AZ HB2594

Amends Arizona law to regulate professional employer organizations (PEOs) by adding new definitions including "client based policy," "master policy," and "multiple coordinated policies" for workers' compensation coverage arrangements.

Requires professional employer organizations that purchase workers' compensation insurance to comply with new section 23-577, which specifies three types of coverage arrangements (individual policies, master policies, or multiple coordinated policies) and requires notification to the commission within 10 days of agreement termination or nonrenewal.

Prohibits clients insured under master policies from coverage if they have had two or more "no coverage" claims eligible for payment from the special fund within a 24-month period; disqualifies such clients from master policy coverage for 24 months following the determination.

Requires insurance carriers providing master or multiple coordinated policies to notify professional employer organizations and each client of any cancellation or nonrenewal of the master policy or coordinated policies.

Modifies workers' compensation rate reporting requirements to require separate reporting of payroll classification and loss experience for each client covered under a master policy.