Senate committee pauses DiFi nomination, asks director nominee to return April 10 with plan on policy notices, NAIC ties and licensing delays

The Senate Committee on Director Nominations did not vote on March 13 on Barbara Richardson’s nomination to lead the Arizona Department of Insurance and Financial Institutions (DIFI). After detailed questioning and critical public testimony, Chair Senator Warren Hoffman gave Richardson two weeks to return with a written framework answering committee concerns; the committee will resume Richardson’s confirmation hearing on April 10.

Why it matters: DIFI regulates insurance and many financial services used by Arizona households and businesses. Committee members said the department’s approach to policy notices, its public role in national regulatory working groups and recent delays in licensing and customer service are material to whether Richardson should be confirmed to run the agency.

Richardson, introduced as the governor’s nominee, reviewed her 30‑plus year background in private‑ and public‑sector financial regulation, including prior service as Nevada insurance commissioner and experience with the National Association of Insurance Commissioners (NAIC). "I stand ready and eager to uphold DiFi's mission to protect consumers, provide certainty on regulatory matters, and perform with efficiency and integrity as good stewards of taxpayer resources," Richardson said in her opening remarks.

Committee members pressed Richardson on multiple themes:

- NAIC committee work and scope: Senators asked why Richardson participated in NAIC groups — including a Special Committee on Race and Insurance and associated work streams that examined the use of data and AI in pricing — and whether NAIC work can push state regulatory priorities or policy. Richardson said she focused on technical questions (for example, data inputs and AI fairness), described the NAIC staff and regulator roles and said one NAIC work stream had recently been disbanded. She told the committee that NAIC recommendations do not replace state law and that state legislatures set policy.

- Notices and substantive policy statements: Senators raised concerns about DIFI communications through its electronic filing/notice system (SURF) and whether the department had used those notices to advance interpretations of statute that should instead go through the state's substantive policy/notice process (and GURC review). Richardson said the SURF notices were used to identify statutory compliance issues and to engage companies directly; she acknowledged the department issues formal substantive policy statements when appropriate but defended use of SURF for targeted objections tied to statute.

- Licensing delays and customer service: Several public witnesses and legislators said agent licensing and regulator contact have slowed since Richardson took office, with anecdotal reports of average license processing rising from a few days to as much as 30 days and of an industry hotline moving to voicemail callbacks. Richardson attributed processing delays to staffing turnover in licensing and said the department is working to improve throughput and customer service.

- Wildfire mitigation and consumer outreach: Richardson described a new resiliency and mitigation council at DIFI focused on wildfire‑prone areas and said the department is convening stakeholders to study affordability and availability of homeowners insurance. She emphasized outreach and consumer‑facing materials, including a wildfire information page and public advisory sessions.

Public comment at the hearing included criticism from political and industry speakers who said licensing delays and remote work arrangements have undermined service; one representative of a financial‑technology company, and a lawyer for Earnin, offered supportive testimony about Richardson’s assistance to stakeholders during the transition.

At the hearing's close, Chair Hoffman instructed Richardson to produce a written framework within two weeks addressing the committee’s concerns about the department’s use of SURF/SERF for notices, DIFI’s involvement in NAIC working groups, and concrete steps and timelines to shorten licensing processing times and improve the public hotline. The committee scheduled a continuation of the hearing for April 10, 2025.

Ending: The committee paused consideration of Richardson’s nomination and set a return date for April 10 to review the written framework and decide whether to recommend confirmation to the full Senate.