CORRECTED Jan 10 2023
PREFILED Dec 27 2022
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REFERENCE TITLE: group excess liability insurance |
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State of Arizona House of Representatives Fifty-sixth Legislature First Regular Session 2023
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HB 2007 |
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Introduced by Representative Livingston
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An Act
amending title 20, chapter 6, Arizona Revised Statutes, by adding article 6; relating to insurance.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 20, chapter 6, Arizona Revised Statutes, is amended by adding article 6, to read:
ARTICLE 6. GROUP EXCESS LIABILITY INSURANCE POLICIES
20-1491. Definitions
In this article, unless the context otherwise requires:
1. "certificate holder" means the individual insured group member.
2. "certificate of insurance" means a certificate of insurance, evidence of coverage or other summary of coverage that is issued to each certificate holder pursuant to section 20-1493.
3. "conditional renewal" means a renewal that is conditioned on any of the following:
(a) a change of limits.
(b) A change in type of coverage.
(c) A reduction or elimination of coverage.
(d) An increased deductible or addition of exclusions or increased premiums in excess of ten percent, except for premium increases that are generated as a result of increased exposure units or as a result of experience rating, loss rating, retrospective rating or audit.
4. "excess liability insurance" means liability insurance, as prescribed in section 20-252, paragraph 1, that provides excess coverage after the insured's primary liability insurance limits have been exhausted.
5. "group excess liability insurance" means excess liability insurance that is issued on a group basis and that covers groups of persons as prescribed in this article.
6. "group policyholder" means those groups described in section 20-1492, subsection c to which a group excess liability insurance policy may be issued.
20-1492. Group excess liability insurance; eligible groups
A. An authorized insurer or an unauthorized insurer as provided in chapter 2, article 5 of this title may offer group excess liability insurance coverage in this state. If an authorized insurer issues a group excess liability insurance policy in this state, the insurer shall file the group policy and the certificate of insurance forms with the department in accordance with section 20-398.
b. An insurer may issue or deliver a group excess liability insurance policy in this state pursuant to this article. In addition to excess liability coverage, the group policy may provide ancillary and additional coverages to certificate holders if the terms and conditions for the additional or ancillary coverage comply with this title.
c. An insurer may issue a group excess liability insurance policy to any eligible group to which a group disability insurance policy may be issued pursuant to section 20-1401, subsection a.
d. The groups described in subsection c of this section shall consist of only those natural persons identified as qualifying group members under section 20-1401, subsection a, including any members of a certificate holder's immediate family or household.
e. An insurer shall treat all eligible groups of the same class in a like manner.
20-1493. Group excess liability insurance policies; premiums; cancellation; requirements
A. The group policyholder may pay the premium for a group excess liability insurance policy from monies contributed wholly by the group policyholder, wholly by the certificate holders or jointly by the group policyholder and the certificate holders.
b. The group excess liability insurance policy shall provide separate limits of coverage for each certificate holder.
c. The insurer or, if authorized by the insurer, the group policyholder's insurance producer shall deliver a copy of the group policy and any endorsement or amendment to the group policyholder and a copy of the certificate of insurance and any endorsement or amendment to each certificate holder. The insurer or, If authorized by the insurer, the group policyholder or the group policyholder's insurance producer may send the certificate of insurance and any endorsement or amendment to the certificate holders on behalf of the insurer.
d. The Group excess liability insurance policy shall be provided to a certificate holder within a reasonable period of time after the certificate of insurance is delivered to a certificate holder, and the certificate of insurance shall contain all material terms and conditions of coverage afforded to a certificate holder, including a disclosure, in clear and easily understandable language of any limitations, exclusions or required underlying coverages.
E. The following requirements apply to the cancellation, nonrenewal or conditional renewal of coverage under a group excess liability insurance policy:
1. Except as provided in paragraph 3 of this subsection, an insurer may cancel or not renew a group policy or any certificate of insurance issued under the policy for any reason. The insurer, or if authorized by the insurer, the group policyholder's insurance producer, shall send notice of cancellation or nonrenewal to the group policyholder and the certificate holders at least thirty days before the effective date of the cancellation or nonrenewal, or twenty days before the effective date if cancellation is for nonpayment of the premium. If authorized by the insurer, the group policyholder may send the notice to the certificate holders on behalf of the insurer.
2. The policy shall set forth the conditions and timing on which a certificate holder's coverage will terminate following the termination of the certificate holder's AFFILIATION with the group policyholder that qualifies the certificate holder for membership in the group.
3. An act or omission by a certificate holder may not constitute the basis for cancellation of the group policy.
f. With thirty days' written notice to the insurer and each affected certificate holder, a group policyholder may cancel the group policy for any reason. A group policyholder is not required to give notice to the affected certificate holders if substantially similar coverage has been obtained from another insurer without a lapse in coverage.
G. If a certificate holder sustains a loss that would be covered by the group excess liability insurance policy and that occurs before the effective date of the cancellation, nonrenewal or conditional renewal of the group policy or the certificate holder's certificate of insurance, whether initiated by the insurer, group policyholder or certificate holder, the loss remains covered as provided under the group policy notwithstanding the cancellation, nonrenewal, conditional renewal or termination.