 1973 (A.R.S.
§ 6-110). DFI licenses, supervises and regulates
state-chartered financial institutions and enterprises to ensure the safety and
soundness of the financial services industry. DFI also investigates complaints
that are filed by consumers against licensed entities and directs appropriate
remedial action if violations are substantiated. DFI will terminate on July 1,
2024 (A.R.S.
§ 41-3204.03).
The ATA, established in 1992, was created to determine the scope of the problem of motor vehicle theft including particular areas of the state where the problem is greatest, analyze the various methods of combating motor vehicle theft, develop and implement a plan of operation and financial plan and solicit and accept gifts and grants (A.R.S. § 41-3451).
The ATA Fund consists of any public or private monies that the ATA receives, including a semiannual fee of 50 cents per vehicle insured under a motor vehicle liability insurance policy that is paid by the insurer (A.R.S. § 41-3451). Failure to pay the fee can result in the suspension of the insurer's certificate of authority, the imposition of a civil penalty of up to 120 percent the amount due or both (A.R.S. § 41-3453). Monies in the ATA Fund are allocated to public agencies to establish, maintain and support programs that are designed to prevent motor vehicle theft, including financial support to law enforcement and prosecution agencies for programs that are designed to increase the effectiveness of motor vehicle theft prosecution and financial support for programs that are designed to educate and assist the public in the prevention of motor vehicle theft. The ATA Fund undergoes an audit conducted by a certified public accountant every two years (A.R.S. § 41-3451).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Absorbs DFI and the ATA into DOI.
2. Renames DOI the Department of Insurance and Financial Institutions (DIFI).
DFI
3. Stipulates that all rules adopted by DFI remain in full force until amended by DIFI.
4. Requires the Director of DIFI (Director) to appoint a superintendent to assist the Director with the execution of the laws of the state relating to financial institutions and enterprises.
5. Requires the Director, instead of the Superintendent of DFI, to appoint a deputy superintendent, assistants and other personnel in the Financial Institutions Division of DIFI.
6. Prohibits the Director from being indebted to any financial institution or enterprise under DIFI's jurisdiction.
7. Prohibits the Director and any member of the Director's staff, instead of the Superintendent of DFI and any member of the Superintendent's staff, from disclosing any information obtained in the discharge of official duties to any person not connected with DIFI.
8. Allows the Director, instead of the Superintendent of DFI, to sue and defend in court actions.
9. Requires the Director, instead of the Superintendent of DFI, to submit to the Legislature, with DIFI's annual budget request, a full and complete account of the DIFI Receivership Revolving Fund through the end of its most recent fiscal year.
10. Amends the text of notices to judgment debtors and bond certifications by the Arizona Department of Administration to reflect the absorption of DFI by DIFI.
11. Amends the chapter heading of the Arizona Revised Statutes Title 6, Chapter 1 from "DEPARTMENT OF FINANCIAL INSTITUTIONS" to "FINANCIAL INSTITUTIONS DIVISION".
12. Amends the article heading of the Arizona Revised Statutes Title 6, Chapter 1, Article 2 from "DEPARTMENT OF FINANCIAL INSTITUTIONS" to "FINANCIAL INSTITUTIONS DIVISION".
13. Redefines department as DIFI, instead of DFI.
14. Defines Director as the Director.
15. Defines division as the Financial Institutions Division of DIFI.
16. Redefines superintendent as the Superintendent of the Financial Institutions Division of DIFI.
17. Defines superintendent of financial institutions as the Superintendent of the Financial Institutions Division of DIFI.
18. Defines Director and administrator in the Arizona Revised Statutes Title 6, Title 32, Chapters 9 and 36, Title 41, Chapter 31 and Title 44, Chapter 2.1, relating to DFI and the ATA, as the Director.
19. Adds statute to allow the Director to adopt rules for the administration of the Arizona Revised Statutes Title 6, Title 32, Chapters 9 and 36, Title 41, Chapter 31 and Title 44, Chapter 2.1, relating to DFI and the ATA.
20. Repeals statute prescribing appointment, qualification and salary requirements for the Superintendent of DFI.
21. Repeals statute prescribing powers and duties in joint examinations by the Director and the Superintendent of DFI.
22. Repeals statute terminating DFI on July 1, 2024.
23. Repeals, on January 1, 2021, the Arizona Revised Statutes Title 6, Title 32, Chapters 9 and 36, Title 41, Chapter 31 and Title 44, Chapter 2.1, relating to DFI and the ATA, if the voters approve a constitutional amendment repealing the authority for DIFI.
The ATA
24. Requires, of the members of the ATA, county attorneys, employees of insurers and members of the general public to be appointed by the Director, instead of the Governor.
25. Requires the Director, instead of the Governor, to be notified of a potential ground for removal of an ATA member.
26. Requires the Director, instead of the Governor, to remove an ATA member if the member was not qualified to serve at the time of appointment, does not maintain the member's qualification to serve, cannot discharge the member's duties for a substantial part of the term or is absent from more than one-half of the regularly-scheduled meetings during a calendar year unless excused by a majority vote of the ATA.
27. Defines administrator as the Superintendent of the Financial Institutions Division of DIFI.
28. Repeals statute terminating the ATA on July 1, 2022.
Miscellaneous
29. Makes technical and conforming changes.
31. Becomes effective on July 1, 2020, except as otherwise noted.
Amendments Adopted by Committee
1. Renames DOI DIFI.
2. Delays the effective date from January 1, 2020, to July 1, 2020.
Senate Action
FIN 2/20/19 DPA 5-4-1
Prepared by Senate Research
February 21, 2019
CS/LC/kja