Second Substitute H.B. 24
This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Thu, Feb 13, 2014 at 3:28 PM by lpoole. --> This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Thu, Feb 27, 2014 at 4:38 PM by bhansen. -->
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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 . provides for insurance fraud investigators being designated as law enforcement
15 officers;
16 . addresses the Insurance Department Restricted Account;
17 . changes the date captive insurance companies are to pay a fee;
18 . addresses what constitutes a qualified insurer;
19 . modifies requirements for plan of orderly withdrawal from writing a line of
20 insurance;
21 . addresses notice requirements related to a request for a hearing;
22 . modifies calculations related to interest payable on life insurance proceeds;
23 . addresses uninsured and underinsured motorist coverage;
24 . addresses preferred provider contract provisions;
25 . addresses coverage of mental health and substance use disorders;
26 . modifies requirements for the uniform application form and the uniform waiver of
27 coverage form;
28 . amends language regarding the health benefit plan on the Health Insurance
29 Exchange;
30 . amends language regarding open enrollment provisions;
31 . modifies language regarding dental and vision policies being offered on the Health
32 Insurance Exchange;
33 . clarifies language related to the designated responsible licensed individual;
34 . clarifies references to the Violent Crime Control and Law Enforcement Act;
35 . modifies references to state of residence to home state;
36 . addresses requirements related to licensing when a person establishes legal
37 residence in the state;
38 . changes requirements related to the commissioner placing a licensee on probation;
39 . repeals language related to a voluntarily surrendered license that is reinstated upon
40 completion of continuing education requirements;
41 . modifies certain exemptions from continuing education requirements;
42 . clarifies training period requirements;
43 . changes a navigator license term to one year;
44 . provides for training periods for a navigator license;
45 . modifies continuing education requirements for a navigator;
46 . repeals the requirement that the commissioner publish a list of professional
47 designations whose continuing education requirements could be used for certain
48 circumstances related to navigators;
49 . modifies provisions related to inducements;
50 . addresses license compensation provisions;
51 . makes navigator licensees subject to unfair marketing practice restrictions;
52 . amends definitions specific to insurance adjusters' chapter;
53 . exempts an applicant for the crop insurance license class from certain requirements;
54 . modifies the definition of receiver;
55 . addresses the provisions related to the receivership court's seizure order;
56 . amends the purpose statement, definition, and applicability and scope provisions for
57 the Individual, Small Employer, and Group Health Insurance Act;
58 . addresses the surcharge for groups changing carriers;
59 . addresses eligibility for the small employer and individual market;
60 . modifies the provisions related to appointment of insurance producers and the
61 Health Insurance Exchange;
62 . modifies Health Insurance Exchange disclosure requirements;
63 . requires a captive insurance company, rather than an association captive insurance
64 company or industrial insured group, to file a specified report;
65 . corrects a reference to a covered employee;
66 . changes reference to a multiple coordinated policy to a master policy;
67 . includes reference to the defined contribution arrangement market into the Defined
68 Contribution Risk Adjuster Act;
69 . modifies definitions in the Small Employer Stop-Loss Insurance Act;
70 . addresses stop-loss insurance coverage standards, stop-loss restrictions, filing
71 requirements, and stop-loss insurance disclosure;
72 . modifies commissioner's rulemaking authority under the Small Employer Stop-Loss
73 Insurance Act; and
74 . makes technical and conforming amendments.
75 Money Appropriated in this Bill:
76 S. [
76a Department Restricted Account by $403,500. .S
77 Other Special Clauses:
78 This bill provides an effective date.
79 This bill provides revisor instructions.
80 Utah Code Sections Affected:
81 AMENDS:
82 31A-1-301 , as last amended by Laws of Utah 2013, Chapter 319
83 31A-2-104 , as last amended by Laws of Utah 1999, Chapter 21
84 31A-3-103 , as last amended by Laws of Utah 2011, Chapter 284
85 31A-3-304 (Superseded 07/01/15), as last amended by Laws of Utah 2011, Chapter
86 284
87 31A-3-304 (Effective 07/01/15), as last amended by Laws of Utah 2013, Chapter 319
88 31A-4-102 , as last amended by Laws of Utah 2008, Chapter 345
89 31A-4-115 , as last amended by Laws of Utah 2002, Chapter 308
90 31A-8-402.3 , as last amended by Laws of Utah 2004, Chapter 329
91 31A-16-103 , as last amended by Laws of Utah 2004, Chapter 2
92 31A-17-607 , as last amended by Laws of Utah 2001, Chapter 116
93 31A-22-305 , as last amended by Laws of Utah 2013, Chapter 460
94 31A-22-305.3 , as last amended by Laws of Utah 2013, Chapter 460
95 31A-22-428 , as enacted by Laws of Utah 2008, Chapter 345
96 31A-22-617 , as last amended by Laws of Utah 2013, Chapters 104 and 319
97 31A-22-618.5 , as last amended by Laws of Utah 2013, Chapter 319
98 31A-22-625 , as last amended by Laws of Utah 2012, Chapter 253
99 31A-22-635 , as last amended by Laws of Utah 2012, Chapters 253 and 279
100 31A-22-721 , as last amended by Laws of Utah 2011, Chapter 284
101 31A-23a-102 , as last amended by Laws of Utah 2013, Chapter 319
102 31A-23a-104 , as last amended by Laws of Utah 2012, Chapter 253
103 31A-23a-105 , as last amended by Laws of Utah 2013, Chapter 319
104 31A-23a-108 , as last amended by Laws of Utah 2012, Chapter 253
105 31A-23a-112 , as last amended by Laws of Utah 2008, Chapter 382
106 31A-23a-113 , as last amended by Laws of Utah 2012, Chapter 253
107 31A-23a-202 , as last amended by Laws of Utah 2013, Chapter 319
108 31A-23a-203 , as last amended by Laws of Utah 2012, Chapter 253
109 31A-23a-402.5 , as last amended by Laws of Utah 2013, Chapter 319
110 31A-23a-501 , as last amended by Laws of Utah 2013, Chapter 341
111 31A-23b-102 , as enacted by Laws of Utah 2013, Chapter 341
112 31A-23b-202 , as enacted by Laws of Utah 2013, Chapter 341
113 31A-23b-205 , as enacted by Laws of Utah 2013, Chapter 341
114 31A-23b-206 , as enacted by Laws of Utah 2013, Chapter 341
115 31A-23b-301 , as enacted by Laws of Utah 2013, Chapter 341
116 31A-23b-402 , as enacted by Laws of Utah 2013, Chapter 341
117 31A-25-208 , as last amended by Laws of Utah 2011, Chapter 284
118 31A-25-209 , as last amended by Laws of Utah 2008, Chapter 382
119 31A-26-102 , as last amended by Laws of Utah 2012, Chapter 151
120 31A-26-206 , as last amended by Laws of Utah 2011, Chapter 284
121 31A-26-207 , as last amended by Laws of Utah 2001, Chapter 116
122 31A-26-213 , as last amended by Laws of Utah 2011, Chapter 284
123 31A-26-214 , as last amended by Laws of Utah 2008, Chapter 382
124 31A-26-214.5 , as last amended by Laws of Utah 2009, Chapter 349
125 31A-27a-102 , as last amended by Laws of Utah 2008, Chapter 382
126 31A-27a-107 , as enacted by Laws of Utah 2007, Chapter 309
127 31A-27a-201 , as enacted by Laws of Utah 2007, Chapter 309
128 31A-27a-701 , as last amended by Laws of Utah 2011, Chapter 297
129 31A-29-106 , as last amended by Laws of Utah 2013, Chapter 319
130 31A-29-111 , as last amended by Laws of Utah 2012, Chapters 158 and 347
131 31A-29-115 , as last amended by Laws of Utah 2004, Chapter 2
132 31A-30-102 , as last amended by Laws of Utah 2009, Chapter 12
133 31A-30-103 , as last amended by Laws of Utah 2013, Chapter 168
134 31A-30-104 , as last amended by Laws of Utah 2013, Chapters 168 and 341
135 31A-30-106 , as last amended by Laws of Utah 2011, Chapter 284
136 31A-30-106.7 , as last amended by Laws of Utah 2008, Chapter 382
137 31A-30-107 , as last amended by Laws of Utah 2009, Chapter 12
138 31A-30-108 , as last amended by Laws of Utah 2011, Chapter 284
139 31A-30-207 , as last amended by Laws of Utah 2011, Second Special Session, Chapter 5
140 31A-30-209 , as last amended by Laws of Utah 2011, Chapter 400
141 31A-30-211 , as last amended by Laws of Utah 2011, Second Special Session, Chapter 5
142 31A-37-501 , as last amended by Laws of Utah 2008, Chapter 302
143 31A-40-203 , as enacted by Laws of Utah 2008, Chapter 318
144 31A-40-209 , as enacted by Laws of Utah 2008, Chapter 318
145 31A-42-202 , as last amended by Laws of Utah 2011, Chapter 400
146 31A-43-102 , as enacted by Laws of Utah 2013, Chapter 341
147 31A-43-301 , as enacted by Laws of Utah 2013, Chapter 341
148 31A-43-302 , as enacted by Laws of Utah 2013, Chapter 341
149 31A-43-303 , as enacted by Laws of Utah 2013, Chapter 341
150 31A-43-304 , as enacted by Laws of Utah 2013, Chapter 341
151 53-13-103 , as last amended by Laws of Utah 2011, Chapter 58
152 63J-1-602.2 , as last amended by Laws of Utah 2013, Chapter 338
153 REPEALS:
154 31A-30-110 , as last amended by Laws of Utah 2011, Chapters 284 and 297
155 31A-30-111 , as last amended by Laws of Utah 2002, Chapter 308
156 Utah Code Sections Affected by Revisor Instructions:
157 31A-22-305 , as last amended by Laws of Utah 2013, Chapter 460
158 31A-22-305.3 , as last amended by Laws of Utah 2013, Chapter 460
159
160 Be it enacted by the Legislature of the state of Utah:
161 Section 1. Section 31A-1-301 is amended to read:
162 31A-1-301. Definitions.
163 As used in this title, unless otherwise specified:
164 (1) (a) "Accident and health insurance" means insurance to provide protection against
165 economic losses resulting from:
166 (i) a medical condition including:
167 (A) a medical care expense; or
168 (B) the risk of disability;
169 (ii) accident; or
170 (iii) sickness.
171 (b) "Accident and health insurance":
172 (i) includes a contract with disability contingencies including:
173 (A) an income replacement contract;
174 (B) a health care contract;
175 (C) an expense reimbursement contract;
176 (D) a credit accident and health contract;
177 (E) a continuing care contract; and
178 (F) a long-term care contract; and
179 (ii) may provide:
180 (A) hospital coverage;
181 (B) surgical coverage;
182 (C) medical coverage;
183 (D) loss of income coverage;
184 (E) prescription drug coverage;
185 (F) dental coverage; or
186 (G) vision coverage.
187 (c) "Accident and health insurance" does not include workers' compensation insurance.
188 (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
189 63G, Chapter 3, Utah Administrative Rulemaking Act.
190 (3) "Administrator" is defined in Subsection [
191 (4) "Adult" means an individual who has attained the age of at least 18 years.
192 (5) "Affiliate" means a person who controls, is controlled by, or is under common
193 control with, another person. A corporation is an affiliate of another corporation, regardless of
194 ownership, if substantially the same group of individuals manage the corporations.
195 (6) "Agency" means:
196 (a) a person other than an individual, including a sole proprietorship by which an
197 individual does business under an assumed name; and
198 (b) an insurance organization licensed or required to be licensed under Section
199 31A-23a-301 , 31A-25-207 , or 31A-26-209 .
200 (7) "Alien insurer" means an insurer domiciled outside the United States.
201 (8) "Amendment" means an endorsement to an insurance policy or certificate.
202 (9) "Annuity" means an agreement to make periodical payments for a period certain or
203 over the lifetime of one or more individuals if the making or continuance of all or some of the
204 series of the payments, or the amount of the payment, is dependent upon the continuance of
205 human life.
206 (10) "Application" means a document:
207 (a) (i) completed by an applicant to provide information about the risk to be insured;
208 and
209 (ii) that contains information that is used by the insurer to evaluate risk and decide
210 whether to:
211 (A) insure the risk under:
212 (I) the coverage as originally offered; or
213 (II) a modification of the coverage as originally offered; or
214 (B) decline to insure the risk; or
215 (b) used by the insurer to gather information from the applicant before issuance of an
216 annuity contract.
217 (11) "Articles" or "articles of incorporation" means:
218 (a) the original articles;
219 (b) a special law;
220 (c) a charter;
221 (d) an amendment;
222 (e) restated articles;
223 (f) articles of merger or consolidation;
224 (g) a trust instrument;
225 (h) another constitutive document for a trust or other entity that is not a corporation;
226 and
227 (i) an amendment to an item listed in Subsections (11)(a) through (h).
228 (12) "Bail bond insurance" means a guarantee that a person will attend court when
229 required, up to and including surrender of the person in execution of a sentence imposed under
230 Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
231 (13) "Binder" is defined in Section 31A-21-102 .
232 (14) "Blanket insurance policy" means a group policy covering a defined class of
233 persons:
234 (a) without individual underwriting or application; and
235 (b) that is determined by definition without designating each person covered.
236 (15) "Board," "board of trustees," or "board of directors" means the group of persons
237 with responsibility over, or management of, a corporation, however designated.
238 (16) "Bona fide office" means a physical office in this state:
239 (a) that is open to the public;
240 (b) that is staffed during regular business hours on regular business days; and
241 (c) at which the public may appear in person to obtain services.
242 (17) "Business entity" means:
243 (a) a corporation;
244 (b) an association;
245 (c) a partnership;
246 (d) a limited liability company;
247 (e) a limited liability partnership; or
248 (f) another legal entity.
249 (18) "Business of insurance" is defined in Subsection (88).
250 (19) "Business plan" means the information required to be supplied to the
251 commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
252 when these subsections apply by reference under:
253 (a) Section 31A-7-201 ;
254 (b) Section 31A-8-205 ; or
255 (c) Subsection 31A-9-205 (2).
256 (20) (a) "Bylaws" means the rules adopted for the regulation or management of a
257 corporation's affairs, however designated.
258 (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
259 corporation.
260 (21) "Captive insurance company" means:
261 (a) an insurer:
262 (i) owned by another organization; and
263 (ii) whose exclusive purpose is to insure risks of the parent organization and an
264 affiliated company; or
265 (b) in the case of a group or association, an insurer:
266 (i) owned by the insureds; and
267 (ii) whose exclusive purpose is to insure risks of:
268 (A) a member organization;
269 (B) a group member; or
270 (C) an affiliate of:
271 (I) a member organization; or
272 (II) a group member.
273 (22) "Casualty insurance" means liability insurance.
274 (23) "Certificate" means evidence of insurance given to:
275 (a) an insured under a group insurance policy; or
276 (b) a third party.
277 (24) "Certificate of authority" is included within the term "license."
278 (25) "Claim," unless the context otherwise requires, means a request or demand on an
279 insurer for payment of a benefit according to the terms of an insurance policy.
280 (26) "Claims-made coverage" means an insurance contract or provision limiting
281 coverage under a policy insuring against legal liability to claims that are first made against the
282 insured while the policy is in force.
283 (27) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
284 commissioner.
285 (b) When appropriate, the terms listed in Subsection (27)(a) apply to the equivalent
286 supervisory official of another jurisdiction.
287 (28) (a) "Continuing care insurance" means insurance that:
288 (i) provides board and lodging;
289 (ii) provides one or more of the following:
290 (A) a personal service;
291 (B) a nursing service;
292 (C) a medical service; or
293 (D) any other health-related service; and
294 (iii) provides the coverage described in this Subsection (28)(a) under an agreement
295 effective:
296 (A) for the life of the insured; or
297 (B) for a period in excess of one year.
298 (b) Insurance is continuing care insurance regardless of whether or not the board and
299 lodging are provided at the same location as a service described in Subsection (28)(a)(ii).
300 (29) (a) "Control," "controlling," "controlled," or "under common control" means the
301 direct or indirect possession of the power to direct or cause the direction of the management
302 and policies of a person. This control may be:
303 (i) by contract;
304 (ii) by common management;
305 (iii) through the ownership of voting securities; or
306 (iv) by a means other than those described in Subsections (29)(a)(i) through (iii).
307 (b) There is no presumption that an individual holding an official position with another
308 person controls that person solely by reason of the position.
309 (c) A person having a contract or arrangement giving control is considered to have
310 control despite the illegality or invalidity of the contract or arrangement.
311 (d) There is a rebuttable presumption of control in a person who directly or indirectly
312 owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
313 voting securities of another person.
314 (30) "Controlled insurer" means a licensed insurer that is either directly or indirectly
315 controlled by a producer.
316 (31) "Controlling person" means a person that directly or indirectly has the power to
317 direct or cause to be directed, the management, control, or activities of a reinsurance
318 intermediary.
319 (32) "Controlling producer" means a producer who directly or indirectly controls an
320 insurer.
321 (33) (a) "Corporation" means an insurance corporation, except when referring to:
322 (i) a corporation doing business:
323 (A) as:
324 (I) an insurance producer;
325 (II) a surplus lines producer;
326 (III) a limited line producer;
327 (IV) a consultant;
328 (V) a managing general agent;
329 (VI) a reinsurance intermediary;
330 (VII) a third party administrator; or
331 (VIII) an adjuster; and
332 (B) under:
333 (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
334 Reinsurance Intermediaries;
335 (II) Chapter 25, Third Party Administrators; or
336 (III) Chapter 26, Insurance Adjusters; or
337 (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
338 Holding Companies.
339 (b) "Stock corporation" means a stock insurance corporation.
340 (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
341 (34) (a) "Creditable coverage" has the same meaning as provided in federal regulations
342 adopted pursuant to the Health Insurance Portability and Accountability Act.
343 (b) "Creditable coverage" includes coverage that is offered through a public health plan
344 such as:
345 (i) the Primary Care Network Program under a Medicaid primary care network
346 demonstration waiver obtained subject to Section 26-18-3 ;
347 (ii) the Children's Health Insurance Program under Section 26-40-106 ; or
348 (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
349 101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. 109-415.
350 (35) "Credit accident and health insurance" means insurance on a debtor to provide
351 indemnity for payments coming due on a specific loan or other credit transaction while the
352 debtor has a disability.
353 (36) (a) "Credit insurance" means insurance offered in connection with an extension of
354 credit that is limited to partially or wholly extinguishing that credit obligation.
355 (b) "Credit insurance" includes:
356 (i) credit accident and health insurance;
357 (ii) credit life insurance;
358 (iii) credit property insurance;
359 (iv) credit unemployment insurance;
360 (v) guaranteed automobile protection insurance;
361 (vi) involuntary unemployment insurance;
362 (vii) mortgage accident and health insurance;
363 (viii) mortgage guaranty insurance; and
364 (ix) mortgage life insurance.
365 (37) "Credit life insurance" means insurance on the life of a debtor in connection with
366 an extension of credit that pays a person if the debtor dies.
367 (38) "Credit property insurance" means insurance:
368 (a) offered in connection with an extension of credit; and
369 (b) that protects the property until the debt is paid.
370 (39) "Credit unemployment insurance" means insurance:
371 (a) offered in connection with an extension of credit; and
372 (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
373 (i) specific loan; or
374 (ii) credit transaction.
375 (40) "Creditor" means a person, including an insured, having a claim, whether:
376 (a) matured;
377 (b) unmatured;
378 (c) liquidated;
379 (d) unliquidated;
380 (e) secured;
381 (f) unsecured;
382 (g) absolute;
383 (h) fixed; or
384 (i) contingent.
385 (41) (a) "Crop insurance" means insurance providing protection against damage to
386 crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation,
387 disease, or other yield-reducing conditions or perils that is:
388 (i) provided by the private insurance market; or
389 (ii) subsidized by the Federal Crop Insurance Corporation.
390 (b) "Crop insurance" includes multiperil crop insurance.
391 (42) (a) "Customer service representative" means a person that provides an insurance
392 service and insurance product information:
393 (i) for the customer service representative's:
394 (A) producer;
395 (B) surplus lines producer; or
396 (C) consultant employer; and
397 (ii) to the customer service representative's employer's:
398 (A) customer;
399 (B) client; or
400 (C) organization.
401 (b) A customer service representative may only operate within the scope of authority of
402 the customer service representative's producer, surplus lines producer, or consultant employer.
403 (43) "Deadline" means a final date or time:
404 (a) imposed by:
405 (i) statute;
406 (ii) rule; or
407 (iii) order; and
408 (b) by which a required filing or payment must be received by the department.
409 (44) "Deemer clause" means a provision under this title under which upon the
410 occurrence of a condition precedent, the commissioner is considered to have taken a specific
411 action. If the statute so provides, a condition precedent may be the commissioner's failure to
412 take a specific action.
413 (45) "Degree of relationship" means the number of steps between two persons
414 determined by counting the generations separating one person from a common ancestor and
415 then counting the generations to the other person.
416 (46) "Department" means the Insurance Department.
417 (47) "Director" means a member of the board of directors of a corporation.
418 (48) "Disability" means a physiological or psychological condition that partially or
419 totally limits an individual's ability to:
420 (a) perform the duties of:
421 (i) that individual's occupation; or
422 (ii) [
423 training, or experience; or
424 (b) perform two or more of the following basic activities of daily living:
425 (i) eating;
426 (ii) toileting;
427 (iii) transferring;
428 (iv) bathing; or
429 (v) dressing.
430 (49) "Disability income insurance" is defined in Subsection (79).
431 (50) "Domestic insurer" means an insurer organized under the laws of this state.
432 (51) "Domiciliary state" means the state in which an insurer:
433 (a) is incorporated;
434 (b) is organized; or
435 (c) in the case of an alien insurer, enters into the United States.
436 (52) (a) "Eligible employee" means:
437 (i) an employee who:
438 (A) works on a full-time basis; and
439 (B) has a normal work week of 30 or more hours; or
440 (ii) a person described in Subsection (52)(b).
441 (b) "Eligible employee" includes, if the individual is included under a health benefit
442 plan of a small employer:
443 (i) a sole proprietor;
444 (ii) a partner in a partnership; or
445 (iii) an independent contractor.
446 (c) "Eligible employee" does not include, unless eligible under Subsection (52)(b):
447 (i) an individual who works on a temporary or substitute basis for a small employer;
448 (ii) an employer's spouse; or
449 (iii) a dependent of an employer.
450 (53) "Employee" means an individual employed by an employer.
451 (54) "Employee benefits" means one or more benefits or services provided to:
452 (a) an employee; or
453 (b) a dependent of an employee.
454 (55) (a) "Employee welfare fund" means a fund:
455 (i) established or maintained, whether directly or through a trustee, by:
456 (A) one or more employers;
457 (B) one or more labor organizations; or
458 (C) a combination of employers and labor organizations; and
459 (ii) that provides employee benefits paid or contracted to be paid, other than income
460 from investments of the fund:
461 (A) by or on behalf of an employer doing business in this state; or
462 (B) for the benefit of a person employed in this state.
463 (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
464 revenues.
465 (56) "Endorsement" means a written agreement attached to a policy or certificate to
466 modify the policy or certificate coverage.
467 (57) "Enrollment date," with respect to a health benefit plan, means:
468 (a) the first day of coverage; or
469 (b) if there is a waiting period, the first day of the waiting period.
470 (58) (a) "Escrow" means:
471 (i) a transaction that effects the sale, transfer, encumbering, or leasing of real property,
472 when a person not a party to the transaction, and neither having nor acquiring an interest in the
473 title, performs, in accordance with the written instructions or terms of the written agreement
474 between the parties to the transaction, any of the following actions:
475 (A) the explanation, holding, or creation of a document; or
476 (B) the receipt, deposit, and disbursement of money;
477 (ii) a settlement or closing involving:
478 (A) a mobile home;
479 (B) a grazing right;
480 (C) a water right; or
481 (D) other personal property authorized by the commissioner.
482 (b) "Escrow" does not include:
483 (i) the following notarial acts performed by a notary within the state:
484 (A) an acknowledgment;
485 (B) a copy certification;
486 (C) jurat; and
487 (D) an oath or affirmation;
488 (ii) the receipt or delivery of a document; or
489 (iii) the receipt of money for delivery to the escrow agent.
490 (59) "Escrow agent" means an agency title insurance producer meeting the
491 requirements of Sections 31A-4-107 , 31A-14-211 , and 31A-23a-204 , who is acting through an
492 individual title insurance producer licensed with an escrow subline of authority.
493 (60) (a) "Excludes" is not exhaustive and does not mean that another thing is not also
494 excluded.
495 (b) The items listed in a list using the term "excludes" are representative examples for
496 use in interpretation of this title.
497 (61) "Exclusion" means for the purposes of accident and health insurance that an
498 insurer does not provide insurance coverage, for whatever reason, for one of the following:
499 (a) a specific physical condition;
500 (b) a specific medical procedure;
501 (c) a specific disease or disorder; or
502 (d) a specific prescription drug or class of prescription drugs.
503 (62) "Expense reimbursement insurance" means insurance:
504 (a) written to provide a payment for an expense relating to hospital confinement
505 resulting from illness or injury; and
506 (b) written:
507 (i) as a daily limit for a specific number of days in a hospital; and
508 (ii) to have a one or two day waiting period following a hospitalization.
509 (63) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding
510 a position of public or private trust.
511 (64) (a) "Filed" means that a filing is:
512 (i) submitted to the department as required by and in accordance with applicable
513 statute, rule, or filing order;
514 (ii) received by the department within the time period provided in applicable statute,
515 rule, or filing order; and
516 (iii) accompanied by the appropriate fee in accordance with:
517 (A) Section 31A-3-103 ; or
518 (B) rule.
519 (b) "Filed" does not include a filing that is rejected by the department because it is not
520 submitted in accordance with Subsection (64)(a).
521 (65) "Filing," when used as a noun, means an item required to be filed with the
522 department including:
523 (a) a policy;
524 (b) a rate;
525 (c) a form;
526 (d) a document;
527 (e) a plan;
528 (f) a manual;
529 (g) an application;
530 (h) a report;
531 (i) a certificate;
532 (j) an endorsement;
533 (k) an actuarial certification;
534 (l) a licensee annual statement;
535 (m) a licensee renewal application;
536 (n) an advertisement; or
537 (o) an outline of coverage.
538 (66) "First party insurance" means an insurance policy or contract in which the insurer
539 agrees to pay a claim submitted to it by the insured for the insured's losses.
540 (67) "Foreign insurer" means an insurer domiciled outside of this state, including an
541 alien insurer.
542 (68) (a) "Form" means one of the following prepared for general use:
543 (i) a policy;
544 (ii) a certificate;
545 (iii) an application;
546 (iv) an outline of coverage; or
547 (v) an endorsement.
548 (b) "Form" does not include a document specially prepared for use in an individual
549 case.
550 (69) "Franchise insurance" means an individual insurance policy provided through a
551 mass marketing arrangement involving a defined class of persons related in some way other
552 than through the purchase of insurance.
553 (70) "General lines of authority" include:
554 (a) the general lines of insurance in Subsection (71);
555 (b) title insurance under one of the following sublines of authority:
556 (i) search, including authority to act as a title marketing representative;
557 (ii) escrow, including authority to act as a title marketing representative; and
558 (iii) title marketing representative only;
559 (c) surplus lines;
560 (d) workers' compensation; and
561 (e) [
562 recognize in the public interest.
563 (71) "General lines of insurance" include:
564 (a) accident and health;
565 (b) casualty;
566 (c) life;
567 (d) personal lines;
568 (e) property; and
569 (f) variable contracts, including variable life and annuity.
570 (72) "Group health plan" means an employee welfare benefit plan to the extent that the
571 plan provides medical care:
572 (a) (i) to an employee; or
573 (ii) to a dependent of an employee; and
574 (b) (i) directly;
575 (ii) through insurance reimbursement; or
576 (iii) through another method.
577 (73) (a) "Group insurance policy" means a policy covering a group of persons that is
578 issued:
579 (i) to a policyholder on behalf of the group; and
580 (ii) for the benefit of a member of the group who is selected under a procedure defined
581 in:
582 (A) the policy; or
583 (B) an agreement that is collateral to the policy.
584 (b) A group insurance policy may include a member of the policyholder's family or a
585 dependent.
586 (74) "Guaranteed automobile protection insurance" means insurance offered in
587 connection with an extension of credit that pays the difference in amount between the
588 insurance settlement and the balance of the loan if the insured automobile is a total loss.
589 (75) (a) Except as provided in Subsection (75)(b), "health benefit plan" means a policy
590 or certificate that:
591 (i) provides health care insurance;
592 (ii) provides major medical expense insurance; or
593 (iii) is offered as a substitute for hospital or medical expense insurance, such as:
594 (A) a hospital confinement indemnity; or
595 (B) a limited benefit plan.
596 (b) "Health benefit plan" does not include a policy or certificate that:
597 (i) provides benefits solely for:
598 (A) accident;
599 (B) dental;
600 (C) income replacement;
601 (D) long-term care;
602 (E) a Medicare supplement;
603 (F) a specified disease;
604 (G) vision; or
605 (H) a short-term limited duration; or
606 (ii) is offered and marketed as supplemental health insurance.
607 (76) "Health care" means any of the following intended for use in the diagnosis,
608 treatment, mitigation, or prevention of a human ailment or impairment:
609 (a) a professional service;
610 (b) a personal service;
611 (c) a facility;
612 (d) equipment;
613 (e) a device;
614 (f) supplies; or
615 (g) medicine.
616 (77) (a) "Health care insurance" or "health insurance" means insurance providing:
617 (i) a health care benefit; or
618 (ii) payment of an incurred health care expense.
619 (b) "Health care insurance" or "health insurance" does not include accident and health
620 insurance providing a benefit for:
621 (i) replacement of income;
622 (ii) short-term accident;
623 (iii) fixed indemnity;
624 (iv) credit accident and health;
625 (v) supplements to liability;
626 (vi) workers' compensation;
627 (vii) automobile medical payment;
628 (viii) no-fault automobile;
629 (ix) equivalent self-insurance; or
630 (x) a type of accident and health insurance coverage that is a part of or attached to
631 another type of policy.
632 (78) "Health Insurance Portability and Accountability Act" means the Health Insurance
633 Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended.
634 (79) "Income replacement insurance" or "disability income insurance" means insurance
635 written to provide payments to replace income lost from accident or sickness.
636 (80) "Indemnity" means the payment of an amount to offset all or part of an insured
637 loss.
638 (81) "Independent adjuster" means an insurance adjuster required to be licensed under
639 Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
640 (82) "Independently procured insurance" means insurance procured under Section
641 31A-15-104 .
642 (83) "Individual" means a natural person.
643 (84) "Inland marine insurance" includes insurance covering:
644 (a) property in transit on or over land;
645 (b) property in transit over water by means other than boat or ship;
646 (c) bailee liability;
647 (d) fixed transportation property such as bridges, electric transmission systems, radio
648 and television transmission towers and tunnels; and
649 (e) personal and commercial property floaters.
650 (85) "Insolvency" means that:
651 (a) an insurer is unable to pay its debts or meet its obligations as the debts and
652 obligations mature;
653 (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
654 RBC under Subsection 31A-17-601 (8)(c); or
655 (c) an insurer is determined to be hazardous under this title.
656 (86) (a) "Insurance" means:
657 (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
658 persons to one or more other persons; or
659 (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
660 group of persons that includes the person seeking to distribute that person's risk.
661 (b) "Insurance" includes:
662 (i) a risk distributing arrangement providing for compensation or replacement for
663 damages or loss through the provision of a service or a benefit in kind;
664 (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
665 business and not as merely incidental to a business transaction; and
666 (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
667 but with a class of persons who have agreed to share the risk.
668 (87) "Insurance adjuster" means a person who directs or conducts the investigation,
669 negotiation, or settlement of a claim under an insurance policy other than life insurance or an
670 annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
671 (88) "Insurance business" or "business of insurance" includes:
672 (a) providing health care insurance by an organization that is or is required to be
673 licensed under this title;
674 (b) providing a benefit to an employee in the event of a contingency not within the
675 control of the employee, in which the employee is entitled to the benefit as a right, which
676 benefit may be provided either:
677 (i) by a single employer or by multiple employer groups; or
678 (ii) through one or more trusts, associations, or other entities;
679 (c) providing an annuity:
680 (i) including an annuity issued in return for a gift; and
681 (ii) except an annuity provided by a person specified in Subsections 31A-22-1305 (2)
682 and (3);
683 (d) providing the characteristic services of a motor club as outlined in Subsection
684 (116);
685 (e) providing another person with insurance;
686 (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
687 or surety, a contract or policy of title insurance;
688 (g) transacting or proposing to transact any phase of title insurance, including:
689 (i) solicitation;
690 (ii) negotiation preliminary to execution;
691 (iii) execution of a contract of title insurance;
692 (iv) insuring; and
693 (v) transacting matters subsequent to the execution of the contract and arising out of
694 the contract, including reinsurance;
695 (h) transacting or proposing a life settlement; and
696 (i) doing, or proposing to do, any business in substance equivalent to Subsections
697 (88)(a) through (h) in a manner designed to evade this title.
698 (89) "Insurance consultant" or "consultant" means a person who:
699 (a) advises another person about insurance needs and coverages;
700 (b) is compensated by the person advised on a basis not directly related to the insurance
701 placed; and
702 (c) except as provided in Section 31A-23a-501 , is not compensated directly or
703 indirectly by an insurer or producer for advice given.
704 (90) "Insurance holding company system" means a group of two or more affiliated
705 persons, at least one of whom is an insurer.
706 (91) (a) "Insurance producer" or "producer" means a person licensed or required to be
707 licensed under the laws of this state to sell, solicit, or negotiate insurance.
708 (b) (i) "Producer for the insurer" means a producer who is compensated directly or
709 indirectly by an insurer for selling, soliciting, or negotiating an insurance product of that
710 insurer.
711 (ii) "Producer for the insurer" may be referred to as an "agent."
712 (c) (i) "Producer for the insured" means a producer who:
713 (A) is compensated directly and only by an insurance customer or an insured; and
714 (B) receives no compensation directly or indirectly from an insurer for selling,
715 soliciting, or negotiating an insurance product of that insurer to an insurance customer or
716 insured.
717 (ii) "Producer for the insured" may be referred to as a "broker."
718 (92) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
719 promise in an insurance policy and includes:
720 (i) a policyholder;
721 (ii) a subscriber;
722 (iii) a member; and
723 (iv) a beneficiary.
724 (b) The definition in Subsection (92)(a):
725 (i) applies only to this title; and
726 (ii) does not define the meaning of this word as used in an insurance policy or
727 certificate.
728 (93) (a) "Insurer" means a person doing an insurance business as a principal including:
729 (i) a fraternal benefit society;
730 (ii) an issuer of a gift annuity other than an annuity specified in Subsections
731 31A-22-1305 (2) and (3);
732 (iii) a motor club;
733 (iv) an employee welfare plan; and
734 (v) a person purporting or intending to do an insurance business as a principal on that
735 person's own account.
736 (b) "Insurer" does not include a governmental entity to the extent the governmental
737 entity is engaged in an activity described in Section 31A-12-107 .
738 (94) "Interinsurance exchange" is defined in Subsection [
739 (95) "Involuntary unemployment insurance" means insurance:
740 (a) offered in connection with an extension of credit; and
741 (b) that provides indemnity if the debtor is involuntarily unemployed for payments
742 coming due on a:
743 (i) specific loan; or
744 (ii) credit transaction.
745 (96) "Large employer," in connection with a health benefit plan, means an employer
746 who, with respect to a calendar year and to a plan year:
747 (a) employed an average of at least 51 eligible employees on each business day during
748 the preceding calendar year; and
749 (b) employs at least two employees on the first day of the plan year.
750 (97) "Late enrollee," with respect to an employer health benefit plan, means an
751 individual whose enrollment is a late enrollment.
752 (98) "Late enrollment," with respect to an employer health benefit plan, means
753 enrollment of an individual other than:
754 (a) on the earliest date on which coverage can become effective for the individual
755 under the terms of the plan; or
756 (b) through special enrollment.
757 (99) (a) Except for a retainer contract or legal assistance described in Section
758 31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
759 specified legal expense.
760 (b) "Legal expense insurance" includes an arrangement that creates a reasonable
761 expectation of an enforceable right.
762 (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
763 legal services incidental to other insurance coverage.
764 (100) (a) "Liability insurance" means insurance against liability:
765 (i) for death, injury, or disability of a human being, or for damage to property,
766 exclusive of the coverages under:
767 (A) Subsection (110) for medical malpractice insurance;
768 (B) Subsection (138) for professional liability insurance; and
769 (C) Subsection [
770 (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
771 insured who is injured, irrespective of legal liability of the insured, when issued with or
772 supplemental to insurance against legal liability for the death, injury, or disability of a human
773 being, exclusive of the coverages under:
774 (A) Subsection (110) for medical malpractice insurance;
775 (B) Subsection (138) for professional liability insurance; and
776 (C) Subsection [
777 (iii) for loss or damage to property resulting from an accident to or explosion of a
778 boiler, pipe, pressure container, machinery, or apparatus;
779 (iv) for loss or damage to property caused by:
780 (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
781 (B) water entering through a leak or opening in a building; or
782 (v) for other loss or damage properly the subject of insurance not within another kind
783 of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
784 (b) "Liability insurance" includes:
785 (i) vehicle liability insurance;
786 (ii) residential dwelling liability insurance; and
787 (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
788 boiler, machinery, or apparatus of any kind when done in connection with insurance on the
789 elevator, boiler, machinery, or apparatus.
790 (101) (a) "License" means authorization issued by the commissioner to engage in an
791 activity that is part of or related to the insurance business.
792 (b) "License" includes a certificate of authority issued to an insurer.
793 (102) (a) "Life insurance" means:
794 (i) insurance on a human life; and
795 (ii) insurance pertaining to or connected with human life.
796 (b) The business of life insurance includes:
797 (i) granting a death benefit;
798 (ii) granting an annuity benefit;
799 (iii) granting an endowment benefit;
800 (iv) granting an additional benefit in the event of death by accident;
801 (v) granting an additional benefit to safeguard the policy against lapse; and
802 (vi) providing an optional method of settlement of proceeds.
803 (103) "Limited license" means a license that:
804 (a) is issued for a specific product of insurance; and
805 (b) limits an individual or agency to transact only for that product or insurance.
806 (104) "Limited line credit insurance" includes the following forms of insurance:
807 (a) credit life;
808 (b) credit accident and health;
809 (c) credit property;
810 (d) credit unemployment;
811 (e) involuntary unemployment;
812 (f) mortgage life;
813 (g) mortgage guaranty;
814 (h) mortgage accident and health;
815 (i) guaranteed automobile protection; and
816 (j) another form of insurance offered in connection with an extension of credit that:
817 (i) is limited to partially or wholly extinguishing the credit obligation; and
818 (ii) the commissioner determines by rule should be designated as a form of limited line
819 credit insurance.
820 (105) "Limited line credit insurance producer" means a person who sells, solicits, or
821 negotiates one or more forms of limited line credit insurance coverage to an individual through
822 a master, corporate, group, or individual policy.
823 (106) "Limited line insurance" includes:
824 (a) bail bond;
825 (b) limited line credit insurance;
826 (c) legal expense insurance;
827 (d) motor club insurance;
828 (e) car rental related insurance;
829 (f) travel insurance;
830 (g) crop insurance;
831 (h) self-service storage insurance;
832 (i) guaranteed asset protection waiver;
833 (j) portable electronics insurance; and
834 (k) another form of limited insurance that the commissioner determines by rule should
835 be designated a form of limited line insurance.
836 (107) "Limited lines authority" includes[
837 Subsection (106)[
838 [
839 (108) "Limited lines producer" means a person who sells, solicits, or negotiates limited
840 lines insurance.
841 (109) (a) "Long-term care insurance" means an insurance policy or rider advertised,
842 marketed, offered, or designated to provide coverage:
843 (i) in a setting other than an acute care unit of a hospital;
844 (ii) for not less than 12 consecutive months for a covered person on the basis of:
845 (A) expenses incurred;
846 (B) indemnity;
847 (C) prepayment; or
848 (D) another method;
849 (iii) for one or more necessary or medically necessary services that are:
850 (A) diagnostic;
851 (B) preventative;
852 (C) therapeutic;
853 (D) rehabilitative;
854 (E) maintenance; or
855 (F) personal care; and
856 (iv) that may be issued by:
857 (A) an insurer;
858 (B) a fraternal benefit society;
859 (C) (I) a nonprofit health hospital; and
860 (II) a medical service corporation;
861 (D) a prepaid health plan;
862 (E) a health maintenance organization; or
863 (F) an entity similar to the entities described in Subsections (109)(a)(iv)(A) through (E)
864 to the extent that the entity is otherwise authorized to issue life or health care insurance.
865 (b) "Long-term care insurance" includes:
866 (i) any of the following that provide directly or supplement long-term care insurance:
867 (A) a group or individual annuity or rider; or
868 (B) a life insurance policy or rider;
869 (ii) a policy or rider that provides for payment of benefits on the basis of:
870 (A) cognitive impairment; or
871 (B) functional capacity; or
872 (iii) a qualified long-term care insurance contract.
873 (c) "Long-term care insurance" does not include:
874 (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
875 (ii) basic hospital expense coverage;
876 (iii) basic medical/surgical expense coverage;
877 (iv) hospital confinement indemnity coverage;
878 (v) major medical expense coverage;
879 (vi) income replacement or related asset-protection coverage;
880 (vii) accident only coverage;
881 (viii) coverage for a specified:
882 (A) disease; or
883 (B) accident;
884 (ix) limited benefit health coverage; or
885 (x) a life insurance policy that accelerates the death benefit to provide the option of a
886 lump sum payment:
887 (A) if the following are not conditioned on the receipt of long-term care:
888 (I) benefits; or
889 (II) eligibility; and
890 (B) the coverage is for one or more the following qualifying events:
891 (I) terminal illness;
892 (II) medical conditions requiring extraordinary medical intervention; or
893 (III) permanent institutional confinement.
894 (110) "Medical malpractice insurance" means insurance against legal liability incident
895 to the practice and provision of a medical service other than the practice and provision of a
896 dental service.
897 (111) "Member" means a person having membership rights in an insurance
898 corporation.
899 (112) "Minimum capital" or "minimum required capital" means the capital that must be
900 constantly maintained by a stock insurance corporation as required by statute.
901 (113) "Mortgage accident and health insurance" means insurance offered in connection
902 with an extension of credit that provides indemnity for payments coming due on a mortgage
903 while the debtor has a disability.
904 (114) "Mortgage guaranty insurance" means surety insurance under which a mortgagee
905 or other creditor is indemnified against losses caused by the default of a debtor.
906 (115) "Mortgage life insurance" means insurance on the life of a debtor in connection
907 with an extension of credit that pays if the debtor dies.
908 (116) "Motor club" means a person:
909 (a) licensed under:
910 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
911 (ii) Chapter 11, Motor Clubs; or
912 (iii) Chapter 14, Foreign Insurers; and
913 (b) that promises for an advance consideration to provide for a stated period of time
914 one or more:
915 (i) legal services under Subsection 31A-11-102 (1)(b);
916 (ii) bail services under Subsection 31A-11-102 (1)(c); or
917 (iii) (A) trip reimbursement;
918 (B) towing services;
919 (C) emergency road services;
920 (D) stolen automobile services;
921 (E) a combination of the services listed in Subsections (116)(b)(iii)(A) through (D); or
922 (F) other services given in Subsections 31A-11-102 (1)(b) through (f).
923 (117) "Mutual" means a mutual insurance corporation.
924 (118) "Network plan" means health care insurance:
925 (a) that is issued by an insurer; and
926 (b) under which the financing and delivery of medical care is provided, in whole or in
927 part, through a defined set of providers under contract with the insurer, including the financing
928 and delivery of an item paid for as medical care.
929 (119) "Nonparticipating" means a plan of insurance under which the insured is not
930 entitled to receive a dividend representing a share of the surplus of the insurer.
931 (120) "Ocean marine insurance" means insurance against loss of or damage to:
932 (a) ships or hulls of ships;
933 (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, money,
934 securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
935 interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
936 (c) earnings such as freight, passage money, commissions, or profits derived from
937 transporting goods or people upon or across the oceans or inland waterways; or
938 (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
939 owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
940 in connection with maritime activity.
941 (121) "Order" means an order of the commissioner.
942 (122) "Outline of coverage" means a summary that explains an accident and health
943 insurance policy.
944 (123) "Participating" means a plan of insurance under which the insured is entitled to
945 receive a dividend representing a share of the surplus of the insurer.
946 (124) "Participation," as used in a health benefit plan, means a requirement relating to
947 the minimum percentage of eligible employees that must be enrolled in relation to the total
948 number of eligible employees of an employer reduced by each eligible employee who
949 voluntarily declines coverage under the plan because the employee:
950 (a) has other group health care insurance coverage; or
951 (b) receives:
952 (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
953 Security Amendments of 1965; or
954 (ii) another government health benefit.
955 (125) "Person" includes:
956 (a) an individual;
957 (b) a partnership;
958 (c) a corporation;
959 (d) an incorporated or unincorporated association;
960 (e) a joint stock company;
961 (f) a trust;
962 (g) a limited liability company;
963 (h) a reciprocal;
964 (i) a syndicate; or
965 (j) another similar entity or combination of entities acting in concert.
966 (126) "Personal lines insurance" means property and casualty insurance coverage sold
967 for primarily noncommercial purposes to:
968 (a) an individual; or
969 (b) a family.
970 (127) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
971 (128) "Plan year" means:
972 (a) the year that is designated as the plan year in:
973 (i) the plan document of a group health plan; or
974 (ii) a summary plan description of a group health plan;
975 (b) if the plan document or summary plan description does not designate a plan year or
976 there is no plan document or summary plan description:
977 (i) the year used to determine deductibles or limits;
978 (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
979 or
980 (iii) the employer's taxable year if:
981 (A) the plan does not impose deductibles or limits on a yearly basis; and
982 (B) (I) the plan is not insured; or
983 (II) the insurance policy is not renewed on an annual basis; or
984 (c) in a case not described in Subsection (128)(a) or (b), the calendar year.
985 (129) (a) "Policy" means a document, including an attached endorsement or application
986 that:
987 (i) purports to be an enforceable contract; and
988 (ii) memorializes in writing some or all of the terms of an insurance contract.
989 (b) "Policy" includes a service contract issued by:
990 (i) a motor club under Chapter 11, Motor Clubs;
991 (ii) a service contract provided under Chapter 6a, Service Contracts; and
992 (iii) a corporation licensed under:
993 (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
994 (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
995 (c) "Policy" does not include:
996 (i) a certificate under a group insurance contract; or
997 (ii) a document that does not purport to have legal effect.
998 (130) "Policyholder" means a person who controls a policy, binder, or oral contract by
999 ownership, premium payment, or otherwise.
1000 (131) "Policy illustration" means a presentation or depiction that includes
1001 nonguaranteed elements of a policy of life insurance over a period of years.
1002 (132) "Policy summary" means a synopsis describing the elements of a life insurance
1003 policy.
1004 (133) "PPACA" means the Patient Protection and Affordable Care Act, Pub. L. No.
1005 111-148 and the Health Care Education Reconciliation Act of 2010, Pub. L. No. 111-152, and
1006 related federal regulations and guidance.
1007 (134) "Preexisting condition," with respect to a health benefit plan:
1008 (a) means a condition that was present before the effective date of coverage, whether or
1009 not medical advice, diagnosis, care, or treatment was recommended or received before that day;
1010 and
1011 (b) does not include a condition indicated by genetic information unless an actual
1012 diagnosis of the condition by a physician has been made.
1013 (135) (a) "Premium" means the monetary consideration for an insurance policy.
1014 (b) "Premium" includes, however designated:
1015 (i) an assessment;
1016 (ii) a membership fee;
1017 (iii) a required contribution; or
1018 (iv) monetary consideration.
1019 (c) (i) "Premium" does not include consideration paid to a third party administrator for
1020 the third party administrator's services.
1021 (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
1022 insurance on the risks administered by the third party administrator.
1023 (136) "Principal officers" for a corporation means the officers designated under
1024 Subsection 31A-5-203 (3).
1025 (137) "Proceeding" includes an action or special statutory proceeding.
1026 (138) "Professional liability insurance" means insurance against legal liability incident
1027 to the practice of a profession and provision of a professional service.
1028 (139) (a) Except as provided in Subsection (139)(b), "property insurance" means
1029 insurance against loss or damage to real or personal property of every kind and any interest in
1030 that property:
1031 (i) from all hazards or causes; and
1032 (ii) against loss consequential upon the loss or damage including vehicle
1033 comprehensive and vehicle physical damage coverages.
1034 (b) "Property insurance" does not include:
1035 (i) inland marine insurance; and
1036 (ii) ocean marine insurance.
1037 (140) "Qualified long-term care insurance contract" or "federally tax qualified
1038 long-term care insurance contract" means:
1039 (a) an individual or group insurance contract that meets the requirements of Section
1040 7702B(b), Internal Revenue Code; or
1041 (b) the portion of a life insurance contract that provides long-term care insurance:
1042 (i) (A) by rider; or
1043 (B) as a part of the contract; and
1044 (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
1045 Code.
1046 (141) "Qualified United States financial institution" means an institution that:
1047 (a) is:
1048 (i) organized under the laws of the United States or any state; or
1049 (ii) in the case of a United States office of a foreign banking organization, licensed
1050 under the laws of the United States or any state;
1051 (b) is regulated, supervised, and examined by a United States federal or state authority
1052 having regulatory authority over a bank or trust company; and
1053 (c) meets the standards of financial condition and standing that are considered
1054 necessary and appropriate to regulate the quality of a financial institution whose letters of credit
1055 will be acceptable to the commissioner as determined by:
1056 (i) the commissioner by rule; or
1057 (ii) the Securities Valuation Office of the National Association of Insurance
1058 Commissioners.
1059 (142) (a) "Rate" means:
1060 (i) the cost of a given unit of insurance; or
1061 (ii) for property or casualty insurance, that cost of insurance per exposure unit either
1062 expressed as:
1063 (A) a single number; or
1064 (B) a pure premium rate, adjusted before the application of individual risk variations
1065 based on loss or expense considerations to account for the treatment of:
1066 (I) expenses;
1067 (II) profit; and
1068 (III) individual insurer variation in loss experience.
1069 (b) "Rate" does not include a minimum premium.
1070 (143) (a) Except as provided in Subsection (143)(b), "rate service organization" means
1071 a person who assists an insurer in rate making or filing by:
1072 (i) collecting, compiling, and furnishing loss or expense statistics;
1073 (ii) recommending, making, or filing rates or supplementary rate information; or
1074 (iii) advising about rate questions, except as an attorney giving legal advice.
1075 (b) "Rate service organization" does not mean:
1076 (i) an employee of an insurer;
1077 (ii) a single insurer or group of insurers under common control;
1078 (iii) a joint underwriting group; or
1079 (iv) an individual serving as an actuarial or legal consultant.
1080 (144) "Rating manual" means any of the following used to determine initial and
1081 renewal policy premiums:
1082 (a) a manual of rates;
1083 (b) a classification;
1084 (c) a rate-related underwriting rule; and
1085 (d) a rating formula that describes steps, policies, and procedures for determining
1086 initial and renewal policy premiums.
1087 (145) (a) "Rebate" means a licensee paying, allowing, giving, or offering to pay, allow,
1088 or give, directly or indirectly:
1089 (i) a refund of premium or portion of premium;
1090 (ii) a refund of commission or portion of commission;
1091 (iii) a refund of all or a portion of a consultant fee; or
1092 (iv) providing services or other benefits not specified in an insurance or annuity
1093 contract.
1094 (b) "Rebate" does not include:
1095 (i) a refund due to termination or changes in coverage;
1096 (ii) a refund due to overcharges made in error by the licensee; or
1097 (iii) savings or wellness benefits as provided in the contract by the licensee.
1098 [
1099 (a) the date delivered to and stamped received by the department, if delivered in
1100 person;
1101 (b) the post mark date, if delivered by mail;
1102 (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
1103 (d) the received date recorded on an item delivered, if delivered by:
1104 (i) facsimile;
1105 (ii) email; or
1106 (iii) another electronic method; or
1107 (e) a date specified in:
1108 (i) a statute;
1109 (ii) a rule; or
1110 (iii) an order.
1111 [
1112 association of persons:
1113 (a) operating through an attorney-in-fact common to all of the persons; and
1114 (b) exchanging insurance contracts with one another that provide insurance coverage
1115 on each other.
1116 [
1117 consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
1118 reinsurance transactions, this title sometimes refers to:
1119 (a) the insurer transferring the risk as the "ceding insurer"; and
1120 (b) the insurer assuming the risk as the:
1121 (i) "assuming insurer"; or
1122 (ii) "assuming reinsurer."
1123 [
1124 authority to assume reinsurance.
1125 [
1126 liability resulting from or incident to the ownership, maintenance, or use of a residential
1127 dwelling that is a detached single family residence or multifamily residence up to four units.
1128 [
1129 assumed under a reinsurance contract.
1130 (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
1131 liability assumed under a reinsurance contract.
1132 [
1133 (a) an insurance policy; or
1134 (b) an insurance certificate.
1135 [
1136 (i) note;
1137 (ii) stock;
1138 (iii) bond;
1139 (iv) debenture;
1140 (v) evidence of indebtedness;
1141 (vi) certificate of interest or participation in a profit-sharing agreement;
1142 (vii) collateral-trust certificate;
1143 (viii) preorganization certificate or subscription;
1144 (ix) transferable share;
1145 (x) investment contract;
1146 (xi) voting trust certificate;
1147 (xii) certificate of deposit for a security;
1148 (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
1149 payments out of production under such a title or lease;
1150 (xiv) commodity contract or commodity option;
1151 (xv) certificate of interest or participation in, temporary or interim certificate for,
1152 receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
1153 in Subsections [
1154 (xvi) another interest or instrument commonly known as a security.
1155 (b) "Security" does not include:
1156 (i) any of the following under which an insurance company promises to pay money in a
1157 specific lump sum or periodically for life or some other specified period:
1158 (A) insurance;
1159 (B) an endowment policy; or
1160 (C) an annuity contract; or
1161 (ii) a burial certificate or burial contract.
1162 [
1163 exclusion from coverage in accident and health insurance.
1164 [
1165 provides for spreading its own risks by a systematic plan.
1166 (b) Except as provided in this Subsection [
1167 include an arrangement under which a number of persons spread their risks among themselves.
1168 (c) "Self-insurance" includes:
1169 (i) an arrangement by which a governmental entity undertakes to indemnify an
1170 employee for liability arising out of the employee's employment; and
1171 (ii) an arrangement by which a person with a managed program of self-insurance and
1172 risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
1173 employees for liability or risk that is related to the relationship or employment.
1174 (d) "Self-insurance" does not include an arrangement with an independent contractor.
1175 [
1176 (a) by any means;
1177 (b) for money or its equivalent; and
1178 (c) on behalf of an insurance company.
1179 [
1180 advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
1181 insurance, but that provides coverage for less than 12 consecutive months for each covered
1182 person.
1183 [
1184 during each of which an individual does not have creditable coverage.
1185 [
1186
1187 who:
1188 (a) employed [
1189 an average of 50 eligible employees on [
1190 calendar year; and
1191 (b) employs at least [
1192 [
1193 the same meaning as provided in federal regulations adopted pursuant to the Health Insurance
1194 Portability and Accountability Act.
1195 [
1196 either directly or indirectly through one or more affiliates or intermediaries.
1197 (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
1198 shares are owned by that person either alone or with its affiliates, except for the minimum
1199 number of shares the law of the subsidiary's domicile requires to be owned by directors or
1200 others.
1201 [
1202 (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
1203 perform the principal's obligations to a creditor or other obligee;
1204 (b) bail bond insurance; and
1205 (c) fidelity insurance.
1206 [
1207 and liabilities.
1208 (b) (i) "Permanent surplus" means the surplus of an insurer or organization that is
1209 designated by the insurer or organization as permanent.
1210 (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-205 require
1211 that insurers or organizations doing business in this state maintain specified minimum levels of
1212 permanent surplus.
1213 (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
1214 same as the minimum required capital requirement that applies to stock insurers.
1215 (c) "Excess surplus" means:
1216 (i) for a life insurer, accident and health insurer, health organization, or property and
1217 casualty insurer as defined in Section 31A-17-601 , the lesser of:
1218 (A) that amount of an insurer's or health organization's total adjusted capital that
1219 exceeds the product of:
1220 (I) 2.5; and
1221 (II) the sum of the insurer's or health organization's minimum capital or permanent
1222 surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
1223 (B) that amount of an insurer's or health organization's total adjusted capital that
1224 exceeds the product of:
1225 (I) 3.0; and
1226 (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
1227 (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
1228 that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
1229 (A) 1.5; and
1230 (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
1231 [
1232 collects charges or premiums from, or who, for consideration, adjusts or settles claims of
1233 residents of the state in connection with insurance coverage, annuities, or service insurance
1234 coverage, except:
1235 (a) a union on behalf of its members;
1236 (b) a person administering a:
1237 (i) pension plan subject to the federal Employee Retirement Income Security Act of
1238 1974;
1239 (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
1240 (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
1241 (c) an employer on behalf of the employer's employees or the employees of one or
1242 more of the subsidiary or affiliated corporations of the employer;
1243 (d) an insurer licensed under the following, but only for a line of insurance for which
1244 the insurer holds a license in this state:
1245 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1246 (ii) Chapter 7, Nonprofit Health Service Insurance Corporations;
1247 (iii) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
1248 (iv) Chapter 9, Insurance Fraternals; or
1249 (v) Chapter 14, Foreign Insurers;
1250 (e) a person:
1251 (i) licensed or exempt from licensing under:
1252 (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
1253 Reinsurance Intermediaries; or
1254 (B) Chapter 26, Insurance Adjusters; and
1255 (ii) whose activities are limited to those authorized under the license the person holds
1256 or for which the person is exempt; or
1257 (f) an institution, bank, or financial institution:
1258 (i) that is:
1259 (A) an institution whose deposits and accounts are to any extent insured by a federal
1260 deposit insurance agency, including the Federal Deposit Insurance Corporation or National
1261 Credit Union Administration; or
1262 (B) a bank or other financial institution that is subject to supervision or examination by
1263 a federal or state banking authority; and
1264 (ii) that does not adjust claims without a third party administrator license.
1265 [
1266 owner of real or personal property or the holder of liens or encumbrances on that property, or
1267 others interested in the property against loss or damage suffered by reason of liens or
1268 encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity
1269 or unenforceability of any liens or encumbrances on the property.
1270 [
1271 organization's statutory capital and surplus as determined in accordance with:
1272 (a) the statutory accounting applicable to the annual financial statements required to be
1273 filed under Section 31A-4-113 ; and
1274 (b) another item provided by the RBC instructions, as RBC instructions is defined in
1275 Section 31A-17-601 .
1276 [
1277 a corporation.
1278 (b) "Trustee," when used in reference to an employee welfare fund, means an
1279 individual, firm, association, organization, joint stock company, or corporation, whether acting
1280 individually or jointly and whether designated by that name or any other, that is charged with
1281 or has the overall management of an employee welfare fund.
1282 [
1283 insurer" means an insurer:
1284 (i) not holding a valid certificate of authority to do an insurance business in this state;
1285 or
1286 (ii) transacting business not authorized by a valid certificate.
1287 (b) "Admitted insurer" or "authorized insurer" means an insurer:
1288 (i) holding a valid certificate of authority to do an insurance business in this state; and
1289 (ii) transacting business as authorized by a valid certificate.
1290 [
1291 insurer.
1292 [
1293 from or incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a
1294 vehicle comprehensive or vehicle physical damage coverage under Subsection (139).
1295 [
1296 security convertible into a security with a voting right associated with the security.
1297 [
1298 pass before coverage for an individual, who is otherwise eligible to enroll under the terms of
1299 the health benefit plan, can become effective.
1300 [
1301 (a) insurance for indemnification of an employer against liability for compensation
1302 based on:
1303 (i) a compensable accidental injury; and
1304 (ii) occupational disease disability;
1305 (b) employer's liability insurance incidental to workers' compensation insurance and
1306 written in connection with workers' compensation insurance; and
1307 (c) insurance assuring to a person entitled to workers' compensation benefits the
1308 compensation provided by law.
1309 Section 2. Section 31A-2-104 is amended to read:
1310 31A-2-104. Other employees -- Insurance fraud investigators.
1311 (1) The department shall employ a chief examiner and such other professional,
1312 technical, and clerical employees as necessary to carry out the duties of the department.
1313 (2) An insurance fraud investigator employed pursuant to Subsection (1) may as
1314 approved by the commissioner:
1315 (a) be designated a [
1316 [
1317 (b) be eligible for retirement benefits under the Public Safety Employee's Retirement
1318 System.
1319 Section 3. Section 31A-3-103 is amended to read:
1320 31A-3-103. Fees.
1321 (1) For purposes of this section, "services" means functions that are reasonable and
1322 necessary to enable the commissioner to perform the duties imposed by this title including:
1323 (a) issuing or renewing a license or certificate of authority;
1324 (b) filing a policy form;
1325 (c) reporting a producer appointment or termination; and
1326 (d) filing an annual statement.
1327 (2) Except as otherwise provided by this title:
1328 (a) the commissioner may set and collect a fee for services provided by the
1329 commissioner;
1330 (b) a fee related to the renewal of a license may be imposed no more frequently than
1331 once each year; and
1332 (c) a fee charged by the commissioner shall be set in accordance with Section
1333 63J-1-504 .
1334 (3) (a) The commissioner shall publish a schedule of fees established pursuant to this
1335 section.
1336 (b) The commissioner shall, by rule, establish the deadlines for payment of a fee
1337 established pursuant to this section.
1338 (4) (a) [
1339 account known as the "Insurance Department Restricted Account."
1340 (b) Except as provided in Subsection (4)(c), the Insurance Department Restricted
1341 Account shall consist of:
1342 (i) fees authorized by this section; and
1343 (ii) other money received by the department, including:
1344 (A) reimbursements for examination costs incurred by the department; and
1345 (B) forfeitures collected under this title.
1346 (c) The department shall deposit money it receives that is subject to a restricted account
1347 or enterprise fund created by this title into the restricted account or enterprise fund in
1348 accordance with the statute creating the restricted account or enterprise fund, and the
1349 department may not deposit the money into the Insurance Department Restricted Account.
1350 (d) Subject to appropriation by the Legislature, the department may expend money in
1351 the Insurance Department Restricted Account to fund the operations of the department.
1352 (e) (i) At the end of each fiscal year until June 30, 2015, the director of the Division of
1353 Finance shall transfer into the General Fund any money deposited into the Insurance
1354 Department Restricted Account under Subsection (4)(b) that exceeds the legislative
1355 appropriations from the Insurance Department Restricted Account for that year.
1356 (ii) Beginning with fiscal year 2015-2016, an appropriation of the Insurance
1357 Department Restricted Account is nonlapsing, except that at the end of each fiscal year, money
1358 received by the commissioner in excess of S. [
1358a revenue in the
1359 General Fund.
1360 Section 4. Section 31A-3-304 (Superseded 07/01/15) is amended to read:
1361 31A-3-304 (Superseded 07/01/15). Annual fees -- Other taxes or fees prohibited --
1362 Captive Insurance Restricted Account.
1363 (1) (a) A captive insurance company shall pay an annual fee imposed under this section
1364 to obtain or renew a certificate of authority.
1365 (b) The commissioner shall:
1366 (i) determine the annual fee pursuant to Section 31A-3-103 ; and
1367 (ii) consider whether the annual fee is competitive with fees imposed by other states on
1368 captive insurance companies.
1369 (2) A captive insurance company that fails to pay the fee required by this section is
1370 subject to the relevant sanctions of this title.
1371 (3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter
1372 9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
1373 the laws of this state that may be levied or assessed on a captive insurance company:
1374 (i) a fee under this section;
1375 (ii) a fee under Chapter 37, Captive Insurance Companies Act; and
1376 (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
1377 Act.
1378 (b) The state or a county, city, or town within the state may not levy or collect an
1379 occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
1380 against a captive insurance company.
1381 (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
1382 against a captive insurance company.
1383 (d) A captive insurance company is subject to real and personal property taxes.
1384 (4) A captive insurance company shall pay the fee imposed by this section to the
1385 commissioner by June [
1386 (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
1387 deposited into the Captive Insurance Restricted Account.
1388 (b) There is created in the General Fund a restricted account known as the "Captive
1389 Insurance Restricted Account."
1390 (c) The Captive Insurance Restricted Account shall consist of the fees described in
1391 Subsection (3)(a).
1392 (d) The commissioner shall administer the Captive Insurance Restricted Account.
1393 Subject to appropriations by the Legislature, the commissioner shall use the money deposited
1394 into the Captive Insurance Restricted Account to:
1395 (i) administer and enforce:
1396 (A) Chapter 37, Captive Insurance Companies Act; and
1397 (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
1398 (ii) promote the captive insurance industry in Utah.
1399 (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
1400 except that at the end of each fiscal year, money received by the commissioner in excess of
1401 $950,000 shall be treated as free revenue in the General Fund.
1402 Section 5. Section 31A-3-304 (Effective 07/01/15) is amended to read:
1403 31A-3-304 (Effective 07/01/15). Annual fees -- Other taxes or fees prohibited --
1404 Captive Insurance Restricted Account.
1405 (1) (a) A captive insurance company shall pay an annual fee imposed under this section
1406 to obtain or renew a certificate of authority.
1407 (b) The commissioner shall:
1408 (i) determine the annual fee pursuant to Section 31A-3-103 ; and
1409 (ii) consider whether the annual fee is competitive with fees imposed by other states on
1410 captive insurance companies.
1411 (2) A captive insurance company that fails to pay the fee required by this section is
1412 subject to the relevant sanctions of this title.
1413 (3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter
1414 9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
1415 the laws of this state that may be levied or assessed on a captive insurance company:
1416 (i) a fee under this section;
1417 (ii) a fee under Chapter 37, Captive Insurance Companies Act; and
1418 (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
1419 Act.
1420 (b) The state or a county, city, or town within the state may not levy or collect an
1421 occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
1422 against a captive insurance company.
1423 (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
1424 against a captive insurance company.
1425 (d) A captive insurance company is subject to real and personal property taxes.
1426 (4) A captive insurance company shall pay the fee imposed by this section to the
1427 commissioner by June [
1428 (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
1429 deposited into the Captive Insurance Restricted Account.
1430 (b) There is created in the General Fund a restricted account known as the "Captive
1431 Insurance Restricted Account."
1432 (c) The Captive Insurance Restricted Account shall consist of the fees described in
1433 Subsection (3)(a).
1434 (d) The commissioner shall administer the Captive Insurance Restricted Account.
1435 Subject to appropriations by the Legislature, the commissioner shall use the money deposited
1436 into the Captive Insurance Restricted Account to:
1437 (i) administer and enforce:
1438 (A) Chapter 37, Captive Insurance Companies Act; and
1439 (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
1440 (ii) promote the captive insurance industry in Utah.
1441 (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
1442 except that at the end of each fiscal year, money received by the commissioner in excess of
1443 $1,250,000 shall be treated as free revenue in the General Fund.
1444 Section 6. Section 31A-4-102 is amended to read:
1445 31A-4-102. Qualified insurers.
1446 (1) A person may not conduct an insurance business in Utah in person, through an
1447 agent, through a broker, through the mail, or through another method of communication,
1448 except:
1449 (a) an insurer:
1450 (i) authorized to do business in Utah under [
1451 (A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1452 (B) Chapter 7, Nonprofit Health Service Insurance Corporations;
1453 (C) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
1454 (D) Chapter 9, Insurance Fraternals;
1455 (E) Chapter 10, Annuities;
1456 (F) Chapter 11, Motor Clubs;
1457 (G) Chapter 13, Employee Welfare Funds and Plans;
1458 (H) Chapter 14, Foreign Insurers;
1459 (I) Chapter 37, Captive Insurance Companies Act; or
1460 (J) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
1461 (ii) within the limits of its certificate of authority;
1462 (b) a joint underwriting group under Section 31A-2-214 or 31A-20-102 ;
1463 (c) an insurer doing business under Section 31A-15-103 ;
1464 (d) a person who submits to the commissioner a certificate from the United States
1465 Department of Labor, or such other evidence as satisfies the commissioner, that the laws of
1466 Utah are preempted with respect to specified activities of that person by Section 514 of the
1467 Employee Retirement Income Security Act of 1974 or other federal law; or
1468 (e) a person exempt from this title under Section 31A-1-103 or another applicable
1469 statute.
1470 (2) As used in this section, "insurer" includes a bail bond surety company, as defined in
1471 Section 31A-35-102 .
1472 Section 7. Section 31A-4-115 is amended to read:
1473 31A-4-115. Plan of orderly withdrawal.
1474 (1) (a) When an insurer intends to withdraw from writing a line of insurance in this
1475 state or to reduce its total annual premium volume by 75% or more, the insurer shall file with
1476 the commissioner a plan of orderly withdrawal.
1477 (b) For purposes of this section, a discontinuance of a health benefit plan pursuant to
1478 one of the following provisions is a withdrawal from a line of insurance:
1479 (i) Subsection 31A-30-107 (3)(e); or
1480 (ii) Subsection 31A-30-107.1 (3)(e).
1481 (2) An insurer's plan of orderly withdrawal shall:
1482 (a) indicate the date the insurer intends to begin and complete its withdrawal plan; and
1483 (b) include provisions for:
1484 (i) meeting the insurer's contractual obligations;
1485 (ii) providing services to its Utah policyholders and claimants;
1486 (iii) meeting [
1487 (iv) [
1488
1489
1490
1491
1492 assumed or placed with another insurer approved by the commissioner.
1493 (3) The commissioner shall approve a plan of orderly withdrawal if the plan of orderly
1494 withdrawal adequately demonstrates that the insurer will:
1495 (a) protect the interests of the people of the state;
1496 (b) meet the insurer's contractual obligations;
1497 (c) provide service to the insurer's Utah policyholders and claimants; and
1498 (d) meet [
1499 (4) Section 31A-2-302 governs the commissioner's approval or disapproval of a plan for
1500 orderly withdrawal.
1501 (5) The commissioner may require an insurer to increase the deposit maintained in
1502 accordance with Section 31A-4-105 or Section 31A-4-105.5 and place the deposit in trust in
1503 the name of the commissioner upon finding, after an adjudicative proceeding that:
1504 (a) there is reasonable cause to conclude that the interests of the people of the state are
1505 best served by such action; and
1506 (b) the insurer:
1507 (i) has filed a plan of orderly withdrawal; or
1508 (ii) intends to:
1509 (A) withdraw from writing a line of insurance in this state; or
1510 (B) reduce the insurer's total annual premium volume by 75% or more.
1511 (6) An insurer is subject to the civil penalties under Section 31A-2-308 , if the insurer:
1512 (a) withdraws from writing insurance in this state without receiving the commissioner's
1513 approval of a plan of orderly withdrawal; or
1514 (b) reduces its total annual premium volume by 75% or more in any year without
1515 [
1516 commissioner's approval of a plan of orderly withdrawal.
1517 (7) An insurer that withdraws from writing all lines of insurance in this state may not
1518 resume writing insurance in this state for five years unless[
1519 the prohibition should be waived because the waiver is:
1520 [
1521 [
1522 [
1523 (8) The commissioner shall adopt rules necessary to implement this section.
1524 Section 8. Section 31A-8-402.3 is amended to read:
1525 31A-8-402.3. Discontinuance, nonrenewal, or changes to group health benefit
1526 plans.
1527 (1) Except as otherwise provided in this section, a group health benefit plan for a plan
1528 sponsor is renewable and continues in force:
1529 (a) with respect to all eligible employees and dependents; and
1530 (b) at the option of the plan sponsor.
1531 (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
1532 (a) for a network plan, if[
1533 plan who lives, resides, or works in:
1534 [
1535 [
1536 [
1537
1538 (b) for coverage made available in the small or large employer market only through an
1539 association, if:
1540 (i) the employer's membership in the association ceases; and
1541 (ii) the coverage is terminated uniformly without regard to any health status-related
1542 factor relating to any covered individual.
1543 (3) A health benefit plan for a plan sponsor may be discontinued if:
1544 (a) a condition described in Subsection (2) exists;
1545 (b) the plan sponsor fails to pay premiums or contributions in accordance with the
1546 terms of the contract;
1547 (c) the plan sponsor:
1548 (i) performs an act or practice that constitutes fraud; or
1549 (ii) makes an intentional misrepresentation of material fact under the terms of the
1550 coverage;
1551 (d) the insurer:
1552 (i) elects to discontinue offering a particular health benefit product delivered or issued
1553 for delivery in this state; and
1554 (ii) (A) provides notice of the discontinuation in writing:
1555 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
1556 (II) at least 90 days before the date the coverage will be discontinued;
1557 (B) provides notice of the discontinuation in writing:
1558 (I) to the commissioner; and
1559 (II) at least three working days prior to the date the notice is sent to the affected plan
1560 sponsors, employees, and dependents of the plan sponsors or employees;
1561 (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase:
1562 (I) all other health benefit products currently being offered by the insurer in the market;
1563 or
1564 (II) in the case of a large employer, any other health benefit product currently being
1565 offered in that market; and
1566 (D) in exercising the option to discontinue that product and in offering the option of
1567 coverage in this section, acts uniformly without regard to:
1568 (I) the claims experience of a plan sponsor;
1569 (II) any health status-related factor relating to any covered participant or beneficiary; or
1570 (III) any health status-related factor relating to any new participant or beneficiary who
1571 may become eligible for the coverage; or
1572 (e) the insurer:
1573 (i) elects to discontinue all of the insurer's health benefit plans in:
1574 (A) the small employer market;
1575 (B) the large employer market; or
1576 (C) both the small employer and large employer markets; and
1577 (ii) (A) provides notice of the discontinuation in writing:
1578 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
1579 (II) at least 180 days before the date the coverage will be discontinued;
1580 (B) provides notice of the discontinuation in writing:
1581 (I) to the commissioner in each state in which an affected insured individual is known
1582 to reside; and
1583 (II) at least 30 working days prior to the date the notice is sent to the affected plan
1584 sponsors, employees, and the dependents of the plan sponsors or employees;
1585 (C) discontinues and nonrenews all plans issued or delivered for issuance in the
1586 market; and
1587 (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
1588 (4) A large employer health benefit plan may be discontinued or nonrenewed:
1589 (a) if a condition described in Subsection (2) exists; or
1590 (b) for noncompliance with the insurer's:
1591 (i) minimum participation requirements; or
1592 (ii) employer contribution requirements.
1593 (5) A small employer health benefit plan may be discontinued or nonrenewed:
1594 (a) if a condition described in Subsection (2) exists; or
1595 (b) for noncompliance with the insurer's employer contribution requirements.
1596 (6) A small employer health benefit plan may be nonrenewed:
1597 (a) if a condition described in Subsection (2) exists; or
1598 (b) for noncompliance with the insurer's minimum participation requirements.
1599 (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
1600 discontinued if after issuance of coverage the eligible employee:
1601 (i) engages in an act or practice in connection with the coverage that constitutes fraud;
1602 or
1603 (ii) makes an intentional misrepresentation of material fact in connection with the
1604 coverage.
1605 (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
1606 (i) 12 months after the date of discontinuance; and
1607 (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
1608 to reenroll.
1609 (c) At the time the eligible employee's coverage is discontinued under Subsection
1610 (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
1611 discontinued.
1612 (d) An eligible employee may not be discontinued under this Subsection (7) because of
1613 a fraud or misrepresentation that relates to health status.
1614 (8) For purposes of this section, a reference to "plan sponsor" includes a reference to
1615 the employer:
1616 (a) with respect to coverage provided to an employer member of the association; and
1617 (b) if the health benefit plan is made available by an insurer in the employer market
1618 only through:
1619 (i) an association;
1620 (ii) a trust; or
1621 (iii) a discretionary group.
1622 (9) An insurer may modify a health benefit plan for a plan sponsor only:
1623 (a) at the time of coverage renewal; and
1624 (b) if the modification is effective uniformly among all plans with that product.
1625 Section 9. Section 31A-16-103 is amended to read:
1626 31A-16-103. Acquisition of control of or merger with domestic insurer.
1627 (1) (a) A person may not take the actions described in Subsections (1)(b) or (c) unless,
1628 at the time any offer, request, or invitation is made or any such agreement is entered into, or
1629 prior to the acquisition of securities if no offer or agreement is involved:
1630 (i) the person files with the commissioner a statement containing the information
1631 required by this section;
1632 (ii) the person provides a copy of the statement described in Subsection (1)(a)(i) to the
1633 insurer; and
1634 (iii) the commissioner approves the offer, request, invitation, agreement, or acquisition.
1635 (b) Unless the person complies with Subsection (1)(a), a person other than the issuer
1636 may not make a tender offer for, a request or invitation for tenders of, or enter into any
1637 agreement to exchange securities, or seek to acquire or acquire in the open market or otherwise,
1638 any voting security of a domestic insurer if after the acquisition, the person would directly,
1639 indirectly, by conversion, or by exercise of any right to acquire be in control of the insurer.
1640 (c) Unless the person complies with Subsection (1)(a), a person may not enter into an
1641 agreement to merge with or otherwise to acquire control of:
1642 (i) a domestic insurer; or
1643 (ii) any person controlling a domestic insurer.
1644 (d) (i) For purposes of this section, a domestic insurer includes any person controlling a
1645 domestic insurer unless the person as determined by the commissioner is either directly or
1646 through its affiliates primarily engaged in business other than the business of insurance.
1647 (ii) The controlling person described in Subsection (1)(d)(i) shall file with the
1648 commissioner a preacquisition notification containing the information required in Subsection
1649 (2) 30 calendar days before the proposed effective date of the acquisition.
1650 (iii) For the purposes of this section, "person" does not include any securities broker
1651 that in the usual and customary brokers function holds less than 20% of:
1652 (A) the voting securities of an insurance company; or
1653 (B) any person that controls an insurance company.
1654 (iv) This section applies to all domestic insurers and other entities licensed under
1655 Chapters 5, 7, 8, 9, and 11.
1656 (e) (i) An agreement for acquisition of control or merger as contemplated by this
1657 Subsection (1) is not valid or enforceable unless the agreement:
1658 (A) is in writing; and
1659 (B) includes a provision that the agreement is subject to the approval of the
1660 commissioner upon the filing of any applicable statement required under this chapter.
1661 (ii) A written agreement for acquisition or control that includes the provision described
1662 in Subsection (1)(e)(i) satisfies the requirements of this Subsection (1).
1663 (2) The statement to be filed with the commissioner under Subsection (1) shall be
1664 made under oath or affirmation and shall contain the following information:
1665 (a) the name and address of the "acquiring party," which means each person by whom
1666 or on whose behalf the merger or other acquisition of control referred to in Subsection (1) is to
1667 be effected; and
1668 (i) if the person is an individual:
1669 (A) the person's principal occupation;
1670 (B) a listing of all offices and positions held by the person during the past five years;
1671 and
1672 (C) any conviction of crimes other than minor traffic violations during the past 10
1673 years; and
1674 (ii) if the person is not an individual:
1675 (A) a report of the nature of its business operations during:
1676 (I) the past five years; or
1677 (II) for any lesser period as the person and any of its predecessors has been in
1678 existence;
1679 (B) an informative description of the business intended to be done by the person and
1680 the person's subsidiaries;
1681 (C) a list of all individuals who are or who have been selected to become directors or
1682 executive officers of the person, or individuals who perform, or who will perform functions
1683 appropriate to such positions; and
1684 (D) for each individual described in Subsection (2)(a)(ii)(C), the information required
1685 by Subsection (2)(a)(i) for each individual;
1686 (b) (i) the source, nature, and amount of the consideration used or to be used in
1687 effecting the merger or acquisition of control;
1688 (ii) a description of any transaction in which funds were or are to be obtained for the
1689 purpose of effecting the merger or acquisition of control, including any pledge of:
1690 (A) the insurer's stock; or
1691 (B) the stock of any of the insurer's subsidiaries or controlling affiliates; and
1692 (iii) the identity of persons furnishing the consideration;
1693 (c) (i) fully audited financial information, or other financial information considered
1694 acceptable by the commissioner, of the earnings and financial condition of each acquiring party
1695 for:
1696 (A) the preceding five fiscal years of each acquiring party; or
1697 (B) any lesser period the acquiring party and any of its predecessors shall have been in
1698 existence; and
1699 (ii) unaudited information:
1700 (A) similar to the information described in Subsection (2)(c)(i); and
1701 (B) prepared within the 90 days prior to the filing of the statement;
1702 (d) any plans or proposals which each acquiring party may have to:
1703 (i) liquidate the insurer;
1704 (ii) sell its assets;
1705 (iii) merge or consolidate the insurer with any person; or
1706 (iv) make any other material change in the insurer's:
1707 (A) business;
1708 (B) corporate structure; or
1709 (C) management;
1710 (e) (i) the number of shares of any security referred to in Subsection (1) that each
1711 acquiring party proposes to acquire;
1712 (ii) the terms of the offer, request, invitation, agreement, or acquisition referred to in
1713 Subsection (1); and
1714 (iii) a statement as to the method by which the fairness of the proposal was arrived at;
1715 (f) the amount of each class of any security referred to in Subsection (1) that:
1716 (i) is beneficially owned; or
1717 (ii) concerning which there is a right to acquire beneficial ownership by each acquiring
1718 party;
1719 (g) a full description of any contract, arrangement, or understanding with respect to any
1720 security referred to in Subsection (1) in which any acquiring party is involved, including:
1721 (i) the transfer of any of the securities;
1722 (ii) joint ventures;
1723 (iii) loan or option arrangements;
1724 (iv) puts or calls;
1725 (v) guarantees of loans;
1726 (vi) guarantees against loss or guarantees of profits;
1727 (vii) division of losses or profits; or
1728 (viii) the giving or withholding of proxies;
1729 (h) a description of the purchase by any acquiring party of any security referred to in
1730 Subsection (1) during the 12 calendar months preceding the filing of the statement including:
1731 (i) the dates of purchase;
1732 (ii) the names of the purchasers; and
1733 (iii) the consideration paid or agreed to be paid for the purchase;
1734 (i) a description of:
1735 (i) any recommendations to purchase by any acquiring party any security referred to in
1736 Subsection (1) made during the 12 calendar months preceding the filing of the statement; or
1737 (ii) any recommendations made by anyone based upon interviews or at the suggestion
1738 of the acquiring party;
1739 (j) (i) copies of all tender offers for, requests for, or invitations for tenders of, exchange
1740 offers for, and agreements to acquire or exchange any securities referred to in Subsection (1);
1741 and
1742 (ii) if distributed, copies of additional soliciting material relating to the transactions
1743 described in Subsection (2)(j)(i);
1744 (k) (i) the term of any agreement, contract, or understanding made with, or proposed to
1745 be made with, any broker-dealer as to solicitation of securities referred to in Subsection (1) for
1746 tender; and
1747 (ii) the amount of any fees, commissions, or other compensation to be paid to
1748 broker-dealers with regard to any agreement, contract, or understanding described in
1749 Subsection (2)(k)(i); and
1750 (l) any additional information the commissioner requires by rule, which the
1751 commissioner determines to be:
1752 (i) necessary or appropriate for the protection of policyholders of the insurer; or
1753 (ii) in the public interest.
1754 (3) The department may request:
1755 (a) (i) criminal background information maintained pursuant to Title 53, Chapter 10,
1756 Part 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
1757 (ii) complete Federal Bureau of Investigation criminal background checks through the
1758 national criminal history system.
1759 (b) Information obtained by the department from the review of criminal history records
1760 received under Subsection (3)(a) shall be used by the department for the purpose of:
1761 (i) verifying the information in Subsection (2)(a)(i);
1762 (ii) determining the integrity of persons who would control the operation of an insurer;
1763 and
1764 (iii) preventing persons who violate 18 U.S.C. [
1765 engaging in the business of insurance in the state.
1766 (c) If the department requests the criminal background information, the department
1767 shall:
1768 (i) pay to the Department of Public Safety the costs incurred by the Department of
1769 Public Safety in providing the department criminal background information under Subsection
1770 (3)(a)(i);
1771 (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
1772 of Investigation in providing the department criminal background information under
1773 Subsection (3)(a)(ii); and
1774 (iii) charge the person required to file the statement referred to in Subsection (1) a fee
1775 equal to the aggregate of Subsections (3)(c)(i) and (ii).
1776 (4) (a) If the source of the consideration under Subsection (2)(b)(i) is a loan made in
1777 the lender's ordinary course of business, the identity of the lender shall remain confidential, if
1778 the person filing the statement so requests.
1779 (b) (i) Under Subsection (2)(e), the commissioner may require a statement of the
1780 adjusted book value assigned by the acquiring party to each security in arriving at the terms of
1781 the offer.
1782 (ii) For purposes of this Subsection (4)(b), "adjusted book value" means each security's
1783 proportional interest in the capital and surplus of the insurer with adjustments that reflect:
1784 (A) market conditions;
1785 (B) business in force; and
1786 (C) other intangible assets or liabilities of the insurer.
1787 (c) The description required by Subsection (2)(g) shall identify the persons with whom
1788 the contracts, arrangements, or understandings have been entered into.
1789 (5) (a) If the person required to file the statement referred to in Subsection (1) is a
1790 partnership, limited partnership, syndicate, or other group, the commissioner may require that
1791 all the information called for by Subsections (2), (3), or (4) shall be given with respect to each:
1792 (i) partner of the partnership or limited partnership;
1793 (ii) member of the syndicate or group; and
1794 (iii) person who controls the partner or member.
1795 (b) If any partner, member, or person referred to in Subsection (5)(a) is a corporation,
1796 or if the person required to file the statement referred to in Subsection (1) is a corporation, the
1797 commissioner may require that the information called for by Subsection (2) shall be given with
1798 respect to:
1799 (i) the corporation;
1800 (ii) each officer and director of the corporation; and
1801 (iii) each person who is directly or indirectly the beneficial owner of more than 10% of
1802 the outstanding voting securities of the corporation.
1803 (6) If any material change occurs in the facts set forth in the statement filed with the
1804 commissioner and sent to the insurer pursuant to Subsection (2), an amendment setting forth
1805 the change, together with copies of all documents and other material relevant to the change,
1806 shall be filed with the commissioner and sent to the insurer within two business days after the
1807 filing person learns of such change.
1808 (7) If any offer, request, invitation, agreement, or acquisition referred to in Subsection
1809 (1) is proposed to be made by means of a registration statement under the Securities Act of
1810 1933, or under circumstances requiring the disclosure of similar information under the
1811 Securities Exchange Act of 1934, or under a state law requiring similar registration or
1812 disclosure, a person required to file the statement referred to in Subsection (1) may use copies
1813 of any registration or disclosure documents in furnishing the information called for by the
1814 statement.
1815 (8) (a) The commissioner shall approve any merger or other acquisition of control
1816 referred to in Subsection (1) unless, after a public hearing on the merger or acquisition, the
1817 commissioner finds that:
1818 (i) after the change of control, the domestic insurer referred to in Subsection (1) would
1819 not be able to satisfy the requirements for the issuance of a license to write the line or lines of
1820 insurance for which it is presently licensed;
1821 (ii) the effect of the merger or other acquisition of control would:
1822 (A) substantially lessen competition in insurance in this state; or
1823 (B) tend to create a monopoly in insurance;
1824 (iii) the financial condition of any acquiring party might:
1825 (A) jeopardize the financial stability of the insurer; or
1826 (B) prejudice the interest of:
1827 (I) its policyholders; or
1828 (II) any remaining securityholders who are unaffiliated with the acquiring party;
1829 (iv) the terms of the offer, request, invitation, agreement, or acquisition referred to in
1830 Subsection (1) are unfair and unreasonable to the securityholders of the insurer;
1831 (v) the plans or proposals which the acquiring party has to liquidate the insurer, sell its
1832 assets, or consolidate or merge it with any person, or to make any other material change in its
1833 business or corporate structure or management, are:
1834 (A) unfair and unreasonable to policyholders of the insurer; and
1835 (B) not in the public interest; or
1836 (vi) the competence, experience, and integrity of those persons who would control the
1837 operation of the insurer are such that it would not be in the interest of the policyholders of the
1838 insurer and the public to permit the merger or other acquisition of control.
1839 (b) For purposes of Subsection (8)(a)(iv), the offering price for each security may not
1840 be considered unfair if the adjusted book values under Subsection (2)(e):
1841 (i) are disclosed to the securityholders; and
1842 (ii) determined by the commissioner to be reasonable.
1843 (9) (a) The public hearing referred to in Subsection (8) shall be held within 30 days
1844 after the statement required by Subsection (1) is filed.
1845 (b) (i) At least 20 days notice of the hearing shall be given by the commissioner to the
1846 person filing the statement.
1847 (ii) Affected parties may waive the notice required by this Subsection (9)(b).
1848 (iii) Not less than seven days notice of the public hearing shall be given by the person
1849 filing the statement to:
1850 (A) the insurer; and
1851 (B) any person designated by the commissioner.
1852 (c) The commissioner shall make a determination within 30 days after the conclusion
1853 of the hearing.
1854 (d) At the hearing, the person filing the statement, the insurer, any person to whom
1855 notice of hearing was sent, and any other person whose interest may be affected by the hearing
1856 may:
1857 (i) present evidence;
1858 (ii) examine and cross-examine witnesses; and
1859 (iii) offer oral and written arguments.
1860 (e) (i) A person or insurer described in Subsection (9)(d) may conduct discovery
1861 proceedings in the same manner as is presently allowed in the district courts of this state.
1862 (ii) All discovery proceedings shall be concluded not later than three days before the
1863 commencement of the public hearing.
1864 (10) (a) The commissioner may retain technical experts to assist in reviewing all, or a
1865 portion of, information filed in connection with a proposed merger or other acquisition of
1866 control referred to in Subsection (1).
1867 (b) In determining whether any of the conditions in Subsection (8) exist, the
1868 commissioner may consider the findings of technical experts employed to review applicable
1869 filings.
1870 (c) (i) A technical expert employed under Subsection (10)(a) shall present to the
1871 commissioner a statement of all expenses incurred by the technical expert in conjunction with
1872 the technical expert's review of a proposed merger or other acquisition of control.
1873 (ii) At the commissioner's direction the acquiring person shall compensate the technical
1874 expert at customary rates for time and expenses:
1875 (A) necessarily incurred; and
1876 (B) approved by the commissioner.
1877 (iii) The acquiring person shall:
1878 (A) certify the consolidated account of all charges and expenses incurred for the review
1879 by technical experts;
1880 (B) retain a copy of the consolidated account described in Subsection (10)(c)(iii)(A);
1881 and
1882 (C) file with the department as a public record a copy of the consolidated account
1883 described in Subsection (10)(c)(iii)(A).
1884 (11) (a) (i) If a domestic insurer proposes to merge into another insurer, any
1885 securityholder electing to exercise a right of dissent may file with the insurer a written request
1886 for payment of the adjusted book value given in the statement required by Subsection (1) and
1887 approved under Subsection (8), in return for the surrender of the security holder's securities.
1888 (ii) The request described in Subsection (11)(a)(i) shall be filed not later than 10 days
1889 after the day of the securityholders' meeting where the corporate action is approved.
1890 (b) The dissenting securityholder is entitled to and the insurer is required to pay to the
1891 dissenting securityholder the specified value within 60 days of receipt of the dissenting security
1892 holder's security.
1893 (c) Persons electing under this Subsection (11) to receive cash for their securities waive
1894 the dissenting shareholder and appraisal rights otherwise applicable under Title 16, Chapter
1895 10a, Part 13, Dissenters' Rights.
1896 (d) (i) This Subsection (11) provides an elective procedure for dissenting
1897 securityholders to resolve their objections to the plan of merger.
1898 (ii) This section does not restrict the rights of dissenting securityholders under Title 16,
1899 Chapter 10a, Utah Revised Business Corporation Act, unless this election is made under this
1900 Subsection (11).
1901 (12) (a) All statements, amendments, or other material filed under Subsection (1), and
1902 all notices of public hearings held under Subsection (8), shall be mailed by the insurer to its
1903 securityholders within five business days after the insurer has received the statements,
1904 amendments, other material, or notices.
1905 (b) (i) Mailing expenses shall be paid by the person making the filing.
1906 (ii) As security for the payment of mailing expenses, that person shall file with the
1907 commissioner an acceptable bond or other deposit in an amount determined by the
1908 commissioner.
1909 (13) This section does not apply to any offer, request, invitation, agreement, or
1910 acquisition that the commissioner by order exempts from the requirements of this section as:
1911 (a) not having been made or entered into for the purpose of, and not having the effect
1912 of, changing or influencing the control of a domestic insurer; or
1913 (b) [
1914 (14) The following are violations of this section:
1915 (a) the failure to file any statement, amendment, or other material required to be filed
1916 pursuant to Subsections (1), (2), and (5); or
1917 (b) the effectuation, or any attempt to effectuate, an acquisition of control of or merger
1918 with a domestic insurer unless the commissioner has given the commissioner's approval to the
1919 acquisition or merger.
1920 (15) (a) The courts of this state are vested with jurisdiction over:
1921 (i) a person who:
1922 (A) files a statement with the commissioner under this section; and
1923 (B) is not resident, domiciled, or authorized to do business in this state; and
1924 (ii) overall actions involving persons described in Subsection (15)(a)(i) arising out of a
1925 violation of this section.
1926 (b) A person described in Subsection (15)(a) is considered to have performed acts
1927 equivalent to and constituting an appointment of the commissioner by that person, to be that
1928 person's lawful agent upon whom may be served all lawful process in any action, suit, or
1929 proceeding arising out of a violation of this section.
1930 (c) A copy of a lawful process described in Subsection (15)(b) shall be:
1931 (i) served on the commissioner; and
1932 (ii) transmitted by registered or certified mail by the commissioner to the person at that
1933 person's last-known address.
1934 Section 10. Section 31A-17-607 is amended to read:
1935 31A-17-607. Hearings.
1936 (1) (a) Following receipt of a notice described in Subsection (2), the insurer or health
1937 organization shall have the right to a confidential departmental hearing at which the insurer or
1938 health organization may challenge [
1939 (b) The insurer or health organization shall notify the commissioner of its request for a
1940 hearing within five days after the notification by the commissioner under [
1941
1942 (c) Upon receipt of the insurer's or health organization's request for a hearing, the
1943 commissioner shall set a date for the hearing, which date shall be no less than 10 nor more than
1944 30 days after the date of the insurer's or health organization's request.
1945 (2) An insurer or health organization has the right to a hearing under Subsection (1)
1946 after:
1947 (a) notification to an insurer or health organization by the commissioner of an adjusted
1948 RBC report;
1949 (b) notification to an insurer or health organization by the commissioner that:
1950 (i) the insurer's or health organization's RBC plan or revised RBC plan is
1951 unsatisfactory; and
1952 (ii) the notification constitutes a regulatory action level event with respect to the
1953 insurer or health organization;
1954 (c) notification to any insurer or health organization by the commissioner that the
1955 insurer or health organization has failed to adhere to its RBC plan or revised RBC plan and that
1956 the failure has substantial adverse effect on the ability of the insurer or health organization to
1957 eliminate the company action level event with respect to the insurer or health organization in
1958 accordance with its RBC plan or revised RBC plan; or
1959 (d) notification to an insurer or health organization by the commissioner of a corrective
1960 order with respect to the insurer or health organization.
1961 Section 11. Section 31A-22-305 is amended to read:
1962 31A-22-305. Uninsured motorist coverage.
1963 (1) As used in this section, "covered persons" includes:
1964 (a) the named insured;
1965 (b) for a claim arising on or after May 13, 2014, the named insured's dependent minor
1966 children;
1967 [
1968 guardianship, who are residents of the named insured's household, including those who usually
1969 make their home in the same household but temporarily live elsewhere;
1970 [
1971 (i) referred to in the policy; or
1972 (ii) owned by a self-insured; and
1973 [
1974 the uninsured or underinsured motor vehicle because of bodily injury to or death of persons
1975 under Subsection (1)(a), (b), [
1976 (2) As used in this section, "uninsured motor vehicle" includes:
1977 (a) (i) a motor vehicle, the operation, maintenance, or use of which is not covered
1978 under a liability policy at the time of an injury-causing occurrence; or
1979 (ii) (A) a motor vehicle covered with lower liability limits than required by Section
1980 31A-22-304 ; and
1981 (B) the motor vehicle described in Subsection (2)(a)(ii)(A) is uninsured to the extent of
1982 the deficiency;
1983 (b) an unidentified motor vehicle that left the scene of an accident proximately caused
1984 by the motor vehicle operator;
1985 (c) a motor vehicle covered by a liability policy, but coverage for an accident is
1986 disputed by the liability insurer for more than 60 days or continues to be disputed for more than
1987 60 days; or
1988 (d) (i) an insured motor vehicle if, before or after the accident, the liability insurer of
1989 the motor vehicle is declared insolvent by a court of competent jurisdiction; and
1990 (ii) the motor vehicle described in Subsection (2)(d)(i) is uninsured only to the extent
1991 that the claim against the insolvent insurer is not paid by a guaranty association or fund.
1992 (3) Uninsured motorist coverage under Subsection 31A-22-302 (1)(b) provides
1993 coverage for covered persons who are legally entitled to recover damages from owners or
1994 operators of uninsured motor vehicles because of bodily injury, sickness, disease, or death.
1995 (4) (a) For new policies written on or after January 1, 2001, the limits of uninsured
1996 motorist coverage shall be equal to the lesser of the limits of the named insured's motor vehicle
1997 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
1998 under the named insured's motor vehicle policy, unless a named insured rejects or purchases
1999 coverage in a lesser amount by signing an acknowledgment form that:
2000 (i) is filed with the department;
2001 (ii) is provided by the insurer;
2002 (iii) waives the higher coverage;
2003 (iv) need only state in this or similar language that uninsured motorist coverage
2004 provides benefits or protection to you and other covered persons for bodily injury resulting
2005 from an accident caused by the fault of another party where the other party has no liability
2006 insurance; and
2007 (v) discloses the additional premiums required to purchase uninsured motorist
2008 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
2009 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
2010 under the named insured's motor vehicle policy.
2011 (b) Any selection or rejection under this Subsection (4) continues for that issuer of the
2012 liability coverage until the insured requests, in writing, a change of uninsured motorist
2013 coverage from that liability insurer.
2014 (c) (i) Subsections (4)(a) and (b) apply retroactively to any claim arising on or after
2015 January 1, 2001, for which, as of May 14, 2013, an insured has not made a written demand for
2016 arbitration or filed a complaint in a court of competent jurisdiction.
2017 (ii) The Legislature finds that the retroactive application of Subsections (4)(a) and (b)
2018 clarifies legislative intent and does not enlarge, eliminate, or destroy vested rights.
2019 (d) For purposes of this Subsection (4), "new policy" means:
2020 (i) any policy that is issued which does not include a renewal or reinstatement of an
2021 existing policy; or
2022 (ii) a change to an existing policy that results in:
2023 (A) a named insured being added to or deleted from the policy; or
2024 (B) a change in the limits of the named insured's motor vehicle liability coverage.
2025 (e) (i) As used in this Subsection (4)(e), "additional motor vehicle" means a change
2026 that increases the total number of vehicles insured by the policy, and does not include
2027 replacement, substitute, or temporary vehicles.
2028 (ii) The adding of an additional motor vehicle to an existing personal lines or
2029 commercial lines policy does not constitute a new policy for purposes of Subsection (4)(d).
2030 (iii) If an additional motor vehicle is added to a personal lines policy where uninsured
2031 motorist coverage has been rejected, or where uninsured motorist limits are lower than the
2032 named insured's motor vehicle liability limits, the insurer shall provide a notice to a named
2033 insured within 30 days that:
2034 (A) in the same manner as described in Subsection (4)(a)(iv), explains the purpose of
2035 uninsured motorist coverage; and
2036 (B) encourages the named insured to contact the insurance company or insurance
2037 producer for quotes as to the additional premiums required to purchase uninsured motorist
2038 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
2039 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
2040 under the named insured's motor vehicle policy.
2041 (f) A change in policy number resulting from any policy change not identified under
2042 Subsection (4)(d)(ii) does not constitute a new policy.
2043 (g) (i) Subsection (4)(d) applies retroactively to any claim arising on or after January 1,
2044 2001, for which, as of May 1, 2012, an insured has not made a written demand for arbitration
2045 or filed a complaint in a court of competent jurisdiction.
2046 (ii) The Legislature finds that the retroactive application of Subsection (4):
2047 (A) does not enlarge, eliminate, or destroy vested rights; and
2048 (B) clarifies legislative intent.
2049 (h) A self-insured, including a governmental entity, may elect to provide uninsured
2050 motorist coverage in an amount that is less than its maximum self-insured retention under
2051 Subsections (4)(a) and (5)(a) by issuing a declaratory memorandum or policy statement from
2052 the chief financial officer or chief risk officer that declares the:
2053 (i) self-insured entity's coverage level; and
2054 (ii) process for filing an uninsured motorist claim.
2055 (i) Uninsured motorist coverage may not be sold with limits that are less than the
2056 minimum bodily injury limits for motor vehicle liability policies under Section 31A-22-304 .
2057 (j) The acknowledgment under Subsection (4)(a) continues for that issuer of the
2058 uninsured motorist coverage until the named insured requests, in writing, different uninsured
2059 motorist coverage from the insurer.
2060 (k) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
2061 policies existing on that date, the insurer shall disclose in the same medium as the premium
2062 renewal notice, an explanation of:
2063 (A) the purpose of uninsured motorist coverage in the same manner as described in
2064 Subsection (4)(a)(iv); and
2065 (B) a disclosure of the additional premiums required to purchase uninsured motorist
2066 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
2067 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
2068 under the named insured's motor vehicle policy.
2069 (ii) The disclosure required under Subsection (4)(k)(i) shall be sent to all named
2070 insureds that carry uninsured motorist coverage limits in an amount less than the named
2071 insured's motor vehicle liability policy limits or the maximum uninsured motorist coverage
2072 limits available by the insurer under the named insured's motor vehicle policy.
2073 (l) For purposes of this Subsection (4), a notice or disclosure sent to a named insured in
2074 a household constitutes notice or disclosure to all insureds within the household.
2075 (5) (a) (i) Except as provided in Subsection (5)(b), the named insured may reject
2076 uninsured motorist coverage by an express writing to the insurer that provides liability
2077 coverage under Subsection 31A-22-302 (1)(a).
2078 (ii) This rejection shall be on a form provided by the insurer that includes a reasonable
2079 explanation of the purpose of uninsured motorist coverage.
2080 (iii) This rejection continues for that issuer of the liability coverage until the insured in
2081 writing requests uninsured motorist coverage from that liability insurer.
2082 (b) (i) All persons, including governmental entities, that are engaged in the business of,
2083 or that accept payment for, transporting natural persons by motor vehicle, and all school
2084 districts that provide transportation services for their students, shall provide coverage for all
2085 motor vehicles used for that purpose, by purchase of a policy of insurance or by self-insurance,
2086 uninsured motorist coverage of at least $25,000 per person and $500,000 per accident.
2087 (ii) This coverage is secondary to any other insurance covering an injured covered
2088 person.
2089 (c) Uninsured motorist coverage:
2090 (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
2091 Compensation Act;
2092 (ii) may not be subrogated by the workers' compensation insurance carrier;
2093 (iii) may not be reduced by any benefits provided by workers' compensation insurance;
2094 (iv) may be reduced by health insurance subrogation only after the covered person has
2095 been made whole;
2096 (v) may not be collected for bodily injury or death sustained by a person:
2097 (A) while committing a violation of Section 41-1a-1314 ;
2098 (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
2099 in violation of Section 41-1a-1314 ; or
2100 (C) while committing a felony; and
2101 (vi) notwithstanding Subsection (5)(c)(v), may be recovered:
2102 (A) for a person under 18 years of age who is injured within the scope of Subsection
2103 (5)(c)(v) but limited to medical and funeral expenses; or
2104 (B) by a law enforcement officer as defined in Section 53-13-103 , who is injured
2105 within the course and scope of the law enforcement officer's duties.
2106 (d) As used in this Subsection (5), "motor vehicle" has the same meaning as under
2107 Section 41-1a-102 .
2108 (6) When a covered person alleges that an uninsured motor vehicle under Subsection
2109 (2)(b) proximately caused an accident without touching the covered person or the motor
2110 vehicle occupied by the covered person, the covered person shall show the existence of the
2111 uninsured motor vehicle by clear and convincing evidence consisting of more than the covered
2112 person's testimony.
2113 (7) (a) The limit of liability for uninsured motorist coverage for two or more motor
2114 vehicles may not be added together, combined, or stacked to determine the limit of insurance
2115 coverage available to an injured person for any one accident.
2116 (b) (i) Subsection (7)(a) applies to all persons except a covered person as defined under
2117 Subsection (8)(b)(ii).
2118 (ii) A covered person as defined under Subsection (8)(b)(ii) is entitled to the highest
2119 limits of uninsured motorist coverage afforded for any one motor vehicle that the covered
2120 person is the named insured or an insured family member.
2121 (iii) This coverage shall be in addition to the coverage on the motor vehicle the covered
2122 person is occupying.
2123 (iv) Neither the primary nor the secondary coverage may be set off against the other.
2124 (c) Coverage on a motor vehicle occupied at the time of an accident shall be primary
2125 coverage, and the coverage elected by a person described under Subsections (1)(a) [
2126 and (c) shall be secondary coverage.
2127 (8) (a) Uninsured motorist coverage under this section applies to bodily injury,
2128 sickness, disease, or death of covered persons while occupying or using a motor vehicle only if
2129 the motor vehicle is described in the policy under which a claim is made, or if the motor
2130 vehicle is a newly acquired or replacement motor vehicle covered under the terms of the policy.
2131 Except as provided in Subsection (7) or this Subsection (8), a covered person injured in a
2132 motor vehicle described in a policy that includes uninsured motorist benefits may not elect to
2133 collect uninsured motorist coverage benefits from any other motor vehicle insurance policy
2134 under which the person is a covered person.
2135 (b) Each of the following persons may also recover uninsured motorist benefits under
2136 any one other policy in which they are described as a "covered person" as defined in Subsection
2137 (1):
2138 (i) a covered person injured as a pedestrian by an uninsured motor vehicle; and
2139 (ii) except as provided in Subsection (8)(c), a covered person injured while occupying
2140 or using a motor vehicle that is not owned, leased, or furnished:
2141 (A) to the covered person;
2142 (B) to the covered person's spouse; or
2143 (C) to the covered person's resident parent or resident sibling.
2144 (c) (i) A covered person may recover benefits from no more than two additional
2145 policies, one additional policy from each parent's household if the covered person is:
2146 (A) a dependent minor of parents who reside in separate households; and
2147 (B) injured while occupying or using a motor vehicle that is not owned, leased, or
2148 furnished:
2149 (I) to the covered person;
2150 (II) to the covered person's resident parent; or
2151 (III) to the covered person's resident sibling.
2152 (ii) Each parent's policy under this Subsection (8)(c) is liable only for the percentage of
2153 the damages that the limit of liability of each parent's policy of uninsured motorist coverage
2154 bears to the total of both parents' uninsured coverage applicable to the accident.
2155 (d) A covered person's recovery under any available policies may not exceed the full
2156 amount of damages.
2157 (e) A covered person in Subsection (8)(b) is not barred against making subsequent
2158 elections if recovery is unavailable under previous elections.
2159 (f) (i) As used in this section, "interpolicy stacking" means recovering benefits for a
2160 single incident of loss under more than one insurance policy.
2161 (ii) Except to the extent permitted by Subsection (7) and this Subsection (8),
2162 interpolicy stacking is prohibited for uninsured motorist coverage.
2163 (9) (a) When a claim is brought by a named insured or a person described in
2164 Subsection (1) and is asserted against the covered person's uninsured motorist carrier, the
2165 claimant may elect to resolve the claim:
2166 (i) by submitting the claim to binding arbitration; or
2167 (ii) through litigation.
2168 (b) Unless otherwise provided in the policy under which uninsured benefits are
2169 claimed, the election provided in Subsection (9)(a) is available to the claimant only, except that
2170 if the policy under which insured benefits are claimed provides that either an insured or the
2171 insurer may elect arbitration, the insured or the insurer may elect arbitration and that election to
2172 arbitrate shall stay the litigation of the claim under Subsection (9)(a)(ii).
2173 (c) Once the claimant has elected to commence litigation under Subsection (9)(a)(ii),
2174 the claimant may not elect to resolve the claim through binding arbitration under this section
2175 without the written consent of the uninsured motorist carrier.
2176 (d) (i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
2177 binding arbitration under Subsection (9)(a)(i) shall be resolved by a single arbitrator.
2178 (ii) All parties shall agree on the single arbitrator selected under Subsection (9)(d)(i).
2179 (iii) If the parties are unable to agree on a single arbitrator as required under Subsection
2180 (9)(d)(ii), the parties shall select a panel of three arbitrators.
2181 (e) If the parties select a panel of three arbitrators under Subsection (9)(d)(iii):
2182 (i) each side shall select one arbitrator; and
2183 (ii) the arbitrators appointed under Subsection (9)(e)(i) shall select one additional
2184 arbitrator to be included in the panel.
2185 (f) Unless otherwise agreed to in writing:
2186 (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
2187 under Subsection (9)(d)(i); or
2188 (ii) if an arbitration panel is selected under Subsection (9)(d)(iii):
2189 (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
2190 (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
2191 under Subsection (9)(e)(ii).
2192 (g) Except as otherwise provided in this section or unless otherwise agreed to in
2193 writing by the parties, an arbitration proceeding conducted under this section shall be governed
2194 by Title 78B, Chapter 11, Utah Uniform Arbitration Act.
2195 (h) (i) The arbitration shall be conducted in accordance with Rules 26(a)(4) through (f),
2196 27 through 37, 54, and 68 of the Utah Rules of Civil Procedure, once the requirements of
2197 Subsections (10)(a) through (c) are satisfied.
2198 (ii) The specified tier as defined by Rule 26(c)(3) of the Utah Rules of Civil Procedure
2199 shall be determined based on the claimant's specific monetary amount in the written demand
2200 for payment of uninsured motorist coverage benefits as required in Subsection (10)(a)(i)(A).
2201 (iii) Rules 26.1 and 26.2 of the Utah Rules of Civil Procedure do not apply to
2202 arbitration claims under this part.
2203 (i) All issues of discovery shall be resolved by the arbitrator or the arbitration panel.
2204 (j) A written decision by a single arbitrator or by a majority of the arbitration panel
2205 shall constitute a final decision.
2206 (k) (i) Except as provided in Subsection (10), the amount of an arbitration award may
2207 not exceed the uninsured motorist policy limits of all applicable uninsured motorist policies,
2208 including applicable uninsured motorist umbrella policies.
2209 (ii) If the initial arbitration award exceeds the uninsured motorist policy limits of all
2210 applicable uninsured motorist policies, the arbitration award shall be reduced to an amount
2211 equal to the combined uninsured motorist policy limits of all applicable uninsured motorist
2212 policies.
2213 (l) The arbitrator or arbitration panel may not decide the issues of coverage or
2214 extra-contractual damages, including:
2215 (i) whether the claimant is a covered person;
2216 (ii) whether the policy extends coverage to the loss; or
2217 (iii) any allegations or claims asserting consequential damages or bad faith liability.
2218 (m) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or
2219 class-representative basis.
2220 (n) If the arbitrator or arbitration panel finds that the action was not brought, pursued,
2221 or defended in good faith, the arbitrator or arbitration panel may award reasonable attorney fees
2222 and costs against the party that failed to bring, pursue, or defend the claim in good faith.
2223 (o) An arbitration award issued under this section shall be the final resolution of all
2224 claims not excluded by Subsection (9)(l) between the parties unless:
2225 (i) the award was procured by corruption, fraud, or other undue means;
2226 (ii) either party, within 20 days after service of the arbitration award:
2227 (A) files a complaint requesting a trial de novo in the district court; and
2228 (B) serves the nonmoving party with a copy of the complaint requesting a trial de novo
2229 under Subsection (9)(o)(ii)(A).
2230 (p) (i) Upon filing a complaint for a trial de novo under Subsection (9)(o), the claim
2231 shall proceed through litigation pursuant to the Utah Rules of Civil Procedure and Utah Rules
2232 of Evidence in the district court.
2233 (ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
2234 request a jury trial with a complaint requesting a trial de novo under Subsection (9)(o)(ii)(A).
2235 (q) (i) If the claimant, as the moving party in a trial de novo requested under
2236 Subsection (9)(o), does not obtain a verdict that is at least $5,000 and is at least 20% greater
2237 than the arbitration award, the claimant is responsible for all of the nonmoving party's costs.
2238 (ii) If the uninsured motorist carrier, as the moving party in a trial de novo requested
2239 under Subsection (9)(o), does not obtain a verdict that is at least 20% less than the arbitration
2240 award, the uninsured motorist carrier is responsible for all of the nonmoving party's costs.
2241 (iii) Except as provided in Subsection (9)(q)(iv), the costs under this Subsection (9)(q)
2242 shall include:
2243 (A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
2244 (B) the costs of expert witnesses and depositions.
2245 (iv) An award of costs under this Subsection (9)(q) may not exceed $2,500 unless
2246 Subsection (10)(h)(iii) applies.
2247 (r) For purposes of determining whether a party's verdict is greater or less than the
2248 arbitration award under Subsection (9)(q), a court may not consider any recovery or other relief
2249 granted on a claim for damages if the claim for damages:
2250 (i) was not fully disclosed in writing prior to the arbitration proceeding; or
2251 (ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil
2252 Procedure.
2253 (s) If a district court determines, upon a motion of the nonmoving party, that the
2254 moving party's use of the trial de novo process was filed in bad faith in accordance with
2255 Section 78B-5-825 , the district court may award reasonable attorney fees to the nonmoving
2256 party.
2257 (t) Nothing in this section is intended to limit any claim under any other portion of an
2258 applicable insurance policy.
2259 (u) If there are multiple uninsured motorist policies, as set forth in Subsection (8), the
2260 claimant may elect to arbitrate in one hearing the claims against all the uninsured motorist
2261 carriers.
2262 (10) (a) Within 30 days after a covered person elects to submit a claim for uninsured
2263 motorist benefits to binding arbitration or files litigation, the covered person shall provide to
2264 the uninsured motorist carrier:
2265 (i) a written demand for payment of uninsured motorist coverage benefits, setting forth:
2266 (A) subject to Subsection (10)(l), the specific monetary amount of the demand,
2267 including a computation of the covered person's claimed past medical expenses, claimed past
2268 lost wages, and the other claimed past economic damages; and
2269 (B) the factual and legal basis and any supporting documentation for the demand;
2270 (ii) a written statement under oath disclosing:
2271 (A) (I) the names and last known addresses of all health care providers who have
2272 rendered health care services to the covered person that are material to the claims for which
2273 uninsured motorist benefits are sought for a period of five years preceding the date of the event
2274 giving rise to the claim for uninsured motorist benefits up to the time the election for
2275 arbitration or litigation has been exercised; and
2276 (II) [
2277 the health care providers who have rendered health care services to the covered person, which
2278 the covered person claims are immaterial to the claims for which uninsured motorist benefits
2279 are sought, for a period of five years preceding the date of the event giving rise to the claim for
2280 uninsured motorist benefits up to the time the election for arbitration or litigation has been
2281 exercised that have not been disclosed under Subsection (10)(a)(ii)(A)(I);
2282 (B) (I) the names and last known addresses of all health insurers or other entities to
2283 whom the covered person has submitted claims for health care services or benefits material to
2284 the claims for which uninsured motorist benefits are sought, for a period of five years
2285 preceding the date of the event giving rise to the claim for uninsured motorist benefits up to the
2286 time the election for arbitration or litigation has been exercised; and
2287 (II) [
2288 insurers or other entities to whom the covered person has submitted claims for health care
2289 services or benefits, which the covered person claims are immaterial to the claims for which
2290 uninsured motorist benefits are sought, for a period of five years preceding the date of the event
2291 giving rise to the claim for uninsured motorist benefits up to the time the election for
2292 arbitration or litigation have not been disclosed;
2293 S. [
2294 any claim submitted to binding arbitration or through litigation on or after May 13, 2014;
2295 S. [
2295a claimed,
2296 all employers of the covered person for a period of five years preceding the date of the event
2297 giving rise to the claim for uninsured motorist benefits up to the time the election for
2298 arbitration or litigation has been exercised;
2299 S. [
2300 S. [
2300a whether
2301 the covered person is a recipient of Medicare or Medicaid benefits or Utah Children's Health
2302 Insurance Program benefits under Title 26, Chapter 40, Utah Children's Health Insurance Act,
2303 or if the claim is subject to any other state or federal statutory liens; and
2304 (iii) signed authorizations to allow the uninsured motorist carrier to only obtain records
2305 and billings from the individuals or entities disclosed under Subsections (10)(a)(ii)(A)(I),
2306 (B)(I), and S. [
2307 (b) (i) If the uninsured motorist carrier determines that the disclosure of undisclosed
2308 health care providers or health care insurers under Subsection (10)(a)(ii) is reasonably
2309 necessary, the uninsured motorist carrier may:
2310 (A) make a request for the disclosure of the identity of the health care providers or
2311 health care insurers; and
2312 (B) make a request for authorizations to allow the uninsured motorist carrier to only
2313 obtain records and billings from the individuals or entities not disclosed.
2314 (ii) If the covered person does not provide the requested information within 10 days:
2315 (A) the covered person shall disclose, in writing, the legal or factual basis for the
2316 failure to disclose the health care providers or health care insurers; and
2317 (B) either the covered person or the uninsured motorist carrier may request the
2318 arbitrator or arbitration panel to resolve the issue of whether the identities or records are to be
2319 provided if the covered person has elected arbitration.
2320 (iii) The time periods imposed by Subsection (10)(c)(i) are tolled pending resolution of
2321 the dispute concerning the disclosure and production of records of the health care providers or
2322 health care insurers.
2323 (c) (i) An uninsured motorist carrier that receives an election for arbitration or a notice
2324 of filing litigation and the demand for payment of uninsured motorist benefits under Subsection
2325 (10)(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the demand and
2326 receipt of the items specified in Subsections (10)(a)(i) through (iii), to:
2327 (A) provide a written response to the written demand for payment provided for in
2328 Subsection (10)(a)(i);
2329 (B) except as provided in Subsection (10)(c)(i)(C), tender the amount, if any, of the
2330 uninsured motorist carrier's determination of the amount owed to the covered person; and
2331 (C) if the covered person is a recipient of Medicare or Medicaid benefits or Utah
2332 Children's Health Insurance Program benefits under Title 26, Chapter 40, Utah Children's
2333 Health Insurance Act, or if the claim is subject to any other state or federal statutory liens,
2334 tender the amount, if any, of the uninsured motorist carrier's determination of the amount owed
2335 to the covered person less:
2336 (I) if the amount of the state or federal statutory lien is established, the amount of the
2337 lien; or
2338 (II) if the amount of the state or federal statutory lien is not established, two times the
2339 amount of the medical expenses subject to the state or federal statutory lien until such time as
2340 the amount of the state or federal statutory lien is established.
2341 (ii) If the amount tendered by the uninsured motorist carrier under Subsection (10)(c)(i)
2342 is the total amount of the uninsured motorist policy limits, the tendered amount shall be
2343 accepted by the covered person.
2344 (d) A covered person who receives a written response from an uninsured motorist
2345 carrier as provided for in Subsection (10)(c)(i), may:
2346 (i) elect to accept the amount tendered in Subsection (10)(c)(i) as payment in full of all
2347 uninsured motorist claims; or
2348 (ii) elect to:
2349 (A) accept the amount tendered in Subsection (10)(c)(i) as partial payment of all
2350 uninsured motorist claims; and
2351 (B) continue to litigate or arbitrate the remaining claim in accordance with the election
2352 made under Subsections (9)(a), (b), and (c).
2353 (e) If a covered person elects to accept the amount tendered under Subsection (10)(c)(i)
2354 as partial payment of all uninsured motorist claims, the final award obtained through
2355 arbitration, litigation, or later settlement shall be reduced by any payment made by the
2356 uninsured motorist carrier under Subsection (10)(c)(i).
2357 (f) In an arbitration proceeding on the remaining uninsured claims:
2358 (i) the parties may not disclose to the arbitrator or arbitration panel the amount paid
2359 under Subsection (10)(c)(i) until after the arbitration award has been rendered; and
2360 (ii) the parties may not disclose the amount of the limits of uninsured motorist benefits
2361 provided by the policy.
2362 (g) If the final award obtained through arbitration or litigation is greater than the
2363 average of the covered person's initial written demand for payment provided for in Subsection
2364 (10)(a)(i) and the uninsured motorist carrier's initial written response provided for in
2365 Subsection (10)(c)(i), the uninsured motorist carrier shall pay:
2366 (i) the final award obtained through arbitration or litigation, except that if the award
2367 exceeds the policy limits of the subject uninsured motorist policy by more than $15,000, the
2368 amount shall be reduced to an amount equal to the policy limits plus $15,000; and
2369 (ii) any of the following applicable costs:
2370 (A) any costs as set forth in Rule 54(d), Utah Rules of Civil Procedure;
2371 (B) the arbitrator or arbitration panel's fee; and
2372 (C) the reasonable costs of expert witnesses and depositions used in the presentation of
2373 evidence during arbitration or litigation.
2374 (h) (i) The covered person shall provide an affidavit of costs within five days of an
2375 arbitration award.
2376 (ii) (A) Objection to the affidavit of costs shall specify with particularity the costs to
2377 which the uninsured motorist carrier objects.
2378 (B) The objection shall be resolved by the arbitrator or arbitration panel.
2379 (iii) The award of costs by the arbitrator or arbitration panel under Subsection
2380 (10)(g)(ii) may not exceed $5,000.
2381 (i) (i) A covered person shall disclose all material information, other than rebuttal
2382 evidence, within 30 days after a covered person elects to submit a claim for uninsured motorist
2383 coverage benefits to binding arbitration or files litigation as specified in Subsection (10)(a).
2384 (ii) If the information under Subsection (10)(i)(i) is not disclosed, the covered person
2385 may not recover costs or any amounts in excess of the policy under Subsection (10)(g).
2386 (j) This Subsection (10) does not limit any other cause of action that arose or may arise
2387 against the uninsured motorist carrier from the same dispute.
2388 (k) The provisions of this Subsection (10) only apply to motor vehicle accidents that
2389 occur on or after March 30, 2010.
2390 (l) S. (i) .S The written demand requirement in Subsection (10)(a)(i)(A) does not affect
2390a the
2391 covered person's requirement to provide a computation of any other economic damages
2392 claimed S. , .S and the one or more respondents shall have a reasonable time after the receipt of
2392a the
2393 computation of any other economic damages claimed to conduct fact and expert discovery as
2394 to any additional damages claimed. The changes made by this bill to this Subsection (10)(l)
2395 and Subsection (10)(a)(i)(A) apply to a claim submitted to binding arbitration or through
2396 litigation on or after May 13, 2014.
2396a S. (ii) The changes made by this bill to Subsections (10)(a)(ii)(A)(II) and (B)(II) apply to
2396b any claim submitted to binding arbitration or through litigation on or after May 13, 2014. .S
2397 Section 12. Section 31A-22-305.3 is amended to read:
2398 31A-22-305.3. Underinsured motorist coverage.
2399 (1) As used in this section:
2400 (a) "Covered person" has the same meaning as defined in Section 31A-22-305 .
2401 (b) (i) "Underinsured motor vehicle" includes a motor vehicle, the operation,
2402 maintenance, or use of which is covered under a liability policy at the time of an injury-causing
2403 occurrence, but which has insufficient liability coverage to compensate fully the injured party
2404 for all special and general damages.
2405 (ii) The term "underinsured motor vehicle" does not include:
2406 (A) a motor vehicle that is covered under the liability coverage of the same policy that
2407 also contains the underinsured motorist coverage;
2408 (B) an uninsured motor vehicle as defined in Subsection 31A-22-305 (2); or
2409 (C) a motor vehicle owned or leased by:
2410 (I) a named insured;
2411 (II) a named insured's spouse; or
2412 (III) a dependent of a named insured.
2413 (2) (a) Underinsured motorist coverage under Subsection 31A-22-302 (1)(c) provides
2414 coverage for a covered person who is legally entitled to recover damages from an owner or
2415 operator of an underinsured motor vehicle because of bodily injury, sickness, disease, or death.
2416 (b) A covered person occupying or using a motor vehicle owned, leased, or furnished
2417 to the covered person, the covered person's spouse, or covered person's resident relative may
2418 recover underinsured benefits only if the motor vehicle is:
2419 (i) described in the policy under which a claim is made; or
2420 (ii) a newly acquired or replacement motor vehicle covered under the terms of the
2421 policy.
2422 (3) (a) For new policies written on or after January 1, 2001, the limits of underinsured
2423 motorist coverage shall be equal to the lesser of the limits of the named insured's motor vehicle
2424 liability coverage or the maximum underinsured motorist coverage limits available by the
2425 insurer under the named insured's motor vehicle policy, unless a named insured rejects or
2426 purchases coverage in a lesser amount by signing an acknowledgment form that:
2427 (i) is filed with the department;
2428 (ii) is provided by the insurer;
2429 (iii) waives the higher coverage;
2430 (iv) need only state in this or similar language that underinsured motorist coverage
2431 provides benefits or protection to you and other covered persons for bodily injury resulting
2432 from an accident caused by the fault of another party where the other party has insufficient
2433 liability insurance; and
2434 (v) discloses the additional premiums required to purchase underinsured motorist
2435 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
2436 liability coverage or the maximum underinsured motorist coverage limits available by the
2437 insurer under the named insured's motor vehicle policy.
2438 (b) Any selection or rejection under Subsection (3)(a) continues for that issuer of the
2439 liability coverage until the insured requests, in writing, a change of underinsured motorist
2440 coverage from that liability insurer.
2441 (c) (i) Subsections (3)(a) and (b) apply retroactively to any claim arising on or after
2442 January 1, 2001, for which, as of May 14, 2013, an insured has not made a written demand for
2443 arbitration or filed a complaint in a court of competent jurisdiction.
2444 (ii) The Legislature finds that the retroactive application of Subsections (3)(a) and (b)
2445 clarifies legislative intent and does not enlarge, eliminate, or destroy vested rights.
2446 (d) For purposes of this Subsection (3), "new policy" means:
2447 (i) any policy that is issued which does not include a renewal or reinstatement of an
2448 existing policy; or
2449 (ii) a change to an existing policy that results in:
2450 (A) a named insured being added to or deleted from the policy; or
2451 (B) a change in the limits of the named insured's motor vehicle liability coverage.
2452 (e) (i) As used in this Subsection (3)(e), "additional motor vehicle" means a change
2453 that increases the total number of vehicles insured by the policy, and does not include
2454 replacement, substitute, or temporary vehicles.
2455 (ii) The adding of an additional motor vehicle to an existing personal lines or
2456 commercial lines policy does not constitute a new policy for purposes of Subsection (3)(d).
2457 (iii) If an additional motor vehicle is added to a personal lines policy where
2458 underinsured motorist coverage has been rejected, or where underinsured motorist limits are
2459 lower than the named insured's motor vehicle liability limits, the insurer shall provide a notice
2460 to a named insured within 30 days that:
2461 (A) in the same manner described in Subsection (3)(a)(iv), explains the purpose of
2462 underinsured motorist coverage; and
2463 (B) encourages the named insured to contact the insurance company or insurance
2464 producer for quotes as to the additional premiums required to purchase underinsured motorist
2465 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
2466 liability coverage or the maximum underinsured motorist coverage limits available by the
2467 insurer under the named insured's motor vehicle policy.
2468 (f) A change in policy number resulting from any policy change not identified under
2469 Subsection (3)(d)(ii) does not constitute a new policy.
2470 (g) (i) Subsection (3)(d) applies retroactively to any claim arising on or after January 1,
2471 2001 for which, as of May 1, 2012, an insured has not made a written demand for arbitration or
2472 filed a complaint in a court of competent jurisdiction.
2473 (ii) The Legislature finds that the retroactive application of Subsection (3)(d):
2474 (A) does not enlarge, eliminate, or destroy vested rights; and
2475 (B) clarifies legislative intent.
2476 (h) A self-insured, including a governmental entity, may elect to provide underinsured
2477 motorist coverage in an amount that is less than its maximum self-insured retention under
2478 Subsections (3)(a) and (l) by issuing a declaratory memorandum or policy statement from the
2479 chief financial officer or chief risk officer that declares the:
2480 (i) self-insured entity's coverage level; and
2481 (ii) process for filing an underinsured motorist claim.
2482 (i) Underinsured motorist coverage may not be sold with limits that are less than:
2483 (i) $10,000 for one person in any one accident; and
2484 (ii) at least $20,000 for two or more persons in any one accident.
2485 (j) An acknowledgment under Subsection (3)(a) continues for that issuer of the
2486 underinsured motorist coverage until the named insured, in writing, requests different
2487 underinsured motorist coverage from the insurer.
2488 (k) (i) The named insured's underinsured motorist coverage, as described in Subsection
2489 (2), is secondary to the liability coverage of an owner or operator of an underinsured motor
2490 vehicle, as described in Subsection (1).
2491 (ii) Underinsured motorist coverage may not be set off against the liability coverage of
2492 the owner or operator of an underinsured motor vehicle, but shall be added to, combined with,
2493 or stacked upon the liability coverage of the owner or operator of the underinsured motor
2494 vehicle to determine the limit of coverage available to the injured person.
2495 (l) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
2496 policies existing on that date, the insurer shall disclose in the same medium as the premium
2497 renewal notice, an explanation of:
2498 (A) the purpose of underinsured motorist coverage in the same manner as described in
2499 Subsection (3)(a)(iv); and
2500 (B) a disclosure of the additional premiums required to purchase underinsured motorist
2501 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
2502 liability coverage or the maximum underinsured motorist coverage limits available by the
2503 insurer under the named insured's motor vehicle policy.
2504 (ii) The disclosure required under this Subsection (3)(l) shall be sent to all named
2505 insureds that carry underinsured motorist coverage limits in an amount less than the named
2506 insured's motor vehicle liability policy limits or the maximum underinsured motorist coverage
2507 limits available by the insurer under the named insured's motor vehicle policy.
2508 (m) For purposes of this Subsection (3), a notice or disclosure sent to a named insured
2509 in a household constitutes notice or disclosure to all insureds within the household.
2510 (4) (a) (i) Except as provided in this Subsection (4), a covered person injured in a
2511 motor vehicle described in a policy that includes underinsured motorist benefits may not elect
2512 to collect underinsured motorist coverage benefits from another motor vehicle insurance policy.
2513 (ii) The limit of liability for underinsured motorist coverage for two or more motor
2514 vehicles may not be added together, combined, or stacked to determine the limit of insurance
2515 coverage available to an injured person for any one accident.
2516 (iii) Subsection (4)(a)(ii) applies to all persons except a covered person described
2517 under Subsections (4)(b)(i) and (ii).
2518 (b) (i) Except as provided in Subsection (4)(b)(ii), a covered person injured while
2519 occupying, using, or maintaining a motor vehicle that is not owned, leased, or furnished to the
2520 covered person, the covered person's spouse, or the covered person's resident parent or resident
2521 sibling, may also recover benefits under any one other policy under which the covered person is
2522 also a covered person.
2523 (ii) (A) A covered person may recover benefits from no more than two additional
2524 policies, one additional policy from each parent's household if the covered person is:
2525 (I) a dependent minor of parents who reside in separate households; and
2526 (II) injured while occupying or using a motor vehicle that is not owned, leased, or
2527 furnished to the covered person, the covered person's resident parent, or the covered person's
2528 resident sibling.
2529 (B) Each parent's policy under this Subsection (4)(b)(ii) is liable only for the
2530 percentage of the damages that the limit of liability of each parent's policy of underinsured
2531 motorist coverage bears to the total of both parents' underinsured coverage applicable to the
2532 accident.
2533 (iii) A covered person's recovery under any available policies may not exceed the full
2534 amount of damages.
2535 (iv) Underinsured coverage on a motor vehicle occupied at the time of an accident is
2536 primary coverage, and the coverage elected by a person described under Subsections
2537 31A-22-305 (1)(a) [
2538 (v) The primary and the secondary coverage may not be set off against the other.
2539 (vi) A covered person as described under Subsection (4)(b)(i) is entitled to the highest
2540 limits of underinsured motorist coverage under only one additional policy per household
2541 applicable to that covered person as a named insured, spouse, or relative.
2542 (vii) A covered injured person is not barred against making subsequent elections if
2543 recovery is unavailable under previous elections.
2544 (viii) (A) As used in this section, "interpolicy stacking" means recovering benefits for a
2545 single incident of loss under more than one insurance policy.
2546 (B) Except to the extent permitted by this Subsection (4), interpolicy stacking is
2547 prohibited for underinsured motorist coverage.
2548 (c) Underinsured motorist coverage:
2549 (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
2550 Compensation Act;
2551 (ii) may not be subrogated by a workers' compensation insurance carrier;
2552 (iii) may not be reduced by benefits provided by workers' compensation insurance;
2553 (iv) may be reduced by health insurance subrogation only after the covered person is
2554 made whole;
2555 (v) may not be collected for bodily injury or death sustained by a person:
2556 (A) while committing a violation of Section 41-1a-1314 ;
2557 (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
2558 in violation of Section 41-1a-1314 ; or
2559 (C) while committing a felony; and
2560 (vi) notwithstanding Subsection (4)(c)(v), may be recovered:
2561 (A) for a person under 18 years of age who is injured within the scope of Subsection
2562 (4)(c)(v), but is limited to medical and funeral expenses; or
2563 (B) by a law enforcement officer as defined in Section 53-13-103 , who is injured
2564 within the course and scope of the law enforcement officer's duties.
2565 (5) The inception of the loss under Subsection 31A-21-313 (1) for underinsured
2566 motorist claims occurs upon the date of the last liability policy payment.
2567 (6) (a) Within five business days after notification that all liability insurers have
2568 tendered their liability policy limits, the underinsured carrier shall either:
2569 (i) waive any subrogation claim the underinsured carrier may have against the person
2570 liable for the injuries caused in the accident; or
2571 (ii) pay the insured an amount equal to the policy limits tendered by the liability carrier.
2572 (b) If neither option is exercised under Subsection (6)(a), the subrogation claim is
2573 considered to be waived by the underinsured carrier.
2574 (c) The notification under Subsection (6)(a) shall include:
2575 (i) the name, address, and phone number for all liability insurers;
2576 (ii) the liability insurers' liability policy limits; and
2577 (iii) the claim number associated with each liability insurer.
2578 (7) Except as otherwise provided in this section, a covered person may seek, subject to
2579 the terms and conditions of the policy, additional coverage under any policy:
2580 (a) that provides coverage for damages resulting from motor vehicle accidents; and
2581 (b) that is not required to conform to Section 31A-22-302 .
2582 (8) (a) When a claim is brought by a named insured or a person described in
2583 Subsection 31A-22-305 (1) and is asserted against the covered person's underinsured motorist
2584 carrier, the claimant may elect to resolve the claim:
2585 (i) by submitting the claim to binding arbitration; or
2586 (ii) through litigation.
2587 (b) Unless otherwise provided in the policy under which underinsured benefits are
2588 claimed, the election provided in Subsection (8)(a) is available to the claimant only, except that
2589 if the policy under which insured benefits are claimed provides that either an insured or the
2590 insurer may elect arbitration, the insured or the insurer may elect arbitration and that election to
2591 arbitrate shall stay the litigation of the claim under Subsection (8)(a)(ii).
2592 (c) Once a claimant elects to commence litigation under Subsection (8)(a)(ii), the
2593 claimant may not elect to resolve the claim through binding arbitration under this section
2594 without the written consent of the underinsured motorist coverage carrier.
2595 (d) (i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
2596 binding arbitration under Subsection (8)(a)(i) shall be resolved by a single arbitrator.
2597 (ii) All parties shall agree on the single arbitrator selected under Subsection (8)(d)(i).
2598 (iii) If the parties are unable to agree on a single arbitrator as required under Subsection
2599 (8)(d)(ii), the parties shall select a panel of three arbitrators.
2600 (e) If the parties select a panel of three arbitrators under Subsection (8)(d)(iii):
2601 (i) each side shall select one arbitrator; and
2602 (ii) the arbitrators appointed under Subsection (8)(e)(i) shall select one additional
2603 arbitrator to be included in the panel.
2604 (f) Unless otherwise agreed to in writing:
2605 (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
2606 under Subsection (8)(d)(i); or
2607 (ii) if an arbitration panel is selected under Subsection (8)(d)(iii):
2608 (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
2609 (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
2610 under Subsection (8)(e)(ii).
2611 (g) Except as otherwise provided in this section or unless otherwise agreed to in
2612 writing by the parties, an arbitration proceeding conducted under this section is governed by
2613 Title 78B, Chapter 11, Utah Uniform Arbitration Act.
2614 (h) (i) The arbitration shall be conducted in accordance with Rules 26(a)(4) through (f),
2615 27 through 37, 54, and 68 of the Utah Rules of Civil Procedure, once the requirements of
2616 Subsections (9)(a) through (c) are satisfied.
2617 (ii) The specified tier as defined by Rule 26(c)(3) of the Utah Rules of Civil Procedure
2618 shall be determined based on the claimant's specific monetary amount in the written demand
2619 for payment of uninsured motorist coverage benefits as required in Subsection (9)(a)(i)(A).
2620 (iii) Rules 26.1 and 26.2 of the Utah Rules of Civil Procedure do not apply to
2621 arbitration claims under this part.
2622 (i) An issue of discovery shall be resolved by the arbitrator or the arbitration panel.
2623 (j) A written decision by a single arbitrator or by a majority of the arbitration panel
2624 constitutes a final decision.
2625 (k) (i) Except as provided in Subsection (9), the amount of an arbitration award may
2626 not exceed the underinsured motorist policy limits of all applicable underinsured motorist
2627 policies, including applicable underinsured motorist umbrella policies.
2628 (ii) If the initial arbitration award exceeds the underinsured motorist policy limits of all
2629 applicable underinsured motorist policies, the arbitration award shall be reduced to an amount
2630 equal to the combined underinsured motorist policy limits of all applicable underinsured
2631 motorist policies.
2632 (l) The arbitrator or arbitration panel may not decide an issue of coverage or
2633 extra-contractual damages, including:
2634 (i) whether the claimant is a covered person;
2635 (ii) whether the policy extends coverage to the loss; or
2636 (iii) an allegation or claim asserting consequential damages or bad faith liability.
2637 (m) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or
2638 class-representative basis.
2639 (n) If the arbitrator or arbitration panel finds that the arbitration is not brought, pursued,
2640 or defended in good faith, the arbitrator or arbitration panel may award reasonable attorney fees
2641 and costs against the party that failed to bring, pursue, or defend the arbitration in good faith.
2642 (o) An arbitration award issued under this section shall be the final resolution of all
2643 claims not excluded by Subsection (8)(l) between the parties unless:
2644 (i) the award is procured by corruption, fraud, or other undue means;
2645 (ii) either party, within 20 days after service of the arbitration award:
2646 (A) files a complaint requesting a trial de novo in the district court; and
2647 (B) serves the nonmoving party with a copy of the complaint requesting a trial de novo
2648 under Subsection (8)(o)(ii)(A).
2649 (p) (i) Upon filing a complaint for a trial de novo under Subsection (8)(o), a claim shall
2650 proceed through litigation pursuant to the Utah Rules of Civil Procedure and Utah Rules of
2651 Evidence in the district court.
2652 (ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
2653 request a jury trial with a complaint requesting a trial de novo under Subsection (8)(o)(ii)(A).
2654 (q) (i) If the claimant, as the moving party in a trial de novo requested under
2655 Subsection (8)(o), does not obtain a verdict that is at least $5,000 and is at least 20% greater
2656 than the arbitration award, the claimant is responsible for all of the nonmoving party's costs.
2657 (ii) If the underinsured motorist carrier, as the moving party in a trial de novo requested
2658 under Subsection (8)(o), does not obtain a verdict that is at least 20% less than the arbitration
2659 award, the underinsured motorist carrier is responsible for all of the nonmoving party's costs.
2660 (iii) Except as provided in Subsection (8)(q)(iv), the costs under this Subsection (8)(q)
2661 shall include:
2662 (A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
2663 (B) the costs of expert witnesses and depositions.
2664 (iv) An award of costs under this Subsection (8)(q) may not exceed $2,500 unless
2665 Subsection (9)(h)(iii) applies.
2666 (r) For purposes of determining whether a party's verdict is greater or less than the
2667 arbitration award under Subsection (8)(q), a court may not consider any recovery or other relief
2668 granted on a claim for damages if the claim for damages:
2669 (i) was not fully disclosed in writing prior to the arbitration proceeding; or
2670 (ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil
2671 Procedure.
2672 (s) If a district court determines, upon a motion of the nonmoving party, that a moving
2673 party's use of the trial de novo process is filed in bad faith in accordance with Section
2674 78B-5-825 , the district court may award reasonable attorney fees to the nonmoving party.
2675 (t) Nothing in this section is intended to limit a claim under another portion of an
2676 applicable insurance policy.
2677 (u) If there are multiple underinsured motorist policies, as set forth in Subsection (4),
2678 the claimant may elect to arbitrate in one hearing the claims against all the underinsured
2679 motorist carriers.
2680 (9) (a) Within 30 days after a covered person elects to submit a claim for underinsured
2681 motorist benefits to binding arbitration or files litigation, the covered person shall provide to
2682 the underinsured motorist carrier:
2683 (i) a written demand for payment of underinsured motorist coverage benefits, setting
2684 forth:
2685 (A) subject to Subsection (9)(l), the specific monetary amount of the demand,
2686 including a computation of the covered person's claimed past medical expenses, claimed past
2687 lost wages, and all other claimed past economic damages; and
2688 (B) the factual and legal basis and any supporting documentation for the demand;
2689 (ii) a written statement under oath disclosing:
2690 (A) (I) the names and last known addresses of all health care providers who have
2691 rendered health care services to the covered person that are material to the claims for which the
2692 underinsured motorist benefits are sought for a period of five years preceding the date of the
2693 event giving rise to the claim for underinsured motorist benefits up to the time the election for
2694 arbitration or litigation has been exercised; and
2695 (II) [
2696 the health care providers who have rendered health care services to the covered person, which
2697 the covered person claims are immaterial to the claims for which underinsured motorist
2698 benefits are sought, for a period of five years preceding the date of the event giving rise to the
2699 claim for underinsured motorist benefits up to the time the election for arbitration or litigation
2700 has been exercised that have not been disclosed under Subsection (9)(a)(ii)(A)(I);
2701 (B) (I) the names and last known addresses of all health insurers or other entities to
2702 whom the covered person has submitted claims for health care services or benefits material to
2703 the claims for which underinsured motorist benefits are sought, for a period of five years
2704 preceding the date of the event giving rise to the claim for underinsured motorist benefits up to
2705 the time the election for arbitration or litigation has been exercised; and
2706 (II) [
2707 insurers or other entities to whom the covered person has submitted claims for health care
2708 services or benefits, which the covered person claims are immaterial to the claims for which
2709 underinsured motorist benefits are sought, for a period of five years preceding the date of the
2710 event giving rise to the claim for underinsured motorist benefits up to the time the election for
2711 arbitration or litigation have not been disclosed;
2712 S. [
2713 to a claim submitted to binding arbitration or through litigation on or after May 13, 2014;
2714 S. [
2714a claimed,
2715 all employers of the covered person for a period of five years preceding the date of the event
2716 giving rise to the claim for underinsured motorist benefits up to the time the election for
2717 arbitration or litigation has been exercised;
2718 S. [
2719 S. [
2719a whether
2720 the covered person is a recipient of Medicare or Medicaid benefits or Utah Children's Health
2721 Insurance Program benefits under Title 26, Chapter 40, Utah Children's Health Insurance Act,
2722 or if the claim is subject to any other state or federal statutory liens; and
2723 (iii) signed authorizations to allow the underinsured motorist carrier to only obtain
2724 records and billings from the individuals or entities disclosed under Subsections
2725 (9)(a)(ii)(A)(I), (B)(I), and S. [
2726 (b) (i) If the underinsured motorist carrier determines that the disclosure of undisclosed
2727 health care providers or health care insurers under Subsection (9)(a)(ii) is reasonably necessary,
2728 the underinsured motorist carrier may:
2729 (A) make a request for the disclosure of the identity of the health care providers or
2730 health care insurers; and
2731 (B) make a request for authorizations to allow the underinsured motorist carrier to only
2732 obtain records and billings from the individuals or entities not disclosed.
2733 (ii) If the covered person does not provide the requested information within 10 days:
2734 (A) the covered person shall disclose, in writing, the legal or factual basis for the
2735 failure to disclose the health care providers or health care insurers; and
2736 (B) either the covered person or the underinsured motorist carrier may request the
2737 arbitrator or arbitration panel to resolve the issue of whether the identities or records are to be
2738 provided if the covered person has elected arbitration.
2739 (iii) The time periods imposed by Subsection (9)(c)(i) are tolled pending resolution of
2740 the dispute concerning the disclosure and production of records of the health care providers or
2741 health care insurers.
2742 (c) (i) An underinsured motorist carrier that receives an election for arbitration or a
2743 notice of filing litigation and the demand for payment of underinsured motorist benefits under
2744 Subsection (9)(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the
2745 demand and receipt of the items specified in Subsections (9)(a)(i) through (iii), to:
2746 (A) provide a written response to the written demand for payment provided for in
2747 Subsection (9)(a)(i);
2748 (B) except as provided in Subsection (9)(c)(i)(C), tender the amount, if any, of the
2749 underinsured motorist carrier's determination of the amount owed to the covered person; and
2750 (C) if the covered person is a recipient of Medicare or Medicaid benefits or Utah
2751 Children's Health Insurance Program benefits under Title 26, Chapter 40, Utah Children's
2752 Health Insurance Act, or if the claim is subject to any other state or federal statutory liens,
2753 tender the amount, if any, of the underinsured motorist carrier's determination of the amount
2754 owed to the covered person less:
2755 (I) if the amount of the state or federal statutory lien is established, the amount of the
2756 lien; or
2757 (II) if the amount of the state or federal statutory lien is not established, two times the
2758 amount of the medical expenses subject to the state or federal statutory lien until such time as
2759 the amount of the state or federal statutory lien is established.
2760 (ii) If the amount tendered by the underinsured motorist carrier under Subsection
2761 (9)(c)(i) is the total amount of the underinsured motorist policy limits, the tendered amount
2762 shall be accepted by the covered person.
2763 (d) A covered person who receives a written response from an underinsured motorist
2764 carrier as provided for in Subsection (9)(c)(i), may:
2765 (i) elect to accept the amount tendered in Subsection (9)(c)(i) as payment in full of all
2766 underinsured motorist claims; or
2767 (ii) elect to:
2768 (A) accept the amount tendered in Subsection (9)(c)(i) as partial payment of all
2769 underinsured motorist claims; and
2770 (B) continue to litigate or arbitrate the remaining claim in accordance with the election
2771 made under Subsections (8)(a), (b), and (c).
2772 (e) If a covered person elects to accept the amount tendered under Subsection (9)(c)(i)
2773 as partial payment of all underinsured motorist claims, the final award obtained through
2774 arbitration, litigation, or later settlement shall be reduced by any payment made by the
2775 underinsured motorist carrier under Subsection (9)(c)(i).
2776 (f) In an arbitration proceeding on the remaining underinsured claims:
2777 (i) the parties may not disclose to the arbitrator or arbitration panel the amount paid
2778 under Subsection (9)(c)(i) until after the arbitration award has been rendered; and
2779 (ii) the parties may not disclose the amount of the limits of underinsured motorist
2780 benefits provided by the policy.
2781 (g) If the final award obtained through arbitration or litigation is greater than the
2782 average of the covered person's initial written demand for payment provided for in Subsection
2783 (9)(a)(i) and the underinsured motorist carrier's initial written response provided for in
2784 Subsection (9)(c)(i), the underinsured motorist carrier shall pay:
2785 (i) the final award obtained through arbitration or litigation, except that if the award
2786 exceeds the policy limits of the subject underinsured motorist policy by more than $15,000, the
2787 amount shall be reduced to an amount equal to the policy limits plus $15,000; and
2788 (ii) any of the following applicable costs:
2789 (A) any costs as set forth in Rule 54(d), Utah Rules of Civil Procedure;
2790 (B) the arbitrator or arbitration panel's fee; and
2791 (C) the reasonable costs of expert witnesses and depositions used in the presentation of
2792 evidence during arbitration or litigation.
2793 (h) (i) The covered person shall provide an affidavit of costs within five days of an
2794 arbitration award.
2795 (ii) (A) Objection to the affidavit of costs shall specify with particularity the costs to
2796 which the underinsured motorist carrier objects.
2797 (B) The objection shall be resolved by the arbitrator or arbitration panel.
2798 (iii) The award of costs by the arbitrator or arbitration panel under Subsection (9)(g)(ii)
2799 may not exceed $5,000.
2800 (i) (i) A covered person shall disclose all material information, other than rebuttal
2801 evidence, within 30 days after a covered person elects to submit a claim for underinsured
2802 motorist coverage benefits to binding arbitration or files litigation as specified in Subsection
2803 (9)(a).
2804 (ii) If the information under Subsection (9)(i)(i) is not disclosed, the covered person
2805 may not recover costs or any amounts in excess of the policy under Subsection (9)(g).
2806 (j) This Subsection (9) does not limit any other cause of action that arose or may arise
2807 against the underinsured motorist carrier from the same dispute.
2808 (k) The provisions of this Subsection (9) only apply to motor vehicle accidents that
2809 occur on or after March 30, 2010.
2810 (l) S. (i) .S The written demand requirement in Subsection (9)(a)(i)(A) does not affect
2810a the
2811 covered person's requirement to provide a computation of any other economic damages
2812 claimed S. , .S and the one or more respondents shall have a reasonable time after the receipt of
2812a the
2813 computation of any other economic damages claimed to conduct fact and expert discovery as
2814 to any additional damages claimed. The changes made by this bill to this Subsection (9)(l) and
2815 Subsection (9)(a)(i)(A) apply to a claim submitted to binding arbitration or through litigation
2816 on or after May 13, 2014.
2816a S. (ii) The changes made by this bill under Subsections (9)(a)(ii)(A)(II) and (B)(II) apply to a
2816b claim submitted to binding arbitration or through litigation on or after May 13, 2014. .S
2817 Section 13. Section 31A-22-428 is amended to read:
2818 31A-22-428. Interest payable on life insurance proceeds.
2819 (1) For a life insurance policy delivered or issued for delivery in this state on or after
2820 May 5, 2008, the insurer shall pay interest on the death proceeds payable upon the death of the
2821 insured.
2822 (2) (a) Except as provided in Subsection (4), for the period beginning on the date of
2823 death and ending the day before the day described in Subsection (3)(b), interest under
2824 Subsection (1) shall accrue at a rate no less than the greater of:
2825 (i) the rate applicable to policy funds left on deposit; [
2826 (ii) [
2827 Constant Maturity Rate as published by the Federal Reserve.
2828 (b) If there is no rate applicable to policy funds on deposit as stated in Subsection
2829 (2)(a)(i), then the Two Year Treasury Constant Maturity Rates as published by the Federal
2830 Reserve applies.
2831 [
2832 which the death occurs.
2833 [
2834 (3) (a) Unless the claim is paid and except as provided in Subsection (4), beginning on
2835 the day described in Subsection (3)(b) and ending the day on which the claim is paid, interest
2836 shall accrue at the rate in Subsection (2) plus additional interest at the rate of 10% annually.
2837 (b) Interest accrues under Subsection (3)(a) beginning with the day that is 31 days from
2838 the latest of:
2839 (i) the day on which the insurer receives proof of death;
2840 (ii) the day on which the insurer receives sufficient information to determine:
2841 (A) liability;
2842 (B) the extent of the liability; and
2843 (C) the appropriate payee legally entitled to the proceeds; and
2844 (iii) the day on which:
2845 (A) legal impediments to payment of proceeds that depend on the action of parties
2846 other than the insurer are resolved; and
2847 (B) the insurer receives sufficient evidence of the resolution of the legal impediments
2848 described in Subsection (3)(b)(iii)(A).
2849 (4) A court of competent jurisdiction may require payment of interest from the date of
2850 death to the day on which a claim is paid at a rate equal to the sum of:
2851 (a) the rate specified in Subsection (2); and
2852 (b) the legal rate identified in Subsection 15-1-1 (2).
2853 Section 14. Section 31A-22-617 is amended to read:
2854 31A-22-617. Preferred provider contract provisions.
2855 Health insurance policies may provide for insureds to receive services or
2856 reimbursement under the policies in accordance with preferred health care provider contracts as
2857 follows:
2858 (1) Subject to restrictions under this section, [
2859 administrator may enter into contracts with health care providers as defined in Section
2860 78B-3-403 under which the health care providers agree to supply services, at prices specified in
2861 the contracts, to persons insured by an insurer.
2862 (a) (i) A health care provider contract may require the health care provider to accept the
2863 specified payment in this Subsection (1) as payment in full, relinquishing the right to collect
2864 additional amounts from the insured person.
2865 (ii) In [
2866 determined in accordance with applicable law, the provider contract, the subscriber contract,
2867 and the insurer's written payment policies in effect at the time services were rendered.
2868 (iii) If the parties are unable to resolve their dispute, the matter shall be subject to
2869 binding arbitration by a jointly selected arbitrator. Each party is to bear its own expense except
2870 the cost of the jointly selected arbitrator shall be equally shared. This Subsection (1)(a)(iii)
2871 does not apply to the claim of a general acute hospital to the extent it is inconsistent with the
2872 hospital's provider agreement.
2873 (iv) An organization may not penalize a provider solely for pursuing a claims dispute
2874 or otherwise demanding payment for a sum believed owing.
2875 (v) If an insurer permits another entity with which it does not share common ownership
2876 or control to use or otherwise lease one or more of the organization's networks of participating
2877 providers, the organization shall ensure, at a minimum, that the entity pays participating
2878 providers in accordance with the same fee schedule and general payment policies as the
2879 organization would for that network.
2880 (b) The insurance contract may reward the insured for selection of preferred health care
2881 providers by:
2882 (i) reducing premium rates;
2883 (ii) reducing deductibles;
2884 (iii) coinsurance;
2885 (iv) other copayments; or
2886 (v) any other reasonable manner.
2887 (c) If the insurer is a managed care organization, as defined in Subsection
2888 31A-27a-403 (1)(f):
2889 (i) the insurance contract and the health care provider contract shall provide that in the
2890 event the managed care organization becomes insolvent, the rehabilitator or liquidator may:
2891 (A) require the health care provider to continue to provide health care services under
2892 the contract until the earlier of:
2893 (I) 90 days after the date of the filing of a petition for rehabilitation or the petition for
2894 liquidation; or
2895 (II) the date the term of the contract ends; and
2896 (B) subject to Subsection (1)(c)(v), reduce the fees the provider is otherwise entitled to
2897 receive from the managed care organization during the time period described in Subsection
2898 (1)(c)(i)(A);
2899 (ii) the provider is required to:
2900 (A) accept the reduced payment under Subsection (1)(c)(i)(B) as payment in full; and
2901 (B) relinquish the right to collect additional amounts from the insolvent managed care
2902 organization's enrollee, as defined in Subsection 31A-27a-403 (1)(b);
2903 (iii) if the contract between the health care provider and the managed care organization
2904 has not been reduced to writing, or the contract fails to contain the [
2905 requirements described in Subsection (1)(c)(i), the provider may not collect or attempt to
2906 collect from the enrollee:
2907 (A) sums owed by the insolvent managed care organization; or
2908 (B) the amount of the regular fee reduction authorized under Subsection (1)(c)(i)(B);
2909 (iv) the following may not bill or maintain [
2910 collect sums owed by the insolvent managed care organization or the amount of the regular fee
2911 reduction authorized under Subsection (1)(c)(i)(B):
2912 (A) a provider;
2913 (B) an agent;
2914 (C) a trustee; or
2915 (D) an assignee of a person described in Subsections (1)(c)(iv)(A) through (C); and
2916 (v) notwithstanding Subsection (1)(c)(i):
2917 (A) a rehabilitator or liquidator may not reduce a fee by less than 75% of the provider's
2918 regular fee set forth in the contract; and
2919 (B) the enrollee shall continue to pay the copayments, deductibles, and other payments
2920 for services received from the provider that the enrollee was required to pay before the filing
2921 of:
2922 (I) a petition for rehabilitation; or
2923 (II) a petition for liquidation.
2924 (2) (a) Subject to Subsections (2)(b) through (2)(e), an insurer using preferred health
2925 care provider contracts is subject to the reimbursement requirements in Section 31A-8-501 on
2926 or after January 1, 2014.
2927 (b) When reimbursing for services of health care providers not under contract, the
2928 insurer may make direct payment to the insured.
2929 (c) An insurer using preferred health care provider contracts may impose a deductible
2930 on coverage of health care providers not under contract.
2931 (d) When selecting health care providers with whom to contract under Subsection (1),
2932 an insurer may not unfairly discriminate between classes of health care providers, but may
2933 discriminate within a class of health care providers, subject to Subsection (7).
2934 (e) For purposes of this section, unfair discrimination between classes of health care
2935 providers includes:
2936 (i) refusal to contract with class members in reasonable proportion to the number of
2937 insureds covered by the insurer and the expected demand for services from class members; and
2938 (ii) refusal to cover procedures for one class of providers that are:
2939 (A) commonly used by members of the class of health care providers for the treatment
2940 of illnesses, injuries, or conditions;
2941 (B) otherwise covered by the insurer; and
2942 (C) within the scope of practice of the class of health care providers.
2943 (3) Before the insured consents to the insurance contract, the insurer shall fully disclose
2944 to the insured that it has entered into preferred health care provider contracts. The insurer shall
2945 provide sufficient detail on the preferred health care provider contracts to permit the insured to
2946 agree to the terms of the insurance contract. The insurer shall provide at least the following
2947 information:
2948 (a) a list of the health care providers under contract, and if requested their business
2949 locations and specialties;
2950 (b) a description of the insured benefits, including [
2951 other copayments;
2952 (c) a description of the quality assurance program required under Subsection (4); and
2953 (d) a description of the adverse benefit determination procedures required under
2954 Subsection (5).
2955 (4) (a) An insurer using preferred health care provider contracts shall maintain a quality
2956 assurance program for assuring that the care provided by the health care providers under
2957 contract meets prevailing standards in the state.
2958 (b) The commissioner in consultation with the executive director of the Department of
2959 Health may designate qualified persons to perform an audit of the quality assurance program.
2960 The auditors shall have full access to all records of the organization and its health care
2961 providers, including medical records of individual patients.
2962 (c) The information contained in the medical records of individual patients shall
2963 remain confidential. All information, interviews, reports, statements, memoranda, or other data
2964 furnished for purposes of the audit and any findings or conclusions of the auditors are
2965 privileged. The information is not subject to discovery, use, or receipt in evidence in any legal
2966 proceeding except hearings before the commissioner concerning alleged violations of this
2967 section.
2968 (5) An insurer using preferred health care provider contracts shall provide a reasonable
2969 procedure for resolving complaints and adverse benefit determinations initiated by the insureds
2970 and health care providers.
2971 (6) An insurer may not contract with a health care provider for treatment of illness or
2972 injury unless the health care provider is licensed to perform that treatment.
2973 (7) (a) A health care provider or insurer may not discriminate against a preferred health
2974 care provider for agreeing to a contract under Subsection (1).
2975 (b) [
2976 scope of the health care provider's practice, who is willing and able to meet the terms and
2977 conditions established by the insurer for designation as a preferred health care provider, shall
2978 be able to apply for and receive the designation as a preferred health care provider. Contract
2979 terms and conditions may include reasonable limitations on the number of designated preferred
2980 health care providers based upon substantial objective and economic grounds, or expected use
2981 of particular services based upon prior provider-patient profiles.
2982 (8) Upon the written request of a provider excluded from a provider contract, the
2983 commissioner may hold a hearing to determine if the insurer's exclusion of the provider is
2984 based on the criteria set forth in Subsection (7)(b).
2985 [
2986
2987 [
2988 certain benefit or service as part of a health benefit plan.
2989 [
2990 in accordance with Section 31A-22-625 .
2991 [
2992 Section 31A-22-618 , an insurer or third party administrator is not required to, but may, enter
2993 into [
2994 Chapter 40a, Athletic Trainer Licensing Act.
2995 Section 15. Section 31A-22-618.5 is amended to read:
2996 31A-22-618.5. Health benefit plan offerings.
2997 (1) The purpose of this section is to increase the range of health benefit plans available
2998 in the small group, small employer group, large group, and individual insurance markets.
2999 (2) A health maintenance organization that is subject to Chapter 8, Health Maintenance
3000 Organizations and Limited Health Plans:
3001 (a) shall offer to potential purchasers at least one health benefit plan that is subject to
3002 the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
3003 and
3004 (b) may offer to a potential purchaser one or more health benefit plans that:
3005 (i) are not subject to one or more of the following:
3006 (A) the limitations on insured indemnity benefits in Subsection 31A-8-105 (4);
3007 (B) the limitation on point of service products in Subsections 31A-8-408 (3) through
3008 (6);
3009 (C) except as provided in Subsection (2)(b)(ii), basic health care services as defined in
3010 Section 31A-8-101 ; or
3011 (D) coverage mandates enacted after January 1, 2009 that are not required by federal
3012 law, provided that the insurer offers one plan under Subsection (2)(a) that covers the mandate
3013 enacted after January 1, 2009; and
3014 (ii) when offering a health plan under this section, provide coverage for an emergency
3015 medical condition as required by Section 31A-22-627 as follows:
3016 (A) within the organization's service area, covered services shall include health care
3017 services from nonaffiliated providers when medically necessary to stabilize an emergency
3018 medical condition; and
3019 (B) outside the organization's service area, covered services shall include medically
3020 necessary health care services for the treatment of an emergency medical condition that are
3021 immediately required while the enrollee is outside the geographic limits of the organization's
3022 service area.
3023 (3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
3024 Maintenance Organizations and Limited Health Plans:
3025 (a) [
3026 not subject to Section 31A-22-618 ;
3027 (b) when offering a health plan under this Subsection (3), shall provide coverage of
3028 emergency care services as required by Section 31A-22-627 ; and
3029 (c) is not subject to coverage mandates enacted after January 1, 2009 that are not
3030 required by federal law, provided that an insurer offers one plan that covers a mandate enacted
3031 after January 1, 2009.
3032 (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
3033 Subsection (2)(b).
3034 (5) (a) Any difference in price between a health benefit plan offered under Subsections
3035 (2)(a) and (b) shall be based on actuarially sound data.
3036 (b) Any difference in price between a health benefit plan offered under Subsection
3037 (3)(a) shall be based on actuarially sound data.
3038 (6) Nothing in this section limits the number of health benefit plans that an insurer may
3039 offer.
3040 Section 16. Section 31A-22-625 is amended to read:
3041 31A-22-625. Catastrophic coverage of mental health conditions.
3042 (1) As used in this section:
3043 (a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
3044 that does not impose a lifetime limit, annual payment limit, episodic limit, inpatient or
3045 outpatient service limit, or maximum out-of-pocket limit that places a greater financial burden
3046 on an insured for the evaluation and treatment of a mental health condition than for the
3047 evaluation and treatment of a physical health condition.
3048 (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
3049 factors, such as deductibles, copayments, or coinsurance, before reaching a maximum
3050 out-of-pocket limit.
3051 (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
3052 limit for physical health conditions and another maximum out-of-pocket limit for mental health
3053 conditions, except that if separate out-of-pocket limits are established, the out-of-pocket limit
3054 for mental health conditions may not exceed the out-of-pocket limit for physical health
3055 conditions.
3056 (b) (i) "50/50 mental health coverage" means coverage in a health benefit plan that
3057 pays for at least 50% of covered services for the diagnosis and treatment of mental health
3058 conditions.
3059 (ii) "50/50 mental health coverage" may include a restriction on:
3060 (A) episodic limits;
3061 (B) inpatient or outpatient service limits; or
3062 (C) maximum out-of-pocket limits.
3063 (c) "Large employer" is as defined in 42 U.S.C. Sec. 300gg-91.
3064 (d) (i) "Mental health condition" means a condition or disorder involving mental illness
3065 that falls under a diagnostic category listed in the Diagnostic and Statistical Manual, as
3066 periodically revised.
3067 (ii) "Mental health condition" does not include the following when diagnosed as the
3068 primary or substantial reason or need for treatment:
3069 (A) a marital or family problem;
3070 (B) a social, occupational, religious, or other social maladjustment;
3071 (C) a conduct disorder;
3072 (D) a chronic adjustment disorder;
3073 (E) a psychosexual disorder;
3074 (F) a chronic organic brain syndrome;
3075 (G) a personality disorder;
3076 (H) a specific developmental disorder or learning disability; or
3077 (I) an intellectual disability.
3078 (e) "Small employer" is as defined in 42 U.S.C. Sec. 300gg-91.
3079 (2) (a) At the time of purchase and renewal, an insurer shall offer to a small employer
3080 that it insures or seeks to insure a choice between:
3081 (i) (A) catastrophic mental health coverage; or
3082 (B) federally qualified mental health coverage as described in Subsection (3); and
3083 (ii) 50/50 mental health coverage.
3084 (b) In addition to complying with Subsection (2)(a), an insurer may offer to provide:
3085 (i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
3086 that exceed the minimum requirements of this section; or
3087 (ii) coverage that excludes benefits for mental health conditions.
3088 (c) A small employer may, at its option, regardless of the employer's previous coverage
3089 for mental health conditions, choose either:
3090 (i) coverage offered under Subsection (2)(a)(i);
3091 (ii) 50/50 mental health coverage; or
3092 (iii) coverage offered under Subsection (2)(b).
3093 (d) An insurer is exempt from the 30% index rating restriction in Section
3094 31A-30-106.1 and, for the first year only that the employer chooses coverage that meets or
3095 exceeds catastrophic mental health coverage, the 15% annual adjustment restriction in Section
3096 31A-30-106.1 , for [
3097 coverage that meets or exceeds catastrophic mental health coverage.
3098 (3) (a) An insurer shall offer a large employer mental health and substance use disorder
3099 benefit in compliance with Section 2705 of the Public Health Service Act, 42 U.S.C. Sec.
3100 300gg-26, and federal regulations adopted pursuant to that act.
3101 (b) An insurer shall provide in an individual or small employer health benefit plan,
3102 mental health and substance use disorder benefits in compliance with Sections 2705 and 2711
3103 of the Public Health Service Act, 42 U.S.C. Sec. 300gg-26, and federal regulations adopted
3104 pursuant to that act.
3105 (4) (a) An insurer may provide catastrophic mental health coverage to a small employer
3106 through a managed care organization or system in a manner consistent with Chapter 8, Health
3107 Maintenance Organizations and Limited Health Plans, regardless of whether the insurance
3108 policy uses a managed care organization or system for the treatment of physical health
3109 conditions.
3110 (b) (i) Notwithstanding any other provision of this title, an insurer may:
3111 (A) establish a closed panel of providers for catastrophic mental health coverage; and
3112 (B) refuse to provide a benefit to be paid for services rendered by a nonpanel provider
3113 unless:
3114 (I) the insured is referred to a nonpanel provider with the prior authorization of the
3115 insurer; and
3116 (II) the nonpanel provider agrees to follow the insurer's protocols and treatment
3117 guidelines.
3118 (ii) If an insured receives services from a nonpanel provider in the manner permitted by
3119 Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
3120 average amount paid by the insurer for comparable services of panel providers under a
3121 noncapitated arrangement who are members of the same class of health care providers.
3122 (iii) This Subsection (4)(b) may not be construed as requiring an insurer to authorize a
3123 referral to a nonpanel provider.
3124 (c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
3125 mental health condition shall be rendered:
3126 (i) by a mental health therapist as defined in Section 58-60-102 ; or
3127 (ii) in a health care facility:
3128 (A) licensed or otherwise authorized to provide mental health services pursuant to:
3129 (I) Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act; or
3130 (II) Title 62A, Chapter 2, Licensure of Programs and Facilities; and
3131 (B) that provides a program for the treatment of a mental health condition pursuant to a
3132 written plan.
3133 (5) The commissioner may prohibit an insurance policy that provides mental health
3134 coverage in a manner that is inconsistent with this section.
3135 (6) The commissioner [
3136 Chapter 3, Utah Administrative Rulemaking Act, as necessary to ensure compliance with this
3137 section[
3138 [
3139 [
3140 [
3141 [
3142 [
3143 [
3144
3145
3146 Section 17. Section 31A-22-635 is amended to read:
3147 31A-22-635. Uniform application -- Uniform waiver of coverage -- Information
3148 on Health Insurance Exchange.
3149 (1) For purposes of this section, "insurer":
3150 (a) is defined in Subsection 31A-22-634 (1); and
3151 (b) includes the state employee's risk pool under Section 49-20-202 .
3152 (2) (a) Insurers offering a health benefit plan to an individual or small employer shall
3153 use a uniform application form.
3154 (b) The uniform application form:
3155 (i) [
3156 health history [
3157 (ii) shall be shortened and simplified in accordance with rules adopted by the
3158 commissioner.
3159 (c) Insurers offering a health benefit plan to a small employer shall use a uniform
3160 waiver of coverage form, which may not include health status related questions [
3161
3162 (i) information that identifies the employee;
3163 (ii) proof of the employee's insurance coverage; and
3164 (iii) a statement that the employee declines coverage with a particular employer group.
3165 (3) Notwithstanding the requirements of Subsection (2)(a), the uniform application and
3166 uniform waiver of coverage forms may, if the combination or modification is approved by the
3167 commissioner, be combined or modified to facilitate a more efficient and consumer friendly
3168 experience for:
3169 (a) enrollees using the Health Insurance Exchange; or
3170 (b) insurers using electronic applications.
3171 (4) The uniform application form, and uniform waiver form, shall be adopted and
3172 approved by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
3173 Rulemaking Act.
3174 (5) (a) An insurer who offers a health benefit plan [
3175
3176 (i) accept and process an electronic submission of the uniform application or uniform
3177 waiver from the Health Insurance Exchange using the electronic standards adopted pursuant to
3178 Section 63M-1-2506 ;
3179 (ii) if requested, provide the applicant with a copy of the completed application either
3180 by mail or electronically;
3181 (iii) post all health benefit plans offered by the insurer in the defined contribution
3182 arrangement market on the Health Insurance Exchange; and
3183 (iv) post the information required by Subsection (6) on the Health Insurance Exchange
3184 for every health benefit plan the insurer offers on the Health Insurance Exchange.
3185 (b) Except as provided in Subsection (5)(c), an insurer who posts health benefit plans
3186 on the Health Insurance Exchange may not directly or indirectly offer products on the Health
3187 Insurance Exchange that are not health benefit plans.
3188 (c) Notwithstanding Subsection (5)(b):
3189 (i) an insurer may offer a health savings account on the Health Insurance Exchange;
3190 [
3191 (ii) an insurer may offer dental [
3192 [
3193 [
3194
3195
3196
3197
3198 [
3199
3200 dental [
3201 (6) An insurer shall provide the commissioner and the Health Insurance Exchange with
3202 the following information for each health benefit plan submitted to the Health Insurance
3203 Exchange, in the electronic format required by Subsection 63M-1-2506 (1):
3204 (a) plan design, benefits, and options offered by the health benefit plan including state
3205 mandates the plan does not cover;
3206 (b) information and Internet address to online provider networks;
3207 (c) wellness programs and incentives;
3208 (d) descriptions of prescription drug benefits, exclusions, or limitations;
3209 (e) the percentage of claims paid by the insurer within 30 days of the date a claim is
3210 submitted to the insurer for the prior year; and
3211 (f) the claims denial and insurer transparency information developed in accordance
3212 with Subsection 31A-22-613.5 (4).
3213 (7) The department shall post on the Health Insurance Exchange the department's
3214 solvency rating for each insurer who posts a health benefit plan on the Health Insurance
3215 Exchange. The solvency rating for each insurer shall be based on methodology established by
3216 the department by administrative rule and shall be updated each calendar year.
3217 (8) (a) The commissioner may request information from an insurer under Section
3218 31A-22-613.5 to verify the data submitted to the department and to the Health Insurance
3219 Exchange.
3220 (b) The commissioner shall regulate [
3221 for a uniform application form or electronic submission of the application forms.
3222 Section 18. Section 31A-22-721 is amended to read:
3223 31A-22-721. A health benefit plan for a plan sponsor -- Discontinuance and
3224 nonrenewal.
3225 (1) Except as otherwise provided in this section, a health benefit plan for a plan
3226 sponsor is renewable and continues in force:
3227 (a) with respect to all eligible employees and dependents; and
3228 (b) at the option of the plan sponsor.
3229 (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
3230 (a) for a network plan, if[
3231 plan who lives, resides, or works in:
3232 [
3233 [
3234 [
3235
3236 (b) for coverage made available in the small or large employer market only through an
3237 association, if:
3238 (i) the employer's membership in the association ceases; and
3239 (ii) the coverage is terminated uniformly without regard to any health status-related
3240 factor relating to any covered individual.
3241 (3) A health benefit plan for a plan sponsor may be discontinued if:
3242 (a) a condition described in Subsection (2) exists;
3243 (b) the plan sponsor fails to pay premiums or contributions in accordance with the
3244 terms of the contract;
3245 (c) the plan sponsor:
3246 (i) performs an act or practice that constitutes fraud; or
3247 (ii) makes an intentional misrepresentation of material fact under the terms of the
3248 coverage;
3249 (d) the insurer:
3250 (i) elects to discontinue offering a particular health benefit product delivered or issued
3251 for delivery in this state;
3252 (ii) (A) provides notice of the discontinuation in writing:
3253 (I) to each plan sponsor, employee, and dependent of a plan sponsor or employee; and
3254 (II) at least 90 days before the date the coverage will be discontinued;
3255 (B) provides notice of the discontinuation in writing:
3256 (I) to the commissioner; and
3257 (II) at least three working days prior to the date the notice is sent to the affected plan
3258 sponsors, employees, and dependents of plan sponsors or employees;
3259 (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase any
3260 other health benefit products currently being offered:
3261 (I) by the insurer in the market; or
3262 (II) in the case of a large employer, any other health benefit plan currently being
3263 offered in that market; and
3264 (D) in exercising the option to discontinue that product and in offering the option of
3265 coverage in this section, the insurer acts uniformly without regard to:
3266 (I) the claims experience of a plan sponsor;
3267 (II) any health status-related factor relating to any covered participant or beneficiary; or
3268 (III) any health status-related factor relating to a new participant or beneficiary who
3269 may become eligible for coverage; or
3270 (e) the insurer:
3271 (i) elects to discontinue all of the insurer's health benefit plans:
3272 (A) in the small employer market; or
3273 (B) the large employer market; or
3274 (C) both the small and large employer markets; and
3275 (ii) (A) provides notice of the discontinuance in writing:
3276 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
3277 (II) at least 180 days before the date the coverage will be discontinued;
3278 (B) provides notice of the discontinuation in writing:
3279 (I) to the commissioner in each state in which an affected insured individual is known
3280 to reside; and
3281 (II) at least 30 business days prior to the date the notice is sent to the affected plan
3282 sponsors, employees, and dependents of a plan sponsor or employee;
3283 (C) discontinues and nonrenews all plans issued or delivered for issuance in the
3284 market; and
3285 (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
3286 (4) A large employer health benefit plan may be discontinued or nonrenewed:
3287 (a) if a condition described in Subsection (2) exists; or
3288 (b) for noncompliance with the insurer's:
3289 (i) minimum participation requirements; or
3290 (ii) employer contribution requirements.
3291 (5) A small employer health benefit plan may be discontinued or nonrenewed:
3292 (a) if a condition described in Subsection (2) exists; or
3293 (b) for noncompliance with the insurer's employer contribution requirements.
3294 (6) A small employer health benefit plan may be nonrenewed:
3295 (a) if a condition described in Subsection (2) exists; or
3296 (b) for noncompliance with the insurer's minimum participation requirements.
3297 (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
3298 discontinued if after issuance of coverage the eligible employee:
3299 (i) engages in an act or practice that constitutes fraud in connection with the coverage;
3300 or
3301 (ii) makes an intentional misrepresentation of material fact in connection with the
3302 coverage.
3303 (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
3304 (i) 12 months after the date of discontinuance; and
3305 (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
3306 to reenroll.
3307 (c) At the time the eligible employee's coverage is discontinued under Subsection
3308 (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
3309 discontinued.
3310 (d) An eligible employee may not be discontinued under this Subsection (7) because of
3311 a fraud or misrepresentation that relates to health status.
3312 (8) (a) Except as provided in Subsection (8)(b), an insurer that elects to discontinue
3313 offering a health benefit plan under Subsection (3)(e) shall be prohibited from writing new
3314 business in such market in this state for a period of five years beginning on the date of
3315 discontinuation of the last coverage that is discontinued.
3316 (b) The commissioner may waive the prohibition under Subsection (8)(a) when the
3317 commissioner finds that waiver is in the public interest:
3318 (i) to promote competition; or
3319 (ii) to resolve inequity in the marketplace.
3320 (9) If an insurer is doing business in one established geographic service area of the
3321 state, this section applies only to the insurer's operations in that geographic service area.
3322 (10) An insurer may modify a health benefit plan for a plan sponsor only:
3323 (a) at the time of coverage renewal; and
3324 (b) if the modification is effective uniformly among all plans with a particular product
3325 or service.
3326 (11) For purposes of this section, a reference to "plan sponsor" includes a reference to
3327 the employer:
3328 (a) with respect to coverage provided to an employer member of the association; and
3329 (b) if the health benefit plan is made available by an insurer in the employer market
3330 only through:
3331 (i) an association;
3332 (ii) a trust; or
3333 (iii) a discretionary group.
3334 (12) (a) A small employer that, after purchasing a health benefit plan in the small group
3335 market, employs on average more than 50 eligible employees on each business day in a
3336 calendar year may continue to renew the health benefit plan purchased in the small group
3337 market.
3338 (b) A large employer that, after purchasing a health benefit plan in the large group
3339 market, employs on average less than 51 eligible employees on each business day in a calendar
3340 year may continue to renew the health benefit plan purchased in the large group market.
3341 (13) An insurer offering employer sponsored health benefit plans shall comply with the
3342 Health Insurance Portability and Accountability Act, 42 U.S.C. Sec. 300gg and 300gg-1.
3343 Section 19. Section 31A-23a-102 is amended to read:
3344 31A-23a-102. Definitions.
3345 As used in this chapter:
3346 (1) "Bail bond producer" is as defined in Section 31A-35-102 .
3347 (2) "Home state" means a state or territory of the United States or the District of
3348 Columbia in which an insurance producer:
3349 (a) maintains the insurance producer's principal:
3350 (i) place of residence; or
3351 (ii) place of business; and
3352 (b) is licensed to act as an insurance producer.
3353 (3) "Insurer" is as defined in Section 31A-1-301 , except that the following persons or
3354 similar persons are not insurers for purposes of Part 7, Producer Controlled Insurers:
3355 (a) a risk retention group as defined in:
3356 (i) the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499;
3357 (ii) the Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.; and
3358 (iii) Chapter 15, Part 2, Risk Retention Groups Act;
3359 (b) a residual market pool;
3360 (c) a joint underwriting authority or association; and
3361 (d) a captive insurer.
3362 (4) "License" is defined in Section 31A-1-301 .
3363 (5) (a) "Managing general agent" means a person that:
3364 (i) manages all or part of the insurance business of an insurer, including the
3365 management of a separate division, department, or underwriting office;
3366 (ii) acts as an agent for the insurer whether it is known as a managing general agent,
3367 manager, or other similar term;
3368 (iii) produces and underwrites an amount of gross direct written premium equal to, or
3369 more than, 5% of[
3370 insurer in any one quarter or year:
3371 (A) with or without the authority;
3372 (B) separately or together with an affiliate; and
3373 (C) directly or indirectly; and
3374 (iv) (A) adjusts or pays claims in excess of an amount determined by the
3375 commissioner; or
3376 (B) negotiates reinsurance on behalf of the insurer.
3377 (b) Notwithstanding Subsection (5)(a), the following persons may not be considered as
3378 managing general agent for the purposes of this chapter:
3379 (i) an employee of the insurer;
3380 (ii) a United States manager of the United States branch of an alien insurer;
3381 (iii) an underwriting manager that, pursuant to contract:
3382 (A) manages all the insurance operations of the insurer;
3383 (B) is under common control with the insurer;
3384 (C) is subject to Chapter 16, Insurance Holding Companies; and
3385 (D) is not compensated based on the volume of premiums written; and
3386 (iv) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal
3387 insurer or inter-insurance exchange under powers of attorney.
3388 (6) "Negotiate" means the act of conferring directly with or offering advice directly to a
3389 purchaser or prospective purchaser of a particular contract of insurance concerning a
3390 substantive benefit, term, or condition of the contract if the person engaged in that act:
3391 (a) sells insurance; or
3392 (b) obtains insurance from insurers for purchasers.
3393 (7) "Reinsurance intermediary" means:
3394 (a) a reinsurance intermediary-broker; or
3395 (b) a reinsurance intermediary-manager.
3396 (8) "Reinsurance intermediary-broker" means a person other than an officer or
3397 employee of the ceding insurer, firm, association, or corporation who solicits, negotiates, or
3398 places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority
3399 or power to bind reinsurance on behalf of the insurer.
3400 (9) (a) "Reinsurance intermediary-manager" means a person who:
3401 (i) has authority to bind or who manages all or part of the assumed reinsurance
3402 business of a reinsurer, including the management of a separate division, department, or
3403 underwriting office; and
3404 (ii) acts as an agent for the reinsurer whether the person is known as a reinsurance
3405 intermediary-manager, manager, or other similar term.
3406 (b) Notwithstanding Subsection (9)(a), the following persons may not be considered
3407 reinsurance intermediary-managers for the purpose of this chapter with respect to the reinsurer:
3408 (i) an employee of the reinsurer;
3409 (ii) a United States manager of the United States branch of an alien reinsurer;
3410 (iii) an underwriting manager that, pursuant to contract:
3411 (A) manages all the reinsurance operations of the reinsurer;
3412 (B) is under common control with the reinsurer;
3413 (C) is subject to Chapter 16, Insurance Holding Companies; and
3414 (D) is not compensated based on the volume of premiums written; and
3415 (iv) the manager of a group, association, pool, or organization of insurers that:
3416 (A) engage in joint underwriting or joint reinsurance; and
3417 (B) are subject to examination by the insurance commissioner of the state in which the
3418 manager's principal business office is located.
3419 (10) "Resident" is as defined by rule made by the commissioner in accordance with
3420 Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
3421 [
3422 insurance line of authority that allows a person to issue title insurance commitments or policies
3423 on behalf of a title insurer.
3424 [
3425 (a) by any means;
3426 (b) for money or its equivalent; and
3427 (c) on behalf of an insurance company.
3428 [
3429 (a) attempting to sell insurance;
3430 (b) asking or urging a person to apply for:
3431 (i) a particular kind of insurance; and
3432 (ii) insurance from a particular insurance company;
3433 (c) advertising insurance, including advertising for the purpose of obtaining leads for
3434 the sale of insurance; or
3435 (d) holding oneself out as being in the insurance business.
3436 [
3437 (a) the cancellation of the relationship between:
3438 (i) an individual licensee or agency licensee and a particular insurer; or
3439 (ii) an individual licensee and a particular agency licensee; or
3440 (b) the termination of:
3441 (i) an individual licensee's or agency licensee's authority to transact insurance on behalf
3442 of a particular insurance company; or
3443 (ii) an individual licensee's authority to transact insurance on behalf of a particular
3444 agency licensee.
3445 [
3446 (a) represents a title insurer in soliciting, requesting, or negotiating the placing of:
3447 (i) title insurance; or
3448 (ii) escrow services; and
3449 (b) does not have a search or escrow license as provided in Section 31A-23a-106 .
3450 [
3451 Insurance Commissioners' uniform application for resident and nonresident producer licensing
3452 at the time the application is filed.
3453 [
3454 Association of Insurance Commissioners' uniform business entity application for resident and
3455 nonresident business entities at the time the application is filed.
3456 Section 20. Section 31A-23a-104 is amended to read:
3457 31A-23a-104. Application for individual license -- Application for agency license.
3458 (1) This section applies to an initial or renewal license as a:
3459 (a) producer;
3460 (b) surplus lines producer;
3461 (c) limited line producer;
3462 (d) consultant;
3463 (e) managing general agent; or
3464 (f) reinsurance intermediary.
3465 (2) (a) Subject to Subsection (2)(b), to obtain or renew an individual license, an
3466 individual shall:
3467 (i) file an application for an initial or renewal individual license with the commissioner
3468 on forms and in a manner the commissioner prescribes; and
3469 (ii) pay a license fee that is not refunded if the application:
3470 (A) is denied; or
3471 (B) is incomplete when filed and is never completed by the applicant.
3472 (b) An application described in this Subsection (2) shall provide:
3473 (i) information about the applicant's identity;
3474 (ii) the applicant's Social Security number;
3475 (iii) the applicant's personal history, experience, education, and business record;
3476 (iv) whether the applicant is 18 years of age or older;
3477 (v) whether the applicant has committed an act that is a ground for denial, suspension,
3478 or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ;
3479 (vi) if the application is for a resident individual producer license, certification that the
3480 applicant complies with Section 31A-23a-203.5 ; and
3481 (vii) any other information the commissioner reasonably requires.
3482 (3) The commissioner may require a document reasonably necessary to verify the
3483 information contained in an application filed under this section.
3484 (4) An applicant's Social Security number contained in an application filed under this
3485 section is a private record under Section 63G-2-302 .
3486 (5) (a) Subject to Subsection (5)(b), to obtain or renew an agency license, a person
3487 shall:
3488 (i) file an application for an initial or renewal agency license with the commissioner on
3489 forms and in a manner the commissioner prescribes; and
3490 (ii) pay a license fee that is not refunded if the application:
3491 (A) is denied; or
3492 (B) is incomplete when filed and is never completed by the applicant.
3493 (b) An application described in Subsection (5)(a) shall provide:
3494 (i) information about the applicant's identity;
3495 (ii) the applicant's federal employer identification number;
3496 (iii) the designated responsible licensed [
3497 (iv) the identity of the owners, partners, officers, and directors;
3498 (v) whether the applicant has committed an act that is a ground for denial, suspension,
3499 or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ; and
3500 (vi) any other information the commissioner reasonably requires.
3501 Section 21. Section 31A-23a-105 is amended to read:
3502 31A-23a-105. General requirements for individual and agency license issuance
3503 and renewal.
3504 (1) (a) The commissioner shall issue or renew a license to a person described in
3505 Subsection (1)(b) to act as:
3506 (i) a producer;
3507 (ii) a surplus lines producer;
3508 (iii) a limited line producer;
3509 (iv) a consultant;
3510 (v) a managing general agent; or
3511 (vi) a reinsurance intermediary.
3512 (b) The commissioner shall issue or renew a license under Subsection (1)(a) to a
3513 person who, as to the license type and line of authority classification applied for under Section
3514 31A-23a-106 :
3515 (i) satisfies the application requirements under Section 31A-23a-104 ;
3516 (ii) satisfies the character requirements under Section 31A-23a-107 ;
3517 (iii) satisfies [
3518 31A-23a-202 ;
3519 (iv) satisfies [
3520 (v) satisfies [
3521 (vi) if an applicant for a resident individual producer license, certifies that, to the extent
3522 applicable, the applicant:
3523 (A) is in compliance with Section 31A-23a-203.5 ; and
3524 (B) will maintain compliance with Section 31A-23a-203.5 during the period for which
3525 the license is issued or renewed;
3526 (vii) has not committed an act that is a ground for denial, suspension, or revocation as
3527 provided in Section 31A-23a-111 ;
3528 (viii) if a nonresident:
3529 (A) complies with Section 31A-23a-109 ; and
3530 (B) holds an active similar license in that person's home state [
3531 (ix) if an applicant for an individual title insurance producer or agency title insurance
3532 producer license, satisfies the requirements of Section 31A-23a-204 ;
3533 (x) if an applicant for a license to act as a life settlement provider or life settlement
3534 producer, satisfies the requirements of Section 31A-23a-117 ; and
3535 (xi) pays the applicable fees under Section 31A-3-103 .
3536 (2) (a) This Subsection (2) applies to the following persons:
3537 (i) an applicant for a pending:
3538 (A) individual or agency producer license;
3539 (B) surplus lines producer license;
3540 (C) limited line producer license;
3541 (D) consultant license;
3542 (E) managing general agent license; or
3543 (F) reinsurance intermediary license; or
3544 (ii) a licensed:
3545 (A) individual or agency producer;
3546 (B) surplus lines producer;
3547 (C) limited line producer;
3548 (D) consultant;
3549 (E) managing general agent; or
3550 (F) reinsurance intermediary.
3551 (b) A person described in Subsection (2)(a) shall report to the commissioner:
3552 (i) an administrative action taken against the person, including a denial of a new or
3553 renewal license application:
3554 (A) in another jurisdiction; or
3555 (B) by another regulatory agency in this state; and
3556 (ii) a criminal prosecution taken against the person in any jurisdiction.
3557 (c) The report required by Subsection (2)(b) shall:
3558 (i) be filed:
3559 (A) at the time the person files the application for an individual or agency license; and
3560 (B) for an action or prosecution that occurs on or after the day on which the person
3561 files the application:
3562 (I) for an administrative action, within 30 days of the final disposition of the
3563 administrative action; or
3564 (II) for a criminal prosecution, within 30 days of the initial appearance before a court;
3565 and
3566 (ii) include a copy of the complaint or other relevant legal documents related to the
3567 action or prosecution described in Subsection (2)(b).
3568 (3) (a) The department may require a person applying for a license or for consent to
3569 engage in the business of insurance to submit to a criminal background check as a condition of
3570 receiving a license or consent.
3571 (b) A person, if required to submit to a criminal background check under Subsection
3572 (3)(a), shall:
3573 (i) submit a fingerprint card in a form acceptable to the department; and
3574 (ii) consent to a fingerprint background check by:
3575 (A) the Utah Bureau of Criminal Identification; and
3576 (B) the Federal Bureau of Investigation.
3577 (c) For a person who submits a fingerprint card and consents to a fingerprint
3578 background check under Subsection (3)(b), the department may request:
3579 (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
3580 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
3581 (ii) complete Federal Bureau of Investigation criminal background checks through the
3582 national criminal history system.
3583 (d) Information obtained by the department from the review of criminal history records
3584 received under this Subsection (3) shall be used by the department for the purposes of:
3585 (i) determining if a person satisfies the character requirements under Section
3586 31A-23a-107 for issuance or renewal of a license;
3587 (ii) determining if a person has failed to maintain the character requirements under
3588 Section 31A-23a-107 ; and
3589 (iii) preventing a person who violates the federal Violent Crime Control and Law
3590 Enforcement Act of 1994, 18 U.S.C. Sec. 1033, from engaging in the business of insurance in
3591 the state.
3592 (e) If the department requests the criminal background information, the department
3593 shall:
3594 (i) pay to the Department of Public Safety the costs incurred by the Department of
3595 Public Safety in providing the department criminal background information under Subsection
3596 (3)(c)(i);
3597 (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
3598 of Investigation in providing the department criminal background information under
3599 Subsection (3)(c)(ii); and
3600 (iii) charge the person applying for a license or for consent to engage in the business of
3601 insurance a fee equal to the aggregate of Subsections (3)(e)(i) and (ii).
3602 (4) To become a resident licensee in accordance with Section 31A-23a-104 and this
3603 section, a person licensed as one of the following in another state who moves to this state shall
3604 apply within 90 days of establishing legal residence in this state:
3605 (a) insurance producer;
3606 (b) surplus lines producer;
3607 (c) limited line producer;
3608 (d) consultant;
3609 (e) managing general agent; or
3610 (f) reinsurance intermediary.
3611 (5) (a) The commissioner may deny a license application for a license listed in
3612 Subsection (5)(b) if the person applying for the license, as to the license type and line of
3613 authority classification applied for under Section 31A-23a-106 :
3614 (i) fails to satisfy the requirements as set forth in this section; or
3615 (ii) commits an act that is grounds for denial, suspension, or revocation as set forth in
3616 Section 31A-23a-111 .
3617 (b) This Subsection (5) applies to the following licenses:
3618 (i) producer;
3619 (ii) surplus lines producer;
3620 (iii) limited line producer;
3621 (iv) consultant;
3622 (v) managing general agent; or
3623 (vi) reinsurance intermediary.
3624 (6) Notwithstanding the other provisions of this section, the commissioner may:
3625 (a) issue a license to an applicant for a license for a title insurance line of authority only
3626 with the concurrence of the Title and Escrow Commission; and
3627 (b) renew a license for a title insurance line of authority only with the concurrence of
3628 the Title and Escrow Commission.
3629 Section 22. Section 31A-23a-108 is amended to read:
3630 31A-23a-108. Examination requirements.
3631 (1) (a) The commissioner may require [
3632 license type under Section 31A-23a-106 to pass a line of authority examination as a
3633 requirement for a license, except that an examination may not be required of [
3634 applicant for:
3635 (i) [
3636 (ii) [
3637 commissioner or the Title and Escrow Commission by rule as provided in Subsection
3638 31A-23a-106 (3).
3639 (b) The examination described in Subsection (1)(a):
3640 (i) shall reasonably relate to the line of authority for which it is prescribed; and
3641 (ii) may be administered by the commissioner or as otherwise specified by rule.
3642 (2) The commissioner shall waive the requirement of an examination for a nonresident
3643 applicant who:
3644 (a) applies for an insurance producer license in this state within 90 days of establishing
3645 legal residence in this state;
3646 (b) has been licensed for the same line of authority in another state; and
3647 (c) (i) is licensed in the state described in Subsection (2)(b) at the time the applicant
3648 applies for an insurance producer license in this state; or
3649 (ii) if the application is received within 90 days of the cancellation of the applicant's
3650 previous license:
3651 (A) the prior state certifies that at the time of cancellation, the applicant was in good
3652 standing in that state; or
3653 (B) the state's producer database records maintained by the National Association of
3654 Insurance Commissioners or the National Association of Insurance Commissioner's affiliates or
3655 subsidiaries, indicates that the producer is or was licensed in good standing for the line of
3656 authority requested.
3657 [
3658
3659
3660
3661 [
3662
3663 Section 23. Section 31A-23a-112 is amended to read:
3664 31A-23a-112. Probation -- Grounds for revocation.
3665 (1) The commissioner may place a licensee on probation for a period not to exceed 24
3666 months as follows:
3667 (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
3668 Procedures Act, for [
3669 31A-23a-111 ; or
3670 (b) at the issuance or renewal of a [
3671 (i) with an admitted violation under 18 U.S.C. [
3672 (ii) with a response to background information questions on a new or renewal license
3673 application [
3674 connection with a new or renewal license application that indicates:
3675 (A) the person has been convicted of a crime, that is listed by rule made in accordance
3676 with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
3677 probation;
3678 (B) the person is currently charged with a crime, that is listed by rule made in
3679 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
3680 grounds for probation regardless of whether adjudication is withheld;
3681 (C) the person has been involved in an administrative proceeding regarding [
3682 professional or occupational license; or
3683 (D) [
3684 director has been involved in an administrative proceeding regarding [
3685 occupational license.
3686 (2) The commissioner may place a licensee on probation for a specified period no
3687 longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [
3688 Sec. 1033 [
3689 (3) The probation order shall state the conditions for retention of the license, which
3690 shall be reasonable.
3691 (4) [
3692 proceeding authorized under Title 63G, Chapter 4, Administrative Procedures Act.
3693 Section 24. Section 31A-23a-113 is amended to read:
3694 31A-23a-113. License lapse and voluntary surrender.
3695 (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
3696 (i) pay when due a fee under Section 31A-3-103 ;
3697 (ii) complete continuing education requirements under Section 31A-23a-202 before
3698 submitting the license renewal application;
3699 (iii) submit a completed renewal application as required by Section 31A-23a-104 ;
3700 (iv) submit additional documentation required to complete the licensing process as
3701 related to a specific license type or line of authority; or
3702 (v) maintain an active license in a [
3703 nonresident licensee.
3704 (b) (i) A licensee whose license lapses due to the following may request an action
3705 described in Subsection (1)(b)(ii):
3706 (A) military service;
3707 (B) voluntary service for a period of time designated by the person for whom the
3708 licensee provides voluntary service; or
3709 (C) some other extenuating circumstances, such as long-term medical disability.
3710 (ii) A licensee described in Subsection (1)(b)(i) may request:
3711 (A) reinstatement of the license no later than one year after the day on which the
3712 license lapses; and
3713 (B) waiver of any of the following imposed for failure to comply with renewal
3714 procedures:
3715 (I) an examination requirement;
3716 (II) reinstatement fees set under Section 31A-3-103 ;
3717 (III) continuing education requirements; or
3718 (IV) other sanction imposed for failure to comply with renewal procedures.
3719 (2) If a license issued under this chapter is voluntarily surrendered, the license or line
3720 of authority may be reinstated:
3721 (a) during the license period in which the license is voluntarily surrendered; and
3722 (b) no later than one year after the day on which the license is voluntarily surrendered.
3723 [
3724
3725
3726
3727 Section 25. Section 31A-23a-202 is amended to read:
3728 31A-23a-202. Continuing education requirements.
3729 (1) Pursuant to this section, the commissioner shall by rule prescribe the continuing
3730 education requirements for a producer and a consultant.
3731 (2) (a) The commissioner may not state a continuing education requirement in terms of
3732 formal education.
3733 (b) The commissioner may state a continuing education requirement in terms of hours
3734 of insurance-related instruction received.
3735 (c) Insurance-related formal education may be a substitute, in whole or in part, for the
3736 hours required under Subsection (2)(b).
3737 (3) (a) The commissioner shall impose continuing education requirements in
3738 accordance with a two-year licensing period in which the licensee meets the requirements of
3739 this Subsection (3).
3740 (b) (i) Except as provided in this section, the continuing education requirements shall
3741 require:
3742 (A) that a licensee complete 24 credit hours of continuing education for every two-year
3743 licensing period;
3744 (B) that 3 of the 24 credit hours described in Subsection (3)(b)(i)(A) be ethics courses;
3745 and
3746 (C) that the licensee complete at least half of the required hours through classroom
3747 hours of insurance-related instruction.
3748 (ii) An hour of continuing education in accordance with Subsection (3)(b)(i) may be
3749 obtained through:
3750 (A) classroom attendance;
3751 (B) home study;
3752 (C) watching a video recording;
3753 (D) experience credit; or
3754 (E) another method provided by rule.
3755 (iii) (A) Notwithstanding Subsections (3)(b)(i)(A) and (B), an individual title insurance
3756 producer is required to complete 12 credit hours of continuing education for every two-year
3757 licensing period, with 3 of the credit hours being ethics courses unless the individual title
3758 insurance producer is licensed in this state as an individual title insurance producer for 20 or
3759 more consecutive years.
3760 (B) If an individual title insurance producer is licensed in this state as an individual
3761 title insurance producer for 20 or more consecutive years, the individual title insurance
3762 producer is required to complete 6 credit hours of continuing education for every two-year
3763 licensing period, with 3 of the credit hours being ethics courses.
3764 (C) Notwithstanding Subsection (3)(b)(iii)(A) or (B), an individual title insurance
3765 producer is considered to have met the continuing education requirements imposed under
3766 Subsection (3)(b)(iii)(A) or (B) if the individual title insurance producer:
3767 (I) is an active member in good standing with the Utah State Bar;
3768 (II) is in compliance with the continuing education requirements of the Utah State Bar;
3769 and
3770 (III) if requested by the department, provides the department evidence that the
3771 individual title insurance producer complied with the continuing education requirements of the
3772 Utah State Bar.
3773 (c) A licensee may obtain continuing education hours at any time during the two-year
3774 licensing period.
3775 (d) (i) A licensee is exempt from continuing education requirements under this section
3776 if:
3777 (A) the licensee was first licensed before [
3778 (B) the license does not have a continuous lapse for a period of more than one year,
3779 except for a license for which the licensee has had an exemption approved before May 11,
3780 2011;
3781 (C) the licensee requests an exemption from the department; and
3782 (D) the department approves the exemption.
3783 (ii) If the department approves the exemption under Subsection (3)(d)(i), the licensee is
3784 not required to apply again for the exemption.
3785 (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
3786 commissioner shall, by rule:
3787 (i) publish a list of insurance professional designations whose continuing education
3788 requirements can be used to meet the requirements for continuing education under Subsection
3789 (3)(b);
3790 (ii) authorize a continuing education provider or a state or national professional
3791 producer or consultant association to:
3792 (A) offer a qualified program for a license type or line of authority on a geographically
3793 accessible basis; and
3794 (B) collect a reasonable fee for funding and administration of a continuing education
3795 program, subject to the review and approval of the commissioner; and
3796 (iii) provide that membership by a producer or consultant in a state or national
3797 professional producer or consultant association is considered a substitute for the equivalent of
3798 two hours for each year during which the producer or consultant is a member of the
3799 professional association, except that the commissioner may not give more than two hours of
3800 continuing education credit in a year regardless of the number of professional associations of
3801 which the producer or consultant is a member.
3802 (f) A fee permitted under Subsection (3)(e)(ii)(B) that is charged for attendance at a
3803 professional producer or consultant association program may be less for an association
3804 member, on the basis of the member's affiliation expense, but shall preserve the right of a
3805 nonmember to attend without affiliation.
3806 (4) The commissioner shall approve a continuing education provider or continuing
3807 education course that satisfies the requirements of this section.
3808 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
3809 commissioner shall by rule set the processes and procedures for continuing education provider
3810 registration and course approval.
3811 (6) The requirements of this section apply only to a producer or consultant who is an
3812 individual.
3813 (7) A nonresident producer or consultant is considered to have satisfied this state's
3814 continuing education requirements if the nonresident producer or consultant satisfies the
3815 nonresident producer's or consultant's home state's continuing education requirements for a
3816 licensed insurance producer or consultant.
3817 (8) A producer or consultant subject to this section shall keep documentation of
3818 completing the continuing education requirements of this section for two years after the end of
3819 the two-year licensing period to which the continuing education applies.
3820 Section 26. Section 31A-23a-203 is amended to read:
3821 31A-23a-203. Training period requirements.
3822 (1) A producer is eligible to become a surplus lines producer only if the producer:
3823 (a) has passed the applicable surplus lines producer examination;
3824 (b) has been a producer with property [
3825 least three years during the four years immediately preceding the date of application; and
3826 (c) has paid the applicable fee under Section 31A-3-103 .
3827 (2) A person is eligible to become a consultant only if the person has acted in a
3828 capacity that would provide the person with preparation to act as an insurance consultant for a
3829 period aggregating not less than three years during the four years immediately preceding the
3830 date of application.
3831 (3) (a) A resident producer with an accident and health line of authority may only sell
3832 long-term care insurance if the producer:
3833 (i) initially completes a minimum of three hours of long-term care training before
3834 selling long-term care coverage; and
3835 (ii) after completing the training required by Subsection (3)(a)(i), completes a
3836 minimum of three hours of long-term care training during each subsequent two-year licensing
3837 period.
3838 (b) A course taken to satisfy a long-term care training requirement may be used toward
3839 satisfying a producer continuing education requirement.
3840 (c) Long-term care training is not a continuing education requirement to renew a
3841 producer license.
3842 (d) An insurer that issues long-term care insurance shall demonstrate to the
3843 commissioner, upon request, that a producer who is appointed by the insurer and who sells
3844 long-term care insurance coverage is in compliance with this Subsection (3).
3845 (4) The training periods required under this section apply only to an individual
3846 applying for a license under this chapter.
3847 Section 27. Section 31A-23a-402.5 is amended to read:
3848 31A-23a-402.5. Inducements.
3849 (1) (a) Except as provided in Subsection (2), a producer, consultant, or other licensee
3850 under this title, or an officer or employee of a licensee, may not induce a person to enter into,
3851 continue, or terminate an insurance contract by offering a benefit that is not:
3852 (i) specified in the insurance contract; or
3853 (ii) directly related to the insurance contract.
3854 (b) An insurer may not make or knowingly allow an agreement of insurance that is not
3855 clearly expressed in the insurance contract to be issued or renewed.
3856 (c) A licensee under this title may not absorb the tax under Section 31A-3-301 .
3857 (2) This section does not apply to a title insurer, an individual title insurance producer,
3858 or agency title insurance producer, or an officer or employee of a title insurer, an individual
3859 title insurance producer, or an agency title insurance producer.
3860 (3) Items not prohibited by Subsection (1) include an insurer:
3861 (a) reducing premiums because of expense savings;
3862 (b) providing to a policyholder or insured one or more incentives, as defined by the
3863 commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
3864 Rulemaking Act, to participate in a program or activity designed to reduce claims or claim
3865 expenses, including:
3866 (i) a premium discount offered to a small or large employer group based on a wellness
3867 program if:
3868 (A) the premium discount for the employer group does not exceed 20% of the group
3869 premium; and
3870 (B) the premium discount based on the wellness program is offered uniformly by the
3871 insurer to all employer groups in the large or small group market;
3872 (ii) a premium discount offered to employees of a small or large employer group in an
3873 amount that does not exceed federal limits on wellness program incentives; or
3874 (iii) a combination of premium discounts offered to the employer group and the
3875 employees of an employer group, based on a wellness program, if:
3876 (A) the premium discounts for the employer group comply with Subsection (3)(b)(i);
3877 and
3878 (B) the premium discounts for the employees of an employer group comply with
3879 Subsection (3)(b)(ii); or
3880 (c) receiving premiums under an installment payment plan.
3881 (4) Items not prohibited by Subsection (1) include a producer, consultant, or other
3882 licensee, or an officer or employee of a licensee, either directly or through a third party:
3883 (a) engaging in a usual kind of social courtesy if receipt of the social courtesy is not
3884 conditioned on a quote or the purchase of a particular insurance product;
3885 (b) extending credit on a premium to the insured:
3886 (i) without interest, for no more than 90 days from the effective date of the insurance
3887 contract;
3888 (ii) for interest that is not less than the legal rate under Section 15-1-1 , on the unpaid
3889 balance after the time period described in Subsection (4)(b)(i); and
3890 (iii) except that an installment or payroll deduction payment of premiums on an
3891 insurance contract issued under an insurer's mass marketing program is not considered an
3892 extension of credit for purposes of this Subsection (4)(b);
3893 (c) preparing or conducting a survey that:
3894 (i) is directly related to an accident and health insurance policy purchased from the
3895 licensee; or
3896 (ii) is used by the licensee to assess the benefit needs and preferences of insureds,
3897 employers, or employees directly related to an insurance product sold by the licensee;
3898 (d) providing limited human resource services that are directly related to an insurance
3899 product sold by the licensee, including:
3900 (i) answering questions directly related to:
3901 (A) an employee benefit offering or administration, if the insurance product purchased
3902 from the licensee is accident and health insurance or health insurance; and
3903 (B) employment practices liability, if the insurance product offered by or purchased
3904 from the licensee is property or casualty insurance; and
3905 (ii) providing limited human resource compliance training and education directly
3906 pertaining to an insurance product purchased from the licensee;
3907 (e) providing the following types of information or guidance:
3908 (i) providing guidance directly related to compliance with federal and state laws for an
3909 insurance product purchased from the licensee;
3910 (ii) providing a workshop or seminar addressing an insurance issue that is directly
3911 related to an insurance product purchased from the licensee; or
3912 (iii) providing information regarding:
3913 (A) employee benefit issues;
3914 (B) directly related insurance regulatory and legislative updates; or
3915 (C) similar education about an insurance product sold by the licensee and how the
3916 insurance product interacts with tax law;
3917 (f) preparing or providing a form that is directly related to an insurance product
3918 purchased from, or offered by, the licensee;
3919 (g) preparing or providing documents directly related to a premium only cafeteria plan
3920 within the meaning of Section 125, Internal Revenue Code, or a flexible spending account, but
3921 not providing ongoing administration of a flexible spending account;
3922 (h) providing enrollment and billing assistance, including:
3923 (i) providing benefit statements or new hire insurance benefits packages; and
3924 (ii) providing technology services such as an electronic enrollment platform or
3925 application system;
3926 (i) communicating coverages in writing and in consultation with the insured and
3927 employees;
3928 (j) providing employee communication materials and notifications directly related to an
3929 insurance product purchased from a licensee;
3930 (k) providing claims management and resolution to the extent permitted under the
3931 licensee's license;
3932 (l) providing underwriting or actuarial analysis or services;
3933 (m) negotiating with an insurer regarding the placement and pricing of an insurance
3934 product;
3935 (n) recommending placement and coverage options;
3936 (o) providing a health fair or providing assistance or advice on establishing or
3937 operating a wellness program, but not providing any payment for or direct operation of the
3938 wellness program;
3939 (p) providing COBRA and Utah mini-COBRA administration, consultations, and other
3940 services directly related to an insurance product purchased from the licensee;
3941 (q) assisting with a summary plan description, including providing a summary plan
3942 description wraparound;
3943 (r) providing information necessary for the preparation of documents directly related to
3944 the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq., as
3945 amended;
3946 (s) providing information or services directly related to the Health Insurance Portability
3947 and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended, such as services
3948 directly related to health care access, portability, and renewability when offered in connection
3949 with accident and health insurance sold by a licensee;
3950 (t) sending proof of coverage to a third party with a legitimate interest in coverage;
3951 (u) providing information in a form approved by the commissioner and directly related
3952 to determining whether an insurance product sold by the licensee meets the requirements of a
3953 third party contract that requires or references insurance coverage;
3954 (v) facilitating risk management services directly related to property and casualty
3955 insurance products sold or offered for sale by the licensee, including:
3956 (i) risk management;
3957 (ii) claims and loss control services;
3958 (iii) risk assessment consulting, including analysis of:
3959 (A) employer's job descriptions; or
3960 (B) employer's safety procedures or manuals; and
3961 (iv) providing information and training on best practices;
3962 (w) otherwise providing services that are legitimately part of servicing an insurance
3963 product purchased from a licensee; and
3964 (x) providing other directly related services approved by the department.
3965 (5) An inducement prohibited under Subsection (1) includes a producer, consultant, or
3966 other licensee, or an officer or employee of a licensee:
3967 (a) (i) providing a [
3968 (ii) paying the salary of an employee of a person who purchases an insurance product
3969 from the licensee; or
3970 (iii) if the licensee is an insurer, or a third party administrator who contracts with an
3971 insurer, paying the salary for an onsite staff member to perform an act prohibited under
3972 Subsection (5)(b)(xii); or
3973 (b) engaging in one or more of the following unless a fee is paid in accordance with
3974 Subsection (8):
3975 (i) performing background checks of prospective employees;
3976 (ii) providing legal services by a person licensed to practice law;
3977 (iii) performing drug testing that is directly related to an insurance product purchased
3978 from the licensee;
3979 (iv) preparing employer or employee handbooks, except that a licensee may:
3980 (A) provide information for a medical benefit section of an employee handbook;
3981 (B) provide information for the section of an employee handbook directly related to an
3982 employment practices liability insurance product purchased from the licensee; or
3983 (C) prepare or print an employee benefit enrollment guide;
3984 (v) providing job descriptions, postings, and applications for a person;
3985 (vi) providing payroll services;
3986 (vii) providing performance reviews or performance review training;
3987 (viii) providing union advice;
3988 (ix) providing accounting services;
3989 (x) providing data analysis information technology programs, except as provided in
3990 Subsection (4)(h)(ii);
3991 (xi) providing administration of health reimbursement accounts or health savings
3992 accounts; or
3993 (xii) if the licensee is an insurer, or a third party administrator who contracts with an
3994 insurer, the insurer issuing an insurance policy that lists in the insurance policy one or more of
3995 the following prohibited benefits:
3996 (A) performing background checks of prospective employees;
3997 (B) providing legal services by a person licensed to practice law;
3998 (C) performing drug testing that is directly related to an insurance product purchased
3999 from the insurer;
4000 (D) preparing employer or employee handbooks;
4001 (E) providing job descriptions postings, and applications;
4002 (F) providing payroll services;
4003 (G) providing performance reviews or performance review training;
4004 (H) providing union advice;
4005 (I) providing accounting services;
4006 (J) providing discrimination testing; or
4007 (K) providing data analysis information technology programs.
4008 (6) A producer, consultant, or other licensee or an officer or employee of a licensee
4009 shall itemize and bill separately from any other insurance product or service offered or
4010 provided under Subsection (5)(b).
4011 (7) (a) A de minimis gift or meal not to exceed $25 for each individual receiving the
4012 gift or meal is presumed to be a social courtesy not conditioned on a quote or purchase of a
4013 particular insurance product for purposes of Subsection (4)(a).
4014 (b) Notwithstanding Subsection (4)(a), a de minimis gift or meal not to exceed $10
4015 may be conditioned on receipt of a quote of a particular insurance product [
4016
4017 (8) If as provided under Subsection (5)(b) a producer, consultant, or other licensee is
4018 paid a fee to provide an item listed in Subsection (5)(b), the licensee shall comply with
4019 Subsection 31A-23a-501 (2) in charging the fee, except that the fee paid for the item shall equal
4020 or exceed the fair market value of the item.
4021 Section 28. Section 31A-23a-501 is amended to read:
4022 31A-23a-501. Licensee compensation.
4023 (1) As used in this section:
4024 (a) "Commission compensation" includes funds paid to or credited for the benefit of a
4025 licensee from:
4026 (i) commission amounts deducted from insurance premiums on insurance sold by or
4027 placed through the licensee; [
4028 (ii) commission amounts received from an insurer or another licensee as a result of the
4029 sale or placement of insurance[
4030 (iii) overrides, bonuses, contingent bonuses, or contingent commissions received from
4031 an insurer or another licensee as a result of the sale or placement of insurance.
4032 (b) (i) "Compensation from an insurer or third party administrator" means
4033 commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options,
4034 gifts, prizes, or any other form of valuable consideration:
4035 (A) whether or not payable pursuant to a written agreement; and
4036 (B) received from:
4037 (I) an insurer; or
4038 (II) a third party to the transaction for the sale or placement of insurance.
4039 (ii) "Compensation from an insurer or third party administrator" does not mean
4040 compensation from a customer that is:
4041 (A) a fee or pass-through costs as provided in Subsection (1)(e); or
4042 (B) a fee or amount collected by or paid to the producer that does not exceed an
4043 amount established by the commissioner by administrative rule.
4044 (c) (i) "Customer" means:
4045 (A) the person signing the application or submission for insurance; or
4046 (B) the authorized representative of the insured actually negotiating the placement of
4047 insurance with the producer.
4048 (ii) "Customer" does not mean a person who is a participant or beneficiary of:
4049 (A) an employee benefit plan; or
4050 (B) a group or blanket insurance policy or group annuity contract sold, solicited, or
4051 negotiated by the producer or affiliate.
4052 (d) (i) "Noncommission compensation" includes all funds paid to or credited for the
4053 benefit of a licensee other than commission compensation.
4054 (ii) "Noncommission compensation" does not include charges for pass-through costs
4055 incurred by the licensee in connection with obtaining, placing, or servicing an insurance policy.
4056 (e) "Pass-through costs" include:
4057 (i) costs for copying documents to be submitted to the insurer; and
4058 (ii) bank costs for processing cash or credit card payments.
4059 (2) A licensee may receive from an insured or from a person purchasing an insurance
4060 policy, noncommission compensation if the noncommission compensation is stated on a
4061 separate, written disclosure.
4062 (a) The disclosure required by this Subsection (2) shall:
4063 (i) include the signature of the insured or prospective insured acknowledging the
4064 noncommission compensation;
4065 (ii) clearly specify the amount or extent of the noncommission compensation; and
4066 (iii) be provided to the insured or prospective insured before the performance of the
4067 service.
4068 (b) Noncommission compensation shall be:
4069 (i) limited to actual or reasonable expenses incurred for services; and
4070 (ii) uniformly applied to all insureds or prospective insureds in a class or classes of
4071 business or for a specific service or services.
4072 (c) A copy of the signed disclosure required by this Subsection (2) shall be maintained
4073 by any licensee who collects or receives the noncommission compensation or any portion of
4074 the noncommission compensation.
4075 (d) All accounting records relating to noncommission compensation shall be
4076 maintained by the person described in Subsection (2)(c) in a manner that facilitates an audit.
4077 (3) (a) A licensee may receive noncommission compensation when acting as a
4078 producer for the insured in connection with the actual sale or placement of insurance if:
4079 (i) the producer and the insured have agreed on the producer's noncommission
4080 compensation; and
4081 (ii) the producer has disclosed to the insured the existence and source of any other
4082 compensation that accrues to the producer as a result of the transaction.
4083 (b) The disclosure required by this Subsection (3) shall:
4084 (i) include the signature of the insured or prospective insured acknowledging the
4085 noncommission compensation;
4086 (ii) clearly specify the amount or extent of the noncommission compensation and the
4087 existence and source of any other compensation; and
4088 (iii) be provided to the insured or prospective insured before the performance of the
4089 service.
4090 (c) The following additional noncommission compensation is authorized:
4091 (i) compensation received by a producer of a compensated corporate surety who under
4092 procedures approved by a rule or order of the commissioner is paid by surety bond principal
4093 debtors for extra services;
4094 (ii) compensation received by an insurance producer who is also licensed as a public
4095 adjuster under Section 31A-26-203 , for services performed for an insured in connection with a
4096 claim adjustment, so long as the producer does not receive or is not promised compensation for
4097 aiding in the claim adjustment prior to the occurrence of the claim;
4098 (iii) compensation received by a consultant as a consulting fee, provided the consultant
4099 complies with the requirements of Section 31A-23a-401 ; or
4100 (iv) other compensation arrangements approved by the commissioner after a finding
4101 that they do not violate Section 31A-23a-401 and are not harmful to the public.
4102 (d) Subject to Section 31A-23a-402.5 , a producer for the insured may receive
4103 compensation from an insured through an insurer, for the negotiation and sale of a health
4104 benefit plan, if there is a separate written agreement between the insured and the licensee for
4105 the compensation. An insurer who passes through the compensation from the insured to the
4106 licensee under this Subsection (3)(d) is not providing direct or indirect compensation or
4107 commission compensation to the licensee.
4108 (4) (a) For purposes of this Subsection (4), "producer" includes:
4109 (i) a producer;
4110 (ii) an affiliate of a producer; or
4111 (iii) a consultant.
4112 (b) A producer may not accept or receive any compensation from an insurer or third
4113 party administrator for the initial placement of a health benefit plan, other than a hospital
4114 confinement indemnity policy, unless prior to the customer's initial purchase of the health
4115 benefit plan the producer discloses in writing to the customer that the producer will receive
4116 compensation from the insurer or third party administrator for the placement of insurance,
4117 including the amount or type of compensation known to the producer at the time of the
4118 disclosure.
4119 (c) A producer shall:
4120 (i) obtain the customer's signed acknowledgment that the disclosure under Subsection
4121 (4)(b) was made to the customer; or
4122 (ii) (A) sign a statement that the disclosure required by Subsection (4)(b) was made to
4123 the customer; and
4124 (B) keep the signed statement on file in the producer's office while the health benefit
4125 plan placed with the customer is in force.
4126 (d) (i) A licensee who collects or receives any part of the compensation from an insurer
4127 or third party administrator in a manner that facilitates an audit shall, while the health benefit
4128 plan placed with the customer is in force, maintain a copy of:
4129 (A) the signed acknowledgment described in Subsection (4)(c)(i); or
4130 (B) the signed statement described in Subsection (4)(c)(ii).
4131 (ii) The standard application developed in accordance with Section 31A-22-635 shall
4132 include a place for a producer to provide the disclosure required by this Subsection (4), and if
4133 completed, shall satisfy the requirement of Subsection (4)(d)(i).
4134 (e) Subsection (4)(c) does not apply to:
4135 (i) a person licensed as a producer who acts only as an intermediary between an insurer
4136 and the customer's producer, including a managing general agent; or
4137 (ii) the placement of insurance in a secondary or residual market.
4138 (5) This section does not alter the right of any licensee to recover from an insured the
4139 amount of any premium due for insurance effected by or through that licensee or to charge a
4140 reasonable rate of interest upon past-due accounts.
4141 (6) This section does not apply to bail bond producers or bail enforcement agents as
4142 defined in Section 31A-35-102 .
4143 (7) A licensee may not receive noncommission compensation from an insured or
4144 enrollee for providing a service or engaging in an act that is required to be provided or
4145 performed in order to receive commission compensation, except for the surplus lines
4146 transactions that do not receive commissions.
4147 Section 29. Section 31A-23b-102 is amended to read:
4148 31A-23b-102. Definitions.
4149 As used in this chapter:
4150 (1) "Compensation" is as defined in:
4151 (a) Subsections 31A-23a-501 (1)(a), (b), and (d); and
4152 (b) PPACA.
4153 (2) "Enroll" and "enrollment" mean to:
4154 (a) (i) obtain personally identifiable information about an individual; and
4155 (ii) inform an individual about accident and health insurance plans or public programs
4156 offered on an exchange;
4157 (b) solicit insurance; or
4158 (c) submit to the exchange:
4159 (i) personally identifiable information about an individual; and
4160 (ii) an individual's selection of a particular accident and health insurance plan or public
4161 program offered on the exchange.
4162 (3) (a) "Exchange" means an online marketplace[
4163
4164 Human Services as either a state-based small employer exchange or a federally facilitated
4165 individual exchange under PPACA.
4166 (b) [
4167 health insurance if the online marketplace is not a certified exchange [
4168 accordance with Subsection (3)(a).
4169 [
4170
4171 [
4172
4173 [
4174
4175
4176 [
4177
4178
4179 (4) "Navigator":
4180 (a) means a person who facilitates enrollment in an exchange by offering to assist, or
4181 who advertises any services to assist, with:
4182 (i) the selection of and enrollment in a qualified health plan or a public program
4183 offered on an exchange; or
4184 (ii) applying for premium subsidies through an exchange; and
4185 (b) includes a person who is an in-person assister or [
4186 [
4187
4188 [
4189
4190
4191 (5) "Personally identifiable information" is as defined in 45 C.F.R. Sec. 155.260.
4192 (6) "Public programs" means the state Medicaid program in Title 26, Chapter 18,
4193 Medical Assistance Act, and Chapter 40, Utah Children's Health Insurance Act.
4194 (7) "Resident" is as defined by rule made by the commissioner in accordance with Title
4195 63G, Chapter 3, Utah Administrative Rulemaking Act.
4196 [
4197 Section 30. Section 31A-23b-202 is amended to read:
4198 31A-23b-202. Qualifications for a license.
4199 (1) (a) The commissioner shall issue or renew a license to a person to act as a navigator
4200 if the person:
4201 (i) satisfies the:
4202 (A) application requirements under Section 31A-23b-203 ;
4203 (B) character requirements under Section 31A-23b-204 ;
4204 (C) examination and training requirements under Section 31A-23b-205 ; and
4205 (D) continuing education requirements under Section 31A-23b-206 ;
4206 (ii) certifies that, to the extent applicable, the applicant:
4207 (A) is in compliance with the surety bond requirements of Section 31A-23b-207 ; and
4208 (B) will maintain compliance with Section 31A-23b-207 during the period for which
4209 the license is issued or renewed; and
4210 (iii) has not committed an act that is a ground for denial, suspension, or revocation as
4211 provided in Section 31A-23b-401 .
4212 (b) A license issued under this chapter is valid for [
4213 (2) (a) A person shall report to the commissioner:
4214 (i) an administrative action taken against the person, including a denial of a new or
4215 renewal license application:
4216 (A) in another jurisdiction; or
4217 (B) by another regulatory agency in this state; and
4218 (ii) a criminal prosecution taken against the person in any jurisdiction.
4219 (b) The report required by Subsection (2)(a) shall be filed:
4220 (i) at the time the person files the application for an individual or agency license; and
4221 (ii) for an action or prosecution that occurs on or after the day on which the person files
4222 the application:
4223 (A) for an administrative action, within 30 days of the final disposition of the
4224 administrative action; or
4225 (B) for a criminal prosecution, within 30 days of the initial appearance before a court.
4226 (c) The report required by Subsection (2)(a) shall include a copy of the complaint or
4227 other relevant legal documents related to the action or prosecution described in Subsection
4228 (2)(a).
4229 (3) (a) The department may:
4230 (i) require a person applying for a license to submit to a criminal background check as
4231 a condition of receiving a license; or
4232 (ii) accept a background check conducted by another organization.
4233 (b) A person, if required to submit to a criminal background check under Subsection
4234 (3)(a), shall:
4235 (i) submit a fingerprint card in a form acceptable to the department; and
4236 (ii) consent to a fingerprint background check by:
4237 (A) the Utah Bureau of Criminal Identification; and
4238 (B) the Federal Bureau of Investigation.
4239 (c) For a person who submits a fingerprint card and consents to a fingerprint
4240 background check under Subsection (3)(b), the department may request:
4241 (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
4242 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
4243 (ii) complete Federal Bureau of Investigation criminal background checks through the
4244 national criminal history system.
4245 (d) Information obtained by the department from the review of criminal history records
4246 received under this Subsection (3) shall be used by the department for the purposes of:
4247 (i) determining if a person satisfies the character requirements under Section
4248 31A-23b-204 for issuance or renewal of a license;
4249 (ii) determining if a person failed to maintain the character requirements under Section
4250 31A-23b-204 ; and
4251 (iii) preventing a person who violates the federal Violent Crime Control and Law
4252 Enforcement Act of 1994, 18 U.S.C. Sec. 1033, from engaging in the business of a navigator or
4253 in-person assistor in the state.
4254 (e) If the department requests the criminal background information, the department
4255 shall:
4256 (i) pay to the Department of Public Safety the costs incurred by the Department of
4257 Public Safety in providing the department criminal background information under Subsection
4258 (3)(c)(i);
4259 (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
4260 of Investigation in providing the department criminal background information under
4261 Subsection (3)(c)(ii); and
4262 (iii) charge the person applying for a license a fee equal to the aggregate of Subsections
4263 (3)(e)(i) and (ii).
4264 (4) The commissioner may deny an application for a license under this chapter if the
4265 person applying for the license:
4266 (a) fails to satisfy the requirements of this section; or
4267 (b) commits an act that is grounds for denial, suspension, or revocation as set forth in
4268 Section 31A-23b-401 .
4269 Section 31. Section 31A-23b-205 is amended to read:
4270 31A-23b-205. Examination and training requirements.
4271 (1) The commissioner may require [
4272 examination and complete a training program as a requirement for a license.
4273 (2) The examination described in Subsection (1) shall reasonably relate to:
4274 (a) the duties and functions of a navigator;
4275 (b) requirements for navigators as established by federal regulation under PPACA; and
4276 (c) other requirements that may be established by the commissioner by administrative
4277 rule.
4278 (3) The examination may be administered by the commissioner or as otherwise
4279 specified by administrative rule.
4280 (4) The training required by Subsection (1) shall be approved by the commissioner and
4281 shall include:
4282 (a) accident and health insurance plans;
4283 (b) qualifications for and enrollment in public programs;
4284 (c) qualifications for and enrollment in premium subsidies;
4285 (d) cultural and linguistic competence;
4286 (e) conflict of interest standards;
4287 (f) exchange functions; and
4288 (g) other requirements that may be adopted by the commissioner by administrative
4289 rule.
4290 (5) The training required by Subsection (1) shall consist of:
4291 (a) at least 21 credit hours of training before obtaining a license;
4292 (b) at least 1 of the 21 credit hours of training described in Subsection (5)(a) on defined
4293 contribution arrangement and the small employer Health Insurance Exchange created in
4294 accordance with Title 63M, Chapter 1, Part 25, Health System Reform Act; and
4295 (c) the navigator training and certification program developed by the Centers for
4296 Medicare and Medicaid Services.
4297 [
4298 who is a natural person.
4299 Section 32. Section 31A-23b-206 is amended to read:
4300 31A-23b-206. Continuing education requirements.
4301 (1) The commissioner shall, by rule, prescribe continuing education requirements for a
4302 navigator.
4303 (2) (a) The commissioner may not require a degree from an institution of higher
4304 education as part of continuing education.
4305 (b) The commissioner may state a continuing education requirement in terms of hours
4306 of instruction received in:
4307 (i) accident and health insurance;
4308 (ii) qualification for and enrollment in public programs;
4309 (iii) qualification for and enrollment in premium subsidies;
4310 (iv) cultural competency;
4311 (v) conflict of interest standards; and
4312 (vi) other exchange functions.
4313 (3) (a) Continuing education requirements shall require:
4314 (i) that a licensee complete [
4315 [
4316 (ii) that [
4317 ethics courses; [
4318 [
4319
4320 (iii) that at least 1 of the 12 credit hours described in Subsection (3)(a)(i) be a defined
4321 contribution course that includes training on use of the Health Insurance Exchange; and
4322 (iv) that a licensee complete the annual navigator training and certification program
4323 developed by the Centers for Medicare and Medicaid Services.
4324 (b) An hour of continuing education in accordance with Subsection (3)(a)(i) may be
4325 obtained through:
4326 (i) classroom attendance;
4327 (ii) home study;
4328 (iii) watching a video recording; or
4329 [
4330 [
4331 (c) A licensee may obtain continuing education hours at any time during the [
4332 one-year license period.
4333 (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
4334 commissioner shall[
4335
4336
4337 providers, including a state or national professional producer or consultant associations, to:
4338 [
4339 [
4340 education program, subject to the review and approval of the commissioner.
4341 (4) The commissioner shall approve a continuing education provider or a continuing
4342 education course that satisfies the requirements of this section.
4343 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
4344 commissioner shall by rule establish the procedures for continuing education provider
4345 registration and course approval.
4346 (6) This section applies only to a navigator who is a natural person.
4347 (7) A navigator shall keep documentation of completing the continuing education
4348 requirements of this section for two years after the end of the [
4349 period to which the continuing education applies.
4350 Section 33. Section 31A-23b-301 is amended to read:
4351 31A-23b-301. Unfair practices -- Compensation -- Limit of scope of practice.
4352 (1) As used in this section, "false or misleading information" includes, with intent to
4353 deceive a person examining it:
4354 (a) filing a report;
4355 (b) making a false entry in a record; or
4356 (c) willfully refraining from making a proper entry in a record.
4357 (2) (a) Communication that contains false or misleading information relating to
4358 enrollment in an insurance plan or a public program, including information that is false or
4359 misleading because it is incomplete, may not be made by:
4360 (i) a person who is or should be licensed under this title;
4361 (ii) an employee of a person described in Subsection (2)(a)(i);
4362 (iii) a person whose primary interest is as a competitor of a person licensed under this
4363 title; and
4364 (iv) a person on behalf of [
4365 (b) A licensee under this chapter may not:
4366 (i) use [
4367 likely to cause the exchange, insurer, or other licensee to be mistaken for another governmental
4368 agency, a PPACA exchange, insurer, or other licensee already in business; or
4369 (ii) use [
4370 cause a reasonable person to mistakenly believe that a state or federal government agency,
4371 public program, or insurer:
4372 (A) is responsible for the insurance or public program enrollment assistance activities
4373 of the person;
4374 (B) stands behind the credit of the person; or
4375 (C) is a source of payment of [
4376 (c) A person who is not an insurer may not assume or use [
4377 implies or suggests that person is an insurer.
4378 (3) A person may not engage in an unfair method of competition or any other unfair or
4379 deceptive act or practice in the business of insurance, as defined by the commissioner by rule,
4380 after a finding that the method of competition, the act, or the practice:
4381 (a) is misleading;
4382 (b) is deceptive;
4383 (c) is unfairly discriminatory;
4384 (d) provides an unfair inducement; or
4385 (e) unreasonably restrains competition.
4386 (4) A navigator licensed under this chapter is subject to the unfair marketing practices
4387 and inducement provisions of [
4388 (5) A navigator licensed under this chapter or who should be licensed under this
4389 chapter:
4390 (a) may not receive direct or indirect compensation from an accident or health insurer
4391 or from an individual who receives services from a navigator in accordance with:
4392 (i) federal conflict of interest regulations established pursuant to PPACA; and
4393 (ii) administrative rule adopted by the department;
4394 (b) may be compensated by the exchange for performing the duties of a navigator;
4395 (c) (i) may perform, offer to perform, or advertise a service as a navigator only for a
4396 person selecting a qualified health plan or public program offered on an exchange; and
4397 (ii) may not perform, offer to perform, or advertise [
4398 individuals or small employer groups selecting accident and health insurance plans, qualified
4399 health plans, public programs, business, or services that are not offered on an exchange; and
4400 (d) may not recommend a particular accident and health insurance plan or qualified
4401 health plan.
4402 Section 34. Section 31A-23b-402 is amended to read:
4403 31A-23b-402. Probation -- Grounds for revocation.
4404 (1) The commissioner may place a licensee on probation for a period not to exceed 24
4405 months as follows:
4406 (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
4407 Procedures Act, for any circumstances that would justify a suspension under this section; or
4408 (b) at the issuance of a new license:
4409 (i) with an admitted violation under 18 U.S.C. [
4410 (ii) with a response to background information questions on a new license application
4411 indicating that:
4412 (A) the person has been convicted of a crime that is listed by rule made in accordance
4413 with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is a ground for
4414 probation;
4415 (B) the person is currently charged with a crime that is listed by rule made in
4416 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
4417 a ground for probation regardless of whether adjudication is withheld;
4418 (C) the person has been involved in an administrative proceeding regarding any
4419 professional or occupational license; or
4420 (D) any business in which the person is or was an owner, partner, officer, or director
4421 has been involved in an administrative proceeding regarding any professional or occupational
4422 license.
4423 (2) The commissioner may place a licensee on probation for a specified period no
4424 longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [
4425 1033 [
4426 (3) The probation order shall state the conditions for revocation or retention of the
4427 license, which shall be reasonable.
4428 (4) Any violation of the probation is a ground for revocation pursuant to any
4429 proceeding authorized under Title 63G, Chapter 4, Administrative Procedures Act.
4430 Section 35. Section 31A-25-208 is amended to read:
4431 31A-25-208. Revocation, suspension, surrender, lapsing, limiting, or otherwise
4432 terminating a license -- Rulemaking for renewal and reinstatement.
4433 (1) A license type issued under this chapter remains in force until:
4434 (a) revoked or suspended under Subsection (4);
4435 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
4436 administrative action;
4437 (c) the licensee dies or is adjudicated incompetent as defined under:
4438 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
4439 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
4440 Minors;
4441 (d) lapsed under Section 31A-25-210 ; or
4442 (e) voluntarily surrendered.
4443 (2) The following may be reinstated within one year after the day on which the license
4444 is no longer in force:
4445 (a) a lapsed license; or
4446 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
4447 not be reinstated after the license period in which the license is voluntarily surrendered.
4448 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
4449 license, submission and acceptance of a voluntary surrender of a license does not prevent the
4450 department from pursuing additional disciplinary or other action authorized under:
4451 (a) this title; or
4452 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
4453 Administrative Rulemaking Act.
4454 (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
4455 adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
4456 commissioner may:
4457 (i) revoke a license;
4458 (ii) suspend a license for a specified period of 12 months or less;
4459 (iii) limit a license in whole or in part; or
4460 (iv) deny a license application.
4461 (b) The commissioner may take an action described in Subsection (4)(a) if the
4462 commissioner finds that the licensee:
4463 (i) is unqualified for a license under Section 31A-25-202 , 31A-25-203 , or 31A-25-204 ;
4464 (ii) has violated:
4465 (A) an insurance statute;
4466 (B) a rule that is valid under Subsection 31A-2-201 (3); or
4467 (C) an order that is valid under Subsection 31A-2-201 (4);
4468 (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
4469 delinquency proceedings in any state;
4470 (iv) fails to pay a final judgment rendered against the person in this state within 60
4471 days after the day on which the judgment became final;
4472 (v) fails to meet the same good faith obligations in claims settlement that is required of
4473 admitted insurers;
4474 (vi) is affiliated with and under the same general management or interlocking
4475 directorate or ownership as another third party administrator that transacts business in this state
4476 without a license;
4477 (vii) refuses:
4478 (A) to be examined; or
4479 (B) to produce its accounts, records, and files for examination;
4480 (viii) has an officer who refuses to:
4481 (A) give information with respect to the third party administrator's affairs; or
4482 (B) perform any other legal obligation as to an examination;
4483 (ix) provides information in the license application that is:
4484 (A) incorrect;
4485 (B) misleading;
4486 (C) incomplete; or
4487 (D) materially untrue;
4488 (x) has violated an insurance law, valid rule, or valid order of another state's insurance
4489 department;
4490 (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
4491 (xii) has improperly withheld, misappropriated, or converted money or properties
4492 received in the course of doing insurance business;
4493 (xiii) has intentionally misrepresented the terms of an actual or proposed:
4494 (A) insurance contract; or
4495 (B) application for insurance;
4496 (xiv) has been convicted of a felony;
4497 (xv) has admitted or been found to have committed an insurance unfair trade practice
4498 or fraud;
4499 (xvi) in the conduct of business in this state or elsewhere has:
4500 (A) used fraudulent, coercive, or dishonest practices; or
4501 (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
4502 (xvii) has had an insurance license or its equivalent, denied, suspended, or revoked in
4503 any other state, province, district, or territory;
4504 (xviii) has forged another's name to:
4505 (A) an application for insurance; or
4506 (B) a document related to an insurance transaction;
4507 (xix) has improperly used notes or any other reference material to complete an
4508 examination for an insurance license;
4509 (xx) has knowingly accepted insurance business from an individual who is not
4510 licensed;
4511 (xxi) has failed to comply with an administrative or court order imposing a child
4512 support obligation;
4513 (xxii) has failed to:
4514 (A) pay state income tax; or
4515 (B) comply with an administrative or court order directing payment of state income
4516 tax;
4517 (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
4518 Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 [
4519 Sec. 1033 is prohibited from engaging in the business of insurance; or
4520 (xxiv) has engaged in methods and practices in the conduct of business that endanger
4521 the legitimate interests of customers and the public.
4522 (c) For purposes of this section, if a license is held by an agency, both the agency itself
4523 and any individual designated under the license are considered to be the holders of the agency
4524 license.
4525 (d) If an individual designated under the agency license commits an act or fails to
4526 perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
4527 the commissioner may suspend, revoke, or limit the license of:
4528 (i) the individual;
4529 (ii) the agency if the agency:
4530 (A) is reckless or negligent in its supervision of the individual; or
4531 (B) knowingly participated in the act or failure to act that is the ground for suspending,
4532 revoking, or limiting the license; or
4533 (iii) (A) the individual; and
4534 (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
4535 (5) A licensee under this chapter is subject to the penalties for acting as a licensee
4536 without a license if:
4537 (a) the licensee's license is:
4538 (i) revoked;
4539 (ii) suspended;
4540 (iii) limited;
4541 (iv) surrendered in lieu of administrative action;
4542 (v) lapsed; or
4543 (vi) voluntarily surrendered; and
4544 (b) the licensee:
4545 (i) continues to act as a licensee; or
4546 (ii) violates the terms of the license limitation.
4547 (6) A licensee under this chapter shall immediately report to the commissioner:
4548 (a) a revocation, suspension, or limitation of the person's license in any other state, the
4549 District of Columbia, or a territory of the United States;
4550 (b) the imposition of a disciplinary sanction imposed on that person by any other state,
4551 the District of Columbia, or a territory of the United States; or
4552 (c) a judgment or injunction entered against the person on the basis of conduct
4553 involving:
4554 (i) fraud;
4555 (ii) deceit;
4556 (iii) misrepresentation; or
4557 (iv) a violation of an insurance law or rule.
4558 (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
4559 license in lieu of administrative action may specify a time, not to exceed five years, within
4560 which the former licensee may not apply for a new license.
4561 (b) If no time is specified in the order or agreement described in Subsection (7)(a), the
4562 former licensee may not apply for a new license for five years from the day on which the order
4563 or agreement is made without the express approval of the commissioner.
4564 (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
4565 a license issued under this part if so ordered by the court.
4566 (9) The commissioner shall by rule prescribe the license renewal and reinstatement
4567 procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
4568 Section 36. Section 31A-25-209 is amended to read:
4569 31A-25-209. Probation -- Grounds for revocation.
4570 (1) The commissioner may place a licensee on probation for a period not to exceed 24
4571 months as follows:
4572 (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
4573 Procedures Act, for any circumstances that would justify a suspension under Section
4574 31A-25-208 ; or
4575 (b) at the issuance of a new license:
4576 (i) with an admitted violation under 18 U.S.C. [
4577 (ii) with a response to a background information question on a new license application
4578 indicating that:
4579 (A) the person has been convicted of a crime that is listed by rule made in accordance
4580 with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
4581 probation;
4582 (B) the person is currently charged with a crime that is listed by rule made in
4583 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
4584 grounds for probation regardless of whether adjudication is withheld;
4585 (C) the person has been involved in an administrative proceeding regarding any
4586 professional or occupational license; or
4587 (D) any business in which the person is or was an owner, partner, officer, or director
4588 has been involved in an administrative proceeding regarding any professional or occupational
4589 license.
4590 (2) The commissioner may place a licensee on probation for a specified period no
4591 longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [
4592 Sec. 1033 [
4593 (3) A probation order under this section shall state the conditions for retention of the
4594 license, which shall be reasonable.
4595 (4) A violation of the probation is grounds for revocation pursuant to any proceeding
4596 authorized under Title 63G, Chapter 4, Administrative Procedures Act.
4597 Section 37. Section 31A-26-102 is amended to read:
4598 31A-26-102. Definitions.
4599 As used in this chapter, unless expressly provided otherwise:
4600 (1) "Company adjuster" means a person employed by an insurer whose regular duties
4601 include insurance adjusting.
4602 (2) "Designated home state" means the state or territory of the United States or the
4603 District of Columbia:
4604 (a) in which an insurance adjuster does not maintain the adjuster's principal:
4605 (i) place of residence; or
4606 (ii) place of business;
4607 (b) if the resident state, territory, or District of Columbia of the adjuster does not
4608 license adjusters for the line of authority sought, the adjuster has qualified for the license as if
4609 the person were a resident in the state, territory, or District of Columbia described in
4610 Subsection (2)(a), including an applicable:
4611 (i) examination requirement;
4612 (ii) fingerprint background check requirement; and
4613 (iii) continuing education requirement; and
4614 (c) the adjuster has designated the state, territory, or District of Columbia as the
4615 designated home state.
4616 (3) "Home state" means:
4617 (a) a state or territory of the United States or the District of Columbia in which an
4618 insurance adjuster:
4619 (i) maintains the adjuster's principal:
4620 (A) place of residence; or
4621 (B) place of business; and
4622 (ii) is licensed to act as a resident adjuster; or
4623 (b) if the resident state, territory, or the District of Columbia described in Subsection
4624 (3)(a) does not license adjusters for the line of authority sought, a state, territory, or the District
4625 of Columbia:
4626 (i) in which the adjuster is licensed;
4627 (ii) in which the adjuster is in good standing; and
4628 (iii) that the adjuster has designated as the adjuster's designated home state.
4629 [
4630 under Section 31A-26-201 , who engages in insurance adjusting as a representative of one or
4631 more insurers.
4632 [
4633 investigation, negotiation, or settlement of a claim under an insurance policy, on behalf of an
4634 insurer, policyholder, or a claimant under an insurance policy.
4635 [
4636 proprietorship by which a natural person does business under an assumed name.
4637 [
4638 [
4639 31A-26-201 , who engages in insurance adjusting as a representative of insureds and claimants
4640 under insurance policies.
4641 Section 38. Section 31A-26-206 is amended to read:
4642 31A-26-206. Continuing education requirements.
4643 (1) Pursuant to this section, the commissioner shall by rule prescribe continuing
4644 education requirements for each class of license under Section 31A-26-204 .
4645 (2) (a) The commissioner shall impose continuing education requirements in
4646 accordance with a two-year licensing period in which the licensee meets the requirements of
4647 this Subsection (2).
4648 (b) (i) Except as otherwise provided in this section, the continuing education
4649 requirements shall require:
4650 (A) that a licensee complete 24 credit hours of continuing education for every two-year
4651 licensing period;
4652 (B) that 3 of the 24 credit hours described in Subsection (2)(b)(i)(A) be ethics courses;
4653 and
4654 (C) that the licensee complete at least half of the required hours through classroom
4655 hours of insurance-related instruction.
4656 (ii) A continuing education hour completed in accordance with Subsection (2)(b)(i)
4657 may be obtained through:
4658 (A) classroom attendance;
4659 (B) home study;
4660 (C) watching a video recording;
4661 (D) experience credit; or
4662 (E) other methods provided by rule.
4663 (iii) Notwithstanding Subsections (2)(b)(i)(A) and (B), a title insurance adjuster is
4664 required to complete 12 credit hours of continuing education for every two-year licensing
4665 period, with 3 of the credit hours being ethics courses.
4666 (c) A licensee may obtain continuing education hours at any time during the two-year
4667 licensing period.
4668 (d) (i) A licensee is exempt from the continuing education requirements of this section
4669 if:
4670 (A) the licensee was first licensed before [
4671 (B) the license does not have a continuous lapse for a period of more than one year,
4672 except for a license for which the licensee has had an exemption approved before May 11,
4673 2011;
4674 (C) the licensee requests an exemption from the department; and
4675 (D) the department approves the exemption.
4676 (ii) If the department approves the exemption under Subsection (2)(d)(i), the licensee is
4677 not required to apply again for the exemption.
4678 (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
4679 commissioner shall by rule:
4680 (i) publish a list of insurance professional designations whose continuing education
4681 requirements can be used to meet the requirements for continuing education under Subsection
4682 (2)(b); and
4683 (ii) authorize a professional adjuster association to:
4684 (A) offer a qualified program for a classification of license on a geographically
4685 accessible basis; and
4686 (B) collect a reasonable fee for funding and administration of a qualified program,
4687 subject to the review and approval of the commissioner.
4688 (f) (i) A fee permitted under Subsection (2)(e)(ii)(B) that is charged to fund and
4689 administer a qualified program shall reasonably relate to the cost of administering the qualified
4690 program.
4691 (ii) Nothing in this section shall prohibit a provider of a continuing education program
4692 or course from charging a fee for attendance at a course offered for continuing education credit.
4693 (iii) A fee permitted under Subsection (2)(e)(ii)(B) that is charged for attendance at an
4694 association program may be less for an association member, on the basis of the member's
4695 affiliation expense, but shall preserve the right of a nonmember to attend without affiliation.
4696 (3) The continuing education requirements of this section apply only to a licensee who
4697 is an individual.
4698 (4) The continuing education requirements of this section do not apply to a member of
4699 the Utah State Bar.
4700 (5) The commissioner shall designate a course that satisfies the requirements of this
4701 section, including a course presented by an insurer.
4702 (6) A nonresident adjuster is considered to have satisfied this state's continuing
4703 education requirements if:
4704 (a) the nonresident adjuster satisfies the nonresident producer's home state's continuing
4705 education requirements for a licensed insurance adjuster; and
4706 (b) on the same basis the nonresident adjuster's home state considers satisfaction of
4707 Utah's continuing education requirements for a producer as satisfying the continuing education
4708 requirements of the home state.
4709 (7) A licensee subject to this section shall keep documentation of completing the
4710 continuing education requirements of this section for two years after the end of the two-year
4711 licensing period to which the continuing education requirement applies.
4712 Section 39. Section 31A-26-207 is amended to read:
4713 31A-26-207. Examination requirements.
4714 (1) The commissioner may require applicants for [
4715 under Section 31A-26-204 to pass an examination as a requirement to receiving a license. The
4716 examination shall reasonably relate to the specific license class for which it is prescribed. The
4717 examinations may be administered by the commissioner or as specified by rule.
4718 (2) The commissioner shall waive the requirement of an examination for a nonresident
4719 applicant who:
4720 (a) applies for an insurance adjuster license in this state;
4721 (b) has been licensed for the same line of authority in another state; and
4722 (c) (i) is licensed in the state described in Subsection (2)(b) at the time the applicant
4723 applies for an insurance producer license in this state; or
4724 (ii) if the application is received within 90 days of the cancellation of the applicant's
4725 previous license:
4726 (A) the prior state certifies that at the time of cancellation, the applicant was in good
4727 standing in that state; or
4728 (B) the state's producer database records maintained by the National Association of
4729 Insurance Commissioners or the National Association of Insurance Commissioner's affiliates or
4730 subsidiaries, indicates that the producer is or was licensed in good standing for the line of
4731 authority requested.
4732 (3) (a) To become a resident licensee in accordance with Sections 31A-26-202 and
4733 31A-26-203 , a person licensed as an insurance producer in another state who moves to this
4734 state shall make application within 90 days of establishing legal residence in this state.
4735 (b) A person who becomes a resident licensee under Subsection (3)(a) may not be
4736 required to meet prelicensing education or examination requirements to obtain any line of
4737 authority previously held in the prior state unless:
4738 (i) the prior state would require a prior resident of this state to meet the prior state's
4739 prelicensing education or examination requirements to become a resident licensee; or
4740 (ii) the commissioner imposes the requirements by rule.
4741 (4) The requirements of this section only apply to [
4742 an applicant who is a natural person.
4743 (5) The requirements of this section do not apply to [
4744 (a) a member of the Utah State Bar[
4745 (b) an applicant for the crop insurance license class who has satisfactorily completed:
4746 (i) a national crop adjuster program, as adopted by the commissioner by rule; or
4747 (ii) the loss adjustment training curriculum and competency testing required by the
4748 Federal Crop Insurance Corporation Standard Reinsurance Agreement through the Risk
4749 Management Agency of the United States Department of Agriculture.
4750 Section 40. Section 31A-26-213 is amended to read:
4751 31A-26-213. Revocation, suspension, surrender, lapsing, limiting, or otherwise
4752 terminating a license -- Rulemaking for renewal or reinstatement.
4753 (1) A license type issued under this chapter remains in force until:
4754 (a) revoked or suspended under Subsection (5);
4755 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
4756 administrative action;
4757 (c) the licensee dies or is adjudicated incompetent as defined under:
4758 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
4759 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
4760 Minors;
4761 (d) lapsed under Section 31A-26-214.5 ; or
4762 (e) voluntarily surrendered.
4763 (2) The following may be reinstated within one year after the day on which the license
4764 is no longer in force:
4765 (a) a lapsed license; or
4766 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
4767 not be reinstated after the license period in which it is voluntarily surrendered.
4768 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
4769 license, submission and acceptance of a voluntary surrender of a license does not prevent the
4770 department from pursuing additional disciplinary or other action authorized under:
4771 (a) this title; or
4772 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
4773 Administrative Rulemaking Act.
4774 (4) A license classification issued under this chapter remains in force until:
4775 (a) the qualifications pertaining to a license classification are no longer met by the
4776 licensee; or
4777 (b) the supporting license type:
4778 (i) is revoked or suspended under Subsection (5); or
4779 (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
4780 administrative action.
4781 (5) (a) If the commissioner makes a finding under Subsection (5)(b) as part of an
4782 adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
4783 commissioner may:
4784 (i) revoke:
4785 (A) a license; or
4786 (B) a license classification;
4787 (ii) suspend for a specified period of 12 months or less:
4788 (A) a license; or
4789 (B) a license classification;
4790 (iii) limit in whole or in part:
4791 (A) a license; or
4792 (B) a license classification; or
4793 (iv) deny a license application.
4794 (b) The commissioner may take an action described in Subsection (5)(a) if the
4795 commissioner finds that the licensee:
4796 (i) is unqualified for a license or license classification under Section 31A-26-202 ,
4797 31A-26-203 , 31A-26-204 , or 31A-26-205 ;
4798 (ii) has violated:
4799 (A) an insurance statute;
4800 (B) a rule that is valid under Subsection 31A-2-201 (3); or
4801 (C) an order that is valid under Subsection 31A-2-201 (4);
4802 (iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
4803 delinquency proceedings in any state;
4804 (iv) fails to pay a final judgment rendered against the person in this state within 60
4805 days after the judgment became final;
4806 (v) fails to meet the same good faith obligations in claims settlement that is required of
4807 admitted insurers;
4808 (vi) is affiliated with and under the same general management or interlocking
4809 directorate or ownership as another insurance adjuster that transacts business in this state
4810 without a license;
4811 (vii) refuses:
4812 (A) to be examined; or
4813 (B) to produce its accounts, records, and files for examination;
4814 (viii) has an officer who refuses to:
4815 (A) give information with respect to the insurance adjuster's affairs; or
4816 (B) perform any other legal obligation as to an examination;
4817 (ix) provides information in the license application that is:
4818 (A) incorrect;
4819 (B) misleading;
4820 (C) incomplete; or
4821 (D) materially untrue;
4822 (x) has violated an insurance law, valid rule, or valid order of another state's insurance
4823 department;
4824 (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
4825 (xii) has improperly withheld, misappropriated, or converted money or properties
4826 received in the course of doing insurance business;
4827 (xiii) has intentionally misrepresented the terms of an actual or proposed:
4828 (A) insurance contract; or
4829 (B) application for insurance;
4830 (xiv) has been convicted of a felony;
4831 (xv) has admitted or been found to have committed an insurance unfair trade practice
4832 or fraud;
4833 (xvi) in the conduct of business in this state or elsewhere has:
4834 (A) used fraudulent, coercive, or dishonest practices; or
4835 (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
4836 (xvii) has had an insurance license, or its equivalent, denied, suspended, or revoked in
4837 any other state, province, district, or territory;
4838 (xviii) has forged another's name to:
4839 (A) an application for insurance; or
4840 (B) a document related to an insurance transaction;
4841 (xix) has improperly used notes or any other reference material to complete an
4842 examination for an insurance license;
4843 (xx) has knowingly accepted insurance business from an individual who is not
4844 licensed;
4845 (xxi) has failed to comply with an administrative or court order imposing a child
4846 support obligation;
4847 (xxii) has failed to:
4848 (A) pay state income tax; or
4849 (B) comply with an administrative or court order directing payment of state income
4850 tax;
4851 (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
4852 Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 [
4853 Sec. 1033 is prohibited from engaging in the business of insurance; or
4854 (xxiv) has engaged in methods and practices in the conduct of business that endanger
4855 the legitimate interests of customers and the public.
4856 (c) For purposes of this section, if a license is held by an agency, both the agency itself
4857 and any individual designated under the license are considered to be the holders of the license.
4858 (d) If an individual designated under the agency license commits an act or fails to
4859 perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
4860 the commissioner may suspend, revoke, or limit the license of:
4861 (i) the individual;
4862 (ii) the agency, if the agency:
4863 (A) is reckless or negligent in its supervision of the individual; or
4864 (B) knowingly participated in the act or failure to act that is the ground for suspending,
4865 revoking, or limiting the license; or
4866 (iii) (A) the individual; and
4867 (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
4868 (6) A licensee under this chapter is subject to the penalties for conducting an insurance
4869 business without a license if:
4870 (a) the licensee's license is:
4871 (i) revoked;
4872 (ii) suspended;
4873 (iii) limited;
4874 (iv) surrendered in lieu of administrative action;
4875 (v) lapsed; or
4876 (vi) voluntarily surrendered; and
4877 (b) the licensee:
4878 (i) continues to act as a licensee; or
4879 (ii) violates the terms of the license limitation.
4880 (7) A licensee under this chapter shall immediately report to the commissioner:
4881 (a) a revocation, suspension, or limitation of the person's license in any other state, the
4882 District of Columbia, or a territory of the United States;
4883 (b) the imposition of a disciplinary sanction imposed on that person by any other state,
4884 the District of Columbia, or a territory of the United States; or
4885 (c) a judgment or injunction entered against that person on the basis of conduct
4886 involving:
4887 (i) fraud;
4888 (ii) deceit;
4889 (iii) misrepresentation; or
4890 (iv) a violation of an insurance law or rule.
4891 (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
4892 license in lieu of administrative action may specify a time not to exceed five years within
4893 which the former licensee may not apply for a new license.
4894 (b) If no time is specified in the order or agreement described in Subsection (8)(a), the
4895 former licensee may not apply for a new license for five years without the express approval of
4896 the commissioner.
4897 (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
4898 a license issued under this part if so ordered by a court.
4899 (10) The commissioner shall by rule prescribe the license renewal and reinstatement
4900 procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
4901 Section 41. Section 31A-26-214 is amended to read:
4902 31A-26-214. Probation -- Grounds for revocation.
4903 (1) The commissioner may place a licensee on probation for a period not to exceed 24
4904 months as follows:
4905 (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
4906 Procedures Act, for any circumstances that would justify a suspension under Section
4907 31A-26-213 ; or
4908 (b) at the issuance of a new license:
4909 (i) with an admitted violation under 18 U.S.C. [
4910 (ii) with a response to a background information question on any new license
4911 application indicating that:
4912 (A) the person has been convicted of a crime, that is listed by rule made in accordance
4913 with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
4914 probation;
4915 (B) the person is currently charged with a crime, that is listed by rule made in
4916 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
4917 grounds for probation regardless of whether adjudication was withheld;
4918 (C) the person has been involved in an administrative proceeding regarding any
4919 professional or occupational license; or
4920 (D) any business in which the person is or was an owner, partner, officer, or director
4921 has been involved in an administrative proceeding regarding any professional or occupational
4922 license.
4923 (2) The commissioner may put a licensee on probation for a specified period no longer
4924 than 24 months if the licensee has admitted to violations under 18 U.S.C. [
4925 [
4926 (3) A probation order under this section shall state the conditions for retention of the
4927 license, which shall be reasonable.
4928 (4) A violation of the probation is grounds for revocation pursuant to any proceeding
4929 authorized under Title 63G, Chapter 4, Administrative Procedures Act.
4930 Section 42. Section 31A-26-214.5 is amended to read:
4931 31A-26-214.5. License lapse and voluntary surrender.
4932 (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
4933 (i) pay when due a fee under Section 31A-3-103 ;
4934 (ii) complete continuing education requirements under Section 31A-26-206 before
4935 submitting the license renewal application;
4936 (iii) submit a completed renewal application as required by Section 31A-26-202 ;
4937 (iv) submit additional documentation required to complete the licensing process as
4938 related to a specific license type or license classification; or
4939 (v) maintain an active license in [
4940 a nonresident licensee.
4941 (b) (i) A licensee whose license lapses due to the following may request an action
4942 described in Subsection (1)(b)(ii):
4943 (A) military service;
4944 (B) voluntary service for a period of time designated by the person for whom the
4945 licensee provides voluntary service; or
4946 (C) some other extenuating circumstances, such as long-term medical disability.
4947 (ii) A licensee described in Subsection (1)(b)(i) may request:
4948 (A) reinstatement of the license no later than one year after the day on which the
4949 license lapses; and
4950 (B) waiver of any of the following imposed for failure to comply with renewal
4951 procedures:
4952 (I) an examination requirement;
4953 (II) reinstatement fees set under Section 31A-3-103 ;
4954 (III) continuing education requirements; or
4955 (IV) other sanction imposed for failure to comply with renewal procedures.
4956 (2) If a license issued under this chapter is voluntarily surrendered, the license may be
4957 reinstated:
4958 (a) during the license period in which it is voluntarily surrendered; and
4959 (b) no later than one year after the day on which the license is voluntarily surrendered.
4960 Section 43. Section 31A-27a-102 is amended to read:
4961 31A-27a-102. Definitions.
4962 As used in this chapter:
4963 (1) "Admitted assets" is as defined by and is measured in accordance with the National
4964 Association of Insurance Commissioner's Statements of Statutory Accounting Principles, as
4965 incorporated in this state by rules made by the department in accordance with Title 63G,
4966 Chapter 3, Utah Administrative Rulemaking Act, for the purposes of Subsection
4967 31A-4-113 (1)(b)(ii).
4968 (2) "Affected guaranty association" means a guaranty association that is or may
4969 become liable for payment of a covered claim.
4970 (3) "Affiliate" is as defined in Section 31A-1-301 .
4971 (4) Notwithstanding Section 31A-1-301 , "alien insurer" means an insurer incorporated
4972 or organized under the laws of a jurisdiction that is not a state.
4973 (5) Notwithstanding Section 31A-1-301 , "claimant" or "creditor" means a person
4974 having a claim against an insurer whether the claim is:
4975 (a) matured or not matured;
4976 (b) liquidated or unliquidated;
4977 (c) secured or unsecured;
4978 (d) absolute; or
4979 (e) fixed or contingent.
4980 (6) "Commissioner" is as defined in Section 31A-1-301 .
4981 (7) "Commodity contract" means:
4982 (a) a contract for the purchase or sale of a commodity for future delivery on, or subject
4983 to the rules of:
4984 (i) a board of trade or contract market under the Commodity Exchange Act, 7 U.S.C.
4985 Sec. 1 et seq.; or
4986 (ii) a board of trade outside the United States;
4987 (b) an agreement that is:
4988 (i) subject to regulation under Section 19 of the Commodity Exchange Act, 7 U.S.C.
4989 Sec. 1 et seq.; and
4990 (ii) commonly known to the commodities trade as:
4991 (A) a margin account;
4992 (B) a margin contract;
4993 (C) a leverage account; or
4994 (D) a leverage contract;
4995 (c) an agreement or transaction that is:
4996 (i) subject to regulation under Section 4c(b) of the Commodity Exchange Act, 7 U.S.C.
4997 Sec. 1 et seq.; and
4998 (ii) commonly known to the commodities trade as a commodity option;
4999 (d) a combination of the agreements or transactions referred to in this Subsection (7);
5000 or
5001 (e) an option to enter into an agreement or transaction referred to in this Subsection (7).
5002 (8) "Control" is as defined in Section 31A-1-301 .
5003 (9) "Delinquency proceeding" means a:
5004 (a) proceeding instituted against an insurer for the purpose of rehabilitating or
5005 liquidating the insurer; and
5006 (b) summary proceeding under Section 31A-27a-201 .
5007 (10) "Department" is as defined in Section 31A-1-301 unless the context requires
5008 otherwise.
5009 (11) "Doing business," "doing insurance business," and "business of insurance"
5010 includes any of the following acts, whether effected by mail, electronic means, or otherwise:
5011 (a) issuing or delivering a contract, certificate, or binder relating to insurance or
5012 annuities:
5013 (i) to a person who is resident in this state; or
5014 (ii) covering a risk located in this state;
5015 (b) soliciting an application for the contract, certificate, or binder described in
5016 Subsection (11)(a);
5017 (c) negotiating preliminary to the execution of the contract, certificate, or binder
5018 described in Subsection (11)(a);
5019 (d) collecting premiums, membership fees, assessments, or other consideration for the
5020 contract, certificate, or binder described in Subsection (11)(a);
5021 (e) transacting matters:
5022 (i) subsequent to execution of the contract, certificate, or binder described in
5023 Subsection (11)(a); and
5024 (ii) arising out of the contract, certificate, or binder described in Subsection (11)(a);
5025 (f) operating as an insurer under a license or certificate of authority issued by the
5026 department; or
5027 (g) engaging in an act identified in Chapter 15, Unauthorized Insurers, Surplus Lines,
5028 and Risk Retention Groups.
5029 (12) Notwithstanding Section 31A-1-301 , "domiciliary state" means the state in which
5030 an insurer is incorporated or organized, except that "domiciliary state" means:
5031 (a) in the case of an alien insurer, its state of entry; or
5032 (b) in the case of a risk retention group, the state in which the risk retention group is
5033 chartered as contemplated in the Liability Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.
5034 (13) "Estate" has the same meaning as "property of the insurer" as defined in
5035 Subsection (30).
5036 (14) "Fair consideration" is given for property or an obligation:
5037 (a) when in exchange for the property or obligation, as a fair equivalent for it, and in
5038 good faith:
5039 (i) property is conveyed;
5040 (ii) services are rendered;
5041 (iii) an obligation is incurred; or
5042 (iv) an antecedent debt is satisfied; or
5043 (b) when the property or obligation is received in good faith to secure a present
5044 advance or an antecedent debt in amount not disproportionately small compared to the value of
5045 the property or obligation obtained.
5046 (15) Notwithstanding Section 31A-1-301 , "foreign insurer" means an insurer domiciled
5047 in another state.
5048 (16) "Formal delinquency proceeding" means a rehabilitation or liquidation
5049 proceeding.
5050 (17) "Forward contract" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.
5051 Sec. 1821(e)(8)(D).
5052 (18) (a) "General assets" include all property of the estate that is not:
5053 (i) subject to a properly perfected secured claim;
5054 (ii) subject to a valid and existing express trust for the security or benefit of a specified
5055 person or class of person; or
5056 (iii) required by the insurance laws of this state or any other state to be held for the
5057 benefit of a specified person or class of person.
5058 (b) "General assets" include [
5059 the amount necessary to discharge a claim described in Subsection (18)(a).
5060 (19) "Good faith" means honesty in fact and intention, and in regard to Part 5, Asset
5061 Recovery, also requires the absence of:
5062 (a) information that would lead a reasonable person in the same position to know that
5063 the insurer is financially impaired or insolvent; and
5064 (b) knowledge regarding the imminence or pendency of a delinquency proceeding
5065 against the insurer.
5066 (20) "Guaranty association" means:
5067 (a) a mechanism mandated by Chapter 28, Guaranty Associations; or
5068 (b) a similar mechanism in another state that is created for the payment of claims or
5069 continuation of policy obligations of a financially impaired or insolvent insurer.
5070 (21) "Impaired" means that an insurer:
5071 (a) does not have admitted assets at least equal to the sum of:
5072 (i) all its liabilities; and
5073 (ii) the minimum surplus required to be maintained by Section 31A-5-211 or
5074 31A-8-209 ; or
5075 (b) has a total adjusted capital that is less than its authorized control level RBC, as
5076 defined in Section 31A-17-601 .
5077 (22) "Insolvency" or "insolvent" means that an insurer:
5078 (a) is unable to pay its obligations when they are due;
5079 (b) does not have admitted assets at least equal to all of its liabilities; or
5080 (c) has a total adjusted capital that is less than its mandatory control level RBC, as
5081 defined in Section 31A-17-601 .
5082 (23) Notwithstanding Section 31A-1-301 , "insurer" means a person who:
5083 (a) is doing, has done, purports to do, or is licensed to do the business of insurance;
5084 (b) is or has been subject to the authority of, or to rehabilitation, liquidation,
5085 reorganization, supervision, or conservation by an insurance commissioner; or
5086 (c) is included under Section 31A-27a-104 .
5087 (24) "Liabilities" is as defined by and is measured in accordance with the National
5088 Association of Insurance Commissioner's Statements of Statutory Accounting Principles, as
5089 incorporated in this state by rules made by the department in accordance with Title 63G,
5090 Chapter 3, Utah Administrative Rulemaking Act, for the purposes of Subsection
5091 31A-4-113 (1)(b)(ii).
5092 (25) (a) Subject to Subsection (21)(b), "netting agreement" means:
5093 (i) a contract or agreement that:
5094 (A) documents one or more transactions between the parties to the agreement for or
5095 involving one or more qualified financial contracts; and
5096 (B) provides for the netting, liquidation, setoff, termination, acceleration, or close out
5097 under or in connection with:
5098 (I) one or more qualified financial contracts; or
5099 (II) present or future payment or delivery obligations or payment or delivery
5100 entitlements under the agreement, including liquidation or close-out values relating to the
5101 obligations or entitlements, among the parties to the netting agreement;
5102 (ii) a master agreement or bridge agreement for one or more master agreements
5103 described in Subsection (25)(a)(i); or
5104 (iii) any of the following related to a contract or agreement described in Subsection
5105 (25)(a)(i) or (ii):
5106 (A) a security agreement;
5107 (B) a security arrangement;
5108 (C) other credit enhancement or guarantee; or
5109 (D) a reimbursement obligation.
5110 (b) If a contract or agreement described in Subsection (25)(a)(i) or (ii) relates to an
5111 agreement or transaction that is not a qualified financial contract, the contract or agreement
5112 described in Subsection (25)(a)(i) or (ii) is considered a netting agreement only with respect to
5113 an agreement or transaction that is a qualified financial contract.
5114 (c) "Netting agreement" includes:
5115 (i) a term or condition incorporated by reference in the contract or agreement described
5116 in Subsection (25)(a); or
5117 (ii) a master agreement described in Subsection (25)(a).
5118 (d) A master agreement described in Subsection (25)(a), together with all schedules,
5119 confirmations, definitions, and addenda to that master agreement and transactions under any of
5120 the items described in this Subsection (25)(d), are treated as one netting agreement.
5121 (26) (a) "New value" means:
5122 (i) money;
5123 (ii) money's worth in goods, services, or new credit; or
5124 (iii) release by a transferee of property previously transferred to the transferee in a
5125 transaction that is neither void nor voidable by the insurer or the receiver under [
5126 applicable law, including proceeds of the property.
5127 (b) "New value" does not include an obligation substituted for an existing obligation.
5128 (27) "Party in interest" means:
5129 (a) the commissioner;
5130 (b) a nondomiciliary commissioner in whose state the insurer has outstanding claims
5131 liabilities;
5132 (c) an affected guaranty association; and
5133 (d) the following parties if the party files a request with the receivership court for
5134 inclusion as a party in interest and to be on the service list:
5135 (i) an insurer that ceded to or assumed business from the insurer;
5136 (ii) a policyholder;
5137 (iii) a third party claimant;
5138 (iv) a creditor;
5139 (v) a 10% or greater equity security holder in the insolvent insurer; and
5140 (vi) a person, including an indenture trustee, with a financial or regulatory interest in
5141 the delinquency proceeding.
5142 (28) (a) Notwithstanding Section 31A-1-301 , "policy" means, notwithstanding what it
5143 is called:
5144 (i) a written contract of insurance;
5145 (ii) a written agreement for or affecting insurance; or
5146 (iii) a certificate of a written contract or agreement described in this Subsection (28)(a).
5147 (b) "Policy" includes all clauses, riders, endorsements, and papers that are a part of a
5148 policy.
5149 (c) "Policy" does not include a contract of reinsurance.
5150 (29) "Preference" means a transfer of property of an insurer to or for the benefit of a
5151 creditor:
5152 (a) for or on account of an antecedent debt, made or allowed by the insurer within one
5153 year before the day on which a successful petition for rehabilitation or liquidation is filed under
5154 this chapter;
5155 (b) the effect of which transfer may enable the creditor to obtain a greater percentage of
5156 the creditor's debt than another creditor of the same class would receive; and
5157 (c) if a liquidation order is entered while the insurer is already subject to a
5158 rehabilitation order and the transfer otherwise qualifies, that is made or allowed within the
5159 shorter of:
5160 (i) one year before the day on which a successful petition for rehabilitation is filed; or
5161 (ii) two years before the day on which a successful petition for liquidation is filed.
5162 (30) "Property of the insurer" or "property of the estate" includes:
5163 (a) a right, title, or interest of the insurer in property:
5164 (i) whether:
5165 (A) legal or equitable;
5166 (B) tangible or intangible; or
5167 (C) choate or inchoate; and
5168 (ii) including choses in action, contract rights, and any other interest recognized under
5169 the laws of this state;
5170 (b) entitlements that exist before the entry of an order of rehabilitation or liquidation;
5171 (c) entitlements that may arise by operation of this chapter or other provisions of law
5172 allowing the receiver to avoid prior transfers or assert other rights; and
5173 (d) (i) records or data that is otherwise the property of the insurer; and
5174 (ii) records or data similar to those described in Subsection (30)(d)(i) that are within
5175 the possession, custody, or control of a managing general agent, a third party administrator, a
5176 management company, a data processing company, an accountant, an attorney, an affiliate, or
5177 other person.
5178 (31) Subject to Subsection 31A-27a-611 (10), "qualified financial contract" means any
5179 of the following:
5180 (a) a commodity contract;
5181 (b) a forward contract;
5182 (c) a repurchase agreement;
5183 (d) a securities contract;
5184 (e) a swap agreement; or
5185 (f) [
5186 qualified financial contract for purposes of this chapter.
5187 (32) As the context requires, "receiver" means the commissioner or the commissioner's
5188 designee, including a rehabilitator, liquidator, or ancillary receiver.
5189 (33) As the context requires, "receivership" means a rehabilitation, liquidation, or
5190 ancillary receivership.
5191 (34) Unless the context requires otherwise, "receivership court" refers to the court in
5192 which a delinquency proceeding is pending.
5193 (35) "Reciprocal state" means [
5194 (a) enforces a law substantially similar to this chapter;
5195 (b) requires the commissioner to be the receiver of a delinquent insurer; and
5196 (c) has laws for the avoidance of fraudulent conveyances and preferential transfers by
5197 the receiver of a delinquent insurer.
5198 (36) "Record," when used as a noun, means [
5199 form maintained, including:
5200 (a) a book;
5201 (b) a document;
5202 (c) a paper;
5203 (d) a file;
5204 (e) an application file;
5205 (f) a policyholder list;
5206 (g) policy information;
5207 (h) a claim or claim file;
5208 (i) an account;
5209 (j) a voucher;
5210 (k) a litigation file;
5211 (l) a premium record;
5212 (m) a rate book;
5213 (n) an underwriting manual;
5214 (o) a personnel record;
5215 (p) a financial record; or
5216 (q) other material.
5217 (37) "Reinsurance" means a transaction or contract under which an assuming insurer
5218 agrees to indemnify a ceding insurer against all, or a part, of [
5219 may sustain under the one or more policies that the ceding insurer issues or will issue.
5220 (38) "Repurchase agreement" is as defined in the Federal Deposit Insurance Act, 12
5221 U.S.C. Sec. 1821(e)(8)(D).
5222 (39) (a) "Secured claim" means, subject to Subsection (39)(b):
5223 (i) a claim secured by an asset that is not a general asset; or
5224 (ii) the right to set off as provided in Section 31A-27a-510 .
5225 (b) "Secured claim" does not include:
5226 (i) a special deposit claim;
5227 (ii) a claim based on mere possession; or
5228 (iii) a claim arising from a constructive or resulting trust.
5229 (40) "Securities contract" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.
5230 Sec. 1821(e)(8)(D).
5231 (41) "Special deposit" means a deposit established pursuant to statute for the security
5232 or benefit of a limited class or classes of persons.
5233 (42) (a) Subject to Subsection (42)(b), "special deposit claim" means a claim secured
5234 by a special deposit.
5235 (b) "Special deposit claim" does not include a claim against the general assets of the
5236 insurer.
5237 (43) "State" means a state, district, or territory of the United States.
5238 (44) "Subsidiary" is as defined in Section 31A-1-301 .
5239 (45) "Swap agreement" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.
5240 Sec. 1821(e)(8)(D).
5241 (46) (a) "Transfer" includes the sale and every other and different mode of disposing of
5242 or parting with property or with an interest in property, whether:
5243 (i) directly or indirectly;
5244 (ii) absolutely or conditionally;
5245 (iii) voluntarily or involuntarily; or
5246 (iv) by or without judicial proceedings.
5247 (b) An interest in property includes:
5248 (i) a set off;
5249 (ii) having possession of the property; or
5250 (iii) fixing a lien on the property or on an interest in the property.
5251 (c) The retention of a security title in property delivered to an insurer and foreclosure
5252 of the insurer's equity of redemption is considered a transfer suffered by the insurer.
5253 (47) Notwithstanding Section 31A-1-301 , "unauthorized insurer" means an insurer
5254 transacting the business of insurance in this state that has not received a certificate of authority
5255 from this state, or some other type of authority that allows for the transaction of the business of
5256 insurance in this state.
5257 Section 44. Section 31A-27a-107 is amended to read:
5258 31A-27a-107. Notice and hearing on matters submitted by the receiver for
5259 receivership court approval.
5260 (1) (a) Upon written request to the receiver, a person shall be placed on the service list
5261 to receive notice of matters filed by the receiver. The person shall include in a written request
5262 under this Subsection (1)(a) the person's address, facsimile number, or electronic mail address.
5263 (b) It is the responsibility of the person requesting notice to:
5264 (i) inform the receiver in writing of any changes in the person's address, facsimile
5265 number, or electronic mail address; or
5266 (ii) request that the person's name be deleted from the service list.
5267 (c) (i) The receiver may serve on a person on the service list a request to confirm
5268 continuation on the service list by returning a form.
5269 (ii) The request to confirm continuation may be served periodically but not more
5270 frequently than every 12 months.
5271 (iii) A person who fails to return the form described in this Subsection (1)(c) may be
5272 removed from the service list.
5273 (d) Inclusion on the service list does not confer standing in the delinquency proceeding
5274 to raise, appear, or be heard on any issue.
5275 (e) The receiver shall:
5276 (i) file a copy of the service list with the receivership court; and
5277 (ii) periodically provide to the receivership court notice of changes to the service list.
5278 (f) Notice may be provided by first-class mail postage paid, electronic mail, or
5279 facsimile transmission, at the receiver's discretion.
5280 (2) Except as otherwise provided by this chapter, notice and hearing of any matter
5281 submitted by the receiver to the receivership court for approval under this chapter shall be
5282 conducted in accordance with this Subsection (2).
5283 (a) The receiver:
5284 (i) shall file a motion:
5285 (A) explaining the proposed action; and
5286 (B) the basis for the proposed action; and
5287 (ii) may include any evidence in support of the motion.
5288 (b) If a document, material, or other information supporting the motion is confidential,
5289 the document, material, or other information may be submitted to the receivership court under
5290 seal for in camera inspection.
5291 (c) (i) The receiver shall provide notice and a copy of the motion to:
5292 (A) all persons on the service list; and
5293 (B) any other person as may be required by the receivership court.
5294 (ii) Notice may be provided by first-class mail postage paid, electronic mail, or
5295 facsimile transmission, at the receiver's discretion.
5296 (iii) For purposes of this section, notice is considered to be given on the day on which
5297 it is deposited with the United States Postmaster or transmitted, as applicable, to the
5298 last-known address as shown on the service list.
5299 (d) (i) A party in interest objecting to the motion shall:
5300 (A) file an objection specifying the grounds for the objection within:
5301 (I) 10 days of the day on which the notice of the filing of the motion is sent; or
5302 (II) such other time as the receivership court may specify; and
5303 (B) serve copies on:
5304 (I) the receiver; and
5305 (II) any other person served with the motion within the time period described in this
5306 Subsection (2)(d)(i).
5307 (ii) In accordance with the Utah Rules of Civil Procedure, days may be added to the
5308 time for filing an objection if the notice of the motion is sent only by way of United States
5309 mail.
5310 (iii) An objecting party has the burden of showing why the receivership court should
5311 not authorize the proposed action.
5312 (e) (i) If no objection to the motion is timely filed:
5313 (A) the receivership court may:
5314 (I) enter an order approving the motion without a hearing; or
5315 (II) hold a hearing to determine if the receiver's motion should be approved; and
5316 (B) the receiver may request that the receivership court enter an order or hold a hearing
5317 on an expedited basis.
5318 (ii) (A) If an objection is timely filed, the receivership court may hold a hearing.
5319 (B) If the receivership court approves the motion and, upon a motion by the receiver,
5320 determines that the objection is frivolous or filed merely for delay or for other improper
5321 purpose, the receivership court may order the objecting party to pay the receiver's reasonable
5322 costs and fees of defending against the objection.
5323 Section 45. Section 31A-27a-201 is amended to read:
5324 31A-27a-201. Receivership court's seizure order.
5325 (1) The commissioner may file in the Third District Court for Salt Lake County a
5326 petition:
5327 (a) with respect to:
5328 (i) an insurer domiciled in this state;
5329 (ii) an unauthorized insurer; or
5330 (iii) pursuant to Section 31A-27a-901 , a foreign insurer;
5331 (b) alleging that:
5332 (i) there exists grounds that would justify a court order for a formal delinquency
5333 proceeding against the insurer under this chapter; and
5334 (ii) the interests of policyholders, creditors, or the public will be endangered by delay;
5335 and
5336 (c) setting forth the contents of a seizure order considered necessary by the
5337 commissioner.
5338 (2) (a) Upon a filing under Subsection (1), the receivership court may issue the
5339 requested seizure order:
5340 (i) immediately, ex parte, and without notice or hearing;
5341 (ii) that directs the commissioner to take possession and control of:
5342 (A) all or a part of the property, accounts, and records of an insurer; and
5343 (B) the premises occupied by the insurer for transaction of the insurer's business; and
5344 (iii) that until further order of the receivership court, enjoins the insurer and its officers,
5345 managers, agents, and employees from disposition of its property and from the transaction of
5346 its business except with the written consent of the commissioner.
5347 (b) [
5348 records or assets of a person against whom a seizure order is issued under this Subsection (2) is
5349 guilty of a class B misdemeanor.
5350 (3) (a) A petition that requests injunctive relief:
5351 (i) shall be verified by the commissioner or the commissioner's designee; and
5352 (ii) is not required to plead or prove irreparable harm or inadequate remedy at law.
5353 (b) The commissioner shall provide only the notice that the receivership court may
5354 require.
5355 (4) (a) The receivership court shall specify in the seizure order the duration of the
5356 seizure, which shall be the time the receivership court considers necessary for the
5357 commissioner to ascertain the condition of the insurer.
5358 (b) The receivership court may from time to time:
5359 (i) hold a hearing that the receivership court considers desirable:
5360 (A) (I) on motion of the commissioner;
5361 (II) on motion of the insurer; or
5362 (III) on its own motion; and
5363 (B) after the notice the receivership court considers appropriate; and
5364 (ii) extend, shorten, or modify the terms of the seizure order.
5365 (c) The receivership court shall vacate the seizure order if the commissioner fails to
5366 commence a formal proceeding under this chapter after having had a reasonable opportunity to
5367 commence a formal proceeding under this chapter.
5368 (d) An order of the receivership court pursuant to a formal proceeding under this
5369 chapter vacates the seizure order.
5370 (5) Entry of a seizure order under this section does not constitute a breach or an
5371 anticipatory breach of [
5372 (6) (a) An insurer subject to an ex parte seizure order under this section may petition
5373 the receivership court at any time after the issuance of a seizure order for a hearing and review
5374 of the basis for the seizure order.
5375 (b) The receivership court shall hold the hearing and review requested under this
5376 Subsection (6) not more than 15 days after the day on which the request is received or as soon
5377 thereafter as the court may allow.
5378 (c) A hearing under this Subsection (6):
5379 (i) may be held privately in chambers; and
5380 (ii) shall be held privately in chambers if the insurer proceeded against requests that it
5381 be private.
5382 (7) (a) If, at any time after the issuance of a seizure order, it appears to the receivership
5383 court that a person whose interest is or will be substantially affected by the seizure order did
5384 not appear at the hearing and has not been served, the receivership court may order that notice
5385 be given to the person.
5386 (b) An order under this Subsection (7) that notice be given may not stay the effect of
5387 [
5388 (8) Whenever the commissioner makes a seizure as provided in Subsection (2), on the
5389 demand of the commissioner, it shall be the duty of the sheriff of a county of this state, and of
5390 the police department of a municipality in the state to furnish the commissioner with necessary
5391 deputies or officers to assist the commissioner in making and enforcing the seizure order.
5392 (9) The commissioner may appoint a receiver under this section. The insurer shall pay
5393 the costs and expenses of the receiver appointed.
5394 Section 46. Section 31A-27a-701 is amended to read:
5395 31A-27a-701. Priority of distribution.
5396 (1) (a) The priority of payment of distributions on unsecured claims shall be in
5397 accordance with the order in which each class of claim is set forth in this section except as
5398 provided in Section 31A-27a-702 .
5399 (b) All claims in each class shall be paid in full or adequate funds retained for the
5400 claim's payment before a member of the next class receives payment.
5401 (c) All claims within a class shall be paid substantially the same percentage.
5402 (d) Except as provided in Subsections (2)(a)(i)(E), (2)(k), and (2)(m), subclasses may
5403 not be established within a class.
5404 (e) A claim by a shareholder, policyholder, or other creditor may not be permitted to
5405 circumvent the priority classes through the use of equitable remedies.
5406 (2) The order of distribution of claims shall be as follows:
5407 (a) a Class 1 claim, which:
5408 (i) is a cost or expense of administration expressly approved or ratified by the
5409 liquidator, including the following:
5410 (A) the actual and necessary costs of preserving or recovering the property of the
5411 insurer;
5412 (B) reasonable compensation for all services rendered on behalf of the administrative
5413 supervisor or receiver;
5414 (C) a necessary filing fee;
5415 (D) the fees and mileage payable to a witness;
5416 (E) an unsecured loan obtained by the receiver, which:
5417 (I) unless its terms otherwise provide, has priority over all other costs of
5418 administration; and
5419 (II) absent agreement to the contrary, shares pro rata with all other claims described in
5420 this Subsection (2)(a)(i)(E); and
5421 (F) an expense approved by the rehabilitator of the insurer, if any, incurred in the
5422 course of the rehabilitation that is unpaid at the time of the entry of the order of liquidation; and
5423 (ii) except as expressly approved by the receiver, excludes any expense arising from a
5424 duty to indemnify a director, officer, or employee of the insurer which expense, if allowed, is a
5425 Class 7 claim;
5426 (b) a Class 2 claim, which:
5427 (i) is a reasonable expense of a guaranty association, including overhead, salaries, or
5428 other general administrative expenses allocable to the receivership such as:
5429 (A) an administrative or claims handling expense;
5430 (B) an expense in connection with arrangements for ongoing coverage; and
5431 (C) in the case of a property and casualty guaranty association, a loss adjustment
5432 expense, including:
5433 (I) an adjusting or other expense; and
5434 (II) a defense or cost containment expense; and
5435 (ii) excludes an expense incurred in the performance of duties under Section
5436 31A-28-112 or similar duties under the statute governing a similar organization in another
5437 state;
5438 (c) a Class 3 claim, which:
5439 (i) is:
5440 (A) a claim under a policy of insurance including a third party claim;
5441 (B) a claim under an annuity contract or funding agreement;
5442 (C) a claim under a nonassessable policy for unearned premium;
5443 (D) a claim of an obligee and, subject to the discretion of the receiver, a completion
5444 contractor under a surety bond or surety undertaking, except for:
5445 (I) a bail bond;
5446 (II) a mortgage guaranty;
5447 (III) a financial guaranty; or
5448 (IV) other form of insurance offering protection against investment risk or warranties;
5449 (E) a claim by a principal under a surety bond or surety undertaking for wrongful
5450 dissipation of collateral by the insurer or its agents;
5451 (F) an indemnity payment on:
5452 (I) a covered claim; or
5453 [
5454 [
5455 the payment of a claim or continuation of coverage of an insolvent health maintenance
5456 organization;
5457 (G) a claim for unearned premium;
5458 [
5459 31A-27a-402 and 31A-27a-403 ; or
5460 [
5461 association not included in Class 2, including:
5462 (I) an indemnity payment on covered claims; and
5463 (II) in the case of a life and health guaranty association, a claim:
5464 (Aa) as a creditor of the impaired or insolvent insurer for a payment of and liabilities
5465 incurred on behalf of a covered claim or covered obligation of the insurer; and
5466 (Bb) for the funds needed to reinsure the obligations described under this Subsection
5467 (2)(c)(i)(H)(II) with a solvent insurer; and
5468 (ii) notwithstanding any other provision of this chapter, excludes the following which
5469 shall be paid under Class 7, except as provided in this section:
5470 (A) an obligation of the insolvent insurer arising out of a reinsurance contract;
5471 (B) an obligation that is incurred pursuant to an occurrence policy or reported pursuant
5472 to a claims made policy after:
5473 (I) the expiration date of the policy;
5474 (II) the policy is replaced by the insured;
5475 (III) the policy is canceled at the insured's request; or
5476 (IV) the policy is canceled as provided in this chapter;
5477 (C) an obligation to an insurer, insurance pool, or underwriting association and the
5478 insurer's, insurance pool's, or underwriting association's claim for contribution, indemnity, or
5479 subrogation, equitable or otherwise, except for direct claims under a policy where the insurer is
5480 the named insured;
5481 (D) an amount accrued as punitive or exemplary damages unless expressly covered
5482 under the terms of the policy, which shall be paid as a claim in Class 9;
5483 (E) a tort claim of any kind against the insurer;
5484 (F) a claim against the insurer for bad faith or wrongful settlement practices; and
5485 (G) a claim of a guaranty association for assessments not paid by the insurer, which
5486 claims shall be paid as claims in Class 7; and
5487 (iii) notwithstanding Subsection (2)(c)(ii)(B), does not exclude an unearned premium
5488 claim on a policy, other than a reinsurance agreement;
5489 (d) a Class 4 claim, which is a claim under a policy for mortgage guaranty, financial
5490 guaranty, or other forms of insurance offering protection against investment risk or warranties;
5491 (e) a Class 5 claim, which is a claim of the federal government not included in Class 3
5492 or 4;
5493 (f) a Class 6 claim, which is a debt due an employee for services or benefits:
5494 (i) to the extent that the expense:
5495 (A) does not exceed the lesser of:
5496 (I) $5,000; or
5497 (II) two months' salary; and
5498 (B) represents payment for services performed within one year before the day on which
5499 the initial order of receivership is issued; and
5500 (ii) which priority is in lieu of any other similar priority that may be authorized by law
5501 as to wages or compensation of employees;
5502 (g) a Class 7 claim, which is a claim of an unsecured creditor not included in Classes 1
5503 through 6, including:
5504 (i) a claim under a reinsurance contract;
5505 (ii) a claim of a guaranty association for an assessment not paid by the insurer; and
5506 (iii) other claims excluded from Class 3 or 4, unless otherwise assigned to Classes 8
5507 through 13;
5508 (h) subject to Subsection (3), a Class 8 claim, which is:
5509 (i) a claim of a state or local government, except a claim specifically classified
5510 elsewhere in this section; or
5511 (ii) a claim for services rendered and expenses incurred in opposing a formal
5512 delinquency proceeding;
5513 (i) a Class 9 claim, which is a claim for penalties, punitive damages, or forfeitures,
5514 unless expressly covered under the terms of a policy of insurance;
5515 (j) a Class 10 claim, which is, except as provided in Subsections 31A-27a-601 (2) and
5516 31A-27a-601 (3), a late filed claim that would otherwise be classified in Classes 3 through 9;
5517 (k) subject to Subsection (4), a Class 11 claim, which is:
5518 (i) a surplus note;
5519 (ii) a capital note;
5520 (iii) a contribution note;
5521 (iv) a similar obligation;
5522 (v) a premium refund on an assessable policy; or
5523 (vi) any other claim specifically assigned to this class;
5524 (l) a Class 12 claim, which is a claim for interest on an allowed claim of Classes 1
5525 through 11, according to the terms of a plan to pay interest on allowed claims proposed by the
5526 liquidator and approved by the receivership court; and
5527 (m) subject to Subsection (4), a Class 13 claim, which is a claim of a shareholder or
5528 other owner arising out of:
5529 (i) the shareholder's or owner's capacity as shareholder or owner or any other capacity;
5530 and
5531 (ii) except as the claim may be qualified in Class 3, 4, 7, or 12.
5532 (3) To prove a claim described in Class 8, the claimant shall show that:
5533 (a) the insurer that is the subject of the delinquency proceeding incurred the fee or
5534 expense on the basis of the insurer's best knowledge, information, and belief:
5535 (i) formed after reasonable inquiry indicating opposition is in the best interests of the
5536 insurer;
5537 (ii) that is well grounded in fact; and
5538 (iii) is warranted by existing law or a good faith argument for the extension,
5539 modification, or reversal of existing law; and
5540 (b) opposition is not pursued for any improper purpose, such as to harass, to cause
5541 unnecessary delay, or to cause needless increase in the cost of the litigation.
5542 (4) (a) A claim in Class 11 is subject to a subordination agreement related to other
5543 claims in Class 11 that exist before the entry of a liquidation order.
5544 (b) A claim in Class 13 is subject to a subordination agreement, related to other claims
5545 in Class 13 that exist before the entry of a liquidation order.
5546 Section 47. Section 31A-29-106 is amended to read:
5547 31A-29-106. Powers of board.
5548 (1) The board shall have the general powers and authority granted under the laws of
5549 this state to insurance companies licensed to transact health care insurance business. In
5550 addition, the board shall have the specific authority to:
5551 (a) enter into contracts to carry out the provisions and purposes of this chapter,
5552 including, with the approval of the commissioner, contracts with:
5553 (i) similar pools of other states for the joint performance of common administrative
5554 functions; or
5555 (ii) persons or other organizations for the performance of administrative functions;
5556 (b) sue or be sued, including taking such legal action necessary to avoid the payment of
5557 improper claims against the pool or the coverage provided through the pool;
5558 (c) establish appropriate rates, rate schedules, rate adjustments, expense allowances,
5559 agents' referral fees, claim reserve formulas, and any other actuarial function appropriate to the
5560 operation of the pool;
5561 (d) issue policies of insurance in accordance with the requirements of this chapter;
5562 (e) retain an executive director and appropriate legal, actuarial, and other personnel as
5563 necessary to provide technical assistance in the operations of the pool;
5564 (f) establish rules, conditions, and procedures for reinsuring risks under this chapter;
5565 (g) cause the pool to have an annual audit of its operations by the state auditor;
5566 (h) coordinate with the Department of Health in seeking to obtain from the Centers for
5567 Medicare and Medicaid Services, or other appropriate office or agency of government, all
5568 appropriate waivers, authority, and permission needed to coordinate the coverage available
5569 from the pool with coverage available under Medicaid, either before or after Medicaid
5570 coverage, or as a conversion option upon completion of Medicaid eligibility, without the
5571 necessity for requalification by the enrollee;
5572 (i) provide for and employ cost containment measures and requirements including
5573 preadmission certification, concurrent inpatient review, and individual case management for
5574 the purpose of making the pool more cost-effective;
5575 (j) offer pool coverage through contracts with health maintenance organizations,
5576 preferred provider organizations, and other managed care systems that will manage costs while
5577 maintaining quality care;
5578 (k) establish annual limits on benefits payable under the pool to or on behalf of any
5579 enrollee;
5580 (l) exclude from coverage under the pool specific benefits, medical conditions, and
5581 procedures for the purpose of protecting the financial viability of the pool;
5582 (m) administer the Pool Fund;
5583 (n) make rules in accordance with Title 63G, Chapter 3, Utah Administrative
5584 Rulemaking Act, to implement this chapter;
5585 (o) adopt, trademark, and copyright a trade name for the pool for use in marketing and
5586 publicizing the pool and its products; and
5587 (p) transition health care coverage for all individuals covered under the pool as part of
5588 the conversion to health insurance coverage, regardless of preexisting conditions, under
5589 PPACA.
5590 (2) (a) The board shall prepare and submit an annual report to the Legislature which
5591 shall include:
5592 (i) the net premiums anticipated;
5593 (ii) actuarial projections of payments required of the pool;
5594 (iii) the expenses of administration; and
5595 (iv) the anticipated reserves or losses of the pool.
5596 (b) The budget for operation of the pool is subject to the approval of the board.
5597 (c) The administrative budget of the board and the commissioner under this chapter
5598 shall comply with the requirements of Title 63J, Chapter 1, Budgetary Procedures Act, and is
5599 subject to review and approval by the Legislature.
5600 [
5601
5602
5603
5604 [
5605
5606 Section 48. Section 31A-29-111 is amended to read:
5607 31A-29-111. Eligibility -- Limitations.
5608 (1) (a) Except as provided in Subsection (1)(b), an individual who is not HIPAA
5609 eligible is eligible for pool coverage if the individual:
5610 (i) pays the established premium;
5611 (ii) is a resident of this state; and
5612 (iii) meets the health underwriting criteria under Subsection (5)(a).
5613 (b) Notwithstanding Subsection (1)(a), an individual who is not HIPAA eligible is not
5614 eligible for pool coverage if one or more of the following conditions apply:
5615 (i) the individual is eligible for health care benefits under Medicaid or Medicare,
5616 except as provided in Section 31A-29-112 ;
5617 (ii) the individual has terminated coverage in the pool, unless:
5618 (A) 12 months have elapsed since the termination date; or
5619 (B) the individual demonstrates that creditable coverage has been involuntarily
5620 terminated for any reason other than nonpayment of premium;
5621 (iii) the pool has paid the maximum lifetime benefit to or on behalf of the individual;
5622 (iv) the individual is an inmate of a public institution;
5623 (v) the individual is eligible for a public health plan, as defined in federal regulations
5624 adopted pursuant to 42 U.S.C. Sec. 300gg;
5625 (vi) the individual's health condition does not meet the criteria established under
5626 Subsection (5);
5627 (vii) the individual is eligible for coverage under an employer group that offers a health
5628 benefit plan or a self-insurance arrangement to its eligible employees, dependents, or members
5629 as:
5630 (A) an eligible employee;
5631 (B) a dependent of an eligible employee; or
5632 (C) a member;
5633 (viii) the individual is covered under any other health benefit plan;
5634 (ix) except as provided in Subsections (3) and (6), at the time of application, the
5635 individual has not resided in Utah for at least 12 consecutive months preceding the date of
5636 application; or
5637 (x) the individual's employer pays any part of the individual's health benefit plan
5638 premium, either as an insured or a dependent, for pool coverage.
5639 (2) (a) Except as provided in Subsection (2)(b), an individual who is HIPAA eligible is
5640 eligible for pool coverage if the individual:
5641 (i) pays the established premium; and
5642 (ii) is a resident of this state.
5643 (b) Notwithstanding Subsection (2)(a), a HIPAA eligible individual is not eligible for
5644 pool coverage if one or more of the following conditions apply:
5645 (i) the individual is eligible for health care benefits under Medicaid or Medicare,
5646 except as provided in Section 31A-29-112 ;
5647 (ii) the individual is eligible for a public health plan, as defined in federal regulations
5648 adopted pursuant to 42 U.S.C. Sec. 300gg;
5649 (iii) the individual is covered under any other health benefit plan;
5650 (iv) the individual is eligible for coverage under an employer group that offers a health
5651 benefit plan or self-insurance arrangements to its eligible employees, dependents, or members
5652 as:
5653 (A) an eligible employee;
5654 (B) a dependent of an eligible employee; or
5655 (C) a member;
5656 (v) the pool has paid the maximum lifetime benefit to or on behalf of the individual;
5657 (vi) the individual is an inmate of a public institution; or
5658 (vii) the individual's employer pays any part of the individual's health benefit plan
5659 premium, either as an insured or a dependent, for pool coverage.
5660 (3) (a) Notwithstanding Subsection (1)(b)(ix), if otherwise eligible under Subsection
5661 (1)(a), an individual whose health care insurance coverage from a state high risk pool with
5662 similar coverage is terminated because of nonresidency in another state is eligible for coverage
5663 under the pool subject to the conditions of Subsections (1)(b)(i) through (viii).
5664 (b) Coverage under Subsection (3)(a) shall be applied for within 63 days after the
5665 termination date of the previous high risk pool coverage.
5666 (c) The effective date of this state's pool coverage shall be the date of termination of
5667 the previous high risk pool coverage.
5668 (d) The waiting period of an individual with a preexisting condition applying for
5669 coverage under this chapter shall be waived:
5670 (i) to the extent to which the waiting period was satisfied under a similar plan from
5671 another state; and
5672 (ii) if the other state's benefit limitation was not reached.
5673 (4) (a) If an eligible individual applies for pool coverage within 30 days of being
5674 denied coverage by an individual carrier, the effective date for pool coverage shall be no later
5675 than the first day of the month following the date of submission of the completed insurance
5676 application to the carrier.
5677 (b) Notwithstanding Subsection (4)(a), for individuals eligible for coverage under
5678 Subsection (3), the effective date shall be the date of termination of the previous high risk pool
5679 coverage.
5680 (5) (a) The board shall establish and adjust, as necessary, health underwriting criteria
5681 based on:
5682 (i) health condition; and
5683 (ii) expected claims so that the expected claims are anticipated to remain within
5684 available funding.
5685 (b) The board, with approval of the commissioner, may contract with one or more
5686 providers under Title 63G, Chapter 6a, Utah Procurement Code, to develop underwriting
5687 criteria under Subsection (5)(a).
5688 [
5689
5690
5691 (6) (a) Notwithstanding Subsection (1)(b)(ix), if otherwise eligible under Subsection
5692 (1)(a), an individual whose individual health care insurance coverage was involuntarily
5693 terminated, is eligible for coverage under the pool subject to the conditions of Subsections
5694 (1)(b)(i) through (viii) and (x).
5695 (b) Coverage under Subsection (6)(a) shall be applied for within 63 days after the
5696 termination date of the previous individual health care insurance coverage.
5697 (c) The effective date of this state's pool coverage shall be the date of termination of
5698 the previous individual coverage.
5699 (d) The waiting period of an individual with a preexisting condition applying for
5700 coverage under this chapter shall be waived to the extent to which the waiting period was
5701 satisfied under the individual health insurance plan.
5702 Section 49. Section 31A-29-115 is amended to read:
5703 31A-29-115. Cancellation -- Notice.
5704 (1) [
5705 [
5706 Subsection 31A-29-111 (5); and
5707 [
5708 less than 60 days before cancellation[
5709 [
5710
5711 [
5712
5713
5714 (2) The pool may cancel an enrollee's policy at any time if:
5715 (a) the pool has provided written notice to the enrollee's last-known address no less
5716 than 15 days before cancellation; and
5717 (b) (i) the enrollee establishes a residency outside of Utah for three consecutive
5718 months;
5719 (ii) there is nonpayment of premiums; or
5720 (iii) the pool determines that the enrollee does not meet the eligibility requirements set
5721 forth in Section 31A-29-111 , in which case:
5722 (A) the policy may be retroactively terminated for the period of time in which the
5723 enrollee was not eligible;
5724 (B) retroactive termination may not exceed three years; and
5725 (C) the board's remedy under this Subsection (2)(b) shall be a cause of action against
5726 the enrollee for benefits paid during the period of ineligibility in accordance with Subsection
5727 31A-29-119 (3).
5728 Section 50. Section 31A-30-102 is amended to read:
5729 31A-30-102. Purpose statement.
5730 The purpose of this chapter is to:
5731 (1) prevent abusive rating practices;
5732 (2) require disclosure of rating practices to purchasers;
5733 (3) establish rules regarding:
5734 (a) a universal individual and small group application; and
5735 (b) renewability of coverage;
5736 (4) improve the overall fairness and efficiency of the individual and small group
5737 insurance market;
5738 (5) provide increased access for individuals and small employers to health insurance;
5739 and
5740 (6) provide an employer with the opportunity to establish a defined contribution
5741 arrangement for an employee to purchase a health benefit plan through the [
5742 Health Insurance Exchange created by Section 63M-1-2504 .
5743 Section 51. Section 31A-30-103 is amended to read:
5744 31A-30-103. Definitions.
5745 As used in this chapter:
5746 (1) "Actuarial certification" means a written statement by a member of the American
5747 Academy of Actuaries or other individual approved by the commissioner that a covered carrier
5748 is in compliance with [
5749 examination of the covered carrier, including review of the appropriate records and of the
5750 actuarial assumptions and methods used by the covered carrier in establishing premium rates
5751 for applicable health benefit plans.
5752 (2) "Affiliate" or "affiliated" means [
5753 through one or more intermediaries, controls or is controlled by, or is under common control
5754 with, a specified [
5755 (3) "Base premium rate" means, for each class of business as to a rating period, the
5756 lowest premium rate charged or that could have been charged under a rating system for that
5757 class of business by the covered carrier to covered insureds with similar case characteristics for
5758 health benefit plans with the same or similar coverage.
5759 (4) (a) "Bona fide employer association" means an association of employers:
5760 (i) that meets the requirements of Subsection 31A-22-701 (2)(b);
5761 (ii) in which the employers of the association, either directly or indirectly, exercise
5762 control over the plan;
5763 (iii) that is organized:
5764 (A) based on a commonality of interest between the employers and their employees
5765 that participate in the plan by some common economic or representation interest or genuine
5766 organizational relationship unrelated to the provision of benefits; and
5767 (B) to act in the best interests of its employers to provide benefits for the employer's
5768 employees and their spouses and dependents, and other benefits relating to employment; and
5769 (iv) whose association sponsored health plan complies with 45 C.F.R. 146.121.
5770 (b) The commissioner shall consider the following with regard to determining whether
5771 an association of employers is a bona fide employer association under Subsection (4)(a):
5772 (i) how association members are solicited;
5773 (ii) who participates in the association;
5774 (iii) the process by which the association was formed;
5775 (iv) the purposes for which the association was formed, and what, if any, were the
5776 pre-existing relationships of its members;
5777 (v) the powers, rights and privileges of employer members; and
5778 (vi) who actually controls and directs the activities and operations of the benefit
5779 programs.
5780 (5) "Carrier" means [
5781 state including:
5782 (a) an insurance company;
5783 (b) a prepaid hospital or medical care plan;
5784 (c) a health maintenance organization;
5785 (d) a multiple employer welfare arrangement; and
5786 (e) [
5787 title.
5788 (6) (a) Except as provided in Subsection (6)(b), "case characteristics" means
5789 demographic or other objective characteristics of a covered insured that are considered by the
5790 carrier in determining premium rates for the covered insured.
5791 (b) "Case characteristics" do not include:
5792 (i) duration of coverage since the policy was issued;
5793 (ii) claim experience; and
5794 (iii) health status.
5795 (7) "Class of business" means all or a separate grouping of covered insureds that is
5796 permitted by the commissioner in accordance with Section 31A-30-105 .
5797 [
5798
5799 [
5800 subject to this chapter.
5801 [
5802 health benefit plan subject to this chapter.
5803 [
5804 a health benefit plan that is subject to this chapter.
5805 [
5806 to be a dependent by:
5807 (a) the health benefit plan covering the covered individual; and
5808 (b) Chapter 22, Part 6, Accident and Health Insurance.
5809 [
5810 by the commissioner within which the carrier is authorized to provide coverage.
5811 [
5812 covered insureds with similar case characteristics, the arithmetic average of the applicable base
5813 premium rate and the corresponding highest premium rate.
5814 [
5815 basis through a health benefit plan regardless of whether:
5816 (a) coverage is offered through:
5817 (i) an association;
5818 (ii) a trust;
5819 (iii) a discretionary group; or
5820 (iv) other similar groups; or
5821 (b) the policy or contract is situated out-of-state.
5822 [
5823 (a) an individual; or
5824 (b) an individual with a family.
5825 [
5826
5827 [
5828
5829 [
5830 rating period, the lowest premium rate charged or offered, or that could have been charged or
5831 offered, by the carrier to covered insureds with similar case characteristics for newly issued
5832 health benefit plans with the same or similar coverage.
5833 [
5834 as a condition of receiving coverage from a covered carrier, including [
5835 contributions associated with the health benefit plan.
5836 [
5837 established by a covered carrier are assumed to be in effect, as determined by the carrier.
5838 (b) A covered carrier may not have:
5839 (i) more than one rating period in any calendar month; and
5840 (ii) no more than 12 rating periods in any calendar year.
5841 [
5842
5843 [
5844 (a) is not renewable; and
5845 (b) has an expiration date specified in the contract that is less than 364 days after the
5846 date the plan became effective.
5847 [
5848 covering eligible employees of one or more small employers in this state, regardless of
5849 whether:
5850 (a) coverage is offered through:
5851 (i) an association;
5852 (ii) a trust;
5853 (iii) a discretionary group; or
5854 (iv) other similar grouping; or
5855 (b) the policy or contract is situated out-of-state.
5856 [
5857 [
5858
5859 [
5860 [
5861
5862
5863 [
5864
5865 [
5866
5867 [
5868
5869 Section 52. Section 31A-30-104 is amended to read:
5870 31A-30-104. Applicability and scope.
5871 (1) This chapter applies to any:
5872 (a) health benefit plan that provides coverage to:
5873 (i) individuals;
5874 (ii) small employers, except as provided in Subsection (3); or
5875 (iii) both Subsections (1)(a)(i) and (ii); or
5876 (b) individual conversion policy for purposes of Sections 31A-30-106.5 and
5877 31A-30-107.5 .
5878 (2) This chapter applies to a health benefit plan that provides coverage to small
5879 employers or individuals regardless of:
5880 (a) whether the contract is issued to:
5881 (i) an association, except as provided in Subsection (3);
5882 (ii) a trust;
5883 (iii) a discretionary group; or
5884 (iv) other similar grouping; or
5885 (b) the situs of delivery of the policy or contract.
5886 (3) This chapter does not apply to:
5887 (a) short-term limited duration health insurance;
5888 (b) federally funded or partially funded programs; or
5889 (c) a bona fide employer association.
5890 (4) (a) Except as provided in Subsection (4)(b), for the purposes of this chapter:
5891 (i) carriers that are affiliated companies or that are eligible to file a consolidated tax
5892 return shall be treated as one carrier; and
5893 (ii) any restrictions or limitations imposed by this chapter shall apply as if all health
5894 benefit plans delivered or issued for delivery to covered insureds in this state by the affiliated
5895 carriers were issued by one carrier.
5896 (b) Upon a finding of the commissioner, an affiliated carrier that is a health
5897 maintenance organization having a certificate of authority under this title may be considered to
5898 be a separate carrier for the purposes of this chapter.
5899 (c) Unless otherwise authorized by the commissioner or by Chapter 42, Defined
5900 Contribution Risk Adjuster Act, a covered carrier may not enter into one or more ceding
5901 arrangements with respect to health benefit plans delivered or issued for delivery to covered
5902 insureds in this state if the ceding arrangements would result in less than 50% of the insurance
5903 obligation or risk for the health benefit plans being retained by the ceding carrier.
5904 (d) Section 31A-22-1201 applies if a covered carrier cedes or assumes all of the
5905 insurance obligation or risk with respect to one or more health benefit plans delivered or issued
5906 for delivery to covered insureds in this state.
5907 (5) (a) A Taft Hartley trust created in accordance with Section 302(c)(5) of the Federal
5908 Labor Management Relations Act, or a carrier with the written authorization of such a trust,
5909 may make a written request to the commissioner for a waiver from the application of any of the
5910 provisions of [
5911 health benefit plan provided to the trust.
5912 (b) The commissioner may grant a trust or carrier described in Subsection (5)(a) a
5913 waiver if the commissioner finds that application with respect to the trust would:
5914 (i) have a substantial adverse effect on the participants and beneficiaries of the trust;
5915 and
5916 (ii) require significant modifications to one or more collective bargaining arrangements
5917 under which the trust is established or maintained.
5918 (c) A waiver granted under this Subsection (5) may not apply to an individual if the
5919 person participates in a Taft Hartley trust as an associate member of any employee
5920 organization.
5921 (6) Sections 31A-30-106 , 31A-30-106.1 , 31A-30-106.5 , 31A-30-106.7 , 31A-30-107 ,
5922 and 31A-30-108 , [
5923 (a) any insurer engaging in the business of insurance related to the risk of a small
5924 employer for medical, surgical, hospital, or ancillary health care expenses of the small
5925 employer's employees provided as an employee benefit; and
5926 (b) any contract of an insurer, other than a workers' compensation policy, related to the
5927 risk of a small employer for medical, surgical, hospital, or ancillary health care expenses of the
5928 small employer's employees provided as an employee benefit.
5929 (7) The commissioner may make rules requiring that the marketing practices be
5930 consistent with this chapter for:
5931 (a) a small employer carrier;
5932 (b) a small employer carrier's agent;
5933 (c) an insurance producer;
5934 (d) an insurance consultant; and
5935 (e) a navigator.
5936 Section 53. Section 31A-30-106 is amended to read:
5937 31A-30-106. Individual premiums -- Rating restrictions -- Disclosure.
5938 (1) Premium rates for health benefit plans for individuals under this chapter are subject
5939 to this section.
5940 (a) The index rate for a rating period for any class of business may not exceed the
5941 index rate for any other class of business by more than 20%.
5942 (b) (i) For a class of business, the premium rates charged during a rating period to
5943 covered insureds with similar case characteristics for the same or similar coverage, or the rates
5944 that could be charged to the individual under the rating system for that class of business, may
5945 not vary from the index rate by more than 30% of the index rate except as provided under
5946 Subsection (1)(b)(ii).
5947 (ii) A carrier that offers individual and small employer health benefit plans may use the
5948 small employer index rates to establish the rate limitations for individual policies, even if some
5949 individual policies are rated below the small employer base rate.
5950 (c) The percentage increase in the premium rate charged to a covered insured for a new
5951 rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
5952 the following:
5953 (i) the percentage change in the new business premium rate measured from the first day
5954 of the prior rating period to the first day of the new rating period;
5955 (ii) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
5956 of less than one year, due to the claim experience, health status, or duration of coverage of the
5957 covered individuals as determined from the rate manual for the class of business of the carrier
5958 offering an individual health benefit plan; and
5959 (iii) any adjustment due to change in coverage or change in the case characteristics of
5960 the covered insured as determined from the rate manual for the class of business of the carrier
5961 offering an individual health benefit plan.
5962 (d) (i) A carrier offering an individual health benefit plan shall apply rating factors,
5963 including case characteristics, consistently with respect to all covered insureds in a class of
5964 business.
5965 (ii) Rating factors shall produce premiums for identical individuals that:
5966 (A) differ only by the amounts attributable to plan design; and
5967 (B) do not reflect differences due to the nature of the individuals assumed to select
5968 particular health benefit products.
5969 (iii) A carrier offering an individual health benefit plan shall treat all health benefit
5970 plans issued or renewed in the same calendar month as having the same rating period.
5971 (e) For the purposes of this Subsection (1), a health benefit plan that uses a restricted
5972 network provision may not be considered similar coverage to a health benefit plan that does not
5973 use a restricted network provision, provided that use of the restricted network provision results
5974 in substantial difference in claims costs.
5975 (f) A carrier offering a health benefit plan to an individual may not, without prior
5976 approval of the commissioner, use case characteristics other than:
5977 (i) age;
5978 (ii) gender;
5979 (iii) geographic area; and
5980 (iv) family composition.
5981 (g) (i) The commissioner shall establish rules in accordance with Title 63G, Chapter 3,
5982 Utah Administrative Rulemaking Act, to:
5983 (A) implement this chapter; [
5984 (B) assure that rating practices used by carriers who offer health benefit plans to
5985 individuals are consistent with the purposes of this chapter[
5986 (C) promote transparency of rating practices of health benefit plans S. , except that a
5986a carrier may not be required to disclose proprietary information .S .
5987 (ii) The rules described in Subsection (1)(g)(i) may include rules that:
5988 (A) assure that differences in rates charged for health benefit products by carriers who
5989 offer health benefit plans to individuals are reasonable and reflect objective differences in plan
5990 design, not including differences due to the nature of the individuals assumed to select
5991 particular health benefit products; and
5992 (B) prescribe the manner in which case characteristics may be used by carriers who
5993 offer health benefit plans to individuals[
5994 [
5995
5996 [
5997 [
5998 [
5999 [
6000 [
6001 [
6002
6003
6004
6005
6006 [
6007 31A-22-605 regarding individual accident and health policy rates to allow rating in accordance
6008 with this section.
6009 (2) For purposes of Subsection (1)(c)(i), if a health benefit product is a health benefit
6010 product into which the covered carrier is no longer enrolling new covered insureds, the covered
6011 carrier shall use the percentage change in the base premium rate, provided that the change does
6012 not exceed, on a percentage basis, the change in the new business premium rate for the most
6013 similar health benefit product into which the covered carrier is actively enrolling new covered
6014 insureds.
6015 (3) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
6016 a class of business.
6017 (b) A covered carrier may not offer to transfer a covered insured into or out of a class
6018 of business unless the offer is made to transfer all covered insureds in the class of business
6019 without regard to:
6020 (i) case characteristics;
6021 (ii) claim experience;
6022 (iii) health status; or
6023 (iv) duration of coverage since issue.
6024 (4) (a) A carrier who offers a health benefit plan to an individual shall maintain at the
6025 carrier's principal place of business a complete and detailed description of its rating practices
6026 and renewal underwriting practices, including information and documentation that demonstrate
6027 that the carrier's rating methods and practices are:
6028 (i) based upon commonly accepted actuarial assumptions; and
6029 (ii) in accordance with sound actuarial principles.
6030 (b) (i) [
6031 before April 1 of each year, in a form, manner, and containing such information as prescribed
6032 by the commissioner, an actuarial certification certifying that:
6033 (A) the carrier is in compliance with this chapter; and
6034 (B) the rating methods of the carrier are actuarially sound.
6035 (ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by the
6036 carrier at the carrier's principal place of business.
6037 (c) A carrier shall make the information and documentation described in this
6038 Subsection (4) available to the commissioner upon request.
6039 (d) [
6040 submitted to the commissioner under this section shall be maintained by the commissioner as a
6041 protected [
6042 Management Act.
6043 Section 54. Section 31A-30-106.7 is amended to read:
6044 31A-30-106.7. Surcharge for groups changing carriers.
6045 (1) (a) Except as provided in Subsection (1)(b), if prior notice is given, a covered
6046 carrier may impose upon a small group that changes coverage to that carrier from another
6047 carrier a one-time surcharge of up to 25% of the annualized premium that the carrier could
6048 otherwise charge under Section [
6049 (b) A covered carrier may not impose the surcharge described in Subsection (1)(a) if:
6050 (i) the change in carriers occurs on the anniversary of the plan year, as defined in
6051 Section 31A-1-301 ;
6052 (ii) the previous coverage was terminated under Subsection 31A-30-107 (3)(e); [
6053 (iii) employees from an existing group form a new business[
6054 (iv) the surcharge is not applied uniformly to all similarly situated small groups.
6055 (2) A covered carrier may not impose the surcharge described in Subsection (1) if the
6056 offer to cover the group occurs at a time other than the anniversary of the plan year because:
6057 (a) (i) the application for coverage is made prior to the anniversary date in accordance
6058 with the covered carrier's published policies; and
6059 (ii) the offer to cover the group is not issued until after the anniversary date; or
6060 (b) (i) the application for coverage is made prior to the anniversary date in accordance
6061 with the covered carrier's published policies; and
6062 (ii) additional underwriting or rating information requested by the covered carrier is not
6063 received until after the anniversary date.
6064 (3) If a covered carrier chooses to apply a surcharge under Subsection (1), the
6065 application of the surcharge and the criteria for incurring or avoiding the surcharge shall be
6066 clearly stated in the:
6067 (a) written application materials provided to the applicant at the time of application;
6068 and
6069 (b) written producer guidelines.
6070 (4) The commissioner shall adopt rules in accordance with Title 63G, Chapter 3, Utah
6071 Administrative Rulemaking Act, to ensure compliance with this section.
6072 Section 55. Section 31A-30-107 is amended to read:
6073 31A-30-107. Renewal -- Limitations -- Exclusions -- Discontinuance and
6074 nonrenewal.
6075 (1) Except as otherwise provided in this section, a small employer health benefit plan is
6076 renewable and continues in force:
6077 (a) with respect to all eligible employees and dependents; and
6078 (b) at the option of the plan sponsor.
6079 (2) A small employer health benefit plan may be discontinued or nonrenewed:
6080 (a) for a network plan, if[
6081 plan who lives, resides, or works in:
6082 [
6083 [
6084 [
6085
6086
6087 (b) for coverage made available in the small or large employer market only through an
6088 association, if:
6089 (i) the employer's membership in the association ceases; and
6090 (ii) the coverage is terminated uniformly without regard to any health status-related
6091 factor relating to any covered individual.
6092 (3) A small employer health benefit plan may be discontinued if:
6093 (a) a condition described in Subsection (2) exists;
6094 (b) except as prohibited by Section 31A-30-206 , the plan sponsor fails to pay
6095 premiums or contributions in accordance with the terms of the contract;
6096 (c) the plan sponsor:
6097 (i) performs an act or practice that constitutes fraud; or
6098 (ii) makes an intentional misrepresentation of material fact under the terms of the
6099 coverage;
6100 (d) the covered carrier:
6101 (i) elects to discontinue offering a particular small employer health benefit product
6102 delivered or issued for delivery in this state; and
6103 (ii) (A) provides notice of the discontinuation in writing:
6104 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
6105 (II) at least 90 days before the date the coverage will be discontinued;
6106 (B) provides notice of the discontinuation in writing:
6107 (I) to the commissioner; and
6108 (II) at least three working days prior to the date the notice is sent to the affected plan
6109 sponsors, employees, and dependents of the plan sponsors or employees;
6110 (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase all
6111 other small employer health benefit products currently being offered by the small employer
6112 carrier in the market; and
6113 (D) in exercising the option to discontinue that product and in offering the option of
6114 coverage in this section, acts uniformly without regard to:
6115 (I) the claims experience of a plan sponsor;
6116 (II) any health status-related factor relating to any covered participant or beneficiary; or
6117 (III) any health status-related factor relating to any new participant or beneficiary who
6118 may become eligible for the coverage; or
6119 (e) the covered carrier:
6120 (i) elects to discontinue all of the covered carrier's small employer health benefit plans
6121 in:
6122 (A) the small employer market;
6123 (B) the large employer market; or
6124 (C) both the small employer and large employer markets; and
6125 (ii) (A) provides notice of the discontinuation in writing:
6126 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
6127 (II) at least 180 days before the date the coverage will be discontinued;
6128 (B) provides notice of the discontinuation in writing:
6129 (I) to the commissioner in each state in which an affected insured individual is known
6130 to reside; and
6131 (II) at least 30 working days prior to the date the notice is sent to the affected plan
6132 sponsors, employees, and the dependents of the plan sponsors or employees;
6133 (C) discontinues and nonrenews all plans issued or delivered for issuance in the
6134 market; and
6135 (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
6136 (4) A small employer health benefit plan may be discontinued or nonrenewed:
6137 (a) if a condition described in Subsection (2) exists; or
6138 (b) except as prohibited by Section 31A-30-206 , for noncompliance with the insurer's
6139 employer contribution requirements.
6140 (5) A small employer health benefit plan may be nonrenewed:
6141 (a) if a condition described in Subsection (2) exists; or
6142 (b) except as prohibited by Section 31A-30-206 , for noncompliance with the insurer's
6143 minimum participation requirements.
6144 (6) (a) Except as provided in Subsection (6)(d), an eligible employee may be
6145 discontinued if after issuance of coverage the eligible employee:
6146 (i) engages in an act or practice that constitutes fraud in connection with the coverage;
6147 or
6148 (ii) makes an intentional misrepresentation of material fact in connection with the
6149 coverage.
6150 (b) An eligible employee that is discontinued under Subsection (6)(a) may reenroll:
6151 (i) 12 months after the date of discontinuance; and
6152 (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
6153 to reenroll.
6154 (c) At the time the eligible employee's coverage is discontinued under Subsection
6155 (6)(a), the covered carrier shall notify the eligible employee of the right to reenroll when
6156 coverage is discontinued.
6157 (d) An eligible employee may not be discontinued under this Subsection (6) because of
6158 a fraud or misrepresentation that relates to health status.
6159 (7) For purposes of this section, a reference to "plan sponsor" includes a reference to
6160 the employer:
6161 (a) with respect to coverage provided to an employer member of the association; and
6162 (b) if the small employer health benefit plan is made available by a covered carrier in
6163 the employer market only through:
6164 (i) an association;
6165 (ii) a trust; or
6166 (iii) a discretionary group.
6167 (8) A covered carrier may modify a small employer health benefit plan only:
6168 (a) at the time of coverage renewal; and
6169 (b) if the modification is effective uniformly among all plans with that product.
6170 Section 56. Section 31A-30-108 is amended to read:
6171 31A-30-108. Eligibility for small employer and individual market.
6172 (1) (a) [
6173 accept a small employer that applies for small group coverage as set forth in the Health
6174 Insurance Portability and Accountability Act, Sec. 2701(f) and 2711(a), and PPACA, Sec.
6175 2702.
6176 [
6177 [
6178 [
6179 (b) An individual carrier shall accept an individual that applies for individual coverage
6180 as set forth in PPACA, Sec. 2702.
6181 (2) (a) [
6182 employees and their dependents at the same level of benefits under any health benefit plan
6183 provided to a small employer.
6184 (b) [
6185 (i) request a small employer to submit a copy of the small employer's quarterly income
6186 tax withholdings to determine whether the employees for whom coverage is provided or
6187 requested are bona fide employees of the small employer; and
6188 (ii) deny or terminate coverage if the small employer refuses to provide documentation
6189 requested under Subsection (2)(b)(i).
6190 [
6191
6192 [
6193 [
6194 [
6195 [
6196 [
6197 [
6198 [
6199
6200 [
6201
6202 [
6203 [
6204
6205 [
6206
6207 [
6208
6209 [
6210 [
6211 [
6212 [
6213 [
6214
6215
6216
6217 [
6218 [
6219
6220
6221
6222 [
6223
6224 [
6225 [
6226
6227 [
6228
6229
6230 [
6231
6232 [
6233 [
6234
6235 [
6236
6237 [
6238
6239 [
6240
6241 [
6242
6243 [
6244 [
6245 [
6246 [
6247
6248
6249
6250
6251 [
6252
6253 [
6254
6255 [
6256
6257 [
6258
6259 [
6260
6261
6262 [
6263 [
6264
6265 [
6266
6267 [
6268
6269
6270
6271 [
6272 [
6273 [
6274
6275 [
6276
6277 Section 57. Section 31A-30-207 is amended to read:
6278 31A-30-207. Rating and underwriting restrictions for health plans in the defined
6279 contribution arrangement market.
6280 (1) Except as provided in Subsection (2), rating and underwriting restrictions for
6281 defined contribution arrangement health benefit plans offered in the Health Insurance
6282 Exchange shall be in accordance with Section 31A-30-106.1 , and the plan adopted under
6283 Chapter 42, Defined Contribution Risk Adjuster Act.
6284 (2) Notwithstanding [
6285 carrier offering a defined contribution arrangement in the Health Insurance Exchange under
6286 this part[
6287 in compliance with Subsection 31A-30-106.1 (9)(b)(i)[
6288 [
6289
6290 (3) All insurers who participate in the defined contribution market shall:
6291 (a) participate in the risk adjuster mechanism developed under Chapter 42, Defined
6292 Contribution Risk Adjuster Act for all defined contribution arrangement health benefit plans;
6293 (b) provide the risk adjuster board with:
6294 (i) an employer group's risk factor; and
6295 (ii) carrier enrollment data; and
6296 (c) submit rates to the exchange that are net of commissions.
6297 (4) When an employer group enters the defined contribution arrangement market and
6298 the employer group has a health plan with an insurer who is participating in the defined
6299 contribution arrangement market, the risk factor applied to the employer group when it enters
6300 the defined contribution arrangement market may not be greater than the employer group's
6301 renewal risk factor for the same group of covered employees and the same effective date, as
6302 determined by the employer group's insurer.
6303 Section 58. Section 31A-30-209 is amended to read:
6304 31A-30-209. Appointment of insurance producers to Health Insurance Exchange.
6305 (1) A producer may be listed on the Health Insurance Exchange as a credentialed
6306 producer [
6307
6308 [
6309 Subsection (2).
6310 (2) A producer whose license under this title authorizes the producer to sell [
6311
6312
6313 Insurance Exchange [
6314 Insurance Exchange, if the producer:
6315 [
6316
6317 [
6318
6319
6320
6321 [
6322
6323 [
6324 [
6325 (a) is an appointed producer with:
6326 (i) all carriers that offer a plan in the defined contribution market on the Health
6327 Insurance Exchange; and
6328 (ii) at least one carrier that offers a dental plan on the Health Insurance Exchange; and
6329 (b) completes each year the Health Insurance Exchange training that includes training
6330 on premium assistance programs.
6331 (3) A carrier shall appoint a producer to sell the carrier's products in the defined
6332 contribution arrangement market of the Health Insurance Exchange, within 30 days of the
6333 notice required in Subsection (3)(b), if:
6334 (a) the producer is currently appointed by a majority of the carriers in the Health
6335 Insurance Exchange to sell products either outside or inside of the Health Insurance Exchange;
6336 and
6337 (b) the producer informs the carrier that the producer is:
6338 (i) applying to be appointed to the defined contribution arrangement market in the
6339 Health Insurance Exchange;
6340 (ii) appointed by a majority of the carriers in the defined contribution arrangement
6341 market in the Health Insurance Exchange;
6342 (iii) willing to complete training regarding the carrier's products offered on the defined
6343 contribution arrangement market in the Health Insurance Exchange; and
6344 (iv) willing to sign the contracts and business associate's agreements that the carrier
6345 requires for appointed producers in the Health Insurance Exchange.
6346 Section 59. Section 31A-30-211 is amended to read:
6347 31A-30-211. Insurer disclosure.
6348 [
6349
6350 [
6351 [
6352 [
6353 (1) (a) [
6354 premium renewal rates at least 60 days [
6355 offered under Part 1, Individual and Small Employer Group[
6356 (b) [
6357 producer with premium renewal rates at least 60 days [
6358 for a plan offered under Part 2, Defined Contribution Arrangements.
6359 [
6360 rates to the employer or the employer's producer if the Health Insurance Exchange provides
6361 notice in accordance with Subsection [
6362 Section 60. Section 31A-37-501 is amended to read:
6363 31A-37-501. Reports to commissioner.
6364 (1) A captive insurance company is not required to make a report except those
6365 provided in this chapter.
6366 (2) (a) Before March 1 of each year, a captive insurance company shall submit to the
6367 commissioner a report of the financial condition of the captive insurance company, verified by
6368 oath of two of the executive officers of the captive insurance company.
6369 (b) Except as provided in Sections 31A-37-204 and 31A-37-205 , a captive insurance
6370 company shall report:
6371 (i) using generally accepted accounting principles, except to the extent that the
6372 commissioner requires, approves, or accepts the use of a statutory accounting principle;
6373 (ii) using a useful or necessary modification or adaptation to an accounting principle
6374 that is required, approved, or accepted by the commissioner for the type of insurance and kind
6375 of insurer to be reported upon; and
6376 (iii) supplemental or additional information required by the commissioner.
6377 (c) Except as otherwise provided:
6378 (i) [
6379 licensed captive insurance company shall file the report required by Section 31A-4-113 ; and
6380 (ii) an industrial insured group shall comply with Section 31A-4-113.5 .
6381 (3) (a) A pure captive insurance company may make written application to file the
6382 required report on a fiscal year end that is consistent with the fiscal year of the parent company
6383 of the pure captive insurance company.
6384 (b) If the commissioner grants an alternative reporting date for a pure captive insurance
6385 company requested under Subsection (3)(a), the annual report is due 60 days after the fiscal
6386 year end.
6387 (4) (a) Sixty days after the fiscal year end, a branch captive insurance company shall
6388 file with the commissioner a copy of [
6389 the laws of the jurisdiction in which the alien captive insurance company is formed, verified by
6390 oath by two of the alien captive insurance company's executive officers.
6391 (b) If the commissioner is satisfied that the annual report filed by the alien captive
6392 insurance company in the jurisdiction in which the alien captive insurance company is formed
6393 provides adequate information concerning the financial condition of the alien captive insurance
6394 company, the commissioner may waive the requirement for completion of the annual statement
6395 required for a captive insurance company under this section with respect to business written in
6396 the alien jurisdiction.
6397 (c) A waiver by the commissioner under Subsection (4)(b):
6398 (i) shall be in writing; and
6399 (ii) is subject to public inspection.
6400 Section 61. Section 31A-40-203 is amended to read:
6401 31A-40-203. Covered employee.
6402 (1) (a) An individual is a covered employee of a professional employer organization if
6403 the individual is coemployed pursuant to a professional employer agreement subject to this
6404 chapter.
6405 (b) An individual who is a covered employee under a professional employer agreement
6406 is a covered [
6407 provides the notice required by Subsection 31A-40-202 (3), the earlier of the day on which:
6408 (i) the employee is first compensated by the professional employer organization; or
6409 (ii) the client notifies the professional employer organization of a new hire.
6410 (2) An individual who is an officer, director, shareholder, partner, or manager of a
6411 client is a covered employee:
6412 (a) to the extent that the client and the professional employer organization expressly
6413 agree in the professional employer agreement that the individual is a covered employee;
6414 (b) if the conditions of Subsection (1) are met; and
6415 (c) if the individual acts as an operational manager or performs day-to-day an
6416 operational service for the client.
6417 Section 62. Section 31A-40-209 is amended to read:
6418 31A-40-209. Workers' compensation.
6419 (1) In accordance with Section 34A-2-103 , a client is responsible for securing workers'
6420 compensation coverage for a covered employee.
6421 (2) Subject to the requirements of Section 34A-2-103 , if a professional employer
6422 organization obtains or assists a client in obtaining workers' compensation insurance pursuant
6423 to a professional employer agreement:
6424 (a) the professional employer organization shall ensure that the client maintains and
6425 provides workers' compensation coverage for a covered employee in accordance with
6426 Subsection 34A-2-201 (1) or (2) and rules of the Labor Commission, made in accordance with
6427 Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
6428 (b) the workers' compensation coverage may show the professional employer
6429 organization as the named insured through a [
6430 (i) the client is shown as an insured by means of an endorsement for each individual
6431 client;
6432 (ii) the experience modification of a client is used; and
6433 (iii) the insurer files the endorsement with the Division of Industrial Accidents as
6434 directed by a rule of the Labor Commission, made in accordance with Title 63G, Chapter 3,
6435 Utah Administrative Rulemaking Act;
6436 (c) at the termination of the professional employer agreement, if requested by the
6437 client, the insurer shall provide the client records regarding the loss experience related to
6438 workers' compensation insurance provided to a covered employee pursuant to the professional
6439 employer agreement; and
6440 (d) the insurer shall notify a client if the workers' compensation coverage for the client
6441 is terminated.
6442 (3) In accordance with Section 34A-2-105 , the exclusive remedy provisions of Section
6443 34A-2-105 apply to both the client and the professional employer organization under a
6444 professional employer agreement regulated under this chapter.
6445 (4) Notwithstanding the other provisions in this section, an insurer may choose whether
6446 to issue:
6447 (a) a policy for a client; or
6448 (b) a [
6449 insured by means of an individual endorsement.
6450 Section 63. Section 31A-42-202 is amended to read:
6451 31A-42-202. Contents of plan.
6452 (1) The board shall submit a plan of operation for the risk adjuster to the
6453 commissioner. The plan shall:
6454 (a) establish the methodology for implementing:
6455 (i) Subsection (2) for the defined contribution arrangement market established under
6456 Chapter 30, Part 2, Defined Contribution Arrangements; and
6457 (ii) the participation of small employer group defined contribution arrangement health
6458 benefit plans;
6459 (b) establish regular times and places for meetings of the board;
6460 (c) establish procedures for keeping records of all financial transactions and for
6461 sending annual fiscal reports to the commissioner;
6462 (d) contain additional provisions necessary and proper for the execution of the powers
6463 and duties of the risk adjuster; and
6464 (e) establish procedures in compliance with Title 63A, Utah Administrative Services
6465 Code, to pay for administrative expenses incurred.
6466 (2) (a) The plan adopted by the board for the defined contribution arrangement market
6467 shall include:
6468 (i) parameters an employer may use to designate eligible employees for the defined
6469 contribution arrangement market; and
6470 (ii) underwriting mechanisms and employer eligibility guidelines:
6471 (A) consistent with the federal Health Insurance Portability and Accountability Act;
6472 and
6473 (B) necessary to protect insurance carriers from adverse selection in the defined
6474 contribution market.
6475 (b) The plan required by Subsection (2)(a) shall outline how premium rates for a
6476 qualified individual in the defined contribution arrangement market are determined, including:
6477 (i) the identification of an initial rate for a qualified individual based on:
6478 (A) standardized age bands submitted by participating insurers; and
6479 (B) wellness incentives for the individual as permitted by federal law; and
6480 (ii) the identification of a group risk factor to be applied to the initial age rate of a
6481 qualified individual based on the health conditions of all qualified individuals in the same
6482 employer group and, for small employers, in accordance with Sections 31A-30-105 and
6483 31A-30-106.1 .
6484 (c) The plan adopted under Subsection (2)(a) for the defined contribution arrangement
6485 market shall outline how:
6486 (i) premium contributions for qualified individuals shall be submitted to the Health
6487 Insurance Exchange in the amount determined under Subsection (2)(b); and
6488 (ii) the Health Insurance Exchange shall distribute premiums to the insurers selected by
6489 qualified individuals within an employer group based on each individual's rating factor
6490 determined in accordance with the plan.
6491 (d) The plan adopted under Subsection (2)(a) shall outline a mechanism for adjusting
6492 risk between defined contribution arrangement market insurers that:
6493 (i) identifies health care conditions subject to risk adjustment;
6494 (ii) establishes an adjustment amount for each identified health care condition;
6495 (iii) determines the extent to which an insurer has more or less individuals with an
6496 identified health condition than would be expected; and
6497 (iv) computes all risk adjustments.
6498 (e) The board may amend the plan if necessary to:
6499 (i) maintain the proper functioning and solvency of the defined contribution
6500 arrangement market and the risk adjuster mechanism;
6501 (ii) mitigate significant issues of risk selection; or
6502 (iii) improve the administration of the risk adjuster mechanism.
6503 (3) The board shall establish a mechanism in which the defined contribution
6504 arrangement market participating carriers shall submit their plan base rates, rating factors, and
6505 premiums to the commissioner for an actuarial review under [
6506 31A-30-115 [
6507 Exchange.
6508 Section 64. Section 31A-43-102 is amended to read:
6509 31A-43-102. Definitions.
6510 For purposes of this chapter:
6511 (1) "Actuarial certification" means a written statement by a member of the American
6512 Academy of Actuaries, or by another individual acceptable to the commissioner, that an insurer
6513 is in compliance with [
6514 and including a review of the appropriate records and the actuarial assumptions and methods
6515 used by the stop-loss insurer in establishing attachment points and other applicable
6516 determinations in conjunction with the provision of stop-loss insurance coverage.
6517 (2) "Aggregate attachment point" means the dollar amount [
6518
6519 insurer incurs liability for [
6520 to limitations included in the contract.
6521 (3) "Coverage" means the combination of the employer plan design and the stop-loss
6522 contract design.
6523 (4) "Expected claims" means the amount of claims that, in the absence of [
6524 stop-loss [
6525 using reasonable and accepted actuarial principles.
6526 (5) "Lasering":
6527 (a) means increasing or removing stop-loss coverage for a specific individual within an
6528 employer group; and
6529 (b) includes other practices that are prohibited by the commissioner by administrative
6530 rule that result in lowering the stop-loss premium for the employer by transferring the risk for
6531 an [
6532 (6) "Small employer" means an employer who, with respect to a calendar year and to a
6533 plan year:
6534 (a) employed an average of at least two employees but not more than 50 eligible
6535 employees on each business day during the preceding calendar year; and
6536 (b) employs at least two employees on the first day of the plan year.
6537 (7) "Specific attachment point" means the dollar amount [
6538
6539 plan in a contract year beyond which the stop-loss insurer assumes [
6540 for losses incurred by the small employer plan, subject to limitations included in the contract.
6541 (8) "Stop-loss insurance" means insurance purchased by a small employer for which
6542 the stop-loss insurer assumes[
6543 plan in excess of a stated amount, subject to the policy limit.
6544 Section 65. Section 31A-43-301 is amended to read:
6545 31A-43-301. Stop-loss insurance coverage standards.
6546 (1) A small employer stop-loss insurance contract shall:
6547 (a) be issued to the small employer to provide insurance to the group health benefit
6548 plan, not the employees of the small employer;
6549 (b) use a standard application form developed by the commissioner by administrative
6550 rule;
6551 (c) have a contract term with guaranteed rates for at least 12 months, without
6552 adjustment, unless there is a change in the benefits provided under the small employer's health
6553 plan during the contract period;
6554 (d) include both a specific attachment point and an aggregate attachment point in a
6555 contract;
6556 (e) align stop-loss plan benefit limitations and exclusions with a small employer's
6557 health plan benefit limitations and exclusions, including any annual or lifetime limits in the
6558 employer's health plan;
6559 (f) have an annual specific attachment point that is at least $10,000;
6560 (g) have an annual aggregate attachment point that may not be less than [
6561 expected claims;
6562 (h) pay stop-loss claims:
6563 (i) incurred during the contract period; and
6564 (ii) [
6565 (i) include provisions to cover incurred and unpaid claims if a small employer plan
6566 terminates.
6567 (2) A small employer stop-loss contract shall not:
6568 (a) include lasering; and
6569 (b) pay claims directly to an individual employee, member, or participant.
6570 Section 66. Section 31A-43-302 is amended to read:
6571 31A-43-302. Stop-loss restrictions -- Filing requirements.
6572 [
6573
6574
6575 [
6576 rate methodology with the commissioner pursuant to Sections 31A-2-201 and 31A-2-201.1
6577 before the stop-loss insurance contract may be issued or delivered in the state.
6578 [
6579 April 1, in a form and manner required by the commissioner by administrative rule adopted by
6580 the commissioner:
6581 (a) an actuarial memorandum and certification which demonstrates that the insurer is in
6582 compliance with this chapter; and
6583 (b) the stop-loss insurer's stop-loss experience.
6584 [
6585 (a) a complete and detailed description of its rating practices and renewal underwriting
6586 practices, including information and documentation that demonstrate the rating methods and
6587 practices are:
6588 (i) based upon commonly accepted actuarial assumptions; and
6589 (ii) in accordance with sound actuarial principles; and
6590 (b) a copy of the [
6591 Section 67. Section 31A-43-303 is amended to read:
6592 31A-43-303. Stop-loss insurance disclosure.
6593 A stop-loss insurance contract delivered, issued for delivery, or entered into shall
6594 include the disclosure exhibit required by the commissioner through administrative rule, which
6595 shall include at least the following information:
6596 (1) the complete costs for the stop-loss contract;
6597 (2) the date on which the insurance takes effect and terminates, including renewability
6598 provisions;
6599 (3) the aggregate attachment point and the specific attachment point;
6600 (4) [
6601 (5) an explanation of monthly accommodation and disclosure about any monthly
6602 accommodation features included in the stop-loss contract; [
6603 (6) a description of terminal liability funding, including[
6604 claims before and after the termination of the contract; and
6605 [
6606 Section 68. Section 31A-43-304 is amended to read:
6607 31A-43-304. Administrative rules.
6608 The commissioner may adopt administrative rules in accordance with Title 63G,
6609 Chapter 3, Utah Administrative Rulemaking Act, to:
6610 (1) implement this chapter;
6611 [
6612
6613 [
6614 [
6615 report on stop-loss experience required by Section 31A-43-302 ;
6616 [
6617 31A-43-303 ;
6618 [
6619 attachment points are actuarially sound and are not against the public interest; and
6620 [
6621 claims if a small employer plan terminates.
6622 Section 69. Section 53-13-103 is amended to read:
6623 53-13-103. Law enforcement officer.
6624 (1) (a) "Law enforcement officer" means a sworn and certified peace officer who is an
6625 employee of a law enforcement agency that is part of or administered by the state or any of its
6626 political subdivisions, and whose primary and principal duties consist of the prevention and
6627 detection of crime and the enforcement of criminal statutes or ordinances of this state or any of
6628 its political subdivisions.
6629 (b) "Law enforcement officer" specifically includes the following:
6630 (i) any sheriff or deputy sheriff, chief of police, police officer, or marshal of any
6631 county, city, or town;
6632 (ii) the commissioner of public safety and any member of the Department of Public
6633 Safety certified as a peace officer;
6634 (iii) all persons specified in Sections 23-20-1.5 and 79-4-501 ;
6635 (iv) any police officer employed by any college or university;
6636 (v) investigators for the Motor Vehicle Enforcement Division;
6637 (vi) investigators for the Department of Insurance, Fraud Division;
6638 [
6639 attorneys, and county attorneys;
6640 [
6641 officers by law;
6642 [
6643 the school district;
6644 [
6645 enforcement or investigative officer designated by the executive director and approved by the
6646 commissioner of public safety and certified by the division;
6647 [
6648 employed by the Department of Corrections serving on or before July 1, 1993;
6649 [
6650 university provided that the college or university has been certified by the commissioner of
6651 public safety according to rules of the Department of Public Safety;
6652 [
6653 of its political subdivisions; and
6654 [
6655 (2) Law enforcement officers may serve criminal process and arrest violators of any
6656 law of this state and have the right to require aid in executing their lawful duties.
6657 (3) (a) A law enforcement officer has statewide full-spectrum peace officer authority,
6658 but the authority extends to other counties, cities, or towns only when the officer is acting
6659 under Title 77, Chapter 9, Uniform Act on Fresh Pursuit, unless the law enforcement officer is
6660 employed by the state.
6661 (b) (i) A local law enforcement agency may limit the jurisdiction in which its law
6662 enforcement officers may exercise their peace officer authority to a certain geographic area.
6663 (ii) Notwithstanding Subsection (3)(b)(i), a law enforcement officer may exercise
6664 authority outside of the limited geographic area, pursuant to Title 77, Chapter 9, Uniform Act
6665 on Fresh Pursuit, if the officer is pursuing an offender for an offense that occurred within the
6666 limited geographic area.
6667 (c) The authority of law enforcement officers employed by the Department of
6668 Corrections is regulated by Title 64, Chapter 13, Department of Corrections - State Prison.
6669 (4) A law enforcement officer shall, prior to exercising peace officer authority:
6670 (a) (i) have satisfactorily completed the requirements of Section 53-6-205 ; or
6671 (ii) have met the waiver requirements in Section 53-6-206 ; and
6672 (b) have satisfactorily completed annual certified training of at least 40 hours per year
6673 as directed by the director of the division, with the advice and consent of the council.
6674 Section 70. Section 63J-1-602.2 is amended to read:
6675 63J-1-602.2. List of nonlapsing funds and accounts -- Title 31 through Title 45.
6676 (1) Appropriations from the Insurance Department Restricted Account created in
6677 Section 31A-3-103 , except to the extent that Section 31A-3-103 makes the money received
6678 under that section free revenue.
6679 [
6680 in Section 31A-3-104 .
6681 [
6682 created in Section 31A-3-105 .
6683 [
6684 Section 31A-3-304 , except to the extent that Section 31A-3-304 makes the money received
6685 under that section free revenue.
6686 [
6687 created in Section 31A-23a-415 .
6688 [
6689 Account created in Section 31A-30-115 .
6690 [
6691 created in Section 31A-31-108 .
6692 [
6693 Campaign Restricted Account created in Section 32B-2-306 .
6694 [
6695 35A-8-1903 .
6696 [
6697 35A-8-2003 .
6698 [
6699 Section 36-24-101 .
6700 [
6701 Section 40-6-14.5 .
6702 [
6703 created by Section 41-1a-121 to the Motor Vehicle Division.
6704 [
6705 (a) purchase and distribution of license plates and decals; and
6706 (b) administration and enforcement of motor vehicle registration requirements.
6707 Section 71. Repealer.
6708 This bill repeals:
6709 Section 31A-30-110 , Individual enrollment cap.
6710 Section 31A-30-111 , Limitations on high risk enrollees.
6710a S. Section 72. Appropriation
6710b Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, for the
6710c fiscal year beginning July 1, 2014, and ending June 30, 2015, the Legislature appropriates the
6710d following sums of money from the funds or accounts indicated for the use and support of the
6710e government of the State of Utah. These are additions to amounts previously appropriated for
6710f fiscal year 2015.
6710g To Insurance Department Administration
6710h From General Fund Restricted-Insurance Department Restricted Account -$403,500
6710i Schedule of Programs:
6710j Administration -$403,500
6710k .S
6711 Section S. [
6712 This bill takes effect on May 13, 2014, except that the amendments to Section
6713 31A-3-304 (Effective 07/01/15) take effect on July 1, 2015.
6714 Section 73. Revisor instructions.
6715 The Legislature intends that the Office of Legislative Research and General Counsel, in
6716 preparing the Utah Code database for publication, replace the language in Subsections
6717 31A-22-305 (10) and 31A-22-305.3 (9), from "this bill" with the bill's designated chapter and
6718 section number in the Laws of Utah.
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