insurance; time-limited offer; settlement demand

Plain English Breakdown

The effective date is listed as the general effective date but no specific calendar date is provided in the source text.

SB1414: Time Limits for Insurance Settlement Demands

This law gives insurers thirty days to review and respond to third-party settlement demands.

What This Bill Does

• Requires insurers to have thirty days to look at and reply to third-party settlement demands.
• Sets the start date for this period as the U.S. Postal Service postmark or the day an email or fax is sent.
• Allows insurers to use proof, such as records, to show when they received a demand if there is a disagreement about dates.

Who It Names or Affects

• Insurance companies in Arizona
• People who send settlement demands on behalf of third parties

Limits and Unknowns

• The law does not say what happens if the insurer misses the thirty-day deadline.
• This rule applies only to third-party demands and may differ for claims made by policyholders directly.

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