Arizona Department of Insurance

LICENSING/REGISTRATION: Rate Service Organization

Thu, 07/24/2014 - 07:30

WHAT IS A RATE SERVICE ORGANIZATION

A rate service organization is a person other than a single insurer who assists insurers by compiling and furnishing loss or expense statistics and recommending, making or filing rates, forms or supplementary rate information. Rate service organization does not include a joint underwriting association, any actuarial or legal consultant, any employee of an insurer or insurers under common control or management, or their employees or manager.  ARS § 20-381.

WHO MUST BE LICENSED?

An entity cannot provide an insurer with the services defined for a rate services organization, and an insurer cannot utilize an entity to provide services defined for a rate service organization, unless the entity is licensed as a rate services organization. A licensed rate services organization cannot refuse to provide services to an Arizona-authorized insurer that offers to pay the fair and usual price for the services. ARS § 20-389.

ARS § 41-1030(G) requires most Arizona government agencies to prominently print the provisions of ARS § 41-1030(B), (D), (E) and (F) on all license applications.  The following is the language in ARS § 41-1030(B), (D), (E) and (F):

B.        An agency shall not base a licensing decision in whole or in part on a licensing requirement or condition that is not specifically authorized by statute, rule or state tribal gaming compact. A general grant of authority in statute does not constitute a basis for imposing a licensing requirement or condition unless a rule is made pursuant to that general grant of authority that specifically authorizes the requirement or condition.

D.        This section may be enforced in a private civil action and relief may be awarded against the state.  The court may award reasonable attorney fees, damages and all fees associated with the license application to a party that prevails in an action against the state for a violation of this section.

E.        A state employee may not intentionally or knowingly violate this section.  A violation of this section is cause for disciplinary action or dismissal pursuant to the agency’s adopted personnel policy.

F.         This section does not abrogate the immunity provided by section 12-820.01 or 12-820.02.