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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
insurance; fraud unit; assessment; increase
Purpose
Retroactive to July 1, 2026, increases the maximum amount the Director of the Department of Insurance and Financial Institutions (DIFI) may assess on each insurer authorized to transact business in Arizona to $1,350 for the administration and operation of DIFI's Fraud Unit and the prosecution of insurance fraud. Contains requirements for enactment and becomes effective on signature of the Governor (Proposition 108).
Background
The Director of DIFI (Director) administers the Fraud Unit to work in conjunction with the Department of Public Safety to investigate any act or practice of fraud against an insurer or licensed entity. The Director may investigate any act or practice of fraud that is statutorily prohibited and any other act or practice of fraud against an insurer or insurance licensed entity. The Director may employ investigators for the Fraud Unit, who must exercise the law enforcement powers of a peace officer while acting in the course and scope of employment for DIFI.
An insurer that believes a fraudulent claim has been or is being made must report relevant information to the Director. If the Director determines that further investigation is necessary, the Director may conduct an independent investigation to determine if fraud, deceit or intentional misrepresentation in the submission of the claim exists. If the Director finds fraud has occurred, the Director may report the violation to the reporting insurer, appropriate licensing agency and appropriate county attorney or the Attorney General for prosecution.
The Director must levy an annual assessment of up to $1,050 on each insurer authorized to transact business in Arizona for the administration and operation of the Fraud Unit and the prosecution of insurance fraud. Beginning in FY 2026, revenues from the annual assessment are deposited into the non-appropriated Fraud Unit Assessment Fund (A.R.S. §§ 20-466 and 35-190).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Increases the maximum amount the Director may assess on each insurer authorized to transact business in Arizona from $1,050 to $1,350 for the administration and operation of the Fraud Unit and the prosecution of insurance fraud.
2. Requires for enactment the affirmative vote of at least two-thirds of the members of each house of the Legislature (Proposition 108).
3. Becomes effective on signature of the Governor, retroactive to July 1, 2026.
House Action
COM 2/17/26 DP 10-0-0-1
3rd Read 2/26/26 42-12-6
Prepared by Senate Research
March 18, 2026
MG/SJ/hk