Bill Text: AZ HB2329 | 2014 | Fifty-first Legislature 2nd Regular | Chaptered
Bill Title: Insurance; notification; cancellation; nonrenewal
Spectrum: Strong Partisan Bill (Republican 13-1)
Status: (Passed) 2014-04-16 - Chapter 58 [HB2329 Detail]
Download: Arizona-2014-HB2329-Chaptered.html
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House Engrossed |
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State of Arizona House of Representatives Fifty-first Legislature Second Regular Session 2014
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CHAPTER 58
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HOUSE BILL 2329 |
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AN ACT
Amending sections 20‑1632, 20‑1674 and 20‑1676, Arizona Revised Statutes; relating to cancellation or nonrenewal of Insurance.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-1632, Arizona Revised Statutes, is amended to read:
20-1632. Cancellation, nonrenewal and reduction of limits for reasons other than nonpayment of premium; notices to insured; refund of unearned premium
A. A notice by the insurer to the policyholder of nonrenewal, cancellation or reduction in the limits of liability or coverage for reasons other than nonpayment of premium shall be mailed to the named insured with the insurer obtaining proof of mail by United States certified mail, or United States post office certificate of mailing or first class mail using intelligent mail barcode or another similar tracking method used or approved by the United States postal service at least ten days before the effective date of such the nonrenewal, cancellation or reduction in limits of liability or coverage, except that notice of nonrenewal under section 20‑1631, subsection E shall be mailed at least forty‑five days before the effective date of the nonrenewal. The notice shall include or be accompanied by all of the following:
1. A statement in writing of the specific facts that constitute the reasons, consistent with section 20‑1631, for such action by the insurer and a notice indicating the named insured's right to complain to the director of the insurer's action within ten days after receipt of the notice by the insured.
2. Notice of the insured's possible eligibility for insurance through the automobile assigned risk plan, and the notice shall state that all information included in the notice is given pursuant to this article.
3. Except as provided in paragraph 4 of this subsection, a refund of unearned premium. For the purposes of this paragraph, the insurer shall either mail the notice and refund of unearned premium together at least ten days before the effective date or mail the notice before the refund of unearned premium if both the notice and the refund of unearned premium are mailed separately to the insured at least ten days before the effective date.
4. In the case of a notice of cancellation or nonrenewal of a policyholder whose premium payment is collected and remitted on the insurer's behalf by the insurer's affiliate, the insurer shall refund any unearned premium to the policyholder within ten days after the policy cancellation. For the purposes of this paragraph, "affiliate" has the same meaning prescribed in section 20‑481.
B. Failure of the insurer to comply with subsection A of this section shall invalidate any cancellation, nonrenewal or reduction in limits of liability or coverage.
C. If a premium has been financed, a refund of unearned premium shall be returned as provided in section 6‑1416.
Sec. 2. Section 20-1674, Arizona Revised Statutes, is amended to read:
20-1674. Notice of cancellation
A. No cancellation under section 20‑1673 is effective unless the insurer mails or electronically delivers, consistent with the requirements of title 44, chapter 26, a copy of the notice of cancellation to the insured's agent and written notice of the cancellation is mailed with the insurer obtaining proof of mail by United States certified mail or first class mail using intelligent mail barcode or another similar tracking method used or approved by the United States postal service to the named insured at the address shown in the policy or to the last known address of the insured at least forty-five days before the effective date of the cancellation, except that, if cancellation is for nonpayment of premium, at least ten days' notice of cancellation must be given. The notice must state the specific facts which that constitute the grounds set forth in section 20‑1673 which that are relied on.
B. The notice of cancellation shall be accompanied by a refund of unearned premium, except a premium that has been financed.
Sec. 3. Section 20-1676, Arizona Revised Statutes, is amended to read:
20-1676. Notice of nonrenewal
A. This article does not apply to the nonrenewal of insurance policies except as provided in subsection B of this section.
B. No nonrenewal of any policy of insurance to which this article applies is effective unless the insurer mails or electronically delivers, consistent with the requirements of title 44, chapter 26, a copy of the notice of nonrenewal to the insured's agent and mails with the insurer obtaining proof of mail by United States certified mail or first class mail using intelligent mail barcode or another similar tracking method used or approved by the United States postal service written notice to the named insured, at the address shown in the policy or to the last known address of the insured, at least forty-five days before the end of the policy period, of its intention not to renew the policy. The transfer of a policyholder between companies within the same insurance group or changes in deductibles, premium, amount of insurance or coverage are not refusals to renew.
C. Notice of nonrenewal is not required if either of the following occurs:
1. The insurer or a company within the same insurance group has offered to issue a renewal policy.
2. The named insured has obtained replacement coverage or has agreed in writing to obtain replacement coverage.
D. If an insurer provides the notice described in subsection B of this section and the insurer subsequently extends the policy for ninety days at the request of the policyholder, an additional notice of nonrenewal is not required with respect to the extension.
E. If the notice of nonrenewal is mailed less than forty-five days before expiration, the coverage shall remain in effect until forty-five days after the notice is mailed. Earned premium for any period of coverage that extends beyond the expiration date shall be considered pro rata based upon on the previous year's rate.
APPROVED BY THE GOVERNOR APRIL 16, 2014.
FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 17, 2014.
