H.B. 236 Enrolled

HEALTH INSURANCE LAW AMENDMENTS
2005 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: James A. Dunnigan
Senate Sponsor: Allen M. Christensen

LONG TITLE
General Description:
This bill amends provisions of the Insurance Code related to accident and health
insurance policies and the Comprehensive Health Insurance Pool Act.
Highlighted Provisions:
This bill:
. adds and amends Insurance Code definitions;
. eliminates a prohibition on requiring health maintenance organizations and limited
health plans to provide conversion policies to persons residing outside their service
areas;
. amends preexisting condition provisions for accident and health insurance policies;
. amends incontestability provisions for accident and health insurance policies;
. amends the definition of "Medicare Supplement Policy";
. amends the types of adverse benefit determinations which may be submitted for an
independent review;
. amends the application of group accident and health policy conversion
requirements;
. amends notice of the right to an individual conversion policy;
. amends Comprehensive Health Insurance Pool Act definitions, pool administrator
provisions, eligibility requirements, and preexisting condition provisions; and
. makes technical changes.
Monies Appropriated in this Bill:
None

Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
31A-1-301, as last amended by Chapters 2 and 267, Laws of Utah 2004
31A-8-402.7, as last amended by Chapter 90, Laws of Utah 2004
31A-22-605, as last amended by Chapter 116, Laws of Utah 2001
31A-22-606, as last amended by Chapter 116, Laws of Utah 2001
31A-22-609, as last amended by Chapter 116, Laws of Utah 2001
31A-22-613, as last amended by Chapter 116, Laws of Utah 2001
31A-22-620, as last amended by Chapter 116, Laws of Utah 2001
31A-22-629, as last amended by Chapter 108, Laws of Utah 2004
31A-22-723, as enacted by Chapter 108, Laws of Utah 2004
31A-29-103, as last amended by Chapter 2, Laws of Utah 2004
31A-29-110, as last amended by Chapter 168, Laws of Utah 2003
31A-29-111, as last amended by Chapter 2, Laws of Utah 2004
31A-29-113, as last amended by Chapters 2 and 329, Laws of Utah 2004
31A-30-107.5, as last amended by Chapter 348, Laws of Utah 2004
ENACTS:
31A-22-605.1, Utah Code Annotated 1953

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 31A-1-301 is amended to read:
31A-1-301. Definitions.
As used in this title, unless otherwise specified:
(1) (a) "Accident and health insurance" means insurance to provide protection against
economic losses resulting from:
(i) a medical condition including:

(A) medical care expenses; or
(B) the risk of disability;
(ii) accident; or
(iii) sickness.
(b) "Accident and health insurance":
(i) includes a contract with disability contingencies including:
(A) an income replacement contract;
(B) a health care contract;
(C) an expense reimbursement contract;
(D) a credit accident and health contract;
(E) a continuing care contract; and
(F) a long-term care contract; and
(ii) may provide:
(A) hospital coverage;
(B) surgical coverage;
(C) medical coverage; or
(D) loss of income coverage.
(c) "Accident and health insurance" does not include workers' compensation insurance.
(2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
63, Chapter 46a, Utah Administrative Rulemaking Act.
(3) "Administrator" is defined in Subsection [(150)] (155).
(4) "Adult" means a natural person who has attained the age of at least 18 years.
(5) "Affiliate" means any person who controls, is controlled by, or is under common
control with, another person. A corporation is an affiliate of another corporation, regardless of
ownership, if substantially the same group of natural persons manages the corporations.
(6) "Agency" means:
(a) a person other than an individual, including a sole proprietorship by which a natural
person does business under an assumed name; and

(b) an insurance organization licensed or required to be licensed under Section
31A-23a-301 .
(7) "Alien insurer" means an insurer domiciled outside the United States.
(8) "Amendment" means an endorsement to an insurance policy or certificate.
(9) "Annuity" means an agreement to make periodical payments for a period certain or
over the lifetime of one or more natural persons if the making or continuance of all or some of
the series of the payments, or the amount of the payment, is dependent upon the continuance of
human life.
(10) "Application" means a document:
(a) (i) completed by an applicant to provide information about the risk to be insured; and
(ii) that contains information that is used by the insurer to evaluate risk and decide
whether to:
(A) insure the risk under:
(I) the coverages as originally offered; or
(II) a modification of the coverage as originally offered; or
(B) decline to insure the risk; or
(b) used by the insurer to gather information from the applicant before issuance of an
annuity contract.
(11) "Articles" or "articles of incorporation" means the original articles, special laws,
charters, amendments, restated articles, articles of merger or consolidation, trust instruments, and
other constitutive documents for trusts and other entities that are not corporations, and
amendments to any of these.
(12) "Bail bond insurance" means a guarantee that a person will attend court when
required, or will obey the orders or judgment of the court, as a condition to the release of that
person from confinement.
(13) "Binder" is defined in Section 31A-21-102 .
(14) "Board," "board of trustees," or "board of directors" means the group of persons
with responsibility over, or management of, a corporation, however designated.

(15) "Business entity" means a corporation, association, partnership, limited liability
company, limited liability partnership, or other legal entity.
(16) "Business of insurance" is defined in Subsection [(81)] (82).
(17) "Business plan" means the information required to be supplied to the commissioner
under Subsections 31A-5-204 (2)(i) and (j), including the information required when these
subsections are applicable by reference under:
(a) Section 31A-7-201 ;
(b) Section 31A-8-205 ; or
(c) Subsection 31A-9-205 (2).
(18) "Bylaws" means the rules adopted for the regulation or management of a
corporation's affairs, however designated and includes comparable rules for trusts and other
entities that are not corporations.
(19) "Captive insurance company" means:
(a) an insurance company:
(i) owned by another organization; and
(ii) whose exclusive purpose is to insure risks of the parent organization and affiliated
companies; or
(b) in the case of groups and associations, an insurance organization:
(i) owned by the insureds; and
(ii) whose exclusive purpose is to insure risks of:
(A) member organizations;
(B) group members; and
(C) affiliates of:
(I) member organizations; or
(II) group members.
(20) "Casualty insurance" means liability insurance as defined in Subsection [(91)] (94).
(21) "Certificate" means evidence of insurance given to:
(a) an insured under a group insurance policy; or

(b) a third party.
(22) "Certificate of authority" is included within the term "license."
(23) "Claim," unless the context otherwise requires, means a request or demand on an
insurer for payment of benefits according to the terms of an insurance policy.
(24) "Claims-made coverage" means an insurance contract or provision limiting coverage
under a policy insuring against legal liability to claims that are first made against the insured
while the policy is in force.
(25) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
commissioner.
(b) When appropriate, the terms listed in Subsection (25)(a) apply to the equivalent
supervisory official of another jurisdiction.
(26) (a) "Continuing care insurance" means insurance that:
(i) provides board and lodging;
(ii) provides one or more of the following services:
(A) personal services;
(B) nursing services;
(C) medical services; or
(D) other health-related services; and
(iii) provides the coverage described in Subsection (26)(a)(i) under an agreement
effective:
(A) for the life of the insured; or
(B) for a period in excess of one year.
(b) Insurance is continuing care insurance regardless of whether or not the board and
lodging are provided at the same location as the services described in Subsection (26)(a)(ii).
(27) (a) "Control," "controlling," "controlled," or "under common control" means the
direct or indirect possession of the power to direct or cause the direction of the management and
policies of a person. This control may be:
(i) by contract;

(ii) by common management;
(iii) through the ownership of voting securities; or
(iv) by a means other than those described in Subsections (27)(a)(i) through (iii).
(b) There is no presumption that an individual holding an official position with another
person controls that person solely by reason of the position.
(c) A person having a contract or arrangement giving control is considered to have
control despite the illegality or invalidity of the contract or arrangement.
(d) There is a rebuttable presumption of control in a person who directly or indirectly
owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the voting
securities of another person.
(28) "Controlled insurer" means a licensed insurer that is either directly or indirectly
controlled by a producer.
(29) "Controlling person" means any person that directly or indirectly has the power to
direct or cause to be directed, the management, control, or activities of a reinsurance
intermediary.
(30) "Controlling producer" means a producer who directly or indirectly controls an
insurer.
(31) (a) "Corporation" means an insurance corporation, except when referring to:
(i) a corporation doing business:
(A) as:
(I) an insurance producer;
(II) a limited line producer;
(III) a consultant;
(IV) a managing general agent;
(V) a reinsurance intermediary;
(VI) a third party administrator; or
(VII) an adjuster; and
(B) under:

(I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
Reinsurance Intermediaries;
(II) Chapter 25, Third Party Administrators; or
(III) Chapter 26, Insurance Adjusters; or
(ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
Holding Companies.
(b) "Stock corporation" means a stock insurance corporation.
(c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
(32) "Creditable coverage" has the same meaning as provided in federal regulations
adopted pursuant to the Health Insurance Portability and Accountability Act of 1996, Pub. L.
104-191, 110 Stat. 1936.
[(32)] (33) "Credit accident and health insurance" means insurance on a debtor to
provide indemnity for payments coming due on a specific loan or other credit transaction while
the debtor is disabled.
[(33)] (34) (a) "Credit insurance" means insurance offered in connection with an
extension of credit that is limited to partially or wholly extinguishing that credit obligation.
(b) "Credit insurance" includes:
(i) credit accident and health insurance;
(ii) credit life insurance;
(iii) credit property insurance;
(iv) credit unemployment insurance;
(v) guaranteed automobile protection insurance;
(vi) involuntary unemployment insurance;
(vii) mortgage accident and health insurance;
(viii) mortgage guaranty insurance; and
(ix) mortgage life insurance.
[(34)] (35) "Credit life insurance" means insurance on the life of a debtor in connection
with an extension of credit that pays a person if the debtor dies.

[(35)] (36) "Credit property insurance" means insurance:
(a) offered in connection with an extension of credit; and
(b) that protects the property until the debt is paid.
[(36)] (37) "Credit unemployment insurance" means insurance:
(a) offered in connection with an extension of credit; and
(b) that provides indemnity if the debtor is unemployed for payments coming due on a:
(i) specific loan; or
(ii) credit transaction.
[(37) "Creditable coverage" is as defined in 45 C.F.R. 146.113(a).]
(38) "Creditor" means a person, including an insured, having any claim, whether:
(a) matured;
(b) unmatured;
(c) liquidated;
(d) unliquidated;
(e) secured;
(f) unsecured;
(g) absolute;
(h) fixed; or
(i) contingent.
(39) (a) "Customer service representative" means a person that provides insurance
services and insurance product information:
(i) for the customer service representative's:
(A) producer; or
(B) consultant employer; and
(ii) to the customer service representative's employer's:
(A) customer;
(B) client; or
(C) organization.

(b) A customer service representative may only operate within the scope of authority of
the customer service representative's producer or consultant employer.
(40) "Deadline" means the final date or time:
(a) imposed by:
(i) statute;
(ii) rule; or
(iii) order; and
(b) by which a required filing or payment must be received by the department.
(41) "Deemer clause" means a provision under this title under which upon the occurrence
of a condition precedent, the commissioner is deemed to have taken a specific action. If the
statute so provides, the condition precedent may be the commissioner's failure to take a specific
action.
(42) "Degree of relationship" means the number of steps between two persons
determined by counting the generations separating one person from a common ancestor and then
counting the generations to the other person.
(43) "Department" means the Insurance Department.
(44) "Director" means a member of the board of directors of a corporation.
(45) "Disability" means a physiological or psychological condition that partially or totally
limits an individual's ability to:
(a) perform the duties of:
(i) that individual's occupation; or
(ii) any occupation for which the individual is reasonably suited by education, training,
or experience; or
(b) perform two or more of the following basic activities of daily living:
(i) eating;
(ii) toileting;
(iii) transferring;
(iv) bathing; or

(v) dressing.
(46) "Disability income insurance" is defined in Subsection [(72)] (73).
(47) "Domestic insurer" means an insurer organized under the laws of this state.
(48) "Domiciliary state" means the state in which an insurer:
(a) is incorporated;
(b) is organized; or
(c) in the case of an alien insurer, enters into the United States.
(49) (a) "Eligible employee" means:
(i) an employee who:
(A) works on a full-time basis; and
(B) has a normal work week of 30 or more hours; or
(ii) a person described in Subsection (49)(b).
(b) "Eligible employee" includes, if the individual is included under a health benefit plan
of a small employer:
(i) a sole proprietor;
(ii) a partner in a partnership; or
(iii) an independent contractor.
(c) "Eligible employee" does not include, unless eligible under Subsection (49)(b):
(i) an individual who works on a temporary or substitute basis for a small employer;
(ii) an employer's spouse; or
(iii) a dependent of an employer.
(50) "Employee" means any individual employed by an employer.
(51) "Employee benefits" means one or more benefits or services provided to:
(a) employees; or
(b) dependents of employees.
(52) (a) "Employee welfare fund" means a fund:
(i) established or maintained, whether directly or through trustees, by:
(A) one or more employers;

(B) one or more labor organizations; or
(C) a combination of employers and labor organizations; and
(ii) that provides employee benefits paid or contracted to be paid, other than income from
investments of the fund, by or on behalf of an employer doing business in this state or for the
benefit of any person employed in this state.
(b) "Employee welfare fund" includes a plan funded or subsidized by user fees or tax
revenues.
(53) "Endorsement" means a written agreement attached to a policy or certificate to
modify one or more of the provisions of the policy or certificate.
(54) "Enrollment date," with respect to a health benefit plan, means the first day of
coverage or, if there is a waiting period, the first day of the waiting period.
[(54)] (55) (a) "Escrow" means:
(i) a real estate settlement or real estate closing conducted by a third party pursuant to the
requirements of a written agreement between the parties in a real estate transaction; or
(ii) a settlement or closing involving:
(A) a mobile home;
(B) a grazing right;
(C) a water right; or
(D) other personal property authorized by the commissioner.
(b) "Escrow" includes the act of conducting a:
(i) real estate settlement; or
(ii) real estate closing.
[(55)] (56) "Escrow agent" means:
(a) an insurance producer with:
(i) a title insurance line of authority; and
(ii) an escrow subline of authority; or
(b) a person defined as an escrow agent in Section 7-22-101 .
[(56)] (57) "Excludes" is not exhaustive and does not mean that other things are not also

excluded. The items listed are representative examples for use in interpretation of this title.
[(57)] (58) "Expense reimbursement insurance" means insurance:
(a) written to provide payments for expenses relating to hospital confinements resulting
from illness or injury; and
(b) written:
(i) as a daily limit for a specific number of days in a hospital; and
(ii) to have a one or two day waiting period following a hospitalization.
[(58)] (59) "Fidelity insurance" means insurance guaranteeing the fidelity of persons
holding positions of public or private trust.
[(59)] (60) (a) "Filed" means that a filing is:
(i) submitted to the department as required by and in accordance with any applicable
statute, rule, or filing order;
(ii) received by the department within the time period provided in the applicable statute,
rule, or filing order; and
(iii) accompanied by the appropriate fee in accordance with:
(A) Section 31A-3-103 ; or
(B) rule.
(b) "Filed" does not include a filing that is rejected by the department because it is not
submitted in accordance with Subsection [(59)] (60)(a).
[(60)] (61) "Filing," when used as a noun, means an item required to be filed with the
department including:
(a) a policy;
(b) a rate;
(c) a form;
(d) a document;
(e) a plan;
(f) a manual;
(g) an application;

(h) a report;
(i) a certificate;
(j) an endorsement;
(k) an actuarial certification;
(l) a licensee annual statement;
(m) a licensee renewal application; or
(n) an advertisement.
[(61)] (62) "First party insurance" means an insurance policy or contract in which the
insurer agrees to pay claims submitted to it by the insured for the insured's losses.
[(62)] (63) "Foreign insurer" means an insurer domiciled outside of this state, including
an alien insurer.
[(63)] (64) (a) "Form" means one of the following prepared for general use:
(i) a policy;
(ii) a certificate;
(iii) an application; or
(iv) an outline of coverage.
(b) "Form" does not include a document specially prepared for use in an individual case.
[(64)] (65) "Franchise insurance" means individual insurance policies provided through a
mass marketing arrangement involving a defined class of persons related in some way other than
through the purchase of insurance.
[(65)] (66) "General lines of authority" include:
(a) the general lines of insurance in Subsection [(66)] (67);
(b) title insurance under one of the following sublines of authority:
(i) search, including authority to act as a title marketing representative;
(ii) escrow, including authority to act as a title marketing representative;
(iii) search and escrow, including authority to act as a title marketing representative; and
(iv) title marketing representative only;
(c) surplus lines;

(d) workers' compensation; and
(e) any other line of insurance that the commissioner considers necessary to recognize in
the public interest.
[(66)] (67) "General lines of insurance" include:
(a) accident and health;
(b) casualty;
(c) life;
(d) personal lines;
(e) property; and
(f) variable contracts, including variable life and annuity.
[(67)] (68) "Group health plan" means an employee welfare benefit plan to the extent
that the plan provides medical care:
(a) (i) to employees; or
(ii) to a dependent of an employee; and
(b) (i) directly;
(ii) through insurance reimbursement; or
(iii) through any other method.
[(68)] (69) "Guaranteed automobile protection insurance" means insurance offered in
connection with an extension of credit that pays the difference in amount between the insurance
settlement and the balance of the loan if the insured automobile is a total loss.
[(69)] (70) (a) Except as provided in Subsection [(69)] (70)(b), "health benefit plan"
means a policy or certificate that:
(i) provides health care insurance;
(ii) provides major medical expense insurance; or
(iii) is offered as a substitute for hospital or medical expense insurance such as:
(A) a hospital confinement indemnity; or
(B) a limited benefit plan.
(b) "Health benefit plan" does not include a policy or certificate that:

(i) provides benefits solely for:
(A) accident;
(B) dental;
(C) income replacement;
(D) long-term care;
(E) a Medicare supplement;
(F) a specified disease;
(G) vision; or
(H) a short-term limited duration; or
(ii) is offered and marketed as supplemental health insurance.
[(70)] (71) "Health care" means any of the following intended for use in the diagnosis,
treatment, mitigation, or prevention of a human ailment or impairment:
(a) professional services;
(b) personal services;
(c) facilities;
(d) equipment;
(e) devices;
(f) supplies; or
(g) medicine.
[(71)] (72) (a) "Health care insurance" or "health insurance" means insurance providing:
(i) health care benefits; or
(ii) payment of incurred health care expenses.
(b) "Health care insurance" or "health insurance" does not include accident and health
insurance providing benefits for:
(i) replacement of income;
(ii) short-term accident;
(iii) fixed indemnity;
(iv) credit accident and health;

(v) supplements to liability;
(vi) workers' compensation;
(vii) automobile medical payment;
(viii) no-fault automobile;
(ix) equivalent self-insurance; or
(x) any type of accident and health insurance coverage that is a part of or attached to
another type of policy.
[(72)] (73) "Income replacement insurance" or "disability income insurance" means
insurance written to provide payments to replace income lost from accident or sickness.
[(73)] (74) "Indemnity" means the payment of an amount to offset all or part of an
insured loss.
[(74)] (75) "Independent adjuster" means an insurance adjuster required to be licensed
under Section 31A-26-201 who engages in insurance adjusting as a representative of insurers.
[(75)] (76) "Independently procured insurance" means insurance procured under Section
31A-15-104 .
[(76)] (77) "Individual" means a natural person.
[(77)] (78) "Inland marine insurance" includes insurance covering:
(a) property in transit on or over land;
(b) property in transit over water by means other than boat or ship;
(c) bailee liability;
(d) fixed transportation property such as bridges, electric transmission systems, radio and
television transmission towers and tunnels; and
(e) personal and commercial property floaters.
[(78)] (79) "Insolvency" means that:
(a) an insurer is unable to pay its debts or meet its obligations as they mature;
(b) an insurer's total adjusted capital is less than the insurer's mandatory control level
RBC under Subsection 31A-17-601 (8)(c); or
(c) an insurer is determined to be hazardous under this title.

[(79)] (80) (a) "Insurance" means:
(i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
persons to one or more other persons; or
(ii) an arrangement, contract, or plan for the distribution of a risk or risks among a group
of persons that includes the person seeking to distribute that person's risk.
(b) "Insurance" includes:
(i) risk distributing arrangements providing for compensation or replacement for
damages or loss through the provision of services or benefits in kind;
(ii) contracts of guaranty or suretyship entered into by the guarantor or surety as a
business and not as merely incidental to a business transaction; and
(iii) plans in which the risk does not rest upon the person who makes the arrangements,
but with a class of persons who have agreed to share it.
[(80)] (81) "Insurance adjuster" means a person who directs the investigation,
negotiation, or settlement of a claim under an insurance policy other than life insurance or an
annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
[(81)] (82) "Insurance business" or "business of insurance" includes:
(a) providing health care insurance, as defined in Subsection [(71)] (72), by organizations
that are or should be licensed under this title;
(b) providing benefits to employees in the event of contingencies not within the control
of the employees, in which the employees are entitled to the benefits as a right, which benefits
may be provided either:
(i) by single employers or by multiple employer groups; or
(ii) through trusts, associations, or other entities;
(c) providing annuities, including those issued in return for gifts, except those provided
by persons specified in Subsections 31A-22-1305 (2) and (3);
(d) providing the characteristic services of motor clubs as outlined in Subsection [(107)]
(110);
(e) providing other persons with insurance as defined in Subsection [(79)] (80);

(f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor, or
surety, any contract or policy of title insurance;
(g) transacting or proposing to transact any phase of title insurance, including:
(i) solicitation;
(ii) negotiation preliminary to execution;
(iii) execution of a contract of title insurance;
(iv) insuring; and
(v) transacting matters subsequent to the execution of the contract and arising out of the
contract, including reinsurance; and
(h) doing, or proposing to do, any business in substance equivalent to Subsections [(81)]
(82)(a) through (g) in a manner designed to evade the provisions of this title.
[(82)] (83) "Insurance consultant" or "consultant" means a person who:
(a) advises other persons about insurance needs and coverages;
(b) is compensated by the person advised on a basis not directly related to the insurance
placed; and
(c) except as provided in Section 31A-23a-501 , is not compensated directly or indirectly
by an insurer or producer for advice given.
[(83)] (84) "Insurance holding company system" means a group of two or more affiliated
persons, at least one of whom is an insurer.
[(84)] (85) (a) "Insurance producer" or "producer" means a person licensed or required to
be licensed under the laws of this state to sell, solicit, or negotiate insurance.
(b) With regards to the selling, soliciting, or negotiating of an insurance product to an
insurance customer or an insured:
(i) "producer for the insurer" means a producer who is compensated directly or indirectly
by an insurer for selling, soliciting, or negotiating any product of that insurer; and
(ii) "producer for the insured" means a producer who:
(A) is compensated directly and only by an insurance customer or an insured; and
(B) receives no compensation directly or indirectly from an insurer for selling, soliciting,

or negotiating any product of that insurer to an insurance customer or insured.
[(85)] (86) (a) "Insured" means a person to whom or for whose benefit an insurer makes
a promise in an insurance policy and includes:
(i) policyholders;
(ii) subscribers;
(iii) members; and
(iv) beneficiaries.
(b) The definition in Subsection [(85)] (86)(a):
(i) applies only to this title; and
(ii) does not define the meaning of this word as used in insurance policies or certificates.
[(86)] (87) (a) (i) "Insurer" means any person doing an insurance business as a principal
including:
(A) fraternal benefit societies;
(B) issuers of gift annuities other than those specified in Subsections 31A-22-1305 (2)
and (3);
(C) motor clubs;
(D) employee welfare plans; and
(E) any person purporting or intending to do an insurance business as a principal on that
person's own account.
(ii) "Insurer" does not include a governmental entity to the extent it is engaged in the
activities described in Section 31A-12-107 .
(b) "Admitted insurer" is defined in Subsection [(154)] (159)(b).
(c) "Alien insurer" is defined in Subsection (7).
(d) "Authorized insurer" is defined in Subsection [(154)] (159)(b).
(e) "Domestic insurer" is defined in Subsection (47).
(f) "Foreign insurer" is defined in Subsection [(62)] (63).
(g) "Nonadmitted insurer" is defined in Subsection [(154)] (159)(a).
(h) "Unauthorized insurer" is defined in Subsection [(154)] (159)(a).

[(87)] (88) "Interinsurance exchange" is defined in Subsection [(136)] (139).
[(88)] (89) "Involuntary unemployment insurance" means insurance:
(a) offered in connection with an extension of credit;
(b) that provides indemnity if the debtor is involuntarily unemployed for payments
coming due on a:
(i) specific loan; or
(ii) credit transaction.
[(89)] (90) "Large employer," in connection with a health benefit plan, means an
employer who, with respect to a calendar year and to a plan year:
(a) employed an average of at least 51 eligible employees on each business day during
the preceding calendar year; and
(b) employs at least two employees on the first day of the plan year.
(91) "Late enrollee," with respect to an employer health benefit plan, means an individual
whose enrollment is a late enrollment.
(92) "Late enrollment," with respect to an employer health benefit plan, means
enrollment of an individual other than:
(a) on the earliest date on which coverage can become effective for the individual under
the terms of the plan; or
(b) through special enrollment.
[(90)] (93) (a) Except for a retainer contract or legal assistance described in Section
31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for specified
legal expenses.
(b) "Legal expense insurance" includes arrangements that create reasonable expectations
of enforceable rights.
(c) "Legal expense insurance" does not include the provision of, or reimbursement for,
legal services incidental to other insurance coverages.
[(91)] (94) (a) "Liability insurance" means insurance against liability:
(i) for death, injury, or disability of any human being, or for damage to property,

exclusive of the coverages under:
(A) Subsection [(101)] (104) for medical malpractice insurance;
(B) Subsection [(128)] (131) for professional liability insurance; and
(C) Subsection [(158)] (164) for workers' compensation insurance;
(ii) for medical, hospital, surgical, and funeral benefits to persons other than the insured
who are injured, irrespective of legal liability of the insured, when issued with or supplemental to
insurance against legal liability for the death, injury, or disability of human beings, exclusive of
the coverages under:
(A) Subsection [(101)] (104) for medical malpractice insurance;
(B) Subsection [(128)] (131) for professional liability insurance; and
(C) Subsection [(158)] (164) for workers' compensation insurance;
(iii) for loss or damage to property resulting from accidents to or explosions of boilers,
pipes, pressure containers, machinery, or apparatus;
(iv) for loss or damage to any property caused by the breakage or leakage of sprinklers,
water pipes and containers, or by water entering through leaks or openings in buildings; or
(v) for other loss or damage properly the subject of insurance not within any other kind
or kinds of insurance as defined in this chapter, if such insurance is not contrary to law or public
policy.
(b) "Liability insurance" includes:
(i) vehicle liability insurance as defined in Subsection [(156)] (161);
(ii) residential dwelling liability insurance as defined in Subsection [(139)] (142); and
(iii) making inspection of, and issuing certificates of inspection upon, elevators, boilers,
machinery, and apparatus of any kind when done in connection with insurance on them.
[(92)] (95) (a) "License" means the authorization issued by the commissioner to engage
in some activity that is part of or related to the insurance business.
(b) "License" includes certificates of authority issued to insurers.
[(93)] (96) (a) "Life insurance" means insurance on human lives and insurances
pertaining to or connected with human life.

(b) The business of life insurance includes:
(i) granting death benefits;
(ii) granting annuity benefits;
(iii) granting endowment benefits;
(iv) granting additional benefits in the event of death by accident;
(v) granting additional benefits to safeguard the policy against lapse in the event of
disability; and
(vi) providing optional methods of settlement of proceeds.
[(94)] (97) "Limited license" means a license that:
(a) is issued for a specific product of insurance; and
(b) limits an individual or agency to transact only for that product or insurance.
[(95)] (98) "Limited line credit insurance" includes the following forms of insurance:
(a) credit life;
(b) credit accident and health;
(c) credit property;
(d) credit unemployment;
(e) involuntary unemployment;
(f) mortgage life;
(g) mortgage guaranty;
(h) mortgage accident and health;
(i) guaranteed automobile protection; and
(j) any other form of insurance offered in connection with an extension of credit that:
(i) is limited to partially or wholly extinguishing the credit obligation; and
(ii) the commissioner determines by rule should be designated as a form of limited line
credit insurance.
[(96)] (99) "Limited line credit insurance producer" means a person who sells, solicits, or
negotiates one or more forms of limited line credit insurance coverage to individuals through a
master, corporate, group, or individual policy.

[(97)] (100) "Limited line insurance" includes:
(a) bail bond;
(b) limited line credit insurance;
(c) legal expense insurance;
(d) motor club insurance;
(e) rental car-related insurance;
(f) travel insurance; and
(g) any other form of limited insurance that the commissioner determines by rule should
be designated a form of limited line insurance.
[(98)] (101) "Limited lines authority" includes:
(a) the lines of insurance listed in Subsection [(97)] (100); and
(b) a customer service representative.
[(99)] (102) "Limited lines producer" means a person who sells, solicits, or negotiates
limited lines insurance.
[(100)] (103) (a) "Long-term care insurance" means an insurance policy or rider
advertised, marketed, offered, or designated to provide coverage:
(i) in a setting other than an acute care unit of a hospital;
(ii) for not less than 12 consecutive months for each covered person on the basis of:
(A) expenses incurred;
(B) indemnity;
(C) prepayment; or
(D) another method;
(iii) for one or more necessary or medically necessary services that are:
(A) diagnostic;
(B) preventative;
(C) therapeutic;
(D) rehabilitative;
(E) maintenance; or

(F) personal care; and
(iv) that may be issued by:
(A) an insurer;
(B) a fraternal benefit society;
(C) (I) a nonprofit health hospital; and
(II) a medical service corporation;
(D) a prepaid health plan;
(E) a health maintenance organization; or
(F) an entity similar to the entities described in Subsections [(100)] (103)(a)(iv)(A)
through (E) to the extent that the entity is otherwise authorized to issue life or health care
insurance.
(b) "Long-term care insurance" includes:
(i) any of the following that provide directly or supplement long-term care insurance:
(A) a group or individual annuity or rider; or
(B) a life insurance policy or rider;
(ii) a policy or rider that provides for payment of benefits based on:
(A) cognitive impairment; or
(B) functional capacity; or
(iii) a qualified long-term care insurance contract.
(c) "Long-term care insurance" does not include:
(i) a policy that is offered primarily to provide basic Medicare supplement coverage;
(ii) basic hospital expense coverage;
(iii) basic medical/surgical expense coverage;
(iv) hospital confinement indemnity coverage;
(v) major medical expense coverage;
(vi) income replacement or related asset-protection coverage;
(vii) accident only coverage;
(viii) coverage for a specified:

(A) disease; or
(B) accident;
(ix) limited benefit health coverage; or
(x) a life insurance policy that accelerates the death benefit to provide the option of a
lump sum payment:
(A) if the following are not conditioned on the receipt of long-term care:
(I) benefits; or
(II) eligibility; and
(B) the coverage is for one or more the following qualifying events:
(I) terminal illness;
(II) medical conditions requiring extraordinary medical intervention; or
(III) permanent institutional confinement.
[(101)] (104) "Medical malpractice insurance" means insurance against legal liability
incident to the practice and provision of medical services other than the practice and provision of
dental services.
[(102)] (105) "Member" means a person having membership rights in an insurance
corporation.
[(103)] (106) "Minimum capital" or "minimum required capital" means the capital that
must be constantly maintained by a stock insurance corporation as required by statute.
[(104)] (107) "Mortgage accident and health insurance" means insurance offered in
connection with an extension of credit that provides indemnity for payments coming due on a
mortgage while the debtor is disabled.
[(105)] (108) "Mortgage guaranty insurance" means surety insurance under which
mortgagees and other creditors are indemnified against losses caused by the default of debtors.
[(106)] (109) "Mortgage life insurance" means insurance on the life of a debtor in
connection with an extension of credit that pays if the debtor dies.
[(107)] (110) "Motor club" means a person:
(a) licensed under:

(i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
(ii) Chapter 11, Motor Clubs; or
(iii) Chapter 14, Foreign Insurers; and
(b) that promises for an advance consideration to provide for a stated period of time:
(i) legal services under Subsection 31A-11-102 (1)(b);
(ii) bail services under Subsection 31A-11-102 (1)(c); or
(iii) trip reimbursement, towing services, emergency road services, stolen automobile
services, a combination of these services, or any other services given in Subsections
31A-11-102 (1)(b) through (f).
[(108)] (111) "Mutual" means a mutual insurance corporation.
[(109)] (112) "Network plan" means health care insurance:
(a) that is issued by an insurer; and
(b) under which the financing and delivery of medical care is provided, in whole or in
part, through a defined set of providers under contract with the insurer, including the financing
and delivery of items paid for as medical care.
[(110)] (113) "Nonparticipating" means a plan of insurance under which the insured is
not entitled to receive dividends representing shares of the surplus of the insurer.
[(111)] (114) "Ocean marine insurance" means insurance against loss of or damage to:
(a) ships or hulls of ships;
(b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys,
securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia interests,
or other cargoes in or awaiting transit over the oceans or inland waterways;
(c) earnings such as freight, passage money, commissions, or profits derived from
transporting goods or people upon or across the oceans or inland waterways; or
(d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
owners of other vessels, owners of fixed objects, customs or other authorities, or other persons in
connection with maritime activity.
[(112)] (115) "Order" means an order of the commissioner.

[(113)] (116) "Outline of coverage" means a summary that explains an accident and
health insurance policy.
[(114)] (117) "Participating" means a plan of insurance under which the insured is
entitled to receive dividends representing shares of the surplus of the insurer.
[(115)] (118) "Participation," as used in a health benefit plan, means a requirement
relating to the minimum percentage of eligible employees that must be enrolled in relation to the
total number of eligible employees of an employer reduced by each eligible employee who
voluntarily declines coverage under the plan because the employee has other group health care
insurance coverage.
[(116)] (119) "Person" includes an individual, partnership, corporation, incorporated or
unincorporated association, joint stock company, trust, limited liability company, reciprocal,
syndicate, or any similar entity or combination of entities acting in concert.
[(117)] (120) "Personal lines insurance" means property and casualty insurance coverage
sold for primarily noncommercial purposes to:
(a) individuals; and
(b) families.
[(118)] (121) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
[(119)] (122) "Plan year" means:
(a) the year that is designated as the plan year in:
(i) the plan document of a group health plan; or
(ii) a summary plan description of a group health plan;
(b) if the plan document or summary plan description does not designate a plan year or
there is no plan document or summary plan description:
(i) the year used to determine deductibles or limits;
(ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis; or
(iii) the employer's taxable year if:
(A) the plan does not impose deductibles or limits on a yearly basis; and
(B) (I) the plan is not insured; or

(II) the insurance policy is not renewed on an annual basis; or
(c) in a case not described in Subsection [(119)] (122)(a) or (b), the calendar year.
[(120)] (123) (a) (i) "Policy" means any document, including attached endorsements and
riders, purporting to be an enforceable contract, which memorializes in writing some or all of the
terms of an insurance contract.
(ii) "Policy" includes a service contract issued by:
(A) a motor club under Chapter 11, Motor Clubs;
(B) a service contract provided under Chapter 6a, Service Contracts; and
(C) a corporation licensed under:
(I) Chapter 7, Nonprofit Health Service Insurance Corporations; or
(II) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
(iii) "Policy" does not include:
(A) a certificate under a group insurance contract; or
(B) a document that does not purport to have legal effect.
(b) (i) "Group insurance policy" means a policy covering a group of persons that is issued
to a policyholder on behalf of the group, for the benefit of group members who are selected under
procedures defined in the policy or in agreements which are collateral to the policy.
(ii) A group insurance policy may include members of the policyholder's family or
dependents.
(c) "Blanket insurance policy" means a group policy covering classes of persons without
individual underwriting, where the persons insured are determined by definition of the class with
or without designating the persons covered.
[(121)] (124) "Policyholder" means the person who controls a policy, binder, or oral
contract by ownership, premium payment, or otherwise.
[(122)] (125) "Policy illustration" means a presentation or depiction that includes
nonguaranteed elements of a policy of life insurance over a period of years.
[(123)] (126) "Policy summary" means a synopsis describing the elements of a life
insurance policy.

[(124)] (127) "Preexisting condition," [in connection] with respect to a health benefit
plan[,]:
(a) means[: (a)] a condition [for which] that was present before the effective date of
coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or
received [during the six months immediately preceding the earlier of:] before that day; and
[(i) the enrollment date; or]
[(ii) the effective date of coverage; or]
[(b) for an individual insurance policy, a pregnancy existing on the effective date of
coverage.]
(b) does not include a condition indicated by genetic information unless an actual
diagnosis of the condition by a physician has been made.
[(125)] (128) (a) "Premium" means the monetary consideration for an insurance policy.
(b) "Premium" includes, however designated:
(i) assessments;
(ii) membership fees;
(iii) required contributions; or
(iv) monetary consideration.
(c) (i) Consideration paid to third party administrators for their services is not
"premium."
(ii) Amounts paid by third party administrators to insurers for insurance on the risks
administered by the third party administrators are "premium."
[(126)] (129) "Principal officers" of a corporation means the officers designated under
Subsection 31A-5-203 (3).
[(127)] (130) "Proceedings" includes actions and special statutory proceedings.
[(128)] (131) "Professional liability insurance" means insurance against legal liability
incident to the practice of a profession and provision of any professional services.
[(129)] (132) "Property insurance" means insurance against loss or damage to real or
personal property of every kind and any interest in that property, from all hazards or causes, and

against loss consequential upon the loss or damage including vehicle comprehensive and vehicle
physical damage coverages, but excluding inland marine insurance and ocean marine insurance
as defined under Subsections [(77)] (78) and [(111)] (114).
[(130)] (133) "Qualified long-term care insurance contract" or "federally tax qualified
long-term care insurance contract" means:
(a) an individual or group insurance contract that meets the requirements of Section
7702B(b), Internal Revenue Code; or
(b) the portion of a life insurance contract that provides long-term care insurance:
(i) (A) by rider; or
(B) as a part of the contract; and
(ii) that satisfies the requirements of [Section] Sections 7702B(b) and (e), Internal
Revenue Code.
[(131)] (134) "Qualified United States financial institution" means an institution that:
(a) is:
(i) organized under the laws of the United States or any state; or
(ii) in the case of a United States office of a foreign banking organization, licensed under
the laws of the United States or any state;
(b) is regulated, supervised, and examined by United States federal or state authorities
having regulatory authority over banks and trust companies; and
(c) meets the standards of financial condition and standing that are considered necessary
and appropriate to regulate the quality of financial institutions whose letters of credit will be
acceptable to the commissioner as determined by:
(i) the commissioner by rule; or
(ii) the Securities Valuation Office of the National Association of Insurance
Commissioners.
[(132)] (135) (a) "Rate" means:
(i) the cost of a given unit of insurance; or
(ii) for property-casualty insurance, that cost of insurance per exposure unit either

expressed as:
(A) a single number; or
(B) a pure premium rate, adjusted before any application of individual risk variations
based on loss or expense considerations to account for the treatment of:
(I) expenses;
(II) profit; and
(III) individual insurer variation in loss experience.
(b) "Rate" does not include a minimum premium.
[(133)] (136) (a) Except as provided in Subsection [(133)] (136)(b), "rate service
organization" means any person who assists insurers in rate making or filing by:
(i) collecting, compiling, and furnishing loss or expense statistics;
(ii) recommending, making, or filing rates or supplementary rate information; or
(iii) advising about rate questions, except as an attorney giving legal advice.
(b) "Rate service organization" does not mean:
(i) an employee of an insurer;
(ii) a single insurer or group of insurers under common control;
(iii) a joint underwriting group; or
(iv) a natural person serving as an actuarial or legal consultant.
[(134)] (137) "Rating manual" means any of the following used to determine initial and
renewal policy premiums:
(a) a manual of rates;
(b) classifications;
(c) rate-related underwriting rules; and
(d) rating formulas that describe steps, policies, and procedures for determining initial
and renewal policy premiums.
[(135)] (138) "Received by the department" means:
(a) except as provided in Subsection [(135)] (138)(b), the date delivered to and stamped
received by the department, whether delivered:

(i) in person; or
(ii) electronically; and
(b) if delivered to the department by a delivery service, the delivery service's postmark
date or pick-up date unless otherwise stated in:
(i) statute;
(ii) rule; or
(iii) a specific filing order.
[(136)] (139) "Reciprocal" or "interinsurance exchange" means any unincorporated
association of persons:
(a) operating through an attorney-in-fact common to all of them; and
(b) exchanging insurance contracts with one another that provide insurance coverage on
each other.
[(137)] (140) "Reinsurance" means an insurance transaction where an insurer, for
consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
reinsurance transactions, this title sometimes refers to:
(a) the insurer transferring the risk as the "ceding insurer"; and
(b) the insurer assuming the risk as the:
(i) "assuming insurer"; or
(ii) "assuming reinsurer."
[(138)] (141) "Reinsurer" means any person licensed in this state as an insurer with the
authority to assume reinsurance.
[(139)] (142) "Residential dwelling liability insurance" means insurance against liability
resulting from or incident to the ownership, maintenance, or use of a residential dwelling that is a
detached single family residence or multifamily residence up to four units.
[(140)] (143) "Retrocession" means reinsurance with another insurer of a liability
assumed under a reinsurance contract. A reinsurer "retrocedes" when it reinsures with another
insurer part of a liability assumed under a reinsurance contract.
[(141)] (144) "Rider" means an endorsement to:

(a) an insurance policy; or
(b) an insurance certificate.
[(142)] (145) (a) "Security" means any:
(i) note;
(ii) stock;
(iii) bond;
(iv) debenture;
(v) evidence of indebtedness;
(vi) certificate of interest or participation in any profit-sharing agreement;
(vii) collateral-trust certificate;
(viii) preorganization certificate or subscription;
(ix) transferable share;
(x) investment contract;
(xi) voting trust certificate;
(xii) certificate of deposit for a security;
(xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
payments out of production under such a title or lease;
(xiv) commodity contract or commodity option;
(xv) any certificate of interest or participation in, temporary or interim certificate for,
receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in
Subsections [(142)] (145)(a)(i) through (xiv); or
(xvi) any other interest or instrument commonly known as a security.
(b) "Security" does not include:
(i) any of the following under which an insurance company promises to pay money in a
specific lump sum or periodically for life or some other specified period:
(A) insurance;
(B) endowment policy; or
(C) annuity contract; or

(ii) a burial certificate or burial contract.
[(143)] (146) "Self-insurance" means any arrangement under which a person provides for
spreading its own risks by a systematic plan.
(a) Except as provided in this Subsection [(143)] (146), "self-insurance" does not include
an arrangement under which a number of persons spread their risks among themselves.
(b) "Self-insurance" includes:
(i) an arrangement by which a governmental entity undertakes to indemnify its
employees for liability arising out of the employees' employment; and
(ii) an arrangement by which a person with a managed program of self-insurance and risk
management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or employees
for liability or risk which is related to the relationship or employment.
(c) "Self-insurance" does not include any arrangement with independent contractors.
[(144)] (147) "Sell" means to exchange a contract of insurance:
(a) by any means;
(b) for money or its equivalent; and
(c) on behalf of an insurance company.
[(145)] (148) "Short-term care insurance" means any insurance policy or rider advertised,
marketed, offered, or designed to provide coverage that is similar to long-term care insurance but
that provides coverage for less than 12 consecutive months for each covered person.
(149) "Significant break in coverage" means a period of 63 consecutive days during each
of which an individual does not have any creditable coverage.
[(146)] (150) "Small employer," in connection with a health benefit plan, means an
employer who, with respect to a calendar year and to a plan year:
(a) employed an average of at least two employees but not more than 50 eligible
employees on each business day during the preceding calendar year; and
(b) employs at least two employees on the first day of the plan year.
(151) "Special enrollment period," in connection with a health benefit plan, has the same
meaning as provided in federal regulations adopted pursuant to the Health Insurance Portability

and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936.
[(147)] (152) (a) "Subsidiary" of a person means an affiliate controlled by that person
either directly or indirectly through one or more affiliates or intermediaries.
(b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
shares are owned by that person either alone or with its affiliates, except for the minimum
number of shares the law of the subsidiary's domicile requires to be owned by directors or others.
[(148)] (153) Subject to Subsection [(79)] (80)(b), "surety insurance" includes:
(a) a guarantee against loss or damage resulting from failure of principals to pay or
perform their obligations to a creditor or other obligee;
(b) bail bond insurance; and
(c) fidelity insurance.
[(149)] (154) (a) "Surplus" means the excess of assets over the sum of paid-in capital and
liabilities.
(b) (i) "Permanent surplus" means the surplus of a mutual insurer that has been
designated by the insurer as permanent.
(ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209 require
that mutuals doing business in this state maintain specified minimum levels of permanent
surplus.
(iii) Except for assessable mutuals, the minimum permanent surplus requirement is
essentially the same as the minimum required capital requirement that applies to stock insurers.
(c) "Excess surplus" means:
(i) for life or accident and health insurers, health organizations, and property and casualty
insurers as defined in Section 31A-17-601 , the lesser of:
(A) that amount of an insurer's or health organization's total adjusted capital, as defined
in Subsection [(152)] (157), that exceeds the product of:
(I) 2.5; and
(II) the sum of the insurer's or health organization's minimum capital or permanent
surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or

(B) that amount of an insurer's or health organization's total adjusted capital, as defined
in Subsection [(152)] (157), that exceeds the product of:
(I) 3.0; and
(II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
(ii) for monoline mortgage guaranty insurers, financial guaranty insurers, and title
insurers, that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
(A) 1.5; and
(B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
[(150)] (155) "Third party administrator" or "administrator" means any person who
collects charges or premiums from, or who, for consideration, adjusts or settles claims of
residents of the state in connection with insurance coverage, annuities, or service insurance
coverage, except:
(a) a union on behalf of its members;
(b) a person administering any:
(i) pension plan subject to the federal Employee Retirement Income Security Act of
1974;
(ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
(iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
(c) an employer on behalf of the employer's employees or the employees of one or more
of the subsidiary or affiliated corporations of the employer;
(d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance for
which the insurer holds a license in this state; or
(e) a person:
(i) licensed or exempt from licensing under:
(A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
Reinsurance Intermediaries; or
(B) Chapter 26, Insurance Adjusters; and
(ii) whose activities are limited to those authorized under the license the person holds or

for which the person is exempt.
[(151)] (156) "Title insurance" means the insuring, guaranteeing, or indemnifying of
owners of real or personal property or the holders of liens or encumbrances on that property, or
others interested in the property against loss or damage suffered by reason of liens or
encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity or
unenforceability of any liens or encumbrances on the property.
[(152)] (157) "Total adjusted capital" means the sum of an insurer's or health
organization's statutory capital and surplus as determined in accordance with:
(a) the statutory accounting applicable to the annual financial statements required to be
filed under Section 31A-4-113 ; and
(b) any other items provided by the RBC instructions, as RBC instructions is defined in
Section 31A-17-601 .
[(153)] (158) (a) "Trustee" means "director" when referring to the board of directors of a
corporation.
(b) "Trustee," when used in reference to an employee welfare fund, means an individual,
firm, association, organization, joint stock company, or corporation, whether acting individually
or jointly and whether designated by that name or any other, that is charged with or has the
overall management of an employee welfare fund.
[(154)] (159) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted insurer"
means an insurer:
(i) not holding a valid certificate of authority to do an insurance business in this state; or
(ii) transacting business not authorized by a valid certificate.
(b) "Admitted insurer" or "authorized insurer" means an insurer:
(i) holding a valid certificate of authority to do an insurance business in this state; and
(ii) transacting business as authorized by a valid certificate.
[(155)] (160) "Underwrite" means the authority to accept or reject risk on behalf of the
insurer.
[(156)] (161) "Vehicle liability insurance" means insurance against liability resulting

from or incident to ownership, maintenance, or use of any land vehicle or aircraft, exclusive of
vehicle comprehensive and vehicle physical damage coverages under Subsection [(129)] (132).
[(157)] (162) "Voting security" means a security with voting rights, and includes any
security convertible into a security with a voting right associated with the security.
(163) "Waiting period" for a health benefit plan means the period that must pass before
coverage for an individual, who is otherwise eligible to enroll under the terms of the health
benefit plan, can become effective.
[(158)] (164) "Workers' compensation insurance" means:
(a) insurance for indemnification of employers against liability for compensation based
on:
(i) compensable accidental injuries; and
(ii) occupational disease disability;
(b) employer's liability insurance incidental to workers' compensation insurance and
written in connection with workers' compensation insurance; and
(c) insurance assuring to the persons entitled to workers' compensation benefits the
compensation provided by law.
Section 2. Section 31A-8-402.7 is amended to read:
31A-8-402.7. Discontinuance and nonrenewal limitations.
(1) Subject to Section 31A-4-115 , an insurer that elects to discontinue offering a health
benefit plan under Subsections 31A-8-402.3 (3)(e) and 31A-8-402.5 (3)(e) is prohibited from
writing new business:
(a) in the market in this state for which the insurer discontinues or does not renew; and
(b) for a period of five years beginning on the date of discontinuation of the last coverage
that is discontinued.
(2) If an insurer is doing business in one established geographic service area of the state,
Sections 31A-8-402.3 and 31A-8-402.5 apply only to the insurer's operations in that service area.
[(3) Notwithstanding whether Chapter 22, Part 7, Group Accident and Health Insurance,
requires a conversion policy be available for certain persons who are no longer entitled to group

coverage, an organization may not be required to provide a conversion policy to a person residing
outside of the organization's service area.]
[(4)] (3) The commissioner may, by rule or order, define the scope of service area.
Section 3. Section 31A-22-605 is amended to read:
31A-22-605. Accident and health insurance standards.
(1) The purposes of this section include:
(a) reasonable standardization and simplification of terms and coverages of individual
and franchise accident and health insurance policies, including accident and health insurance
contracts of insurers licensed under Chapters 7 and 8, to facilitate public understanding and
comparison in purchasing;
(b) elimination of provisions contained in individual and franchise accident and health
insurance contracts that may be misleading or confusing in connection with either the purchase of
those types of coverages or the settlement of claims; and
(c) full disclosure in the sale of individual and franchise accident and health insurance
contracts.
(2) As used in this section:
(a) "Direct response insurance policy" means an individual insurance policy solicited and
sold without the policyholder having direct contact with a natural person intermediary.
(b) "Medicare" is defined in Subsection 31A-22-620 (1)(e).
(c) "Medicare supplement policy" is defined in Subsection 31A-22-620 (1)(f).
(3) This section applies to all individual and franchise accident and health policies.
(4) The commissioner shall adopt rules relating to the following matters:
(a) standards for the manner and content of policy provisions, and disclosures to be made
in connection with the sale of policies covered by this section, dealing with at least the following
matters:
(i) terms of renewability;
(ii) initial and subsequent conditions of eligibility;
(iii) nonduplication of coverage provisions;

(iv) coverage of dependents;
(v) preexisting conditions;
(vi) termination of insurance;
(vii) probationary periods;
(viii) limitations;
(ix) exceptions;
(x) reductions;
(xi) elimination periods;
(xii) requirements for replacement;
(xiii) recurrent conditions;
(xiv) coverage of persons eligible for Medicare; and
(xv) definition of terms;
(b) minimum standards for benefits under each of the following categories of coverage in
policies covered in this section:
(i) basic hospital expense coverage;
(ii) basic medical-surgical expense coverage;
(iii) hospital confinement indemnity coverage;
(iv) major medical expense coverage;
(v) income replacement coverage;
(vi) accident only coverage;
(vii) specified disease or specified accident coverage;
(viii) limited benefit health coverage; and
(ix) nursing home and long-term care coverage;
(c) the content and format of the outline of coverage, in addition to that required under
Subsection (6);
(d) the method of identification of policies and contracts based upon coverages provided;
and
(e) rating practices.

(5) Nothing in Subsection (4)(b) precludes the issuance of policies that combine
categories of coverage in that subsection provided that any combination of categories meets the
standards of a component category of coverage.
(6) The commissioner may adopt rules relating to the following matters:
(a) establishing disclosure requirements for insurance policies covered in this section,
designed to adequately inform the prospective insured of the need for and extent of the coverage
offered, and requiring that this disclosure be furnished to the prospective insured with the
application form, unless it is a direct response insurance policy;
(b) (i) prescribing caption or notice requirements designed to inform prospective insureds
that particular insurance coverages are not Medicare Supplement coverages;
(ii) the requirements of Subsection (6)(b)(i) apply to all insurance policies and
certificates sold to persons eligible for Medicare; and
(c) requiring the disclosures or information brochures to be furnished to the prospective
insured on direct response insurance policies, upon his request or, in any event, no later than the
time of the policy delivery.
(7) A policy covered by this section may be issued only if it meets the minimum
standards established by the commissioner under Subsection (4), an outline of coverage
accompanies the policy or is delivered to the applicant at the time of the application, and, except
with respect to direct response insurance policies, an acknowledged receipt is provided to the
insurer. The outline of coverage shall include:
(a) a statement identifying the applicable categories of coverage provided by the policy
as prescribed under Subsection (4);
(b) a description of the principal benefits and coverage;
(c) a statement of the exceptions, reductions, and limitations contained in the policy;
(d) a statement of the renewal provisions, including any reservation by the insurer of a
right to change premiums;
(e) a statement that the outline is a summary of the policy issued or applied for and that
the policy should be consulted to determine governing contractual provisions; and

(f) any other contents the commissioner prescribes.
(8) If a policy is issued on a basis other than that applied for, the outline of coverage shall
accompany the policy when it is delivered and it shall clearly state that it is not the policy for
which application was made.
[(9) (a) Notwithstanding Subsection 31A-22-609 (2), and except as provided under
Subsection (9)(b), an insurer that elects to use an application form without questions concerning
the insured's health history or medical treatment history, shall provide coverage under the policy
for any loss which occurs more than 12 months after the effective date of the policy due to a
preexisting condition which is not specifically excluded from coverage.]
[(b) (i) An insurer that issues a specified disease policy, regardless of whether the basis
of issuance is a detailed application form, a simplified application form, or an enrollment form,
may not deny a claim for loss due to a preexisting condition which occurs more than six months
after the effective date of coverage.]
[(ii) A specified disease policy may not define a preexisting condition more restrictively
than a condition which first manifested itself within six months prior to the effective date of
coverage or which was diagnosed by a physician at any time prior to the effective date of
coverage.]
[(iii) A specified disease policy may not include wording that provides a defense based
upon a preexisting condition except as allowed under this Subsection (9).]
[(10)] (9) Notwithstanding Subsection 31A-22-606 (1), limited accident and health
policies or certificates issued to persons eligible for Medicare shall contain a notice prominently
printed on or attached to the cover or front page which states that the policyholder or certificate
holder has the right to return the policy for any reason within 30 days after its delivery and to
have the premium refunded.
Section 4. Section 31A-22-605.1 is enacted to read:
31A-22-605.1. Preexisting condition limitations.
(1) Any provision dealing with preexisting conditions shall be consistent with this
section, Section 31A-22-609 , and rules adopted by the commissioner.

(2) Except as provided in this section, an insurer that elects to use an application form
without questions concerning the insured's health or medical treatment history shall provide
coverage under the policy for any loss which occurs more than 12 months after the effective date
of coverage due to a preexisting condition which is not specifically excluded from coverage.
(3) (a) An insurer that issues a specified disease policy may not deny a claim for loss due
to a preexisting condition that occurs more than six months after the effective date of coverage.
(b) A specified disease policy may impose a preexisting condition exclusion only if the
exclusion relates to a preexisting condition which first manifested itself within six months prior
to the effective date of coverage or which was diagnosed by a physician at any time prior to the
effective date of coverage.
(4) (a) Except as provided in this Subsection (4), a health benefit plan may impose a
preexisting condition exclusion only if:
(i) the exclusion relates to a preexisting condition for which medical advice, diagnosis,
care, or treatment was recommended or received within the six-month period ending on the
enrollment date from an individual licensed or similarly authorized to provide those services
under state law and operating within the scope of practice authorized by state law;
(ii) the exclusion period ends no later than 12 months after the enrollment date, or in the
case of a late enrollee, 18 months after the enrollment date; and
(iii) the exclusion period is reduced by the number of days of creditable coverage the
enrollee has as of the enrollment date, in accordance with Subsection (4)(b).
(b) (i) The amount of creditable coverage allowed under Subsection (4)(a)(iii) is
determined by counting all the days on which the individual has one or more types of creditable
coverage.
(ii) Days of creditable coverage that occur before a significant break in coverage are not
required to be counted.
(A) Days in a waiting period or affiliation period are not taken into account in
determining whether a significant break in coverage has occurred.
(B) For an individual who elects federal COBRA continuation coverage during the

second election period provided under the federal Trade Act of 2002, the days between the date
the individual lost group health plan coverage and the first day of the second COBRA election
period are not taken into account in determining whether a significant break in coverage has
occurred.
(c) A group health benefit plan may not impose a preexisting condition exclusion relating
to pregnancy.
(d) (i) An insurer imposing a preexisting condition exclusion shall provide a written
general notice of preexisting condition exclusion as part of any written application materials.
(ii) The general notice shall include:
(A) a description of the existence and terms of any preexisting condition exclusion under
the plan, including the six-month period ending on the enrollment date, the maximum preexisting
condition exclusion period, and how the insurer will reduce the maximum preexisting condition
exclusion period by creditable coverage;
(B) a description of the rights of individuals:
(I) to demonstrate creditable coverage, including any applicable waiting periods, through
a certificate of creditable coverage or through other means; and
(II) to request a certificate of creditable coverage from a prior plan;
(C) a statement that the current plan will assist in obtaining a certificate of creditable
coverage from any prior plan or issuer if necessary; and
(D) a person to contact, and an address and telephone number for the person, for
obtaining additional information or assistance regarding the preexisting condition exclusion.
(e) An insurer may not impose any limit on the amount of time that an individual has to
present a certificate or other evidence of creditable coverage.
(f) This Subsection (4) does not preclude application of any waiting period applicable to
all new enrollees under the plan.
Section 5. Section 31A-22-606 is amended to read:
31A-22-606. Policy examination period.
(1) (a) Except as provided in Subsection (2), all accident and health policies shall contain

a notice prominently printed on or attached to the cover or front page stating that the policyholder
has the right to return the policy for any reason within ten days after its delivery.
(b) "Return" means delivery to the insurer or its agent or mailing of the policy to either,
properly addressed and stamped for first class handling, with a written statement on the policy or
an accompanying communication that it is being returned for termination of coverage. A policy
returned under this Subsection (1) is void from the beginning and a policyholder returning his
policy is entitled to a refund of any premium paid.
(2) This section does not apply to:
(a) group policies;
(b) policies issued to persons entitled to a 30-day examination period under Subsection
31A-22-605 [(10)](9);
(c) single premium nonrenewable policies issued for terms not longer than 60 days;
(d) policies covering accidents only or accidental bodily injury only; and
(e) other classes of policies which the commissioner by rule specifies after a finding that
a right to return those policies would be impracticable or unnecessary to protect the
policyholder's interests.
Section 6. Section 31A-22-609 is amended to read:
31A-22-609. Incontestability for accident and health insurance.
(1) (a) A statement made by an applicant [in the application for individual or franchise
accident and health insurance coverage or statement made] relating to the person's insurability
[by a person insured under a group policy], except fraudulent misrepresentation, may not be a
basis for avoidance of [the] a policy, coverage, or denial of a claim for loss incurred or disability
commencing after the coverage has been in effect for two years.
(b) The insurer has the burden of proving fraud by clear and convincing evidence.
[(c) The policy may provide for incontestability even for fraudulent misstatements.]
(2) Except as [otherwise] provided under [Subsection 31A-22-605 (9)] Section
31A-22-605.1 , a claim for loss incurred or disability commencing after two years from the date
of issue of the policy may not be reduced or denied on the ground that a disease or physical

condition existed prior to the effective date of coverage, unless the condition was excluded from
coverage by name or specific description in a provision that was in effect on the date of loss.
(3) Except as provided in Subsection (1)(a), a specified disease policy may not include
wording that provides a defense based upon a disease or physical condition that existed prior to
the effective date of coverage except as allowed under Subsection 31A-22-605.1 (2).
Section 7. Section 31A-22-613 is amended to read:
31A-22-613. Permitted provisions for accident and health insurance policies.
The following provisions may be contained in an accident and health insurance policy,
but if they are in that policy, they shall conform to at least the minimum requirements for the
policyholder in this section.
(1) Any provision respecting change of occupation may provide only for a lower
maximum benefit payment and for reduction of loss payments proportionate to the change in
appropriate premium rates, if the change is to a higher rated occupation, and this provision shall
provide for retroactive reduction of premium rates from the date of change of occupation or the
last policy anniversary date, whichever is the more recent, if the change is to a lower rated
occupation.
(2) Section 31A-22-405 applies to misstatement of age in accident and health policies,
with the appropriate modifications of terminology.
(3) Any policy which contains a provision establishing, as an age limit or otherwise, a
date after which the coverage provided by the policy is not effective, and if that date falls within
a period for which a premium is accepted by the insurer or if the insurer accepts a premium after
that date, the coverage provided by the policy continues in force, subject to any right of
cancellation, until the end of the period for which the premium was accepted. This Subsection
(3) does not apply if the acceptance of premium would not have occurred but for a misstatement
of age by the insured.
[(4) Any provision dealing with preexisting conditions shall be consistent with
Subsections 31A-22-605 (9)(a) and 31A-22-609 (2), and any applicable rule adopted by the
commissioner.]

[(5)] (4) (a) If an insured is otherwise eligible for maternity benefits, a policy may not
contain language which requires an insured to obtain any additional preauthorization or
preapproval for customary and reasonable maternity care expenses or for the delivery of the child
after an initial preauthorization or preapproval has been obtained from the insurer for prenatal
care. A requirement for notice of admission for delivery is not a requirement for preauthorization
or preapproval, however, the maternity benefit may not be denied or diminished for failure to
provide admission notice. The policy may not require the provision of admission notice by only
the insured patient.
(b) This Subsection [(5)] (4) does not prohibit an insurer from:
(i) requiring a referral before maternity care can be obtained;
(ii) specifying a group of providers or a particular location from which an insured is
required to obtain maternity care; or
(iii) limiting reimbursement for maternity expenses and benefits in accordance with the
terms and conditions of the insurance contract so long as such terms do not conflict with
Subsection [(5)] (4)(a).
[(6)] (5) An insurer may only represent that a policy:
(a) offers a vision benefit if the policy:
(i) charges a premium for the benefit; and
(ii) provides reimbursement for materials or services provided under the policy; and
(b) covers laser vision correction, whether photorefractive keratectomy, laser assisted
in-situ keratomelusis, or related procedure, if the policy:
(i) charges a premium for the benefit; and
(ii) the procedure is at least a partially covered benefit.
Section 8. Section 31A-22-620 is amended to read:
31A-22-620. Medicare Supplement Insurance Minimum Standards Act.
(1) As used in this section:
(a) "Applicant" means:
(i) in the case of an individual Medicare supplement policy, the person who seeks to

contract for insurance benefits; and
(ii) in the case of a group Medicare supplement policy, the proposed certificate holder.
(b) "Certificate" means any certificate delivered or issued for delivery in this state under
a group Medicare supplement policy.
(c) "Certificate form" means the form on which the certificate is delivered or issued for
delivery by the issuer.
(d) "Issuer" includes insurance companies, fraternal benefit societies, health care service
plans, health maintenance organizations, and any other entity delivering, or issuing for delivery in
this state, Medicare supplement policies or certificates.
(e) "Medicare" means the "Health Insurance for the Aged Act," Title XVIII of the Social
Security Amendments of 1965, as then constituted or later amended.
(f) "Medicare Supplement Policy":
(i) means a group or individual policy of disability insurance, other than a policy issued
pursuant to a contract under Section 1876 of the federal Social Security Act, 42 U.S.C. Section
1395 et seq., or an issued policy under a demonstration project specified in 41 U.S.C. Section
1395ss(g)(1), that is advertised, marketed, or designed primarily as a supplement to
reimbursements under Medicare for the hospital, medical, or surgical expenses of persons
eligible for Medicare[.]; and
(ii) does not include Medicare Advantage plans established under Medicare Part C,
outpatient prescription drug plans established under Medicare Part D, or any health care
prepayment plan that provides benefits pursuant to an agreement under Section 1833(a)(1)(A) of
the Social Security Act.
(g) "Policy form" means the form on which the policy is delivered or issued for delivery
by the issuer.
(2) (a) Except as otherwise specifically provided, this section applies to:
(i) all Medicare supplement policies delivered or issued for delivery in this state on or
after the effective date of this section;
(ii) all certificates issued under group Medicare supplement policies, that have been

delivered or issued for delivery in this state on or after the effective date of this section; and
(iii) policies or certificates that were in force prior to the effective date of this section,
with respect to requirements for benefits, claims payment, and policy reporting practice under
Subsection (3)(d), and loss ratios under Subsection (4).
(b) This section does not apply to a policy of one or more employers or labor
organizations, or of the trustees of a fund established by one or more employers or labor
organizations, or a combination of employers and labor unions, for employees or former
employees or a combination of employees and former employees, or for members or former
members of the labor organizations, or a combination of members and former members of labor
organizations.
(c) This section does not prohibit, nor does it apply to insurance policies or health care
benefit plans, including group conversion policies, provided to Medicare eligible persons that are
not marketed or held out to be Medicare supplement policies or benefit plans.
(3) (a) A Medicare supplement policy or certificate in force in the state may not contain
benefits that duplicate benefits provided by Medicare.
(b) Notwithstanding any other provision of law of this state, a Medicare supplement
policy or certificate may not exclude or limit benefits for loss incurred more than six months
from the effective date of coverage because it involved a preexisting condition. The policy or
certificate may not define a preexisting condition more restrictively than: "A condition for which
medical advice was given or treatment was recommended by or received from a physician within
six months before the effective date of coverage."
(c) The commissioner shall adopt rules to establish specific standards for policy
provisions of Medicare supplement policies and certificates. The standards adopted shall be in
addition to and in accordance with applicable laws of this state. A requirement of this title
relating to minimum required policy benefits, other than the minimum standards contained in this
section, may not apply to Medicare supplement policies and certificates. The standards may
include:
(i) terms of renewability;

