H.B. 39

1

INSURANCE RELATED AMENDMENTS
2 2010 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: James A. Dunnigan
5 Senate Sponsor: Wayne L. Niederhauser
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 and related provisions to make various
12 amendments.
13 Highlighted Provisions:
14 This bill:
15 . modifies definitions;
16 . addresses fees, nonlapsing money, and the creation of restricted accounts;
17 . removes outdated language related to reporting;
18 . allows a member of the Title and Escrow Commission to continue to serve until
19 replaced;
20 . modifies duties of the Title and Escrow Commission;
21 . modifies provisions related to variable contract law;
22 . modifies provisions related to approval of forms;
23 . addresses requirements for purchasing groups;
24 . clarifies language related to underinsured motorist coverage;
25 . prohibits certain conduct related insurance premium finance agreements;
26 . modifies provisions related to catastrophic coverage of mental health conditions;
27 . addresses issuance of group or blanket accident and health insurance;

28 . modifies Utah's mini-COBRA provisions;
29 . addresses special enrollment periods relating to Medicaid and Children's Health
30 Insurance Program;
31 . addresses provisions related to licensure and insurance adjusting;
32 . modifies definitions related to life settlements;
33 . provides for rulemaking and other processes related to surrender of a professional
34 employer organization license;
35 . addresses the board of directors for the Utah Defined Contribution Risk Adjuster;
36 and
37 . makes technical and conforming amendments.
38 Monies Appropriated in this Bill:
39 None
40 Other Special Clauses:
41 This bill provides an effective date.
42 Utah Code Sections Affected:
43 AMENDS:
44 31A-1-301, as last amended by Laws of Utah 2009, Chapter 349
45 31A-2-403, as last amended by Laws of Utah 2008, Chapter 345
46 31A-2-404, as last amended by Laws of Utah 2008, Chapter 382
47 31A-3-103, as last amended by Laws of Utah 2009, Chapters 183 and 368
48 31A-3-104, as last amended by Laws of Utah 2006, Chapter 117
49 31A-3-304 (Superseded 07/01/10), as last amended by Laws of Utah 2009, Chapter
50 183
51 31A-3-304 (Effective 07/01/10), as last amended by Laws of Utah 2009, Chapter 183
52 31A-5-217.5, as enacted by Laws of Utah 1992, Chapter 230
53 31A-15-208, as enacted by Laws of Utah 1992, Chapter 258
54 31A-20-106, as enacted by Laws of Utah 1985, Chapter 242
55 31A-21-201, as last amended by Laws of Utah 2005, Chapter 123
56 31A-21-301, as last amended by Laws of Utah 2001, Chapter 116
57 31A-22-305.3, as last amended by Laws of Utah 2009, Chapter 231
58 31A-22-411, as last amended by Laws of Utah 1991, Chapter 74

59 31A-22-625, as last amended by Laws of Utah 2008, Chapters 345 and 382
60 31A-22-701, as last amended by Laws of Utah 2007, Chapter 307
61 31A-22-722, as last amended by Laws of Utah 2009, Chapter 12
62 31A-23a-415, as last amended by Laws of Utah 2007, Chapter 325
63 31A-26-201, as last amended by Laws of Utah 2003, Chapter 298
64 31A-35-401, as last amended by Laws of Utah 2009, Chapter 183
65 31A-35-406, as last amended by Laws of Utah 2009, Chapters 183 and 349
66 31A-36-102, as last amended by Laws of Utah 2009, Chapter 355
67 31A-40-103, as enacted by Laws of Utah 2008, Chapter 318
68 31A-40-302, as enacted by Laws of Utah 2008, Chapter 318
69 31A-42-201, as enacted by Laws of Utah 2009, Chapter 12
70 63J-1-602, as enacted by Laws of Utah 2009, Chapter 368
71 ENACTS:
72 31A-3-105, Utah Code Annotated 1953
73 31A-22-429, Utah Code Annotated 1953
74 31A-22-725, Utah Code Annotated 1953
75 31A-40-307, Utah Code Annotated 1953
76 ENACTS UNCODIFIED MATERIAL
77
78 Be it enacted by the Legislature of the state of Utah:
79 Section 1. Section 31A-1-301 is amended to read:
80 31A-1-301. Definitions.
81 As used in this title, unless otherwise specified:
82 (1) (a) "Accident and health insurance" means insurance to provide protection against
83 economic losses resulting from:
84 (i) a medical condition including:
85 (A) a medical care expense; or
86 (B) the risk of disability;
87 (ii) accident; or
88 (iii) sickness.
89 (b) "Accident and health insurance":

90 (i) includes a contract with disability contingencies including:
91 (A) an income replacement contract;
92 (B) a health care contract;
93 (C) an expense reimbursement contract;
94 (D) a credit accident and health contract;
95 (E) a continuing care contract; and
96 (F) a long-term care contract; and
97 (ii) may provide:
98 (A) hospital coverage;
99 (B) surgical coverage;
100 (C) medical coverage;
101 (D) loss of income coverage;
102 (E) prescription drug coverage;
103 (F) dental coverage; or
104 (G) vision coverage.
105 (c) "Accident and health insurance" does not include workers' compensation insurance.
106 (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
107 63G, Chapter 3, Utah Administrative Rulemaking Act.
108 (3) "Administrator" is defined in Subsection (159).
109 (4) "Adult" means an individual who has attained the age of at least 18 years.
110 (5) "Affiliate" means a person who controls, is controlled by, or is under common
111 control with, another person. A corporation is an affiliate of another corporation, regardless of
112 ownership, if substantially the same group of individuals manage the corporations.
113 (6) "Agency" means:
114 (a) a person other than an individual, including a sole proprietorship by which an
115 individual does business under an assumed name; and
116 (b) an insurance organization licensed or required to be licensed under Section
117 31A-23a-301 .
118 (7) "Alien insurer" means an insurer domiciled outside the United States.
119 (8) "Amendment" means an endorsement to an insurance policy or certificate.
120 (9) "Annuity" means an agreement to make periodical payments for a period certain or

121 over the lifetime of one or more individuals if the making or continuance of all or some of the
122 series of the payments, or the amount of the payment, is dependent upon the continuance of
123 human life.
124 (10) "Application" means a document:
125 (a) (i) completed by an applicant to provide information about the risk to be insured;
126 and
127 (ii) that contains information that is used by the insurer to evaluate risk and decide
128 whether to:
129 (A) insure the risk under:
130 (I) the coverage as originally offered; or
131 (II) a modification of the coverage as originally offered; or
132 (B) decline to insure the risk; or
133 (b) used by the insurer to gather information from the applicant before issuance of an
134 annuity contract.
135 (11) "Articles" or "articles of incorporation" means:
136 (a) the original articles;
137 (b) a special law;
138 (c) a charter;
139 (d) an amendment;
140 (e) restated articles;
141 (f) articles of merger or consolidation;
142 (g) a trust instrument;
143 (h) another constitutive document for a trust or other entity that is not a corporation;
144 and
145 (i) an amendment to an item listed in Subsections (11)(a) through (h).
146 (12) "Bail bond insurance" means a guarantee that a person will attend court when
147 required, up to and including surrender of the person in execution of a sentence imposed under
148 Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
149 (13) "Binder" is defined in Section 31A-21-102 .
150 (14) "Blanket insurance policy" means a group policy covering a defined class of
151 persons:

152 (a) without individual underwriting or application; and
153 (b) that is determined by definition with or without designating each person covered.
154 (15) "Board," "board of trustees," or "board of directors" means the group of persons
155 with responsibility over, or management of, a corporation, however designated.
156 (16) "Business entity" means:
157 (a) a corporation;
158 (b) an association;
159 (c) a partnership;
160 (d) a limited liability company;
161 (e) a limited liability partnership; or
162 (f) another legal entity.
163 (17) "Business of insurance" is defined in Subsection (85).
164 (18) "Business plan" means the information required to be supplied to the
165 commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
166 when these subsections apply by reference under:
167 (a) Section 31A-7-201 ;
168 (b) Section 31A-8-205 ; or
169 (c) Subsection 31A-9-205 (2).
170 (19) (a) "Bylaws" means the rules adopted for the regulation or management of a
171 corporation's affairs, however designated.
172 (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
173 corporation.
174 (20) "Captive insurance company" means:
175 (a) an insurer:
176 (i) owned by another organization; and
177 (ii) whose exclusive purpose is to insure risks of the parent organization and an
178 affiliated company; or
179 (b) in the case of a group or association, an insurer:
180 (i) owned by the insureds; and
181 (ii) whose exclusive purpose is to insure risks of:
182 (A) a member organization;

183 (B) a group member; or
184 (C) an affiliate of:
185 (I) a member organization; or
186 (II) a group member.
187 (21) "Casualty insurance" means liability insurance.
188 (22) "Certificate" means evidence of insurance given to:
189 (a) an insured under a group insurance policy; or
190 (b) a third party.
191 (23) "Certificate of authority" is included within the term "license."
192 (24) "Claim," unless the context otherwise requires, means a request or demand on an
193 insurer for payment of a benefit according to the terms of an insurance policy.
194 (25) "Claims-made coverage" means an insurance contract or provision limiting
195 coverage under a policy insuring against legal liability to claims that are first made against the
196 insured while the policy is in force.
197 (26) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
198 commissioner.
199 (b) When appropriate, the terms listed in Subsection (26)(a) apply to the equivalent
200 supervisory official of another jurisdiction.
201 (27) (a) "Continuing care insurance" means insurance that:
202 (i) provides board and lodging;
203 (ii) provides one or more of the following:
204 (A) a personal service;
205 (B) a nursing service;
206 (C) a medical service; or
207 (D) any other health-related service; and
208 (iii) provides the coverage described in this Subsection (27)(a) under an agreement
209 effective:
210 (A) for the life of the insured; or
211 (B) for a period in excess of one year.
212 (b) Insurance is continuing care insurance regardless of whether or not the board and
213 lodging are provided at the same location as a service described in Subsection (27)(a)(ii).

214 (28) (a) "Control," "controlling," "controlled," or "under common control" means the
215 direct or indirect possession of the power to direct or cause the direction of the management
216 and policies of a person. This control may be:
217 (i) by contract;
218 (ii) by common management;
219 (iii) through the ownership of voting securities; or
220 (iv) by a means other than those described in Subsections (28)(a)(i) through (iii).
221 (b) There is no presumption that an individual holding an official position with another
222 person controls that person solely by reason of the position.
223 (c) A person having a contract or arrangement giving control is considered to have
224 control despite the illegality or invalidity of the contract or arrangement.
225 (d) There is a rebuttable presumption of control in a person who directly or indirectly
226 owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
227 voting securities of another person.
228 (29) "Controlled insurer" means a licensed insurer that is either directly or indirectly
229 controlled by a producer.
230 (30) "Controlling person" means a person that directly or indirectly has the power to
231 direct or cause to be directed, the management, control, or activities of a reinsurance
232 intermediary.
233 (31) "Controlling producer" means a producer who directly or indirectly controls an
234 insurer.
235 (32) (a) "Corporation" means an insurance corporation, except when referring to:
236 (i) a corporation doing business:
237 (A) as:
238 (I) an insurance producer;
239 (II) a limited line producer;
240 (III) a consultant;
241 (IV) a managing general agent;
242 (V) a reinsurance intermediary;
243 (VI) a third party administrator; or
244 (VII) an adjuster; and

245 (B) under:
246 (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
247 Reinsurance Intermediaries;
248 (II) Chapter 25, Third Party Administrators; or
249 (III) Chapter 26, Insurance Adjusters; or
250 (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
251 Holding Companies.
252 (b) "Stock corporation" means a stock insurance corporation.
253 (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
254 (33) (a) "Creditable coverage" has the same meaning as provided in federal regulations
255 adopted pursuant to the Health Insurance Portability and Accountability Act of 1996, Pub. L.
256 104-191, 110 Stat. 1936.
257 (b) "Creditable coverage" includes coverage that is offered through a public health plan
258 such as:
259 (i) the Primary Care Network Program under a Medicaid primary care network
260 demonstration waiver obtained subject to Section 26-18-3 ;
261 (ii) the Children's Health Insurance Program under Section 26-40-106 ; or
262 (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
263 101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. 109-415.
264 (34) "Credit accident and health insurance" means insurance on a debtor to provide
265 indemnity for payments coming due on a specific loan or other credit transaction while the
266 debtor is disabled.
267 (35) (a) "Credit insurance" means insurance offered in connection with an extension of
268 credit that is limited to partially or wholly extinguishing that credit obligation.
269 (b) "Credit insurance" includes:
270 (i) credit accident and health insurance;
271 (ii) credit life insurance;
272 (iii) credit property insurance;
273 (iv) credit unemployment insurance;
274 (v) guaranteed automobile protection insurance;
275 (vi) involuntary unemployment insurance;

276 (vii) mortgage accident and health insurance;
277 (viii) mortgage guaranty insurance; and
278 (ix) mortgage life insurance.
279 (36) "Credit life insurance" means insurance on the life of a debtor in connection with
280 an extension of credit that pays a person if the debtor dies.
281 (37) "Credit property insurance" means insurance:
282 (a) offered in connection with an extension of credit; and
283 (b) that protects the property until the debt is paid.
284 (38) "Credit unemployment insurance" means insurance:
285 (a) offered in connection with an extension of credit; and
286 (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
287 (i) specific loan; or
288 (ii) credit transaction.
289 (39) "Creditor" means a person, including an insured, having a claim, whether:
290 (a) matured;
291 (b) unmatured;
292 (c) liquidated;
293 (d) unliquidated;
294 (e) secured;
295 (f) unsecured;
296 (g) absolute;
297 (h) fixed; or
298 (i) contingent.
299 (40) (a) "Customer service representative" means a person that provides an insurance
300 service and insurance product information:
301 (i) for the customer service representative's:
302 (A) producer; or
303 (B) consultant employer; and
304 (ii) to the customer service representative's employer's:
305 (A) customer;
306 (B) client; or

307 (C) organization.
308 (b) A customer service representative may only operate within the scope of authority of
309 the customer service representative's producer or consultant employer.
310 (41) "Deadline" means a final date or time:
311 (a) imposed by:
312 (i) statute;
313 (ii) rule; or
314 (iii) order; and
315 (b) by which a required filing or payment must be received by the department.
316 (42) "Deemer clause" means a provision under this title under which upon the
317 occurrence of a condition precedent, the commissioner is considered to have taken a specific
318 action. If the statute so provides, a condition precedent may be the commissioner's failure to
319 take a specific action.
320 (43) "Degree of relationship" means the number of steps between two persons
321 determined by counting the generations separating one person from a common ancestor and
322 then counting the generations to the other person.
323 (44) "Department" means the Insurance Department.
324 (45) "Director" means a member of the board of directors of a corporation.
325 (46) "Disability" means a physiological or psychological condition that partially or
326 totally limits an individual's ability to:
327 (a) perform the duties of:
328 (i) that individual's occupation; or
329 (ii) any occupation for which the individual is reasonably suited by education, training,
330 or experience; or
331 (b) perform two or more of the following basic activities of daily living:
332 (i) eating;
333 (ii) toileting;
334 (iii) transferring;
335 (iv) bathing; or
336 (v) dressing.
337 (47) "Disability income insurance" is defined in Subsection (76).

338 (48) "Domestic insurer" means an insurer organized under the laws of this state.
339 (49) "Domiciliary state" means the state in which an insurer:
340 (a) is incorporated;
341 (b) is organized; or
342 (c) in the case of an alien insurer, enters into the United States.
343 (50) (a) "Eligible employee" means:
344 (i) an employee who:
345 (A) works on a full-time basis; and
346 (B) has a normal work week of 30 or more hours; or
347 (ii) a person described in Subsection (50)(b).
348 (b) "Eligible employee" includes, if the individual is included under a health benefit
349 plan of a small employer:
350 (i) a sole proprietor;
351 (ii) a partner in a partnership; or
352 (iii) an independent contractor.
353 (c) "Eligible employee" does not include, unless eligible under Subsection (50)(b):
354 (i) an individual who works on a temporary or substitute basis for a small employer;
355 (ii) an employer's spouse; or
356 (iii) a dependent of an employer.
357 (51) "Employee" means an individual employed by an employer.
358 (52) "Employee benefits" means one or more benefits or services provided to:
359 (a) an employee; or
360 (b) a dependent of an employee.
361 (53) (a) "Employee welfare fund" means a fund:
362 (i) established or maintained, whether directly or through a trustee, by:
363 (A) one or more employers;
364 (B) one or more labor organizations; or
365 (C) a combination of employers and labor organizations; and
366 (ii) that provides employee benefits paid or contracted to be paid, other than income
367 from investments of the fund:
368 (A) by or on behalf of an employer doing business in this state; or

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

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

431 (i) a certificate;
432 (j) an endorsement;
433 (k) an actuarial certification;
434 (l) a licensee annual statement;
435 (m) a licensee renewal application;
436 (n) an advertisement; or
437 (o) an outline of coverage.
438 (64) "First party insurance" means an insurance policy or contract in which the insurer
439 agrees to pay a claim submitted to it by the insured for the insured's losses.
440 (65) "Foreign insurer" means an insurer domiciled outside of this state, including an
441 alien insurer.
442 (66) (a) "Form" means one of the following prepared for general use:
443 (i) a policy;
444 (ii) a certificate;
445 (iii) an application;
446 (iv) an outline of coverage; or
447 (v) an endorsement.
448 (b) "Form" does not include a document specially prepared for use in an individual
449 case.
450 (67) "Franchise insurance" means an individual insurance policy provided through a
451 mass marketing arrangement involving a defined class of persons related in some way other
452 than through the purchase of insurance.
453 (68) "General lines of authority" include:
454 (a) the general lines of insurance in Subsection (69);
455 (b) title insurance under one of the following sublines of authority:
456 (i) search, including authority to act as a title marketing representative;
457 (ii) escrow, including authority to act as a title marketing representative; and
458 (iii) title marketing representative only;
459 (c) surplus lines;
460 (d) workers' compensation; and
461 (e) any other line of insurance that the commissioner considers necessary to recognize

462 in the public interest.
463 (69) "General lines of insurance" include:
464 (a) accident and health;
465 (b) casualty;
466 (c) life;
467 (d) personal lines;
468 (e) property; and
469 (f) variable contracts, including variable life and annuity.
470 (70) "Group health plan" means an employee welfare benefit plan to the extent that the
471 plan provides medical care:
472 (a) (i) to an employee; or
473 (ii) to a dependent of an employee; and
474 (b) (i) directly;
475 (ii) through insurance reimbursement; or
476 (iii) through another method.
477 (71) (a) "Group insurance policy" means a policy covering a group of persons that is
478 issued:
479 (i) to a policyholder on behalf of the group; and
480 (ii) for the benefit of a member of the group who is selected under a procedure defined
481 in:
482 (A) the policy; or
483 (B) an agreement that is collateral to the policy.
484 (b) A group insurance policy may include a member of the policyholder's family or a
485 dependent.
486 (72) "Guaranteed automobile protection insurance" means insurance offered in
487 connection with an extension of credit that pays the difference in amount between the
488 insurance settlement and the balance of the loan if the insured automobile is a total loss.
489 (73) (a) Except as provided in Subsection (73)(b), "health benefit plan" means a policy
490 or certificate that:
491 (i) provides health care insurance;
492 (ii) provides major medical expense insurance; or

493 (iii) is offered as a substitute for hospital or medical expense insurance, such as:
494 (A) a hospital confinement indemnity; or
495 (B) a limited benefit plan.
496 (b) "Health benefit plan" does not include a policy or certificate that:
497 (i) provides benefits solely for:
498 (A) accident;
499 (B) dental;
500 (C) income replacement;
501 (D) long-term care;
502 (E) a Medicare supplement;
503 (F) a specified disease;
504 (G) vision; or
505 (H) a short-term limited duration; or
506 (ii) is offered and marketed as supplemental health insurance.
507 (74) "Health care" means any of the following intended for use in the diagnosis,
508 treatment, mitigation, or prevention of a human ailment or impairment:
509 (a) a professional service;
510 (b) a personal service;
511 (c) a facility;
512 (d) equipment;
513 (e) a device;
514 (f) supplies; or
515 (g) medicine.
516 (75) (a) "Health care insurance" or "health insurance" means insurance providing:
517 (i) a health care benefit; or
518 (ii) payment of an incurred health care expense.
519 (b) "Health care insurance" or "health insurance" does not include accident and health
520 insurance providing a benefit for:
521 (i) replacement of income;
522 (ii) short-term accident;
523 (iii) fixed indemnity;

524 (iv) credit accident and health;
525 (v) supplements to liability;
526 (vi) workers' compensation;
527 (vii) automobile medical payment;
528 (viii) no-fault automobile;
529 (ix) equivalent self-insurance; or
530 (x) a type of accident and health insurance coverage that is a part of or attached to
531 another type of policy.
532 (76) "Income replacement insurance" or "disability income insurance" means insurance
533 written to provide payments to replace income lost from accident or sickness.
534 (77) "Indemnity" means the payment of an amount to offset all or part of an insured
535 loss.
536 (78) "Independent adjuster" means an insurance adjuster required to be licensed under
537 Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
538 (79) "Independently procured insurance" means insurance procured under Section
539 31A-15-104 .
540 (80) "Individual" means a natural person.
541 (81) "Inland marine insurance" includes insurance covering:
542 (a) property in transit on or over land;
543 (b) property in transit over water by means other than boat or ship;
544 (c) bailee liability;
545 (d) fixed transportation property such as bridges, electric transmission systems, radio
546 and television transmission towers and tunnels; and
547 (e) personal and commercial property floaters.
548 (82) "Insolvency" means that:
549 (a) an insurer is unable to pay its debts or meet its obligations as the debts and
550 obligations mature;
551 (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
552 RBC under Subsection 31A-17-601 (8)(c); or
553 (c) an insurer is determined to be hazardous under this title.
554 (83) (a) "Insurance" means:

555 (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
556 persons to one or more other persons; or
557 (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
558 group of persons that includes the person seeking to distribute that person's risk.
559 (b) "Insurance" includes:
560 (i) a risk distributing arrangement providing for compensation or replacement for
561 damages or loss through the provision of a service or a benefit in kind;
562 (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
563 business and not as merely incidental to a business transaction; and
564 (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
565 but with a class of persons who have agreed to share the risk.
566 (84) "Insurance adjuster" means a person who directs the investigation, negotiation, or
567 settlement of a claim under an insurance policy other than life insurance or an annuity, on
568 behalf of an insurer, policyholder, or a claimant under an insurance policy.
569 (85) "Insurance business" or "business of insurance" includes:
570 (a) providing health care insurance by an organization that is or is required to be
571 licensed under this title;
572 (b) providing a benefit to an employee in the event of a contingency not within the
573 control of the employee, in which the employee is entitled to the benefit as a right, which
574 benefit may be provided either:
575 (i) by a single employer or by multiple employer groups; or
576 (ii) through one or more trusts, associations, or other entities;
577 (c) providing an annuity:
578 (i) including an annuity issued in return for a gift; and
579 (ii) except an annuity provided by a person specified in Subsections 31A-22-1305 (2)
580 and (3);
581 (d) providing the characteristic services of a motor club as outlined in Subsection
582 (113);
583 (e) providing another person with insurance;
584 (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
585 or surety, a contract or policy of title insurance;

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

617 (ii) a subscriber;
618 (iii) a member; and
619 (iv) a beneficiary.
620 (b) The definition in Subsection (89)(a):
621 (i) applies only to this title; and
622 (ii) does not define the meaning of this word as used in an insurance policy or
623 certificate.
624 (90) (a) "Insurer" means a person doing an insurance business as a principal including:
625 (i) a fraternal benefit society;
626 (ii) an issuer of a gift annuity other than an annuity specified in Subsections
627 31A-22-1305 (2) and (3);
628 (iii) a motor club;
629 (iv) an employee welfare plan; and
630 (v) a person purporting or intending to do an insurance business as a principal on that
631 person's own account.
632 (b) "Insurer" does not include a governmental entity to the extent the governmental
633 entity is engaged in an activity described in Section 31A-12-107 .
634 (91) "Interinsurance exchange" is defined in Subsection (142).
635 (92) "Involuntary unemployment insurance" means insurance:
636 (a) offered in connection with an extension of credit; and
637 (b) that provides indemnity if the debtor is involuntarily unemployed for payments
638 coming due on a:
639 (i) specific loan; or
640 (ii) credit transaction.
641 (93) "Large employer," in connection with a health benefit plan, means an employer
642 who, with respect to a calendar year and to a plan year:
643 (a) employed an average of at least 51 eligible employees on each business day during
644 the preceding calendar year; and
645 (b) employs at least two employees on the first day of the plan year.
646 (94) "Late enrollee," with respect to an employer health benefit plan, means an
647 individual whose enrollment is a late enrollment.

648 (95) "Late enrollment," with respect to an employer health benefit plan, means
649 enrollment of an individual other than:
650 (a) on the earliest date on which coverage can become effective for the individual
651 under the terms of the plan; or
652 (b) through special enrollment.
653 (96) (a) Except for a retainer contract or legal assistance described in Section
654 31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
655 specified legal expense.
656 (b) "Legal expense insurance" includes an arrangement that creates a reasonable
657 expectation of an enforceable right.
658 (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
659 legal services incidental to other insurance coverage.
660 (97) (a) "Liability insurance" means insurance against liability:
661 (i) for death, injury, or disability of a human being, or for damage to property,
662 exclusive of the coverages under:
663 (A) Subsection (107) for medical malpractice insurance;
664 (B) Subsection (134) for professional liability insurance; and
665 (C) Subsection (168) for workers' compensation insurance;
666 (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
667 insured who is injured, irrespective of legal liability of the insured, when issued with or
668 supplemental to insurance against legal liability for the death, injury, or disability of a human
669 being, exclusive of the coverages under:
670 (A) Subsection (107) for medical malpractice insurance;
671 (B) Subsection (134) for professional liability insurance; and
672 (C) Subsection (168) for workers' compensation insurance;
673 (iii) for loss or damage to property resulting from an accident to or explosion of a
674 boiler, pipe, pressure container, machinery, or apparatus;
675 (iv) for loss or damage to property caused by:
676 (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
677 (B) water entering through a leak or opening in a building; or
678 (v) for other loss or damage properly the subject of insurance not within another kind

679 of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
680 (b) "Liability insurance" includes:
681 (i) vehicle liability insurance;
682 (ii) residential dwelling liability insurance; and
683 (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
684 boiler, machinery, or apparatus of any kind when done in connection with insurance on the
685 elevator, boiler, machinery, or apparatus.
686 (98) (a) "License" means authorization issued by the commissioner to engage in an
687 activity that is part of or related to the insurance business.
688 (b) "License" includes a certificate of authority issued to an insurer.
689 (99) (a) "Life insurance" means:
690 (i) insurance on a human life; and
691 (ii) insurance pertaining to or connected with human life.
692 (b) The business of life insurance includes:
693 (i) granting a death benefit;
694 (ii) granting an annuity benefit;
695 (iii) granting an endowment benefit;
696 (iv) granting an additional benefit in the event of death by accident;
697 (v) granting an additional benefit to safeguard the policy against lapse; and
698 (vi) providing an optional method of settlement of proceeds.
699 (100) "Limited license" means a license that:
700 (a) is issued for a specific product of insurance; and
701 (b) limits an individual or agency to transact only for that product or insurance.
702 (101) "Limited line credit insurance" includes the following forms of insurance:
703 (a) credit life;
704 (b) credit accident and health;
705 (c) credit property;
706 (d) credit unemployment;
707 (e) involuntary unemployment;
708 (f) mortgage life;
709 (g) mortgage guaranty;

