Arizona Revised Statutes Title 20. Insurance § 20-463. Fraud;  injunction;  penalties;  restitution;  definitions

A. It is a fraudulent practice and unlawful for a person to knowingly:

1. Present, cause to be presented or prepare with the knowledge or belief that it will be presented an oral or written statement, including computer generated documents, to or by an insurer, reinsurer, purported insurer or reinsurer, insurance producer or agent of a reinsurer that contains untrue statements of material fact or that fails to state any material fact with respect to any of the following:

(a) An application for the issuance or renewal of an insurance policy.

(b) The rating of an insurance policy.

(c) A claim for payment or benefit pursuant to an insurance policy.

(d) Premiums paid on any insurance policy.

(e) Payments made pursuant to the terms of any insurance policy.

(f) An application for a certificate of authority.

(g) The financial condition of an insurer, reinsurer or purported insurer or reinsurer.

(h) The acquisition of an insurer or reinsurer or the concealing of any information concerning any fact material to the acquisition.

2. Solicit or accept new or renewal insurance risks by or for any insolvent insurer, reinsurer or other entity licensed to transact insurance business in this state.

3. Conceal or attempt to conceal from the department or remove or attempt to remove from the home office, place of safekeeping or other place of business of any insurer, reinsurer or other entity licensed to transact insurance business in this state part or all of the assets or records of the assets, transactions and affairs.

4. Divert or attempt or conspire to divert the monies of an insurer, reinsurer, entity licensed to transact insurance business in this state or other person in connection with:

(a) The transaction of insurance or reinsurance.

(b) The conduct of business activities by any insurer, reinsurer or other entity licensed to transact insurance business in this state.

(c) The formation, acquisition or dissolution of any insurer, reinsurer or other entity licensed to transact insurance business in this state.

5. Assist, abet, solicit or conspire with another person to violate paragraph 1 of this subsection.

6. Employ, use or act as a runner, capper or steerer for the purposes of violating paragraph 1 of this subsection.

B. A person who acts without malice, fraudulent intent or bad faith is not subject to liability for filing reports or furnishing orally or in writing other information concerning suspected, anticipated or completed fraudulent insurance acts if the reports or information is provided to or received from:

1. The director or the department.

2. Law enforcement officials and their agents and employees.

3. The national association of insurance commissioners, other state insurance departments, a federal or state agency or bureau established to detect and prevent fraudulent insurance acts, and the agency's or bureau's agents, employees or designees, or an organization established by insurers to assist in the detection and prevention of fraudulent insurance acts, and the organization's agents, employees or designees.

C. A person, or an officer, employee or agent of the person acting within the scope of employment or agency of that officer, employee or agent, identified under subsection B, paragraph 1, 2 or 3 when performing authorized activities without malice, fraudulent intent or bad faith is not subject to civil liability for libel, slander or another relevant tort.  No civil cause of action may be brought against the person or entity.

D. A person or entity under subsection B or C is entitled to an award of attorney fees and costs if the person or entity is a prevailing party in a civil cause of action for libel, slander or other relevant tort and the action is not substantially justified.  For purposes of this subsection, “substantially justified” means a proceeding that has a reasonable basis in law or fact at the time that it is initiated.

E. Nothing in this section limits any common law right of the person or entity.

F. Nothing in this section is intended to prohibit contact or communication with clients or patients for any lawful purpose, including communication by and between insurers, the insurers' policyholders and claimants under policies issued to the insurers' policyholders regarding the investigation or settlement of any claim.

G. For the purposes of this section:

1. “Runner”, “capper” or “steerer” means a person who procures clients at the direction of, or in cooperation with, a person who intends to perform or obtain services or benefits under a contract of insurance or who intends to assert a claim against an insured.

2. “Statement” includes any notice, proof of injury, bill for services, payment for services, hospital or doctor records, x-rays, test reports, medical or legal expenses, or other evidence of loss or injury, or other expense or payment.


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