(ii) initial and subsequent conditions of eligibility;
(iii) nonduplication of coverage;
(iv) probationary periods;
(v) benefit limitations, exceptions, and reductions;
(vi) elimination periods;
(vii) requirements for replacement;
(viii) recurrent conditions; and
(ix) definitions of terms.
(d) The commissioner shall adopt rules establishing minimum standards for benefits,
claims payment, marketing practices, compensation arrangements, and reporting practices for
Medicare supplement policies and certificates.
(e) The commissioner may adopt [such] rules [as are necessary] to conform Medicare
supplement policies and certificates to the requirements of federal law and regulations
[promulgated thereunder], including:
(i) requiring refunds or credits if the policies do not meet loss ratio requirements;
(ii) establishing a uniform methodology for calculating and reporting loss ratios;
(iii) assuring public access to policies, premiums, and loss ratio information of issuers of
Medicare supplement insurance;
(iv) establishing a process for approving or disapproving policy forms and certificate
forms and proposed premium increases;
(v) establishing a policy for holding public hearings prior to approval of premium
increases; and
(vi) establishing standards for Medicare select policies and certificates.
(f) The commissioner may adopt rules that prohibit policy provisions not otherwise
specifically authorized by statute that, in the opinion of the commissioner, are unjust, unfair, or
unfairly discriminatory to any person insured or proposed to be insured under a Medicare
supplement policy or certificate.
(4) Medicare supplement policies shall return to policyholders benefits that are

reasonable in relation to the premium charged. The commissioner shall make rules to establish
minimum standards for loss ratios of Medicare supplement policies on the basis of incurred
claims experience, or incurred health care expenses where coverage is provided by a health
maintenance organization on a service basis rather than on a reimbursement basis, and earned
premiums in accordance with accepted actuarial principles and practices.
(5) (a) To provide for full and fair disclosure in the sale of Medicare supplement policies,
a Medicare supplement policy or certificate may not be delivered in this state unless an outline of
coverage is delivered to the applicant at the time application is made.
(b) The commissioner shall prescribe the format and content of the outline of coverage
required by Subsection (5)(a).
(c) For purposes of this section, "format" means style arrangements and overall
appearance, including such items as the size, color, and prominence of type and arrangement of
text and captions. The outline of coverage shall include:
(i) a description of the principal benefits and coverage provided in the policy;
(ii) a statement of the renewal provisions, including any reservation by the issuer of a
right to change premiums; and disclosure of the existence of any automatic renewal premium
increases based on the policyholder's age; and
(iii) a statement that the outline of coverage is a summary of the policy issued or applied
for and that the policy should be consulted to determine governing contractual provisions.
(d) The commissioner may make rules for captions or notice if the commissioner finds
that the rules are:
(i) in the public interest; and
(ii) designed to inform prospective insureds that particular insurance coverages are not
Medicare supplement coverages, for all accident and health insurance policies sold to persons
eligible for Medicare, other than:
(A) a medicare supplement policy; or
(B) a disability income policy.
(e) The commissioner may prescribe by rule a standard form and the contents of an

informational brochure for persons eligible for Medicare, that is intended to improve the buyer's
ability to select the most appropriate coverage and improve the buyer's understanding of
Medicare. Except in the case of direct response insurance policies, the commissioner may
require by rule that the informational brochure be provided concurrently with delivery of the
outline of coverage to any prospective insureds eligible for Medicare. With respect to direct
response insurance policies, the commissioner may require by rule that the prescribed brochure
be provided upon request to any prospective insureds eligible for Medicare, but in no event later
than the time of policy delivery.
(f) The commissioner may adopt reasonable rules to govern the full and fair disclosure of
the information in connection with the replacement of accident and health policies, subscriber
contracts, or certificates by persons eligible for Medicare.
(6) Notwithstanding Subsection (1), Medicare supplement policies and certificates shall
have a notice prominently printed on the first page of the policy or certificate, or attached to the
front page, stating in substance that the applicant has the right to return the policy or certificate
within 30 days of its delivery and to have the premium refunded if, after examination of the
policy or certificate, the applicant is not satisfied for any reason. Any refund made pursuant to
this section shall be paid directly to the applicant by the issuer in a timely manner.
(7) Every issuer of Medicare supplement insurance policies or certificates in this state
shall provide a copy of any Medicare supplement advertisement intended for use in this state,
whether through written or broadcast medium, to the commissioner for review.
Section 9. Section 31A-22-629 is amended to read:
31A-22-629. Adverse benefit determination review process.
(1) As used in this section:
(a) (i) "Adverse benefit determination" means the:
(A) denial of a benefit;
(B) reduction of a benefit;
(C) termination of a benefit; or
(D) failure to provide or make payment, in whole or in part, for a benefit.

(ii) "Adverse benefit determination" includes:
(A) denial, reduction, termination, or failure to provide or make payment that is based on
a determination of an insured's or a beneficiary's eligibility to participate in a plan;
(B) with respect to individual or group health plans, and income replacement or disability
income policies, a denial, reduction, or termination of, or a failure to provide or make payment,
in whole or in part, for, a benefit resulting from the application of a utilization review; and
(C) failure to cover an item or service for which benefits are otherwise provided because
it is determined to be:
(I) experimental;
(II) investigational; or
(III) not medically necessary or appropriate.
(b) "Independent review" means a process that:
(i) is a voluntary option for the resolution of an adverse benefit determination;
(ii) is conducted at the discretion of the claimant;
(iii) is conducted by an independent review organization designated by the insurer;
(iv) renders an independent and impartial decision on an adverse benefit determination
submitted by an insured; and
(v) may not require the insured to pay a fee for requesting the independent review.
(c) "Insured" is as defined in Section 31A-1-301 and includes a person who is authorized
to act on the insured's behalf.
(d) "Insurer" is as defined in Section 31A-1-301 and includes:
(i) a health maintenance organization; and
(ii) a third-party administrator that offers, sells, manages, or administers a health
insurance policy or health maintenance organization contract that is subject to this title.
(e) "Internal review" means the process an insurer uses to review an insured's adverse
benefit determination before the adverse benefit determination is submitted for independent
review.
(2) This section applies generally to health insurance policies, health maintenance

organization contracts, and income replacement or disability income policies.
(3) (a) An insured may submit an adverse benefit determination to the insurer.
(b) The insurer shall conduct an internal review of the insured's adverse benefit
determination.
(c) An insured who disagrees with the results of an internal review may submit the
adverse benefit determination for an independent review if the adverse benefit determination
involves payment of a claim regarding medical necessity or denial of [coverage] a claim
regarding medical necessity.
(4) Before October 1, 2000, the commissioner shall adopt rules that establish minimum
standards for:
(a) internal reviews;
(b) independent reviews to ensure independence and impartiality;
(c) the types of adverse benefit determinations that may be submitted to an independent
review; and
(d) the timing of the review process, including an expedited review when medically
necessary.
(5) Nothing in this section may be construed as:
(a) expanding, extending, or modifying the terms of a policy or contract with respect to
benefits or coverage;
(b) permitting an insurer to charge an insured for the internal review of an adverse
benefit determination;
(c) restricting the use of arbitration in connection with or subsequent to an independent
review; or
(d) altering the legal rights of any party to seek court or other redress in connection with:
(i) an adverse decision resulting from an independent review, except that if the insurer is
the party seeking legal redress, the insurer shall pay for the reasonable attorneys' fees of the
insured related to the action and court costs; or
(ii) an adverse benefit determination or other claim that is not eligible for submission to

independent review.
Section 10. Section 31A-22-723 is amended to read:
31A-22-723. Group and blanket conversion coverage.
(1) Notwithstanding Subsection 31A-1-103 (3)(f), and except as provided in Subsection
(3), all policies of accident and health insurance offered on a group basis under this title, or Title
49, Chapter 20, Public Employees' Benefit and Insurance Program Act, shall provide that a
person whose insurance under the group policy has been terminated is entitled to choose a
converted individual policy of similar accident and health insurance.
(2) A person who has lost group coverage may elect conversion coverage with the insurer
that provided prior group coverage if the person:
(a) has been continuously covered [under a group policy] for a period of six months by
the group policy or the group's preceding policies immediately prior to termination; [and]
(b) has exhausted either Utah mini-COBRA coverage as required in Section 31A-22-722
or federal COBRA coverage[, if offered]; [and]
(c) has not acquired or is not covered under any other group coverage that covers all
preexisting conditions, including maternity, if the coverage exists[.]; and
(d) resides in the insurer's service area.
(3) This section does not apply if the person's prior group coverage:
(a) is a stand alone policy that only provides one of the following:
(i) catastrophic benefits;
(ii) aggregate stop loss benefits;
(iii) specific stop loss benefits;
(iv) benefits for specific diseases;
(v) accidental injuries only;
(vi) dental; or
(vii) vision;
(b) is an income replacement policy; [or]
(c) was terminated because the insured:

(i) failed to pay any required individual contribution;
(ii) performed an act or practice that constitutes fraud in connection with the coverage; or
(iii) made intentional misrepresentation of material fact under the terms of coverage[.];
or
(d) was terminated pursuant to Subsection 31A-8-402.3 (2)(a), 31A-22-721 (2)(a), or
31A-30-107 (2)(a).
(4) (a) The employer shall provide written notification of the right to an individual
conversion policy within 30 days of the insured's termination of coverage to:
(i) the terminated insured;
(ii) the ex-spouse; or
(iii) in the case of the death of the insured:
(A) the surviving spouse; [or] and
(B) the guardian of any dependents, if different from a surviving spouse.
(b) The notification required by Subsection (4)(a) shall:
(i) be sent by first class mail;
(ii) contain the name, address, and telephone number of the insurer that will provide the
conversion coverage; and
(iii) be sent to the insured's last-known address as shown on the records of the employer
of: