First Substitute H.B. 24

This document includes House Floor Amendments incorporated into the bill on Tue, Feb 4, 2014 at 11:34 AM by jeyring. -->

Representative James A. Dunnigan proposes the following substitute bill:


             1     
INSURANCE RELATED AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             5     
Senate Sponsor: Curtis S. Bramble

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies Title 31A, Insurance Code, and other related provisions, to address
             10      the regulation of insurance.
             11      Highlighted Provisions:
             12          This bill:
             13          .    amends definition provisions;
             14          .    designates insurance fraud investigators as law enforcement officers;
             15          .    addresses the Insurance Department Restricted Account;
             16          .    changes the date captive insurance companies are to pay a fee;
             17          .    addresses what constitutes a qualified insurer;
             18          .    modifies requirements for plan of orderly withdrawal from writing a line of
             19      insurance;
             20          .    addresses notice requirements related to a request for a hearing;
             21          .    modifies calculations related to interest payable on life insurance proceeds;
             22          .    addresses preferred provider contract provisions;
             23          .    addresses coverage of mental health and substance use disorders;
             24          .    modifies requirements for the uniform application form and the uniform waiver of
             25      coverage form;


             26          .    amends language regarding the health benefit plan on the Health Insurance
             27      Exchange;
             28          .    amends language regarding open enrollment provisions;
             29          .    modifies language regarding dental and vision policies being offered on the Health
             30      Insurance Exchange;
             31          .    clarifies language related to the designated responsible licensed individual;
             32          .    clarifies references to the Violent Crime Control and Law Enforcement Act;
             33          .    modifies references to state of residence to home state;
             34          .    addresses requirements related to licensing when a person establishes legal
             35      residence in the state;
             36          .    changes requirements related to the commissioner placing a licensee on probation;
             37          .    repeals language related to a voluntarily surrendered license that is reinstated upon
             38      completion of continuing education requirements;
             39          .    modifies certain exemptions from continuing education requirements;
             40          .    clarifies training period requirements;
             41          .    changes a navigator license term to one year;
             42          .    provides for training periods for a navigator license;
             43          .    modifies continuing education requirements for a navigator;
             44          .    repeals the requirement that the commissioner publish a list of professional
             45      designations whose continuing education requirements could be used for certain
             46      circumstances related to navigators;
             47          .    modifies provisions related to inducements;
             48          .    makes navigator licensees subject to unfair marketing practice restrictions;
             49          .    amends definitions specific to insurance adjusters' chapter;
             50          .    exempts an applicant for the crop insurance license class from certain requirements;
             51          .    modifies the definition of receiver;
             52          .    addresses the provisions related to the receivership court's seizure order;
             53          .    amends the purpose statement, definition, and applicability and scope provisions for
             54      the Individual, Small Employer, and Group Health Insurance Act;
             55          .    addresses the surcharge for groups changing carriers;
             56          .    addresses eligibility for the small employer and individual market;


             57          .    modifies the provisions related to appointment of insurance producers and the
             58      Health Insurance Exchange;
             59          .    modifies Health Insurance Exchange disclosure requirements;
             60          .    requires a captive insurance company, rather than an association captive insurance
             61      company or industrial insured group, to file a specified report;
             62          .    corrects a reference to a covered employee;
             63          .    changes reference to a multiple coordinated policy to a master policy;
             64          .    includes reference to the defined contribution arrangement market into the Defined
             65      Contribution Risk Adjuster Act;
             66          .    modifies definitions in the Small Employer Stop-Loss Insurance Act;
             67          .    addresses stop-loss insurance coverage standards, stop-loss restrictions, filing
             68      requirements, and stop-loss insurance disclosure;
             69          .    modifies commissioner's rulemaking authority under the Small Employer Stop-Loss
             70      Insurance Act; and
             71          .    makes technical and conforming amendments.
             72      Money Appropriated in this Bill:
             73          None
             74      Other Special Clauses:
             75          This bill provides an effective date.
             76      Utah Code Sections Affected:
             77      AMENDS:
             78           31A-1-301 , as last amended by Laws of Utah 2013, Chapter 319
             79           31A-2-104 , as last amended by Laws of Utah 1999, Chapter 21
             80           31A-3-103 , as last amended by Laws of Utah 2011, Chapter 284
             81           31A-3-304 (Superseded 07/01/15), as last amended by Laws of Utah 2011, Chapter
             82      284
             83           31A-3-304 (Effective 07/01/15), as last amended by Laws of Utah 2013, Chapter 319
             84           31A-4-102 , as last amended by Laws of Utah 2008, Chapter 345
             85           31A-4-115 , as last amended by Laws of Utah 2002, Chapter 308
             86           31A-8-402.3 , as last amended by Laws of Utah 2004, Chapter 329
             87           31A-16-103 , as last amended by Laws of Utah 2004, Chapter 2


             88           31A-17-607 , as last amended by Laws of Utah 2001, Chapter 116
             89           31A-22-428 , as enacted by Laws of Utah 2008, Chapter 345
             90           31A-22-617 , as last amended by Laws of Utah 2013, Chapters 104 and 319
             91           31A-22-618.5 , as last amended by Laws of Utah 2013, Chapter 319
             92           31A-22-625 , as last amended by Laws of Utah 2012, Chapter 253
             93           31A-22-635 , as last amended by Laws of Utah 2012, Chapters 253 and 279
             94           31A-22-721 , as last amended by Laws of Utah 2011, Chapter 284
             95           31A-23a-102 , as last amended by Laws of Utah 2013, Chapter 319
             96           31A-23a-104 , as last amended by Laws of Utah 2012, Chapter 253
             97           31A-23a-105 , as last amended by Laws of Utah 2013, Chapter 319
             98           31A-23a-108 , as last amended by Laws of Utah 2012, Chapter 253
             99           31A-23a-112 , as last amended by Laws of Utah 2008, Chapter 382
             100           31A-23a-113 , as last amended by Laws of Utah 2012, Chapter 253
             101           31A-23a-202 , as last amended by Laws of Utah 2013, Chapter 319
             102           31A-23a-203 , as last amended by Laws of Utah 2012, Chapter 253
             103           31A-23a-402.5 , as last amended by Laws of Utah 2013, Chapter 319
             104           31A-23b-102 , as enacted by Laws of Utah 2013, Chapter 341
             105           31A-23b-202 , as enacted by Laws of Utah 2013, Chapter 341
             106           31A-23b-205 , as enacted by Laws of Utah 2013, Chapter 341
             107           31A-23b-206 , as enacted by Laws of Utah 2013, Chapter 341
             108           31A-23b-301 , as enacted by Laws of Utah 2013, Chapter 341
             109           31A-23b-402 , as enacted by Laws of Utah 2013, Chapter 341
             110           31A-25-208 , as last amended by Laws of Utah 2011, Chapter 284
             111           31A-25-209 , as last amended by Laws of Utah 2008, Chapter 382
             112           31A-26-102 , as last amended by Laws of Utah 2012, Chapter 151
             113           31A-26-206 , as last amended by Laws of Utah 2011, Chapter 284
             114           31A-26-207 , as last amended by Laws of Utah 2001, Chapter 116
             115           31A-26-213 , as last amended by Laws of Utah 2011, Chapter 284
             116           31A-26-214 , as last amended by Laws of Utah 2008, Chapter 382
             117           31A-26-214.5 , as last amended by Laws of Utah 2009, Chapter 349
             118           31A-27a-102 , as last amended by Laws of Utah 2008, Chapter 382


             119           31A-27a-107 , as enacted by Laws of Utah 2007, Chapter 309
             120           31A-27a-201 , as enacted by Laws of Utah 2007, Chapter 309
             121           31A-27a-701 , as last amended by Laws of Utah 2011, Chapter 297
             122           31A-29-106 , as last amended by Laws of Utah 2013, Chapter 319
             123           31A-29-111 , as last amended by Laws of Utah 2012, Chapters 158 and 347
             124           31A-29-115 , as last amended by Laws of Utah 2004, Chapter 2
             125           31A-30-102 , as last amended by Laws of Utah 2009, Chapter 12
             126           31A-30-103 , as last amended by Laws of Utah 2013, Chapter 168
             127           31A-30-104 , as last amended by Laws of Utah 2013, Chapters 168 and 341
             128           31A-30-106 , as last amended by Laws of Utah 2011, Chapter 284
             129           31A-30-106.7 , as last amended by Laws of Utah 2008, Chapter 382
             130           31A-30-107 , as last amended by Laws of Utah 2009, Chapter 12
             131           31A-30-108 , as last amended by Laws of Utah 2011, Chapter 284
             132           31A-30-207 , as last amended by Laws of Utah 2011, Second Special Session, Chapter 5
             133           31A-30-209 , as last amended by Laws of Utah 2011, Chapter 400
             134           31A-30-211 , as last amended by Laws of Utah 2011, Second Special Session, Chapter 5
             135           31A-37-501 , as last amended by Laws of Utah 2008, Chapter 302
             136           31A-40-203 , as enacted by Laws of Utah 2008, Chapter 318
             137           31A-40-209 , as enacted by Laws of Utah 2008, Chapter 318
             138           31A-42-202 , as last amended by Laws of Utah 2011, Chapter 400
             139           31A-43-102 , as enacted by Laws of Utah 2013, Chapter 341
             140           31A-43-301 , as enacted by Laws of Utah 2013, Chapter 341
             141           31A-43-302 , as enacted by Laws of Utah 2013, Chapter 341
             142           31A-43-303 , as enacted by Laws of Utah 2013, Chapter 341
             143           31A-43-304 , as enacted by Laws of Utah 2013, Chapter 341
             144           53-13-103 , as last amended by Laws of Utah 2011, Chapter 58
             145           63J-1-602.2 , as last amended by Laws of Utah 2013, Chapter 338
             146      REPEALS:
             147           31A-30-110 , as last amended by Laws of Utah 2011, Chapters 284 and 297
             148           31A-30-111 , as last amended by Laws of Utah 2002, Chapter 308
             149     


             150      Be it enacted by the Legislature of the state of Utah:
             151          Section 1. Section 31A-1-301 is amended to read:
             152           31A-1-301. Definitions.
             153          As used in this title, unless otherwise specified:
             154          (1) (a) "Accident and health insurance" means insurance to provide protection against
             155      economic losses resulting from:
             156          (i) a medical condition including:
             157          (A) a medical care expense; or
             158          (B) the risk of disability;
             159          (ii) accident; or
             160          (iii) sickness.
             161          (b) "Accident and health insurance":
             162          (i) includes a contract with disability contingencies including:
             163          (A) an income replacement contract;
             164          (B) a health care contract;
             165          (C) an expense reimbursement contract;
             166          (D) a credit accident and health contract;
             167          (E) a continuing care contract; and
             168          (F) a long-term care contract; and
             169          (ii) may provide:
             170          (A) hospital coverage;
             171          (B) surgical coverage;
             172          (C) medical coverage;
             173          (D) loss of income coverage;
             174          (E) prescription drug coverage;
             175          (F) dental coverage; or
             176          (G) vision coverage.
             177          (c) "Accident and health insurance" does not include workers' compensation insurance.
             178          (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
             179      63G, Chapter 3, Utah Administrative Rulemaking Act.
             180          (3) "Administrator" is defined in Subsection [(163)] (164).


             181          (4) "Adult" means an individual who has attained the age of at least 18 years.
             182          (5) "Affiliate" means a person who controls, is controlled by, or is under common
             183      control with, another person. A corporation is an affiliate of another corporation, regardless of
             184      ownership, if substantially the same group of individuals manage the corporations.
             185          (6) "Agency" means:
             186          (a) a person other than an individual, including a sole proprietorship by which an
             187      individual does business under an assumed name; and
             188          (b) an insurance organization licensed or required to be licensed under Section
             189      31A-23a-301 , 31A-25-207 , or 31A-26-209 .
             190          (7) "Alien insurer" means an insurer domiciled outside the United States.
             191          (8) "Amendment" means an endorsement to an insurance policy or certificate.
             192          (9) "Annuity" means an agreement to make periodical payments for a period certain or
             193      over the lifetime of one or more individuals if the making or continuance of all or some of the
             194      series of the payments, or the amount of the payment, is dependent upon the continuance of
             195      human life.
             196          (10) "Application" means a document:
             197          (a) (i) completed by an applicant to provide information about the risk to be insured;
             198      and
             199          (ii) that contains information that is used by the insurer to evaluate risk and decide
             200      whether to:
             201          (A) insure the risk under:
             202          (I) the coverage as originally offered; or
             203          (II) a modification of the coverage as originally offered; or
             204          (B) decline to insure the risk; or
             205          (b) used by the insurer to gather information from the applicant before issuance of an
             206      annuity contract.
             207          (11) "Articles" or "articles of incorporation" means:
             208          (a) the original articles;
             209          (b) a special law;
             210          (c) a charter;
             211          (d) an amendment;


             212          (e) restated articles;
             213          (f) articles of merger or consolidation;
             214          (g) a trust instrument;
             215          (h) another constitutive document for a trust or other entity that is not a corporation;
             216      and
             217          (i) an amendment to an item listed in Subsections (11)(a) through (h).
             218          (12) "Bail bond insurance" means a guarantee that a person will attend court when
             219      required, up to and including surrender of the person in execution of a sentence imposed under
             220      Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
             221          (13) "Binder" is defined in Section 31A-21-102 .
             222          (14) "Blanket insurance policy" means a group policy covering a defined class of
             223      persons:
             224          (a) without individual underwriting or application; and
             225          (b) that is determined by definition without designating each person covered.
             226          (15) "Board," "board of trustees," or "board of directors" means the group of persons
             227      with responsibility over, or management of, a corporation, however designated.
             228          (16) "Bona fide office" means a physical office in this state:
             229          (a) that is open to the public;
             230          (b) that is staffed during regular business hours on regular business days; and
             231          (c) at which the public may appear in person to obtain services.
             232          (17) "Business entity" means:
             233          (a) a corporation;
             234          (b) an association;
             235          (c) a partnership;
             236          (d) a limited liability company;
             237          (e) a limited liability partnership; or
             238          (f) another legal entity.
             239          (18) "Business of insurance" is defined in Subsection (88).
             240          (19) "Business plan" means the information required to be supplied to the
             241      commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
             242      when these subsections apply by reference under:


             243          (a) Section 31A-7-201 ;
             244          (b) Section 31A-8-205 ; or
             245          (c) Subsection 31A-9-205 (2).
             246          (20) (a) "Bylaws" means the rules adopted for the regulation or management of a
             247      corporation's affairs, however designated.
             248          (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
             249      corporation.
             250          (21) "Captive insurance company" means:
             251          (a) an insurer:
             252          (i) owned by another organization; and
             253          (ii) whose exclusive purpose is to insure risks of the parent organization and an
             254      affiliated company; or
             255          (b) in the case of a group or association, an insurer:
             256          (i) owned by the insureds; and
             257          (ii) whose exclusive purpose is to insure risks of:
             258          (A) a member organization;
             259          (B) a group member; or
             260          (C) an affiliate of:
             261          (I) a member organization; or
             262          (II) a group member.
             263          (22) "Casualty insurance" means liability insurance.
             264          (23) "Certificate" means evidence of insurance given to:
             265          (a) an insured under a group insurance policy; or
             266          (b) a third party.
             267          (24) "Certificate of authority" is included within the term "license."
             268          (25) "Claim," unless the context otherwise requires, means a request or demand on an
             269      insurer for payment of a benefit according to the terms of an insurance policy.
             270          (26) "Claims-made coverage" means an insurance contract or provision limiting
             271      coverage under a policy insuring against legal liability to claims that are first made against the
             272      insured while the policy is in force.
             273          (27) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance


             274      commissioner.
             275          (b) When appropriate, the terms listed in Subsection (27)(a) apply to the equivalent
             276      supervisory official of another jurisdiction.
             277          (28) (a) "Continuing care insurance" means insurance that:
             278          (i) provides board and lodging;
             279          (ii) provides one or more of the following:
             280          (A) a personal service;
             281          (B) a nursing service;
             282          (C) a medical service; or
             283          (D) any other health-related service; and
             284          (iii) provides the coverage described in this Subsection (28)(a) under an agreement
             285      effective:
             286          (A) for the life of the insured; or
             287          (B) for a period in excess of one year.
             288          (b) Insurance is continuing care insurance regardless of whether or not the board and
             289      lodging are provided at the same location as a service described in Subsection (28)(a)(ii).
             290          (29) (a) "Control," "controlling," "controlled," or "under common control" means the
             291      direct or indirect possession of the power to direct or cause the direction of the management
             292      and policies of a person. This control may be:
             293          (i) by contract;
             294          (ii) by common management;
             295          (iii) through the ownership of voting securities; or
             296          (iv) by a means other than those described in Subsections (29)(a)(i) through (iii).
             297          (b) There is no presumption that an individual holding an official position with another
             298      person controls that person solely by reason of the position.
             299          (c) A person having a contract or arrangement giving control is considered to have
             300      control despite the illegality or invalidity of the contract or arrangement.
             301          (d) There is a rebuttable presumption of control in a person who directly or indirectly
             302      owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
             303      voting securities of another person.
             304          (30) "Controlled insurer" means a licensed insurer that is either directly or indirectly


             305      controlled by a producer.
             306          (31) "Controlling person" means a person that directly or indirectly has the power to
             307      direct or cause to be directed, the management, control, or activities of a reinsurance
             308      intermediary.
             309          (32) "Controlling producer" means a producer who directly or indirectly controls an
             310      insurer.
             311          (33) (a) "Corporation" means an insurance corporation, except when referring to:
             312          (i) a corporation doing business:
             313          (A) as:
             314          (I) an insurance producer;
             315          (II) a surplus lines producer;
             316          (III) a limited line producer;
             317          (IV) a consultant;
             318          (V) a managing general agent;
             319          (VI) a reinsurance intermediary;
             320          (VII) a third party administrator; or
             321          (VIII) an adjuster; and
             322          (B) under:
             323          (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             324      Reinsurance Intermediaries;
             325          (II) Chapter 25, Third Party Administrators; or
             326          (III) Chapter 26, Insurance Adjusters; or
             327          (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
             328      Holding Companies.
             329          (b) "Stock corporation" means a stock insurance corporation.
             330          (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
             331          (34) (a) "Creditable coverage" has the same meaning as provided in federal regulations
             332      adopted pursuant to the Health Insurance Portability and Accountability Act.
             333          (b) "Creditable coverage" includes coverage that is offered through a public health plan
             334      such as:
             335          (i) the Primary Care Network Program under a Medicaid primary care network


             336      demonstration waiver obtained subject to Section 26-18-3 ;
             337          (ii) the Children's Health Insurance Program under Section 26-40-106 ; or
             338          (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
             339      101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. 109-415.
             340          (35) "Credit accident and health insurance" means insurance on a debtor to provide
             341      indemnity for payments coming due on a specific loan or other credit transaction while the
             342      debtor has a disability.
             343          (36) (a) "Credit insurance" means insurance offered in connection with an extension of
             344      credit that is limited to partially or wholly extinguishing that credit obligation.
             345          (b) "Credit insurance" includes:
             346          (i) credit accident and health insurance;
             347          (ii) credit life insurance;
             348          (iii) credit property insurance;
             349          (iv) credit unemployment insurance;
             350          (v) guaranteed automobile protection insurance;
             351          (vi) involuntary unemployment insurance;
             352          (vii) mortgage accident and health insurance;
             353          (viii) mortgage guaranty insurance; and
             354          (ix) mortgage life insurance.
             355          (37) "Credit life insurance" means insurance on the life of a debtor in connection with
             356      an extension of credit that pays a person if the debtor dies.
             357          (38) "Credit property insurance" means insurance:
             358          (a) offered in connection with an extension of credit; and
             359          (b) that protects the property until the debt is paid.
             360          (39) "Credit unemployment insurance" means insurance:
             361          (a) offered in connection with an extension of credit; and
             362          (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
             363          (i) specific loan; or
             364          (ii) credit transaction.
             365          (40) "Creditor" means a person, including an insured, having a claim, whether:
             366          (a) matured;


             367          (b) unmatured;
             368          (c) liquidated;
             369          (d) unliquidated;
             370          (e) secured;
             371          (f) unsecured;
             372          (g) absolute;
             373          (h) fixed; or
             374          (i) contingent.
             375          (41) (a) "Crop insurance" means insurance providing protection against damage to
             376      crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation,
             377      disease, or other yield-reducing conditions or perils that is:
             378          (i) provided by the private insurance market; or
             379          (ii) subsidized by the Federal Crop Insurance Corporation.
             380          (b) "Crop insurance" includes multiperil crop insurance.
             381          (42) (a) "Customer service representative" means a person that provides an insurance
             382      service and insurance product information:
             383          (i) for the customer service representative's:
             384          (A) producer;
             385          (B) surplus lines producer; or
             386          (C) consultant employer; and
             387          (ii) to the customer service representative's employer's:
             388          (A) customer;
             389          (B) client; or
             390          (C) organization.
             391          (b) A customer service representative may only operate within the scope of authority of
             392      the customer service representative's producer, surplus lines producer, or consultant employer.
             393          (43) "Deadline" means a final date or time:
             394          (a) imposed by:
             395          (i) statute;
             396          (ii) rule; or
             397          (iii) order; and


             398          (b) by which a required filing or payment must be received by the department.
             399          (44) "Deemer clause" means a provision under this title under which upon the
             400      occurrence of a condition precedent, the commissioner is considered to have taken a specific
             401      action. If the statute so provides, a condition precedent may be the commissioner's failure to
             402      take a specific action.
             403          (45) "Degree of relationship" means the number of steps between two persons
             404      determined by counting the generations separating one person from a common ancestor and
             405      then counting the generations to the other person.
             406          (46) "Department" means the Insurance Department.
             407          (47) "Director" means a member of the board of directors of a corporation.
             408          (48) "Disability" means a physiological or psychological condition that partially or
             409      totally limits an individual's ability to:
             410          (a) perform the duties of:
             411          (i) that individual's occupation; or
             412          (ii) [any] an occupation for which the individual is reasonably suited by education,
             413      training, or experience; or
             414          (b) perform two or more of the following basic activities of daily living:
             415          (i) eating;
             416          (ii) toileting;
             417          (iii) transferring;
             418          (iv) bathing; or
             419          (v) dressing.
             420          (49) "Disability income insurance" is defined in Subsection (79).
             421          (50) "Domestic insurer" means an insurer organized under the laws of this state.
             422          (51) "Domiciliary state" means the state in which an insurer:
             423          (a) is incorporated;
             424          (b) is organized; or
             425          (c) in the case of an alien insurer, enters into the United States.
             426          (52) (a) "Eligible employee" means:
             427          (i) an employee who:
             428          (A) works on a full-time basis; and


             429          (B) has a normal work week of 30 or more hours; or
             430          (ii) a person described in Subsection (52)(b).
             431          (b) "Eligible employee" includes, if the individual is included under a health benefit
             432      plan of a small employer:
             433          (i) a sole proprietor;
             434          (ii) a partner in a partnership; or
             435          (iii) an independent contractor.
             436          (c) "Eligible employee" does not include, unless eligible under Subsection (52)(b):
             437          (i) an individual who works on a temporary or substitute basis for a small employer;
             438          (ii) an employer's spouse; or
             439          (iii) a dependent of an employer.
             440          (53) "Employee" means an individual employed by an employer.
             441          (54) "Employee benefits" means one or more benefits or services provided to:
             442          (a) an employee; or
             443          (b) a dependent of an employee.
             444          (55) (a) "Employee welfare fund" means a fund:
             445          (i) established or maintained, whether directly or through a trustee, by:
             446          (A) one or more employers;
             447          (B) one or more labor organizations; or
             448          (C) a combination of employers and labor organizations; and
             449          (ii) that provides employee benefits paid or contracted to be paid, other than income
             450      from investments of the fund:
             451          (A) by or on behalf of an employer doing business in this state; or
             452          (B) for the benefit of a person employed in this state.
             453          (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
             454      revenues.
             455          (56) "Endorsement" means a written agreement attached to a policy or certificate to
             456      modify the policy or certificate coverage.
             457          (57) "Enrollment date," with respect to a health benefit plan, means:
             458          (a) the first day of coverage; or
             459          (b) if there is a waiting period, the first day of the waiting period.


             460          (58) (a) "Escrow" means:
             461          (i) a transaction that effects the sale, transfer, encumbering, or leasing of real property,
             462      when a person not a party to the transaction, and neither having nor acquiring an interest in the
             463      title, performs, in accordance with the written instructions or terms of the written agreement
             464      between the parties to the transaction, any of the following actions:
             465          (A) the explanation, holding, or creation of a document; or
             466          (B) the receipt, deposit, and disbursement of money;
             467          (ii) a settlement or closing involving:
             468          (A) a mobile home;
             469          (B) a grazing right;
             470          (C) a water right; or
             471          (D) other personal property authorized by the commissioner.
             472          (b) "Escrow" does not include:
             473          (i) the following notarial acts performed by a notary within the state:
             474          (A) an acknowledgment;
             475          (B) a copy certification;
             476          (C) jurat; and
             477          (D) an oath or affirmation;
             478          (ii) the receipt or delivery of a document; or
             479          (iii) the receipt of money for delivery to the escrow agent.
             480          (59) "Escrow agent" means an agency title insurance producer meeting the
             481      requirements of Sections 31A-4-107 , 31A-14-211 , and 31A-23a-204 , who is acting through an
             482      individual title insurance producer licensed with an escrow subline of authority.
             483          (60) (a) "Excludes" is not exhaustive and does not mean that another thing is not also
             484      excluded.
             485          (b) The items listed in a list using the term "excludes" are representative examples for
             486      use in interpretation of this title.
             487          (61) "Exclusion" means for the purposes of accident and health insurance that an
             488      insurer does not provide insurance coverage, for whatever reason, for one of the following:
             489          (a) a specific physical condition;
             490          (b) a specific medical procedure;


             491          (c) a specific disease or disorder; or
             492          (d) a specific prescription drug or class of prescription drugs.
             493          (62) "Expense reimbursement insurance" means insurance:
             494          (a) written to provide a payment for an expense relating to hospital confinement
             495      resulting from illness or injury; and
             496          (b) written:
             497          (i) as a daily limit for a specific number of days in a hospital; and
             498          (ii) to have a one or two day waiting period following a hospitalization.
             499          (63) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding
             500      a position of public or private trust.
             501          (64) (a) "Filed" means that a filing is:
             502          (i) submitted to the department as required by and in accordance with applicable
             503      statute, rule, or filing order;
             504          (ii) received by the department within the time period provided in applicable statute,
             505      rule, or filing order; and
             506          (iii) accompanied by the appropriate fee in accordance with:
             507          (A) Section 31A-3-103 ; or
             508          (B) rule.
             509          (b) "Filed" does not include a filing that is rejected by the department because it is not
             510      submitted in accordance with Subsection (64)(a).
             511          (65) "Filing," when used as a noun, means an item required to be filed with the
             512      department including:
             513          (a) a policy;
             514          (b) a rate;
             515          (c) a form;
             516          (d) a document;
             517          (e) a plan;
             518          (f) a manual;
             519          (g) an application;
             520          (h) a report;
             521          (i) a certificate;


             522          (j) an endorsement;
             523          (k) an actuarial certification;
             524          (l) a licensee annual statement;
             525          (m) a licensee renewal application;
             526          (n) an advertisement; or
             527          (o) an outline of coverage.
             528          (66) "First party insurance" means an insurance policy or contract in which the insurer
             529      agrees to pay a claim submitted to it by the insured for the insured's losses.
             530          (67) "Foreign insurer" means an insurer domiciled outside of this state, including an
             531      alien insurer.
             532          (68) (a) "Form" means one of the following prepared for general use:
             533          (i) a policy;
             534          (ii) a certificate;
             535          (iii) an application;
             536          (iv) an outline of coverage; or
             537          (v) an endorsement.
             538          (b) "Form" does not include a document specially prepared for use in an individual
             539      case.
             540          (69) "Franchise insurance" means an individual insurance policy provided through a
             541      mass marketing arrangement involving a defined class of persons related in some way other
             542      than through the purchase of insurance.
             543          (70) "General lines of authority" include:
             544          (a) the general lines of insurance in Subsection (71);
             545          (b) title insurance under one of the following sublines of authority:
             546          (i) search, including authority to act as a title marketing representative;
             547          (ii) escrow, including authority to act as a title marketing representative; and
             548          (iii) title marketing representative only;
             549          (c) surplus lines;
             550          (d) workers' compensation; and
             551          (e) [any other] another line of insurance that the commissioner considers necessary to
             552      recognize in the public interest.


             553          (71) "General lines of insurance" include:
             554          (a) accident and health;
             555          (b) casualty;
             556          (c) life;
             557          (d) personal lines;
             558          (e) property; and
             559          (f) variable contracts, including variable life and annuity.
             560          (72) "Group health plan" means an employee welfare benefit plan to the extent that the
             561      plan provides medical care:
             562          (a) (i) to an employee; or
             563          (ii) to a dependent of an employee; and
             564          (b) (i) directly;
             565          (ii) through insurance reimbursement; or
             566          (iii) through another method.
             567          (73) (a) "Group insurance policy" means a policy covering a group of persons that is
             568      issued:
             569          (i) to a policyholder on behalf of the group; and
             570          (ii) for the benefit of a member of the group who is selected under a procedure defined
             571      in:
             572          (A) the policy; or
             573          (B) an agreement that is collateral to the policy.
             574          (b) A group insurance policy may include a member of the policyholder's family or a
             575      dependent.
             576          (74) "Guaranteed automobile protection insurance" means insurance offered in
             577      connection with an extension of credit that pays the difference in amount between the
             578      insurance settlement and the balance of the loan if the insured automobile is a total loss.
             579          (75) (a) Except as provided in Subsection (75)(b), "health benefit plan" means a policy
             580      or certificate that:
             581          (i) provides health care insurance;
             582          (ii) provides major medical expense insurance; or
             583          (iii) is offered as a substitute for hospital or medical expense insurance, such as:


             584          (A) a hospital confinement indemnity; or
             585          (B) a limited benefit plan.
             586          (b) "Health benefit plan" does not include a policy or certificate that:
             587          (i) provides benefits solely for:
             588          (A) accident;
             589          (B) dental;
             590          (C) income replacement;
             591          (D) long-term care;
             592          (E) a Medicare supplement;
             593          (F) a specified disease;
             594          (G) vision; or
             595          (H) a short-term limited duration; or
             596          (ii) is offered and marketed as supplemental health insurance.
             597          (76) "Health care" means any of the following intended for use in the diagnosis,
             598      treatment, mitigation, or prevention of a human ailment or impairment:
             599          (a) a professional service;
             600          (b) a personal service;
             601          (c) a facility;
             602          (d) equipment;
             603          (e) a device;
             604          (f) supplies; or
             605          (g) medicine.
             606          (77) (a) "Health care insurance" or "health insurance" means insurance providing:
             607          (i) a health care benefit; or
             608          (ii) payment of an incurred health care expense.
             609          (b) "Health care insurance" or "health insurance" does not include accident and health
             610      insurance providing a benefit for:
             611          (i) replacement of income;
             612          (ii) short-term accident;
             613          (iii) fixed indemnity;
             614          (iv) credit accident and health;


             615          (v) supplements to liability;
             616          (vi) workers' compensation;
             617          (vii) automobile medical payment;
             618          (viii) no-fault automobile;
             619          (ix) equivalent self-insurance; or
             620          (x) a type of accident and health insurance coverage that is a part of or attached to
             621      another type of policy.
             622          (78) "Health Insurance Portability and Accountability Act" means the Health Insurance
             623      Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended.
             624          (79) "Income replacement insurance" or "disability income insurance" means insurance
             625      written to provide payments to replace income lost from accident or sickness.
             626          (80) "Indemnity" means the payment of an amount to offset all or part of an insured
             627      loss.
             628          (81) "Independent adjuster" means an insurance adjuster required to be licensed under
             629      Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
             630          (82) "Independently procured insurance" means insurance procured under Section
             631      31A-15-104 .
             632          (83) "Individual" means a natural person.
             633          (84) "Inland marine insurance" includes insurance covering:
             634          (a) property in transit on or over land;
             635          (b) property in transit over water by means other than boat or ship;
             636          (c) bailee liability;
             637          (d) fixed transportation property such as bridges, electric transmission systems, radio
             638      and television transmission towers and tunnels; and
             639          (e) personal and commercial property floaters.
             640          (85) "Insolvency" means that:
             641          (a) an insurer is unable to pay its debts or meet its obligations as the debts and
             642      obligations mature;
             643          (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
             644      RBC under Subsection 31A-17-601 (8)(c); or
             645          (c) an insurer is determined to be hazardous under this title.


             646          (86) (a) "Insurance" means:
             647          (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
             648      persons to one or more other persons; or
             649          (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
             650      group of persons that includes the person seeking to distribute that person's risk.
             651          (b) "Insurance" includes:
             652          (i) a risk distributing arrangement providing for compensation or replacement for
             653      damages or loss through the provision of a service or a benefit in kind;
             654          (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
             655      business and not as merely incidental to a business transaction; and
             656          (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
             657      but with a class of persons who have agreed to share the risk.
             658          (87) "Insurance adjuster" means a person who directs or conducts the investigation,
             659      negotiation, or settlement of a claim under an insurance policy other than life insurance or an
             660      annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
             661          (88) "Insurance business" or "business of insurance" includes:
             662          (a) providing health care insurance by an organization that is or is required to be
             663      licensed under this title;
             664          (b) providing a benefit to an employee in the event of a contingency not within the
             665      control of the employee, in which the employee is entitled to the benefit as a right, which
             666      benefit may be provided either:
             667          (i) by a single employer or by multiple employer groups; or
             668          (ii) through one or more trusts, associations, or other entities;
             669          (c) providing an annuity:
             670          (i) including an annuity issued in return for a gift; and
             671          (ii) except an annuity provided by a person specified in Subsections 31A-22-1305 (2)
             672      and (3);
             673          (d) providing the characteristic services of a motor club as outlined in Subsection
             674      (116);
             675          (e) providing another person with insurance;
             676          (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,


             677      or surety, a contract or policy of title insurance;
             678          (g) transacting or proposing to transact any phase of title insurance, including:
             679          (i) solicitation;
             680          (ii) negotiation preliminary to execution;
             681          (iii) execution of a contract of title insurance;
             682          (iv) insuring; and
             683          (v) transacting matters subsequent to the execution of the contract and arising out of
             684      the contract, including reinsurance;
             685          (h) transacting or proposing a life settlement; and
             686          (i) doing, or proposing to do, any business in substance equivalent to Subsections
             687      (88)(a) through (h) in a manner designed to evade this title.
             688          (89) "Insurance consultant" or "consultant" means a person who:
             689          (a) advises another person about insurance needs and coverages;
             690          (b) is compensated by the person advised on a basis not directly related to the insurance
             691      placed; and
             692          (c) except as provided in Section 31A-23a-501 , is not compensated directly or
             693      indirectly by an insurer or producer for advice given.
             694          (90) "Insurance holding company system" means a group of two or more affiliated
             695      persons, at least one of whom is an insurer.
             696          (91) (a) "Insurance producer" or "producer" means a person licensed or required to be
             697      licensed under the laws of this state to sell, solicit, or negotiate insurance.
             698          (b) (i) "Producer for the insurer" means a producer who is compensated directly or
             699      indirectly by an insurer for selling, soliciting, or negotiating an insurance product of that
             700      insurer.
             701          (ii) "Producer for the insurer" may be referred to as an "agent."
             702          (c) (i) "Producer for the insured" means a producer who:
             703          (A) is compensated directly and only by an insurance customer or an insured; and
             704          (B) receives no compensation directly or indirectly from an insurer for selling,
             705      soliciting, or negotiating an insurance product of that insurer to an insurance customer or
             706      insured.
             707          (ii) "Producer for the insured" may be referred to as a "broker."


             708          (92) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
             709      promise in an insurance policy and includes:
             710          (i) a policyholder;
             711          (ii) a subscriber;
             712          (iii) a member; and
             713          (iv) a beneficiary.
             714          (b) The definition in Subsection (92)(a):
             715          (i) applies only to this title; and
             716          (ii) does not define the meaning of this word as used in an insurance policy or
             717      certificate.
             718          (93) (a) "Insurer" means a person doing an insurance business as a principal including:
             719          (i) a fraternal benefit society;
             720          (ii) an issuer of a gift annuity other than an annuity specified in Subsections
             721      31A-22-1305 (2) and (3);
             722          (iii) a motor club;
             723          (iv) an employee welfare plan; and
             724          (v) a person purporting or intending to do an insurance business as a principal on that
             725      person's own account.
             726          (b) "Insurer" does not include a governmental entity to the extent the governmental
             727      entity is engaged in an activity described in Section 31A-12-107 .
             728          (94) "Interinsurance exchange" is defined in Subsection [(146)] (147).
             729          (95) "Involuntary unemployment insurance" means insurance:
             730          (a) offered in connection with an extension of credit; and
             731          (b) that provides indemnity if the debtor is involuntarily unemployed for payments
             732      coming due on a:
             733          (i) specific loan; or
             734          (ii) credit transaction.
             735          (96) "Large employer," in connection with a health benefit plan, means an employer
             736      who, with respect to a calendar year and to a plan year:
             737          (a) employed an average of at least 51 eligible employees on each business day during
             738      the preceding calendar year; and


             739          (b) employs at least two employees on the first day of the plan year.
             740          (97) "Late enrollee," with respect to an employer health benefit plan, means an
             741      individual whose enrollment is a late enrollment.
             742          (98) "Late enrollment," with respect to an employer health benefit plan, means
             743      enrollment of an individual other than:
             744          (a) on the earliest date on which coverage can become effective for the individual
             745      under the terms of the plan; or
             746          (b) through special enrollment.
             747          (99) (a) Except for a retainer contract or legal assistance described in Section
             748      31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
             749      specified legal expense.
             750          (b) "Legal expense insurance" includes an arrangement that creates a reasonable
             751      expectation of an enforceable right.
             752          (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
             753      legal services incidental to other insurance coverage.
             754          (100) (a) "Liability insurance" means insurance against liability:
             755          (i) for death, injury, or disability of a human being, or for damage to property,
             756      exclusive of the coverages under:
             757          (A) Subsection (110) for medical malpractice insurance;
             758          (B) Subsection (138) for professional liability insurance; and
             759          (C) Subsection [(172)] (173) for workers' compensation insurance;
             760          (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
             761      insured who is injured, irrespective of legal liability of the insured, when issued with or
             762      supplemental to insurance against legal liability for the death, injury, or disability of a human
             763      being, exclusive of the coverages under:
             764          (A) Subsection (110) for medical malpractice insurance;
             765          (B) Subsection (138) for professional liability insurance; and
             766          (C) Subsection [(172)] (173) for workers' compensation insurance;
             767          (iii) for loss or damage to property resulting from an accident to or explosion of a
             768      boiler, pipe, pressure container, machinery, or apparatus;
             769          (iv) for loss or damage to property caused by:


             770          (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
             771          (B) water entering through a leak or opening in a building; or
             772          (v) for other loss or damage properly the subject of insurance not within another kind
             773      of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
             774          (b) "Liability insurance" includes:
             775          (i) vehicle liability insurance;
             776          (ii) residential dwelling liability insurance; and
             777          (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
             778      boiler, machinery, or apparatus of any kind when done in connection with insurance on the
             779      elevator, boiler, machinery, or apparatus.
             780          (101) (a) "License" means authorization issued by the commissioner to engage in an
             781      activity that is part of or related to the insurance business.
             782          (b) "License" includes a certificate of authority issued to an insurer.
             783          (102) (a) "Life insurance" means:
             784          (i) insurance on a human life; and
             785          (ii) insurance pertaining to or connected with human life.
             786          (b) The business of life insurance includes:
             787          (i) granting a death benefit;
             788          (ii) granting an annuity benefit;
             789          (iii) granting an endowment benefit;
             790          (iv) granting an additional benefit in the event of death by accident;
             791          (v) granting an additional benefit to safeguard the policy against lapse; and
             792          (vi) providing an optional method of settlement of proceeds.
             793          (103) "Limited license" means a license that:
             794          (a) is issued for a specific product of insurance; and
             795          (b) limits an individual or agency to transact only for that product or insurance.
             796          (104) "Limited line credit insurance" includes the following forms of insurance:
             797          (a) credit life;
             798          (b) credit accident and health;
             799          (c) credit property;
             800          (d) credit unemployment;


             801          (e) involuntary unemployment;
             802          (f) mortgage life;
             803          (g) mortgage guaranty;
             804          (h) mortgage accident and health;
             805          (i) guaranteed automobile protection; and
             806          (j) another form of insurance offered in connection with an extension of credit that:
             807          (i) is limited to partially or wholly extinguishing the credit obligation; and
             808          (ii) the commissioner determines by rule should be designated as a form of limited line
             809      credit insurance.
             810          (105) "Limited line credit insurance producer" means a person who sells, solicits, or
             811      negotiates one or more forms of limited line credit insurance coverage to an individual through
             812      a master, corporate, group, or individual policy.
             813          (106) "Limited line insurance" includes:
             814          (a) bail bond;
             815          (b) limited line credit insurance;
             816          (c) legal expense insurance;
             817          (d) motor club insurance;
             818          (e) car rental related insurance;
             819          (f) travel insurance;
             820          (g) crop insurance;
             821          (h) self-service storage insurance;
             822          (i) guaranteed asset protection waiver;
             823          (j) portable electronics insurance; and
             824          (k) another form of limited insurance that the commissioner determines by rule should
             825      be designated a form of limited line insurance.
             826          (107) "Limited lines authority" includes[: (a)] the lines of insurance listed in
             827      Subsection (106)[; and].
             828          [(b) a customer service representative.]
             829          (108) "Limited lines producer" means a person who sells, solicits, or negotiates limited
             830      lines insurance.
             831          (109) (a) "Long-term care insurance" means an insurance policy or rider advertised,


             832      marketed, offered, or designated to provide coverage:
             833          (i) in a setting other than an acute care unit of a hospital;
             834          (ii) for not less than 12 consecutive months for a covered person on the basis of:
             835          (A) expenses incurred;
             836          (B) indemnity;
             837          (C) prepayment; or
             838          (D) another method;
             839          (iii) for one or more necessary or medically necessary services that are:
             840          (A) diagnostic;
             841          (B) preventative;
             842          (C) therapeutic;
             843          (D) rehabilitative;
             844          (E) maintenance; or
             845          (F) personal care; and
             846          (iv) that may be issued by:
             847          (A) an insurer;
             848          (B) a fraternal benefit society;
             849          (C) (I) a nonprofit health hospital; and
             850          (II) a medical service corporation;
             851          (D) a prepaid health plan;
             852          (E) a health maintenance organization; or
             853          (F) an entity similar to the entities described in Subsections (109)(a)(iv)(A) through (E)
             854      to the extent that the entity is otherwise authorized to issue life or health care insurance.
             855          (b) "Long-term care insurance" includes:
             856          (i) any of the following that provide directly or supplement long-term care insurance:
             857          (A) a group or individual annuity or rider; or
             858          (B) a life insurance policy or rider;
             859          (ii) a policy or rider that provides for payment of benefits on the basis of:
             860          (A) cognitive impairment; or
             861          (B) functional capacity; or
             862          (iii) a qualified long-term care insurance contract.


             863          (c) "Long-term care insurance" does not include:
             864          (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
             865          (ii) basic hospital expense coverage;
             866          (iii) basic medical/surgical expense coverage;
             867          (iv) hospital confinement indemnity coverage;
             868          (v) major medical expense coverage;
             869          (vi) income replacement or related asset-protection coverage;
             870          (vii) accident only coverage;
             871          (viii) coverage for a specified:
             872          (A) disease; or
             873          (B) accident;
             874          (ix) limited benefit health coverage; or
             875          (x) a life insurance policy that accelerates the death benefit to provide the option of a
             876      lump sum payment:
             877          (A) if the following are not conditioned on the receipt of long-term care:
             878          (I) benefits; or
             879          (II) eligibility; and
             880          (B) the coverage is for one or more the following qualifying events:
             881          (I) terminal illness;
             882          (II) medical conditions requiring extraordinary medical intervention; or
             883          (III) permanent institutional confinement.
             884          (110) "Medical malpractice insurance" means insurance against legal liability incident
             885      to the practice and provision of a medical service other than the practice and provision of a
             886      dental service.
             887          (111) "Member" means a person having membership rights in an insurance
             888      corporation.
             889          (112) "Minimum capital" or "minimum required capital" means the capital that must be
             890      constantly maintained by a stock insurance corporation as required by statute.
             891          (113) "Mortgage accident and health insurance" means insurance offered in connection
             892      with an extension of credit that provides indemnity for payments coming due on a mortgage
             893      while the debtor has a disability.


             894          (114) "Mortgage guaranty insurance" means surety insurance under which a mortgagee
             895      or other creditor is indemnified against losses caused by the default of a debtor.
             896          (115) "Mortgage life insurance" means insurance on the life of a debtor in connection
             897      with an extension of credit that pays if the debtor dies.
             898          (116) "Motor club" means a person:
             899          (a) licensed under:
             900          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             901          (ii) Chapter 11, Motor Clubs; or
             902          (iii) Chapter 14, Foreign Insurers; and
             903          (b) that promises for an advance consideration to provide for a stated period of time
             904      one or more:
             905          (i) legal services under Subsection 31A-11-102 (1)(b);
             906          (ii) bail services under Subsection 31A-11-102 (1)(c); or
             907          (iii) (A) trip reimbursement;
             908          (B) towing services;
             909          (C) emergency road services;
             910          (D) stolen automobile services;
             911          (E) a combination of the services listed in Subsections (116)(b)(iii)(A) through (D); or
             912          (F) other services given in Subsections 31A-11-102 (1)(b) through (f).
             913          (117) "Mutual" means a mutual insurance corporation.
             914          (118) "Network plan" means health care insurance:
             915          (a) that is issued by an insurer; and
             916          (b) under which the financing and delivery of medical care is provided, in whole or in
             917      part, through a defined set of providers under contract with the insurer, including the financing
             918      and delivery of an item paid for as medical care.
             919          (119) "Nonparticipating" means a plan of insurance under which the insured is not
             920      entitled to receive a dividend representing a share of the surplus of the insurer.
             921          (120) "Ocean marine insurance" means insurance against loss of or damage to:
             922          (a) ships or hulls of ships;
             923          (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, money,
             924      securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia


             925      interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
             926          (c) earnings such as freight, passage money, commissions, or profits derived from
             927      transporting goods or people upon or across the oceans or inland waterways; or
             928          (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
             929      owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
             930      in connection with maritime activity.
             931          (121) "Order" means an order of the commissioner.
             932          (122) "Outline of coverage" means a summary that explains an accident and health
             933      insurance policy.
             934          (123) "Participating" means a plan of insurance under which the insured is entitled to
             935      receive a dividend representing a share of the surplus of the insurer.
             936          (124) "Participation," as used in a health benefit plan, means a requirement relating to
             937      the minimum percentage of eligible employees that must be enrolled in relation to the total
             938      number of eligible employees of an employer reduced by each eligible employee who
             939      voluntarily declines coverage under the plan because the employee:
             940          (a) has other group health care insurance coverage; or
             941          (b) receives:
             942          (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
             943      Security Amendments of 1965; or
             944          (ii) another government health benefit.
             945          (125) "Person" includes:
             946          (a) an individual;
             947          (b) a partnership;
             948          (c) a corporation;
             949          (d) an incorporated or unincorporated association;
             950          (e) a joint stock company;
             951          (f) a trust;
             952          (g) a limited liability company;
             953          (h) a reciprocal;
             954          (i) a syndicate; or
             955          (j) another similar entity or combination of entities acting in concert.


             956          (126) "Personal lines insurance" means property and casualty insurance coverage sold
             957      for primarily noncommercial purposes to:
             958          (a) an individual; or
             959          (b) a family.
             960          (127) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
             961          (128) "Plan year" means:
             962          (a) the year that is designated as the plan year in:
             963          (i) the plan document of a group health plan; or
             964          (ii) a summary plan description of a group health plan;
             965          (b) if the plan document or summary plan description does not designate a plan year or
             966      there is no plan document or summary plan description:
             967          (i) the year used to determine deductibles or limits;
             968          (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
             969      or
             970          (iii) the employer's taxable year if:
             971          (A) the plan does not impose deductibles or limits on a yearly basis; and
             972          (B) (I) the plan is not insured; or
             973          (II) the insurance policy is not renewed on an annual basis; or
             974          (c) in a case not described in Subsection (128)(a) or (b), the calendar year.
             975          (129) (a) "Policy" means a document, including an attached endorsement or application
             976      that:
             977          (i) purports to be an enforceable contract; and
             978          (ii) memorializes in writing some or all of the terms of an insurance contract.
             979          (b) "Policy" includes a service contract issued by:
             980          (i) a motor club under Chapter 11, Motor Clubs;
             981          (ii) a service contract provided under Chapter 6a, Service Contracts; and
             982          (iii) a corporation licensed under:
             983          (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
             984          (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
             985          (c) "Policy" does not include:
             986          (i) a certificate under a group insurance contract; or


             987          (ii) a document that does not purport to have legal effect.
             988          (130) "Policyholder" means a person who controls a policy, binder, or oral contract by
             989      ownership, premium payment, or otherwise.
             990          (131) "Policy illustration" means a presentation or depiction that includes
             991      nonguaranteed elements of a policy of life insurance over a period of years.
             992          (132) "Policy summary" means a synopsis describing the elements of a life insurance
             993      policy.
             994          (133) "PPACA" means the Patient Protection and Affordable Care Act, Pub. L. No.
             995      111-148 and the Health Care Education Reconciliation Act of 2010, Pub. L. No. 111-152, and
             996      related federal regulations and guidance.
             997          (134) "Preexisting condition," with respect to a health benefit plan:
             998          (a) means a condition that was present before the effective date of coverage, whether or
             999      not medical advice, diagnosis, care, or treatment was recommended or received before that day;
             1000      and
             1001          (b) does not include a condition indicated by genetic information unless an actual
             1002      diagnosis of the condition by a physician has been made.
             1003          (135) (a) "Premium" means the monetary consideration for an insurance policy.
             1004          (b) "Premium" includes, however designated:
             1005          (i) an assessment;
             1006          (ii) a membership fee;
             1007          (iii) a required contribution; or
             1008          (iv) monetary consideration.
             1009          (c) (i) "Premium" does not include consideration paid to a third party administrator for
             1010      the third party administrator's services.
             1011          (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
             1012      insurance on the risks administered by the third party administrator.
             1013          (136) "Principal officers" for a corporation means the officers designated under
             1014      Subsection 31A-5-203 (3).
             1015          (137) "Proceeding" includes an action or special statutory proceeding.
             1016          (138) "Professional liability insurance" means insurance against legal liability incident
             1017      to the practice of a profession and provision of a professional service.


             1018          (139) (a) Except as provided in Subsection (139)(b), "property insurance" means
             1019      insurance against loss or damage to real or personal property of every kind and any interest in
             1020      that property:
             1021          (i) from all hazards or causes; and
             1022          (ii) against loss consequential upon the loss or damage including vehicle
             1023      comprehensive and vehicle physical damage coverages.
             1024          (b) "Property insurance" does not include:
             1025          (i) inland marine insurance; and
             1026          (ii) ocean marine insurance.
             1027          (140) "Qualified long-term care insurance contract" or "federally tax qualified
             1028      long-term care insurance contract" means:
             1029          (a) an individual or group insurance contract that meets the requirements of Section
             1030      7702B(b), Internal Revenue Code; or
             1031          (b) the portion of a life insurance contract that provides long-term care insurance:
             1032          (i) (A) by rider; or
             1033          (B) as a part of the contract; and
             1034          (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
             1035      Code.
             1036          (141) "Qualified United States financial institution" means an institution that:
             1037          (a) is:
             1038          (i) organized under the laws of the United States or any state; or
             1039          (ii) in the case of a United States office of a foreign banking organization, licensed
             1040      under the laws of the United States or any state;
             1041          (b) is regulated, supervised, and examined by a United States federal or state authority
             1042      having regulatory authority over a bank or trust company; and
             1043          (c) meets the standards of financial condition and standing that are considered
             1044      necessary and appropriate to regulate the quality of a financial institution whose letters of credit
             1045      will be acceptable to the commissioner as determined by:
             1046          (i) the commissioner by rule; or
             1047          (ii) the Securities Valuation Office of the National Association of Insurance
             1048      Commissioners.


             1049          (142) (a) "Rate" means:
             1050          (i) the cost of a given unit of insurance; or
             1051          (ii) for property or casualty insurance, that cost of insurance per exposure unit either
             1052      expressed as:
             1053          (A) a single number; or
             1054          (B) a pure premium rate, adjusted before the application of individual risk variations
             1055      based on loss or expense considerations to account for the treatment of:
             1056          (I) expenses;
             1057          (II) profit; and
             1058          (III) individual insurer variation in loss experience.
             1059          (b) "Rate" does not include a minimum premium.
             1060          (143) (a) Except as provided in Subsection (143)(b), "rate service organization" means
             1061      a person who assists an insurer in rate making or filing by:
             1062          (i) collecting, compiling, and furnishing loss or expense statistics;
             1063          (ii) recommending, making, or filing rates or supplementary rate information; or
             1064          (iii) advising about rate questions, except as an attorney giving legal advice.
             1065          (b) "Rate service organization" does not mean:
             1066          (i) an employee of an insurer;
             1067          (ii) a single insurer or group of insurers under common control;
             1068          (iii) a joint underwriting group; or
             1069          (iv) an individual serving as an actuarial or legal consultant.
             1070          (144) "Rating manual" means any of the following used to determine initial and
             1071      renewal policy premiums:
             1072          (a) a manual of rates;
             1073          (b) a classification;
             1074          (c) a rate-related underwriting rule; and
             1075          (d) a rating formula that describes steps, policies, and procedures for determining
             1076      initial and renewal policy premiums.
             1077          (145) "Rebate" means to refund or return a portion of the premium from the premium
             1078      paid, commission paid, or consultant fee paid, directly or indirectly, on the sale or renewal of
             1079      an insurance policy.


             1080          [(145)] (146) "Received by the department" means:
             1081          (a) the date delivered to and stamped received by the department, if delivered in
             1082      person;
             1083          (b) the post mark date, if delivered by mail;
             1084          (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
             1085          (d) the received date recorded on an item delivered, if delivered by:
             1086          (i) facsimile;
             1087          (ii) email; or
             1088          (iii) another electronic method; or
             1089          (e) a date specified in:
             1090          (i) a statute;
             1091          (ii) a rule; or
             1092          (iii) an order.
             1093          [(146)] (147) "Reciprocal" or "interinsurance exchange" means an unincorporated
             1094      association of persons:
             1095          (a) operating through an attorney-in-fact common to all of the persons; and
             1096          (b) exchanging insurance contracts with one another that provide insurance coverage
             1097      on each other.
             1098          [(147)] (148) "Reinsurance" means an insurance transaction where an insurer, for
             1099      consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
             1100      reinsurance transactions, this title sometimes refers to:
             1101          (a) the insurer transferring the risk as the "ceding insurer"; and
             1102          (b) the insurer assuming the risk as the:
             1103          (i) "assuming insurer"; or
             1104          (ii) "assuming reinsurer."
             1105          [(148)] (149) "Reinsurer" means a person licensed in this state as an insurer with the
             1106      authority to assume reinsurance.
             1107          [(149)] (150) "Residential dwelling liability insurance" means insurance against
             1108      liability resulting from or incident to the ownership, maintenance, or use of a residential
             1109      dwelling that is a detached single family residence or multifamily residence up to four units.
             1110          [(150)] (151) (a) "Retrocession" means reinsurance with another insurer of a liability


             1111      assumed under a reinsurance contract.
             1112          (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
             1113      liability assumed under a reinsurance contract.
             1114          [(151)] (152) "Rider" means an endorsement to:
             1115          (a) an insurance policy; or
             1116          (b) an insurance certificate.
             1117          [(152)] (153) (a) "Security" means a:
             1118          (i) note;
             1119          (ii) stock;
             1120          (iii) bond;
             1121          (iv) debenture;
             1122          (v) evidence of indebtedness;
             1123          (vi) certificate of interest or participation in a profit-sharing agreement;
             1124          (vii) collateral-trust certificate;
             1125          (viii) preorganization certificate or subscription;
             1126          (ix) transferable share;
             1127          (x) investment contract;
             1128          (xi) voting trust certificate;
             1129          (xii) certificate of deposit for a security;
             1130          (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
             1131      payments out of production under such a title or lease;
             1132          (xiv) commodity contract or commodity option;
             1133          (xv) certificate of interest or participation in, temporary or interim certificate for,
             1134      receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
             1135      in Subsections [(152)] (153)(a)(i) through (xiv); or
             1136          (xvi) another interest or instrument commonly known as a security.
             1137          (b) "Security" does not include:
             1138          (i) any of the following under which an insurance company promises to pay money in a
             1139      specific lump sum or periodically for life or some other specified period:
             1140          (A) insurance;
             1141          (B) an endowment policy; or


             1142          (C) an annuity contract; or
             1143          (ii) a burial certificate or burial contract.
             1144          [(153)] (154) "Secondary medical condition" means a complication related to an
             1145      exclusion from coverage in accident and health insurance.
             1146          [(154)] (155) (a) "Self-insurance" means an arrangement under which a person
             1147      provides for spreading its own risks by a systematic plan.
             1148          (b) Except as provided in this Subsection [(154)] (155), "self-insurance" does not
             1149      include an arrangement under which a number of persons spread their risks among themselves.
             1150          (c) "Self-insurance" includes:
             1151          (i) an arrangement by which a governmental entity undertakes to indemnify an
             1152      employee for liability arising out of the employee's employment; and
             1153          (ii) an arrangement by which a person with a managed program of self-insurance and
             1154      risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
             1155      employees for liability or risk that is related to the relationship or employment.
             1156          (d) "Self-insurance" does not include an arrangement with an independent contractor.
             1157          [(155)] (156) "Sell" means to exchange a contract of insurance:
             1158          (a) by any means;
             1159          (b) for money or its equivalent; and
             1160          (c) on behalf of an insurance company.
             1161          [(156)] (157) "Short-term care insurance" means an insurance policy or rider
             1162      advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
             1163      insurance, but that provides coverage for less than 12 consecutive months for each covered
             1164      person.
             1165          [(157)] (158) "Significant break in coverage" means a period of 63 consecutive days
             1166      during each of which an individual does not have creditable coverage.
             1167          [(158)] (159) "Small employer[,]" means, in connection with a health benefit plan[,
             1168      means an employer who,] and with respect to a calendar year and to a plan year, an employer
             1169      who:
             1170          (a) employed [an average of] at least [two employees] one employee but not more than
             1171      an average of 50 eligible employees on [each] business [day] days during the preceding
             1172      calendar year; and


             1173          (b) employs at least [two employees] one employee on the first day of the plan year.
             1174          [(159)] (160) "Special enrollment period," in connection with a health benefit plan, has
             1175      the same meaning as provided in federal regulations adopted pursuant to the Health Insurance
             1176      Portability and Accountability Act.
             1177          [(160)] (161) (a) "Subsidiary" of a person means an affiliate controlled by that person
             1178      either directly or indirectly through one or more affiliates or intermediaries.
             1179          (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
             1180      shares are owned by that person either alone or with its affiliates, except for the minimum
             1181      number of shares the law of the subsidiary's domicile requires to be owned by directors or
             1182      others.
             1183          [(161)] (162) Subject to Subsection (86)(b), "surety insurance" includes:
             1184          (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
             1185      perform the principal's obligations to a creditor or other obligee;
             1186          (b) bail bond insurance; and
             1187          (c) fidelity insurance.
             1188          [(162)] (163) (a) "Surplus" means the excess of assets over the sum of paid-in capital
             1189      and liabilities.
             1190          (b) (i) "Permanent surplus" means the surplus of an insurer or organization that is
             1191      designated by the insurer or organization as permanent.
             1192          (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-205 require
             1193      that insurers or organizations doing business in this state maintain specified minimum levels of
             1194      permanent surplus.
             1195          (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
             1196      same as the minimum required capital requirement that applies to stock insurers.
             1197          (c) "Excess surplus" means:
             1198          (i) for a life insurer, accident and health insurer, health organization, or property and
             1199      casualty insurer as defined in Section 31A-17-601 , the lesser of:
             1200          (A) that amount of an insurer's or health organization's total adjusted capital that
             1201      exceeds the product of:
             1202          (I) 2.5; and
             1203          (II) the sum of the insurer's or health organization's minimum capital or permanent


             1204      surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
             1205          (B) that amount of an insurer's or health organization's total adjusted capital that
             1206      exceeds the product of:
             1207          (I) 3.0; and
             1208          (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
             1209          (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
             1210      that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
             1211          (A) 1.5; and
             1212          (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
             1213          [(163)] (164) "Third party administrator" or "administrator" means a person who
             1214      collects charges or premiums from, or who, for consideration, adjusts or settles claims of
             1215      residents of the state in connection with insurance coverage, annuities, or service insurance
             1216      coverage, except:
             1217          (a) a union on behalf of its members;
             1218          (b) a person administering a:
             1219          (i) pension plan subject to the federal Employee Retirement Income Security Act of
             1220      1974;
             1221          (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
             1222          (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
             1223          (c) an employer on behalf of the employer's employees or the employees of one or
             1224      more of the subsidiary or affiliated corporations of the employer;
             1225          (d) an insurer licensed under the following, but only for a line of insurance for which
             1226      the insurer holds a license in this state:
             1227          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             1228          (ii) Chapter 7, Nonprofit Health Service Insurance Corporations;
             1229          (iii) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1230          (iv) Chapter 9, Insurance Fraternals; or
             1231          (v) Chapter 14, Foreign Insurers;
             1232          (e) a person:
             1233          (i) licensed or exempt from licensing under:
             1234          (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and


             1235      Reinsurance Intermediaries; or
             1236          (B) Chapter 26, Insurance Adjusters; and
             1237          (ii) whose activities are limited to those authorized under the license the person holds
             1238      or for which the person is exempt; or
             1239          (f) an institution, bank, or financial institution:
             1240          (i) that is:
             1241          (A) an institution whose deposits and accounts are to any extent insured by a federal
             1242      deposit insurance agency, including the Federal Deposit Insurance Corporation or National
             1243      Credit Union Administration; or
             1244          (B) a bank or other financial institution that is subject to supervision or examination by
             1245      a federal or state banking authority; and
             1246          (ii) that does not adjust claims without a third party administrator license.
             1247          [(164)] (165) "Title insurance" means the insuring, guaranteeing, or indemnifying of an
             1248      owner of real or personal property or the holder of liens or encumbrances on that property, or
             1249      others interested in the property against loss or damage suffered by reason of liens or
             1250      encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity
             1251      or unenforceability of any liens or encumbrances on the property.
             1252          [(165)] (166) "Total adjusted capital" means the sum of an insurer's or health
             1253      organization's statutory capital and surplus as determined in accordance with:
             1254          (a) the statutory accounting applicable to the annual financial statements required to be
             1255      filed under Section 31A-4-113 ; and
             1256          (b) another item provided by the RBC instructions, as RBC instructions is defined in
             1257      Section 31A-17-601 .
             1258          [(166)] (167) (a) "Trustee" means "director" when referring to the board of directors of
             1259      a corporation.
             1260          (b) "Trustee," when used in reference to an employee welfare fund, means an
             1261      individual, firm, association, organization, joint stock company, or corporation, whether acting
             1262      individually or jointly and whether designated by that name or any other, that is charged with
             1263      or has the overall management of an employee welfare fund.
             1264          [(167)] (168) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted
             1265      insurer" means an insurer:


             1266          (i) not holding a valid certificate of authority to do an insurance business in this state;
             1267      or
             1268          (ii) transacting business not authorized by a valid certificate.
             1269          (b) "Admitted insurer" or "authorized insurer" means an insurer:
             1270          (i) holding a valid certificate of authority to do an insurance business in this state; and
             1271          (ii) transacting business as authorized by a valid certificate.
             1272          [(168)] (169) "Underwrite" means the authority to accept or reject risk on behalf of the
             1273      insurer.
             1274          [(169)] (170) "Vehicle liability insurance" means insurance against liability resulting
             1275      from or incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a
             1276      vehicle comprehensive or vehicle physical damage coverage under Subsection (139).
             1277          [(170)] (171) "Voting security" means a security with voting rights, and includes a
             1278      security convertible into a security with a voting right associated with the security.
             1279          [(171)] (172) "Waiting period" for a health benefit plan means the period that must
             1280      pass before coverage for an individual, who is otherwise eligible to enroll under the terms of
             1281      the health benefit plan, can become effective.
             1282          [(172)] (173) "Workers' compensation insurance" means:
             1283          (a) insurance for indemnification of an employer against liability for compensation
             1284      based on:
             1285          (i) a compensable accidental injury; and
             1286          (ii) occupational disease disability;
             1287          (b) employer's liability insurance incidental to workers' compensation insurance and
             1288      written in connection with workers' compensation insurance; and
             1289          (c) insurance assuring to a person entitled to workers' compensation benefits the
             1290      compensation provided by law.
             1291          Section 2. Section 31A-2-104 is amended to read:
             1292           31A-2-104. Other employees -- Insurance fraud investigators.
             1293          (1) The department shall employ a chief examiner and such other professional,
             1294      technical, and clerical employees as necessary to carry out the duties of the department.
             1295          (2) An insurance fraud investigator employed pursuant to Subsection (1) may as
             1296      approved by the commissioner:


             1297          (a) be designated a [special function] law enforcement officer, as defined in Section
             1298      [53-13-105 , by the commissioner, but is not] 53-13-103 ; and
             1299          (b) be eligible for retirement benefits under the Public Safety Employee's Retirement
             1300      System.
             1301          Section 3. Section 31A-3-103 is amended to read:
             1302           31A-3-103. Fees.
             1303          (1) For purposes of this section, "services" means functions that are reasonable and
             1304      necessary to enable the commissioner to perform the duties imposed by this title including:
             1305          (a) issuing or renewing a license or certificate of authority;
             1306          (b) filing a policy form;
             1307          (c) reporting a producer appointment or termination; and
             1308          (d) filing an annual statement.
             1309          (2) Except as otherwise provided by this title:
             1310          (a) the commissioner may set and collect a fee for services provided by the
             1311      commissioner;
             1312          (b) a fee related to the renewal of a license may be imposed no more frequently than
             1313      once each year; and
             1314          (c) a fee charged by the commissioner shall be set in accordance with Section
             1315      63J-1-504 .
             1316          (3) (a) The commissioner shall publish a schedule of fees established pursuant to this
             1317      section.
             1318          (b) The commissioner shall, by rule, establish the deadlines for payment of a fee
             1319      established pursuant to this section.
             1320          (4) (a) [Beginning July 1, 2011, there] There is created in the General Fund a restricted
             1321      account known as the "Insurance Department Restricted Account."
             1322          (b) Except as provided in Subsection (4)(c), the Insurance Department Restricted
             1323      Account shall consist of:
             1324          (i) fees authorized by this section; and
             1325          (ii) other money received by the department, including:
             1326          (A) reimbursements for examination costs incurred by the department; and
             1327          (B) forfeitures collected under this title.


             1328          (c) The department shall deposit money it receives that is subject to a restricted account
             1329      or enterprise fund created by this title into the restricted account or enterprise fund in
             1330      accordance with the statute creating the restricted account or enterprise fund, and the
             1331      department may not deposit the money into the Insurance Department Restricted Account.
             1332          (d) Subject to appropriation by the Legislature, the department may expend money in
             1333      the Insurance Department Restricted Account to fund the operations of the department.
             1334          (e) (i) At the end of each fiscal year until June 30, 2015, the director of the Division of
             1335      Finance shall transfer into the General Fund any money deposited into the Insurance
             1336      Department Restricted Account under Subsection (4)(b) that exceeds the legislative
             1337      appropriations from the Insurance Department Restricted Account for that year.
             1338          (ii) Beginning with fiscal year 2015-2016, an appropriation of the Insurance
             1339      Department Restricted Account is nonlapsing, except that at the end of each fiscal year, money
             1340      received by the commissioner in excess of $8,500,000 shall be treated as free revenue in the
             1341      General Fund.
             1342          Section 4. Section 31A-3-304 (Superseded 07/01/15) is amended to read:
             1343           31A-3-304 (Superseded 07/01/15). Annual fees -- Other taxes or fees prohibited --
             1344      Captive Insurance Restricted Account.
             1345          (1) (a) A captive insurance company shall pay an annual fee imposed under this section
             1346      to obtain or renew a certificate of authority.
             1347          (b) The commissioner shall:
             1348          (i) determine the annual fee pursuant to Section 31A-3-103 ; and
             1349          (ii) consider whether the annual fee is competitive with fees imposed by other states on
             1350      captive insurance companies.
             1351          (2) A captive insurance company that fails to pay the fee required by this section is
             1352      subject to the relevant sanctions of this title.
             1353          (3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter
             1354      9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
             1355      the laws of this state that may be levied or assessed on a captive insurance company:
             1356          (i) a fee under this section;
             1357          (ii) a fee under Chapter 37, Captive Insurance Companies Act; and
             1358          (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company


             1359      Act.
             1360          (b) The state or a county, city, or town within the state may not levy or collect an
             1361      occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
             1362      against a captive insurance company.
             1363          (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
             1364      against a captive insurance company.
             1365          (d) A captive insurance company is subject to real and personal property taxes.
             1366          (4) A captive insurance company shall pay the fee imposed by this section to the
             1367      commissioner by June [20] 1 of each year.
             1368          (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
             1369      deposited into the Captive Insurance Restricted Account.
             1370          (b) There is created in the General Fund a restricted account known as the "Captive
             1371      Insurance Restricted Account."
             1372          (c) The Captive Insurance Restricted Account shall consist of the fees described in
             1373      Subsection (3)(a).
             1374          (d) The commissioner shall administer the Captive Insurance Restricted Account.
             1375      Subject to appropriations by the Legislature, the commissioner shall use the money deposited
             1376      into the Captive Insurance Restricted Account to:
             1377          (i) administer and enforce:
             1378          (A) Chapter 37, Captive Insurance Companies Act; and
             1379          (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
             1380          (ii) promote the captive insurance industry in Utah.
             1381          (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
             1382      except that at the end of each fiscal year, money received by the commissioner in excess of
             1383      $950,000 shall be treated as free revenue in the General Fund.
             1384          Section 5. Section 31A-3-304 (Effective 07/01/15) is amended to read:
             1385           31A-3-304 (Effective 07/01/15). Annual fees -- Other taxes or fees prohibited --
             1386      Captive Insurance Restricted Account.
             1387          (1) (a) A captive insurance company shall pay an annual fee imposed under this section
             1388      to obtain or renew a certificate of authority.
             1389          (b) The commissioner shall:


             1390          (i) determine the annual fee pursuant to Section 31A-3-103 ; and
             1391          (ii) consider whether the annual fee is competitive with fees imposed by other states on
             1392      captive insurance companies.
             1393          (2) A captive insurance company that fails to pay the fee required by this section is
             1394      subject to the relevant sanctions of this title.
             1395          (3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter
             1396      9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
             1397      the laws of this state that may be levied or assessed on a captive insurance company:
             1398          (i) a fee under this section;
             1399          (ii) a fee under Chapter 37, Captive Insurance Companies Act; and
             1400          (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
             1401      Act.
             1402          (b) The state or a county, city, or town within the state may not levy or collect an
             1403      occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
             1404      against a captive insurance company.
             1405          (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
             1406      against a captive insurance company.
             1407          (d) A captive insurance company is subject to real and personal property taxes.
             1408          (4) A captive insurance company shall pay the fee imposed by this section to the
             1409      commissioner by June [20] 1 of each year.
             1410          (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
             1411      deposited into the Captive Insurance Restricted Account.
             1412          (b) There is created in the General Fund a restricted account known as the "Captive
             1413      Insurance Restricted Account."
             1414          (c) The Captive Insurance Restricted Account shall consist of the fees described in
             1415      Subsection (3)(a).
             1416          (d) The commissioner shall administer the Captive Insurance Restricted Account.
             1417      Subject to appropriations by the Legislature, the commissioner shall use the money deposited
             1418      into the Captive Insurance Restricted Account to:
             1419          (i) administer and enforce:
             1420          (A) Chapter 37, Captive Insurance Companies Act; and


             1421          (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
             1422          (ii) promote the captive insurance industry in Utah.
             1423          (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
             1424      except that at the end of each fiscal year, money received by the commissioner in excess of
             1425      $1,250,000 shall be treated as free revenue in the General Fund.
             1426          Section 6. Section 31A-4-102 is amended to read:
             1427           31A-4-102. Qualified insurers.
             1428          (1) A person may not conduct an insurance business in Utah in person, through an
             1429      agent, through a broker, through the mail, or through another method of communication,
             1430      except:
             1431          (a) an insurer:
             1432          (i) authorized to do business in Utah under [Chapter 5, 7, 8, 9, 10, 11, 13, or 14; and]:
             1433          (A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             1434          (B) Chapter 7, Nonprofit Health Service Insurance Corporations;
             1435          (C) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1436          (D) Chapter 9, Insurance Fraternals;
             1437          (E) Chapter 10, Annuities;
             1438          (F) Chapter 11, Motor Clubs;
             1439          (G) Chapter 13, Employee Welfare Funds and Plans;
             1440          (H) Chapter 14, Foreign Insurers;
             1441          (I) Chapter 37, Captive Insurance Companies Act; or
             1442          (J) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
             1443          (ii) within the limits of its certificate of authority;
             1444          (b) a joint underwriting group under Section 31A-2-214 or 31A-20-102 ;
             1445          (c) an insurer doing business under Section 31A-15-103 ;
             1446          (d) a person who submits to the commissioner a certificate from the United States
             1447      Department of Labor, or such other evidence as satisfies the commissioner, that the laws of
             1448      Utah are preempted with respect to specified activities of that person by Section 514 of the
             1449      Employee Retirement Income Security Act of 1974 or other federal law; or
             1450          (e) a person exempt from this title under Section 31A-1-103 or another applicable
             1451      statute.


             1452          (2) As used in this section, "insurer" includes a bail bond surety company, as defined in
             1453      Section 31A-35-102 .
             1454          Section 7. Section 31A-4-115 is amended to read:
             1455           31A-4-115. Plan of orderly withdrawal.
             1456          (1) (a) When an insurer intends to withdraw from writing a line of insurance in this
             1457      state or to reduce its total annual premium volume by 75% or more, the insurer shall file with
             1458      the commissioner a plan of orderly withdrawal.
             1459          (b) For purposes of this section, a discontinuance of a health benefit plan pursuant to
             1460      one of the following provisions is a withdrawal from a line of insurance:
             1461          (i) Subsection 31A-30-107 (3)(e); or
             1462          (ii) Subsection 31A-30-107.1 (3)(e).
             1463          (2) An insurer's plan of orderly withdrawal shall:
             1464          (a) indicate the date the insurer intends to begin and complete its withdrawal plan; and
             1465          (b) include provisions for:
             1466          (i) meeting the insurer's contractual obligations;
             1467          (ii) providing services to its Utah policyholders and claimants;
             1468          (iii) meeting [any] applicable statutory obligations; and
             1469          (iv) [(A)] the payment of a withdrawal fee of $50,000 to the [Utah Comprehensive
             1470      Health Insurance Pool if: (I) the insurer is an accident and health insurer; and (II) the insurer's
             1471      line of business is not assumed or placed with another insurer approved by the commissioner;
             1472      or (B) the payment of a withdrawal fee of $50,000 to the department if: (I) the insurer is not
             1473      an accident and health insurer; and (II)] department if the insurer's line of business is not
             1474      assumed or placed with another insurer approved by the commissioner.
             1475          (3) The commissioner shall approve a plan of orderly withdrawal if the plan of orderly
             1476      withdrawal adequately demonstrates that the insurer will:
             1477          (a) protect the interests of the people of the state;
             1478          (b) meet the insurer's contractual obligations;
             1479          (c) provide service to the insurer's Utah policyholders and claimants; and
             1480          (d) meet [any] applicable statutory obligations.
             1481          (4) Section 31A-2-302 governs the commissioner's approval or disapproval of a plan for
             1482      orderly withdrawal.


             1483          (5) The commissioner may require an insurer to increase the deposit maintained in
             1484      accordance with Section 31A-4-105 or Section 31A-4-105.5 and place the deposit in trust in
             1485      the name of the commissioner upon finding, after an adjudicative proceeding that:
             1486          (a) there is reasonable cause to conclude that the interests of the people of the state are
             1487      best served by such action; and
             1488          (b) the insurer:
             1489          (i) has filed a plan of orderly withdrawal; or
             1490          (ii) intends to:
             1491          (A) withdraw from writing a line of insurance in this state; or
             1492          (B) reduce the insurer's total annual premium volume by 75% or more.
             1493          (6) An insurer is subject to the civil penalties under Section 31A-2-308 , if the insurer:
             1494          (a) withdraws from writing insurance in this state without receiving the commissioner's
             1495      approval of a plan of orderly withdrawal; or
             1496          (b) reduces its total annual premium volume by 75% or more in any year without
             1497      [having submitted a plan or receiving the commissioner's approval] receiving the
             1498      commissioner's approval of a plan of orderly withdrawal.
             1499          (7) An insurer that withdraws from writing all lines of insurance in this state may not
             1500      resume writing insurance in this state for five years unless[: (a)] the commissioner finds that
             1501      the prohibition should be waived because the waiver is:
             1502          [(i)] (a) in the public interest to promote competition; or
             1503          [(ii)] (b) to resolve inequity in the marketplace[; and].
             1504          [(b) the insurer complies with Subsection 31A-30-108 (5), if applicable.]
             1505          (8) The commissioner shall adopt rules necessary to implement this section.
             1506          Section 8. Section 31A-8-402.3 is amended to read:
             1507           31A-8-402.3. Discontinuance, nonrenewal, or changes to group health benefit
             1508      plans.
             1509          (1) Except as otherwise provided in this section, a group health benefit plan for a plan
             1510      sponsor is renewable and continues in force:
             1511          (a) with respect to all eligible employees and dependents; and
             1512          (b) at the option of the plan sponsor.
             1513          (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:


             1514          (a) for a network plan, if[: (i)] there is no longer any enrollee under the group health
             1515      plan who lives, resides, or works in:
             1516          [(A)] (i) the service area of the insurer; or
             1517          [(B)] (ii) the area for which the insurer is authorized to do business; [and] or
             1518          [(ii) in the case of the small employer market, the insurer applies the same criteria the
             1519      insurer would apply in denying enrollment in the plan under Subsection 31A-30-108 (7); or]
             1520          (b) for coverage made available in the small or large employer market only through an
             1521      association, if:
             1522          (i) the employer's membership in the association ceases; and
             1523          (ii) the coverage is terminated uniformly without regard to any health status-related
             1524      factor relating to any covered individual.
             1525          (3) A health benefit plan for a plan sponsor may be discontinued if:
             1526          (a) a condition described in Subsection (2) exists;
             1527          (b) the plan sponsor fails to pay premiums or contributions in accordance with the
             1528      terms of the contract;
             1529          (c) the plan sponsor:
             1530          (i) performs an act or practice that constitutes fraud; or
             1531          (ii) makes an intentional misrepresentation of material fact under the terms of the
             1532      coverage;
             1533          (d) the insurer:
             1534          (i) elects to discontinue offering a particular health benefit product delivered or issued
             1535      for delivery in this state; and
             1536          (ii) (A) provides notice of the discontinuation in writing:
             1537          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             1538          (II) at least 90 days before the date the coverage will be discontinued;
             1539          (B) provides notice of the discontinuation in writing:
             1540          (I) to the commissioner; and
             1541          (II) at least three working days prior to the date the notice is sent to the affected plan
             1542      sponsors, employees, and dependents of the plan sponsors or employees;
             1543          (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase:
             1544          (I) all other health benefit products currently being offered by the insurer in the market;


             1545      or
             1546          (II) in the case of a large employer, any other health benefit product currently being
             1547      offered in that market; and
             1548          (D) in exercising the option to discontinue that product and in offering the option of
             1549      coverage in this section, acts uniformly without regard to:
             1550          (I) the claims experience of a plan sponsor;
             1551          (II) any health status-related factor relating to any covered participant or beneficiary; or
             1552          (III) any health status-related factor relating to any new participant or beneficiary who
             1553      may become eligible for the coverage; or
             1554          (e) the insurer:
             1555          (i) elects to discontinue all of the insurer's health benefit plans in:
             1556          (A) the small employer market;
             1557          (B) the large employer market; or
             1558          (C) both the small employer and large employer markets; and
             1559          (ii) (A) provides notice of the discontinuation in writing:
             1560          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             1561          (II) at least 180 days before the date the coverage will be discontinued;
             1562          (B) provides notice of the discontinuation in writing:
             1563          (I) to the commissioner in each state in which an affected insured individual is known
             1564      to reside; and
             1565          (II) at least 30 working days prior to the date the notice is sent to the affected plan
             1566      sponsors, employees, and the dependents of the plan sponsors or employees;
             1567          (C) discontinues and nonrenews all plans issued or delivered for issuance in the
             1568      market; and
             1569          (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
             1570          (4) A large employer health benefit plan may be discontinued or nonrenewed:
             1571          (a) if a condition described in Subsection (2) exists; or
             1572          (b) for noncompliance with the insurer's:
             1573          (i) minimum participation requirements; or
             1574          (ii) employer contribution requirements.
             1575          (5) A small employer health benefit plan may be discontinued or nonrenewed:


             1576          (a) if a condition described in Subsection (2) exists; or
             1577          (b) for noncompliance with the insurer's employer contribution requirements.
             1578          (6) A small employer health benefit plan may be nonrenewed:
             1579          (a) if a condition described in Subsection (2) exists; or
             1580          (b) for noncompliance with the insurer's minimum participation requirements.
             1581          (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
             1582      discontinued if after issuance of coverage the eligible employee:
             1583          (i) engages in an act or practice in connection with the coverage that constitutes fraud;
             1584      or
             1585          (ii) makes an intentional misrepresentation of material fact in connection with the
             1586      coverage.
             1587          (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
             1588          (i) 12 months after the date of discontinuance; and
             1589          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
             1590      to reenroll.
             1591          (c) At the time the eligible employee's coverage is discontinued under Subsection
             1592      (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
             1593      discontinued.
             1594          (d) An eligible employee may not be discontinued under this Subsection (7) because of
             1595      a fraud or misrepresentation that relates to health status.
             1596          (8) For purposes of this section, a reference to "plan sponsor" includes a reference to
             1597      the employer:
             1598          (a) with respect to coverage provided to an employer member of the association; and
             1599          (b) if the health benefit plan is made available by an insurer in the employer market
             1600      only through:
             1601          (i) an association;
             1602          (ii) a trust; or
             1603          (iii) a discretionary group.
             1604          (9) An insurer may modify a health benefit plan for a plan sponsor only:
             1605          (a) at the time of coverage renewal; and
             1606          (b) if the modification is effective uniformly among all plans with that product.


             1607          Section 9. Section 31A-16-103 is amended to read:
             1608           31A-16-103. Acquisition of control of or merger with domestic insurer.
             1609          (1) (a) A person may not take the actions described in Subsections (1)(b) or (c) unless,
             1610      at the time any offer, request, or invitation is made or any such agreement is entered into, or
             1611      prior to the acquisition of securities if no offer or agreement is involved:
             1612          (i) the person files with the commissioner a statement containing the information
             1613      required by this section;
             1614          (ii) the person provides a copy of the statement described in Subsection (1)(a)(i) to the
             1615      insurer; and
             1616          (iii) the commissioner approves the offer, request, invitation, agreement, or acquisition.
             1617          (b) Unless the person complies with Subsection (1)(a), a person other than the issuer
             1618      may not make a tender offer for, a request or invitation for tenders of, or enter into any
             1619      agreement to exchange securities, or seek to acquire or acquire in the open market or otherwise,
             1620      any voting security of a domestic insurer if after the acquisition, the person would directly,
             1621      indirectly, by conversion, or by exercise of any right to acquire be in control of the insurer.
             1622          (c) Unless the person complies with Subsection (1)(a), a person may not enter into an
             1623      agreement to merge with or otherwise to acquire control of:
             1624          (i) a domestic insurer; or
             1625          (ii) any person controlling a domestic insurer.
             1626          (d) (i) For purposes of this section, a domestic insurer includes any person controlling a
             1627      domestic insurer unless the person as determined by the commissioner is either directly or
             1628      through its affiliates primarily engaged in business other than the business of insurance.
             1629          (ii) The controlling person described in Subsection (1)(d)(i) shall file with the
             1630      commissioner a preacquisition notification containing the information required in Subsection
             1631      (2) 30 calendar days before the proposed effective date of the acquisition.
             1632          (iii) For the purposes of this section, "person" does not include any securities broker
             1633      that in the usual and customary brokers function holds less than 20% of:
             1634          (A) the voting securities of an insurance company; or
             1635          (B) any person that controls an insurance company.
             1636          (iv) This section applies to all domestic insurers and other entities licensed under
             1637      Chapters 5, 7, 8, 9, and 11.


             1638          (e) (i) An agreement for acquisition of control or merger as contemplated by this
             1639      Subsection (1) is not valid or enforceable unless the agreement:
             1640          (A) is in writing; and
             1641          (B) includes a provision that the agreement is subject to the approval of the
             1642      commissioner upon the filing of any applicable statement required under this chapter.
             1643          (ii) A written agreement for acquisition or control that includes the provision described
             1644      in Subsection (1)(e)(i) satisfies the requirements of this Subsection (1).
             1645          (2) The statement to be filed with the commissioner under Subsection (1) shall be
             1646      made under oath or affirmation and shall contain the following information:
             1647          (a) the name and address of the "acquiring party," which means each person by whom
             1648      or on whose behalf the merger or other acquisition of control referred to in Subsection (1) is to
             1649      be effected; and
             1650          (i) if the person is an individual:
             1651          (A) the person's principal occupation;
             1652          (B) a listing of all offices and positions held by the person during the past five years;
             1653      and
             1654          (C) any conviction of crimes other than minor traffic violations during the past 10
             1655      years; and
             1656          (ii) if the person is not an individual:
             1657          (A) a report of the nature of its business operations during:
             1658          (I) the past five years; or
             1659          (II) for any lesser period as the person and any of its predecessors has been in
             1660      existence;
             1661          (B) an informative description of the business intended to be done by the person and
             1662      the person's subsidiaries;
             1663          (C) a list of all individuals who are or who have been selected to become directors or
             1664      executive officers of the person, or individuals who perform, or who will perform functions
             1665      appropriate to such positions; and
             1666          (D) for each individual described in Subsection (2)(a)(ii)(C), the information required
             1667      by Subsection (2)(a)(i) for each individual;
             1668          (b) (i) the source, nature, and amount of the consideration used or to be used in


             1669      effecting the merger or acquisition of control;
             1670          (ii) a description of any transaction in which funds were or are to be obtained for the
             1671      purpose of effecting the merger or acquisition of control, including any pledge of:
             1672          (A) the insurer's stock; or
             1673          (B) the stock of any of the insurer's subsidiaries or controlling affiliates; and
             1674          (iii) the identity of persons furnishing the consideration;
             1675          (c) (i) fully audited financial information, or other financial information considered
             1676      acceptable by the commissioner, of the earnings and financial condition of each acquiring party
             1677      for:
             1678          (A) the preceding five fiscal years of each acquiring party; or
             1679          (B) any lesser period the acquiring party and any of its predecessors shall have been in
             1680      existence; and
             1681          (ii) unaudited information:
             1682          (A) similar to the information described in Subsection (2)(c)(i); and
             1683          (B) prepared within the 90 days prior to the filing of the statement;
             1684          (d) any plans or proposals which each acquiring party may have to:
             1685          (i) liquidate the insurer;
             1686          (ii) sell its assets;
             1687          (iii) merge or consolidate the insurer with any person; or
             1688          (iv) make any other material change in the insurer's:
             1689          (A) business;
             1690          (B) corporate structure; or
             1691          (C) management;
             1692          (e) (i) the number of shares of any security referred to in Subsection (1) that each
             1693      acquiring party proposes to acquire;
             1694          (ii) the terms of the offer, request, invitation, agreement, or acquisition referred to in
             1695      Subsection (1); and
             1696          (iii) a statement as to the method by which the fairness of the proposal was arrived at;
             1697          (f) the amount of each class of any security referred to in Subsection (1) that:
             1698          (i) is beneficially owned; or
             1699          (ii) concerning which there is a right to acquire beneficial ownership by each acquiring


             1700      party;
             1701          (g) a full description of any contract, arrangement, or understanding with respect to any
             1702      security referred to in Subsection (1) in which any acquiring party is involved, including:
             1703          (i) the transfer of any of the securities;
             1704          (ii) joint ventures;
             1705          (iii) loan or option arrangements;
             1706          (iv) puts or calls;
             1707          (v) guarantees of loans;
             1708          (vi) guarantees against loss or guarantees of profits;
             1709          (vii) division of losses or profits; or
             1710          (viii) the giving or withholding of proxies;
             1711          (h) a description of the purchase by any acquiring party of any security referred to in
             1712      Subsection (1) during the 12 calendar months preceding the filing of the statement including:
             1713          (i) the dates of purchase;
             1714          (ii) the names of the purchasers; and
             1715          (iii) the consideration paid or agreed to be paid for the purchase;
             1716          (i) a description of:
             1717          (i) any recommendations to purchase by any acquiring party any security referred to in
             1718      Subsection (1) made during the 12 calendar months preceding the filing of the statement; or
             1719          (ii) any recommendations made by anyone based upon interviews or at the suggestion
             1720      of the acquiring party;
             1721          (j) (i) copies of all tender offers for, requests for, or invitations for tenders of, exchange
             1722      offers for, and agreements to acquire or exchange any securities referred to in Subsection (1);
             1723      and
             1724          (ii) if distributed, copies of additional soliciting material relating to the transactions
             1725      described in Subsection (2)(j)(i);
             1726          (k) (i) the term of any agreement, contract, or understanding made with, or proposed to
             1727      be made with, any broker-dealer as to solicitation of securities referred to in Subsection (1) for
             1728      tender; and
             1729          (ii) the amount of any fees, commissions, or other compensation to be paid to
             1730      broker-dealers with regard to any agreement, contract, or understanding described in


             1731      Subsection (2)(k)(i); and
             1732          (l) any additional information the commissioner requires by rule, which the
             1733      commissioner determines to be:
             1734          (i) necessary or appropriate for the protection of policyholders of the insurer; or
             1735          (ii) in the public interest.
             1736          (3) The department may request:
             1737          (a) (i) criminal background information maintained pursuant to Title 53, Chapter 10,
             1738      Part 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             1739          (ii) complete Federal Bureau of Investigation criminal background checks through the
             1740      national criminal history system.
             1741          (b) Information obtained by the department from the review of criminal history records
             1742      received under Subsection (3)(a) shall be used by the department for the purpose of:
             1743          (i) verifying the information in Subsection (2)(a)(i);
             1744          (ii) determining the integrity of persons who would control the operation of an insurer;
             1745      and
             1746          (iii) preventing persons who violate 18 U.S.C. [Sections] Sec. 1033 [and 1034] from
             1747      engaging in the business of insurance in the state.
             1748          (c) If the department requests the criminal background information, the department
             1749      shall:
             1750          (i) pay to the Department of Public Safety the costs incurred by the Department of
             1751      Public Safety in providing the department criminal background information under Subsection
             1752      (3)(a)(i);
             1753          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             1754      of Investigation in providing the department criminal background information under
             1755      Subsection (3)(a)(ii); and
             1756          (iii) charge the person required to file the statement referred to in Subsection (1) a fee
             1757      equal to the aggregate of Subsections (3)(c)(i) and (ii).
             1758          (4) (a) If the source of the consideration under Subsection (2)(b)(i) is a loan made in
             1759      the lender's ordinary course of business, the identity of the lender shall remain confidential, if
             1760      the person filing the statement so requests.
             1761          (b) (i) Under Subsection (2)(e), the commissioner may require a statement of the


             1762      adjusted book value assigned by the acquiring party to each security in arriving at the terms of
             1763      the offer.
             1764          (ii) For purposes of this Subsection (4)(b), "adjusted book value" means each security's
             1765      proportional interest in the capital and surplus of the insurer with adjustments that reflect:
             1766          (A) market conditions;
             1767          (B) business in force; and
             1768          (C) other intangible assets or liabilities of the insurer.
             1769          (c) The description required by Subsection (2)(g) shall identify the persons with whom
             1770      the contracts, arrangements, or understandings have been entered into.
             1771          (5) (a) If the person required to file the statement referred to in Subsection (1) is a
             1772      partnership, limited partnership, syndicate, or other group, the commissioner may require that
             1773      all the information called for by Subsections (2), (3), or (4) shall be given with respect to each:
             1774          (i) partner of the partnership or limited partnership;
             1775          (ii) member of the syndicate or group; and
             1776          (iii) person who controls the partner or member.
             1777          (b) If any partner, member, or person referred to in Subsection (5)(a) is a corporation,
             1778      or if the person required to file the statement referred to in Subsection (1) is a corporation, the
             1779      commissioner may require that the information called for by Subsection (2) shall be given with
             1780      respect to:
             1781          (i) the corporation;
             1782          (ii) each officer and director of the corporation; and
             1783          (iii) each person who is directly or indirectly the beneficial owner of more than 10% of
             1784      the outstanding voting securities of the corporation.
             1785          (6) If any material change occurs in the facts set forth in the statement filed with the
             1786      commissioner and sent to the insurer pursuant to Subsection (2), an amendment setting forth
             1787      the change, together with copies of all documents and other material relevant to the change,
             1788      shall be filed with the commissioner and sent to the insurer within two business days after the
             1789      filing person learns of such change.
             1790          (7) If any offer, request, invitation, agreement, or acquisition referred to in Subsection
             1791      (1) is proposed to be made by means of a registration statement under the Securities Act of
             1792      1933, or under circumstances requiring the disclosure of similar information under the


             1793      Securities Exchange Act of 1934, or under a state law requiring similar registration or
             1794      disclosure, a person required to file the statement referred to in Subsection (1) may use copies
             1795      of any registration or disclosure documents in furnishing the information called for by the
             1796      statement.
             1797          (8) (a) The commissioner shall approve any merger or other acquisition of control
             1798      referred to in Subsection (1) unless, after a public hearing on the merger or acquisition, the
             1799      commissioner finds that:
             1800          (i) after the change of control, the domestic insurer referred to in Subsection (1) would
             1801      not be able to satisfy the requirements for the issuance of a license to write the line or lines of
             1802      insurance for which it is presently licensed;
             1803          (ii) the effect of the merger or other acquisition of control would:
             1804          (A) substantially lessen competition in insurance in this state; or
             1805          (B) tend to create a monopoly in insurance;
             1806          (iii) the financial condition of any acquiring party might:
             1807          (A) jeopardize the financial stability of the insurer; or
             1808          (B) prejudice the interest of:
             1809          (I) its policyholders; or
             1810          (II) any remaining securityholders who are unaffiliated with the acquiring party;
             1811          (iv) the terms of the offer, request, invitation, agreement, or acquisition referred to in
             1812      Subsection (1) are unfair and unreasonable to the securityholders of the insurer;
             1813          (v) the plans or proposals which the acquiring party has to liquidate the insurer, sell its
             1814      assets, or consolidate or merge it with any person, or to make any other material change in its
             1815      business or corporate structure or management, are:
             1816          (A) unfair and unreasonable to policyholders of the insurer; and
             1817          (B) not in the public interest; or
             1818          (vi) the competence, experience, and integrity of those persons who would control the
             1819      operation of the insurer are such that it would not be in the interest of the policyholders of the
             1820      insurer and the public to permit the merger or other acquisition of control.
             1821          (b) For purposes of Subsection (8)(a)(iv), the offering price for each security may not
             1822      be considered unfair if the adjusted book values under Subsection (2)(e):
             1823          (i) are disclosed to the securityholders; and


             1824          (ii) determined by the commissioner to be reasonable.
             1825          (9) (a) The public hearing referred to in Subsection (8) shall be held within 30 days
             1826      after the statement required by Subsection (1) is filed.
             1827          (b) (i) At least 20 days notice of the hearing shall be given by the commissioner to the
             1828      person filing the statement.
             1829          (ii) Affected parties may waive the notice required by this Subsection (9)(b).
             1830          (iii) Not less than seven days notice of the public hearing shall be given by the person
             1831      filing the statement to:
             1832          (A) the insurer; and
             1833          (B) any person designated by the commissioner.
             1834          (c) The commissioner shall make a determination within 30 days after the conclusion
             1835      of the hearing.
             1836          (d) At the hearing, the person filing the statement, the insurer, any person to whom
             1837      notice of hearing was sent, and any other person whose interest may be affected by the hearing
             1838      may:
             1839          (i) present evidence;
             1840          (ii) examine and cross-examine witnesses; and
             1841          (iii) offer oral and written arguments.
             1842          (e) (i) A person or insurer described in Subsection (9)(d) may conduct discovery
             1843      proceedings in the same manner as is presently allowed in the district courts of this state.
             1844          (ii) All discovery proceedings shall be concluded not later than three days before the
             1845      commencement of the public hearing.
             1846          (10) (a) The commissioner may retain technical experts to assist in reviewing all, or a
             1847      portion of, information filed in connection with a proposed merger or other acquisition of
             1848      control referred to in Subsection (1).
             1849          (b) In determining whether any of the conditions in Subsection (8) exist, the
             1850      commissioner may consider the findings of technical experts employed to review applicable
             1851      filings.
             1852          (c) (i) A technical expert employed under Subsection (10)(a) shall present to the
             1853      commissioner a statement of all expenses incurred by the technical expert in conjunction with
             1854      the technical expert's review of a proposed merger or other acquisition of control.


             1855          (ii) At the commissioner's direction the acquiring person shall compensate the technical
             1856      expert at customary rates for time and expenses:
             1857          (A) necessarily incurred; and
             1858          (B) approved by the commissioner.
             1859          (iii) The acquiring person shall:
             1860          (A) certify the consolidated account of all charges and expenses incurred for the review
             1861      by technical experts;
             1862          (B) retain a copy of the consolidated account described in Subsection (10)(c)(iii)(A);
             1863      and
             1864          (C) file with the department as a public record a copy of the consolidated account
             1865      described in Subsection (10)(c)(iii)(A).
             1866          (11) (a) (i) If a domestic insurer proposes to merge into another insurer, any
             1867      securityholder electing to exercise a right of dissent may file with the insurer a written request
             1868      for payment of the adjusted book value given in the statement required by Subsection (1) and
             1869      approved under Subsection (8), in return for the surrender of the security holder's securities.
             1870          (ii) The request described in Subsection (11)(a)(i) shall be filed not later than 10 days
             1871      after the day of the securityholders' meeting where the corporate action is approved.
             1872          (b) The dissenting securityholder is entitled to and the insurer is required to pay to the
             1873      dissenting securityholder the specified value within 60 days of receipt of the dissenting security
             1874      holder's security.
             1875          (c) Persons electing under this Subsection (11) to receive cash for their securities waive
             1876      the dissenting shareholder and appraisal rights otherwise applicable under Title 16, Chapter
             1877      10a, Part 13, Dissenters' Rights.
             1878          (d) (i) This Subsection (11) provides an elective procedure for dissenting
             1879      securityholders to resolve their objections to the plan of merger.
             1880          (ii) This section does not restrict the rights of dissenting securityholders under Title 16,
             1881      Chapter 10a, Utah Revised Business Corporation Act, unless this election is made under this
             1882      Subsection (11).
             1883          (12) (a) All statements, amendments, or other material filed under Subsection (1), and
             1884      all notices of public hearings held under Subsection (8), shall be mailed by the insurer to its
             1885      securityholders within five business days after the insurer has received the statements,


             1886      amendments, other material, or notices.
             1887          (b) (i) Mailing expenses shall be paid by the person making the filing.
             1888          (ii) As security for the payment of mailing expenses, that person shall file with the
             1889      commissioner an acceptable bond or other deposit in an amount determined by the
             1890      commissioner.
             1891          (13) This section does not apply to any offer, request, invitation, agreement, or
             1892      acquisition that the commissioner by order exempts from the requirements of this section as:
             1893          (a) not having been made or entered into for the purpose of, and not having the effect
             1894      of, changing or influencing the control of a domestic insurer; or
             1895          (b) H. [ as ] .H otherwise not comprehended within the purposes of this section.
             1896          (14) The following are violations of this section:
             1897          (a) the failure to file any statement, amendment, or other material required to be filed
             1898      pursuant to Subsections (1), (2), and (5); or
             1899          (b) the effectuation, or any attempt to effectuate, an acquisition of control of or merger
             1900      with a domestic insurer unless the commissioner has given the commissioner's approval to the
             1901      acquisition or merger.
             1902          (15) (a) The courts of this state are vested with jurisdiction over:
             1903          (i) a person who:
             1904          (A) files a statement with the commissioner under this section; and
             1905          (B) is not resident, domiciled, or authorized to do business in this state; and
             1906          (ii) overall actions involving persons described in Subsection (15)(a)(i) arising out of a
             1907      violation of this section.
             1908          (b) A person described in Subsection (15)(a) is considered to have performed acts
             1909      equivalent to and constituting an appointment of the commissioner by that person, to be that
             1910      person's lawful agent upon whom may be served all lawful process in any action, suit, or
             1911      proceeding arising out of a violation of this section.
             1912          (c) A copy of a lawful process described in Subsection (15)(b) shall be:
             1913          (i) served on the commissioner; and
             1914          (ii) transmitted by registered or certified mail by the commissioner to the person at that
             1915      person's last-known address.
             1916          Section 10. Section 31A-17-607 is amended to read:


             1917           31A-17-607. Hearings.
             1918          (1) (a) Following receipt of a notice described in Subsection (2), the insurer or health
             1919      organization shall have the right to a confidential departmental hearing at which the insurer or
             1920      health organization may challenge [any] a determination or action by the commissioner.
             1921          (b) The insurer or health organization shall notify the commissioner of its request for a
             1922      hearing within five days after the notification by the commissioner under [Subsections
             1923      31A-17-604 (1), (2), and (3)] Subsection (2).
             1924          (c) Upon receipt of the insurer's or health organization's request for a hearing, the
             1925      commissioner shall set a date for the hearing, which date shall be no less than 10 nor more than
             1926      30 days after the date of the insurer's or health organization's request.
             1927          (2) An insurer or health organization has the right to a hearing under Subsection (1)
             1928      after:
             1929          (a) notification to an insurer or health organization by the commissioner of an adjusted
             1930      RBC report;
             1931          (b) notification to an insurer or health organization by the commissioner that:
             1932          (i) the insurer's or health organization's RBC plan or revised RBC plan is
             1933      unsatisfactory; and
             1934          (ii) the notification constitutes a regulatory action level event with respect to the
             1935      insurer or health organization;
             1936          (c) notification to any insurer or health organization by the commissioner that the
             1937      insurer or health organization has failed to adhere to its RBC plan or revised RBC plan and that
             1938      the failure has substantial adverse effect on the ability of the insurer or health organization to
             1939      eliminate the company action level event with respect to the insurer or health organization in
             1940      accordance with its RBC plan or revised RBC plan; or
             1941          (d) notification to an insurer or health organization by the commissioner of a corrective
             1942      order with respect to the insurer or health organization.
             1943          Section 11. Section 31A-22-428 is amended to read:
             1944           31A-22-428. Interest payable on life insurance proceeds.
             1945          (1) For a life insurance policy delivered or issued for delivery in this state on or after
             1946      May 5, 2008, the insurer shall pay interest on the death proceeds payable upon the death of the
             1947      insured.


             1948          (2) (a) Except as provided in Subsection (4), for the period beginning on the date of
             1949      death and ending the day before the day described in Subsection (3)(b), interest under
             1950      Subsection (1) shall accrue at a rate no less than the greater of:
             1951          (i) the rate applicable to policy funds left on deposit; [or] and
             1952          (ii) [if there is no rate described in Subsection (2)(a)(i), at] the Two Year Treasury
             1953      Constant Maturity Rate as published by the Federal Reserve.
             1954          (b) If there is no rate applicable to policy funds on deposit as stated in Subsection
             1955      (2)(a)(i), then the Two Year Treasury Constant Maturity Rates as published by the Federal
             1956      Reserve applies.
             1957          [(b)] (c) The rate described in Subsection (2)(a) or (b) is the rate in effect on the day on
             1958      which the death occurs.
             1959          [(c)] (d) Interest is payable until the day on which the claim is paid.
             1960          (3) (a) Unless the claim is paid and except as provided in Subsection (4), beginning on
             1961      the day described in Subsection (3)(b) and ending the day on which the claim is paid, interest
             1962      shall accrue at the rate in Subsection (2) plus additional interest at the rate of 10% annually.
             1963          (b) Interest accrues under Subsection (3)(a) beginning with the day that is 31 days from
             1964      the latest of:
             1965          (i) the day on which the insurer receives proof of death;
             1966          (ii) the day on which the insurer receives sufficient information to determine:
             1967          (A) liability;
             1968          (B) the extent of the liability; and
             1969          (C) the appropriate payee legally entitled to the proceeds; and
             1970          (iii) the day on which:
             1971          (A) legal impediments to payment of proceeds that depend on the action of parties
             1972      other than the insurer are resolved; and
             1973          (B) the insurer receives sufficient evidence of the resolution of the legal impediments
             1974      described in Subsection (3)(b)(iii)(A).
             1975          (4) A court of competent jurisdiction may require payment of interest from the date of
             1976      death to the day on which a claim is paid at a rate equal to the sum of:
             1977          (a) the rate specified in Subsection (2); and
             1978          (b) the legal rate identified in Subsection 15-1-1 (2).


             1979          Section 12. Section 31A-22-617 is amended to read:
             1980           31A-22-617. Preferred provider contract provisions.
             1981          Health insurance policies may provide for insureds to receive services or
             1982      reimbursement under the policies in accordance with preferred health care provider contracts as
             1983      follows:
             1984          (1) Subject to restrictions under this section, [any] an insurer or third party
             1985      administrator may enter into contracts with health care providers as defined in Section
             1986      78B-3-403 under which the health care providers agree to supply services, at prices specified in
             1987      the contracts, to persons insured by an insurer.
             1988          (a) (i) A health care provider contract may require the health care provider to accept the
             1989      specified payment in this Subsection (1) as payment in full, relinquishing the right to collect
             1990      additional amounts from the insured person.
             1991          (ii) In [any] a dispute involving a provider's claim for reimbursement, the same shall be
             1992      determined in accordance with applicable law, the provider contract, the subscriber contract,
             1993      and the insurer's written payment policies in effect at the time services were rendered.
             1994          (iii) If the parties are unable to resolve their dispute, the matter shall be subject to
             1995      binding arbitration by a jointly selected arbitrator. Each party is to bear its own expense except
             1996      the cost of the jointly selected arbitrator shall be equally shared. This Subsection (1)(a)(iii)
             1997      does not apply to the claim of a general acute hospital to the extent it is inconsistent with the
             1998      hospital's provider agreement.
             1999          (iv) An organization may not penalize a provider solely for pursuing a claims dispute
             2000      or otherwise demanding payment for a sum believed owing.
             2001          (v) If an insurer permits another entity with which it does not share common ownership
             2002      or control to use or otherwise lease one or more of the organization's networks of participating
             2003      providers, the organization shall ensure, at a minimum, that the entity pays participating
             2004      providers in accordance with the same fee schedule and general payment policies as the
             2005      organization would for that network.
             2006          (b) The insurance contract may reward the insured for selection of preferred health care
             2007      providers by:
             2008          (i) reducing premium rates;
             2009          (ii) reducing deductibles;


             2010          (iii) coinsurance;
             2011          (iv) other copayments; or
             2012          (v) any other reasonable manner.
             2013          (c) If the insurer is a managed care organization, as defined in Subsection
             2014      31A-27a-403 (1)(f):
             2015          (i) the insurance contract and the health care provider contract shall provide that in the
             2016      event the managed care organization becomes insolvent, the rehabilitator or liquidator may:
             2017          (A) require the health care provider to continue to provide health care services under
             2018      the contract until the earlier of:
             2019          (I) 90 days after the date of the filing of a petition for rehabilitation or the petition for
             2020      liquidation; or
             2021          (II) the date the term of the contract ends; and
             2022          (B) subject to Subsection (1)(c)(v), reduce the fees the provider is otherwise entitled to
             2023      receive from the managed care organization during the time period described in Subsection
             2024      (1)(c)(i)(A);
             2025          (ii) the provider is required to:
             2026          (A) accept the reduced payment under Subsection (1)(c)(i)(B) as payment in full; and
             2027          (B) relinquish the right to collect additional amounts from the insolvent managed care
             2028      organization's enrollee, as defined in Subsection 31A-27a-403 (1)(b);
             2029          (iii) if the contract between the health care provider and the managed care organization
             2030      has not been reduced to writing, or the contract fails to contain the [language required by]
             2031      requirements described in Subsection (1)(c)(i), the provider may not collect or attempt to
             2032      collect from the enrollee:
             2033          (A) sums owed by the insolvent managed care organization; or
             2034          (B) the amount of the regular fee reduction authorized under Subsection (1)(c)(i)(B);
             2035          (iv) the following may not bill or maintain [any] an action at law against an enrollee to
             2036      collect sums owed by the insolvent managed care organization or the amount of the regular fee
             2037      reduction authorized under Subsection (1)(c)(i)(B):
             2038          (A) a provider;
             2039          (B) an agent;
             2040          (C) a trustee; or


             2041          (D) an assignee of a person described in Subsections (1)(c)(iv)(A) through (C); and
             2042          (v) notwithstanding Subsection (1)(c)(i):
             2043          (A) a rehabilitator or liquidator may not reduce a fee by less than 75% of the provider's
             2044      regular fee set forth in the contract; and
             2045          (B) the enrollee shall continue to pay the copayments, deductibles, and other payments
             2046      for services received from the provider that the enrollee was required to pay before the filing
             2047      of:
             2048          (I) a petition for rehabilitation; or
             2049          (II) a petition for liquidation.
             2050          (2) (a) Subject to Subsections (2)(b) through (2)(e), an insurer using preferred health
             2051      care provider contracts is subject to the reimbursement requirements in Section 31A-8-501 on
             2052      or after January 1, 2014.
             2053          (b) When reimbursing for services of health care providers not under contract, the
             2054      insurer may make direct payment to the insured.
             2055          (c) An insurer using preferred health care provider contracts may impose a deductible
             2056      on coverage of health care providers not under contract.
             2057          (d) When selecting health care providers with whom to contract under Subsection (1),
             2058      an insurer may not unfairly discriminate between classes of health care providers, but may
             2059      discriminate within a class of health care providers, subject to Subsection (7).
             2060          (e) For purposes of this section, unfair discrimination between classes of health care
             2061      providers includes:
             2062          (i) refusal to contract with class members in reasonable proportion to the number of
             2063      insureds covered by the insurer and the expected demand for services from class members; and
             2064          (ii) refusal to cover procedures for one class of providers that are:
             2065          (A) commonly used by members of the class of health care providers for the treatment
             2066      of illnesses, injuries, or conditions;
             2067          (B) otherwise covered by the insurer; and
             2068          (C) within the scope of practice of the class of health care providers.
             2069          (3) Before the insured consents to the insurance contract, the insurer shall fully disclose
             2070      to the insured that it has entered into preferred health care provider contracts. The insurer shall
             2071      provide sufficient detail on the preferred health care provider contracts to permit the insured to


             2072      agree to the terms of the insurance contract. The insurer shall provide at least the following
             2073      information:
             2074          (a) a list of the health care providers under contract, and if requested their business
             2075      locations and specialties;
             2076          (b) a description of the insured benefits, including [any] deductibles, coinsurance, or
             2077      other copayments;
             2078          (c) a description of the quality assurance program required under Subsection (4); and
             2079          (d) a description of the adverse benefit determination procedures required under
             2080      Subsection (5).
             2081          (4) (a) An insurer using preferred health care provider contracts shall maintain a quality
             2082      assurance program for assuring that the care provided by the health care providers under
             2083      contract meets prevailing standards in the state.
             2084          (b) The commissioner in consultation with the executive director of the Department of
             2085      Health may designate qualified persons to perform an audit of the quality assurance program.
             2086      The auditors shall have full access to all records of the organization and its health care
             2087      providers, including medical records of individual patients.
             2088          (c) The information contained in the medical records of individual patients shall
             2089      remain confidential. All information, interviews, reports, statements, memoranda, or other data
             2090      furnished for purposes of the audit and any findings or conclusions of the auditors are
             2091      privileged. The information is not subject to discovery, use, or receipt in evidence in any legal
             2092      proceeding except hearings before the commissioner concerning alleged violations of this
             2093      section.
             2094          (5) An insurer using preferred health care provider contracts shall provide a reasonable
             2095      procedure for resolving complaints and adverse benefit determinations initiated by the insureds
             2096      and health care providers.
             2097          (6) An insurer may not contract with a health care provider for treatment of illness or
             2098      injury unless the health care provider is licensed to perform that treatment.
             2099          (7) (a) A health care provider or insurer may not discriminate against a preferred health
             2100      care provider for agreeing to a contract under Subsection (1).
             2101          (b) [Any] A health care provider licensed to treat [any] an illness or injury within the
             2102      scope of the health care provider's practice, who is willing and able to meet the terms and


             2103      conditions established by the insurer for designation as a preferred health care provider, shall
             2104      be able to apply for and receive the designation as a preferred health care provider. Contract
             2105      terms and conditions may include reasonable limitations on the number of designated preferred
             2106      health care providers based upon substantial objective and economic grounds, or expected use
             2107      of particular services based upon prior provider-patient profiles.
             2108          (8) Upon the written request of a provider excluded from a provider contract, the
             2109      commissioner may hold a hearing to determine if the insurer's exclusion of the provider is
             2110      based on the criteria set forth in Subsection (7)(b).
             2111          [(9) Except as provided in Subsection 31A-22-618.5 (3)(a), insurers are subject to
             2112      Sections 31A-22-613.5 , 31A-22-614.5 , and 31A-22-618 .]
             2113          [(10)] (9) Nothing in this section is to be construed as to require an insurer to offer a
             2114      certain benefit or service as part of a health benefit plan.
             2115          [(11)] (10) This section does not apply to catastrophic mental health coverage provided
             2116      in accordance with Section 31A-22-625 .
             2117          [(12)] (11) Notwithstanding [the provisions of] Subsection (1), Subsection (7)(b), and
             2118      Section 31A-22-618 , an insurer or third party administrator is not required to, but may, enter
             2119      into [contracts] a contract with a licensed athletic [trainers] trainer, licensed under Title 58,
             2120      Chapter 40a, Athletic Trainer Licensing Act.
             2121          Section 13. Section 31A-22-618.5 is amended to read:
             2122           31A-22-618.5. Health benefit plan offerings.
             2123          (1) The purpose of this section is to increase the range of health benefit plans available
             2124      in the small group, small employer group, large group, and individual insurance markets.
             2125          (2) A health maintenance organization that is subject to Chapter 8, Health Maintenance
             2126      Organizations and Limited Health Plans:
             2127          (a) shall offer to potential purchasers at least one health benefit plan that is subject to
             2128      the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             2129      and
             2130          (b) may offer to a potential purchaser one or more health benefit plans that:
             2131          (i) are not subject to one or more of the following:
             2132          (A) the limitations on insured indemnity benefits in Subsection 31A-8-105 (4);
             2133          (B) the limitation on point of service products in Subsections 31A-8-408 (3) through


             2134      (6);
             2135          (C) except as provided in Subsection (2)(b)(ii), basic health care services as defined in
             2136      Section 31A-8-101 ; or
             2137          (D) coverage mandates enacted after January 1, 2009 that are not required by federal
             2138      law, provided that the insurer offers one plan under Subsection (2)(a) that covers the mandate
             2139      enacted after January 1, 2009; and
             2140          (ii) when offering a health plan under this section, provide coverage for an emergency
             2141      medical condition as required by Section 31A-22-627 as follows:
             2142          (A) within the organization's service area, covered services shall include health care
             2143      services from nonaffiliated providers when medically necessary to stabilize an emergency
             2144      medical condition; and
             2145          (B) outside the organization's service area, covered services shall include medically
             2146      necessary health care services for the treatment of an emergency medical condition that are
             2147      immediately required while the enrollee is outside the geographic limits of the organization's
             2148      service area.
             2149          (3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
             2150      Maintenance Organizations and Limited Health Plans:
             2151          (a) [notwithstanding Subsection 31A-22-617 (9),] may offer a health benefit plan that is
             2152      not subject to Section 31A-22-618 ;
             2153          (b) when offering a health plan under this Subsection (3), shall provide coverage of
             2154      emergency care services as required by Section 31A-22-627 ; and
             2155          (c) is not subject to coverage mandates enacted after January 1, 2009 that are not
             2156      required by federal law, provided that an insurer offers one plan that covers a mandate enacted
             2157      after January 1, 2009.
             2158          (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
             2159      Subsection (2)(b).
             2160          (5) (a) Any difference in price between a health benefit plan offered under Subsections
             2161      (2)(a) and (b) shall be based on actuarially sound data.
             2162          (b) Any difference in price between a health benefit plan offered under Subsection
             2163      (3)(a) shall be based on actuarially sound data.
             2164          (6) Nothing in this section limits the number of health benefit plans that an insurer may


             2165      offer.
             2166          Section 14. Section 31A-22-625 is amended to read:
             2167           31A-22-625. Catastrophic coverage of mental health conditions.
             2168          (1) As used in this section:
             2169          (a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
             2170      that does not impose a lifetime limit, annual payment limit, episodic limit, inpatient or
             2171      outpatient service limit, or maximum out-of-pocket limit that places a greater financial burden
             2172      on an insured for the evaluation and treatment of a mental health condition than for the
             2173      evaluation and treatment of a physical health condition.
             2174          (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
             2175      factors, such as deductibles, copayments, or coinsurance, before reaching a maximum
             2176      out-of-pocket limit.
             2177          (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
             2178      limit for physical health conditions and another maximum out-of-pocket limit for mental health
             2179      conditions, except that if separate out-of-pocket limits are established, the out-of-pocket limit
             2180      for mental health conditions may not exceed the out-of-pocket limit for physical health
             2181      conditions.
             2182          (b) (i) "50/50 mental health coverage" means coverage in a health benefit plan that
             2183      pays for at least 50% of covered services for the diagnosis and treatment of mental health
             2184      conditions.
             2185          (ii) "50/50 mental health coverage" may include a restriction on:
             2186          (A) episodic limits;
             2187          (B) inpatient or outpatient service limits; or
             2188          (C) maximum out-of-pocket limits.
             2189          (c) "Large employer" is as defined in 42 U.S.C. Sec. 300gg-91.
             2190          (d) (i) "Mental health condition" means a condition or disorder involving mental illness
             2191      that falls under a diagnostic category listed in the Diagnostic and Statistical Manual, as
             2192      periodically revised.
             2193          (ii) "Mental health condition" does not include the following when diagnosed as the
             2194      primary or substantial reason or need for treatment:
             2195          (A) a marital or family problem;


             2196          (B) a social, occupational, religious, or other social maladjustment;
             2197          (C) a conduct disorder;
             2198          (D) a chronic adjustment disorder;
             2199          (E) a psychosexual disorder;
             2200          (F) a chronic organic brain syndrome;
             2201          (G) a personality disorder;
             2202          (H) a specific developmental disorder or learning disability; or
             2203          (I) an intellectual disability.
             2204          (e) "Small employer" is as defined in 42 U.S.C. Sec. 300gg-91.
             2205          (2) (a) At the time of purchase and renewal on or before January 1, 2014, an insurer
             2206      shall offer to a small employer that it insures or seeks to insure a choice between:
             2207          (i) (A) catastrophic mental health coverage; or
             2208          (B) federally qualified mental health coverage as described in Subsection (3); and
             2209          (ii) 50/50 mental health coverage.
             2210          (b) In addition to complying with Subsection (2)(a), an insurer may offer to provide:
             2211          (i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
             2212      that exceed the minimum requirements of this section; or
             2213          (ii) coverage that excludes benefits for mental health conditions.
             2214          (c) A small employer may, at its option, regardless of the employer's previous coverage
             2215      for mental health conditions, choose either:
             2216          (i) coverage offered under Subsection (2)(a)(i);
             2217          (ii) 50/50 mental health coverage; or
             2218          (iii) coverage offered under Subsection (2)(b).
             2219          (d) An insurer is exempt from the 30% index rating restriction in Section
             2220      31A-30-106.1 and, for the first year only that the employer chooses coverage that meets or
             2221      exceeds catastrophic mental health coverage, the 15% annual adjustment restriction in Section
             2222      31A-30-106.1 , for [any] a small employer with 20 or less enrolled employees who chooses
             2223      coverage that meets or exceeds catastrophic mental health coverage.
             2224          (3) (a) An insurer shall offer a large employer mental health and substance use disorder
             2225      benefit in compliance with Section 2705 of the Public Health Service Act, 42 U.S.C. Sec.
             2226      300gg-26, and federal regulations adopted pursuant to that act.


             2227          (b) An insurer shall provide in an individual or small employer health benefit plan,
             2228      mental health and substance use disorder benefits in compliance with Sections 2705 and 2711
             2229      of the Public Health Service Act, 42 U.S.C. Sec. 300gg-26, and federal regulations adopted
             2230      pursuant to that act.
             2231          (4) (a) An insurer may provide catastrophic mental health coverage to a small employer
             2232      through a managed care organization or system in a manner consistent with Chapter 8, Health
             2233      Maintenance Organizations and Limited Health Plans, regardless of whether the insurance
             2234      policy uses a managed care organization or system for the treatment of physical health
             2235      conditions.
             2236          (b) (i) Notwithstanding any other provision of this title, an insurer may:
             2237          (A) establish a closed panel of providers for catastrophic mental health coverage; and
             2238          (B) refuse to provide a benefit to be paid for services rendered by a nonpanel provider
             2239      unless:
             2240          (I) the insured is referred to a nonpanel provider with the prior authorization of the
             2241      insurer; and
             2242          (II) the nonpanel provider agrees to follow the insurer's protocols and treatment
             2243      guidelines.
             2244          (ii) If an insured receives services from a nonpanel provider in the manner permitted by
             2245      Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
             2246      average amount paid by the insurer for comparable services of panel providers under a
             2247      noncapitated arrangement who are members of the same class of health care providers.
             2248          (iii) This Subsection (4)(b) may not be construed as requiring an insurer to authorize a
             2249      referral to a nonpanel provider.
             2250          (c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
             2251      mental health condition shall be rendered:
             2252          (i) by a mental health therapist as defined in Section 58-60-102 ; or
             2253          (ii) in a health care facility:
             2254          (A) licensed or otherwise authorized to provide mental health services pursuant to:
             2255          (I) Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act; or
             2256          (II) Title 62A, Chapter 2, Licensure of Programs and Facilities; and
             2257          (B) that provides a program for the treatment of a mental health condition pursuant to a


             2258      written plan.
             2259          (5) The commissioner may prohibit an insurance policy that provides mental health
             2260      coverage in a manner that is inconsistent with this section.
             2261          (6) The commissioner [shall: (a)] may adopt rules, in accordance with Title 63G,
             2262      Chapter 3, Utah Administrative Rulemaking Act, as necessary to ensure compliance with this
             2263      section[; and].
             2264          [(b) provide general figures on the percentage of insurance policies that include:]
             2265          [(i) no mental health coverage;]
             2266          [(ii) 50/50 mental health coverage;]
             2267          [(iii) catastrophic mental health coverage; and]
             2268          [(iv) coverage that exceeds the minimum requirements of this section.]
             2269          [(7) This section may not be construed as discouraging or otherwise preventing an
             2270      insurer from providing mental health coverage in connection with an individual insurance
             2271      policy.]
             2272          Section 15. Section 31A-22-635 is amended to read:
             2273           31A-22-635. Uniform application -- Uniform waiver of coverage -- Information
             2274      on Health Insurance Exchange.
             2275          (1) For purposes of this section, "insurer":
             2276          (a) is defined in Subsection 31A-22-634 (1); and
             2277          (b) includes the state employee's risk pool under Section 49-20-202 .
             2278          (2) (a) Insurers offering a health benefit plan to an individual or small employer shall
             2279      use a uniform application form.
             2280          (b) The uniform application form:
             2281          (i) [except for cancer and transplants,] may not include questions about an applicant's
             2282      health history [prior to the previous five years]; and
             2283          (ii) shall be shortened and simplified in accordance with rules adopted by the
             2284      commissioner.
             2285          (c) Insurers offering a health benefit plan to a small employer shall use a uniform
             2286      waiver of coverage form, which may not include health status related questions [other than
             2287      pregnancy], and is limited to:
             2288          (i) information that identifies the employee;


             2289          (ii) proof of the employee's insurance coverage; and
             2290          (iii) a statement that the employee declines coverage with a particular employer group.
             2291          (3) Notwithstanding the requirements of Subsection (2)(a), the uniform application and
             2292      uniform waiver of coverage forms may, if the combination or modification is approved by the
             2293      commissioner, be combined or modified to facilitate a more efficient and consumer friendly
             2294      experience for:
             2295          (a) enrollees using the Health Insurance Exchange; or
             2296          (b) insurers using electronic applications.
             2297          (4) The uniform application form, and uniform waiver form, shall be adopted and
             2298      approved by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
             2299      Rulemaking Act.
             2300          (5) (a) An insurer who offers a health benefit plan [in either the group or individual
             2301      market] on the Health Insurance Exchange created in Section 63M-1-2504 , shall:
             2302          (i) accept and process an electronic submission of the uniform application or uniform
             2303      waiver from the Health Insurance Exchange using the electronic standards adopted pursuant to
             2304      Section 63M-1-2506 ;
             2305          (ii) if requested, provide the applicant with a copy of the completed application either
             2306      by mail or electronically;
             2307          (iii) post all health benefit plans offered by the insurer in the defined contribution
             2308      arrangement market on the Health Insurance Exchange; and
             2309          (iv) post the information required by Subsection (6) on the Health Insurance Exchange
             2310      for every health benefit plan the insurer offers on the Health Insurance Exchange.
             2311          (b) Except as provided in Subsection (5)(c), an insurer who posts health benefit plans
             2312      on the Health Insurance Exchange may not directly or indirectly offer products on the Health
             2313      Insurance Exchange that are not health benefit plans.
             2314          (c) Notwithstanding Subsection (5)(b):
             2315          (i) an insurer may offer a health savings account on the Health Insurance Exchange;
             2316      [and]
             2317          (ii) an insurer may offer dental [and vision] plans on the Health Insurance Exchange
             2318      [if:]; and
             2319          [(A) the department determines, after study and consultation with the Health System


             2320      Reform Task Force, that the department is able to establish standards for dental and vision
             2321      policies offered on the Health Insurance Exchange, and the department determines whether a
             2322      risk adjuster mechanism is necessary for a defined contribution vision and dental plan market
             2323      on the Health Insurance Exchange; and]
             2324          [(B)] (iii) the department[, in accordance with recommendations from the Health
             2325      System Reform Task Force, adopts] may make administrative rules to regulate the offer of
             2326      dental [and vision] plans on the Health Insurance Exchange.
             2327          (6) An insurer shall provide the commissioner and the Health Insurance Exchange with
             2328      the following information for each health benefit plan submitted to the Health Insurance
             2329      Exchange, in the electronic format required by Subsection 63M-1-2506 (1):
             2330          (a) plan design, benefits, and options offered by the health benefit plan including state
             2331      mandates the plan does not cover;
             2332          (b) information and Internet address to online provider networks;
             2333          (c) wellness programs and incentives;
             2334          (d) descriptions of prescription drug benefits, exclusions, or limitations;
             2335          (e) the percentage of claims paid by the insurer within 30 days of the date a claim is
             2336      submitted to the insurer for the prior year; and
             2337          (f) the claims denial and insurer transparency information developed in accordance
             2338      with Subsection 31A-22-613.5 (4).
             2339          (7) The department shall post on the Health Insurance Exchange the department's
             2340      solvency rating for each insurer who posts a health benefit plan on the Health Insurance
             2341      Exchange. The solvency rating for each insurer shall be based on methodology established by
             2342      the department by administrative rule and shall be updated each calendar year.
             2343          (8) (a) The commissioner may request information from an insurer under Section
             2344      31A-22-613.5 to verify the data submitted to the department and to the Health Insurance
             2345      Exchange.
             2346          (b) The commissioner shall regulate [any] the fees charged by insurers to an enrollee
             2347      for a uniform application form or electronic submission of the application forms.
             2348          Section 16. Section 31A-22-721 is amended to read:
             2349           31A-22-721. A health benefit plan for a plan sponsor -- Discontinuance and
             2350      nonrenewal.


             2351          (1) Except as otherwise provided in this section, a health benefit plan for a plan
             2352      sponsor is renewable and continues in force:
             2353          (a) with respect to all eligible employees and dependents; and
             2354          (b) at the option of the plan sponsor.
             2355          (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
             2356          (a) for a network plan, if[: (i)] there is no longer any enrollee under the group health
             2357      plan who lives, resides, or works in:
             2358          [(A)] (i) the service area of the insurer; or
             2359          [(B)] (ii) the area for which the insurer is authorized to do business; [and] or
             2360          [(ii) in the case of the small employer market, the insurer applies the same criteria the
             2361      insurer would apply in denying enrollment in the plan under Subsection 31A-30-108 (7); or]
             2362          (b) for coverage made available in the small or large employer market only through an
             2363      association, if:
             2364          (i) the employer's membership in the association ceases; and
             2365          (ii) the coverage is terminated uniformly without regard to any health status-related
             2366      factor relating to any covered individual.
             2367          (3) A health benefit plan for a plan sponsor may be discontinued if:
             2368          (a) a condition described in Subsection (2) exists;
             2369          (b) the plan sponsor fails to pay premiums or contributions in accordance with the
             2370      terms of the contract;
             2371          (c) the plan sponsor:
             2372          (i) performs an act or practice that constitutes fraud; or
             2373          (ii) makes an intentional misrepresentation of material fact under the terms of the
             2374      coverage;
             2375          (d) the insurer:
             2376          (i) elects to discontinue offering a particular health benefit product delivered or issued
             2377      for delivery in this state;
             2378          (ii) (A) provides notice of the discontinuation in writing:
             2379          (I) to each plan sponsor, employee, and dependent of a plan sponsor or employee; and
             2380          (II) at least 90 days before the date the coverage will be discontinued;
             2381          (B) provides notice of the discontinuation in writing:


             2382          (I) to the commissioner; and
             2383          (II) at least three working days prior to the date the notice is sent to the affected plan
             2384      sponsors, employees, and dependents of plan sponsors or employees;
             2385          (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase any
             2386      other health benefit products currently being offered:
             2387          (I) by the insurer in the market; or
             2388          (II) in the case of a large employer, any other health benefit plan currently being
             2389      offered in that market; and
             2390          (D) in exercising the option to discontinue that product and in offering the option of
             2391      coverage in this section, the insurer acts uniformly without regard to:
             2392          (I) the claims experience of a plan sponsor;
             2393          (II) any health status-related factor relating to any covered participant or beneficiary; or
             2394          (III) any health status-related factor relating to a new participant or beneficiary who
             2395      may become eligible for coverage; or
             2396          (e) the insurer:
             2397          (i) elects to discontinue all of the insurer's health benefit plans:
             2398          (A) in the small employer market; or
             2399          (B) the large employer market; or
             2400          (C) both the small and large employer markets; and
             2401          (ii) (A) provides notice of the discontinuance in writing:
             2402          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             2403          (II) at least 180 days before the date the coverage will be discontinued;
             2404          (B) provides notice of the discontinuation in writing:
             2405          (I) to the commissioner in each state in which an affected insured individual is known
             2406      to reside; and
             2407          (II) at least 30 business days prior to the date the notice is sent to the affected plan
             2408      sponsors, employees, and dependents of a plan sponsor or employee;
             2409          (C) discontinues and nonrenews all plans issued or delivered for issuance in the
             2410      market; and
             2411          (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
             2412          (4) A large employer health benefit plan may be discontinued or nonrenewed:


             2413          (a) if a condition described in Subsection (2) exists; or
             2414          (b) for noncompliance with the insurer's:
             2415          (i) minimum participation requirements; or
             2416          (ii) employer contribution requirements.
             2417          (5) A small employer health benefit plan may be discontinued or nonrenewed:
             2418          (a) if a condition described in Subsection (2) exists; or
             2419          (b) for noncompliance with the insurer's employer contribution requirements.
             2420          (6) A small employer health benefit plan may be nonrenewed:
             2421          (a) if a condition described in Subsection (2) exists; or
             2422          (b) for noncompliance with the insurer's minimum participation requirements.
             2423          (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
             2424      discontinued if after issuance of coverage the eligible employee:
             2425          (i) engages in an act or practice that constitutes fraud in connection with the coverage;
             2426      or
             2427          (ii) makes an intentional misrepresentation of material fact in connection with the
             2428      coverage.
             2429          (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
             2430          (i) 12 months after the date of discontinuance; and
             2431          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
             2432      to reenroll.
             2433          (c) At the time the eligible employee's coverage is discontinued under Subsection
             2434      (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
             2435      discontinued.
             2436          (d) An eligible employee may not be discontinued under this Subsection (7) because of
             2437      a fraud or misrepresentation that relates to health status.
             2438          (8) (a) Except as provided in Subsection (8)(b), an insurer that elects to discontinue
             2439      offering a health benefit plan under Subsection (3)(e) shall be prohibited from writing new
             2440      business in such market in this state for a period of five years beginning on the date of
             2441      discontinuation of the last coverage that is discontinued.
             2442          (b) The commissioner may waive the prohibition under Subsection (8)(a) when the
             2443      commissioner finds that waiver is in the public interest:


             2444          (i) to promote competition; or
             2445          (ii) to resolve inequity in the marketplace.
             2446          (9) If an insurer is doing business in one established geographic service area of the
             2447      state, this section applies only to the insurer's operations in that geographic service area.
             2448          (10) An insurer may modify a health benefit plan for a plan sponsor only:
             2449          (a) at the time of coverage renewal; and
             2450          (b) if the modification is effective uniformly among all plans with a particular product
             2451      or service.
             2452          (11) For purposes of this section, a reference to "plan sponsor" includes a reference to
             2453      the employer:
             2454          (a) with respect to coverage provided to an employer member of the association; and
             2455          (b) if the health benefit plan is made available by an insurer in the employer market
             2456      only through:
             2457          (i) an association;
             2458          (ii) a trust; or
             2459          (iii) a discretionary group.
             2460          (12) (a) A small employer that, after purchasing a health benefit plan in the small group
             2461      market, employs on average more than 50 eligible employees on each business day in a
             2462      calendar year may continue to renew the health benefit plan purchased in the small group
             2463      market.
             2464          (b) A large employer that, after purchasing a health benefit plan in the large group
             2465      market, employs on average less than 51 eligible employees on each business day in a calendar
             2466      year may continue to renew the health benefit plan purchased in the large group market.
             2467          (13) An insurer offering employer sponsored health benefit plans shall comply with the
             2468      Health Insurance Portability and Accountability Act, 42 U.S.C. Sec. 300gg and 300gg-1.
             2469          Section 17. Section 31A-23a-102 is amended to read:
             2470           31A-23a-102. Definitions.
             2471          As used in this chapter:
             2472          (1) "Bail bond producer" is as defined in Section 31A-35-102 .
             2473          (2) "Home state" means a state or territory of the United States or the District of
             2474      Columbia in which an insurance producer:


             2475          (a) maintains the insurance producer's principal:
             2476          (i) place of residence; or
             2477          (ii) place of business; and
             2478          (b) is licensed to act as an insurance producer.
             2479          (3) "Insurer" is as defined in Section 31A-1-301 , except that the following persons or
             2480      similar persons are not insurers for purposes of Part 7, Producer Controlled Insurers:
             2481          (a) a risk retention group as defined in:
             2482          (i) the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499;
             2483          (ii) the Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.; and
             2484          (iii) Chapter 15, Part 2, Risk Retention Groups Act;
             2485          (b) a residual market pool;
             2486          (c) a joint underwriting authority or association; and
             2487          (d) a captive insurer.
             2488          (4) "License" is defined in Section 31A-1-301 .
             2489          (5) (a) "Managing general agent" means a person that:
             2490          (i) manages all or part of the insurance business of an insurer, including the
             2491      management of a separate division, department, or underwriting office;
             2492          (ii) acts as an agent for the insurer whether it is known as a managing general agent,
             2493      manager, or other similar term;
             2494          (iii) produces and underwrites an amount of gross direct written premium equal to, or
             2495      more than, 5% of[,] the policyholder surplus as reported in the last annual statement of the
             2496      insurer in any one quarter or year:
             2497          (A) with or without the authority;
             2498          (B) separately or together with an affiliate; and
             2499          (C) directly or indirectly; and
             2500          (iv) (A) adjusts or pays claims in excess of an amount determined by the
             2501      commissioner; or
             2502          (B) negotiates reinsurance on behalf of the insurer.
             2503          (b) Notwithstanding Subsection (5)(a), the following persons may not be considered as
             2504      managing general agent for the purposes of this chapter:
             2505          (i) an employee of the insurer;


             2506          (ii) a United States manager of the United States branch of an alien insurer;
             2507          (iii) an underwriting manager that, pursuant to contract:
             2508          (A) manages all the insurance operations of the insurer;
             2509          (B) is under common control with the insurer;
             2510          (C) is subject to Chapter 16, Insurance Holding Companies; and
             2511          (D) is not compensated based on the volume of premiums written; and
             2512          (iv) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal
             2513      insurer or inter-insurance exchange under powers of attorney.
             2514          (6) "Negotiate" means the act of conferring directly with or offering advice directly to a
             2515      purchaser or prospective purchaser of a particular contract of insurance concerning a
             2516      substantive benefit, term, or condition of the contract if the person engaged in that act:
             2517          (a) sells insurance; or
             2518          (b) obtains insurance from insurers for purchasers.
             2519          (7) "Reinsurance intermediary" means:
             2520          (a) a reinsurance intermediary-broker; or
             2521          (b) a reinsurance intermediary-manager.
             2522          (8) "Reinsurance intermediary-broker" means a person other than an officer or
             2523      employee of the ceding insurer, firm, association, or corporation who solicits, negotiates, or
             2524      places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority
             2525      or power to bind reinsurance on behalf of the insurer.
             2526          (9) (a) "Reinsurance intermediary-manager" means a person who:
             2527          (i) has authority to bind or who manages all or part of the assumed reinsurance
             2528      business of a reinsurer, including the management of a separate division, department, or
             2529      underwriting office; and
             2530          (ii) acts as an agent for the reinsurer whether the person is known as a reinsurance
             2531      intermediary-manager, manager, or other similar term.
             2532          (b) Notwithstanding Subsection (9)(a), the following persons may not be considered
             2533      reinsurance intermediary-managers for the purpose of this chapter with respect to the reinsurer:
             2534          (i) an employee of the reinsurer;
             2535          (ii) a United States manager of the United States branch of an alien reinsurer;
             2536          (iii) an underwriting manager that, pursuant to contract:


             2537          (A) manages all the reinsurance operations of the reinsurer;
             2538          (B) is under common control with the reinsurer;
             2539          (C) is subject to Chapter 16, Insurance Holding Companies; and
             2540          (D) is not compensated based on the volume of premiums written; and
             2541          (iv) the manager of a group, association, pool, or organization of insurers that:
             2542          (A) engage in joint underwriting or joint reinsurance; and
             2543          (B) are subject to examination by the insurance commissioner of the state in which the
             2544      manager's principal business office is located.
             2545          (10) "Resident" is as defined by rule made by the commissioner in accordance with
             2546      Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2547          [(10)] (11) "Search" means a license subline of authority in conjunction with the title
             2548      insurance line of authority that allows a person to issue title insurance commitments or policies
             2549      on behalf of a title insurer.
             2550          [(11)] (12) "Sell" means to exchange a contract of insurance:
             2551          (a) by any means;
             2552          (b) for money or its equivalent; and
             2553          (c) on behalf of an insurance company.
             2554          [(12)] (13) "Solicit" means:
             2555          (a) attempting to sell insurance;
             2556          (b) asking or urging a person to apply for:
             2557          (i) a particular kind of insurance; and
             2558          (ii) insurance from a particular insurance company;
             2559          (c) advertising insurance, including advertising for the purpose of obtaining leads for
             2560      the sale of insurance; or
             2561          (d) holding oneself out as being in the insurance business.
             2562          [(13)] (14) "Terminate" means:
             2563          (a) the cancellation of the relationship between:
             2564          (i) an individual licensee or agency licensee and a particular insurer; or
             2565          (ii) an individual licensee and a particular agency licensee; or
             2566          (b) the termination of:
             2567          (i) an individual licensee's or agency licensee's authority to transact insurance on behalf


             2568      of a particular insurance company; or
             2569          (ii) an individual licensee's authority to transact insurance on behalf of a particular
             2570      agency licensee.
             2571          [(14)] (15) "Title marketing representative" means a person who:
             2572          (a) represents a title insurer in soliciting, requesting, or negotiating the placing of:
             2573          (i) title insurance; or
             2574          (ii) escrow services; and
             2575          (b) does not have a search or escrow license as provided in Section 31A-23a-106 .
             2576          [(15)] (16) "Uniform application" means the version of the National Association of
             2577      Insurance Commissioners' uniform application for resident and nonresident producer licensing
             2578      at the time the application is filed.
             2579          [(16)] (17) "Uniform business entity application" means the version of the National
             2580      Association of Insurance Commissioners' uniform business entity application for resident and
             2581      nonresident business entities at the time the application is filed.
             2582          Section 18. Section 31A-23a-104 is amended to read:
             2583           31A-23a-104. Application for individual license -- Application for agency license.
             2584          (1) This section applies to an initial or renewal license as a:
             2585          (a) producer;
             2586          (b) surplus lines producer;
             2587          (c) limited line producer;
             2588          (d) consultant;
             2589          (e) managing general agent; or
             2590          (f) reinsurance intermediary.
             2591          (2) (a) Subject to Subsection (2)(b), to obtain or renew an individual license, an
             2592      individual shall:
             2593          (i) file an application for an initial or renewal individual license with the commissioner
             2594      on forms and in a manner the commissioner prescribes; and
             2595          (ii) pay a license fee that is not refunded if the application:
             2596          (A) is denied; or
             2597          (B) is incomplete when filed and is never completed by the applicant.
             2598          (b) An application described in this Subsection (2) shall provide:


             2599          (i) information about the applicant's identity;
             2600          (ii) the applicant's Social Security number;
             2601          (iii) the applicant's personal history, experience, education, and business record;
             2602          (iv) whether the applicant is 18 years of age or older;
             2603          (v) whether the applicant has committed an act that is a ground for denial, suspension,
             2604      or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ;
             2605          (vi) if the application is for a resident individual producer license, certification that the
             2606      applicant complies with Section 31A-23a-203.5 ; and
             2607          (vii) any other information the commissioner reasonably requires.
             2608          (3) The commissioner may require a document reasonably necessary to verify the
             2609      information contained in an application filed under this section.
             2610          (4) An applicant's Social Security number contained in an application filed under this
             2611      section is a private record under Section 63G-2-302 .
             2612          (5) (a) Subject to Subsection (5)(b), to obtain or renew an agency license, a person
             2613      shall:
             2614          (i) file an application for an initial or renewal agency license with the commissioner on
             2615      forms and in a manner the commissioner prescribes; and
             2616          (ii) pay a license fee that is not refunded if the application:
             2617          (A) is denied; or
             2618          (B) is incomplete when filed and is never completed by the applicant.
             2619          (b) An application described in Subsection (5)(a) shall provide:
             2620          (i) information about the applicant's identity;
             2621          (ii) the applicant's federal employer identification number;
             2622          (iii) the designated responsible licensed [producer] individual;
             2623          (iv) the identity of the owners, partners, officers, and directors;
             2624          (v) whether the applicant has committed an act that is a ground for denial, suspension,
             2625      or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ; and
             2626          (vi) any other information the commissioner reasonably requires.
             2627          Section 19. Section 31A-23a-105 is amended to read:
             2628           31A-23a-105. General requirements for individual and agency license issuance
             2629      and renewal.


             2630          (1) (a) The commissioner shall issue or renew a license to a person described in
             2631      Subsection (1)(b) to act as:
             2632          (i) a producer;
             2633          (ii) a surplus lines producer;
             2634          (iii) a limited line producer;
             2635          (iv) a consultant;
             2636          (v) a managing general agent; or
             2637          (vi) a reinsurance intermediary.
             2638          (b) The commissioner shall issue or renew a license under Subsection (1)(a) to a
             2639      person who, as to the license type and line of authority classification applied for under Section
             2640      31A-23a-106 :
             2641          (i) satisfies the application requirements under Section 31A-23a-104 ;
             2642          (ii) satisfies the character requirements under Section 31A-23a-107 ;
             2643          (iii) satisfies [any] applicable continuing education requirements under Section
             2644      31A-23a-202 ;
             2645          (iv) satisfies [any] applicable examination requirements under Section 31A-23a-108 ;
             2646          (v) satisfies [any] applicable training period requirements under Section 31A-23a-203 ;
             2647          (vi) if an applicant for a resident individual producer license, certifies that, to the extent
             2648      applicable, the applicant:
             2649          (A) is in compliance with Section 31A-23a-203.5 ; and
             2650          (B) will maintain compliance with Section 31A-23a-203.5 during the period for which
             2651      the license is issued or renewed;
             2652          (vii) has not committed an act that is a ground for denial, suspension, or revocation as
             2653      provided in Section 31A-23a-111 ;
             2654          (viii) if a nonresident:
             2655          (A) complies with Section 31A-23a-109 ; and
             2656          (B) holds an active similar license in that person's home state [of residence];
             2657          (ix) if an applicant for an individual title insurance producer or agency title insurance
             2658      producer license, satisfies the requirements of Section 31A-23a-204 ;
             2659          (x) if an applicant for a license to act as a life settlement provider or life settlement
             2660      producer, satisfies the requirements of Section 31A-23a-117 ; and


             2661          (xi) pays the applicable fees under Section 31A-3-103 .
             2662          (2) (a) This Subsection (2) applies to the following persons:
             2663          (i) an applicant for a pending:
             2664          (A) individual or agency producer license;
             2665          (B) surplus lines producer license;
             2666          (C) limited line producer license;
             2667          (D) consultant license;
             2668          (E) managing general agent license; or
             2669          (F) reinsurance intermediary license; or
             2670          (ii) a licensed:
             2671          (A) individual or agency producer;
             2672          (B) surplus lines producer;
             2673          (C) limited line producer;
             2674          (D) consultant;
             2675          (E) managing general agent; or
             2676          (F) reinsurance intermediary.
             2677          (b) A person described in Subsection (2)(a) shall report to the commissioner:
             2678          (i) an administrative action taken against the person, including a denial of a new or
             2679      renewal license application:
             2680          (A) in another jurisdiction; or
             2681          (B) by another regulatory agency in this state; and
             2682          (ii) a criminal prosecution taken against the person in any jurisdiction.
             2683          (c) The report required by Subsection (2)(b) shall:
             2684          (i) be filed:
             2685          (A) at the time the person files the application for an individual or agency license; and
             2686          (B) for an action or prosecution that occurs on or after the day on which the person
             2687      files the application:
             2688          (I) for an administrative action, within 30 days of the final disposition of the
             2689      administrative action; or
             2690          (II) for a criminal prosecution, within 30 days of the initial appearance before a court;
             2691      and


             2692          (ii) include a copy of the complaint or other relevant legal documents related to the
             2693      action or prosecution described in Subsection (2)(b).
             2694          (3) (a) The department may require a person applying for a license or for consent to
             2695      engage in the business of insurance to submit to a criminal background check as a condition of
             2696      receiving a license or consent.
             2697          (b) A person, if required to submit to a criminal background check under Subsection
             2698      (3)(a), shall:
             2699          (i) submit a fingerprint card in a form acceptable to the department; and
             2700          (ii) consent to a fingerprint background check by:
             2701          (A) the Utah Bureau of Criminal Identification; and
             2702          (B) the Federal Bureau of Investigation.
             2703          (c) For a person who submits a fingerprint card and consents to a fingerprint
             2704      background check under Subsection (3)(b), the department may request:
             2705          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             2706      2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             2707          (ii) complete Federal Bureau of Investigation criminal background checks through the
             2708      national criminal history system.
             2709          (d) Information obtained by the department from the review of criminal history records
             2710      received under this Subsection (3) shall be used by the department for the purposes of:
             2711          (i) determining if a person satisfies the character requirements under Section
             2712      31A-23a-107 for issuance or renewal of a license;
             2713          (ii) determining if a person has failed to maintain the character requirements under
             2714      Section 31A-23a-107 ; and
             2715          (iii) preventing a person who violates the federal Violent Crime Control and Law
             2716      Enforcement Act of 1994, 18 U.S.C. Sec. 1033, from engaging in the business of insurance in
             2717      the state.
             2718          (e) If the department requests the criminal background information, the department
             2719      shall:
             2720          (i) pay to the Department of Public Safety the costs incurred by the Department of
             2721      Public Safety in providing the department criminal background information under Subsection
             2722      (3)(c)(i);


             2723          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             2724      of Investigation in providing the department criminal background information under
             2725      Subsection (3)(c)(ii); and
             2726          (iii) charge the person applying for a license or for consent to engage in the business of
             2727      insurance a fee equal to the aggregate of Subsections (3)(e)(i) and (ii).
             2728          (4) To become a resident licensee in accordance with Section 31A-23a-104 and this
             2729      section, a person licensed as one of the following in another state who moves to this state shall
             2730      apply within 90 days of establishing legal residence in this state:
             2731          (a) insurance producer;
             2732          (b) surplus lines producer;
             2733          (c) limited line producer;
             2734          (d) consultant;
             2735          (e) managing general agent; or
             2736          (f) reinsurance intermediary.
             2737          (5) (a) The commissioner may deny a license application for a license listed in
             2738      Subsection (5)(b) if the person applying for the license, as to the license type and line of
             2739      authority classification applied for under Section 31A-23a-106 :
             2740          (i) fails to satisfy the requirements as set forth in this section; or
             2741          (ii) commits an act that is grounds for denial, suspension, or revocation as set forth in
             2742      Section 31A-23a-111 .
             2743          (b) This Subsection (5) applies to the following licenses:
             2744          (i) producer;
             2745          (ii) surplus lines producer;
             2746          (iii) limited line producer;
             2747          (iv) consultant;
             2748          (v) managing general agent; or
             2749          (vi) reinsurance intermediary.
             2750          (6) Notwithstanding the other provisions of this section, the commissioner may:
             2751          (a) issue a license to an applicant for a license for a title insurance line of authority only
             2752      with the concurrence of the Title and Escrow Commission; and
             2753          (b) renew a license for a title insurance line of authority only with the concurrence of


             2754      the Title and Escrow Commission.
             2755          Section 20. Section 31A-23a-108 is amended to read:
             2756           31A-23a-108. Examination requirements.
             2757          (1) (a) The commissioner may require [applicants] an applicant for [any] a particular
             2758      license type under Section 31A-23a-106 to pass a line of authority examination as a
             2759      requirement for a license, except that an examination may not be required of [applicants] an
             2760      applicant for:
             2761          (i) [licenses] a license under Subsection 31A-23a-106 (2)(c); or
             2762          (ii) [other] another limited line license [lines] line of authority recognized by the
             2763      commissioner or the Title and Escrow Commission by rule as provided in Subsection
             2764      31A-23a-106 (3).
             2765          (b) The examination described in Subsection (1)(a):
             2766          (i) shall reasonably relate to the line of authority for which it is prescribed; and
             2767          (ii) may be administered by the commissioner or as otherwise specified by rule.
             2768          (2) The commissioner shall waive the requirement of an examination for a nonresident
             2769      applicant who:
             2770          (a) applies for an insurance producer license in this state within 90 days of establishing
             2771      legal residence in this state;
             2772          (b) has been licensed for the same line of authority in another state; and
             2773          (c) (i) is licensed in the state described in Subsection (2)(b) at the time the applicant
             2774      applies for an insurance producer license in this state; or
             2775          (ii) if the application is received within 90 days of the cancellation of the applicant's
             2776      previous license:
             2777          (A) the prior state certifies that at the time of cancellation, the applicant was in good
             2778      standing in that state; or
             2779          (B) the state's producer database records maintained by the National Association of
             2780      Insurance Commissioners or the National Association of Insurance Commissioner's affiliates or
             2781      subsidiaries, indicates that the producer is or was licensed in good standing for the line of
             2782      authority requested.
             2783          [(3) A nonresident producer licensee who moves to this state and applies for a resident
             2784      license within 90 days of establishing legal residence in this state shall be exempt from any line


             2785      of authority examination that the producer was authorized on the producer's nonresident
             2786      producer license, except where the commissioner determines otherwise by rule.]
             2787          [(4)] (3) This section's requirement may only be applied to [applicants who are natural
             2788      persons] an applicant who is a natural person.
             2789          Section 21. Section 31A-23a-112 is amended to read:
             2790           31A-23a-112. Probation -- Grounds for revocation.
             2791          (1) The commissioner may place a licensee on probation for a period not to exceed 24
             2792      months as follows:
             2793          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
             2794      Procedures Act, for [any] circumstances that would justify a suspension under Section
             2795      31A-23a-111 ; or
             2796          (b) at the issuance or renewal of a [new] license:
             2797          (i) with an admitted violation under 18 U.S.C. [Sections] Sec. 1033 [and 1034]; or
             2798          (ii) with a response to background information questions on a new or renewal license
             2799      application [indicating that] or information received from a background check conducted in
             2800      connection with a new or renewal license application that indicates:
             2801          (A) the person has been convicted of a crime, that is listed by rule made in accordance
             2802      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
             2803      probation;
             2804          (B) the person is currently charged with a crime, that is listed by rule made in
             2805      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             2806      grounds for probation regardless of whether adjudication is withheld;
             2807          (C) the person has been involved in an administrative proceeding regarding [any] a
             2808      professional or occupational license; or
             2809          (D) [any] a business in which the person is or was an owner, partner, officer, or
             2810      director has been involved in an administrative proceeding regarding [any] a professional or
             2811      occupational license.
             2812          (2) The commissioner may place a licensee on probation for a specified period no
             2813      longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [Sections]
             2814      Sec. 1033 [and 1034].
             2815          (3) The probation order shall state the conditions for retention of the license, which


             2816      shall be reasonable.
             2817          (4) [Any] A violation of the probation is grounds for revocation pursuant to [any] a
             2818      proceeding authorized under Title 63G, Chapter 4, Administrative Procedures Act.
             2819          Section 22. Section 31A-23a-113 is amended to read:
             2820           31A-23a-113. License lapse and voluntary surrender.
             2821          (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
             2822          (i) pay when due a fee under Section 31A-3-103 ;
             2823          (ii) complete continuing education requirements under Section 31A-23a-202 before
             2824      submitting the license renewal application;
             2825          (iii) submit a completed renewal application as required by Section 31A-23a-104 ;
             2826          (iv) submit additional documentation required to complete the licensing process as
             2827      related to a specific license type or line of authority; or
             2828          (v) maintain an active license in a [resident] licensee's home state if the licensee is a
             2829      nonresident licensee.
             2830          (b) (i) A licensee whose license lapses due to the following may request an action
             2831      described in Subsection (1)(b)(ii):
             2832          (A) military service;
             2833          (B) voluntary service for a period of time designated by the person for whom the
             2834      licensee provides voluntary service; or
             2835          (C) some other extenuating circumstances, such as long-term medical disability.
             2836          (ii) A licensee described in Subsection (1)(b)(i) may request:
             2837          (A) reinstatement of the license no later than one year after the day on which the
             2838      license lapses; and
             2839          (B) waiver of any of the following imposed for failure to comply with renewal
             2840      procedures:
             2841          (I) an examination requirement;
             2842          (II) reinstatement fees set under Section 31A-3-103 ;
             2843          (III) continuing education requirements; or
             2844          (IV) other sanction imposed for failure to comply with renewal procedures.
             2845          (2) If a license issued under this chapter is voluntarily surrendered, the license or line
             2846      of authority may be reinstated:


             2847          (a) during the license period in which the license is voluntarily surrendered; and
             2848          (b) no later than one year after the day on which the license is voluntarily surrendered.
             2849          [(3) A voluntarily surrendered license that is reinstated during the license period set
             2850      forth in Subsection (2) may not be reinstated until the person who voluntarily surrendered the
             2851      license complies with any applicable continuing education requirements for the period during
             2852      which the license was voluntarily surrendered.]
             2853          Section 23. Section 31A-23a-202 is amended to read:
             2854           31A-23a-202. Continuing education requirements.
             2855          (1) Pursuant to this section, the commissioner shall by rule prescribe the continuing
             2856      education requirements for a producer and a consultant.
             2857          (2) (a) The commissioner may not state a continuing education requirement in terms of
             2858      formal education.
             2859          (b) The commissioner may state a continuing education requirement in terms of hours
             2860      of insurance-related instruction received.
             2861          (c) Insurance-related formal education may be a substitute, in whole or in part, for the
             2862      hours required under Subsection (2)(b).
             2863          (3) (a) The commissioner shall impose continuing education requirements in
             2864      accordance with a two-year licensing period in which the licensee meets the requirements of
             2865      this Subsection (3).
             2866          (b) (i) Except as provided in this section, the continuing education requirements shall
             2867      require:
             2868          (A) that a licensee complete 24 credit hours of continuing education for every two-year
             2869      licensing period;
             2870          (B) that 3 of the 24 credit hours described in Subsection (3)(b)(i)(A) be ethics courses;
             2871      and
             2872          (C) that the licensee complete at least half of the required hours through classroom
             2873      hours of insurance-related instruction.
             2874          (ii) An hour of continuing education in accordance with Subsection (3)(b)(i) may be
             2875      obtained through:
             2876          (A) classroom attendance;
             2877          (B) home study;


             2878          (C) watching a video recording;
             2879          (D) experience credit; or
             2880          (E) another method provided by rule.
             2881          (iii) (A) Notwithstanding Subsections (3)(b)(i)(A) and (B), an individual title insurance
             2882      producer is required to complete 12 credit hours of continuing education for every two-year
             2883      licensing period, with 3 of the credit hours being ethics courses unless the individual title
             2884      insurance producer is licensed in this state as an individual title insurance producer for 20 or
             2885      more consecutive years.
             2886          (B) If an individual title insurance producer is licensed in this state as an individual
             2887      title insurance producer for 20 or more consecutive years, the individual title insurance
             2888      producer is required to complete 6 credit hours of continuing education for every two-year
             2889      licensing period, with 3 of the credit hours being ethics courses.
             2890          (C) Notwithstanding Subsection (3)(b)(iii)(A) or (B), an individual title insurance
             2891      producer is considered to have met the continuing education requirements imposed under
             2892      Subsection (3)(b)(iii)(A) or (B) if the individual title insurance producer:
             2893          (I) is an active member in good standing with the Utah State Bar;
             2894          (II) is in compliance with the continuing education requirements of the Utah State Bar;
             2895      and
             2896          (III) if requested by the department, provides the department evidence that the
             2897      individual title insurance producer complied with the continuing education requirements of the
             2898      Utah State Bar.
             2899          (c) A licensee may obtain continuing education hours at any time during the two-year
             2900      licensing period.
             2901          (d) (i) A licensee is exempt from continuing education requirements under this section
             2902      if:
             2903          (A) the licensee was first licensed before [April 1, 1978] December 31, 1982;
             2904          (B) the license does not have a continuous lapse for a period of more than one year,
             2905      except for a license for which the licensee has had an exemption approved before May 11,
             2906      2011;
             2907          (C) the licensee requests an exemption from the department; and
             2908          (D) the department approves the exemption.


             2909          (ii) If the department approves the exemption under Subsection (3)(d)(i), the licensee is
             2910      not required to apply again for the exemption.
             2911          (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2912      commissioner shall, by rule:
             2913          (i) publish a list of insurance professional designations whose continuing education
             2914      requirements can be used to meet the requirements for continuing education under Subsection
             2915      (3)(b);
             2916          (ii) authorize a continuing education provider or a state or national professional
             2917      producer or consultant association to:
             2918          (A) offer a qualified program for a license type or line of authority on a geographically
             2919      accessible basis; and
             2920          (B) collect a reasonable fee for funding and administration of a continuing education
             2921      program, subject to the review and approval of the commissioner; and
             2922          (iii) provide that membership by a producer or consultant in a state or national
             2923      professional producer or consultant association is considered a substitute for the equivalent of
             2924      two hours for each year during which the producer or consultant is a member of the
             2925      professional association, except that the commissioner may not give more than two hours of
             2926      continuing education credit in a year regardless of the number of professional associations of
             2927      which the producer or consultant is a member.
             2928          (f) A fee permitted under Subsection (3)(e)(ii)(B) that is charged for attendance at a
             2929      professional producer or consultant association program may be less for an association
             2930      member, on the basis of the member's affiliation expense, but shall preserve the right of a
             2931      nonmember to attend without affiliation.
             2932          (4) The commissioner shall approve a continuing education provider or continuing
             2933      education course that satisfies the requirements of this section.
             2934          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2935      commissioner shall by rule set the processes and procedures for continuing education provider
             2936      registration and course approval.
             2937          (6) The requirements of this section apply only to a producer or consultant who is an
             2938      individual.
             2939          (7) A nonresident producer or consultant is considered to have satisfied this state's


             2940      continuing education requirements if the nonresident producer or consultant satisfies the
             2941      nonresident producer's or consultant's home state's continuing education requirements for a
             2942      licensed insurance producer or consultant.
             2943          (8) A producer or consultant subject to this section shall keep documentation of
             2944      completing the continuing education requirements of this section for two years after the end of
             2945      the two-year licensing period to which the continuing education applies.
             2946          Section 24. Section 31A-23a-203 is amended to read:
             2947           31A-23a-203. Training period requirements.
             2948          (1) A producer is eligible to become a surplus lines producer only if the producer:
             2949          (a) has passed the applicable surplus lines producer examination;
             2950          (b) has been a producer with property [and] or casualty or both lines of authority for at
             2951      least three years during the four years immediately preceding the date of application; and
             2952          (c) has paid the applicable fee under Section 31A-3-103 .
             2953          (2) A person is eligible to become a consultant only if the person has acted in a
             2954      capacity that would provide the person with preparation to act as an insurance consultant for a
             2955      period aggregating not less than three years during the four years immediately preceding the
             2956      date of application.
             2957          (3) (a) A resident producer with an accident and health line of authority may only sell
             2958      long-term care insurance if the producer:
             2959          (i) initially completes a minimum of three hours of long-term care training before
             2960      selling long-term care coverage; and
             2961          (ii) after completing the training required by Subsection (3)(a)(i), completes a
             2962      minimum of three hours of long-term care training during each subsequent two-year licensing
             2963      period.
             2964          (b) A course taken to satisfy a long-term care training requirement may be used toward
             2965      satisfying a producer continuing education requirement.
             2966          (c) Long-term care training is not a continuing education requirement to renew a
             2967      producer license.
             2968          (d) An insurer that issues long-term care insurance shall demonstrate to the
             2969      commissioner, upon request, that a producer who is appointed by the insurer and who sells
             2970      long-term care insurance coverage is in compliance with this Subsection (3).


             2971          (4) The training periods required under this section apply only to an individual
             2972      applying for a license under this chapter.
             2973          Section 25. Section 31A-23a-402.5 is amended to read:
             2974           31A-23a-402.5. Inducements.
             2975          (1) (a) Except as provided in Subsection (2), a producer, consultant, or other licensee
             2976      under this title, or an officer or employee of a licensee, may not induce a person to enter into,
             2977      continue, or terminate an insurance contract by offering a benefit that is not:
             2978          (i) specified in the insurance contract; or
             2979          (ii) directly related to the insurance contract.
             2980          (b) An insurer may not make or knowingly allow an agreement of insurance that is not
             2981      clearly expressed in the insurance contract to be issued or renewed.
             2982          (c) A licensee under this title may not absorb the tax under Section 31A-3-301 .
             2983          (2) This section does not apply to a title insurer, an individual title insurance producer,
             2984      or agency title insurance producer, or an officer or employee of a title insurer, an individual
             2985      title insurance producer, or an agency title insurance producer.
             2986          (3) Items not prohibited by Subsection (1) include an insurer:
             2987          (a) reducing premiums because of expense savings;
             2988          (b) providing to a policyholder or insured one or more incentives, as defined by the
             2989      commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             2990      Rulemaking Act, to participate in a program or activity designed to reduce claims or claim
             2991      expenses, including:
             2992          (i) a premium discount offered to a small or large employer group based on a wellness
             2993      program if:
             2994          (A) the premium discount for the employer group does not exceed 20% of the group
             2995      premium; and
             2996          (B) the premium discount based on the wellness program is offered uniformly by the
             2997      insurer to all employer groups in the large or small group market;
             2998          (ii) a premium discount offered to employees of a small or large employer group in an
             2999      amount that does not exceed federal limits on wellness program incentives; or
             3000          (iii) a combination of premium discounts offered to the employer group and the
             3001      employees of an employer group, based on a wellness program, if:


             3002          (A) the premium discounts for the employer group comply with Subsection (3)(b)(i);
             3003      and
             3004          (B) the premium discounts for the employees of an employer group comply with
             3005      Subsection (3)(b)(ii); or
             3006          (c) receiving premiums under an installment payment plan.
             3007          (4) Items not prohibited by Subsection (1) include a producer, consultant, or other
             3008      licensee, or an officer or employee of a licensee, either directly or through a third party:
             3009          (a) engaging in a usual kind of social courtesy if receipt of the social courtesy is not
             3010      conditioned on a quote or the purchase of a particular insurance product;
             3011          (b) extending credit on a premium to the insured:
             3012          (i) without interest, for no more than 90 days from the effective date of the insurance
             3013      contract;
             3014          (ii) for interest that is not less than the legal rate under Section 15-1-1 , on the unpaid
             3015      balance after the time period described in Subsection (4)(b)(i); and
             3016          (iii) except that an installment or payroll deduction payment of premiums on an
             3017      insurance contract issued under an insurer's mass marketing program is not considered an
             3018      extension of credit for purposes of this Subsection (4)(b);
             3019          (c) preparing or conducting a survey that:
             3020          (i) is directly related to an accident and health insurance policy purchased from the
             3021      licensee; or
             3022          (ii) is used by the licensee to assess the benefit needs and preferences of insureds,
             3023      employers, or employees directly related to an insurance product sold by the licensee;
             3024          (d) providing limited human resource services that are directly related to an insurance
             3025      product sold by the licensee, including:
             3026          (i) answering questions directly related to:
             3027          (A) an employee benefit offering or administration, if the insurance product purchased
             3028      from the licensee is accident and health insurance or health insurance; and
             3029          (B) employment practices liability, if the insurance product offered by or purchased
             3030      from the licensee is property or casualty insurance; and
             3031          (ii) providing limited human resource compliance training and education directly
             3032      pertaining to an insurance product purchased from the licensee;


             3033          (e) providing the following types of information or guidance:
             3034          (i) providing guidance directly related to compliance with federal and state laws for an
             3035      insurance product purchased from the licensee;
             3036          (ii) providing a workshop or seminar addressing an insurance issue that is directly
             3037      related to an insurance product purchased from the licensee; or
             3038          (iii) providing information regarding:
             3039          (A) employee benefit issues;
             3040          (B) directly related insurance regulatory and legislative updates; or
             3041          (C) similar education about an insurance product sold by the licensee and how the
             3042      insurance product interacts with tax law;
             3043          (f) preparing or providing a form that is directly related to an insurance product
             3044      purchased from, or offered by, the licensee;
             3045          (g) preparing or providing documents directly related to a premium only cafeteria plan
             3046      within the meaning of Section 125, Internal Revenue Code, or a flexible spending account, but
             3047      not providing ongoing administration of a flexible spending account;
             3048          (h) providing enrollment and billing assistance, including:
             3049          (i) providing benefit statements or new hire insurance benefits packages; and
             3050          (ii) providing technology services such as an electronic enrollment platform or
             3051      application system;
             3052          (i) communicating coverages in writing and in consultation with the insured and
             3053      employees;
             3054          (j) providing employee communication materials and notifications directly related to an
             3055      insurance product purchased from a licensee;
             3056          (k) providing claims management and resolution to the extent permitted under the
             3057      licensee's license;
             3058          (l) providing underwriting or actuarial analysis or services;
             3059          (m) negotiating with an insurer regarding the placement and pricing of an insurance
             3060      product;
             3061          (n) recommending placement and coverage options;
             3062          (o) providing a health fair or providing assistance or advice on establishing or
             3063      operating a wellness program, but not providing any payment for or direct operation of the


             3064      wellness program;
             3065          (p) providing COBRA and Utah mini-COBRA administration, consultations, and other
             3066      services directly related to an insurance product purchased from the licensee;
             3067          (q) assisting with a summary plan description, including providing a summary plan
             3068      description wraparound;
             3069          (r) providing information necessary for the preparation of documents directly related to
             3070      the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq., as
             3071      amended;
             3072          (s) providing information or services directly related to the Health Insurance Portability
             3073      and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended, such as services
             3074      directly related to health care access, portability, and renewability when offered in connection
             3075      with accident and health insurance sold by a licensee;
             3076          (t) sending proof of coverage to a third party with a legitimate interest in coverage;
             3077          (u) providing information in a form approved by the commissioner and directly related
             3078      to determining whether an insurance product sold by the licensee meets the requirements of a
             3079      third party contract that requires or references insurance coverage;
             3080          (v) facilitating risk management services directly related to property and casualty
             3081      insurance products sold or offered for sale by the licensee, including:
             3082          (i) risk management;
             3083          (ii) claims and loss control services;
             3084          (iii) risk assessment consulting, including analysis of:
             3085          (A) employer's job descriptions; or
             3086          (B) employer's safety procedures or manuals; and
             3087          (iv) providing information and training on best practices;
             3088          (w) otherwise providing services that are legitimately part of servicing an insurance
             3089      product purchased from a licensee; and
             3090          (x) providing other directly related services approved by the department.
             3091          (5) An inducement prohibited under Subsection (1) includes a producer, consultant, or
             3092      other licensee, or an officer or employee of a licensee:
             3093          (a) (i) providing a premium or commission rebate;
             3094          (ii) paying the salary of an employee of a person who purchases an insurance product


             3095      from the licensee; or
             3096          (iii) if the licensee is an insurer, or a third party administrator who contracts with an
             3097      insurer, paying the salary for an onsite staff member to perform an act prohibited under
             3098      Subsection (5)(b)(xii); or
             3099          (b) engaging in one or more of the following unless a fee is paid in accordance with
             3100      Subsection (8):
             3101          (i) performing background checks of prospective employees;
             3102          (ii) providing legal services by a person licensed to practice law;
             3103          (iii) performing drug testing that is directly related to an insurance product purchased
             3104      from the licensee;
             3105          (iv) preparing employer or employee handbooks, except that a licensee may:
             3106          (A) provide information for a medical benefit section of an employee handbook;
             3107          (B) provide information for the section of an employee handbook directly related to an
             3108      employment practices liability insurance product purchased from the licensee; or
             3109          (C) prepare or print an employee benefit enrollment guide;
             3110          (v) providing job descriptions, postings, and applications for a person;
             3111          (vi) providing payroll services;
             3112          (vii) providing performance reviews or performance review training;
             3113          (viii) providing union advice;
             3114          (ix) providing accounting services;
             3115          (x) providing data analysis information technology programs, except as provided in
             3116      Subsection (4)(h)(ii);
             3117          (xi) providing administration of health reimbursement accounts or health savings
             3118      accounts; or
             3119          (xii) if the licensee is an insurer, or a third party administrator who contracts with an
             3120      insurer, the insurer issuing an insurance policy that lists in the insurance policy one or more of
             3121      the following prohibited benefits:
             3122          (A) performing background checks of prospective employees;
             3123          (B) providing legal services by a person licensed to practice law;
             3124          (C) performing drug testing that is directly related to an insurance product purchased
             3125      from the insurer;


             3126          (D) preparing employer or employee handbooks;
             3127          (E) providing job descriptions postings, and applications;
             3128          (F) providing payroll services;
             3129          (G) providing performance reviews or performance review training;
             3130          (H) providing union advice;
             3131          (I) providing accounting services;
             3132          (J) providing discrimination testing; or
             3133          (K) providing data analysis information technology programs.
             3134          (6) A producer, consultant, or other licensee or an officer or employee of a licensee
             3135      shall itemize and bill separately from any other insurance product or service offered or
             3136      provided under Subsection (5)(b).
             3137          (7) (a) A de minimis gift or meal not to exceed $25 for each individual receiving the
             3138      gift or meal is presumed to be a social courtesy not conditioned on a quote or purchase of a
             3139      particular insurance product for purposes of Subsection (4)(a).
             3140          (b) Notwithstanding Subsection (4)(a), a de minimis gift or meal not to exceed $10
             3141      may be conditioned on receipt of a quote of a particular insurance product [if the de minimis
             3142      gift or meal is provided by the insurer and not by a producer or consultant].
             3143          (8) If as provided under Subsection (5)(b) a producer, consultant, or other licensee is
             3144      paid a fee to provide an item listed in Subsection (5)(b), the licensee shall comply with
             3145      Subsection 31A-23a-501 (2) in charging the fee, except that the fee paid for the item shall equal
             3146      or exceed the fair market value of the item.
             3147          Section 26. Section 31A-23b-102 is amended to read:
             3148           31A-23b-102. Definitions.
             3149          As used in this chapter:
             3150          (1) "Compensation" is as defined in:
             3151          (a) Subsections 31A-23a-501 (1)(a), (b), and (d); and
             3152          (b) PPACA.
             3153          (2) "Enroll" and "enrollment" mean to:
             3154          (a) (i) obtain personally identifiable information about an individual; and
             3155          (ii) inform an individual about accident and health insurance plans or public programs
             3156      offered on an exchange;


             3157          (b) solicit insurance; or
             3158          (c) submit to the exchange:
             3159          (i) personally identifiable information about an individual; and
             3160          (ii) an individual's selection of a particular accident and health insurance plan or public
             3161      program offered on the exchange.
             3162          (3) (a) "Exchange" means an online marketplace[: (i) for an individual to purchase a
             3163      qualified health plan; and (ii)] that is certified by the United States Department of Health and
             3164      Human Services as either a state-based small employer exchange or a federally facilitated
             3165      individual exchange under PPACA.
             3166          (b) [(i)] "Exchange" does not include[: (A)] an online marketplace for the purchase of
             3167      health insurance if the online marketplace is not a certified exchange [under PPACA; or] in
             3168      accordance with Subsection (3)(a).
             3169          [(B) except as provided in Subsection (3)(b)(ii), an online marketplace for small
             3170      employers that is certified as a PPACA compliant SHOP exchange.]
             3171          [(ii) For purposes of this chapter, exchange does include a small employer SHOP
             3172      exchange described under Subsection (3)(b)(i)(B) if:]
             3173          [(A) federal regulations under PPACA require a small employer exchange to allow
             3174      navigators to assist small employers and their employees with selection of qualified health
             3175      plans on a small employer exchange; and]
             3176          [(B) the state has not entered into an agreement with the United States Department of
             3177      Health and Human Services that permits the state to limit the scope of practice of navigators to
             3178      only the individual PPACA exchange.]
             3179          (4) "Navigator":
             3180          (a) means a person who facilitates enrollment in an exchange by offering to assist, or
             3181      who advertises any services to assist, with:
             3182          (i) the selection of and enrollment in a qualified health plan or a public program
             3183      offered on an exchange; or
             3184          (ii) applying for premium subsidies through an exchange; and
             3185          (b) includes a person who is an in-person assister or [an] a certified application
             3186      [assister] counselor as described in[: (i)] federal regulations or guidance issued under PPACA[;
             3187      and].


             3188          [(ii) the state exchange blueprint published by the Center for Consumer Information
             3189      and Insurance Oversight within the Centers for Medicare and Medicaid Services in the United
             3190      States Department of Health and Human Services.]
             3191          (5) "Personally identifiable information" is as defined in 45 C.F.R. Sec. 155.260.
             3192          (6) "Public programs" means the state Medicaid program in Title 26, Chapter 18,
             3193      Medical Assistance Act, and Chapter 40, Utah Children's Health Insurance Act.
             3194          (7) "Resident" is as defined by rule made by the commissioner in accordance with Title
             3195      63G, Chapter 3, Utah Administrative Rulemaking Act.
             3196          [(7)] (8) "Solicit" is as defined in Section 31A-23a-102 .
             3197          Section 27. Section 31A-23b-202 is amended to read:
             3198           31A-23b-202. Qualifications for a license.
             3199          (1) (a) The commissioner shall issue or renew a license to a person to act as a navigator
             3200      if the person:
             3201          (i) satisfies the:
             3202          (A) application requirements under Section 31A-23b-203 ;
             3203          (B) character requirements under Section 31A-23b-204 ;
             3204          (C) examination and training requirements under Section 31A-23b-205 ; and
             3205          (D) continuing education requirements under Section 31A-23b-206 ;
             3206          (ii) certifies that, to the extent applicable, the applicant:
             3207          (A) is in compliance with the surety bond requirements of Section 31A-23b-207 ; and
             3208          (B) will maintain compliance with Section 31A-23b-207 during the period for which
             3209      the license is issued or renewed; and
             3210          (iii) has not committed an act that is a ground for denial, suspension, or revocation as
             3211      provided in Section 31A-23b-401 .
             3212          (b) A license issued under this chapter is valid for [two years] one year.
             3213          (2) (a) A person shall report to the commissioner:
             3214          (i) an administrative action taken against the person, including a denial of a new or
             3215      renewal license application:
             3216          (A) in another jurisdiction; or
             3217          (B) by another regulatory agency in this state; and
             3218          (ii) a criminal prosecution taken against the person in any jurisdiction.


             3219          (b) The report required by Subsection (2)(a) shall be filed:
             3220          (i) at the time the person files the application for an individual or agency license; and
             3221          (ii) for an action or prosecution that occurs on or after the day on which the person files
             3222      the application:
             3223          (A) for an administrative action, within 30 days of the final disposition of the
             3224      administrative action; or
             3225          (B) for a criminal prosecution, within 30 days of the initial appearance before a court.
             3226          (c) The report required by Subsection (2)(a) shall include a copy of the complaint or
             3227      other relevant legal documents related to the action or prosecution described in Subsection
             3228      (2)(a).
             3229          (3) (a) The department may:
             3230          (i) require a person applying for a license to submit to a criminal background check as
             3231      a condition of receiving a license; or
             3232          (ii) accept a background check conducted by another organization.
             3233          (b) A person, if required to submit to a criminal background check under Subsection
             3234      (3)(a), shall:
             3235          (i) submit a fingerprint card in a form acceptable to the department; and
             3236          (ii) consent to a fingerprint background check by:
             3237          (A) the Utah Bureau of Criminal Identification; and
             3238          (B) the Federal Bureau of Investigation.
             3239          (c) For a person who submits a fingerprint card and consents to a fingerprint
             3240      background check under Subsection (3)(b), the department may request:
             3241          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             3242      2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             3243          (ii) complete Federal Bureau of Investigation criminal background checks through the
             3244      national criminal history system.
             3245          (d) Information obtained by the department from the review of criminal history records
             3246      received under this Subsection (3) shall be used by the department for the purposes of:
             3247          (i) determining if a person satisfies the character requirements under Section
             3248      31A-23b-204 for issuance or renewal of a license;
             3249          (ii) determining if a person failed to maintain the character requirements under Section


             3250      31A-23b-204 ; and
             3251          (iii) preventing a person who violates the federal Violent Crime Control and Law
             3252      Enforcement Act of 1994, 18 U.S.C. Sec. 1033, from engaging in the business of a navigator or
             3253      in-person assistor in the state.
             3254          (e) If the department requests the criminal background information, the department
             3255      shall:
             3256          (i) pay to the Department of Public Safety the costs incurred by the Department of
             3257      Public Safety in providing the department criminal background information under Subsection
             3258      (3)(c)(i);
             3259          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             3260      of Investigation in providing the department criminal background information under
             3261      Subsection (3)(c)(ii); and
             3262          (iii) charge the person applying for a license a fee equal to the aggregate of Subsections
             3263      (3)(e)(i) and (ii).
             3264          (4) The commissioner may deny an application for a license under this chapter if the
             3265      person applying for the license:
             3266          (a) fails to satisfy the requirements of this section; or
             3267          (b) commits an act that is grounds for denial, suspension, or revocation as set forth in
             3268      Section 31A-23b-401 .
             3269          Section 28. Section 31A-23b-205 is amended to read:
             3270           31A-23b-205. Examination and training requirements.
             3271          (1) The commissioner may require [applicants] an applicant for a license to pass an
             3272      examination and complete a training program as a requirement for a license.
             3273          (2) The examination described in Subsection (1) shall reasonably relate to:
             3274          (a) the duties and functions of a navigator;
             3275          (b) requirements for navigators as established by federal regulation under PPACA; and
             3276          (c) other requirements that may be established by the commissioner by administrative
             3277      rule.
             3278          (3) The examination may be administered by the commissioner or as otherwise
             3279      specified by administrative rule.
             3280          (4) The training required by Subsection (1) shall be approved by the commissioner and


             3281      shall include:
             3282          (a) accident and health insurance plans;
             3283          (b) qualifications for and enrollment in public programs;
             3284          (c) qualifications for and enrollment in premium subsidies;
             3285          (d) cultural and linguistic competence;
             3286          (e) conflict of interest standards;
             3287          (f) exchange functions; and
             3288          (g) other requirements that may be adopted by the commissioner by administrative
             3289      rule.
             3290          (5) The training required by Subsection (1) shall consist of:
             3291          (a) at least 21 credit hours of training before obtaining a license;
             3292          (b) at least 1 of the 21 credit hours of training described in Subsection (5)(a) on defined
             3293      contribution arrangement and the small employer Health Insurance Exchange created in
             3294      accordance with Title 63M, Chapter 1, Part 25, Health System Reform Act; and
             3295          (c) the navigator training and certification program developed by the Centers for
             3296      Medicare and Medicaid Services.
             3297          [(5)] (6) This section applies only to [applicants who are natural persons] an applicant
             3298      who is a natural person.
             3299          Section 29. Section 31A-23b-206 is amended to read:
             3300           31A-23b-206. Continuing education requirements.
             3301          (1) The commissioner shall, by rule, prescribe continuing education requirements for a
             3302      navigator.
             3303          (2) (a) The commissioner may not require a degree from an institution of higher
             3304      education as part of continuing education.
             3305          (b) The commissioner may state a continuing education requirement in terms of hours
             3306      of instruction received in:
             3307          (i) accident and health insurance;
             3308          (ii) qualification for and enrollment in public programs;
             3309          (iii) qualification for and enrollment in premium subsidies;
             3310          (iv) cultural competency;
             3311          (v) conflict of interest standards; and


             3312          (vi) other exchange functions.
             3313          (3) (a) Continuing education requirements shall require:
             3314          (i) that a licensee complete [24] 12 credit hours of continuing education for every
             3315      [two-year] one-year licensing period;
             3316          (ii) that [3] at least 2 of the [24] 12 credit hours described in Subsection (3)(a)(i) be
             3317      ethics courses; [and]
             3318          [(iii) that the licensee complete at least half of the required hours through classroom
             3319      hours of insurance and exchange related instruction.]
             3320          (iii) that at least 1 of the 12 credit hours described in Subsection (3)(a)(i) be a defined
             3321      contribution course that includes training on use of the Health Insurance Exchange; and
             3322          (iv) that a licensee complete the annual navigator training and certification program
             3323      developed by the Centers for Medicare and Medicaid Services.
             3324          (b) An hour of continuing education in accordance with Subsection (3)(a)(i) may be
             3325      obtained through:
             3326          (i) classroom attendance;
             3327          (ii) home study;
             3328          (iii) watching a video recording; or
             3329          [(iv) experience credit; or]
             3330          [(v)] (iv) another method approved by rule.
             3331          (c) A licensee may obtain continuing education hours at any time during the [two-year]
             3332      one-year license period.
             3333          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             3334      commissioner shall[,] by rule[: (i) publish a list of insurance professional designations whose
             3335      continuing education requirements can be used to meet the requirements for continuing
             3336      education under Subsection (3)(b); and (ii)] authorize one or more continuing education
             3337      providers, including a state or national professional producer or consultant associations, to:
             3338          [(A)] (i) offer a qualified program on a geographically accessible basis; and
             3339          [(B)] (ii) collect a reasonable fee for funding and administration of a continuing
             3340      education program, subject to the review and approval of the commissioner.
             3341          (4) The commissioner shall approve a continuing education provider or a continuing
             3342      education course that satisfies the requirements of this section.


             3343          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             3344      commissioner shall by rule establish the procedures for continuing education provider
             3345      registration and course approval.
             3346          (6) This section applies only to a navigator who is a natural person.
             3347          (7) A navigator shall keep documentation of completing the continuing education
             3348      requirements of this section for two years after the end of the [two-year] one-year licensing
             3349      period to which the continuing education applies.
             3350          Section 30. Section 31A-23b-301 is amended to read:
             3351           31A-23b-301. Unfair practices -- Compensation -- Limit of scope of practice.
             3352          (1) As used in this section, "false or misleading information" includes, with intent to
             3353      deceive a person examining it:
             3354          (a) filing a report;
             3355          (b) making a false entry in a record; or
             3356          (c) willfully refraining from making a proper entry in a record.
             3357          (2) (a) Communication that contains false or misleading information relating to
             3358      enrollment in an insurance plan or a public program, including information that is false or
             3359      misleading because it is incomplete, may not be made by:
             3360          (i) a person who is or should be licensed under this title;
             3361          (ii) an employee of a person described in Subsection (2)(a)(i);
             3362          (iii) a person whose primary interest is as a competitor of a person licensed under this
             3363      title; and
             3364          (iv) a person on behalf of [any of the persons] a person listed in this Subsection (2)(a).
             3365          (b) A licensee under this chapter may not:
             3366          (i) use [any] a business name, slogan, emblem, or related device that is misleading or
             3367      likely to cause the exchange, insurer, or other licensee to be mistaken for another governmental
             3368      agency, a PPACA exchange, insurer, or other licensee already in business; or
             3369          (ii) use [any] an advertisement or other insurance promotional material that would
             3370      cause a reasonable person to mistakenly believe that a state or federal government agency,
             3371      public program, or insurer:
             3372          (A) is responsible for the insurance or public program enrollment assistance activities
             3373      of the person;


             3374          (B) stands behind the credit of the person; or
             3375          (C) is a source of payment of [any] an insurance obligation of or sold by the person.
             3376          (c) A person who is not an insurer may not assume or use [any] a name that deceptively
             3377      implies or suggests that person is an insurer.
             3378          (3) A person may not engage in an unfair method of competition or any other unfair or
             3379      deceptive act or practice in the business of insurance, as defined by the commissioner by rule,
             3380      after a finding that the method of competition, the act, or the practice:
             3381          (a) is misleading;
             3382          (b) is deceptive;
             3383          (c) is unfairly discriminatory;
             3384          (d) provides an unfair inducement; or
             3385          (e) unreasonably restrains competition.
             3386          (4) A navigator licensed under this chapter is subject to the unfair marketing practices
             3387      and inducement provisions of [Section] Sections 31A-23a-402 and 31A-23a-402.5 .
             3388          (5) A navigator licensed under this chapter or who should be licensed under this
             3389      chapter:
             3390          (a) may not receive direct or indirect compensation from an accident or health insurer
             3391      or from an individual who receives services from a navigator in accordance with:
             3392          (i) federal conflict of interest regulations established pursuant to PPACA; and
             3393          (ii) administrative rule adopted by the department;
             3394          (b) may be compensated by the exchange for performing the duties of a navigator;
             3395          (c) (i) may perform, offer to perform, or advertise a service as a navigator only for a
             3396      person selecting a qualified health plan or public program offered on an exchange; and
             3397          (ii) may not perform, offer to perform, or advertise [any] services as a navigator for
             3398      individuals or small employer groups selecting accident and health insurance plans, qualified
             3399      health plans, public programs, business, or services that are not offered on an exchange; and
             3400          (d) may not recommend a particular accident and health insurance plan or qualified
             3401      health plan.
             3402          Section 31. Section 31A-23b-402 is amended to read:
             3403           31A-23b-402. Probation -- Grounds for revocation.
             3404          (1) The commissioner may place a licensee on probation for a period not to exceed 24


             3405      months as follows:
             3406          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
             3407      Procedures Act, for any circumstances that would justify a suspension under this section; or
             3408          (b) at the issuance of a new license:
             3409          (i) with an admitted violation under 18 U.S.C. [Secs.] Sec. 1033 [and 1034]; or
             3410          (ii) with a response to background information questions on a new license application
             3411      indicating that:
             3412          (A) the person has been convicted of a crime that is listed by rule made in accordance
             3413      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is a ground for
             3414      probation;
             3415          (B) the person is currently charged with a crime that is listed by rule made in
             3416      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             3417      a ground for probation regardless of whether adjudication is withheld;
             3418          (C) the person has been involved in an administrative proceeding regarding any
             3419      professional or occupational license; or
             3420          (D) any business in which the person is or was an owner, partner, officer, or director
             3421      has been involved in an administrative proceeding regarding any professional or occupational
             3422      license.
             3423          (2) The commissioner may place a licensee on probation for a specified period no
             3424      longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [Secs.] Sec.
             3425      1033 [and 1034].
             3426          (3) The probation order shall state the conditions for revocation or retention of the
             3427      license, which shall be reasonable.
             3428          (4) Any violation of the probation is a ground for revocation pursuant to any
             3429      proceeding authorized under Title 63G, Chapter 4, Administrative Procedures Act.
             3430          Section 32. Section 31A-25-208 is amended to read:
             3431           31A-25-208. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             3432      terminating a license -- Rulemaking for renewal and reinstatement.
             3433          (1) A license type issued under this chapter remains in force until:
             3434          (a) revoked or suspended under Subsection (4);
             3435          (b) surrendered to the commissioner and accepted by the commissioner in lieu of


             3436      administrative action;
             3437          (c) the licensee dies or is adjudicated incompetent as defined under:
             3438          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             3439          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             3440      Minors;
             3441          (d) lapsed under Section 31A-25-210 ; or
             3442          (e) voluntarily surrendered.
             3443          (2) The following may be reinstated within one year after the day on which the license
             3444      is no longer in force:
             3445          (a) a lapsed license; or
             3446          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             3447      not be reinstated after the license period in which the license is voluntarily surrendered.
             3448          (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
             3449      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             3450      department from pursuing additional disciplinary or other action authorized under:
             3451          (a) this title; or
             3452          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             3453      Administrative Rulemaking Act.
             3454          (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
             3455      adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             3456      commissioner may:
             3457          (i) revoke a license;
             3458          (ii) suspend a license for a specified period of 12 months or less;
             3459          (iii) limit a license in whole or in part; or
             3460          (iv) deny a license application.
             3461          (b) The commissioner may take an action described in Subsection (4)(a) if the
             3462      commissioner finds that the licensee:
             3463          (i) is unqualified for a license under Section 31A-25-202 , 31A-25-203 , or 31A-25-204 ;
             3464          (ii) has violated:
             3465          (A) an insurance statute;
             3466          (B) a rule that is valid under Subsection 31A-2-201 (3); or


             3467          (C) an order that is valid under Subsection 31A-2-201 (4);
             3468          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
             3469      delinquency proceedings in any state;
             3470          (iv) fails to pay a final judgment rendered against the person in this state within 60
             3471      days after the day on which the judgment became final;
             3472          (v) fails to meet the same good faith obligations in claims settlement that is required of
             3473      admitted insurers;
             3474          (vi) is affiliated with and under the same general management or interlocking
             3475      directorate or ownership as another third party administrator that transacts business in this state
             3476      without a license;
             3477          (vii) refuses:
             3478          (A) to be examined; or
             3479          (B) to produce its accounts, records, and files for examination;
             3480          (viii) has an officer who refuses to:
             3481          (A) give information with respect to the third party administrator's affairs; or
             3482          (B) perform any other legal obligation as to an examination;
             3483          (ix) provides information in the license application that is:
             3484          (A) incorrect;
             3485          (B) misleading;
             3486          (C) incomplete; or
             3487          (D) materially untrue;
             3488          (x) has violated an insurance law, valid rule, or valid order of another state's insurance
             3489      department;
             3490          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             3491          (xii) has improperly withheld, misappropriated, or converted money or properties
             3492      received in the course of doing insurance business;
             3493          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             3494          (A) insurance contract; or
             3495          (B) application for insurance;
             3496          (xiv) has been convicted of a felony;
             3497          (xv) has admitted or been found to have committed an insurance unfair trade practice


             3498      or fraud;
             3499          (xvi) in the conduct of business in this state or elsewhere has:
             3500          (A) used fraudulent, coercive, or dishonest practices; or
             3501          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             3502          (xvii) has had an insurance license or its equivalent, denied, suspended, or revoked in
             3503      any other state, province, district, or territory;
             3504          (xviii) has forged another's name to:
             3505          (A) an application for insurance; or
             3506          (B) a document related to an insurance transaction;
             3507          (xix) has improperly used notes or any other reference material to complete an
             3508      examination for an insurance license;
             3509          (xx) has knowingly accepted insurance business from an individual who is not
             3510      licensed;
             3511          (xxi) has failed to comply with an administrative or court order imposing a child
             3512      support obligation;
             3513          (xxii) has failed to:
             3514          (A) pay state income tax; or
             3515          (B) comply with an administrative or court order directing payment of state income
             3516      tax;
             3517          (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
             3518      Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 [and 1034] and therefore under 18 U.S.C.
             3519      Sec. 1033 is prohibited from engaging in the business of insurance; or
             3520          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             3521      the legitimate interests of customers and the public.
             3522          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             3523      and any individual designated under the license are considered to be the holders of the agency
             3524      license.
             3525          (d) If an individual designated under the agency license commits an act or fails to
             3526      perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
             3527      the commissioner may suspend, revoke, or limit the license of:
             3528          (i) the individual;


             3529          (ii) the agency if the agency:
             3530          (A) is reckless or negligent in its supervision of the individual; or
             3531          (B) knowingly participated in the act or failure to act that is the ground for suspending,
             3532      revoking, or limiting the license; or
             3533          (iii) (A) the individual; and
             3534          (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
             3535          (5) A licensee under this chapter is subject to the penalties for acting as a licensee
             3536      without a license if:
             3537          (a) the licensee's license is:
             3538          (i) revoked;
             3539          (ii) suspended;
             3540          (iii) limited;
             3541          (iv) surrendered in lieu of administrative action;
             3542          (v) lapsed; or
             3543          (vi) voluntarily surrendered; and
             3544          (b) the licensee:
             3545          (i) continues to act as a licensee; or
             3546          (ii) violates the terms of the license limitation.
             3547          (6) A licensee under this chapter shall immediately report to the commissioner:
             3548          (a) a revocation, suspension, or limitation of the person's license in any other state, the
             3549      District of Columbia, or a territory of the United States;
             3550          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             3551      the District of Columbia, or a territory of the United States; or
             3552          (c) a judgment or injunction entered against the person on the basis of conduct
             3553      involving:
             3554          (i) fraud;
             3555          (ii) deceit;
             3556          (iii) misrepresentation; or
             3557          (iv) a violation of an insurance law or rule.
             3558          (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
             3559      license in lieu of administrative action may specify a time, not to exceed five years, within


             3560      which the former licensee may not apply for a new license.
             3561          (b) If no time is specified in the order or agreement described in Subsection (7)(a), the
             3562      former licensee may not apply for a new license for five years from the day on which the order
             3563      or agreement is made without the express approval of the commissioner.
             3564          (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
             3565      a license issued under this part if so ordered by the court.
             3566          (9) The commissioner shall by rule prescribe the license renewal and reinstatement
             3567      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             3568          Section 33. Section 31A-25-209 is amended to read:
             3569           31A-25-209. Probation -- Grounds for revocation.
             3570          (1) The commissioner may place a licensee on probation for a period not to exceed 24
             3571      months as follows:
             3572          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
             3573      Procedures Act, for any circumstances that would justify a suspension under Section
             3574      31A-25-208 ; or
             3575          (b) at the issuance of a new license:
             3576          (i) with an admitted violation under 18 U.S.C. [Sections] Sec. 1033 [and 1034]; or
             3577          (ii) with a response to a background information question on a new license application
             3578      indicating that:
             3579          (A) the person has been convicted of a crime that is listed by rule made in accordance
             3580      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
             3581      probation;
             3582          (B) the person is currently charged with a crime that is listed by rule made in
             3583      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             3584      grounds for probation regardless of whether adjudication is withheld;
             3585          (C) the person has been involved in an administrative proceeding regarding any
             3586      professional or occupational license; or
             3587          (D) any business in which the person is or was an owner, partner, officer, or director
             3588      has been involved in an administrative proceeding regarding any professional or occupational
             3589      license.
             3590          (2) The commissioner may place a licensee on probation for a specified period no


             3591      longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [Sections]
             3592      Sec. 1033 [and 1034].
             3593          (3) A probation order under this section shall state the conditions for retention of the
             3594      license, which shall be reasonable.
             3595          (4) A violation of the probation is grounds for revocation pursuant to any proceeding
             3596      authorized under Title 63G, Chapter 4, Administrative Procedures Act.
             3597          Section 34. Section 31A-26-102 is amended to read:
             3598           31A-26-102. Definitions.
             3599          As used in this chapter, unless expressly provided otherwise:
             3600          (1) "Company adjuster" means a person employed by an insurer whose regular duties
             3601      include insurance adjusting.
             3602          (2) "Designated home state" means the state or territory of the United States or the
             3603      District of Columbia:
             3604          (a) in which an insurance adjuster does not maintain the adjuster's principal:
             3605          (i) place of residence; or
             3606          (ii) place of business;
             3607          (b) if the resident state, territory, or District of Columbia of the adjuster does not
             3608      license adjusters for the line of authority sought, the adjuster has qualified for the license as if
             3609      the person were a resident in the state, territory, or District of Columbia described in
             3610      Subsection (2)(a) H. , .H including an applicable:
             3611           H. [ (A) ] (i) .H examination requirement;
             3612           H. [ (B) ] (ii) .H fingerprint background check requirement; and
             3613           H. [ (C) ] (iii) .H continuing education requirement; and
             3614          (c) the adjuster has designated the state, territory, or District of Columbia as the
             3615      designated home state.
             3616          (3) "Home state" means:
             3617          (a) a state or territory of the United States or the District of Columbia in which an
             3618      insurance adjuster:
             3619          (i) maintains the adjuster's principal:
             3620          (A) place of residence; or
             3621          (B) place of business; and


             3622          (ii) is licensed to act as a resident adjuster; or
             3623          (b) if the resident state, territory, or the District of Columbia described in Subsection
             3624      (3)(a) does not license adjusters for the line of authority sought, a state, territory, or the District
             3625      of Columbia:
             3626          (i) in which the adjuster is licensed;
             3627          (ii) in which the adjuster is in good standing; and
             3628          (iii) that the adjuster has designated as the adjuster's designated home state.
             3629          [(2)] (4) "Independent adjuster" means an insurance adjuster required to be licensed
             3630      under Section 31A-26-201 , who engages in insurance adjusting as a representative of one or
             3631      more insurers.
             3632          [(3)] (5) "Insurance adjusting" or "adjusting" means directing or conducting the
             3633      investigation, negotiation, or settlement of a claim under an insurance policy, on behalf of an
             3634      insurer, policyholder, or a claimant under an insurance policy.
             3635          [(4)] (6) "Organization" means a person other than a natural person, and includes a sole
             3636      proprietorship by which a natural person does business under an assumed name.
             3637          [(5)] (7) "Portable electronics insurance" is as defined in Section 31A-22-1802 .
             3638          [(6)] (8) "Public adjuster" means a person required to be licensed under Section
             3639      31A-26-201 , who engages in insurance adjusting as a representative of insureds and claimants
             3640      under insurance policies.
             3641          Section 35. Section 31A-26-206 is amended to read:
             3642           31A-26-206. Continuing education requirements.
             3643          (1) Pursuant to this section, the commissioner shall by rule prescribe continuing
             3644      education requirements for each class of license under Section 31A-26-204 .
             3645          (2) (a) The commissioner shall impose continuing education requirements in
             3646      accordance with a two-year licensing period in which the licensee meets the requirements of
             3647      this Subsection (2).
             3648          (b) (i) Except as otherwise provided in this section, the continuing education
             3649      requirements shall require:
             3650          (A) that a licensee complete 24 credit hours of continuing education for every two-year
             3651      licensing period;
             3652          (B) that 3 of the 24 credit hours described in Subsection (2)(b)(i)(A) be ethics courses;


             3653      and
             3654          (C) that the licensee complete at least half of the required hours through classroom
             3655      hours of insurance-related instruction.
             3656          (ii) A continuing education hour completed in accordance with Subsection (2)(b)(i)
             3657      may be obtained through:
             3658          (A) classroom attendance;
             3659          (B) home study;
             3660          (C) watching a video recording;
             3661          (D) experience credit; or
             3662          (E) other methods provided by rule.
             3663          (iii) Notwithstanding Subsections (2)(b)(i)(A) and (B), a title insurance adjuster is
             3664      required to complete 12 credit hours of continuing education for every two-year licensing
             3665      period, with 3 of the credit hours being ethics courses.
             3666          (c) A licensee may obtain continuing education hours at any time during the two-year
             3667      licensing period.
             3668          (d) (i) A licensee is exempt from the continuing education requirements of this section
             3669      if:
             3670          (A) the licensee was first licensed before [April 1, 1978] December 31, 1982;
             3671          (B) the license does not have a continuous lapse for a period of more than one year,
             3672      except for a license for which the licensee has had an exemption approved before May 11,
             3673      2011;
             3674          (C) the licensee requests an exemption from the department; and
             3675          (D) the department approves the exemption.
             3676          (ii) If the department approves the exemption under Subsection (2)(d)(i), the licensee is
             3677      not required to apply again for the exemption.
             3678          (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             3679      commissioner shall by rule:
             3680          (i) publish a list of insurance professional designations whose continuing education
             3681      requirements can be used to meet the requirements for continuing education under Subsection
             3682      (2)(b); and
             3683          (ii) authorize a professional adjuster association to:


             3684          (A) offer a qualified program for a classification of license on a geographically
             3685      accessible basis; and
             3686          (B) collect a reasonable fee for funding and administration of a qualified program,
             3687      subject to the review and approval of the commissioner.
             3688          (f) (i) A fee permitted under Subsection (2)(e)(ii)(B) that is charged to fund and
             3689      administer a qualified program shall reasonably relate to the cost of administering the qualified
             3690      program.
             3691          (ii) Nothing in this section shall prohibit a provider of a continuing education program
             3692      or course from charging a fee for attendance at a course offered for continuing education credit.
             3693          (iii) A fee permitted under Subsection (2)(e)(ii)(B) that is charged for attendance at an
             3694      association program may be less for an association member, on the basis of the member's
             3695      affiliation expense, but shall preserve the right of a nonmember to attend without affiliation.
             3696          (3) The continuing education requirements of this section apply only to a licensee who
             3697      is an individual.
             3698          (4) The continuing education requirements of this section do not apply to a member of
             3699      the Utah State Bar.
             3700          (5) The commissioner shall designate a course that satisfies the requirements of this
             3701      section, including a course presented by an insurer.
             3702          (6) A nonresident adjuster is considered to have satisfied this state's continuing
             3703      education requirements if:
             3704          (a) the nonresident adjuster satisfies the nonresident producer's home state's continuing
             3705      education requirements for a licensed insurance adjuster; and
             3706          (b) on the same basis the nonresident adjuster's home state considers satisfaction of
             3707      Utah's continuing education requirements for a producer as satisfying the continuing education
             3708      requirements of the home state.
             3709          (7) A licensee subject to this section shall keep documentation of completing the
             3710      continuing education requirements of this section for two years after the end of the two-year
             3711      licensing period to which the continuing education requirement applies.
             3712          Section 36. Section 31A-26-207 is amended to read:
             3713           31A-26-207. Examination requirements.
             3714          (1) The commissioner may require applicants for [any] a particular class of license


             3715      under Section 31A-26-204 to pass an examination as a requirement to receiving a license. The
             3716      examination shall reasonably relate to the specific license class for which it is prescribed. The
             3717      examinations may be administered by the commissioner or as specified by rule.
             3718          (2) The commissioner shall waive the requirement of an examination for a nonresident
             3719      applicant who:
             3720          (a) applies for an insurance adjuster license in this state;
             3721          (b) has been licensed for the same line of authority in another state; and
             3722          (c) (i) is licensed in the state described in Subsection (2)(b) at the time the applicant
             3723      applies for an insurance producer license in this state; or
             3724          (ii) if the application is received within 90 days of the cancellation of the applicant's
             3725      previous license:
             3726          (A) the prior state certifies that at the time of cancellation, the applicant was in good
             3727      standing in that state; or
             3728          (B) the state's producer database records maintained by the National Association of
             3729      Insurance Commissioners or the National Association of Insurance Commissioner's affiliates or
             3730      subsidiaries, indicates that the producer is or was licensed in good standing for the line of
             3731      authority requested.
             3732          (3) (a) To become a resident licensee in accordance with Sections 31A-26-202 and
             3733      31A-26-203 , a person licensed as an insurance producer in another state who moves to this
             3734      state shall make application within 90 days of establishing legal residence in this state.
             3735          (b) A person who becomes a resident licensee under Subsection (3)(a) may not be
             3736      required to meet prelicensing education or examination requirements to obtain any line of
             3737      authority previously held in the prior state unless:
             3738          (i) the prior state would require a prior resident of this state to meet the prior state's
             3739      prelicensing education or examination requirements to become a resident licensee; or
             3740          (ii) the commissioner imposes the requirements by rule.
             3741          (4) The requirements of this section only apply to [applicants who are natural persons]
             3742      an applicant who is a natural person.
             3743          (5) The requirements of this section do not apply to [members]:
             3744          (a) a member of the Utah State Bar[.]; or
             3745          (b) an applicant for the crop insurance license class who has satisfactorily completed:


             3746          (i) a national crop adjuster program, as adopted by the commissioner by rule; or
             3747          (ii) the loss adjustment training curriculum and competency testing required by the
             3748      Federal Crop Insurance Corporation Standard Reinsurance Agreement through the Risk
             3749      Management Agency of the United States Department of Agriculture.
             3750          Section 37. Section 31A-26-213 is amended to read:
             3751           31A-26-213. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             3752      terminating a license -- Rulemaking for renewal or reinstatement.
             3753          (1) A license type issued under this chapter remains in force until:
             3754          (a) revoked or suspended under Subsection (5);
             3755          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             3756      administrative action;
             3757          (c) the licensee dies or is adjudicated incompetent as defined under:
             3758          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             3759          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             3760      Minors;
             3761          (d) lapsed under Section 31A-26-214.5 ; or
             3762          (e) voluntarily surrendered.
             3763          (2) The following may be reinstated within one year after the day on which the license
             3764      is no longer in force:
             3765          (a) a lapsed license; or
             3766          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             3767      not be reinstated after the license period in which it is voluntarily surrendered.
             3768          (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
             3769      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             3770      department from pursuing additional disciplinary or other action authorized under:
             3771          (a) this title; or
             3772          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             3773      Administrative Rulemaking Act.
             3774          (4) A license classification issued under this chapter remains in force until:
             3775          (a) the qualifications pertaining to a license classification are no longer met by the
             3776      licensee; or


             3777          (b) the supporting license type:
             3778          (i) is revoked or suspended under Subsection (5); or
             3779          (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
             3780      administrative action.
             3781          (5) (a) If the commissioner makes a finding under Subsection (5)(b) as part of an
             3782      adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             3783      commissioner may:
             3784          (i) revoke:
             3785          (A) a license; or
             3786          (B) a license classification;
             3787          (ii) suspend for a specified period of 12 months or less:
             3788          (A) a license; or
             3789          (B) a license classification;
             3790          (iii) limit in whole or in part:
             3791          (A) a license; or
             3792          (B) a license classification; or
             3793          (iv) deny a license application.
             3794          (b) The commissioner may take an action described in Subsection (5)(a) if the
             3795      commissioner finds that the licensee:
             3796          (i) is unqualified for a license or license classification under Section 31A-26-202 ,
             3797      31A-26-203 , 31A-26-204 , or 31A-26-205 ;
             3798          (ii) has violated:
             3799          (A) an insurance statute;
             3800          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             3801          (C) an order that is valid under Subsection 31A-2-201 (4);
             3802          (iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
             3803      delinquency proceedings in any state;
             3804          (iv) fails to pay a final judgment rendered against the person in this state within 60
             3805      days after the judgment became final;
             3806          (v) fails to meet the same good faith obligations in claims settlement that is required of
             3807      admitted insurers;


             3808          (vi) is affiliated with and under the same general management or interlocking
             3809      directorate or ownership as another insurance adjuster that transacts business in this state
             3810      without a license;
             3811          (vii) refuses:
             3812          (A) to be examined; or
             3813          (B) to produce its accounts, records, and files for examination;
             3814          (viii) has an officer who refuses to:
             3815          (A) give information with respect to the insurance adjuster's affairs; or
             3816          (B) perform any other legal obligation as to an examination;
             3817          (ix) provides information in the license application that is:
             3818          (A) incorrect;
             3819          (B) misleading;
             3820          (C) incomplete; or
             3821          (D) materially untrue;
             3822          (x) has violated an insurance law, valid rule, or valid order of another state's insurance
             3823      department;
             3824          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             3825          (xii) has improperly withheld, misappropriated, or converted money or properties
             3826      received in the course of doing insurance business;
             3827          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             3828          (A) insurance contract; or
             3829          (B) application for insurance;
             3830          (xiv) has been convicted of a felony;
             3831          (xv) has admitted or been found to have committed an insurance unfair trade practice
             3832      or fraud;
             3833          (xvi) in the conduct of business in this state or elsewhere has:
             3834          (A) used fraudulent, coercive, or dishonest practices; or
             3835          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             3836          (xvii) has had an insurance license, or its equivalent, denied, suspended, or revoked in
             3837      any other state, province, district, or territory;
             3838          (xviii) has forged another's name to:


             3839          (A) an application for insurance; or
             3840          (B) a document related to an insurance transaction;
             3841          (xix) has improperly used notes or any other reference material to complete an
             3842      examination for an insurance license;
             3843          (xx) has knowingly accepted insurance business from an individual who is not
             3844      licensed;
             3845          (xxi) has failed to comply with an administrative or court order imposing a child
             3846      support obligation;
             3847          (xxii) has failed to:
             3848          (A) pay state income tax; or
             3849          (B) comply with an administrative or court order directing payment of state income
             3850      tax;
             3851          (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
             3852      Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 [and 1034] and therefore under 18 U.S.C.
             3853      Sec. 1033 is prohibited from engaging in the business of insurance; or
             3854          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             3855      the legitimate interests of customers and the public.
             3856          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             3857      and any individual designated under the license are considered to be the holders of the license.
             3858          (d) If an individual designated under the agency license commits an act or fails to
             3859      perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
             3860      the commissioner may suspend, revoke, or limit the license of:
             3861          (i) the individual;
             3862          (ii) the agency, if the agency:
             3863          (A) is reckless or negligent in its supervision of the individual; or
             3864          (B) knowingly participated in the act or failure to act that is the ground for suspending,
             3865      revoking, or limiting the license; or
             3866          (iii) (A) the individual; and
             3867          (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
             3868          (6) A licensee under this chapter is subject to the penalties for conducting an insurance
             3869      business without a license if:


             3870          (a) the licensee's license is:
             3871          (i) revoked;
             3872          (ii) suspended;
             3873          (iii) limited;
             3874          (iv) surrendered in lieu of administrative action;
             3875          (v) lapsed; or
             3876          (vi) voluntarily surrendered; and
             3877          (b) the licensee:
             3878          (i) continues to act as a licensee; or
             3879          (ii) violates the terms of the license limitation.
             3880          (7) A licensee under this chapter shall immediately report to the commissioner:
             3881          (a) a revocation, suspension, or limitation of the person's license in any other state, the
             3882      District of Columbia, or a territory of the United States;
             3883          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             3884      the District of Columbia, or a territory of the United States; or
             3885          (c) a judgment or injunction entered against that person on the basis of conduct
             3886      involving:
             3887          (i) fraud;
             3888          (ii) deceit;
             3889          (iii) misrepresentation; or
             3890          (iv) a violation of an insurance law or rule.
             3891          (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
             3892      license in lieu of administrative action may specify a time not to exceed five years within
             3893      which the former licensee may not apply for a new license.
             3894          (b) If no time is specified in the order or agreement described in Subsection (8)(a), the
             3895      former licensee may not apply for a new license for five years without the express approval of
             3896      the commissioner.
             3897          (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
             3898      a license issued under this part if so ordered by a court.
             3899          (10) The commissioner shall by rule prescribe the license renewal and reinstatement
             3900      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.


             3901          Section 38. Section 31A-26-214 is amended to read:
             3902           31A-26-214. Probation -- Grounds for revocation.
             3903          (1) The commissioner may place a licensee on probation for a period not to exceed 24
             3904      months as follows:
             3905          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
             3906      Procedures Act, for any circumstances that would justify a suspension under Section
             3907      31A-26-213 ; or
             3908          (b) at the issuance of a new license:
             3909          (i) with an admitted violation under 18 U.S.C. [Sections] Sec. 1033 [and 1034]; or
             3910          (ii) with a response to a background information question on any new license
             3911      application indicating that:
             3912          (A) the person has been convicted of a crime, that is listed by rule made in accordance
             3913      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
             3914      probation;
             3915          (B) the person is currently charged with a crime, that is listed by rule made in
             3916      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             3917      grounds for probation regardless of whether adjudication was withheld;
             3918          (C) the person has been involved in an administrative proceeding regarding any
             3919      professional or occupational license; or
             3920          (D) any business in which the person is or was an owner, partner, officer, or director
             3921      has been involved in an administrative proceeding regarding any professional or occupational
             3922      license.
             3923          (2) The commissioner may put a licensee on probation for a specified period no longer
             3924      than 24 months if the licensee has admitted to violations under 18 U.S.C. [Sections] Sec. 1033
             3925      [and 1034].
             3926          (3) A probation order under this section shall state the conditions for retention of the
             3927      license, which shall be reasonable.
             3928          (4) A violation of the probation is grounds for revocation pursuant to any proceeding
             3929      authorized under Title 63G, Chapter 4, Administrative Procedures Act.
             3930          Section 39. Section 31A-26-214.5 is amended to read:
             3931           31A-26-214.5. License lapse and voluntary surrender.


             3932          (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
             3933          (i) pay when due a fee under Section 31A-3-103 ;
             3934          (ii) complete continuing education requirements under Section 31A-26-206 before
             3935      submitting the license renewal application;
             3936          (iii) submit a completed renewal application as required by Section 31A-26-202 ;
             3937          (iv) submit additional documentation required to complete the licensing process as
             3938      related to a specific license type or license classification; or
             3939          (v) maintain an active license in [a resident] the licensee's home state if the licensee is
             3940      a nonresident licensee.
             3941          (b) (i) A licensee whose license lapses due to the following may request an action
             3942      described in Subsection (1)(b)(ii):
             3943          (A) military service;
             3944          (B) voluntary service for a period of time designated by the person for whom the
             3945      licensee provides voluntary service; or
             3946          (C) some other extenuating circumstances, such as long-term medical disability.
             3947          (ii) A licensee described in Subsection (1)(b)(i) may request:
             3948          (A) reinstatement of the license no later than one year after the day on which the
             3949      license lapses; and
             3950          (B) waiver of any of the following imposed for failure to comply with renewal
             3951      procedures:
             3952          (I) an examination requirement;
             3953          (II) reinstatement fees set under Section 31A-3-103 ;
             3954          (III) continuing education requirements; or
             3955          (IV) other sanction imposed for failure to comply with renewal procedures.
             3956          (2) If a license issued under this chapter is voluntarily surrendered, the license may be
             3957      reinstated:
             3958          (a) during the license period in which it is voluntarily surrendered; and
             3959          (b) no later than one year after the day on which the license is voluntarily surrendered.
             3960          Section 40. Section 31A-27a-102 is amended to read:
             3961           31A-27a-102. Definitions.
             3962          As used in this chapter:


             3963          (1) "Admitted assets" is as defined by and is measured in accordance with the National
             3964      Association of Insurance Commissioner's Statements of Statutory Accounting Principles, as
             3965      incorporated in this state by rules made by the department in accordance with Title 63G,
             3966      Chapter 3, Utah Administrative Rulemaking Act, for the purposes of Subsection
             3967      31A-4-113 (1)(b)(ii).
             3968          (2) "Affected guaranty association" means a guaranty association that is or may
             3969      become liable for payment of a covered claim.
             3970          (3) "Affiliate" is as defined in Section 31A-1-301 .
             3971          (4) Notwithstanding Section 31A-1-301 , "alien insurer" means an insurer incorporated
             3972      or organized under the laws of a jurisdiction that is not a state.
             3973          (5) Notwithstanding Section 31A-1-301 , "claimant" or "creditor" means a person
             3974      having a claim against an insurer whether the claim is:
             3975          (a) matured or not matured;
             3976          (b) liquidated or unliquidated;
             3977          (c) secured or unsecured;
             3978          (d) absolute; or
             3979          (e) fixed or contingent.
             3980          (6) "Commissioner" is as defined in Section 31A-1-301 .
             3981          (7) "Commodity contract" means:
             3982          (a) a contract for the purchase or sale of a commodity for future delivery on, or subject
             3983      to the rules of:
             3984          (i) a board of trade or contract market under the Commodity Exchange Act, 7 U.S.C.
             3985      Sec. 1 et seq.; or
             3986          (ii) a board of trade outside the United States;
             3987          (b) an agreement that is:
             3988          (i) subject to regulation under Section 19 of the Commodity Exchange Act, 7 U.S.C.
             3989      Sec. 1 et seq.; and
             3990          (ii) commonly known to the commodities trade as:
             3991          (A) a margin account;
             3992          (B) a margin contract;
             3993          (C) a leverage account; or


             3994          (D) a leverage contract;
             3995          (c) an agreement or transaction that is:
             3996          (i) subject to regulation under Section 4c(b) of the Commodity Exchange Act, 7 U.S.C.
             3997      Sec. 1 et seq.; and
             3998          (ii) commonly known to the commodities trade as a commodity option;
             3999          (d) a combination of the agreements or transactions referred to in this Subsection (7);
             4000      or
             4001          (e) an option to enter into an agreement or transaction referred to in this Subsection (7).
             4002          (8) "Control" is as defined in Section 31A-1-301 .
             4003          (9) "Delinquency proceeding" means a:
             4004          (a) proceeding instituted against an insurer for the purpose of rehabilitating or
             4005      liquidating the insurer; and
             4006          (b) summary proceeding under Section 31A-27a-201 .
             4007          (10) "Department" is as defined in Section 31A-1-301 unless the context requires
             4008      otherwise.
             4009          (11) "Doing business," "doing insurance business," and "business of insurance"
             4010      includes any of the following acts, whether effected by mail, electronic means, or otherwise:
             4011          (a) issuing or delivering a contract, certificate, or binder relating to insurance or
             4012      annuities:
             4013          (i) to a person who is resident in this state; or
             4014          (ii) covering a risk located in this state;
             4015          (b) soliciting an application for the contract, certificate, or binder described in
             4016      Subsection (11)(a);
             4017          (c) negotiating preliminary to the execution of the contract, certificate, or binder
             4018      described in Subsection (11)(a);
             4019          (d) collecting premiums, membership fees, assessments, or other consideration for the
             4020      contract, certificate, or binder described in Subsection (11)(a);
             4021          (e) transacting matters:
             4022          (i) subsequent to execution of the contract, certificate, or binder described in
             4023      Subsection (11)(a); and
             4024          (ii) arising out of the contract, certificate, or binder described in Subsection (11)(a);


             4025          (f) operating as an insurer under a license or certificate of authority issued by the
             4026      department; or
             4027          (g) engaging in an act identified in Chapter 15, Unauthorized Insurers, Surplus Lines,
             4028      and Risk Retention Groups.
             4029          (12) Notwithstanding Section 31A-1-301 , "domiciliary state" means the state in which
             4030      an insurer is incorporated or organized, except that "domiciliary state" means:
             4031          (a) in the case of an alien insurer, its state of entry; or
             4032          (b) in the case of a risk retention group, the state in which the risk retention group is
             4033      chartered as contemplated in the Liability Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.
             4034          (13) "Estate" has the same meaning as "property of the insurer" as defined in
             4035      Subsection (30).
             4036          (14) "Fair consideration" is given for property or an obligation:
             4037          (a) when in exchange for the property or obligation, as a fair equivalent for it, and in
             4038      good faith:
             4039          (i) property is conveyed;
             4040          (ii) services are rendered;
             4041          (iii) an obligation is incurred; or
             4042          (iv) an antecedent debt is satisfied; or
             4043          (b) when the property or obligation is received in good faith to secure a present
             4044      advance or an antecedent debt in amount not disproportionately small compared to the value of
             4045      the property or obligation obtained.
             4046          (15) Notwithstanding Section 31A-1-301 , "foreign insurer" means an insurer domiciled
             4047      in another state.
             4048          (16) "Formal delinquency proceeding" means a rehabilitation or liquidation
             4049      proceeding.
             4050          (17) "Forward contract" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.
             4051      Sec. 1821(e)(8)(D).
             4052          (18) (a) "General assets" include all property of the estate that is not:
             4053          (i) subject to a properly perfected secured claim;
             4054          (ii) subject to a valid and existing express trust for the security or benefit of a specified
             4055      person or class of person; or


             4056          (iii) required by the insurance laws of this state or any other state to be held for the
             4057      benefit of a specified person or class of person.
             4058          (b) "General assets" include [all] the property of the estate or its proceeds in excess of
             4059      the amount necessary to discharge a claim described in Subsection (18)(a).
             4060          (19) "Good faith" means honesty in fact and intention, and in regard to Part 5, Asset
             4061      Recovery, also requires the absence of:
             4062          (a) information that would lead a reasonable person in the same position to know that
             4063      the insurer is financially impaired or insolvent; and
             4064          (b) knowledge regarding the imminence or pendency of a delinquency proceeding
             4065      against the insurer.
             4066          (20) "Guaranty association" means:
             4067          (a) a mechanism mandated by Chapter 28, Guaranty Associations; or
             4068          (b) a similar mechanism in another state that is created for the payment of claims or
             4069      continuation of policy obligations of a financially impaired or insolvent insurer.
             4070          (21) "Impaired" means that an insurer:
             4071          (a) does not have admitted assets at least equal to the sum of:
             4072          (i) all its liabilities; and
             4073          (ii) the minimum surplus required to be maintained by Section 31A-5-211 or
             4074      31A-8-209 ; or
             4075          (b) has a total adjusted capital that is less than its authorized control level RBC, as
             4076      defined in Section 31A-17-601 .
             4077          (22) "Insolvency" or "insolvent" means that an insurer:
             4078          (a) is unable to pay its obligations when they are due;
             4079          (b) does not have admitted assets at least equal to all of its liabilities; or
             4080          (c) has a total adjusted capital that is less than its mandatory control level RBC, as
             4081      defined in Section 31A-17-601 .
             4082          (23) Notwithstanding Section 31A-1-301 , "insurer" means a person who:
             4083          (a) is doing, has done, purports to do, or is licensed to do the business of insurance;
             4084          (b) is or has been subject to the authority of, or to rehabilitation, liquidation,
             4085      reorganization, supervision, or conservation by an insurance commissioner; or
             4086          (c) is included under Section 31A-27a-104 .


             4087          (24) "Liabilities" is as defined by and is measured in accordance with the National
             4088      Association of Insurance Commissioner's Statements of Statutory Accounting Principles, as
             4089      incorporated in this state by rules made by the department in accordance with Title 63G,
             4090      Chapter 3, Utah Administrative Rulemaking Act, for the purposes of Subsection
             4091      31A-4-113 (1)(b)(ii).
             4092          (25) (a) Subject to Subsection (21)(b), "netting agreement" means:
             4093          (i) a contract or agreement that:
             4094          (A) documents one or more transactions between the parties to the agreement for or
             4095      involving one or more qualified financial contracts; and
             4096          (B) provides for the netting, liquidation, setoff, termination, acceleration, or close out
             4097      under or in connection with:
             4098          (I) one or more qualified financial contracts; or
             4099          (II) present or future payment or delivery obligations or payment or delivery
             4100      entitlements under the agreement, including liquidation or close-out values relating to the
             4101      obligations or entitlements, among the parties to the netting agreement;
             4102          (ii) a master agreement or bridge agreement for one or more master agreements
             4103      described in Subsection (25)(a)(i); or
             4104          (iii) any of the following related to a contract or agreement described in Subsection
             4105      (25)(a)(i) or (ii):
             4106          (A) a security agreement;
             4107          (B) a security arrangement;
             4108          (C) other credit enhancement or guarantee; or
             4109          (D) a reimbursement obligation.
             4110          (b) If a contract or agreement described in Subsection (25)(a)(i) or (ii) relates to an
             4111      agreement or transaction that is not a qualified financial contract, the contract or agreement
             4112      described in Subsection (25)(a)(i) or (ii) is considered a netting agreement only with respect to
             4113      an agreement or transaction that is a qualified financial contract.
             4114          (c) "Netting agreement" includes:
             4115          (i) a term or condition incorporated by reference in the contract or agreement described
             4116      in Subsection (25)(a); or
             4117          (ii) a master agreement described in Subsection (25)(a).


             4118          (d) A master agreement described in Subsection (25)(a), together with all schedules,
             4119      confirmations, definitions, and addenda to that master agreement and transactions under any of
             4120      the items described in this Subsection (25)(d), are treated as one netting agreement.
             4121          (26) (a) "New value" means:
             4122          (i) money;
             4123          (ii) money's worth in goods, services, or new credit; or
             4124          (iii) release by a transferee of property previously transferred to the transferee in a
             4125      transaction that is neither void nor voidable by the insurer or the receiver under [any]
             4126      applicable law, including proceeds of the property.
             4127          (b) "New value" does not include an obligation substituted for an existing obligation.
             4128          (27) "Party in interest" means:
             4129          (a) the commissioner;
             4130          (b) a nondomiciliary commissioner in whose state the insurer has outstanding claims
             4131      liabilities;
             4132          (c) an affected guaranty association; and
             4133          (d) the following parties if the party files a request with the receivership court for
             4134      inclusion as a party in interest and to be on the service list:
             4135          (i) an insurer that ceded to or assumed business from the insurer;
             4136          (ii) a policyholder;
             4137          (iii) a third party claimant;
             4138          (iv) a creditor;
             4139          (v) a 10% or greater equity security holder in the insolvent insurer; and
             4140          (vi) a person, including an indenture trustee, with a financial or regulatory interest in
             4141      the delinquency proceeding.
             4142          (28) (a) Notwithstanding Section 31A-1-301 , "policy" means, notwithstanding what it
             4143      is called:
             4144          (i) a written contract of insurance;
             4145          (ii) a written agreement for or affecting insurance; or
             4146          (iii) a certificate of a written contract or agreement described in this Subsection (28)(a).
             4147          (b) "Policy" includes all clauses, riders, endorsements, and papers that are a part of a
             4148      policy.


             4149          (c) "Policy" does not include a contract of reinsurance.
             4150          (29) "Preference" means a transfer of property of an insurer to or for the benefit of a
             4151      creditor:
             4152          (a) for or on account of an antecedent debt, made or allowed by the insurer within one
             4153      year before the day on which a successful petition for rehabilitation or liquidation is filed under
             4154      this chapter;
             4155          (b) the effect of which transfer may enable the creditor to obtain a greater percentage of
             4156      the creditor's debt than another creditor of the same class would receive; and
             4157          (c) if a liquidation order is entered while the insurer is already subject to a
             4158      rehabilitation order and the transfer otherwise qualifies, that is made or allowed within the
             4159      shorter of:
             4160          (i) one year before the day on which a successful petition for rehabilitation is filed; or
             4161          (ii) two years before the day on which a successful petition for liquidation is filed.
             4162          (30) "Property of the insurer" or "property of the estate" includes:
             4163          (a) a right, title, or interest of the insurer in property:
             4164          (i) whether:
             4165          (A) legal or equitable;
             4166          (B) tangible or intangible; or
             4167          (C) choate or inchoate; and
             4168          (ii) including choses in action, contract rights, and any other interest recognized under
             4169      the laws of this state;
             4170          (b) entitlements that exist before the entry of an order of rehabilitation or liquidation;
             4171          (c) entitlements that may arise by operation of this chapter or other provisions of law
             4172      allowing the receiver to avoid prior transfers or assert other rights; and
             4173          (d) (i) records or data that is otherwise the property of the insurer; and
             4174          (ii) records or data similar to those described in Subsection (30)(d)(i) that are within
             4175      the possession, custody, or control of a managing general agent, a third party administrator, a
             4176      management company, a data processing company, an accountant, an attorney, an affiliate, or
             4177      other person.
             4178          (31) Subject to Subsection 31A-27a-611 (10), "qualified financial contract" means any
             4179      of the following:


             4180          (a) a commodity contract;
             4181          (b) a forward contract;
             4182          (c) a repurchase agreement;
             4183          (d) a securities contract;
             4184          (e) a swap agreement; or
             4185          (f) [any] a similar agreement that the commissioner determines by rule or order to be a
             4186      qualified financial contract for purposes of this chapter.
             4187          (32) As the context requires, "receiver" means the commissioner or the commissioner's
             4188      designee, including a rehabilitator, liquidator, or ancillary receiver.
             4189          (33) As the context requires, "receivership" means a rehabilitation, liquidation, or
             4190      ancillary receivership.
             4191          (34) Unless the context requires otherwise, "receivership court" refers to the court in
             4192      which a delinquency proceeding is pending.
             4193          (35) "Reciprocal state" means [any] a state other than this state that:
             4194          (a) enforces a law substantially similar to this chapter;
             4195          (b) requires the commissioner to be the receiver of a delinquent insurer; and
             4196          (c) has laws for the avoidance of fraudulent conveyances and preferential transfers by
             4197      the receiver of a delinquent insurer.
             4198          (36) "Record," when used as a noun, means [any] information or data, in whatever
             4199      form maintained, including:
             4200          (a) a book;
             4201          (b) a document;
             4202          (c) a paper;
             4203          (d) a file;
             4204          (e) an application file;
             4205          (f) a policyholder list;
             4206          (g) policy information;
             4207          (h) a claim or claim file;
             4208          (i) an account;
             4209          (j) a voucher;
             4210          (k) a litigation file;


             4211          (l) a premium record;
             4212          (m) a rate book;
             4213          (n) an underwriting manual;
             4214          (o) a personnel record;
             4215          (p) a financial record; or
             4216          (q) other material.
             4217          (37) "Reinsurance" means a transaction or contract under which an assuming insurer
             4218      agrees to indemnify a ceding insurer against all, or a part, of [any] a loss that the ceding insurer
             4219      may sustain under the one or more policies that the ceding insurer issues or will issue.
             4220          (38) "Repurchase agreement" is as defined in the Federal Deposit Insurance Act, 12
             4221      U.S.C. Sec. 1821(e)(8)(D).
             4222          (39) (a) "Secured claim" means, subject to Subsection (39)(b):
             4223          (i) a claim secured by an asset that is not a general asset; or
             4224          (ii) the right to set off as provided in Section 31A-27a-510 .
             4225          (b) "Secured claim" does not include:
             4226          (i) a special deposit claim;
             4227          (ii) a claim based on mere possession; or
             4228          (iii) a claim arising from a constructive or resulting trust.
             4229          (40) "Securities contract" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.
             4230      Sec. 1821(e)(8)(D).
             4231          (41) "Special deposit" means a deposit established pursuant to statute for the security
             4232      or benefit of a limited class or classes of persons.
             4233          (42) (a) Subject to Subsection (42)(b), "special deposit claim" means a claim secured
             4234      by a special deposit.
             4235          (b) "Special deposit claim" does not include a claim against the general assets of the
             4236      insurer.
             4237          (43) "State" means a state, district, or territory of the United States.
             4238          (44) "Subsidiary" is as defined in Section 31A-1-301 .
             4239          (45) "Swap agreement" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.
             4240      Sec. 1821(e)(8)(D).
             4241          (46) (a) "Transfer" includes the sale and every other and different mode of disposing of


             4242      or parting with property or with an interest in property, whether:
             4243          (i) directly or indirectly;
             4244          (ii) absolutely or conditionally;
             4245          (iii) voluntarily or involuntarily; or
             4246          (iv) by or without judicial proceedings.
             4247          (b) An interest in property includes:
             4248          (i) a set off;
             4249          (ii) having possession of the property; or
             4250          (iii) fixing a lien on the property or on an interest in the property.
             4251          (c) The retention of a security title in property delivered to an insurer and foreclosure
             4252      of the insurer's equity of redemption is considered a transfer suffered by the insurer.
             4253          (47) Notwithstanding Section 31A-1-301 , "unauthorized insurer" means an insurer
             4254      transacting the business of insurance in this state that has not received a certificate of authority
             4255      from this state, or some other type of authority that allows for the transaction of the business of
             4256      insurance in this state.
             4257          Section 41. Section 31A-27a-107 is amended to read:
             4258           31A-27a-107. Notice and hearing on matters submitted by the receiver for
             4259      receivership court approval.
             4260          (1) (a) Upon written request to the receiver, a person shall be placed on the service list
             4261      to receive notice of matters filed by the receiver. The person shall include in a written request
             4262      under this Subsection (1)(a) the person's address, facsimile number, or electronic mail address.
             4263          (b) It is the responsibility of the person requesting notice to:
             4264          (i) inform the receiver in writing of any changes in the person's address, facsimile
             4265      number, H. [ and ] or .H electronic mail address; or
             4266          (ii) request that the person's name be deleted from the service list.
             4267          (c) (i) The receiver may serve on a person on the service list a request to confirm
             4268      continuation on the service list by returning a form.
             4269          (ii) The request to confirm continuation may be served periodically but not more
             4270      frequently than every 12 months.
             4271          (iii) A person who fails to return the form described in this Subsection (1)(c) may be
             4272      removed from the service list.


             4273          (d) Inclusion on the service list does not confer standing in the delinquency proceeding
             4274      to raise, appear, or be heard on any issue.
             4275          (e) The receiver shall:
             4276          (i) file a copy of the service list with the receivership court; and
             4277          (ii) periodically provide to the receivership court notice of changes to the service list.
             4278          (f) Notice may be provided by first-class mail postage paid, electronic mail, or
             4279      facsimile transmission, at the receiver's discretion.
             4280          (2) Except as otherwise provided by this chapter, notice and hearing of any matter
             4281      submitted by the receiver to the receivership court for approval under this chapter shall be
             4282      conducted in accordance with this Subsection (2).
             4283          (a) The receiver:
             4284          (i) shall file a motion:
             4285          (A) explaining the proposed action; and
             4286          (B) the basis for the proposed action; and
             4287          (ii) may include any evidence in support of the motion.
             4288          (b) If a document, material, or other information supporting the motion is confidential,
             4289      the document, material, or other information may be submitted to the receivership court under
             4290      seal for in camera inspection.
             4291          (c) (i) The receiver shall provide notice and a copy of the motion to:
             4292          (A) all persons on the service list; and
             4293          (B) any other person as may be required by the receivership court.
             4294          (ii) Notice may be provided by first-class mail postage paid, electronic mail, or
             4295      facsimile transmission, at the receiver's discretion.
             4296          (iii) For purposes of this section, notice is considered to be given on the day on which
             4297      it is deposited with the United States Postmaster or transmitted, as applicable, to the
             4298      last-known address as shown on the service list.
             4299          (d) (i) A party in interest objecting to the motion shall:
             4300          (A) file an objection specifying the grounds for the objection within:
             4301          (I) 10 days of the day on which the notice of the filing of the motion is sent; or
             4302          (II) such other time as the receivership court may specify; and
             4303          (B) serve copies on:


             4304          (I) the receiver; and
             4305          (II) any other person served with the motion within the time period described in this
             4306      Subsection (2)(d)(i).
             4307          (ii) In accordance with the Utah Rules of Civil Procedure, days may be added to the
             4308      time for filing an objection if the notice of the motion is sent only by way of United States
             4309      mail.
             4310          (iii) An objecting party has the burden of showing why the receivership court should
             4311      not authorize the proposed action.
             4312          (e) (i) If no objection to the motion is timely filed:
             4313          (A) the receivership court may:
             4314          (I) enter an order approving the motion without a hearing; or
             4315          (II) hold a hearing to determine if the receiver's motion should be approved; and
             4316          (B) the receiver may request that the receivership court enter an order or hold a hearing
             4317      on an expedited basis.
             4318          (ii) (A) If an objection is timely filed, the receivership court may hold a hearing.
             4319          (B) If the receivership court approves the motion and, upon a motion by the receiver,
             4320      determines that the objection is frivolous or filed merely for delay or for other improper
             4321      purpose, the receivership court may order the objecting party to pay the receiver's reasonable
             4322      costs and fees of defending against the objection.
             4323          Section 42. Section 31A-27a-201 is amended to read:
             4324           31A-27a-201. Receivership court's seizure order.
             4325          (1) The commissioner may file in the Third District Court for Salt Lake County a
             4326      petition:
             4327          (a) with respect to:
             4328          (i) an insurer domiciled in this state;
             4329          (ii) an unauthorized insurer; or
             4330          (iii) pursuant to Section 31A-27a-901 , a foreign insurer;
             4331          (b) alleging that:
             4332          (i) there exists grounds that would justify a court order for a formal delinquency
             4333      proceeding against the insurer under this chapter; and
             4334          (ii) the interests of policyholders, creditors, or the public will be endangered by delay;


             4335      and
             4336          (c) setting forth the contents of a seizure order considered necessary by the
             4337      commissioner.
             4338          (2) (a) Upon a filing under Subsection (1), the receivership court may issue the
             4339      requested seizure order:
             4340          (i) immediately, ex parte, and without notice or hearing;
             4341          (ii) that directs the commissioner to take possession and control of:
             4342          (A) all or a part of the property, accounts, and records of an insurer; and
             4343          (B) the premises occupied by the insurer for transaction of the insurer's business; and
             4344          (iii) that until further order of the receivership court, enjoins the insurer and its officers,
             4345      managers, agents, and employees from disposition of its property and from the transaction of
             4346      its business except with the written consent of the commissioner.
             4347          (b) [Any] A person having possession or control of and refusing to deliver any of the
             4348      records or assets of a person against whom a seizure order is issued under this Subsection (2) is
             4349      guilty of a class B misdemeanor.
             4350          (3) (a) A petition that requests injunctive relief:
             4351          (i) shall be verified by the commissioner or the commissioner's designee; and
             4352          (ii) is not required to plead or prove irreparable harm or inadequate remedy at law.
             4353          (b) The commissioner shall provide only the notice that the receivership court may
             4354      require.
             4355          (4) (a) The receivership court shall specify in the seizure order the duration of the
             4356      seizure, which shall be the time the receivership court considers necessary for the
             4357      commissioner to ascertain the condition of the insurer.
             4358          (b) The receivership court may from time to time:
             4359          (i) hold a hearing that the receivership court considers desirable:
             4360          (A) (I) on motion of the commissioner;
             4361          (II) on motion of the insurer; or
             4362          (III) on its own motion; and
             4363          (B) after the notice the receivership court considers appropriate; and
             4364          (ii) extend, shorten, or modify the terms of the seizure order.
             4365          (c) The receivership court shall vacate the seizure order if the commissioner fails to


             4366      commence a formal proceeding under this chapter after having had a reasonable opportunity to
             4367      commence a formal proceeding under this chapter.
             4368          (d) An order of the receivership court pursuant to a formal proceeding under this
             4369      chapter vacates the seizure order.
             4370          (5) Entry of a seizure order under this section does not constitute a breach or an
             4371      anticipatory breach of [any] a contract of the insurer.
             4372          (6) (a) An insurer subject to an ex parte seizure order under this section may petition
             4373      the receivership court at any time after the issuance of a seizure order for a hearing and review
             4374      of the basis for the seizure order.
             4375          (b) The receivership court shall hold the hearing and review requested under this
             4376      Subsection (6) not more than 15 days after the day on which the request is received or as soon
             4377      thereafter as the court may allow.
             4378          (c) A hearing under this Subsection (6):
             4379          (i) may be held privately in chambers; and
             4380          (ii) shall be held privately in chambers if the insurer proceeded against requests that it
             4381      be private.
             4382          (7) (a) If, at any time after the issuance of a seizure order, it appears to the receivership
             4383      court that a person whose interest is or will be substantially affected by the seizure order did
             4384      not appear at the hearing and has not been served, the receivership court may order that notice
             4385      be given to the person.
             4386          (b) An order under this Subsection (7) that notice be given may not stay the effect of
             4387      [any] a seizure order previously issued by the receivership court.
             4388          (8) Whenever the commissioner makes a seizure as provided in Subsection (2), on the
             4389      demand of the commissioner, it shall be the duty of the sheriff of a county of this state, and of
             4390      the police department of a municipality in the state to furnish the commissioner with necessary
             4391      deputies or officers to assist the commissioner in making and enforcing the seizure order.
             4392          (9) The commissioner may appoint a receiver under this section. The insurer shall pay
             4393      the costs and expenses of the receiver appointed.
             4394          Section 43. Section 31A-27a-701 is amended to read:
             4395           31A-27a-701. Priority of distribution.
             4396          (1) (a) The priority of payment of distributions on unsecured claims shall be in


             4397      accordance with the order in which each class of claim is set forth in this section except as
             4398      provided in Section 31A-27a-702 .
             4399          (b) All claims in each class shall be paid in full or adequate funds retained for the
             4400      claim's payment before a member of the next class receives payment.
             4401          (c) All claims within a class shall be paid substantially the same percentage.
             4402          (d) Except as provided in Subsections (2)(a)(i)(E), (2)(k), and (2)(m), subclasses may
             4403      not be established within a class.
             4404          (e) A claim by a shareholder, policyholder, or other creditor may not be permitted to
             4405      circumvent the priority classes through the use of equitable remedies.
             4406          (2) The order of distribution of claims shall be as follows:
             4407          (a) a Class 1 claim, which:
             4408          (i) is a cost or expense of administration expressly approved or ratified by the
             4409      liquidator, including the following:
             4410          (A) the actual and necessary costs of preserving or recovering the property of the
             4411      insurer;
             4412          (B) reasonable compensation for all services rendered on behalf of the administrative
             4413      supervisor or receiver;
             4414          (C) a necessary filing fee;
             4415          (D) the fees and mileage payable to a witness;
             4416          (E) an unsecured loan obtained by the receiver, which:
             4417          (I) unless its terms otherwise provide, has priority over all other costs of
             4418      administration; and
             4419          (II) absent agreement to the contrary, shares pro rata with all other claims described in
             4420      this Subsection (2)(a)(i)(E); and
             4421          (F) an expense approved by the rehabilitator of the insurer, if any, incurred in the
             4422      course of the rehabilitation that is unpaid at the time of the entry of the order of liquidation; and
             4423          (ii) except as expressly approved by the receiver, excludes any expense arising from a
             4424      duty to indemnify a director, officer, or employee of the insurer which expense, if allowed, is a
             4425      Class 7 claim;
             4426          (b) a Class 2 claim, which:
             4427          (i) is a reasonable expense of a guaranty association, including overhead, salaries, or


             4428      other general administrative expenses allocable to the receivership such as:
             4429          (A) an administrative or claims handling expense;
             4430          (B) an expense in connection with arrangements for ongoing coverage; and
             4431          (C) in the case of a property and casualty guaranty association, a loss adjustment
             4432      expense, including:
             4433          (I) an adjusting or other expense; and
             4434          (II) a defense or cost containment expense; and
             4435          (ii) excludes an expense incurred in the performance of duties under Section
             4436      31A-28-112 or similar duties under the statute governing a similar organization in another
             4437      state;
             4438          (c) a Class 3 claim, which:
             4439          (i) is:
             4440          (A) a claim under a policy of insurance including a third party claim;
             4441          (B) a claim under an annuity contract or funding agreement;
             4442          (C) a claim under a nonassessable policy for unearned premium;
             4443          (D) a claim of an obligee and, subject to the discretion of the receiver, a completion
             4444      contractor under a surety bond or surety undertaking, except for:
             4445          (I) a bail bond;
             4446          (II) a mortgage guaranty;
             4447          (III) a financial guaranty; or
             4448          (IV) other form of insurance offering protection against investment risk or warranties;
             4449          (E) a claim by a principal under a surety bond or surety undertaking for wrongful
             4450      dissipation of collateral by the insurer or its agents;
             4451          (F) an indemnity payment on:
             4452          (I) a covered claim; or
             4453          [(II) unearned premium; or]
             4454          [(III)] (II) a payment for the continuation of coverage made by an entity responsible for
             4455      the payment of a claim or continuation of coverage of an insolvent health maintenance
             4456      organization;
             4457          (G) a claim for unearned premium;
             4458          [(G)] (H) a claim incurred during the extension of coverage provided for in Sections


             4459      31A-27a-402 and 31A-27a-403 ; or
             4460          [(H)] (I) all other claims incurred in fulfilling the statutory obligations of a guaranty
             4461      association not included in Class 2, including:
             4462          (I) an indemnity payment on covered claims; and
             4463          (II) in the case of a life and health guaranty association, a claim:
             4464          (Aa) as a creditor of the impaired or insolvent insurer for a payment of and liabilities
             4465      incurred on behalf of a covered claim or covered obligation of the insurer; and
             4466          (Bb) for the funds needed to reinsure the obligations described under this Subsection
             4467      (2)(c)(i)(H)(II) with a solvent insurer; and
             4468          (ii) notwithstanding any other provision of this chapter, excludes the following which
             4469      shall be paid under Class 7, except as provided in this section:
             4470          (A) an obligation of the insolvent insurer arising out of a reinsurance contract;
             4471          (B) an obligation that is incurred pursuant to an occurrence policy or reported pursuant
             4472      to a claims made policy after:
             4473          (I) the expiration date of the policy;
             4474          (II) the policy is replaced by the insured;
             4475          (III) the policy is canceled at the insured's request; or
             4476          (IV) the policy is canceled as provided in this chapter;
             4477          (C) an obligation to an insurer, insurance pool, or underwriting association and the
             4478      insurer's, insurance pool's, or underwriting association's claim for contribution, indemnity, or
             4479      subrogation, equitable or otherwise, except for direct claims under a policy where the insurer is
             4480      the named insured;
             4481          (D) an amount accrued as punitive or exemplary damages unless expressly covered
             4482      under the terms of the policy, which shall be paid as a claim in Class 9;
             4483          (E) a tort claim of any kind against the insurer;
             4484          (F) a claim against the insurer for bad faith or wrongful settlement practices; and
             4485          (G) a claim of a guaranty association for assessments not paid by the insurer, which
             4486      claims shall be paid as claims in Class 7; and
             4487          (iii) notwithstanding Subsection (2)(c)(ii)(B), does not exclude an unearned premium
             4488      claim on a policy, other than a reinsurance agreement;
             4489          (d) a Class 4 claim, which is a claim under a policy for mortgage guaranty, financial


             4490      guaranty, or other forms of insurance offering protection against investment risk or warranties;
             4491          (e) a Class 5 claim, which is a claim of the federal government not included in Class 3
             4492      or 4;
             4493          (f) a Class 6 claim, which is a debt due an employee for services or benefits:
             4494          (i) to the extent that the expense:
             4495          (A) does not exceed the lesser of:
             4496          (I) $5,000; or
             4497          (II) two months' salary; and
             4498          (B) represents payment for services performed within one year before the day on which
             4499      the initial order of receivership is issued; and
             4500          (ii) which priority is in lieu of any other similar priority that may be authorized by law
             4501      as to wages or compensation of employees;
             4502          (g) a Class 7 claim, which is a claim of an unsecured creditor not included in Classes 1
             4503      through 6, including:
             4504          (i) a claim under a reinsurance contract;
             4505          (ii) a claim of a guaranty association for an assessment not paid by the insurer; and
             4506          (iii) other claims excluded from Class 3 or 4, unless otherwise assigned to Classes 8
             4507      through 13;
             4508          (h) subject to Subsection (3), a Class 8 claim, which is:
             4509          (i) a claim of a state or local government, except a claim specifically classified
             4510      elsewhere in this section; or
             4511          (ii) a claim for services rendered and expenses incurred in opposing a formal
             4512      delinquency proceeding;
             4513          (i) a Class 9 claim, which is a claim for penalties, punitive damages, or forfeitures,
             4514      unless expressly covered under the terms of a policy of insurance;
             4515          (j) a Class 10 claim, which is, except as provided in Subsections 31A-27a-601 (2) and
             4516      31A-27a-601 (3), a late filed claim that would otherwise be classified in Classes 3 through 9;
             4517          (k) subject to Subsection (4), a Class 11 claim, which is:
             4518          (i) a surplus note;
             4519          (ii) a capital note;
             4520          (iii) a contribution note;


             4521          (iv) a similar obligation;
             4522          (v) a premium refund on an assessable policy; or
             4523          (vi) any other claim specifically assigned to this class;
             4524          (l) a Class 12 claim, which is a claim for interest on an allowed claim of Classes 1
             4525      through 11, according to the terms of a plan to pay interest on allowed claims proposed by the
             4526      liquidator and approved by the receivership court; and
             4527          (m) subject to Subsection (4), a Class 13 claim, which is a claim of a shareholder or
             4528      other owner arising out of:
             4529          (i) the shareholder's or owner's capacity as shareholder or owner or any other capacity;
             4530      and
             4531          (ii) except as the claim may be qualified in Class 3, 4, 7, or 12.
             4532          (3) To prove a claim described in Class 8, the claimant shall show that:
             4533          (a) the insurer that is the subject of the delinquency proceeding incurred the fee or
             4534      expense on the basis of the insurer's best knowledge, information, and belief:
             4535          (i) formed after reasonable inquiry indicating opposition is in the best interests of the
             4536      insurer;
             4537          (ii) that is well grounded in fact; and
             4538          (iii) is warranted by existing law or a good faith argument for the extension,
             4539      modification, or reversal of existing law; and
             4540          (b) opposition is not pursued for any improper purpose, such as to harass, to cause
             4541      unnecessary delay, or to cause needless increase in the cost of the litigation.
             4542          (4) (a) A claim in Class 11 is subject to a subordination agreement related to other
             4543      claims in Class 11 that exist before the entry of a liquidation order.
             4544          (b) A claim in Class 13 is subject to a subordination agreement, related to other claims
             4545      in Class 13 that exist before the entry of a liquidation order.
             4546          Section 44. Section 31A-29-106 is amended to read:
             4547           31A-29-106. Powers of board.
             4548          (1) The board shall have the general powers and authority granted under the laws of
             4549      this state to insurance companies licensed to transact health care insurance business. In
             4550      addition, the board shall have the specific authority to:
             4551          (a) enter into contracts to carry out the provisions and purposes of this chapter,


             4552      including, with the approval of the commissioner, contracts with:
             4553          (i) similar pools of other states for the joint performance of common administrative
             4554      functions; or
             4555          (ii) persons or other organizations for the performance of administrative functions;
             4556          (b) sue or be sued, including taking such legal action necessary to avoid the payment of
             4557      improper claims against the pool or the coverage provided through the pool;
             4558          (c) establish appropriate rates, rate schedules, rate adjustments, expense allowances,
             4559      agents' referral fees, claim reserve formulas, and any other actuarial function appropriate to the
             4560      operation of the pool;
             4561          (d) issue policies of insurance in accordance with the requirements of this chapter;
             4562          (e) retain an executive director and appropriate legal, actuarial, and other personnel as
             4563      necessary to provide technical assistance in the operations of the pool;
             4564          (f) establish rules, conditions, and procedures for reinsuring risks under this chapter;
             4565          (g) cause the pool to have an annual audit of its operations by the state auditor;
             4566          (h) coordinate with the Department of Health in seeking to obtain from the Centers for
             4567      Medicare and Medicaid Services, or other appropriate office or agency of government, all
             4568      appropriate waivers, authority, and permission needed to coordinate the coverage available
             4569      from the pool with coverage available under Medicaid, either before or after Medicaid
             4570      coverage, or as a conversion option upon completion of Medicaid eligibility, without the
             4571      necessity for requalification by the enrollee;
             4572          (i) provide for and employ cost containment measures and requirements including
             4573      preadmission certification, concurrent inpatient review, and individual case management for
             4574      the purpose of making the pool more cost-effective;
             4575          (j) offer pool coverage through contracts with health maintenance organizations,
             4576      preferred provider organizations, and other managed care systems that will manage costs while
             4577      maintaining quality care;
             4578          (k) establish annual limits on benefits payable under the pool to or on behalf of any
             4579      enrollee;
             4580          (l) exclude from coverage under the pool specific benefits, medical conditions, and
             4581      procedures for the purpose of protecting the financial viability of the pool;
             4582          (m) administer the Pool Fund;


             4583          (n) make rules in accordance with Title 63G, Chapter 3, Utah Administrative
             4584      Rulemaking Act, to implement this chapter;
             4585          (o) adopt, trademark, and copyright a trade name for the pool for use in marketing and
             4586      publicizing the pool and its products; and
             4587          (p) transition health care coverage for all individuals covered under the pool as part of
             4588      the conversion to health insurance coverage, regardless of preexisting conditions, under
             4589      PPACA.
             4590          (2) (a) The board shall prepare and submit an annual report to the Legislature which
             4591      shall include:
             4592          (i) the net premiums anticipated;
             4593          (ii) actuarial projections of payments required of the pool;
             4594          (iii) the expenses of administration; and
             4595          (iv) the anticipated reserves or losses of the pool.
             4596          (b) The budget for operation of the pool is subject to the approval of the board.
             4597          (c) The administrative budget of the board and the commissioner under this chapter
             4598      shall comply with the requirements of Title 63J, Chapter 1, Budgetary Procedures Act, and is
             4599      subject to review and approval by the Legislature.
             4600          [(3) (a) The board shall on or before September 1, 2004, require the plan administrator
             4601      or an independent actuarial consultant retained by the plan administrator to redetermine the
             4602      reasonable equivalent of the criteria for uninsurability required under Subsection
             4603      31A-30-106 (1)(h) that is used by the board to determine eligibility for coverage in the pool.]
             4604          [(b) The board shall redetermine the criteria established in Subsection (3)(a) at least
             4605      every five years thereafter.]
             4606          Section 45. Section 31A-29-111 is amended to read:
             4607           31A-29-111. Eligibility -- Limitations.
             4608          (1) (a) Except as provided in Subsection (1)(b), an individual who is not HIPAA
             4609      eligible is eligible for pool coverage if the individual:
             4610          (i) pays the established premium;
             4611          (ii) is a resident of this state; and
             4612          (iii) meets the health underwriting criteria under Subsection (5)(a).
             4613          (b) Notwithstanding Subsection (1)(a), an individual who is not HIPAA eligible is not


             4614      eligible for pool coverage if one or more of the following conditions apply:
             4615          (i) the individual is eligible for health care benefits under Medicaid or Medicare,
             4616      except as provided in Section 31A-29-112 ;
             4617          (ii) the individual has terminated coverage in the pool, unless:
             4618          (A) 12 months have elapsed since the termination date; or
             4619          (B) the individual demonstrates that creditable coverage has been involuntarily
             4620      terminated for any reason other than nonpayment of premium;
             4621          (iii) the pool has paid the maximum lifetime benefit to or on behalf of the individual;
             4622          (iv) the individual is an inmate of a public institution;
             4623          (v) the individual is eligible for a public health plan, as defined in federal regulations
             4624      adopted pursuant to 42 U.S.C. Sec. 300gg;
             4625          (vi) the individual's health condition does not meet the criteria established under
             4626      Subsection (5);
             4627          (vii) the individual is eligible for coverage under an employer group that offers a health
             4628      benefit plan or a self-insurance arrangement to its eligible employees, dependents, or members
             4629      as:
             4630          (A) an eligible employee;
             4631          (B) a dependent of an eligible employee; or
             4632          (C) a member;
             4633          (viii) the individual is covered under any other health benefit plan;
             4634          (ix) except as provided in Subsections (3) and (6), at the time of application, the
             4635      individual has not resided in Utah for at least 12 consecutive months preceding the date of
             4636      application; or
             4637          (x) the individual's employer pays any part of the individual's health benefit plan
             4638      premium, either as an insured or a dependent, for pool coverage.
             4639          (2) (a) Except as provided in Subsection (2)(b), an individual who is HIPAA eligible is
             4640      eligible for pool coverage if the individual:
             4641          (i) pays the established premium; and
             4642          (ii) is a resident of this state.
             4643          (b) Notwithstanding Subsection (2)(a), a HIPAA eligible individual is not eligible for
             4644      pool coverage if one or more of the following conditions apply:


             4645          (i) the individual is eligible for health care benefits under Medicaid or Medicare,
             4646      except as provided in Section 31A-29-112 ;
             4647          (ii) the individual is eligible for a public health plan, as defined in federal regulations
             4648      adopted pursuant to 42 U.S.C. Sec. 300gg;
             4649          (iii) the individual is covered under any other health benefit plan;
             4650          (iv) the individual is eligible for coverage under an employer group that offers a health
             4651      benefit plan or self-insurance arrangements to its eligible employees, dependents, or members
             4652      as:
             4653          (A) an eligible employee;
             4654          (B) a dependent of an eligible employee; or
             4655          (C) a member;
             4656          (v) the pool has paid the maximum lifetime benefit to or on behalf of the individual;
             4657          (vi) the individual is an inmate of a public institution; or
             4658          (vii) the individual's employer pays any part of the individual's health benefit plan
             4659      premium, either as an insured or a dependent, for pool coverage.
             4660          (3) (a) Notwithstanding Subsection (1)(b)(ix), if otherwise eligible under Subsection
             4661      (1)(a), an individual whose health care insurance coverage from a state high risk pool with
             4662      similar coverage is terminated because of nonresidency in another state is eligible for coverage
             4663      under the pool subject to the conditions of Subsections (1)(b)(i) through (viii).
             4664          (b) Coverage under Subsection (3)(a) shall be applied for within 63 days after the
             4665      termination date of the previous high risk pool coverage.
             4666          (c) The effective date of this state's pool coverage shall be the date of termination of
             4667      the previous high risk pool coverage.
             4668          (d) The waiting period of an individual with a preexisting condition applying for
             4669      coverage under this chapter shall be waived:
             4670          (i) to the extent to which the waiting period was satisfied under a similar plan from
             4671      another state; and
             4672          (ii) if the other state's benefit limitation was not reached.
             4673          (4) (a) If an eligible individual applies for pool coverage within 30 days of being
             4674      denied coverage by an individual carrier, the effective date for pool coverage shall be no later
             4675      than the first day of the month following the date of submission of the completed insurance


             4676      application to the carrier.
             4677          (b) Notwithstanding Subsection (4)(a), for individuals eligible for coverage under
             4678      Subsection (3), the effective date shall be the date of termination of the previous high risk pool
             4679      coverage.
             4680          (5) (a) The board shall establish and adjust, as necessary, health underwriting criteria
             4681      based on:
             4682          (i) health condition; and
             4683          (ii) expected claims so that the expected claims are anticipated to remain within
             4684      available funding.
             4685          (b) The board, with approval of the commissioner, may contract with one or more
             4686      providers under Title 63G, Chapter 6a, Utah Procurement Code, to develop underwriting
             4687      criteria under Subsection (5)(a).
             4688          [(c) If an individual is denied coverage by the pool under the criteria established in
             4689      Subsection (5)(a), the pool shall issue a certificate of insurability to the individual for coverage
             4690      under Subsection 31A-30-108 (3).]
             4691          (6) (a) Notwithstanding Subsection (1)(b)(ix), if otherwise eligible under Subsection
             4692      (1)(a), an individual whose individual health care insurance coverage was involuntarily
             4693      terminated, is eligible for coverage under the pool subject to the conditions of Subsections
             4694      (1)(b)(i) through (viii) and (x).
             4695          (b) Coverage under Subsection (6)(a) shall be applied for within 63 days after the
             4696      termination date of the previous individual health care insurance coverage.
             4697          (c) The effective date of this state's pool coverage shall be the date of termination of
             4698      the previous individual coverage.
             4699          (d) The waiting period of an individual with a preexisting condition applying for
             4700      coverage under this chapter shall be waived to the extent to which the waiting period was
             4701      satisfied under the individual health insurance plan.
             4702          Section 46. Section 31A-29-115 is amended to read:
             4703           31A-29-115. Cancellation -- Notice.
             4704          (1) [(a)] On the date of renewal, the pool may cancel an enrollee's policy if:
             4705          [(i)] (a) the enrollee's health condition does not meet the criteria established in
             4706      Subsection 31A-29-111 (5); and


             4707          [(ii)] (b) the pool has provided written notice to the enrollee's last-known address no
             4708      less than 60 days before cancellation[; and].
             4709          [(iii) at least one individual carrier has not reached the individual enrollment cap
             4710      established in Section 31A-30-110 .]
             4711          [(b) The pool shall issue a certificate of insurability to an enrollee whose policy is
             4712      cancelled under Subsection (1)(a) for coverage under Subsection 31A-30-108 (3) if the
             4713      requirements of Subsection 31A-29-111 (5) are met.]
             4714          (2) The pool may cancel an enrollee's policy at any time if:
             4715          (a) the pool has provided written notice to the enrollee's last-known address no less
             4716      than 15 days before cancellation; and
             4717          (b) (i) the enrollee establishes a residency outside of Utah for three consecutive
             4718      months;
             4719          (ii) there is nonpayment of premiums; or
             4720          (iii) the pool determines that the enrollee does not meet the eligibility requirements set
             4721      forth in Section 31A-29-111 , in which case:
             4722          (A) the policy may be retroactively terminated for the period of time in which the
             4723      enrollee was not eligible;
             4724          (B) retroactive termination may not exceed three years; and
             4725          (C) the board's remedy under this Subsection (2)(b) shall be a cause of action against
             4726      the enrollee for benefits paid during the period of ineligibility in accordance with Subsection
             4727      31A-29-119 (3).
             4728          Section 47. Section 31A-30-102 is amended to read:
             4729           31A-30-102. Purpose statement.
             4730          The purpose of this chapter is to:
             4731          (1) prevent abusive rating practices;
             4732          (2) require disclosure of rating practices to purchasers;
             4733          (3) establish rules regarding:
             4734          (a) a universal individual and small group application; and
             4735          (b) renewability of coverage;
             4736          (4) improve the overall fairness and efficiency of the individual and small group
             4737      insurance market;


             4738          (5) provide increased access for individuals and small employers to health insurance;
             4739      and
             4740          (6) provide an employer with the opportunity to establish a defined contribution
             4741      arrangement for an employee to purchase a health benefit plan through the [Internet portal]
             4742      Health Insurance Exchange created by Section 63M-1-2504 .
             4743          Section 48. Section 31A-30-103 is amended to read:
             4744           31A-30-103. Definitions.
             4745          As used in this chapter:
             4746          (1) "Actuarial certification" means a written statement by a member of the American
             4747      Academy of Actuaries or other individual approved by the commissioner that a covered carrier
             4748      is in compliance with [Sections 31A-30-106 and 31A-30-106.1 ] this chapter, based upon the
             4749      examination of the covered carrier, including review of the appropriate records and of the
             4750      actuarial assumptions and methods used by the covered carrier in establishing premium rates
             4751      for applicable health benefit plans.
             4752          (2) "Affiliate" or "affiliated" means [any entity or] a person who directly or indirectly
             4753      through one or more intermediaries, controls or is controlled by, or is under common control
             4754      with, a specified [entity or] person.
             4755          (3) "Base premium rate" means, for each class of business as to a rating period, the
             4756      lowest premium rate charged or that could have been charged under a rating system for that
             4757      class of business by the covered carrier to covered insureds with similar case characteristics for
             4758      health benefit plans with the same or similar coverage.
             4759          (4) (a) "Bona fide employer association" means an association of employers:
             4760          (i) that meets the requirements of Subsection 31A-22-701 (2)(b);
             4761          (ii) in which the employers of the association, either directly or indirectly, exercise
             4762      control over the plan;
             4763          (iii) that is organized:
             4764          (A) based on a commonality of interest between the employers and their employees
             4765      that participate in the plan by some common economic or representation interest or genuine
             4766      organizational relationship unrelated to the provision of benefits; and
             4767          (B) to act in the best interests of its employers to provide benefits for the employer's
             4768      employees and their spouses and dependents, and other benefits relating to employment; and


             4769          (iv) whose association sponsored health plan complies with 45 C.F.R. 146.121.
             4770          (b) The commissioner shall consider the following with regard to determining whether
             4771      an association of employers is a bona fide employer association under Subsection (4)(a):
             4772          (i) how association members are solicited;
             4773          (ii) who participates in the association;
             4774          (iii) the process by which the association was formed;
             4775          (iv) the purposes for which the association was formed, and what, if any, were the
             4776      pre-existing relationships of its members;
             4777          (v) the powers, rights and privileges of employer members; and
             4778          (vi) who actually controls and directs the activities and operations of the benefit
             4779      programs.
             4780          (5) "Carrier" means [any] a person [or entity] that provides health insurance in this
             4781      state including:
             4782          (a) an insurance company;
             4783          (b) a prepaid hospital or medical care plan;
             4784          (c) a health maintenance organization;
             4785          (d) a multiple employer welfare arrangement; and
             4786          (e) [any other] another person [or entity] providing a health insurance plan under this
             4787      title.
             4788          (6) (a) Except as provided in Subsection (6)(b), "case characteristics" means
             4789      demographic or other objective characteristics of a covered insured that are considered by the
             4790      carrier in determining premium rates for the covered insured.
             4791          (b) "Case characteristics" do not include:
             4792          (i) duration of coverage since the policy was issued;
             4793          (ii) claim experience; and
             4794          (iii) health status.
             4795          (7) "Class of business" means all or a separate grouping of covered insureds that is
             4796      permitted by the commissioner in accordance with Section 31A-30-105 .
             4797          [(8) "Conversion policy" means a policy providing coverage under the conversion
             4798      provisions required in Chapter 22, Part 7, Group Accident and Health Insurance.]
             4799          [(9)] (8) "Covered carrier" means [any] an individual carrier or small employer carrier


             4800      subject to this chapter.
             4801          [(10)] (9) "Covered individual" means [any] an individual who is covered under a
             4802      health benefit plan subject to this chapter.
             4803          [(11)] (10) "Covered insureds" means small employers and individuals who are issued
             4804      a health benefit plan that is subject to this chapter.
             4805          [(12)] (11) "Dependent" means an individual to the extent that the individual is defined
             4806      to be a dependent by:
             4807          (a) the health benefit plan covering the covered individual; and
             4808          (b) Chapter 22, Part 6, Accident and Health Insurance.
             4809          [(13)] (12) "Established geographic service area" means a geographical area approved
             4810      by the commissioner within which the carrier is authorized to provide coverage.
             4811          [(14)] (13) "Index rate" means, for each class of business as to a rating period for
             4812      covered insureds with similar case characteristics, the arithmetic average of the applicable base
             4813      premium rate and the corresponding highest premium rate.
             4814          [(15)] (14) "Individual carrier" means a carrier that provides coverage on an individual
             4815      basis through a health benefit plan regardless of whether:
             4816          (a) coverage is offered through:
             4817          (i) an association;
             4818          (ii) a trust;
             4819          (iii) a discretionary group; or
             4820          (iv) other similar groups; or
             4821          (b) the policy or contract is situated out-of-state.
             4822          [(16)] (15) "Individual conversion policy" means a conversion policy issued to:
             4823          (a) an individual; or
             4824          (b) an individual with a family.
             4825          [(17) "Individual coverage count" means the number of natural persons covered under
             4826      a carrier's health benefit products that are individual policies.]
             4827          [(18) "Individual enrollment cap" means the percentage set by the commissioner in
             4828      accordance with Section 31A-30-110 .]
             4829          [(19)] (16) "New business premium rate" means, for each class of business as to a
             4830      rating period, the lowest premium rate charged or offered, or that could have been charged or


             4831      offered, by the carrier to covered insureds with similar case characteristics for newly issued
             4832      health benefit plans with the same or similar coverage.
             4833          [(20)] (17) "Premium" means money paid by covered insureds and covered individuals
             4834      as a condition of receiving coverage from a covered carrier, including [any] fees or other
             4835      contributions associated with the health benefit plan.
             4836          [(21)] (18) (a) "Rating period" means the calendar period for which premium rates
             4837      established by a covered carrier are assumed to be in effect, as determined by the carrier.
             4838          (b) A covered carrier may not have:
             4839          (i) more than one rating period in any calendar month; and
             4840          (ii) no more than 12 rating periods in any calendar year.
             4841          [(22) "Resident" means an individual who has resided in this state for at least 12
             4842      consecutive months immediately preceding the date of application.]
             4843          [(23)] (19) "Short-term limited duration insurance" means a health benefit product that:
             4844          (a) is not renewable; and
             4845          (b) has an expiration date specified in the contract that is less than 364 days after the
             4846      date the plan became effective.
             4847          [(24)] (20) "Small employer carrier" means a carrier that provides health benefit plans
             4848      covering eligible employees of one or more small employers in this state, regardless of
             4849      whether:
             4850          (a) coverage is offered through:
             4851          (i) an association;
             4852          (ii) a trust;
             4853          (iii) a discretionary group; or
             4854          (iv) other similar grouping; or
             4855          (b) the policy or contract is situated out-of-state.
             4856          [(25) "Uninsurable" means an individual who:]
             4857          [(a) is eligible for the Comprehensive Health Insurance Pool coverage under the
             4858      underwriting criteria established in Subsection 31A-29-111 (5); or]
             4859          [(b) (i) is issued a certificate for coverage under Subsection 31A-30-108 (3); and]
             4860          [(ii) has a condition of health that does not meet consistently applied underwriting
             4861      criteria as established by the commissioner in accordance with Subsections 31A-30-106 (1)(g)


             4862      and (h) for which coverage the applicant is applying.]
             4863          [(26) "Uninsurable percentage" for a given calendar year equals UC/CI where, for
             4864      purposes of this formula:]
             4865          [(a) "CI" means the carrier's individual coverage count as of December 31 of the
             4866      preceding year; and]
             4867          [(b) "UC" means the number of uninsurable individuals who were issued an individual
             4868      policy on or after July 1, 1997.]
             4869          Section 49. Section 31A-30-104 is amended to read:
             4870           31A-30-104. Applicability and scope.
             4871          (1) This chapter applies to any:
             4872          (a) health benefit plan that provides coverage to:
             4873          (i) individuals;
             4874          (ii) small employers, except as provided in Subsection (3); or
             4875          (iii) both Subsections (1)(a)(i) and (ii); or
             4876          (b) individual conversion policy for purposes of Sections 31A-30-106.5 and
             4877      31A-30-107.5 .
             4878          (2) This chapter applies to a health benefit plan that provides coverage to small
             4879      employers or individuals regardless of:
             4880          (a) whether the contract is issued to:
             4881          (i) an association, except as provided in Subsection (3);
             4882          (ii) a trust;
             4883          (iii) a discretionary group; or
             4884          (iv) other similar grouping; or
             4885          (b) the situs of delivery of the policy or contract.
             4886          (3) This chapter does not apply to:
             4887          (a) short-term limited duration health insurance;
             4888          (b) federally funded or partially funded programs; or
             4889          (c) a bona fide employer association.
             4890          (4) (a) Except as provided in Subsection (4)(b), for the purposes of this chapter:
             4891          (i) carriers that are affiliated companies or that are eligible to file a consolidated tax
             4892      return shall be treated as one carrier; and


             4893          (ii) any restrictions or limitations imposed by this chapter shall apply as if all health
             4894      benefit plans delivered or issued for delivery to covered insureds in this state by the affiliated
             4895      carriers were issued by one carrier.
             4896          (b) Upon a finding of the commissioner, an affiliated carrier that is a health
             4897      maintenance organization having a certificate of authority under this title may be considered to
             4898      be a separate carrier for the purposes of this chapter.
             4899          (c) Unless otherwise authorized by the commissioner or by Chapter 42, Defined
             4900      Contribution Risk Adjuster Act, a covered carrier may not enter into one or more ceding
             4901      arrangements with respect to health benefit plans delivered or issued for delivery to covered
             4902      insureds in this state if the ceding arrangements would result in less than 50% of the insurance
             4903      obligation or risk for the health benefit plans being retained by the ceding carrier.
             4904          (d) Section 31A-22-1201 applies if a covered carrier cedes or assumes all of the
             4905      insurance obligation or risk with respect to one or more health benefit plans delivered or issued
             4906      for delivery to covered insureds in this state.
             4907          (5) (a) A Taft Hartley trust created in accordance with Section 302(c)(5) of the Federal
             4908      Labor Management Relations Act, or a carrier with the written authorization of such a trust,
             4909      may make a written request to the commissioner for a waiver from the application of any of the
             4910      provisions of [Subsection] Subsections 31A-30-106 (1) and 31A-30-106.1 (1) with respect to a
             4911      health benefit plan provided to the trust.
             4912          (b) The commissioner may grant a trust or carrier described in Subsection (5)(a) a
             4913      waiver if the commissioner finds that application with respect to the trust would:
             4914          (i) have a substantial adverse effect on the participants and beneficiaries of the trust;
             4915      and
             4916          (ii) require significant modifications to one or more collective bargaining arrangements
             4917      under which the trust is established or maintained.
             4918          (c) A waiver granted under this Subsection (5) may not apply to an individual if the
             4919      person participates in a Taft Hartley trust as an associate member of any employee
             4920      organization.
             4921          (6) Sections 31A-30-106 , 31A-30-106.1 , 31A-30-106.5 , 31A-30-106.7 , 31A-30-107 ,
             4922      and 31A-30-108 , [and 31A-30-111 ] apply to:
             4923          (a) any insurer engaging in the business of insurance related to the risk of a small


             4924      employer for medical, surgical, hospital, or ancillary health care expenses of the small
             4925      employer's employees provided as an employee benefit; and
             4926          (b) any contract of an insurer, other than a workers' compensation policy, related to the
             4927      risk of a small employer for medical, surgical, hospital, or ancillary health care expenses of the
             4928      small employer's employees provided as an employee benefit.
             4929          (7) The commissioner may make rules requiring that the marketing practices be
             4930      consistent with this chapter for:
             4931          (a) a small employer carrier;
             4932          (b) a small employer carrier's agent;
             4933          (c) an insurance producer;
             4934          (d) an insurance consultant; and
             4935          (e) a navigator.
             4936          Section 50. Section 31A-30-106 is amended to read:
             4937           31A-30-106. Individual premiums -- Rating restrictions -- Disclosure.
             4938          (1) Premium rates for health benefit plans for individuals under this chapter are subject
             4939      to this section.
             4940          (a) The index rate for a rating period for any class of business may not exceed the
             4941      index rate for any other class of business by more than 20%.
             4942          (b) (i) For a class of business, the premium rates charged during a rating period to
             4943      covered insureds with similar case characteristics for the same or similar coverage, or the rates
             4944      that could be charged to the individual under the rating system for that class of business, may
             4945      not vary from the index rate by more than 30% of the index rate except as provided under
             4946      Subsection (1)(b)(ii).
             4947          (ii) A carrier that offers individual and small employer health benefit plans may use the
             4948      small employer index rates to establish the rate limitations for individual policies, even if some
             4949      individual policies are rated below the small employer base rate.
             4950          (c) The percentage increase in the premium rate charged to a covered insured for a new
             4951      rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
             4952      the following:
             4953          (i) the percentage change in the new business premium rate measured from the first day
             4954      of the prior rating period to the first day of the new rating period;


             4955          (ii) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
             4956      of less than one year, due to the claim experience, health status, or duration of coverage of the
             4957      covered individuals as determined from the rate manual for the class of business of the carrier
             4958      offering an individual health benefit plan; and
             4959          (iii) any adjustment due to change in coverage or change in the case characteristics of
             4960      the covered insured as determined from the rate manual for the class of business of the carrier
             4961      offering an individual health benefit plan.
             4962          (d) (i) A carrier offering an individual health benefit plan shall apply rating factors,
             4963      including case characteristics, consistently with respect to all covered insureds in a class of
             4964      business.
             4965          (ii) Rating factors shall produce premiums for identical individuals that:
             4966          (A) differ only by the amounts attributable to plan design; and
             4967          (B) do not reflect differences due to the nature of the individuals assumed to select
             4968      particular health benefit products.
             4969          (iii) A carrier offering an individual health benefit plan shall treat all health benefit
             4970      plans issued or renewed in the same calendar month as having the same rating period.
             4971          (e) For the purposes of this Subsection (1), a health benefit plan that uses a restricted
             4972      network provision may not be considered similar coverage to a health benefit plan that does not
             4973      use a restricted network provision, provided that use of the restricted network provision results
             4974      in substantial difference in claims costs.
             4975          (f) A carrier offering a health benefit plan to an individual may not, without prior
             4976      approval of the commissioner, use case characteristics other than:
             4977          (i) age;
             4978          (ii) gender;
             4979          (iii) geographic area; and
             4980          (iv) family composition.
             4981          (g) (i) The commissioner shall establish rules in accordance with Title 63G, Chapter 3,
             4982      Utah Administrative Rulemaking Act, to:
             4983          (A) implement this chapter; [and]
             4984          (B) assure that rating practices used by carriers who offer health benefit plans to
             4985      individuals are consistent with the purposes of this chapter[.]; and


             4986          (C) promote transparency of rating practices of health benefit plans.
             4987          (ii) The rules described in Subsection (1)(g)(i) may include rules that:
             4988          (A) assure that differences in rates charged for health benefit products by carriers who
             4989      offer health benefit plans to individuals are reasonable and reflect objective differences in plan
             4990      design, not including differences due to the nature of the individuals assumed to select
             4991      particular health benefit products; and
             4992          (B) prescribe the manner in which case characteristics may be used by carriers who
             4993      offer health benefit plans to individuals[;].
             4994          [(C) implement the individual enrollment cap under Section 31A-30-110 , including
             4995      specifying:]
             4996          [(I) the contents for certification;]
             4997          [(II) auditing standards;]
             4998          [(III) underwriting criteria for uninsurable classification; and]
             4999          [(IV) limitations on high risk enrollees under Section 31A-30-111 ; and]
             5000          [(D) establish the individual enrollment cap under Subsection 31A-30-110 (1).]
             5001          [(h) Before implementing regulations for underwriting criteria for uninsurable
             5002      classification, the commissioner shall contract with an independent consulting organization to
             5003      develop industry-wide underwriting criteria for uninsurability based on an individual's expected
             5004      claims under open enrollment coverage exceeding 325% of that expected for a standard
             5005      insurable individual with the same case characteristics.]
             5006          [(i)] (h) The commissioner shall revise rules issued for Sections 31A-22-602 and
             5007      31A-22-605 regarding individual accident and health policy rates to allow rating in accordance
             5008      with this section.
             5009          (2) For purposes of Subsection (1)(c)(i), if a health benefit product is a health benefit
             5010      product into which the covered carrier is no longer enrolling new covered insureds, the covered
             5011      carrier shall use the percentage change in the base premium rate, provided that the change does
             5012      not exceed, on a percentage basis, the change in the new business premium rate for the most
             5013      similar health benefit product into which the covered carrier is actively enrolling new covered
             5014      insureds.
             5015          (3) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
             5016      a class of business.


             5017          (b) A covered carrier may not offer to transfer a covered insured into or out of a class
             5018      of business unless the offer is made to transfer all covered insureds in the class of business
             5019      without regard to:
             5020          (i) case characteristics;
             5021          (ii) claim experience;
             5022          (iii) health status; or
             5023          (iv) duration of coverage since issue.
             5024          (4) (a) A carrier who offers a health benefit plan to an individual shall maintain at the
             5025      carrier's principal place of business a complete and detailed description of its rating practices
             5026      and renewal underwriting practices, including information and documentation that demonstrate
             5027      that the carrier's rating methods and practices are:
             5028          (i) based upon commonly accepted actuarial assumptions; and
             5029          (ii) in accordance with sound actuarial principles.
             5030          (b) (i) [Each] A carrier subject to this section shall file with the commissioner, on or
             5031      before April 1 of each year, in a form, manner, and containing such information as prescribed
             5032      by the commissioner, an actuarial certification certifying that:
             5033          (A) the carrier is in compliance with this chapter; and
             5034          (B) the rating methods of the carrier are actuarially sound.
             5035          (ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by the
             5036      carrier at the carrier's principal place of business.
             5037          (c) A carrier shall make the information and documentation described in this
             5038      Subsection (4) available to the commissioner upon request.
             5039          (d) [Records] Except as provided in Subsection (1)(g) or required by PPACA, a record
             5040      submitted to the commissioner under this section shall be maintained by the commissioner as a
             5041      protected [records] record under Title 63G, Chapter 2, Government Records Access and
             5042      Management Act.
             5043          Section 51. Section 31A-30-106.7 is amended to read:
             5044           31A-30-106.7. Surcharge for groups changing carriers.
             5045          (1) (a) Except as provided in Subsection (1)(b), if prior notice is given, a covered
             5046      carrier may impose upon a small group that changes coverage to that carrier from another
             5047      carrier a one-time surcharge of up to 25% of the annualized premium that the carrier could


             5048      otherwise charge under Section [ 31A-30-106 ] 31A-30-106.1 .
             5049          (b) A covered carrier may not impose the surcharge described in Subsection (1)(a) if:
             5050          (i) the change in carriers occurs on the anniversary of the plan year, as defined in
             5051      Section 31A-1-301 ;
             5052          (ii) the previous coverage was terminated under Subsection 31A-30-107 (3)(e); [or]
             5053          (iii) employees from an existing group form a new business[.]; and
             5054          (iv) the surcharge is not applied uniformly to all similarly situated small groups.
             5055          (2) A covered carrier may not impose the surcharge described in Subsection (1) if the
             5056      offer to cover the group occurs at a time other than the anniversary of the plan year because:
             5057          (a) (i) the application for coverage is made prior to the anniversary date in accordance
             5058      with the covered carrier's published policies; and
             5059          (ii) the offer to cover the group is not issued until after the anniversary date; or
             5060          (b) (i) the application for coverage is made prior to the anniversary date in accordance
             5061      with the covered carrier's published policies; and
             5062          (ii) additional underwriting or rating information requested by the covered carrier is not
             5063      received until after the anniversary date.
             5064          (3) If a covered carrier chooses to apply a surcharge under Subsection (1), the
             5065      application of the surcharge and the criteria for incurring or avoiding the surcharge shall be
             5066      clearly stated in the:
             5067          (a) written application materials provided to the applicant at the time of application;
             5068      and
             5069          (b) written producer guidelines.
             5070          (4) The commissioner shall adopt rules in accordance with Title 63G, Chapter 3, Utah
             5071      Administrative Rulemaking Act, to ensure compliance with this section.
             5072          Section 52. Section 31A-30-107 is amended to read:
             5073           31A-30-107. Renewal -- Limitations -- Exclusions -- Discontinuance and
             5074      nonrenewal.
             5075          (1) Except as otherwise provided in this section, a small employer health benefit plan is
             5076      renewable and continues in force:
             5077          (a) with respect to all eligible employees and dependents; and
             5078          (b) at the option of the plan sponsor.


             5079          (2) A small employer health benefit plan may be discontinued or nonrenewed:
             5080          (a) for a network plan, if[: (i)] there is no longer any enrollee under the group health
             5081      plan who lives, resides, or works in:
             5082          [(A)] (i) the service area of the covered carrier; or
             5083          [(B)] (ii) the area for which the covered carrier is authorized to do business; [and] or
             5084          [(ii) in the case of the small employer market, the small employer carrier applies the
             5085      same criteria the small employer carrier would apply in denying enrollment in the plan under
             5086      Subsection 31A-30-108 (7); or]
             5087          (b) for coverage made available in the small or large employer market only through an
             5088      association, if:
             5089          (i) the employer's membership in the association ceases; and
             5090          (ii) the coverage is terminated uniformly without regard to any health status-related
             5091      factor relating to any covered individual.
             5092          (3) A small employer health benefit plan may be discontinued if:
             5093          (a) a condition described in Subsection (2) exists;
             5094          (b) except as prohibited by Section 31A-30-206 , the plan sponsor fails to pay
             5095      premiums or contributions in accordance with the terms of the contract;
             5096          (c) the plan sponsor:
             5097          (i) performs an act or practice that constitutes fraud; or
             5098          (ii) makes an intentional misrepresentation of material fact under the terms of the
             5099      coverage;
             5100          (d) the covered carrier:
             5101          (i) elects to discontinue offering a particular small employer health benefit product
             5102      delivered or issued for delivery in this state; and
             5103          (ii) (A) provides notice of the discontinuation in writing:
             5104          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             5105          (II) at least 90 days before the date the coverage will be discontinued;
             5106          (B) provides notice of the discontinuation in writing:
             5107          (I) to the commissioner; and
             5108          (II) at least three working days prior to the date the notice is sent to the affected plan
             5109      sponsors, employees, and dependents of the plan sponsors or employees;


             5110          (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase all
             5111      other small employer health benefit products currently being offered by the small employer
             5112      carrier in the market; and
             5113          (D) in exercising the option to discontinue that product and in offering the option of
             5114      coverage in this section, acts uniformly without regard to:
             5115          (I) the claims experience of a plan sponsor;
             5116          (II) any health status-related factor relating to any covered participant or beneficiary; or
             5117          (III) any health status-related factor relating to any new participant or beneficiary who
             5118      may become eligible for the coverage; or
             5119          (e) the covered carrier:
             5120          (i) elects to discontinue all of the covered carrier's small employer health benefit plans
             5121      in:
             5122          (A) the small employer market;
             5123          (B) the large employer market; or
             5124          (C) both the small employer and large employer markets; and
             5125          (ii) (A) provides notice of the discontinuation in writing:
             5126          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             5127          (II) at least 180 days before the date the coverage will be discontinued;
             5128          (B) provides notice of the discontinuation in writing:
             5129          (I) to the commissioner in each state in which an affected insured individual is known
             5130      to reside; and
             5131          (II) at least 30 working days prior to the date the notice is sent to the affected plan
             5132      sponsors, employees, and the dependents of the plan sponsors or employees;
             5133          (C) discontinues and nonrenews all plans issued or delivered for issuance in the
             5134      market; and
             5135          (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
             5136          (4) A small employer health benefit plan may be discontinued or nonrenewed:
             5137          (a) if a condition described in Subsection (2) exists; or
             5138          (b) except as prohibited by Section 31A-30-206 , for noncompliance with the insurer's
             5139      employer contribution requirements.
             5140          (5) A small employer health benefit plan may be nonrenewed:


             5141          (a) if a condition described in Subsection (2) exists; or
             5142          (b) except as prohibited by Section 31A-30-206 , for noncompliance with the insurer's
             5143      minimum participation requirements.
             5144          (6) (a) Except as provided in Subsection (6)(d), an eligible employee may be
             5145      discontinued if after issuance of coverage the eligible employee:
             5146          (i) engages in an act or practice that constitutes fraud in connection with the coverage;
             5147      or
             5148          (ii) makes an intentional misrepresentation of material fact in connection with the
             5149      coverage.
             5150          (b) An eligible employee that is discontinued under Subsection (6)(a) may reenroll:
             5151          (i) 12 months after the date of discontinuance; and
             5152          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
             5153      to reenroll.
             5154          (c) At the time the eligible employee's coverage is discontinued under Subsection
             5155      (6)(a), the covered carrier shall notify the eligible employee of the right to reenroll when
             5156      coverage is discontinued.
             5157          (d) An eligible employee may not be discontinued under this Subsection (6) because of
             5158      a fraud or misrepresentation that relates to health status.
             5159          (7) For purposes of this section, a reference to "plan sponsor" includes a reference to
             5160      the employer:
             5161          (a) with respect to coverage provided to an employer member of the association; and
             5162          (b) if the small employer health benefit plan is made available by a covered carrier in
             5163      the employer market only through:
             5164          (i) an association;
             5165          (ii) a trust; or
             5166          (iii) a discretionary group.
             5167          (8) A covered carrier may modify a small employer health benefit plan only:
             5168          (a) at the time of coverage renewal; and
             5169          (b) if the modification is effective uniformly among all plans with that product.
             5170          Section 53. Section 31A-30-108 is amended to read:
             5171           31A-30-108. Eligibility for small employer and individual market.


             5172          (1) (a) [Small employer carriers shall accept residents] A small employer carrier shall
             5173      accept a small employer that applies for small group coverage as set forth in the Health
             5174      Insurance Portability and Accountability Act, Sec. 2701(f) and 2711(a), and PPACA, Sec.
             5175      2702.
             5176          [(b) Individual carriers shall accept residents for individual coverage pursuant to:]
             5177          [(i) Health Insurance Portability and Accountability Act, Sec. 2741(a)-(b); and]
             5178          [(ii) Subsection (3).]
             5179          (b) An individual carrier shall accept an individual that applies for individual coverage
             5180      as set forth in PPACA, H. [ Section ] Sec. .H 2702.
             5181          (2) (a) [Small] A small employer [carriers] carrier shall offer to accept all eligible
             5182      employees and their dependents at the same level of benefits under any health benefit plan
             5183      provided to a small employer.
             5184          (b) [Small] A small employer [carriers] carrier may:
             5185          (i) request a small employer to submit a copy of the small employer's quarterly income
             5186      tax withholdings to determine whether the employees for whom coverage is provided or
             5187      requested are bona fide employees of the small employer; and
             5188          (ii) deny or terminate coverage if the small employer refuses to provide documentation
             5189      requested under Subsection (2)(b)(i).
             5190          [(3) Except as provided in Subsections (5) and (6) and Section 31A-30-110 , individual
             5191      carriers shall accept for coverage individuals to whom all of the following conditions apply:]
             5192          [(a) the individual is not covered or eligible for coverage:]
             5193          [(i) (A) as an employee of an employer;]
             5194          [(B) as a member of an association; or]
             5195          [(C) as a member of any other group; and]
             5196          [(ii) under:]
             5197          [(A) a health benefit plan; or]
             5198          [(B) a self-insured arrangement that provides coverage similar to that provided by a
             5199      health benefit plan as defined in Section 31A-1-301 ;]
             5200          [(b) the individual is not covered and is not eligible for coverage under any public
             5201      health benefits arrangement including:]
             5202          [(i) the Medicare program established under Title XVIII of the Social Security Act;]


             5203          [(ii) any act of Congress or law of this or any other state that provides benefits
             5204      comparable to the benefits provided under this chapter; or]
             5205          [(iii) coverage under the Comprehensive Health Insurance Pool Act created in Chapter
             5206      29, Comprehensive Health Insurance Pool Act;]
             5207          [(c) unless the maximum benefit has been reached the individual is not covered or
             5208      eligible for coverage under any:]
             5209          [(i) Medicare supplement policy;]
             5210          [(ii) conversion option;]
             5211          [(iii) continuation or extension under COBRA; or]
             5212          [(iv) state extension;]
             5213          [(d) the individual has not terminated or declined coverage described in Subsection
             5214      (3)(a), (b), or (c) within 93 days of application for coverage, unless the individual is eligible for
             5215      individual coverage under Health Insurance Portability and Accountability Act, Sec. 2741(b),
             5216      in which case, the requirement of this Subsection (3)(d) does not apply; and]
             5217          [(e) the individual is certified as ineligible for the Health Insurance Pool if:]
             5218          [(i) the individual applies for coverage with the Comprehensive Health Insurance Pool
             5219      within 30 days after being rejected or refused coverage by the covered carrier and reapplies for
             5220      coverage with that covered carrier within 30 days after the date of issuance of a certificate
             5221      under Subsection 31A-29-111 (5)(c); or]
             5222          [(ii) the individual applies for coverage with any individual carrier within 45 days
             5223      after:]
             5224          [(A) notice of cancellation of coverage under Subsection 31A-29-115 (1); or]
             5225          [(B) the date of issuance of a certificate under Subsection 31A-29-111 (5)(c) if the
             5226      individual applied first for coverage with the Comprehensive Health Insurance Pool.]
             5227          [(4) (a) If coverage is obtained under Subsection (3)(e)(i) and the required premium is
             5228      paid, the effective date of coverage shall be the first day of the month following the individual's
             5229      submission of a completed insurance application to that covered carrier.]
             5230          [(b) If coverage is obtained under Subsection (3)(e)(ii) and the required premium is
             5231      paid, the effective date of coverage shall be the day following the:]
             5232          [(i) cancellation of coverage under Subsection 31A-29-115 (1); or]
             5233          [(ii) submission of a completed insurance application to the Comprehensive Health


             5234      Insurance Pool.]
             5235          [(5) (a) An individual carrier is not required to accept individuals for coverage under
             5236      Subsection (3) if the carrier issues no new individual policies in the state after July 1, 1997.]
             5237          [(b) A carrier described in Subsection (5)(a) may not issue new individual policies in
             5238      the state for five years from July 1, 1997.]
             5239          [(c) Notwithstanding Subsection (5)(b), a carrier may request permission to issue new
             5240      policies after July 1, 1999, which may only be granted if:]
             5241          [(i) the carrier accepts uninsurables as is required of a carrier entering the market under
             5242      Subsection 31A-30-110 ; and]
             5243          [(ii) the commissioner finds that the carrier's issuance of new individual policies:]
             5244          [(A) is in the best interests of the state; and]
             5245          [(B) does not provide an unfair advantage to the carrier.]
             5246          [(6) (a) If the Comprehensive Health Insurance Pool, as set forth under Chapter 29,
             5247      Comprehensive Health Insurance Pool Act, is dissolved or discontinued, or if enrollment is
             5248      capped or suspended, an individual carrier may decline to accept individuals applying for
             5249      individual enrollment, other than individuals applying for coverage as set forth in Health
             5250      Insurance Portability and Accountability Act, Sec. 2741 (a)-(b).]
             5251          [(b) Within two calendar days of taking action under Subsection (6)(a), an individual
             5252      carrier will provide written notice to the department.]
             5253          [(7) (a) If a small employer carrier offers health benefit plans to small employers
             5254      through a network plan, the small employer carrier may:]
             5255          [(i) limit the employers that may apply for the coverage to those employers with
             5256      eligible employees who live, reside, or work in the service area for the network plan; and]
             5257          [(ii) within the service area of the network plan, deny coverage to an employer if the
             5258      small employer carrier has demonstrated to the commissioner that the small employer carrier:]
             5259          [(A) will not have the capacity to deliver services adequately to enrollees of any
             5260      additional groups because of the small employer carrier's obligations to existing group contract
             5261      holders and enrollees; and]
             5262          [(B) applies this section uniformly to all employers without regard to:]
             5263          [(I) the claims experience of an employer, an employer's employee, or a dependent of
             5264      an employee; or]


             5265          [(II) any health status-related factor relating to an employee or dependent of an
             5266      employee.]
             5267          [(b) (i) A small employer carrier that denies a health benefit product to an employer in
             5268      any service area in accordance with this section may not offer coverage in the small employer
             5269      market within the service area to any employer for a period of 180 days after the date the
             5270      coverage is denied.]
             5271          [(ii) This Subsection (7)(b) does not:]
             5272          [(A) limit the small employer carrier's ability to renew coverage that is in force; or]
             5273          [(B) relieve the small employer carrier of the responsibility to renew coverage that is in
             5274      force.]
             5275          [(c) Coverage offered within a service area after the 180-day period specified in
             5276      Subsection (7)(b) is subject to the requirements of this section.]
             5277          Section 54. Section 31A-30-207 is amended to read:
             5278           31A-30-207. Rating and underwriting restrictions for health plans in the defined
             5279      contribution arrangement market.
             5280          (1) Except as provided in Subsection (2), rating and underwriting restrictions for
             5281      defined contribution arrangement health benefit plans offered in the Health Insurance
             5282      Exchange shall be in accordance with Section 31A-30-106.1 , and the plan adopted under
             5283      Chapter 42, Defined Contribution Risk Adjuster Act.
             5284          (2) Notwithstanding [the provisions of] Subsections 31A-30-106.1 (9)(b)(ii) and (iii), a
             5285      carrier offering a defined contribution arrangement in the Health Insurance Exchange under
             5286      this part[: (a)] shall calculate rates based on a family tier rating structure that includes four tiers
             5287      in compliance with Subsection 31A-30-106.1 (9)(b)(i)[; and].
             5288          [(b) may not calculate rates based on a family tier rating structure that includes five or
             5289      six tiers as described in Subsection 31A-30-106 (9)(b)(ii) or (iii).]
             5290          (3) All insurers who participate in the defined contribution market shall:
             5291          (a) participate in the risk adjuster mechanism developed under Chapter 42, Defined
             5292      Contribution Risk Adjuster Act for all defined contribution arrangement health benefit plans;
             5293          (b) provide the risk adjuster board with:
             5294          (i) an employer group's risk factor; and
             5295          (ii) carrier enrollment data; and


             5296          (c) submit rates to the exchange that are net of commissions.
             5297          (4) When an employer group enters the defined contribution arrangement market and
             5298      the employer group has a health plan with an insurer who is participating in the defined
             5299      contribution arrangement market, the risk factor applied to the employer group when it enters
             5300      the defined contribution arrangement market may not be greater than the employer group's
             5301      renewal risk factor for the same group of covered employees and the same effective date, as
             5302      determined by the employer group's insurer.
             5303          Section 55. Section 31A-30-209 is amended to read:
             5304           31A-30-209. Appointment of insurance producers to Health Insurance Exchange.
             5305          (1) A producer may be listed on the Health Insurance Exchange as a credentialed
             5306      producer [for the defined contribution arrangement market in accordance with Section
             5307      63M-1-2504 ] H. [ , ] .H if the producer is designated as [an appointed] a credentialed agent
             5307a      for the
             5308      [defined contribution arrangement market] Health Insurance Exchange in accordance with
             5309      Subsection (2).
             5310          (2) A producer whose license under this title authorizes the producer to sell [defined
             5311      contribution arrangement health benefit plans may be appointed to the defined contribution
             5312      arrangement market on] accident and health insurance may be credentialed by the Health
             5313      Insurance Exchange [by the Insurance Department] and may sell any product on the Health
             5314      Insurance Exchange, if the producer:
             5315          [(a) submits an application to the Insurance Department to be appointed as a producer
             5316      for the defined contribution arrangement market on the Health Insurance Exchange;]
             5317          [(b) is an appointed agent in accordance with Subsection (3), for products offered in
             5318      the defined contribution arrangement market of the Health Insurance Exchange, with the
             5319      carriers that offer a defined contribution arrangement health benefit plan on the Health
             5320      Insurance Exchange; and]
             5321          [(c) has completed continuing education for the defined contribution arrangement
             5322      market that:]
             5323          [(i) is required by administrative rule adopted by the commissioner; and]
             5324          [(ii) provides training on premium assistance programs.]
             5325          (a) is an appointed producer with:
             5326          (i) all carriers that offer a plan in the defined contribution market on the Health


             5327      Insurance Exchange; and
             5328          (ii) at least one carrier that offers a dental plan on the Health Insurance Exchange; and
             5329          (b) completes each year the Health Insurance Exchange training that includes training
             5330      on premium assistance programs.
             5331          (3) A carrier shall appoint a producer to sell the carrier's products in the defined
             5332      contribution arrangement market of the Health Insurance Exchange, within 30 days of the
             5333      notice required in Subsection (3)(b), if:
             5334          (a) the producer is currently appointed by a majority of the carriers in the Health
             5335      Insurance Exchange to sell products either outside or inside of the Health Insurance Exchange;
             5336      and
             5337          (b) the producer informs the carrier that the producer is:
             5338          (i) applying to be appointed to the defined contribution arrangement market in the
             5339      Health Insurance Exchange;
             5340          (ii) appointed by a majority of the carriers in the defined contribution arrangement
             5341      market in the Health Insurance Exchange;
             5342          (iii) willing to complete training regarding the carrier's products offered on the defined
             5343      contribution arrangement market in the Health Insurance Exchange; and
             5344          (iv) willing to sign the contracts and business associate's agreements that the carrier
             5345      requires for appointed producers in the Health Insurance Exchange.
             5346          Section 56. Section 31A-30-211 is amended to read:
             5347           31A-30-211. Insurer disclosure.
             5348          [(1) The Health Insurance Exchange shall provide an employer's producer with the
             5349      group's risk factor used to calculate the employer group's premium at the time of:]
             5350          [(a) the initial offering of a health benefit plan; and]
             5351          [(b) the renewal of a health benefit plan.]
             5352          [(2) For health benefit plans that renew on or after March 1, 2012:]
             5353          (1) (a) [a] A carrier shall provide an employer and the employer's producer with
             5354      premium renewal rates at least 60 days [prior to] before the group's renewal date for a plan
             5355      offered under Part 1, Individual and Small Employer Group[; and].
             5356          (b) [the] The Health Insurance Exchange shall provide an employer and the employer's
             5357      producer with premium renewal rates at least 60 days [prior to] before the group's renewal date


             5358      for a plan offered under Part 2, Defined Contribution Arrangements.
             5359          [(3)] (2) An insurer does not have to provide additional notice of premium renewal
             5360      rates to the employer or the employer's producer if the Health Insurance Exchange provides
             5361      notice in accordance with Subsection [(2)] (1)(b).
             5362          Section 57. Section 31A-37-501 is amended to read:
             5363           31A-37-501. Reports to commissioner.
             5364          (1) A captive insurance company is not required to make a report except those
             5365      provided in this chapter.
             5366          (2) (a) Before March 1 of each year, a captive insurance company shall submit to the
             5367      commissioner a report of the financial condition of the captive insurance company, verified by
             5368      oath of two of the executive officers of the captive insurance company.
             5369          (b) Except as provided in Sections 31A-37-204 and 31A-37-205 , a captive insurance
             5370      company shall report:
             5371          (i) using generally accepted accounting principles, except to the extent that the
             5372      commissioner requires, approves, or accepts the use of a statutory accounting principle;
             5373          (ii) using a useful or necessary modification or adaptation to an accounting principle
             5374      that is required, approved, or accepted by the commissioner for the type of insurance and kind
             5375      of insurer to be reported upon; and
             5376          (iii) supplemental or additional information required by the commissioner.
             5377          (c) Except as otherwise provided:
             5378          (i) [an association captive insurance company and an industrial insured group] a
             5379      licensed captive insurance company shall file the report required by Section 31A-4-113 ; and
             5380          (ii) an industrial insured group shall comply with Section 31A-4-113.5 .
             5381          (3) (a) A pure captive insurance company may make written application to file the
             5382      required report on a fiscal year end that is consistent with the fiscal year of the parent company
             5383      of the pure captive insurance company.
             5384          (b) If the commissioner grants an alternative reporting date for a pure captive insurance
             5385      company requested under Subsection (3)(a), the annual report is due 60 days after the fiscal
             5386      year end.
             5387          (4) (a) Sixty days after the fiscal year end, a branch captive insurance company shall
             5388      file with the commissioner a copy of [all] the reports and statements required to be filed under


             5389      the laws of the jurisdiction in which the alien captive insurance company is formed, verified by
             5390      oath by two of the alien captive insurance company's executive officers.
             5391          (b) If the commissioner is satisfied that the annual report filed by the alien captive
             5392      insurance company in the jurisdiction in which the alien captive insurance company is formed
             5393      provides adequate information concerning the financial condition of the alien captive insurance
             5394      company, the commissioner may waive the requirement for completion of the annual statement
             5395      required for a captive insurance company under this section with respect to business written in
             5396      the alien jurisdiction.
             5397          (c) A waiver by the commissioner under Subsection (4)(b):
             5398          (i) shall be in writing; and
             5399          (ii) is subject to public inspection.
             5400          Section 58. Section 31A-40-203 is amended to read:
             5401           31A-40-203. Covered employee.
             5402          (1) (a) An individual is a covered employee of a professional employer organization if
             5403      the individual is coemployed pursuant to a professional employer agreement subject to this
             5404      chapter.
             5405          (b) An individual who is a covered employee under a professional employer agreement
             5406      is a covered [employer] employee, whether or not the professional employer organization
             5407      provides the notice required by Subsection 31A-40-202 (3), the earlier of the day on which:
             5408          (i) the employee is first compensated by the professional employer organization; or
             5409          (ii) the client notifies the professional employer organization of a new hire.
             5410          (2) An individual who is an officer, director, shareholder, partner, or manager of a
             5411      client is a covered employee:
             5412          (a) to the extent that the client and the professional employer organization expressly
             5413      agree in the professional employer agreement that the individual is a covered employee;
             5414          (b) if the conditions of Subsection (1) are met; and
             5415          (c) if the individual acts as an operational manager or performs day-to-day an
             5416      operational service for the client.
             5417          Section 59. Section 31A-40-209 is amended to read:
             5418           31A-40-209. Workers' compensation.
             5419          (1) In accordance with Section 34A-2-103 , a client is responsible for securing workers'


             5420      compensation coverage for a covered employee.
             5421          (2) Subject to the requirements of Section 34A-2-103 , if a professional employer
             5422      organization obtains or assists a client in obtaining workers' compensation insurance pursuant
             5423      to a professional employer agreement:
             5424          (a) the professional employer organization shall ensure that the client maintains and
             5425      provides workers' compensation coverage for a covered employee in accordance with
             5426      Subsection 34A-2-201 (1) or (2) and rules of the Labor Commission, made in accordance with
             5427      Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             5428          (b) the workers' compensation coverage may show the professional employer
             5429      organization as the named insured through a [multiple coordinated] master policy, if:
             5430          (i) the client is shown as an insured by means of an endorsement for each individual
             5431      client;
             5432          (ii) the experience modification of a client is used; and
             5433          (iii) the insurer files the endorsement with the Division of Industrial Accidents as
             5434      directed by a rule of the Labor Commission, made in accordance with Title 63G, Chapter 3,
             5435      Utah Administrative Rulemaking Act;
             5436          (c) at the termination of the professional employer agreement, if requested by the
             5437      client, the insurer shall provide the client records regarding the loss experience related to
             5438      workers' compensation insurance provided to a covered employee pursuant to the professional
             5439      employer agreement; and
             5440          (d) the insurer shall notify a client if the workers' compensation coverage for the client
             5441      is terminated.
             5442          (3) In accordance with Section 34A-2-105 , the exclusive remedy provisions of Section
             5443      34A-2-105 apply to both the client and the professional employer organization under a
             5444      professional employer agreement regulated under this chapter.
             5445          (4) Notwithstanding the other provisions in this section, an insurer may choose whether
             5446      to issue:
             5447          (a) a policy for a client; or
             5448          (b) a [multiple coordinated] master policy with the client shown as an additional
             5449      insured by means of an individual endorsement.
             5450          Section 60. Section 31A-42-202 is amended to read:


             5451           31A-42-202. Contents of plan.
             5452          (1) The board shall submit a plan of operation for the risk adjuster to the
             5453      commissioner. The plan shall:
             5454          (a) establish the methodology for implementing:
             5455          (i) Subsection (2) for the defined contribution arrangement market established under
             5456      Chapter 30, Part 2, Defined Contribution Arrangements; and
             5457          (ii) the participation of small employer group defined contribution arrangement health
             5458      benefit plans;
             5459          (b) establish regular times and places for meetings of the board;
             5460          (c) establish procedures for keeping records of all financial transactions and for
             5461      sending annual fiscal reports to the commissioner;
             5462          (d) contain additional provisions necessary and proper for the execution of the powers
             5463      and duties of the risk adjuster; and
             5464          (e) establish procedures in compliance with Title 63A, Utah Administrative Services
             5465      Code, to pay for administrative expenses incurred.
             5466          (2) (a) The plan adopted by the board for the defined contribution arrangement market
             5467      shall include:
             5468          (i) parameters an employer may use to designate eligible employees for the defined
             5469      contribution arrangement market; and
             5470          (ii) underwriting mechanisms and employer eligibility guidelines:
             5471          (A) consistent with the federal Health Insurance Portability and Accountability Act;
             5472      and
             5473          (B) necessary to protect insurance carriers from adverse selection in the defined
             5474      contribution market.
             5475          (b) The plan required by Subsection (2)(a) shall outline how premium rates for a
             5476      qualified individual in the defined contribution arrangement market are determined, including:
             5477          (i) the identification of an initial rate for a qualified individual based on:
             5478          (A) standardized age bands submitted by participating insurers; and
             5479          (B) wellness incentives for the individual as permitted by federal law; and
             5480          (ii) the identification of a group risk factor to be applied to the initial age rate of a
             5481      qualified individual based on the health conditions of all qualified individuals in the same


             5482      employer group and, for small employers, in accordance with Sections 31A-30-105 and
             5483      31A-30-106.1 .
             5484          (c) The plan adopted under Subsection (2)(a) for the defined contribution arrangement
             5485      market shall outline how:
             5486          (i) premium contributions for qualified individuals shall be submitted to the Health
             5487      Insurance Exchange in the amount determined under Subsection (2)(b); and
             5488          (ii) the Health Insurance Exchange shall distribute premiums to the insurers selected by
             5489      qualified individuals within an employer group based on each individual's rating factor
             5490      determined in accordance with the plan.
             5491          (d) The plan adopted under Subsection (2)(a) shall outline a mechanism for adjusting
             5492      risk between defined contribution arrangement market insurers that:
             5493          (i) identifies health care conditions subject to risk adjustment;
             5494          (ii) establishes an adjustment amount for each identified health care condition;
             5495          (iii) determines the extent to which an insurer has more or less individuals with an
             5496      identified health condition than would be expected; and
             5497          (iv) computes all risk adjustments.
             5498          (e) The board may amend the plan if necessary to:
             5499          (i) maintain the proper functioning and solvency of the defined contribution
             5500      arrangement market and the risk adjuster mechanism;
             5501          (ii) mitigate significant issues of risk selection; or
             5502          (iii) improve the administration of the risk adjuster mechanism.
             5503          (3) The board shall establish a mechanism in which the defined contribution
             5504      arrangement market participating carriers shall submit their plan base rates, rating factors, and
             5505      premiums to the commissioner for an actuarial review under [the provisions of] Section
             5506      31A-30-115 [prior to] before the publication of the premium rates on the Health Insurance
             5507      Exchange.
             5508          Section 61. Section 31A-43-102 is amended to read:
             5509           31A-43-102. Definitions.
             5510          For purposes of this chapter:
             5511          (1) "Actuarial certification" means a written statement by a member of the American
             5512      Academy of Actuaries, or by another individual acceptable to the commissioner, that an insurer


             5513      is in compliance with [the provisions of] this chapter, based upon the individual's examination
             5514      and including a review of the appropriate records and the actuarial assumptions and methods
             5515      used by the stop-loss insurer in establishing attachment points and other applicable
             5516      determinations in conjunction with the provision of stop-loss insurance coverage.
             5517          (2) "Aggregate attachment point" means the dollar amount [in losses for eligible
             5518      expenses] of covered claims incurred by a small employer plan beyond which the stop-loss
             5519      insurer incurs liability for [all or part of the] losses incurred by the small employer plan, subject
             5520      to limitations included in the contract.
             5521          (3) "Coverage" means the combination of the employer plan design and the stop-loss
             5522      contract design.
             5523          (4) "Expected claims" means the amount of claims that, in the absence of [a] aggregate
             5524      stop-loss [contract] insurance, are projected to be incurred by a small employer health plan
             5525      using reasonable and accepted actuarial principles.
             5526          (5) "Lasering":
             5527          (a) means increasing or removing stop-loss coverage for a specific individual within an
             5528      employer group; and
             5529          (b) includes other practices that are prohibited by the commissioner by administrative
             5530      rule that result in lowering the stop-loss premium for the employer by transferring the risk for
             5531      an [individual] individual's claims back to the employer.
             5532          (6) "Small employer" means an employer who, with respect to a calendar year and to a
             5533      plan year:
             5534          (a) employed an average of at least two employees but not more than 50 eligible
             5535      employees on each business day during the preceding calendar year; and
             5536          (b) employs at least two employees on the first day of the plan year.
             5537          (7) "Specific attachment point" means the dollar amount [in losses for eligible
             5538      expenses] of covered claims attributable to a single individual covered by a small employer
             5539      plan in a contract year beyond which the stop-loss insurer assumes [all or part of] the liability
             5540      for losses incurred by the small employer plan, subject to limitations included in the contract.
             5541          (8) "Stop-loss insurance" means insurance purchased by a small employer for which
             5542      the stop-loss insurer assumes[, on a per-loss basis,] all loss amounts of the small employer's
             5543      plan in excess of a stated amount, subject to the policy limit.


             5544          Section 62. Section 31A-43-301 is amended to read:
             5545           31A-43-301. Stop-loss insurance coverage standards.
             5546          (1) A small employer stop-loss insurance contract shall:
             5547          (a) be issued to the small employer to provide insurance to the group health benefit
             5548      plan, not the employees of the small employer;
             5549          (b) use a standard application form developed by the commissioner by administrative
             5550      rule;
             5551          (c) have a contract term with guaranteed rates for at least 12 months, without
             5552      adjustment, unless there is a change in the benefits provided under the small employer's health
             5553      plan during the contract period;
             5554          (d) include both a specific attachment point and an aggregate attachment point in a
             5555      contract;
             5556          (e) align stop-loss plan benefit limitations and exclusions with a small employer's
             5557      health plan benefit limitations and exclusions, including any annual or lifetime limits in the
             5558      employer's health plan;
             5559          (f) have an annual specific attachment point that is at least $10,000;
             5560          (g) have an annual aggregate attachment point that may not be less than [90%] 85% of
             5561      expected claims;
             5562          (h) pay stop-loss claims:
             5563          (i) incurred during the contract period; and
             5564          (ii) [submitted] paid within 12 months after the expiration date of the contract; and
             5565          (i) include provisions to cover incurred and unpaid claims if a small employer plan
             5566      terminates.
             5567          (2) A small employer stop-loss contract shall not:
             5568          (a) include lasering; and
             5569          (b) pay claims directly to an individual employee, member, or participant.
             5570          Section 63. Section 31A-43-302 is amended to read:
             5571           31A-43-302. Stop-loss restrictions -- Filing requirements.
             5572          [(1) A stop-loss insurer shall demonstrate to the commissioner that the rates associated
             5573      with specific and aggregate attachment points retained by a small employer group under the
             5574      insurer's stop-loss plan are actuarially sound.]


             5575          [(2)] (1) A stop-loss insurer shall file the stop-loss insurance contract form and [rates]
             5576      rate methodology with the commissioner pursuant to Sections 31A-2-201 and 31A-2-201.1
             5577      before the stop-loss insurance contract may be issued or delivered in the state.
             5578          [(3)] (2) A stop-loss insurer shall file with the commissioner, annually on or before
             5579      April 1, in a form and manner required by the commissioner by administrative rule adopted by
             5580      the commissioner:
             5581          (a) an actuarial memorandum and certification which demonstrates that the insurer is in
             5582      compliance with this chapter; and
             5583          (b) the stop-loss insurer's stop-loss experience.
             5584          [(4) Each] (3) An insurer shall maintain at its principal place of business:
             5585          (a) a complete and detailed description of its rating practices and renewal underwriting
             5586      practices, including information and documentation that demonstrate the rating methods and
             5587      practices are:
             5588          (i) based upon commonly accepted actuarial assumptions; and
             5589          (ii) in accordance with sound actuarial principles; and
             5590          (b) a copy of the [actuarial certification] annual filing required by Subsection [(3)] (2).
             5591          Section 64. Section 31A-43-303 is amended to read:
             5592           31A-43-303. Stop-loss insurance disclosure.
             5593          A stop-loss insurance contract delivered, issued for delivery, or entered into shall
             5594      include the disclosure exhibit required by the commissioner through administrative rule, which
             5595      shall include at least the following information:
             5596          (1) the complete costs for the stop-loss contract;
             5597          (2) the date on which the insurance takes effect and terminates, including renewability
             5598      provisions;
             5599          (3) the aggregate attachment point and the specific attachment point;
             5600          (4) [any] limitations on coverage;
             5601          (5) an explanation of monthly accommodation and disclosure about any monthly
             5602      accommodation features included in the stop-loss contract; [and]
             5603          (6) a description of terminal liability funding, including[: (a)] the cost of processing
             5604      claims before and after the termination of the contract; and
             5605          [(b)] (7) maximum claims liability to the employer.


             5606          Section 65. Section 31A-43-304 is amended to read:
             5607           31A-43-304. Administrative rules.
             5608          The commissioner may adopt administrative rules in accordance with Title 63G,
             5609      Chapter 3, Utah Administrative Rulemaking Act, to:
             5610          (1) implement this chapter;
             5611          [(2) assure that differences in rates charged are reasonable and reflect objective
             5612      differences in plan design;]
             5613          [(3)] (2) define lasering practices that are prohibited by this chapter;
             5614          [(4)] (3) establish the form and manner of the actuarial certification and the annual
             5615      report on stop-loss experience required by Section 31A-43-302 ;
             5616          [(5)] (4) establish the form and manner of the disclosure required by Section
             5617      31A-43-303 ;
             5618          [(6)] (5) assure the rates associated with the specific attachment points and aggregate
             5619      attachment points are actuarially sound and are not against the public interest; and
             5620          [(7)] (6) assure that stop-loss contracts include provisions to cover incurred and unpaid
             5621      claims if a small employer plan terminates.
             5622          Section 66. Section 53-13-103 is amended to read:
             5623           53-13-103. Law enforcement officer.
             5624          (1) (a) "Law enforcement officer" means a sworn and certified peace officer who is an
             5625      employee of a law enforcement agency that is part of or administered by the state or any of its
             5626      political subdivisions, and whose primary and principal duties consist of the prevention and
             5627      detection of crime and the enforcement of criminal statutes or ordinances of this state or any of
             5628      its political subdivisions.
             5629          (b) "Law enforcement officer" specifically includes the following:
             5630          (i) any sheriff or deputy sheriff, chief of police, police officer, or marshal of any
             5631      county, city, or town;
             5632          (ii) the commissioner of public safety and any member of the Department of Public
             5633      Safety certified as a peace officer;
             5634          (iii) all persons specified in Sections 23-20-1.5 and 79-4-501 ;
             5635          (iv) any police officer employed by any college or university;
             5636          (v) investigators for the Motor Vehicle Enforcement Division;


             5637          (vi) investigators for the Department of Insurance, Fraud Division;
             5638          [(vi)] (vii) special agents or investigators employed by the attorney general, district
             5639      attorneys, and county attorneys;
             5640          [(vii)] (viii) employees of the Department of Natural Resources designated as peace
             5641      officers by law;
             5642          [(viii)] (ix) school district police officers as designated by the board of education for
             5643      the school district;
             5644          [(ix)] (x) the executive director of the Department of Corrections and any correctional
             5645      enforcement or investigative officer designated by the executive director and approved by the
             5646      commissioner of public safety and certified by the division;
             5647          [(x)] (xi) correctional enforcement, investigative, or adult probation and parole officers
             5648      employed by the Department of Corrections serving on or before July 1, 1993;
             5649          [(xi)] (xii) members of a law enforcement agency established by a private college or
             5650      university provided that the college or university has been certified by the commissioner of
             5651      public safety according to rules of the Department of Public Safety;
             5652          [(xii)] (xiii) airport police officers of any airport owned or operated by the state or any
             5653      of its political subdivisions; and
             5654          [(xiii)] (xiv) transit police officers designated under Section 17B-2a-823 .
             5655          (2) Law enforcement officers may serve criminal process and arrest violators of any
             5656      law of this state and have the right to require aid in executing their lawful duties.
             5657          (3) (a) A law enforcement officer has statewide full-spectrum peace officer authority,
             5658      but the authority extends to other counties, cities, or towns only when the officer is acting
             5659      under Title 77, Chapter 9, Uniform Act on Fresh Pursuit, unless the law enforcement officer is
             5660      employed by the state.
             5661          (b) (i) A local law enforcement agency may limit the jurisdiction in which its law
             5662      enforcement officers may exercise their peace officer authority to a certain geographic area.
             5663          (ii) Notwithstanding Subsection (3)(b)(i), a law enforcement officer may exercise
             5664      authority outside of the limited geographic area, pursuant to Title 77, Chapter 9, Uniform Act
             5665      on Fresh Pursuit, if the officer is pursuing an offender for an offense that occurred within the
             5666      limited geographic area.
             5667          (c) The authority of law enforcement officers employed by the Department of


             5668      Corrections is regulated by Title 64, Chapter 13, Department of Corrections - State Prison.
             5669          (4) A law enforcement officer shall, prior to exercising peace officer authority:
             5670          (a) (i) have satisfactorily completed the requirements of Section 53-6-205 ; or
             5671          (ii) have met the waiver requirements in Section 53-6-206 ; and
             5672          (b) have satisfactorily completed annual certified training of at least 40 hours per year
             5673      as directed by the director of the division, with the advice and consent of the council.
             5674          Section 67. Section 63J-1-602.2 is amended to read:
             5675           63J-1-602.2. List of nonlapsing funds and accounts -- Title 31 through Title 45.
             5676          (1) Appropriations from the Insurance Department Restricted Account created in
             5677      Section 31A-3-103 , except to the extent that Section 31A-3-103 makes the money received
             5678      under that section free revenue.
             5679          [(1)] (2) Appropriations from the Technology Development Restricted Account created
             5680      in Section 31A-3-104 .
             5681          [(2)] (3) Appropriations from the Criminal Background Check Restricted Account
             5682      created in Section 31A-3-105 .
             5683          [(3)] (4) Appropriations from the Captive Insurance Restricted Account created in
             5684      Section 31A-3-304 , except to the extent that Section 31A-3-304 makes the money received
             5685      under that section free revenue.
             5686          [(4)] (5) Appropriations from the Title Licensee Enforcement Restricted Account
             5687      created in Section 31A-23a-415 .
             5688          [(5)] (6) Appropriations from the Health Insurance Actuarial Review Restricted
             5689      Account created in Section 31A-30-115 .
             5690          [(6)] (7) Appropriations from the Insurance Fraud Investigation Restricted Account
             5691      created in Section 31A-31-108 .
             5692          [(7)] (8) Appropriations from the Underage Drinking Prevention Media and Education
             5693      Campaign Restricted Account created in Section 32B-2-306 .
             5694          [(8)] (9) The Youth Development Organization Restricted Account created in Section
             5695      35A-8-1903 .
             5696          [(9)] (10) The Youth Character Organization Restricted Account created in Section
             5697      35A-8-2003 .
             5698          [(10)] (11) Funding for a new program or agency that is designated as nonlapsing under


             5699      Section 36-24-101 .
             5700          [(11)] (12) Appropriations from the Oil and Gas Conservation Account created in
             5701      Section 40-6-14.5 .
             5702          [(12)] (13) Appropriations from the Electronic Payment Fee Restricted Account
             5703      created by Section 41-1a-121 to the Motor Vehicle Division.
             5704          [(13)] (14) Funds available to the Tax Commission under Section 41-1a-1201 for the:
             5705          (a) purchase and distribution of license plates and decals; and
             5706          (b) administration and enforcement of motor vehicle registration requirements.
             5707          Section 68. Repealer.
             5708          This bill repeals:
             5709          Section 31A-30-110 , Individual enrollment cap.
             5710          Section 31A-30-111 , Limitations on high risk enrollees.
             5711          Section 69. Effective date.
             5712          This bill takes effect on May 13, 2014, except that the amendments to Section
             5713      31A-3-304 (Effective 07/01/15) take effect on July 1, 2015.


[Bill Documents][Bills Directory]