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H.B. 52

This document includes House Floor Amendments incorporated into the bill on Thu, Jan 29, 2009 at 12:23 PM by jeyring. --> This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Fri, Feb 6, 2009 at 11:54 AM by Rday. -->              1     

INSURANCE CODE H. AND RELATED .H AMENDMENTS

             2     
2009 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             5     
Senate Sponsor: John L. Valentine

             6     
             7      LONG TITLE
             8      Committee Note:
             9          The Business and Labor Interim Committee recommended this bill.
             10      General Description:
             11          This bill modifies the Insurance Code H. and related provisions .H .
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies definitions;
             15          .    provides for rulemaking authority related to annual financial reporting requirements
             16      similar to those adopted by the National Association of Insurance Commissioners;
             17          .    modifies provisions related to audit committees:
             18              .    making the board of directors an audit committee in certain circumstances;
             19              .    providing rulemaking authority for rules pertaining to an audit committee
             20      requirement; and
             21              .    clarifying insider directors;
             21a      H. . addresses single risk limitations; .H
             22          .    addresses the suicide provisions;
             23          .    authorizes the commissioner to make rules related to federal law requirements
             24      involving genetic information and involving marketing;
             25          .    addresses general requirements for licensing and when the commissioner may deny
             26      a license application;
             27          .    modifies license types and classifications;


             28          .    addresses reinstatement of a voluntarily surrendered license;
             29          .    modifies requirements related to a title insurance producer's reserve fund;
             30          .    addresses designations by an insurer, agency licensee, or organization of an
             31      individual licensee;
             32          .    makes certain records private records under the Government Records Access and
             33      Management Act;
             34          .    addresses loss of a license if an individual licensee commits an act or fails to
             35      perform a duty;
             36          .    exempts a nonresident licensee from trust account requirements of this state by
             37      requiring that the licensee comply with the trust account requirements of the
             38      licensee's home state;
             39          .    modifies notice requirements related to termination of coverage when an employer
             40      receives premium by deducting wages or salary;
             41          .    modifies exemptions from the prohibition on sharing commissions;
             42          .    modifies provisions related to a bail bond licensee;
             43          .    shortens the period of time an applicant for a bail bond surety company license has
             44      to request a hearing for a denial;
             45          .    modifies the renewal process for a bail bond surety company;
             46          .    permits the commissioner to accept a comprehensive annual independent audit in
             47      lieu of an examination for a captive insurance company; H. [ and ]
             47a          . provides for the sharing of information with the Insurance Department related to
             47b      professional employer organizations; and .H
             48          .    makes technical and conforming amendments, including repealing outdated
             49      language.
             50      Monies Appropriated in this Bill:
             51          None
             52      Other Special Clauses:
             53          None
             54      Utah Code Sections Affected:
             55      AMENDS:
             56          31A-1-301, as last amended by Laws of Utah 2008, Chapters 345 and 382
             57          31A-2-203, as last amended by Laws of Utah 2008, Chapters 345 and 382
             58          31A-5-412, as last amended by Laws of Utah 1987, Chapters 91 and 95


             59          31A-8-215, as last amended by Laws of Utah 2004, Chapter 90
             59a      H. 31A-20-108, as last amended by Laws of Utah 2008, Chapter 257 .H
             60          31A-22-404, as last amended by Laws of Utah 2008, Chapter 345
             61          31A-22-620, as last amended by Laws of Utah 2005, Chapter 78
             62          31A-22-1602, as enacted by Laws of Utah 2002, Chapter 120
             63          31A-23a-102, as last amended by Laws of Utah 2004, Chapters 90 and 173
             64          31A-23a-104, as last amended by Laws of Utah 2008, Chapter 382
             65          31A-23a-105, as last amended by Laws of Utah 2008, Chapter 345
             66          31A-23a-106, as last amended by Laws of Utah 2007, Chapter 325
             67          31A-23a-111, as last amended by Laws of Utah 2008, Chapters 345 and 382
             68          31A-23a-113, as last amended by Laws of Utah 2006, Chapter 312
             69          31A-23a-115, as last amended by Laws of Utah 2008, Chapter 382
             70          31A-23a-203, as last amended by Laws of Utah 2005, Chapter 124
             71          31A-23a-204, as last amended by Laws of Utah 2008, Chapter 220
             72          31A-23a-302, as last amended by Laws of Utah 2008, Chapter 382
             73          31A-23a-409, as last amended by Laws of Utah 2004, Chapter 2
             74          31A-23a-410, as renumbered and amended by Laws of Utah 2003, Chapter 298
             75          31A-23a-504, as last amended by Laws of Utah 2007, Chapter 307
             76          31A-25-203, as last amended by Laws of Utah 2008, Chapter 345
             77          31A-25-208, as last amended by Laws of Utah 2008, Chapter 382
             78          31A-25-210, as enacted by Laws of Utah 2006, Chapter 312
             79          31A-26-203, as last amended by Laws of Utah 2008, Chapter 345
             80          31A-26-204, as last amended by Laws of Utah 2007, Chapter 325
             81          31A-26-210, as last amended by Laws of Utah 2007, Chapter 306
             82          31A-26-213, as last amended by Laws of Utah 2008, Chapter 382
             83          31A-26-214.5, as enacted by Laws of Utah 2006, Chapter 312
             84          31A-35-405, as last amended by Laws of Utah 2008, Chapter 382
             85          31A-35-406, as last amended by Laws of Utah 2008, Chapter 382
             86          31A-37-502, as last amended by Laws of Utah 2008, Chapter 302
             87          31A-37a-402, as enacted by Laws of Utah 2008, Chapter 302
             87a      H. 35A-4-312, as last amended by Laws of Utah 2008, Chapters 58 and 382 .H
             88          63G-2-302, as last amended by Laws of Utah 2008, Chapter 91 and renumbered and
             89      amended by Laws of Utah 2008, Chapter 382


             90     
             91      Be it enacted by the Legislature of the state of Utah:
             92          Section 1. Section 31A-1-301 is amended to read:
             93           31A-1-301. Definitions.
             94          As used in this title, unless otherwise specified:
             95          (1) (a) "Accident and health insurance" means insurance to provide protection against
             96      economic losses resulting from:
             97          (i) a medical condition including:
             98          (A) a medical care expense; or
             99          (B) the risk of disability;
             100          (ii) accident; or
             101          (iii) sickness.
             102          (b) "Accident and health insurance":
             103          (i) includes a contract with disability contingencies including:
             104          (A) an income replacement contract;
             105          (B) a health care contract;
             106          (C) an expense reimbursement contract;
             107          (D) a credit accident and health contract;
             108          (E) a continuing care contract; and
             109          (F) a long-term care contract; and
             110          (ii) may provide:
             111          (A) hospital coverage;
             112          (B) surgical coverage;
             113          (C) medical coverage;
             114          (D) loss of income coverage;
             115          (E) prescription drug coverage;
             116          (F) dental coverage; or
             117          (G) vision coverage.
             118          (c) "Accident and health insurance" does not include workers' compensation insurance.
             119          (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
             120      63G, Chapter 3, Utah Administrative Rulemaking Act.


             121          (3) "Administrator" is defined in Subsection (159).
             122          (4) "Adult" means [a natural person] an individual who has attained the age of at least
             123      18 years.
             124          (5) "Affiliate" means a person who controls, is controlled by, or is under common
             125      control with, another person. A corporation is an affiliate of another corporation, regardless of
             126      ownership, if substantially the same group of [natural persons manages] individuals manage the
             127      corporations.
             128          (6) "Agency" means:
             129          (a) a person other than an individual, including a sole proprietorship by which [a
             130      natural person] an individual does business under an assumed name; and
             131          (b) an insurance organization licensed or required to be licensed under Section
             132      31A-23a-301 .
             133          (7) "Alien insurer" means an insurer domiciled outside the United States.
             134          (8) "Amendment" means an endorsement to an insurance policy or certificate.
             135          (9) "Annuity" means an agreement to make periodical payments for a period certain or
             136      over the lifetime of one or more [natural persons] individuals if the making or continuance of
             137      all or some of the series of the payments, or the amount of the payment, is dependent upon the
             138      continuance of human life.
             139          (10) "Application" means a document:
             140          (a) (i) completed by an applicant to provide information about the risk to be insured;
             141      and
             142          (ii) that contains information that is used by the insurer to evaluate risk and decide
             143      whether to:
             144          (A) insure the risk under:
             145          (I) the coverage as originally offered; or
             146          (II) a modification of the coverage as originally offered; or
             147          (B) decline to insure the risk; or
             148          (b) used by the insurer to gather information from the applicant before issuance of an
             149      annuity contract.
             150          (11) "Articles" or "articles of incorporation" means:
             151          (a) the original articles;


             152          (b) a special law;
             153          (c) a charter;
             154          (d) an amendment;
             155          (e) restated articles;
             156          (f) articles of merger or consolidation;
             157          (g) a trust instrument;
             158          (h) another constitutive document for a trust or other entity that is not a corporation;
             159      and
             160          (i) an amendment to an item listed in Subsections (11)(a) through (h).
             161          (12) "Bail bond insurance" means a guarantee that a person will attend court when
             162      required, up to and including surrender of the person in execution of a sentence imposed under
             163      Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
             164          (13) "Binder" is defined in Section 31A-21-102 .
             165          (14) "Blanket insurance policy" means a group policy covering a defined class of
             166      persons:
             167          (a) without individual underwriting or application; and
             168          (b) that is determined by definition with or without designating each person covered.
             169          (15) "Board," "board of trustees," or "board of directors" means the group of persons
             170      with responsibility over, or management of, a corporation, however designated.
             171          (16) "Business entity" means:
             172          (a) a corporation;
             173          (b) an association;
             174          (c) a partnership;
             175          (d) a limited liability company;
             176          (e) a limited liability partnership; or
             177          (f) another legal entity.
             178          (17) "Business of insurance" is defined in Subsection (85).
             179          (18) "Business plan" means the information required to be supplied to the
             180      commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
             181      when these subsections apply by reference under:
             182          (a) Section 31A-7-201 ;


             183          (b) Section 31A-8-205 ; or
             184          (c) Subsection 31A-9-205 (2).
             185          (19) (a) "Bylaws" means the rules adopted for the regulation or management of a
             186      corporation's affairs, however designated.
             187          (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
             188      corporation.
             189          (20) "Captive insurance company" means:
             190          (a) an insurer:
             191          (i) owned by another organization; and
             192          (ii) whose exclusive purpose is to insure risks of the parent organization and an
             193      affiliated company; or
             194          (b) in the case of a group or association, an insurer:
             195          (i) owned by the insureds; and
             196          (ii) whose exclusive purpose is to insure risks of:
             197          (A) a member organization;
             198          (B) a group member; or
             199          (C) an affiliate of:
             200          (I) a member organization; or
             201          (II) a group member.
             202          (21) "Casualty insurance" means liability insurance [as defined in Subsection (97)].
             203          (22) "Certificate" means evidence of insurance given to:
             204          (a) an insured under a group insurance policy; or
             205          (b) a third party.
             206          (23) "Certificate of authority" is included within the term "license."
             207          (24) "Claim," unless the context otherwise requires, means a request or demand on an
             208      insurer for payment of a benefit according to the terms of an insurance policy.
             209          (25) "Claims-made coverage" means an insurance contract or provision limiting
             210      coverage under a policy insuring against legal liability to claims that are first made against the
             211      insured while the policy is in force.
             212          (26) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
             213      commissioner.


             214          (b) When appropriate, the terms listed in Subsection (26)(a) apply to the equivalent
             215      supervisory official of another jurisdiction.
             216          (27) (a) "Continuing care insurance" means insurance that:
             217          (i) provides board and lodging;
             218          (ii) provides one or more of the following:
             219          (A) a personal service;
             220          (B) a nursing service;
             221          (C) a medical service; or
             222          (D) any other health-related service; and
             223          (iii) provides the coverage described in this Subsection (27)(a)[(i)] under an agreement
             224      effective:
             225          (A) for the life of the insured; or
             226          (B) for a period in excess of one year.
             227          (b) Insurance is continuing care insurance regardless of whether or not the board and
             228      lodging are provided at the same location as a service described in Subsection (27)(a)(ii).
             229          (28) (a) "Control," "controlling," "controlled," or "under common control" means the
             230      direct or indirect possession of the power to direct or cause the direction of the management
             231      and policies of a person. This control may be:
             232          (i) by contract;
             233          (ii) by common management;
             234          (iii) through the ownership of voting securities; or
             235          (iv) by a means other than those described in Subsections (28)(a)(i) through (iii).
             236          (b) There is no presumption that an individual holding an official position with another
             237      person controls that person solely by reason of the position.
             238          (c) A person having a contract or arrangement giving control is considered to have
             239      control despite the illegality or invalidity of the contract or arrangement.
             240          (d) There is a rebuttable presumption of control in a person who directly or indirectly
             241      owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
             242      voting securities of another person.
             243          (29) "Controlled insurer" means a licensed insurer that is either directly or indirectly
             244      controlled by a producer.


             245          (30) "Controlling person" means a person that directly or indirectly has the power to
             246      direct or cause to be directed, the management, control, or activities of a reinsurance
             247      intermediary.
             248          (31) "Controlling producer" means a producer who directly or indirectly controls an
             249      insurer.
             250          (32) (a) "Corporation" means an insurance corporation, except when referring to:
             251          (i) a corporation doing business:
             252          (A) as:
             253          (I) an insurance producer;
             254          (II) a limited line producer;
             255          (III) a consultant;
             256          (IV) a managing general agent;
             257          (V) a reinsurance intermediary;
             258          (VI) a third party administrator; or
             259          (VII) an adjuster; and
             260          (B) under:
             261          (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             262      Reinsurance Intermediaries;
             263          (II) Chapter 25, Third Party Administrators; or
             264          (III) Chapter 26, Insurance Adjusters; or
             265          (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
             266      Holding Companies.
             267          (b) "Stock corporation" means a stock insurance corporation.
             268          (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
             269          (33) "Creditable coverage" has the same meaning as provided in federal regulations
             270      adopted pursuant to the Health Insurance Portability and Accountability Act of 1996, Pub. L.
             271      104-191, 110 Stat. 1936.
             272          (34) "Credit accident and health insurance" means insurance on a debtor to provide
             273      indemnity for payments coming due on a specific loan or other credit transaction while the
             274      debtor is disabled.
             275          (35) (a) "Credit insurance" means insurance offered in connection with an extension of


             276      credit that is limited to partially or wholly extinguishing that credit obligation.
             277          (b) "Credit insurance" includes:
             278          (i) credit accident and health insurance;
             279          (ii) credit life insurance;
             280          (iii) credit property insurance;
             281          (iv) credit unemployment insurance;
             282          (v) guaranteed automobile protection insurance;
             283          (vi) involuntary unemployment insurance;
             284          (vii) mortgage accident and health insurance;
             285          (viii) mortgage guaranty insurance; and
             286          (ix) mortgage life insurance.
             287          (36) "Credit life insurance" means insurance on the life of a debtor in connection with
             288      an extension of credit that pays a person if the debtor dies.
             289          (37) "Credit property insurance" means insurance:
             290          (a) offered in connection with an extension of credit; and
             291          (b) that protects the property until the debt is paid.
             292          (38) "Credit unemployment insurance" means insurance:
             293          (a) offered in connection with an extension of credit; and
             294          (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
             295          (i) specific loan; or
             296          (ii) credit transaction.
             297          (39) "Creditor" means a person, including an insured, having a claim, whether:
             298          (a) matured;
             299          (b) unmatured;
             300          (c) liquidated;
             301          (d) unliquidated;
             302          (e) secured;
             303          (f) unsecured;
             304          (g) absolute;
             305          (h) fixed; or
             306          (i) contingent.


             307          (40) (a) "Customer service representative" means a person that provides an insurance
             308      service and insurance product information:
             309          (i) for the customer service representative's:
             310          (A) producer; or
             311          (B) consultant employer; and
             312          (ii) to the customer service representative's employer's:
             313          (A) customer;
             314          (B) client; or
             315          (C) organization.
             316          (b) A customer service representative may only operate within the scope of authority of
             317      the customer service representative's producer or consultant employer.
             318          (41) "Deadline" means [the] a final date or time:
             319          (a) imposed by:
             320          (i) statute;
             321          (ii) rule; or
             322          (iii) order; and
             323          (b) by which a required filing or payment must be received by the department.
             324          (42) "Deemer clause" means a provision under this title under which upon the
             325      occurrence of a condition precedent, the commissioner is considered to have taken a specific
             326      action. If the statute so provides, a condition precedent may be the commissioner's failure to
             327      take a specific action.
             328          (43) "Degree of relationship" means the number of steps between two persons
             329      determined by counting the generations separating one person from a common ancestor and
             330      then counting the generations to the other person.
             331          (44) "Department" means the Insurance Department.
             332          (45) "Director" means a member of the board of directors of a corporation.
             333          (46) "Disability" means a physiological or psychological condition that partially or
             334      totally limits an individual's ability to:
             335          (a) perform the duties of:
             336          (i) that individual's occupation; or
             337          (ii) any occupation for which the individual is reasonably suited by education, training,


             338      or experience; or
             339          (b) perform two or more of the following basic activities of daily living:
             340          (i) eating;
             341          (ii) toileting;
             342          (iii) transferring;
             343          (iv) bathing; or
             344          (v) dressing.
             345          (47) "Disability income insurance" is defined in Subsection (76).
             346          (48) "Domestic insurer" means an insurer organized under the laws of this state.
             347          (49) "Domiciliary state" means the state in which an insurer:
             348          (a) is incorporated;
             349          (b) is organized; or
             350          (c) in the case of an alien insurer, enters into the United States.
             351          (50) (a) "Eligible employee" means:
             352          (i) an employee who:
             353          (A) works on a full-time basis; and
             354          (B) has a normal work week of 30 or more hours; or
             355          (ii) a person described in Subsection (50)(b).
             356          (b) "Eligible employee" includes, if the individual is included under a health benefit
             357      plan of a small employer:
             358          (i) a sole proprietor;
             359          (ii) a partner in a partnership; or
             360          (iii) an independent contractor.
             361          (c) "Eligible employee" does not include, unless eligible under Subsection (50)(b):
             362          (i) an individual who works on a temporary or substitute basis for a small employer;
             363          (ii) an employer's spouse; or
             364          (iii) a dependent of an employer.
             365          (51) "Employee" means an individual employed by an employer.
             366          (52) "Employee benefits" means one or more benefits or services provided to:
             367          (a) an employee; or
             368          (b) a dependent of an employee.


             369          (53) (a) "Employee welfare fund" means a fund:
             370          (i) established or maintained, whether directly or through a trustee, by:
             371          (A) one or more employers;
             372          (B) one or more labor organizations; or
             373          (C) a combination of employers and labor organizations; and
             374          (ii) that provides employee benefits paid or contracted to be paid, other than income
             375      from investments of the fund:
             376          (A) by or on behalf of an employer doing business in this state; or
             377          (B) for the benefit of a person employed in this state.
             378          (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
             379      revenues.
             380          (54) "Endorsement" means a written agreement attached to a policy or certificate to
             381      modify [one or more of the provisions of] the policy or certificate coverage.
             382          (55) "Enrollment date," with respect to a health benefit plan, means:
             383          (a) the first day of coverage; or
             384          (b) if there is a waiting period, the first day of the waiting period.
             385          (56) (a) "Escrow" means:
             386          (i) a real estate settlement or real estate closing conducted by a third party pursuant to
             387      the requirements of a written agreement between the parties in a real estate transaction; or
             388          (ii) a settlement or closing involving:
             389          (A) a mobile home;
             390          (B) a grazing right;
             391          (C) a water right; or
             392          (D) other personal property authorized by the commissioner.
             393          (b) "Escrow" includes the act of conducting a:
             394          (i) real estate settlement; or
             395          (ii) real estate closing.
             396          (57) "Escrow agent" means:
             397          (a) an insurance producer with:
             398          (i) a title insurance line of authority; and
             399          (ii) an escrow subline of authority; or


             400          (b) a person defined as an escrow agent in Section 7-22-101 .
             401          (58) (a) "Excludes" is not exhaustive and does not mean that another thing is not also
             402      excluded.
             403          (b) The items listed in a list using the term "excludes" are representative examples for
             404      use in interpretation of this title.
             405          (59) "Exclusion" means for the purposes of accident and health insurance that an
             406      insurer does not provide insurance coverage, for whatever reason, for one of the following:
             407          (a) a specific physical condition;
             408          (b) a specific medical procedure;
             409          (c) a specific disease or disorder; or
             410          (d) a specific prescription drug or class of prescription drugs.
             411          (60) "Expense reimbursement insurance" means insurance:
             412          (a) written to provide a payment for an expense relating to hospital confinement
             413      resulting from illness or injury; and
             414          (b) written:
             415          (i) as a daily limit for a specific number of days in a hospital; and
             416          (ii) to have a one or two day waiting period following a hospitalization.
             417          (61) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding
             418      a position of public or private trust.
             419          (62) (a) "Filed" means that a filing is:
             420          (i) submitted to the department as required by and in accordance with applicable
             421      statute, rule, or filing order;
             422          (ii) received by the department within the time period provided in applicable statute,
             423      rule, or filing order; and
             424          (iii) accompanied by the appropriate fee in accordance with:
             425          (A) Section 31A-3-103 ; or
             426          (B) rule.
             427          (b) "Filed" does not include a filing that is rejected by the department because it is not
             428      submitted in accordance with Subsection (62)(a).
             429          (63) "Filing," when used as a noun, means an item required to be filed with the
             430      department including:


             431          (a) a policy;
             432          (b) a rate;
             433          (c) a form;
             434          (d) a document;
             435          (e) a plan;
             436          (f) a manual;
             437          (g) an application;
             438          (h) a report;
             439          (i) a certificate;
             440          (j) an endorsement;
             441          (k) an actuarial certification;
             442          (l) a licensee annual statement;
             443          (m) a licensee renewal application;
             444          (n) an advertisement; or
             445          (o) an outline of coverage.
             446          (64) "First party insurance" means an insurance policy or contract in which the insurer
             447      agrees to pay a claim submitted to it by the insured for the insured's losses.
             448          (65) "Foreign insurer" means an insurer domiciled outside of this state, including an
             449      alien insurer.
             450          (66) (a) "Form" means one of the following prepared for general use:
             451          (i) a policy;
             452          (ii) a certificate;
             453          (iii) an application;
             454          (iv) an outline of coverage; or
             455          (v) an endorsement.
             456          (b) "Form" does not include a document specially prepared for use in an individual
             457      case.
             458          (67) "Franchise insurance" means an individual insurance policy provided through a
             459      mass marketing arrangement involving a defined class of persons related in some way other
             460      than through the purchase of insurance.
             461          (68) "General lines of authority" include:


             462          (a) the general lines of insurance in Subsection (69);
             463          (b) title insurance under one of the following sublines of authority:
             464          (i) search, including authority to act as a title marketing representative;
             465          (ii) escrow, including authority to act as a title marketing representative; and
             466          [(iii) search and escrow, including authority to act as a title marketing representative;
             467      and]
             468          [(iv)] (iii) title marketing representative only;
             469          (c) surplus lines;
             470          (d) workers' compensation; and
             471          (e) any other line of insurance that the commissioner considers necessary to recognize
             472      in the public interest.
             473          (69) "General lines of insurance" include:
             474          (a) accident and health;
             475          (b) casualty;
             476          (c) life;
             477          (d) personal lines;
             478          (e) property; and
             479          (f) variable contracts, including variable life and annuity.
             480          (70) "Group health plan" means an employee welfare benefit plan to the extent that the
             481      plan provides medical care:
             482          (a) (i) to an employee; or
             483          (ii) to a dependent of an employee; and
             484          (b) (i) directly;
             485          (ii) through insurance reimbursement; or
             486          (iii) through another method.
             487          (71) (a) "Group insurance policy" means a policy covering a group of persons that is
             488      issued:
             489          (i) to a policyholder on behalf of the group; and
             490          (ii) for the benefit of a member of the group who is selected under a procedure defined
             491      in:
             492          (A) the policy; or


             493          (B) an agreement that is collateral to the policy.
             494          (b) A group insurance policy may include a member of the policyholder's family or a
             495      dependent.
             496          (72) "Guaranteed automobile protection insurance" means insurance offered in
             497      connection with an extension of credit that pays the difference in amount between the
             498      insurance settlement and the balance of the loan if the insured automobile is a total loss.
             499          (73) (a) Except as provided in Subsection (73)(b), "health benefit plan" means a policy
             500      or certificate that:
             501          (i) provides health care insurance;
             502          (ii) provides major medical expense insurance; or
             503          (iii) is offered as a substitute for hospital or medical expense insurance, such as:
             504          (A) a hospital confinement indemnity; or
             505          (B) a limited benefit plan.
             506          (b) "Health benefit plan" does not include a policy or certificate that:
             507          (i) provides benefits solely for:
             508          (A) accident;
             509          (B) dental;
             510          (C) income replacement;
             511          (D) long-term care;
             512          (E) a Medicare supplement;
             513          (F) a specified disease;
             514          (G) vision; or
             515          (H) a short-term limited duration; or
             516          (ii) is offered and marketed as supplemental health insurance.
             517          (74) "Health care" means any of the following intended for use in the diagnosis,
             518      treatment, mitigation, or prevention of a human ailment or impairment:
             519          (a) a professional service;
             520          (b) a personal service;
             521          (c) a facility;
             522          (d) equipment;
             523          (e) a device;


             524          (f) supplies; or
             525          (g) medicine.
             526          (75) (a) "Health care insurance" or "health insurance" means insurance providing:
             527          (i) a health care benefit; or
             528          (ii) payment of an incurred health care expense.
             529          (b) "Health care insurance" or "health insurance" does not include accident and health
             530      insurance providing a benefit for:
             531          (i) replacement of income;
             532          (ii) short-term accident;
             533          (iii) fixed indemnity;
             534          (iv) credit accident and health;
             535          (v) supplements to liability;
             536          (vi) workers' compensation;
             537          (vii) automobile medical payment;
             538          (viii) no-fault automobile;
             539          (ix) equivalent self-insurance; or
             540          (x) a type of accident and health insurance coverage that is a part of or attached to
             541      another type of policy.
             542          (76) "Income replacement insurance" or "disability income insurance" means insurance
             543      written to provide payments to replace income lost from accident or sickness.
             544          (77) "Indemnity" means the payment of an amount to offset all or part of an insured
             545      loss.
             546          (78) "Independent adjuster" means an insurance adjuster required to be licensed under
             547      Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
             548          (79) "Independently procured insurance" means insurance procured under Section
             549      31A-15-104 .
             550          (80) "Individual" means a natural person.
             551          (81) "Inland marine insurance" includes insurance covering:
             552          (a) property in transit on or over land;
             553          (b) property in transit over water by means other than boat or ship;
             554          (c) bailee liability;


             555          (d) fixed transportation property such as bridges, electric transmission systems, radio
             556      and television transmission towers and tunnels; and
             557          (e) personal and commercial property floaters.
             558          (82) "Insolvency" means that:
             559          (a) an insurer is unable to pay its debts or meet its obligations as the debts and
             560      obligations mature;
             561          (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
             562      RBC under Subsection 31A-17-601 (8)(c); or
             563          (c) an insurer is determined to be hazardous under this title.
             564          (83) (a) "Insurance" means:
             565          (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
             566      persons to one or more other persons; or
             567          (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
             568      group of persons that includes the person seeking to distribute that person's risk.
             569          (b) "Insurance" includes:
             570          (i) a risk distributing arrangement providing for compensation or replacement for
             571      damages or loss through the provision of a service or a benefit in kind;
             572          (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
             573      business and not as merely incidental to a business transaction; and
             574          (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
             575      but with a class of persons who have agreed to share the risk.
             576          (84) "Insurance adjuster" means a person who directs the investigation, negotiation, or
             577      settlement of a claim under an insurance policy other than life insurance or an annuity, on
             578      behalf of an insurer, policyholder, or a claimant under an insurance policy.
             579          (85) "Insurance business" or "business of insurance" includes:
             580          (a) providing health care insurance[, as defined in Subsection (75),] by an organization
             581      that is or [should] is required to be licensed under this title;
             582          (b) providing a benefit to an employee in the event of a contingency not within the
             583      control of the employee, in which the employee is entitled to the benefit as a right, which
             584      benefit may be provided either:
             585          (i) by a single employer or by multiple employer groups; or


             586          (ii) through one or more trusts, associations, or other entities;
             587          (c) providing an annuity:
             588          (i) including an annuity issued in return for a gift; and
             589          (ii) except an annuity provided by a person specified in Subsections 31A-22-1305 (2)
             590      and (3);
             591          (d) providing the characteristic services of a motor club as outlined in Subsection
             592      (113);
             593          (e) providing another person with insurance [as defined in Subsection (83)];
             594          (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
             595      or surety, a contract or policy of title insurance;
             596          (g) transacting or proposing to transact any phase of title insurance, including:
             597          (i) solicitation;
             598          (ii) negotiation preliminary to execution;
             599          (iii) execution of a contract of title insurance;
             600          (iv) insuring; and
             601          (v) transacting matters subsequent to the execution of the contract and arising out of
             602      the contract, including reinsurance; and
             603          (h) doing, or proposing to do, any business in substance equivalent to Subsections
             604      (85)(a) through (g) in a manner designed to evade [the provisions of] this title.
             605          (86) "Insurance consultant" or "consultant" means a person who:
             606          (a) advises another person about insurance needs and coverages;
             607          (b) is compensated by the person advised on a basis not directly related to the insurance
             608      placed; and
             609          (c) except as provided in Section 31A-23a-501 , is not compensated directly or
             610      indirectly by an insurer or producer for advice given.
             611          (87) "Insurance holding company system" means a group of two or more affiliated
             612      persons, at least one of whom is an insurer.
             613          (88) (a) "Insurance producer" or "producer" means a person licensed or required to be
             614      licensed under the laws of this state to sell, solicit, or negotiate insurance.
             615          (b) With regards to the selling, soliciting, or negotiating of an insurance product to an
             616      insurance customer or an insured:


             617          (i) "producer for the insurer" means a producer who is compensated directly or
             618      indirectly by an insurer for selling, soliciting, or negotiating a product of that insurer; and
             619          (ii) "producer for the insured" means a producer who:
             620          (A) is compensated directly and only by an insurance customer or an insured; and
             621          (B) receives no compensation directly or indirectly from an insurer for selling,
             622      soliciting, or negotiating a product of that insurer to an insurance customer or insured.
             623          (89) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
             624      promise in an insurance policy and includes:
             625          (i) a policyholder;
             626          (ii) a subscriber;
             627          (iii) a member; and
             628          (iv) a beneficiary.
             629          (b) The definition in Subsection (89)(a):
             630          (i) applies only to this title; and
             631          (ii) does not define the meaning of this word as used in an insurance policy or
             632      certificate.
             633          (90) (a) [(i)] "Insurer" means a person doing an insurance business as a principal
             634      including:
             635          [(A)] (i) a fraternal benefit society;
             636          [(B)] (ii) an issuer of a gift annuity other than an annuity specified in Subsections
             637      31A-22-1305 (2) and (3);
             638          [(C)] (iii) a motor club;
             639          [(D)] (iv) an employee welfare plan; and
             640          [(E)] (v) a person purporting or intending to do an insurance business as a principal on
             641      that person's own account.
             642          [(ii)] (b) "Insurer" does not include a governmental entity to the extent the
             643      governmental entity is engaged in an activity described in Section 31A-12-107 .
             644          [(b) "Admitted insurer" is defined in Subsection (163)(b).]
             645          [(c) "Alien insurer" is defined in Subsection (7).]
             646          [(d) "Authorized insurer" is defined in Subsection (163)(b).]
             647          [(e) "Domestic insurer" is defined in Subsection (48).]


             648          [(f) "Foreign insurer" is defined in Subsection (65).]
             649          [(g) "Nonadmitted insurer" is defined in Subsection (163)(a).]
             650          [(h) "Unauthorized insurer" is defined in Subsection (163)(a).]
             651          (91) "Interinsurance exchange" is defined in Subsection (142).
             652          (92) "Involuntary unemployment insurance" means insurance:
             653          (a) offered in connection with an extension of credit; and
             654          (b) that provides indemnity if the debtor is involuntarily unemployed for payments
             655      coming due on a:
             656          (i) specific loan; or
             657          (ii) credit transaction.
             658          (93) "Large employer," in connection with a health benefit plan, means an employer
             659      who, with respect to a calendar year and to a plan year:
             660          (a) employed an average of at least 51 eligible employees on each business day during
             661      the preceding calendar year; and
             662          (b) employs at least two employees on the first day of the plan year.
             663          (94) "Late enrollee," with respect to an employer health benefit plan, means an
             664      individual whose enrollment is a late enrollment.
             665          (95) "Late enrollment," with respect to an employer health benefit plan, means
             666      enrollment of an individual other than:
             667          (a) on the earliest date on which coverage can become effective for the individual
             668      under the terms of the plan; or
             669          (b) through special enrollment.
             670          (96) (a) Except for a retainer contract or legal assistance described in Section
             671      31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
             672      specified legal expense.
             673          (b) "Legal expense insurance" includes an arrangement that creates a reasonable
             674      expectation of an enforceable right.
             675          (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
             676      legal services incidental to other insurance coverage.
             677          (97) (a) "Liability insurance" means insurance against liability:
             678          (i) for death, injury, or disability of a human being, or for damage to property,


             679      exclusive of the coverages under:
             680          (A) Subsection (107) for medical malpractice insurance;
             681          (B) Subsection (134) for professional liability insurance; and
             682          (C) Subsection (168) for workers' compensation insurance;
             683          (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
             684      insured who is injured, irrespective of legal liability of the insured, when issued with or
             685      supplemental to insurance against legal liability for the death, injury, or disability of a human
             686      being, exclusive of the coverages under:
             687          (A) Subsection (107) for medical malpractice insurance;
             688          (B) Subsection (134) for professional liability insurance; and
             689          (C) Subsection (168) for workers' compensation insurance;
             690          (iii) for loss or damage to property resulting from an accident to or explosion of a
             691      boiler, pipe, pressure container, machinery, or apparatus;
             692          (iv) for loss or damage to property caused by:
             693          (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
             694          (B) water entering through a leak or opening in a building; or
             695          (v) for other loss or damage properly the subject of insurance not within another kind
             696      of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
             697          (b) "Liability insurance" includes:
             698          (i) vehicle liability insurance [as defined in Subsection (165)];
             699          (ii) residential dwelling liability insurance [as defined in Subsection (145)]; and
             700          (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
             701      boiler, machinery, or apparatus of any kind when done in connection with insurance on the
             702      elevator, boiler, machinery, or apparatus.
             703          (98) (a) "License" means [the] authorization issued by the commissioner to engage in
             704      an activity that is part of or related to the insurance business.
             705          (b) "License" includes a certificate of authority issued to an insurer.
             706          (99) (a) "Life insurance" means:
             707          (i) insurance on a human life; and
             708          (ii) insurance pertaining to or connected with human life.
             709          (b) The business of life insurance includes:


             710          (i) granting a death benefit;
             711          (ii) granting an annuity benefit;
             712          (iii) granting an endowment benefit;
             713          (iv) granting an additional benefit in the event of death by accident;
             714          (v) granting an additional benefit to safeguard the policy against lapse; and
             715          (vi) providing an optional method of settlement of proceeds.
             716          (100) "Limited license" means a license that:
             717          (a) is issued for a specific product of insurance; and
             718          (b) limits an individual or agency to transact only for that product or insurance.
             719          (101) "Limited line credit insurance" includes the following forms of insurance:
             720          (a) credit life;
             721          (b) credit accident and health;
             722          (c) credit property;
             723          (d) credit unemployment;
             724          (e) involuntary unemployment;
             725          (f) mortgage life;
             726          (g) mortgage guaranty;
             727          (h) mortgage accident and health;
             728          (i) guaranteed automobile protection; and
             729          (j) another form of insurance offered in connection with an extension of credit that:
             730          (i) is limited to partially or wholly extinguishing the credit obligation; and
             731          (ii) the commissioner determines by rule should be designated as a form of limited line
             732      credit insurance.
             733          (102) "Limited line credit insurance producer" means a person who sells, solicits, or
             734      negotiates one or more forms of limited line credit insurance coverage to an individual through
             735      a master, corporate, group, or individual policy.
             736          (103) "Limited line insurance" includes:
             737          (a) bail bond;
             738          (b) limited line credit insurance;
             739          (c) legal expense insurance;
             740          (d) motor club insurance;


             741          (e) rental car-related insurance;
             742          (f) travel insurance; [and]
             743          (g) crop insurance;
             744          (h) self-service storage insurance; and
             745          [(g)] (i) another form of limited insurance that the commissioner determines by rule
             746      should be designated a form of limited line insurance.
             747          (104) "Limited lines authority" includes:
             748          (a) the lines of insurance listed in Subsection (103); and
             749          (b) a customer service representative.
             750          (105) "Limited lines producer" means a person who sells, solicits, or negotiates limited
             751      lines insurance.
             752          (106) (a) "Long-term care insurance" means an insurance policy or rider advertised,
             753      marketed, offered, or designated to provide coverage:
             754          (i) in a setting other than an acute care unit of a hospital;
             755          (ii) for not less than 12 consecutive months for a covered person on the basis of:
             756          (A) expenses incurred;
             757          (B) indemnity;
             758          (C) prepayment; or
             759          (D) another method;
             760          (iii) for one or more necessary or medically necessary services that are:
             761          (A) diagnostic;
             762          (B) preventative;
             763          (C) therapeutic;
             764          (D) rehabilitative;
             765          (E) maintenance; or
             766          (F) personal care; and
             767          (iv) that may be issued by:
             768          (A) an insurer;
             769          (B) a fraternal benefit society;
             770          (C) (I) a nonprofit health hospital; and
             771          (II) a medical service corporation;


             772          (D) a prepaid health plan;
             773          (E) a health maintenance organization; or
             774          (F) an entity similar to the entities described in Subsections (106)(a)(iv)(A) through (E)
             775      to the extent that the entity is otherwise authorized to issue life or health care insurance.
             776          (b) "Long-term care insurance" includes:
             777          (i) any of the following that provide directly or supplement long-term care insurance:
             778          (A) a group or individual annuity or rider; or
             779          (B) a life insurance policy or rider;
             780          (ii) a policy or rider that provides for payment of benefits on the basis of:
             781          (A) cognitive impairment; or
             782          (B) functional capacity; or
             783          (iii) a qualified long-term care insurance contract.
             784          (c) "Long-term care insurance" does not include:
             785          (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
             786          (ii) basic hospital expense coverage;
             787          (iii) basic medical/surgical expense coverage;
             788          (iv) hospital confinement indemnity coverage;
             789          (v) major medical expense coverage;
             790          (vi) income replacement or related asset-protection coverage;
             791          (vii) accident only coverage;
             792          (viii) coverage for a specified:
             793          (A) disease; or
             794          (B) accident;
             795          (ix) limited benefit health coverage; or
             796          (x) a life insurance policy that accelerates the death benefit to provide the option of a
             797      lump sum payment:
             798          (A) if the following are not conditioned on the receipt of long-term care:
             799          (I) benefits; or
             800          (II) eligibility; and
             801          (B) the coverage is for one or more the following qualifying events:
             802          (I) terminal illness;


             803          (II) medical conditions requiring extraordinary medical intervention; or
             804          (III) permanent institutional confinement.
             805          (107) "Medical malpractice insurance" means insurance against legal liability incident
             806      to the practice and provision of a medical service other than the practice and provision of a
             807      dental service.
             808          (108) "Member" means a person having membership rights in an insurance
             809      corporation.
             810          (109) "Minimum capital" or "minimum required capital" means the capital that must be
             811      constantly maintained by a stock insurance corporation as required by statute.
             812          (110) "Mortgage accident and health insurance" means insurance offered in connection
             813      with an extension of credit that provides indemnity for payments coming due on a mortgage
             814      while the debtor is disabled.
             815          (111) "Mortgage guaranty insurance" means surety insurance under which a mortgagee
             816      or other creditor is indemnified against losses caused by the default of a debtor.
             817          (112) "Mortgage life insurance" means insurance on the life of a debtor in connection
             818      with an extension of credit that pays if the debtor dies.
             819          (113) "Motor club" means a person:
             820          (a) licensed under:
             821          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             822          (ii) Chapter 11, Motor Clubs; or
             823          (iii) Chapter 14, Foreign Insurers; and
             824          (b) that promises for an advance consideration to provide for a stated period of time
             825      one or more:
             826          (i) legal services under Subsection 31A-11-102 (1)(b);
             827          (ii) bail services under Subsection 31A-11-102 (1)(c); or
             828          (iii) (A) trip reimbursement;
             829          (B) towing services;
             830          (C) emergency road services;
             831          (D) stolen automobile services;
             832          (E) a combination of the services listed in Subsections (113)(b)(iii)(A) through (D); or
             833          (F) other services given in Subsections 31A-11-102 (1)(b) through (f).


             834          (114) "Mutual" means a mutual insurance corporation.
             835          (115) "Network plan" means health care insurance:
             836          (a) that is issued by an insurer; and
             837          (b) under which the financing and delivery of medical care is provided, in whole or in
             838      part, through a defined set of providers under contract with the insurer, including the financing
             839      and delivery of an item paid for as medical care.
             840          (116) "Nonparticipating" means a plan of insurance under which the insured is not
             841      entitled to receive a dividend representing a share of the surplus of the insurer.
             842          (117) "Ocean marine insurance" means insurance against loss of or damage to:
             843          (a) ships or hulls of ships;
             844          (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys,
             845      securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
             846      interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
             847          (c) earnings such as freight, passage money, commissions, or profits derived from
             848      transporting goods or people upon or across the oceans or inland waterways; or
             849          (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
             850      owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
             851      in connection with maritime activity.
             852          (118) "Order" means an order of the commissioner.
             853          (119) "Outline of coverage" means a summary that explains an accident and health
             854      insurance policy.
             855          (120) "Participating" means a plan of insurance under which the insured is entitled to
             856      receive a dividend representing a share of the surplus of the insurer.
             857          (121) "Participation," as used in a health benefit plan, means a requirement relating to
             858      the minimum percentage of eligible employees that must be enrolled in relation to the total
             859      number of eligible employees of an employer reduced by each eligible employee who
             860      voluntarily declines coverage under the plan because the employee:
             861          (a) has other group health care insurance coverage; or
             862          (b) receives:
             863          (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
             864      Security Amendments of 1965; or


             865          (ii) another government health benefit.
             866          (122) "Person" includes:
             867          (a) an individual;
             868          (b) a partnership;
             869          (c) a corporation;
             870          (d) an incorporated or unincorporated association;
             871          (e) a joint stock company;
             872          (f) a trust;
             873          (g) a limited liability company;
             874          (h) a reciprocal;
             875          (i) a syndicate; or
             876          (j) another similar entity or combination of entities acting in concert.
             877          (123) "Personal lines insurance" means property and casualty insurance coverage sold
             878      for primarily noncommercial purposes to:
             879          (a) an individual; or
             880          (b) a family.
             881          (124) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
             882          (125) "Plan year" means:
             883          (a) the year that is designated as the plan year in:
             884          (i) the plan document of a group health plan; or
             885          (ii) a summary plan description of a group health plan;
             886          (b) if the plan document or summary plan description does not designate a plan year or
             887      there is no plan document or summary plan description:
             888          (i) the year used to determine deductibles or limits;
             889          (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
             890      or
             891          (iii) the employer's taxable year if:
             892          (A) the plan does not impose deductibles or limits on a yearly basis; and
             893          (B) (I) the plan is not insured; or
             894          (II) the insurance policy is not renewed on an annual basis; or
             895          (c) in a case not described in Subsection (125)(a) or (b), the calendar year.


             896          (126) (a) "Policy" means a document, including any attached endorsement or
             897      application that:
             898          (i) purports to be an enforceable contract; and
             899          (ii) memorializes in writing some or all of the terms of an insurance contract.
             900          (b) "Policy" includes a service contract issued by:
             901          (i) a motor club under Chapter 11, Motor Clubs;
             902          (ii) a service contract provided under Chapter 6a, Service Contracts; and
             903          (iii) a corporation licensed under:
             904          (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
             905          (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
             906          (c) "Policy" does not include:
             907          (i) a certificate under a group insurance contract; or
             908          (ii) a document that does not purport to have legal effect.
             909          (127) "Policyholder" means [the] a person who controls a policy, binder, or oral
             910      contract by ownership, premium payment, or otherwise.
             911          (128) "Policy illustration" means a presentation or depiction that includes
             912      nonguaranteed elements of a policy of life insurance over a period of years.
             913          (129) "Policy summary" means a synopsis describing the elements of a life insurance
             914      policy.
             915          (130) "Preexisting condition," with respect to a health benefit plan:
             916          (a) means a condition that was present before the effective date of coverage, whether or
             917      not medical advice, diagnosis, care, or treatment was recommended or received before that day;
             918      and
             919          (b) does not include a condition indicated by genetic information unless an actual
             920      diagnosis of the condition by a physician has been made.
             921          (131) (a) "Premium" means the monetary consideration for an insurance policy.
             922          (b) "Premium" includes, however designated:
             923          (i) an assessment;
             924          (ii) a membership fee;
             925          (iii) a required contribution; or
             926          (iv) monetary consideration.


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


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


             989      renewal policy premiums:
             990          (a) a manual of rates;
             991          (b) a classification;
             992          (c) a rate-related underwriting rule; and
             993          (d) a rating formula that describes steps, policies, and procedures for determining
             994      initial and renewal policy premiums.
             995          (141) "Received by the department" means:
             996          (a) [except as provided in Subsection (141)(b),] the date delivered to and stamped
             997      received by the department, [whether] if delivered[: (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          (b) the post mark date, if delivered by mail;
             1002          (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
             1003          (d) the received date recorded on an item delivered, if delivered by:
             1004          (i) facsimile;
             1005          (ii) email; or
             1006          (iii) another electronic method; or
             1007          (e) a date specified in:
             1008          (i) a statute;
             1009          (ii) a rule; or
             1010          (iii) [a specific filing] an order.
             1011          (142) "Reciprocal" or "interinsurance exchange" means an unincorporated association
             1012      of persons:
             1013          (a) operating through an attorney-in-fact common to all of the persons; and
             1014          (b) exchanging insurance contracts with one another that provide insurance coverage
             1015      on each other.
             1016          (143) "Reinsurance" means an insurance transaction where an insurer, for
             1017      consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
             1018      reinsurance transactions, this title sometimes refers to:
             1019          (a) the insurer transferring the risk as the "ceding insurer"; and


             1020          (b) the insurer assuming the risk as the:
             1021          (i) "assuming insurer"; or
             1022          (ii) "assuming reinsurer."
             1023          (144) "Reinsurer" means a person licensed in this state as an insurer with the authority
             1024      to assume reinsurance.
             1025          (145) "Residential dwelling liability insurance" means insurance against liability
             1026      resulting from or incident to the ownership, maintenance, or use of a residential dwelling that is
             1027      a detached single family residence or multifamily residence up to four units.
             1028          (146) (a) "Retrocession" means reinsurance with another insurer of a liability assumed
             1029      under a reinsurance contract.
             1030          (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
             1031      liability assumed under a reinsurance contract.
             1032          (147) "Rider" means an endorsement to:
             1033          (a) an insurance policy; or
             1034          (b) an insurance certificate.
             1035          (148) (a) "Security" means a:
             1036          (i) note;
             1037          (ii) stock;
             1038          (iii) bond;
             1039          (iv) debenture;
             1040          (v) evidence of indebtedness;
             1041          (vi) certificate of interest or participation in a profit-sharing agreement;
             1042          (vii) collateral-trust certificate;
             1043          (viii) preorganization certificate or subscription;
             1044          (ix) transferable share;
             1045          (x) investment contract;
             1046          (xi) voting trust certificate;
             1047          (xii) certificate of deposit for a security;
             1048          (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
             1049      payments out of production under such a title or lease;
             1050          (xiv) commodity contract or commodity option;


             1051          (xv) certificate of interest or participation in, temporary or interim certificate for, receipt
             1052      for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in
             1053      Subsections (148)(a)(i) through (xiv); or
             1054          (xvi) another interest or instrument commonly known as a security.
             1055          (b) "Security" does not include:
             1056          (i) any of the following under which an insurance company promises to pay money in a
             1057      specific lump sum or periodically for life or some other specified period:
             1058          (A) insurance;
             1059          (B) an endowment policy; or
             1060          (C) an annuity contract; or
             1061          (ii) a burial certificate or burial contract.
             1062          (149) "Secondary medical condition" means a complication related to an exclusion
             1063      from coverage in accident and health insurance.
             1064          (150) "Self-insurance" means an arrangement under which a person provides for
             1065      spreading its own risks by a systematic plan.
             1066          (a) Except as provided in this Subsection (150), "self-insurance" does not include an
             1067      arrangement under which a number of persons spread their risks among themselves.
             1068          (b) "Self-insurance" includes:
             1069          (i) an arrangement by which a governmental entity undertakes to indemnify an
             1070      employee for liability arising out of the employee's employment; and
             1071          (ii) an arrangement by which a person with a managed program of self-insurance and
             1072      risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
             1073      employees for liability or risk [which] that is related to the relationship or employment.
             1074          (c) "Self-insurance" does not include an arrangement with an independent contractor.
             1075          (151) "Sell" means to exchange a contract of insurance:
             1076          (a) by any means;
             1077          (b) for money or its equivalent; and
             1078          (c) on behalf of an insurance company.
             1079          (152) "Short-term care insurance" means an insurance policy or rider advertised,
             1080      marketed, offered, or designed to provide coverage that is similar to long-term care insurance,
             1081      but that provides coverage for less than 12 consecutive months for each covered person.


             1082          (153) "Significant break in coverage" means a period of 63 consecutive days during
             1083      each of which an individual does not have creditable coverage.
             1084          (154) "Small employer," in connection with a health benefit plan, means an employer
             1085      who, with respect to a calendar year and to a plan year:
             1086          (a) employed an average of at least two employees but not more than 50 eligible
             1087      employees on each business day during the preceding calendar year; and
             1088          (b) employs at least two employees on the first day of the plan year.
             1089          (155) "Special enrollment period," in connection with a health benefit plan, has the
             1090      same meaning as provided in federal regulations adopted pursuant to the Health Insurance
             1091      Portability and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936.
             1092          (156) (a) "Subsidiary" of a person means an affiliate controlled by that person either
             1093      directly or indirectly through one or more affiliates or intermediaries.
             1094          (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
             1095      shares are owned by that person either alone or with its affiliates, except for the minimum
             1096      number of shares the law of the subsidiary's domicile requires to be owned by directors or
             1097      others.
             1098          (157) Subject to Subsection (83)(b), "surety insurance" includes:
             1099          (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
             1100      perform the principal's obligations to a creditor or other obligee;
             1101          (b) bail bond insurance; and
             1102          (c) fidelity insurance.
             1103          (158) (a) "Surplus" means the excess of assets over the sum of paid-in capital and
             1104      liabilities.
             1105          (b) (i) "Permanent surplus" means the surplus of a mutual insurer that is designated by
             1106      the insurer as permanent.
             1107          (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209 require
             1108      that mutuals doing business in this state maintain specified minimum levels of permanent
             1109      surplus.
             1110          (iii) Except for assessable mutuals, the minimum permanent surplus requirement is
             1111      [essentially] the same as the minimum required capital requirement that applies to stock
             1112      insurers.


             1113          (c) "Excess surplus" means:
             1114          (i) for a life insurer, accident and health insurer, health organization, or property and
             1115      casualty insurer as defined in Section 31A-17-601 , the lesser of:
             1116          (A) that amount of an insurer's or health organization's total adjusted capital[, as
             1117      defined in Subsection (161),] that exceeds the product of:
             1118          (I) 2.5; and
             1119          (II) the sum of the insurer's or health organization's minimum capital or permanent
             1120      surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
             1121          (B) that amount of an insurer's or health organization's total adjusted capital[, as
             1122      defined in Subsection (161),] that exceeds the product of:
             1123          (I) 3.0; and
             1124          (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
             1125          (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
             1126      that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
             1127          (A) 1.5; and
             1128          (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
             1129          (159) "Third party administrator" or "administrator" means a person who collects
             1130      charges or premiums from, or who, for consideration, adjusts or settles claims of residents of
             1131      the state in connection with insurance coverage, annuities, or service insurance coverage,
             1132      except:
             1133          (a) a union on behalf of its members;
             1134          (b) a person administering a:
             1135          (i) pension plan subject to the federal Employee Retirement Income Security Act of
             1136      1974;
             1137          (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
             1138          (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
             1139          (c) an employer on behalf of the employer's employees or the employees of one or
             1140      more of the subsidiary or affiliated corporations of the employer;
             1141          (d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance
             1142      for which the insurer holds a license in this state; or
             1143          (e) a person:


             1144          (i) licensed or exempt from licensing under:
             1145          (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             1146      Reinsurance Intermediaries; or
             1147          (B) Chapter 26, Insurance Adjusters; and
             1148          (ii) whose activities are limited to those authorized under the license the person holds
             1149      or for which the person is exempt.
             1150          (160) "Title insurance" means the insuring, guaranteeing, or indemnifying of an owner
             1151      of real or personal property or the holder of liens or encumbrances on that property, or others
             1152      interested in the property against loss or damage suffered by reason of liens or encumbrances
             1153      upon, defects in, or the unmarketability of the title to the property, or invalidity or
             1154      unenforceability of any liens or encumbrances on the property.
             1155          (161) "Total adjusted capital" means the sum of an insurer's or health organization's
             1156      statutory capital and surplus as determined in accordance with:
             1157          (a) the statutory accounting applicable to the annual financial statements required to be
             1158      filed under Section 31A-4-113 ; and
             1159          (b) another item provided by the RBC instructions, as RBC instructions is defined in
             1160      Section 31A-17-601 .
             1161          (162) (a) "Trustee" means "director" when referring to the board of directors of a
             1162      corporation.
             1163          (b) "Trustee," when used in reference to an employee welfare fund, means an
             1164      individual, firm, association, organization, joint stock company, or corporation, whether acting
             1165      individually or jointly and whether designated by that name or any other, that is charged with
             1166      or has the overall management of an employee welfare fund.
             1167          (163) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted insurer"
             1168      means an insurer:
             1169          (i) not holding a valid certificate of authority to do an insurance business in this state;
             1170      or
             1171          (ii) transacting business not authorized by a valid certificate.
             1172          (b) "Admitted insurer" or "authorized insurer" means an insurer:
             1173          (i) holding a valid certificate of authority to do an insurance business in this state; and
             1174          (ii) transacting business as authorized by a valid certificate.


             1175          (164) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.
             1176          (165) "Vehicle liability insurance" means insurance against liability resulting from or
             1177      incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a vehicle
             1178      comprehensive or vehicle physical damage coverage under Subsection (135).
             1179          (166) "Voting security" means a security with voting rights, and includes a security
             1180      convertible into a security with a voting right associated with the security.
             1181          (167) "Waiting period" for a health benefit plan means the period that must pass before
             1182      coverage for an individual, who is otherwise eligible to enroll under the terms of the health
             1183      benefit plan, can become effective.
             1184          (168) "Workers' compensation insurance" means:
             1185          (a) insurance for indemnification of an employer against liability for compensation
             1186      based on:
             1187          (i) a compensable accidental injury; and
             1188          (ii) occupational disease disability;
             1189          (b) employer's liability insurance incidental to workers' compensation insurance and
             1190      written in connection with workers' compensation insurance; and
             1191          (c) insurance assuring to a person entitled to workers' compensation benefits the
             1192      compensation provided by law.
             1193          Section 2. Section 31A-2-203 is amended to read:
             1194           31A-2-203. Examinations and alternatives.
             1195          (1) (a) [Whenever] When the commissioner determines that information is needed
             1196      about a matter related to the enforcement of this title, the commissioner may examine the
             1197      affairs and condition of:
             1198          (i) a licensee under this title;
             1199          (ii) an applicant for a license under this title;
             1200          (iii) a person or organization of persons doing or in process of organizing to do an
             1201      insurance business in this state; or
             1202          (iv) a person who is not, but [should] is required to be, licensed under this title.
             1203          (b) When reasonably necessary for an examination under Subsection (1)(a), the
             1204      commissioner may examine:
             1205          (i) so far as it relates to the examinee, an account, record, document, or evidence of a


             1206      transaction of:
             1207          (A) the insurer or other licensee;
             1208          (B) an officer or other person who has executive authority over or is in charge of any
             1209      segment of the examinee's affairs; or
             1210          (C) an affiliate of the examinee; or
             1211          (ii) a third party model or product used by the examinee.
             1212          (c) (i) On demand, an examinee under Subsection (1)(a) shall make available to the
             1213      commissioner for examination:
             1214          (A) the examinee's own account, record, file, document, or evidence of a transaction;
             1215      and
             1216          (B) to the extent reasonably necessary for an examination, an account, record, file,
             1217      document, or evidence of a transaction of a person described under Subsection (1)(b).
             1218          (ii) Except as provided in Subsection (1)(c)(iii), failure to make an item described in
             1219      Subsection (1)(c)(i) available is concealment of records under Subsection 31A-27a-207 (1)(e).
             1220          (iii) If [the] an examinee is unable to obtain an account, record, file, document, or
             1221      evidence of a transaction from a person described under Subsection (1)(b), that failure is not
             1222      concealment of records if the examinee immediately terminates the relationship with the other
             1223      person.
             1224          (d) (i) [Neither the] The commissioner [nor] or an examiner may not remove an
             1225      account, record, file, document, evidence of a transaction, or other property of [the] an
             1226      examinee from the examinee's offices unless:
             1227          (A) the examinee consents in writing; or
             1228          (B) a court grants permission.
             1229          (ii) The commissioner may make and remove a copy or abstract of the following
             1230      described in Subsection (1)(d)(i):
             1231          (A) an account;
             1232          (B) a record;
             1233          (C) a file;
             1234          (D) a document;
             1235          (E) evidence of a transaction; or
             1236          (F) other property.


             1237          (2) (a) Subject to the other provisions of this section, the commissioner shall examine
             1238      as needed and as otherwise provided by law:
             1239          (i) every insurer, both domestic and nondomestic;
             1240          (ii) every licensed rate service organization; and
             1241          (iii) any other licensee.
             1242          (b) The commissioner shall examine an insurer, both domestic and nondomestic, no
             1243      less frequently than once every five years, but the commissioner may use in lieu an
             1244      examination under Subsection (4) to satisfy this requirement.
             1245          (c) The commissioner shall revoke the certificate of authority of an insurer or the
             1246      license of a rate service organization that has not been examined, or submitted an acceptable in
             1247      lieu report under Subsection (4), within the past five years.
             1248          (d) (i) Any 25 persons who are policyholders, shareholders, or creditors of a domestic
             1249      insurer may by verified petition demand a hearing under Section 31A-2-301 to determine
             1250      whether the commissioner should conduct an unscheduled examination of the insurer.
             1251          (ii) Persons demanding the hearing under this Subsection (2)(d) shall be given an
             1252      opportunity in the hearing to present evidence that an examination of the insurer is necessary.
             1253          (iii) If the evidence justifies an examination, the commissioner shall order an
             1254      examination.
             1255          (e) (i) If the board of directors of a domestic insurer requests that the commissioner
             1256      examine the insurer, the commissioner shall examine the insurer as soon as reasonably
             1257      possible.
             1258          (ii) If the examination requested under this Subsection (2)(e) is conducted within two
             1259      years after completion of a comprehensive examination by the commissioner, costs of the
             1260      requested examination may not be deducted from premium taxes under Section 59-9-102
             1261      unless the commissioner's order specifically provides for the deduction.
             1262          (f) A bail bond surety company, as defined in Section 31A-35-102 , 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 accountant or actuary:


             1268          (i) in lieu of all or part of an examination under Subsection (1) or (2); or
             1269          (ii) in addition to an examination under Subsection (1) or (2).
             1270          (b) An audit or evaluation under this Subsection (3) is subject to Subsection (5),
             1271      Section 31A-2-204 , and Subsection 31A-2-205 (4).
             1272          (4) (a) In lieu of all or a part of an examination under this section, the commissioner
             1273      may accept the report of an examination made by:
             1274          (i) the insurance department of another state; or
             1275          (ii) another government agency in:
             1276          (A) this state;
             1277          (B) the federal government; or
             1278          (C) another state.
             1279          (b) An examination by the commissioner under Subsection (1) or (2) or accepted by the
             1280      commissioner under this Subsection (4) may use:
             1281          (i) an audit [already made] completed by a certified public accountant; or
             1282          (ii) an actuarial evaluation made by an actuary approved by the commissioner.
             1283          (5) (a) An examination may be comprehensive or limited with respect to the
             1284      examinee's affairs and condition. The commissioner shall determine the nature and scope of
             1285      [each] an examination, taking into account all relevant factors, including:
             1286          (i) the length of time the examinee has been licensed in this state;
             1287          (ii) the nature of the business being examined;
             1288          (iii) the nature of the accounting or other records available;
             1289          (iv) one or more reports from:
             1290          (A) independent auditors; and
             1291          (B) self-certification entities; and
             1292          (v) the nature of examinations performed elsewhere.
             1293          (b) The examination of an alien insurer is limited to one or more insurance transactions
             1294      and assets in the United States, unless the commissioner orders otherwise after finding that
             1295      extraordinary circumstances necessitate a broader examination.
             1296          (6) To effectively administer this section, the commissioner:
             1297          (a) shall:
             1298          (i) maintain one or more effective financial condition and market regulation


             1299      surveillance systems including:
             1300          (A) financial and market analysis; and
             1301          (B) a review of insurance regulatory information system reports;
             1302          (ii) employ a priority scheduling method that focuses on insurers and other licensees
             1303      most in need of examination; and
             1304          (iii) use examination management techniques similar to those outlined in the Financial
             1305      Condition Examination Handbook of the National Association of Insurance Commissioners;
             1306      and
             1307          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             1308      may make rules pertaining to:
             1309          (i) a financial condition and market regulation surveillance system[.]; and
             1310          (ii) annual financial reporting requirements similar to those outlined in the Annual
             1311      Financial Reporting Model Regulation of the National Association of Insurance
             1312      Commissioners.
             1313          Section 3. Section 31A-5-412 is amended to read:
             1314           31A-5-412. Committees of directors.
             1315          (1) (a) If provided for in the articles or bylaws of a corporation, the board, by resolution
             1316      adopted by a majority of the full board, may designate one or more committees. [Each of these
             1317      committees]
             1318          (b) A committee designated under this Subsection (1) shall consist of three or more
             1319      directors serving at the pleasure of the board.
             1320          (c) The board may designate one or more directors as alternate members of [any] a
             1321      committee to substitute for an absent member at any meeting of the committee.
             1322          (d) The designation of a committee and delegation of authority to [it] the committee
             1323      does not relieve the board or [any] a director of responsibility imposed by law upon [it or him
             1324      by law] the board or director.
             1325          (2) (a) (i) Except for [corporations] a corporation described under Subsection
             1326      31A-5-407 (4), [every] a corporation shall have an audit committee.
             1327          (ii) A corporation's entire board constitutes the audit committee if the corporation:
             1328          (A) is described under Subsection 31A-5-407 (4); and
             1329          (B) does not have an audit committee that complies with this Subsection (2).


             1330          (b) [No] If a corporation is required to have an audit committee under Subsection
             1331      (2)(a), a member of the audit committee may not be an inside director as defined under
             1332      Subsection 31A-5-407 (3).
             1333          (c) [The] An audit committee shall maintain an overview of the audit activities,
             1334      systems, and staff of the company and of the activities of the outside auditors, in order to
             1335      advise the board on the adequacy of fiscal control. [The]
             1336          (d) A corporation shall give an audit committee [has] direct and private access to
             1337      company data and personnel as that committee considers necessary[, and].
             1338          (e) An audit committee may meet privately with the outside directors as [it] the audit
             1339      committee sees fit.
             1340          (f) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1341      commissioner may make rules pertaining to audit committee requirements similar to those
             1342      outlined in the Annual Financial Reporting Model Regulation of the National Association of
             1343      Insurance Commissioners.
             1344          (3) (a) When the board is not in session, a committee may exercise the powers of the
             1345      board in the management of the business and affairs of the corporation to the extent authorized
             1346      in the resolution or in the articles or bylaws, except action regarding:
             1347          [(a)] (i) compensation or indemnification of [any] a person who is:
             1348          (A) a director[,];
             1349          (B) a principal officer[,]; or
             1350          (C) one of the three most highly paid employees;
             1351          [(b)] (ii) benefits or payments requiring shareholder or policyholder approval;
             1352          [(c)] (iii) approval of a contract requiring board approval under Section 31A-5-414 [,
             1353      or];
             1354          (iv) approval of [any other] a transaction in which a director has a material interest
             1355      adverse to the corporation;
             1356          [(d)] (v) amendment of the articles or bylaws;
             1357          [(e)] (vi) merger or consolidation under Section 31A-5-501 , 31A-5-502 , or
             1358      31A-5-503 [,];
             1359          (vii) conversion under Section 31A-5-505 , 31A-5-506 , 31A-5-507 , or 31A-5-509 [,];
             1360          (viii) voluntary dissolution under Section 31A-5-504 [, or];


             1361          (ix) transfer of business or assets under Section 31A-5-508 ;
             1362          [(f)] (x) any other decision requiring shareholder or policyholder approval;
             1363          [(g)] (xi) amendment or repeal of an action taken by the full board, which by its terms
             1364      is not subject to amendment or repeal by a committee;
             1365          [(h)] (xii) dividends or other distributions to shareholders, policyholders, or voting
             1366      members other than in the routine implementation of a policy [determinations] determination
             1367      of the full board;
             1368          [(i)] (xiii) selection of a principal [officers] officer; and
             1369          [(j)] (xiv) filling [vacancies] a vacancy on the board or on a committee created under
             1370      Subsection (1), except that the articles or bylaws may provide for a temporary [appointments]
             1371      appointment to fill [vacancies] a vacancy on the board or a committee. [These temporary
             1372      appointments]
             1373          (b) A temporary appointment provided for in Subsection (3)(a)(xiv) may last only until
             1374      the end of the next board meeting.
             1375          (4) [At the next meeting following action by any committee, the] The full board shall
             1376      review [any] a transaction in which an officer has a material financial interest adverse to the
             1377      corporation at the next board meeting after the transaction.
             1378          Section 4. Section 31A-8-215 is amended to read:
             1379           31A-8-215. Management.
             1380          Chapter 5, Part 4, Management of Insurance Corporations, applies to organizations,
             1381      except that for purposes of this chapter, [Subsection] Subsections 31A-5-412 (3)[(e)](a)(vi)
             1382      through (ix) shall be read: "corporate reorganizations under Section 31A-8-216 ."
             1382a      H. Section 5. Section 31A-20-108 is amended to read:
             1382b           31A-20-108.   Single risk limitation.
             1382c          (1) This section applies to all lines of insurance, including ocean marine and reinsurance, except:
             1382d          (a) title insurance;
             1382e          (b) workers' compensation insurance;
             1382f          (c) occupational disease insurance; [ and ]
             1382g           (d) employers' liability insurance ; and
             1382h          (e) health insurance .
             1382i          (2) (a) Except as provided under Subsections (3) and (4) and under Section 31A-20-109, an insurer
             1382j      authorized to do an insurance business in Utah may not expose itself to loss on a single risk in an amount
             1382k      exceeding 10% of its capital and surplus.
             1382l          (b) The commissioner may adopt rules to calculate surplus under this section.
             1382m          (c) An insurer may deduct the portion of a risk reinsured by a reinsurance contract worthy of


             1382n      a reserve credit under Sections 31A-17-404 through 31A-17-404.4 in determining the limitation of risk under
             1382o      this section.
             1382p          (3) (a) The commissioner may adopt rules, after hearings held with notice provided under Section
             1382q      31A-2-303, to specify the maximum exposure to which an assessable mutual may subject itself.
             1382r          (b) The rules described in Subsection (3)(a) may provide for classifications of insurance and insurers
             1382s      to preserve the solidity of insurers.
             1382t          (4) As used in this section, a "single risk" includes all losses reasonably expected as a result of the
             1382u      same event.
             1382v          (5) A company transacting fidelity or surety insurance may expose itself to a risk or hazard in excess
             1382w      of the amount prescribed in Subsection (2), if the commissioner, after considering all the facts and
             1382x      circumstances, approves the risk. .H    
             1383          Section H. [ 5 ] 6 .H . Section 31A-22-404 is amended to read:
             1384           31A-22-404. Suicide.
             1385          (1) (a) Suicide is not a defense to a claim under a life insurance policy that is in force
             1386      [as to a policyholder or certificate holder] for two years from the date of issuance of the later
             1387      of:
             1388          (i) the policy; or
             1389          (ii) the certificate.
             1390          (b) Subsection (1)(a) applies whether:
             1391          (i) the insured's death by suicide is voluntary or involuntary; or


             1392          (ii) the insured is sane or insane.
             1393          (c) If a suicide occurs within the two-year period described in Subsection (1)(a), the
             1394      insurer shall pay to the beneficiary an amount not less than the premium paid less the
             1395      following:
             1396          (i) a dividend paid;
             1397          (ii) an indebtedness; and
             1398          (iii) a partial withdrawal.
             1399          (2) (a) If after a life insurance policy is in effect the policy allows the [insured to
             1400      obtain] policyholder to purchase a death benefit that is larger than when the policy was
             1401      originally effective for an additional premium, the payment of the additional increment of
             1402      benefit may be limited in the event of a suicide within a two-year period beginning on the day
             1403      on which the increment increase takes effect.
             1404          (b) If a suicide occurs within the two-year period described in Subsection (2)(a), the
             1405      insurer shall pay to the beneficiary an amount not less than the additional premium paid for the
             1406      additional increment of benefit.
             1407          (3) For a survivorship life insurance policy, this section applies when within two years
             1408      from the day on which the survivorship life insurance policy is issued:
             1409          (a) the death of all insureds results from suicide; or
             1410          (b) the death of the surviving insured results from suicide.
             1411          [(3)] (4) This section does not apply to:
             1412          (a) a policy insuring against death by accident only; or
             1413          (b) an accident or double indemnity provision of an insurance policy.
             1414          Section H. [ 6 ] 7 .H . Section 31A-22-620 is amended to read:
             1415           31A-22-620. Medicare Supplement Insurance Minimum Standards Act.
             1416          (1) As used in this section:
             1417          (a) "Applicant" means:
             1418          (i) in the case of an individual Medicare supplement policy, the person who seeks to
             1419      contract for insurance benefits; and
             1420          (ii) in the case of a group Medicare supplement policy, the proposed certificate holder.
             1421          (b) "Certificate" means any certificate delivered or issued for delivery in this state
             1422      under a group Medicare supplement policy.


             1423          (c) "Certificate form" means the form on which the certificate is delivered or issued for
             1424      delivery by the issuer.
             1425          (d) "Issuer" includes insurance companies, fraternal benefit societies, health care
             1426      service plans, health maintenance organizations, and any other entity delivering, or issuing for
             1427      delivery in this state, Medicare supplement policies or certificates.
             1428          (e) "Medicare" means the "Health Insurance for the Aged Act," Title XVIII of the
             1429      Social Security Amendments of 1965, as then constituted or later amended.
             1430          (f) "Medicare Supplement Policy":
             1431          (i) means a group or individual policy of disability insurance, other than a policy issued
             1432      pursuant to a contract under Section 1876 of the federal Social Security Act, 42 U.S.C. Section
             1433      1395 et seq., or an issued policy under a demonstration project specified in 42 U.S.C. Section
             1434      1395ss(g)(1), that is advertised, marketed, or designed primarily as a supplement to
             1435      reimbursements under Medicare for the hospital, medical, or surgical expenses of persons
             1436      eligible for Medicare; and
             1437          (ii) does not include Medicare Advantage plans established under Medicare Part C,
             1438      outpatient prescription drug plans established under Medicare Part D, or any health care
             1439      prepayment plan that provides benefits pursuant to an agreement under Section 1833(a)(1)(A)
             1440      of the Social Security Act.
             1441          (g) "Policy form" means the form on which the policy is delivered or issued for
             1442      delivery by the issuer.
             1443          (2) (a) Except as otherwise specifically provided, this section applies to:
             1444          (i) all Medicare supplement policies delivered or issued for delivery in this state on or
             1445      after the effective date of this section;
             1446          (ii) all certificates issued under group Medicare supplement policies, that have been
             1447      delivered or issued for delivery in this state on or after the effective date of this section; and
             1448          (iii) policies or certificates that were in force prior to the effective date of this section,
             1449      with respect to requirements for benefits, claims payment, and policy reporting practice under
             1450      Subsection (3)(d), and loss ratios under Subsection (4).
             1451          (b) This section does not apply to a policy of one or more employers or labor
             1452      organizations, or of the trustees of a fund established by one or more employers or labor
             1453      organizations, or a combination of employers and labor unions, for employees or former


             1454      employees or a combination of employees and former employees, or for members or former
             1455      members of the labor organizations, or a combination of members and former members of
             1456      labor organizations.
             1457          (c) This section does not prohibit, nor does it apply to insurance policies or health care
             1458      benefit plans, including group conversion policies, provided to Medicare eligible persons that
             1459      are not marketed or held out to be Medicare supplement policies or benefit plans.
             1460          (3) (a) A Medicare supplement policy or certificate in force in the state may not contain
             1461      benefits that duplicate benefits provided by Medicare.
             1462          (b) Notwithstanding any other provision of law of this state, a Medicare supplement
             1463      policy or certificate may not exclude or limit benefits for loss incurred more than six months
             1464      from the effective date of coverage because it involved a preexisting condition. The policy or
             1465      certificate may not define a preexisting condition more restrictively than: "A condition for
             1466      which medical advice was given or treatment was recommended by or received from a
             1467      physician within six months before the effective date of coverage."
             1468          (c) The commissioner shall adopt rules to establish specific standards for policy
             1469      provisions of Medicare supplement policies and certificates. The standards adopted shall be in
             1470      addition to and in accordance with applicable laws of this state. A requirement of this title
             1471      relating to minimum required policy benefits, other than the minimum standards contained in
             1472      this section, may not apply to Medicare supplement policies and certificates. The standards
             1473      may include:
             1474          (i) terms of renewability;
             1475          (ii) initial and subsequent conditions of eligibility;
             1476          (iii) nonduplication of coverage;
             1477          (iv) probationary periods;
             1478          (v) benefit limitations, exceptions, and reductions;
             1479          (vi) elimination periods;
             1480          (vii) requirements for replacement;
             1481          (viii) recurrent conditions; and
             1482          (ix) definitions of terms.
             1483          (d) The commissioner shall adopt rules establishing minimum standards for benefits,
             1484      claims payment, marketing practices, compensation arrangements, and reporting practices for


             1485      Medicare supplement policies and certificates.
             1486          (e) The commissioner may adopt rules to conform Medicare supplement policies and
             1487      certificates to the requirements of federal law and regulations, including:
             1488          (i) requiring refunds or credits if the policies do not meet loss ratio requirements;
             1489          (ii) establishing a uniform methodology for calculating and reporting loss ratios;
             1490          (iii) assuring public access to policies, premiums, and loss ratio information of issuers
             1491      of Medicare supplement insurance;
             1492          (iv) establishing a process for approving or disapproving policy forms and certificate
             1493      forms and proposed premium increases;
             1494          (v) establishing a policy for holding public hearings prior to approval of premium
             1495      increases; [and]
             1496          (vi) establishing standards for Medicare select policies and certificates[.]; and
             1497          (vii) nondiscrimination for genetic testing or genetic information.
             1498          (f) The commissioner may adopt rules that prohibit policy provisions not otherwise
             1499      specifically authorized by statute that, in the opinion of the commissioner, are unjust, unfair, or
             1500      unfairly discriminatory to any person insured or proposed to be insured under a Medicare
             1501      supplement policy or certificate.
             1502          (4) Medicare supplement policies shall return to policyholders benefits that are
             1503      reasonable in relation to the premium charged. The commissioner shall make rules to establish
             1504      minimum standards for loss ratios of Medicare supplement policies on the basis of incurred
             1505      claims experience, or incurred health care expenses where coverage is provided by a health
             1506      maintenance organization on a service basis rather than on a reimbursement basis, and earned
             1507      premiums in accordance with accepted actuarial principles and practices.
             1508          (5) (a) To provide for full and fair disclosure in the sale of Medicare supplement
             1509      policies, a Medicare supplement policy or certificate may not be delivered in this state unless
             1510      an outline of coverage is delivered to the applicant at the time application is made.
             1511          (b) The commissioner shall prescribe the format and content of the outline of coverage
             1512      required by Subsection (5)(a).
             1513          (c) For purposes of this section, "format" means style arrangements and overall
             1514      appearance, including such items as the size, color, and prominence of type and arrangement of
             1515      text and captions. The outline of coverage shall include:


             1516          (i) a description of the principal benefits and coverage provided in the policy;
             1517          (ii) a statement of the renewal provisions, including any reservation by the issuer of a
             1518      right to change premiums; and disclosure of the existence of any automatic renewal premium
             1519      increases based on the policyholder's age; and
             1520          (iii) a statement that the outline of coverage is a summary of the policy issued or
             1521      applied for and that the policy should be consulted to determine governing contractual
             1522      provisions.
             1523          (d) The commissioner may make rules for captions or notice if the commissioner finds
             1524      that the rules are:
             1525          (i) in the public interest; and
             1526          (ii) designed to inform prospective insureds that particular insurance coverages are not
             1527      Medicare supplement coverages, for all accident and health insurance policies sold to persons
             1528      eligible for Medicare, other than:
             1529          (A) a medicare supplement policy; or
             1530          (B) a disability income policy.
             1531          (e) The commissioner may prescribe by rule a standard form and the contents of an
             1532      informational brochure for persons eligible for Medicare, that is intended to improve the
             1533      buyer's ability to select the most appropriate coverage and improve the buyer's understanding of
             1534      Medicare. Except in the case of direct response insurance policies, the commissioner may
             1535      require by rule that the informational brochure be provided concurrently with delivery of the
             1536      outline of coverage to any prospective insureds eligible for Medicare. With respect to direct
             1537      response insurance policies, the commissioner may require by rule that the prescribed brochure
             1538      be provided upon request to any prospective insureds eligible for Medicare, but in no event
             1539      later than the time of policy delivery.
             1540          (f) The commissioner may adopt reasonable rules to govern the full and fair disclosure
             1541      of the information in connection with the replacement of accident and health policies,
             1542      subscriber contracts, or certificates by persons eligible for Medicare.
             1543          (6) Notwithstanding Subsection (1), Medicare supplement policies and certificates
             1544      shall have a notice prominently printed on the first page of the policy or certificate, or attached
             1545      to the front page, stating in substance that the applicant has the right to return the policy or
             1546      certificate within 30 days of its delivery and to have the premium refunded if, after examination


             1547      of the policy or certificate, the applicant is not satisfied for any reason. Any refund made
             1548      pursuant to this section shall be paid directly to the applicant by the issuer in a timely manner.
             1549          (7) Every issuer of Medicare supplement insurance policies or certificates in this state
             1550      shall provide a copy of any Medicare supplement advertisement intended for use in this state,
             1551      whether through written or broadcast medium, to the commissioner for review.
             1552          (8) The commissioner may adopt rules to conform Medicare and Medicare supplement
             1553      policies and certificates to the marketing requirements of federal law and regulation.
             1554          Section H. [ 7 ] 8 .H . Section 31A-22-1602 is amended to read:
             1555           31A-22-1602. Genetic testing restrictions.
             1556          [With] Except as provided under Section 31A-22-620 , with respect to [matters] a
             1557      matter related to genetic testing and private genetic information, an insurer shall comply with
             1558      [Section 26-45-104 and the other] the applicable provisions of Title 26, Chapter 45, Genetic
             1559      Testing Privacy Act, including Section 26-45-104 .
             1560          Section H. [ 8 ] 9 .H . Section 31A-23a-102 is amended to read:
             1561           31A-23a-102. Definitions.
             1562          As used in this chapter:
             1563          (1) "Bail bond producer" means a person who:
             1564          (a) is appointed by:
             1565          (i) a surety insurer that issues bail bonds; or
             1566          (ii) a bail bond surety company licensed under Chapter 35, Bail Bond Act;
             1567          (b) is designated to execute or countersign undertakings of bail in connection with a
             1568      judicial [proceedings] proceeding; and
             1569          (c) receives or is promised money or other things of value for engaging in an act
             1570      described in Subsection (1)(b).
             1571          (2) "Escrow" means a license subline of authority in conjunction with the title
             1572      insurance line of authority that allows a person to conduct escrow as defined in Section
             1573      31A-1-301 .
             1574          (3) "Home state" means [any] a state or territory of the United States or the District of
             1575      Columbia in which an insurance producer:
             1576          (a) maintains the insurance producer's principal:
             1577          (i) place of residence; or


             1578          (ii) place of business; and
             1579          (b) is licensed to act as an insurance producer.
             1580          (4) "Insurer" is as defined in Section 31A-1-301 , except that the following persons or
             1581      similar persons are not insurers for purposes of Part 7, Producer Controlled Insurers:
             1582          (a) [all] a risk retention [groups] group as defined in:
             1583          (i) the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499;
             1584          (ii) the Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.; and
             1585          (iii) Chapter 15, Part 2, Risk Retention Groups Act;
             1586          (b) [all] a residual market [pools and] pool;
             1587          (c) a joint underwriting [authorities or associations] authority or association; and
             1588          [(c) all] (d) a captive [insurers] insurer.
             1589          (5) "License" is defined in Section 31A-1-301 .
             1590          (6) (a) "Managing general agent" means [any] a person that:
             1591          (i) manages all or part of the insurance business of an insurer, including the
             1592      management of a separate division, department, or underwriting office;
             1593          (ii) acts as an agent for the insurer whether it is known as a managing general agent,
             1594      manager, or other similar term;
             1595          (iii) [with or without the authority, either separately or together with affiliates, directly
             1596      or indirectly] produces and underwrites an amount of gross direct written premium equal to, or
             1597      more than 5% of, the policyholder surplus as reported in the last annual statement of the insurer
             1598      in any one quarter or year[; and]:
             1599          (A) with or without the authority;
             1600          (B) separately or together with an affiliate; and
             1601          (C) directly or indirectly; and
             1602          (iv) (A) adjusts or pays claims in excess of an amount determined by the
             1603      commissioner; or
             1604          (B) negotiates reinsurance on behalf of the insurer.
             1605          (b) Notwithstanding Subsection (6)(a), the following persons may not be considered as
             1606      managing general agent for the purposes of this chapter:
             1607          (i) an employee of the insurer;
             1608          (ii) a United States manager of the United States branch of an alien insurer;


             1609          (iii) an underwriting manager that, pursuant to contract:
             1610          (A) manages all the insurance operations of the insurer;
             1611          (B) is under common control with the insurer;
             1612          (C) is subject to Chapter 16, Insurance Holding Companies; and
             1613          (D) is not compensated based on the volume of premiums written; and
             1614          (iv) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal
             1615      insurer or inter-insurance exchange under powers of attorney.
             1616          (7) "Negotiate" means the act of conferring directly with or offering advice directly to a
             1617      purchaser or prospective purchaser of a particular contract of insurance concerning [any of the]
             1618      a substantive [benefits, terms, or conditions] benefit, term, or condition of the contract if the
             1619      person engaged in that act:
             1620          (a) sells insurance; or
             1621          (b) obtains insurance from insurers for purchasers.
             1622          (8) "Reinsurance intermediary" means:
             1623          (a) a reinsurance intermediary-broker; or
             1624          (b) a reinsurance intermediary-manager.
             1625          (9) "Reinsurance intermediary-broker" means a person other than an officer or
             1626      employee of the ceding insurer, firm, association, or corporation who solicits, negotiates, or
             1627      places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority
             1628      or power to bind reinsurance on behalf of the insurer.
             1629          (10) (a) "Reinsurance intermediary-manager" means a person who:
             1630          (i) has authority to bind or who manages all or part of the assumed reinsurance
             1631      business of a reinsurer, including the management of a separate division, department, or
             1632      underwriting office; and
             1633          (ii) acts as an agent for the reinsurer whether the person is known as a reinsurance
             1634      intermediary-manager, manager, or other similar term.
             1635          (b) Notwithstanding Subsection (10)(a), the following persons may not be considered
             1636      reinsurance intermediary-managers for the purpose of this chapter with respect to the reinsurer:
             1637          (i) an employee of the reinsurer;
             1638          (ii) a United States manager of the United States branch of an alien reinsurer;
             1639          (iii) an underwriting manager that, pursuant to contract:


             1640          (A) manages all the reinsurance operations of the reinsurer;
             1641          (B) is under common control with the reinsurer;
             1642          (C) is subject to Chapter 16, Insurance Holding Companies; and
             1643          (D) is not compensated based on the volume of premiums written; and
             1644          (iv) the manager of a group, association, pool, or organization of insurers that:
             1645          (A) engage in joint underwriting or joint reinsurance; and
             1646          (B) are subject to examination by the insurance commissioner of the state in which the
             1647      manager's principal business office is located.
             1648          (11) "Search" means a license subline of authority in conjunction with the title
             1649      insurance line of authority that allows a person to issue title insurance commitments or policies
             1650      on behalf of a title insurer.
             1651          (12) "Sell" means to exchange a contract of insurance:
             1652          (a) by any means;
             1653          (b) for money or its equivalent; and
             1654          (c) on behalf of an insurance company.
             1655          (13) "Solicit" means:
             1656          (a) attempting to sell insurance;
             1657          (b) asking or urging a person to apply for:
             1658          (i) a particular kind of insurance; and
             1659          (ii) insurance from a particular insurance company;
             1660          (c) advertising insurance, including advertising for the purpose of obtaining leads for
             1661      the sale of insurance; or
             1662          (d) holding oneself out as being in the insurance business.
             1663          (14) "Terminate" means:
             1664          (a) the cancellation of the relationship between:
             1665          [(i) an insurance producer; and]
             1666          [(ii) a particular insurer; or]
             1667          (i) an individual licensee or agency licensee and a particular insurer; or
             1668          (ii) an individual licensee and a particular agency licensee; or
             1669          (b) the termination of [the producer's]:
             1670          (i) an individual licensee's or agency licensee's authority to transact insurance on behalf


             1671      of a particular insurance company[.]; or
             1672          (ii) an individual licensee's authority to transact insurance on behalf of a particular
             1673      agency licensee.
             1674          (15) "Title marketing representative" means a person who:
             1675          (a) represents a title insurer in soliciting, requesting, or negotiating the placing of:
             1676          (i) title insurance; or
             1677          (ii) escrow services; and
             1678          (b) does not have a search or escrow license as provided in Section 31A-23a-106 .
             1679          (16) "Uniform application" means the version of the National Association of Insurance
             1680      Commissioner's uniform application for resident and nonresident producer licensing at the time
             1681      the application is filed.
             1682          (17) "Uniform business entity application" means the version of the National
             1683      Association of Insurance Commissioner's uniform business entity application for resident and
             1684      nonresident business entities at the time the application is filed.
             1685          Section H. [ 9 ] 10 .H . Section 31A-23a-104 is amended to read:
             1686           31A-23a-104. Application for individual license -- Application for agency license.
             1687          (1) This section applies to an initial or renewal license as a:
             1688          (a) producer;
             1689          (b) limited line producer;
             1690          (c) customer service representative;
             1691          (d) consultant;
             1692          (e) managing general agent; or
             1693          (f) reinsurance intermediary.
             1694          (2) (a) Subject to Subsection (2)(b), an application for an initial or renewal individual
             1695      license shall be:
             1696          (i) made to the commissioner on forms and in a manner the commissioner prescribes;
             1697      and
             1698          (ii) accompanied by a license fee that is not refunded if the application:
             1699          (A) is denied; or
             1700          (B) if incomplete, is never completed by the applicant.
             1701          (b) An application described in this Subsection (2) shall provide:


             1702          (i) information about the applicant's identity;
             1703          (ii) the applicant's Social Security number;
             1704          (iii) the applicant's personal history, experience, education, and business record;
             1705          (iv) whether the applicant is 18 years of age or older;
             1706          (v) whether the applicant has committed an act that is a ground for denial, suspension,
             1707      or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ; and
             1708          (vi) any other information the commissioner reasonably requires.
             1709          (3) The commissioner may require [any documents] a document reasonably necessary
             1710      to verify the information contained in an application filed under this section.
             1711          (4) An applicant's Social Security number contained in an application filed under this
             1712      section is a private record under Section 63G-2-302 .
             1713          (5) (a) Subject to Subsection (5)(b), an application for an initial or renewal agency
             1714      license shall be:
             1715          (i) made to the commissioner on forms and in a manner the commissioner prescribes;
             1716      and
             1717          (ii) accompanied by a license fee that is not refunded if the application:
             1718          (A) is denied; or
             1719          (B) if incomplete, is never completed by the applicant.
             1720          (b) An application described in Subsection (5)(a) shall provide:
             1721          (i) information about the applicant's identity;
             1722          (ii) the applicant's federal employer identification number;
             1723          (iii) the designated responsible licensed producer;
             1724          (iv) the identity of all owners, partners, officers, and directors;
             1725          (v) whether the applicant has committed an act that is a ground for denial, suspension,
             1726      or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ; and
             1727          (vi) any other information the commissioner reasonably requires.
             1728          Section H. [ 10 ] 11 .H . Section 31A-23a-105 is amended to read:
             1729           31A-23a-105. General requirements for individual and agency license issuance
             1730      and renewal.
             1731          (1) (a) The commissioner shall issue or renew a license to a person described in
             1732      Subsection (1)(b) to act as:


             1733          (i) a producer[,];
             1734          (ii) a limited line producer[,];
             1735          (iii) a customer service representative[,];
             1736          (iv) a consultant[,];
             1737          (v) a managing general agent[,]; or
             1738          (vi) a reinsurance intermediary [to any person].
             1739          (b) The commissioner shall issue or renew a license under Subsection (1)(a) to a
             1740      person who, as to the license type and line of authority classification applied for under Section
             1741      31A-23a-106 :
             1742          (a) satisfies the application requirements under Section 31A-23a-104 ;
             1743          (b) satisfies the character requirements under Section 31A-23a-107 ;
             1744          (c) satisfies any applicable continuing education requirements under Section
             1745      31A-23a-202 ;
             1746          (d) satisfies any applicable examination requirements under Section 31A-23a-108 ;
             1747          (e) satisfies any applicable training period requirements under Section 31A-23a-203 ;
             1748          (f) has not committed an act that is a ground for denial, suspension, or revocation as
             1749      provided in Section 31A-23a-111 ;
             1750          [(f)] (g) if a nonresident:
             1751          (i) complies with Section 31A-23a-109 ; and
             1752          (ii) holds an active similar license in that person's state of residence;
             1753          [(g)] (h) if an applicant for a title insurance producer license, satisfies the requirements
             1754      of Sections 31A-23a-203 and 31A-23a-204 ;
             1755          [(h)] (i) if an applicant for a license to act as a viatical settlement provider or viatical
             1756      settlement producer, satisfies the requirements of Section 31A-23a-117 ; and
             1757          [(i)] (j) pays the applicable fees under Section 31A-3-103 .
             1758          (2) (a) This Subsection (2) applies to the following persons:
             1759          (i) an applicant for a pending:
             1760          (A) individual or agency producer license;
             1761          (B) limited line producer license;
             1762          (C) customer service representative license;
             1763          (D) consultant license;


             1764          (E) managing general agent license; or
             1765          (F) reinsurance intermediary license; or
             1766          (ii) a licensed:
             1767          (A) individual or agency producer;
             1768          (B) limited line producer;
             1769          (C) customer service representative;
             1770          (D) consultant;
             1771          (E) managing general agent; or
             1772          (F) reinsurance intermediary.
             1773          (b) A person described in Subsection (2)(a) shall report to the commissioner:
             1774          (i) [any] an administrative action taken against the person:
             1775          (A) in another jurisdiction; or
             1776          (B) by another regulatory agency in this state; and
             1777          (ii) [any] a criminal prosecution taken against the person in any jurisdiction.
             1778          (c) The report required by Subsection (2)(b) shall:
             1779          (i) be filed:
             1780          (A) at the time the person files the application for an individual or agency license; and
             1781          (B) for an action or prosecution that occurs on or after the day on which the person
             1782      files the application:
             1783          (I) for an administrative action, within 30 days of the final disposition of the
             1784      administrative action; or
             1785          (II) for a criminal prosecution, within 30 days of the initial appearance before a court;
             1786      and
             1787          (ii) include a copy of the complaint or other relevant legal documents related to the
             1788      action or prosecution described in Subsection (2)(b).
             1789          (3) (a) The department may require a person applying for a license or for consent to
             1790      engage in the business of insurance to submit to a criminal background check as a condition of
             1791      receiving a license or consent.
             1792          (b) A person, if required to submit to a criminal background check under Subsection
             1793      (3)(a), shall:
             1794          (i) submit a fingerprint card in a form acceptable to the department; and


             1795          (ii) consent to a fingerprint background check by:
             1796          (A) the Utah Bureau of Criminal Identification; and
             1797          (B) the Federal Bureau of Investigation.
             1798          (c) For a person who submits a fingerprint card and consents to a fingerprint
             1799      background check under Subsection (3)(b), the department may request:
             1800          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             1801      2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             1802          (ii) complete Federal Bureau of Investigation criminal background checks through the
             1803      national criminal history system.
             1804          (d) Information obtained by the department from the review of criminal history records
             1805      received under this Subsection (3) shall be used by the department for the purposes of:
             1806          (i) determining if a person satisfies the character requirements under Section
             1807      31A-23a-107 for issuance or renewal of a license;
             1808          (ii) determining if a person has failed to maintain the character requirements under
             1809      Section 31A-23a-107 ; and
             1810          (iii) preventing [persons] a person who [violate] violates the federal Violent Crime
             1811      Control and Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in
             1812      the business of insurance in the state.
             1813          (e) If the department requests the criminal background information, the department
             1814      shall:
             1815          (i) pay to the Department of Public Safety the costs incurred by the Department of
             1816      Public Safety in providing the department criminal background information under Subsection
             1817      (3)(c)(i);
             1818          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             1819      of Investigation in providing the department criminal background information under
             1820      Subsection (3)(c)(ii); and
             1821          (iii) charge the person applying for a license[, for renewal of a license,] or for consent
             1822      to engage in the business of insurance a fee equal to the aggregate of Subsections (3)(e)(i) and
             1823      (ii).
             1824          (4) To become a resident licensee in accordance with Section 31A-23a-104 and this
             1825      section, a person licensed as one of the following in another state who moves to this state shall


             1826      apply within 90 days of establishing legal residence in this state:
             1827          (a) insurance producer;
             1828          (b) limited line producer;
             1829          (c) customer service representative;
             1830          (d) consultant;
             1831          (e) managing general agent; or
             1832          (f) reinsurance intermediary.
             1833          (5) (a) The commissioner may deny a license application for a license listed in
             1834      Subsection (5)(b) if the person applying for the license, as to the license type and line of
             1835      authority classification applied for under Section 31A-23a-106 :
             1836          (i) fails to satisfy the requirements as set forth in this section; or
             1837          (ii) commits an act that is grounds for denial, suspension, or revocation as set forth in
             1838      Section 31A-23a-111 .
             1839          (b) This Subsection (5) applies to the following licenses:
             1840          (i) producer;
             1841          (ii) limited line producer;
             1842          (iii) customer service representative;
             1843          (iv) consultant;
             1844          (v) managing general agent; or
             1845          (vi) reinsurance intermediary.
             1846          [(5)] (6) Notwithstanding the other provisions of this section, the commissioner may:
             1847          (a) issue a license to an applicant for a license for a title insurance line of authority only
             1848      with the concurrence of the Title and Escrow Commission; and
             1849          (b) renew a license for a title insurance line of authority only with the concurrence of
             1850      the Title and Escrow Commission.
             1851          Section H. [ 11 ] 12 .H . Section 31A-23a-106 is amended to read:
             1852           31A-23a-106. License types.
             1853          (1) (a) A resident or nonresident license issued under this chapter shall be issued under
             1854      the license types described under Subsection (2).
             1855          (b) [License types] A license type and [lines] a line of authority pertaining to [each] a
             1856      license type describe the type of licensee and the lines of business that a licensee may sell,


             1857      solicit, or negotiate. [License types are] A license type is intended to describe the matters to be
             1858      considered under any education, examination, and training required of a license [applicants]
             1859      applicant under Sections 31A-23a-108 , 31A-23a-202 , and 31A-23a-203 .
             1860          (2) (a) A producer license type includes the following lines of authority:
             1861          (i) life insurance, including a nonvariable [contracts] contract;
             1862          (ii) variable contracts, including variable life and annuity, if the producer has the life
             1863      insurance line of authority;
             1864          (iii) accident and health insurance, including [contracts] a contract issued to
             1865      [policyholders] a policyholder under Chapter 7, Nonprofit Health Service Insurance
             1866      Corporations, or Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1867          (iv) property insurance;
             1868          (v) casualty insurance, including a surety [and] or other [bonds] bond;
             1869          (vi) title insurance under one or more of the following categories:
             1870          (A) search, including authority to act as a title marketing representative;
             1871          (B) escrow, including authority to act as a title marketing representative; and
             1872          [(C) search and escrow, including authority to act as a title marketing representative;
             1873      and]
             1874          [(D)] (C) title marketing representative only;
             1875          [(vii) workers' compensation insurance;]
             1876          [(viii)] (vii) personal lines insurance; and
             1877          [(ix)] (viii) surplus lines, if the producer has the property or casualty or both lines of
             1878      authority.
             1879          (b) A limited line producer license type includes the following limited lines of
             1880      authority:
             1881          (i) limited line credit insurance;
             1882          (ii) travel insurance;
             1883          (iii) motor club insurance;
             1884          (iv) car rental related insurance;
             1885          (v) legal expense insurance; [and]
             1886          (vi) crop insurance;
             1887          (vii) self-service storage insurance; and


             1888          [(vi)] (viii) bail bond producer.
             1889          (c) A customer service representative license type includes the following lines of
             1890      authority, if held by the customer service representative's employer producer:
             1891          (i) life insurance, including a nonvariable [contracts] contract;
             1892          (ii) accident and health insurance, including [contracts] a contract issued to
             1893      [policyholders] a policyholder under Chapter 7, Nonprofit Health Service Insurance
             1894      Corporations, or Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1895          (iii) property insurance;
             1896          (iv) casualty insurance, including a surety [and] or other [bonds;] bond;
             1897          [(v) workers' compensation insurance;]
             1898          [(vi)] (v) personal lines insurance; and
             1899          [(vii)] (vi) surplus lines, if the employer producer has the property or casualty or both
             1900      lines of authority.
             1901          (d) A consultant license type includes the following lines of authority:
             1902          (i) life insurance, including a nonvariable [contracts] contract;
             1903          (ii) variable contracts, including variable life and annuity, if the consultant has the life
             1904      insurance line of authority;
             1905          (iii) accident and health insurance, including [contracts] a contract issued to
             1906      [policyholders] a policyholder under Chapter 7, Nonprofit Health Service Insurance
             1907      Corporations, or Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1908          (iv) property insurance;
             1909          (v) casualty insurance, including a surety [and] or other [bonds;] bond; and
             1910          [(vi) workers' compensation insurance; and]
             1911          [(vii)] (vi) personal lines insurance.
             1912          (e) A managing general agent license type includes the following lines of authority:
             1913          (i) life insurance, including a nonvariable [contracts] contract;
             1914          (ii) variable contracts, including variable life and annuity, if the managing general
             1915      agent has the life insurance line of authority;
             1916          (iii) accident and health insurance, including [contracts] a contract issued to
             1917      [policyholders] a policyholder under Chapter 7, Nonprofit Health Service Insurance
             1918      Corporations, or Chapter 8, Health Maintenance Organizations and Limited Health Plans;


             1919          (iv) property insurance;
             1920          (v) casualty insurance, including a surety [and] or other [bonds;] bond; and
             1921          [(vi) workers' compensation insurance; and]
             1922          [(vii)] (vi) personal lines insurance.
             1923          (f) A reinsurance intermediary license type includes the following lines of authority:
             1924          (i) life insurance, including a nonvariable [contracts] contract;
             1925          (ii) variable contracts, including variable life and annuity, if the reinsurance
             1926      intermediary has the life insurance line of authority;
             1927          (iii) accident and health insurance, including [contracts] a contract issued to
             1928      [policyholders] a policyholder under Chapter 7, Nonprofit Health Service Insurance
             1929      Corporations, or Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1930          (iv) property insurance;
             1931          (v) casualty insurance, including a surety [and] or other [bonds;] bond; and
             1932          [(vi) workers' compensation insurance; and]
             1933          [(vii)] (vi) personal lines insurance.
             1934          (g) A holder of licenses under Subsections (2)(a), (d), (e), and (f) has all qualifications
             1935      necessary to act as a holder of a license under Subsections (2)(b) and (c).
             1936          (3) (a) The commissioner may by rule recognize other producer, limited line producer,
             1937      customer service representative, consultant, managing general agent, or reinsurance
             1938      intermediary lines of authority as to kinds of insurance not listed under Subsections (2)(a)
             1939      through (f).
             1940          (b) Notwithstanding Subsection (3)(a), for purposes of title insurance the Title and
             1941      Escrow Commission may by rule, with the concurrence of the commissioner and subject to
             1942      Section 31A-2-404 , recognize other categories for a title insurance producer line of authority
             1943      not listed under Subsection (2)(a)(vi).
             1944          (4) The variable contracts, including variable life and annuity line of authority requires:
             1945          (a) licensure as a registered agent or broker by the National Association of Securities
             1946      Dealers; and
             1947          (b) current registration with a securities [broker/dealer] broker-dealer.
             1948          (5) A surplus lines producer is a producer who has a surplus lines line of authority.
             1949          Section H. [ 12 ] 13 .H . Section 31A-23a-111 is amended to read:


             1950           31A-23a-111. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             1951      terminating a license -- Rulemaking for renewal or reinstatement.
             1952          (1) A license type issued under this chapter remains in force until:
             1953          (a) revoked or suspended under Subsection (5);
             1954          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             1955      administrative action;
             1956          (c) the licensee dies or is adjudicated incompetent as defined under:
             1957          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             1958          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             1959      Minors;
             1960          (d) lapsed under Section 31A-23a-113 ; or
             1961          (e) voluntarily surrendered.
             1962          (2) The following may be reinstated within one year after the day on which the license
             1963      is [inactivated] no longer in force:
             1964          (a) a lapsed license; or
             1965          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             1966      not be reinstated after the license period in which the license is voluntarily surrendered.
             1967          (3) Unless otherwise stated in the written agreement for the voluntary surrender of a
             1968      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             1969      department from pursuing additional disciplinary or other action authorized under:
             1970          (a) this title; or
             1971          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             1972      Administrative Rulemaking Act.
             1973          (4) A line of authority issued under this chapter remains in force until:
             1974          (a) the qualifications pertaining to a line of authority are no longer met by the licensee;
             1975      or
             1976          (b) the supporting license type:
             1977          (i) is revoked or suspended under Subsection (5); [or]
             1978          (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
             1979      administrative action[.];
             1980          (iii) the licensee dies or is adjudicated incompetent as defined under:


             1981          (A) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             1982          (B) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             1983      Minors;
             1984          (iv) lapsed under Section 31A-23a-113 ; or
             1985          (v) voluntarily surrendered.
             1986          (5) (a) If the commissioner makes a finding under Subsection (5)(b), [after] as part of
             1987      an adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             1988      commissioner may:
             1989          (i) revoke:
             1990          (A) a license; or
             1991          (B) a line of authority;
             1992          (ii) suspend for a specified period of 12 months or less:
             1993          (A) a license; or
             1994          (B) a line of authority; [or]
             1995          (iii) limit in whole or in part:
             1996          (A) a license; or
             1997          (B) a line of authority[.]; or
             1998          (iv) deny a license application.
             1999          (b) The commissioner may take an action described in Subsection (5)(a) if the
             2000      commissioner finds that the licensee:
             2001          (i) is unqualified for a license or line of authority under [Sections] Section
             2002      31A-23a-104 [and], 31A-23a-105 , or 31A-23a-107 ;
             2003          (ii) violates:
             2004          (A) an insurance statute;
             2005          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             2006          (C) an order that is valid under Subsection 31A-2-201 (4);
             2007          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
             2008      delinquency proceedings in any state;
             2009          (iv) fails to pay [any] a final judgment rendered against the person in this state within
             2010      60 days after the day on which the judgment became final;
             2011          (v) fails to meet the same good faith obligations in claims settlement that is required of


             2012      admitted insurers;
             2013          (vi) is affiliated with and under the same general management or interlocking
             2014      directorate or ownership as another insurance producer that transacts business in this state
             2015      without a license;
             2016          (vii) refuses:
             2017          (A) to be examined; or
             2018          (B) to produce its accounts, records, and files for examination;
             2019          (viii) has an officer who refuses to:
             2020          (A) give information with respect to the insurance producer's affairs; or
             2021          (B) perform any other legal obligation as to an examination;
             2022          (ix) provides information in the license application that is:
             2023          (A) incorrect;
             2024          (B) misleading;
             2025          (C) incomplete; or
             2026          (D) materially untrue;
             2027          (x) violates an insurance law, valid rule, or valid order of another state's insurance
             2028      department;
             2029          (xi) obtains or attempts to obtain a license through misrepresentation or fraud;
             2030          (xii) improperly withholds, misappropriates, or converts [any] monies or properties
             2031      received in the course of doing insurance business;
             2032          (xiii) intentionally misrepresents the terms of an actual or proposed:
             2033          (A) insurance contract;
             2034          (B) application for insurance; or
             2035          (C) viatical settlement;
             2036          (xiv) is convicted of a felony;
             2037          (xv) admits or is found to have committed an insurance unfair trade practice or fraud;
             2038          (xvi) in the conduct of business in this state or elsewhere:
             2039          (A) uses fraudulent, coercive, or dishonest practices; or
             2040          (B) demonstrates incompetence, untrustworthiness, or financial irresponsibility;
             2041          (xvii) has an insurance license, or its equivalent, denied, suspended, or revoked in
             2042      another state, province, district, or territory;


             2043          (xviii) forges another's name to:
             2044          (A) an application for insurance; or
             2045          (B) a document related to an insurance transaction;
             2046          (xix) improperly uses notes or another reference material to complete an examination
             2047      for an insurance license;
             2048          (xx) knowingly accepts insurance business from an individual who is not licensed;
             2049          (xxi) fails to comply with an administrative or court order imposing a child support
             2050      obligation;
             2051          (xxii) fails to:
             2052          (A) pay state income tax; or
             2053          (B) comply with an administrative or court order directing payment of state income
             2054      tax;
             2055          (xxiii) violates or permits others to violate the federal Violent Crime Control and Law
             2056      Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034; or
             2057          (xxiv) engages in a method or practice in the conduct of business that endangers the
             2058      legitimate interests of customers and the public.
             2059          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             2060      and any [natural person named on] individual designated under the license are considered to be
             2061      the holders of the license.
             2062          (d) If [a natural person named on] an individual designated under the agency license
             2063      commits an act or fails to perform a duty that is a ground for suspending, revoking, or limiting
             2064      the [natural person's] individual's license, the commissioner may suspend, revoke, or limit the
             2065      license of:
             2066          (i) the [natural person] individual;
             2067          (ii) the agency, if the agency:
             2068          (A) is reckless or negligent in its supervision of the [natural person] individual; or
             2069          (B) knowingly participates in the act or failure to act that is the ground for suspending,
             2070      revoking, or limiting the license; or
             2071          (iii) (A) the [natural person] individual; and
             2072          (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
             2073          (6) A licensee under this chapter is subject to the penalties for acting as a licensee


             2074      without a license if:
             2075          (a) the licensee's license is:
             2076          (i) revoked;
             2077          (ii) suspended;
             2078          (iii) limited;
             2079          (iv) surrendered in lieu of administrative action;
             2080          (v) lapsed; or
             2081          (vi) voluntarily surrendered; and
             2082          (b) the licensee:
             2083          (i) continues to act as a licensee; or
             2084          (ii) violates the terms of the license limitation.
             2085          (7) A licensee under this chapter shall immediately report to the commissioner:
             2086          (a) a revocation, suspension, or limitation of the person's license in another state, the
             2087      District of Columbia, or a territory of the United States;
             2088          (b) the imposition of a disciplinary sanction imposed on that person by another state,
             2089      the District of Columbia, or a territory of the United States; or
             2090          (c) a judgment or injunction entered against that person on the basis of conduct
             2091      involving:
             2092          (i) fraud;
             2093          (ii) deceit;
             2094          (iii) misrepresentation; or
             2095          (iv) a violation of an insurance law or rule.
             2096          (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
             2097      license in lieu of administrative action may specify a time, not to exceed five years, within
             2098      which the former licensee may not apply for a new license.
             2099          (b) If no time is specified in [the] an order or agreement described in Subsection (8)(a),
             2100      the former licensee may not apply for a new license for five years from the day on which the
             2101      order or agreement is made without the express approval by the commissioner.
             2102          (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
             2103      a license issued under this part if so ordered by a court.
             2104          (10) The commissioner shall by rule prescribe the license renewal and reinstatement


             2105      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2106          Section H. [ 13 ] 14 .H . Section 31A-23a-113 is amended to read:
             2107           31A-23a-113. License lapse and voluntary surrender.
             2108          (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
             2109          (i) pay when due a fee under Section 31A-3-103 ;
             2110          (ii) complete continuing education requirements under Section 31A-23a-202 before
             2111      submitting the license renewal application;
             2112          (iii) submit a completed renewal application as required by Section 31A-23a-104 ;
             2113          (iv) submit additional documentation required to complete the licensing process as
             2114      related to a specific license type or line of authority; or
             2115          (v) maintain an active license in a resident state if the licensee is a nonresident
             2116      licensee.
             2117          (b) (i) A licensee whose license lapses due to the following may request an action
             2118      described in Subsection (1)(b)(ii):
             2119          (A) military service;
             2120          (B) voluntary service for a period of time designated by the person for whom the
             2121      licensee provides voluntary service; or
             2122          (C) some other extenuating circumstances, such as long-term medical disability.
             2123          (ii) A licensee described in Subsection (1)(b)(i) may request:
             2124          (A) reinstatement of the license no later than one year after the day on which the
             2125      license lapses; and
             2126          (B) waiver of any of the following imposed for failure to comply with renewal
             2127      procedures:
             2128          (I) an examination requirement;
             2129          (II) reinstatement fees set under Section 31A-3-103 ;
             2130          (III) continuing education requirements; or
             2131          (IV) other sanction imposed for failure to comply with renewal procedures.
             2132          (2) If a license [type or line of authority] issued under this chapter is voluntarily
             2133      surrendered, the license or line of authority may be reinstated [within one year]:
             2134          (a) during the license period in which the license is voluntarily surrendered; and
             2135          (b) no later than one year after the day on which the license [or line of authority is


             2136      inactivated] is voluntarily surrendered.
             2137          Section H. [ 14 ] 15 .H . Section 31A-23a-115 is amended to read:
             2138           31A-23a-115. Appointment of individual and agency insurance producer, limited
             2139      line producer, or managing general agent -- Reports and lists.
             2140          (1) (a) An insurer shall appoint [a natural person] an individual or agency [that has an]
             2141      with whom it has a contract as an insurance producer, limited line producer, or managing
             2142      general agent [license] to act [as an insurance producer, limited line producer, or managing
             2143      general agent on the insurer's behalf prior to any producer, limited line producer, or managing
             2144      general agent doing] on the insurer's behalf in order for the licensee to do business for the
             2145      insurer in this state.
             2146          (b) An insurer shall report to the commissioner, at intervals and in the form the
             2147      commissioner establishes by rule:
             2148          (i) [all] a new [appointments] appointment; and
             2149          [(ii) all terminations of appointments.]
             2150          (ii) a termination of appointment.
             2151          (2) (a) (i) An insurer shall report to the commissioner the cause of termination of an
             2152      appointment[.] if:
             2153          (A) the reason for termination is a reason described in Subsection 31A-23a-111 (5)(b);
             2154      or
             2155          (B) the insurer has knowledge that the individual or agency licensee is found to have
             2156      engaged in an activity described in Subsection 31A-23a-111 (5)(b) by:
             2157          (I) a court;
             2158          (II) a government body; or
             2159          (III) a self-regulatory organization, which the commissioner may define by rule made
             2160      in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2161          (ii) The information provided to the commissioner under this Subsection (2) is a
             2162      private record under Title 63G, Chapter 2, Government Records Access and Management Act.
             2163          (b) An insurer is immune from civil action, civil penalty, or damages if the insurer
             2164      complies in good faith with this Subsection (2) in reporting to the commissioner the cause of
             2165      termination of an appointment.
             2166          (c) Notwithstanding any other provision in this section, an insurer is not immune from


             2167      any action or resulting penalty imposed on the reporting insurer as a result of proceedings
             2168      brought by or on behalf of the department if the action is based on evidence other than the
             2169      report submitted in compliance with this Subsection (2).
             2170          (3) If an insurer appoints an agency, the insurer need not appoint, report, or pay
             2171      appointment reporting fees for [natural persons] an individual designated on the agency's
             2172      license under Section 31A-23a-302 .
             2173          (4) If an insurer lists a licensee in a report submitted under Subsection (2), there is a
             2174      rebuttable presumption that in placing a risk with the insurer the appointed licensee or any of
             2175      the licensee's licensed employees [acted] act on behalf of the insurer.
             2176          Section H. [ 15 ] 16 .H . Section 31A-23a-203 is amended to read:
             2177           31A-23a-203. Training period requirements.
             2178          (1) A producer is eligible to add the surplus lines of authority to the person's producer's
             2179      license if the producer:
             2180          (a) has passed the applicable examination;
             2181          (b) has been a producer with property and casualty lines of authority for at least three
             2182      years during the four years immediately preceding the date of application; and
             2183          (c) has paid the applicable fee under Section 31A-3-103 .
             2184          (2) A person is eligible to become a consultant only if the person has acted in a
             2185      capacity that would provide the person with preparation to act as an insurance consultant for a
             2186      period aggregating not less than three years during the four years immediately preceding the
             2187      date of application.
             2188          (3) The training periods required under this section apply only to [natural persons] an
             2189      individual applying for [licenses] a license under this chapter.
             2190          Section H. [ 16 ] 17 .H . Section 31A-23a-204 is amended to read:
             2191           31A-23a-204. Special requirements for title insurance producers and agencies.
             2192          A title insurance producer, including an agency, shall be licensed in accordance with
             2193      this chapter, with the additional requirements listed in this section.
             2194          (1) (a) A person that receives a new license under this title [on or after July 1, 2007] as
             2195      a title insurance agency, shall at the time of licensure be owned or managed by one or more
             2196      [natural persons] individuals who are licensed [with the following lines of authority] for at least
             2197      three of the five years immediately proceeding the date on which the title insurance agency


             2198      applies for a license[: (i)] with both [a]:
             2199          [(A)] (i) a search line of authority; and
             2200          [(B)] (ii) an escrow line of authority[; or].
             2201          [(ii) a search and escrow line of authority.]
             2202          (b) A title insurance agency subject to Subsection (1)(a) may comply with Subsection
             2203      (1)(a) by having the title insurance agency owned or managed by:
             2204          (i) one or more [natural persons] individuals who are licensed with the search line of
             2205      authority for the time period provided in Subsection (1)(a); and
             2206          (ii) one or more [natural persons] individuals who are licensed with the escrow line of
             2207      authority for the time period provided in Subsection (1)(a).
             2208          (c) The Title and Escrow Commission may by rule, subject to Section 31A-2-404 ,
             2209      exempt an attorney with real estate experience from the experience requirements in Subsection
             2210      (1)(a).
             2211          (2) (a) A title insurance agency or producer appointed by an insurer shall maintain:
             2212          (i) a fidelity bond;
             2213          (ii) a professional liability insurance policy; or
             2214          (iii) a financial protection:
             2215          (A) equivalent to that described in Subsection (2)(a)(i) or (ii); and
             2216          (B) that the commissioner considers adequate.
             2217          (b) The bond, insurance, or financial protection required by this Subsection (2):
             2218          (i) shall be supplied under a contract approved by the commissioner to provide
             2219      protection against the improper performance of any service in conjunction with the issuance of
             2220      a contract or policy of title insurance; and
             2221          (ii) be in a face amount no less than $50,000.
             2222          (c) The Title and Escrow Commission may by rule, subject to Section 31A-2-404 ,
             2223      exempt title insurance producers from the requirements of this Subsection (2) upon a finding
             2224      that, and only so long as, the required policy or bond is generally unavailable at reasonable
             2225      rates.
             2226          (3) [(a)] A title insurance agency or producer appointed by an insurer [shall] may
             2227      maintain a reserve fund to the extent [required by this Subsection (3)] monies were deposited
             2228      before July 1, 2008, and not withdrawn to the income of the title insurance producer.


             2229          [(b) On or after July 1, 2008, a title insurance agency or producer may not deposit
             2230      monies to a reserve fund required by this Subsection (3).]
             2231          [(c) On or after July 1, 2008, a title insurance agency or producer for the portion of the
             2232      assets held in the reserve fund over the preceding ten years may:]
             2233          [(i) withdraw from the reserve fund in accordance with a time schedule adopted by the
             2234      title insurance agency or producer that allows:]
             2235          [(A) all the monies to be withdrawn in one year; or]
             2236          [(B) the monies to be withdrawn in equal partial withdrawals of principal over a time
             2237      period of two years, three years, four years, five years, or ten years; and]
             2238          [(ii) restore the amounts withdrawn to the income of the title insurance producer.]
             2239          [(d) The title insurance producer may withdraw interest from the reserve fund related to
             2240      the principal amount as it accrues.]
             2241          [(e) (i) A disbursement may not be made from the reserve fund except as provided in
             2242      Subsection (3)(c) unless the title insurance producer ceases doing business as a result of:]
             2243          [(A) a sale of assets;]
             2244          [(B) a merger of the producer with another producer;]
             2245          [(C) a termination of the producer's license;]
             2246          [(D) an insolvency; or]
             2247          [(E) any cessation of business by the producer.]
             2248          [(ii) A disbursement from the reserve fund may be made only to settle a claim arising
             2249      from the improper performance of the title insurance producer in providing services defined in
             2250      Section 31A-23a-406 .]
             2251          [(iii) The commissioner shall be notified ten days before any disbursement from the
             2252      reserve fund.]
             2253          [(iv) The notice required by this Subsection (3)(e) shall contain:]
             2254          [(A) the amount of claim;]
             2255          [(B) the nature of the claim; and]
             2256          [(C) the name of the payee.]
             2257          [(f) (i) Except as provided in Subsection (3)(c), the reserve fund shall be maintained by
             2258      the title insurance producer or the title insurance producer's representative for a period of two
             2259      years after the day on which the title insurance producer ceases doing business.]


             2260          [(ii) Any assets remaining in the reserve fund at the end of the two years specified in
             2261      Subsection (3)(c)(i) may be withdrawn and restored to the former title insurance producer.]
             2262          (4) [Any] An examination for licensure shall include questions regarding the search
             2263      and examination of title to real property.
             2264          (5) A title insurance producer may not perform the functions of escrow unless the title
             2265      insurance producer has been examined on the fiduciary duties and procedures involved in those
             2266      functions.
             2267          (6) The Title and Escrow Commission shall adopt rules, subject to Section 31A-2-404 ,
             2268      after consulting with the department and the department's test administrator, establishing an
             2269      examination for a license that will satisfy this section.
             2270          (7) A license may be issued to a title insurance producer who has qualified:
             2271          (a) to perform only searches and examinations of title as specified in Subsection (4);
             2272          (b) to handle only escrow arrangements as specified in Subsection (5); or
             2273          (c) to act as a title marketing representative.
             2274          (8) (a) A person licensed to practice law in Utah is exempt from the requirements of
             2275      Subsections (2) and (3) if that person issues 12 or less policies in any 12-month period.
             2276          (b) In determining the number of policies issued by a person licensed to practice law in
             2277      Utah for purposes of Subsection (8)(a), if the person licensed to practice law in Utah issues a
             2278      policy to more than one party to the same closing, the person is considered to have issued only
             2279      one policy.
             2280          (9) A person licensed to practice law in Utah, whether exempt under Subsection (8) or
             2281      not, shall maintain a trust account separate from a law firm trust account for all title and real
             2282      estate escrow transactions.
             2283          Section H. [ 17 ] 18 .H . Section 31A-23a-302 is amended to read:
             2284           31A-23a-302. Agency designations.
             2285          (1) An agency shall designate [a natural person] an individual that has [a] an individual
             2286      producer, limited line producer, customer service representative, consultant, managing general
             2287      agent, or reinsurance intermediary license to act on [its] the agency's behalf [prior to] in order
             2288      for the licensee [doing] to do business for the agency in this state.
             2289          (2) An agency shall report to the commissioner, at intervals and in the form the
             2290      commissioner establishes by rule:


             2291          (a) [all] a new [designations] designation; and
             2292          (b) [all] a terminated [designations] designation.
             2293          (3) (a) An agency licensed under this chapter shall report to the commissioner the
             2294      cause of termination of a designation[.] if:
             2295          (A) the reason for termination is a reason described in Subsection 31A-23a-111 (5)(b);
             2296      or
             2297          (B) the agency has knowledge that the individual licensee is found to have engaged in
             2298      an activity described in Subsection 31A-23a-111 (5)(b) by:
             2299          (I) a court;
             2300          (II) a government body; or
             2301          (III) a self-regulatory organization, which the commissioner may define by rule made
             2302      in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2303          (b) The information provided the commissioner under Subsection (3)(a) is a private
             2304      record under Title 63G, Chapter 2, Government Records Access and Management Act.
             2305          (c) An agency is immune from civil action, civil penalty, or damages if the agency
             2306      complies in good faith with this Subsection (3) in reporting to the commissioner the cause of
             2307      termination of a designation.
             2308          (d) Notwithstanding any other provision in this section, an agency is not immune from
             2309      [any] an action or resulting penalty imposed on the reporting agency as a result of proceedings
             2310      brought by or on behalf of the department if the action is based on evidence other than the
             2311      report submitted in compliance with this Subsection (3).
             2312          (4) An agency licensed under this chapter may act in [the capacities] a capacity for
             2313      which it is licensed only through [natural persons who are] an individual who is licensed under
             2314      this chapter to act in the same [capacities] capacity.
             2315          (5) An agency licensed under this chapter shall designate and report to the
             2316      commissioner [by rule] in accordance with any rule made by the commissioner the name of [at
             2317      least one natural person] the designated responsible licensed individual who has authority to act
             2318      on behalf of the agency in all matters pertaining to compliance with this title and orders of the
             2319      commissioner.
             2320          (6) If an agency designates a licensee in reports submitted under Subsection (2) or (5),
             2321      there is a rebuttable presumption that the designated licensee [acted] acts on behalf of the


             2322      agency.
             2323          (7) (a) When a license is held by an agency, both the agency itself and any individual
             2324      designated under the agency license shall be considered to be the holder of the agency license
             2325      for purposes of this section.
             2326          (b) If an individual designated under the agency license commits an act or fails to
             2327      perform a duty that is a ground for suspending, revoking, or limiting the agency license, the
             2328      commissioner may suspend, revoke, or limit the license of:
             2329          (i) the individual;
             2330          (ii) the agency, if the agency:
             2331          (A) is reckless or negligent in its supervision of the individual; or
             2332          (B) knowingly participates in the act or failure to act that is the ground for suspending,
             2333      revoking, or limiting the license; or
             2334          (iii) (A) the individual; and
             2335          (B) the agency if the agency meets the requirements of Subsection (7)(b)(ii).
             2336          Section H. [ 18 ] 19 .H . Section 31A-23a-409 is amended to read:
             2337           31A-23a-409. Trust obligation for monies collected.
             2338          (1) (a) [Every] Subject to Subsection (7), a licensee is a trustee for [all funds] monies
             2339      received or collected for forwarding to insurers or to insureds.
             2340          (b) (i) Except [for amounts necessary to pay bank charges, and except for funds paid by
             2341      insureds and belonging in part to the licensee as fees or commissions] as provided in
             2342      Subsection (1)(b)(ii), a licensee may not commingle trust funds with:
             2343          [(i)] (A) the licensee's own [funds] monies; or
             2344          [(ii) funds] (B) monies held in any other capacity.
             2345          (ii) This Subsection (1)(b) does not apply to:
             2346          (A) amounts necessary to pay bank charges; and
             2347          (B) monies paid by insureds and belonging in part to the licensee as a fee or
             2348      commission.
             2349          (c) Except as provided under Subsection (4), [every] a licensee owes to insureds and
             2350      insurers the fiduciary duties of a trustee with respect to money to be forwarded to insurers or
             2351      insureds through the licensee.
             2352          (d) (i) Unless [the funds] monies are sent to the appropriate payee by the close of the


             2353      next business day after their receipt, the licensee shall deposit them in an account authorized
             2354      under Subsection (2).
             2355          (ii) [Funds] Monies deposited under this Subsection (1)(d) shall remain in an account
             2356      authorized under Subsection (2) until sent to the appropriate payee.
             2357          (2) [Funds] Monies required to be deposited under Subsection (1) shall be deposited:
             2358          (a) in a federally insured trust account in a depository institution, as defined in Section
             2359      7-1-103 , which:
             2360          (i) has an office in this state, if the licensee depositing the monies is a resident licensee;
             2361          (ii) has federal deposit insurance; and
             2362          (iii) is authorized by its primary regulator to engage in the trust business, as defined by
             2363      Section 7-5-1 , in this state; or
             2364          (b) in some other account, approved by the commissioner by rule or order, providing
             2365      safety comparable to federally insured trust accounts.
             2366          (3) It is not a violation of Subsection (2)(a) if the amounts in the accounts exceed the
             2367      amount of the federal insurance on the accounts.
             2368          (4) A trust account into which [funds] monies are deposited may be interest bearing.
             2369      The interest accrued on the account may be paid to the licensee, so long as the licensee
             2370      otherwise complies with this section and with the contract with the insurer.
             2371          (5) A [financial] depository institution or other organization holding trust funds under
             2372      this section may not offset or impound trust account funds against debts and obligations
             2373      incurred by the licensee.
             2374          (6) [Any] A licensee who, not being lawfully entitled [thereto] to do so, diverts or
             2375      appropriates any portion of the [funds] monies held under Subsection (1) to the licensee's own
             2376      use, is guilty of theft under Title 76, Chapter 6, Part 4, Theft. Section 76-6-412 applies in
             2377      determining the classification of the offense. Sanctions under Section 31A-2-308 also apply.
             2378          (7) A nonresident licensee:
             2379          (a) shall comply with Subsection (1)(a) by complying with the trust account
             2380      requirements of the nonresident licensee's home state; and
             2381          (b) is not required to comply with the other provisions of this section.
             2382          Section H. [ 19 ] 20 .H . Section 31A-23a-410 is amended to read:
             2383           31A-23a-410. Insurer's liability if insured pays premium to a licensee or group


             2384      policyholder.
             2385          (1) Subject to Subsections (2) and (5), as between the insurer and the insured, the
             2386      insurer is considered to have received the premium and is liable to the insured for losses
             2387      covered by the insurance and for any unearned premiums upon cancellation of the insurance if
             2388      an insurer, including a surplus lines insurer:
             2389          (a) [has assumed] assumes a risk; and
             2390          (b) the premium for that insurance [has been] is received by:
             2391          (i) a licensee who placed the insurance;
             2392          (ii) a group policyholder;
             2393          (iii) an employer who deducts part or all of the premium from an employee's wages or
             2394      salary; or
             2395          (iv) an employer who pays all or part of the premium for an employee.
             2396          (2) Subsection (1) does not apply if:
             2397          (a) the insured pays a licensee, knowing the licensee does not intend to submit the
             2398      premium to the insurer; or
             2399          (b) the insured has premium withheld from the insured's wages or salary knowing the
             2400      employer does not intend to submit it to the insurer.
             2401          (3) (a) In the case of an employer who has received the premium by deducting all or
             2402      part of it from the wages or salaries of the certificate holders, the insurer may terminate its
             2403      liability by giving notice of coverage termination to:
             2404          (i) the certificate holders [reasonable notice of coverage termination.];
             2405          (ii) the policyholder; and
             2406          (iii) the producer, if any, for the policy.
             2407          (b) S. The insurer may not send the notice required by Subsection (3)(a) to a
             2407a      certificate holder before 20 days after the day on which premium is due and unpaid.
             2407b          (c) .S The liability of the insurer for the losses covered by the insurance terminates at the
             2408      later of:
             2409          [(a)] (i) the last day of the coverage period for which premium has been withheld by
             2410      the employer; [or]
             2411          [(b) 15] (ii) ten days after the date the insurer mails [actual] notice to the certificate
             2412      holder that coverage has terminated[, but in the event]; or
             2413          (iii) if the insurer fails to provide [actual] notice as required by this Subsection (3),
             2414      [then the liability of the insurer for losses described in Subsection (1) shall terminate] 45 days


             2415      from the last date for which premium [was] is received. [While the insurer shall be liable for
             2416      losses as herein provided, the provisions of this section apply only to apportion the liability for
             2417      those losses described and do not operate to extend any insurance contract policy or coverage
             2418      beyond its date of termination nor alter or amend provisions thereof.]
             2419           S. [ (c) The insurer may not send the notice required by Subsection (3)(a) to a certificate
             2420      holder before 20 days after the day on which premium is due and unpaid.
] .S

             2421          (4) Despite an employer's collection of premium under Subsection (1), the
             2422      responsibility of an insurer to continue to cover the losses covered by the insurance to group
             2423      policy certificate holders terminates upon the effective date of notice from the policyholder
             2424      that:
             2425          (a) coverage of a similar kind and quality has been obtained from another insurer; or
             2426          (b) the policyholder is electing to voluntarily terminate the certificate holder's coverage
             2427      and has given the employees notice of the termination.
             2428          (5) If the insurer is obligated to pay [any claims] a claim pursuant to [the provisions of]
             2429      this section, the licensee or employer who received the premium and failed to forward it [shall
             2430      be] is obligated to the insurer for the entire unpaid premium due under the policy [of insurance]
             2431      together with reasonable expenses of suit and reasonable [attorney's] attorney fees.
             2432          (6) If, under an employee health insurance plan, an employee builds up credit for future
             2433      coverage because the employee has not used the policy protection, or in some other way, the
             2434      insurer is obligated to the employee for that future coverage earned while the policy was in full
             2435      effect.
             2436          (7) (a) Notwithstanding that an insurer is liable for losses as provided in this section,
             2437      this section applies only to apportion the liability for the losses described in this section.
             2438          (b) This section does not:
             2439          (i) extend a policy or coverage beyond its date of termination; or
             2440          (ii) alter or amend a provision of a policy.
             2441          Section H. [ 20 ] 21 .H . Section 31A-23a-504 is amended to read:
             2442           31A-23a-504. Sharing commissions.
             2443          (1) (a) Except as provided in Subsection 31A-15-103 (3), a licensee under this chapter
             2444      or an insurer may only pay consideration or reimburse out-of-pocket expenses to a person if the
             2445      licensee knows that the person is licensed under this chapter as to the particular type of


             2446      insurance to act in Utah as:
             2447          (i) a producer;
             2448          (ii) a limited line producer;
             2449          (iii) a customer service representative;
             2450          (iv) a consultant;
             2451          (v) a managing general agent; or
             2452          (vi) a reinsurance intermediary.
             2453          (b) A person may only accept commission compensation or other compensation as a
             2454      person described in Subsections (1)(a)(i) through (vi) that is directly or indirectly the result of
             2455      [any] an insurance transaction if that person is licensed under this chapter to act as described in
             2456      Subsection (1)(a).
             2457          (2) (a) Except as provided in Section 31A-23a-501 , a consultant may not pay or receive
             2458      [any] a commission or other compensation that is directly or indirectly the result of [any] an
             2459      insurance transaction.
             2460          (b) A consultant may share a consultant fee or other compensation received for
             2461      consulting services performed within Utah only:
             2462          (i) with another consultant licensed under this chapter; and
             2463          (ii) to the extent that the other consultant contributed to the services performed.
             2464          (3) This section does not prohibit:
             2465          (a) the payment of renewal commissions to former licensees under this chapter, former
             2466      Title 31, Chapter 17, or their successors in interest under a deferred compensation or agency
             2467      sales agreement[.];
             2468          [(4) This section does not prohibit]
             2469          (b) compensation paid to or received by a person for referral of a potential customer
             2470      that seeks to purchase or obtain an opinion or advice on an insurance product if:
             2471          [(a)] (i) the person is not licensed to sell insurance;
             2472          [(b)] (ii) the person does not sell or provide opinions or advice on the product; and
             2473          [(c)] (iii) the compensation does not depend on whether the referral results in a
             2474      purchase or sale[.]; or
             2475          (c) the payment or assignment of a commission, service fee, brokerage, or other
             2476      valuable consideration to an agency or a person who does not sell, solicit, or negotiate


             2477      insurance in this state, unless the payment would constitute an inducement or commission
             2478      rebate under Section 31A-23a-402 .
             2479          [(5)] (4) (a) In selling a policy of title insurance, sharing of commissions under
             2480      Subsection (1) may not occur if it will result in:
             2481          (i) an unlawful rebate;
             2482          (ii) compensation in connection with controlled business; or
             2483          (iii) payment of a forwarding fee or finder's fee.
             2484          (b) A person may share compensation for the issuance of a title insurance policy only
             2485      to the extent that the person contributed to the search and examination of the title or other
             2486      services connected with the title insurance policy.
             2487          [(6)] (5) This section does not apply to a bail bond [producers] producer or bail
             2488      enforcement [agents] agent as defined in Section 31A-35-102 .
             2489          Section H. [ 21 ] 22 .H . Section 31A-25-203 is amended to read:
             2490           31A-25-203. General requirements for license issuance.
             2491          (1) The commissioner shall issue a license to act as a third party administrator to a
             2492      person who:
             2493          (a) satisfies the character requirements under Section 31A-25-204 ;
             2494          (b) satisfies the financial responsibility requirement under Section 31A-25-205 ;
             2495          (c) has not committed an act that is a ground for denial, suspension, or revocation
             2496      provided in Section 31A-25-208 ;
             2497          [(c)] (d) if a nonresident, complies with Section 31A-25-206 ; and
             2498          [(d)] (e) pays the applicable fees under Section 31A-3-103 .
             2499          [(2) The license of a third party administrator licensed under former Title 31, Chapter
             2500      15a, is continued under this chapter.]
             2501          [(3)] (2) (a) This Subsection [(3)] (2) applies to the following persons:
             2502          (i) an applicant for a third party administrator's license; or
             2503          (ii) a licensed third party administrator.
             2504          (b) A person described in Subsection [(3)] (2)(a) shall report to the commissioner:
             2505          (i) an administrative action taken against the person:
             2506          (A) in another jurisdiction; or
             2507          (B) by another regulatory agency in this state; and


             2508          (ii) a criminal prosecution taken against the person in any jurisdiction.
             2509          (c) The report required by Subsection [(3)] (2)(b) shall:
             2510          (i) be filed:
             2511          (A) at the time the person applies for a third party administrator's license; and
             2512          (B) [for] if an action or prosecution [that] occurs on or after the day on which the
             2513      person applies for a third party administrator license:
             2514          (I) for an administrative action, within 30 days of the final disposition of the
             2515      administrative action; or
             2516          (II) for a criminal prosecution, within 30 days of the initial appearance before a court;
             2517      and
             2518          (ii) include a copy of the complaint or other relevant legal documents related to the
             2519      action or prosecution described in Subsection [(3)] (2)(b).
             2520          [(4)] (3) (a) The department may require a person applying for a license or for consent
             2521      to engage in the business of insurance to submit to a criminal background check as a condition
             2522      of receiving a license or consent.
             2523          (b) A person, if required to submit to a criminal background check under Subsection
             2524      [(4)] (3)(a), shall:
             2525          (i) submit a fingerprint card in a form acceptable to the department; and
             2526          (ii) consent to a fingerprint background check by:
             2527          (A) the Utah Bureau of Criminal Identification; and
             2528          (B) the Federal Bureau of Investigation.
             2529          (c) For a person who submits a fingerprint card and consents to a fingerprint
             2530      background check under Subsection [(4)] (3)(b), the department may request concerning a
             2531      person applying for a third party administrator's license:
             2532          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             2533      2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             2534          (ii) complete Federal Bureau of Investigation criminal background checks through the
             2535      national criminal history system.
             2536          (d) Information obtained by the department from the review of criminal history records
             2537      received under this Subsection [(4)] (3) shall be used by the department for the purposes of:
             2538          (i) determining if a person satisfies the character requirements under Section


             2539      31A-25-204 for issuance or renewal of a license;
             2540          (ii) determining if a person has failed to maintain the character requirements under
             2541      Section 31A-25-204 ; and
             2542          (iii) preventing [persons] a person who [violate] violates the federal Violent Crime
             2543      Control and Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in
             2544      the business of insurance in the state.
             2545          (e) If the department requests the criminal background information, the department
             2546      shall:
             2547          (i) pay to the Department of Public Safety the costs incurred by the Department of
             2548      Public Safety in providing the department criminal background information under Subsection
             2549      [(4)] (3)(c)(i);
             2550          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             2551      of Investigation in providing the department criminal background information under
             2552      Subsection [(4)] (3)(c)(ii); and
             2553          (iii) charge the person applying for a license[, for renewal of a license,] or for consent
             2554      to engage in the business of insurance a fee equal to the aggregate of Subsections [(4)] (3)(e)(i)
             2555      and (ii).
             2556          (4) The commissioner may deny a license application to act as a third party
             2557      administrator to a person who:
             2558          (a) fails to satisfy the requirements of this section; or
             2559          (b) commits an act that is a ground for denial, suspension, or revocation provided in
             2560      Section 31A-25-208 .
             2561          Section H. [ 22 ] 23 .H . Section 31A-25-208 is amended to read:
             2562           31A-25-208. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             2563      terminating a license -- Rulemaking for renewal and reinstatement.
             2564          (1) A license type issued under this chapter remains in force until:
             2565          (a) revoked or suspended under Subsection (4);
             2566          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             2567      administrative action;
             2568          (c) the licensee dies or is adjudicated incompetent as defined under:
             2569          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or


             2570          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             2571      Minors;
             2572          (d) lapsed under Section 31A-25-210 ; or
             2573          (e) voluntarily surrendered.
             2574          (2) The following may be reinstated within one year after the day on which the license
             2575      is [inactivated] no longer in force:
             2576          (a) a lapsed license; or
             2577          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             2578      not be reinstated after the license period in which the license is voluntarily surrendered.
             2579          (3) Unless otherwise stated in the written agreement for the voluntary surrender of a
             2580      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             2581      department from pursuing additional disciplinary or other action authorized under:
             2582          (a) this title; or
             2583          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             2584      Administrative Rulemaking Act.
             2585          (4) (a) If the commissioner makes a finding under Subsection (4)(b), [after] as part of
             2586      an adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             2587      commissioner may:
             2588          (i) revoke a license;
             2589          (ii) suspend a license for a specified period of 12 months or less; [or]
             2590          (iii) limit a license in whole or in part[.]; or
             2591          (iv) deny a license application.
             2592          (b) The commissioner may take an action described in Subsection (4)(a) if the
             2593      commissioner finds that the licensee:
             2594          (i) is unqualified for a license under [Sections] Section 31A-25-202 [and],
             2595      31A-25-203 , or 31A-25-204 ;
             2596          (ii) has violated:
             2597          (A) an insurance statute;
             2598          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             2599          (C) an order that is valid under Subsection 31A-2-201 (4);
             2600          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other


             2601      delinquency proceedings in any state;
             2602          (iv) fails to pay [any] a final judgment rendered against the person in this state within
             2603      60 days after the day on which the judgment became final;
             2604          (v) fails to meet the same good faith obligations in claims settlement that is required of
             2605      admitted insurers;
             2606          (vi) is affiliated with and under the same general management or interlocking
             2607      directorate or ownership as another third party administrator that transacts business in this state
             2608      without a license;
             2609          (vii) refuses:
             2610          (A) to be examined; or
             2611          (B) to produce its accounts, records, and files for examination;
             2612          (viii) has an officer who refuses to:
             2613          (A) give information with respect to the third party administrator's affairs; or
             2614          (B) perform any other legal obligation as to an examination;
             2615          (ix) provides information in the license application that is:
             2616          (A) incorrect;
             2617          (B) misleading;
             2618          (C) incomplete; or
             2619          (D) materially untrue;
             2620          (x) has violated an insurance law, valid rule, or valid order of another state's insurance
             2621      department;
             2622          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             2623          (xii) has improperly withheld, misappropriated, or converted [any] monies or
             2624      properties received in the course of doing insurance business;
             2625          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             2626          (A) insurance contract; or
             2627          (B) application for insurance;
             2628          (xiv) has been convicted of a felony;
             2629          (xv) has admitted or been found to have committed [any] an insurance unfair trade
             2630      practice or fraud;
             2631          (xvi) in the conduct of business in this state or elsewhere has:


             2632          (A) used fraudulent, coercive, or dishonest practices; or
             2633          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             2634          (xvii) has had an insurance license or its equivalent, denied, suspended, or revoked in
             2635      any other state, province, district, or territory;
             2636          (xviii) has forged another's name to:
             2637          (A) an application for insurance; or
             2638          (B) a document related to an insurance transaction;
             2639          (xix) has improperly used notes or any other reference material to complete an
             2640      examination for an insurance license;
             2641          (xx) has knowingly accepted insurance business from an individual who is not
             2642      licensed;
             2643          (xxi) has failed to comply with an administrative or court order imposing a child
             2644      support obligation;
             2645          (xxii) has failed to:
             2646          (A) pay state income tax; or
             2647          (B) comply with [any] an administrative or court order directing payment of state
             2648      income tax;
             2649          (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
             2650      Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034; or
             2651          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             2652      the legitimate interests of customers and the public.
             2653          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             2654      and any [natural person named on] individual designated under the license are considered to be
             2655      the holders of the agency license.
             2656          (d) If [a natural person named on] an individual designated under the agency license
             2657      commits [any] an act or fails to perform [any] a duty that is a ground for suspending, revoking,
             2658      or limiting the [natural person's] individual's license, the commissioner may suspend, revoke,
             2659      or limit the license of:
             2660          (i) the [natural person] individual;
             2661          (ii) the agency if the agency:
             2662          (A) is reckless or negligent in its supervision of the [natural person] individual; or


             2663          (B) knowingly participated in the act or failure to act that is the ground for suspending,
             2664      revoking, or limiting the license; or
             2665          (iii) (A) the [natural person] individual; and
             2666          (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
             2667          (5) A licensee under this chapter is subject to the penalties for acting as a licensee
             2668      without a license if:
             2669          (a) the licensee's license is:
             2670          (i) revoked;
             2671          (ii) suspended;
             2672          (iii) limited;
             2673          (iv) surrendered in lieu of administrative action;
             2674          (v) lapsed; or
             2675          (vi) voluntarily surrendered; and
             2676          (b) the licensee:
             2677          (i) continues to act as a licensee; or
             2678          (ii) violates the terms of the license limitation.
             2679          (6) A licensee under this chapter shall immediately report to the commissioner:
             2680          (a) a revocation, suspension, or limitation of the person's license in any other state, the
             2681      District of Columbia, or a territory of the United States;
             2682          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             2683      the District of Columbia, or a territory of the United States; or
             2684          (c) a judgment or injunction entered against the person on the basis of conduct
             2685      involving:
             2686          (i) fraud;
             2687          (ii) deceit;
             2688          (iii) misrepresentation; or
             2689          (iv) a violation of an insurance law or rule.
             2690          (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
             2691      license in lieu of administrative action may specify a time, not to exceed five years, within
             2692      which the former licensee may not apply for a new license.
             2693          (b) If no time is specified in the order or agreement described in Subsection (7)(a), the


             2694      former licensee may not apply for a new license for five years from the day on which the order
             2695      or agreement is made without the express approval of the commissioner.
             2696          (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
             2697      a license issued under this part if so ordered by the court.
             2698          (9) The commissioner shall by rule prescribe the license renewal and reinstatement
             2699      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2700          Section H. [ 23 ] 24 .H . Section 31A-25-210 is amended to read:
             2701           31A-25-210. License lapse and voluntary surrender.
             2702          (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
             2703          (i) pay when due a fee under Section 31A-3-103 ;
             2704          (ii) submit a completed renewal application as required by Section 31A-25-202 ;
             2705          (iii) produce, when due, evidence of compliance with the financial responsibility
             2706      requirement under Section 31A-25-205 ; or
             2707          (iv) maintain an active license in a resident state if the licensee is a nonresident
             2708      licensee.
             2709          (b) (i) A licensee whose license lapses due to the following may request an action
             2710      described in Subsection (1)(b)(ii):
             2711          (A) military service;
             2712          (B) voluntary service for a period of time designated by the person for whom the
             2713      licensee provides voluntary service; or
             2714          (C) some other extenuating circumstances, such as long-term medical disability.
             2715          (ii) A licensee described in Subsection (1)(b)(i) may request:
             2716          (A) reinstatement of the license no later than one year from the day on which the
             2717      license lapses; and
             2718          (B) waiver of any of the following imposed for failure to comply with renewal
             2719      procedures:
             2720          (I) an examination requirement;
             2721          (II) reinstatement fees set under Section 31A-3-103 ; or
             2722          (III) other sanction imposed for failure to comply with renewal procedures.
             2723          (2) If a license issued under this chapter is voluntarily surrendered, the license may be
             2724      reinstated [within one year]:


             2725          (a) during the license period in which the license is voluntarily surrendered; and
             2726          (b) no later than one year after the day on which the license is [inactivated] voluntarily
             2727      surrendered.
             2728          Section H. [ 24 ] 25 .H . Section 31A-26-203 is amended to read:
             2729           31A-26-203. Adjuster's license required.
             2730          (1) The commissioner shall issue a license to act as an independent adjuster or public
             2731      adjuster to a person who, as to the license classification applied for under Section 31A-26-204 :
             2732          (a) satisfies the character requirements under Section 31A-26-205 ;
             2733          (b) satisfies the applicable continuing education requirements under Section
             2734      31A-26-206 ;
             2735          (c) satisfies the applicable examination requirements under Section 31A-26-207 ;
             2736          (d) has not committed an act that is a ground for denial, suspension, or revocation
             2737      provided for in Section 31A-26-213 ;
             2738          [(d)] (e) if a nonresident, complies with Section 31A-26-208 ; and
             2739          [(e)] (f) pays the applicable fees under Section 31A-3-103 .
             2740          (2) (a) This Subsection (2) applies to the following persons:
             2741          (i) an applicant for:
             2742          (A) an independent adjuster's license; or
             2743          (B) a public adjuster's license;
             2744          (ii) a licensed independent adjuster; or
             2745          (iii) a licensed public adjuster.
             2746          (b) A person described in Subsection (2)(a) shall report to the commissioner:
             2747          (i) an administrative action taken against the person:
             2748          (A) in another jurisdiction; or
             2749          (B) by another regulatory agency in this state; and
             2750          (ii) a criminal prosecution taken against the person in any jurisdiction.
             2751          (c) The report required by Subsection (2)(b) shall:
             2752          (i) be filed:
             2753          (A) at the time the person applies for an adjustor's license; and
             2754          (B) [for] if an action or prosecution [that] occurs on or after the day on which the
             2755      person applies for an adjustor's license:


             2756          (I) for an administrative action, within 30 days of the final disposition of the
             2757      administrative action; or
             2758          (II) for a criminal prosecution, within 30 days of the initial appearance before a court;
             2759      and
             2760          (ii) include a copy of the complaint or other relevant legal documents related to the
             2761      action or prosecution described in Subsection (2)(b).
             2762          (3) (a) The department may require a person applying for a license or for consent to
             2763      engage in the business of insurance to submit to a criminal background check as a condition of
             2764      receiving a license or consent.
             2765          (b) A person, if required to submit to a criminal background check under Subsection
             2766      (3)(a), shall:
             2767          (i) submit a fingerprint card in a form acceptable to the department; and
             2768          (ii) consent to a fingerprint background check by:
             2769          (A) the Utah Bureau of Criminal Identification; and
             2770          (B) the Federal Bureau of Investigation.
             2771          (c) For a person who submits a fingerprint card and consents to a fingerprint
             2772      background check under Subsection (3)(b), the department may request concerning a person
             2773      applying for an independent or public adjuster's license:
             2774          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             2775      2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             2776          (ii) complete Federal Bureau of Investigation criminal background checks through the
             2777      national criminal history system.
             2778          (d) Information obtained by the department from the review of criminal history records
             2779      received under this Subsection (3) shall be used by the department for the purposes of:
             2780          (i) determining if a person satisfies the character requirements under Section
             2781      31A-26-205 for issuance or renewal of a license;
             2782          (ii) determining if a person has failed to maintain the character requirements under
             2783      Section [ 31A-25-204 ] 31A-26-205 ; and
             2784          (iii) preventing [persons] a person who [violate] violates the federal Violent Crime
             2785      Control and Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in
             2786      the business of insurance in the state.


             2787          (e) If the department requests the criminal background information, the department
             2788      shall:
             2789          (i) pay to the Department of Public Safety the costs incurred by the Department of
             2790      Public Safety in providing the department criminal background information under Subsection
             2791      (3)(c)(i);
             2792          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             2793      of Investigation in providing the department criminal background information under
             2794      Subsection (3)(c)(ii); and
             2795          (iii) charge the person applying for a license[, for renewal of a license,] or for consent
             2796      to engage in the business of insurance a fee equal to the aggregate of Subsections (3)(e)(i) and
             2797      (ii).
             2798          (4) The commissioner may deny a license application to act as an independent adjuster
             2799      or public adjuster to a person who, as to the license classification applied for under Section
             2800      31A-26-204 :
             2801          (a) fails to satisfy the requirements in this section; or
             2802          (b) commits an act that is a ground for denial, suspension, or revocation provided for in
             2803      Section 31A-26-213 .
             2804          [(4)] (5) Notwithstanding the other provisions of this section, the commissioner may:
             2805          (a) issue a license to an applicant for a license for a title insurance classification only
             2806      with the concurrence of the Title and Escrow Commission; or
             2807          (b) renew a license for a title insurance classification only with the concurrence of the
             2808      Title and Escrow Commission.
             2809          Section H. [ 25 ] 26 .H . Section 31A-26-204 is amended to read:
             2810           31A-26-204. License classifications.
             2811          A resident or nonresident license issued under this chapter shall be issued under the
             2812      classifications described under Subsections (1), (2), and (3). [These classifications are
             2813      intended to describe] A classification describes the matters to be considered under [any] a
             2814      prerequisite education [and] or examination required of license applicants under Sections
             2815      31A-26-206 and 31A-26-207 .
             2816          (1) Independent adjuster license classifications include:
             2817          (a) accident and health insurance, including related service insurance under Chapter 7,


             2818      Nonprofit Health Service Insurance [Corporation] Corporations, or Chapter 8, Health
             2819      Maintenance Organizations and Limited Health Plans;
             2820          (b) property and [liability] casualty insurance, [which includes:] including a surety or
             2821      other bond;
             2822          [(i) property insurance;]
             2823          [(ii) liability insurance;]
             2824          [(iii) surety bonds; and]
             2825          [(iv) policies containing combinations or variations of these coverages;]
             2826          [(c) service insurance;]
             2827          [(d) title insurance;]
             2828          [(e) credit insurance; and]
             2829          (c) crop insurance; and
             2830          [(f)] (d) workers' compensation insurance.
             2831          (2) Public adjuster license classifications include:
             2832          (a) accident and health insurance, including related service insurance under Chapter 7
             2833      or 8;
             2834          (b) property and [liability] casualty insurance, [which includes:] including a surety or
             2835      other bond;
             2836          [(i) property insurance;]
             2837          [(ii) liability insurance;]
             2838          [(iii) surety bonds; and]
             2839          [(iv) policies containing combinations or variations of these coverages;]
             2840          [(c) service insurance;]
             2841          [(d) title insurance;]
             2842          [(e) credit insurance; and]
             2843          (c) crop insurance; and
             2844          [(f)] (d) workers' compensation insurance.
             2845          (3) (a) The commissioner may by rule:
             2846          (i) recognize other independent adjuster or public adjuster license classifications as to
             2847      other kinds of insurance not listed under Subsection (1); and
             2848          (ii) create license classifications that grant only part of the authority arising under


             2849      another license class.
             2850          (b) Notwithstanding Subsection (3)(a), for purpose of title insurance, the Title and
             2851      Escrow Commission may make the rules provided for in Subsection (3)(a), subject to Section
             2852      31A-2-404 .
             2853          Section H. [ 26 ] 27 .H . Section 31A-26-210 is amended to read:
             2854           31A-26-210. Reports from organizations licensed as adjusters.
             2855          [(1) Organizations licensed as adjusters under Section 31A-26-203 shall report to the
             2856      commissioner, at the times and in the detail and form as prescribed by rule, every change in the
             2857      list of natural person adjusters authorized to act in that position for the organization.]
             2858          [(2) Each organization licensed as an adjuster shall, at the time of paying its license
             2859      continuation fee under Section 31A-3-103 , report to the commissioner, in the form established
             2860      by the commissioner by rule, all natural person adjusters acting in that position for the
             2861      organization.]
             2862          [(3) Organizations]
             2863          (1) An organization licensed as an adjuster under Section 31A-26-203 shall designate
             2864      an individual who has an individual adjuster license to act on the organization's behalf in order
             2865      for the licensee to do business for the organization in this state.
             2866          (2) An organization licensed under this chapter shall report to the commissioner, at
             2867      intervals and in the form the commissioner establishes by rule:
             2868          (a) a new designation; and
             2869          (b) a terminated designation.
             2870          (3) (a) An organization licensed under this chapter shall report to the commissioner the
             2871      cause of termination of a designation if:
             2872          (i) the reason for termination is a reason described in Subsection 31A-26-213 (5)(b); or
             2873          (ii) the organization has knowledge that the individual licensee is found to have
             2874      engaged in an activity described in Subsection 31A-26-213 (5)(b) by:
             2875          (A) a court;
             2876          (B) a government body; or
             2877          (C) a self-regulatory organization, which the commissioner may define by rule made in
             2878      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2879          (b) The information provided the commissioner under Subsection (3)(a) is a private


             2880      record under Title 63G, Chapter 2, Government Records Access and Management Act.
             2881          (c) An organization is immune from civil action, civil penalty, or damages if the
             2882      organization complies in good faith with this Subsection (3) in reporting to the commissioner
             2883      the cause of termination of a designation.
             2884          (d) Notwithstanding any other provision in this section, an organization is not immune
             2885      from an action or resulting penalty imposed on the reporting organization as a result of a
             2886      proceeding brought by or on behalf of the department if the action is based on evidence other
             2887      than the report submitted in compliance with this Subsection (3).
             2888          (4) An organization licensed under this chapter may act in a capacity for which it is
             2889      licensed only through an individual who is licensed under this chapter to act in the same
             2890      capacity.
             2891          (5) An organization licensed under this chapter shall designate and report promptly to
             2892      the commissioner the name of [at least one natural person] the designated responsible licensed
             2893      individual who has authority to act on behalf of the organization in all matters pertaining to
             2894      compliance with this title and orders of the commissioner.
             2895          (6) If an agency designates a licensee in a report submitted under Subsection (2) or (5),
             2896      there is a rebuttable presumption that the designated licensee acts on behalf of the agency.
             2897          [(4) Where] (7) (a) When a license is held by an organization, both the organization
             2898      itself and [any persons named on] an individual designated under the license shall, for purposes
             2899      of this section, be considered to be the holders of the organization license.
             2900          (b) If [a person named on] an individual designated under the organization license
             2901      commits [any] an act or fails to perform [any] a duty [which] that is a ground for suspending,
             2902      revoking, or limiting the organization license, the commissioner may suspend, revoke, or limit
             2903      the license of [that person or the organization, or both.]:
             2904          (i) that individual;
             2905          (ii) the organization, if the organization:
             2906          (A) is reckless or negligent in its supervision of the individual; or
             2907          (B) knowingly participates in the act or failure to act that is the ground for suspending,
             2908      revoking, or limiting the license; or
             2909          (iii) (A) the individual; and
             2910          (B) the organization, if the organization meets the requirements of Subsection


             2911      (7)(b)(ii).
             2912          Section H. [ 27 ] 28 .H . Section 31A-26-213 is amended to read:
             2913           31A-26-213. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             2914      terminating a license -- Rulemaking for renewal or reinstatement.
             2915          (1) A license type issued under this chapter remains in force until:
             2916          (a) revoked or suspended under Subsection (5);
             2917          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             2918      administrative action;
             2919          (c) the licensee dies or is adjudicated incompetent as defined under:
             2920          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             2921          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             2922      Minors;
             2923          (d) lapsed under Section 31A-26-214.5 ; or
             2924          (e) voluntarily surrendered.
             2925          (2) The following may be reinstated within one year after the day on which the license
             2926      is [inactivated] no longer in force:
             2927          (a) a lapsed license; or
             2928          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             2929      not be reinstated after the license period in which it is voluntarily surrendered.
             2930          (3) Unless otherwise stated in the written agreement for the voluntary surrender of a
             2931      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             2932      department from pursuing additional disciplinary or other action authorized under:
             2933          (a) this title; or
             2934          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             2935      Administrative Rulemaking Act.
             2936          (4) A license classification issued under this chapter remains in force until:
             2937          (a) the qualifications pertaining to a license classification are no longer met by the
             2938      licensee; or
             2939          (b) the supporting license type:
             2940          (i) is revoked or suspended under Subsection (5); or
             2941          (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of


             2942      administrative action.
             2943          (5) (a) If the commissioner makes a finding under Subsection (5)(b) [after] as part of
             2944      an adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             2945      commissioner may:
             2946          (i) revoke:
             2947          (A) a license; or
             2948          (B) a license classification;
             2949          (ii) suspend for a specified period of 12 months or less:
             2950          (A) a license; or
             2951          (B) a license classification; [or]
             2952          (iii) limit in whole or in part:
             2953          (A) a license; or
             2954          (B) a license classification[.]; or
             2955          (iv) deny a license application.
             2956          (b) The commissioner may take an action described in Subsection (5)(a) if the
             2957      commissioner finds that the licensee:
             2958          (i) is unqualified for a license or license classification under [Sections] Section
             2959      31A-26-202 , 31A-26-203 , [and] 31A-26-204 , or 31A-26-205 ;
             2960          (ii) has violated:
             2961          (A) an insurance statute;
             2962          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             2963          (C) an order that is valid under Subsection 31A-2-201 (4);
             2964          (iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
             2965      delinquency proceedings in any state;
             2966          (iv) fails to pay [any] a final judgment rendered against the person in this state within
             2967      60 days after the judgment became final;
             2968          (v) fails to meet the same good faith obligations in claims settlement that is required of
             2969      admitted insurers;
             2970          (vi) is affiliated with and under the same general management or interlocking
             2971      directorate or ownership as another insurance adjuster that transacts business in this state
             2972      without a license;


             2973          (vii) refuses:
             2974          (A) to be examined; or
             2975          (B) to produce its accounts, records, and files for examination;
             2976          (viii) has an officer who refuses to:
             2977          (A) give information with respect to the insurance adjuster's affairs; or
             2978          (B) perform any other legal obligation as to an examination;
             2979          (ix) provides information in the license application that is:
             2980          (A) incorrect;
             2981          (B) misleading;
             2982          (C) incomplete; or
             2983          (D) materially untrue;
             2984          (x) has violated [any] an insurance law, valid rule, or valid order of another state's
             2985      insurance department;
             2986          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             2987          (xii) has improperly withheld, misappropriated, or converted [any] monies or
             2988      properties received in the course of doing insurance business;
             2989          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             2990          (A) insurance contract; or
             2991          (B) application for insurance;
             2992          (xiv) has been convicted of a felony;
             2993          (xv) has admitted or been found to have committed [any] an insurance unfair trade
             2994      practice or fraud;
             2995          (xvi) in the conduct of business in this state or elsewhere has:
             2996          (A) used fraudulent, coercive, or dishonest practices; or
             2997          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             2998          (xvii) has had an insurance license, or its equivalent, denied, suspended, or revoked in
             2999      any other state, province, district, or territory;
             3000          (xviii) has forged another's name to:
             3001          (A) an application for insurance; or
             3002          (B) [any] a document related to an insurance transaction;
             3003          (xix) has improperly used notes or any other reference material to complete an


             3004      examination for an insurance license;
             3005          (xx) has knowingly accepted insurance business from an individual who is not
             3006      licensed;
             3007          (xxi) has failed to comply with an administrative or court order imposing a child
             3008      support obligation;
             3009          (xxii) has failed to:
             3010          (A) pay state income tax; or
             3011          (B) comply with [any] an administrative or court order directing payment of state
             3012      income tax;
             3013          (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
             3014      Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034; or
             3015          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             3016      the legitimate interests of customers and the public.
             3017          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             3018      and any [natural person named on] individual designated under the license are considered to be
             3019      the holders of the license.
             3020          (d) If [a natural person named on] an individual designated under the agency license
             3021      commits [any] an act or fails to perform [any] a duty that is a ground for suspending, revoking,
             3022      or limiting the [natural person's] individual's license, the commissioner may suspend, revoke,
             3023      or limit the license of:
             3024          (i) the [natural person] individual;
             3025          (ii) the agency, if the agency:
             3026          (A) is reckless or negligent in its supervision of the [natural person] individual; or
             3027          (B) knowingly participated in the act or failure to act that is the ground for suspending,
             3028      revoking, or limiting the license; or
             3029          (iii) (A) the [natural person] individual; and
             3030          (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
             3031          (6) A licensee under this chapter is subject to the penalties for conducting an insurance
             3032      business without a license if:
             3033          (a) the licensee's license is:
             3034          (i) revoked;


             3035          (ii) suspended;
             3036          (iii) limited;
             3037          (iv) surrendered in lieu of administrative action;
             3038          (v) lapsed; or
             3039          (vi) voluntarily surrendered; and
             3040          (b) the licensee:
             3041          (i) continues to act as a licensee; or
             3042          (ii) violates the terms of the license limitation.
             3043          (7) A licensee under this chapter shall immediately report to the commissioner:
             3044          (a) a revocation, suspension, or limitation of the person's license in any other state, the
             3045      District of Columbia, or a territory of the United States;
             3046          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             3047      the District of Columbia, or a territory of the United States; or
             3048          (c) a judgment or injunction entered against that person on the basis of conduct
             3049      involving:
             3050          (i) fraud;
             3051          (ii) deceit;
             3052          (iii) misrepresentation; or
             3053          (iv) a violation of an insurance law or rule.
             3054          (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
             3055      license in lieu of administrative action may specify a time not to exceed five years within
             3056      which the former licensee may not apply for a new license.
             3057          (b) If no time is specified in the order or agreement described in Subsection (8)(a), the
             3058      former licensee may not apply for a new license for five years without the express approval of
             3059      the commissioner.
             3060          (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
             3061      a license issued under this part if so ordered by a court.
             3062          (10) The commissioner shall by rule prescribe the license renewal and reinstatement
             3063      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             3064          Section H. [ 28 ] 29 .H . Section 31A-26-214.5 is amended to read:
             3065           31A-26-214.5. License lapse and voluntary surrender.


             3066          (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
             3067          (i) pay when due a fee under Section 31A-3-103 ;
             3068          (ii) complete continuing education requirements under Section 31A-26-206 before
             3069      submitting the license renewal application;
             3070          (iii) submit a completed renewal application as required by Section 31A-26-202 ;
             3071          (iv) submit additional documentation required to complete the licensing process as
             3072      related to a specific license type or license classification; or
             3073          (v) maintain an active license in a resident state if the licensee is a nonresident
             3074      licensee.
             3075          (b) (i) A licensee whose license lapses due to the following may request an action
             3076      described in Subsection (1)(b)(ii):
             3077          (A) military service;
             3078          (B) voluntary service for a period of time designated by the person for whom the
             3079      licensee provides voluntary service; or
             3080          (C) some other extenuating circumstances, such as long-term medical disability.
             3081          (ii) A licensee described in Subsection (1)(b)(i) may request:
             3082          (A) reinstatement of the license no later than one year after the day on which the
             3083      license lapses; and
             3084          (B) waiver of any of the following imposed for failure to comply with renewal
             3085      procedures:
             3086          (I) an examination requirement;
             3087          (II) reinstatement fees set under Section 31A-3-103 ;
             3088          (III) continuing education requirements; or
             3089          (IV) other sanction imposed for failure to comply with renewal procedures.
             3090          (2) If a license [type or license classification] issued under this chapter is voluntarily
             3091      surrendered, the license [type or license classification] may be reinstated [within one year]:
             3092          (a) during the license period in which it is voluntarily surrendered; and
             3093          (b) no later than one year after the day on which the license [type or license
             3094      classification is inactivated] is voluntarily surrendered.
             3095          Section H. [ 29 ] 30 .H . Section 31A-35-405 is amended to read:
             3096           31A-35-405. Issuance of license -- Denial -- Right of appeal.


             3097          (1) Upon a determination by the board that a person applying for a bail bond surety
             3098      company license meets the requirements for issuance of a license under this chapter, the
             3099      commissioner shall issue to that person a bail bond surety company license.
             3100          (2) (a) If the commissioner denies an application for a bail bond surety company
             3101      license under this chapter, the commissioner shall provide prompt written notification to the
             3102      person applying for licensure:
             3103          (i) stating the grounds for denial; and
             3104          (ii) notifying the person applying for licensure as a bail bond surety company that:
             3105          (A) the person is entitled to a hearing if that person wants to contest the denial; and
             3106          (B) if the person wants a hearing, the person shall submit the request in writing to the
             3107      commissioner within [30] 15 days after the issuance of the denial.
             3108          (b) The department shall schedule a hearing described in Subsection (2)(a) [shall be
             3109      scheduled not] no later than 60 days after the commissioner's receipt of the request.
             3110          (c) The department shall hear the appeal, and may:
             3111          (i) return the case to the commissioner for reconsideration;
             3112          (ii) modify the commissioner's decision; or
             3113          (iii) reverse the commissioner's decision.
             3114          (3) A decision under this section is subject to review under Title 63G, Chapter 4,
             3115      Administrative Procedures Act.
             3116          Section H. [ 30 ] 31 .H . Section 31A-35-406 is amended to read:
             3117           31A-35-406. Renewal and reinstatement.
             3118          (1) (a) To renew its license under this chapter, on or before the last day of the month in
             3119      which the license expires a bail bond surety company shall:
             3120          (i) complete and submit a renewal application to the department; and
             3121          (ii) pay the department the applicable renewal fee established in accordance with
             3122      Section 63J-1-303 .
             3123          (b) A bail bond surety company shall renew its license under this chapter annually as
             3124      established by department rule, regardless of when the license is issued.
             3125          [(2) A bail bond surety company may renew a bail bond surety company license not
             3126      renewed under Subsection (1) within 30 days after the expiration date by:]
             3127          [(a) submitting a renewal application required by Subsection (1); and]


             3128          [(b) paying a late renewal fee established in accordance with Section 63J-1-303 .]
             3129          [(3)] (2) A bail bond surety company may apply for reinstatement of an expired bail
             3130      bond surety company license [between 31 days and six months] within one year following the
             3131      expiration of the license under Subsection (1) by:
             3132          (a) submitting the renewal application required by Subsection (1); and
             3133          (b) paying a license reinstatement fee established in accordance with Section
             3134      63J-1-303 .
             3135          [(4)] (3) If a bail bond surety company license has been expired for more than [six
             3136      months] one year, the person applying for reinstatement of the bail bond surety license shall:
             3137          (a) submit [an] a new application form to the commissioner; and
             3138          (b) pay the application fee established in accordance with Section 63J-1-303 .
             3139          [(5)] (4) If a bail bond surety company license is suspended, the applicant may not
             3140      submit an application for a bail bond surety company license until after the end of the period of
             3141      suspension.
             3142          [(6)] (5) Fees collected under this section shall be deposited in the restricted account
             3143      created in Section 31A-35-407 .
             3144          Section H. [ 31 ] 32 .H . Section 31A-37-502 is amended to read:
             3145           31A-37-502. Examination.
             3146          (1) (a) As provided in this section, the commissioner or a person appointed by the
             3147      commissioner, shall examine each captive insurance company in each three-year period.
             3148          (b) The three-year period described in Subsection (1)(a) shall be determined on the
             3149      basis of three full annual accounting periods of operation.
             3150          (c) The examination is to be made as of:
             3151          (i) December 31 of the full three-year period; or
             3152          (ii) the last day of the month of an annual accounting period authorized for a captive
             3153      insurance company under this section.
             3154          (d) In addition to an examination required under this Subsection (1), the commissioner,
             3155      or a person appointed by the commissioner may examine a captive insurance company
             3156      whenever the commissioner determines it to be prudent.
             3157          (2) During an examination under this section the commissioner, or a person appointed
             3158      by the commissioner, shall thoroughly inspect and examine the affairs of the captive insurance


             3159      company to ascertain:
             3160          (a) the financial condition of the captive insurance company;
             3161          (b) the ability of the captive insurance company to fulfill the obligations of the captive
             3162      insurance company; and
             3163          (c) whether the captive insurance company has complied with this chapter.
             3164          (3) The commissioner upon application may enlarge the three-year period described in
             3165      Subsection (1) to five years, if a captive insurance company is subject to a comprehensive
             3166      annual audit during that period:
             3167          (a) of a scope satisfactory to the commissioner; and
             3168          (b) performed by independent auditors approved by the commissioner.
             3169          (4) The commissioner may accept a comprehensive annual independent audit in lieu of
             3170      an examination:
             3171          (a) of a scope satisfactory to the commissioner; and
             3172          (b) performed by an independent auditor approved by the commissioner.
             3173          [(4)] (5) A captive insurance company that is inspected and examined under this
             3174      section shall pay, as provided in Subsection 31A-37-202 (6)(b), the expenses and charges of an
             3175      inspection and examination.
             3176          Section H. [ 32 ] 33 .H . Section 31A-37a-402 is amended to read:
             3177           31A-37a-402. Permitted reinsurance.
             3178          (1) (a) A special purpose financial captive insurance company may reinsure only the
             3179      risks of a ceding insurer, pursuant to a reinsurance contract.
             3180          (b) A special purpose financial captive insurance company may not issue a contract of
             3181      insurance or a contract for assumption of risk or indemnification of loss other than a
             3182      reinsurance contract described in Subsection (1)(a).
             3183          (2) Unless otherwise approved in advance by the commissioner, a special purpose
             3184      financial captive insurance company may not assume or retain exposure to insurance or
             3185      reinsurance losses for its own account that are not funded by:
             3186          (a) proceeds from a special purpose financial captive insurance company insurance
             3187      securitization;
             3188          (b) a letter of credit; [or]
             3189          (c) an asset described in Subsection 31A-37a-102 (1)(c);


             3190          (d) a premium or another amount payable by the ceding insurer to the special purpose
             3191      financial captive insurance company pursuant to the reinsurance contract; [and] or
             3192          (e) a return on investment of an item described in Subsections (2)(a) through (d).
             3193          (3) (a) A reinsurance contract shall contain a provision reasonably required or
             3194      approved by the commissioner.
             3195          (b) A requirement described in Subsection (3)(a) shall take into account the laws
             3196      applicable to the ceding insurer regarding the ceding insurer taking credit for the reinsurance
             3197      provided under the reinsurance contract.
             3198          (4) Subject to the prior approval of the commissioner, a special purpose financial
             3199      captive insurance company may cede risks assumed through a reinsurance contract to one or
             3200      more reinsurers through the purchase of reinsurance.
             3201          (5) (a) This Subsection (5) applies to a contract or commercial activity that:
             3202          (i) relates to or is incidental to a reinsurance contract; and
             3203          (ii) is necessary to fulfill the purposes of:
             3204          (A) a reinsurance contract;
             3205          (B) insurance securitization; and
             3206          (C) this chapter.
             3207          (b) A special purpose financial captive insurance company may engage in a contract or
             3208      commercial activity described in Subsection (5)(a) if the contract or commercial activity is:
             3209          (i) in the special purpose financial captive insurance company's plan of operation; or
             3210          (ii) approved in advance by the commissioner.
             3211          (c) A contract or commercial activity described in Subsection (5)(a) includes:
             3212          (i) entering into a reinsurance contract;
             3213          (ii) issuing a special purpose financial captive insurance company security;
             3214          (iii) complying with a term of a contract or security described in Subsection (5)(c)(i) or
             3215      (ii);
             3216          (iv) entering into:
             3217          (A) a trust;
             3218          (B) a guaranteed investment contract;
             3219          (C) a swap;
             3220          (D) a derivative transaction;


             3221          (E) a tax transaction;
             3222          (F) an administration transaction;
             3223          (G) a reimbursement transaction; or
             3224          (H) a fiscal agent transaction;
             3225          (v) complying with a trust indenture, reinsurance, or retrocession; and
             3226          (vi) another agreement necessary or incidental to effect an insurance securitization in
             3227      compliance with:
             3228          (A) the special purpose financial captive insurance company's plan of operation; and
             3229          (B) this chapter.
             3230          (6) Unless otherwise approved in advance by the commissioner, a reinsurance contract
             3231      may not contain a provision for payment by the special purpose financial captive insurance
             3232      company in discharge of its obligations under the reinsurance contract to a person other than
             3233      the ceding insurer or any receiver of the ceding insurer.
             3234          (7) A special purpose financial captive insurance company shall notify the
             3235      commissioner immediately of an action by a ceding insurer or another person to foreclose on or
             3236      otherwise take possession of collateral provided by the special purpose financial captive
             3237      insurance company to secure an obligation of the special purpose financial captive insurance
             3238      company.
             3238a      H. Section [ 33 ] 34 . Section 35A-4-312 is amended to read:
             3238b          35A-4-312.   Records.
             3238c          (1) (a) An employing unit shall keep true and accurate work records containing any information the
             3238d      department may prescribe by rule.
             3238e          (b) A record shall be open to inspection and subject to being copied by the division or its authorized
             3238f      representatives at a reasonable time and as often as may be necessary.
             3238g          (c) An employing unit shall make a record available in the state for three years after the calendar year
             3238h      in which the services are rendered.
             3238i          (2) The division may require from an employing unit a sworn or unsworn report with respect to a
             3238j      person employed by the employing unit that the division considers necessary for the effective administration
             3238k      of this chapter.
             3238l          (3) Except as provided in this section or in Sections 35A-4-103 and 35A-4-106, information
             3238m      obtained under this chapter or obtained from an individual may not be published or open to public inspection
             3238n      in any manner revealing the employing unit's or individual's identity.
             3238o          (4) (a) The information obtained by the division under this section may not be used in court or
             3238p      admitted into evidence in an action or proceeding, except:
             3238q          (i) in an action or proceeding arising out of this chapter;
             3238r          (ii) if the Labor Commission enters into a written agreement with the division under


             3238s      H. Subsection (6)(b), in an action or proceeding by the Labor Commission to enforce:
             3238t          (A) Title 34, Chapter 23, Employment of Minors;
             3238u          (B) Title 34, Chapter 28, Payment of Wages;
             3238v          (C) Title 34, Chapter 40, Utah Minimum Wage Act; or
             3238w          (D) Title 34A, Utah Labor Code; or
             3238x          (iii) under the terms of a court order obtained under Subsection 63G-2-202(7) and Section
             3238y      63G-2-207.
             3238z          (b) The information obtained by the division under this section shall be disclosed to:
             3238aa          (i) a party to an unemployment insurance hearing before an administrative law judge of the
             3238ab      department or a review by the Workforce Appeals Board to the extent necessary for the proper presentation
             3238ac      of the party's case; or
             3238ad          (ii) an employer, upon request in writing for any information concerning a claim for a benefit with
             3238ae      respect to a former employee of the employer.
             3238af          (5) The information obtained by the division under this section may be disclosed to:
             3238ag          (a) an employee of the department in the performance of the employee's duties in administering this
             3238ah      chapter or other programs of the department;
             3238ai          (b) an employee of the Labor Commission for the purpose of carrying out the programs administered
             3238aj      by the Labor Commission;
             3238ak          (c) an employee of the Department of Commerce for the purpose of carrying out the programs
             3238al      administered by the Department of Commerce;
             3238am          (d) an employee of the governor's office or another state governmental agency administratively
             3238an      responsible for statewide economic development, to the extent necessary for economic development policy
             3238ao      analysis and formulation;
             3238ap          (e) an employee of another governmental agency that is specifically identified and authorized by
             3238aq      federal or state law to receive the information for the purposes stated in the law authorizing the employee of
             3238ar      the agency to receive the information;
             3238as          (f) an employee of a governmental agency or workers' compensation insurer to the extent the
             3238at      information will aid in:
             3238au          (i) the detection or avoidance of duplicate, inconsistent, or fraudulent claims against:
             3238av          (A) a workers' compensation program; or
             3238aw          (B) public assistance funds; or
             3238ax          (ii) the recovery of overpayments of workers' compensation or public assistance funds;
             3238ay          (g) an employee of a law enforcement agency to the extent the disclosure is necessary to avoid a
             3238az      significant risk to public safety or in aid of a felony criminal investigation;
             3238ba          (h) an employee of the State Tax Commission or the Internal Revenue Service for the purposes of:
             3238bb          (i) audit verification or simplification;
             3238bc          (ii) state or federal tax compliance;
             3238bd          (iii) verification of a code or classification of the: .H


             3238be          (A) 1987 Standard Industrial Classification Manual of the federal Executive Office of the President,
             3238bf      Office of Management and Budget; or
             3238bg          (B) 2002 North American Industry Classification System of the federal Executive Office of the
             3238bh      President, Office of Management and Budget; and
             3238bi          (iv) statistics;
             3238bj          (i) an employee or contractor of the department or an educational institution, or other governmental
             3238bk      entity engaged in workforce investment and development activities under the Workforce Investment Act of
             3238bl      1998 for the purpose of:
             3238bm          (i) coordinating services with the department;
             3238bn          (ii) evaluating the effectiveness of those activities; and
             3238bo          (iii) measuring performance;
             3238bp          (j) an employee of the Governor's Office of Economic Development, for the purpose of periodically
             3238bq      publishing in the Directory of Business and Industry, the name, address, telephone number, number of
             3238br      employees by range, code or classification of an employer, and type of ownership of Utah employers;
             3238bs          (k) the public for any purpose following a written waiver by all interested parties of their rights to
             3238bt      nondisclosure; [ or ]
             3238bu          (l) an individual whose wage data is submitted to the department by an employer, so long as no
             3238bv      information other than the individual's wage data and the identity of the employer who submitted the
             3238bw      information is provided to the individual ; or
             3238bx          (m) an employee of the Insurance Department for the purpose of administering Title 31A, Chapter
             3238by      40, Professional Employer Organization Licensing Act .
             3238bz           (6) Disclosure of private information under Subsection (4)(a)(ii) or Subsection (5), with the
             3238ca      exception of Subsections (5)(a) and (g), shall be made only if:
             3238cb          (a) the division determines that the disclosure will not have a negative effect on:
             3238cc          (i) the willingness of employers to report wage and employment information; or
             3238cd          (ii) the willingness of individuals to file claims for unemployment benefits; and
             3238ce          (b) the agency enters into a written agreement with the division in accordance with rules made by
             3238cf      the department.
             3238cg          (7) (a) The employees of a division of the department other than the Workforce Development and
             3238ch      Information Division and the Unemployment Insurance Division or an agency receiving private information
             3238ci      from the division under this chapter are subject to the same requirements of privacy and confidentiality and
             3238cj      to the same penalties for misuse or improper disclosure of the information as employees of the division.
             3238ck          (b) Use of private information obtained from the department by a person, or for a purpose other than
             3238cl      one authorized in Subsection (4) or (5) violates Subsection 76-8-1301(4). .H
             3239          Section H. [ 33 ] 35 .H . Section 63G-2-302 is amended to read:
             3240           63G-2-302. Private records.
             3241          (1) The following records are private:


             3242          (a) records concerning an individual's eligibility for unemployment insurance benefits,
             3243      social services, welfare benefits, or the determination of benefit levels;
             3244          (b) records containing data on individuals describing medical history, diagnosis,
             3245      condition, treatment, evaluation, or similar medical data;
             3246          (c) records of publicly funded libraries that when examined alone or with other records
             3247      identify a patron;
             3248          (d) records received or generated for a Senate or House Ethics Committee concerning
             3249      any alleged violation of the rules on legislative ethics, prior to the meeting, and after the
             3250      meeting, if the ethics committee meeting was closed to the public;
             3251          (e) records received or generated for a Senate confirmation committee concerning


             3252      character, professional competence, or physical or mental health of an individual:
             3253          (i) if prior to the meeting, the chair of the committee determines release of the records:
             3254          (A) reasonably could be expected to interfere with the investigation undertaken by the
             3255      committee; or
             3256          (B) would create a danger of depriving a person of a right to a fair proceeding or
             3257      impartial hearing; and
             3258          (ii) after the meeting, if the meeting was closed to the public;
             3259          (f) employment records concerning a current or former employee of, or applicant for
             3260      employment with, a governmental entity that would disclose that individual's home address,
             3261      home telephone number, Social Security number, insurance coverage, marital status, or payroll
             3262      deductions;
             3263          (g) records or parts of records under Section 63G-2-303 that a current or former
             3264      employee identifies as private according to the requirements of that section;
             3265          (h) that part of a record indicating a person's Social Security number or federal
             3266      employer identification number if provided under Section 31A-23a-104 , 31A-25-202 ,
             3267      31A-26-202 , 58-1-301 , 61-1-4 , or 61-2-6 ;
             3268          (i) that part of a voter registration record identifying a voter's driver license or
             3269      identification card number, Social Security number, or last four digits of the Social Security
             3270      number;
             3271          (j) a record that:
             3272          (i) contains information about an individual;
             3273          (ii) is voluntarily provided by the individual; and
             3274          (iii) goes into an electronic database that:
             3275          (A) is designated by and administered under the authority of the Chief Information
             3276      Officer; and
             3277          (B) acts as a repository of information about the individual that can be electronically
             3278      retrieved and used to facilitate the individual's online interaction with a state agency;
             3279          (k) information provided to the Commissioner of Insurance under:
             3280          (i) Subsection 31A-23a-115 (2)(a); [or]
             3281          (ii) Subsection 31A-23a-302 (3); [and] or
             3282          (iii) Subsection 31A-26-210 (3); and


             3283          (l) information obtained through a criminal background check under Title 11, Chapter
             3284      40, Criminal Background Checks by Political Subdivisions Operating Water Systems.
             3285          (2) The following records are private if properly classified by a governmental entity:
             3286          (a) records concerning a current or former employee of, or applicant for employment
             3287      with a governmental entity, including performance evaluations and personal status information
             3288      such as race, religion, or disabilities, but not including records that are public under Subsection
             3289      63G-2-301 (2)(b) or 63G-2-301 (3)(o), or private under Subsection (1)(b);
             3290          (b) records describing an individual's finances, except that the following are public:
             3291          (i) records described in Subsection 63G-2-301 (2);
             3292          (ii) information provided to the governmental entity for the purpose of complying with
             3293      a financial assurance requirement; or
             3294          (iii) records that must be disclosed in accordance with another statute;
             3295          (c) records of independent state agencies if the disclosure of those records would
             3296      conflict with the fiduciary obligations of the agency;
             3297          (d) other records containing data on individuals the disclosure of which constitutes a
             3298      clearly unwarranted invasion of personal privacy;
             3299          (e) records provided by the United States or by a government entity outside the state
             3300      that are given with the requirement that the records be managed as private records, if the
             3301      providing entity states in writing that the record would not be subject to public disclosure if
             3302      retained by it; and
             3303          (f) any portion of a record in the custody of the Division of Aging and Adult Services,
             3304      created in Section 62A-3-102 , that may disclose, or lead to the discovery of, the identity of a
             3305      person who made a report of alleged abuse, neglect, or exploitation of a vulnerable adult.
             3306          (3) (a) As used in this Subsection (3), "medical records" means medical reports,
             3307      records, statements, history, diagnosis, condition, treatment, and evaluation.
             3308          (b) Medical records in the possession of the University of Utah Hospital, its clinics,
             3309      doctors, or affiliated entities are not private records or controlled records under Section
             3310      63G-2-304 when the records are sought:
             3311          (i) in connection with any legal or administrative proceeding in which the patient's
             3312      physical, mental, or emotional condition is an element of any claim or defense; or
             3313          (ii) after a patient's death, in any legal or administrative proceeding in which any party


             3314      relies upon the condition as an element of the claim or defense.
             3315          (c) Medical records are subject to production in a legal or administrative proceeding
             3316      according to state or federal statutes or rules of procedure and evidence as if the medical
             3317      records were in the possession of a nongovernmental medical care provider.




Legislative Review Note
    as of 11-20-08 4:25 PM


Office of Legislative Research and General Counsel


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