insurance; time-limited offer; settlement demand

Plain English Breakdown

Checked against official source text during the last sync.

Insurance Settlement Demand Time Limit

This bill gives insurance companies 30 days to review and respond to settlement demands from third parties.

What This Bill Does

• Gives insurers 30 days to look at and answer settlement demands from people who are not directly involved in the original insurance policy (third-party).
• The 30-day period starts on the postmark date if sent by mail, or the email or fax transmission date.
• If there is a disagreement about whether an insurer met this deadline, they can prove the date using evidence.

Who It Names or Affects

• Insurance companies
• People who make settlement demands to insurance companies

Terms To Know

Settlement demand

A request made by someone asking an insurance company to pay a certain amount of money to settle a claim.

Third-party

Someone who is not directly involved in the original insurance policy but may be affected by it, such as another driver in a car accident.

Limits and Unknowns

• The bill does not specify what happens if an insurer misses the deadline.
• It's unclear how this will affect existing laws about prompt settlement of claims.

Official Summary Text

SB1414 - 572R - Senate Fact Sheet

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ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

FACT SHEET FOR
S.B. 1414

insurance; time-limited
offer; settlement demand

Purpose

Grants an
insurer 30 days to review and respond to third-party settlement demands.

Background

Statute
prohibits an insurer from failing to acknowledge or acting reasonably and
promptly upon communications with respect to claims arising under an insurance
policy. An insurer must attempt in good faith to effectuate prompt, fair and
equitable settlements of claims in which liability has become reasonably clear
(
A.R.S.
� 20-461
).

Statute relating
to first-party claims requires first-party claims to be paid within 30 days of
receiving an acceptable proof of loss. An insurer must pay 10 percent annual
interest on any late payments, beginning from the date the claim was received (
A.R.S.
� 20-462
).

There is no
anticipated fiscal impact to the state General Fund associated with this
legislation.

Provisions

1.

Grants an insurer 30 days to review and respond to third-party
settlement demands.

2.

Specifies that the 30-day review period begins on the date of the U.S.
Postal Service postmark or the date of a digital transmission sent via email or
fax.

3.

Allows an insurer, if there is a dispute as to whether the insurer
complied with the time limit, to establish the date by competent evidence.

4.

Becomes effective on the general effective date.

Prepared by Senate Research

February 4, 2026

MG/SJ/hk

Current Bill Text

SB1414 - 572R - I Ver

REFERENCE TITLE:
insurance; time-limited offer; settlement demand

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1414

Introduced by

Senator
Bolick

AN
ACT

amending title 20, chapter 2, article 1,
arizona revised statutes, by adding section 20-243; relating to the
transaction of insurance business.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 20, chapter 2, article 1,
Arizona Revised Statutes, is amended by adding section 20-243, to read:

START_STATUTE
20-243.

Time-limited offer; settlement demand; thirty days; notice
requirements

A. Except as otherwise provided by
law, when an insurer receives a settlement demand that pertains to a third-party
demand from any source, the insurer has thirty days to review and respond to
the settlement demand.

B. For the purposes of determining
the time limit set forth in subsection A of this section, the thirty days
begins on the date shown by the postmark or other official mark of the United
States postal service that is stamped on the settlement demand or on the date
the settlement demand was emailed or sent by fax, if the settlement demand was
sent by email or fax.� If there is a dispute as to whether the insurer complied
with the time limit set forth in subsection A of this section, the insurer may
establish the date by competent evidence.
END_STATUTE