710 (h) mortgage accident and health;
711 (i) guaranteed automobile protection; and
712 (j) another form of insurance offered in connection with an extension of credit that:
713 (i) is limited to partially or wholly extinguishing the credit obligation; and
714 (ii) the commissioner determines by rule should be designated as a form of limited line
715 credit insurance.
716 (102) "Limited line credit insurance producer" means a person who sells, solicits, or
717 negotiates one or more forms of limited line credit insurance coverage to an individual through
718 a master, corporate, group, or individual policy.
719 (103) "Limited line insurance" includes:
720 (a) bail bond;
721 (b) limited line credit insurance;
722 (c) legal expense insurance;
723 (d) motor club insurance;
724 (e) rental car-related insurance;
725 (f) travel insurance;
726 (g) crop insurance;
727 (h) self-service storage insurance; and
728 (i) another form of limited insurance that the commissioner determines by rule should
729 be designated a form of limited line insurance.
730 (104) "Limited lines authority" includes:
731 (a) the lines of insurance listed in Subsection (103); and
732 (b) a customer service representative.
733 (105) "Limited lines producer" means a person who sells, solicits, or negotiates limited
734 lines insurance.
735 (106) (a) "Long-term care insurance" means an insurance policy or rider advertised,
736 marketed, offered, or designated to provide coverage:
737 (i) in a setting other than an acute care unit of a hospital;
738 (ii) for not less than 12 consecutive months for a covered person on the basis of:
739 (A) expenses incurred;
740 (B) indemnity;

741 (C) prepayment; or
742 (D) another method;
743 (iii) for one or more necessary or medically necessary services that are:
744 (A) diagnostic;
745 (B) preventative;
746 (C) therapeutic;
747 (D) rehabilitative;
748 (E) maintenance; or
749 (F) personal care; and
750 (iv) that may be issued by:
751 (A) an insurer;
752 (B) a fraternal benefit society;
753 (C) (I) a nonprofit health hospital; and
754 (II) a medical service corporation;
755 (D) a prepaid health plan;
756 (E) a health maintenance organization; or
757 (F) an entity similar to the entities described in Subsections (106)(a)(iv)(A) through (E)
758 to the extent that the entity is otherwise authorized to issue life or health care insurance.
759 (b) "Long-term care insurance" includes:
760 (i) any of the following that provide directly or supplement long-term care insurance:
761 (A) a group or individual annuity or rider; or
762 (B) a life insurance policy or rider;
763 (ii) a policy or rider that provides for payment of benefits on the basis of:
764 (A) cognitive impairment; or
765 (B) functional capacity; or
766 (iii) a qualified long-term care insurance contract.
767 (c) "Long-term care insurance" does not include:
768 (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
769 (ii) basic hospital expense coverage;
770 (iii) basic medical/surgical expense coverage;
771 (iv) hospital confinement indemnity coverage;

772 (v) major medical expense coverage;
773 (vi) income replacement or related asset-protection coverage;
774 (vii) accident only coverage;
775 (viii) coverage for a specified:
776 (A) disease; or
777 (B) accident;
778 (ix) limited benefit health coverage; or
779 (x) a life insurance policy that accelerates the death benefit to provide the option of a
780 lump sum payment:
781 (A) if the following are not conditioned on the receipt of long-term care:
782 (I) benefits; or
783 (II) eligibility; and
784 (B) the coverage is for one or more the following qualifying events:
785 (I) terminal illness;
786 (II) medical conditions requiring extraordinary medical intervention; or
787 (III) permanent institutional confinement.
788 (107) "Medical malpractice insurance" means insurance against legal liability incident
789 to the practice and provision of a medical service other than the practice and provision of a
790 dental service.
791 (108) "Member" means a person having membership rights in an insurance
792 corporation.
793 (109) "Minimum capital" or "minimum required capital" means the capital that must be
794 constantly maintained by a stock insurance corporation as required by statute.
795 (110) "Mortgage accident and health insurance" means insurance offered in connection
796 with an extension of credit that provides indemnity for payments coming due on a mortgage
797 while the debtor is disabled.
798 (111) "Mortgage guaranty insurance" means surety insurance under which a mortgagee
799 or other creditor is indemnified against losses caused by the default of a debtor.
800 (112) "Mortgage life insurance" means insurance on the life of a debtor in connection
801 with an extension of credit that pays if the debtor dies.
802 (113) "Motor club" means a person:

803 (a) licensed under:
804 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
805 (ii) Chapter 11, Motor Clubs; or
806 (iii) Chapter 14, Foreign Insurers; and
807 (b) that promises for an advance consideration to provide for a stated period of time
808 one or more:
809 (i) legal services under Subsection 31A-11-102 (1)(b);
810 (ii) bail services under Subsection 31A-11-102 (1)(c); or
811 (iii) (A) trip reimbursement;
812 (B) towing services;
813 (C) emergency road services;
814 (D) stolen automobile services;
815 (E) a combination of the services listed in Subsections (113)(b)(iii)(A) through (D); or
816 (F) other services given in Subsections 31A-11-102 (1)(b) through (f).
817 (114) "Mutual" means a mutual insurance corporation.
818 (115) "Network plan" means health care insurance:
819 (a) that is issued by an insurer; and
820 (b) under which the financing and delivery of medical care is provided, in whole or in
821 part, through a defined set of providers under contract with the insurer, including the financing
822 and delivery of an item paid for as medical care.
823 (116) "Nonparticipating" means a plan of insurance under which the insured is not
824 entitled to receive a dividend representing a share of the surplus of the insurer.
825 (117) "Ocean marine insurance" means insurance against loss of or damage to:
826 (a) ships or hulls of ships;
827 (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys,
828 securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
829 interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
830 (c) earnings such as freight, passage money, commissions, or profits derived from
831 transporting goods or people upon or across the oceans or inland waterways; or
832 (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
833 owners of other vessels, owners of fixed objects, customs or other authorities, or other persons

834 in connection with maritime activity.
835 (118) "Order" means an order of the commissioner.
836 (119) "Outline of coverage" means a summary that explains an accident and health
837 insurance policy.
838 (120) "Participating" means a plan of insurance under which the insured is entitled to
839 receive a dividend representing a share of the surplus of the insurer.
840 (121) "Participation," as used in a health benefit plan, means a requirement relating to
841 the minimum percentage of eligible employees that must be enrolled in relation to the total
842 number of eligible employees of an employer reduced by each eligible employee who
843 voluntarily declines coverage under the plan because the employee:
844 (a) has other group health care insurance coverage; or
845 (b) receives:
846 (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
847 Security Amendments of 1965; or
848 (ii) another government health benefit.
849 (122) "Person" includes:
850 (a) an individual;
851 (b) a partnership;
852 (c) a corporation;
853 (d) an incorporated or unincorporated association;
854 (e) a joint stock company;
855 (f) a trust;
856 (g) a limited liability company;
857 (h) a reciprocal;
858 (i) a syndicate; or
859 (j) another similar entity or combination of entities acting in concert.
860 (123) "Personal lines insurance" means property and casualty insurance coverage sold
861 for primarily noncommercial purposes to:
862 (a) an individual; or
863 (b) a family.
864 (124) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).

865 (125) "Plan year" means:
866 (a) the year that is designated as the plan year in:
867 (i) the plan document of a group health plan; or
868 (ii) a summary plan description of a group health plan;
869 (b) if the plan document or summary plan description does not designate a plan year or
870 there is no plan document or summary plan description:
871 (i) the year used to determine deductibles or limits;
872 (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
873 or
874 (iii) the employer's taxable year if:
875 (A) the plan does not impose deductibles or limits on a yearly basis; and
876 (B) (I) the plan is not insured; or
877 (II) the insurance policy is not renewed on an annual basis; or
878 (c) in a case not described in Subsection (125)(a) or (b), the calendar year.
879 (126) (a) "Policy" means a document, including [any] an attached endorsement or
880 application that:
881 (i) purports to be an enforceable contract; and
882 (ii) memorializes in writing some or all of the terms of an insurance contract.
883 (b) "Policy" includes a service contract issued by:
884 (i) a motor club under Chapter 11, Motor Clubs;
885 (ii) a service contract provided under Chapter 6a, Service Contracts; and
886 (iii) a corporation licensed under:
887 (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
888 (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
889 (c) "Policy" does not include:
890 (i) a certificate under a group insurance contract; or
891 (ii) a document that does not purport to have legal effect.
892 (127) "Policyholder" means a person who controls a policy, binder, or oral contract by
893 ownership, premium payment, or otherwise.
894 (128) "Policy illustration" means a presentation or depiction that includes
895 nonguaranteed elements of a policy of life insurance over a period of years.

896 (129) "Policy summary" means a synopsis describing the elements of a life insurance
897 policy.
898 (130) "Preexisting condition," with respect to a health benefit plan:
899 (a) means a condition that was present before the effective date of coverage, whether or
900 not medical advice, diagnosis, care, or treatment was recommended or received before that day;
901 and
902 (b) does not include a condition indicated by genetic information unless an actual
903 diagnosis of the condition by a physician has been made.
904 (131) (a) "Premium" means the monetary consideration for an insurance policy.
905 (b) "Premium" includes, however designated:
906 (i) an assessment;
907 (ii) a membership fee;
908 (iii) a required contribution; or
909 (iv) monetary consideration.
910 (c) (i) "Premium" does not include consideration paid to a third party administrator for
911 the third party administrator's services.
912 (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
913 insurance on the risks administered by the third party administrator.
914 (132) "Principal officers" for a corporation means the officers designated under
915 Subsection 31A-5-203 (3).
916 (133) "Proceeding" includes an action or special statutory proceeding.
917 (134) "Professional liability insurance" means insurance against legal liability incident
918 to the practice of a profession and provision of a professional service.
919 (135) (a) Except as provided in Subsection (135)(b), "property insurance" means
920 insurance against loss or damage to real or personal property of every kind and any interest in
921 that property:
922 (i) from all hazards or causes; and
923 (ii) against loss consequential upon the loss or damage including vehicle
924 comprehensive and vehicle physical damage coverages.
925 (b) "Property insurance" does not include:
926 (i) inland marine insurance; and

927 (ii) ocean marine insurance.
928 (136) "Qualified long-term care insurance contract" or "federally tax qualified
929 long-term care insurance contract" means:
930 (a) an individual or group insurance contract that meets the requirements of Section
931 7702B(b), Internal Revenue Code; or
932 (b) the portion of a life insurance contract that provides long-term care insurance:
933 (i) (A) by rider; or
934 (B) as a part of the contract; and
935 (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
936 Code.
937 (137) "Qualified United States financial institution" means an institution that:
938 (a) is:
939 (i) organized under the laws of the United States or any state; or
940 (ii) in the case of a United States office of a foreign banking organization, licensed
941 under the laws of the United States or any state;
942 (b) is regulated, supervised, and examined by a United States federal or state authority
943 having regulatory authority over a bank or trust company; and
944 (c) meets the standards of financial condition and standing that are considered
945 necessary and appropriate to regulate the quality of a financial institution whose letters of credit
946 will be acceptable to the commissioner as determined by:
947 (i) the commissioner by rule; or
948 (ii) the Securities Valuation Office of the National Association of Insurance
949 Commissioners.
950 (138) (a) "Rate" means:
951 (i) the cost of a given unit of insurance; or
952 (ii) for property or casualty insurance, that cost of insurance per exposure unit either
953 expressed as:
954 (A) a single number; or
955 (B) a pure premium rate, adjusted before the application of individual risk variations
956 based on loss or expense considerations to account for the treatment of:
957 (I) expenses;

958 (II) profit; and
959 (III) individual insurer variation in loss experience.
960 (b) "Rate" does not include a minimum premium.
961 (139) (a) Except as provided in Subsection (139)(b), "rate service organization" means
962 a person who assists an insurer in rate making or filing by:
963 (i) collecting, compiling, and furnishing loss or expense statistics;
964 (ii) recommending, making, or filing rates or supplementary rate information; or
965 (iii) advising about rate questions, except as an attorney giving legal advice.
966 (b) "Rate service organization" does not mean:
967 (i) an employee of an insurer;
968 (ii) a single insurer or group of insurers under common control;
969 (iii) a joint underwriting group; or
970 (iv) an individual serving as an actuarial or legal consultant.
971 (140) "Rating manual" means any of the following used to determine initial and
972 renewal policy premiums:
973 (a) a manual of rates;
974 (b) a classification;
975 (c) a rate-related underwriting rule; and
976 (d) a rating formula that describes steps, policies, and procedures for determining
977 initial and renewal policy premiums.
978 (141) "Received by the department" means:
979 (a) the date delivered to and stamped received by the department, if delivered in
980 person;
981 (b) the post mark date, if delivered by mail;
982 (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
983 (d) the received date recorded on an item delivered, if delivered by:
984 (i) facsimile;
985 (ii) email; or
986 (iii) another electronic method; or
987 (e) a date specified in:
988 (i) a statute;

989 (ii) a rule; or
990 (iii) an order.
991 (142) "Reciprocal" or "interinsurance exchange" means an unincorporated association
992 of persons:
993 (a) operating through an attorney-in-fact common to all of the persons; and
994 (b) exchanging insurance contracts with one another that provide insurance coverage
995 on each other.
996 (143) "Reinsurance" means an insurance transaction where an insurer, for
997 consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
998 reinsurance transactions, this title sometimes refers to:
999 (a) the insurer transferring the risk as the "ceding insurer"; and
1000 (b) the insurer assuming the risk as the:
1001 (i) "assuming insurer"; or
1002 (ii) "assuming reinsurer."
1003 (144) "Reinsurer" means a person licensed in this state as an insurer with the authority
1004 to assume reinsurance.
1005 (145) "Residential dwelling liability insurance" means insurance against liability
1006 resulting from or incident to the ownership, maintenance, or use of a residential dwelling that is
1007 a detached single family residence or multifamily residence up to four units.
1008 (146) (a) "Retrocession" means reinsurance with another insurer of a liability assumed
1009 under a reinsurance contract.
1010 (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
1011 liability assumed under a reinsurance contract.
1012 (147) "Rider" means an endorsement to:
1013 (a) an insurance policy; or
1014 (b) an insurance certificate.
1015 (148) (a) "Security" means a:
1016 (i) note;
1017 (ii) stock;
1018 (iii) bond;
1019 (iv) debenture;

1020 (v) evidence of indebtedness;
1021 (vi) certificate of interest or participation in a profit-sharing agreement;
1022 (vii) collateral-trust certificate;
1023 (viii) preorganization certificate or subscription;
1024 (ix) transferable share;
1025 (x) investment contract;
1026 (xi) voting trust certificate;
1027 (xii) certificate of deposit for a security;
1028 (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
1029 payments out of production under such a title or lease;
1030 (xiv) commodity contract or commodity option;
1031 (xv) certificate of interest or participation in, temporary or interim certificate for,
1032 receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
1033 in Subsections (148)(a)(i) through (xiv); or
1034 (xvi) another interest or instrument commonly known as a security.
1035 (b) "Security" does not include:
1036 (i) any of the following under which an insurance company promises to pay money in a
1037 specific lump sum or periodically for life or some other specified period:
1038 (A) insurance;
1039 (B) an endowment policy; or
1040 (C) an annuity contract; or
1041 (ii) a burial certificate or burial contract.
1042 (149) "Secondary medical condition" means a complication related to an exclusion
1043 from coverage in accident and health insurance.
1044 (150) "Self-insurance" means an arrangement under which a person provides for
1045 spreading its own risks by a systematic plan.
1046 (a) Except as provided in this Subsection (150), "self-insurance" does not include an
1047 arrangement under which a number of persons spread their risks among themselves.
1048 (b) "Self-insurance" includes:
1049 (i) an arrangement by which a governmental entity undertakes to indemnify an
1050 employee for liability arising out of the employee's employment; and

1051 (ii) an arrangement by which a person with a managed program of self-insurance and
1052 risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
1053 employees for liability or risk that is related to the relationship or employment.
1054 (c) "Self-insurance" does not include an arrangement with an independent contractor.
1055 (151) "Sell" means to exchange a contract of insurance:
1056 (a) by any means;
1057 (b) for money or its equivalent; and
1058 (c) on behalf of an insurance company.
1059 (152) "Short-term care insurance" means an insurance policy or rider advertised,
1060 marketed, offered, or designed to provide coverage that is similar to long-term care insurance,
1061 but that provides coverage for less than 12 consecutive months for each covered person.
1062 (153) "Significant break in coverage" means a period of 63 consecutive days during
1063 each of which an individual does not have creditable coverage.
1064 (154) "Small employer," in connection with a health benefit plan, means an employer
1065 who, with respect to a calendar year and to a plan year:
1066 (a) employed an average of at least two employees but not more than 50 eligible
1067 employees on each business day during the preceding calendar year; and
1068 (b) employs at least two employees on the first day of the plan year.
1069 (155) "Special enrollment period," in connection with a health benefit plan, has the
1070 same meaning as provided in federal regulations adopted pursuant to the Health Insurance
1071 Portability and Accountability Act of 1996, Pub. L. [No.] 104-191, 110 Stat. 1936.
1072 (156) (a) "Subsidiary" of a person means an affiliate controlled by that person either
1073 directly or indirectly through one or more affiliates or intermediaries.
1074 (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
1075 shares are owned by that person either alone or with its affiliates, except for the minimum
1076 number of shares the law of the subsidiary's domicile requires to be owned by directors or
1077 others.
1078 (157) Subject to Subsection (83)(b), "surety insurance" includes:
1079 (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
1080 perform the principal's obligations to a creditor or other obligee;
1081 (b) bail bond insurance; and

1082 (c) fidelity insurance.
1083 (158) (a) "Surplus" means the excess of assets over the sum of paid-in capital and
1084 liabilities.
1085 (b) (i) "Permanent surplus" means the surplus of a mutual insurer that is designated by
1086 the insurer as permanent.
1087 (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209 require
1088 that mutuals doing business in this state maintain specified minimum levels of permanent
1089 surplus.
1090 (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
1091 same as the minimum required capital requirement that applies to stock insurers.
1092 (c) "Excess surplus" means:
1093 (i) for a life insurer, accident and health insurer, health organization, or property and
1094 casualty insurer as defined in Section 31A-17-601 , the lesser of:
1095 (A) that amount of an insurer's or health organization's total adjusted capital that
1096 exceeds the product of:
1097 (I) 2.5; and
1098 (II) the sum of the insurer's or health organization's minimum capital or permanent
1099 surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
1100 (B) that amount of an insurer's or health organization's total adjusted capital that
1101 exceeds the product of:
1102 (I) 3.0; and
1103 (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
1104 (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
1105 that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
1106 (A) 1.5; and
1107 (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
1108 (159) "Third party administrator" or "administrator" means a person who collects
1109 charges or premiums from, or who, for consideration, adjusts or settles claims of residents of
1110 the state in connection with insurance coverage, annuities, or service insurance coverage,
1111 except:
1112 (a) a union on behalf of its members;

