Of Insurance Annual Report
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Arizona Depar1tmen1t Of Insurance 2000/2001 Annual Report Jane Dee Hun Governor Charles R~ Cohen Director of Insurance 028 Please contact our Americans with Disabilities Act (ADA) Coordinator at (602) 912-8456 if you need reasonable accommodations due to a disability or handicap with regard to this publication or other services of this Department. Requests should be made as early as possible to allow reasonable time to make necessary arrangements or procure materials in an alternate format. Charles R~ Cohen Director of Insurance to Jane Dee Hull Governor and Members of the Arizona Legisla11:ure Arizona Department of Insurance 2910 North 44th Street, Suite 210 Phoenix, Arizona 85018-7256 (602) 912-8400 The information in this report is in the public domain and may be reprinted without permission. * To provide the reader with the most up-to-date information about the Department of Insurance, this report contains the most current, complete data available, which in some cases is for Calendar Year 2000 and in others is for Fiscal Year 2001 (7101100 through 6130101). Generally, data concerning the Department's licensees is reported for Calendar Year 2000, while data relating to the Department's operations is reported for Fiscal Year 2001. Exceptions are noted. \\'''"" ,.' ,. ;.· . TABLE OF CONTENTS ~t" . - . Directory 1 Message from the Director of Insurance 2 Strategic Plan Summary 3 Division Reports 4 Director's Office 5 Administrative Services and Licensing 7 Consumer Affairs 9 Financial Affairs 12 Rates and Regulations 15 Life and Health 18 Fraud Unit 20 Guaranty Funds 21 Receivership 22 Information Services 23 Public Information Resources 24 Newsletter Profile 25 Internet Resources 26 Consumer Publications 27 Laws and Policy 28 2000 Legislation 29 2000 Regulatory Bulletins 30 Fiscal Reports 31 Insurance Professionals and Insurers Authorized in Arizona 34 Summary of Insurance Professionals 35 Synopsis of Annual Statements 36 Insurers Authorized in Arizona 38 Name Changes 94 Top 25 Premium Writers by Line of Business 96 Insurers Whose Businesses Were Closed 11 O Receivership Activity 114 Qualified Surplus Lines Insurers 116 .,,_ ,. ~. ." "'~~ ~ -..;; .. ' ~ " f.. - + .. DIREC~ORY __ - - ..: .- .. - -.· ~- _·-_= < " ~ , ..,£~ I "'- ~ : r " <,;;:.,,. _.,.. Phone Fax Main Office Number (602) 912-8400 (602) 912-8408 Director's Office (602) 912-8456 (602) 912-8452 Administrative Services Business Services Section (602) 912-8400 (602) 912-8408 Licensing Section (602) 912-8470 (602) 912-8437 AZ Toll-Free (877) 660-0964 Arizona Guaranty Funds (602) 248-0685 (602) 248-0780 Consumer Affairs Division Consumer Assistance (602) 912-8444 (602) 954-7008 AZ Toll-Free (800) 325-2548 Health Care Appeals (602) 912-8443 (602) 912-8447 Investigations Section (602) 912-8430 (602) 954-7008 Market Assistance Section (602) 912-8450 (602) 954-7008 AZ Toll-Free (800) 544-9208 Market Conduct Section (602) 912-8442 (602) 912-8469 Ombudsman (602) 912-8430 Financial Affairs Division (602) 912-8420 (602) 912-8421 Examinations Section (602) 912-8422 Financial Surveillance Section (602) 912-8420 Compliance Section (602) 912-8420 Records Unit (602) 912-8425 Tax Unit (602) 912-8429 Trust Deposits Unit (602) 912-8427 Fraud Unit (602) 912-8418 (602) 912-8419 Information Services (602) 912-8410 (602) 912-8467 life and Health Division Rates and Forms Section (602) 912-8460 (602) 912-8453 Utilization Review Section (602) 912-8460 (602) 912-8453 Managed Care and Prepaid (602) 912-8464 (602) 912-8453 Dental Section Rates& RegulationsDivision (602) 912-8466 (602) 912-8421 Property and Casualty Section Registration Section Receivership Division (602) 912-8458 (602) 912-8459 Tucson Office (520) 628-6370 (520) 628-6633 i,'I ~ffe Message from the Director of Insurance ~ ~~ ' . ~ Governor Hull and Members of the Arizona Legislature: I am pleased to provide this 2000/2001 Annual Report of the Arizona Department of Insurance. I must commend and thank the staff of the Department for their dedication and hard work on behalf of Arizona's insurance consumers. This report can only begin to tell the story of their good work which goes on in many forms each day. The Department of Insurance continues to be a great bargain for the people of Arizona. The Department not only recovers its appropriation through fees, in fiscal year 2001 the Department collected over $200 million in premium taxes from the insurance industry. Among the Department's numerous accomplishments over the past year, particularly note the following: • The Department successfully established the new Managed Care Section of the Life and Health Division. Necessitated by the enactment of SB 1330, SB 1172 and HB2600 in 2000, this still-developing section administers the Department's new responsibilities to oversee the health care delivery systems of HMOs and Prepaid Dental Plans and the provider payment systems of all health insurers. • The Department continued its critical work to modernize regulatory systems in the areas of rate and form regulation, market conduct oversight, and insurer and producer licensing, enhancing the uniformity, reciprocity, and multi-state efficiency of our laws and systems in numerous ways. In the wake of the passage of the 1999 Gramm-Leach-Bliley Act, the most critical insurance regulation issue facing Arizona and other states is the modernization and preservation of the system of state regulation of the insurance industry. The convergence of the financial services industries continues to generate advocates for federal regulation of insurance. I believe insurance regulation issues typically arise out of local public policy, market and environmental conditions best understood and addressed at the state level, and that State government is much better suited than the federal government to provide prompt, quality local consumer assistance and support. It is critical for state insurance regulators, governors and state legislators to work together to modernize and adequately resource the state insurance regulatory system. Thank you for your support of the Department of Insurance, and the opportunity to serve the insurance consumers of Arizona. Sincerely, Charles R. Cohen Director of Insurance 2 Strategic Plan Summary _ The mission of the Department of Insurance is to faithfully execute the state insurance laws in a manner that protects insurance consumers and encourages economic development. The Department of Insurance achieves its overall mission through accomplishing the missions of the following programs and subprograms. STRATEGIC PLAN SUMMARY PROGRAM/SUBPROGRAM MISSION STATEMENT Policy and Administration To provide leadership, direction, coordination and support enabling the Department to achieve its mission. Solvency Regulation To oversee and promote the ability of authorized insurers to perform their financial obligations under insurance policies. Financial Condition and Soundness To detect and deter insurer financial deficiencies and Oversight unsound practices as early as possible. Insolvency Administration To minimize the impact of insurer insolvencies on Arizona residents. Consumer Support To inform and protect Arizona insurance consumers. Consumer Information and Assistance To make insurance-related information and assistance readily available to enable Arizona consumers to make informed decisions, and to facilitate the receipt of benefits to which they are entitled. Market Practices Oversight To protect Arizona insurance consumers from unfair and illegal market practices and to oversee insurer compliance with Arizona laws that promote effective health service delivery systems. Licensing To render efficient, effective and high-quality insurance licensing services and to restrict license issuance and renewal to qualified candidates. Professional Service Licensing To render efficient, effective and high-quality licensing services to producers and other insurance-related service providers and to restrict license issuance and renewal to qualified applicants. Insurer Licensing To render efficient, effective and high-quality licensing services to insurers and other insurance risk-bearing entities and to restrict license issuance to qualified applicants. Premium Tax Collections and Analysis To fully collect, efficiently deposit and accurately forecast insurance premium tax revenues. Fraud Investigation and Deterrence To deter, investigate and facilitate conviction for insurance fraud. 3 Department of Insurance Division Reports GOVERNOR OF ARIZONA DIRECTOR OF INSURANCE ADMINISTRATIVE Business Services Section~ SERVICES Licensing Sectiont DIVISION LIFE & HEAL TH Manaqed Care Section DIVISION Forms Review Section .... Utilization Review Section INFORMATION SERVICES DIVISION RATES& H REGULATIONS Property and Casualty Section DIVISION -I Reqistration Section FINANCIAL Compliance Section,_ AFFAIRS .... Consumer Assistance Section Financial Examinations Section ... DIVISION CONSUMER .... lnvestioations Section Financial Surveillance Section ,_ AFFAIRS DIVISION .... Market Conduct Section ..... Health Care Appeals Section RECEIVERSHIP DIVISION INSURANCE FRAUD UNIT ARIZONA Arizona Life and Disability Insurance INSURANCE Guaranty Fund GUARANTY Arizona Property and Casualty FUNDS Insurance Guaranty Fund 4 Charles R. Cohen Director Sara M., Begley Deputy Director Vista T. Brown Executive Asst., Policy Affairs Gerrie Marks Executive Asst., Regulatory Affairs Erin H. Klug Special Asst. to the Director Margaret McClelland Rules Analyst Bill Robinson Actuary The mission of the Director's Office is to provide