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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
insurance; time-limited offer; settlement demand
Purpose
Grants an insurer 30 days to review and respond to third-party settlement demands.
Background
Statute prohibits an insurer from failing to acknowledge or acting reasonably and promptly upon communications with respect to claims arising under an insurance policy. An insurer must attempt in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear (A.R.S. § 20-461).
Statute relating to first-party claims requires first-party claims to be paid within 30 days of receiving an acceptable proof of loss. An insurer must pay 10 percent annual interest on any late payments, beginning from the date the claim was received (A.R.S. § 20-462).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Grants an insurer 30 days to review and respond to third-party settlement demands.
2. Specifies that the 30-day review period begins on the date of the U.S. Postal Service postmark or the date of a digital transmission sent via email or fax.
3. Allows an insurer, if there is a dispute as to whether the insurer complied with the time limit, to establish the date by competent evidence.
4. Becomes effective on the general effective date.
Prepared by Senate Research
February 4, 2026
MG/SJ/hk