Assigned to FICO FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
FACT SHEET FOR H.B. 2205
fraud unit; investigations; annual report
Purpose
Specifies that monies appropriated to the Department of Insurance and Financial Institution
(DIFI) for DIFI's Insurance Fraud Unit (Fraud Unit) are exempt from lapsing.
Background
The Director of DIFI administers the Fraud Unit to work in conjunction with the
Department of Public Safety to investigate any act or practice of fraud against an insurer or licensed
entity.
The Director of DIFI levies a $1,050 assessment on each insurer authorized to transact
business in Arizona for the administration and operation of the Fraud Unit and the prosecution of
fraud. Monies collected must be deposited in the state General Fund for appropriation to the Fraud
Unit. In FY 2023, DIFI collected $1,997,100 from the assessment. All monies appropriated to DIFI
for the Fraud Unit must be included as a separate line item in the annual general appropriations
act. DIFI must use all appropriated monies exclusively to operate the Fraud Unit. One month after
the beginning of each fiscal year, all balances of appropriations for the prior fiscal year lapse and
further payments may not be made on any expenditure for the prior fiscal year (DIFI; A.R.S.
ยงยง 20-466 and 35-190).
According to the Joint Legislative Budget Committee (JLBC), the FY 2025 JLBC Baseline
for the Fraud Unit includes $1,849,800 and nine full-time equivalent positions from the state
General Fund. The amounts are unchanged from FY 2024 (JLBC).
If exempting monies appropriated to the Fraud Unit from lapsing results in DIFI retaining
monies that would have otherwise reverted to the state General Fund, there may be a fiscal impact
to the state General Fund.
Provisions
1. Specifies that monies appropriated to the Fraud Unit are exempt from lapsing.
2. Makes a conforming change.
3. Becomes effective on the general effective date.
House Action
COM 1/30/24 DPA 10-0-0-0
3
rd
Read 2/20/24 56-1-2-0-1
Prepared by Senate Research
February 28, 2024
MG/AB/cs