ARIZONA STATE SENATE
Phoenix, Arizona
Revises statutory time frames for the review and approval of insurance rate and form filings and adopts a reasonable exemption standard for industrial insureds.
Background
In an effort to streamline the process for review and approval of insurer rates and forms, the Arizona Department of Insurance (DOI) adopted guidelines established by the National Association of Insurance Commissioners (NAIC) to make market introduction of insurance products more efficient, expeditious thus competitive with other states. This "speed to market" initiative was developed to standardize the processes for filing and reviewing rates and forms, introduce a review checklist, as well as implement an electronic rate filing system.
In addition to these initiatives, a new time frame for review of the filed rates is recommended to give DOI time to examine the filed rates and make a determination to their appropriateness, while simultaneously offering industry efficient regulation in market delivery of their products. The proposed legislation standardizes the statutory time frame at thirty days for disapproval of proposed rates. The measure also provides an extension if the director needs additional time to complete the review. In addition, the measure changes the filing requirement for large corporations classified as “industrial insureds” and makes them adhere to standard administrative rates and form filing exemptions.
There is no anticipated fiscal impact to the state general fund associated with this bill.
Provisions
1. Establishes the rates filing time frame to thirty days for review and approval by DOI.
2. Prescribes that a filed rate is deemed approved upon the expiration of the review period unless the director issues a disapproval order.
3. Provides that the director, on written notice, may extend the waiting period for an additional fifteen days to complete the review.
4. Amends the current definition of "industrial insured" to conform to an administrative rate and form filing exemption for exempt commercial policyholders.
5. Limits eligibility for form filing exemptions to companies with earnings in excess of $25 million and a minimum annual premium of $100,000 and stipulates that such entities are required to have a risk manager on site.
6. Makes numerous conforming and technical changes.
7. Contains a general effective date.
House Action
FII 1/30/02 DP 10-0-0-0
3rd Read 2/12/02 59-0-1-0
Prepared by Senate Staff
March 25, 2002