SB1101 Summary

• Amends Arizona law governing captive insurance licensing to allow agency captive insurers to directly insure life and disability income insurance (employer group term life, employer group disability income, and employer health plan deductible reimbursement) with director approval.

• Requires agency captive insurers writing life or disability insurance to place policies only through affiliated insurance producers or managing general agents, maintain regulatory good standing, and disclose all limitations and obligations to policyholders.

• Mandates that policies issued by agency captive insurers include a conspicuous notice stating the insurer is not part of Arizona's insurance guaranty fund and insureds are not eligible for guaranty fund protection if the insurer becomes insolvent.

• Restricts agency captive insurers insuring life or disability risks to employers maintaining principal places of business within Arizona and requires financial statement audits by independent certified public accountants.

• Clarifies that agency captive insurers insuring life or disability policies must pay premium taxes under section 20-224 in addition to licensing fees, removing the exemption from other state and local taxes.