1113 (b) a person administering a:
1114 (i) pension plan subject to the federal Employee Retirement Income Security Act of
1115 1974;
1116 (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
1117 (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
1118 (c) an employer on behalf of the employer's employees or the employees of one or
1119 more of the subsidiary or affiliated corporations of the employer;
1120 (d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance
1121 for which the insurer holds a license in this state; or
1122 (e) a person:
1123 (i) licensed or exempt from licensing under:
1124 (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
1125 Reinsurance Intermediaries; or
1126 (B) Chapter 26, Insurance Adjusters; and
1127 (ii) whose activities are limited to those authorized under the license the person holds
1128 or for which the person is exempt.
1129 (160) "Title insurance" means the insuring, guaranteeing, or indemnifying of an owner
1130 of real or personal property or the holder of liens or encumbrances on that property, or others
1131 interested in the property against loss or damage suffered by reason of liens or encumbrances
1132 upon, defects in, or the unmarketability of the title to the property, or invalidity or
1133 unenforceability of any liens or encumbrances on the property.
1134 (161) "Total adjusted capital" means the sum of an insurer's or health organization's
1135 statutory capital and surplus as determined in accordance with:
1136 (a) the statutory accounting applicable to the annual financial statements required to be
1137 filed under Section 31A-4-113 ; and
1138 (b) another item provided by the RBC instructions, as RBC instructions is defined in
1139 Section 31A-17-601 .
1140 (162) (a) "Trustee" means "director" when referring to the board of directors of a
1141 corporation.
1142 (b) "Trustee," when used in reference to an employee welfare fund, means an
1143 individual, firm, association, organization, joint stock company, or corporation, whether acting

1144 individually or jointly and whether designated by that name or any other, that is charged with
1145 or has the overall management of an employee welfare fund.
1146 (163) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted insurer"
1147 means an insurer:
1148 (i) not holding a valid certificate of authority to do an insurance business in this state;
1149 or
1150 (ii) transacting business not authorized by a valid certificate.
1151 (b) "Admitted insurer" or "authorized insurer" means an insurer:
1152 (i) holding a valid certificate of authority to do an insurance business in this state; and
1153 (ii) transacting business as authorized by a valid certificate.
1154 (164) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.
1155 (165) "Vehicle liability insurance" means insurance against liability resulting from or
1156 incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a vehicle
1157 comprehensive or vehicle physical damage coverage under Subsection (135).
1158 (166) "Voting security" means a security with voting rights, and includes a security
1159 convertible into a security with a voting right associated with the security.
1160 (167) "Waiting period" for a health benefit plan means the period that must pass before
1161 coverage for an individual, who is otherwise eligible to enroll under the terms of the health
1162 benefit plan, can become effective.
1163 (168) "Workers' compensation insurance" means:
1164 (a) insurance for indemnification of an employer against liability for compensation
1165 based on:
1166 (i) a compensable accidental injury; and
1167 (ii) occupational disease disability;
1168 (b) employer's liability insurance incidental to workers' compensation insurance and
1169 written in connection with workers' compensation insurance; and
1170 (c) insurance assuring to a person entitled to workers' compensation benefits the
1171 compensation provided by law.
1172 Section 2. Section 31A-2-403 is amended to read:
1173 31A-2-403. Title and Escrow Commission created.
1174 (1) (a) Subject to Subsection (1)(b), there is created within the department the Title and

1175 Escrow Commission that is comprised of five members appointed by the governor with the
1176 consent of the Senate as follows:
1177 (i) four members shall each:
1178 (A) be or have been licensed under the title insurance line of authority; [and]
1179 (B) as of the day on which the member is appointed, be or have been licensed with the
1180 search or escrow subline of authority for at least five years; and
1181 (C) as of the day on which the member is appointed, not be from the same county as
1182 another member appointed under this Subsection (1)(a)(i); and
1183 (ii) one member shall be a member of the general public from any county in the state.
1184 (b) No more than one commission member may be appointed from a single company.
1185 (2) (a) Subject to Subsection (2)(c), a [member of the] commission member shall file
1186 with the [department] commissioner a disclosure of any position of employment or ownership
1187 interest that the [member of the] commission member has with respect to a person that is
1188 subject to the jurisdiction of the [department] commissioner.
1189 (b) The disclosure statement required by this Subsection (2) shall be:
1190 (i) filed by no later than the day on which the person begins that person's appointment;
1191 and
1192 (ii) amended when a significant change occurs in any matter required to be disclosed
1193 under this Subsection (2).
1194 (c) A [member of the] commission member is not required to disclose an ownership
1195 interest that the [member of the] commission member has if the ownership interest is held as
1196 part of a mutual fund, trust, or similar investment.
1197 (3) (a) Except as required by Subsection (3)(b), as terms of current commission
1198 members expire, the governor shall appoint each new commission member to a four-year term
1199 ending on June 30.
1200 (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
1201 time of appointment, adjust the length of terms to ensure that the terms of the commission
1202 members are staggered so that approximately half of the commission is appointed every two
1203 years.
1204 (c) A commission member may not serve more than one consecutive term.
1205 (d) When a vacancy occurs in the membership for any reason, the governor, with the

1206 consent of the Senate, shall appoint a replacement for the unexpired term.
1207 (e) Notwithstanding the other provisions of this Subsection (3), a commission member
1208 serves until a successor is appointed by the governor with the consent of the Senate.
1209 (4) (a) A [member of the] commission member may not receive compensation or
1210 benefits for the commission member's services, but may receive per diem and expenses
1211 incurred in the performance of the commission member's official duties at the rates established
1212 by the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
1213 (b) A commission member may decline to receive per diem and expenses for the
1214 commission member's service.
1215 (5) Members of the commission shall annually select one commission member to serve
1216 as chair.
1217 (6) (a) The commission shall meet at least monthly.
1218 (b) The commissioner may call additional meetings:
1219 (i) at the commissioner's discretion;
1220 (ii) upon the request of the chair of the commission; or
1221 (iii) upon the written request of three or more commission members.
1222 (c) (i) Three [members of the] commission members constitute a quorum for the
1223 transaction of business.
1224 (ii) The action of a majority of the commission members when a quorum is present is
1225 the action of the commission.
1226 (7) The [department] commissioner shall staff the commission.
1227 Section 3. Section 31A-2-404 is amended to read:
1228 31A-2-404. Duties of the commissioner and Title and Escrow Commission.
1229 (1) Notwithstanding the other provisions of this chapter, to the extent provided in this
1230 part, the commissioner shall administer and enforce the provisions in this title related to:
1231 (a) title insurance; and
1232 (b) escrow conducted by a title licensee or title insurer.
1233 (2) The commission shall:
1234 (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and
1235 subject to Subsection (3), make rules for the administration of the provisions in this title related
1236 to title insurance including rules related to:

1237 (i) rating standards and rating methods for a title [agencies and producers] licensee, as
1238 provided in Section 31A-19a-209 ;
1239 (ii) the licensing for a title licensee, including the licensing requirements of Sections
1240 31A-23a-203 and 31A-23a-204 ;
1241 (iii) continuing education requirements of Section 31A-23a-202 ;
1242 (iv) examination procedures, after consultation with the [department] commissioner
1243 and the [department's] commissioner's test administrator when required by Section
1244 31A-23a-204 ; and
1245 (v) standards of conduct for a title licensee;
1246 (b) concur in the issuance and renewal of [licenses] a license in accordance with
1247 Section 31A-23a-105 or 31A-26-203 ;
1248 (c) in accordance with Section 31A-3-103 , establish, with the concurrence of the
1249 [department] commissioner, [all] the fees imposed by this title on a title licensee;
1250 (d) in accordance with Section 31A-23a-415 determine, after consulting with the
1251 commissioner, the assessment on a title insurer as defined in Section 31A-23a-415 ;
1252 (e) conduct [all] an administrative [hearings] hearing not delegated by the commission
1253 to an administrative law judge related to the:
1254 (i) licensing of [any] an applicant;
1255 (ii) conduct of [any] a title licensee; or
1256 (iii) approval of a continuing education [programs] program required by Section
1257 31A-23a-202 ;
1258 [(f) with the concurrence of the commissioner, approve assets that can be included in a
1259 reserve fund required by Section 31A-23a-204 ;]
1260 [(g)] (f) with the concurrence of the commissioner, approve a continuing education
1261 [programs] program required by Section 31A-23a-202 ;
1262 [(h)] (g) with the concurrence of the commissioner, impose [penalties] a penalty:
1263 (i) under this title related to:
1264 (A) title insurance; or
1265 (B) escrow conducted by a title licensee;
1266 (ii) after investigation by the [department] commissioner in accordance with Part 3,
1267 Procedures and Enforcement; and

1268 (iii) that [are] is enforced by the commissioner;
1269 [(i)] (h) advise the commissioner on the administration and enforcement of any
1270 [matters] matter affecting the title insurance industry;
1271 [(j)] (i) advise the commissioner on matters affecting the [department's]
1272 commissioner's budget related to title insurance; and
1273 [(k)] (j) perform other duties as provided in this title.
1274 (3) The commission may make a rule under this title only if at the time the commission
1275 files its proposed rule and rule analysis with the Division of Administrative Rules in
1276 accordance with Section 63G-3-301 , the commission provides the Real Estate Commission that
1277 same information.
1278 (4) (a) The commissioner shall annually report the information described in Subsection
1279 (4)(b) in writing to:
1280 (i) the commission; and
1281 (ii) the Business and Labor Interim Committee.
1282 (b) The information required to be reported under this Subsection (4):
1283 (i) may not identify a person; and
1284 (ii) shall include:
1285 (A) the number of complaints the [department] commissioner receives with regard to
1286 transactions involving title insurance or a title licensee during the calendar year immediately
1287 proceeding the report;
1288 (B) the type of complaints described in Subsection (4)(b)(ii)(A); and
1289 (C) for each complaint described in Subsection (4)(b)(ii)(A):
1290 (I) any action taken by the [department] commissioner with regard to the complaint;
1291 and
1292 (II) the time-period beginning the day on which a complaint is made and ending the
1293 day on which the [department] commissioner determines it will take no further action with
1294 regard to the complaint.
1295 Section 4. Section 31A-3-103 is amended to read:
1296 31A-3-103. Fees.
1297 (1) For purposes of this section[: (a) "Services"], "services" means functions that are
1298 reasonable and necessary to enable the commissioner to perform the duties imposed by this title

