Examinations and Analysis Program

GENERAL INFORMATION

Arizona Revised Statutes ("A.R.S.") § 20-156 provides the Arizona Department of Insurance with the authority to perform examinations of insurance companies. A.R.S. § 20-148 authorizes the Department to utilize independent contractor examiners to perform actuarial, technical and other professional services.

The Department's Examinations Program consists of

  • "Analysis" or "desk audit" work, which includes, but is not limited to, review of annual and quarterly statements, audited financial reports, reinsurance agreements, Form A, B and D filings, extraordinary dividends, biographical affidavits, actuarial reports, risk-based capital, workers' compensation deposits, certificate of authority applications, redomestication applications, requests for name changes, merger requests and withdrawal requests;
  • "On-site examination" work , and
  • "Post-examination" work, which may include report preparation, follow-up with examinees, and other activities).
Details about various Examination Program activities are available on our Invoice Terminology page .

When the Department conducts an on-site examination, one or more contractor examiners will be assigned to perform the work. An examination team may include some or all of the following: Examination Supervisor, Examiner-in-Charge, Assisting Examiners, or Specialist Examiners. The Examinee will receive a letter identifying the examiners authorized to conduct the examination. This letter will include other important relative to the cost of the examination.

Upon commencement of the examination, and in accordance with A.R.S. § 41-1009 , the Field Supervisor or Examiner-in-Charge will present your examination contact person with a form entitled Notice of Inspection Rights: Disclosure Verification . Throughout the examination and until the Report of Examination is filed, your company will receive an Inspection Status Report from the Department.

WHAT CAN EXAMINATION CHARGES INCLUDE?

Examiner fees

Examiner services will be charged at the examiner's hourly rate awarded in his/her contract with the State of Arizona. The examiner's hourly rate may change during the examination period. The examiner contract renews annually and some examiners' hourly rates will change as a result of contract renewal terms. In addition, the Department may elect to use a contractor in a different examiner classification which may result in a change in the examiner's hourly rate.

In accordance with A.R.S. § 20-159 , the Examinee will be charged for examiner services for time spent working or traveling, and the related examination expenses. Charges may include preexamination selection and preparation, examination, and postexamination costs, as well as other costs of evaluating compliance with Arizona law.

Contractor examiners are competitively procured by the Arizona State Procurement Office. To be able to be assigned to examination jobs, a vendor must have been awarded a contract in response to a Request For Proposals ("RFP"), which includes the qualifications, terms and conditions for examination contractors as well as a description of the items for which examiners can be remunerated. The Department may utilize contractors from any state contract (accessible from the "Procure AZ" web site at http://procure.az.gov), including but not limited to the following:

  • EPS080029: Insurer Examination Services.
  • SCC060006: Auditing
  • SCC070018: Statewide Actuarial Services

Examiner expenses

Examination expenses include, but are not limited to, lodging, meals, airfare, ground transportation and car rental. The lodging and meal expenses are based upon the U.S. General Services Administration (GSA) Domestic Per Diem Rates, accessible from the GSA web page.

Examination Invoices

The Department sends invoices to the company detailing the fees and expenses incurred by examiners and analysts. When reviewing your invoice, please note that a singular invoice may contain fees and expenses relating to more than one type of work performed (i.e. market conduct examination, financial examination, financial surveillance, et al). Weekly invoices include a charge to cover the cost of unallocated administrative costs arising from examinations. This charge, presently 70% of examiner fees, is subject to change based on prevailing administrative costs. For clarification about terminology used on an invoice, you may wish to consult our INVOICE TERMINOLOGY page.

The invoiced amount must be paid within 14 calendar days from the invoice date. Please make your check or money order payable to INSURANCE EXAMINERS' REVOLVING FUND, and send your payment, with your invoice, to

Insurance Examiners' Revolving Fund
2910 North 44th Street, Suite 210
Phoenix, Arizona 85018-7269


If you have any questions about an invoice, feel free to e-mail Mary Jordan at mjordan@azinsurance.gov or call her at (602) 364-2459.

HOW MAY AN EXAMINEE INQUIRE ABOUT EXAMINATION CHARGES?

Invoices are payable within 14 calendar days of the invoice date. If the Department is contacted with an inquiry concerning an invoice prior to the payment date, the payment date will be deferred until the Department responds to the inquiry.

The examinee may choose whether to make an informal inquiry or a formal inquiry.

Direct informal inquiries to

Submit formal inquiries in writing. Include a full description of the basis of the inquiry, supporting documents and the specific relief sought. Submit your inquiry to one of the following examination coordinators:

Financial Examinations Market Conduct Examinations Managed Care Examinations
David Lee
DLee@azinsurance.gov
Financial Affairs Division
Arizona Dept. of Insurance
2910 N 44th St., Suite 210
Phoenix, AZ 85018-7269
Claudia Vargas
CVargas@azinsurance.gov
Market Oversight Division
Arizona Dept. of Insurance
2910 N 44th St., Suite 210
Phoenix, AZ 85018-7269
Alix Shafer
AShafer@azinsurance.gov
Life and Health Division
Arizona Dept. of Insurance
2910 N 44th St.,Suite 210
Phoenix, AZ 85018-7269

Upon receiving a formal inquiry, the examination coordinator will review and investigate the inquiry, and will provide a written resolution and explanation within 7 calendar days. Amounts determined to be payable under the invoice shall be due the later of the original payment date or 7 calendar days after the date of the decision.

The Department of Insurance is committed toward resolving inquiries concerning your invoices as promptly as possible.

HELP US COMPLETE YOUR EXAMINATION PROMPTLY

Prior to commencement of the examination, the Field Supervisor or Examiner-in-Charge may request a pre-examination conference with representatives of the Examinee to facilitate the examination process. In lieu of a pre-examination conference, a meeting will be arranged once the examination team arrives on-site. Your prompt cooperation with the examiners' requests for information and access to records and transactions will help to keep the cost and length of the examination to a minimum. Any documentation requested prior to commencement of the examination should be available for the examination team when they arrive on site. A.R.S. § 20-157 requires that records shall be produced and made freely accessible. Compliance with this provision will also help ensure the timely completion of the examination.