Arizona property/casualty insurance laws addressing the use of credit information, new form filing and investment provisions, spiraling costs of construction defect litigation and minors’ seatbelt usage took affect this week.
“Overall, the outcome of this year’s session was a victory for both consumers and insurance companies since several troublesome measures were scaled back or defeated,” said Sam Sorich, vice president and western regional manager of the National Association of Independent Insurers (NAII).
“Topping the list of burdensome bills defeated were several credit-based insurance scoring measures introduced this session. Fortunately, the version that became law contains provisions that call for reasonable notice and disclosure requirements.”
House Bill 2386, which took affect Aug. 25, requires an insurer or agent to provide a written explanation for adverse underwriting decisions-such as being charged a higher rate-based on an applicant’s or policyholder’s credit.
It also mandates that an insurer reconsider its underwriting decision when an individual submits corrected information. Also, an insurer must provide a consumer with a list of typical items that could affect his or her credit report.
As a result of NAII’s vigorous opposition to earlier versions of HB 2072 and SB 1098, measures that would have made a renter’s own insurance policy primary to the rental car company’s insurance coverage were extensively amended and, in their final forms, the bills no longer related to rental car insurance issues.
“These bills would have transferred the significant cost of rental car liability losses from the rental car company to the driver’s insurance policy,” Sorich said. “The state legislature was wise to realize that sound public policy requires any business entity to provide liability coverage for its own vehicles.”
Several other bills impacting the insurance industry have been signed by Arizona Gov. Jane Dee Hull since the legislature adjourned May 23, and take affect this week: HB 2402 requires automobile passengers under age 16 to wear seatbelts. Scofflaws face a maximum $25 fine for each violation.
HB 2204 clarifies that a property/casualty policy form is deemed approved 30 days after it has been filed with the insurance director, unless the director has issued an order approving or disapproving the form. A new provision added in this bill authorizes the insurance department director to extend the 30-day period for an additional 15 days, with written notice. The bill also liberalizes the criteria for qualifying as an “industrial insured,” an insured that is exempt from the normal rate and form filing requirements.
HB 2620 requires the purchaser of a dwelling to give the seller an opportunity to repair construction defect before the purchaser may file a construction defect lawsuit, helping insurers cope with the high litigation costs of covering contractors.
SB 1162 increases the fees—from $45-$135 to $70-$205—that the insurance department can charge to insurance companies for various activities and procedures, such as filing annual statements, obtaining licenses and certificates of authority.
HB 2027 increases the percentage of assets that a domestic insurer may invest in its subsidiaries from 5 percent to 10 percent.
Topics Carriers Legislation Arizona
Was this article valuable?
Here are more articles you may enjoy.
Reserve Strengthening for Casualty Lines Not Over: Moody’s 
Michigan Supreme Court Rules Against Couple in Drone Surveillance Case 
China Construction Bank Sued in US Over Reinsurance Fraud Losses 
Progressive Set to ‘Maximize’ Growth, Building on Q1 
