2017 Arizona Revised Statutes
Title 20 - Insurance
§ 20-1632 Cancellation, nonrenewal and reduction of limits for reasons other than nonpayment of premium; notices to insured; refund of unearned premium

20-1632. Cancellation, nonrenewal and reduction of limits for reasons other than nonpayment of premium; notices to insured; refund of unearned premium

A. A notice by the insurer to the policyholder of cancellation or reduction in the limits of liability or coverage for reasons other than nonpayment of premium shall be mailed to the named insured with the insurer obtaining proof of mailing by United States certified mail, United States post office certificate of mailing or first class mail using intelligent mail barcode or another similar tracking method used or approved by the United States postal service at least ten days before the effective date of the cancellation or reduction in limits of liability or coverage. Notice of nonrenewal for reasons other than nonpayment of premium shall be mailed at least forty-five days before the effective date of the nonrenewal. A notice under this section shall include or be accompanied by all of the following:

1. A statement in writing of the specific facts that constitute the reasons, consistent with this article, for such action by the insurer and a notice indicating the named insured's right to complain to the director of the insurer's action within ten days after receipt of the notice by the insured.

2. Notice of the insured's possible eligibility for insurance through the automobile assigned risk plan, and the notice shall state that all information included in the notice is given pursuant to this article.

3. Except as provided in paragraph 4 of this subsection, a refund of unearned premium. For the purposes of this paragraph, the insurer shall either mail the notice and refund of unearned premium together at least ten days before the effective date or mail the notice before the refund of unearned premium if both the notice and the refund of unearned premium are mailed separately to the insured at least ten days before the effective date. As an alternative to mailing, an insurer may choose to refund the unearned premium by any electronic means previously established with the customer to make and receive premium payments for the policy.

4. In the case of a notice of cancellation or nonrenewal of a policyholder whose premium payment is collected and remitted on the insurer's behalf by the insurer's affiliate, the insurer shall refund any unearned premium to the policyholder within ten days after the policy cancellation or nonrenewal. For the purposes of this paragraph, " affiliate" has the same meaning prescribed in section 20-481.

B. Failure of the insurer to comply with subsection A of this section shall invalidate any cancellation, nonrenewal or reduction in limits of liability or coverage.

C. If a premium has been financed, a refund of unearned premium shall be returned as provided in section 6-1416.