Arizona State Senate
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ARIZONA STATE SENATE RESEARCH STAFF ALANNA BENDEL ASSISTANT RESEARCH ANALYST TO: JOINT LEGISLATIVE AUDIT COMMITTEE MOLLY GRAVER DATE: January 3, 2020 LEGISLATIVE RESEARCH ANALYST FINANCE COMMITTEE Telephone: (602) 926-3171 SUBJECT: Sunset Review of the Arizona Department of Insurance ____________________________________________________________________________ _ Attached is the final report of the sunset review of the Arizona Department of Insurance, which was conducted by the Senate Finance Committee of Reference. A performance audit of the Arizona Department of Insurance was conducted by the Arizona Office of the Auditor General (Report No. 19-110). This report has been distributed to the following individuals and agencies: Governor of the State of Arizona The Honorable Douglas A. Ducey President of the Senate Speaker of the House of Representatives Senator Karen Fann Representative Russell Bowers Senate Members Senator J.D. Mesnard, Chair Secretary of the Senate Senator Lela Alston Senate Resource Center Senator Sean Bowie Senate Republican Staff Senator Paul Boyer Senate Democratic Staff Senator Lupe Contreras Senate Research Staff Senator David C. Farnsworth Office of the Chief Clerk Senator Vince Leach House Republican Staff Senator David Livingston House Democratic Staff Senator Martin Quezada House Research Staff Senator Michelle Ugenti-Rita Arizona Department of Insurance Office of the Auditor General Arizona State Library, Archives and Public Records Senate Finance Committee of Reference Report Arizona Department of Insurance Background Established in 1968, the Arizona Department of Insurance (DOI) regulates and monitors insurance companies and professionals operating in Arizona to protect the public and help ensure that these entities follow Arizona and federal laws (Ariz. Const. art. 15 § 5). Laws 2019, Chapter 252 consolidated the Arizona Department of Financial Institutions and the Arizona Automobile Theft Authority as divisions within DOI and renamed DOI the Arizona Department of Insurance and Financial Institutions, effective July 1, 2020. DOI is responsible for: 1) licensing qualified insurance professionals and companies, such as long-term care insurance, property insurance, vehicle insurance and workers' compensation insurance; 2) investigating consumer complaints and suspected fraud; 3) overseeing insurance companies’ financial solvency; 4) reviewing insurance policies, rates and products; and 5) administering the Arizona Life and Disability Insurance Guaranty Fund and the Arizona Property and Casualty Insurance Guaranty Fund (A.R.S. §§ 20-285; 20-376; 20-466; 20-491.03; 20-662; and 20-683). DOI is set to terminate on July 1, 2020, unless legislation is enacted for its continuation (A.R.S. § 41-3020.17). Committee of Reference Sunset Review Procedure The Senate Finance Committee of Reference conducted a public meeting on Tuesday, December 17, 2019, to review the audit report prepared by the Auditor General, evaluate DOI's response to the sunset factors and receive public testimony. Committee Recommendations The Senate Finance Committee of Reference recommended that the Arizona Department of Insurance and Financial Institutions be continued for five years until July 1, 2025. Attachments A. Meeting Notice B. Minutes of the Senate Finance Committee of Reference C. Auditor General Presentation D. Chairman’s Letter requesting the DOI's response to the agency factors E. DOI's response to the agency factors pursuant to A.R.S. § 41-2954, subsection F MG/AB/gs REVISED REVISED REVISED Interim agendas can be obtained via the Internet at http://www.azleg.gov/Interim-Committees ARIZONA STATE SENATE INTERIM MEETING NOTICE OPEN TO THE PUBLIC SENATE FINANCE COMMITTEE OF REFERENCE FOR THE SUNSET REVIEWS OF THE ARIZONA DEPARTMENT OF INSURANCE, THE ARIZONA DEPARTMENT OF REVENUE AND THE ARIZONA STATE BOARD OF INVESTMENT AND THE REVIEW OF THE LEGISLATIVE PROPOSAL TO ESTABLISH ARIZONA FERTILITY INSURANCE COVERAGE Date: Tuesday, December 17, 2019 Time: 8:30 A.M. Place: SHR 1 AGENDA 1. Call to Order 2. Roll Call 3. Legislative Proposal to Establish Arizona Fertility Insurance Coverage • Overview of the Sunrise Application to Establish Arizona Fertility Insurance Coverage • Public Testimony • Discussion • Recommendations by the Committee of Reference 4. Sunset Review of the Arizona Department of Insurance • Presentation by the Office of the Auditor General • Response by the Arizona Department of Insurance • Public Testimony • Discussion • Recommendations by the Committee of Reference 5. Sunset Review of the Arizona Department of Revenue • Presentation by the Office of the Auditor General • Response by the Arizona Department of Revenue • Public Testimony • Discussion • Recommendations by the Committee of Reference 6. Sunset Review of the Arizona State Board of Investment • Presentation by the Office of the Auditor General • Response by the Arizona State Board of Investment • Public Testimony • Discussion • Recommendations by the Committee of Reference 7. Adjourn Page 1 of 2 Members: Senator J.D. Mesnard, Chair Senator Lela Alston Senator Sean Bowie Senator Paul Boyer Senator Lupe Contreras Senator David C. Farnsworth Senator Vince Leach Senator David Livingston Senator Martin Quezada Senator Michelle Ugenti-Rita 12/10/19 12/13/19 sa jr For questions regarding this agenda, please contact Senate Research Department. Persons with a disability may request a reasonable accommodation such as a sign language interpreter, by contacting the Senate Secretary’s Office: (602) 926-4231 (voice). Requests should be made as early as possible to allow time to arrange the accommodation. Page 2 of 2 ARIZONA STATE SENATE SENATE FINANCE COMMITTEE OF REFERENCE FOR THE SUNSET REVIEWS OF THE ARIZONA DEPARTMENT OF INSURANCE, THE ARIZONA DEPARTMENT OF REVENUE AND THE ARIZONA STATE BOARD OF INVESTMENT AND THE REVIEW OF THE LEGISLATIVE PROPOSAL TO ESTABLISH ARIZONA FERTILITY INSURANCE COVERAGE Minutes of the Meeting December 17, 2019 8:30 a.m., Senate Hearing Room 1 Members Present: Senator J.D. Mesnard, Chair Senator Lela Alston Senator Sean Bowie Senator David C. Farnsworth Senator Martin Quezada Senator Michelle Ugenti-Rita Members Excused: Senator Paul Boyer Senator Lupe Contreras Senator Vince Leach Senator David Livingston Staff: Molly Graver, Senate Research Analyst Alanna Bendel, Senate Research Assistant Analyst Chairman Mesnard announced that the Committee would begin to hear testimony and eventually the Committee will officially start with the review of the Sunset process. LEGISLATIVE PROPOSAL TO ESTABLISH ARIZONA FERTILITY INSURANCE COVERAGE Overview of the Legislative Proposal to Establish Arizona Fertility Insurance Coverage Molly Graver, Legislative Research Analyst, Finance Committee, gave an overview of the Legislative process for a legislative proposal to establish Arizona Fertility Insurance Coverage. Senate Finance Committee of Reference December 17, 2019 Page 1 Public Testimony Elizabeth Marshall, representing herself, distributed a handout entitled "Letters in Support of Proposal to Establish Arizona Fertility Insurance Coverage" (Attachment A) and testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Dr. Jesse Hade, Boston IVF, Arizona Center, distributed a handout entitled "Access to Fertility Care Benefits" (Attachment B) and testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Dr. H. Randall Craig, Fertility Specialist, testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Chairman Mesnard called the meeting to order at 9:15 a.m. and attendance was noted. Tyler Webb, representing himself, testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Kerri Lopez-Howell, representing herself, testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Nicole Smith, representing herself, testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Rachel Wilgoren, representing herself, testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Jullian Lenehan, representing herself, testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Hannah Israelsen, representing herself, testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Jovan Heusser, representing herself, testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Jennifer Klein, representing herself, testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Kathryn Fiore, representing herself, testified in support of the proposal to establish Arizona Fertility Insurance Coverage. Marc Osborn, representing America's Health Insurance Plans (AHIP), Blue Cross Blue Shield of Arizona, testified in opposition to the proposal to establish Arizona Fertility Insurance Coverage and answered questions posed by the Committee. Senate Finance Committee of Reference December 17, 2019 Page 2 Brian Hummell, representing American Cancer Society, Cancer Action Network, testified in support of the proposal to establish Arizona Fertility Insurance Coverage and answered questions posed by the Committee. Ms. Marshall offered additional testimony and answered questions posed by the Committee. Ms. Smith answered questions posed by the Committee. Ms. Lenehan offered further comments. Ms. Heusser offered further comments. Mr. Osborn answered additional questions posed