E-AFR.OHE (v 20201031) Page 1 of 3
AUDITED FINANCIAL REPORT
GUIDELINES FOR STANDARDIZED ORGANIZATIONAL HARDSHIP EXEMPTION
AND
SAMPLE AFFIDAVIT
GENERAL INSTRUCTIONS
You may apply to the Director for an exemption if filing an Audited Financial Report (AFR) will create a
financial or organizational hardship.
Guidelines for a Standardized Organizational Hardship Exemption are shown on Page 2. If you meet
all of these criteria, apply for an exemption by completing the application requirements below.
DO NOT file this application if you qualify for automatic exemption. Use the Automatic Exemption
Notification in Page 2 of Form E-AFR.GFE instead.
APPLICATION REQUIREMENTS
Your application for an Organizational Hardship Exemption must include:
1. A letter, signed by an officer who is authorized to sign your Annual Statement, requesting an
Organizational Hardship Exemption; AND
2. A properly completed and signed affidavit. Use the affidavit form on Page 3. It must be signed by
an officer who is authorized to sign your Annual Statement.
DUE DATE
We must receive your application before March 31st. LATE APPLICATIONS ARE NOT CONSIDERED.
SEND THE APPLICATION DOCUMENTS TO financialfilings@difi.az.gov
.
DOCUMENTATION REQUIRED
You must provide documentation to support the statements made in your affidavit if we request it.
APPROVAL PROCESS
Your application is deemed approved upon receipt by us if it is complete, properly signed and we do
not notify you that it is not approved.
We may withdraw or rescind approval of an exemption if you do not meet all requirements.
OTHER HARDSHIP EXEMPTION
If you do not qualify for the automatic or standardized organizational hardship exemptions, you may still
apply for an exemption by sending us a letter requesting an organizational or financial hardship
exemption and an affidavit signed by one of your officers avowing to the facts which create the hardship.
We will notify you in writing that your application is granted or denied.
Reset
E-AFR.OHE (v 20201031) Page 2 of 3
GUIDELINES FOR
STANDARDIZED ORGANIZATIONAL HARDSHIP EXEMPTION
The following are the criteria for a standardized organizational hardship exemption for Arizona domestic
reinsurers¹.
1. You are a reinsurer holding a certificate of authority in the State of Arizona only; and
2. You comply with the provisions of items 3 through 6 with respect to each reinsurance contract
and ceding insurer; and
3. A trust account or custodial account is established with a qualified financial institution located in
the United States which is organized under the laws of the United States or any State of the
United States that has been granted authority to operate with fiduciary powers, in which assets
equal to the net reserve credit taken by the ceding insurer for the business ceded are deposited
or, in the alternative, the reinsurance agreement provides that funds will be withheld by the
ceding insurer; and
4. The trust account or custodial account requires only the ceding insurer's (direct writer's)
signature in order to withdraw funds and/or to pay claims, provided however, that with the
approval of the ceding insurer, funds may be withdrawn by the assuming reinsurer providing
that, after the withdrawal, the market value of assets in the trust account or custodial account
shall be no less than 102 percent of the net reserves for the business ceded; and
5. You have obtained from the bank, as custodian or trustee, a verification and listing of assets
held in a trust or custodial account for the purposes described in A.R.S. § 20-1092 as of the
calendar year end for which the exemption is requested, and
6. You have not assumed gross premiums of more than five million dollars in the calendar year for
which the exemption is requested and you are not otherwise required to file an audited financial
report on the basis of direct premiums.
¹ For purposes of these Guidelines, a "reinsurer" means you had direct ARIZONA
premiums written of less than $1,000,000 and assumed premiums pursuant to contracts
and/or treaties of reinsurance of $1,000,000 or more for the calendar year of your
application.
E-AFR.OHE (v 20201031) Page 3 of 3
AUDITED FINANCIAL REPORT
STANDARDIZED ORGANIZATIONAL HARDSHIP EXEMPTION
FOR ARIZONA DOMESTIC COMPANY ONLY
AFFIDAVIT
State of
)
) ss.
County of
)
I, , being first duly sworn, upon my oath depose and say:
1. I am the of ,
whose NAIC number is _____ and am duly authorized to execute this affidavit on its behalf; and
2. is a reinsurer holding a
certificate of authority in the State of Arizona only; and
3. complies with the provisions of
items 4 through 7 of this affidavit with respect to each reinsurance contract and ceding insurer; and
4. A trust account or custodial account is established with a qualified financial institution located
in the United States which is organized under the laws of the United States or any State of the United
States that has been granted authority to operate with Fiduciary power, in which assets equal to the net
reserve credit taken by the ceding insurer for the business ceded are deposited or, in the alternative, the
reinsurance agreement provides that funds will be withheld by the ceding insurer; and
5. The trust account or custodial account requires only the ceding insurer's (direct writer's)
signature in order to withdraw funds and/or to pay claims, provided however, that with the approval of
the ceding insurer, funds may be withdrawn by the assuming reinsurer providing that, after the
withdrawal, the market value of assets in the trust account or custodial account shall be no less than
102 percent of the net reserves for the business ceded; and
6. has obtained from the bank,
as custodian or trustee, a verification and listing of assets held in a trust or custodial account for the
purposes described in A.R.S. § 20-1092 as of the most recent calendar year end; and
7. has not assumed gross
premiums of more than five million dollars in the ______ calendar year and is not otherwise required
to file an audited financial report on the basis of direct premiums.
Further affiant sayeth not.
Affiant Signature
Subscribed and sworn to before me this
day of
,
Stamp or seal
Notary Public Signature
My commission expires: