20-2212. Deficits; equitable assessments; premium tax credits
228 words·~1 min read·
/az/title-20/20-2212A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
A. On a determination that within the next one hundred eighty days thereafter the association will be unable to pay its outstanding lawful obligations as they mature in the regular course of business as shown by an excess of such lawful obligations over admitted assets, the association shall certify to the director the existence of this condition.
B. At the time of certification, the association shall submit a schedule of policyholder surcharges and a plan of member assessments which, in combination, are sufficient to assure the continued sound financial operation of the association. The surcharge may not exceed ten per cent of the total premium paid for a policy or policies obtained through the association. Member assessments shall not exceed one per cent of each member's net direct premium in this state attributable to the line of insurance, the writing of which requires it to be a member of the association.
C. Any member of the association subject to an assessment in any one calendar year shall be allowed a premium tax credit beginning in the following calendar year, at the rate of twenty per cent per year for five years.
D. The association shall certify to the director the estimated amount of any deficit remaining after the termination of all underwriting activities of the association. Policyholder surcharges are limited to ten per cent of the annual premium.