Purpose

Requires the Director of the Department of Insurance (DOI) to examine the financial condition of each domestic insurer licensed to conduct business in this state a minimum of once every five years. Appropriates $250,000 in each of FY 2001-2002 and 2002-2003 from the state general fund to the Department for hiring financial analysts.

Background

Currently, the Director is authorized under A.R.S. §20-156 to examine the financial condition of insurers that conduct business in this state as often as the Director deems necessary and must examine the financial solvency of domestic insurers at least once every three years. A five-year examination period is sufficient, according to DOI, due to the small number of insolvency cases among domestic insurers. Domestic life and disability insurers, service companies and mechanical reimbursement reinsurers must be examined at least once every five years.

H.B. 2118 changes the examination period of financial solvency of domestic insurers by the Director from once every three years to once every five years and appropriates $250,000 to hire financial analysts.

Provisions

1. Requires the Director to examine each domestic insurer licensed to transact business in this state at least once every five years.

2. Appropriates $250,000 in FY 2001-2002 and FY 2002-2003 to the Department for hiring financial analysts to assist in conducting examinations of domestic insurers.

3. Provides for a general effective date.

House Action

2/26/01 DPA 56-1-3-0

Prepared by Senate Staff

March 13, 2001

Assigned to BI FOR COMMITTEE

Purpose