A. In addition to the powers that the director has under sections 20-156 to 20-160, inclusive, relating to the examination of insurers, the director shall also have the power to examine any insurer registered under Section 20-481.09 and its affiliates to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by the ultimate controlling party or by any entity or combination of entities within the insurance holding company system or by the insurance holding company system on a consolidated basis.

Terms Used In Arizona Laws 20-481.20

  • controlling: means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. See Arizona Laws 20-481
  • Enterprise risk: means any activity, circumstance, event or series of events involving one or more affiliates of an insurer that if not remedied promptly is likely to have a material adverse effect on the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including causing the insurer's risk-based capital to decrease to or below a company action level under Section 20-488. See Arizona Laws 20-481
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
  • Insurance holding company system: means two or more affiliated persons, one or more of whom is an insurer. See Arizona Laws 20-481
  • Insurer: means every person engaged in the business of making contracts of insurance except:

    (a) Agencies, authorities or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia or a state or political subdivision of a state. See Arizona Laws 20-481

  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Person: means an individual, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization and any similar entity or any combination of the foregoing acting in concert but does not include any joint venture partnership exclusively engaged in owning, managing, leasing or developing real or tangible personal property. See Arizona Laws 20-481
  • Subpoena: A command to a witness to appear and give testimony.

B. To determine compliance with this article, the director may order any insurer registered under Section 20-481.09 to produce:

1. All records, books or other information papers in the possession of the insurer or its affiliates insofar as the records, books or other information papers in the possession of any affiliate relate to any transactions between or among the insurer and any of its affiliates.

2. Information not in the possession of the insurer if the insurer has the right to access the information pursuant to contractual relationships, statutory obligations or any other method.

C. If the insurer cannot obtain the information requested under subsection B of this section, the insurer shall provide the director with a detailed explanation of the reason that the insurer cannot obtain the information and the identity of the holder of the information. If the director determines that the detailed explanation is without merit, the director, after notice and a hearing pursuant to section 20-161, may order that the insurer pay a penalty of not more than two hundred dollars for each day’s delay or that the insurer’s certificate of authority be suspended or revoked.

D. The director shall exercise his examination power under subsection A of this section only if the examination of the insurer under sections 20-156 through 20-160, inclusive, is inadequate or the interests of the policyholders of such insurer may be adversely affected.

E. Each registered insurer shall be liable for and shall pay the expenses of such examination in accordance with section 20-159.

F. If an insurer fails to comply with an order under subsection C of this section, the director may examine records, books or other information papers in the possession of any affiliate of the insurer insofar as such records, books or other information papers in the possession of any affiliate relate to any transactions between or among the insurer and any of its affiliates. The director may also issue subpoenas, administer oaths and examine under oath any person for purposes of determining compliance with this section. If a person fails or refuses to obey a subpoena, the director may petition a court of competent jurisdiction seeking relief from the court. The court may enter an order compelling the witness to appear and testify or produce documentary evidence. Each witness is entitled to the same fees and mileage, if claimed, as if the person was a witness in superior court pursuant to section 12-303 and the costs of those fees and mileage and any actual expense necessarily incurred in securing the attendance of witnesses shall be itemized and charged against and paid by the company being examined.

 

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