A. Notwithstanding the control of a domestic insurer by any person, the officers and directors of an insurer may not be relieved of any obligation or liability to which they are subject by law and the insurer shall be managed so as to assure its separate operating identity consistent with this article.

Terms Used In Arizona Laws 20-481.32

  • 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
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
  • 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

  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • 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
  • Property: includes both real and personal property. See Arizona Laws 1-215
  • Quorum: The number of legislators that must be present to do business.

B. This section does not preclude a domestic insurer from having or sharing a common management or the cooperative or joint use of personnel, property or services with one or more other persons under arrangements meeting the standards of Section 20-481.12.

C. At least one-third of the directors of a domestic insurer and at least one-third of the members of each committee of the board of directors of any domestic insurer must be composed of persons who are not officers or employees of the insurer or of any entity controlling, controlled by or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or entity. At least one person must be included in any quorum for the transaction of business at any meeting of the board of directors or any committee.

D. The board of directors of a domestic insurer shall establish one or more committees composed solely of directors who are not officers or employees of the insurer or of any entity controlling, controlled by or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or any such entity. The committee or committees shall have responsibility for nominating candidates for director for election by shareholders or policyholders, evaluating the performance of officers deemed to be principal officers of the insurer and recommending to the board of directors the selection and compensation of the principal officers.

E. Subsections C and D of this section do not apply to a domestic insurer if the person controlling the insurer, including an insurer, a mutual insurance holding company or a publicly held corporation, has a board of directors and committees that meet the requirements of subsections C and D of this section.

F. An insurer may make application to the director for a waiver from the requirements of this section if the insurer’s annual direct written and assumed premium excluding premiums reinsured with the federal crop insurance corporation and federal flood program is less than three hundred million dollars. An insurer may also make application to the director for a waiver from the requirements of this section based on unique circumstances. The director may consider various factors including the type of business entity, volume of business written, availability of qualified board members and the ownership or organizational structure of the entity.

 

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