1299 including:
1300 [(i)] (a) issuing [and] or renewing [licenses and certificates] a license or certificate of
1301 authority;
1302 [(ii)] (b) filing a policy [forms] form;
1303 [(iii)] (c) reporting [agent appointments and terminations] a producer appointment or
1304 termination; and
1305 [(iv)] (d) filing an annual [statements] statement.
1306 (2) Except as otherwise provided by this title:
1307 (a) the commissioner may set and collect a fee for services provided by the
1308 commissioner;
1309 (b) [Fees] a fee related to the renewal of [licenses] a license may be imposed no more
1310 frequently than once each year[.]; and
1311 [(2) A] (c) a fee charged by the [department] commissioner shall be set in accordance
1312 with Section 63J-1-504 .
1313 (3) [(a) A fee approved by the Legislature] Except as otherwise provided in this title, a
1314 fee established pursuant to this section shall be deposited into the General Fund for
1315 appropriation by the Legislature.
1316 [(b) A fee approved pursuant to this section that relates to the use of electronic or other
1317 similar technology to provide the services of the department shall be deposited into the
1318 General Fund as a dedicated credit to be used by the department to provide services through
1319 use of electronic commerce or other similar technology.]
1320 (4) (a) The commissioner shall [separately] publish [the] a schedule of fees [approved
1321 by the Legislature and make it available upon request for $1 per copy. This fee schedule shall
1322 also be included in any compilation of rules promulgated by the commissioner] established
1323 pursuant to this section.
1324 [(5)] (b) The commissioner shall, by rule, establish the deadlines for payment of [any]
1325 a fee established [by the department in accordance with] pursuant to this section.
1326 Section 5. Section 31A-3-104 is amended to read:
1327 31A-3-104. Technology fees -- Restricted account.
1328 (1) The [department may charge] commissioner may impose a fee for requests for
1329 information:

1330 (a) that is obtained from an electronic database of the [department] commissioner; or
1331 (b) derived from data that is generated by electronic means.
1332 (2) In addition to any fee authorized in this title, the [department] commissioner shall
1333 impose a supplemental fee on the issuance or renewal of any of the following issued by the
1334 department:
1335 (a) a license;
1336 (b) a registration; or
1337 (c) a certificate of authority.
1338 (3) A fee imposed under this section shall be:
1339 (a) established in accordance with [Subsection 31A-3-103 (3)] Section 31A-3-103 ; and
1340 (b) deposited into the [General Fund as a dedicated credit in accordance with
1341 Subsection 31A-3-103 (3)] Technology Development Restricted Account.
1342 (4) (a) There is created in the General Fund a restricted account known as the
1343 "Technology Development Restricted Account."
1344 (b) The Technology Development Restricted Account shall consist of the fees imposed
1345 by the commissioner in accordance with this section.
1346 (c) The commissioner shall administer the Technology Development Restricted
1347 Account. Subject to appropriations by the Legislature, the commissioner shall use the money
1348 deposited into the Technology Development Restricted Account to provide services through
1349 use of electronic commerce or other similar technology.
1350 (d) The money in the Technology Development Restricted Account is nonlapsing.
1351 Section 6. Section 31A-3-105 is enacted to read:
1352 31A-3-105. Criminal Background Check Restricted Account.
1353 (1) There is created in the General Fund a restricted account known as the "Criminal
1354 Background Check Restricted Account."
1355 (2) The Criminal Background Check Restricted Account shall consist of the fees
1356 imposed by the commissioner in accordance with:
1357 (a) Subsection 31A-16-103 (3);
1358 (b) Subsection 31A-23a-105 (3);
1359 (c) Subsection 31A-25-203 (3); and
1360 (d) Subsection 31A-26-203 (3).

1361 (3) The commissioner shall administer the Criminal Background Check Restricted
1362 Account. Subject to appropriations by the Legislature, the commissioner shall use the money
1363 deposited into the Criminal Background Check Restricted Account to pay the costs the
1364 department is required to pay related to obtaining criminal background information in
1365 accordance with the provisions listed in Subsection (2)(a).
1366 (4) The money in the Criminal Background Check Restricted Account is nonlapsing.
1367 Section 7. Section 31A-3-304 (Superseded 07/01/10) is amended to read:
1368 31A-3-304 (Superseded 07/01/10). Annual fees -- Other taxes or fees prohibited --
1369 Captive Insurance Restricted Account.
1370 (1) (a) A captive insurance company shall pay an annual fee imposed under this section
1371 to obtain or renew a certificate of authority.
1372 (b) The commissioner shall:
1373 (i) determine the annual fee pursuant to [Sections ] Section 31A-3-103 [and
1374 63J-1-504 ]; and
1375 (ii) consider whether the annual fee is competitive with fees imposed by other states on
1376 captive insurance companies.
1377 (2) A captive insurance company that fails to pay the fee required by this section is
1378 subject to the relevant sanctions of this title.
1379 (3) (a) Except as provided in Subsection (3)(b) and notwithstanding Title 59, Chapter
1380 9, Taxation of Admitted Insurers, the fee provided for in this section constitutes the sole tax or
1381 fee under the laws of this state that may be otherwise levied or assessed on a captive insurance
1382 company, and no other occupation tax or other tax or fee may be levied or collected from a
1383 captive insurance company by the state or a county, city, or municipality within this state.
1384 (b) Notwithstanding Subsection (3)(a), a captive insurance company is subject to real
1385 and personal property taxes.
1386 (4) A captive insurance company shall pay the fee imposed by this section to the
1387 [department] commissioner by March 31 of each year.
1388 [(5) (a) The funds received pursuant to Subsection (2) shall be deposited into the
1389 General Fund as a dedicated credit to be used by the department to:]
1390 (5) (a) Money received pursuant to Subsection (2) shall be deposited into the Captive
1391 Insurance Restricted Account.

1392 (b) There is created in the General Fund a restricted account known as the "Captive
1393 Insurance Restricted Account."
1394 (c) The Captive Insurance Restricted Account shall consist of the fees imposed by the
1395 commissioner in accordance with this section.
1396 (d) The commissioner shall administer the Captive Insurance Restricted Account.
1397 Subject to appropriations by the Legislature, the commissioner shall use the money deposited
1398 into the Captive Insurance Restricted Account to:
1399 (i) administer and enforce Chapter 37, Captive Insurance Companies Act; and
1400 (ii) promote the captive insurance industry in Utah.
1401 [(b) At] (e) The money in the Captive Insurance Restricted Account is nonlapsing,
1402 except that at the end of each fiscal year, [funds] money received by the [department]
1403 commissioner in excess of $250,000 shall be treated as free revenue in the General Fund.
1404 Section 8. Section 31A-3-304 (Effective 07/01/10) is amended to read:
1405 31A-3-304 (Effective 07/01/10). Annual fees -- Other taxes or fees prohibited --
1406 Captive Insurance Restricted Account.
1407 (1) (a) A captive insurance company shall pay an annual fee imposed under this section
1408 to obtain or renew a certificate of authority.
1409 (b) The commissioner shall:
1410 (i) determine the annual fee pursuant to [Sections ] Section 31A-3-103 [and
1411 63J-1-504 ]; and
1412 (ii) consider whether the annual fee is competitive with fees imposed by other states on
1413 captive insurance companies.
1414 (2) A captive insurance company that fails to pay the fee required by this section is
1415 subject to the relevant sanctions of this title.
1416 (3) (a) Except as provided in Subsection (3)(b) and notwithstanding Title 59, Chapter
1417 9, Taxation of Admitted Insurers, the fee provided for in this section constitutes the sole tax or
1418 fee under the laws of this state that may be otherwise levied or assessed on a captive insurance
1419 company, and no other occupation tax or other tax or fee may be levied or collected from a
1420 captive insurance company by the state or a county, city, or municipality within this state.
1421 (b) Notwithstanding Subsection (3)(a), a captive insurance company is subject to real
1422 and personal property taxes.

