Arizona § 41-624 - Definitions; commissions on sales of insurance to the state; violation; classification

§ 41-624. Definitions; commissions on sales of insurance to the state; violation; classification

A. In this section, unless the context otherwise requires:

1. "Bidder" or "offeror" means a person who has submitted a bid or proposal for the sale of insurance to the state in response to a request for a proposal from the department of administration.

2. "Commissions" means any contingent commission, excess profits commission or other commission that may be based on losses or experience or other compensation that a successful contractor for the sale of insurance to the state may be eligible to receive from insurance carriers or underwriters.

3. "Solicitation" means all documents whether attached or incorporated by reference that are utilized for soliciting bids or proposals.

B. Only a contractor or persons who have performed actual services for a contractor in connection with a bid shall be eligible to receive directly or indirectly any commissions.

C. A contractor may pay commissions directly or indirectly only to persons who have performed actual services for the contractor in connection with the solicitation.

D. Any contractor who pays commissions in violation of subsection C of this section or any person who receives commissions in violation of subsection B of this section shall be subject to the following penalties:

1. The contractor or the person who receives commissions, or both, shall be guilty of a class 2 misdemeanor.

2. The contractor or the person who receives the commissions, or both, shall be liable under section 20-295 for suspension, revocation or denial of renewal of any licenses issued under title 20, chapter 2, article 3, 3.1, 3.2, 3.3 or 3.5.

3. The contractor and the person who receives commissions shall be jointly and severally liable to the state for the amount of the commissions paid in violation of subsection B or C of this section.

4. The contractor and the person who receives the commissions shall be jointly and severally liable to competing bidders or offerors under the same solicitation for the amount of the commissions paid in violation of subsection B or C of this section as well as for reasonable attorney fees of the competing bidders or offerors in recovering the penalty. Where there is more than one competing bidder or offeror, the contractor and the person who receives commissions shall be subject only to one liability under this subsection and the competitors who have joined in or intervened before judgment in the first action under this subsection to proceed to final judgment shall be entitled to equal shares in the penalty recovered.