H.B. 47

1

INSURANCE LAW AMENDMENTS
2 2013 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: James A. Dunnigan
5 Senate Sponsor: Curtis S. Bramble
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.
12 Highlighted Provisions:
13 This bill:
14 . amends the definition provision;
15 . addresses rules related to title and escrow examinations;
16 . modifies the cap on appropriations from the Captive Insurance Restricted Account
17 effective July 1, 2015;
18 . amends provisions related to company action level events;
19 . enacts a provision regarding producer's duties related to replacement of life
20 insurance;
21 . addresses death pending conversion of group life insurance policy;
22 . modifies preferred provider contract provisions;
23 . amends provisions related to health benefit plan offerings;
24 . modifies provisions related to alternative coverage;
25 . amends provisions related to inducements;
26 . addresses money deposited into the Insurance Fraud Investigation Restricted
27 Account and the Insurance Fraud Victim Restitution Account;

28 . amends lifetime maximum for covered benefits from the Comprehensive Health
29 Insurance Pool;
30 . creates the Insurance Fraud Victim Restitution Account; and
31 . makes technical and conforming amendments.
32 Money Appropriated in this Bill:
33 None
34 Other Special Clauses:
35 This bill has an effective date.
36 Utah Code Sections Affected:
37 AMENDS:
38 31A-1-301, as last amended by Laws of Utah 2012, Chapters 151 and 253
39 31A-2-404, as last amended by Laws of Utah 2012, Chapter 253
40 31A-3-304 (Effective 07/01/13), as last amended by Laws of Utah 2011, Chapter 284
41 31A-8-301, as last amended by Laws of Utah 2005, Chapter 123
42 31A-17-603, as last amended by Laws of Utah 2001, Chapter 116
43 31A-22-519, as enacted by Laws of Utah 1985, Chapter 242
44 31A-22-617, as last amended by Laws of Utah 2009, Chapter 12
45 31A-22-618.5, as last amended by Laws of Utah 2011, Chapters 284 and 297
46 31A-22-724, as last amended by Laws of Utah 2011, Chapter 400
47 31A-23a-204, as last amended by Laws of Utah 2011, Chapters 284 and 342
48 31A-23a-402.5, as last amended by Laws of Utah 2012, Chapters 253 and 279
49 31A-29-113, as last amended by Laws of Utah 2007, Chapter 40
50 31A-31-108, as last amended by Laws of Utah 2012, Chapter 253
51 ENACTS:
52 31A-22-429, Utah Code Annotated 1953
53 31A-31-108.5, Utah Code Annotated 1953
54
55 Be it enacted by the Legislature of the state of Utah:
56 Section 1. Section 31A-1-301 is amended to read:
57 31A-1-301. Definitions.
58 As used in this title, unless otherwise specified:

59 (1) (a) "Accident and health insurance" means insurance to provide protection against
60 economic losses resulting from:
61 (i) a medical condition including:
62 (A) a medical care expense; or
63 (B) the risk of disability;
64 (ii) accident; or
65 (iii) sickness.
66 (b) "Accident and health insurance":
67 (i) includes a contract with disability contingencies including:
68 (A) an income replacement contract;
69 (B) a health care contract;
70 (C) an expense reimbursement contract;
71 (D) a credit accident and health contract;
72 (E) a continuing care contract; and
73 (F) a long-term care contract; and
74 (ii) may provide:
75 (A) hospital coverage;
76 (B) surgical coverage;
77 (C) medical coverage;
78 (D) loss of income coverage;
79 (E) prescription drug coverage;
80 (F) dental coverage; or
81 (G) vision coverage.
82 (c) "Accident and health insurance" does not include workers' compensation insurance.
83 (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
84 63G, Chapter 3, Utah Administrative Rulemaking Act.
85 (3) "Administrator" is defined in Subsection [(162)] (163).
86 (4) "Adult" means an individual who has attained the age of at least 18 years.
87 (5) "Affiliate" means a person who controls, is controlled by, or is under common
88 control with, another person. A corporation is an affiliate of another corporation, regardless of
89 ownership, if substantially the same group of individuals manage the corporations.

90 (6) "Agency" means:
91 (a) a person other than an individual, including a sole proprietorship by which an
92 individual does business under an assumed name; and
93 (b) an insurance organization licensed or required to be licensed under Section
94 31A-23a-301 , 31A-25-207 , or 31A-26-209 .
95 (7) "Alien insurer" means an insurer domiciled outside the United States.
96 (8) "Amendment" means an endorsement to an insurance policy or certificate.
97 (9) "Annuity" means an agreement to make periodical payments for a period certain or
98 over the lifetime of one or more individuals if the making or continuance of all or some of the
99 series of the payments, or the amount of the payment, is dependent upon the continuance of
100 human life.
101 (10) "Application" means a document:
102 (a) (i) completed by an applicant to provide information about the risk to be insured;
103 and
104 (ii) that contains information that is used by the insurer to evaluate risk and decide
105 whether to:
106 (A) insure the risk under:
107 (I) the coverage as originally offered; or
108 (II) a modification of the coverage as originally offered; or
109 (B) decline to insure the risk; or
110 (b) used by the insurer to gather information from the applicant before issuance of an
111 annuity contract.
112 (11) "Articles" or "articles of incorporation" means:
113 (a) the original articles;
114 (b) a special law;
115 (c) a charter;
116 (d) an amendment;
117 (e) restated articles;
118 (f) articles of merger or consolidation;
119 (g) a trust instrument;
120 (h) another constitutive document for a trust or other entity that is not a corporation;

121 and
122 (i) an amendment to an item listed in Subsections (11)(a) through (h).
123 (12) "Bail bond insurance" means a guarantee that a person will attend court when
124 required, up to and including surrender of the person in execution of a sentence imposed under
125 Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
126 (13) "Binder" is defined in Section 31A-21-102 .
127 (14) "Blanket insurance policy" means a group policy covering a defined class of
128 persons:
129 (a) without individual underwriting or application; and
130 (b) that is determined by definition without designating each person covered.
131 (15) "Board," "board of trustees," or "board of directors" means the group of persons
132 with responsibility over, or management of, a corporation, however designated.
133 (16) "Bona fide office" means a physical office in this state:
134 (a) that is open to the public;
135 (b) that is staffed during regular business hours on regular business days; and
136 (c) at which the public may appear in person to obtain services.
137 (17) "Business entity" means:
138 (a) a corporation;
139 (b) an association;
140 (c) a partnership;
141 (d) a limited liability company;
142 (e) a limited liability partnership; or
143 (f) another legal entity.
144 (18) "Business of insurance" is defined in Subsection (88).
145 (19) "Business plan" means the information required to be supplied to the
146 commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
147 when these subsections apply by reference under:
148 (a) Section 31A-7-201 ;
149 (b) Section 31A-8-205 ; or
150 (c) Subsection 31A-9-205 (2).
151 (20) (a) "Bylaws" means the rules adopted for the regulation or management of a

152 corporation's affairs, however designated.
153 (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
154 corporation.
155 (21) "Captive insurance company" means:
156 (a) an insurer:
157 (i) owned by another organization; and
158 (ii) whose exclusive purpose is to insure risks of the parent organization and an
159 affiliated company; or
160 (b) in the case of a group or association, an insurer:
161 (i) owned by the insureds; and
162 (ii) whose exclusive purpose is to insure risks of:
163 (A) a member organization;
164 (B) a group member; or
165 (C) an affiliate of:
166 (I) a member organization; or
167 (II) a group member.
168 (22) "Casualty insurance" means liability insurance.
169 (23) "Certificate" means evidence of insurance given to:
170 (a) an insured under a group insurance policy; or
171 (b) a third party.
172 (24) "Certificate of authority" is included within the term "license."
173 (25) "Claim," unless the context otherwise requires, means a request or demand on an
174 insurer for payment of a benefit according to the terms of an insurance policy.
175 (26) "Claims-made coverage" means an insurance contract or provision limiting
176 coverage under a policy insuring against legal liability to claims that are first made against the
177 insured while the policy is in force.
178 (27) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
179 commissioner.
180 (b) When appropriate, the terms listed in Subsection (27)(a) apply to the equivalent
181 supervisory official of another jurisdiction.
182 (28) (a) "Continuing care insurance" means insurance that:

183 (i) provides board and lodging;
184 (ii) provides one or more of the following:
185 (A) a personal service;
186 (B) a nursing service;
187 (C) a medical service; or
188 (D) any other health-related service; and
189 (iii) provides the coverage described in this Subsection (28)(a) under an agreement
190 effective:
191 (A) for the life of the insured; or
192 (B) for a period in excess of one year.
193 (b) Insurance is continuing care insurance regardless of whether or not the board and
194 lodging are provided at the same location as a service described in Subsection (28)(a)(ii).
195 (29) (a) "Control," "controlling," "controlled," or "under common control" means the
196 direct or indirect possession of the power to direct or cause the direction of the management
197 and policies of a person. This control may be:
198 (i) by contract;
199 (ii) by common management;
200 (iii) through the ownership of voting securities; or
201 (iv) by a means other than those described in Subsections (29)(a)(i) through (iii).
202 (b) There is no presumption that an individual holding an official position with another
203 person controls that person solely by reason of the position.
204 (c) A person having a contract or arrangement giving control is considered to have
205 control despite the illegality or invalidity of the contract or arrangement.
206 (d) There is a rebuttable presumption of control in a person who directly or indirectly
207 owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
208 voting securities of another person.
209 (30) "Controlled insurer" means a licensed insurer that is either directly or indirectly
210 controlled by a producer.
211 (31) "Controlling person" means a person that directly or indirectly has the power to
212 direct or cause to be directed, the management, control, or activities of a reinsurance
213 intermediary.

214 (32) "Controlling producer" means a producer who directly or indirectly controls an
215 insurer.
216 (33) (a) "Corporation" means an insurance corporation, except when referring to:
217 (i) a corporation doing business:
218 (A) as:
219 (I) an insurance producer;
220 (II) a surplus lines producer;
221 (III) a limited line producer;
222 (IV) a consultant;
223 (V) a managing general agent;
224 (VI) a reinsurance intermediary;
225 (VII) a third party administrator; or
226 (VIII) an adjuster; and
227 (B) under:
228 (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
229 Reinsurance Intermediaries;
230 (II) Chapter 25, Third Party Administrators; or
231 (III) Chapter 26, Insurance Adjusters; or
232 (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
233 Holding Companies.
234 (b) "Stock corporation" means a stock insurance corporation.
235 (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
236 (34) (a) "Creditable coverage" has the same meaning as provided in federal regulations
237 adopted pursuant to the Health Insurance Portability and Accountability Act.
238 (b) "Creditable coverage" includes coverage that is offered through a public health plan
239 such as:
240 (i) the Primary Care Network Program under a Medicaid primary care network
241 demonstration waiver obtained subject to Section 26-18-3 ;
242 (ii) the Children's Health Insurance Program under Section 26-40-106 ; or
243 (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
244 101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. 109-415.

245 (35) "Credit accident and health insurance" means insurance on a debtor to provide
246 indemnity for payments coming due on a specific loan or other credit transaction while the
247 debtor has a disability.
248 (36) (a) "Credit insurance" means insurance offered in connection with an extension of
249 credit that is limited to partially or wholly extinguishing that credit obligation.
250 (b) "Credit insurance" includes:
251 (i) credit accident and health insurance;
252 (ii) credit life insurance;
253 (iii) credit property insurance;
254 (iv) credit unemployment insurance;
255 (v) guaranteed automobile protection insurance;
256 (vi) involuntary unemployment insurance;
257 (vii) mortgage accident and health insurance;
258 (viii) mortgage guaranty insurance; and
259 (ix) mortgage life insurance.
260 (37) "Credit life insurance" means insurance on the life of a debtor in connection with
261 an extension of credit that pays a person if the debtor dies.
262 (38) "Credit property insurance" means insurance:
263 (a) offered in connection with an extension of credit; and
264 (b) that protects the property until the debt is paid.
265 (39) "Credit unemployment insurance" means insurance:
266 (a) offered in connection with an extension of credit; and
267 (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
268 (i) specific loan; or
269 (ii) credit transaction.
270 (40) "Creditor" means a person, including an insured, having a claim, whether:
271 (a) matured;
272 (b) unmatured;
273 (c) liquidated;
274 (d) unliquidated;
275 (e) secured;

276 (f) unsecured;
277 (g) absolute;
278 (h) fixed; or
279 (i) contingent.
280 (41) (a) "Crop insurance" means insurance providing protection against damage to
281 crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation,
282 disease, or other yield-reducing conditions or perils that is:
283 (i) provided by the private insurance market; or
284 (ii) subsidized by the Federal Crop Insurance Corporation.
285 (b) "Crop insurance" includes multiperil crop insurance.
286 (42) (a) "Customer service representative" means a person that provides an insurance
287 service and insurance product information:
288 (i) for the customer service representative's:
289 (A) producer;
290 (B) surplus lines producer; or
291 (C) consultant employer; and
292 (ii) to the customer service representative's employer's:
293 (A) customer;
294 (B) client; or
295 (C) organization.
296 (b) A customer service representative may only operate within the scope of authority of
297 the customer service representative's producer, surplus lines producer, or consultant employer.
298 (43) "Deadline" means a final date or time:
299 (a) imposed by:
300 (i) statute;
301 (ii) rule; or
302 (iii) order; and
303 (b) by which a required filing or payment must be received by the department.
304 (44) "Deemer clause" means a provision under this title under which upon the
305 occurrence of a condition precedent, the commissioner is considered to have taken a specific
306 action. If the statute so provides, a condition precedent may be the commissioner's failure to

307 take a specific action.
308 (45) "Degree of relationship" means the number of steps between two persons
309 determined by counting the generations separating one person from a common ancestor and
310 then counting the generations to the other person.
311 (46) "Department" means the Insurance Department.
312 (47) "Director" means a member of the board of directors of a corporation.
313 (48) "Disability" means a physiological or psychological condition that partially or
314 totally limits an individual's ability to:
315 (a) perform the duties of:
316 (i) that individual's occupation; or
317 (ii) any occupation for which the individual is reasonably suited by education, training,
318 or experience; or
319 (b) perform two or more of the following basic activities of daily living:
320 (i) eating;
321 (ii) toileting;
322 (iii) transferring;
323 (iv) bathing; or
324 (v) dressing.
325 (49) "Disability income insurance" is defined in Subsection (79).
326 (50) "Domestic insurer" means an insurer organized under the laws of this state.
327 (51) "Domiciliary state" means the state in which an insurer:
328 (a) is incorporated;
329 (b) is organized; or
330 (c) in the case of an alien insurer, enters into the United States.
331 (52) (a) "Eligible employee" means:
332 (i) an employee who:
333 (A) works on a full-time basis; and
334 (B) has a normal work week of 30 or more hours; or
335 (ii) a person described in Subsection (52)(b).
336 (b) "Eligible employee" includes, if the individual is included under a health benefit
337 plan of a small employer:

338 (i) a sole proprietor;
339 (ii) a partner in a partnership; or
340 (iii) an independent contractor.
341 (c) "Eligible employee" does not include, unless eligible under Subsection (52)(b):
342 (i) an individual who works on a temporary or substitute basis for a small employer;
343 (ii) an employer's spouse; or
344 (iii) a dependent of an employer.
345 (53) "Employee" means an individual employed by an employer.
346 (54) "Employee benefits" means one or more benefits or services provided to:
347 (a) an employee; or
348 (b) a dependent of an employee.
349 (55) (a) "Employee welfare fund" means a fund:
350 (i) established or maintained, whether directly or through a trustee, by:
351 (A) one or more employers;
352 (B) one or more labor organizations; or
353 (C) a combination of employers and labor organizations; and
354 (ii) that provides employee benefits paid or contracted to be paid, other than income
355 from investments of the fund:
356 (A) by or on behalf of an employer doing business in this state; or
357 (B) for the benefit of a person employed in this state.
358 (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
359 revenues.
360 (56) "Endorsement" means a written agreement attached to a policy or certificate to
361 modify the policy or certificate coverage.
362 (57) "Enrollment date," with respect to a health benefit plan, means:
363 (a) the first day of coverage; or
364 (b) if there is a waiting period, the first day of the waiting period.
365 (58) (a) "Escrow" means:
366 (i) a real estate settlement or real estate closing conducted by a third party pursuant to
367 the requirements of a written agreement between the parties in a real estate transaction; or
368 (ii) a settlement or closing involving:

369 (A) a mobile home;
370 (B) a grazing right;
371 (C) a water right; or
372 (D) other personal property authorized by the commissioner.
373 (b) "Escrow" includes the act of conducting a:
374 (i) real estate settlement; or
375 (ii) real estate closing.
376 (59) "Escrow agent" means:
377 (a) an insurance producer with:
378 (i) a title insurance line of authority; and
379 (ii) an escrow subline of authority; or
380 (b) a person defined as an escrow agent in Section 7-22-101 .
381 (60) (a) "Excludes" is not exhaustive and does not mean that another thing is not also
382 excluded.
383 (b) The items listed in a list using the term "excludes" are representative examples for
384 use in interpretation of this title.
385 (61) "Exclusion" means for the purposes of accident and health insurance that an
386 insurer does not provide insurance coverage, for whatever reason, for one of the following:
387 (a) a specific physical condition;
388 (b) a specific medical procedure;
389 (c) a specific disease or disorder; or
390 (d) a specific prescription drug or class of prescription drugs.
391 (62) "Expense reimbursement insurance" means insurance:
392 (a) written to provide a payment for an expense relating to hospital confinement
393 resulting from illness or injury; and
394 (b) written:
395 (i) as a daily limit for a specific number of days in a hospital; and
396 (ii) to have a one or two day waiting period following a hospitalization.
397 (63) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding
398 a position of public or private trust.
399 (64) (a) "Filed" means that a filing is:

400 (i) submitted to the department as required by and in accordance with applicable
401 statute, rule, or filing order;
402 (ii) received by the department within the time period provided in applicable statute,
403 rule, or filing order; and
404 (iii) accompanied by the appropriate fee in accordance with:
405 (A) Section 31A-3-103 ; or
406 (B) rule.
407 (b) "Filed" does not include a filing that is rejected by the department because it is not
408 submitted in accordance with Subsection (64)(a).
409 (65) "Filing," when used as a noun, means an item required to be filed with the
410 department including:
411 (a) a policy;
412 (b) a rate;
413 (c) a form;
414 (d) a document;
415 (e) a plan;
416 (f) a manual;
417 (g) an application;
418 (h) a report;
419 (i) a certificate;
420 (j) an endorsement;
421 (k) an actuarial certification;
422 (l) a licensee annual statement;
423 (m) a licensee renewal application;
424 (n) an advertisement; or
425 (o) an outline of coverage.
426 (66) "First party insurance" means an insurance policy or contract in which the insurer
427 agrees to pay a claim submitted to it by the insured for the insured's losses.
428 (67) "Foreign insurer" means an insurer domiciled outside of this state, including an
429 alien insurer.
430 (68) (a) "Form" means one of the following prepared for general use:

431 (i) a policy;
432 (ii) a certificate;
433 (iii) an application;
434 (iv) an outline of coverage; or
435 (v) an endorsement.
436 (b) "Form" does not include a document specially prepared for use in an individual
437 case.
438 (69) "Franchise insurance" means an individual insurance policy provided through a
439 mass marketing arrangement involving a defined class of persons related in some way other
440 than through the purchase of insurance.
441 (70) "General lines of authority" include:
442 (a) the general lines of insurance in Subsection (71);
443 (b) title insurance under one of the following sublines of authority:
444 (i) search, including authority to act as a title marketing representative;
445 (ii) escrow, including authority to act as a title marketing representative; and
446 (iii) title marketing representative only;
447 (c) surplus lines;
448 (d) workers' compensation; and
449 (e) any other line of insurance that the commissioner considers necessary to recognize
450 in the public interest.
451 (71) "General lines of insurance" include:
452 (a) accident and health;
453 (b) casualty;
454 (c) life;
455 (d) personal lines;
456 (e) property; and
457 (f) variable contracts, including variable life and annuity.
458 (72) "Group health plan" means an employee welfare benefit plan to the extent that the
459 plan provides medical care:
460 (a) (i) to an employee; or
461 (ii) to a dependent of an employee; and

462 (b) (i) directly;
463 (ii) through insurance reimbursement; or
464 (iii) through another method.
465 (73) (a) "Group insurance policy" means a policy covering a group of persons that is
466 issued:
467 (i) to a policyholder on behalf of the group; and
468 (ii) for the benefit of a member of the group who is selected under a procedure defined
469 in:
470 (A) the policy; or
471 (B) an agreement that is collateral to the policy.
472 (b) A group insurance policy may include a member of the policyholder's family or a
473 dependent.
474 (74) "Guaranteed automobile protection insurance" means insurance offered in
475 connection with an extension of credit that pays the difference in amount between the
476 insurance settlement and the balance of the loan if the insured automobile is a total loss.
477 (75) (a) Except as provided in Subsection (75)(b), "health benefit plan" means a policy
478 or certificate that:
479 (i) provides health care insurance;
480 (ii) provides major medical expense insurance; or
481 (iii) is offered as a substitute for hospital or medical expense insurance, such as:
482 (A) a hospital confinement indemnity; or
483 (B) a limited benefit plan.
484 (b) "Health benefit plan" does not include a policy or certificate that:
485 (i) provides benefits solely for:
486 (A) accident;
487 (B) dental;
488 (C) income replacement;
489 (D) long-term care;
490 (E) a Medicare supplement;
491 (F) a specified disease;
492 (G) vision; or

493 (H) a short-term limited duration; or
494 (ii) is offered and marketed as supplemental health insurance.
495 (76) "Health care" means any of the following intended for use in the diagnosis,
496 treatment, mitigation, or prevention of a human ailment or impairment:
497 (a) a professional service;
498 (b) a personal service;
499 (c) a facility;
500 (d) equipment;
501 (e) a device;
502 (f) supplies; or
503 (g) medicine.
504 (77) (a) "Health care insurance" or "health insurance" means insurance providing:
505 (i) a health care benefit; or
506 (ii) payment of an incurred health care expense.
507 (b) "Health care insurance" or "health insurance" does not include accident and health
508 insurance providing a benefit for:
509 (i) replacement of income;
510 (ii) short-term accident;
511 (iii) fixed indemnity;
512 (iv) credit accident and health;
513 (v) supplements to liability;
514 (vi) workers' compensation;
515 (vii) automobile medical payment;
516 (viii) no-fault automobile;
517 (ix) equivalent self-insurance; or
518 (x) a type of accident and health insurance coverage that is a part of or attached to
519 another type of policy.
520 (78) "Health Insurance Portability and Accountability Act" means the Health Insurance
521 Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended.
522 (79) "Income replacement insurance" or "disability income insurance" means insurance
523 written to provide payments to replace income lost from accident or sickness.

524 (80) "Indemnity" means the payment of an amount to offset all or part of an insured
525 loss.
526 (81) "Independent adjuster" means an insurance adjuster required to be licensed under
527 Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
528 (82) "Independently procured insurance" means insurance procured under Section
529 31A-15-104 .
530 (83) "Individual" means a natural person.
531 (84) "Inland marine insurance" includes insurance covering:
532 (a) property in transit on or over land;
533 (b) property in transit over water by means other than boat or ship;
534 (c) bailee liability;
535 (d) fixed transportation property such as bridges, electric transmission systems, radio
536 and television transmission towers and tunnels; and
537 (e) personal and commercial property floaters.
538 (85) "Insolvency" means that:
539 (a) an insurer is unable to pay its debts or meet its obligations as the debts and
540 obligations mature;
541 (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
542 RBC under Subsection 31A-17-601 (8)(c); or
543 (c) an insurer is determined to be hazardous under this title.
544 (86) (a) "Insurance" means:
545 (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
546 persons to one or more other persons; or
547 (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
548 group of persons that includes the person seeking to distribute that person's risk.
549 (b) "Insurance" includes:
550 (i) a risk distributing arrangement providing for compensation or replacement for
551 damages or loss through the provision of a service or a benefit in kind;
552 (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
553 business and not as merely incidental to a business transaction; and
554 (iii) a plan in which the risk does not rest upon the person who makes an arrangement,

555 but with a class of persons who have agreed to share the risk.
556 (87) "Insurance adjuster" means a person who directs the investigation, negotiation, or
557 settlement of a claim under an insurance policy other than life insurance or an annuity, on
558 behalf of an insurer, policyholder, or a claimant under an insurance policy.
559 (88) "Insurance business" or "business of insurance" includes:
560 (a) providing health care insurance by an organization that is or is required to be
561 licensed under this title;
562 (b) providing a benefit to an employee in the event of a contingency not within the
563 control of the employee, in which the employee is entitled to the benefit as a right, which
564 benefit may be provided either:
565 (i) by a single employer or by multiple employer groups; or
566 (ii) through one or more trusts, associations, or other entities;
567 (c) providing an annuity:
568 (i) including an annuity issued in return for a gift; and
569 (ii) except an annuity provided by a person specified in Subsections 31A-22-1305 (2)
570 and (3);
571 (d) providing the characteristic services of a motor club as outlined in Subsection
572 (116);
573 (e) providing another person with insurance;
574 (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
575 or surety, a contract or policy of title insurance;
576 (g) transacting or proposing to transact any phase of title insurance, including:
577 (i) solicitation;
578 (ii) negotiation preliminary to execution;
579 (iii) execution of a contract of title insurance;
580 (iv) insuring; and
581 (v) transacting matters subsequent to the execution of the contract and arising out of
582 the contract, including reinsurance;
583 (h) transacting or proposing a life settlement; and
584 (i) doing, or proposing to do, any business in substance equivalent to Subsections
585 (88)(a) through (h) in a manner designed to evade this title.

586 (89) "Insurance consultant" or "consultant" means a person who:
587 (a) advises another person about insurance needs and coverages;
588 (b) is compensated by the person advised on a basis not directly related to the insurance
589 placed; and
590 (c) except as provided in Section 31A-23a-501 , is not compensated directly or
591 indirectly by an insurer or producer for advice given.
592 (90) "Insurance holding company system" means a group of two or more affiliated
593 persons, at least one of whom is an insurer.
594 (91) (a) "Insurance producer" or "producer" means a person licensed or required to be
595 licensed under the laws of this state to sell, solicit, or negotiate insurance.
596 (b) (i) "Producer for the insurer" means a producer who is compensated directly or
597 indirectly by an insurer for selling, soliciting, or negotiating an insurance product of that
598 insurer.
599 (ii) "Producer for the insurer" may be referred to as an "agent."
600 (c) (i) "Producer for the insured" means a producer who:
601 (A) is compensated directly and only by an insurance customer or an insured; and
602 (B) receives no compensation directly or indirectly from an insurer for selling,
603 soliciting, or negotiating an insurance product of that insurer to an insurance customer or
604 insured.
605 (ii) "Producer for the insured" may be referred to as a "broker."
606 (92) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
607 promise in an insurance policy and includes:
608 (i) a policyholder;
609 (ii) a subscriber;
610 (iii) a member; and
611 (iv) a beneficiary.
612 (b) The definition in Subsection (92)(a):
613 (i) applies only to this title; and
614 (ii) does not define the meaning of this word as used in an insurance policy or
615 certificate.
616 (93) (a) "Insurer" means a person doing an insurance business as a principal including:

617 (i) a fraternal benefit society;
618 (ii) an issuer of a gift annuity other than an annuity specified in Subsections
619 31A-22-1305 (2) and (3);
620 (iii) a motor club;
621 (iv) an employee welfare plan; and
622 (v) a person purporting or intending to do an insurance business as a principal on that
623 person's own account.
624 (b) "Insurer" does not include a governmental entity to the extent the governmental
625 entity is engaged in an activity described in Section 31A-12-107 .
626 (94) "Interinsurance exchange" is defined in Subsection [(145)] (146).
627 (95) "Involuntary unemployment insurance" means insurance:
628 (a) offered in connection with an extension of credit; and
629 (b) that provides indemnity if the debtor is involuntarily unemployed for payments
630 coming due on a:
631 (i) specific loan; or
632 (ii) credit transaction.
633 (96) "Large employer," in connection with a health benefit plan, means an employer
634 who, with respect to a calendar year and to a plan year:
635 (a) employed an average of at least 51 eligible employees on each business day during
636 the preceding calendar year; and
637 (b) employs at least two employees on the first day of the plan year.
638 (97) "Late enrollee," with respect to an employer health benefit plan, means an
639 individual whose enrollment is a late enrollment.
640 (98) "Late enrollment," with respect to an employer health benefit plan, means
641 enrollment of an individual other than:
642 (a) on the earliest date on which coverage can become effective for the individual
643 under the terms of the plan; or
644 (b) through special enrollment.
645 (99) (a) Except for a retainer contract or legal assistance described in Section
646 31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
647 specified legal expense.

648 (b) "Legal expense insurance" includes an arrangement that creates a reasonable
649 expectation of an enforceable right.
650 (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
651 legal services incidental to other insurance coverage.
652 (100) (a) "Liability insurance" means insurance against liability:
653 (i) for death, injury, or disability of a human being, or for damage to property,
654 exclusive of the coverages under:
655 (A) Subsection (110) for medical malpractice insurance;
656 (B) Subsection [(137)] (138) for professional liability insurance; and
657 (C) Subsection [(171)] (172) for workers' compensation insurance;
658 (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
659 insured who is injured, irrespective of legal liability of the insured, when issued with or
660 supplemental to insurance against legal liability for the death, injury, or disability of a human
661 being, exclusive of the coverages under:
662 (A) Subsection (110) for medical malpractice insurance;
663 (B) Subsection [(137)] (138) for professional liability insurance; and
664 (C) Subsection [(171)] (172) for workers' compensation insurance;
665 (iii) for loss or damage to property resulting from an accident to or explosion of a
666 boiler, pipe, pressure container, machinery, or apparatus;
667 (iv) for loss or damage to property caused by:
668 (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
669 (B) water entering through a leak or opening in a building; or
670 (v) for other loss or damage properly the subject of insurance not within another kind
671 of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
672 (b) "Liability insurance" includes:
673 (i) vehicle liability insurance;
674 (ii) residential dwelling liability insurance; and
675 (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
676 boiler, machinery, or apparatus of any kind when done in connection with insurance on the
677 elevator, boiler, machinery, or apparatus.
678 (101) (a) "License" means authorization issued by the commissioner to engage in an

679 activity that is part of or related to the insurance business.
680 (b) "License" includes a certificate of authority issued to an insurer.
681 (102) (a) "Life insurance" means:
682 (i) insurance on a human life; and
683 (ii) insurance pertaining to or connected with human life.
684 (b) The business of life insurance includes:
685 (i) granting a death benefit;
686 (ii) granting an annuity benefit;
687 (iii) granting an endowment benefit;
688 (iv) granting an additional benefit in the event of death by accident;
689 (v) granting an additional benefit to safeguard the policy against lapse; and
690 (vi) providing an optional method of settlement of proceeds.
691 (103) "Limited license" means a license that:
692 (a) is issued for a specific product of insurance; and
693 (b) limits an individual or agency to transact only for that product or insurance.
694 (104) "Limited line credit insurance" includes the following forms of insurance:
695 (a) credit life;
696 (b) credit accident and health;
697 (c) credit property;
698 (d) credit unemployment;
699 (e) involuntary unemployment;
700 (f) mortgage life;
701 (g) mortgage guaranty;
702 (h) mortgage accident and health;
703 (i) guaranteed automobile protection; and
704 (j) another form of insurance offered in connection with an extension of credit that:
705 (i) is limited to partially or wholly extinguishing the credit obligation; and
706 (ii) the commissioner determines by rule should be designated as a form of limited line
707 credit insurance.
708 (105) "Limited line credit insurance producer" means a person who sells, solicits, or
709 negotiates one or more forms of limited line credit insurance coverage to an individual through

710 a master, corporate, group, or individual policy.
711 (106) "Limited line insurance" includes:
712 (a) bail bond;
713 (b) limited line credit insurance;
714 (c) legal expense insurance;
715 (d) motor club insurance;
716 (e) car rental related insurance;
717 (f) travel insurance;
718 (g) crop insurance;
719 (h) self-service storage insurance;
720 (i) guaranteed asset protection waiver;
721 (j) portable electronics insurance; and
722 (k) another form of limited insurance that the commissioner determines by rule should
723 be designated a form of limited line insurance.
724 (107) "Limited lines authority" includes:
725 (a) the lines of insurance listed in Subsection (106); and
726 (b) a customer service representative.
727 (108) "Limited lines producer" means a person who sells, solicits, or negotiates limited
728 lines insurance.
729 (109) (a) "Long-term care insurance" means an insurance policy or rider advertised,
730 marketed, offered, or designated to provide coverage:
731 (i) in a setting other than an acute care unit of a hospital;
732 (ii) for not less than 12 consecutive months for a covered person on the basis of:
733 (A) expenses incurred;
734 (B) indemnity;
735 (C) prepayment; or
736 (D) another method;
737 (iii) for one or more necessary or medically necessary services that are:
738 (A) diagnostic;
739 (B) preventative;
740 (C) therapeutic;

741 (D) rehabilitative;
742 (E) maintenance; or
743 (F) personal care; and
744 (iv) that may be issued by:
745 (A) an insurer;
746 (B) a fraternal benefit society;
747 (C) (I) a nonprofit health hospital; and
748 (II) a medical service corporation;
749 (D) a prepaid health plan;
750 (E) a health maintenance organization; or
751 (F) an entity similar to the entities described in Subsections (109)(a)(iv)(A) through (E)
752 to the extent that the entity is otherwise authorized to issue life or health care insurance.
753 (b) "Long-term care insurance" includes:
754 (i) any of the following that provide directly or supplement long-term care insurance:
755 (A) a group or individual annuity or rider; or
756 (B) a life insurance policy or rider;
757 (ii) a policy or rider that provides for payment of benefits on the basis of:
758 (A) cognitive impairment; or
759 (B) functional capacity; or
760 (iii) a qualified long-term care insurance contract.
761 (c) "Long-term care insurance" does not include:
762 (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
763 (ii) basic hospital expense coverage;
764 (iii) basic medical/surgical expense coverage;
765 (iv) hospital confinement indemnity coverage;
766 (v) major medical expense coverage;
767 (vi) income replacement or related asset-protection coverage;
768 (vii) accident only coverage;
769 (viii) coverage for a specified:
770 (A) disease; or
771 (B) accident;

772 (ix) limited benefit health coverage; or
773 (x) a life insurance policy that accelerates the death benefit to provide the option of a
774 lump sum payment:
775 (A) if the following are not conditioned on the receipt of long-term care:
776 (I) benefits; or
777 (II) eligibility; and
778 (B) the coverage is for one or more the following qualifying events:
779 (I) terminal illness;
780 (II) medical conditions requiring extraordinary medical intervention; or
781 (III) permanent institutional confinement.
782 (110) "Medical malpractice insurance" means insurance against legal liability incident
783 to the practice and provision of a medical service other than the practice and provision of a
784 dental service.
785 (111) "Member" means a person having membership rights in an insurance
786 corporation.
787 (112) "Minimum capital" or "minimum required capital" means the capital that must be
788 constantly maintained by a stock insurance corporation as required by statute.
789 (113) "Mortgage accident and health insurance" means insurance offered in connection
790 with an extension of credit that provides indemnity for payments coming due on a mortgage
791 while the debtor has a disability.
792 (114) "Mortgage guaranty insurance" means surety insurance under which a mortgagee
793 or other creditor is indemnified against losses caused by the default of a debtor.
794 (115) "Mortgage life insurance" means insurance on the life of a debtor in connection
795 with an extension of credit that pays if the debtor dies.
796 (116) "Motor club" means a person:
797 (a) licensed under:
798 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
799 (ii) Chapter 11, Motor Clubs; or
800 (iii) Chapter 14, Foreign Insurers; and
801 (b) that promises for an advance consideration to provide for a stated period of time
802 one or more:

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

834 (124) "Participation," as used in a health benefit plan, means a requirement relating to
835 the minimum percentage of eligible employees that must be enrolled in relation to the total
836 number of eligible employees of an employer reduced by each eligible employee who
837 voluntarily declines coverage under the plan because the employee:
838 (a) has other group health care insurance coverage; or
839 (b) receives:
840 (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
841 Security Amendments of 1965; or
842 (ii) another government health benefit.
843 (125) "Person" includes:
844 (a) an individual;
845 (b) a partnership;
846 (c) a corporation;
847 (d) an incorporated or unincorporated association;
848 (e) a joint stock company;
849 (f) a trust;
850 (g) a limited liability company;
851 (h) a reciprocal;
852 (i) a syndicate; or
853 (j) another similar entity or combination of entities acting in concert.
854 (126) "Personal lines insurance" means property and casualty insurance coverage sold
855 for primarily noncommercial purposes to:
856 (a) an individual; or
857 (b) a family.
858 (127) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
859 (128) "Plan year" means:
860 (a) the year that is designated as the plan year in:
861 (i) the plan document of a group health plan; or
862 (ii) a summary plan description of a group health plan;
863 (b) if the plan document or summary plan description does not designate a plan year or
864 there is no plan document or summary plan description:

865 (i) the year used to determine deductibles or limits;
866 (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
867 or
868 (iii) the employer's taxable year if:
869 (A) the plan does not impose deductibles or limits on a yearly basis; and
870 (B) (I) the plan is not insured; or
871 (II) the insurance policy is not renewed on an annual basis; or
872 (c) in a case not described in Subsection (128)(a) or (b), the calendar year.
873 (129) (a) "Policy" means a document, including an attached endorsement or application
874 that:
875 (i) purports to be an enforceable contract; and
876 (ii) memorializes in writing some or all of the terms of an insurance contract.
877 (b) "Policy" includes a service contract issued by:
878 (i) a motor club under Chapter 11, Motor Clubs;
879 (ii) a service contract provided under Chapter 6a, Service Contracts; and
880 (iii) a corporation licensed under:
881 (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
882 (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
883 (c) "Policy" does not include:
884 (i) a certificate under a group insurance contract; or
885 (ii) a document that does not purport to have legal effect.
886 (130) "Policyholder" means a person who controls a policy, binder, or oral contract by
887 ownership, premium payment, or otherwise.
888 (131) "Policy illustration" means a presentation or depiction that includes
889 nonguaranteed elements of a policy of life insurance over a period of years.
890 (132) "Policy summary" means a synopsis describing the elements of a life insurance
891 policy.
892 (133) "PPACA" means the Patient Protection and Affordable Care Act, Pub. L. No.
893 111-148 and the Health Care Education Reconciliation Act of 2010, Pub. L. No. 111-152, and
894 related federal regulations and guidance.
895 [(133)] (134) "Preexisting condition," with respect to a health benefit plan:

896 (a) means a condition that was present before the effective date of coverage, whether or
897 not medical advice, diagnosis, care, or treatment was recommended or received before that day;
898 and
899 (b) does not include a condition indicated by genetic information unless an actual
900 diagnosis of the condition by a physician has been made.
901 [(134)] (135) (a) "Premium" means the monetary consideration for an insurance policy.
902 (b) "Premium" includes, however designated:
903 (i) an assessment;
904 (ii) a membership fee;
905 (iii) a required contribution; or
906 (iv) monetary consideration.
907 (c) (i) "Premium" does not include consideration paid to a third party administrator for
908 the third party administrator's services.
909 (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
910 insurance on the risks administered by the third party administrator.
911 [(135)] (136) "Principal officers" for a corporation means the officers designated under
912 Subsection 31A-5-203 (3).
913 [(136)] (137) "Proceeding" includes an action or special statutory proceeding.
914 [(137)] (138) "Professional liability insurance" means insurance against legal liability
915 incident to the practice of a profession and provision of a professional service.
916 [(138)] (139) (a) Except as provided in Subsection [(138)] (139)(b), "property
917 insurance" means insurance against loss or damage to real or personal property of every kind
918 and any interest in that property:
919 (i) from all hazards or causes; and
920 (ii) against loss consequential upon the loss or damage including vehicle
921 comprehensive and vehicle physical damage coverages.
922 (b) "Property insurance" does not include:
923 (i) inland marine insurance; and
924 (ii) ocean marine insurance.
925 [(139)] (140) "Qualified long-term care insurance contract" or "federally tax qualified
926 long-term care insurance contract" means:

927 (a) an individual or group insurance contract that meets the requirements of Section
928 7702B(b), Internal Revenue Code; or
929 (b) the portion of a life insurance contract that provides long-term care insurance:
930 (i) (A) by rider; or
931 (B) as a part of the contract; and
932 (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
933 Code.
934 [(140)] (141) "Qualified United States financial institution" means an institution that:
935 (a) is:
936 (i) organized under the laws of the United States or any state; or
937 (ii) in the case of a United States office of a foreign banking organization, licensed
938 under the laws of the United States or any state;
939 (b) is regulated, supervised, and examined by a United States federal or state authority
940 having regulatory authority over a bank or trust company; and
941 (c) meets the standards of financial condition and standing that are considered
942 necessary and appropriate to regulate the quality of a financial institution whose letters of credit
943 will be acceptable to the commissioner as determined by:
944 (i) the commissioner by rule; or
945 (ii) the Securities Valuation Office of the National Association of Insurance
946 Commissioners.
947 [(141)] (142) (a) "Rate" means:
948 (i) the cost of a given unit of insurance; or
949 (ii) for property or casualty insurance, that cost of insurance per exposure unit either
950 expressed as:
951 (A) a single number; or
952 (B) a pure premium rate, adjusted before the application of individual risk variations
953 based on loss or expense considerations to account for the treatment of:
954 (I) expenses;
955 (II) profit; and
956 (III) individual insurer variation in loss experience.
957 (b) "Rate" does not include a minimum premium.

958 [(142)] (143) (a) Except as provided in Subsection [(142)] (143)(b), "rate service
959 organization" means a person who assists an insurer in rate making or filing by:
960 (i) collecting, compiling, and furnishing loss or expense statistics;
961 (ii) recommending, making, or filing rates or supplementary rate information; or
962 (iii) advising about rate questions, except as an attorney giving legal advice.
963 (b) "Rate service organization" does not mean:
964 (i) an employee of an insurer;
965 (ii) a single insurer or group of insurers under common control;
966 (iii) a joint underwriting group; or
967 (iv) an individual serving as an actuarial or legal consultant.
968 [(143)] (144) "Rating manual" means any of the following used to determine initial and
969 renewal policy premiums:
970 (a) a manual of rates;
971 (b) a classification;
972 (c) a rate-related underwriting rule; and
973 (d) a rating formula that describes steps, policies, and procedures for determining
974 initial and renewal policy premiums.
975 [(144)] (145) "Received by the department" means:
976 (a) the date delivered to and stamped received by the department, if delivered in
977 person;
978 (b) the post mark date, if delivered by mail;
979 (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
980 (d) the received date recorded on an item delivered, if delivered by:
981 (i) facsimile;
982 (ii) email; or
983 (iii) another electronic method; or
984 (e) a date specified in:
985 (i) a statute;
986 (ii) a rule; or
987 (iii) an order.
988 [(145)] (146) "Reciprocal" or "interinsurance exchange" means an unincorporated

989 association of persons:
990 (a) operating through an attorney-in-fact common to all of the persons; and
991 (b) exchanging insurance contracts with one another that provide insurance coverage
992 on each other.
993 [(146)] (147) "Reinsurance" means an insurance transaction where an insurer, for
994 consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
995 reinsurance transactions, this title sometimes refers to:
996 (a) the insurer transferring the risk as the "ceding insurer"; and
997 (b) the insurer assuming the risk as the:
998 (i) "assuming insurer"; or
999 (ii) "assuming reinsurer."
1000 [(147)] (148) "Reinsurer" means a person licensed in this state as an insurer with the
1001 authority to assume reinsurance.
1002 [(148)] (149) "Residential dwelling liability insurance" means insurance against
1003 liability resulting from or incident to the ownership, maintenance, or use of a residential
1004 dwelling that is a detached single family residence or multifamily residence up to four units.
1005 [(149)] (150) (a) "Retrocession" means reinsurance with another insurer of a liability
1006 assumed under a reinsurance contract.
1007 (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
1008 liability assumed under a reinsurance contract.
1009 [(150)] (151) "Rider" means an endorsement to:
1010 (a) an insurance policy; or
1011 (b) an insurance certificate.
1012 [(151)] (152) (a) "Security" means a:
1013 (i) note;
1014 (ii) stock;
1015 (iii) bond;
1016 (iv) debenture;
1017 (v) evidence of indebtedness;
1018 (vi) certificate of interest or participation in a profit-sharing agreement;
1019 (vii) collateral-trust certificate;

1020 (viii) preorganization certificate or subscription;
1021 (ix) transferable share;
1022 (x) investment contract;
1023 (xi) voting trust certificate;
1024 (xii) certificate of deposit for a security;
1025 (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
1026 payments out of production under such a title or lease;
1027 (xiv) commodity contract or commodity option;
1028 (xv) certificate of interest or participation in, temporary or interim certificate for,
1029 receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
1030 in Subsections [(151)] (152)(a)(i) through (xiv); or
1031 (xvi) another interest or instrument commonly known as a security.
1032 (b) "Security" does not include:
1033 (i) any of the following under which an insurance company promises to pay money in a
1034 specific lump sum or periodically for life or some other specified period:
1035 (A) insurance;
1036 (B) an endowment policy; or
1037 (C) an annuity contract; or
1038 (ii) a burial certificate or burial contract.
1039 [(152)] (153) "Secondary medical condition" means a complication related to an
1040 exclusion from coverage in accident and health insurance.
1041 [(153)] (154) (a) "Self-insurance" means an arrangement under which a person
1042 provides for spreading its own risks by a systematic plan.
1043 (b) Except as provided in this Subsection [(153)] (154), "self-insurance" does not
1044 include an arrangement under which a number of persons spread their risks among themselves.
1045 (c) "Self-insurance" includes:
1046 (i) an arrangement by which a governmental entity undertakes to indemnify an
1047 employee for liability arising out of the employee's employment; and
1048 (ii) an arrangement by which a person with a managed program of self-insurance and
1049 risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
1050 employees for liability or risk that is related to the relationship or employment.

1051 (d) "Self-insurance" does not include an arrangement with an independent contractor.
1052 [(154)] (155) "Sell" means to exchange a contract of insurance:
1053 (a) by any means;
1054 (b) for money or its equivalent; and
1055 (c) on behalf of an insurance company.
1056 [(155)] (156) "Short-term care insurance" means an insurance policy or rider
1057 advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
1058 insurance, but that provides coverage for less than 12 consecutive months for each covered
1059 person.
1060 [(156)] (157) "Significant break in coverage" means a period of 63 consecutive days
1061 during each of which an individual does not have creditable coverage.
1062 [(157)] (158) "Small employer," in connection with a health benefit plan, means an
1063 employer who, with respect to a calendar year and to a plan year:
1064 (a) employed an average of at least two employees but not more than 50 eligible
1065 employees on each business day during the preceding calendar year; and
1066 (b) employs at least two employees on the first day of the plan year.
1067 [(158)] (159) "Special enrollment period," in connection with a health benefit plan, has
1068 the same meaning as provided in federal regulations adopted pursuant to the Health Insurance
1069 Portability and Accountability Act.
1070 [(159)] (160) (a) "Subsidiary" of a person means an affiliate controlled by that person
1071 either directly or indirectly through one or more affiliates or intermediaries.
1072 (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
1073 shares are owned by that person either alone or with its affiliates, except for the minimum
1074 number of shares the law of the subsidiary's domicile requires to be owned by directors or
1075 others.
1076 [(160)] (161) Subject to Subsection (86)(b), "surety insurance" includes:
1077 (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
1078 perform the principal's obligations to a creditor or other obligee;
1079 (b) bail bond insurance; and
1080 (c) fidelity insurance.
1081 [(161)] (162) (a) "Surplus" means the excess of assets over the sum of paid-in capital

1082 and liabilities.
1083 (b) (i) "Permanent surplus" means the surplus of [a mutual] an insurer or organization
1084 that is designated by the insurer or organization as permanent.
1085 (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and [ 31A-14-209 ]
1086 31A-14-205 require that [mutuals] insurers or organizations doing business in this state
1087 maintain specified minimum levels of permanent surplus.
1088 (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
1089 same as the minimum required capital requirement that applies to stock insurers.
1090 (c) "Excess surplus" means:
1091 (i) for a life insurer, accident and health insurer, health organization, or property and
1092 casualty insurer as defined in Section 31A-17-601 , the lesser of:
1093 (A) that amount of an insurer's or health organization's total adjusted capital that
1094 exceeds the product of:
1095 (I) 2.5; and
1096 (II) the sum of the insurer's or health organization's minimum capital or permanent
1097 surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
1098 (B) that amount of an insurer's or health organization's total adjusted capital that
1099 exceeds the product of:
1100 (I) 3.0; and
1101 (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
1102 (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
1103 that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
1104 (A) 1.5; and
1105 (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
1106 [(162)] (163) "Third party administrator" or "administrator" means a person who
1107 collects charges or premiums from, or who, for consideration, adjusts or settles claims of
1108 residents of the state in connection with insurance coverage, annuities, or service insurance
1109 coverage, except:
1110 (a) a union on behalf of its members;
1111 (b) a person administering a:
1112 (i) pension plan subject to the federal Employee Retirement Income Security Act of

1113 1974;
1114 (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
1115 (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
1116 (c) an employer on behalf of the employer's employees or the employees of one or
1117 more of the subsidiary or affiliated corporations of the employer;
1118 (d) an insurer licensed under the following, but only for a line of insurance for which
1119 the insurer holds a license in this state:
1120 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1121 (ii) Chapter 7, Nonprofit Health Service Insurance Corporations;
1122 (iii) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
1123 (iv) Chapter 9, Insurance Fraternals; or
1124 (v) Chapter 14, Foreign Insurers;
1125 (e) a person:
1126 (i) licensed or exempt from licensing under:
1127 (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
1128 Reinsurance Intermediaries; or
1129 (B) Chapter 26, Insurance Adjusters; and
1130 (ii) whose activities are limited to those authorized under the license the person holds
1131 or for which the person is exempt; or
1132 (f) an institution, bank, or financial institution:
1133 (i) that is:
1134 (A) an institution whose deposits and accounts are to any extent insured by a federal
1135 deposit insurance agency, including the Federal Deposit Insurance Corporation or National
1136 Credit Union Administration; or
1137 (B) a bank or other financial institution that is subject to supervision or examination by
1138 a federal or state banking authority; and
1139 (ii) that does not adjust claims without a third party administrator license.
1140 [(163)] (164) "Title insurance" means the insuring, guaranteeing, or indemnifying of an
1141 owner of real or personal property or the holder of liens or encumbrances on that property, or
1142 others interested in the property against loss or damage suffered by reason of liens or
1143 encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity

1144 or unenforceability of any liens or encumbrances on the property.
1145 [(164)] (165) "Total adjusted capital" means the sum of an insurer's or health
1146 organization's statutory capital and surplus as determined in accordance with:
1147 (a) the statutory accounting applicable to the annual financial statements required to be
1148 filed under Section 31A-4-113 ; and
1149 (b) another item provided by the RBC instructions, as RBC instructions is defined in
1150 Section 31A-17-601 .
1151 [(165)] (166) (a) "Trustee" means "director" when referring to the board of directors of
1152 a corporation.
1153 (b) "Trustee," when used in reference to an employee welfare fund, means an
1154 individual, firm, association, organization, joint stock company, or corporation, whether acting
1155 individually or jointly and whether designated by that name or any other, that is charged with
1156 or has the overall management of an employee welfare fund.
1157 [(166)] (167) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted
1158 insurer" means an insurer:
1159 (i) not holding a valid certificate of authority to do an insurance business in this state;
1160 or
1161 (ii) transacting business not authorized by a valid certificate.
1162 (b) "Admitted insurer" or "authorized insurer" means an insurer:
1163 (i) holding a valid certificate of authority to do an insurance business in this state; and
1164 (ii) transacting business as authorized by a valid certificate.
1165 [(167)] (168) "Underwrite" means the authority to accept or reject risk on behalf of the
1166 insurer.
1167 [(168)] (169) "Vehicle liability insurance" means insurance against liability resulting
1168 from or incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a
1169 vehicle comprehensive or vehicle physical damage coverage under Subsection [(138)] (139).
1170 [(169)] (170) "Voting security" means a security with voting rights, and includes a
1171 security convertible into a security with a voting right associated with the security.
1172 [(170)] (171) "Waiting period" for a health benefit plan means the period that must
1173 pass before coverage for an individual, who is otherwise eligible to enroll under the terms of
1174 the health benefit plan, can become effective.

1175 [(171)] (172) "Workers' compensation insurance" means:
1176 (a) insurance for indemnification of an employer against liability for compensation
1177 based on:
1178 (i) a compensable accidental injury; and
1179 (ii) occupational disease disability;
1180 (b) employer's liability insurance incidental to workers' compensation insurance and
1181 written in connection with workers' compensation insurance; and
1182 (c) insurance assuring to a person entitled to workers' compensation benefits the
1183 compensation provided by law.
1184 Section 2. Section 31A-2-404 is amended to read:
1185 31A-2-404. Duties of the commissioner and Title and Escrow Commission.
1186 (1) Notwithstanding the other provisions of this chapter, to the extent provided in this
1187 part, the commissioner shall administer and enforce the provisions in this title related to:
1188 (a) title insurance; and
1189 (b) escrow conducted by a title licensee or title insurer.
1190 (2) The commission shall:
1191 (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and
1192 subject to Subsection [(3)] (4), make rules for the administration of the provisions in this title
1193 related to title insurance including rules related to:
1194 (i) rating standards and rating methods for a title licensee, as provided in Section
1195 31A-19a-209 ;
1196 (ii) the licensing for a title licensee, including the licensing requirements of Section
1197 31A-23a-204 ;
1198 (iii) continuing education requirements of Section 31A-23a-202 ; and
1199 [(iv) examination procedures, after consultation with the commissioner and the
1200 commissioner's test administrator when required by Section 31A-23a-204 ; and]
1201 [(v)] (iv) standards of conduct for a title licensee;
1202 (b) concur in the issuance and renewal of a license in accordance with Section
1203 31A-23a-105 or 31A-26-203 ;
1204 (c) in accordance with Section 31A-3-103 , establish, with the concurrence of the
1205 commissioner, the fees imposed by this title on a title licensee;

1206 (d) in accordance with Section 31A-23a-415 determine, after consulting with the
1207 commissioner, the assessment on a title insurer as defined in Section 31A-23a-415 ;
1208 (e) conduct an administrative hearing not delegated by the commission to an
1209 administrative law judge related to the:
1210 (i) licensing of an applicant;
1211 (ii) conduct of a title licensee; or
1212 (iii) approval of a continuing education program required by Section 31A-23a-202 ;
1213 (f) with the concurrence of the commissioner, approve a continuing education program
1214 required by Section 31A-23a-202 ;
1215 (g) with the concurrence of the commissioner, impose a penalty:
1216 (i) under this title related to:
1217 (A) title insurance; or
1218 (B) escrow conducted by a title licensee;
1219 (ii) after investigation by the commissioner in accordance with Part 3, Procedures and
1220 Enforcement; and
1221 (iii) that is enforced by the commissioner;
1222 (h) advise the commissioner on the administration and enforcement of any matter
1223 affecting the title insurance industry;
1224 (i) advise the commissioner on matters affecting the commissioner's budget related to
1225 title insurance; and
1226 (j) perform other duties as provided in this title.
1227 (3) The commission may make rules establishing an examination for a license that will
1228 satisfy Section 31A-23a-204 :
1229 (a) after consultation with the commissioner and the commissioner's test administrator;
1230 (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and
1231 (c) subject to Subsection (4).
1232 [(3)] (4) The commission may make a rule under this title only if at the time the
1233 commission files its proposed rule and rule analysis with the Division of Administrative Rules
1234 in accordance with Section 63G-3-301 , the commission provides the Real Estate Commission
1235 that same information.
1236 [(4)] (5) (a) The commissioner shall annually report the information described in

1237 Subsection [(4)] (5)(b) in writing to:
1238 (i) the commission; and
1239 (ii) the Business and Labor Interim Committee.
1240 (b) The information required to be reported under this Subsection [(4)] (5):
1241 (i) may not identify a person; and
1242 (ii) shall include:
1243 (A) the number of complaints the commissioner receives with regard to transactions
1244 involving title insurance or a title licensee during the calendar year immediately proceeding the
1245 report;
1246 (B) the type of complaints described in Subsection [(4)] (5)(b)(ii)(A); and
1247 (C) for each complaint described in Subsection [(4)] (5)(b)(ii)(A):
1248 (I) any action taken by the commissioner with regard to the complaint; and
1249 (II) the time-period beginning the day on which a complaint is made and ending the
1250 day on which the commissioner determines it will take no further action with regard to the
1251 complaint.
1252 Section 3. Section 31A-3-304 (Effective 07/01/13) is amended to read:
1253 31A-3-304 (Effective 07/01/13). Annual fees -- Other taxes or fees prohibited --
1254 Captive Insurance Restricted Account.
1255 (1) (a) A captive insurance company shall pay an annual fee imposed under this section
1256 to obtain or renew a certificate of authority.
1257 (b) The commissioner shall:
1258 (i) determine the annual fee pursuant to Section 31A-3-103 ; and
1259 (ii) consider whether the annual fee is competitive with fees imposed by other states on
1260 captive insurance companies.
1261 (2) A captive insurance company that fails to pay the fee required by this section is
1262 subject to the relevant sanctions of this title.
1263 (3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter
1264 9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
1265 the laws of this state that may be levied or assessed on a captive insurance company:
1266 (i) a fee under this section;
1267 (ii) a fee under Chapter 37, Captive Insurance Companies Act; and

1268 (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
1269 Act.
1270 (b) The state or a county, city, or town within the state may not levy or collect an
1271 occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
1272 against a captive insurance company.
1273 (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
1274 against a captive insurance company.
1275 (d) A captive insurance company is subject to real and personal property taxes.
1276 (4) A captive insurance company shall pay the fee imposed by this section to the
1277 commissioner by June 20 of each year.
1278 (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
1279 deposited into the Captive Insurance Restricted Account.
1280 (b) There is created in the General Fund a restricted account known as the "Captive
1281 Insurance Restricted Account."
1282 (c) The Captive Insurance Restricted Account shall consist of the fees described in
1283 Subsection (3)(a).
1284 (d) The commissioner shall administer the Captive Insurance Restricted Account.
1285 Subject to appropriations by the Legislature, the commissioner shall use the money deposited
1286 into the Captive Insurance Restricted Account to:
1287 (i) administer and enforce:
1288 (A) Chapter 37, Captive Insurance Companies Act; and
1289 (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
1290 (ii) promote the captive insurance industry in Utah.
1291 (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
1292 except that at the end of each fiscal year, money received by the commissioner in excess of
1293 [$950,000] $1,250,000 shall be treated as free revenue in the General Fund.
1294 Section 4. Section 31A-8-301 is amended to read:
1295 31A-8-301. Requirements for doing business in state.
1296 (1) Only a corporation incorporated and licensed under Part 2, Domestic
1297 Organizations, may do business in this state as an organization.
1298 (2) To do business in this state as an organization, a foreign [corporations] corporation

1299 doing a similar business in other states shall incorporate a subsidiary and license [if] it under
1300 Part 2, Domestic Organizations, for its Utah business. Except as to Chapter 16, Insurance
1301 Holding Companies, the laws applicable to a domestic [organizations] organization apply only
1302 to the domestic organization and not to its foreign parent corporation.
1303 Section 5. Section 31A-17-603 is amended to read:
1304 31A-17-603. Company action level event.
1305 (1) "Company action level event" means any of the following events:
1306 (a) the filing of an RBC report by an insurer or health organization that indicates that:
1307 (i) the insurer's or health organization's total adjusted capital is greater than or equal to
1308 its regulatory action level RBC but less than its company action level RBC; [or]
1309 (ii) if a life or accident and health insurer, the insurer has:
1310 (A) total adjusted capital that is greater than or equal to its company action level RBC
1311 but less than the product of its authorized control level RBC and [2.5] 3.0; and
1312 [(B) a negative trend, determined in accordance with the "trend test calculation"
1313 included in the RBC instructions;]
1314 (B) triggers the trend test determined in accordance with the trend test calculation
1315 included in the life or fraternal RBC instructions; or
1316 (iii) if a property and casualty insurer, the insurer has:
1317 (A) total adjusted capital that is greater than or equal to its company action level RBC,
1318 but less than the product of its authorized control level RBC and 3.0; and
1319 (B) triggers the trend test determined in accordance with the trend test calculation
1320 included in the property and casualty RBC instructions;
1321 (b) the notification by the commissioner to the insurer or health organization of an
1322 adjusted RBC report that indicates an event in Subsection (1)(a), provided the insurer or health
1323 organization does not challenge the adjusted RBC report under Section 31A-17-607 ; or
1324 (c) if, pursuant to Section 31A-17-607 , an insurer or health organization challenges an
1325 adjusted RBC report that indicates the event in Subsection (1)(a), the notification by the
1326 commissioner to the insurer or health organization that after a hearing the commissioner rejects
1327 the insurer's or health organization's challenge.
1328 (2) (a) In the event of a company action level event, the insurer or health organization
1329 shall prepare and submit to the commissioner an RBC plan that shall:

1330 (i) identify the conditions that contribute to the company action level event;
1331 (ii) contain proposals of corrective actions that the insurer or health organization
1332 intends to take and that are expected to result in the elimination of the company action level
1333 event;
1334 (iii) provide projections of the insurer's or health organization's financial results in the
1335 current year and at least the four succeeding years, both in the absence of proposed corrective
1336 actions and giving effect to the proposed corrective actions, including projections of:
1337 (A) statutory operating income;
1338 (B) net income;
1339 (C) capital;
1340 (D) surplus; and
1341 (E) RBC levels;
1342 (iv) identify the key assumptions impacting the insurer's or health organization's
1343 projections and the sensitivity of the projections to the assumptions; and
1344 (v) identify the quality of, and problems associated with, the insurer's or health
1345 organization's business, including its assets, anticipated business growth and associated surplus
1346 strain, extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each
1347 case.
1348 (b) For purposes of Subsection (2)(a)(iii), the projections for both new and renewal
1349 business may include separate projections for each major line of business and separately
1350 identify each significant income, expense, and benefit component.
1351 (3) The RBC plan shall be submitted:
1352 (a) within 45 days of the company action level event; or
1353 (b) if the insurer or health organization challenges an adjusted RBC report pursuant to
1354 Section 31A-17-607 , within 45 days after notification to the insurer or health organization that
1355 after a hearing the commissioner rejects the insurer's or health organization's challenge.
1356 (4) (a) Within 60 days after the submission by an insurer or health organization of an
1357 RBC plan to the commissioner, the commissioner shall notify the insurer or health organization
1358 whether the RBC plan:
1359 (i) shall be implemented; or
1360 (ii) is unsatisfactory.

1361 (b) If the commissioner determines the RBC plan is unsatisfactory, the notification to
1362 the insurer or health organization shall set forth the reasons for the determination, and may
1363 propose revisions that will render the RBC plan satisfactory. Upon notification from the
1364 commissioner, the insurer or health organization shall:
1365 (i) prepare a revised RBC plan that incorporates any revision proposed by the
1366 commissioner; and
1367 (ii) submit the revised RBC plan to the commissioner:
1368 (A) within 45 days after the notification from the commissioner; or
1369 (B) if the insurer challenges the notification from the commissioner under Section
1370 31A-17-607 , within 45 days after a notification to the insurer or health organization that after a
1371 hearing the commissioner rejects the insurer's or health organization's challenge.
1372 (5) In the event of a notification by the commissioner to an insurer or health
1373 organization that the insurer's or health organization's RBC plan or revised RBC plan is
1374 unsatisfactory, the commissioner may specify in the notification that the notification constitutes
1375 a regulatory action level event subject to the insurer's or health organization's right to a hearing
1376 under Section 31A-17-607 .
1377 (6) Every domestic insurer or health organization that files an RBC plan or revised
1378 RBC plan with the commissioner shall file a copy of the RBC plan or revised RBC plan with
1379 the insurance commissioner in any state in which the insurer or health organization is
1380 authorized to do business if:
1381 (a) the state has an RBC provision substantially similar to Subsection 31A-17-608 (1);
1382 and
1383 (b) the insurance commissioner of that state notifies the insurer or health organization
1384 of its request for the filing in writing, in which case the insurer or health organization shall file
1385 a copy of the RBC plan or revised RBC plan in that state no later than the later of:
1386 (i) 15 days after the receipt of notice to file a copy of its RBC plan or revised RBC plan
1387 with that state; or
1388 (ii) the date on which the RBC plan or revised RBC plan is filed under Subsections (3)
1389 and (4).
1390 Section 6. Section 31A-22-429 is enacted to read:
1391 31A-22-429. Producer's duties related to replacement of life insurance or annuity.

1392 (1) In connection with or as part of each application for life insurance or annuities, the
1393 applicant shall complete and the producer shall submit to the insurer the statements required by
1394 rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act as to:
1395 (a) whether the applicant has existing policies or contracts; and
1396 (b) whether the proposed life insurance or annuity will replace, discontinue, or change
1397 an existing policy or contract.
1398 (2) If an applicant for life insurance or an annuity answers "yes" to the question
1399 regarding replacement, discontinuance, or change of an existing policy or contract referred to in
1400 Subsection (1), the producer shall present to, and leave with, the applicant, not later than at the
1401 time of taking the application, the notice regarding replacements in the form adopted by the
1402 commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
1403 Rulemaking Act, or other substantially similar document filed with the commissioner.
1404 However, a filing is not required when an amendment to the notice is limited to the omission of
1405 a reference not applicable to the product being sold or replaced. With respect to an
1406 electronically completed application and notice, the producer is not required to leave a copy of
1407 the electronically completed notice with the applicant.
1408 (3) (a) The notice described in Subsection (2) shall:
1409 (i) list each existing policy or contract contemplated to be replaced, properly identified
1410 by name of insurer, the insured or annuitant, and policy or contract number if available; and
1411 (ii) include a statement as to whether each policy or contract will be replaced or
1412 whether a policy will be used as a source of financing for the new policy or contract.
1413 (b) If a policy or contract number has not been issued by the existing insurer,
1414 alternative identification, such as an application or receipt number, shall be listed.
1415 (4) In connection with a replacement transaction the producer shall leave with the
1416 applicant by no later than at the time of policy or contract delivery the original or a copy of all
1417 printed sales material. With respect to electronically presented sales material, it shall be
1418 provided to the policy or contract holder in printed form no later than at the time of policy or
1419 contract delivery.
1420 (5) Except as provided in rule made by the commissioner in accordance with Title
1421 63G, Chapter 3, Utah Administrative Rulemaking Act, in connection with a replacement
1422 transaction, the producer shall submit to the insurer to which an application for a policy or

1423 contract is presented:
1424 (a) a copy of each document required by this section;
1425 (b) a statement identifying any preprinted or electronically presented company
1426 approved sales materials used; and
1427 (c) copies of any individualized sales materials, including any illustrations related to
1428 the specific policy or contract purchased.
1429 Section 7. Section 31A-22-519 is amended to read:
1430 31A-22-519. Death pending conversion.
1431 If a person insured under a group life insurance policy, or the insured dependent of that
1432 person, dies during the period of eligibility for conversion under Section 31A-22-517 or
1433 31A-22-518 and before the individual policy becomes effective, the amount of life insurance to
1434 which [he] the insured would have been entitled to have issued under the individual policy is
1435 payable as a claim under the group policy, whether or not application for the individual policy
1436 or the payment of the first premium has been made.
1437 Section 8. Section 31A-22-617 is amended to read:
1438 31A-22-617. Preferred provider contract provisions.
1439 Health insurance policies may provide for insureds to receive services or
1440 reimbursement under the policies in accordance with preferred health care provider contracts as
1441 follows:
1442 (1) Subject to restrictions under this section, any insurer or third party administrator
1443 may enter into contracts with health care providers as defined in Section 78B-3-403 under
1444 which the health care providers agree to supply services, at prices specified in the contracts, to
1445 persons insured by an insurer.
1446 (a) (i) A health care provider contract may require the health care provider to accept the
1447 specified payment as payment in full, relinquishing the right to collect additional amounts from
1448 the insured person.
1449 (ii) In any dispute involving a provider's claim for reimbursement, the same shall be
1450 determined in accordance with applicable law, the provider contract, the subscriber contract,
1451 and the insurer's written payment policies in effect at the time services were rendered.
1452 (iii) If the parties are unable to resolve their dispute, the matter shall be subject to
1453 binding arbitration by a jointly selected arbitrator. Each party is to bear its own expense except

1454 the cost of the jointly selected arbitrator shall be equally shared. This Subsection (1)(a)(iii)
1455 does not apply to the claim of a general acute hospital to the extent it is inconsistent with the
1456 hospital's provider agreement.
1457 (iv) An organization may not penalize a provider solely for pursuing a claims dispute
1458 or otherwise demanding payment for a sum believed owing.
1459 (v) If an insurer permits another entity with which it does not share common ownership
1460 or control to use or otherwise lease one or more of the organization's networks of participating
1461 providers, the organization shall ensure, at a minimum, that the entity pays participating
1462 providers in accordance with the same fee schedule and general payment policies as the
1463 organization would for that network.
1464 (b) The insurance contract may reward the insured for selection of preferred health care
1465 providers by:
1466 (i) reducing premium rates;
1467 (ii) reducing deductibles;
1468 (iii) coinsurance;
1469 (iv) other copayments; or
1470 (v) any other reasonable manner.
1471 (c) If the insurer is a managed care organization, as defined in Subsection
1472 31A-27a-403 (1)(f):
1473 (i) the insurance contract and the health care provider contract shall provide that in the
1474 event the managed care organization becomes insolvent, the rehabilitator or liquidator may:
1475 (A) require the health care provider to continue to provide health care services under
1476 the contract until the earlier of:
1477 (I) 90 days after the date of the filing of a petition for rehabilitation or the petition for
1478 liquidation; or
1479 (II) the date the term of the contract ends; and
1480 (B) subject to Subsection (1)(c)(v), reduce the fees the provider is otherwise entitled to
1481 receive from the managed care organization during the time period described in Subsection
1482 (1)(c)(i)(A);
1483 (ii) the provider is required to:
1484 (A) accept the reduced payment under Subsection (1)(c)(i)(B) as payment in full; and

1485 (B) relinquish the right to collect additional amounts from the insolvent managed care
1486 organization's enrollee, as defined in Subsection 31A-27a-403 (1)(b);
1487 (iii) if the contract between the health care provider and the managed care organization
1488 has not been reduced to writing, or the contract fails to contain the language required by
1489 Subsection (1)(c)(i), the provider may not collect or attempt to collect from the enrollee:
1490 (A) sums owed by the insolvent managed care organization; or
1491 (B) the amount of the regular fee reduction authorized under Subsection (1)(c)(i)(B);
1492 (iv) the following may not bill or maintain any action at law against an enrollee to
1493 collect sums owed by the insolvent managed care organization or the amount of the regular fee
1494 reduction authorized under Subsection (1)(c)(i)(B):
1495 (A) a provider;
1496 (B) an agent;
1497 (C) a trustee; or
1498 (D) an assignee of a person described in Subsections (1)(c)(iv)(A) through (C); and
1499 (v) notwithstanding Subsection (1)(c)(i):
1500 (A) a rehabilitator or liquidator may not reduce a fee by less than 75% of the provider's
1501 regular fee set forth in the contract; and
1502 (B) the enrollee shall continue to pay the copayments, deductibles, and other payments
1503 for services received from the provider that the enrollee was required to pay before the filing
1504 of:
1505 (I) a petition for rehabilitation; or
1506 (II) a petition for liquidation.
1507 (2) (a) Subject to Subsections (2)(b) through (2)[(f)](e), an insurer using preferred
1508 health care provider contracts [shall pay for the services of health care providers not under the
1509 contract, unless the illnesses or injuries treated by the health care provider are not within the
1510 scope of the insurance contract. As used in this section, "class of health care providers" means
1511 all health care providers licensed or licensed and certified by the state within the same
1512 professional, trade, occupational, or facility licensure or licensure and certification category
1513 established pursuant to Titles 26, Utah Health Code and 58, Occupations and Professions] is
1514 subject to the reimbursement requirements in Section 31A-8-501 .
1515 [(b) (i) Until July 1, 2012, when the insured receives services from a health care

1516 provider not under contract, the insurer shall reimburse the insured for at least 75% of the
1517 average amount paid by the insurer for comparable services of preferred health care providers
1518 who are members of the same class of health care providers.]
1519 [(ii) Notwithstanding Subsection (2)(b)(i), an insurer may offer a health plan that
1520 complies with the provisions of Subsection 31A-22-618.5 (3).]
1521 [(iii) The commissioner may adopt a rule dealing with the determination of what
1522 constitutes 75% of the average amount paid by the insurer under Subsection (2)(b)(i) for
1523 comparable services of preferred health care providers who are members of the same class of
1524 health care providers.]
1525 [(c)] (b) When reimbursing for services of health care providers not under contract, the
1526 insurer may make direct payment to the insured.
1527 [(d) Notwithstanding Subsection (2)(b), an]
1528 (c) An insurer using preferred health care provider contracts may impose a deductible
1529 on coverage of health care providers not under contract.
1530 [(e)] (d) When selecting health care providers with whom to contract under Subsection
1531 (1), an insurer may not unfairly discriminate between classes of health care providers, but may
1532 discriminate within a class of health care providers, subject to Subsection (7).
1533 [(f)] (e) For purposes of this section, unfair discrimination between classes of health
1534 care providers [shall include] includes:
1535 (i) refusal to contract with class members in reasonable proportion to the number of
1536 insureds covered by the insurer and the expected demand for services from class members; and
1537 (ii) refusal to cover procedures for one class of providers that are:
1538 (A) commonly [utilized] used by members of the class of health care providers for the
1539 treatment of illnesses, injuries, or conditions;
1540 (B) otherwise covered by the insurer; and
1541 (C) within the scope of practice of the class of health care providers.
1542 (3) Before the insured consents to the insurance contract, the insurer shall fully disclose
1543 to the insured that it has entered into preferred health care provider contracts. The insurer shall
1544 provide sufficient detail on the preferred health care provider contracts to permit the insured to
1545 agree to the terms of the insurance contract. The insurer shall provide at least the following
1546 information:

1547 (a) a list of the health care providers under contract, and if requested their business
1548 locations and specialties;
1549 (b) a description of the insured benefits, including any deductibles, coinsurance, or
1550 other copayments;
1551 (c) a description of the quality assurance program required under Subsection (4); and
1552 (d) a description of the adverse benefit determination procedures required under
1553 Subsection (5).
1554 (4) (a) An insurer using preferred health care provider contracts shall maintain a quality
1555 assurance program for assuring that the care provided by the health care providers under
1556 contract meets prevailing standards in the state.
1557 (b) The commissioner in consultation with the executive director of the Department of
1558 Health may designate qualified persons to perform an audit of the quality assurance program.
1559 The auditors shall have full access to all records of the organization and its health care
1560 providers, including medical records of individual patients.
1561 (c) The information contained in the medical records of individual patients shall
1562 remain confidential. All information, interviews, reports, statements, memoranda, or other data
1563 furnished for purposes of the audit and any findings or conclusions of the auditors are
1564 privileged. The information is not subject to discovery, use, or receipt in evidence in any legal
1565 proceeding except hearings before the commissioner concerning alleged violations of this
1566 section.
1567 (5) An insurer using preferred health care provider contracts shall provide a reasonable
1568 procedure for resolving complaints and adverse benefit determinations initiated by the insureds
1569 and health care providers.
1570 (6) An insurer may not contract with a health care provider for treatment of illness or
1571 injury unless the health care provider is licensed to perform that treatment.
1572 (7) (a) A health care provider or insurer may not discriminate against a preferred health
1573 care provider for agreeing to a contract under Subsection (1).
1574 (b) Any health care provider licensed to treat any illness or injury within the scope of
1575 the health care provider's practice, who is willing and able to meet the terms and conditions
1576 established by the insurer for designation as a preferred health care provider, shall be able to
1577 apply for and receive the designation as a preferred health care provider. Contract terms and

1578 conditions may include reasonable limitations on the number of designated preferred health
1579 care providers based upon substantial objective and economic grounds, or expected use of
1580 particular services based upon prior provider-patient profiles.
1581 (8) Upon the written request of a provider excluded from a provider contract, the
1582 commissioner may hold a hearing to determine if the insurer's exclusion of the provider is
1583 based on the criteria set forth in Subsection (7)(b).
1584 (9) Insurers are subject to [the provisions of] Sections 31A-22-613.5 , 31A-22-614.5 ,
1585 and 31A-22-618 .
1586 (10) Nothing in this section is to be construed as to require an insurer to offer a certain
1587 benefit or service as part of a health benefit plan.
1588 (11) This section does not apply to catastrophic mental health coverage provided in
1589 accordance with Section 31A-22-625 .
1590 Section 9. Section 31A-22-618.5 is amended to read:
1591 31A-22-618.5. Health benefit plan offerings.
1592 (1) The purpose of this section is to increase the range of health benefit plans available
1593 in the small group, small employer group, large group, and individual insurance markets.
1594 (2) A health maintenance organization that is subject to Chapter 8, Health Maintenance
1595 Organizations and Limited Health Plans:
1596 (a) shall offer to potential purchasers at least one health benefit plan that is subject to
1597 the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
1598 and
1599 (b) may offer to a potential purchaser one or more health benefit plans that:
1600 (i) are not subject to one or more of the following:
1601 (A) the limitations on insured indemnity benefits in Subsection 31A-8-105 (4);
1602 (B) the limitation on point of service products in Subsections 31A-8-408 (3) through
1603 (6);
1604 (C) except as provided in Subsection (2)(b)(ii), basic health care services as defined in
1605 Section 31A-8-101 ; or
1606 (D) coverage mandates enacted after January 1, 2009 that are not required by federal
1607 law, provided that the insurer offers one plan under Subsection (2)(a) that covers the mandate
1608 enacted after January 1, 2009; and

1609 (ii) when offering a health plan under this section, provide coverage for an emergency
1610 medical condition as required by Section 31A-22-627 as follows:
1611 (A) within the organization's service area, covered services shall include health care
1612 services from non-affiliated providers when medically necessary to stabilize an emergency
1613 medical condition; and
1614 (B) outside the organization's service area, covered services shall include medically
1615 necessary health care services for the treatment of an emergency medical condition that are
1616 immediately required while the enrollee is outside the geographic limits of the organization's
1617 service area.
1618 (3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
1619 Maintenance Organizations and Limited Health Plans:
1620 [(a) notwithstanding Subsection 31A-22-617 (2), may offer a health benefit plan that
1621 groups providers into the following reimbursement levels:]
1622 [(i) tier one contracted providers;]
1623 [(ii) tier two contracted providers who the insurer shall reimburse at least 75% of tier
1624 one providers; and]
1625 [(iii) one or more tiers of non-contracted providers;]
1626 [(b)] (a) notwithstanding Subsection 31A-22-617 (9), may offer a health benefit plan
1627 that is not subject to Section 31A-22-618 ;
1628 [(c) beginning July 1, 2012, may offer health benefit plans that:]
1629 [(i) are not subject to Subsection 31A-22-617 (2); and]
1630 [(ii) are subject to the reimbursement requirements in Section 31A-8-501 ;]
1631 [(d)] (b) when offering a health plan under this Subsection (3), shall provide coverage
1632 of emergency care services as required by Section 31A-22-627 [by providing coverage at a
1633 reimbursement level of at least 75% of the health benefit plan's highest contracted provider
1634 category]; and
1635 [(e)] (c) are not subject to coverage mandates enacted after January 1, 2009 that are not
1636 required by federal law, provided that an insurer offers one plan that covers a mandate enacted
1637 after January 1, 2009.
1638 (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
1639 Subsection (2)(b).

1640 (5) (a) Any difference in price between a health benefit plan offered under Subsections
1641 (2)(a) and (b) shall be based on actuarially sound data.
1642 (b) Any difference in price between a health benefit plan offered under [Subsections]
1643 Subsection (3)(a) [and (b)] shall be based on actuarially sound data.
1644 (6) Nothing in this section limits the number of health benefit plans that an insurer may
1645 offer.
1646 Section 10. Section 31A-22-724 is amended to read:
1647 31A-22-724. Offer of alternative coverage -- Utah NetCare Plan.
1648 (1) For purposes of this section, "alternative coverage" means:
1649 (a) a high deductible or low deductible Utah NetCare Plan described in Subsection (2)
1650 for a conversion health benefit plan policy offered under Section 31A-22-723 ; and
1651 (b) a high deductible and low deductible Utah NetCare Plans described in Subsection
1652 (2) as an alternative to COBRA and mini-COBRA health benefit plan coverage offered under
1653 Section 31A-22-722 .
1654 (2) A Utah NetCare Plan under this section is subject to Section 31A-2-212 and shall,
1655 except when prohibited by federal law, include:
1656 (a) healthy lifestyle and wellness incentives;
1657 (b) the benefits described in this Subsection (2) or at least the actuarial equivalent of
1658 the benefits described in this Subsection (2);
1659 (c) a lifetime maximum benefit per person of not less than $1,000,000;
1660 (d) an annual maximum benefit per person of not less than $250,000;
1661 (e) the following deductibles:
1662 (i) for a low deductible plan:
1663 (A) $2,000 for an individual plan;
1664 (B) $4,000 for a two party plan; and
1665 (C) $6,000 for a family plan;
1666 (ii) for a high deductible plan:
1667 (A) $4,000 for an individual plan;
1668 (B) $8,000 for a two party plan; and
1669 (C) $12,000 for a family plan;
1670 (f) the following out-of-pocket maximum costs, including deductibles, copayments,

1671 and coinsurance:
1672 (i) for a low deductible plan:
1673 (A) $5,000 for an individual plan;
1674 (B) $10,000 for a two party plan; and
1675 (C) $15,000 for a family plan; and
1676 (ii) for a high deductible plan:
1677 (A) $10,000 for an individual plan;
1678 (B) $20,000 for a two party plan; and
1679 (C) $30,000 for a family plan;
1680 (g) the following benefits before applying a deductible requirement and in accordance
1681 with Section 223, Internal Revenue Code, and 42 U.S.C. Sec. 300gg-13:
1682 (i) all well child exams and immunizations up to age five, with no annual maximum;
1683 (ii) preventive care up to a $500 annual maximum;
1684 (iii) primary care and specialist and urgent care not covered under Subsection (2)(g)(i)
1685 or (ii) up to a $300 annual maximum; and
1686 (iv) supplemental accident coverage up to a $500 annual maximum;
1687 (h) the following copayments for each exam:
1688 (i) $15 for preventive care and well child exams;
1689 (ii) $25 for primary care; and
1690 (iii) $50 for urgent care and specialist care;
1691 (i) a $200 copayment for an emergency room visit after applying the deductible;
1692 (j) no more than a 30% coinsurance after deductible for covered plan benefits for:
1693 (i) hospital services;
1694 (ii) maternity;
1695 (iii) laboratory work;
1696 (iv) x-rays;
1697 (v) radiology;
1698 (vi) outpatient surgery services;
1699 (vii) injectable medications not otherwise covered under a pharmacy benefit;
1700 (viii) durable medical equipment;
1701 (ix) ambulance services;

1702 (x) in-patient mental health services; and
1703 (xi) out-patient mental health services; and
1704 (k) the following cost-sharing features for a prescription drug:
1705 (i) up to a $15 copayment for a generic drug; and
1706 (ii) up to a 50% coinsurance for a name brand drug.
1707 (3) A Utah NetCare Plan may exclude:
1708 (a) the benefit mandates described in Subsections 31A-22-618.5 (2)(b) and (3)[(b)](a);
1709 and
1710 (b) unless required by federal law, mandated coverage required by the following
1711 sections and related administrative rules:
1712 (i) Section 31A-22-610.1 , Adoption indemnity benefit;
1713 (ii) Section 31A-22-623 , Coverage of inborn metabolic errors;
1714 (iii) Section 31A-22-624 , Primary care physician;
1715 (iv) Section 31A-22-626 , Coverage of diabetes;
1716 (v) Section 31A-22-628 , Standing referral to a specialist; and
1717 (vi) a mandated coverage enacted after January 1, 2009, that is not required by federal
1718 law.
1719 (4) A Utah NetCare Plan may include a formulary or preferred drug list.
1720 (5) (a) Except as provided in Subsection (6), a person may elect alternative coverage
1721 under this section if the person is eligible for:
1722 (i) continuation of employer group health benefit plan coverage under federal COBRA
1723 laws;
1724 (ii) continuation of employer group health benefit plan coverage under state
1725 mini-COBRA under Section 31A-22-722 ; or
1726 (iii) a conversion to an individual health benefit plan after the exhaustion of benefits
1727 under:
1728 (A) alternative coverage elected in place of federal COBRA; or
1729 (B) state mini-COBRA under Section 31A-22-722 .
1730 (b) The right to extend coverage under Subsection (5)(a) applies to spouse or
1731 dependent coverages, including a surviving spouse or dependent whose coverage under the
1732 policy terminates by reason of the death of the employee or member.

1733 (6) If a person elects federal COBRA or state mini-COBRA health benefit plan
1734 coverage under Section 31A-22-722 , the person is not eligible to elect alternative coverage
1735 under this section until the person is eligible to convert coverage to an individual policy under
1736 Section 31A-22-723 and Subsection (1)(a).
1737 (7) (a) [(i)] If alternative coverage is selected as an alternative to COBRA or
1738 mini-COBRA health benefit plan coverage under Section 31A-22-722 [,]:
1739 (i) Section 31A-22-722 applies to the alternative coverage[.];
1740 (ii) [If an employee of a small employer selects alternative coverage as an alternative to
1741 COBRA or mini-COBRA health benefit plan coverage,] the insurer may not use a risk factor
1742 greater than the employer's most current risk factor for purposes of Subsection
1743 31A-22-722 (5)[.]; and
1744 (iii) the insurer shall credit to the alternative coverage the current year's deductible and
1745 out of pocket amounts satisfied under the employer's plan.
1746 (b) If alternative coverage is selected as a conversion policy under Section
1747 31A-22-723 [,]:
1748 (i) Section 31A-22-723 applies[.]; and
1749 (ii) the insurer shall credit to the alternative coverage the current year's deductible and
1750 out of pocket amounts satisfied under the employer's plan.
1751 (8) The commissioner shall adopt administrative rules in accordance with Title 63G,
1752 Chapter 3, Utah Administrative Rulemaking Act, to develop a model letter for employers to
1753 use to notify an employee of the employee's options for alternative coverage.
1754 Section 11. Section 31A-23a-204 is amended to read:
1755 31A-23a-204. Special requirements for title insurance producers and agencies.
1756 A title insurance producer, including an agency, shall be licensed in accordance with
1757 this chapter, with the additional requirements listed in this section.
1758 (1) (a) A person that receives a new license under this title as a title insurance agency,
1759 shall at the time of licensure be owned or managed by at least one individual who is licensed
1760 for at least three of the five years immediately preceding the date on which the title insurance
1761 agency applies for a license with both:
1762 (i) a search line of authority; and
1763 (ii) an escrow line of authority.

1764 (b) A title insurance agency subject to Subsection (1)(a) may comply with Subsection
1765 (1)(a) by having the title insurance agency owned or managed by:
1766 (i) one or more individuals who are licensed with the search line of authority for the
1767 time period provided in Subsection (1)(a); and
1768 (ii) one or more individuals who are licensed with the escrow line of authority for the
1769 time period provided in Subsection (1)(a).
1770 (c) A person licensed as a title insurance agency shall at all times during the term of
1771 licensure be owned or managed by at least one individual who is licensed for at least three
1772 years within the preceding five-year period with both:
1773 (i) a search line of authority; and
1774 (ii) an escrow line of authority.
1775 (d) The Title and Escrow Commission may by rule, subject to Section 31A-2-404 ,
1776 exempt an attorney with real estate experience from the experience requirements in Subsection
1777 (1)(a).
1778 (2) (a) A title insurance agency or producer appointed by an insurer shall maintain:
1779 (i) a fidelity bond;
1780 (ii) a professional liability insurance policy; or
1781 (iii) a financial protection:
1782 (A) equivalent to that described in Subsection (2)(a)(i) or (ii); and
1783 (B) that the commissioner considers adequate.
1784 (b) The bond, insurance, or financial protection required by this Subsection (2):
1785 (i) shall be supplied under a contract approved by the commissioner to provide
1786 protection against the improper performance of any service in conjunction with the issuance of
1787 a contract or policy of title insurance; and
1788 (ii) be in a face amount no less than $50,000.
1789 (c) The Title and Escrow Commission may by rule, subject to Section 31A-2-404 ,
1790 exempt title insurance producers from the requirements of this Subsection (2) upon a finding
1791 that, and only so long as, the required policy or bond is generally unavailable at reasonable
1792 rates.
1793 (3) A title insurance agency or producer appointed by an insurer may maintain a
1794 reserve fund to the extent money was deposited before July 1, 2008, and not withdrawn to the

1795 income of the title insurance producer.
1796 (4) An examination for licensure shall include questions regarding the search and
1797 examination of title to real property.
1798 (5) A title insurance producer may not perform the functions of escrow unless the title
1799 insurance producer has been examined on the fiduciary duties and procedures involved in those
1800 functions.
1801 (6) The Title and Escrow Commission [shall] may adopt rules, subject to Section
1802 31A-2-404 , after consulting with the [department] commissioner and the [department's]
1803 commissioner's test administrator, establishing an examination for a license that will satisfy
1804 this section.
1805 (7) A license may be issued to a title insurance producer who has qualified:
1806 (a) to perform only searches and examinations of title as specified in Subsection (4);
1807 (b) to handle only escrow arrangements as specified in Subsection (5); or
1808 (c) to act as a title marketing representative.
1809 (8) (a) A person licensed to practice law in Utah is exempt from the requirements of
1810 Subsections (2) and (3) if that person issues 12 or less policies in any 12-month period.
1811 (b) In determining the number of policies issued by a person licensed to practice law in
1812 Utah for purposes of Subsection (8)(a), if the person licensed to practice law in Utah issues a
1813 policy to more than one party to the same closing, the person is considered to have issued only
1814 one policy.
1815 (9) A person licensed to practice law in Utah, whether exempt under Subsection (8) or
1816 not, shall maintain a trust account separate from a law firm trust account for all title and real
1817 estate escrow transactions.
1818 Section 12. Section 31A-23a-402.5 is amended to read:
1819 31A-23a-402.5. Inducements.
1820 (1) (a) Except as provided in Subsection (2), a producer, consultant, or other licensee
1821 under this title, or an officer or employee of a licensee, may not induce a person to enter into,
1822 continue, or terminate an insurance contract by offering a benefit that is not:
1823 (i) specified in the insurance contract; or
1824 (ii) directly related to the insurance contract.
1825 (b) An insurer may not make or knowingly allow an agreement of insurance that is not

1826 clearly expressed in the insurance contract to be issued or renewed.
1827 (c) A licensee under this title may not absorb the tax under Section 31A-3-301 .
1828 (2) This section does not apply to a title insurer, a title producer, or an officer or
1829 employee of a title insurer or title producer.
1830 (3) Items not prohibited by Subsection (1) include an insurer:
1831 (a) reducing premiums because of expense savings;
1832 (b) providing to a policyholder or insured one or more incentives, as defined by the
1833 commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
1834 Rulemaking Act, to participate in a program or activity designed to reduce claims or claim
1835 expenses, including:
1836 (i) a premium discount offered to a small or large employer group based on a wellness
1837 program if:
1838 (A) the premium discount for the employer group does not exceed 20% of the group
1839 premium; and
1840 (B) the premium discount based on the wellness program is offered uniformly by the
1841 insurer to all employer groups in the large or small group market;
1842 (ii) a premium discount offered to employees of a small or large employer group in an
1843 amount that does not exceed federal limits on wellness program incentives; or
1844 (iii) a combination of premium discounts offered to the employer group and the
1845 employees of an employer group, based on a wellness program, if:
1846 (A) the premium discounts for the employer group comply with Subsection (3)(b)(i);
1847 and
1848 (B) the premium discounts for the employees of an employer group comply with
1849 Subsection (3)(b)(ii); or
1850 (c) receiving premiums under an installment payment plan.
1851 (4) Items not prohibited by Subsection (1) include a producer, consultant, or other
1852 licensee, or an officer or employee of a licensee, either directly or through a third party:
1853 (a) engaging in a usual kind of social courtesy if receipt of the social courtesy is not
1854 conditioned on the purchase of a particular insurance product;
1855 (b) extending credit on a premium to the insured:
1856 (i) without interest, for no more than 90 days from the effective date of the insurance

1857 contract;
1858 (ii) for interest that is not less than the legal rate under Section 15-1-1 , on the unpaid
1859 balance after the time period described in Subsection (4)(b)(i); and
1860 (iii) except that an installment or payroll deduction payment of premiums on an
1861 insurance contract issued under an insurer's mass marketing program is not considered an
1862 extension of credit for purposes of this Subsection (4)(b);
1863 (c) preparing or conducting a survey that:
1864 (i) is directly related to an accident and health insurance policy purchased from the
1865 licensee; or
1866 (ii) is used by the licensee to assess the benefit needs and preferences of insureds,
1867 employers, or employees directly related to an insurance product sold by the licensee;
1868 (d) providing limited human resource services that are directly related to an insurance
1869 product sold by the licensee, including:
1870 (i) answering questions directly related to:
1871 (A) an employee benefit offering or administration, if the insurance product purchased
1872 from the licensee is accident and health insurance or health insurance; and
1873 (B) employment practices liability, if the insurance product offered by or purchased
1874 from the licensee is property or casualty insurance; and
1875 (ii) providing limited human resource compliance training and education directly
1876 pertaining to an insurance product purchased from the licensee;
1877 (e) providing the following types of information or guidance:
1878 (i) providing guidance directly related to compliance with federal and state laws for an
1879 insurance product purchased from the licensee;
1880 (ii) providing a workshop or seminar addressing an insurance issue that is directly
1881 related to an insurance product purchased from the licensee; or
1882 (iii) providing information regarding:
1883 (A) employee benefit issues;
1884 (B) directly related insurance regulatory and legislative updates; or
1885 (C) similar education about an insurance product sold by the licensee and how the
1886 insurance product interacts with tax law;
1887 (f) preparing or providing a form that is directly related to an insurance product

1888 purchased from, or offered by, the licensee;
1889 (g) preparing or providing documents directly related to a premium only cafeteria plan
1890 within the meaning of Section 125, Internal Revenue Code, or a flexible spending account, but
1891 not providing ongoing administration of a flexible spending account;
1892 (h) providing enrollment and billing assistance, including:
1893 (i) providing benefit statements or new hire insurance benefits packages; and
1894 (ii) providing technology services such as an electronic enrollment platform or
1895 application system;
1896 (i) communicating coverages in writing and in consultation with the insured and
1897 employees;
1898 (j) providing employee communication materials and notifications directly related to an
1899 insurance product purchased from a licensee;
1900 (k) providing claims management and resolution to the extent permitted under the
1901 licensee's license;
1902 (l) providing underwriting or actuarial analysis or services;
1903 (m) negotiating with an insurer regarding the placement and pricing of an insurance
1904 product;
1905 (n) recommending placement and coverage options;
1906 (o) providing a health fair or providing assistance or advice on establishing or
1907 operating a wellness program, but not providing any payment for or direct operation of the
1908 wellness program;
1909 (p) providing COBRA and Utah mini-COBRA administration, consultations, and other
1910 services directly related to an insurance product purchased from the licensee;
1911 (q) assisting with a summary plan description;
1912 (r) providing information necessary for the preparation of documents directly related to
1913 the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq., as
1914 amended;
1915 (s) providing information or services directly related to the Health Insurance Portability
1916 and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended, such as services
1917 directly related to health care access, portability, and renewability when offered in connection
1918 with accident and health insurance sold by a licensee;

1919 (t) sending proof of coverage to a third party with a legitimate interest in coverage;
1920 (u) providing information in a form approved by the commissioner and directly related
1921 to determining whether an insurance product sold by the licensee meets the requirements of a
1922 third party contract that requires or references insurance coverage;
1923 (v) facilitating risk management services directly related to [the] property and casualty
1924 insurance [product] products sold or offered for sale by the licensee, including:
1925 (i) risk management;
1926 (ii) claims and loss control services; [and]
1927 (iii) risk assessment consulting[;], including analysis of:
1928 (A) employer's job descriptions; or
1929 (B) employer's safety procedures or manuals; and
1930 (iv) providing information and training on best practices;
1931 (w) otherwise providing services that are legitimately part of servicing an insurance
1932 product purchased from a licensee; and
1933 (x) providing other directly related services approved by the department.
1934 (5) An inducement prohibited under Subsection (1) includes a producer, consultant, or
1935 other licensee, or an officer or employee of a licensee:
1936 (a) (i) providing a premium or commission rebate;
1937 (ii) paying the salary of an employee of a person who purchases an insurance product
1938 from the licensee; or
1939 (iii) if the licensee is an insurer, or a third party administrator who contracts with an
1940 insurer, paying the salary for an onsite staff member to perform an act prohibited under
1941 Subsection (5)(b)(xii); or
1942 (b) engaging in one or more of the following unless a fee is paid in accordance with
1943 Subsection [(7)] (8):
1944 (i) performing background checks of prospective employees;
1945 (ii) providing legal services by a person licensed to practice law;
1946 (iii) performing drug testing that is directly related to an insurance product purchased
1947 from the licensee;
1948 (iv) preparing employer or employee handbooks, except that a licensee may:
1949 (A) provide information for a medical benefit section of an employee handbook;

1950 (B) provide information for the section of an employee handbook directly related to an
1951 employment practices liability insurance product purchased from the licensee; or
1952 (C) prepare or print an employee benefit enrollment guide;
1953 (v) providing job descriptions, postings, and applications for a person [that purchases
1954 an employment practices liability insurance product from the licensee];
1955 (vi) providing payroll services;
1956 (vii) providing performance reviews or performance review training;
1957 (viii) providing union advice;
1958 (ix) providing accounting services;
1959 (x) providing data analysis information technology programs, except as provided in
1960 Subsection (4)(h)(ii);
1961 (xi) providing administration of health reimbursement accounts or health savings
1962 accounts; or
1963 (xii) if the licensee is an insurer, or a third party administrator who contracts with an
1964 insurer, the insurer issuing an insurance policy that lists in the insurance policy one or more of
1965 the following prohibited benefits:
1966 (A) performing background checks of prospective employees;
1967 (B) providing legal services by a person licensed to practice law;
1968 (C) performing drug testing that is directly related to an insurance product purchased
1969 from the insurer;
1970 (D) preparing employer or employee handbooks;
1971 (E) providing job descriptions postings, and applications;
1972 (F) providing payroll services;
1973 (G) providing performance reviews or performance review training;
1974 (H) providing union advice;
1975 (I) providing accounting services;
1976 (J) providing discrimination testing; or
1977 (K) providing data analysis information technology programs.
1978 (6) A producer, consultant, or other licensee or an officer or employee of a licensee
1979 shall itemize and bill separately from any other insurance product or service offered or
1980 provided under Subsection (5)(b).

1981 [(6)] (7) A de minimis gift or meal not to exceed $25 for each individual receiving the
1982 gift or meal is presumed to be a social courtesy not conditioned on the quote or purchase of a
1983 particular insurance product for purposes of Subsection (4)(a).
1984 [(7)] (8) If as provided under Subsection (5)(b) a producer, consultant, or other licensee
1985 is paid a fee to provide an item listed in Subsection (5)(b), the licensee shall comply with
1986 Subsection 31A-23a-501 (2) in charging the fee, except that the fee paid for the item shall equal
1987 or exceed the fair market value of the item.
1988 Section 13. Section 31A-29-113 is amended to read:
1989 31A-29-113. Benefits -- Additional types of pool insurance -- Preexisting
1990 conditions -- Waiver -- Maximum benefits.
1991 (1) (a) The pool policy shall pay for eligible medical expenses rendered or furnished
1992 for the diagnoses or treatment of illness or injury that:
1993 (i) exceed the deductible and copayment amounts applicable under Section
1994 31A-29-114 ; and
1995 (ii) are not otherwise limited or excluded.
1996 (b) Eligible medical expenses are the allowed charges established by the board for the
1997 health care services and items rendered during times for which benefits are extended under the
1998 pool policy.
1999 (2) The coverage to be issued by the pool, its schedule of benefits, exclusions, and
2000 other limitations shall be established by the board.
2001 (3) The commissioner shall approve the benefit package developed by the board to
2002 ensure its compliance with this chapter.
2003 (4) The pool shall offer at least one benefit plan through a managed care program as
2004 authorized under Section 31A-29-106 .
2005 (5) This chapter may not be construed to prohibit the pool from issuing additional types
2006 of pool policies with different types of benefits which in the opinion of the board may be of
2007 benefit to the citizens of Utah.
2008 (6) (a) The board shall design and require an administrator to employ cost containment
2009 measures and requirements including preadmission certification and concurrent inpatient
2010 review for the purpose of making the pool more cost effective.
2011 (b) Sections 31A-22-617 and 31A-22-618 do not apply to coverage issued under this

2012 chapter.
2013 (7) (a) A pool policy may contain provisions under which coverage for a preexisting
2014 condition is excluded if:
2015 (i) the exclusion relates to a condition, regardless of the cause of the condition, for
2016 which medical advice, diagnosis, care, or treatment was recommended or received, from an
2017 individual licensed or similarly authorized to provide such services under state law and
2018 operating within the scope of practice authorized by state law, within the six-month period
2019 ending on the effective date of plan coverage; and
2020 (ii) except as provided in Subsection (8), the exclusion extends for a period no longer
2021 than the six-month period following the effective date of plan coverage for a given individual.
2022 (b) Subsection (7)(a) does not apply to a HIPAA eligible individual.
2023 (8) (a) A pool policy may contain provisions under which coverage for a preexisting
2024 pregnancy is excluded during a ten-month period following the effective date of plan coverage
2025 for a given individual.
2026 (b) Subsection (8)(a) does not apply to a HIPAA eligible individual.
2027 (9) (a) The pool will waive the preexisting condition exclusion described in
2028 Subsections (7)(a) and (8)(a) for an individual that is changing health coverage to the pool, to
2029 the extent to which similar exclusions have been satisfied under any prior health insurance
2030 coverage if the individual applies not later than 63 days following the date of involuntary
2031 termination, other than for nonpayment of premiums, from health coverage.
2032 (b) If this Subsection (9) applies, coverage in the pool shall be effective from the date
2033 on which the prior coverage was terminated.
2034 (10) Covered benefits available from the pool may not exceed a [$1,500,000]
2035 $1,800,000 lifetime maximum, which includes a per enrollee calendar year maximum
2036 established by the board.
2037 Section 14. Section 31A-31-108 is amended to read:
2038 31A-31-108. Assessment of insurers.
2039 (1) For purposes of this section:
2040 (a) The commissioner shall by rule made in accordance with Title 63G, Chapter 3,
2041 Utah Administrative Rulemaking Act, define:
2042 (i) "annuity consideration";

2043 (ii) "membership fees";
2044 (iii) "other fees";
2045 (iv) "deposit-type contract funds"; and
2046 (v) "other considerations in Utah."
2047 (b) "Insurance fraud provisions" means:
2048 (i) this chapter;
2049 (ii) Section 34A-2-110 ; and
2050 (iii) Section 76-6-521 .
2051 (c) "Utah consideration" means:
2052 (i) the total premiums written for Utah risks;
2053 (ii) annuity consideration;
2054 (iii) membership fees collected by the insurer;
2055 (iv) other fees collected by the insurer;
2056 (v) deposit-type contract funds; and
2057 (vi) other considerations in Utah.
2058 (d) "Utah risks" means insurance coverage on the lives, health, or against the liability
2059 of persons residing in Utah, or on property located in Utah, other than property temporarily in
2060 transit through Utah.
2061 (2) To implement insurance fraud provisions, the commissioner may assess an
2062 admitted insurer and a nonadmitted insurer transacting insurance under Chapter 15, Parts 1,
2063 Unauthorized Insurers and Surplus Lines, and 2, Risk Retention Groups Act, an annual fee as
2064 follows:
2065 (a) $200 for an insurer for which the sum of the Utah consideration is less than or equal
2066 to $1,000,000;
2067 (b) $450 for an insurer for which the sum of the Utah consideration is greater than
2068 $1,000,000 but is less than or equal to $2,500,000;
2069 (c) $800 for an insurer for which the sum of the Utah consideration is greater than
2070 $2,500,000 but is less than or equal to $5,000,000;
2071 (d) $1,600 for an insurer for which the sum of the Utah consideration is greater than
2072 $5,000,000 but less than or equal to $10,000,000;
2073 (e) $6,100 for an insurer for which the sum of the Utah consideration is greater than

2074 $10,000,000 but less than $50,000,000; and
2075 (f) $15,000 for an insurer for which the sum of the Utah consideration equals or
2076 exceeds $50,000,000.
2077 (3) Money received by the state under this section shall be deposited into the Insurance
2078 Fraud Investigation Restricted Account created in Subsection (4).
2079 (4) (a) There is created in the General Fund a restricted account known as the
2080 "Insurance Fraud Investigation Restricted Account."
2081 (b) The Insurance Fraud Investigation Restricted Account shall consist of the money
2082 received by the commissioner under this section and [Section 31A-31-109 .] Subsections
2083 31A-31-109 (1)(a)(ii), (1)(b), (2)(b)(i), (2)(c), and (3)(a). Money ordered paid under
2084 Subsections 31A-31-109 (1)(a)(i) and (2)(a) shall be deposited in the Insurance Fraud Victim
2085 Restitution Fund pursuant to Section 31A-31-108.5 .
2086 (c) The commissioner shall administer the Insurance Fraud Investigation Restricted
2087 Account. Subject to appropriations by the Legislature, the commissioner shall use the money
2088 deposited into the Insurance Fraud Investigation Restricted Account to pay for a cost or
2089 expense incurred by the commissioner in the administration, investigation, and enforcement of
2090 insurance fraud provisions.
2091 Section 15. Section 31A-31-108.5 is enacted to read:
2092 31A-31-108.5. Insurance Fraud Victim Restitution Fund.
2093 (1) There is created a restricted special revenue fund known as the "Insurance Fraud
2094 Victim Restitution Fund."
2095 (2) The Insurance Fraud Victim Restitution Fund shall consist of money ordered paid
2096 under Subsections 31A-31-109 (1)(a)(i) and (2)(a).
2097 (3) Interest on fund money shall be deposited into the General Fund.
2098 (4) The commissioner shall administer the Insurance Fraud Victim Restitution Fund for
2099 the sole benefit of insurance fraud victims.
2100 Section 16. Effective date.
2101 This bill takes effect on May 14, 2013, except that the amendment to Section
2102 31A-3-304 (Effective 07/01/13) takes effect on July 1, 2015.

Legislative Review Note
as of 11-15-12 2:46 PM

Office of Legislative Research and General Counsel

[Bill Documents]