Third Substitute H.B. 24

Senator Curtis S. Bramble proposes the following substitute bill:


             1     
INSURANCE RELATED AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             5     
Senate Sponsor: Curtis S. Bramble

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


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


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


             88           31A-8-402.3 , as last amended by Laws of Utah 2004, Chapter 329
             89           31A-16-103 , as last amended by Laws of Utah 2004, Chapter 2
             90           31A-17-607 , as last amended by Laws of Utah 2001, Chapter 116
             91           31A-22-305 , as last amended by Laws of Utah 2013, Chapter 460
             92           31A-22-305.3 , as last amended by Laws of Utah 2013, Chapter 460
             93           31A-22-428 , as enacted by Laws of Utah 2008, Chapter 345
             94           31A-22-617 , as last amended by Laws of Utah 2013, Chapters 104 and 319
             95           31A-22-618.5 , as last amended by Laws of Utah 2013, Chapter 319
             96           31A-22-625 , as last amended by Laws of Utah 2012, Chapter 253
             97           31A-22-635 , as last amended by Laws of Utah 2012, Chapters 253 and 279
             98           31A-22-721 , as last amended by Laws of Utah 2011, Chapter 284
             99           31A-23a-102 , as last amended by Laws of Utah 2013, Chapter 319
             100           31A-23a-104 , as last amended by Laws of Utah 2012, Chapter 253
             101           31A-23a-105 , as last amended by Laws of Utah 2013, Chapter 319
             102           31A-23a-108 , as last amended by Laws of Utah 2012, Chapter 253
             103           31A-23a-112 , as last amended by Laws of Utah 2008, Chapter 382
             104           31A-23a-113 , as last amended by Laws of Utah 2012, Chapter 253
             105           31A-23a-202 , as last amended by Laws of Utah 2013, Chapter 319
             106           31A-23a-203 , as last amended by Laws of Utah 2012, Chapter 253
             107           31A-23a-402.5 , as last amended by Laws of Utah 2013, Chapter 319
             108           31A-23a-501 , as last amended by Laws of Utah 2013, Chapter 341
             109           31A-23b-102 , as enacted by Laws of Utah 2013, Chapter 341
             110           31A-23b-202 , as enacted by Laws of Utah 2013, Chapter 341
             111           31A-23b-205 , as enacted by Laws of Utah 2013, Chapter 341
             112           31A-23b-206 , as enacted by Laws of Utah 2013, Chapter 341
             113           31A-23b-301 , as enacted by Laws of Utah 2013, Chapter 341
             114           31A-23b-402 , as enacted by Laws of Utah 2013, Chapter 341
             115           31A-25-208 , as last amended by Laws of Utah 2011, Chapter 284
             116           31A-25-209 , as last amended by Laws of Utah 2008, Chapter 382
             117           31A-26-102 , as last amended by Laws of Utah 2012, Chapter 151
             118           31A-26-206 , as last amended by Laws of Utah 2011, Chapter 284


             119           31A-26-207 , as last amended by Laws of Utah 2001, Chapter 116
             120           31A-26-213 , as last amended by Laws of Utah 2011, Chapter 284
             121           31A-26-214 , as last amended by Laws of Utah 2008, Chapter 382
             122           31A-26-214.5 , as last amended by Laws of Utah 2009, Chapter 349
             123           31A-27a-102 , as last amended by Laws of Utah 2008, Chapter 382
             124           31A-27a-107 , as enacted by Laws of Utah 2007, Chapter 309
             125           31A-27a-201 , as enacted by Laws of Utah 2007, Chapter 309
             126           31A-27a-701 , as last amended by Laws of Utah 2011, Chapter 297
             127           31A-29-106 , as last amended by Laws of Utah 2013, Chapter 319
             128           31A-29-111 , as last amended by Laws of Utah 2012, Chapters 158 and 347
             129           31A-29-115 , as last amended by Laws of Utah 2004, Chapter 2
             130           31A-30-102 , as last amended by Laws of Utah 2009, Chapter 12
             131           31A-30-103 , as last amended by Laws of Utah 2013, Chapter 168
             132           31A-30-104 , as last amended by Laws of Utah 2013, Chapters 168 and 341
             133           31A-30-106 , as last amended by Laws of Utah 2011, Chapter 284
             134           31A-30-106.7 , as last amended by Laws of Utah 2008, Chapter 382
             135           31A-30-107 , as last amended by Laws of Utah 2009, Chapter 12
             136           31A-30-108 , as last amended by Laws of Utah 2011, Chapter 284
             137           31A-30-207 , as last amended by Laws of Utah 2011, Second Special Session, Chapter 5
             138           31A-30-209 , as last amended by Laws of Utah 2011, Chapter 400
             139           31A-30-211 , as last amended by Laws of Utah 2011, Second Special Session, Chapter 5
             140           31A-37-501 , as last amended by Laws of Utah 2008, Chapter 302
             141           31A-40-203 , as enacted by Laws of Utah 2008, Chapter 318
             142           31A-40-209 , as enacted by Laws of Utah 2008, Chapter 318
             143           31A-42-202 , as last amended by Laws of Utah 2011, Chapter 400
             144           31A-43-102 , as enacted by Laws of Utah 2013, Chapter 341
             145           31A-43-301 , as enacted by Laws of Utah 2013, Chapter 341
             146           31A-43-302 , as enacted by Laws of Utah 2013, Chapter 341
             147           31A-43-303 , as enacted by Laws of Utah 2013, Chapter 341
             148           31A-43-304 , as enacted by Laws of Utah 2013, Chapter 341
             149           53-13-103 , as last amended by Laws of Utah 2011, Chapter 58


             150      REPEALS:
             151           31A-30-110 , as last amended by Laws of Utah 2011, Chapters 284 and 297
             152           31A-30-111 , as last amended by Laws of Utah 2002, Chapter 308
             153      Utah Code Sections Affected by Revisor Instructions:
             154           31A-22-305 , as last amended by Laws of Utah 2013, Chapter 460
             155           31A-22-305.3 , as last amended by Laws of Utah 2013, Chapter 460
             156     
             157      Be it enacted by the Legislature of the state of Utah:
             158          Section 1. Section 31A-1-301 is amended to read:
             159           31A-1-301. Definitions.
             160          As used in this title, unless otherwise specified:
             161          (1) (a) "Accident and health insurance" means insurance to provide protection against
             162      economic losses resulting from:
             163          (i) a medical condition including:
             164          (A) a medical care expense; or
             165          (B) the risk of disability;
             166          (ii) accident; or
             167          (iii) sickness.
             168          (b) "Accident and health insurance":
             169          (i) includes a contract with disability contingencies including:
             170          (A) an income replacement contract;
             171          (B) a health care contract;
             172          (C) an expense reimbursement contract;
             173          (D) a credit accident and health contract;
             174          (E) a continuing care contract; and
             175          (F) a long-term care contract; and
             176          (ii) may provide:
             177          (A) hospital coverage;
             178          (B) surgical coverage;
             179          (C) medical coverage;
             180          (D) loss of income coverage;


             181          (E) prescription drug coverage;
             182          (F) dental coverage; or
             183          (G) vision coverage.
             184          (c) "Accident and health insurance" does not include workers' compensation insurance.
             185          (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
             186      63G, Chapter 3, Utah Administrative Rulemaking Act.
             187          (3) "Administrator" is defined in Subsection [(163)] (164).
             188          (4) "Adult" means an individual who has attained the age of at least 18 years.
             189          (5) "Affiliate" means a person who controls, is controlled by, or is under common
             190      control with, another person. A corporation is an affiliate of another corporation, regardless of
             191      ownership, if substantially the same group of individuals manage the corporations.
             192          (6) "Agency" means:
             193          (a) a person other than an individual, including a sole proprietorship by which an
             194      individual does business under an assumed name; and
             195          (b) an insurance organization licensed or required to be licensed under Section
             196      31A-23a-301 , 31A-25-207 , or 31A-26-209 .
             197          (7) "Alien insurer" means an insurer domiciled outside the United States.
             198          (8) "Amendment" means an endorsement to an insurance policy or certificate.
             199          (9) "Annuity" means an agreement to make periodical payments for a period certain or
             200      over the lifetime of one or more individuals if the making or continuance of all or some of the
             201      series of the payments, or the amount of the payment, is dependent upon the continuance of
             202      human life.
             203          (10) "Application" means a document:
             204          (a) (i) completed by an applicant to provide information about the risk to be insured;
             205      and
             206          (ii) that contains information that is used by the insurer to evaluate risk and decide
             207      whether to:
             208          (A) insure the risk under:
             209          (I) the coverage as originally offered; or
             210          (II) a modification of the coverage as originally offered; or
             211          (B) decline to insure the risk; or


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


             243          (d) a limited liability company;
             244          (e) a limited liability partnership; or
             245          (f) another legal entity.
             246          (18) "Business of insurance" is defined in Subsection (88).
             247          (19) "Business plan" means the information required to be supplied to the
             248      commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
             249      when these subsections apply by reference under:
             250          (a) Section 31A-7-201 ;
             251          (b) Section 31A-8-205 ; or
             252          (c) Subsection 31A-9-205 (2).
             253          (20) (a) "Bylaws" means the rules adopted for the regulation or management of a
             254      corporation's affairs, however designated.
             255          (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
             256      corporation.
             257          (21) "Captive insurance company" means:
             258          (a) an insurer:
             259          (i) owned by another organization; and
             260          (ii) whose exclusive purpose is to insure risks of the parent organization and an
             261      affiliated company; or
             262          (b) in the case of a group or association, an insurer:
             263          (i) owned by the insureds; and
             264          (ii) whose exclusive purpose is to insure risks of:
             265          (A) a member organization;
             266          (B) a group member; or
             267          (C) an affiliate of:
             268          (I) a member organization; or
             269          (II) a group member.
             270          (22) "Casualty insurance" means liability insurance.
             271          (23) "Certificate" means evidence of insurance given to:
             272          (a) an insured under a group insurance policy; or
             273          (b) a third party.


             274          (24) "Certificate of authority" is included within the term "license."
             275          (25) "Claim," unless the context otherwise requires, means a request or demand on an
             276      insurer for payment of a benefit according to the terms of an insurance policy.
             277          (26) "Claims-made coverage" means an insurance contract or provision limiting
             278      coverage under a policy insuring against legal liability to claims that are first made against the
             279      insured while the policy is in force.
             280          (27) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
             281      commissioner.
             282          (b) When appropriate, the terms listed in Subsection (27)(a) apply to the equivalent
             283      supervisory official of another jurisdiction.
             284          (28) (a) "Continuing care insurance" means insurance that:
             285          (i) provides board and lodging;
             286          (ii) provides one or more of the following:
             287          (A) a personal service;
             288          (B) a nursing service;
             289          (C) a medical service; or
             290          (D) any other health-related service; and
             291          (iii) provides the coverage described in this Subsection (28)(a) under an agreement
             292      effective:
             293          (A) for the life of the insured; or
             294          (B) for a period in excess of one year.
             295          (b) Insurance is continuing care insurance regardless of whether or not the board and
             296      lodging are provided at the same location as a service described in Subsection (28)(a)(ii).
             297          (29) (a) "Control," "controlling," "controlled," or "under common control" means the
             298      direct or indirect possession of the power to direct or cause the direction of the management
             299      and policies of a person. This control may be:
             300          (i) by contract;
             301          (ii) by common management;
             302          (iii) through the ownership of voting securities; or
             303          (iv) by a means other than those described in Subsections (29)(a)(i) through (iii).
             304          (b) There is no presumption that an individual holding an official position with another


             305      person controls that person solely by reason of the position.
             306          (c) A person having a contract or arrangement giving control is considered to have
             307      control despite the illegality or invalidity of the contract or arrangement.
             308          (d) There is a rebuttable presumption of control in a person who directly or indirectly
             309      owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
             310      voting securities of another person.
             311          (30) "Controlled insurer" means a licensed insurer that is either directly or indirectly
             312      controlled by a producer.
             313          (31) "Controlling person" means a person that directly or indirectly has the power to
             314      direct or cause to be directed, the management, control, or activities of a reinsurance
             315      intermediary.
             316          (32) "Controlling producer" means a producer who directly or indirectly controls an
             317      insurer.
             318          (33) (a) "Corporation" means an insurance corporation, except when referring to:
             319          (i) a corporation doing business:
             320          (A) as:
             321          (I) an insurance producer;
             322          (II) a surplus lines producer;
             323          (III) a limited line producer;
             324          (IV) a consultant;
             325          (V) a managing general agent;
             326          (VI) a reinsurance intermediary;
             327          (VII) a third party administrator; or
             328          (VIII) an adjuster; and
             329          (B) under:
             330          (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             331      Reinsurance Intermediaries;
             332          (II) Chapter 25, Third Party Administrators; or
             333          (III) Chapter 26, Insurance Adjusters; or
             334          (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
             335      Holding Companies.


             336          (b) "Stock corporation" means a stock insurance corporation.
             337          (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
             338          (34) (a) "Creditable coverage" has the same meaning as provided in federal regulations
             339      adopted pursuant to the Health Insurance Portability and Accountability Act.
             340          (b) "Creditable coverage" includes coverage that is offered through a public health plan
             341      such as:
             342          (i) the Primary Care Network Program under a Medicaid primary care network
             343      demonstration waiver obtained subject to Section 26-18-3 ;
             344          (ii) the Children's Health Insurance Program under Section 26-40-106 ; or
             345          (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
             346      101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. 109-415.
             347          (35) "Credit accident and health insurance" means insurance on a debtor to provide
             348      indemnity for payments coming due on a specific loan or other credit transaction while the
             349      debtor has a disability.
             350          (36) (a) "Credit insurance" means insurance offered in connection with an extension of
             351      credit that is limited to partially or wholly extinguishing that credit obligation.
             352          (b) "Credit insurance" includes:
             353          (i) credit accident and health insurance;
             354          (ii) credit life insurance;
             355          (iii) credit property insurance;
             356          (iv) credit unemployment insurance;
             357          (v) guaranteed automobile protection insurance;
             358          (vi) involuntary unemployment insurance;
             359          (vii) mortgage accident and health insurance;
             360          (viii) mortgage guaranty insurance; and
             361          (ix) mortgage life insurance.
             362          (37) "Credit life insurance" means insurance on the life of a debtor in connection with
             363      an extension of credit that pays a person if the debtor dies.
             364          (38) "Credit property insurance" means insurance:
             365          (a) offered in connection with an extension of credit; and
             366          (b) that protects the property until the debt is paid.


             367          (39) "Credit unemployment insurance" means insurance:
             368          (a) offered in connection with an extension of credit; and
             369          (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
             370          (i) specific loan; or
             371          (ii) credit transaction.
             372          (40) "Creditor" means a person, including an insured, having a claim, whether:
             373          (a) matured;
             374          (b) unmatured;
             375          (c) liquidated;
             376          (d) unliquidated;
             377          (e) secured;
             378          (f) unsecured;
             379          (g) absolute;
             380          (h) fixed; or
             381          (i) contingent.
             382          (41) (a) "Crop insurance" means insurance providing protection against damage to
             383      crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation,
             384      disease, or other yield-reducing conditions or perils that is:
             385          (i) provided by the private insurance market; or
             386          (ii) subsidized by the Federal Crop Insurance Corporation.
             387          (b) "Crop insurance" includes multiperil crop insurance.
             388          (42) (a) "Customer service representative" means a person that provides an insurance
             389      service and insurance product information:
             390          (i) for the customer service representative's:
             391          (A) producer;
             392          (B) surplus lines producer; or
             393          (C) consultant employer; and
             394          (ii) to the customer service representative's employer's:
             395          (A) customer;
             396          (B) client; or
             397          (C) organization.


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


             429          (51) "Domiciliary state" means the state in which an insurer:
             430          (a) is incorporated;
             431          (b) is organized; or
             432          (c) in the case of an alien insurer, enters into the United States.
             433          (52) (a) "Eligible employee" means:
             434          (i) an employee who:
             435          (A) works on a full-time basis; and
             436          (B) has a normal work week of 30 or more hours; or
             437          (ii) a person described in Subsection (52)(b).
             438          (b) "Eligible employee" includes, if the individual is included under a health benefit
             439      plan of a small employer:
             440          (i) a sole proprietor;
             441          (ii) a partner in a partnership; or
             442          (iii) an independent contractor.
             443          (c) "Eligible employee" does not include, unless eligible under Subsection (52)(b):
             444          (i) an individual who works on a temporary or substitute basis for a small employer;
             445          (ii) an employer's spouse; or
             446          (iii) a dependent of an employer.
             447          (53) "Employee" means an individual employed by an employer.
             448          (54) "Employee benefits" means one or more benefits or services provided to:
             449          (a) an employee; or
             450          (b) a dependent of an employee.
             451          (55) (a) "Employee welfare fund" means a fund:
             452          (i) established or maintained, whether directly or through a trustee, by:
             453          (A) one or more employers;
             454          (B) one or more labor organizations; or
             455          (C) a combination of employers and labor organizations; and
             456          (ii) that provides employee benefits paid or contracted to be paid, other than income
             457      from investments of the fund:
             458          (A) by or on behalf of an employer doing business in this state; or
             459          (B) for the benefit of a person employed in this state.


             460          (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
             461      revenues.
             462          (56) "Endorsement" means a written agreement attached to a policy or certificate to
             463      modify the policy or certificate coverage.
             464          (57) "Enrollment date," with respect to a health benefit plan, means:
             465          (a) the first day of coverage; or
             466          (b) if there is a waiting period, the first day of the waiting period.
             467          (58) (a) "Escrow" means:
             468          (i) a transaction that effects the sale, transfer, encumbering, or leasing of real property,
             469      when a person not a party to the transaction, and neither having nor acquiring an interest in the
             470      title, performs, in accordance with the written instructions or terms of the written agreement
             471      between the parties to the transaction, any of the following actions:
             472          (A) the explanation, holding, or creation of a document; or
             473          (B) the receipt, deposit, and disbursement of money;
             474          (ii) a settlement or closing involving:
             475          (A) a mobile home;
             476          (B) a grazing right;
             477          (C) a water right; or
             478          (D) other personal property authorized by the commissioner.
             479          (b) "Escrow" does not include:
             480          (i) the following notarial acts performed by a notary within the state:
             481          (A) an acknowledgment;
             482          (B) a copy certification;
             483          (C) jurat; and
             484          (D) an oath or affirmation;
             485          (ii) the receipt or delivery of a document; or
             486          (iii) the receipt of money for delivery to the escrow agent.
             487          (59) "Escrow agent" means an agency title insurance producer meeting the
             488      requirements of Sections 31A-4-107 , 31A-14-211 , and 31A-23a-204 , who is acting through an
             489      individual title insurance producer licensed with an escrow subline of authority.
             490          (60) (a) "Excludes" is not exhaustive and does not mean that another thing is not also


             491      excluded.
             492          (b) The items listed in a list using the term "excludes" are representative examples for
             493      use in interpretation of this title.
             494          (61) "Exclusion" means for the purposes of accident and health insurance that an
             495      insurer does not provide insurance coverage, for whatever reason, for one of the following:
             496          (a) a specific physical condition;
             497          (b) a specific medical procedure;
             498          (c) a specific disease or disorder; or
             499          (d) a specific prescription drug or class of prescription drugs.
             500          (62) "Expense reimbursement insurance" means insurance:
             501          (a) written to provide a payment for an expense relating to hospital confinement
             502      resulting from illness or injury; and
             503          (b) written:
             504          (i) as a daily limit for a specific number of days in a hospital; and
             505          (ii) to have a one or two day waiting period following a hospitalization.
             506          (63) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding
             507      a position of public or private trust.
             508          (64) (a) "Filed" means that a filing is:
             509          (i) submitted to the department as required by and in accordance with applicable
             510      statute, rule, or filing order;
             511          (ii) received by the department within the time period provided in applicable statute,
             512      rule, or filing order; and
             513          (iii) accompanied by the appropriate fee in accordance with:
             514          (A) Section 31A-3-103 ; or
             515          (B) rule.
             516          (b) "Filed" does not include a filing that is rejected by the department because it is not
             517      submitted in accordance with Subsection (64)(a).
             518          (65) "Filing," when used as a noun, means an item required to be filed with the
             519      department including:
             520          (a) a policy;
             521          (b) a rate;


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


             553          (i) search, including authority to act as a title marketing representative;
             554          (ii) escrow, including authority to act as a title marketing representative; and
             555          (iii) title marketing representative only;
             556          (c) surplus lines;
             557          (d) workers' compensation; and
             558          (e) [any other] another line of insurance that the commissioner considers necessary to
             559      recognize in the public interest.
             560          (71) "General lines of insurance" include:
             561          (a) accident and health;
             562          (b) casualty;
             563          (c) life;
             564          (d) personal lines;
             565          (e) property; and
             566          (f) variable contracts, including variable life and annuity.
             567          (72) "Group health plan" means an employee welfare benefit plan to the extent that the
             568      plan provides medical care:
             569          (a) (i) to an employee; or
             570          (ii) to a dependent of an employee; and
             571          (b) (i) directly;
             572          (ii) through insurance reimbursement; or
             573          (iii) through another method.
             574          (73) (a) "Group insurance policy" means a policy covering a group of persons that is
             575      issued:
             576          (i) to a policyholder on behalf of the group; and
             577          (ii) for the benefit of a member of the group who is selected under a procedure defined
             578      in:
             579          (A) the policy; or
             580          (B) an agreement that is collateral to the policy.
             581          (b) A group insurance policy may include a member of the policyholder's family or a
             582      dependent.
             583          (74) "Guaranteed automobile protection insurance" means insurance offered in


             584      connection with an extension of credit that pays the difference in amount between the
             585      insurance settlement and the balance of the loan if the insured automobile is a total loss.
             586          (75) (a) Except as provided in Subsection (75)(b), "health benefit plan" means a policy
             587      or certificate that:
             588          (i) provides health care insurance;
             589          (ii) provides major medical expense insurance; or
             590          (iii) is offered as a substitute for hospital or medical expense insurance, such as:
             591          (A) a hospital confinement indemnity; or
             592          (B) a limited benefit plan.
             593          (b) "Health benefit plan" does not include a policy or certificate that:
             594          (i) provides benefits solely for:
             595          (A) accident;
             596          (B) dental;
             597          (C) income replacement;
             598          (D) long-term care;
             599          (E) a Medicare supplement;
             600          (F) a specified disease;
             601          (G) vision; or
             602          (H) a short-term limited duration; or
             603          (ii) is offered and marketed as supplemental health insurance.
             604          (76) "Health care" means any of the following intended for use in the diagnosis,
             605      treatment, mitigation, or prevention of a human ailment or impairment:
             606          (a) a professional service;
             607          (b) a personal service;
             608          (c) a facility;
             609          (d) equipment;
             610          (e) a device;
             611          (f) supplies; or
             612          (g) medicine.
             613          (77) (a) "Health care insurance" or "health insurance" means insurance providing:
             614          (i) a health care benefit; or


             615          (ii) payment of an incurred health care expense.
             616          (b) "Health care insurance" or "health insurance" does not include accident and health
             617      insurance providing a benefit for:
             618          (i) replacement of income;
             619          (ii) short-term accident;
             620          (iii) fixed indemnity;
             621          (iv) credit accident and health;
             622          (v) supplements to liability;
             623          (vi) workers' compensation;
             624          (vii) automobile medical payment;
             625          (viii) no-fault automobile;
             626          (ix) equivalent self-insurance; or
             627          (x) a type of accident and health insurance coverage that is a part of or attached to
             628      another type of policy.
             629          (78) "Health Insurance Portability and Accountability Act" means the Health Insurance
             630      Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended.
             631          (79) "Income replacement insurance" or "disability income insurance" means insurance
             632      written to provide payments to replace income lost from accident or sickness.
             633          (80) "Indemnity" means the payment of an amount to offset all or part of an insured
             634      loss.
             635          (81) "Independent adjuster" means an insurance adjuster required to be licensed under
             636      Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
             637          (82) "Independently procured insurance" means insurance procured under Section
             638      31A-15-104 .
             639          (83) "Individual" means a natural person.
             640          (84) "Inland marine insurance" includes insurance covering:
             641          (a) property in transit on or over land;
             642          (b) property in transit over water by means other than boat or ship;
             643          (c) bailee liability;
             644          (d) fixed transportation property such as bridges, electric transmission systems, radio
             645      and television transmission towers and tunnels; and


             646          (e) personal and commercial property floaters.
             647          (85) "Insolvency" means that:
             648          (a) an insurer is unable to pay its debts or meet its obligations as the debts and
             649      obligations mature;
             650          (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
             651      RBC under Subsection 31A-17-601 (8)(c); or
             652          (c) an insurer is determined to be hazardous under this title.
             653          (86) (a) "Insurance" means:
             654          (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
             655      persons to one or more other persons; or
             656          (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
             657      group of persons that includes the person seeking to distribute that person's risk.
             658          (b) "Insurance" includes:
             659          (i) a risk distributing arrangement providing for compensation or replacement for
             660      damages or loss through the provision of a service or a benefit in kind;
             661          (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
             662      business and not as merely incidental to a business transaction; and
             663          (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
             664      but with a class of persons who have agreed to share the risk.
             665          (87) "Insurance adjuster" means a person who directs or conducts the investigation,
             666      negotiation, or settlement of a claim under an insurance policy other than life insurance or an
             667      annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
             668          (88) "Insurance business" or "business of insurance" includes:
             669          (a) providing health care insurance by an organization that is or is required to be
             670      licensed under this title;
             671          (b) providing a benefit to an employee in the event of a contingency not within the
             672      control of the employee, in which the employee is entitled to the benefit as a right, which
             673      benefit may be provided either:
             674          (i) by a single employer or by multiple employer groups; or
             675          (ii) through one or more trusts, associations, or other entities;
             676          (c) providing an annuity:


             677          (i) including an annuity issued in return for a gift; and
             678          (ii) except an annuity provided by a person specified in Subsections 31A-22-1305 (2)
             679      and (3);
             680          (d) providing the characteristic services of a motor club as outlined in Subsection
             681      (116);
             682          (e) providing another person with insurance;
             683          (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
             684      or surety, a contract or policy of title insurance;
             685          (g) transacting or proposing to transact any phase of title insurance, including:
             686          (i) solicitation;
             687          (ii) negotiation preliminary to execution;
             688          (iii) execution of a contract of title insurance;
             689          (iv) insuring; and
             690          (v) transacting matters subsequent to the execution of the contract and arising out of
             691      the contract, including reinsurance;
             692          (h) transacting or proposing a life settlement; and
             693          (i) doing, or proposing to do, any business in substance equivalent to Subsections
             694      (88)(a) through (h) in a manner designed to evade this title.
             695          (89) "Insurance consultant" or "consultant" means a person who:
             696          (a) advises another person about insurance needs and coverages;
             697          (b) is compensated by the person advised on a basis not directly related to the insurance
             698      placed; and
             699          (c) except as provided in Section 31A-23a-501 , is not compensated directly or
             700      indirectly by an insurer or producer for advice given.
             701          (90) "Insurance holding company system" means a group of two or more affiliated
             702      persons, at least one of whom is an insurer.
             703          (91) (a) "Insurance producer" or "producer" means a person licensed or required to be
             704      licensed under the laws of this state to sell, solicit, or negotiate insurance.
             705          (b) (i) "Producer for the insurer" means a producer who is compensated directly or
             706      indirectly by an insurer for selling, soliciting, or negotiating an insurance product of that
             707      insurer.


