H.B. 93 Enrolled

1

INSURANCE FRAUD AMENDMENTS
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Douglas C. Aagard
5 Senate Sponsor: Michael G. Waddoups
6
7 LONG TITLE
8 General Description:
9 This bill modifies the Insurance Code to address reporting of fraudulent insurance acts.
10 Highlighted Provisions:
11 This bill:
12 . addresses immunity;
13 . expands required reporting of fraudulent insurance acts;
14 . modifies the requirements of that report;
15 . modifies penalties;
16 . provides for rulemaking; and
17 . makes technical changes.
18 Monies Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 None
22 Utah Code Sections Affected:
23 AMENDS:
24 31A-31-105, as enacted by Laws of Utah 1994, Chapter 243
25 31A-31-110, as enacted by Laws of Utah 2004, Chapter 104
26
27 Be it enacted by the Legislature of the state of Utah:
28 Section 1. Section 31A-31-105 is amended to read:
29 31A-31-105. Immunity.

30 (1) (a) A person, insurer, or authorized agency is immune from civil action, civil
31 penalty, or damages when in good faith that person, insurer, or authorized agency:
32 (i) cooperates with[,] an agency described in Subsection (1)(b);
33 (ii) furnishes evidence[,] to an agency described in Subsection (1)(b);
34 (iii) provides [or receives] information regarding a suspected fraudulent insurance
35 [fraud] act to [or received from:] an agency described in Subsection (1)(b);
36 (iv) receives information regarding a suspected fraudulent insurance act from an agency
37 described in Subsection (1)(b); or
38 (v) submits a required report to the department under Section 31A-31-110 .
39 (b) An agency referred to in Subsection (1)(a) is one or more of the following:
40 [(a)] (i) the department or [any] a division of the department;
41 [(b) any] (ii) a federal, state, or government agency established to detect and prevent
42 insurance fraud; [or]
43 (iii) a non-profit organization established to detect and prevent insurance fraud; or
44 [(c) any] (iv) an agent, employee, or designee of an [entity] agency listed in this
45 Subsection [(1)(a) or] (1)(b).
46 (2) A person, insurer, or authorized agency is immune from civil action, civil penalty, or
47 damages if that person, insurer, or authorized agency complies in good faith with a court order
48 to provide evidence or testimony requested by [the entities] an agency described in [Subsections
49 (1)(a) through (1)(c)] Subsection (1)(b).
50 (3) This section does not abrogate or modify a common law or statutory [rights,
51 privileges, or immunities] right, privilege, or immunity enjoyed by [any] a person [or entity].
52 (4) Notwithstanding any other provision in this section, a person, insurer, or service
53 provider is not immune from civil action, civil penalty or damages under this section if that
54 person commits the fraudulent insurance act that is the subject of the information.
55 Section 2. Section 31A-31-110 is amended to read:
56 31A-31-110. Mandatory reporting of fraudulent insurance acts.
57 [(1) An auditor that is employed by a title insurer and that has knowledge that a

58 fraudulent insurance act]
59 (1) (a) A person shall report a fraudulent insurance act to the department if:
60 (i) the person has a good faith belief on the basis of a preponderance of the evidence
61 that a fraudulent insurance act is being, will be, or has been committed [related to title insurance
62 shall report the fraudulent act to the commissioner in a writing that provides] by a person other
63 than the person making the report; and
64 (ii) the person is:
65 (A) an insurer; or
66 (B) in relation to the business of title insurance, an auditor that is employed by a title
67 insurer.
68 (b) The report required by this Subsection (1) shall:
69 (i) be in writing;
70 (ii) provide information in detail relating to:
71 [(a)] (A) the fraudulent insurance act; and
72 [(b)] (B) the perpetrator of the fraudulent insurance act[.]; and
73 (iii) (A) state whether the person required to report under Subsection (1)(a) also
74 reported the fraudulent insurance act in writing to:
75 (I) the attorney general;
76 (II) a state law enforcement agency;
77 (III) a criminal investigative department or agency of the United States;
78 (IV) a district attorney; or
79 (V) the prosecuting attorney of a municipality or county; and
80 (B) if the person reported the fraudulent insurance act as provided in Subsection
81 (1)(b)(iii)(A), state the agency to which the person reported the fraudulent insurance act.
82 (c) A person required to submit a written report under this Subsection (1) shall submit
83 the written report to the department by no later than 90 days from the day on which the person
84 required to report the fraudulent insurance act has a good faith belief on the basis of a
85 preponderance of the evidence that the fraudulent insurance act is being, will be, or has been

86 committed.
87 [(2) (a) Any auditor required to report a fraudulent insurance act under Subsection (1)
88 who willfully fails to comply with Subsection (1) is guilty of a class B misdemeanor.]
89 [(b)] (2) An action brought under Section 31A-2-201 , 31A-2-308 , or 31A-31-109 , for
90 failure to comply with Subsection (1) shall be commenced within four years from the date on
91 which [the auditor employed by the title insurer:] a person described in Subsection (1):
92 [(i) had knowledge of the]
93 (a) has a good faith belief on the basis of a preponderance of the evidence that a
94 fraudulent insurance act is being, will be, or has been committed; and
95 [(ii)] (b) willfully [failed] fails to report the fraudulent insurance act.
96 (3) The department may by rule made in accordance with Title 63, Chapter 46a, Utah
97 Administrative Rulemaking Act, provide a process by which a person described in Subsection
98 (1)(a)(ii)(B) may comply with the requirements of Subsection (1) by reporting a fraudulent
99 insurance act to the insurer with whom the person is employed, except that the rule shall
100 provide that if the person reports the fraudulent insurance act to the insurer, the insurer is
101 required to report the fraudulent insurance act to the department.
102 (4) A person described in Subsection (1)(a)(ii) who in good faith makes a report under
103 this section, in accordance with Section 31A-31-105 , is immune from civil action, civil penalty,
104 or damages for making that report.