AZ Regulatory Bulletin 2006-05: 2006 Arizona Insurance Laws

Department of Insurance

State of Arizona

Office of the Director

Telephone: (602) 364-3471

Telecopier: (602) 364-3470

JANET NAPOLITANO

2910 North 44th Street, Suite 210

CHRISTINA URIAS

Governor

Phoenix, Arizona 85018-7256

Director of Insurance

www.id.state.az.us

REGULATORY BULLETIN 2006-05 1

To:

Insurance Producers, Surplus Lines Brokers, Insurance Industry

Representatives, Insurance Trade Associations, Life & Disability Insurers,

Property & Casualty Insurers, and other interested parties

From:

Christina Urias

Director of Insurance

Date:

July 20, 2006

Re:

2006 Arizona Insurance Laws

This Regulatory Bulletin summarizes the major, newly enacted legislation affecting the

Department, its licensees, and insurance consumers. This summary is not meant as an

exhaustive list or a detailed analysis of all insurance-related bills. It generally describes the

substantive content, but does not capture all details or necessarily cover all bills that may be of

interest to a particular reader. The Department may follow this bulletin with other, more detailed

bulletins related to implementation of the legislation. All interested persons are encouraged to

obtain copies of the enacted bills by contacting the Arizona Secretary of State’s office at 602/542-

4086, or from the Arizona legislative web site at http://www.azleg.state.az.us. Please direct any

questions regarding this bulletin to Karlene Wenz, Executive Assistant for Policy Affairs, 602/364-

3471.

Arizona’s Forty-seventh Legislature, Second Regular Session, adjourned sine die on, June 22,

2006. Except as otherwise noted, all insurance related legislation has a general effective date of

September 21, 2006.

1This Substantive Policy Statement is advisory only

o Karlene Wenz, Executive Assistant for Policy Affairs, 602/364-

3471.

Arizona’s Forty-seventh Legislature, Second Regular Session, adjourned sine die on, June 22,

2006. Except as otherwise noted, all insurance related legislation has a general effective date of

September 21, 2006.

1This Substantive Policy Statement is advisory only. A Substantive Policy Statement does not include internal procedural

documents that only affect the internal procedures of the Agency, and does not impose additional requirements or

penalties on regulated parties or include confidential information or rules made in accordance with the Arizona

Administrative Procedure Act. If you believe that this Substantive Policy Statement does impose additional requirements

or penalties on regulated parties you may petition the agency under Arizona Revised Statutes Section 41-1033 for a

review of the Statement.

INSURANCE-RELATED BILLS ENACTED IN 2006:

HB 2162: insurance annuities; protection (Ch. 172)

The bill establishes suitability standards for annuities transactions.

Enacts A.R.S. §20-1243:

• Defines “annuity” as “a fixed or variable annuity that is individually solicited, whether the product is

classified as an individual or group annuity.”

• Defines “recommendation” as “advice provided by an insurance producer, or an insurer if no

producer is involved, to an individual consumer that results in a purchase or exchange of an

annuity pursuant to the advice.”

• References terms defined elsewhere in Title 20.

Enacts A.R.S. §20-1243.01:

•

Applies provisions to any “recommendation” as defined above.

• Specifies that the provisions do not affect Title 44, chapters 12 and 13.

Enacts A.R.S

nce producer, or an insurer if no

producer is involved, to an individual consumer that results in a purchase or exchange of an

annuity pursuant to the advice.”

• References terms defined elsewhere in Title 20.

Enacts A.R.S. §20-1243.01:

•

Applies provisions to any “recommendation” as defined above.

• Specifies that the provisions do not affect Title 44, chapters 12 and 13.

Enacts A.R.S. §20-1243.02:

• Provides that unless otherwise specified, the provisions do not apply to: 1) annuities

recommendations involving direct response solicitations in which the recommendation is not

based on information collected from the consumer, 2) contracts used to fund employee pension or

welfare benefit plans, various retirement savings plans established or maintained by the employer,

government or church plans, certain deferred compensation plans, liability settlements, or prepaid

funeral contracts.

***NOTE: The enacted version of HB 2162 contained a typographical error in §20-1243.02 (2)(d), “a

nonqualified deferred compensation arrangement established or maintained by an employee or plan

sponsor.” The proponents of this bill and the legislature intended the word “employee” in this clause

to be “employer.” The Department and the bill’s proponents will pursue a technical correction in the

next legislative session. Until then, the Department will treat the reference to “employee” in this

clause to reference “employer” as intended.

Enacts A.R.S. §20-1243.03:

• Requires insurance producers or the insurer to have reasonable grounds to believe the

recommendation is suitable for the consumer based on the facts disclosed by the consumer

regarding the consumer’s investments, other insurance products, financial situation and needs.

• Requires insurance producers or the insurer to make reasonable efforts to obtain information

about the consumer’s tax status, financial status, investment objectives, and other reasonable

information prior to the purchase or exchange of an annuity

nsumer based on the facts disclosed by the consumer

regarding the consumer’s investments, other insurance products, financial situation and needs.

• Requires insurance producers or the insurer to make reasonable efforts to obtain information

about the consumer’s tax status, financial status, investment objectives, and other reasonable

information prior to the purchase or exchange of an annuity.

• Specifies that the insurance producer or the insurer does not have any obligation to the consumer

if the consumer: 1) refuses to provide relevant information requested by the producer or insurer, 2)

decides to enter an insurance transaction not based on a recommendation of the producer or

insurer, or 3) fails to provide complete or accurate information.

• Requires that an insurer’s or a producer’s recommendations be reasonable under all of the

circumstances actually known to the insurer or the producer at the time of the recommendation.

Enacts A.R.S. §20-1243.04:

• Requires insurers to either establish and maintain a system to achieve compliance with the

standards, or to hire a third party, such as a managing general agent or business entity, to

establish and maintain the system.

• Specifies that the system shall include written procedures and periodic review of records designed

to assist in finding and preventing violations.

• Requires third parties to either adopt a system established by the insurer, or to establish and

maintain such a system.

• Requires insurers to ensure the third party is performing the necessary functions by annually

obtaining certification from the third party that the third party is performing the required functions,

and by periodically selecting third parties contracted for this purpose for a review to determine

whether they are performing the required functions.

• States that an insurer that contracts with a third party fulfills its responsibilities by obtaining the

certification and conducting the periodic review

rtification from the third party that the third party is performing the required functions,

and by periodically selecting third parties contracted for this purpose for a review to determine

whether they are performing the required functions.

• States that an insurer that contracts with a third party fulfills its responsibilities by obtaining the

certification and conducting the periodic review.

• Specifies that an insurer, managing general agent, or business entity is not required to review all

insurance producer solicited transactions, or to include in the system a review of insurance

producers’ recommendations to consumers on products other than the annuities offered by the

insurer, managing general agent, or business entity.

• Requires managing general agents or business entities to promptly provide the certification

required above, or to provide a clear statement that they are unable to meet the certification

criteria.

• Prohibits a person from providing the certification unless the person is a senior manager with

responsibility for the delegated functions, and the person has a reasonable basis for making the

certification.

• Allows compliance with the National Association of Securities Dealers conduct rules pertaining to

suitability to satisfy the requirements of the section, but preserves the Director’s authority to

enforce the article.

Enacts A.R.S. §20-1243.05:

• Authorizes the Director to order appropriate corrective action by an insurer for a consumer harmed

by the insurer’s or the insurer’s insurance producer’s violation of the article.

• Authorizes the Director to order appropriate corrective action by an insurance producer, or a

managing general agent that employs or contracts with an insurance producer to sell annuities, for

any consumer harmed by the insurance producer’s violation of the article

tive action by an insurer for a consumer harmed

by the insurer’s or the insurer’s insurance producer’s violation of the article.

• Authorizes the Director to order appropriate corrective action by an insurance producer, or a

managing general agent that employs or contracts with an insurance producer to sell annuities, for

any consumer harmed by the insurance producer’s violation of the article.

• Permits the Director to reduce or eliminate applicable penalties in Title 20 if the above corrective

action for the consumer was made promptly after discovery of the violation.

Enacts A.R.S. §20-1243.06:

• Requires insurers, insurance producers, managing general agents and business entities to be

able to provide the Director with the records of the information collected from the consumer and

used to make the recommendations, for at least five years, or until the next regular examination by

the insurance regulator of the pertinent domicile, whichever is later.

• Allows an insurer to keep the records on behalf of the insurance producer.

• Permits records to be maintained in any form or process that accurately reproduces the actual

document.

HB 2164: motorist coverage; claims; time limits (Ch. 107)

The legislation changes the statute of limitations for uninsured and underinsured motorist claims.

Amends A.R.S. §12-555:

• States that an insurer is not liable for uninsured motorist coverage benefits unless the person

making the claim gives written notice to the insurer of their intent to pursue the claim against the

uninsured motorist portion of a policy within three years after the date of the accident that caused

the bodily injury.

• Provides for three exceptions to the above, stating that a person may make an uninsured motorist

claim within three years after the earliest of the following:

1) The date the person knew that the tortfeasor (other motorist) was uninsured.

2) The date the person knows or should have known that the tortfeasor’s insurer denied

coverage

r the date of the accident that caused

the bodily injury.

• Provides for three exceptions to the above, stating that a person may make an uninsured motorist

claim within three years after the earliest of the following:

1) The date the person knew that the tortfeasor (other motorist) was uninsured.

2) The date the person knows or should have known that the tortfeasor’s insurer denied

coverage.

3) The date the person knows or should have known of the insolvency of the tortfeasor’s insurer.

• Establishes a separate statute of limitations governing underinsured motorist benefits, requiring

the person making the claim to give written notice to the insurer within three years of the date of

the accident.

• Also requires the person to file a claim with the underinsured motorist’s insurer, or to file an action

against the underinsured motorist per A.R. S. §12-542, or within the time prescribed by law in the

location where the accident occurred.

• Requires a person making an underinsured motorist claim to do so within three years after the

date the person knows or should have known that the other person has insufficient liability

insurance.

• Requires insurers to notify claimants in writing that the claimant must request arbitration or file suit

pursuant to the term of the insurance contract within three years of providing the written notice of

the claim, if the uninsured or underinsured motorist claim is not settled, or the insurer will not be

liable.

• Requires claimants to request arbitration or file suit as described above, or the insurer is not liable

for uninsured motorist or underinsured motorist coverage benefits.

The changes above apply only to losses that occur on or after the effective date of the act.

HB 2217: accountable health plans; filing rates (Ch. 109)

The bill requires accountable health plans to file with the Department the base premium rates and

index rates for coverage sold to small employers.

Amends A.R.S

liable

for uninsured motorist or underinsured motorist coverage benefits.

The changes above apply only to losses that occur on or after the effective date of the act.

HB 2217: accountable health plans; filing rates (Ch. 109)

The bill requires accountable health plans to file with the Department the base premium rates and

index rates for coverage sold to small employers.

Amends A.R.S. §20-2311:

• Clarifies that the annual actuarial certification required of each plan must include a review of the

records, actuarial assumptions and methods used by the plan to establish base premium rates,

index rates and premium rates.

• Requires accountable health plans to annually file their base premium rates and index rates with

DOI for informational purposes.

•

Requires the Director to make the rate filings available to the public upon request.

***NOTE: HB 2217 does not specify when the filing to the Department must take place or if the

premium rates should be those in effect as of a specific date. The Department requests insurers to

file the base premium rates and the index rates along with the annual actuarial certification required

by 20-2311(E) during the first quarter of each year. The base premium rates and index rates filed

should be those in effect as of January 1st of the year in question.

Further, HB 2217 does not authorize the Department to review or institute a rate approval process for

the rates filed.

HB 2177: health insurance premium tax credit (Ch. 378)

This bill establishes a health insurance premium subsidy for qualified individuals and small

businesses via a premium tax credit for health insurers that reduce health insurance premiums by the

amount of the subsidy.

Enacts A.R.S. §20-224.05:

• Permits an annual premium tax credit, beginning January 1, 2007, against the tax owed by health

insurers in Arizona in the amount equal to the premium subsidy due a qualified individual or small

business, as determined by the Department of Revenue

sses via a premium tax credit for health insurers that reduce health insurance premiums by the

amount of the subsidy.

Enacts A.R.S. §20-224.05:

• Permits an annual premium tax credit, beginning January 1, 2007, against the tax owed by health

insurers in Arizona in the amount equal to the premium subsidy due a qualified individual or small

business, as determined by the Department of Revenue.

• Requires individuals and small businesses to purchase health insurance within 90 days after

receiving a certificate of eligibility from the Department of Revenue.

• Limits the amount of annual tax credits allowed to the aggregate amount of the certificates

approved by the Department of Revenue.

• Establishes that the amount of the tax credit allowed for coverage issued to an individual shall be

the lesser of 50% of the health insurance premium, or, $1,000 for a single person, $500 for a child,

and $3,000 for family coverage.

• Establishes that the amount of the tax credit allowed for coverage issued to a small business shall

be the lesser of 50% of the health insurance premium, or, $1,000 for a single employee or $3,000

for an employee selecting family coverage.

• Permits a health insurer to carry forward unused tax credits and apply them to future years’

premium tax liability for up to 5 years.

• Permits the Department of Insurance to adopt rules as necessary for the administration of this

section.

• Specifies that a health insurer claiming this credit is not subject to additional retaliatory tax as a

result of this section.

• Defines “family” as any of the following: 1) an adult and the adult’s spouse; 2) an adult, the adult’s

spouse and all unmarried dependent children under age 19, or under age 25 if the child is a full-

time student; 3) an adult and the adult’s unmarried dependent children under age 19, or under age

25 if the child is a full-time student

additional retaliatory tax as a

result of this section.

• Defines “family” as any of the following: 1) an adult and the adult’s spouse; 2) an adult, the adult’s

spouse and all unmarried dependent children under age 19, or under age 25 if the child is a full-

time student; 3) an adult and the adult’s unmarried dependent children under age 19, or under age

25 if the child is a full-time student.

• Defines “health care insurer” as a disability insurer, group disability insurer, blanket disability

insurer, health care services organization, hospital service corporation, medical service corporation

or hospital, medical, dental and optometric service corporation that provides health insurance in

Arizona.

• Defines “health insurance” as licensed health care plan or arrangement that pays for or furnishes

medical or health care services and that is issued by a health care insurer.

• Specifies that “health insurance” does not include limited benefit coverage as defined in A.R.S.

§20-1137.

• Defines “small business” as a business in existence in Arizona for at least one calendar year that

has not provided health insurance to its employees for at least 6 months, and that had between 2

and 25 employees during the most recent calendar year.

Enacts A.R.S. §43-210:

• Requires the Department of Revenue to issue certificates of eligibility on a first-come, first-served

basis, to persons and small businesses that complete an application prescribed by the Department

of Revenue.

• Requires the Department of Revenue to determine whether program funds are still available prior

to issuing the certificate, and to ensure that the person has not received a certificate previously

Department of Revenue to issue certificates of eligibility on a first-come, first-served

basis, to persons and small businesses that complete an application prescribed by the Department

of Revenue.

• Requires the Department of Revenue to determine whether program funds are still available prior

to issuing the certificate, and to ensure that the person has not received a certificate previously.

• Requires recipients to either be a small business or an individual meeting all of the following

requirements: earns less than 250% of the federal poverty level; has not had health insurance for

at least 6 consecutive months prior to application; is not enrolled in the Arizona Health Care Cost

Containment System, Medicare, or any other federal or state health insurance program.

• Requires a health care insurer that enrolls an individual or small business under this section to

deduct the amount of the certificate from the premium charged.

• Establishes that the amount of the certificate issued to an individual shall be the lesser of 50% of

the health insurance premium, or, $1,000 for a single person, $500 for a child, and $3,000 for

family coverage.

• Establishes that the amount of the certificate issued to a small business shall be the lesser of 50%

of the health insurance premium, or, $1,000 for a single employee or $3,000 for an employee

selecting family coverage.

• Requires a health insurer enrolling an individual or small business pursuant to this section to notify

the Department of Revenue of the enrollment and the amount of premium tax credit they intend to

claim for the current calendar year no later than the 15th day of the month following the beginning

of coverage.

• Prohibits the Department of Revenue from issuing certificates that exceed $5 million in the

aggregate per calendar year

individual or small business pursuant to this section to notify

the Department of Revenue of the enrollment and the amount of premium tax credit they intend to

claim for the current calendar year no later than the 15th day of the month following the beginning

of coverage.

• Prohibits the Department of Revenue from issuing certificates that exceed $5 million in the

aggregate per calendar year.

• Establishes validity of the certificates for 30 days after issuance, and if the recipient applies for

health insurance within this 30 days, the certificate is valid for one year from the commencement of

coverage.

• Requires the Department of Revenue to review the status of certificate recipients 60 days before

expiration of coverage, and if a recipient continues to meet the eligibility requirements, requires the

Department of Revenue to reissue the certificate.

• Limits recipients to two reissued certificates of eligibility.

• States that this section does not guarantee health insurance coverage to an individual or small

business.

• Requires the Department of Revenue to issue the certificates in the name of a specific individual,

and specifies that the certificates are nontransferable.

• Establishes the sale, conveyance, transfer or assignment of the certificates to another person, or

such attempts, as Class 2 misdemeanors.

• Defines “family,” “health care insurer,” “health insurance,” and “small business” as explained above

in the description of A.R.S. § 20-224.05.

• Defines “federal poverty level” as the federal poverty guidelines published annually by the United

States Department of Health and Humans Services.

HB 2177 also requires the Department of Insurance and the Department of Revenue to provide

information on the premium tax credit to the legislative council, and requires the legislative council to

submit an annual report to the president of the senate and the speaker of the house semiannually

through December 31, 2008

d annually by the United

States Department of Health and Humans Services.

HB 2177 also requires the Department of Insurance and the Department of Revenue to provide

information on the premium tax credit to the legislative council, and requires the legislative council to

submit an annual report to the president of the senate and the speaker of the house semiannually

through December 31, 2008. It also includes a continuing appropriation to the Department of

Revenue for administrative costs.

HB 2364: eosinophilic esophagitas disorder (Ch. 233)

This bill requires health insurance that includes a prescription drug benefit to cover the medical food

necessary for persons with eosinophilic gastrointestinal disorder.

Enacts A.R.S. §20-826.03:

• Requires a contract offered by a hospital service corporation or medical service corporation that

includes a prescription drug benefit to cover amino acid-based formula ordered by a physician if

the subscriber is diagnosed with an eosinophilic gastrointestinal disorder, is under the supervision

of a licensed physician, and is at risk of a mental or physical impairment without the formula.

• Requires the hospital service corporation or medical service corporation to cover at least 75% of

the cost of the formula, and allows a limit of coverage of $20,000 annually.

• Specifies that the above does not apply to limited benefit coverage.

Enacts A.R.S. §20-1057.10:

• Requires a contract or evidence of coverage offered by a health care services organization that

includes a prescription drug benefit to cover amino acid-based formula ordered by a physician if

the enrollee is diagnosed with an eosinophilic gastrointestinal disorder, is under the supervision of

a licensed physician, and is at risk of a mental or physical impairment without the formula.

• Requires the health care services organization to cover at least 75% of the cost of the formula, and

allows a limit of coverage of $20,000 annually

amino acid-based formula ordered by a physician if

the enrollee is diagnosed with an eosinophilic gastrointestinal disorder, is under the supervision of

a licensed physician, and is at risk of a mental or physical impairment without the formula.

• Requires the health care services organization to cover at least 75% of the cost of the formula, and

allows a limit of coverage of $20,000 annually.

• Specifies that the above does not apply to limited benefit coverage.

Enacts A.R.S. §20-1342.05:

• Requires a disability policy offered by a disability insurer that includes a prescription drug benefit to

cover amino acid-based formula ordered by a physician if the insured is diagnosed with an

eosinophilic gastrointestinal disorder, is under the supervision of a licensed physician, and is at risk

of a mental or physical impairment without the formula.

• Requires the disability insurer to cover at least 75% of the cost of the formula, and allows a limit of

coverage of $20,000 annually.

• Specifies that the above does not apply to limited benefit coverage.

Enacts A.R.S. §20-1402.02:

• Requires a group disability policy offered by a group disability insurer that includes a prescription

drug benefit to cover amino acid-based formula ordered by a physician if the insured is diagnosed

with an eosinophilic gastrointestinal disorder, is under the supervision of a licensed physician, and

is at risk of a mental or physical impairment without the formula.

• Requires the group disability insurer to cover at least 75% of the cost of the formula, and allows a

limit of coverage of $20,000 annually.

• Specifies that the above does not apply to limited benefit coverage.

Enacts A.R.S

ith an eosinophilic gastrointestinal disorder, is under the supervision of a licensed physician, and

is at risk of a mental or physical impairment without the formula.

• Requires the group disability insurer to cover at least 75% of the cost of the formula, and allows a

limit of coverage of $20,000 annually.

• Specifies that the above does not apply to limited benefit coverage.

Enacts A.R.S. §20-1404.02:

• Requires a policy or contract offered by a blanket disability insurer that includes a prescription drug

benefit to cover amino acid-based formula ordered by a physician if the insured is diagnosed with

an eosinophilic gastrointestinal disorder, is under the supervision of a licensed physician, and is at

risk of a mental or physical impairment without the formula.

• Requires the blanket disability insurer to cover at least 75% of the cost of the formula, and allows a

limit of coverage of $20,000 annually.

• Specifies that the above does not apply to limited benefit coverage.

Enacts A.R.S. §20-2332:

• Requires a health benefit plan offered by an accountable health plan includes a prescription drug

benefit to cover amino acid-based formula ordered by a physician if the subscriber is diagnosed

with an eosinophilic gastrointestinal disorder, is under the supervision of a licensed physician, and

is at risk of a mental or physical impairment without the formula.

• Requires the accountable health plan to cover at least 75% of the cost of the formula, and allows a

limit of coverage of $20,000 annually.

• Specifies that the above does not apply to limited benefit coverage.

HB 2698: small business health insurance plans (Ch. 229)

The bill permits the sale of health insurance coverage that is not subject to certain state requirements

to a subset of small employers the bill refers to as “small businesses.”

Enacts A.R.S

of the formula, and allows a

limit of coverage of $20,000 annually.

• Specifies that the above does not apply to limited benefit coverage.

HB 2698: small business health insurance plans (Ch. 229)

The bill permits the sale of health insurance coverage that is not subject to certain state requirements

to a subset of small employers the bill refers to as “small businesses.”

Enacts A.R.S. §20-2341:

• Defines “health care insurer” as “a disability insurer, group disability insurer, blanket disability

insurer, health care services organization, hospital service corporation, medical service

corporation or hospital and medical service corporation.”

• Defines “small business” as “a business that employed at least two but not more than twenty-five

persons at any time during the most recent calendar year and that has been uninsured for at least

six months.”

• Exempts health insurance coverage issued to small businesses as defined above from the

following coverage requirements:

ƒ Minimum 12 chiropractic visits; provider choice

ƒ Claiming handicapped or disabled children as dependents beyond limiting age

ƒ Continuity of care for new HCSO enrollees and for those whose physician has been removed

from an HCSO’s network

ƒ Contraceptives, if plan covers prescriptions, and outpatient services related to contraceptives

ƒ Maternity benefits for the natural mother of adopted children

ƒ Medical foods for some metabolic disorders

ƒ Medical supplies from vendors reasonably accessible in hours of service and areas of

coverage

ƒ Choice of care from nurse practitioner, if policy covers service within lawful scope of practice

for nurse practitioner

ƒ Occupational and physical therapy provided out of network, despite lack of referral or

prescription of specific services

ƒ Provider choice for covered eye care services as long as service is within scope of practice

ƒ Medical or surgical care provided by a podiatrist or dentist if service covered if performed by a

physician, if service within provider’s sco

practice

for nurse practitioner

ƒ Occupational and physical therapy provided out of network, despite lack of referral or

prescription of specific services

ƒ Provider choice for covered eye care services as long as service is within scope of practice

ƒ Medical or surgical care provided by a podiatrist or dentist if service covered if performed by a

physician, if service within provider’s scope of practice, and if the service is surgical, the

provider is on an accredited hospital’s staff

ƒ Process for assuring access to medically necessary formulary and non-formulary drugs;

approval of non-formulary drug if formulary drug ineffective or causes adverse reactions;

coverage of prescription drugs removed from formulary for minimum of 60 days

ƒ Psychiatric, drug abuse or alcoholism services whether provided in psychiatric or general

hospital

ƒ Choice of physician or psychologist care if coverage of psychologist services provided

ƒ Standing referral procedure

ƒ Surgery performed at any location if policy covers surgery.

• Specifies that § 20-2304(B), which requires insurers that offer more than one plan to small

employers to offer all their plans to small employers, does not apply to small business health

insurance plans issued under this article. In other words, an insurer that offers a “small business

health insurance plan” as defined in this legislation, to qualified small businesses and offers

another plan(s) to all small employers, does not have to offer the “small business health insurance

plan” to small employers that are not qualified small businesses.

SB 1070: group life insurance; coverage requirement (Ch. 216)

The bill eliminates the participation requirement from the provisions governing several types of group

life insurance.

Amends A.R.S. §20-1251.01:

• Removes the requirement that 75% of eligible persons participate in a group life insurance policy

from the provision governing credit union groups.

Amends A.R.S

mall businesses.

SB 1070: group life insurance; coverage requirement (Ch. 216)

The bill eliminates the participation requirement from the provisions governing several types of group

life insurance.

Amends A.R.S. §20-1251.01:

• Removes the requirement that 75% of eligible persons participate in a group life insurance policy

from the provision governing credit union groups.

Amends A.R.S. §20-1252:

• Removes the requirement that 75% of eligible persons participate in a group life insurance policy

from the provision governing employee groups.

Amends A.R.S. §20-1254:

• Removes the requirement that 75% of eligible persons participate in a group life insurance policy

from the provision governing labor union groups.

Amends A.R.S. §20-1255:

• Removes the requirement that 75% of eligible persons participate in a group life insurance policy

from the provision governing trustee groups.

Amends A.R.S. §20-1257:

• Removes the requirement that in order for coverage under a group life insurance policy to be

extended to dependents, 75% of eligible persons insured under the policy must elect to do so.

SB 1154: chiropractic care: medical necessity review (Ch. 293)

The bill adds permissive language to the statute governing medical necessity review.

Amends A.R.S. §20-2510:

• Permits health care insurers to use a chiropractor licensed in Arizona or another state to conduct

a medical necessity review of a direct denial of prior authorization of chiropractic service

requested by a chiropractor.

SB 1188: bail bond agent prohibitions (Ch. 255)

The bill provides an exception to the restrictions governing who may be licensed as a bail bond agent

or work for a bail bond agent.

re insurers to use a chiropractor licensed in Arizona or another state to conduct

a medical necessity review of a direct denial of prior authorization of chiropractic service

requested by a chiropractor.

SB 1188: bail bond agent prohibitions (Ch. 255)

The bill provides an exception to the restrictions governing who may be licensed as a bail bond agent

or work for a bail bond agent.

Amends A.R.S. §20-340.03:

• Permits persons whose felony conviction has been set aside, or whose civil rights have been

restored, to be licensed as bail bond agents or to be employed by bail bond agents, provided the

conviction was not for theft or for a crime involving the carrying or possession of a deadly weapon

or dangerous instrument.

• Effective May 1, 2006.

This summary is not meant as an exhaustive list or a detailed analysis of all insurance-related bills. It

generally describes the substantive content, but does not capture all details or necessarily cover all

bills that may be of interest to a particular reader. The Department may follow this bulletin with other,

more detailed bulletins related to implementation of the legislation. Any person may view this bulletin

on the Department’s web site at www.id.state.az.us. For questions about this bulletin, please contact

Karlene Wenz, Executive Assistant for Policy Affairs, at 602/364-3471, or kwenz@id.state.az.us.