Arizona § 20-260 Limit of risk

Arizona Statutes

§ 20-260 — Limit of risk

Arizona § 20-260

Title 20Arizona Revised Statutes

Ch. 2TRANSACTION OF INSURANCE BUSINESS

Art. 2Kinds of Insurance; Reinsurance; Limits of Risk

This text of Arizona § 20-260 (Limit of risk) is published on Counsel Stack Legal Research, covering Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ariz. Rev. Stat. Ann. § 20-260 (2026).

Text

A.No insurer shall retain any risk on any one subject of insurance, whether located or to be performed in this state or elsewhere, in an amount exceeding ten per cent of its surplus to policyholders, except that a domestic mutual insurer holding a certificate of authority may retain up to such ten per cent or up to the maximum applicable as set forth in section 20-711, whichever is the larger, and a domestic limited stock insurer may retain up to the maximum applicable as set forth in section 20-708.

B.Reinsurance authorized by section 20-261 shall be deducted in determining risk retained. As to surety risks, deduction shall also be made of the amount assumed by any established incorporated cosurety and the value of any security deposited, pledged or held subject to the surety's consent

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A. No insurer shall retain any risk on any one subject of insurance, whether located or to be performed in this state or elsewhere, in an amount exceeding ten per cent of its surplus to policyholders, except that a domestic mutual insurer holding a certificate of authority may retain up to such ten per cent or up to the maximum applicable as set forth in section 20-711, whichever is the larger, and a domestic limited stock insurer may retain up to the maximum applicable as set forth in section 20-708.

B. Reinsurance authorized by section 20-261 shall be deducted in determining risk retained. As to surety risks, deduction shall also be made of the amount assumed by any established incorporated cosurety and the value of any security deposited, pledged or held subject to the surety's consent and for the surety's protection.

C. As to alien insurers, other than life insurers domiciled in Canada, this section shall relate only to risks and surplus to policyholders of the insurer's United States branch.

D. This section shall not apply to group life or group or blanket disability insurance, title insurance, insurance of ocean marine risks or marine protection and indemnity risks, workers' compensation insurance, employers' liability coverages, nor to any policy or type of coverage as to which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy.

E. A "subject of insurance" for the purposes of this section, as to insurance against fire and hazards other than windstorm or earthquake, includes all properties insured by the same insurer which are customarily considered by underwriters to be subject to loss or damage from the same fire or other such hazard insured against.

F. "Surplus to policyholders" for the purpose of this section shall be deemed to include any voluntary reserves which are not required pursuant to law, and shall be determined from the last sworn statement of the insurer on file with the director or by the last report of examination by the director, whichever is the more recent at time of assumption of such risk.