ARIZONA STATE SENATE
Phoenix, Arizona
Conforms specific insurers to consistent and uniform financial and accounting rules and penalties to provide more efficient oversight by the Department of Insurance (DOI).
Currently, different insurers, including hospitals, dental, health care service organizations are subject to different standards for their financial accounting and reporting procedures. Each follows different reporting and accounting procedures and financial requirements as part of their regulatory oversight by DOI. S.B. 1134 requires the insurers follow the same (or similar) financial and accounting rules that other insurers follow. The bill conforms DOI’s regulatory rules with those requirements pertaining to other insurance companies’ accounting and reporting procedures.
Provisions
1. Eliminates the premium tax credit for domestic life and disability insurers in the amount of their fees.
2. Establishes December 1 as an annual reporting deadline for DOI to revise its fee structure and credit structure to reflect between 95 and 110 percent of its appropriated budget.
3. Stipulates that the appropriated budget requirement does not include appropriations for the captive insurers program, nor fees collected by that program.
4. Requires DOI to establish a certificate of authority issuance and renewal fees set at the discretion of the Director.
5. Repeals statute to readjust insurance categories for the associated fee structure.
6. Requires the above insurance organizations to maintain unimpaired capital or surplus of at least $25,000.
7. Requires insures to file an annual statement with DOI regarding their financial condition and to disclose information similar to information required of non-profit corporations, using generally acceptable accounting methods.
8. Prescribes penalties for reporting deficiencies and for intentional violations of not more than $5000 and not more than $50,000 in a six month period, and unintentional violations of not more than $1000 and not more than $10,000 in a six month period.
9. Authorizes DOI to suspend or revoke certificates of authority for different criteria including unsound financial practices, false advertising or operating in a manner contrary to their organizational documents filed with DOI.
10. Outlines procedural requirements for administrative hearings and judicial review as appropriate.
11. Allows DOI to adopt rules necessary to implement the provisions in this act.
12. Contains technical and conforming changes.
13. Contains a general effective date.
Prepared by Senate Staff
January 29, 2002