Arizona Life and Health Insurance Administrator Bond

Arizona Life and Health Insurance Administrator Bond

Life and Health Insurance Third Party Administrators (TPA) must purchase a bond and keep it active in order to hold a certificate of registration, pertinent to Arizona Statutes ARS 20-485.10. Jet Insurance Company offers this bond as a guarantee to the Arizona Department of Insurance and Financial Institutions (DIFI) that losses caused to insureds and insurers through fraudulent actions of registered life and health insurance administrators can be recovered.

APPLY FOR BOND

Jet offers this bond without middlemen agents or brokers which would only make the bonding process more difficult, confusing, and expensive.

What Is the Lowest Price for the Life and Health Insurance Administrator Bond?

For the minimum bond limit of $5,000, Jet offers this bond for a price of $100 per year . Bond rates will depend on the bond limit and personal credit of the TPA. Below are some examples of preferred tier pricing for different bond limits.

Bond LimitMonthlyAnnual
$5,000$10$100
$25,000$25$250
$50,000$50$500
Arizona Insurance Administrator Bond Cost

Bond limits are 10% of the total amount of funds handled by the Third Party Administrator. The DIFI can reduce the bonding limit at their discretion. New TPA can estimate what 10% of their first year funds handled will be for their initial bond amount.

What Is the Purpose of the Life and Health Insurance Administrator Bond?

The purpose of the bond is for Jet to guarantee to the DIFI that you, the Third Party Administrator, have the financial capacity to not damage insureds or insurers. In the case that a TPA is unable to resolve financial harm caused, Jet would make proper payment to the damage party.

The Life and Health Insurance Administrator Bond is required by any person engaging in business activities as an insurance administrator pertinent to Arizona Statutes ARS 20-485.

TPAs are held accountable for proper enrollment, claims payouts, or whatever they were hired for. The TPA has the opportunity to negligently or fraudulently administer the handling of services and payouts. The bond acts as a tool to fulfill the DIFI’s goal of protecting the public from financial harm having surety companies  promise compensation for those who have endured financial loss.

How Does the Application Process Work With Jet?

Complete our online application in minutes by providing some basic business information and the owner or an officer’s social security number. We need that to do a quick credit check, but don’t worry it will not affect the credit score of the applicant.

You will have the option to pick your term online and make payment. A copy of the bond will be immediately available to you for filing with the DIFI.

How Does the Life and Health Insurance Administrator Bond Get Filed to the Arizona DIFI?

You will need to file the bond which can be done directly to the DIFI in their Third Party Administrator Registration Portal. They will allow for document upload once you login to your account.

For any other paperwork outside of the electronic bond filing, the DIFI’s address is found below:

Arizona Department of Insurance and Financial Institutions
100 North 15th Avenue, Suite 261
Phoenix, AZ 85007-2630

Can I Cancel My Life and Health Insurance Administrator Bond and Get a Refund?

To cancel your bond, contact Jet via email or phone. Jet will cancel the bond and notify the DIFI immediately. The bond will remain active for 30 days during a grace period with the DIFI. Jet will return any unearned premium on the cancelled bond to you.

For those on the monthly payment plan we will have to wait that 30-day period while the bond remains active before stopping the withdrawal process.

How Do I Renew the Life and Health Insurance Administrator Bond?

If you are participating in a monthly payment plan from Jet, there is no need for renewal, as long as automatic payments continue. 

For those on an annual or multi-year payment plan, Jet will contact you regarding renewal through email and mail well before the bond expires. After renewal, an updated copy of the bond and receipt will be sent to you immediately.

Should the bond limit change due to varying annual income, reach out to Jet and provide all relevant information so that we can adjust your bond rate and notify the DIFI.

How Does an Administrator Avoid Complaints and Ultimately a Bond Claim?

A life and health insurance administrator can avoid disciplinary issues by knowing their work duties and not committing any prohibited acts stated in Arizona Statutes ARS 20.485.12. To summarize, we have listed the most significant points below:

Violations and means for bond claim includeLawful duties include
Failing to sustain financial solvency that renders policyholders at riskMaintaining an active surety bond with limits according to annual income, which ultimately upholds lawful licensure
Breaching classified client information to the publicCreating a written contract between policyholders and creditors which is reasonably agreed upon
Knowingly failing to comply with specific orders from the Director of InsurancePreserving accurate books and accounting records dating back five years in accordance with prudent standards of insurance record keeping
Fraudulently adjusting a policyholder’s premium rate to collect funds for personal financial gainAdvertising underwriting abilities only that has been approved by the Director of Insurance
Arizona Insurance Administrator Duties and Complaints

If a life and health insurance administrator were to violate any lawful duties above and subsequently cause financial damage, the affected party could file a complaint with the DIFI. Complaints can be filed via the complaint page on the DIFI’s website. Should the DIFI determine losses were sustained by an insured or insurer and the Third Party Administrator doesn’t make restitution a claim may be made on the surety bond.

What Happens if I Get a Bond Claim?

If you receive a claim on your surety bond, promptly contact Jet and provide any information related to your case. Jet will perform an investigation on your behalf, while striving to protect you from faulty claims and false accusations.

If Jet deems the bond claim to be valid, we will provide payment up to the maximum bond limit to the financially damaged person or company. 

Even though Jet will provide payment to those damaged, the liability of the insurance administrator still remains. They must repay Jet for any claims that have been paid out. Jet is an intermediary that guarantees the transfer of funds to damaged parties, unfortunately the guilt does not transfer to us and remains with the TPA responsible for the damages.

Arizona Life and Health Insurance Administrator Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: