ARIZONA HOUSE OF REPRESENTATIVES
Second Regular Session
Senate: FIN DPA 10-0-0-0 | 3rd Read 30-0-0-0
SB 1062: insurance transactions; discrimination; exceptions
Sponsor: Senator Livingston, LD 22
Allows a life insurer (Insurer) to offset expenses that a group policyholder or employer incurs using implementation credits under certain conditions.
Statute does not include in the definitions of discrimination or rebates on life or disability insurance the following practices:
1) Paying bonuses to life insurance or life annuity policy holders or premium abatements out of surplus accumulated from nonparticipating insurance, provided such bonuses and abatements are in the best interests of the Insurer and its policyholders;
2) Paying allowance to policyholders, who have made consistent premium payments directly to an office of the Insurer for a specified period, concerning life insurance policies issued on the industrial debit plan;
3) Readjustment of a group insurance policy premium rate due to loss or expense at the end of a policy year, which may be retroactive only for that policy year; and
4) Issuing life or disability policies on a salary savings or payroll deduction plan at a reduced rate proportionate with the savings of the plan (A.R.S. § 20-450).
Statute does not prohibit providing:
1) Rewards or incentives under a wellness program permitted under the Health Insurance Portability and Accountability Act of 1996 for group disability insurance and individual disability insurance; or
2) Products or services that supplement a life or disability insurance policy and are intended to minimize or prevent claims-related losses or expenses, to deter injury or death or to improve health of the insured (A.R.S. § 20-450).
1. Allows the payments of implementation credits an Insurer makes to offset expenses that a group policyholder or employer incurs when the Insurer changes new or existing group coverage to do either of the following:
a) Include implementation credits in the premium and then reimburse the policy holder;
i. The life insurer must disclose to the policy holder whether implementation credits were included in the premium; or
b) Pay for the implementation credits and provide appropriate disclosure in the group policy. (Sec. 1)
2. Adds to the list of products and services not prohibited to include those that enhance the financial wellness of the insured. (Sec. 1)
3. Defines Life Insurance to include disability income policies and supplemental benefits policies. (Sec. 1)
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7. SB 1062
8. Initials JR/LB Page 0 House Engrossed
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