§ 20-410 — Validity of surplus lines insurance; disclosure; policy fees

Arizona § 20-410

• Jurisdiction: Arizona
• Title 20: Arizona Revised Statutes
• Ch. 2: TRANSACTION OF INSURANCE BUSINESS
• Art. 5: Unauthorized Insurers

Text

A. Insurance contracts procured as surplus lines coverage are fully valid and enforceable as to all parties and shall be recognized in all matters in the same manner as like contracts issued by authorized insurers.

B. Any policy and any evidence of surplus lines coverage that are issued by an unauthorized insurer pursuant to this article and that are issued for delivery to the insured shall contain a conspicuously stamped or written notice in bold-faced type that states one of the following:

1. If the surplus lines policy and any evidence of coverage are issued by a surplus lines insurer that is not a domestic surplus lines insurer:

Pursuant to section 20-401.01, subsection B, paragraph 1, Arizona Revised Statutes, this policy is issued by an insurer that does not possess a certificate of authority from the director of the Arizona department of insurance and financial institutions. If the insurer that issued this policy becomes insolvent, insureds or claimants will not be eligible for insurance guaranty fund protection pursuant to title 20, Arizona Revised Statutes.

2. If the surplus lines policy and any evidence of coverage are issued by a domestic surplus lines insurer:

If the insurer that issued this policy becomes insolvent, insureds or claimants will not be eligible for insurance guaranty fund protection pursuant to title 20, Arizona Revised Statutes.

C. A surplus lines broker may charge and receive a fee in addition to the premium for services provided in the transaction of surplus lines insurance if before effecting any coverage both of the following conditions are met:

1. The service fees and the specific services for which the fees are charged are disclosed to the insured or the insured's representative and are agreed to in writing by the insured or the insured's representative.

2. The taxes prescribed in section 20-416 are paid on any fees charged to the insured.