H.B. 342 Enrolled

1

INSURANCE CODE AMENDMENTS
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: James A. Dunnigan
5 Senate Sponsor: Sheldon L. Killpack
6
7 LONG TITLE
8 General Description:
9 This bill modifies the Insurance Code to make various amendments.
10 Highlighted Provisions:
11 This bill:
12 . modifies definition provisions;
13 . addresses the timing of examinations;
14 . changes the requirements for appointments to the Title and Escrow Commission;
15 . addresses requirements to conduct an insurance business in Utah;
16 . addresses filing of evidence of preemption;
17 . addresses service contract providers and service contract reimbursement insurance
18 policies including:
19 . requiring registration;
20 . requiring disclosures; and
21 . addressing prohibited acts;
22 . addresses how to calculate monies paid a beneficiary in certain circumstances where
23 a suicide occurs;
24 . addresses certain circumstances related to annuity payments;
25 . provides for the payment of interest on life insurance proceeds;
26 . provides for special enrollment for individuals receiving premium assistance;
27 . addresses the Basic Health Care Plan;
28 . clarifies language related to catastrophic coverage of mental health conditions;
29 . clarifies circumstances when the commissioner can prohibit a policy, contract,

30 certificate, or form;
31 . requires submission to criminal background checks in certain circumstances;
32 . modifies the contents of a form used in a license;
33 . addresses grounds involving a viatical settlement for action against a licensee;
34 . makes technical changes regarding delinquency proceedings;
35 . expands the purposes of the Individual, Small Employer, and Group Health
36 Insurance Act; and
37 . makes additional technical amendments.
38 Monies Appropriated in this Bill:
39 None
40 Other Special Clauses:
41 None
42 Utah Code Sections Affected:
43 AMENDS:
44 31A-1-301, as last amended by Laws of Utah 2007, Chapter 307
45 31A-2-203, as last amended by Laws of Utah 2007, Chapter 309
46 31A-2-403, as last amended by Laws of Utah 2007, Chapter 325
47 31A-4-102, as last amended by Laws of Utah 1998, Chapter 293
48 31A-4-106, as last amended by Laws of Utah 2003, Chapter 298
49 31A-6a-103, as last amended by Laws of Utah 2005, Chapter 124
50 31A-6a-104, as enacted by Laws of Utah 1992, Chapter 203
51 31A-6a-105, as enacted by Laws of Utah 1992, Chapter 203
52 31A-22-404, as last amended by Laws of Utah 2002, Chapter 308
53 31A-22-409, as last amended by Laws of Utah 2005, Chapter 125
54 31A-22-613.5, as last amended by Laws of Utah 2007, Chapter 307
55 31A-22-625, as last amended by Laws of Utah 2002, Chapter 308
56 31A-22-807, as last amended by Laws of Utah 2001, Chapter 116
57 31A-23a-105, as last amended by Laws of Utah 2007, Chapter 307

58 31A-23a-110, as renumbered and amended by Laws of Utah 2003, Chapter 298
59 31A-23a-111, as last amended by Laws of Utah 2006, Chapter 312
60 31A-23a-116, as renumbered and amended by Laws of Utah 2003, Chapter 298
61 31A-25-203, as last amended by Laws of Utah 2006, Chapter 312
62 31A-26-203, as last amended by Laws of Utah 2006, Chapter 312
63 31A-27a-513, as enacted by Laws of Utah 2007, Chapter 309
64 31A-27a-515, as enacted by Laws of Utah 2007, Chapter 309
65 31A-27a-516, as enacted by Laws of Utah 2007, Chapter 309
66 31A-30-102, as last amended by Laws of Utah 1997, Chapter 265
67 31A-30-112, as last amended by Laws of Utah 2007, Chapter 307
68 ENACTS:
69 31A-22-428, Utah Code Annotated 1953
70 31A-22-610.6, Utah Code Annotated 1953
71
72 Be it enacted by the Legislature of the state of Utah:
73 Section 1. Section 31A-1-301 is amended to read:
74 31A-1-301. Definitions.
75 As used in this title, unless otherwise specified:
76 (1) (a) "Accident and health insurance" means insurance to provide protection against
77 economic losses resulting from:
78 (i) a medical condition including:
79 (A) a medical care [expenses] expense; or
80 (B) the risk of disability;
81 (ii) accident; or
82 (iii) sickness.
83 (b) "Accident and health insurance":
84 (i) includes a contract with disability contingencies including:
85 (A) an income replacement contract;

86 (B) a health care contract;
87 (C) an expense reimbursement contract;
88 (D) a credit accident and health contract;
89 (E) a continuing care contract; and
90 (F) a long-term care contract; and
91 (ii) may provide:
92 (A) hospital coverage;
93 (B) surgical coverage;
94 (C) medical coverage; [or]
95 (D) loss of income coverage[.];
96 (E) prescription drug coverage;
97 (F) dental coverage; or
98 (G) vision coverage.
99 (c) "Accident and health insurance" does not include workers' compensation insurance.
100 (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
101 63, Chapter 46a, Utah Administrative Rulemaking Act.
102 (3) "Administrator" is defined in Subsection [(157)] (159).
103 (4) "Adult" means a natural person who has attained the age of at least 18 years.
104 (5) "Affiliate" means [any] a person who controls, is controlled by, or is under common
105 control with, another person. A corporation is an affiliate of another corporation, regardless of
106 ownership, if substantially the same group of natural persons manages the corporations.
107 (6) "Agency" means:
108 (a) a person other than an individual, including a sole proprietorship by which a natural
109 person does business under an assumed name; and
110 (b) an insurance organization licensed or required to be licensed under Section
111 31A-23a-301 .
112 (7) "Alien insurer" means an insurer domiciled outside the United States.
113 (8) "Amendment" means an endorsement to an insurance policy or certificate.

114 (9) "Annuity" means an agreement to make periodical payments for a period certain or
115 over the lifetime of one or more natural persons if the making or continuance of all or some of
116 the series of the payments, or the amount of the payment, is dependent upon the continuance of
117 human life.
118 (10) "Application" means a document:
119 (a) (i) completed by an applicant to provide information about the risk to be insured;
120 and
121 (ii) that contains information that is used by the insurer to evaluate risk and decide
122 whether to:
123 (A) insure the risk under:
124 (I) the [coverages] coverage as originally offered; or
125 (II) a modification of the coverage as originally offered; or
126 (B) decline to insure the risk; or
127 (b) used by the insurer to gather information from the applicant before issuance of an
128 annuity contract.
129 (11) "Articles" or "articles of incorporation" means:
130 (a) the original articles[,];
131 (b) a special [laws, charters, amendments,] law;
132 (c) a charter;
133 (d) an amendment;
134 (e) restated articles[,];
135 (f) articles of merger or consolidation[, trust instruments, and other constitutive
136 documents for trusts and other entities that are not corporations, and amendments to any of
137 these.];
138 (g) a trust instrument;
139 (h) another constitutive document for a trust or other entity that is not a corporation;
140 and
141 (i) an amendment to an item listed in Subsections (11)(a) through (h).

142 (12) "Bail bond insurance" means a guarantee that a person will attend court when
143 required, up to and including surrender of the person in execution of [any] a sentence imposed
144 under Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
145 (13) "Binder" is defined in Section 31A-21-102 .
146 (14) "Blanket insurance policy" means a group policy covering [classes] a defined class
147 of persons:
148 (a) without individual underwriting[, where the persons insured are] or application; and
149 (b) that is determined by definition [of the class] with or without designating [the
150 persons] each person covered.
151 (15) "Board," "board of trustees," or "board of directors" means the group of persons
152 with responsibility over, or management of, a corporation, however designated.
153 (16) "Business entity" means:
154 (a) a corporation[,];
155 (b) an association[,];
156 (c) a partnership[,];
157 (d) a limited liability company[,];
158 (e) a limited liability partnership[,]; or [other]
159 (f) another legal entity.
160 (17) "Business of insurance" is defined in Subsection [(84)] (85).
161 (18) "Business plan" means the information required to be supplied to the commissioner
162 under Subsections 31A-5-204 (2)(i) and (j), including the information required when these
163 subsections [are applicable] apply by reference under:
164 (a) Section 31A-7-201 ;
165 (b) Section 31A-8-205 ; or
166 (c) Subsection 31A-9-205 (2).
167 (19) (a) "Bylaws" means the rules adopted for the regulation or management of a
168 corporation's affairs, however designated [and].
169 (b) "Bylaws" includes comparable rules for [trusts and other entities that are not

170 corporations] a trust or other entity that is not a corporation.
171 (20) "Captive insurance company" means:
172 (a) an [insurance company] insurer:
173 (i) owned by another organization; and
174 (ii) whose exclusive purpose is to insure risks of the parent organization and an
175 affiliated [companies] company; or
176 (b) in the case of [groups and associations, an insurance organization] a group or
177 association, an insurer:
178 (i) owned by the insureds; and
179 (ii) whose exclusive purpose is to insure risks of:
180 (A) a member [organizations] organization;
181 (B) a group [members; and] member; or
182 (C) [affiliates] an affiliate of:
183 (I) a member [organizations] organization; or
184 (II) a group [members] member.
185 (21) "Casualty insurance" means liability insurance as defined in Subsection [(96)] (97).
186 (22) "Certificate" means evidence of insurance given to:
187 (a) an insured under a group insurance policy; or
188 (b) a third party.
189 (23) "Certificate of authority" is included within the term "license."
190 (24) "Claim," unless the context otherwise requires, means a request or demand on an
191 insurer for payment of [benefits] a benefit according to the terms of an insurance policy.
192 (25) "Claims-made coverage" means an insurance contract or provision limiting
193 coverage under a policy insuring against legal liability to claims that are first made against the
194 insured while the policy is in force.
195 (26) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
196 commissioner.
197 (b) When appropriate, the terms listed in Subsection (26)(a) apply to the equivalent

198 supervisory official of another jurisdiction.
199 (27) (a) "Continuing care insurance" means insurance that:
200 (i) provides board and lodging;
201 (ii) provides one or more of the following [services]:
202 (A) a personal [services] service;
203 (B) a nursing [services] service;
204 (C) a medical [services] service; or
205 (D) any other health-related [services] service; and
206 (iii) provides the coverage described in Subsection (27)(a)(i) under an agreement
207 effective:
208 (A) for the life of the insured; or
209 (B) for a period in excess of one year.
210 (b) Insurance is continuing care insurance regardless of whether or not the board and
211 lodging are provided at the same location as [the services] a service described in Subsection
212 (27)(a)(ii).
213 (28) (a) "Control," "controlling," "controlled," or "under common control" means the
214 direct or indirect possession of the power to direct or cause the direction of the management
215 and policies of a person. This control may be:
216 (i) by contract;
217 (ii) by common management;
218 (iii) through the ownership of voting securities; or
219 (iv) by a means other than those described in Subsections (28)(a)(i) through (iii).
220 (b) There is no presumption that an individual holding an official position with another
221 person controls that person solely by reason of the position.
222 (c) A person having a contract or arrangement giving control is considered to have
223 control despite the illegality or invalidity of the contract or arrangement.
224 (d) There is a rebuttable presumption of control in a person who directly or indirectly
225 owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the

226 voting securities of another person.
227 (29) "Controlled insurer" means a licensed insurer that is either directly or indirectly
228 controlled by a producer.
229 (30) "Controlling person" means [any] a person that directly or indirectly has the power
230 to direct or cause to be directed, the management, control, or activities of a reinsurance
231 intermediary.
232 (31) "Controlling producer" means a producer who directly or indirectly controls an
233 insurer.
234 (32) (a) "Corporation" means an insurance corporation, except when referring to:
235 (i) a corporation doing business:
236 (A) as:
237 (I) an insurance producer;
238 (II) a limited line producer;
239 (III) a consultant;
240 (IV) a managing general agent;
241 (V) a reinsurance intermediary;
242 (VI) a third party administrator; or
243 (VII) an adjuster; and
244 (B) under:
245 (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
246 Reinsurance Intermediaries;
247 (II) Chapter 25, Third Party Administrators; or
248 (III) Chapter 26, Insurance Adjusters; or
249 (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
250 Holding Companies.
251 (b) "Stock corporation" means a stock insurance corporation.
252 (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
253 (33) "Creditable coverage" has the same meaning as provided in federal regulations

254 adopted pursuant to the Health Insurance Portability and Accountability Act of 1996, Pub. L.
255 104-191, 110 Stat. 1936.
256 (34) "Credit accident and health insurance" means insurance on a debtor to provide
257 indemnity for payments coming due on a specific loan or other credit transaction while the
258 debtor is disabled.
259 (35) (a) "Credit insurance" means insurance offered in connection with an extension of
260 credit that is limited to partially or wholly extinguishing that credit obligation.
261 (b) "Credit insurance" includes:
262 (i) credit accident and health insurance;
263 (ii) credit life insurance;
264 (iii) credit property insurance;
265 (iv) credit unemployment insurance;
266 (v) guaranteed automobile protection insurance;
267 (vi) involuntary unemployment insurance;
268 (vii) mortgage accident and health insurance;
269 (viii) mortgage guaranty insurance; and
270 (ix) mortgage life insurance.
271 (36) "Credit life insurance" means insurance on the life of a debtor in connection with
272 an extension of credit that pays a person if the debtor dies.
273 (37) "Credit property insurance" means insurance:
274 (a) offered in connection with an extension of credit; and
275 (b) that protects the property until the debt is paid.
276 (38) "Credit unemployment insurance" means insurance:
277 (a) offered in connection with an extension of credit; and
278 (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
279 (i) specific loan; or
280 (ii) credit transaction.
281 (39) "Creditor" means a person, including an insured, having [any] a claim, whether:

282 (a) matured;
283 (b) unmatured;
284 (c) liquidated;
285 (d) unliquidated;
286 (e) secured;
287 (f) unsecured;
288 (g) absolute;
289 (h) fixed; or
290 (i) contingent.
291 (40) (a) "Customer service representative" means a person that provides an insurance
292 [services] service and insurance product information:
293 (i) for the customer service representative's:
294 (A) producer; or
295 (B) consultant employer; and
296 (ii) to the customer service representative's employer's:
297 (A) customer;
298 (B) client; or
299 (C) organization.
300 (b) A customer service representative may only operate within the scope of authority of
301 the customer service representative's producer or consultant employer.
302 (41) "Deadline" means the final date or time:
303 (a) imposed by:
304 (i) statute;
305 (ii) rule; or
306 (iii) order; and
307 (b) by which a required filing or payment must be received by the department.
308 (42) "Deemer clause" means a provision under this title under which upon the
309 occurrence of a condition precedent, the commissioner is [deemed] considered to have taken a

310 specific action. If the statute so provides, [the] a condition precedent may be the
311 commissioner's failure to take a specific action.
312 (43) "Degree of relationship" means the number of steps between two persons
313 determined by counting the generations separating one person from a common ancestor and
314 then counting the generations to the other person.
315 (44) "Department" means the Insurance Department.
316 (45) "Director" means a member of the board of directors of a corporation.
317 (46) "Disability" means a physiological or psychological condition that partially or
318 totally limits an individual's ability to:
319 (a) perform the duties of:
320 (i) that individual's occupation; or
321 (ii) any occupation for which the individual is reasonably suited by education, training,
322 or experience; or
323 (b) perform two or more of the following basic activities of daily living:
324 (i) eating;
325 (ii) toileting;
326 (iii) transferring;
327 (iv) bathing; or
328 (v) dressing.
329 (47) "Disability income insurance" is defined in Subsection [(75)] (76).
330 (48) "Domestic insurer" means an insurer organized under the laws of this state.
331 (49) "Domiciliary state" means the state in which an insurer:
332 (a) is incorporated;
333 (b) is organized; or
334 (c) in the case of an alien insurer, enters into the United States.
335 (50) (a) "Eligible employee" means:
336 (i) an employee who:
337 (A) works on a full-time basis; and

338 (B) has a normal work week of 30 or more hours; or
339 (ii) a person described in Subsection (50)(b).
340 (b) "Eligible employee" includes, if the individual is included under a health benefit plan
341 of a small employer:
342 (i) a sole proprietor;
343 (ii) a partner in a partnership; or
344 (iii) an independent contractor.
345 (c) "Eligible employee" does not include, unless eligible under Subsection (50)(b):
346 (i) an individual who works on a temporary or substitute basis for a small employer;
347 (ii) an employer's spouse; or
348 (iii) a dependent of an employer.
349 (51) "Employee" means [any] an individual employed by an employer.
350 (52) "Employee benefits" means one or more benefits or services provided to:
351 (a) [employees] an employee; or
352 (b) [dependents of employees] a dependent of an employee.
353 (53) (a) "Employee welfare fund" means a fund:
354 (i) established or maintained, whether directly or through [trustees] a trustee, by:
355 (A) one or more employers;
356 (B) one or more labor organizations; or
357 (C) a combination of employers and labor organizations; and
358 (ii) that provides employee benefits paid or contracted to be paid, other than income
359 from investments of the fund[,]:
360 (A) by or on behalf of an employer doing business in this state; or
361 (B) for the benefit of [any] a person employed in this state.
362 (b) "Employee welfare fund" includes a plan funded or subsidized by a user [fees] fee or
363 tax revenues.
364 (54) "Endorsement" means a written agreement attached to a policy or certificate to
365 modify one or more of the provisions of the policy or certificate.

366 (55) "Enrollment date," with respect to a health benefit plan, means:
367 (a) the first day of coverage; or[,]
368 (b) if there is a waiting period, the first day of the waiting period.
369 (56) (a) "Escrow" means:
370 (i) a real estate settlement or real estate closing conducted by a third party pursuant to
371 the requirements of a written agreement between the parties in a real estate transaction; or
372 (ii) a settlement or closing involving:
373 (A) a mobile home;
374 (B) a grazing right;
375 (C) a water right; or
376 (D) other personal property authorized by the commissioner.
377 (b) "Escrow" includes the act of conducting a:
378 (i) real estate settlement; or
379 (ii) real estate closing.
380 (57) "Escrow agent" means:
381 (a) an insurance producer with:
382 (i) a title insurance line of authority; and
383 (ii) an escrow subline of authority; or
384 (b) a person defined as an escrow agent in Section 7-22-101 .
385 (58) (a) "Excludes" is not exhaustive and does not mean that [other things are] another
386 thing is not also excluded.
387 (b) The items listed in a list using the term "excludes" are representative examples for
388 use in interpretation of this title.
389 (59) "Exclusion" means for the purposes of accident and health insurance that an insurer
390 does not provide insurance coverage, for whatever reason, for one of the following:
391 (a) a specific physical condition;
392 (b) a specific medical procedure;
393 (c) a specific disease or disorder; or

394 (d) a specific prescription drug or class of prescription drugs.
395 [(59)] (60) "Expense reimbursement insurance" means insurance:
396 (a) written to provide [payments for expenses] a payment for an expense relating to
397 hospital [confinements] confinement resulting from illness or injury; and
398 (b) written:
399 (i) as a daily limit for a specific number of days in a hospital; and
400 (ii) to have a one or two day waiting period following a hospitalization.
401 [(60)] (61) "Fidelity insurance" means insurance guaranteeing the fidelity of [persons] a
402 person holding [positions] a position of public or private trust.
403 [(61)] (62) (a) "Filed" means that a filing is:
404 (i) submitted to the department as required by and in accordance with [any] applicable
405 statute, rule, or filing order;
406 (ii) received by the department within the time period provided in [the] applicable
407 statute, rule, or filing order; and
408 (iii) accompanied by the appropriate fee in accordance with:
409 (A) Section 31A-3-103 ; or
410 (B) rule.
411 (b) "Filed" does not include a filing that is rejected by the department because it is not
412 submitted in accordance with Subsection [(61)] (62)(a).
413 [(62)] (63) "Filing," when used as a noun, means an item required to be filed with the
414 department including:
415 (a) a policy;
416 (b) a rate;
417 (c) a form;
418 (d) a document;
419 (e) a plan;
420 (f) a manual;
421 (g) an application;

422 (h) a report;
423 (i) a certificate;
424 (j) an endorsement;
425 (k) an actuarial certification;
426 (l) a licensee annual statement;
427 (m) a licensee renewal application; [or]
428 (n) an advertisement; or
429 (o) an outline of coverage.
430 [(63)] (64) "First party insurance" means an insurance policy or contract in which the
431 insurer agrees to pay [claims] a claim submitted to it by the insured for the insured's losses.
432 [(64)] (65) "Foreign insurer" means an insurer domiciled outside of this state, including
433 an alien insurer.
434 [(65)] (66) (a) "Form" means one of the following prepared for general use:
435 (i) a policy;
436 (ii) a certificate;
437 (iii) an application; [or]
438 (iv) an outline of coverage; or
439 (v) an endorsement.
440 (b) "Form" does not include a document specially prepared for use in an individual case.
441 [(66)] (67) "Franchise insurance" means an individual insurance [policies] policy
442 provided through a mass marketing arrangement involving a defined class of persons related in
443 some way other than through the purchase of insurance.
444 [(67)] (68) "General lines of authority" include:
445 (a) the general lines of insurance in Subsection [(68)] (69);
446 (b) title insurance under one of the following sublines of authority:
447 (i) search, including authority to act as a title marketing representative;
448 (ii) escrow, including authority to act as a title marketing representative;
449 (iii) search and escrow, including authority to act as a title marketing representative;

450 and
451 (iv) title marketing representative only;
452 (c) surplus lines;
453 (d) workers' compensation; and
454 (e) any other line of insurance that the commissioner considers necessary to recognize
455 in the public interest.
456 [(68)] (69) "General lines of insurance" include:
457 (a) accident and health;
458 (b) casualty;
459 (c) life;
460 (d) personal lines;
461 (e) property; and
462 (f) variable contracts, including variable life and annuity.
463 [(69)] (70) "Group health plan" means an employee welfare benefit plan to the extent
464 that the plan provides medical care:
465 (a) (i) to [employees] an employee; or
466 (ii) to a dependent of an employee; and
467 (b) (i) directly;
468 (ii) through insurance reimbursement; or
469 (iii) through [any other] another method.
470 [(70)] (71) (a) "Group insurance policy" means a policy covering a group of persons
471 that is issued:
472 (i) to a policyholder on behalf of the group; and
473 (ii) for the benefit of [group members who are] a member of the group who is selected
474 under [procedures] a procedure defined in:
475 (A) the policy; or
476 (B) [agreements which are] an agreement that is collateral to the policy.
477 (b) A group insurance policy may include [members] a member of the policyholder's

478 family or [dependents] a dependent.
479 [(71)] (72) "Guaranteed automobile protection insurance" means insurance offered in
480 connection with an extension of credit that pays the difference in amount between the insurance
481 settlement and the balance of the loan if the insured automobile is a total loss.
482 [(72)] (73) (a) Except as provided in Subsection [(72)] (73)(b), "health benefit plan"
483 means a policy or certificate that:
484 (i) provides health care insurance;
485 (ii) provides major medical expense insurance; or
486 (iii) is offered as a substitute for hospital or medical expense insurance such as:
487 (A) a hospital confinement indemnity; or
488 (B) a limited benefit plan.
489 (b) "Health benefit plan" does not include a policy or certificate that:
490 (i) provides benefits solely for:
491 (A) accident;
492 (B) dental;
493 (C) income replacement;
494 (D) long-term care;
495 (E) a Medicare supplement;
496 (F) a specified disease;
497 (G) vision; or
498 (H) a short-term limited duration; or
499 (ii) is offered and marketed as supplemental health insurance.
500 [(73)] (74) "Health care" means any of the following intended for use in the diagnosis,
501 treatment, mitigation, or prevention of a human ailment or impairment:
502 (a) a professional [services] service;
503 (b) a personal [services] service;
504 (c) [facilities] a facility;
505 (d) equipment;

506 (e) [devices] a device;
507 (f) supplies; or
508 (g) medicine.
509 [(74)] (75) (a) "Health care insurance" or "health insurance" means insurance providing:
510 (i) a health care [benefits] benefit; or
511 (ii) payment of an incurred health care [expenses] expense.
512 (b) "Health care insurance" or "health insurance" does not include accident and health
513 insurance providing [benefits] a benefit for:
514 (i) replacement of income;
515 (ii) short-term accident;
516 (iii) fixed indemnity;
517 (iv) credit accident and health;
518 (v) supplements to liability;
519 (vi) workers' compensation;
520 (vii) automobile medical payment;
521 (viii) no-fault automobile;
522 (ix) equivalent self-insurance; or
523 (x) [any] a type of accident and health insurance coverage that is a part of or attached
524 to another type of policy.
525 [(75)] (76) "Income replacement insurance" or "disability income insurance" means
526 insurance written to provide payments to replace income lost from accident or sickness.
527 [(76)] (77) "Indemnity" means the payment of an amount to offset all or part of an
528 insured loss.
529 [(77)] (78) "Independent adjuster" means an insurance adjuster required to be licensed
530 under Section 31A-26-201 who engages in insurance adjusting as a representative of [insurers]
531 an insurer.
532 [(78)] (79) "Independently procured insurance" means insurance procured under
533 Section 31A-15-104 .

534 [(79)] (80) "Individual" means a natural person.
535 [(80)] (81) "Inland marine insurance" includes insurance covering:
536 (a) property in transit on or over land;
537 (b) property in transit over water by means other than boat or ship;
538 (c) bailee liability;
539 (d) fixed transportation property such as bridges, electric transmission systems, radio
540 and television transmission towers and tunnels; and
541 (e) personal and commercial property floaters.
542 [(81)] (82) "Insolvency" means that:
543 (a) an insurer is unable to pay its debts or meet its obligations as [they] the debts and
544 obligations mature;
545 (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
546 RBC under Subsection 31A-17-601 (8)(c); or
547 (c) an insurer is determined to be hazardous under this title.
548 [(82)] (83) (a) "Insurance" means:
549 (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
550 persons to one or more other persons; or
551 (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
552 group of persons that includes the person seeking to distribute that person's risk.
553 (b) "Insurance" includes:
554 (i) a risk distributing [arrangements] arrangement providing for compensation or
555 replacement for damages or loss through the provision of [services or benefits] a service or a
556 benefit in kind;
557 (ii) [contracts] a contract of guaranty or suretyship entered into by the guarantor or
558 surety as a business and not as merely incidental to a business transaction; and
559 (iii) [plans] a plan in which the risk does not rest upon the person who makes [the
560 arrangements] an arrangement, but with a class of persons who have agreed to share [it] the
561 risk.

562 [(83)] (84) "Insurance adjuster" means a person who directs the investigation,
563 negotiation, or settlement of a claim under an insurance policy other than life insurance or an
564 annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
565 [(84)] (85) "Insurance business" or "business of insurance" includes:
566 (a) providing health care insurance, as defined in Subsection [(74)] (75), by
567 [organizations that are] an organization that is or should be licensed under this title;
568 (b) providing [benefits to employees] a benefit to an employee in the event of
569 [contingencies] a contingency not within the control of the [employees] employee, in which the
570 [employees are] employee is entitled to the [benefits] benefit as a right, which [benefits] benefit
571 may be provided either:
572 (i) by a single [employers] employer or by multiple employer groups; or
573 (ii) through one or more trusts, associations, or other entities;
574 (c) providing [annuities,] an annuity:
575 (i) including [those] an annuity issued in return for [gifts,] a gift; and
576 (ii) except [those] an annuity provided by [persons] a person specified in Subsections
577 31A-22-1305 (2) and (3);
578 (d) providing the characteristic services of a motor [clubs] club as outlined in
579 Subsection [(112)] (113);
580 (e) providing [other persons] another person with insurance as defined in Subsection
581 [(82)] (83);
582 (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
583 or surety, [any] a contract or policy of title insurance;
584 (g) transacting or proposing to transact any phase of title insurance, including:
585 (i) solicitation;
586 (ii) negotiation preliminary to execution;
587 (iii) execution of a contract of title insurance;
588 (iv) insuring; and
589 (v) transacting matters subsequent to the execution of the contract and arising out of

590 the contract, including reinsurance; and
591 (h) doing, or proposing to do, any business in substance equivalent to Subsections
592 [(84)] (85)(a) through (g) in a manner designed to evade the provisions of this title.
593 [(85)] (86) "Insurance consultant" or "consultant" means a person who:
594 (a) advises [other persons] another person about insurance needs and coverages;
595 (b) is compensated by the person advised on a basis not directly related to the insurance
596 placed; and
597 (c) except as provided in Section 31A-23a-501 , is not compensated directly or
598 indirectly by an insurer or producer for advice given.
599 [(86)] (87) "Insurance holding company system" means a group of two or more
600 affiliated persons, at least one of whom is an insurer.
601 [(87)] (88) (a) "Insurance producer" or "producer" means a person licensed or required
602 to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
603 (b) With regards to the selling, soliciting, or negotiating of an insurance product to an
604 insurance customer or an insured:
605 (i) "producer for the insurer" means a producer who is compensated directly or
606 indirectly by an insurer for selling, soliciting, or negotiating [any] a product of that insurer; and
607 (ii) "producer for the insured" means a producer who:
608 (A) is compensated directly and only by an insurance customer or an insured; and
609 (B) receives no compensation directly or indirectly from an insurer for selling, soliciting,
610 or negotiating [any] a product of that insurer to an insurance customer or insured.
611 [(88)] (89) (a) "Insured" means a person to whom or for whose benefit an insurer
612 makes a promise in an insurance policy and includes:
613 (i) [policyholders] a policyholder;
614 (ii) [subscribers] a subscriber;
615 (iii) [members] a member; and
616 (iv) [beneficiaries] a beneficiary.
617 (b) The definition in Subsection [(88)] (89)(a):

618 (i) applies only to this title; and
619 (ii) does not define the meaning of this word as used in an insurance [policies or
620 certificates] policy or certificate.
621 [(89)] (90) (a) (i) "Insurer" means [any] a person doing an insurance business as a
622 principal including:
623 (A) a fraternal benefit [societies] society;
624 (B) [issuers of gift annuities other than those] an issuer of a gift annuity other than an
625 annuity specified in Subsections 31A-22-1305 (2) and (3);
626 (C) a motor [clubs] club;
627 (D) an employee welfare [plans] plan; and
628 (E) [any] a person purporting or intending to do an insurance business as a principal on
629 that person's own account.
630 (ii) "Insurer" does not include a governmental entity to the extent [it] the governmental
631 entity is engaged in [the activities] an activity described in Section 31A-12-107 .
632 (b) "Admitted insurer" is defined in Subsection [(161)] (163)(b).
633 (c) "Alien insurer" is defined in Subsection (7).
634 (d) "Authorized insurer" is defined in Subsection [(161)] (163)(b).
635 (e) "Domestic insurer" is defined in Subsection (48).
636 (f) "Foreign insurer" is defined in Subsection [(64)] (65).
637 (g) "Nonadmitted insurer" is defined in Subsection [(161)] (163)(a).
638 (h) "Unauthorized insurer" is defined in Subsection [(161)] (163)(a).
639 [(90)] (91) "Interinsurance exchange" is defined in Subsection [(141)] (142).
640 [(91)] (92) "Involuntary unemployment insurance" means insurance:
641 (a) offered in connection with an extension of credit; and
642 (b) that provides indemnity if the debtor is involuntarily unemployed for payments
643 coming due on a:
644 (i) specific loan; or
645 (ii) credit transaction.

646 [(92)] (93) "Large employer," in connection with a health benefit plan, means an
647 employer who, with respect to a calendar year and to a plan year:
648 (a) employed an average of at least 51 eligible employees on each business day during
649 the preceding calendar year; and
650 (b) employs at least two employees on the first day of the plan year.
651 [(93)] (94) "Late enrollee," with respect to an employer health benefit plan, means an
652 individual whose enrollment is a late enrollment.
653 [(94)] (95) "Late enrollment," with respect to an employer health benefit plan, means
654 enrollment of an individual other than:
655 (a) on the earliest date on which coverage can become effective for the individual under
656 the terms of the plan; or
657 (b) through special enrollment.
658 [(95)] (96) (a) Except for a retainer contract or legal assistance described in Section
659 31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
660 specified legal [expenses] expense.
661 (b) "Legal expense insurance" includes [arrangements that create] an arrangement that
662 creates a reasonable [expectations of ] expectation of an enforceable [rights] right.
663 (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
664 legal services incidental to other insurance [coverages] coverage.
665 [(96)] (97) (a) "Liability insurance" means insurance against liability:
666 (i) for death, injury, or disability of [any] a human being, or for damage to property,
667 exclusive of the coverages under:
668 (A) Subsection [(106)] (107) for medical malpractice insurance;
669 (B) Subsection [(133)] (134) for professional liability insurance; and
670 (C) Subsection [(166)] (168) for workers' compensation insurance;
671 (ii) for a medical, hospital, surgical, and funeral [benefits to persons] benefit to a person
672 other than the insured who [are] is injured, irrespective of legal liability of the insured, when
673 issued with or supplemental to insurance against legal liability for the death, injury, or disability

674 of a human [beings] being, exclusive of the coverages under:
675 (A) Subsection [(106)] (107) for medical malpractice insurance;
676 (B) Subsection [(133)] (134) for professional liability insurance; and
677 (C) Subsection [(166)] (168) for workers' compensation insurance;
678 (iii) for loss or damage to property resulting from [accidents to or explosions of boilers,
679 pipes, pressure containers] an accident to or explosion of a boiler, pipe, pressure container,
680 machinery, or apparatus;
681 (iv) for loss or damage to [any] property caused by:
682 (A) the breakage or leakage of [sprinklers, water pipes and containers, or by] a
683 sprinkler, water pipe, or water container; or
684 (B) water entering through [leaks or openings in buildings] a leak or opening in a
685 building; or
686 (v) for other loss or damage properly the subject of insurance not within [any other]
687 another kind [or kinds] of insurance as defined in this chapter, if [such] the insurance is not
688 contrary to law or public policy.
689 (b) "Liability insurance" includes:
690 (i) vehicle liability insurance as defined in Subsection [(163)] (165);
691 (ii) residential dwelling liability insurance as defined in Subsection [(144)] (145); and
692 (iii) making inspection of, and issuing [certificates] a certificate of inspection upon,
693 [elevators, boilers] an elevator, boiler, machinery, [and] or apparatus of any kind when done in
694 connection with insurance on [them] the elevator, boiler, machinery, or apparatus.
695 [(97)] (98) (a) "License" means the authorization issued by the commissioner to engage
696 in [some] an activity that is part of or related to the insurance business.
697 (b) "License" includes [certificates] a certificate of authority issued to [insurers] an
698 insurer.
699 [(98)] (99) (a) "Life insurance" means:
700 (i) insurance on a human [lives] life; and [insurances]
701 (ii) insurance pertaining to or connected with human life.

702 (b) The business of life insurance includes:
703 (i) granting a death [benefits] benefit;
704 (ii) granting an annuity [benefits] benefit;
705 (iii) granting an endowment [benefits] benefit;
706 (iv) granting an additional [benefits] benefit in the event of death by accident;
707 (v) granting an additional [benefits] benefit to safeguard the policy against lapse; and
708 (vi) providing an optional [methods] method of settlement of proceeds.
709 [(99)] (100) "Limited license" means a license that:
710 (a) is issued for a specific product of insurance; and
711 (b) limits an individual or agency to transact only for that product or insurance.
712 [(100)] (101) "Limited line credit insurance" includes the following forms of insurance:
713 (a) credit life;
714 (b) credit accident and health;
715 (c) credit property;
716 (d) credit unemployment;
717 (e) involuntary unemployment;
718 (f) mortgage life;
719 (g) mortgage guaranty;
720 (h) mortgage accident and health;
721 (i) guaranteed automobile protection; and
722 (j) [any other] another form of insurance offered in connection with an extension of
723 credit that:
724 (i) is limited to partially or wholly extinguishing the credit obligation; and
725 (ii) the commissioner determines by rule should be designated as a form of limited line
726 credit insurance.
727 [(101)] (102) "Limited line credit insurance producer" means a person who sells,
728 solicits, or negotiates one or more forms of limited line credit insurance coverage to
729 [individuals] an individual through a master, corporate, group, or individual policy.

730 [(102)] (103) "Limited line insurance" includes:
731 (a) bail bond;
732 (b) limited line credit insurance;
733 (c) legal expense insurance;
734 (d) motor club insurance;
735 (e) rental car-related insurance;
736 (f) travel insurance; and
737 (g) [any other] another form of limited insurance that the commissioner determines by
738 rule should be designated a form of limited line insurance.
739 [(103)] (104) "Limited lines authority" includes:
740 (a) the lines of insurance listed in Subsection [(102)] (103); and
741 (b) a customer service representative.
742 [(104)] (105) "Limited lines producer" means a person who sells, solicits, or negotiates
743 limited lines insurance.
744 [(105)] (106) (a) "Long-term care insurance" means an insurance policy or rider
745 advertised, marketed, offered, or designated to provide coverage:
746 (i) in a setting other than an acute care unit of a hospital;
747 (ii) for not less than 12 consecutive months for [each] a covered person on the basis of:
748 (A) expenses incurred;
749 (B) indemnity;
750 (C) prepayment; or
751 (D) another method;
752 (iii) for one or more necessary or medically necessary services that are:
753 (A) diagnostic;
754 (B) preventative;
755 (C) therapeutic;
756 (D) rehabilitative;
757 (E) maintenance; or

758 (F) personal care; and
759 (iv) that may be issued by:
760 (A) an insurer;
761 (B) a fraternal benefit society;
762 (C) (I) a nonprofit health hospital; and
763 (II) a medical service corporation;
764 (D) a prepaid health plan;
765 (E) a health maintenance organization; or
766 (F) an entity similar to the entities described in Subsections [(105)] (106)(a)(iv)(A)
767 through (E) to the extent that the entity is otherwise authorized to issue life or health care
768 insurance.
769 (b) "Long-term care insurance" includes:
770 (i) any of the following that provide directly or supplement long-term care insurance:
771 (A) a group or individual annuity or rider; or
772 (B) a life insurance policy or rider;
773 (ii) a policy or rider that provides for payment of benefits [based on] on the basis of:
774 (A) cognitive impairment; or
775 (B) functional capacity; or
776 (iii) a qualified long-term care insurance contract.
777 (c) "Long-term care insurance" does not include:
778 (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
779 (ii) basic hospital expense coverage;
780 (iii) basic medical/surgical expense coverage;
781 (iv) hospital confinement indemnity coverage;
782 (v) major medical expense coverage;
783 (vi) income replacement or related asset-protection coverage;
784 (vii) accident only coverage;
785 (viii) coverage for a specified:

786 (A) disease; or
787 (B) accident;
788 (ix) limited benefit health coverage; or
789 (x) a life insurance policy that accelerates the death benefit to provide the option of a
790 lump sum payment:
791 (A) if the following are not conditioned on the receipt of long-term care:
792 (I) benefits; or
793 (II) eligibility; and
794 (B) the coverage is for one or more the following qualifying events:
795 (I) terminal illness;
796 (II) medical conditions requiring extraordinary medical intervention; or
797 (III) permanent institutional confinement.
798 [(106)] (107) "Medical malpractice insurance" means insurance against legal liability
799 incident to the practice and provision of a medical [services] service other than the practice and
800 provision of a dental [services] service.
801 [(107)] (108) "Member" means a person having membership rights in an insurance
802 corporation.
803 [(108)] (109) "Minimum capital" or "minimum required capital" means the capital that
804 must be constantly maintained by a stock insurance corporation as required by statute.
805 [(109)] (110) "Mortgage accident and health insurance" means insurance offered in
806 connection with an extension of credit that provides indemnity for payments coming due on a
807 mortgage while the debtor is disabled.
808 [(110)] (111) "Mortgage guaranty insurance" means surety insurance under which
809 [mortgagees and other creditors are] a mortgagee or other creditor is indemnified against losses
810 caused by the default of [debtors] a debtor.
811 [(111)] (112) "Mortgage life insurance" means insurance on the life of a debtor in
812 connection with an extension of credit that pays if the debtor dies.
813 [(112)] (113) "Motor club" means a person:

814 (a) licensed under:
815 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
816 (ii) Chapter 11, Motor Clubs; or
817 (iii) Chapter 14, Foreign Insurers; and
818 (b) that promises for an advance consideration to provide for a stated period of time
819 one or more:
820 (i) legal services under Subsection 31A-11-102 (1)(b);
821 (ii) bail services under Subsection 31A-11-102 (1)(c); or
822 (iii) (A) trip reimbursement;
823 (B) towing services;
824 (C) emergency road services;
825 (D) stolen automobile services;
826 (E) a combination of the services listed in Subsections [(112)] (113)(b)(iii)(A) through
827 (D); or
828 (F) [any] other services given in Subsections 31A-11-102 (1)(b) through (f).
829 [(113)] (114) "Mutual" means a mutual insurance corporation.
830 [(114)] (115) "Network plan" means health care insurance:
831 (a) that is issued by an insurer; and
832 (b) under which the financing and delivery of medical care is provided, in whole or in
833 part, through a defined set of providers under contract with the insurer, including the financing
834 and delivery of [items] an item paid for as medical care.
835 [(115)] (116) "Nonparticipating" means a plan of insurance under which the insured is
836 not entitled to receive [dividends] a dividend representing [shares] a share of the surplus of the
837 insurer.
838 [(116)] (117) "Ocean marine insurance" means insurance against loss of or damage to:
839 (a) ships or hulls of ships;
840 (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys,
841 securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia interests,

842 or other cargoes in or awaiting transit over the oceans or inland waterways;
843 (c) earnings such as freight, passage money, commissions, or profits derived from
844 transporting goods or people upon or across the oceans or inland waterways; or
845 (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
846 owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
847 in connection with maritime activity.
848 [(117)] (118) "Order" means an order of the commissioner.
849 [(118)] (119) "Outline of coverage" means a summary that explains an accident and
850 health insurance policy.
851 [(119)] (120) "Participating" means a plan of insurance under which the insured is
852 entitled to receive [dividends] a dividend representing [shares] a share of the surplus of the
853 insurer.
854 [(120)] (121) "Participation," as used in a health benefit plan, means a requirement
855 relating to the minimum percentage of eligible employees that must be enrolled in relation to the
856 total number of eligible employees of an employer reduced by each eligible employee who
857 voluntarily declines coverage under the plan because the employee:
858 (a) has other group health care insurance coverage[.]; or
859 (b) receives:
860 (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
861 Security Amendments of 1965; or
862 (ii) another government health benefit.
863 [(121)] (122) "Person" includes:
864 (a) an individual[,];
865 (b) a partnership[,];
866 (c) a corporation[,];
867 (d) an incorporated or unincorporated association[,];
868 (e) a joint stock company[,];
869 (f) a trust[,];

870 (g) a limited liability company[,];
871 (h) a reciprocal[,];
872 (i) a syndicate[,]; or [any]
873 (j) another similar entity or combination of entities acting in concert.
874 [(122)] (123) "Personal lines insurance" means property and casualty insurance
875 coverage sold for primarily noncommercial purposes to:
876 (a) [individuals; and] an individual; or
877 (b) [families] a family.
878 [(123)] (124) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
879 [(124)] (125) "Plan year" means:
880 (a) the year that is designated as the plan year in:
881 (i) the plan document of a group health plan; or
882 (ii) a summary plan description of a group health plan;
883 (b) if the plan document or summary plan description does not designate a plan year or
884 there is no plan document or summary plan description:
885 (i) the year used to determine deductibles or limits;
886 (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis; or
887 (iii) the employer's taxable year if:
888 (A) the plan does not impose deductibles or limits on a yearly basis; and
889 (B) (I) the plan is not insured; or
890 (II) the insurance policy is not renewed on an annual basis; or
891 (c) in a case not described in Subsection [(124)] (125)(a) or (b), the calendar year.
892 [(125)] (126) (a) "Policy" means [any] a document, including any attached
893 [endorsements and riders, purporting] endorsement or application that:
894 (i) purports to be an enforceable contract[, which]; and
895 (ii) memorializes in writing some or all of the terms of an insurance contract.
896 (b) "Policy" includes a service contract issued by:
897 (i) a motor club under Chapter 11, Motor Clubs;

898 (ii) a service contract provided under Chapter 6a, Service Contracts; and
899 (iii) a corporation licensed under:
900 (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
901 (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
902 (c) "Policy" does not include:
903 (i) a certificate under a group insurance contract; or
904 (ii) a document that does not purport to have legal effect.
905 [(126)] (127) "Policyholder" means the person who controls a policy, binder, or oral
906 contract by ownership, premium payment, or otherwise.
907 [(127)] (128) "Policy illustration" means a presentation or depiction that includes
908 nonguaranteed elements of a policy of life insurance over a period of years.
909 [(128)] (129) "Policy summary" means a synopsis describing the elements of a life
910 insurance policy.
911 [(129)] (130) "Preexisting condition," with respect to a health benefit plan:
912 (a) means a condition that was present before the effective date of coverage, whether or
913 not [any] medical advice, diagnosis, care, or treatment was recommended or received before
914 that day; and
915 (b) does not include a condition indicated by genetic information unless an actual
916 diagnosis of the condition by a physician has been made.
917 [(130)] (131) (a) "Premium" means the monetary consideration for an insurance policy.
918 (b) "Premium" includes, however designated:
919 (i) [assessments] an assessment;
920 (ii) a membership [fees] fee;
921 (iii) a required [contributions] contribution; or
922 (iv) monetary consideration.
923 (c) (i) [Consideration] "Premium" does not include consideration paid to a third party
924 [administrators for their services is not "premium."] administrator for the third party
925 administrator's services.

926 (ii) [Amounts] "Premium" includes an amount paid by a third party [administrators to
927 insurers] administrator to an insurer for insurance on the risks administered by the third party
928 [administrators are "premium."] administrator.
929 [(131)] (132) "Principal officers" of a corporation means the officers designated under
930 Subsection 31A-5-203 (3).
931 [(132) "Proceedings"] (133) "Proceeding" includes [actions and] an action or special
932 statutory [proceedings] proceeding.
933 [(133)] (134) "Professional liability insurance" means insurance against legal liability
934 incident to the practice of a profession and provision of [any] a professional [services] service.
935 [(134)] (135) (a) Except as provided in Subsection [(134)] (135)(b), "property
936 insurance" means insurance against loss or damage to real or personal property of every kind
937 and any interest in that property:
938 (i) from all hazards or causes; and
939 (ii) against loss consequential upon the loss or damage including vehicle comprehensive
940 and vehicle physical damage coverages.
941 (b) "Property insurance" does not include:
942 (i) inland marine insurance as defined in Subsection [(80)] (81); and
943 (ii) ocean marine insurance as defined under Subsection [(116)] (117).
944 [(135)] (136) "Qualified long-term care insurance contract" or "federally tax qualified
945 long-term care insurance contract" means:
946 (a) an individual or group insurance contract that meets the requirements of Section
947 7702B(b), Internal Revenue Code; or
948 (b) the portion of a life insurance contract that provides long-term care insurance:
949 (i) (A) by rider; or
950 (B) as a part of the contract; and
951 (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue Code.
952 [(136)] (137) "Qualified United States financial institution" means an institution that:
953 (a) is:

954 (i) organized under the laws of the United States or any state; or
955 (ii) in the case of a United States office of a foreign banking organization, licensed
956 under the laws of the United States or any state;
957 (b) is regulated, supervised, and examined by a United States federal or state
958 [authorities] authority having regulatory authority over [banks and trust companies] a bank or
959 trust company; and
960 (c) meets the standards of financial condition and standing that are considered necessary
961 and appropriate to regulate the quality of a financial [institutions] institution whose letters of
962 credit will be acceptable to the commissioner as determined by:
963 (i) the commissioner by rule; or
964 (ii) the Securities Valuation Office of the National Association of Insurance
965 Commissioners.
966 [(137)] (138) (a) "Rate" means:
967 (i) the cost of a given unit of insurance; or
968 (ii) for property-casualty insurance, that cost of insurance per exposure unit either
969 expressed as:
970 (A) a single number; or
971 (B) a pure premium rate, adjusted before [any] the application of individual risk
972 variations based on loss or expense considerations to account for the treatment of:
973 (I) expenses;
974 (II) profit; and
975 (III) individual insurer variation in loss experience.
976 (b) "Rate" does not include a minimum premium.
977 [(138)] (139) (a) Except as provided in Subsection [(138)] (139)(b), "rate service
978 organization" means [any] a person who assists [insurers] an insurer in rate making or filing by:
979 (i) collecting, compiling, and furnishing loss or expense statistics;
980 (ii) recommending, making, or filing rates or supplementary rate information; or
981 (iii) advising about rate questions, except as an attorney giving legal advice.

982 (b) "Rate service organization" does not mean:
983 (i) an employee of an insurer;
984 (ii) a single insurer or group of insurers under common control;
985 (iii) a joint underwriting group; or
986 (iv) a natural person serving as an actuarial or legal consultant.
987 [(139)] (140) "Rating manual" means any of the following used to determine initial and
988 renewal policy premiums:
989 (a) a manual of rates;
990 (b) [classifications] a classification;
991 (c) a rate-related underwriting [rules] rule; and
992 (d) a rating [formulas that describe] formula that describes steps, policies, and
993 procedures for determining initial and renewal policy premiums.
994 [(140)] (141) "Received by the department" means:
995 (a) except as provided in Subsection [(140)] (141)(b), the date delivered to and
996 stamped received by the department, whether delivered:
997 (i) in person; or
998 (ii) electronically; and
999 (b) if delivered to the department by a delivery service, the delivery service's postmark
1000 date or pick-up date unless otherwise stated in:
1001 (i) statute;
1002 (ii) rule; or
1003 (iii) a specific filing order.
1004 [(141)] (142) "Reciprocal" or "interinsurance exchange" means [any] an unincorporated
1005 association of persons:
1006 (a) operating through an attorney-in-fact common to all of [them] the persons; and
1007 (b) exchanging insurance contracts with one another that provide insurance coverage on
1008 each other.
1009 [(142)] (143) "Reinsurance" means an insurance transaction where an insurer, for

1010 consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
1011 reinsurance transactions, this title sometimes refers to:
1012 (a) the insurer transferring the risk as the "ceding insurer"; and
1013 (b) the insurer assuming the risk as the:
1014 (i) "assuming insurer"; or
1015 (ii) "assuming reinsurer."
1016 [(143)] (144) "Reinsurer" means [any] a person licensed in this state as an insurer with
1017 the authority to assume reinsurance.
1018 [(144)] (145) "Residential dwelling liability insurance" means insurance against liability
1019 resulting from or incident to the ownership, maintenance, or use of a residential dwelling that is
1020 a detached single family residence or multifamily residence up to four units.
1021 [(145)] (146) (a) "Retrocession" means reinsurance with another insurer of a liability
1022 assumed under a reinsurance contract.
1023 (b) A reinsurer "retrocedes" when [it] the reinsurer reinsures with another insurer part
1024 of a liability assumed under a reinsurance contract.
1025 [(146)] (147) "Rider" means an endorsement to:
1026 (a) an insurance policy; or
1027 (b) an insurance certificate.
1028 [(147)] (148) (a) "Security" means [any] a:
1029 (i) note;
1030 (ii) stock;
1031 (iii) bond;
1032 (iv) debenture;
1033 (v) evidence of indebtedness;
1034 (vi) certificate of interest or participation in [any] a profit-sharing agreement;
1035 (vii) collateral-trust certificate;
1036 (viii) preorganization certificate or subscription;
1037 (ix) transferable share;

1038 (x) investment contract;
1039 (xi) voting trust certificate;
1040 (xii) certificate of deposit for a security;
1041 (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
1042 payments out of production under such a title or lease;
1043 (xiv) commodity contract or commodity option;
1044 (xv) certificate of interest or participation in, temporary or interim certificate for, receipt
1045 for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in
1046 Subsections [(147)] (148)(a)(i) through (xiv); or
1047 (xvi) [other] another interest or instrument commonly known as a security.
1048 (b) "Security" does not include:
1049 (i) any of the following under which an insurance company promises to pay money in a
1050 specific lump sum or periodically for life or some other specified period:
1051 (A) insurance;
1052 (B) endowment policy; or
1053 (C) annuity contract; or
1054 (ii) a burial certificate or burial contract.
1055 (149) "Secondary medical condition" means a complication related to an exclusion from
1056 coverage in accident and health insurance.
1057 [(148)] (150) "Self-insurance" means [any] an arrangement under which a person
1058 provides for spreading its own risks by a systematic plan.
1059 (a) Except as provided in this Subsection [(148)] (150), "self-insurance" does not
1060 include an arrangement under which a number of persons spread their risks among themselves.
1061 (b) "Self-insurance" includes:
1062 (i) an arrangement by which a governmental entity undertakes to indemnify [its
1063 employees] an employee for liability arising out of the [employees'] employee's employment; and
1064 (ii) an arrangement by which a person with a managed program of self-insurance and
1065 risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or

1066 employees for liability or risk which is related to the relationship or employment.
1067 (c) "Self-insurance" does not include [any] an arrangement with an independent
1068 [contractors] contractor.
1069 [(149)] (151) "Sell" means to exchange a contract of insurance:
1070 (a) by any means;
1071 (b) for money or its equivalent; and
1072 (c) on behalf of an insurance company.
1073 [(150)] (152) "Short-term care insurance" means [any] an insurance policy or rider
1074 advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
1075 insurance, but that provides coverage for less than 12 consecutive months for each covered
1076 person.
1077 [(151)] (153) "Significant break in coverage" means a period of 63 consecutive days
1078 during each of which an individual does not have [any] creditable coverage.
1079 [(152)] (154) "Small employer," in connection with a health benefit plan, means an
1080 employer who, with respect to a calendar year and to a plan year:
1081 (a) employed an average of at least two employees but not more than 50 eligible
1082 employees on each business day during the preceding calendar year; and
1083 (b) employs at least two employees on the first day of the plan year.
1084 [(153)] (155) "Special enrollment period," in connection with a health benefit plan, has
1085 the same meaning as provided in federal regulations adopted pursuant to the Health Insurance
1086 Portability and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936.
1087 [(154)] (156) (a) "Subsidiary" of a person means an affiliate controlled by that person
1088 either directly or indirectly through one or more affiliates or intermediaries.
1089 (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
1090 shares are owned by that person either alone or with its affiliates, except for the minimum
1091 number of shares the law of the subsidiary's domicile requires to be owned by directors or
1092 others.
1093 [(155)] (157) Subject to Subsection [(82)] (83)(b), "surety insurance" includes:

1094 (a) a guarantee against loss or damage resulting from the failure of [principals] a
1095 principal to pay or perform [their] the principal's obligations to a creditor or other obligee;
1096 (b) bail bond insurance; and
1097 (c) fidelity insurance.
1098 [(156)] (158) (a) "Surplus" means the excess of assets over the sum of paid-in capital
1099 and liabilities.
1100 (b) (i) "Permanent surplus" means the surplus of a mutual insurer that [has been] is
1101 designated by the insurer as permanent.
1102 (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209 require
1103 that mutuals doing business in this state maintain specified minimum levels of permanent
1104 surplus.
1105 (iii) Except for assessable mutuals, the minimum permanent surplus requirement is
1106 essentially the same as the minimum required capital requirement that applies to stock insurers.
1107 (c) "Excess surplus" means:
1108 (i) for [life or accident and health insurers, health organizations, and property and
1109 casualty insurers] a life insurer, accident and health insurer, health organization, or property and
1110 casualty insurer as defined in Section 31A-17-601 , the lesser of:
1111 (A) that amount of an insurer's or health organization's total adjusted capital, as defined
1112 in Subsection [(159)] (161), that exceeds the product of:
1113 (I) 2.5; and
1114 (II) the sum of the insurer's or health organization's minimum capital or permanent
1115 surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
1116 (B) that amount of an insurer's or health organization's total adjusted capital, as defined
1117 in Subsection [(159)] (161), that exceeds the product of:
1118 (I) 3.0; and
1119 (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
1120 (ii) for [monoline mortgage guaranty insurers, financial guaranty insurers, and title
1121 insurers,] a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer that

1122 amount of an insurer's paid-in-capital and surplus that exceeds the product of:
1123 (A) 1.5; and
1124 (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
1125 [(157)] (159) "Third party administrator" or "administrator" means [any] a person who
1126 collects charges or premiums from, or who, for consideration, adjusts or settles claims of
1127 residents of the state in connection with insurance coverage, annuities, or service insurance
1128 coverage, except:
1129 (a) a union on behalf of its members;
1130 (b) a person administering [any] a:
1131 (i) pension plan subject to the federal Employee Retirement Income Security Act of
1132 1974;
1133 (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
1134 (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
1135 (c) an employer on behalf of the employer's employees or the employees of one or more
1136 of the subsidiary or affiliated corporations of the employer;
1137 (d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance
1138 for which the insurer holds a license in this state; or
1139 (e) a person:
1140 (i) licensed or exempt from licensing under:
1141 (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
1142 Reinsurance Intermediaries; or
1143 (B) Chapter 26, Insurance Adjusters; and
1144 (ii) whose activities are limited to those authorized under the license the person holds or
1145 for which the person is exempt.
1146 [(158)] (160) "Title insurance" means the insuring, guaranteeing, or indemnifying of
1147 [owners] an owner of real or personal property or the [holders] holder of liens or encumbrances
1148 on that property, or others interested in the property against loss or damage suffered by reason
1149 of liens or encumbrances upon, defects in, or the unmarketability of the title to the property, or

1150 invalidity or unenforceability of any liens or encumbrances on the property.
1151 [(159)] (161) "Total adjusted capital" means the sum of an insurer's or health
1152 organization's statutory capital and surplus as determined in accordance with:
1153 (a) the statutory accounting applicable to the annual financial statements required to be
1154 filed under Section 31A-4-113 ; and
1155 (b) [any other items] another item provided by the RBC instructions, as RBC
1156 instructions is defined in Section 31A-17-601 .
1157 [(160)] (162) (a) "Trustee" means "director" when referring to the board of directors of
1158 a corporation.
1159 (b) "Trustee," when used in reference to an employee welfare fund, means an individual,
1160 firm, association, organization, joint stock company, or corporation, whether acting individually
1161 or jointly and whether designated by that name or any other, that is charged with or has the
1162 overall management of an employee welfare fund.
1163 [(161)] (163) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted
1164 insurer" means an insurer:
1165 (i) not holding a valid certificate of authority to do an insurance business in this state; or
1166 (ii) transacting business not authorized by a valid certificate.
1167 (b) "Admitted insurer" or "authorized insurer" means an insurer:
1168 (i) holding a valid certificate of authority to do an insurance business in this state; and
1169 (ii) transacting business as authorized by a valid certificate.
1170 [(162)] (164) "Underwrite" means the authority to accept or reject risk on behalf of the
1171 insurer.
1172 [(163)] (165) "Vehicle liability insurance" means insurance against liability resulting
1173 from or incident to ownership, maintenance, or use of [any] a land vehicle or aircraft, exclusive
1174 of a vehicle comprehensive [and] or vehicle physical damage [coverages] coverage under
1175 Subsection [(134)] (135).
1176 [(164)] (166) "Voting security" means a security with voting rights, and includes [any]
1177 a security convertible into a security with a voting right associated with the security.

1178 [(165)] (167) "Waiting period" for a health benefit plan means the period that must pass
1179 before coverage for an individual, who is otherwise eligible to enroll under the terms of the
1180 health benefit plan, can become effective.
1181 [(166)] (168) "Workers' compensation insurance" means:
1182 (a) insurance for indemnification of [employers] an employer against liability for
1183 compensation based on:
1184 (i) a compensable accidental [injuries] injury; and
1185 (ii) occupational disease disability;
1186 (b) employer's liability insurance incidental to workers' compensation insurance and
1187 written in connection with workers' compensation insurance; and
1188 (c) insurance assuring to [the persons] a person entitled to workers' compensation
1189 benefits the compensation provided by law.
1190 Section 2. Section 31A-2-203 is amended to read:
1191 31A-2-203. Examinations and alternatives.
1192 (1) (a) Whenever the commissioner [considers it necessary in order to inform the
1193 commissioner about any] determines that information is needed about a matter related to the
1194 enforcement of this title, the commissioner may examine the affairs and condition of:
1195 (i) a licensee under this title;
1196 (ii) an applicant for a license under this title;
1197 (iii) a person or organization of persons doing or in process of organizing to do an
1198 insurance business in this state; or
1199 (iv) a person who is not, but should be, licensed under this title.
1200 (b) When reasonably necessary for an examination under Subsection (1)(a), the
1201 commissioner may examine:
1202 (i) so far as [they relate] it relates to the examinee, [the accounts, records, documents,
1203 or evidences of transactions] an account, record, document, or evidence of a transaction of:
1204 (A) the insurer or other licensee;
1205 (B) [any] an officer or other person who has executive authority over or is in charge of

1206 any segment of the examinee's affairs; or
1207 (C) [any] an affiliate of the examinee; or
1208 (ii) [any] a third party model or product used by the examinee.
1209 (c) (i) On demand, [each] an examinee under Subsection (1)(a) shall make available to
1210 the commissioner for examination:
1211 (A) [any of] the examinee's own [accounts, records, files, documents, or evidences of
1212 transactions] account, record, file, document, or evidence of a transaction; and
1213 (B) to the extent reasonably necessary for an examination, [the accounts, records, files,
1214 documents, or evidences of transactions of any persons] an account, record, file, document, or
1215 evidence of a transaction of a person described under Subsection (1)(b).
1216 (ii) Except as provided in Subsection (1)(c)(iii), failure to make [the documents] an item
1217 described in Subsection (1)(c)(i) available is concealment of records under Subsection
1218 31A-27a-207 (1)(e).
1219 (iii) If the examinee is unable to obtain [accounts, records, files, documents, or
1220 evidences of transactions from persons] an account, record, file, document, or evidence of a
1221 transaction from a person described under Subsection (1)(b), that failure is not concealment of
1222 records if the examinee immediately terminates the relationship with the other person.
1223 (d) (i) Neither the commissioner nor an examiner may remove [any] an account, record,
1224 file, document, evidence of a transaction, or other property of the examinee from the examinee's
1225 offices unless:
1226 (A) the examinee consents in writing; or
1227 (B) a court grants permission.
1228 (ii) The commissioner may make and remove [copies or abstracts] a copy or abstract of
1229 the following described in Subsection (1)(d)(i):
1230 (A) an account;
1231 (B) a record;
1232 (C) a file;
1233 (D) a document;

1234 (E) evidence of a transaction; or
1235 (F) other property.
1236 (2) (a) Subject to the other provisions of this section, the commissioner shall examine as
1237 needed and as otherwise provided by law:
1238 (i) every insurer, both domestic and nondomestic;
1239 (ii) every licensed rate service organization; and
1240 (iii) any other licensee.
1241 (b) The commissioner shall examine [insurers] an insurer, both domestic and
1242 nondomestic, no less frequently than once every five years, but the commissioner may use in lieu
1243 [examinations] an examination under Subsection (4) to satisfy this requirement.
1244 (c) The commissioner shall revoke the certificate of authority of an insurer or the
1245 license of a rate service organization that has not been examined, or submitted an acceptable in
1246 lieu report under Subsection (4), within the past five years.
1247 (d) (i) Any 25 persons who are policyholders, shareholders, or creditors of a domestic
1248 insurer may by verified petition demand a hearing under Section 31A-2-301 to determine
1249 whether the commissioner should conduct an unscheduled examination of the insurer.
1250 (ii) Persons demanding the hearing under this Subsection (2)(d) shall be given an
1251 opportunity in the hearing to present evidence that an examination of the insurer is necessary.
1252 (iii) If the evidence justifies an examination, the commissioner shall order an
1253 examination.
1254 (e) (i) [When] If the board of directors of a domestic insurer requests that the
1255 commissioner examine the insurer, the commissioner shall examine the insurer as soon as
1256 reasonably possible.
1257 (ii) If the examination requested under this Subsection (2)(e) is conducted within two
1258 years after completion of a comprehensive examination by the commissioner, costs of the
1259 requested examination may not be deducted from premium taxes under Section 59-9-102 unless
1260 the commissioner's order specifically provides for the deduction.
1261 (f) [Bail] A bail bond surety [companies] company, as defined in Section 31A-35-102 ,

1262 [are exempted] is exempt from:
1263 (i) the five-year examination requirement in Subsection (2)(b);
1264 (ii) the revocation under Subsection (2)(c); and
1265 (iii) Subsections (2)(d) and (2)(e).
1266 (3) (a) The commissioner may order an independent audit or examination by one or
1267 more technical experts, including a certified public [accountants and actuaries] accountant or
1268 actuary:
1269 (i) in lieu of all or part of an examination under Subsection (1) or (2); or
1270 (ii) in addition to an examination under Subsection (1) or (2).
1271 (b) [Any] An audit or evaluation under this Subsection (3) is subject to Subsection (5),
1272 Section 31A-2-204 , and Subsection 31A-2-205 (4).
1273 (4) (a) In lieu of all or [any] a part of an examination under this section, the
1274 commissioner may accept the report of an examination made by:
1275 (i) the insurance department of another state; or
1276 (ii) another government agency in:
1277 (A) this state;
1278 (B) the federal government; or
1279 (C) another state.
1280 (b) An examination by the commissioner under Subsection (1) or (2) or accepted by the
1281 commissioner under this Subsection (4) may use:
1282 (i) an audit already made by a certified public accountant; or
1283 (ii) an actuarial evaluation made by an actuary approved by the commissioner.
1284 (5) (a) An examination may be comprehensive or limited with respect to the examinee's
1285 affairs and condition. The commissioner shall determine the nature and scope of each
1286 examination, taking into account all relevant factors, including:
1287 (i) the length of time the examinee has been licensed in this state;
1288 (ii) the nature of the business being examined;
1289 (iii) the nature of the accounting or other records available;

1290 (iv) one or more reports from:
1291 (A) independent auditors; and
1292 (B) self-certification entities; and
1293 (v) the nature of examinations performed elsewhere.
1294 (b) The examination of an alien insurer [shall be] is limited to one or more insurance
1295 transactions and assets in the United States, unless the commissioner orders otherwise after
1296 finding that extraordinary circumstances necessitate a broader examination.
1297 (6) To effectively administer this section, the commissioner:
1298 (a) shall:
1299 (i) maintain one or more effective financial condition and market regulation surveillance
1300 systems including:
1301 (A) financial and market analysis; and
1302 (B) a review of insurance regulatory information system reports;
1303 (ii) employ a priority scheduling method that focuses on insurers and other licensees
1304 most in need of examination; and
1305 (iii) use examination management techniques similar to those outlined in the Financial
1306 Condition Examination Handbook of the National Association of Insurance Commissioners; and
1307 (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
1308 may make rules pertaining to [the] a financial condition and market regulation surveillance
1309 [systems] system.
1310 Section 3. Section 31A-2-403 is amended to read:
1311 31A-2-403. Title and Escrow Commission created.
1312 (1) (a) [There] Subject to Subsection (1)(b), there is created within the department the
1313 Title and Escrow Commission that is comprised of five members appointed by the governor
1314 with the consent of the Senate as follows:
1315 (i) four members shall each:
1316 (A) be or have been licensed under the title insurance line of authority; and
1317 (B) as of the day on which the member is appointed, be or have been licensed with the

1318 search or escrow subline of authority for at least five years; [and]
1319 (C) as of the day on which the member is appointed, not be from the same county as
1320 another member appointed under this Subsection (1)(a)(i); and
1321 (ii) one member shall be a member of the general public from any county in the state.
1322 (b) No more than one commission member may be appointed from[: (i) any county in
1323 the state; or (ii) any] a single company.
1324 (2) (a) Subject to Subsection (2)(c), [each] a member of the commission shall file with
1325 the department a disclosure of any position of employment or ownership interest that the
1326 member of the commission has with respect to [any] a person that is subject to the jurisdiction
1327 of the department.
1328 (b) The disclosure statement required by this Subsection (2) shall be:
1329 (i) filed by no later than the day on which the person begins that person's appointment;
1330 and
1331 (ii) amended when a significant change occurs in any matter required to be disclosed
1332 under this Subsection (2).
1333 (c) A member of the commission is not required to disclose an ownership interest that
1334 the member of the commission has if the ownership interest is held as part of a mutual fund,
1335 trust, or similar investment.
1336 (3) (a) Except as required by Subsection (3)(b), as terms of current commission
1337 members expire, the governor shall appoint each new member to a four-year term ending on
1338 June 30.
1339 (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
1340 time of appointment, adjust the length of terms to ensure that the terms of the commission
1341 members are staggered so that approximately half of the commission is appointed every two
1342 years.
1343 (c) A commission member may not serve more than one consecutive term.
1344 (d) When a vacancy occurs in the membership for any reason, the governor, with the
1345 consent of the Senate, shall appoint a replacement [shall be appointed] for the unexpired term.

1346 (4) (a) A member of the commission may not receive compensation or benefits for the
1347 member's services, but may receive per diem and expenses incurred in the performance of the
1348 member's official duties at the rates established by the Division of Finance under Sections
1349 63A-3-106 and 63A-3-107 .
1350 (b) A member may decline to receive per diem and expenses for the member's service.
1351 (5) Members of the commission shall annually select one member to serve as chair.
1352 (6) (a) The commission shall meet at least monthly.
1353 (b) The commissioner may call additional meetings:
1354 (i) at the commissioner's discretion;
1355 (ii) upon the request of the chair of the commission; or
1356 (iii) upon the written request of three or more commission members.
1357 (c) (i) Three members of the commission constitute a quorum for the transaction of
1358 business.
1359 (ii) The action of a majority of the members when a quorum is present is the action of
1360 the commission.
1361 (7) The department shall staff the commission.
1362 Section 4. Section 31A-4-102 is amended to read:
1363 31A-4-102. Qualified insurers.
1364 (1) A person may not conduct an insurance business in Utah[, either] in person, through
1365 [agents or brokers, or] an agent, through a broker, through the mail, or [any other] through
1366 another method of communication, except:
1367 (a) an insurer:
1368 (i) authorized to do business in Utah under [Title 31A,] Chapter 5, 7, 8, 9, 10, 11, 13,
1369 or 14[,]; and
1370 (ii) within the limits of its certificate of authority;
1371 (b) a joint underwriting group under Section 31A-2-214 or 31A-20-102 ;
1372 (c) an insurer doing business under Section 31A-15-103 ;
1373 (d) a person who[, pursuant to Section 31A-1-105 ,] submits to the commissioner a

1374 certificate from the United States Department of Labor, or such other evidence as satisfies the
1375 commissioner, that the laws of Utah are preempted with respect to specified activities of that
1376 person by Section 514 of the Employee Retirement Income Security Act of 1974 or other
1377 federal law; or
1378 (e) a person exempt from [the application of the Insurance Code] this title under
1379 Section 31A-1-103 [and all other applicable statutes] or another applicable statute.
1380 (2) As used in this section, "insurer" includes a bail bond surety company, as defined in
1381 Section 31A-35-102 .
1382 Section 5. Section 31A-4-106 is amended to read:
1383 31A-4-106. Provision of health care.
1384 (1) As used in this section, "health care provider" has the same definition as in Section
1385 78-14-3 .
1386 (2) Except under Subsection (3) or (4), unless authorized to do so or employed by
1387 someone authorized to do so under Chapter 5, 7, 8, 9, or 14, a person may not:
1388 (a) directly or indirectly provide health care[, or];
1389 (b) arrange for[,] health care;
1390 (c) manage[,] or administer the provision or arrangement of[,] health care;
1391 (d) collect advance payments for[,] health care; or
1392 (e) compensate [providers] a provider of health care [unless authorized to do so or
1393 employed by someone authorized to do so under Chapter 5, 7, 8, 9, or 14].
1394 (3) Subsection (2) does not apply to:
1395 (a) a natural person or professional corporation that alone or with others professionally
1396 associated with the natural person or professional corporation, and without receiving
1397 consideration for services in advance of the need for a particular service, provides the service
1398 personally with the aid of nonprofessional assistants;
1399 (b) a health care facility as defined in Section 26-21-2 [which] that:
1400 (i) is licensed or exempt from licensing under Title 26, Chapter 21, Health Care Facility
1401 Licensing and Inspection Act; and

1402 (ii) does not engage in health care insurance as defined under Section 31A-1-301 ;
1403 (c) a person who files with the commissioner [under Section 31A-1-105 ] a certificate
1404 from the United States Department of Labor, or other evidence satisfactory to the
1405 commissioner, showing that the laws of Utah are preempted under Section 514 of the Employee
1406 Retirement Income Security Act of 1974 or other federal law;
1407 (d) a person licensed under Chapter 23a, Insurance Marketing - Licensing Producers,
1408 Consultants, and Reinsurance Intermediaries, who [has arranged]:
1409 (i) arranges for the insurance of all services under:
1410 [(i)] (A) Subsection (2) by an insurer authorized to do business in Utah; or
1411 [(ii)] (B) Section 31A-15-103 ; or
1412 [(iii)] (ii) works for an uninsured employer that complies with Chapter 13, Employee
1413 Welfare Funds and Plans; or
1414 (e) an employer that self-funds its obligations to provide health care services or
1415 indemnity for its employees if the employer complies with Chapter 13, Employee Welfare Funds
1416 and Plans.
1417 (4) A person may not provide administrative or management services for [any other]
1418 another person subject to Subsection (2) and not exempt under Subsection (3) unless the
1419 person:
1420 (a) is an authorized insurer under Chapter 5, 7, 8, 9, or 14[,]; or
1421 (b) complies with Chapter 25, Third Party Administrators.
1422 (5) [It is unlawful for any] An insurer or person [providing, administering, or managing]
1423 who provides, administers, or manages health care insurance under Chapter 5, 7, 8, 9, or 14 [to]
1424 may not enter into a contract that limits a health care provider's ability to advise the health care
1425 provider's patients or clients fully about treatment options or other issues that affect the health
1426 care of the health care provider's patients or clients.
1427 Section 6. Section 31A-6a-103 is amended to read:
1428 31A-6a-103. Requirements for doing business.
1429 (1) A service contract may not be issued, sold, or offered for sale in this state unless the

1430 service contract is insured under a service contract reimbursement insurance policy issued by:
1431 (a) an insurer authorized to do business in this state; or
1432 (b) a recognized surplus lines carrier.
1433 (2) (a) A service contract may not be issued, sold, or offered for sale unless [a true and
1434 correct copy of the service contract and the provider's reimbursement insurance policy have
1435 been filed with the commissioner. A copy of a contract and policy must be filed] the service
1436 contract provider completes the registration process described in this Subsection (2).
1437 (b) To register, a service contract provider shall submit to the department the following:
1438 (i) an application for registration;
1439 (ii) a fee established in accordance with Section 31A-3-103 ;
1440 (iii) a copy of any service contract that the service contract provider offers in this state;
1441 and
1442 (iv) a copy of the service contract provider's reimbursement insurance policy.
1443 (c) A service provider shall submit the information described in Subsection (2)(b) no
1444 less than 30 days [prior to the issuance, sale offering for sale, or use of the] before the day on
1445 which the service provider issues, sells, offers for sale, or uses a service contract or
1446 reimbursement insurance policy in this state.
1447 [(b) Each] (d) A service provider shall file any modification of the terms of [any] a
1448 service contract or reimbursement insurance policy [must also be filed] 30 days [prior to its use]
1449 before the day on which it is used in this state.
1450 [(c) Persons] (e) A person complying with this chapter [are] is not required to comply
1451 with:
1452 (i) Subsections 31A-21-201 (1) and 31A-23a-402 (3); or
1453 (ii) Chapter 19a, Utah Rate Regulation Act.
1454 (3) (a) Premiums collected on a service [contracts] contract are not subject to premium
1455 taxes.
1456 (b) Premiums collected by [issuers] an issuer of a reimbursement insurance [policies]
1457 policy are subject to premium taxes.

1458 (4) A person marketing, selling, or offering to sell a service [contracts] contract for a
1459 service contract [providers] provider that complies with this chapter is exempt from the
1460 licensing requirements of this title.
1461 (5) [Service] A service contract [providers] provider complying with this chapter [are]
1462 is not required to comply with:
1463 (a) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1464 (b) Chapter 7, Nonprofit Health Service Insurance Corporations;
1465 (c) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
1466 (d) Chapter 9, Insurance Fraternals;
1467 (e) Chapter 10, Annuities;
1468 (f) Chapter 11, Motor Clubs;
1469 (g) Chapter 12, State Risk Management Fund;
1470 (h) Chapter 13, Employee Welfare Funds and Plans;
1471 (i) Chapter 14, Foreign Insurers;
1472 (j) Chapter 19a, Utah Rate Regulation Act;
1473 (k) Chapter 25, Third Party Administrators; and
1474 (l) Chapter 28, Guaranty Associations.
1475 Section 7. Section 31A-6a-104 is amended to read:
1476 31A-6a-104. Required disclosures.
1477 (1) [All] A service contract reimbursement insurance [policies] policy insuring a service
1478 [contracts] contract that is issued, sold, or offered for sale in this state must conspicuously state
1479 that, upon failure of the service contract provider to perform under the contract, the issuer of
1480 the policy shall:
1481 (a) pay on behalf of the service contract provider any sums the service contract provider
1482 is legally obligated to pay according to the service contract provider's contractual obligations
1483 under the service contract issued or sold by the service contract provider; or [shall]
1484 (b) provide the service which the service contract provider is legally obligated to
1485 perform, according to the service contract provider's contractual obligations under the service

1486 [contracts] contract issued or sold by the service contract provider.
1487 (2) (a) A service contract may not be issued, sold, or offered for sale in this state unless
1488 the service contract contains [a statement] the following statements in substantially the
1489 following form[,]:
1490 (i) "Obligations of the provider under this service contract are guaranteed under a
1491 service contract reimbursement insurance policy. Should the provider fail to pay or provide
1492 service on any claim within 60 days after proof of loss has been filed, the contract holder is
1493 entitled to make a claim directly against the Insurance Company." [The]; and
1494 (ii) "This service contract or warranty is subject to limited regulation by the Utah
1495 Insurance Department. To file a complaint, contact the Utah Insurance Department."
1496 (b) A service contract or reimbursement insurance policy may not be issued, sold, or
1497 offered for sale in this state unless the contract contains a statement in substantially the
1498 following form, "Coverage afforded under this contract is not guaranteed by the Property and
1499 Casualty Guaranty Association."
1500 (3) A service contract shall [also]:
1501 (a) conspicuously state the name [and], address, and a toll free claims service telephone
1502 number of the reimbursement insurer[.];
1503 [(3) The contract must] (b) identify the service contract provider, the seller, and the
1504 service contract holder[.];
1505 [(4) The contract must]
1506 (c) conspicuously state the total purchase price and the terms under which [it] the
1507 service contract is to be paid[.];
1508 (d) conspicuously state the existence of any deductible amount;
1509 (e) specify the merchandise, service to be provided, and any limitation, exception, or
1510 exclusion;
1511 (f) state a term, restriction, or condition governing the transferability of the service
1512 contract; and
1513 (g) state a term, restriction, or condition that governs cancellation of the service

1514 contract as provided in Sections 31A-21-303 through 31A-21-305 by either the contract holder
1515 or service contract provider.
1516 [(5)] (4) If prior approval of repair work is required, [the] a service contract must
1517 conspicuously state the procedure for obtaining prior approval and for making a claim,
1518 including:
1519 (a) a toll free telephone number for claim service; and
1520 (b) a procedure for obtaining reimbursement for emergency repairs performed outside
1521 of normal business hours.
1522 [(6) The contract must conspicuously state the existence of any deductible amount.]
1523 [(7) The contract must specify the merchandise, services to be provided and any
1524 limitations, exceptions, or exclusions. Any preexisting conditions clause]
1525 (5) A preexisting condition clause in a service contract must specifically state which
1526 preexisting [conditions are] condition is excluded from coverage.
1527 [(8) The] (6) (a) Except as provided in Subsection (6)(c), a service contract must state
1528 the conditions upon which the use of a nonmanufacturers' [parts will be] part is allowed.
1529 [Conditions stated]
1530 (b) A condition described in Subsection (6)(a) must comply with applicable state and
1531 federal laws.
1532 [(9) The contract must state any terms, restrictions, or conditions governing the
1533 transferability of the service contract.]
1534 [(10) The contract must state the terms, restrictions, or conditions governing
1535 cancellation of the contract by either the contract holder or provider, and must satisfy the
1536 provisions of Sections 31A-21-303 through 31A-21-305 .]
1537 (c) This Subsection (6) does not apply to a home warranty contract.
1538 [(11) A service contract or reimbursement insurance policy may not be issued, sold, or
1539 offered for sale in this state unless the contract contains a statement in substantially the
1540 following form, "Coverage afforded under this contract is not guaranteed by the Property and
1541 Casualty Guaranty Association."]

1542 Section 8. Section 31A-6a-105