1423 (4) A captive insurance company shall pay the fee imposed by this section to the
1424 [department] commissioner by March 31 of each year.
1425 [(5) (a) The funds received pursuant to Subsection (2) shall be deposited into the
1426 General Fund as a dedicated credit to be used by the department to:]
1427 (5) (a) Money received pursuant to Subsection (2) shall be deposited into the Captive
1428 Insurance Restricted Account.
1429 (b) There is created in the General Fund a restricted account known as the "Captive
1430 Insurance Restricted Account."
1431 (c) The Captive Insurance Restricted Account shall consist of the fees imposed by the
1432 commissioner in accordance with this section.
1433 (d) The commissioner shall administer the Captive Insurance Restricted Account.
1434 Subject to appropriations by the Legislature, the commissioner shall use the money deposited
1435 into the Captive Insurance Restricted Account to:
1436 (i) administer and enforce Chapter 37, Captive Insurance Companies Act; and
1437 (ii) promote the captive insurance industry in Utah.
1438 [(b) At] (e) The money in the Captive Insurance Restricted Account is nonlapsing,
1439 except that at the end of each fiscal year, [funds] money received by the [department]
1440 commissioner in excess of $750,000 shall be treated as free revenue in the General Fund.
1441 Section 9. Section 31A-5-217.5 is amended to read:
1442 31A-5-217.5. Variable contract law.
1443 (1) This section applies to [all] a separate [accounts] account that [are] is used to
1444 support [any] one or more of the following:
1445 (a) a variable life insurance [policies] policy that [satisfy] satisfies the requirements of
1446 Section 817, Internal Revenue Code;
1447 (b) a variable annuity [contracts] policy, including a modified guaranteed [annuities]
1448 annuity; or
1449 (c) benefits under [plans] a plan governed by the Employee Retirement Income
1450 Security Act of 1974.
1451 (2) [In the event of] If there is a conflict between this section and [any other] another
1452 section of this title as it relates to [these accounts] a separate account described in Subsection
1453 (1), this section prevails.

1454 (3) [A] (a) Subject to the other provisions of this Subsection (3), a domestic life
1455 [insurance company] insurer may:
1456 (i) establish one or more separate accounts[,]; and [may]
1457 (ii) allocate to those separate accounts amounts, which include:
1458 (A) proceeds applied under optional modes of settlement or under dividend options, to
1459 provide for life insurance or annuities[,]; and
1460 (B) benefits incidental to life insurance or annuities, payable in fixed [or], variable, or
1461 both fixed and variable amounts [or both, subject to the following:].
1462 [(a) The] (b) An insurer shall credit to or charge against a separate account the income,
1463 gains, and losses, realized or unrealized, from assets allocated to [a] the separate account [shall
1464 be credited to or charged against the account], without regard to other income, gains, or losses
1465 of the [company] insurer.
1466 [(b)] (c) Except as may be provided with respect to reserves for guaranteed benefits
1467 and funds referred to in Subsection [(c)] (3)(d):
1468 (i) an insurer may invest or reinvest amounts allocated to [any] a separate account and
1469 accumulations on [such] those amounts [may be invested and reinvested] without regard to
1470 [any] the requirements or limitations prescribed by the laws of this state governing the
1471 investments of a life [insurance companies] insurer; and
1472 (ii) an insurer may not take into account the investments in [any such] a separate
1473 account [may not be taken into account] in applying the investment limitations that otherwise
1474 apply to the investments of the [company] insurer.
1475 [(c)] (d) Except with the approval of the commissioner and under any [conditions]
1476 condition the commissioner prescribes as to investments and other matters [as he may
1477 prescribe], which shall recognize the guaranteed nature of the benefits provided, an insurer may
1478 not maintain in a separate account reserves for:
1479 (i) benefits guaranteed as to dollar amount and duration[,]; and
1480 (ii) funds guaranteed as to principal amount or stated rate of interest [may not be
1481 maintained in a separate account].
1482 [(d) Unless] (e) (i) Except as provided in Subsection (3)(e)(ii) and unless otherwise
1483 approved by the commissioner, assets allocated to a separate account shall be valued:
1484 (A) at their market value on the date of valuation[,]; or

1485 (B) if there is no readily available market, then as provided under the terms of the
1486 contract [or the], rules, or other written agreement that applies to the separate account.
1487 [However, unless]
1488 (ii) Unless otherwise approved by the commissioner, the portion of [any of] the assets
1489 of [the] a separate account that are equal to the [company's] insurer's reserve liability with
1490 regard to the guaranteed benefits and funds referred to in Subsection [(c)] (3)(d) shall be valued
1491 in accordance with the rules that otherwise apply to the company's assets.
1492 [(e) Amounts allocated] (f)(i) An insurer owns the amounts it allocates to a separate
1493 account in the exercise of the power granted by this section [shall be owned by the company,
1494 and the company], and the insurer may not be, nor hold itself out to be, a trustee with respect to
1495 those amounts. [If, and to]
1496 (ii) To the extent provided under the applicable [contracts, that] insurance policy, an
1497 insurer may not charge the portion of the assets of [any] a separate account that is equal to the
1498 reserves and other [contract] insurance liabilities with respect to the separate account [may not
1499 be chargeable] with liabilities arising out of any other business the [company] insurer may
1500 conduct.
1501 [(f)] (g) (i) A sale, exchange, or other transfer of assets may not be made by [a
1502 company] an insurer between any of its separate accounts or between any other investment
1503 account and one or more of its separate accounts unless[,]:
1504 (A) in case of a transfer into a separate account, the transfer is made solely to establish
1505 the account or to support the operation of the [contracts] insurance policies with respect to the
1506 separate account to which the transfer is made[,]; and [unless]
1507 (B) the transfer, whether into or from a separate account, is made by:
1508 (I) a transfer of cash[,]; or [by]
1509 (II) if the transfer of securities is approved by the commissioner, a transfer of securities
1510 having a readily determinable market value[, if the transfer of securities is approved by the
1511 commissioner].
1512 (ii) The commissioner may approve [other transfers] a transfer not described in
1513 Subsection (2)(g)(i) among [such] the accounts described in Subsection (2)(g)(i) if, in [his] the
1514 commissioner's opinion, the [transfers] transfer would not be inequitable.
1515 [(g)] (h) To the extent [a company] an insurer considers it necessary to comply with

1516 [any] an applicable federal or state [laws, the company,] law, the insurer with respect to [any] a
1517 separate account, including [any] a separate account which is a management investment
1518 company or a unit investment trust, may provide for [persons] a person having an interest in the
1519 separate account to have appropriate voting and other rights and special procedures for the
1520 conduct of the business of the separate account, including:
1521 (i) special rights and procedures relating to investment policy[,];
1522 (ii) investment advisory services[,];
1523 (iii) selection of independent public accountants[,]; and
1524 (iv) the selection of a committee, the members of which need not be otherwise
1525 affiliated with the [company] insurer, to manage the business of the separate account.
1526 [(4) Any contract providing benefits payable in variable amounts delivered or issued
1527 for delivery in this state shall contain a statement of the essential features of the procedures to
1528 be followed by the insurance company in determining the dollar amount of the variable
1529 benefits. Any contract under which the benefits vary to reflect investment experience,
1530 including a group contract and any certificate in evidence of variable benefits issued under a
1531 group contract, shall state that the dollar amount will vary according to investment experience.
1532 The contract shall contain on its first page a statement to the effect that the benefits under the
1533 contract are on a variable basis.]
1534 [(5) (a) A company may not deliver or issue for delivery within this state variable
1535 contracts unless it is licensed or organized to do a life insurance or annuity business in this
1536 state, and the commissioner is satisfied that its condition or method of operation in connection
1537 with the issuance of such contracts will not render its operation hazardous to the public or its
1538 policyholders in this state. In this connection, the commissioner shall consider among other
1539 things:]
1540 [(i) the history and financial condition of the company;]
1541 [(ii) the character, responsibility, and fitness of the officers and directors of the
1542 company; and]
1543 [(iii) (A) the law and regulation under which the company is authorized in the state of
1544 domicile to issue variable contracts.]
1545 [(B) The state of entry of an alien company shall be considered its place of domicile for
1546 the purposes of Subsection (iii)(A).]

1547 [(b) If the company is a subsidiary of an admitted life insurance company, or affiliated
1548 with such a company through common management or ownership, it may be considered by the
1549 commissioner to have met the provisions of this section if either it or the parent or the affiliated
1550 company meets the requirements of this section.]
1551 [(6) Notwithstanding any other provision of law, the commissioner shall have sole
1552 authority to regulate the issuance and sale of variable contracts, and to make rules necessary
1553 and appropriate to carry out the purposes and provisions of this chapter.]
1554 [(7) (a) Except for Sections 31A-22-402 , 31A-22-407 , and 31A-22-409 , in the case of
1555 a variable annuity contract and Sections 31A-22-402 , 31A-22-407 , and 31A-22-408 in the case
1556 of a variable life insurance policy, and except as otherwise provided in this chapter, all
1557 pertinent provisions of this title apply to separate accounts and contracts relating to the separate
1558 accounts. Any individual variable life insurance contract, delivered or issued for delivery in
1559 this state shall contain grace, reinstatement, and nonforfeiture provisions appropriate to the
1560 contract.]
1561 [(b) The reserve liability for variable contracts shall be established in accordance with
1562 actuarial procedures that recognize the variable nature of the benefits provided and any
1563 mortality guarantees.]
1564 Section 10. Section 31A-15-208 is amended to read:
1565 31A-15-208. Purchasing groups -- Filing and registration requirements.
1566 (1) A purchasing group [which] that intends to do business in this state shall, prior to
1567 doing business, furnish notice to the insurance commissioner:
1568 (a) identifying the state in which the purchasing group is domiciled;
1569 (b) identifying [all other states] any state in which the purchasing group intends to do
1570 business;
1571 (c) specifying the lines and classifications of liability insurance [which] that the
1572 purchasing group intends to purchase;
1573 (d) identifying the [insurance companies] insurers from which the group intends to
1574 purchase its insurance and the domicile of the [company] insurers;
1575 (e) specifying the method by which, and any persons through whom, insurance will be
1576 offered to group members whose risks are resident or located in this state;
1577 (f) identifying the principal place of business of the purchasing group; and

1578 (g) providing any other information required by the [insurance] commissioner to verify
1579