             708          (ii) "Producer for the insurer" may be referred to as an "agent."
             709          (c) (i) "Producer for the insured" means a producer who:
             710          (A) is compensated directly and only by an insurance customer or an insured; and
             711          (B) receives no compensation directly or indirectly from an insurer for selling,
             712      soliciting, or negotiating an insurance product of that insurer to an insurance customer or
             713      insured.
             714          (ii) "Producer for the insured" may be referred to as a "broker."
             715          (92) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
             716      promise in an insurance policy and includes:
             717          (i) a policyholder;
             718          (ii) a subscriber;
             719          (iii) a member; and
             720          (iv) a beneficiary.
             721          (b) The definition in Subsection (92)(a):
             722          (i) applies only to this title; and
             723          (ii) does not define the meaning of this word as used in an insurance policy or
             724      certificate.
             725          (93) (a) "Insurer" means a person doing an insurance business as a principal including:
             726          (i) a fraternal benefit society;
             727          (ii) an issuer of a gift annuity other than an annuity specified in Subsections
             728      31A-22-1305 (2) and (3);
             729          (iii) a motor club;
             730          (iv) an employee welfare plan; and
             731          (v) a person purporting or intending to do an insurance business as a principal on that
             732      person's own account.
             733          (b) "Insurer" does not include a governmental entity to the extent the governmental
             734      entity is engaged in an activity described in Section 31A-12-107 .
             735          (94) "Interinsurance exchange" is defined in Subsection [(146)] (147).
             736          (95) "Involuntary unemployment insurance" means insurance:
             737          (a) offered in connection with an extension of credit; and
             738          (b) that provides indemnity if the debtor is involuntarily unemployed for payments


             739      coming due on a:
             740          (i) specific loan; or
             741          (ii) credit transaction.
             742          (96) "Large employer," in connection with a health benefit plan, means an employer
             743      who, with respect to a calendar year and to a plan year:
             744          (a) employed an average of at least 51 eligible employees on each business day during
             745      the preceding calendar year; and
             746          (b) employs at least two employees on the first day of the plan year.
             747          (97) "Late enrollee," with respect to an employer health benefit plan, means an
             748      individual whose enrollment is a late enrollment.
             749          (98) "Late enrollment," with respect to an employer health benefit plan, means
             750      enrollment of an individual other than:
             751          (a) on the earliest date on which coverage can become effective for the individual
             752      under the terms of the plan; or
             753          (b) through special enrollment.
             754          (99) (a) Except for a retainer contract or legal assistance described in Section
             755      31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
             756      specified legal expense.
             757          (b) "Legal expense insurance" includes an arrangement that creates a reasonable
             758      expectation of an enforceable right.
             759          (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
             760      legal services incidental to other insurance coverage.
             761          (100) (a) "Liability insurance" means insurance against liability:
             762          (i) for death, injury, or disability of a human being, or for damage to property,
             763      exclusive of the coverages under:
             764          (A) Subsection (110) for medical malpractice insurance;
             765          (B) Subsection (138) for professional liability insurance; and
             766          (C) Subsection [(172)] (173) for workers' compensation insurance;
             767          (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
             768      insured who is injured, irrespective of legal liability of the insured, when issued with or
             769      supplemental to insurance against legal liability for the death, injury, or disability of a human


             770      being, exclusive of the coverages under:
             771          (A) Subsection (110) for medical malpractice insurance;
             772          (B) Subsection (138) for professional liability insurance; and
             773          (C) Subsection [(172)] (173) for workers' compensation insurance;
             774          (iii) for loss or damage to property resulting from an accident to or explosion of a
             775      boiler, pipe, pressure container, machinery, or apparatus;
             776          (iv) for loss or damage to property caused by:
             777          (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
             778          (B) water entering through a leak or opening in a building; or
             779          (v) for other loss or damage properly the subject of insurance not within another kind
             780      of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
             781          (b) "Liability insurance" includes:
             782          (i) vehicle liability insurance;
             783          (ii) residential dwelling liability insurance; and
             784          (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
             785      boiler, machinery, or apparatus of any kind when done in connection with insurance on the
             786      elevator, boiler, machinery, or apparatus.
             787          (101) (a) "License" means authorization issued by the commissioner to engage in an
             788      activity that is part of or related to the insurance business.
             789          (b) "License" includes a certificate of authority issued to an insurer.
             790          (102) (a) "Life insurance" means:
             791          (i) insurance on a human life; and
             792          (ii) insurance pertaining to or connected with human life.
             793          (b) The business of life insurance includes:
             794          (i) granting a death benefit;
             795          (ii) granting an annuity benefit;
             796          (iii) granting an endowment benefit;
             797          (iv) granting an additional benefit in the event of death by accident;
             798          (v) granting an additional benefit to safeguard the policy against lapse; and
             799          (vi) providing an optional method of settlement of proceeds.
             800          (103) "Limited license" means a license that:


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


             832      be designated a form of limited line insurance.
             833          (107) "Limited lines authority" includes[: (a)] the lines of insurance listed in
             834      Subsection (106)[; and].
             835          [(b) a customer service representative.]
             836          (108) "Limited lines producer" means a person who sells, solicits, or negotiates limited
             837      lines insurance.
             838          (109) (a) "Long-term care insurance" means an insurance policy or rider advertised,
             839      marketed, offered, or designated to provide coverage:
             840          (i) in a setting other than an acute care unit of a hospital;
             841          (ii) for not less than 12 consecutive months for a covered person on the basis of:
             842          (A) expenses incurred;
             843          (B) indemnity;
             844          (C) prepayment; or
             845          (D) another method;
             846          (iii) for one or more necessary or medically necessary services that are:
             847          (A) diagnostic;
             848          (B) preventative;
             849          (C) therapeutic;
             850          (D) rehabilitative;
             851          (E) maintenance; or
             852          (F) personal care; and
             853          (iv) that may be issued by:
             854          (A) an insurer;
             855          (B) a fraternal benefit society;
             856          (C) (I) a nonprofit health hospital; and
             857          (II) a medical service corporation;
             858          (D) a prepaid health plan;
             859          (E) a health maintenance organization; or
             860          (F) an entity similar to the entities described in Subsections (109)(a)(iv)(A) through (E)
             861      to the extent that the entity is otherwise authorized to issue life or health care insurance.
             862          (b) "Long-term care insurance" includes:


             863          (i) any of the following that provide directly or supplement long-term care insurance:
             864          (A) a group or individual annuity or rider; or
             865          (B) a life insurance policy or rider;
             866          (ii) a policy or rider that provides for payment of benefits on the basis of:
             867          (A) cognitive impairment; or
             868          (B) functional capacity; or
             869          (iii) a qualified long-term care insurance contract.
             870          (c) "Long-term care insurance" does not include:
             871          (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
             872          (ii) basic hospital expense coverage;
             873          (iii) basic medical/surgical expense coverage;
             874          (iv) hospital confinement indemnity coverage;
             875          (v) major medical expense coverage;
             876          (vi) income replacement or related asset-protection coverage;
             877          (vii) accident only coverage;
             878          (viii) coverage for a specified:
             879          (A) disease; or
             880          (B) accident;
             881          (ix) limited benefit health coverage; or
             882          (x) a life insurance policy that accelerates the death benefit to provide the option of a
             883      lump sum payment:
             884          (A) if the following are not conditioned on the receipt of long-term care:
             885          (I) benefits; or
             886          (II) eligibility; and
             887          (B) the coverage is for one or more the following qualifying events:
             888          (I) terminal illness;
             889          (II) medical conditions requiring extraordinary medical intervention; or
             890          (III) permanent institutional confinement.
             891          (110) "Medical malpractice insurance" means insurance against legal liability incident
             892      to the practice and provision of a medical service other than the practice and provision of a
             893      dental service.


             894          (111) "Member" means a person having membership rights in an insurance
             895      corporation.
             896          (112) "Minimum capital" or "minimum required capital" means the capital that must be
             897      constantly maintained by a stock insurance corporation as required by statute.
             898          (113) "Mortgage accident and health insurance" means insurance offered in connection
             899      with an extension of credit that provides indemnity for payments coming due on a mortgage
             900      while the debtor has a disability.
             901          (114) "Mortgage guaranty insurance" means surety insurance under which a mortgagee
             902      or other creditor is indemnified against losses caused by the default of a debtor.
             903          (115) "Mortgage life insurance" means insurance on the life of a debtor in connection
             904      with an extension of credit that pays if the debtor dies.
             905          (116) "Motor club" means a person:
             906          (a) licensed under:
             907          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             908          (ii) Chapter 11, Motor Clubs; or
             909          (iii) Chapter 14, Foreign Insurers; and
             910          (b) that promises for an advance consideration to provide for a stated period of time
             911      one or more:
             912          (i) legal services under Subsection 31A-11-102 (1)(b);
             913          (ii) bail services under Subsection 31A-11-102 (1)(c); or
             914          (iii) (A) trip reimbursement;
             915          (B) towing services;
             916          (C) emergency road services;
             917          (D) stolen automobile services;
             918          (E) a combination of the services listed in Subsections (116)(b)(iii)(A) through (D); or
             919          (F) other services given in Subsections 31A-11-102 (1)(b) through (f).
             920          (117) "Mutual" means a mutual insurance corporation.
             921          (118) "Network plan" means health care insurance:
             922          (a) that is issued by an insurer; and
             923          (b) under which the financing and delivery of medical care is provided, in whole or in
             924      part, through a defined set of providers under contract with the insurer, including the financing


             925      and delivery of an item paid for as medical care.
             926          (119) "Nonparticipating" means a plan of insurance under which the insured is not
             927      entitled to receive a dividend representing a share of the surplus of the insurer.
             928          (120) "Ocean marine insurance" means insurance against loss of or damage to:
             929          (a) ships or hulls of ships;
             930          (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, money,
             931      securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
             932      interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
             933          (c) earnings such as freight, passage money, commissions, or profits derived from
             934      transporting goods or people upon or across the oceans or inland waterways; or
             935          (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
             936      owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
             937      in connection with maritime activity.
             938          (121) "Order" means an order of the commissioner.
             939          (122) "Outline of coverage" means a summary that explains an accident and health
             940      insurance policy.
             941          (123) "Participating" means a plan of insurance under which the insured is entitled to
             942      receive a dividend representing a share of the surplus of the insurer.
             943          (124) "Participation," as used in a health benefit plan, means a requirement relating to
             944      the minimum percentage of eligible employees that must be enrolled in relation to the total
             945      number of eligible employees of an employer reduced by each eligible employee who
             946      voluntarily declines coverage under the plan because the employee:
             947          (a) has other group health care insurance coverage; or
             948          (b) receives:
             949          (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
             950      Security Amendments of 1965; or
             951          (ii) another government health benefit.
             952          (125) "Person" includes:
             953          (a) an individual;
             954          (b) a partnership;
             955          (c) a corporation;


             956          (d) an incorporated or unincorporated association;
             957          (e) a joint stock company;
             958          (f) a trust;
             959          (g) a limited liability company;
             960          (h) a reciprocal;
             961          (i) a syndicate; or
             962          (j) another similar entity or combination of entities acting in concert.
             963          (126) "Personal lines insurance" means property and casualty insurance coverage sold
             964      for primarily noncommercial purposes to:
             965          (a) an individual; or
             966          (b) a family.
             967          (127) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
             968          (128) "Plan year" means:
             969          (a) the year that is designated as the plan year in:
             970          (i) the plan document of a group health plan; or
             971          (ii) a summary plan description of a group health plan;
             972          (b) if the plan document or summary plan description does not designate a plan year or
             973      there is no plan document or summary plan description:
             974          (i) the year used to determine deductibles or limits;
             975          (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
             976      or
             977          (iii) the employer's taxable year if:
             978          (A) the plan does not impose deductibles or limits on a yearly basis; and
             979          (B) (I) the plan is not insured; or
             980          (II) the insurance policy is not renewed on an annual basis; or
             981          (c) in a case not described in Subsection (128)(a) or (b), the calendar year.
             982          (129) (a) "Policy" means a document, including an attached endorsement or application
             983      that:
             984          (i) purports to be an enforceable contract; and
             985          (ii) memorializes in writing some or all of the terms of an insurance contract.
             986          (b) "Policy" includes a service contract issued by:


             987          (i) a motor club under Chapter 11, Motor Clubs;
             988          (ii) a service contract provided under Chapter 6a, Service Contracts; and
             989          (iii) a corporation licensed under:
             990          (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
             991          (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
             992          (c) "Policy" does not include:
             993          (i) a certificate under a group insurance contract; or
             994          (ii) a document that does not purport to have legal effect.
             995          (130) "Policyholder" means a person who controls a policy, binder, or oral contract by
             996      ownership, premium payment, or otherwise.
             997          (131) "Policy illustration" means a presentation or depiction that includes
             998      nonguaranteed elements of a policy of life insurance over a period of years.
             999          (132) "Policy summary" means a synopsis describing the elements of a life insurance
             1000      policy.
             1001          (133) "PPACA" means the Patient Protection and Affordable Care Act, Pub. L. No.
             1002      111-148 and the Health Care Education Reconciliation Act of 2010, Pub. L. No. 111-152, and
             1003      related federal regulations and guidance.
             1004          (134) "Preexisting condition," with respect to a health benefit plan:
             1005          (a) means a condition that was present before the effective date of coverage, whether or
             1006      not medical advice, diagnosis, care, or treatment was recommended or received before that day;
             1007      and
             1008          (b) does not include a condition indicated by genetic information unless an actual
             1009      diagnosis of the condition by a physician has been made.
             1010          (135) (a) "Premium" means the monetary consideration for an insurance policy.
             1011          (b) "Premium" includes, however designated:
             1012          (i) an assessment;
             1013          (ii) a membership fee;
             1014          (iii) a required contribution; or
             1015          (iv) monetary consideration.
             1016          (c) (i) "Premium" does not include consideration paid to a third party administrator for
             1017      the third party administrator's services.


             1018          (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
             1019      insurance on the risks administered by the third party administrator.
             1020          (136) "Principal officers" for a corporation means the officers designated under
             1021      Subsection 31A-5-203 (3).
             1022          (137) "Proceeding" includes an action or special statutory proceeding.
             1023          (138) "Professional liability insurance" means insurance against legal liability incident
             1024      to the practice of a profession and provision of a professional service.
             1025          (139) (a) Except as provided in Subsection (139)(b), "property insurance" means
             1026      insurance against loss or damage to real or personal property of every kind and any interest in
             1027      that property:
             1028          (i) from all hazards or causes; and
             1029          (ii) against loss consequential upon the loss or damage including vehicle
             1030      comprehensive and vehicle physical damage coverages.
             1031          (b) "Property insurance" does not include:
             1032          (i) inland marine insurance; and
             1033          (ii) ocean marine insurance.
             1034          (140) "Qualified long-term care insurance contract" or "federally tax qualified
             1035      long-term care insurance contract" means:
             1036          (a) an individual or group insurance contract that meets the requirements of Section
             1037      7702B(b), Internal Revenue Code; or
             1038          (b) the portion of a life insurance contract that provides long-term care insurance:
             1039          (i) (A) by rider; or
             1040          (B) as a part of the contract; and
             1041          (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
             1042      Code.
             1043          (141) "Qualified United States financial institution" means an institution that:
             1044          (a) is:
             1045          (i) organized under the laws of the United States or any state; or
             1046          (ii) in the case of a United States office of a foreign banking organization, licensed
             1047      under the laws of the United States or any state;
             1048          (b) is regulated, supervised, and examined by a United States federal or state authority


             1049      having regulatory authority over a bank or trust company; and
             1050          (c) meets the standards of financial condition and standing that are considered
             1051      necessary and appropriate to regulate the quality of a financial institution whose letters of credit
             1052      will be acceptable to the commissioner as determined by:
             1053          (i) the commissioner by rule; or
             1054          (ii) the Securities Valuation Office of the National Association of Insurance
             1055      Commissioners.
             1056          (142) (a) "Rate" means:
             1057          (i) the cost of a given unit of insurance; or
             1058          (ii) for property or casualty insurance, that cost of insurance per exposure unit either
             1059      expressed as:
             1060          (A) a single number; or
             1061          (B) a pure premium rate, adjusted before the application of individual risk variations
             1062      based on loss or expense considerations to account for the treatment of:
             1063          (I) expenses;
             1064          (II) profit; and
             1065          (III) individual insurer variation in loss experience.
             1066          (b) "Rate" does not include a minimum premium.
             1067          (143) (a) Except as provided in Subsection (143)(b), "rate service organization" means
             1068      a person who assists an insurer in rate making or filing by:
             1069          (i) collecting, compiling, and furnishing loss or expense statistics;
             1070          (ii) recommending, making, or filing rates or supplementary rate information; or
             1071          (iii) advising about rate questions, except as an attorney giving legal advice.
             1072          (b) "Rate service organization" does not mean:
             1073          (i) an employee of an insurer;
             1074          (ii) a single insurer or group of insurers under common control;
             1075          (iii) a joint underwriting group; or
             1076          (iv) an individual serving as an actuarial or legal consultant.
             1077          (144) "Rating manual" means any of the following used to determine initial and
             1078      renewal policy premiums:
             1079          (a) a manual of rates;


             1080          (b) a classification;
             1081          (c) a rate-related underwriting rule; and
             1082          (d) a rating formula that describes steps, policies, and procedures for determining
             1083      initial and renewal policy premiums.
             1084          (145) (a) "Rebate" means a licensee paying, allowing, giving, or offering to pay, allow,
             1085      or give, directly or indirectly:
             1086          (i) a refund of premium or portion of premium;
             1087          (ii) a refund of commission or portion of commission;
             1088          (iii) a refund of all or a portion of a consultant fee; or
             1089          (iv) providing services or other benefits not specified in an insurance or annuity
             1090      contract.
             1091          (b) "Rebate" does not include:
             1092          (i) a refund due to termination or changes in coverage;
             1093          (ii) a refund due to overcharges made in error by the licensee; or
             1094          (iii) savings or wellness benefits as provided in the contract by the licensee.
             1095          [(145)] (146) "Received by the department" means:
             1096          (a) the date delivered to and stamped received by the department, if delivered in
             1097      person;
             1098          (b) the post mark date, if delivered by mail;
             1099          (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
             1100          (d) the received date recorded on an item delivered, if delivered by:
             1101          (i) facsimile;
             1102          (ii) email; or
             1103          (iii) another electronic method; or
             1104          (e) a date specified in:
             1105          (i) a statute;
             1106          (ii) a rule; or
             1107          (iii) an order.
             1108          [(146)] (147) "Reciprocal" or "interinsurance exchange" means an unincorporated
             1109      association of persons:
             1110          (a) operating through an attorney-in-fact common to all of the persons; and


             1111          (b) exchanging insurance contracts with one another that provide insurance coverage
             1112      on each other.
             1113          [(147)] (148) "Reinsurance" means an insurance transaction where an insurer, for
             1114      consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
             1115      reinsurance transactions, this title sometimes refers to:
             1116          (a) the insurer transferring the risk as the "ceding insurer"; and
             1117          (b) the insurer assuming the risk as the:
             1118          (i) "assuming insurer"; or
             1119          (ii) "assuming reinsurer."
             1120          [(148)] (149) "Reinsurer" means a person licensed in this state as an insurer with the
             1121      authority to assume reinsurance.
             1122          [(149)] (150) "Residential dwelling liability insurance" means insurance against
             1123      liability resulting from or incident to the ownership, maintenance, or use of a residential
             1124      dwelling that is a detached single family residence or multifamily residence up to four units.
             1125          [(150)] (151) (a) "Retrocession" means reinsurance with another insurer of a liability
             1126      assumed under a reinsurance contract.
             1127          (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
             1128      liability assumed under a reinsurance contract.
             1129          [(151)] (152) "Rider" means an endorsement to:
             1130          (a) an insurance policy; or
             1131          (b) an insurance certificate.
             1132          [(152)] (153) (a) "Security" means a:
             1133          (i) note;
             1134          (ii) stock;
             1135          (iii) bond;
             1136          (iv) debenture;
             1137          (v) evidence of indebtedness;
             1138          (vi) certificate of interest or participation in a profit-sharing agreement;
             1139          (vii) collateral-trust certificate;
             1140          (viii) preorganization certificate or subscription;
             1141          (ix) transferable share;


             1142          (x) investment contract;
             1143          (xi) voting trust certificate;
             1144          (xii) certificate of deposit for a security;
             1145          (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
             1146      payments out of production under such a title or lease;
             1147          (xiv) commodity contract or commodity option;
             1148          (xv) certificate of interest or participation in, temporary or interim certificate for,
             1149      receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
             1150      in Subsections [(152)] (153)(a)(i) through (xiv); or
             1151          (xvi) another interest or instrument commonly known as a security.
             1152          (b) "Security" does not include:
             1153          (i) any of the following under which an insurance company promises to pay money in a
             1154      specific lump sum or periodically for life or some other specified period:
             1155          (A) insurance;
             1156          (B) an endowment policy; or
             1157          (C) an annuity contract; or
             1158          (ii) a burial certificate or burial contract.
             1159          [(153)] (154) "Secondary medical condition" means a complication related to an
             1160      exclusion from coverage in accident and health insurance.
             1161          [(154)] (155) (a) "Self-insurance" means an arrangement under which a person
             1162      provides for spreading its own risks by a systematic plan.
             1163          (b) Except as provided in this Subsection [(154)] (155), "self-insurance" does not
             1164      include an arrangement under which a number of persons spread their risks among themselves.
             1165          (c) "Self-insurance" includes:
             1166          (i) an arrangement by which a governmental entity undertakes to indemnify an
             1167      employee for liability arising out of the employee's employment; and
             1168          (ii) an arrangement by which a person with a managed program of self-insurance and
             1169      risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
             1170      employees for liability or risk that is related to the relationship or employment.
             1171          (d) "Self-insurance" does not include an arrangement with an independent contractor.
             1172          [(155)] (156) "Sell" means to exchange a contract of insurance:


             1173          (a) by any means;
             1174          (b) for money or its equivalent; and
             1175          (c) on behalf of an insurance company.
             1176          [(156)] (157) "Short-term care insurance" means an insurance policy or rider
             1177      advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
             1178      insurance, but that provides coverage for less than 12 consecutive months for each covered
             1179      person.
             1180          [(157)] (158) "Significant break in coverage" means a period of 63 consecutive days
             1181      during each of which an individual does not have creditable coverage.
             1182          [(158)] (159) "Small employer[,]" means, in connection with a health benefit plan[,
             1183      means an employer who,] and with respect to a calendar year and to a plan year, an employer
             1184      who:
             1185          (a) employed [an average of] at least [two employees] one employee but not more than
             1186      an average of 50 eligible employees on [each] business [day] days during the preceding
             1187      calendar year; and
             1188          (b) employs at least [two employees] one employee on the first day of the plan year.
             1189          [(159)] (160) "Special enrollment period," in connection with a health benefit plan, has
             1190      the same meaning as provided in federal regulations adopted pursuant to the Health Insurance
             1191      Portability and Accountability Act.
             1192          [(160)] (161) (a) "Subsidiary" of a person means an affiliate controlled by that person
             1193      either directly or indirectly through one or more affiliates or intermediaries.
             1194          (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
             1195      shares are owned by that person either alone or with its affiliates, except for the minimum
             1196      number of shares the law of the subsidiary's domicile requires to be owned by directors or
             1197      others.
             1198          [(161)] (162) Subject to Subsection (86)(b), "surety insurance" includes:
             1199          (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
             1200      perform the principal's obligations to a creditor or other obligee;
             1201          (b) bail bond insurance; and
             1202          (c) fidelity insurance.
             1203          [(162)] (163) (a) "Surplus" means the excess of assets over the sum of paid-in capital


             1204      and liabilities.
             1205          (b) (i) "Permanent surplus" means the surplus of an insurer or organization that is
             1206      designated by the insurer or organization as permanent.
             1207          (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-205 require
             1208      that insurers or organizations doing business in this state maintain specified minimum levels of
             1209      permanent surplus.
             1210          (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
             1211      same as the minimum required capital requirement that applies to stock insurers.
             1212          (c) "Excess surplus" means:
             1213          (i) for a life insurer, accident and health insurer, health organization, or property and
             1214      casualty insurer as defined in Section 31A-17-601 , the lesser of:
             1215          (A) that amount of an insurer's or health organization's total adjusted capital that
             1216      exceeds the product of:
             1217          (I) 2.5; and
             1218          (II) the sum of the insurer's or health organization's minimum capital or permanent
             1219      surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
             1220          (B) that amount of an insurer's or health organization's total adjusted capital that
             1221      exceeds the product of:
             1222          (I) 3.0; and
             1223          (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
             1224          (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
             1225      that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
             1226          (A) 1.5; and
             1227          (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
             1228          [(163)] (164) "Third party administrator" or "administrator" means a person who
             1229      collects charges or premiums from, or who, for consideration, adjusts or settles claims of
             1230      residents of the state in connection with insurance coverage, annuities, or service insurance
             1231      coverage, except:
             1232          (a) a union on behalf of its members;
             1233          (b) a person administering a:
             1234          (i) pension plan subject to the federal Employee Retirement Income Security Act of


             1235      1974;
             1236          (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
             1237          (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
             1238          (c) an employer on behalf of the employer's employees or the employees of one or
             1239      more of the subsidiary or affiliated corporations of the employer;
             1240          (d) an insurer licensed under the following, but only for a line of insurance for which
             1241      the insurer holds a license in this state:
             1242          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             1243          (ii) Chapter 7, Nonprofit Health Service Insurance Corporations;
             1244          (iii) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1245          (iv) Chapter 9, Insurance Fraternals; or
             1246          (v) Chapter 14, Foreign Insurers;
             1247          (e) a person:
             1248          (i) licensed or exempt from licensing under:
             1249          (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             1250      Reinsurance Intermediaries; or
             1251          (B) Chapter 26, Insurance Adjusters; and
             1252          (ii) whose activities are limited to those authorized under the license the person holds
             1253      or for which the person is exempt; or
             1254          (f) an institution, bank, or financial institution:
             1255          (i) that is:
             1256          (A) an institution whose deposits and accounts are to any extent insured by a federal
             1257      deposit insurance agency, including the Federal Deposit Insurance Corporation or National
             1258      Credit Union Administration; or
             1259          (B) a bank or other financial institution that is subject to supervision or examination by
             1260      a federal or state banking authority; and
             1261          (ii) that does not adjust claims without a third party administrator license.
             1262          [(164)] (165) "Title insurance" means the insuring, guaranteeing, or indemnifying of an
             1263      owner of real or personal property or the holder of liens or encumbrances on that property, or
             1264      others interested in the property against loss or damage suffered by reason of liens or
             1265      encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity


             1266      or unenforceability of any liens or encumbrances on the property.
             1267          [(165)] (166) "Total adjusted capital" means the sum of an insurer's or health
             1268      organization's statutory capital and surplus as determined in accordance with:
             1269          (a) the statutory accounting applicable to the annual financial statements required to be
             1270      filed under Section 31A-4-113 ; and
             1271          (b) another item provided by the RBC instructions, as RBC instructions is defined in
             1272      Section 31A-17-601 .
             1273          [(166)] (167) (a) "Trustee" means "director" when referring to the board of directors of
             1274      a corporation.
             1275          (b) "Trustee," when used in reference to an employee welfare fund, means an
             1276      individual, firm, association, organization, joint stock company, or corporation, whether acting
             1277      individually or jointly and whether designated by that name or any other, that is charged with
             1278      or has the overall management of an employee welfare fund.
             1279          [(167)] (168) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted
             1280      insurer" means an insurer:
             1281          (i) not holding a valid certificate of authority to do an insurance business in this state;
             1282      or
             1283          (ii) transacting business not authorized by a valid certificate.
             1284          (b) "Admitted insurer" or "authorized insurer" means an insurer:
             1285          (i) holding a valid certificate of authority to do an insurance business in this state; and
             1286          (ii) transacting business as authorized by a valid certificate.
             1287          [(168)] (169) "Underwrite" means the authority to accept or reject risk on behalf of the
             1288      insurer.
             1289          [(169)] (170) "Vehicle liability insurance" means insurance against liability resulting
             1290      from or incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a
             1291      vehicle comprehensive or vehicle physical damage coverage under Subsection (139).
             1292          [(170)] (171) "Voting security" means a security with voting rights, and includes a
             1293      security convertible into a security with a voting right associated with the security.
             1294          [(171)] (172) "Waiting period" for a health benefit plan means the period that must
             1295      pass before coverage for an individual, who is otherwise eligible to enroll under the terms of
             1296      the health benefit plan, can become effective.


             1297          [(172)] (173) "Workers' compensation insurance" means:
             1298          (a) insurance for indemnification of an employer against liability for compensation
             1299      based on:
             1300          (i) a compensable accidental injury; and
             1301          (ii) occupational disease disability;
             1302          (b) employer's liability insurance incidental to workers' compensation insurance and
             1303      written in connection with workers' compensation insurance; and
             1304          (c) insurance assuring to a person entitled to workers' compensation benefits the
             1305      compensation provided by law.
             1306          Section 2. Section 31A-2-104 is amended to read:
             1307           31A-2-104. Other employees -- Insurance fraud investigators.
             1308          (1) The department shall employ a chief examiner and such other professional,
             1309      technical, and clerical employees as necessary to carry out the duties of the department.
             1310          (2) An insurance fraud investigator employed pursuant to Subsection (1) may as
             1311      approved by the commissioner:
             1312          (a) be designated a [special function] law enforcement officer, as defined in Section
             1313      [53-13-105 , by the commissioner, but is not] 53-13-103 ; and
             1314          (b) be eligible for retirement benefits under the Public Safety Employee's Retirement
             1315      System.
             1316          Section 3. Section 31A-3-304 (Superseded 07/01/15) is amended to read:
             1317           31A-3-304 (Superseded 07/01/15). Annual fees -- Other taxes or fees prohibited --
             1318      Captive Insurance Restricted Account.
             1319          (1) (a) A captive insurance company shall pay an annual fee imposed under this section
             1320      to obtain or renew a certificate of authority.
             1321          (b) The commissioner shall:
             1322          (i) determine the annual fee pursuant to Section 31A-3-103 ; and
             1323          (ii) consider whether the annual fee is competitive with fees imposed by other states on
             1324      captive insurance companies.
             1325          (2) A captive insurance company that fails to pay the fee required by this section is
             1326      subject to the relevant sanctions of this title.
             1327          (3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter


             1328      9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
             1329      the laws of this state that may be levied or assessed on a captive insurance company:
             1330          (i) a fee under this section;
             1331          (ii) a fee under Chapter 37, Captive Insurance Companies Act; and
             1332          (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
             1333      Act.
             1334          (b) The state or a county, city, or town within the state may not levy or collect an
             1335      occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
             1336      against a captive insurance company.
             1337          (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
             1338      against a captive insurance company.
             1339          (d) A captive insurance company is subject to real and personal property taxes.
             1340          (4) A captive insurance company shall pay the fee imposed by this section to the
             1341      commissioner by June [20] 1 of each year.
             1342          (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
             1343      deposited into the Captive Insurance Restricted Account.
             1344          (b) There is created in the General Fund a restricted account known as the "Captive
             1345      Insurance Restricted Account."
             1346          (c) The Captive Insurance Restricted Account shall consist of the fees described in
             1347      Subsection (3)(a).
             1348          (d) The commissioner shall administer the Captive Insurance Restricted Account.
             1349      Subject to appropriations by the Legislature, the commissioner shall use the money deposited
             1350      into the Captive Insurance Restricted Account to:
             1351          (i) administer and enforce:
             1352          (A) Chapter 37, Captive Insurance Companies Act; and
             1353          (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
             1354          (ii) promote the captive insurance industry in Utah.
             1355          (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
             1356      except that at the end of each fiscal year, money received by the commissioner in excess of
             1357      $950,000 shall be treated as free revenue in the General Fund.
             1358          Section 4. Section 31A-3-304 (Effective 07/01/15) is amended to read:


             1359           31A-3-304 (Effective 07/01/15). Annual fees -- Other taxes or fees prohibited --
             1360      Captive Insurance Restricted Account.
             1361          (1) (a) A captive insurance company shall pay an annual fee imposed under this section
             1362      to obtain or renew a certificate of authority.
             1363          (b) The commissioner shall:
             1364          (i) determine the annual fee pursuant to Section 31A-3-103 ; and
             1365          (ii) consider whether the annual fee is competitive with fees imposed by other states on
             1366      captive insurance companies.
             1367          (2) A captive insurance company that fails to pay the fee required by this section is
             1368      subject to the relevant sanctions of this title.
             1369          (3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter
             1370      9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
             1371      the laws of this state that may be levied or assessed on a captive insurance company:
             1372          (i) a fee under this section;
             1373          (ii) a fee under Chapter 37, Captive Insurance Companies Act; and
             1374          (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
             1375      Act.
             1376          (b) The state or a county, city, or town within the state may not levy or collect an
             1377      occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
             1378      against a captive insurance company.
             1379          (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
             1380      against a captive insurance company.
             1381          (d) A captive insurance company is subject to real and personal property taxes.
             1382          (4) A captive insurance company shall pay the fee imposed by this section to the
             1383      commissioner by June [20] 1 of each year.
             1384          (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
             1385      deposited into the Captive Insurance Restricted Account.
             1386          (b) There is created in the General Fund a restricted account known as the "Captive
             1387      Insurance Restricted Account."
             1388          (c) The Captive Insurance Restricted Account shall consist of the fees described in
             1389      Subsection (3)(a).


             1390          (d) The commissioner shall administer the Captive Insurance Restricted Account.
             1391      Subject to appropriations by the Legislature, the commissioner shall use the money deposited
             1392      into the Captive Insurance Restricted Account to:
             1393          (i) administer and enforce:
             1394          (A) Chapter 37, Captive Insurance Companies Act; and
             1395          (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
             1396          (ii) promote the captive insurance industry in Utah.
             1397          (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
             1398      except that at the end of each fiscal year, money received by the commissioner in excess of
             1399      $1,250,000 shall be treated as free revenue in the General Fund.
             1400          Section 5. Section 31A-4-102 is amended to read:
             1401           31A-4-102. Qualified insurers.
             1402          (1) A person may not conduct an insurance business in Utah in person, through an
             1403      agent, through a broker, through the mail, or through another method of communication,
             1404      except:
             1405          (a) an insurer:
             1406          (i) authorized to do business in Utah under [Chapter 5, 7, 8, 9, 10, 11, 13, or 14; and]:
             1407          (A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             1408          (B) Chapter 7, Nonprofit Health Service Insurance Corporations;
             1409          (C) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1410          (D) Chapter 9, Insurance Fraternals;
             1411          (E) Chapter 10, Annuities;
             1412          (F) Chapter 11, Motor Clubs;
             1413          (G) Chapter 13, Employee Welfare Funds and Plans;
             1414          (H) Chapter 14, Foreign Insurers;
             1415          (I) Chapter 37, Captive Insurance Companies Act; or
             1416          (J) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
             1417          (ii) within the limits of its certificate of authority;
             1418          (b) a joint underwriting group under Section 31A-2-214 or 31A-20-102 ;
             1419          (c) an insurer doing business under Section 31A-15-103 ;
             1420          (d) a person who submits to the commissioner a certificate from the United States


             1421      Department of Labor, or such other evidence as satisfies the commissioner, that the laws of
             1422      Utah are preempted with respect to specified activities of that person by Section 514 of the
             1423      Employee Retirement Income Security Act of 1974 or other federal law; or
             1424          (e) a person exempt from this title under Section 31A-1-103 or another applicable
             1425      statute.
             1426          (2) As used in this section, "insurer" includes a bail bond surety company, as defined in
             1427      Section 31A-35-102 .
             1428          Section 6. Section 31A-4-115 is amended to read:
             1429           31A-4-115. Plan of orderly withdrawal.
             1430          (1) (a) When an insurer intends to withdraw from writing a line of insurance in this
             1431      state or to reduce its total annual premium volume by 75% or more, the insurer shall file with
             1432      the commissioner a plan of orderly withdrawal.
             1433          (b) For purposes of this section, a discontinuance of a health benefit plan pursuant to
             1434      one of the following provisions is a withdrawal from a line of insurance:
             1435          (i) Subsection 31A-30-107 (3)(e); or
             1436          (ii) Subsection 31A-30-107.1 (3)(e).
             1437          (2) An insurer's plan of orderly withdrawal shall:
             1438          (a) indicate the date the insurer intends to begin and complete its withdrawal plan; and
             1439          (b) include provisions for:
             1440          (i) meeting the insurer's contractual obligations;
             1441          (ii) providing services to its Utah policyholders and claimants;
             1442          (iii) meeting [any] applicable statutory obligations; and
             1443          (iv) [(A)] the payment of a withdrawal fee of $50,000 to the [Utah Comprehensive
             1444      Health Insurance Pool if: (I) the insurer is an accident and health insurer; and (II) the insurer's
             1445      line of business is not assumed or placed with another insurer approved by the commissioner;
             1446      or (B) the payment of a withdrawal fee of $50,000 to the department if: (I) the insurer is not
             1447      an accident and health insurer; and (II)] department if the insurer's line of business is not
             1448      assumed or placed with another insurer approved by the commissioner.
             1449          (3) The commissioner shall approve a plan of orderly withdrawal if the plan of orderly
             1450      withdrawal adequately demonstrates that the insurer will:
             1451          (a) protect the interests of the people of the state;


             1452          (b) meet the insurer's contractual obligations;
             1453          (c) provide service to the insurer's Utah policyholders and claimants; and
             1454          (d) meet [any] applicable statutory obligations.
             1455          (4) Section 31A-2-302 governs the commissioner's approval or disapproval of a plan for
             1456      orderly withdrawal.
             1457          (5) The commissioner may require an insurer to increase the deposit maintained in
             1458      accordance with Section 31A-4-105 or Section 31A-4-105.5 and place the deposit in trust in
             1459      the name of the commissioner upon finding, after an adjudicative proceeding that:
             1460          (a) there is reasonable cause to conclude that the interests of the people of the state are
             1461      best served by such action; and
             1462          (b) the insurer:
             1463          (i) has filed a plan of orderly withdrawal; or
             1464          (ii) intends to:
             1465          (A) withdraw from writing a line of insurance in this state; or
             1466          (B) reduce the insurer's total annual premium volume by 75% or more.
             1467          (6) An insurer is subject to the civil penalties under Section 31A-2-308 , if the insurer:
             1468          (a) withdraws from writing insurance in this state without receiving the commissioner's
             1469      approval of a plan of orderly withdrawal; or
             1470          (b) reduces its total annual premium volume by 75% or more in any year without
             1471      [having submitted a plan or receiving the commissioner's approval] receiving the
             1472      commissioner's approval of a plan of orderly withdrawal.
             1473          (7) An insurer that withdraws from writing all lines of insurance in this state may not
             1474      resume writing insurance in this state for five years unless[: (a)] the commissioner finds that
             1475      the prohibition should be waived because the waiver is:
             1476          [(i)] (a) in the public interest to promote competition; or
             1477          [(ii)] (b) to resolve inequity in the marketplace[; and].
             1478          [(b) the insurer complies with Subsection 31A-30-108 (5), if applicable.]
             1479          (8) The commissioner shall adopt rules necessary to implement this section.
             1480          Section 7. Section 31A-8-402.3 is amended to read:
             1481           31A-8-402.3. Discontinuance, nonrenewal, or changes to group health benefit
             1482      plans.


             1483          (1) Except as otherwise provided in this section, a group health benefit plan for a plan
             1484      sponsor is renewable and continues in force:
             1485          (a) with respect to all eligible employees and dependents; and
             1486          (b) at the option of the plan sponsor.
             1487          (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
             1488          (a) for a network plan, if[: (i)] there is no longer any enrollee under the group health
             1489      plan who lives, resides, or works in:
             1490          [(A)] (i) the service area of the insurer; or
             1491          [(B)] (ii) the area for which the insurer is authorized to do business; [and] or
             1492          [(ii) in the case of the small employer market, the insurer applies the same criteria the
             1493      insurer would apply in denying enrollment in the plan under Subsection 31A-30-108 (7); or]
             1494          (b) for coverage made available in the small or large employer market only through an
             1495      association, if:
             1496          (i) the employer's membership in the association ceases; and
             1497          (ii) the coverage is terminated uniformly without regard to any health status-related
             1498      factor relating to any covered individual.
             1499          (3) A health benefit plan for a plan sponsor may be discontinued if:
             1500          (a) a condition described in Subsection (2) exists;
             1501          (b) the plan sponsor fails to pay premiums or contributions in accordance with the
             1502      terms of the contract;
             1503          (c) the plan sponsor:
             1504          (i) performs an act or practice that constitutes fraud; or
             1505          (ii) makes an intentional misrepresentation of material fact under the terms of the
             1506      coverage;
             1507          (d) the insurer:
             1508          (i) elects to discontinue offering a particular health benefit product delivered or issued
             1509      for delivery in this state; and
             1510          (ii) (A) provides notice of the discontinuation in writing:
             1511          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             1512          (II) at least 90 days before the date the coverage will be discontinued;
             1513          (B) provides notice of the discontinuation in writing:


             1514          (I) to the commissioner; and
             1515          (II) at least three working days prior to the date the notice is sent to the affected plan
             1516      sponsors, employees, and dependents of the plan sponsors or employees;
             1517          (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase:
             1518          (I) all other health benefit products currently being offered by the insurer in the market;
             1519      or
             1520          (II) in the case of a large employer, any other health benefit product currently being
             1521      offered in that market; and
             1522          (D) in exercising the option to discontinue that product and in offering the option of
             1523      coverage in this section, acts uniformly without regard to:
             1524          (I) the claims experience of a plan sponsor;
             1525          (II) any health status-related factor relating to any covered participant or beneficiary; or
             1526          (III) any health status-related factor relating to any new participant or beneficiary who
             1527      may become eligible for the coverage; or
             1528          (e) the insurer:
             1529          (i) elects to discontinue all of the insurer's health benefit plans in:
             1530          (A) the small employer market;
             1531          (B) the large employer market; or
             1532          (C) both the small employer and large employer markets; and
             1533          (ii) (A) provides notice of the discontinuation in writing:
             1534          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             1535          (II) at least 180 days before the date the coverage will be discontinued;
             1536          (B) provides notice of the discontinuation in writing:
             1537          (I) to the commissioner in each state in which an affected insured individual is known
             1538      to reside; and
             1539          (II) at least 30 working days prior to the date the notice is sent to the affected plan
             1540      sponsors, employees, and the dependents of the plan sponsors or employees;
             1541          (C) discontinues and nonrenews all plans issued or delivered for issuance in the
             1542      market; and
             1543          (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
             1544          (4) A large employer health benefit plan may be discontinued or nonrenewed:


             1545          (a) if a condition described in Subsection (2) exists; or
             1546          (b) for noncompliance with the insurer's:
             1547          (i) minimum participation requirements; or
             1548          (ii) employer contribution requirements.
             1549          (5) A small employer health benefit plan may be discontinued or nonrenewed:
             1550          (a) if a condition described in Subsection (2) exists; or
             1551          (b) for noncompliance with the insurer's employer contribution requirements.
             1552          (6) A small employer health benefit plan may be nonrenewed:
             1553          (a) if a condition described in Subsection (2) exists; or
             1554          (b) for noncompliance with the insurer's minimum participation requirements.
             1555          (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
             1556      discontinued if after issuance of coverage the eligible employee:
             1557          (i) engages in an act or practice in connection with the coverage that constitutes fraud;
             1558      or
             1559          (ii) makes an intentional misrepresentation of material fact in connection with the
             1560      coverage.
             1561          (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
             1562          (i) 12 months after the date of discontinuance; and
             1563          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
             1564      to reenroll.
             1565          (c) At the time the eligible employee's coverage is discontinued under Subsection
             1566      (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
             1567      discontinued.
             1568          (d) An eligible employee may not be discontinued under this Subsection (7) because of
             1569      a fraud or misrepresentation that relates to health status.
             1570          (8) For purposes of this section, a reference to "plan sponsor" includes a reference to
             1571      the employer:
             1572          (a) with respect to coverage provided to an employer member of the association; and
             1573          (b) if the health benefit plan is made available by an insurer in the employer market
             1574      only through:
             1575          (i) an association;


             1576          (ii) a trust; or
             1577          (iii) a discretionary group.
             1578          (9) An insurer may modify a health benefit plan for a plan sponsor only:
             1579          (a) at the time of coverage renewal; and
             1580          (b) if the modification is effective uniformly among all plans with that product.
             1581          Section 8. Section 31A-16-103 is amended to read:
             1582           31A-16-103. Acquisition of control of or merger with domestic insurer.
             1583          (1) (a) A person may not take the actions described in Subsections (1)(b) or (c) unless,
             1584      at the time any offer, request, or invitation is made or any such agreement is entered into, or
             1585      prior to the acquisition of securities if no offer or agreement is involved:
             1586          (i) the person files with the commissioner a statement containing the information
             1587      required by this section;
             1588          (ii) the person provides a copy of the statement described in Subsection (1)(a)(i) to the
             1589      insurer; and
             1590          (iii) the commissioner approves the offer, request, invitation, agreement, or acquisition.
             1591          (b) Unless the person complies with Subsection (1)(a), a person other than the issuer
             1592      may not make a tender offer for, a request or invitation for tenders of, or enter into any
             1593      agreement to exchange securities, or seek to acquire or acquire in the open market or otherwise,
             1594      any voting security of a domestic insurer if after the acquisition, the person would directly,
             1595      indirectly, by conversion, or by exercise of any right to acquire be in control of the insurer.
             1596          (c) Unless the person complies with Subsection (1)(a), a person may not enter into an
             1597      agreement to merge with or otherwise to acquire control of:
             1598          (i) a domestic insurer; or
             1599          (ii) any person controlling a domestic insurer.
             1600          (d) (i) For purposes of this section, a domestic insurer includes any person controlling a
             1601      domestic insurer unless the person as determined by the commissioner is either directly or
             1602      through its affiliates primarily engaged in business other than the business of insurance.
             1603          (ii) The controlling person described in Subsection (1)(d)(i) shall file with the
             1604      commissioner a preacquisition notification containing the information required in Subsection
             1605      (2) 30 calendar days before the proposed effective date of the acquisition.
             1606          (iii) For the purposes of this section, "person" does not include any securities broker


             1607      that in the usual and customary brokers function holds less than 20% of:
             1608          (A) the voting securities of an insurance company; or
             1609          (B) any person that controls an insurance company.
             1610          (iv) This section applies to all domestic insurers and other entities licensed under
             1611      Chapters 5, 7, 8, 9, and 11.
             1612          (e) (i) An agreement for acquisition of control or merger as contemplated by this
             1613      Subsection (1) is not valid or enforceable unless the agreement:
             1614          (A) is in writing; and
             1615          (B) includes a provision that the agreement is subject to the approval of the
             1616      commissioner upon the filing of any applicable statement required under this chapter.
             1617          (ii) A written agreement for acquisition or control that includes the provision described
             1618      in Subsection (1)(e)(i) satisfies the requirements of this Subsection (1).
             1619          (2) The statement to be filed with the commissioner under Subsection (1) shall be
             1620      made under oath or affirmation and shall contain the following information:
             1621          (a) the name and address of the "acquiring party," which means each person by whom
             1622      or on whose behalf the merger or other acquisition of control referred to in Subsection (1) is to
             1623      be effected; and
             1624          (i) if the person is an individual:
             1625          (A) the person's principal occupation;
             1626          (B) a listing of all offices and positions held by the person during the past five years;
             1627      and
             1628          (C) any conviction of crimes other than minor traffic violations during the past 10
             1629      years; and
             1630          (ii) if the person is not an individual:
             1631          (A) a report of the nature of its business operations during:
             1632          (I) the past five years; or
             1633          (II) for any lesser period as the person and any of its predecessors has been in
             1634      existence;
             1635          (B) an informative description of the business intended to be done by the person and
             1636      the person's subsidiaries;
             1637          (C) a list of all individuals who are or who have been selected to become directors or


             1638      executive officers of the person, or individuals who perform, or who will perform functions
             1639      appropriate to such positions; and
             1640          (D) for each individual described in Subsection (2)(a)(ii)(C), the information required
             1641      by Subsection (2)(a)(i) for each individual;
             1642          (b) (i) the source, nature, and amount of the consideration used or to be used in
             1643      effecting the merger or acquisition of control;
             1644          (ii) a description of any transaction in which funds were or are to be obtained for the
             1645      purpose of effecting the merger or acquisition of control, including any pledge of:
             1646          (A) the insurer's stock; or
             1647          (B) the stock of any of the insurer's subsidiaries or controlling affiliates; and
             1648          (iii) the identity of persons furnishing the consideration;
             1649          (c) (i) fully audited financial information, or other financial information considered
             1650      acceptable by the commissioner, of the earnings and financial condition of each acquiring party
             1651      for:
             1652          (A) the preceding five fiscal years of each acquiring party; or
             1653          (B) any lesser period the acquiring party and any of its predecessors shall have been in
             1654      existence; and
             1655          (ii) unaudited information:
             1656          (A) similar to the information described in Subsection (2)(c)(i); and
             1657          (B) prepared within the 90 days prior to the filing of the statement;
             1658          (d) any plans or proposals which each acquiring party may have to:
             1659          (i) liquidate the insurer;
             1660          (ii) sell its assets;
             1661          (iii) merge or consolidate the insurer with any person; or
             1662          (iv) make any other material change in the insurer's:
             1663          (A) business;
             1664          (B) corporate structure; or
             1665          (C) management;
             1666          (e) (i) the number of shares of any security referred to in Subsection (1) that each
             1667      acquiring party proposes to acquire;
             1668          (ii) the terms of the offer, request, invitation, agreement, or acquisition referred to in


             1669      Subsection (1); and
             1670          (iii) a statement as to the method by which the fairness of the proposal was arrived at;
             1671          (f) the amount of each class of any security referred to in Subsection (1) that:
             1672          (i) is beneficially owned; or
             1673          (ii) concerning which there is a right to acquire beneficial ownership by each acquiring
             1674      party;
             1675          (g) a full description of any contract, arrangement, or understanding with respect to any
             1676      security referred to in Subsection (1) in which any acquiring party is involved, including:
             1677          (i) the transfer of any of the securities;
             1678          (ii) joint ventures;
             1679          (iii) loan or option arrangements;
             1680          (iv) puts or calls;
             1681          (v) guarantees of loans;
             1682          (vi) guarantees against loss or guarantees of profits;
             1683          (vii) division of losses or profits; or
             1684          (viii) the giving or withholding of proxies;
             1685          (h) a description of the purchase by any acquiring party of any security referred to in
             1686      Subsection (1) during the 12 calendar months preceding the filing of the statement including:
             1687          (i) the dates of purchase;
             1688          (ii) the names of the purchasers; and
             1689          (iii) the consideration paid or agreed to be paid for the purchase;
             1690          (i) a description of:
             1691          (i) any recommendations to purchase by any acquiring party any security referred to in
             1692      Subsection (1) made during the 12 calendar months preceding the filing of the statement; or
             1693          (ii) any recommendations made by anyone based upon interviews or at the suggestion
             1694      of the acquiring party;
             1695          (j) (i) copies of all tender offers for, requests for, or invitations for tenders of, exchange
             1696      offers for, and agreements to acquire or exchange any securities referred to in Subsection (1);
             1697      and
             1698          (ii) if distributed, copies of additional soliciting material relating to the transactions
             1699      described in Subsection (2)(j)(i);


             1700          (k) (i) the term of any agreement, contract, or understanding made with, or proposed to
             1701      be made with, any broker-dealer as to solicitation of securities referred to in Subsection (1) for
             1702      tender; and
             1703          (ii) the amount of any fees, commissions, or other compensation to be paid to
             1704      broker-dealers with regard to any agreement, contract, or understanding described in
             1705      Subsection (2)(k)(i); and
             1706          (l) any additional information the commissioner requires by rule, which the
             1707      commissioner determines to be:
             1708          (i) necessary or appropriate for the protection of policyholders of the insurer; or
             1709          (ii) in the public interest.
             1710          (3) The department may request:
             1711          (a) (i) criminal background information maintained pursuant to Title 53, Chapter 10,
             1712      Part 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             1713          (ii) complete Federal Bureau of Investigation criminal background checks through the
             1714      national criminal history system.
             1715          (b) Information obtained by the department from the review of criminal history records
             1716      received under Subsection (3)(a) shall be used by the department for the purpose of:
             1717          (i) verifying the information in Subsection (2)(a)(i);
             1718          (ii) determining the integrity of persons who would control the operation of an insurer;
             1719      and
             1720          (iii) preventing persons who violate 18 U.S.C. [Sections] Sec. 1033 [and 1034] from
             1721      engaging in the business of insurance in the state.
             1722          (c) If the department requests the criminal background information, the department
             1723      shall:
             1724          (i) pay to the Department of Public Safety the costs incurred by the Department of
             1725      Public Safety in providing the department criminal background information under Subsection
             1726      (3)(a)(i);
             1727          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             1728      of Investigation in providing the department criminal background information under
             1729      Subsection (3)(a)(ii); and
             1730          (iii) charge the person required to file the statement referred to in Subsection (1) a fee


             1731      equal to the aggregate of Subsections (3)(c)(i) and (ii).
             1732          (4) (a) If the source of the consideration under Subsection (2)(b)(i) is a loan made in
             1733      the lender's ordinary course of business, the identity of the lender shall remain confidential, if
             1734      the person filing the statement so requests.
             1735          (b) (i) Under Subsection (2)(e), the commissioner may require a statement of the
             1736      adjusted book value assigned by the acquiring party to each security in arriving at the terms of
             1737      the offer.
             1738          (ii) For purposes of this Subsection (4)(b), "adjusted book value" means each security's
             1739      proportional interest in the capital and surplus of the insurer with adjustments that reflect:
             1740          (A) market conditions;
             1741          (B) business in force; and
             1742          (C) other intangible assets or liabilities of the insurer.
             1743          (c) The description required by Subsection (2)(g) shall identify the persons with whom
             1744      the contracts, arrangements, or understandings have been entered into.
             1745          (5) (a) If the person required to file the statement referred to in Subsection (1) is a
             1746      partnership, limited partnership, syndicate, or other group, the commissioner may require that
             1747      all the information called for by Subsections (2), (3), or (4) shall be given with respect to each:
             1748          (i) partner of the partnership or limited partnership;
             1749          (ii) member of the syndicate or group; and
             1750          (iii) person who controls the partner or member.
             1751          (b) If any partner, member, or person referred to in Subsection (5)(a) is a corporation,
             1752      or if the person required to file the statement referred to in Subsection (1) is a corporation, the
             1753      commissioner may require that the information called for by Subsection (2) shall be given with
             1754      respect to:
             1755          (i) the corporation;
             1756          (ii) each officer and director of the corporation; and
             1757          (iii) each person who is directly or indirectly the beneficial owner of more than 10% of
             1758      the outstanding voting securities of the corporation.
             1759          (6) If any material change occurs in the facts set forth in the statement filed with the
             1760      commissioner and sent to the insurer pursuant to Subsection (2), an amendment setting forth
             1761      the change, together with copies of all documents and other material relevant to the change,


             1762      shall be filed with the commissioner and sent to the insurer within two business days after the
             1763      filing person learns of such change.
             1764          (7) If any offer, request, invitation, agreement, or acquisition referred to in Subsection
             1765      (1) is proposed to be made by means of a registration statement under the Securities Act of
             1766      1933, or under circumstances requiring the disclosure of similar information under the
             1767      Securities Exchange Act of 1934, or under a state law requiring similar registration or
             1768      disclosure, a person required to file the statement referred to in Subsection (1) may use copies
             1769      of any registration or disclosure documents in furnishing the information called for by the
             1770      statement.
             1771          (8) (a) The commissioner shall approve any merger or other acquisition of control
             1772      referred to in Subsection (1) unless, after a public hearing on the merger or acquisition, the
             1773      commissioner finds that:
             1774          (i) after the change of control, the domestic insurer referred to in Subsection (1) would
             1775      not be able to satisfy the requirements for the issuance of a license to write the line or lines of
             1776      insurance for which it is presently licensed;
             1777          (ii) the effect of the merger or other acquisition of control would:
             1778          (A) substantially lessen competition in insurance in this state; or
             1779          (B) tend to create a monopoly in insurance;
             1780          (iii) the financial condition of any acquiring party might:
             1781          (A) jeopardize the financial stability of the insurer; or
             1782          (B) prejudice the interest of:
             1783          (I) its policyholders; or
             1784          (II) any remaining securityholders who are unaffiliated with the acquiring party;
             1785          (iv) the terms of the offer, request, invitation, agreement, or acquisition referred to in
             1786      Subsection (1) are unfair and unreasonable to the securityholders of the insurer;
             1787          (v) the plans or proposals which the acquiring party has to liquidate the insurer, sell its
             1788      assets, or consolidate or merge it with any person, or to make any other material change in its
             1789      business or corporate structure or management, are:
             1790          (A) unfair and unreasonable to policyholders of the insurer; and
             1791          (B) not in the public interest; or
             1792          (vi) the competence, experience, and integrity of those persons who would control the


             1793      operation of the insurer are such that it would not be in the interest of the policyholders of the
             1794      insurer and the public to permit the merger or other acquisition of control.
             1795          (b) For purposes of Subsection (8)(a)(iv), the offering price for each security may not
             1796      be considered unfair if the adjusted book values under Subsection (2)(e):
             1797          (i) are disclosed to the securityholders; and
             1798          (ii) determined by the commissioner to be reasonable.
             1799          (9) (a) The public hearing referred to in Subsection (8) shall be held within 30 days
             1800      after the statement required by Subsection (1) is filed.
             1801          (b) (i) At least 20 days notice of the hearing shall be given by the commissioner to the
             1802      person filing the statement.
             1803          (ii) Affected parties may waive the notice required by this Subsection (9)(b).
             1804          (iii) Not less than seven days notice of the public hearing shall be given by the person
             1805      filing the statement to:
             1806          (A) the insurer; and
             1807          (B) any person designated by the commissioner.
             1808          (c) The commissioner shall make a determination within 30 days after the conclusion
             1809      of the hearing.
             1810          (d) At the hearing, the person filing the statement, the insurer, any person to whom
             1811      notice of hearing was sent, and any other person whose interest may be affected by the hearing
             1812      may:
             1813          (i) present evidence;
             1814          (ii) examine and cross-examine witnesses; and
             1815          (iii) offer oral and written arguments.
             1816          (e) (i) A person or insurer described in Subsection (9)(d) may conduct discovery
             1817      proceedings in the same manner as is presently allowed in the district courts of this state.
             1818          (ii) All discovery proceedings shall be concluded not later than three days before the
             1819      commencement of the public hearing.
             1820          (10) (a) The commissioner may retain technical experts to assist in reviewing all, or a
             1821      portion of, information filed in connection with a proposed merger or other acquisition of
             1822      control referred to in Subsection (1).
             1823          (b) In determining whether any of the conditions in Subsection (8) exist, the


             1824      commissioner may consider the findings of technical experts employed to review applicable
             1825      filings.
             1826          (c) (i) A technical expert employed under Subsection (10)(a) shall present to the
             1827      commissioner a statement of all expenses incurred by the technical expert in conjunction with
             1828      the technical expert's review of a proposed merger or other acquisition of control.
             1829          (ii) At the commissioner's direction the acquiring person shall compensate the technical
             1830      expert at customary rates for time and expenses:
             1831          (A) necessarily incurred; and
             1832          (B) approved by the commissioner.
             1833          (iii) The acquiring person shall:
             1834          (A) certify the consolidated account of all charges and expenses incurred for the review
             1835      by technical experts;
             1836          (B) retain a copy of the consolidated account described in Subsection (10)(c)(iii)(A);
             1837      and
             1838          (C) file with the department as a public record a copy of the consolidated account
             1839      described in Subsection (10)(c)(iii)(A).
             1840          (11) (a) (i) If a domestic insurer proposes to merge into another insurer, any
             1841      securityholder electing to exercise a right of dissent may file with the insurer a written request
             1842      for payment of the adjusted book value given in the statement required by Subsection (1) and
             1843      approved under Subsection (8), in return for the surrender of the security holder's securities.
             1844          (ii) The request described in Subsection (11)(a)(i) shall be filed not later than 10 days
             1845      after the day of the securityholders' meeting where the corporate action is approved.
             1846          (b) The dissenting securityholder is entitled to and the insurer is required to pay to the
             1847      dissenting securityholder the specified value within 60 days of receipt of the dissenting security
             1848      holder's security.
             1849          (c) Persons electing under this Subsection (11) to receive cash for their securities waive
             1850      the dissenting shareholder and appraisal rights otherwise applicable under Title 16, Chapter
             1851      10a, Part 13, Dissenters' Rights.
             1852          (d) (i) This Subsection (11) provides an elective procedure for dissenting
             1853      securityholders to resolve their objections to the plan of merger.
             1854          (ii) This section does not restrict the rights of dissenting securityholders under Title 16,


             1855      Chapter 10a, Utah Revised Business Corporation Act, unless this election is made under this
             1856      Subsection (11).
             1857          (12) (a) All statements, amendments, or other material filed under Subsection (1), and
             1858      all notices of public hearings held under Subsection (8), shall be mailed by the insurer to its
             1859      securityholders within five business days after the insurer has received the statements,
             1860      amendments, other material, or notices.
             1861          (b) (i) Mailing expenses shall be paid by the person making the filing.
             1862          (ii) As security for the payment of mailing expenses, that person shall file with the
             1863      commissioner an acceptable bond or other deposit in an amount determined by the
             1864      commissioner.
             1865          (13) This section does not apply to any offer, request, invitation, agreement, or
             1866      acquisition that the commissioner by order exempts from the requirements of this section as:
             1867          (a) not having been made or entered into for the purpose of, and not having the effect
             1868      of, changing or influencing the control of a domestic insurer; or
             1869          (b) [as] otherwise not comprehended within the purposes of this section.
             1870          (14) The following are violations of this section:
             1871          (a) the failure to file any statement, amendment, or other material required to be filed
             1872      pursuant to Subsections (1), (2), and (5); or
             1873          (b) the effectuation, or any attempt to effectuate, an acquisition of control of or merger
             1874      with a domestic insurer unless the commissioner has given the commissioner's approval to the
             1875      acquisition or merger.
             1876          (15) (a) The courts of this state are vested with jurisdiction over:
             1877          (i) a person who:
             1878          (A) files a statement with the commissioner under this section; and
             1879          (B) is not resident, domiciled, or authorized to do business in this state; and
             1880          (ii) overall actions involving persons described in Subsection (15)(a)(i) arising out of a
             1881      violation of this section.
             1882          (b) A person described in Subsection (15)(a) is considered to have performed acts
             1883      equivalent to and constituting an appointment of the commissioner by that person, to be that
             1884      person's lawful agent upon whom may be served all lawful process in any action, suit, or
             1885      proceeding arising out of a violation of this section.


             1886          (c) A copy of a lawful process described in Subsection (15)(b) shall be:
             1887          (i) served on the commissioner; and
             1888          (ii) transmitted by registered or certified mail by the commissioner to the person at that
             1889      person's last-known address.
             1890          Section 9. Section 31A-17-607 is amended to read:
             1891           31A-17-607. Hearings.
             1892          (1) (a) Following receipt of a notice described in Subsection (2), the insurer or health
             1893      organization shall have the right to a confidential departmental hearing at which the insurer or
             1894      health organization may challenge [any] a determination or action by the commissioner.
             1895          (b) The insurer or health organization shall notify the commissioner of its request for a
             1896      hearing within five days after the notification by the commissioner under [Subsections
             1897      31A-17-604 (1), (2), and (3)] Subsection (2).
             1898          (c) Upon receipt of the insurer's or health organization's request for a hearing, the
             1899      commissioner shall set a date for the hearing, which date shall be no less than 10 nor more than
             1900      30 days after the date of the insurer's or health organization's request.
             1901          (2) An insurer or health organization has the right to a hearing under Subsection (1)
             1902      after:
             1903          (a) notification to an insurer or health organization by the commissioner of an adjusted
             1904      RBC report;
             1905          (b) notification to an insurer or health organization by the commissioner that:
             1906          (i) the insurer's or health organization's RBC plan or revised RBC plan is
             1907      unsatisfactory; and
             1908          (ii) the notification constitutes a regulatory action level event with respect to the
             1909      insurer or health organization;
             1910          (c) notification to any insurer or health organization by the commissioner that the
             1911      insurer or health organization has failed to adhere to its RBC plan or revised RBC plan and that
             1912      the failure has substantial adverse effect on the ability of the insurer or health organization to
             1913      eliminate the company action level event with respect to the insurer or health organization in
             1914      accordance with its RBC plan or revised RBC plan; or
             1915          (d) notification to an insurer or health organization by the commissioner of a corrective
             1916      order with respect to the insurer or health organization.


             1917          Section 10. Section 31A-22-305 is amended to read:
             1918           31A-22-305. Uninsured motorist coverage.
             1919          (1) As used in this section, "covered persons" includes:
             1920          (a) the named insured;
             1921          (b) for a claim arising on or after May 13, 2014, the named insured's dependent minor
             1922      children;
             1923          [(b)] (c) persons related to the named insured by blood, marriage, adoption, or
             1924      guardianship, who are residents of the named insured's household, including those who usually
             1925      make their home in the same household but temporarily live elsewhere;
             1926          [(c)] (d) any person occupying or using a motor vehicle:
             1927          (i) referred to in the policy; or
             1928          (ii) owned by a self-insured; and
             1929          [(d)] (e) any person who is entitled to recover damages against the owner or operator of
             1930      the uninsured or underinsured motor vehicle because of bodily injury to or death of persons
             1931      under Subsection (1)(a), (b), [or] (c), or (d).
             1932          (2) As used in this section, "uninsured motor vehicle" includes:
             1933          (a) (i) a motor vehicle, the operation, maintenance, or use of which is not covered
             1934      under a liability policy at the time of an injury-causing occurrence; or
             1935          (ii) (A) a motor vehicle covered with lower liability limits than required by Section
             1936      31A-22-304 ; and
             1937          (B) the motor vehicle described in Subsection (2)(a)(ii)(A) is uninsured to the extent of
             1938      the deficiency;
             1939          (b) an unidentified motor vehicle that left the scene of an accident proximately caused
             1940      by the motor vehicle operator;
             1941          (c) a motor vehicle covered by a liability policy, but coverage for an accident is
             1942      disputed by the liability insurer for more than 60 days or continues to be disputed for more than
             1943      60 days; or
             1944          (d) (i) an insured motor vehicle if, before or after the accident, the liability insurer of
             1945      the motor vehicle is declared insolvent by a court of competent jurisdiction; and
             1946          (ii) the motor vehicle described in Subsection (2)(d)(i) is uninsured only to the extent
             1947      that the claim against the insolvent insurer is not paid by a guaranty association or fund.


             1948          (3) Uninsured motorist coverage under Subsection 31A-22-302 (1)(b) provides
             1949      coverage for covered persons who are legally entitled to recover damages from owners or
             1950      operators of uninsured motor vehicles because of bodily injury, sickness, disease, or death.
             1951          (4) (a) For new policies written on or after January 1, 2001, the limits of uninsured
             1952      motorist coverage shall be equal to the lesser of the limits of the named insured's motor vehicle
             1953      liability coverage or the maximum uninsured motorist coverage limits available by the insurer
             1954      under the named insured's motor vehicle policy, unless a named insured rejects or purchases
             1955      coverage in a lesser amount by signing an acknowledgment form that:
             1956          (i) is filed with the department;
             1957          (ii) is provided by the insurer;
             1958          (iii) waives the higher coverage;
             1959          (iv) need only state in this or similar language that uninsured motorist coverage
             1960      provides benefits or protection to you and other covered persons for bodily injury resulting
             1961      from an accident caused by the fault of another party where the other party has no liability
             1962      insurance; and
             1963          (v) discloses the additional premiums required to purchase uninsured motorist
             1964      coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
             1965      liability coverage or the maximum uninsured motorist coverage limits available by the insurer
             1966      under the named insured's motor vehicle policy.
             1967          (b) Any selection or rejection under this Subsection (4) continues for that issuer of the
             1968      liability coverage until the insured requests, in writing, a change of uninsured motorist
             1969      coverage from that liability insurer.
             1970          (c) (i) Subsections (4)(a) and (b) apply retroactively to any claim arising on or after
             1971      January 1, 2001, for which, as of May 14, 2013, an insured has not made a written demand for
             1972      arbitration or filed a complaint in a court of competent jurisdiction.
             1973          (ii) The Legislature finds that the retroactive application of Subsections (4)(a) and (b)
             1974      clarifies legislative intent and does not enlarge, eliminate, or destroy vested rights.
             1975          (d) For purposes of this Subsection (4), "new policy" means:
             1976          (i) any policy that is issued which does not include a renewal or reinstatement of an
             1977      existing policy; or
             1978          (ii) a change to an existing policy that results in:


             1979          (A) a named insured being added to or deleted from the policy; or
             1980          (B) a change in the limits of the named insured's motor vehicle liability coverage.
             1981          (e) (i) As used in this Subsection (4)(e), "additional motor vehicle" means a change
             1982      that increases the total number of vehicles insured by the policy, and does not include
             1983      replacement, substitute, or temporary vehicles.
             1984          (ii) The adding of an additional motor vehicle to an existing personal lines or
             1985      commercial lines policy does not constitute a new policy for purposes of Subsection (4)(d).
             1986          (iii) If an additional motor vehicle is added to a personal lines policy where uninsured
             1987      motorist coverage has been rejected, or where uninsured motorist limits are lower than the
             1988      named insured's motor vehicle liability limits, the insurer shall provide a notice to a named
             1989      insured within 30 days that:
             1990          (A) in the same manner as described in Subsection (4)(a)(iv), explains the purpose of
             1991      uninsured motorist coverage; and
             1992          (B) encourages the named insured to contact the insurance company or insurance
             1993      producer for quotes as to the additional premiums required to purchase uninsured motorist
             1994      coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
             1995      liability coverage or the maximum uninsured motorist coverage limits available by the insurer
             1996      under the named insured's motor vehicle policy.
             1997          (f) A change in policy number resulting from any policy change not identified under
             1998      Subsection (4)(d)(ii) does not constitute a new policy.
             1999          (g) (i) Subsection (4)(d) applies retroactively to any claim arising on or after January 1,
             2000      2001, for which, as of May 1, 2012, an insured has not made a written demand for arbitration
             2001      or filed a complaint in a court of competent jurisdiction.
             2002          (ii) The Legislature finds that the retroactive application of Subsection (4):
             2003          (A) does not enlarge, eliminate, or destroy vested rights; and
             2004          (B) clarifies legislative intent.
             2005          (h) A self-insured, including a governmental entity, may elect to provide uninsured
             2006      motorist coverage in an amount that is less than its maximum self-insured retention under
             2007      Subsections (4)(a) and (5)(a) by issuing a declaratory memorandum or policy statement from
             2008      the chief financial officer or chief risk officer that declares the:
             2009          (i) self-insured entity's coverage level; and


             2010          (ii) process for filing an uninsured motorist claim.
             2011          (i) Uninsured motorist coverage may not be sold with limits that are less than the
             2012      minimum bodily injury limits for motor vehicle liability policies under Section 31A-22-304 .
             2013          (j) The acknowledgment under Subsection (4)(a) continues for that issuer of the
             2014      uninsured motorist coverage until the named insured requests, in writing, different uninsured
             2015      motorist coverage from the insurer.
             2016          (k) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
             2017      policies existing on that date, the insurer shall disclose in the same medium as the premium
             2018      renewal notice, an explanation of:
             2019          (A) the purpose of uninsured motorist coverage in the same manner as described in
             2020      Subsection (4)(a)(iv); and
             2021          (B) a disclosure of the additional premiums required to purchase uninsured motorist
             2022      coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
             2023      liability coverage or the maximum uninsured motorist coverage limits available by the insurer
             2024      under the named insured's motor vehicle policy.
             2025          (ii) The disclosure required under Subsection (4)(k)(i) shall be sent to all named
             2026      insureds that carry uninsured motorist coverage limits in an amount less than the named
             2027      insured's motor vehicle liability policy limits or the maximum uninsured motorist coverage
             2028      limits available by the insurer under the named insured's motor vehicle policy.
             2029          (l) For purposes of this Subsection (4), a notice or disclosure sent to a named insured in
             2030      a household constitutes notice or disclosure to all insureds within the household.
             2031          (5) (a) (i) Except as provided in Subsection (5)(b), the named insured may reject
             2032      uninsured motorist coverage by an express writing to the insurer that provides liability
             2033      coverage under Subsection 31A-22-302 (1)(a).
             2034          (ii) This rejection shall be on a form provided by the insurer that includes a reasonable
             2035      explanation of the purpose of uninsured motorist coverage.
             2036          (iii) This rejection continues for that issuer of the liability coverage until the insured in
             2037      writing requests uninsured motorist coverage from that liability insurer.
             2038          (b) (i) All persons, including governmental entities, that are engaged in the business of,
             2039      or that accept payment for, transporting natural persons by motor vehicle, and all school
             2040      districts that provide transportation services for their students, shall provide coverage for all


             2041      motor vehicles used for that purpose, by purchase of a policy of insurance or by self-insurance,
             2042      uninsured motorist coverage of at least $25,000 per person and $500,000 per accident.
             2043          (ii) This coverage is secondary to any other insurance covering an injured covered
             2044      person.
             2045          (c) Uninsured motorist coverage:
             2046          (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
             2047      Compensation Act;
             2048          (ii) may not be subrogated by the workers' compensation insurance carrier;
             2049          (iii) may not be reduced by any benefits provided by workers' compensation insurance;
             2050          (iv) may be reduced by health insurance subrogation only after the covered person has
             2051      been made whole;
             2052          (v) may not be collected for bodily injury or death sustained by a person:
             2053          (A) while committing a violation of Section 41-1a-1314 ;
             2054          (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
             2055      in violation of Section 41-1a-1314 ; or
             2056          (C) while committing a felony; and
             2057          (vi) notwithstanding Subsection (5)(c)(v), may be recovered:
             2058          (A) for a person under 18 years of age who is injured within the scope of Subsection
             2059      (5)(c)(v) but limited to medical and funeral expenses; or
             2060          (B) by a law enforcement officer as defined in Section 53-13-103 , who is injured
             2061      within the course and scope of the law enforcement officer's duties.
             2062          (d) As used in this Subsection (5), "motor vehicle" has the same meaning as under
             2063      Section 41-1a-102 .
             2064          (6) When a covered person alleges that an uninsured motor vehicle under Subsection
             2065      (2)(b) proximately caused an accident without touching the covered person or the motor
             2066      vehicle occupied by the covered person, the covered person shall show the existence of the
             2067      uninsured motor vehicle by clear and convincing evidence consisting of more than the covered
             2068      person's testimony.
             2069          (7) (a) The limit of liability for uninsured motorist coverage for two or more motor
             2070      vehicles may not be added together, combined, or stacked to determine the limit of insurance
             2071      coverage available to an injured person for any one accident.


             2072          (b) (i) Subsection (7)(a) applies to all persons except a covered person as defined under
             2073      Subsection (8)(b)(ii).
             2074          (ii) A covered person as defined under Subsection (8)(b)(ii) is entitled to the highest
             2075      limits of uninsured motorist coverage afforded for any one motor vehicle that the covered
             2076      person is the named insured or an insured family member.
             2077          (iii) This coverage shall be in addition to the coverage on the motor vehicle the covered
             2078      person is occupying.
             2079          (iv) Neither the primary nor the secondary coverage may be set off against the other.
             2080          (c) Coverage on a motor vehicle occupied at the time of an accident shall be primary
             2081      coverage, and the coverage elected by a person described under Subsections (1)(a) [and], (b),
             2082      and (c) shall be secondary coverage.
             2083          (8) (a) Uninsured motorist coverage under this section applies to bodily injury,
             2084      sickness, disease, or death of covered persons while occupying or using a motor vehicle only if
             2085      the motor vehicle is described in the policy under which a claim is made, or if the motor
             2086      vehicle is a newly acquired or replacement motor vehicle covered under the terms of the policy.
             2087      Except as provided in Subsection (7) or this Subsection (8), a covered person injured in a
             2088      motor vehicle described in a policy that includes uninsured motorist benefits may not elect to
             2089      collect uninsured motorist coverage benefits from any other motor vehicle insurance policy
             2090      under which the person is a covered person.
             2091          (b) Each of the following persons may also recover uninsured motorist benefits under
             2092      any one other policy in which they are described as a "covered person" as defined in Subsection
             2093      (1):
             2094          (i) a covered person injured as a pedestrian by an uninsured motor vehicle; and
             2095          (ii) except as provided in Subsection (8)(c), a covered person injured while occupying
             2096      or using a motor vehicle that is not owned, leased, or furnished:
             2097          (A) to the covered person;
             2098          (B) to the covered person's spouse; or
             2099          (C) to the covered person's resident parent or resident sibling.
             2100          (c) (i) A covered person may recover benefits from no more than two additional
             2101      policies, one additional policy from each parent's household if the covered person is:
             2102          (A) a dependent minor of parents who reside in separate households; and


             2103          (B) injured while occupying or using a motor vehicle that is not owned, leased, or
             2104      furnished:
             2105          (I) to the covered person;
             2106          (II) to the covered person's resident parent; or
             2107          (III) to the covered person's resident sibling.
             2108          (ii) Each parent's policy under this Subsection (8)(c) is liable only for the percentage of
             2109      the damages that the limit of liability of each parent's policy of uninsured motorist coverage
             2110      bears to the total of both parents' uninsured coverage applicable to the accident.
             2111          (d) A covered person's recovery under any available policies may not exceed the full
             2112      amount of damages.
             2113          (e) A covered person in Subsection (8)(b) is not barred against making subsequent
             2114      elections if recovery is unavailable under previous elections.
             2115          (f) (i) As used in this section, "interpolicy stacking" means recovering benefits for a
             2116      single incident of loss under more than one insurance policy.
             2117          (ii) Except to the extent permitted by Subsection (7) and this Subsection (8),
             2118      interpolicy stacking is prohibited for uninsured motorist coverage.
             2119          (9) (a) When a claim is brought by a named insured or a person described in
             2120      Subsection (1) and is asserted against the covered person's uninsured motorist carrier, the
             2121      claimant may elect to resolve the claim:
             2122          (i) by submitting the claim to binding arbitration; or
             2123          (ii) through litigation.
             2124          (b) Unless otherwise provided in the policy under which uninsured benefits are
             2125      claimed, the election provided in Subsection (9)(a) is available to the claimant only, except that
             2126      if the policy under which insured benefits are claimed provides that either an insured or the
             2127      insurer may elect arbitration, the insured or the insurer may elect arbitration and that election to
             2128      arbitrate shall stay the litigation of the claim under Subsection (9)(a)(ii).
             2129          (c) Once the claimant has elected to commence litigation under Subsection (9)(a)(ii),
             2130      the claimant may not elect to resolve the claim through binding arbitration under this section
             2131      without the written consent of the uninsured motorist carrier.
             2132          (d) (i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
             2133      binding arbitration under Subsection (9)(a)(i) shall be resolved by a single arbitrator.


             2134          (ii) All parties shall agree on the single arbitrator selected under Subsection (9)(d)(i).
             2135          (iii) If the parties are unable to agree on a single arbitrator as required under Subsection
             2136      (9)(d)(ii), the parties shall select a panel of three arbitrators.
             2137          (e) If the parties select a panel of three arbitrators under Subsection (9)(d)(iii):
             2138          (i) each side shall select one arbitrator; and
             2139          (ii) the arbitrators appointed under Subsection (9)(e)(i) shall select one additional
             2140      arbitrator to be included in the panel.
             2141          (f) Unless otherwise agreed to in writing:
             2142          (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
             2143      under Subsection (9)(d)(i); or
             2144          (ii) if an arbitration panel is selected under Subsection (9)(d)(iii):
             2145          (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
             2146          (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
             2147      under Subsection (9)(e)(ii).
             2148          (g) Except as otherwise provided in this section or unless otherwise agreed to in
             2149      writing by the parties, an arbitration proceeding conducted under this section shall be governed
             2150      by Title 78B, Chapter 11, Utah Uniform Arbitration Act.
             2151          (h) (i) The arbitration shall be conducted in accordance with Rules 26(a)(4) through (f),
             2152      27 through 37, 54, and 68 of the Utah Rules of Civil Procedure, once the requirements of
             2153      Subsections (10)(a) through (c) are satisfied.
             2154          (ii) The specified tier as defined by Rule 26(c)(3) of the Utah Rules of Civil Procedure
             2155      shall be determined based on the claimant's specific monetary amount in the written demand
             2156      for payment of uninsured motorist coverage benefits as required in Subsection (10)(a)(i)(A).
             2157          (iii) Rules 26.1 and 26.2 of the Utah Rules of Civil Procedure do not apply to
             2158      arbitration claims under this part.
             2159          (i) All issues of discovery shall be resolved by the arbitrator or the arbitration panel.
             2160          (j) A written decision by a single arbitrator or by a majority of the arbitration panel
             2161      shall constitute a final decision.
             2162          (k) (i) Except as provided in Subsection (10), the amount of an arbitration award may
             2163      not exceed the uninsured motorist policy limits of all applicable uninsured motorist policies,
             2164      including applicable uninsured motorist umbrella policies.


             2165          (ii) If the initial arbitration award exceeds the uninsured motorist policy limits of all
             2166      applicable uninsured motorist policies, the arbitration award shall be reduced to an amount
             2167      equal to the combined uninsured motorist policy limits of all applicable uninsured motorist
             2168      policies.
             2169          (l) The arbitrator or arbitration panel may not decide the issues of coverage or
             2170      extra-contractual damages, including:
             2171          (i) whether the claimant is a covered person;
             2172          (ii) whether the policy extends coverage to the loss; or
             2173          (iii) any allegations or claims asserting consequential damages or bad faith liability.
             2174          (m) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or
             2175      class-representative basis.
             2176          (n) If the arbitrator or arbitration panel finds that the action was not brought, pursued,
             2177      or defended in good faith, the arbitrator or arbitration panel may award reasonable attorney fees
             2178      and costs against the party that failed to bring, pursue, or defend the claim in good faith.
             2179          (o) An arbitration award issued under this section shall be the final resolution of all
             2180      claims not excluded by Subsection (9)(l) between the parties unless:
             2181          (i) the award was procured by corruption, fraud, or other undue means;
             2182          (ii) either party, within 20 days after service of the arbitration award:
             2183          (A) files a complaint requesting a trial de novo in the district court; and
             2184          (B) serves the nonmoving party with a copy of the complaint requesting a trial de novo
             2185      under Subsection (9)(o)(ii)(A).
             2186          (p) (i) Upon filing a complaint for a trial de novo under Subsection (9)(o), the claim
             2187      shall proceed through litigation pursuant to the Utah Rules of Civil Procedure and Utah Rules
             2188      of Evidence in the district court.
             2189          (ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
             2190      request a jury trial with a complaint requesting a trial de novo under Subsection (9)(o)(ii)(A).
             2191          (q) (i) If the claimant, as the moving party in a trial de novo requested under
             2192      Subsection (9)(o), does not obtain a verdict that is at least $5,000 and is at least 20% greater
             2193      than the arbitration award, the claimant is responsible for all of the nonmoving party's costs.
             2194          (ii) If the uninsured motorist carrier, as the moving party in a trial de novo requested
             2195      under Subsection (9)(o), does not obtain a verdict that is at least 20% less than the arbitration


             2196      award, the uninsured motorist carrier is responsible for all of the nonmoving party's costs.
             2197          (iii) Except as provided in Subsection (9)(q)(iv), the costs under this Subsection (9)(q)
             2198      shall include:
             2199          (A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
             2200          (B) the costs of expert witnesses and depositions.
             2201          (iv) An award of costs under this Subsection (9)(q) may not exceed $2,500 unless
             2202      Subsection (10)(h)(iii) applies.
             2203          (r) For purposes of determining whether a party's verdict is greater or less than the
             2204      arbitration award under Subsection (9)(q), a court may not consider any recovery or other relief
             2205      granted on a claim for damages if the claim for damages:
             2206          (i) was not fully disclosed in writing prior to the arbitration proceeding; or
             2207          (ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil
             2208      Procedure.
             2209          (s) If a district court determines, upon a motion of the nonmoving party, that the
             2210      moving party's use of the trial de novo process was filed in bad faith in accordance with
             2211      Section 78B-5-825 , the district court may award reasonable attorney fees to the nonmoving
             2212      party.
             2213          (t) Nothing in this section is intended to limit any claim under any other portion of an
             2214      applicable insurance policy.
             2215          (u) If there are multiple uninsured motorist policies, as set forth in Subsection (8), the
             2216      claimant may elect to arbitrate in one hearing the claims against all the uninsured motorist
             2217      carriers.
             2218          (10) (a) Within 30 days after a covered person elects to submit a claim for uninsured
             2219      motorist benefits to binding arbitration or files litigation, the covered person shall provide to
             2220      the uninsured motorist carrier:
             2221          (i) a written demand for payment of uninsured motorist coverage benefits, setting forth:
             2222          (A) subject to Subsection (10)(l), the specific monetary amount of the demand,
             2223      including a computation of the covered person's claimed past medical expenses, claimed past
             2224      lost wages, and the other claimed past economic damages; and
             2225          (B) the factual and legal basis and any supporting documentation for the demand;
             2226          (ii) a written statement under oath disclosing:


             2227          (A) (I) the names and last known addresses of all health care providers who have
             2228      rendered health care services to the covered person that are material to the claims for which
             2229      uninsured motorist benefits are sought for a period of five years preceding the date of the event
             2230      giving rise to the claim for uninsured motorist benefits up to the time the election for
             2231      arbitration or litigation has been exercised; and
             2232          (II) [whether the covered person has seen other] the names and last known addresses of
             2233      the health care providers who have rendered health care services to the covered person, which
             2234      the covered person claims are immaterial to the claims for which uninsured motorist benefits
             2235      are sought, for a period of five years preceding the date of the event giving rise to the claim for
             2236      uninsured motorist benefits up to the time the election for arbitration or litigation has been
             2237      exercised that have not been disclosed under Subsection (10)(a)(ii)(A)(I);
             2238          (B) (I) the names and last known addresses of all health insurers or other entities to
             2239      whom the covered person has submitted claims for health care services or benefits material to
             2240      the claims for which uninsured motorist benefits are sought, for a period of five years
             2241      preceding the date of the event giving rise to the claim for uninsured motorist benefits up to the
             2242      time the election for arbitration or litigation has been exercised; and
             2243          (II) [whether the identity of any] the names and last known addresses of the health
             2244      insurers or other entities to whom the covered person has submitted claims for health care
             2245      services or benefits, which the covered person claims are immaterial to the claims for which
             2246      uninsured motorist benefits are sought, for a period of five years preceding the date of the event
             2247      giving rise to the claim for uninsured motorist benefits up to the time the election for
             2248      arbitration or litigation have not been disclosed;
             2249          (C) if lost wages, diminished earning capacity, or similar damages are claimed, all
             2250      employers of the covered person for a period of five years preceding the date of the event
             2251      giving rise to the claim for uninsured motorist benefits up to the time the election for
             2252      arbitration or litigation has been exercised;
             2253          (D) other documents to reasonably support the claims being asserted; and
             2254          (E) all state and federal statutory lienholders including a statement as to whether the
             2255      covered person is a recipient of Medicare or Medicaid benefits or Utah Children's Health
             2256      Insurance Program benefits under Title 26, Chapter 40, Utah Children's Health Insurance Act,
             2257      or if the claim is subject to any other state or federal statutory liens; and


             2258          (iii) signed authorizations to allow the uninsured motorist carrier to only obtain records
             2259      and billings from the individuals or entities disclosed under Subsections (10)(a)(ii)(A)(I),
             2260      (B)(I), and (C).
             2261          (b) (i) If the uninsured motorist carrier determines that the disclosure of undisclosed
             2262      health care providers or health care insurers under Subsection (10)(a)(ii) is reasonably
             2263      necessary, the uninsured motorist carrier may:
             2264          (A) make a request for the disclosure of the identity of the health care providers or
             2265      health care insurers; and
             2266          (B) make a request for authorizations to allow the uninsured motorist carrier to only
             2267      obtain records and billings from the individuals or entities not disclosed.
             2268          (ii) If the covered person does not provide the requested information within 10 days:
             2269          (A) the covered person shall disclose, in writing, the legal or factual basis for the
             2270      failure to disclose the health care providers or health care insurers; and
             2271          (B) either the covered person or the uninsured motorist carrier may request the
             2272      arbitrator or arbitration panel to resolve the issue of whether the identities or records are to be
             2273      provided if the covered person has elected arbitration.
             2274          (iii) The time periods imposed by Subsection (10)(c)(i) are tolled pending resolution of
             2275      the dispute concerning the disclosure and production of records of the health care providers or
             2276      health care insurers.
             2277          (c) (i) An uninsured motorist carrier that receives an election for arbitration or a notice
             2278      of filing litigation and the demand for payment of uninsured motorist benefits under Subsection
             2279      (10)(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the demand and
             2280      receipt of the items specified in Subsections (10)(a)(i) through (iii), to:
             2281          (A) provide a written response to the written demand for payment provided for in
             2282      Subsection (10)(a)(i);
             2283          (B) except as provided in Subsection (10)(c)(i)(C), tender the amount, if any, of the
             2284      uninsured motorist carrier's determination of the amount owed to the covered person; and
             2285          (C) if the covered person is a recipient of Medicare or Medicaid benefits or Utah
             2286      Children's Health Insurance Program benefits under Title 26, Chapter 40, Utah Children's
             2287      Health Insurance Act, or if the claim is subject to any other state or federal statutory liens,
             2288      tender the amount, if any, of the uninsured motorist carrier's determination of the amount owed


             2289      to the covered person less:
             2290          (I) if the amount of the state or federal statutory lien is established, the amount of the
             2291      lien; or
             2292          (II) if the amount of the state or federal statutory lien is not established, two times the
             2293      amount of the medical expenses subject to the state or federal statutory lien until such time as
             2294      the amount of the state or federal statutory lien is established.
             2295          (ii) If the amount tendered by the uninsured motorist carrier under Subsection (10)(c)(i)
             2296      is the total amount of the uninsured motorist policy limits, the tendered amount shall be
             2297      accepted by the covered person.
             2298          (d) A covered person who receives a written response from an uninsured motorist
             2299      carrier as provided for in Subsection (10)(c)(i), may:
             2300          (i) elect to accept the amount tendered in Subsection (10)(c)(i) as payment in full of all
             2301      uninsured motorist claims; or
             2302          (ii) elect to:
             2303          (A) accept the amount tendered in Subsection (10)(c)(i) as partial payment of all
             2304      uninsured motorist claims; and
             2305          (B) continue to litigate or arbitrate the remaining claim in accordance with the election
             2306      made under Subsections (9)(a), (b), and (c).
             2307          (e) If a covered person elects to accept the amount tendered under Subsection (10)(c)(i)
             2308      as partial payment of all uninsured motorist claims, the final award obtained through
             2309      arbitration, litigation, or later settlement shall be reduced by any payment made by the
             2310      uninsured motorist carrier under Subsection (10)(c)(i).
             2311          (f) In an arbitration proceeding on the remaining uninsured claims:
             2312          (i) the parties may not disclose to the arbitrator or arbitration panel the amount paid
             2313      under Subsection (10)(c)(i) until after the arbitration award has been rendered; and
             2314          (ii) the parties may not disclose the amount of the limits of uninsured motorist benefits
             2315      provided by the policy.
             2316          (g) If the final award obtained through arbitration or litigation is greater than the
             2317      average of the covered person's initial written demand for payment provided for in Subsection
             2318      (10)(a)(i) and the uninsured motorist carrier's initial written response provided for in
             2319      Subsection (10)(c)(i), the uninsured motorist carrier shall pay:


             2320          (i) the final award obtained through arbitration or litigation, except that if the award
             2321      exceeds the policy limits of the subject uninsured motorist policy by more than $15,000, the
             2322      amount shall be reduced to an amount equal to the policy limits plus $15,000; and
             2323          (ii) any of the following applicable costs:
             2324          (A) any costs as set forth in Rule 54(d), Utah Rules of Civil Procedure;
             2325          (B) the arbitrator or arbitration panel's fee; and
             2326          (C) the reasonable costs of expert witnesses and depositions used in the presentation of
             2327      evidence during arbitration or litigation.
             2328          (h) (i) The covered person shall provide an affidavit of costs within five days of an
             2329      arbitration award.
             2330          (ii) (A) Objection to the affidavit of costs shall specify with particularity the costs to
             2331      which the uninsured motorist carrier objects.
             2332          (B) The objection shall be resolved by the arbitrator or arbitration panel.
             2333          (iii) The award of costs by the arbitrator or arbitration panel under Subsection
             2334      (10)(g)(ii) may not exceed $5,000.
             2335          (i) (i) A covered person shall disclose all material information, other than rebuttal
             2336      evidence, within 30 days after a covered person elects to submit a claim for uninsured motorist
             2337      coverage benefits to binding arbitration or files litigation as specified in Subsection (10)(a).
             2338          (ii) If the information under Subsection (10)(i)(i) is not disclosed, the covered person
             2339      may not recover costs or any amounts in excess of the policy under Subsection (10)(g).
             2340          (j) This Subsection (10) does not limit any other cause of action that arose or may arise
             2341      against the uninsured motorist carrier from the same dispute.
             2342          (k) The provisions of this Subsection (10) only apply to motor vehicle accidents that
             2343      occur on or after March 30, 2010.
             2344          (l) (i) The written demand requirement in Subsection (10)(a)(i)(A) does not affect the
             2345      covered person's requirement to provide a computation of any other economic damages
             2346      claimed, and the one or more respondents shall have a reasonable time after the receipt of the
             2347      computation of any other economic damages claimed to conduct fact and expert discovery as
             2348      to any additional damages claimed. The changes made by this bill to this Subsection (10)(l)
             2349      and Subsection (10)(a)(i)(A) apply to a claim submitted to binding arbitration or through
             2350      litigation on or after May 13, 2014.


             2351          (ii) The changes made by this bill to Subsections (10)(a)(ii)(A)(II) and (B)(II) apply to
             2352      any claim submitted to binding arbitration or through litigation on or after May 13, 2014.
             2353          Section 11. Section 31A-22-305.3 is amended to read:
             2354           31A-22-305.3. Underinsured motorist coverage.
             2355          (1) As used in this section:
             2356          (a) "Covered person" has the same meaning as defined in Section 31A-22-305 .
             2357          (b) (i) "Underinsured motor vehicle" includes a motor vehicle, the operation,
             2358      maintenance, or use of which is covered under a liability policy at the time of an injury-causing
             2359      occurrence, but which has insufficient liability coverage to compensate fully the injured party
             2360      for all special and general damages.
             2361          (ii) The term "underinsured motor vehicle" does not include:
             2362          (A) a motor vehicle that is covered under the liability coverage of the same policy that
             2363      also contains the underinsured motorist coverage;
             2364          (B) an uninsured motor vehicle as defined in Subsection 31A-22-305 (2); or
             2365          (C) a motor vehicle owned or leased by:
             2366          (I) a named insured;
             2367          (II) a named insured's spouse; or
             2368          (III) a dependent of a named insured.
             2369          (2) (a) Underinsured motorist coverage under Subsection 31A-22-302 (1)(c) provides
             2370      coverage for a covered person who is legally entitled to recover damages from an owner or
             2371      operator of an underinsured motor vehicle because of bodily injury, sickness, disease, or death.
             2372          (b) A covered person occupying or using a motor vehicle owned, leased, or furnished
             2373      to the covered person, the covered person's spouse, or covered person's resident relative may
             2374      recover underinsured benefits only if the motor vehicle is:
             2375          (i) described in the policy under which a claim is made; or
             2376          (ii) a newly acquired or replacement motor vehicle covered under the terms of the
             2377      policy.
             2378          (3) (a) For new policies written on or after January 1, 2001, the limits of underinsured
             2379      motorist coverage shall be equal to the lesser of the limits of the named insured's motor vehicle
             2380      liability coverage or the maximum underinsured motorist coverage limits available by the
             2381      insurer under the named insured's motor vehicle policy, unless a named insured rejects or


             2382      purchases coverage in a lesser amount by signing an acknowledgment form that:
             2383          (i) is filed with the department;
             2384          (ii) is provided by the insurer;
             2385          (iii) waives the higher coverage;
             2386          (iv) need only state in this or similar language that underinsured motorist coverage
             2387      provides benefits or protection to you and other covered persons for bodily injury resulting
             2388      from an accident caused by the fault of another party where the other party has insufficient
             2389      liability insurance; and
             2390          (v) discloses the additional premiums required to purchase underinsured motorist
             2391      coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
             2392      liability coverage or the maximum underinsured motorist coverage limits available by the
             2393      insurer under the named insured's motor vehicle policy.
             2394          (b) Any selection or rejection under Subsection (3)(a) continues for that issuer of the
             2395      liability coverage until the insured requests, in writing, a change of underinsured motorist
             2396      coverage from that liability insurer.
             2397          (c) (i) Subsections (3)(a) and (b) apply retroactively to any claim arising on or after
             2398      January 1, 2001, for which, as of May 14, 2013, an insured has not made a written demand for
             2399      arbitration or filed a complaint in a court of competent jurisdiction.
             2400          (ii) The Legislature finds that the retroactive application of Subsections (3)(a) and (b)
             2401      clarifies legislative intent and does not enlarge, eliminate, or destroy vested rights.
             2402          (d) For purposes of this Subsection (3), "new policy" means:
             2403          (i) any policy that is issued which does not include a renewal or reinstatement of an
             2404      existing policy; or
             2405          (ii) a change to an existing policy that results in:
             2406          (A) a named insured being added to or deleted from the policy; or
             2407          (B) a change in the limits of the named insured's motor vehicle liability coverage.
             2408          (e) (i) As used in this Subsection (3)(e), "additional motor vehicle" means a change
             2409      that increases the total number of vehicles insured by the policy, and does not include
             2410      replacement, substitute, or temporary vehicles.
             2411          (ii) The adding of an additional motor vehicle to an existing personal lines or
             2412      commercial lines policy does not constitute a new policy for purposes of Subsection (3)(d).


             2413          (iii) If an additional motor vehicle is added to a personal lines policy where
             2414      underinsured motorist coverage has been rejected, or where underinsured motorist limits are
             2415      lower than the named insured's motor vehicle liability limits, the insurer shall provide a notice
             2416      to a named insured within 30 days that:
             2417          (A) in the same manner described in Subsection (3)(a)(iv), explains the purpose of
             2418      underinsured motorist coverage; and
             2419          (B) encourages the named insured to contact the insurance company or insurance
             2420      producer for quotes as to the additional premiums required to purchase underinsured motorist
             2421      coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
             2422      liability coverage or the maximum underinsured motorist coverage limits available by the
             2423      insurer under the named insured's motor vehicle policy.
             2424          (f) A change in policy number resulting from any policy change not identified under
             2425      Subsection (3)(d)(ii) does not constitute a new policy.
             2426          (g) (i) Subsection (3)(d) applies retroactively to any claim arising on or after January 1,
             2427      2001 for which, as of May 1, 2012, an insured has not made a written demand for arbitration or
             2428      filed a complaint in a court of competent jurisdiction.
             2429          (ii) The Legislature finds that the retroactive application of Subsection (3)(d):
             2430          (A) does not enlarge, eliminate, or destroy vested rights; and
             2431          (B) clarifies legislative intent.
             2432          (h) A self-insured, including a governmental entity, may elect to provide underinsured
             2433      motorist coverage in an amount that is less than its maximum self-insured retention under
             2434      Subsections (3)(a) and (l) by issuing a declaratory memorandum or policy statement from the
             2435      chief financial officer or chief risk officer that declares the:
             2436          (i) self-insured entity's coverage level; and
             2437          (ii) process for filing an underinsured motorist claim.
             2438          (i) Underinsured motorist coverage may not be sold with limits that are less than:
             2439          (i) $10,000 for one person in any one accident; and
             2440          (ii) at least $20,000 for two or more persons in any one accident.
             2441          (j) An acknowledgment under Subsection (3)(a) continues for that issuer of the
             2442      underinsured motorist coverage until the named insured, in writing, requests different
             2443      underinsured motorist coverage from the insurer.


             2444          (k) (i) The named insured's underinsured motorist coverage, as described in Subsection
             2445      (2), is secondary to the liability coverage of an owner or operator of an underinsured motor
             2446      vehicle, as described in Subsection (1).
             2447          (ii) Underinsured motorist coverage may not be set off against the liability coverage of
             2448      the owner or operator of an underinsured motor vehicle, but shall be added to, combined with,
             2449      or stacked upon the liability coverage of the owner or operator of the underinsured motor
             2450      vehicle to determine the limit of coverage available to the injured person.
             2451          (l) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
             2452      policies existing on that date, the insurer shall disclose in the same medium as the premium
             2453      renewal notice, an explanation of:
             2454          (A) the purpose of underinsured motorist coverage in the same manner as described in
             2455      Subsection (3)(a)(iv); and
             2456          (B) a disclosure of the additional premiums required to purchase underinsured motorist
             2457      coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
             2458      liability coverage or the maximum underinsured motorist coverage limits available by the
             2459      insurer under the named insured's motor vehicle policy.
             2460          (ii) The disclosure required under this Subsection (3)(l) shall be sent to all named
             2461      insureds that carry underinsured motorist coverage limits in an amount less than the named
             2462      insured's motor vehicle liability policy limits or the maximum underinsured motorist coverage
             2463      limits available by the insurer under the named insured's motor vehicle policy.
             2464          (m) For purposes of this Subsection (3), a notice or disclosure sent to a named insured
             2465      in a household constitutes notice or disclosure to all insureds within the household.
             2466          (4) (a) (i) Except as provided in this Subsection (4), a covered person injured in a
             2467      motor vehicle described in a policy that includes underinsured motorist benefits may not elect
             2468      to collect underinsured motorist coverage benefits from another motor vehicle insurance policy.
             2469          (ii) The limit of liability for underinsured motorist coverage for two or more motor
             2470      vehicles may not be added together, combined, or stacked to determine the limit of insurance
             2471      coverage available to an injured person for any one accident.
             2472          (iii) Subsection (4)(a)(ii) applies to all persons except a covered person described
             2473      under Subsections (4)(b)(i) and (ii).
             2474          (b) (i) Except as provided in Subsection (4)(b)(ii), a covered person injured while


             2475      occupying, using, or maintaining a motor vehicle that is not owned, leased, or furnished to the
             2476      covered person, the covered person's spouse, or the covered person's resident parent or resident
             2477      sibling, may also recover benefits under any one other policy under which the covered person is
             2478      also a covered person.
             2479          (ii) (A) A covered person may recover benefits from no more than two additional
             2480      policies, one additional policy from each parent's household if the covered person is:
             2481          (I) a dependent minor of parents who reside in separate households; and
             2482          (II) injured while occupying or using a motor vehicle that is not owned, leased, or
             2483      furnished to the covered person, the covered person's resident parent, or the covered person's
             2484      resident sibling.
             2485          (B) Each parent's policy under this Subsection (4)(b)(ii) is liable only for the
             2486      percentage of the damages that the limit of liability of each parent's policy of underinsured
             2487      motorist coverage bears to the total of both parents' underinsured coverage applicable to the
             2488      accident.
             2489          (iii) A covered person's recovery under any available policies may not exceed the full
             2490      amount of damages.
             2491          (iv) Underinsured coverage on a motor vehicle occupied at the time of an accident is
             2492      primary coverage, and the coverage elected by a person described under Subsections
             2493      31A-22-305 (1)(a) [and], (b), and (c) is secondary coverage.
             2494          (v) The primary and the secondary coverage may not be set off against the other.
             2495          (vi) A covered person as described under Subsection (4)(b)(i) is entitled to the highest
             2496      limits of underinsured motorist coverage under only one additional policy per household
             2497      applicable to that covered person as a named insured, spouse, or relative.
             2498          (vii) A covered injured person is not barred against making subsequent elections if
             2499      recovery is unavailable under previous elections.
             2500          (viii) (A) As used in this section, "interpolicy stacking" means recovering benefits for a
             2501      single incident of loss under more than one insurance policy.
             2502          (B) Except to the extent permitted by this Subsection (4), interpolicy stacking is
             2503      prohibited for underinsured motorist coverage.
             2504          (c) Underinsured motorist coverage:
             2505          (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'


             2506      Compensation Act;
             2507          (ii) may not be subrogated by a workers' compensation insurance carrier;
             2508          (iii) may not be reduced by benefits provided by workers' compensation insurance;
             2509          (iv) may be reduced by health insurance subrogation only after the covered person is
             2510      made whole;
             2511          (v) may not be collected for bodily injury or death sustained by a person:
             2512          (A) while committing a violation of Section 41-1a-1314 ;
             2513          (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
             2514      in violation of Section 41-1a-1314 ; or
             2515          (C) while committing a felony; and
             2516          (vi) notwithstanding Subsection (4)(c)(v), may be recovered:
             2517          (A) for a person under 18 years of age who is injured within the scope of Subsection
             2518      (4)(c)(v), but is limited to medical and funeral expenses; or
             2519          (B) by a law enforcement officer as defined in Section 53-13-103 , who is injured
             2520      within the course and scope of the law enforcement officer's duties.
             2521          (5) The inception of the loss under Subsection 31A-21-313 (1) for underinsured
             2522      motorist claims occurs upon the date of the last liability policy payment.
             2523          (6) (a) Within five business days after notification that all liability insurers have
             2524      tendered their liability policy limits, the underinsured carrier shall either:
             2525          (i) waive any subrogation claim the underinsured carrier may have against the person
             2526      liable for the injuries caused in the accident; or
             2527          (ii) pay the insured an amount equal to the policy limits tendered by the liability carrier.
             2528          (b) If neither option is exercised under Subsection (6)(a), the subrogation claim is
             2529      considered to be waived by the underinsured carrier.
             2530          (c) The notification under Subsection (6)(a) shall include:
             2531          (i) the name, address, and phone number for all liability insurers;
             2532          (ii) the liability insurers' liability policy limits; and
             2533          (iii) the claim number associated with each liability insurer.
             2534          (7) Except as otherwise provided in this section, a covered person may seek, subject to
             2535      the terms and conditions of the policy, additional coverage under any policy:
             2536          (a) that provides coverage for damages resulting from motor vehicle accidents; and


             2537          (b) that is not required to conform to Section 31A-22-302 .
             2538          (8) (a) When a claim is brought by a named insured or a person described in
             2539      Subsection 31A-22-305 (1) and is asserted against the covered person's underinsured motorist
             2540      carrier, the claimant may elect to resolve the claim:
             2541          (i) by submitting the claim to binding arbitration; or
             2542          (ii) through litigation.
             2543          (b) Unless otherwise provided in the policy under which underinsured benefits are
             2544      claimed, the election provided in Subsection (8)(a) is available to the claimant only, except that
             2545      if the policy under which insured benefits are claimed provides that either an insured or the
             2546      insurer may elect arbitration, the insured or the insurer may elect arbitration and that election to
             2547      arbitrate shall stay the litigation of the claim under Subsection (8)(a)(ii).
             2548          (c) Once a claimant elects to commence litigation under Subsection (8)(a)(ii), the
             2549      claimant may not elect to resolve the claim through binding arbitration under this section
             2550      without the written consent of the underinsured motorist coverage carrier.
             2551          (d) (i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
             2552      binding arbitration under Subsection (8)(a)(i) shall be resolved by a single arbitrator.
             2553          (ii) All parties shall agree on the single arbitrator selected under Subsection (8)(d)(i).
             2554          (iii) If the parties are unable to agree on a single arbitrator as required under Subsection
             2555      (8)(d)(ii), the parties shall select a panel of three arbitrators.
             2556          (e) If the parties select a panel of three arbitrators under Subsection (8)(d)(iii):
             2557          (i) each side shall select one arbitrator; and
             2558          (ii) the arbitrators appointed under Subsection (8)(e)(i) shall select one additional
             2559      arbitrator to be included in the panel.
             2560          (f) Unless otherwise agreed to in writing:
             2561          (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
             2562      under Subsection (8)(d)(i); or
             2563          (ii) if an arbitration panel is selected under Subsection (8)(d)(iii):
             2564          (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
             2565          (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
             2566      under Subsection (8)(e)(ii).
             2567          (g) Except as otherwise provided in this section or unless otherwise agreed to in


             2568      writing by the parties, an arbitration proceeding conducted under this section is governed by
             2569      Title 78B, Chapter 11, Utah Uniform Arbitration Act.
             2570          (h) (i) The arbitration shall be conducted in accordance with Rules 26(a)(4) through (f),
             2571      27 through 37, 54, and 68 of the Utah Rules of Civil Procedure, once the requirements of
             2572      Subsections (9)(a) through (c) are satisfied.
             2573          (ii) The specified tier as defined by Rule 26(c)(3) of the Utah Rules of Civil Procedure
             2574      shall be determined based on the claimant's specific monetary amount in the written demand
             2575      for payment of uninsured motorist coverage benefits as required in Subsection (9)(a)(i)(A).
             2576          (iii) Rules 26.1 and 26.2 of the Utah Rules of Civil Procedure do not apply to
             2577      arbitration claims under this part.
             2578          (i) An issue of discovery shall be resolved by the arbitrator or the arbitration panel.
             2579          (j) A written decision by a single arbitrator or by a majority of the arbitration panel
             2580      constitutes a final decision.
             2581          (k) (i) Except as provided in Subsection (9), the amount of an arbitration award may
             2582      not exceed the underinsured motorist policy limits of all applicable underinsured motorist
             2583      policies, including applicable underinsured motorist umbrella policies.
             2584          (ii) If the initial arbitration award exceeds the underinsured motorist policy limits of all
             2585      applicable underinsured motorist policies, the arbitration award shall be reduced to an amount
             2586      equal to the combined underinsured motorist policy limits of all applicable underinsured
             2587      motorist policies.
             2588          (l) The arbitrator or arbitration panel may not decide an issue of coverage or
             2589      extra-contractual damages, including:
             2590          (i) whether the claimant is a covered person;
             2591          (ii) whether the policy extends coverage to the loss; or
             2592          (iii) an allegation or claim asserting consequential damages or bad faith liability.
             2593          (m) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or
             2594      class-representative basis.
             2595          (n) If the arbitrator or arbitration panel finds that the arbitration is not brought, pursued,
             2596      or defended in good faith, the arbitrator or arbitration panel may award reasonable attorney fees
             2597      and costs against the party that failed to bring, pursue, or defend the arbitration in good faith.
             2598          (o) An arbitration award issued under this section shall be the final resolution of all


             2599      claims not excluded by Subsection (8)(l) between the parties unless:
             2600          (i) the award is procured by corruption, fraud, or other undue means;
             2601          (ii) either party, within 20 days after service of the arbitration award:
             2602          (A) files a complaint requesting a trial de novo in the district court; and
             2603          (B) serves the nonmoving party with a copy of the complaint requesting a trial de novo
             2604      under Subsection (8)(o)(ii)(A).
             2605          (p) (i) Upon filing a complaint for a trial de novo under Subsection (8)(o), a claim shall
             2606      proceed through litigation pursuant to the Utah Rules of Civil Procedure and Utah Rules of
             2607      Evidence in the district court.
             2608          (ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
             2609      request a jury trial with a complaint requesting a trial de novo under Subsection (8)(o)(ii)(A).
             2610          (q) (i) If the claimant, as the moving party in a trial de novo requested under
             2611      Subsection (8)(o), does not obtain a verdict that is at least $5,000 and is at least 20% greater
             2612      than the arbitration award, the claimant is responsible for all of the nonmoving party's costs.
             2613          (ii) If the underinsured motorist carrier, as the moving party in a trial de novo requested
             2614      under Subsection (8)(o), does not obtain a verdict that is at least 20% less than the arbitration
             2615      award, the underinsured motorist carrier is responsible for all of the nonmoving party's costs.
             2616          (iii) Except as provided in Subsection (8)(q)(iv), the costs under this Subsection (8)(q)
             2617      shall include:
             2618          (A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
             2619          (B) the costs of expert witnesses and depositions.
             2620          (iv) An award of costs under this Subsection (8)(q) may not exceed $2,500 unless
             2621      Subsection (9)(h)(iii) applies.
             2622          (r) For purposes of determining whether a party's verdict is greater or less than the
             2623      arbitration award under Subsection (8)(q), a court may not consider any recovery or other relief
             2624      granted on a claim for damages if the claim for damages:
             2625          (i) was not fully disclosed in writing prior to the arbitration proceeding; or
             2626          (ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil
             2627      Procedure.
             2628          (s) If a district court determines, upon a motion of the nonmoving party, that a moving
             2629      party's use of the trial de novo process is filed in bad faith in accordance with Section


             2630      78B-5-825 , the district court may award reasonable attorney fees to the nonmoving party.
             2631          (t) Nothing in this section is intended to limit a claim under another portion of an
             2632      applicable insurance policy.
             2633          (u) If there are multiple underinsured motorist policies, as set forth in Subsection (4),
             2634      the claimant may elect to arbitrate in one hearing the claims against all the underinsured
             2635      motorist carriers.
             2636          (9) (a) Within 30 days after a covered person elects to submit a claim for underinsured
             2637      motorist benefits to binding arbitration or files litigation, the covered person shall provide to
             2638      the underinsured motorist carrier:
             2639          (i) a written demand for payment of underinsured motorist coverage benefits, setting
             2640      forth:
             2641          (A) subject to Subsection (9)(l), the specific monetary amount of the demand,
             2642      including a computation of the covered person's claimed past medical expenses, claimed past
             2643      lost wages, and all other claimed past economic damages; and
             2644          (B) the factual and legal basis and any supporting documentation for the demand;
             2645          (ii) a written statement under oath disclosing:
             2646          (A) (I) the names and last known addresses of all health care providers who have
             2647      rendered health care services to the covered person that are material to the claims for which the
             2648      underinsured motorist benefits are sought for a period of five years preceding the date of the
             2649      event giving rise to the claim for underinsured motorist benefits up to the time the election for
             2650      arbitration or litigation has been exercised; and
             2651          (II) [whether the covered person has seen other] the names and last know addresses of
             2652      the health care providers who have rendered health care services to the covered person, which
             2653      the covered person claims are immaterial to the claims for which underinsured motorist
             2654      benefits are sought, for a period of five years preceding the date of the event giving rise to the
             2655      claim for underinsured motorist benefits up to the time the election for arbitration or litigation
             2656      has been exercised that have not been disclosed under Subsection (9)(a)(ii)(A)(I);
             2657          (B) (I) the names and last known addresses of all health insurers or other entities to
             2658      whom the covered person has submitted claims for health care services or benefits material to
             2659      the claims for which underinsured motorist benefits are sought, for a period of five years
             2660      preceding the date of the event giving rise to the claim for underinsured motorist benefits up to


             2661      the time the election for arbitration or litigation has been exercised; and
             2662          (II) [whether the identity of any] the names and last known addresses of the health
             2663      insurers or other entities to whom the covered person has submitted claims for health care
             2664      services or benefits, which the covered person claims are immaterial to the claims for which
             2665      underinsured motorist benefits are sought, for a period of five years preceding the date of the
             2666      event giving rise to the claim for underinsured motorist benefits up to the time the election for
             2667      arbitration or litigation have not been disclosed;
             2668          (C) if lost wages, diminished earning capacity, or similar damages are claimed, all
             2669      employers of the covered person for a period of five years preceding the date of the event
             2670      giving rise to the claim for underinsured motorist benefits up to the time the election for
             2671      arbitration or litigation has been exercised;
             2672          (D) other documents to reasonably support the claims being asserted; and
             2673          (E) all state and federal statutory lienholders including a statement as to whether the
             2674      covered person is a recipient of Medicare or Medicaid benefits or Utah Children's Health
             2675      Insurance Program benefits under Title 26, Chapter 40, Utah Children's Health Insurance Act,
             2676      or if the claim is subject to any other state or federal statutory liens; and
             2677          (iii) signed authorizations to allow the underinsured motorist carrier to only obtain
             2678      records and billings from the individuals or entities disclosed under Subsections
             2679      (9)(a)(ii)(A)(I), (B)(I), and (C).
             2680          (b) (i) If the underinsured motorist carrier determines that the disclosure of undisclosed
             2681      health care providers or health care insurers under Subsection (9)(a)(ii) is reasonably necessary,
             2682      the underinsured motorist carrier may:
             2683          (A) make a request for the disclosure of the identity of the health care providers or
             2684      health care insurers; and
             2685          (B) make a request for authorizations to allow the underinsured motorist carrier to only
             2686      obtain records and billings from the individuals or entities not disclosed.
             2687          (ii) If the covered person does not provide the requested information within 10 days:
             2688          (A) the covered person shall disclose, in writing, the legal or factual basis for the
             2689      failure to disclose the health care providers or health care insurers; and
             2690          (B) either the covered person or the underinsured motorist carrier may request the
             2691      arbitrator or arbitration panel to resolve the issue of whether the identities or records are to be


             2692      provided if the covered person has elected arbitration.
             2693          (iii) The time periods imposed by Subsection (9)(c)(i) are tolled pending resolution of
             2694      the dispute concerning the disclosure and production of records of the health care providers or
             2695      health care insurers.
             2696          (c) (i) An underinsured motorist carrier that receives an election for arbitration or a
             2697      notice of filing litigation and the demand for payment of underinsured motorist benefits under
             2698      Subsection (9)(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the
             2699      demand and receipt of the items specified in Subsections (9)(a)(i) through (iii), to:
             2700          (A) provide a written response to the written demand for payment provided for in
             2701      Subsection (9)(a)(i);
             2702          (B) except as provided in Subsection (9)(c)(i)(C), tender the amount, if any, of the
             2703      underinsured motorist carrier's determination of the amount owed to the covered person; and
             2704          (C) if the covered person is a recipient of Medicare or Medicaid benefits or Utah
             2705      Children's Health Insurance Program benefits under Title 26, Chapter 40, Utah Children's
             2706      Health Insurance Act, or if the claim is subject to any other state or federal statutory liens,
             2707      tender the amount, if any, of the underinsured motorist carrier's determination of the amount
             2708      owed to the covered person less:
             2709          (I) if the amount of the state or federal statutory lien is established, the amount of the
             2710      lien; or
             2711          (II) if the amount of the state or federal statutory lien is not established, two times the
             2712      amount of the medical expenses subject to the state or federal statutory lien until such time as
             2713      the amount of the state or federal statutory lien is established.
             2714          (ii) If the amount tendered by the underinsured motorist carrier under Subsection
             2715      (9)(c)(i) is the total amount of the underinsured motorist policy limits, the tendered amount
             2716      shall be accepted by the covered person.
             2717          (d) A covered person who receives a written response from an underinsured motorist
             2718      carrier as provided for in Subsection (9)(c)(i), may:
             2719          (i) elect to accept the amount tendered in Subsection (9)(c)(i) as payment in full of all
             2720      underinsured motorist claims; or
             2721          (ii) elect to:
             2722          (A) accept the amount tendered in Subsection (9)(c)(i) as partial payment of all


             2723      underinsured motorist claims; and
             2724          (B) continue to litigate or arbitrate the remaining claim in accordance with the election
             2725      made under Subsections (8)(a), (b), and (c).
             2726          (e) If a covered person elects to accept the amount tendered under Subsection (9)(c)(i)
             2727      as partial payment of all underinsured motorist claims, the final award obtained through
             2728      arbitration, litigation, or later settlement shall be reduced by any payment made by the
             2729      underinsured motorist carrier under Subsection (9)(c)(i).
             2730          (f) In an arbitration proceeding on the remaining underinsured claims:
             2731          (i) the parties may not disclose to the arbitrator or arbitration panel the amount paid
             2732      under Subsection (9)(c)(i) until after the arbitration award has been rendered; and
             2733          (ii) the parties may not disclose the amount of the limits of underinsured motorist
             2734      benefits provided by the policy.
             2735          (g) If the final award obtained through arbitration or litigation is greater than the
             2736      average of the covered person's initial written demand for payment provided for in Subsection
             2737      (9)(a)(i) and the underinsured motorist carrier's initial written response provided for in
             2738      Subsection (9)(c)(i), the underinsured motorist carrier shall pay:
             2739          (i) the final award obtained through arbitration or litigation, except that if the award
             2740      exceeds the policy limits of the subject underinsured motorist policy by more than $15,000, the
             2741      amount shall be reduced to an amount equal to the policy limits plus $15,000; and
             2742          (ii) any of the following applicable costs:
             2743          (A) any costs as set forth in Rule 54(d), Utah Rules of Civil Procedure;
             2744          (B) the arbitrator or arbitration panel's fee; and
             2745          (C) the reasonable costs of expert witnesses and depositions used in the presentation of
             2746      evidence during arbitration or litigation.
             2747          (h) (i) The covered person shall provide an affidavit of costs within five days of an
             2748      arbitration award.
             2749          (ii) (A) Objection to the affidavit of costs shall specify with particularity the costs to
             2750      which the underinsured motorist carrier objects.
             2751          (B) The objection shall be resolved by the arbitrator or arbitration panel.
             2752          (iii) The award of costs by the arbitrator or arbitration panel under Subsection (9)(g)(ii)
             2753      may not exceed $5,000.


             2754          (i) (i) A covered person shall disclose all material information, other than rebuttal
             2755      evidence, within 30 days after a covered person elects to submit a claim for underinsured
             2756      motorist coverage benefits to binding arbitration or files litigation as specified in Subsection
             2757      (9)(a).
             2758          (ii) If the information under Subsection (9)(i)(i) is not disclosed, the covered person
             2759      may not recover costs or any amounts in excess of the policy under Subsection (9)(g).
             2760          (j) This Subsection (9) does not limit any other cause of action that arose or may arise
             2761      against the underinsured motorist carrier from the same dispute.
             2762          (k) The provisions of this Subsection (9) only apply to motor vehicle accidents that
             2763      occur on or after March 30, 2010.
             2764          (l) (i) The written demand requirement in Subsection (9)(a)(i)(A) does not affect the
             2765      covered person's requirement to provide a computation of any other economic damages
             2766      claimed, and the one or more respondents shall have a reasonable time after the receipt of the
             2767      computation of any other economic damages claimed to conduct fact and expert discovery as to
             2768      any additional damages claimed. The changes made by this bill to this Subsection (9)(l) and
             2769      Subsection (9)(a)(i)(A) apply to a claim submitted to binding arbitration or through litigation
             2770      on or after May 13, 2014.
             2771          (ii) The changes made by this bill under Subsections (9)(a)(ii)(A)(II) and (B)(II) apply
             2772      to a claim submitted to binding arbitration or through litigation on or after May 13, 2014.
             2773          Section 12. Section 31A-22-428 is amended to read:
             2774           31A-22-428. Interest payable on life insurance proceeds.
             2775          (1) For a life insurance policy delivered or issued for delivery in this state on or after
             2776      May 5, 2008, the insurer shall pay interest on the death proceeds payable upon the death of the
             2777      insured.
             2778          (2) (a) Except as provided in Subsection (4), for the period beginning on the date of
             2779      death and ending the day before the day described in Subsection (3)(b), interest under
             2780      Subsection (1) shall accrue at a rate no less than the greater of:
             2781          (i) the rate applicable to policy funds left on deposit; [or] and
             2782          (ii) [if there is no rate described in Subsection (2)(a)(i), at] the Two Year Treasury
             2783      Constant Maturity Rate as published by the Federal Reserve.
             2784          (b) If there is no rate applicable to policy funds on deposit as stated in Subsection


             2785      (2)(a)(i), then the Two Year Treasury Constant Maturity Rates as published by the Federal
             2786      Reserve applies.
             2787          [(b)] (c) The rate described in Subsection (2)(a) or (b) is the rate in effect on the day on
             2788      which the death occurs.
             2789          [(c)] (d) Interest is payable until the day on which the claim is paid.
             2790          (3) (a) Unless the claim is paid and except as provided in Subsection (4), beginning on
             2791      the day described in Subsection (3)(b) and ending the day on which the claim is paid, interest
             2792      shall accrue at the rate in Subsection (2) plus additional interest at the rate of 10% annually.
             2793          (b) Interest accrues under Subsection (3)(a) beginning with the day that is 31 days from
             2794      the latest of:
             2795          (i) the day on which the insurer receives proof of death;
             2796          (ii) the day on which the insurer receives sufficient information to determine:
             2797          (A) liability;
             2798          (B) the extent of the liability; and
             2799          (C) the appropriate payee legally entitled to the proceeds; and
             2800          (iii) the day on which:
             2801          (A) legal impediments to payment of proceeds that depend on the action of parties
             2802      other than the insurer are resolved; and
             2803          (B) the insurer receives sufficient evidence of the resolution of the legal impediments
             2804      described in Subsection (3)(b)(iii)(A).
             2805          (4) A court of competent jurisdiction may require payment of interest from the date of
             2806      death to the day on which a claim is paid at a rate equal to the sum of:
             2807          (a) the rate specified in Subsection (2); and
             2808          (b) the legal rate identified in Subsection 15-1-1 (2).
             2809          Section 13. Section 31A-22-617 is amended to read:
             2810           31A-22-617. Preferred provider contract provisions.
             2811          Health insurance policies may provide for insureds to receive services or
             2812      reimbursement under the policies in accordance with preferred health care provider contracts as
             2813      follows:
             2814          (1) Subject to restrictions under this section, [any] an insurer or third party
             2815      administrator may enter into contracts with health care providers as defined in Section


             2816      78B-3-403 under which the health care providers agree to supply services, at prices specified in
             2817      the contracts, to persons insured by an insurer.
             2818          (a) (i) A health care provider contract may require the health care provider to accept the
             2819      specified payment in this Subsection (1) as payment in full, relinquishing the right to collect
             2820      additional amounts from the insured person.
             2821          (ii) In [any] a dispute involving a provider's claim for reimbursement, the same shall be
             2822      determined in accordance with applicable law, the provider contract, the subscriber contract,
             2823      and the insurer's written payment policies in effect at the time services were rendered.
             2824          (iii) If the parties are unable to resolve their dispute, the matter shall be subject to
             2825      binding arbitration by a jointly selected arbitrator. Each party is to bear its own expense except
             2826      the cost of the jointly selected arbitrator shall be equally shared. This Subsection (1)(a)(iii)
             2827      does not apply to the claim of a general acute hospital to the extent it is inconsistent with the
             2828      hospital's provider agreement.
             2829          (iv) An organization may not penalize a provider solely for pursuing a claims dispute
             2830      or otherwise demanding payment for a sum believed owing.
             2831          (v) If an insurer permits another entity with which it does not share common ownership
             2832      or control to use or otherwise lease one or more of the organization's networks of participating
             2833      providers, the organization shall ensure, at a minimum, that the entity pays participating
             2834      providers in accordance with the same fee schedule and general payment policies as the
             2835      organization would for that network.
             2836          (b) The insurance contract may reward the insured for selection of preferred health care
             2837      providers by:
             2838          (i) reducing premium rates;
             2839          (ii) reducing deductibles;
             2840          (iii) coinsurance;
             2841          (iv) other copayments; or
             2842          (v) any other reasonable manner.
             2843          (c) If the insurer is a managed care organization, as defined in Subsection
             2844      31A-27a-403 (1)(f):
             2845          (i) the insurance contract and the health care provider contract shall provide that in the
             2846      event the managed care organization becomes insolvent, the rehabilitator or liquidator may:


             2847          (A) require the health care provider to continue to provide health care services under
             2848      the contract until the earlier of:
             2849          (I) 90 days after the date of the filing of a petition for rehabilitation or the petition for
             2850      liquidation; or
             2851          (II) the date the term of the contract ends; and
             2852          (B) subject to Subsection (1)(c)(v), reduce the fees the provider is otherwise entitled to
             2853      receive from the managed care organization during the time period described in Subsection
             2854      (1)(c)(i)(A);
             2855          (ii) the provider is required to:
             2856          (A) accept the reduced payment under Subsection (1)(c)(i)(B) as payment in full; and
             2857          (B) relinquish the right to collect additional amounts from the insolvent managed care
             2858      organization's enrollee, as defined in Subsection 31A-27a-403 (1)(b);
             2859          (iii) if the contract between the health care provider and the managed care organization
             2860      has not been reduced to writing, or the contract fails to contain the [language required by]
             2861      requirements described in Subsection (1)(c)(i), the provider may not collect or attempt to
             2862      collect from the enrollee:
             2863          (A) sums owed by the insolvent managed care organization; or
             2864          (B) the amount of the regular fee reduction authorized under Subsection (1)(c)(i)(B);
             2865          (iv) the following may not bill or maintain [any] an action at law against an enrollee to
             2866      collect sums owed by the insolvent managed care organization or the amount of the regular fee
             2867      reduction authorized under Subsection (1)(c)(i)(B):
             2868          (A) a provider;
             2869          (B) an agent;
             2870          (C) a trustee; or
             2871          (D) an assignee of a person described in Subsections (1)(c)(iv)(A) through (C); and
             2872          (v) notwithstanding Subsection (1)(c)(i):
             2873          (A) a rehabilitator or liquidator may not reduce a fee by less than 75% of the provider's
             2874      regular fee set forth in the contract; and
             2875          (B) the enrollee shall continue to pay the copayments, deductibles, and other payments
             2876      for services received from the provider that the enrollee was required to pay before the filing
             2877      of:


             2878          (I) a petition for rehabilitation; or
             2879          (II) a petition for liquidation.
             2880          (2) (a) Subject to Subsections (2)(b) through (2)(e), an insurer using preferred health
             2881      care provider contracts is subject to the reimbursement requirements in Section 31A-8-501 on
             2882      or after January 1, 2014.
             2883          (b) When reimbursing for services of health care providers not under contract, the
             2884      insurer may make direct payment to the insured.
             2885          (c) An insurer using preferred health care provider contracts may impose a deductible
             2886      on coverage of health care providers not under contract.
             2887          (d) When selecting health care providers with whom to contract under Subsection (1),
             2888      an insurer may not unfairly discriminate between classes of health care providers, but may
             2889      discriminate within a class of health care providers, subject to Subsection (7).
             2890          (e) For purposes of this section, unfair discrimination between classes of health care
             2891      providers includes:
             2892          (i) refusal to contract with class members in reasonable proportion to the number of
             2893      insureds covered by the insurer and the expected demand for services from class members; and
             2894          (ii) refusal to cover procedures for one class of providers that are:
             2895          (A) commonly used by members of the class of health care providers for the treatment
             2896      of illnesses, injuries, or conditions;
             2897          (B) otherwise covered by the insurer; and
             2898          (C) within the scope of practice of the class of health care providers.
             2899          (3) Before the insured consents to the insurance contract, the insurer shall fully disclose
             2900      to the insured that it has entered into preferred health care provider contracts. The insurer shall
             2901      provide sufficient detail on the preferred health care provider contracts to permit the insured to
             2902      agree to the terms of the insurance contract. The insurer shall provide at least the following
             2903      information:
             2904          (a) a list of the health care providers under contract, and if requested their business
             2905      locations and specialties;
             2906          (b) a description of the insured benefits, including [any] deductibles, coinsurance, or
             2907      other copayments;
             2908          (c) a description of the quality assurance program required under Subsection (4); and


             2909          (d) a description of the adverse benefit determination procedures required under
             2910      Subsection (5).
             2911          (4) (a) An insurer using preferred health care provider contracts shall maintain a quality
             2912      assurance program for assuring that the care provided by the health care providers under
             2913      contract meets prevailing standards in the state.
             2914          (b) The commissioner in consultation with the executive director of the Department of
             2915      Health may designate qualified persons to perform an audit of the quality assurance program.
             2916      The auditors shall have full access to all records of the organization and its health care
             2917      providers, including medical records of individual patients.
             2918          (c) The information contained in the medical records of individual patients shall
             2919      remain confidential. All information, interviews, reports, statements, memoranda, or other data
             2920      furnished for purposes of the audit and any findings or conclusions of the auditors are
             2921      privileged. The information is not subject to discovery, use, or receipt in evidence in any legal
             2922      proceeding except hearings before the commissioner concerning alleged violations of this
             2923      section.
             2924          (5) An insurer using preferred health care provider contracts shall provide a reasonable
             2925      procedure for resolving complaints and adverse benefit determinations initiated by the insureds
             2926      and health care providers.
             2927          (6) An insurer may not contract with a health care provider for treatment of illness or
             2928      injury unless the health care provider is licensed to perform that treatment.
             2929          (7) (a) A health care provider or insurer may not discriminate against a preferred health
             2930      care provider for agreeing to a contract under Subsection (1).
             2931          (b) [Any] A health care provider licensed to treat [any] an illness or injury within the
             2932      scope of the health care provider's practice, who is willing and able to meet the terms and
             2933      conditions established by the insurer for designation as a preferred health care provider, shall
             2934      be able to apply for and receive the designation as a preferred health care provider. Contract
             2935      terms and conditions may include reasonable limitations on the number of designated preferred
             2936      health care providers based upon substantial objective and economic grounds, or expected use
             2937      of particular services based upon prior provider-patient profiles.
             2938          (8) Upon the written request of a provider excluded from a provider contract, the
             2939      commissioner may hold a hearing to determine if the insurer's exclusion of the provider is


             2940      based on the criteria set forth in Subsection (7)(b).
             2941          [(9) Except as provided in Subsection 31A-22-618.5 (3)(a), insurers are subject to
             2942      Sections 31A-22-613.5 , 31A-22-614.5 , and 31A-22-618 .]
             2943          [(10)] (9) Nothing in this section is to be construed as to require an insurer to offer a
             2944      certain benefit or service as part of a health benefit plan.
             2945          [(11)] (10) This section does not apply to catastrophic mental health coverage provided
             2946      in accordance with Section 31A-22-625 .
             2947          [(12)] (11) Notwithstanding [the provisions of] Subsection (1), Subsection (7)(b), and
             2948      Section 31A-22-618 , an insurer or third party administrator is not required to, but may, enter
             2949      into [contracts] a contract with a licensed athletic [trainers] trainer, licensed under Title 58,
             2950      Chapter 40a, Athletic Trainer Licensing Act.
             2951          Section 14. Section 31A-22-618.5 is amended to read:
             2952           31A-22-618.5. Health benefit plan offerings.
             2953          (1) The purpose of this section is to increase the range of health benefit plans available
             2954      in the small group, small employer group, large group, and individual insurance markets.
             2955          (2) A health maintenance organization that is subject to Chapter 8, Health Maintenance
             2956      Organizations and Limited Health Plans:
             2957          (a) shall offer to potential purchasers at least one health benefit plan that is subject to
             2958      the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             2959      and
             2960          (b) may offer to a potential purchaser one or more health benefit plans that:
             2961          (i) are not subject to one or more of the following:
             2962          (A) the limitations on insured indemnity benefits in Subsection 31A-8-105 (4);
             2963          (B) the limitation on point of service products in Subsections 31A-8-408 (3) through
             2964      (6);
             2965          (C) except as provided in Subsection (2)(b)(ii), basic health care services as defined in
             2966      Section 31A-8-101 ; or
             2967          (D) coverage mandates enacted after January 1, 2009 that are not required by federal
             2968      law, provided that the insurer offers one plan under Subsection (2)(a) that covers the mandate
             2969      enacted after January 1, 2009; and
             2970          (ii) when offering a health plan under this section, provide coverage for an emergency


             2971      medical condition as required by Section 31A-22-627 as follows:
             2972          (A) within the organization's service area, covered services shall include health care
             2973      services from nonaffiliated providers when medically necessary to stabilize an emergency
             2974      medical condition; and
             2975          (B) outside the organization's service area, covered services shall include medically
             2976      necessary health care services for the treatment of an emergency medical condition that are
             2977      immediately required while the enrollee is outside the geographic limits of the organization's
             2978      service area.
             2979          (3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
             2980      Maintenance Organizations and Limited Health Plans:
             2981          (a) [notwithstanding Subsection 31A-22-617 (9),] may offer a health benefit plan that is
             2982      not subject to Section 31A-22-618 ;
             2983          (b) when offering a health plan under this Subsection (3), shall provide coverage of
             2984      emergency care services as required by Section 31A-22-627 ; and
             2985          (c) is not subject to coverage mandates enacted after January 1, 2009 that are not
             2986      required by federal law, provided that an insurer offers one plan that covers a mandate enacted
             2987      after January 1, 2009.
             2988          (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
             2989      Subsection (2)(b).
             2990          (5) (a) Any difference in price between a health benefit plan offered under Subsections
             2991      (2)(a) and (b) shall be based on actuarially sound data.
             2992          (b) Any difference in price between a health benefit plan offered under Subsection
             2993      (3)(a) shall be based on actuarially sound data.
             2994          (6) Nothing in this section limits the number of health benefit plans that an insurer may
             2995      offer.
             2996          Section 15. Section 31A-22-625 is amended to read:
             2997           31A-22-625. Catastrophic coverage of mental health conditions.
             2998          (1) As used in this section:
             2999          (a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
             3000      that does not impose a lifetime limit, annual payment limit, episodic limit, inpatient or
             3001      outpatient service limit, or maximum out-of-pocket limit that places a greater financial burden


             3002      on an insured for the evaluation and treatment of a mental health condition than for the
             3003      evaluation and treatment of a physical health condition.
             3004          (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
             3005      factors, such as deductibles, copayments, or coinsurance, before reaching a maximum
             3006      out-of-pocket limit.
             3007          (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
             3008      limit for physical health conditions and another maximum out-of-pocket limit for mental health
             3009      conditions, except that if separate out-of-pocket limits are established, the out-of-pocket limit
             3010      for mental health conditions may not exceed the out-of-pocket limit for physical health
             3011      conditions.
             3012          (b) (i) "50/50 mental health coverage" means coverage in a health benefit plan that
             3013      pays for at least 50% of covered services for the diagnosis and treatment of mental health
             3014      conditions.
             3015          (ii) "50/50 mental health coverage" may include a restriction on:
             3016          (A) episodic limits;
             3017          (B) inpatient or outpatient service limits; or
             3018          (C) maximum out-of-pocket limits.
             3019          (c) "Large employer" is as defined in 42 U.S.C. Sec. 300gg-91.
             3020          (d) (i) "Mental health condition" means a condition or disorder involving mental illness
             3021      that falls under a diagnostic category listed in the Diagnostic and Statistical Manual, as
             3022      periodically revised.
             3023          (ii) "Mental health condition" does not include the following when diagnosed as the
             3024      primary or substantial reason or need for treatment:
             3025          (A) a marital or family problem;
             3026          (B) a social, occupational, religious, or other social maladjustment;
             3027          (C) a conduct disorder;
             3028          (D) a chronic adjustment disorder;
             3029          (E) a psychosexual disorder;
             3030          (F) a chronic organic brain syndrome;
             3031          (G) a personality disorder;
             3032          (H) a specific developmental disorder or learning disability; or


             3033          (I) an intellectual disability.
             3034          (e) "Small employer" is as defined in 42 U.S.C. Sec. 300gg-91.
             3035          (2) (a) At the time of purchase and renewal, an insurer shall offer to a small employer
             3036      that it insures or seeks to insure a choice between:
             3037          (i) (A) catastrophic mental health coverage; or
             3038          (B) federally qualified mental health coverage as described in Subsection (3); and
             3039          (ii) 50/50 mental health coverage.
             3040          (b) In addition to complying with Subsection (2)(a), an insurer may offer to provide:
             3041          (i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
             3042      that exceed the minimum requirements of this section; or
             3043          (ii) coverage that excludes benefits for mental health conditions.
             3044          (c) A small employer may, at its option, regardless of the employer's previous coverage
             3045      for mental health conditions, choose either:
             3046          (i) coverage offered under Subsection (2)(a)(i);
             3047          (ii) 50/50 mental health coverage; or
             3048          (iii) coverage offered under Subsection (2)(b).
             3049          (d) An insurer is exempt from the 30% index rating restriction in Section
             3050      31A-30-106.1 and, for the first year only that the employer chooses coverage that meets or
             3051      exceeds catastrophic mental health coverage, the 15% annual adjustment restriction in Section
             3052      31A-30-106.1 , for [any] a small employer with 20 or less enrolled employees who chooses
             3053      coverage that meets or exceeds catastrophic mental health coverage.
             3054          (3) (a) An insurer shall offer a large employer mental health and substance use disorder
             3055      benefit in compliance with Section 2705 of the Public Health Service Act, 42 U.S.C. Sec.
             3056      300gg-26, and federal regulations adopted pursuant to that act.
             3057          (b) An insurer shall provide in an individual or small employer health benefit plan,
             3058      mental health and substance use disorder benefits in compliance with Sections 2705 and 2711
             3059      of the Public Health Service Act, 42 U.S.C. Sec. 300gg-26, and federal regulations adopted
             3060      pursuant to that act.
             3061          (4) (a) An insurer may provide catastrophic mental health coverage to a small employer
             3062      through a managed care organization or system in a manner consistent with Chapter 8, Health
             3063      Maintenance Organizations and Limited Health Plans, regardless of whether the insurance


             3064      policy uses a managed care organization or system for the treatment of physical health
             3065      conditions.
             3066          (b) (i) Notwithstanding any other provision of this title, an insurer may:
             3067          (A) establish a closed panel of providers for catastrophic mental health coverage; and
             3068          (B) refuse to provide a benefit to be paid for services rendered by a nonpanel provider
             3069      unless:
             3070          (I) the insured is referred to a nonpanel provider with the prior authorization of the
             3071      insurer; and
             3072          (II) the nonpanel provider agrees to follow the insurer's protocols and treatment
             3073      guidelines.
             3074          (ii) If an insured receives services from a nonpanel provider in the manner permitted by
             3075      Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
             3076      average amount paid by the insurer for comparable services of panel providers under a
             3077      noncapitated arrangement who are members of the same class of health care providers.
             3078          (iii) This Subsection (4)(b) may not be construed as requiring an insurer to authorize a
             3079      referral to a nonpanel provider.
             3080          (c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
             3081      mental health condition shall be rendered:
             3082          (i) by a mental health therapist as defined in Section 58-60-102 ; or
             3083          (ii) in a health care facility:
             3084          (A) licensed or otherwise authorized to provide mental health services pursuant to:
             3085          (I) Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act; or
             3086          (II) Title 62A, Chapter 2, Licensure of Programs and Facilities; and
             3087          (B) that provides a program for the treatment of a mental health condition pursuant to a
             3088      written plan.
             3089          (5) The commissioner may prohibit an insurance policy that provides mental health
             3090      coverage in a manner that is inconsistent with this section.
             3091          (6) The commissioner [shall: (a)] may adopt rules, in accordance with Title 63G,
             3092      Chapter 3, Utah Administrative Rulemaking Act, as necessary to ensure compliance with this
             3093      section[; and].
             3094          [(b) provide general figures on the percentage of insurance policies that include:]


             3095          [(i) no mental health coverage;]
             3096          [(ii) 50/50 mental health coverage;]
             3097          [(iii) catastrophic mental health coverage; and]
             3098          [(iv) coverage that exceeds the minimum requirements of this section.]
             3099          [(7) This section may not be construed as discouraging or otherwise preventing an
             3100      insurer from providing mental health coverage in connection with an individual insurance
             3101      policy.]
             3102          Section 16. Section 31A-22-635 is amended to read:
             3103           31A-22-635. Uniform application -- Uniform waiver of coverage -- Information
             3104      on Health Insurance Exchange.
             3105          (1) For purposes of this section, "insurer":
             3106          (a) is defined in Subsection 31A-22-634 (1); and
             3107          (b) includes the state employee's risk pool under Section 49-20-202 .
             3108          (2) (a) Insurers offering a health benefit plan to an individual or small employer shall
             3109      use a uniform application form.
             3110          (b) The uniform application form:
             3111          (i) [except for cancer and transplants,] may not include questions about an applicant's
             3112      health history [prior to the previous five years]; and
             3113          (ii) shall be shortened and simplified in accordance with rules adopted by the
             3114      commissioner.
             3115          (c) Insurers offering a health benefit plan to a small employer shall use a uniform
             3116      waiver of coverage form, which may not include health status related questions [other than
             3117      pregnancy], and is limited to:
             3118          (i) information that identifies the employee;
             3119          (ii) proof of the employee's insurance coverage; and
             3120          (iii) a statement that the employee declines coverage with a particular employer group.
             3121          (3) Notwithstanding the requirements of Subsection (2)(a), the uniform application and
             3122      uniform waiver of coverage forms may, if the combination or modification is approved by the
             3123      commissioner, be combined or modified to facilitate a more efficient and consumer friendly
             3124      experience for:
             3125          (a) enrollees using the Health Insurance Exchange; or


             3126          (b) insurers using electronic applications.
             3127          (4) The uniform application form, and uniform waiver form, shall be adopted and
             3128      approved by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
             3129      Rulemaking Act.
             3130          (5) (a) An insurer who offers a health benefit plan [in either the group or individual
             3131      market] on the Health Insurance Exchange created in Section 63M-1-2504 , shall:
             3132          (i) accept and process an electronic submission of the uniform application or uniform
             3133      waiver from the Health Insurance Exchange using the electronic standards adopted pursuant to
             3134      Section 63M-1-2506 ;
             3135          (ii) if requested, provide the applicant with a copy of the completed application either
             3136      by mail or electronically;
             3137          (iii) post all health benefit plans offered by the insurer in the defined contribution
             3138      arrangement market on the Health Insurance Exchange; and
             3139          (iv) post the information required by Subsection (6) on the Health Insurance Exchange
             3140      for every health benefit plan the insurer offers on the Health Insurance Exchange.
             3141          (b) Except as provided in Subsection (5)(c), an insurer who posts health benefit plans
             3142      on the Health Insurance Exchange may not directly or indirectly offer products on the Health
             3143      Insurance Exchange that are not health benefit plans.
             3144          (c) Notwithstanding Subsection (5)(b):
             3145          (i) an insurer may offer a health savings account on the Health Insurance Exchange;
             3146      [and]
             3147          (ii) an insurer may offer dental [and vision] plans on the Health Insurance Exchange
             3148      [if:]; and
             3149          [(A) the department determines, after study and consultation with the Health System
             3150      Reform Task Force, that the department is able to establish standards for dental and vision
             3151      policies offered on the Health Insurance Exchange, and the department determines whether a
             3152      risk adjuster mechanism is necessary for a defined contribution vision and dental plan market
             3153      on the Health Insurance Exchange; and]
             3154          [(B)] (iii) the department[, in accordance with recommendations from the Health
             3155      System Reform Task Force, adopts] may make administrative rules to regulate the offer of
             3156      dental [and vision] plans on the Health Insurance Exchange.


             3157          (6) An insurer shall provide the commissioner and the Health Insurance Exchange with
             3158      the following information for each health benefit plan submitted to the Health Insurance
             3159      Exchange, in the electronic format required by Subsection 63M-1-2506 (1):
             3160          (a) plan design, benefits, and options offered by the health benefit plan including state
             3161      mandates the plan does not cover;
             3162          (b) information and Internet address to online provider networks;
             3163          (c) wellness programs and incentives;
             3164          (d) descriptions of prescription drug benefits, exclusions, or limitations;
             3165          (e) the percentage of claims paid by the insurer within 30 days of the date a claim is
             3166      submitted to the insurer for the prior year; and
             3167          (f) the claims denial and insurer transparency information developed in accordance
             3168      with Subsection 31A-22-613.5 (4).
             3169          (7) The department shall post on the Health Insurance Exchange the department's
             3170      solvency rating for each insurer who posts a health benefit plan on the Health Insurance
             3171      Exchange. The solvency rating for each insurer shall be based on methodology established by
             3172      the department by administrative rule and shall be updated each calendar year.
             3173          (8) (a) The commissioner may request information from an insurer under Section
             3174      31A-22-613.5 to verify the data submitted to the department and to the Health Insurance
             3175      Exchange.
             3176          (b) The commissioner shall regulate [any] the fees charged by insurers to an enrollee
             3177      for a uniform application form or electronic submission of the application forms.
             3178          Section 17. Section 31A-22-721 is amended to read:
             3179           31A-22-721. A health benefit plan for a plan sponsor -- Discontinuance and
             3180      nonrenewal.
             3181          (1) Except as otherwise provided in this section, a health benefit plan for a plan
             3182      sponsor is renewable and continues in force:
             3183          (a) with respect to all eligible employees and dependents; and
             3184          (b) at the option of the plan sponsor.
             3185          (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
             3186          (a) for a network plan, if[: (i)] there is no longer any enrollee under the group health
             3187      plan who lives, resides, or works in:


             3188          [(A)] (i) the service area of the insurer; or
             3189          [(B)] (ii) the area for which the insurer is authorized to do business; [and] or
             3190          [(ii) in the case of the small employer market, the insurer applies the same criteria the
             3191      insurer would apply in denying enrollment in the plan under Subsection 31A-30-108 (7); or]
             3192          (b) for coverage made available in the small or large employer market only through an
             3193      association, if:
             3194          (i) the employer's membership in the association ceases; and
             3195          (ii) the coverage is terminated uniformly without regard to any health status-related
             3196      factor relating to any covered individual.
             3197          (3) A health benefit plan for a plan sponsor may be discontinued if:
             3198          (a) a condition described in Subsection (2) exists;
             3199          (b) the plan sponsor fails to pay premiums or contributions in accordance with the
             3200      terms of the contract;
             3201          (c) the plan sponsor:
             3202          (i) performs an act or practice that constitutes fraud; or
             3203          (ii) makes an intentional misrepresentation of material fact under the terms of the
             3204      coverage;
             3205          (d) the insurer:
             3206          (i) elects to discontinue offering a particular health benefit product delivered or issued
             3207      for delivery in this state;
             3208          (ii) (A) provides notice of the discontinuation in writing:
             3209          (I) to each plan sponsor, employee, and dependent of a plan sponsor or employee; and
             3210          (II) at least 90 days before the date the coverage will be discontinued;
             3211          (B) provides notice of the discontinuation in writing:
             3212          (I) to the commissioner; and
             3213          (II) at least three working days prior to the date the notice is sent to the affected plan
             3214      sponsors, employees, and dependents of plan sponsors or employees;
             3215          (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase any
             3216      other health benefit products currently being offered:
             3217          (I) by the insurer in the market; or
             3218          (II) in the case of a large employer, any other health benefit plan currently being


             3219      offered in that market; and
             3220          (D) in exercising the option to discontinue that product and in offering the option of
             3221      coverage in this section, the insurer acts uniformly without regard to:
             3222          (I) the claims experience of a plan sponsor;
             3223          (II) any health status-related factor relating to any covered participant or beneficiary; or
             3224          (III) any health status-related factor relating to a new participant or beneficiary who
             3225      may become eligible for coverage; or
             3226          (e) the insurer:
             3227          (i) elects to discontinue all of the insurer's health benefit plans:
             3228          (A) in the small employer market; or
             3229          (B) the large employer market; or
             3230          (C) both the small and large employer markets; and
             3231          (ii) (A) provides notice of the discontinuance in writing:
             3232          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             3233          (II) at least 180 days before the date the coverage will be discontinued;
             3234          (B) provides notice of the discontinuation in writing:
             3235          (I) to the commissioner in each state in which an affected insured individual is known
             3236      to reside; and
             3237          (II) at least 30 business days prior to the date the notice is sent to the affected plan
             3238      sponsors, employees, and dependents of a plan sponsor or employee;
             3239          (C) discontinues and nonrenews all plans issued or delivered for issuance in the
             3240      market; and
             3241          (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
             3242          (4) A large employer health benefit plan may be discontinued or nonrenewed:
             3243          (a) if a condition described in Subsection (2) exists; or
             3244          (b) for noncompliance with the insurer's:
             3245          (i) minimum participation requirements; or
             3246          (ii) employer contribution requirements.
             3247          (5) A small employer health benefit plan may be discontinued or nonrenewed:
             3248          (a) if a condition described in Subsection (2) exists; or
             3249          (b) for noncompliance with the insurer's employer contribution requirements.


             3250          (6) A small employer health benefit plan may be nonrenewed:
             3251          (a) if a condition described in Subsection (2) exists; or
             3252          (b) for noncompliance with the insurer's minimum participation requirements.
             3253          (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
             3254      discontinued if after issuance of coverage the eligible employee:
             3255          (i) engages in an act or practice that constitutes fraud in connection with the coverage;
             3256      or
             3257          (ii) makes an intentional misrepresentation of material fact in connection with the
             3258      coverage.
             3259          (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
             3260          (i) 12 months after the date of discontinuance; and
             3261          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
             3262      to reenroll.
             3263          (c) At the time the eligible employee's coverage is discontinued under Subsection
             3264      (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
             3265      discontinued.
             3266          (d) An eligible employee may not be discontinued under this Subsection (7) because of
             3267      a fraud or misrepresentation that relates to health status.
             3268          (8) (a) Except as provided in Subsection (8)(b), an insurer that elects to discontinue
             3269      offering a health benefit plan under Subsection (3)(e) shall be prohibited from writing new
             3270      business in such market in this state for a period of five years beginning on the date of
             3271      discontinuation of the last coverage that is discontinued.
             3272          (b) The commissioner may waive the prohibition under Subsection (8)(a) when the
             3273      commissioner finds that waiver is in the public interest:
             3274          (i) to promote competition; or
             3275          (ii) to resolve inequity in the marketplace.
             3276          (9) If an insurer is doing business in one established geographic service area of the
             3277      state, this section applies only to the insurer's operations in that geographic service area.
             3278          (10) An insurer may modify a health benefit plan for a plan sponsor only:
             3279          (a) at the time of coverage renewal; and
             3280          (b) if the modification is effective uniformly among all plans with a particular product


             3281      or service.
             3282          (11) For purposes of this section, a reference to "plan sponsor" includes a reference to
             3283      the employer:
             3284          (a) with respect to coverage provided to an employer member of the association; and
             3285          (b) if the health benefit plan is made available by an insurer in the employer market
             3286      only through:
             3287          (i) an association;
             3288          (ii) a trust; or
             3289          (iii) a discretionary group.
             3290          (12) (a) A small employer that, after purchasing a health benefit plan in the small group
             3291      market, employs on average more than 50 eligible employees on each business day in a
             3292      calendar year may continue to renew the health benefit plan purchased in the small group
             3293      market.
             3294          (b) A large employer that, after purchasing a health benefit plan in the large group
             3295      market, employs on average less than 51 eligible employees on each business day in a calendar
             3296      year may continue to renew the health benefit plan purchased in the large group market.
             3297          (13) An insurer offering employer sponsored health benefit plans shall comply with the
             3298      Health Insurance Portability and Accountability Act, 42 U.S.C. Sec. 300gg and 300gg-1.
             3299          Section 18. Section 31A-23a-102 is amended to read:
             3300           31A-23a-102. Definitions.
             3301          As used in this chapter:
             3302          (1) "Bail bond producer" is as defined in Section 31A-35-102 .
             3303          (2) "Home state" means a state or territory of the United States or the District of
             3304      Columbia in which an insurance producer:
             3305          (a) maintains the insurance producer's principal:
             3306          (i) place of residence; or
             3307          (ii) place of business; and
             3308          (b) is licensed to act as an insurance producer.
             3309          (3) "Insurer" is as defined in Section 31A-1-301 , except that the following persons or
             3310      similar persons are not insurers for purposes of Part 7, Producer Controlled Insurers:
             3311          (a) a risk retention group as defined in:


             3312          (i) the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499;
             3313          (ii) the Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.; and
             3314          (iii) Chapter 15, Part 2, Risk Retention Groups Act;
             3315          (b) a residual market pool;
             3316          (c) a joint underwriting authority or association; and
             3317          (d) a captive insurer.
             3318          (4) "License" is defined in Section 31A-1-301 .
             3319          (5) (a) "Managing general agent" means a person that:
             3320          (i) manages all or part of the insurance business of an insurer, including the
             3321      management of a separate division, department, or underwriting office;
             3322          (ii) acts as an agent for the insurer whether it is known as a managing general agent,
             3323      manager, or other similar term;
             3324          (iii) produces and underwrites an amount of gross direct written premium equal to, or
             3325      more than, 5% of[,] the policyholder surplus as reported in the last annual statement of the
             3326      insurer in any one quarter or year:
             3327          (A) with or without the authority;
             3328          (B) separately or together with an affiliate; and
             3329          (C) directly or indirectly; and
             3330          (iv) (A) adjusts or pays claims in excess of an amount determined by the
             3331      commissioner; or
             3332          (B) negotiates reinsurance on behalf of the insurer.
             3333          (b) Notwithstanding Subsection (5)(a), the following persons may not be considered as
             3334      managing general agent for the purposes of this chapter:
             3335          (i) an employee of the insurer;
             3336          (ii) a United States manager of the United States branch of an alien insurer;
             3337          (iii) an underwriting manager that, pursuant to contract:
             3338          (A) manages all the insurance operations of the insurer;
             3339          (B) is under common control with the insurer;
             3340          (C) is subject to Chapter 16, Insurance Holding Companies; and
             3341          (D) is not compensated based on the volume of premiums written; and
             3342          (iv) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal


             3343      insurer or inter-insurance exchange under powers of attorney.
             3344          (6) "Negotiate" means the act of conferring directly with or offering advice directly to a
             3345      purchaser or prospective purchaser of a particular contract of insurance concerning a
             3346      substantive benefit, term, or condition of the contract if the person engaged in that act:
             3347          (a) sells insurance; or
             3348          (b) obtains insurance from insurers for purchasers.
             3349          (7) "Reinsurance intermediary" means:
             3350          (a) a reinsurance intermediary-broker; or
             3351          (b) a reinsurance intermediary-manager.
             3352          (8) "Reinsurance intermediary-broker" means a person other than an officer or
             3353      employee of the ceding insurer, firm, association, or corporation who solicits, negotiates, or
             3354      places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority
             3355      or power to bind reinsurance on behalf of the insurer.
             3356          (9) (a) "Reinsurance intermediary-manager" means a person who:
             3357          (i) has authority to bind or who manages all or part of the assumed reinsurance
             3358      business of a reinsurer, including the management of a separate division, department, or
             3359      underwriting office; and
             3360          (ii) acts as an agent for the reinsurer whether the person is known as a reinsurance
             3361      intermediary-manager, manager, or other similar term.
             3362          (b) Notwithstanding Subsection (9)(a), the following persons may not be considered
             3363      reinsurance intermediary-managers for the purpose of this chapter with respect to the reinsurer:
             3364          (i) an employee of the reinsurer;
             3365          (ii) a United States manager of the United States branch of an alien reinsurer;
             3366          (iii) an underwriting manager that, pursuant to contract:
             3367          (A) manages all the reinsurance operations of the reinsurer;
             3368          (B) is under common control with the reinsurer;
             3369          (C) is subject to Chapter 16, Insurance Holding Companies; and
             3370          (D) is not compensated based on the volume of premiums written; and
             3371          (iv) the manager of a group, association, pool, or organization of insurers that:
             3372          (A) engage in joint underwriting or joint reinsurance; and
             3373          (B) are subject to examination by the insurance commissioner of the state in which the


             3374      manager's principal business office is located.
             3375          (10) "Resident" is as defined by rule made by the commissioner in accordance with
             3376      Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             3377          [(10)] (11) "Search" means a license subline of authority in conjunction with the title
             3378      insurance line of authority that allows a person to issue title insurance commitments or policies
             3379      on behalf of a title insurer.
             3380          [(11)] (12) "Sell" means to exchange a contract of insurance:
             3381          (a) by any means;
             3382          (b) for money or its equivalent; and
             3383          (c) on behalf of an insurance company.
             3384          [(12)] (13) "Solicit" means:
             3385          (a) attempting to sell insurance;
             3386          (b) asking or urging a person to apply for:
             3387          (i) a particular kind of insurance; and
             3388          (ii) insurance from a particular insurance company;
             3389          (c) advertising insurance, including advertising for the purpose of obtaining leads for
             3390      the sale of insurance; or
             3391          (d) holding oneself out as being in the insurance business.
             3392          [(13)] (14) "Terminate" means:
             3393          (a) the cancellation of the relationship between:
             3394          (i) an individual licensee or agency licensee and a particular insurer; or
             3395          (ii) an individual licensee and a particular agency licensee; or
             3396          (b) the termination of:
             3397          (i) an individual licensee's or agency licensee's authority to transact insurance on behalf
             3398      of a particular insurance company; or
             3399          (ii) an individual licensee's authority to transact insurance on behalf of a particular
             3400      agency licensee.
             3401          [(14)] (15) "Title marketing representative" means a person who:
             3402          (a) represents a title insurer in soliciting, requesting, or negotiating the placing of:
             3403          (i) title insurance; or
             3404          (ii) escrow services; and


             3405          (b) does not have a search or escrow license as provided in Section 31A-23a-106 .
             3406          [(15)] (16) "Uniform application" means the version of the National Association of
             3407      Insurance Commissioners' uniform application for resident and nonresident producer licensing
             3408      at the time the application is filed.
             3409          [(16)] (17) "Uniform business entity application" means the version of the National
             3410      Association of Insurance Commissioners' uniform business entity application for resident and
             3411      nonresident business entities at the time the application is filed.
             3412          Section 19. Section 31A-23a-104 is amended to read:
             3413           31A-23a-104. Application for individual license -- Application for agency license.
             3414          (1) This section applies to an initial or renewal license as a:
             3415          (a) producer;
             3416          (b) surplus lines producer;
             3417          (c) limited line producer;
             3418          (d) consultant;
             3419          (e) managing general agent; or
             3420          (f) reinsurance intermediary.
             3421          (2) (a) Subject to Subsection (2)(b), to obtain or renew an individual license, an
             3422      individual shall:
             3423          (i) file an application for an initial or renewal individual license with the commissioner
             3424      on forms and in a manner the commissioner prescribes; and
             3425          (ii) pay a license fee that is not refunded if the application:
             3426          (A) is denied; or
             3427          (B) is incomplete when filed and is never completed by the applicant.
             3428          (b) An application described in this Subsection (2) shall provide:
             3429          (i) information about the applicant's identity;
             3430          (ii) the applicant's Social Security number;
             3431          (iii) the applicant's personal history, experience, education, and business record;
             3432          (iv) whether the applicant is 18 years of age or older;
             3433          (v) whether the applicant has committed an act that is a ground for denial, suspension,
             3434      or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ;
             3435          (vi) if the application is for a resident individual producer license, certification that the


             3436      applicant complies with Section 31A-23a-203.5 ; and
             3437          (vii) any other information the commissioner reasonably requires.
             3438          (3) The commissioner may require a document reasonably necessary to verify the
             3439      information contained in an application filed under this section.
             3440          (4) An applicant's Social Security number contained in an application filed under this
             3441      section is a private record under Section 63G-2-302 .
             3442          (5) (a) Subject to Subsection (5)(b), to obtain or renew an agency license, a person
             3443      shall:
             3444          (i) file an application for an initial or renewal agency license with the commissioner on
             3445      forms and in a manner the commissioner prescribes; and
             3446          (ii) pay a license fee that is not refunded if the application:
             3447          (A) is denied; or
             3448          (B) is incomplete when filed and is never completed by the applicant.
             3449          (b) An application described in Subsection (5)(a) shall provide:
             3450          (i) information about the applicant's identity;
             3451          (ii) the applicant's federal employer identification number;
             3452          (iii) the designated responsible licensed [producer] individual;
             3453          (iv) the identity of the owners, partners, officers, and directors;
             3454          (v) whether the applicant has committed an act that is a ground for denial, suspension,
             3455      or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ; and
             3456          (vi) any other information the commissioner reasonably requires.
             3457          Section 20. Section 31A-23a-105 is amended to read:
             3458           31A-23a-105. General requirements for individual and agency license issuance
             3459      and renewal.
             3460          (1) (a) The commissioner shall issue or renew a license to a person described in
             3461      Subsection (1)(b) to act as:
             3462          (i) a producer;
             3463          (ii) a surplus lines producer;
             3464          (iii) a limited line producer;
             3465          (iv) a consultant;
             3466          (v) a managing general agent; or


             3467          (vi) a reinsurance intermediary.
             3468          (b) The commissioner shall issue or renew a license under Subsection (1)(a) to a
             3469      person who, as to the license type and line of authority classification applied for under Section
             3470      31A-23a-106 :
             3471          (i) satisfies the application requirements under Section 31A-23a-104 ;
             3472          (ii) satisfies the character requirements under Section 31A-23a-107 ;
             3473          (iii) satisfies [any] applicable continuing education requirements under Section
             3474      31A-23a-202 ;
             3475          (iv) satisfies [any] applicable examination requirements under Section 31A-23a-108 ;
             3476          (v) satisfies [any] applicable training period requirements under Section 31A-23a-203 ;
             3477          (vi) if an applicant for a resident individual producer license, certifies that, to the extent
             3478      applicable, the applicant:
             3479          (A) is in compliance with Section 31A-23a-203.5 ; and
             3480          (B) will maintain compliance with Section 31A-23a-203.5 during the period for which
             3481      the license is issued or renewed;
             3482          (vii) has not committed an act that is a ground for denial, suspension, or revocation as
             3483      provided in Section 31A-23a-111 ;
             3484          (viii) if a nonresident:
             3485          (A) complies with Section 31A-23a-109 ; and
             3486          (B) holds an active similar license in that person's home state [of residence];
             3487          (ix) if an applicant for an individual title insurance producer or agency title insurance
             3488      producer license, satisfies the requirements of Section 31A-23a-204 ;
             3489          (x) if an applicant for a license to act as a life settlement provider or life settlement
             3490      producer, satisfies the requirements of Section 31A-23a-117 ; and
             3491          (xi) pays the applicable fees under Section 31A-3-103 .
             3492          (2) (a) This Subsection (2) applies to the following persons:
             3493          (i) an applicant for a pending:
             3494          (A) individual or agency producer license;
             3495          (B) surplus lines producer license;
             3496          (C) limited line producer license;
             3497          (D) consultant license;


             3498          (E) managing general agent license; or
             3499          (F) reinsurance intermediary license; or
             3500          (ii) a licensed:
             3501          (A) individual or agency producer;
             3502          (B) surplus lines producer;
             3503          (C) limited line producer;
             3504          (D) consultant;
             3505          (E) managing general agent; or
             3506          (F) reinsurance intermediary.
             3507          (b) A person described in Subsection (2)(a) shall report to the commissioner:
             3508          (i) an administrative action taken against the person, including a denial of a new or
             3509      renewal license application:
             3510          (A) in another jurisdiction; or
             3511          (B) by another regulatory agency in this state; and
             3512          (ii) a criminal prosecution taken against the person in any jurisdiction.
             3513          (c) The report required by Subsection (2)(b) shall:
             3514          (i) be filed:
             3515          (A) at the time the person files the application for an individual or agency license; and
             3516          (B) for an action or prosecution that occurs on or after the day on which the person
             3517      files the application:
             3518          (I) for an administrative action, within 30 days of the final disposition of the
             3519      administrative action; or
             3520          (II) for a criminal prosecution, within 30 days of the initial appearance before a court;
             3521      and
             3522          (ii) include a copy of the complaint or other relevant legal documents related to the
             3523      action or prosecution described in Subsection (2)(b).
             3524          (3) (a) The department may require a person applying for a license or for consent to
             3525      engage in the business of insurance to submit to a criminal background check as a condition of
             3526      receiving a license or consent.
             3527          (b) A person, if required to submit to a criminal background check under Subsection
             3528      (3)(a), shall:


             3529          (i) submit a fingerprint card in a form acceptable to the department; and
             3530          (ii) consent to a fingerprint background check by:
             3531          (A) the Utah Bureau of Criminal Identification; and
             3532          (B) the Federal Bureau of Investigation.
             3533          (c) For a person who submits a fingerprint card and consents to a fingerprint
             3534      background check under Subsection (3)(b), the department may request:
             3535          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             3536      2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             3537          (ii) complete Federal Bureau of Investigation criminal background checks through the
             3538      national criminal history system.
             3539          (d) Information obtained by the department from the review of criminal history records
             3540      received under this Subsection (3) shall be used by the department for the purposes of:
             3541          (i) determining if a person satisfies the character requirements under Section
             3542      31A-23a-107 for issuance or renewal of a license;
             3543          (ii) determining if a person has failed to maintain the character requirements under
             3544      Section 31A-23a-107 ; and
             3545          (iii) preventing a person who violates the federal Violent Crime Control and Law
             3546      Enforcement Act of 1994, 18 U.S.C. Sec. 1033, from engaging in the business of insurance in
             3547      the state.
             3548          (e) If the department requests the criminal background information, the department
             3549      shall:
             3550          (i) pay to the Department of Public Safety the costs incurred by the Department of
             3551      Public Safety in providing the department criminal background information under Subsection
             3552      (3)(c)(i);
             3553          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             3554      of Investigation in providing the department criminal background information under
             3555      Subsection (3)(c)(ii); and
             3556          (iii) charge the person applying for a license or for consent to engage in the business of
             3557      insurance a fee equal to the aggregate of Subsections (3)(e)(i) and (ii).
             3558          (4) To become a resident licensee in accordance with Section 31A-23a-104 and this
             3559      section, a person licensed as one of the following in another state who moves to this state shall


             3560      apply within 90 days of establishing legal residence in this state:
             3561          (a) insurance producer;
             3562          (b) surplus lines producer;
             3563          (c) limited line producer;
             3564          (d) consultant;
             3565          (e) managing general agent; or
             3566          (f) reinsurance intermediary.
             3567          (5) (a) The commissioner may deny a license application for a license listed in
             3568      Subsection (5)(b) if the person applying for the license, as to the license type and line of
             3569      authority classification applied for under Section 31A-23a-106 :
             3570          (i) fails to satisfy the requirements as set forth in this section; or
             3571          (ii) commits an act that is grounds for denial, suspension, or revocation as set forth in
             3572      Section 31A-23a-111 .
             3573          (b) This Subsection (5) applies to the following licenses:
             3574          (i) producer;
             3575          (ii) surplus lines producer;
             3576          (iii) limited line producer;
             3577          (iv) consultant;
             3578          (v) managing general agent; or
             3579          (vi) reinsurance intermediary.
             3580          (6) Notwithstanding the other provisions of this section, the commissioner may:
             3581          (a) issue a license to an applicant for a license for a title insurance line of authority only
             3582      with the concurrence of the Title and Escrow Commission; and
             3583          (b) renew a license for a title insurance line of authority only with the concurrence of
             3584      the Title and Escrow Commission.
             3585          Section 21. Section 31A-23a-108 is amended to read:
             3586           31A-23a-108. Examination requirements.
             3587          (1) (a) The commissioner may require [applicants] an applicant for [any] a particular
             3588      license type under Section 31A-23a-106 to pass a line of authority examination as a
             3589      requirement for a license, except that an examination may not be required of [applicants] an
             3590      applicant for:


             3591          (i) [licenses] a license under Subsection 31A-23a-106 (2)(c); or
             3592          (ii) [other] another limited line license [lines] line of authority recognized by the
             3593      commissioner or the Title and Escrow Commission by rule as provided in Subsection
             3594      31A-23a-106 (3).
             3595          (b) The examination described in Subsection (1)(a):
             3596          (i) shall reasonably relate to the line of authority for which it is prescribed; and
             3597          (ii) may be administered by the commissioner or as otherwise specified by rule.
             3598          (2) The commissioner shall waive the requirement of an examination for a nonresident
             3599      applicant who:
             3600          (a) applies for an insurance producer license in this state within 90 days of establishing
             3601      legal residence in this state;
             3602          (b) has been licensed for the same line of authority in another state; and
             3603          (c) (i) is licensed in the state described in Subsection (2)(b) at the time the applicant
             3604      applies for an insurance producer license in this state; or
             3605          (ii) if the application is received within 90 days of the cancellation of the applicant's
             3606      previous license:
             3607          (A) the prior state certifies that at the time of cancellation, the applicant was in good
             3608      standing in that state; or
             3609          (B) the state's producer database records maintained by the National Association of
             3610      Insurance Commissioners or the National Association of Insurance Commissioner's affiliates or
             3611      subsidiaries, indicates that the producer is or was licensed in good standing for the line of
             3612      authority requested.
             3613          [(3) A nonresident producer licensee who moves to this state and applies for a resident
             3614      license within 90 days of establishing legal residence in this state shall be exempt from any line
             3615      of authority examination that the producer was authorized on the producer's nonresident
             3616      producer license, except where the commissioner determines otherwise by rule.]
             3617          [(4)] (3) This section's requirement may only be applied to [applicants who are natural
             3618      persons] an applicant who is a natural person.
             3619          Section 22. Section 31A-23a-112 is amended to read:
             3620           31A-23a-112. Probation -- Grounds for revocation.
             3621          (1) The commissioner may place a licensee on probation for a period not to exceed 24


             3622      months as follows:
             3623          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
             3624      Procedures Act, for [any] circumstances that would justify a suspension under Section
             3625      31A-23a-111 ; or
             3626          (b) at the issuance or renewal of a [new] license:
             3627          (i) with an admitted violation under 18 U.S.C. [Sections] Sec. 1033 [and 1034]; or
             3628          (ii) with a response to background information questions on a new or renewal license
             3629      application [indicating that] or information received from a background check conducted in
             3630      connection with a new or renewal license application that indicates:
             3631          (A) the person has been convicted of a crime, that is listed by rule made in accordance
             3632      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
             3633      probation;
             3634          (B) the person is currently charged with a crime, that is listed by rule made in
             3635      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             3636      grounds for probation regardless of whether adjudication is withheld;
             3637          (C) the person has been involved in an administrative proceeding regarding [any] a
             3638      professional or occupational license; or
             3639          (D) [any] a business in which the person is or was an owner, partner, officer, or
             3640      director has been involved in an administrative proceeding regarding [any] a professional or
             3641      occupational license.
             3642          (2) The commissioner may place a licensee on probation for a specified period no
             3643      longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [Sections]
             3644      Sec. 1033 [and 1034].
             3645          (3) The probation order shall state the conditions for retention of the license, which
             3646      shall be reasonable.
             3647          (4) [Any] A violation of the probation is grounds for revocation pursuant to [any] a
             3648      proceeding authorized under Title 63G, Chapter 4, Administrative Procedures Act.
             3649          Section 23. Section 31A-23a-113 is amended to read:
             3650           31A-23a-113. License lapse and voluntary surrender.
             3651          (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
             3652          (i) pay when due a fee under Section 31A-3-103 ;


             3653          (ii) complete continuing education requirements under Section 31A-23a-202 before
             3654      submitting the license renewal application;
             3655          (iii) submit a completed renewal application as required by Section 31A-23a-104 ;
             3656          (iv) submit additional documentation required to complete the licensing process as
             3657      related to a specific license type or line of authority; or
             3658          (v) maintain an active license in a [resident] licensee's home state if the licensee is a
             3659      nonresident licensee.
             3660          (b) (i) A licensee whose license lapses due to the following may request an action
             3661      described in Subsection (1)(b)(ii):
             3662          (A) military service;
             3663          (B) voluntary service for a period of time designated by the person for whom the
             3664      licensee provides voluntary service; or
             3665          (C) some other extenuating circumstances, such as long-term medical disability.
             3666          (ii) A licensee described in Subsection (1)(b)(i) may request:
             3667          (A) reinstatement of the license no later than one year after the day on which the
             3668      license lapses; and
             3669          (B) waiver of any of the following imposed for failure to comply with renewal
             3670      procedures:
             3671          (I) an examination requirement;
             3672          (II) reinstatement fees set under Section 31A-3-103 ;
             3673          (III) continuing education requirements; or
             3674          (IV) other sanction imposed for failure to comply with renewal procedures.
             3675          (2) If a license issued under this chapter is voluntarily surrendered, the license or line
             3676      of authority may be reinstated:
             3677          (a) during the license period in which the license is voluntarily surrendered; and
             3678          (b) no later than one year after the day on which the license is voluntarily surrendered.
             3679          [(3) A voluntarily surrendered license that is reinstated during the license period set
             3680      forth in Subsection (2) may not be reinstated until the person who voluntarily surrendered the
             3681      license complies with any applicable continuing education requirements for the period during
             3682      which the license was voluntarily surrendered.]
             3683          Section 24. Section 31A-23a-202 is amended to read:


             3684           31A-23a-202. Continuing education requirements.
             3685          (1) Pursuant to this section, the commissioner shall by rule prescribe the continuing
             3686      education requirements for a producer and a consultant.
             3687          (2) (a) The commissioner may not state a continuing education requirement in terms of
             3688      formal education.
             3689          (b) The commissioner may state a continuing education requirement in terms of hours
             3690      of insurance-related instruction received.
             3691          (c) Insurance-related formal education may be a substitute, in whole or in part, for the
             3692      hours required under Subsection (2)(b).
             3693          (3) (a) The commissioner shall impose continuing education requirements in
             3694      accordance with a two-year licensing period in which the licensee meets the requirements of
             3695      this Subsection (3).
             3696          (b) (i) Except as provided in this section, the continuing education requirements shall
             3697      require:
             3698          (A) that a licensee complete 24 credit hours of continuing education for every two-year
             3699      licensing period;
             3700          (B) that 3 of the 24 credit hours described in Subsection (3)(b)(i)(A) be ethics courses;
             3701      and
             3702          (C) that the licensee complete at least half of the required hours through classroom
             3703      hours of insurance-related instruction.
             3704          (ii) An hour of continuing education in accordance with Subsection (3)(b)(i) may be
             3705      obtained through:
             3706          (A) classroom attendance;
             3707          (B) home study;
             3708          (C) watching a video recording;
             3709          (D) experience credit; or
             3710          (E) another method provided by rule.
             3711          (iii) (A) Notwithstanding Subsections (3)(b)(i)(A) and (B), an individual title insurance
             3712      producer is required to complete 12 credit hours of continuing education for every two-year
             3713      licensing period, with 3 of the credit hours being ethics courses unless the individual title
             3714      insurance producer is licensed in this state as an individual title insurance producer for 20 or


             3715      more consecutive years.
             3716          (B) If an individual title insurance producer is licensed in this state as an individual
             3717      title insurance producer for 20 or more consecutive years, the individual title insurance
             3718      producer is required to complete 6 credit hours of continuing education for every two-year
             3719      licensing period, with 3 of the credit hours being ethics courses.
             3720          (C) Notwithstanding Subsection (3)(b)(iii)(A) or (B), an individual title insurance
             3721      producer is considered to have met the continuing education requirements imposed under
             3722      Subsection (3)(b)(iii)(A) or (B) if the individual title insurance producer:
             3723          (I) is an active member in good standing with the Utah State Bar;
             3724          (II) is in compliance with the continuing education requirements of the Utah State Bar;
             3725      and
             3726          (III) if requested by the department, provides the department evidence that the
             3727      individual title insurance producer complied with the continuing education requirements of the
             3728      Utah State Bar.
             3729          (c) A licensee may obtain continuing education hours at any time during the two-year
             3730      licensing period.
             3731          (d) (i) A licensee is exempt from continuing education requirements under this section
             3732      if:
             3733          (A) the licensee was first licensed before [April 1, 1978] December 31, 1982;
             3734          (B) the license does not have a continuous lapse for a period of more than one year,
             3735      except for a license for which the licensee has had an exemption approved before May 11,
             3736      2011;
             3737          (C) the licensee requests an exemption from the department; and
             3738          (D) the department approves the exemption.
             3739          (ii) If the department approves the exemption under Subsection (3)(d)(i), the licensee is
             3740      not required to apply again for the exemption.
             3741          (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             3742      commissioner shall, by rule:
             3743          (i) publish a list of insurance professional designations whose continuing education
             3744      requirements can be used to meet the requirements for continuing education under Subsection
             3745      (3)(b);


             3746          (ii) authorize a continuing education provider or a state or national professional
             3747      producer or consultant association to:
             3748          (A) offer a qualified program for a license type or line of authority on a geographically
             3749      accessible basis; and
             3750          (B) collect a reasonable fee for funding and administration of a continuing education
             3751      program, subject to the review and approval of the commissioner; and
             3752          (iii) provide that membership by a producer or consultant in a state or national
             3753      professional producer or consultant association is considered a substitute for the equivalent of
             3754      two hours for each year during which the producer or consultant is a member of the
             3755      professional association, except that the commissioner may not give more than two hours of
             3756      continuing education credit in a year regardless of the number of professional associations of
             3757      which the producer or consultant is a member.
             3758          (f) A fee permitted under Subsection (3)(e)(ii)(B) that is charged for attendance at a
             3759      professional producer or consultant association program may be less for an association
             3760      member, on the basis of the member's affiliation expense, but shall preserve the right of a
             3761      nonmember to attend without affiliation.
             3762          (4) The commissioner shall approve a continuing education provider or continuing
             3763      education course that satisfies the requirements of this section.
             3764          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             3765      commissioner shall by rule set the processes and procedures for continuing education provider
             3766      registration and course approval.
             3767          (6) The requirements of this section apply only to a producer or consultant who is an
             3768      individual.
             3769          (7) A nonresident producer or consultant is considered to have satisfied this state's
             3770      continuing education requirements if the nonresident producer or consultant satisfies the
             3771      nonresident producer's or consultant's home state's continuing education requirements for a
             3772      licensed insurance producer or consultant.
             3773          (8) A producer or consultant subject to this section shall keep documentation of
             3774      completing the continuing education requirements of this section for two years after the end of
             3775      the two-year licensing period to which the continuing education applies.
             3776          Section 25. Section 31A-23a-203 is amended to read:


             3777           31A-23a-203. Training period requirements.
             3778          (1) A producer is eligible to become a surplus lines producer only if the producer:
             3779          (a) has passed the applicable surplus lines producer examination;
             3780          (b) has been a producer with property [and] or casualty or both lines of authority for at
             3781      least three years during the four years immediately preceding the date of application; and
             3782          (c) has paid the applicable fee under Section 31A-3-103 .
             3783          (2) A person is eligible to become a consultant only if the person has acted in a
             3784      capacity that would provide the person with preparation to act as an insurance consultant for a
             3785      period aggregating not less than three years during the four years immediately preceding the
             3786      date of application.
             3787          (3) (a) A resident producer with an accident and health line of authority may only sell
             3788      long-term care insurance if the producer:
             3789          (i) initially completes a minimum of three hours of long-term care training before
             3790      selling long-term care coverage; and
             3791          (ii) after completing the training required by Subsection (3)(a)(i), completes a
             3792      minimum of three hours of long-term care training during each subsequent two-year licensing
             3793      period.
             3794          (b) A course taken to satisfy a long-term care training requirement may be used toward
             3795      satisfying a producer continuing education requirement.
             3796          (c) Long-term care training is not a continuing education requirement to renew a
             3797      producer license.
             3798          (d) An insurer that issues long-term care insurance shall demonstrate to the
             3799      commissioner, upon request, that a producer who is appointed by the insurer and who sells
             3800      long-term care insurance coverage is in compliance with this Subsection (3).
             3801          (4) The training periods required under this section apply only to an individual
             3802      applying for a license under this chapter.
             3803          Section 26. Section 31A-23a-402.5 is amended to read:
             3804           31A-23a-402.5. Inducements.
             3805          (1) (a) Except as provided in Subsection (2), a producer, consultant, or other licensee
             3806      under this title, or an officer or employee of a licensee, may not induce a person to enter into,
             3807      continue, or terminate an insurance contract by offering a benefit that is not:


             3808          (i) specified in the insurance contract; or
             3809          (ii) directly related to the insurance contract.
             3810          (b) An insurer may not make or knowingly allow an agreement of insurance that is not
             3811      clearly expressed in the insurance contract to be issued or renewed.
             3812          (c) A licensee under this title may not absorb the tax under Section 31A-3-301 .
             3813          (2) This section does not apply to a title insurer, an individual title insurance producer,
             3814      or agency title insurance producer, or an officer or employee of a title insurer, an individual
             3815      title insurance producer, or an agency title insurance producer.
             3816          (3) Items not prohibited by Subsection (1) include an insurer:
             3817          (a) reducing premiums because of expense savings;
             3818          (b) providing to a policyholder or insured one or more incentives, as defined by the
             3819      commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             3820      Rulemaking Act, to participate in a program or activity designed to reduce claims or claim
             3821      expenses, including:
             3822          (i) a premium discount offered to a small or large employer group based on a wellness
             3823      program if:
             3824          (A) the premium discount for the employer group does not exceed 20% of the group
             3825      premium; and
             3826          (B) the premium discount based on the wellness program is offered uniformly by the
             3827      insurer to all employer groups in the large or small group market;
             3828          (ii) a premium discount offered to employees of a small or large employer group in an
             3829      amount that does not exceed federal limits on wellness program incentives; or
             3830          (iii) a combination of premium discounts offered to the employer group and the
             3831      employees of an employer group, based on a wellness program, if:
             3832          (A) the premium discounts for the employer group comply with Subsection (3)(b)(i);
             3833      and
             3834          (B) the premium discounts for the employees of an employer group comply with
             3835      Subsection (3)(b)(ii); or
             3836          (c) receiving premiums under an installment payment plan.
             3837          (4) Items not prohibited by Subsection (1) include a producer, consultant, or other
             3838      licensee, or an officer or employee of a licensee, either directly or through a third party:


             3839          (a) engaging in a usual kind of social courtesy if receipt of the social courtesy is not
             3840      conditioned on a quote or the purchase of a particular insurance product;
             3841          (b) extending credit on a premium to the insured:
             3842          (i) without interest, for no more than 90 days from the effective date of the insurance
             3843      contract;
             3844          (ii) for interest that is not less than the legal rate under Section 15-1-1 , on the unpaid
             3845      balance after the time period described in Subsection (4)(b)(i); and
             3846          (iii) except that an installment or payroll deduction payment of premiums on an
             3847      insurance contract issued under an insurer's mass marketing program is not considered an
             3848      extension of credit for purposes of this Subsection (4)(b);
             3849          (c) preparing or conducting a survey that:
             3850          (i) is directly related to an accident and health insurance policy purchased from the
             3851      licensee; or
             3852          (ii) is used by the licensee to assess the benefit needs and preferences of insureds,
             3853      employers, or employees directly related to an insurance product sold by the licensee;
             3854          (d) providing limited human resource services that are directly related to an insurance
             3855      product sold by the licensee, including:
             3856          (i) answering questions directly related to:
             3857          (A) an employee benefit offering or administration, if the insurance product purchased
             3858      from the licensee is accident and health insurance or health insurance; and
             3859          (B) employment practices liability, if the insurance product offered by or purchased
             3860      from the licensee is property or casualty insurance; and
             3861          (ii) providing limited human resource compliance training and education directly
             3862      pertaining to an insurance product purchased from the licensee;
             3863          (e) providing the following types of information or guidance:
             3864          (i) providing guidance directly related to compliance with federal and state laws for an
             3865      insurance product purchased from the licensee;
             3866          (ii) providing a workshop or seminar addressing an insurance issue that is directly
             3867      related to an insurance product purchased from the licensee; or
             3868          (iii) providing information regarding:
             3869          (A) employee benefit issues;


             3870          (B) directly related insurance regulatory and legislative updates; or
             3871          (C) similar education about an insurance product sold by the licensee and how the
             3872      insurance product interacts with tax law;
             3873          (f) preparing or providing a form that is directly related to an insurance product
             3874      purchased from, or offered by, the licensee;
             3875          (g) preparing or providing documents directly related to a premium only cafeteria plan
             3876      within the meaning of Section 125, Internal Revenue Code, or a flexible spending account, but
             3877      not providing ongoing administration of a flexible spending account;
             3878          (h) providing enrollment and billing assistance, including:
             3879          (i) providing benefit statements or new hire insurance benefits packages; and
             3880          (ii) providing technology services such as an electronic enrollment platform or
             3881      application system;
             3882          (i) communicating coverages in writing and in consultation with the insured and
             3883      employees;
             3884          (j) providing employee communication materials and notifications directly related to an
             3885      insurance product purchased from a licensee;
             3886          (k) providing claims management and resolution to the extent permitted under the
             3887      licensee's license;
             3888          (l) providing underwriting or actuarial analysis or services;
             3889          (m) negotiating with an insurer regarding the placement and pricing of an insurance
             3890      product;
             3891          (n) recommending placement and coverage options;
             3892          (o) providing a health fair or providing assistance or advice on establishing or
             3893      operating a wellness program, but not providing any payment for or direct operation of the
             3894      wellness program;
             3895          (p) providing COBRA and Utah mini-COBRA administration, consultations, and other
             3896      services directly related to an insurance product purchased from the licensee;
             3897          (q) assisting with a summary plan description, including providing a summary plan
             3898      description wraparound;
             3899          (r) providing information necessary for the preparation of documents directly related to
             3900      the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq., as


             3901      amended;
             3902          (s) providing information or services directly related to the Health Insurance Portability
             3903      and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended, such as services
             3904      directly related to health care access, portability, and renewability when offered in connection
             3905      with accident and health insurance sold by a licensee;
             3906          (t) sending proof of coverage to a third party with a legitimate interest in coverage;
             3907          (u) providing information in a form approved by the commissioner and directly related
             3908      to determining whether an insurance product sold by the licensee meets the requirements of a
             3909      third party contract that requires or references insurance coverage;
             3910          (v) facilitating risk management services directly related to property and casualty
             3911      insurance products sold or offered for sale by the licensee, including:
             3912          (i) risk management;
             3913          (ii) claims and loss control services;
             3914          (iii) risk assessment consulting, including analysis of:
             3915          (A) employer's job descriptions; or
             3916          (B) employer's safety procedures or manuals; and
             3917          (iv) providing information and training on best practices;
             3918          (w) otherwise providing services that are legitimately part of servicing an insurance
             3919      product purchased from a licensee; and
             3920          (x) providing other directly related services approved by the department.
             3921          (5) An inducement prohibited under Subsection (1) includes a producer, consultant, or
             3922      other licensee, or an officer or employee of a licensee:
             3923          (a) (i) providing a [premium or commission] rebate;
             3924          (ii) paying the salary of an employee of a person who purchases an insurance product
             3925      from the licensee; or
             3926          (iii) if the licensee is an insurer, or a third party administrator who contracts with an
             3927      insurer, paying the salary for an onsite staff member to perform an act prohibited under
             3928      Subsection (5)(b)(xii); or
             3929          (b) engaging in one or more of the following unless a fee is paid in accordance with
             3930      Subsection (8):
             3931          (i) performing background checks of prospective employees;


             3932          (ii) providing legal services by a person licensed to practice law;
             3933          (iii) performing drug testing that is directly related to an insurance product purchased
             3934      from the licensee;
             3935          (iv) preparing employer or employee handbooks, except that a licensee may:
             3936          (A) provide information for a medical benefit section of an employee handbook;
             3937          (B) provide information for the section of an employee handbook directly related to an
             3938      employment practices liability insurance product purchased from the licensee; or
             3939          (C) prepare or print an employee benefit enrollment guide;
             3940          (v) providing job descriptions, postings, and applications for a person;
             3941          (vi) providing payroll services;
             3942          (vii) providing performance reviews or performance review training;
             3943          (viii) providing union advice;
             3944          (ix) providing accounting services;
             3945          (x) providing data analysis information technology programs, except as provided in
             3946      Subsection (4)(h)(ii);
             3947          (xi) providing administration of health reimbursement accounts or health savings
             3948      accounts; or
             3949          (xii) if the licensee is an insurer, or a third party administrator who contracts with an
             3950      insurer, the insurer issuing an insurance policy that lists in the insurance policy one or more of
             3951      the following prohibited benefits:
             3952          (A) performing background checks of prospective employees;
             3953          (B) providing legal services by a person licensed to practice law;
             3954          (C) performing drug testing that is directly related to an insurance product purchased
             3955      from the insurer;
             3956          (D) preparing employer or employee handbooks;
             3957          (E) providing job descriptions postings, and applications;
             3958          (F) providing payroll services;
             3959          (G) providing performance reviews or performance review training;
             3960          (H) providing union advice;
             3961          (I) providing accounting services;
             3962          (J) providing discrimination testing; or


             3963          (K) providing data analysis information technology programs.
             3964          (6) A producer, consultant, or other licensee or an officer or employee of a licensee
             3965      shall itemize and bill separately from any other insurance product or service offered or
             3966      provided under Subsection (5)(b).
             3967          (7) (a) A de minimis gift or meal not to exceed $25 for each individual receiving the
             3968      gift or meal is presumed to be a social courtesy not conditioned on a quote or purchase of a
             3969      particular insurance product for purposes of Subsection (4)(a).
             3970          (b) Notwithstanding Subsection (4)(a), a de minimis gift or meal not to exceed $10
             3971      may be conditioned on receipt of a quote of a particular insurance product [if the de minimis
             3972      gift or meal is provided by the insurer and not by a producer or consultant].
             3973          (8) If as provided under Subsection (5)(b) a producer, consultant, or other licensee is
             3974      paid a fee to provide an item listed in Subsection (5)(b), the licensee shall comply with
             3975      Subsection 31A-23a-501 (2) in charging the fee, except that the fee paid for the item shall equal
             3976      or exceed the fair market value of the item.
             3977          Section 27. Section 31A-23a-501 is amended to read:
             3978           31A-23a-501. Licensee compensation.
             3979          (1) As used in this section:
             3980          (a) "Commission compensation" includes funds paid to or credited for the benefit of a
             3981      licensee from:
             3982          (i) commission amounts deducted from insurance premiums on insurance sold by or
             3983      placed through the licensee; [or]
             3984          (ii) commission amounts received from an insurer or another licensee as a result of the
             3985      sale or placement of insurance[.]; or
             3986          (iii) overrides, bonuses, contingent bonuses, or contingent commissions received from
             3987      an insurer or another licensee as a result of the sale or placement of insurance.
             3988          (b) (i) "Compensation from an insurer or third party administrator" means
             3989      commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options,
             3990      gifts, prizes, or any other form of valuable consideration:
             3991          (A) whether or not payable pursuant to a written agreement; and
             3992          (B) received from:
             3993          (I) an insurer; or


             3994          (II) a third party to the transaction for the sale or placement of insurance.
             3995          (ii) "Compensation from an insurer or third party administrator" does not mean
             3996      compensation from a customer that is:
             3997          (A) a fee or pass-through costs as provided in Subsection (1)(e); or
             3998          (B) a fee or amount collected by or paid to the producer that does not exceed an
             3999      amount established by the commissioner by administrative rule.
             4000          (c) (i) "Customer" means:
             4001          (A) the person signing the application or submission for insurance; or
             4002          (B) the authorized representative of the insured actually negotiating the placement of
             4003      insurance with the producer.
             4004          (ii) "Customer" does not mean a person who is a participant or beneficiary of:
             4005          (A) an employee benefit plan; or
             4006          (B) a group or blanket insurance policy or group annuity contract sold, solicited, or
             4007      negotiated by the producer or affiliate.
             4008          (d) (i) "Noncommission compensation" includes all funds paid to or credited for the
             4009      benefit of a licensee other than commission compensation.
             4010          (ii) "Noncommission compensation" does not include charges for pass-through costs
             4011      incurred by the licensee in connection with obtaining, placing, or servicing an insurance policy.
             4012          (e) "Pass-through costs" include:
             4013          (i) costs for copying documents to be submitted to the insurer; and
             4014          (ii) bank costs for processing cash or credit card payments.
             4015          (2) A licensee may receive from an insured or from a person purchasing an insurance
             4016      policy, noncommission compensation if the noncommission compensation is stated on a
             4017      separate, written disclosure.
             4018          (a) The disclosure required by this Subsection (2) shall:
             4019          (i) include the signature of the insured or prospective insured acknowledging the
             4020      noncommission compensation;
             4021          (ii) clearly specify the amount or extent of the noncommission compensation; and
             4022          (iii) be provided to the insured or prospective insured before the performance of the
             4023      service.
             4024          (b) Noncommission compensation shall be:


             4025          (i) limited to actual or reasonable expenses incurred for services; and
             4026          (ii) uniformly applied to all insureds or prospective insureds in a class or classes of
             4027      business or for a specific service or services.
             4028          (c) A copy of the signed disclosure required by this Subsection (2) shall be maintained
             4029      by any licensee who collects or receives the noncommission compensation or any portion of
             4030      the noncommission compensation.
             4031          (d) All accounting records relating to noncommission compensation shall be
             4032      maintained by the person described in Subsection (2)(c) in a manner that facilitates an audit.
             4033          (3) (a) A licensee may receive noncommission compensation when acting as a
             4034      producer for the insured in connection with the actual sale or placement of insurance if:
             4035          (i) the producer and the insured have agreed on the producer's noncommission
             4036      compensation; and
             4037          (ii) the producer has disclosed to the insured the existence and source of any other
             4038      compensation that accrues to the producer as a result of the transaction.
             4039          (b) The disclosure required by this Subsection (3) shall:
             4040          (i) include the signature of the insured or prospective insured acknowledging the
             4041      noncommission compensation;
             4042          (ii) clearly specify the amount or extent of the noncommission compensation and the
             4043      existence and source of any other compensation; and
             4044          (iii) be provided to the insured or prospective insured before the performance of the
             4045      service.
             4046          (c) The following additional noncommission compensation is authorized:
             4047          (i) compensation received by a producer of a compensated corporate surety who under
             4048      procedures approved by a rule or order of the commissioner is paid by surety bond principal
             4049      debtors for extra services;
             4050          (ii) compensation received by an insurance producer who is also licensed as a public
             4051      adjuster under Section 31A-26-203 , for services performed for an insured in connection with a
             4052      claim adjustment, so long as the producer does not receive or is not promised compensation for
             4053      aiding in the claim adjustment prior to the occurrence of the claim;
             4054          (iii) compensation received by a consultant as a consulting fee, provided the consultant
             4055      complies with the requirements of Section 31A-23a-401 ; or


             4056          (iv) other compensation arrangements approved by the commissioner after a finding
             4057      that they do not violate Section 31A-23a-401 and are not harmful to the public.
             4058          (d) Subject to Section 31A-23a-402.5 , a producer for the insured may receive
             4059      compensation from an insured through an insurer, for the negotiation and sale of a health
             4060      benefit plan, if there is a separate written agreement between the insured and the licensee for
             4061      the compensation. An insurer who passes through the compensation from the insured to the
             4062      licensee under this Subsection (3)(d) is not providing direct or indirect compensation or
             4063      commission compensation to the licensee.
             4064          (4) (a) For purposes of this Subsection (4), "producer" includes:
             4065          (i) a producer;
             4066          (ii) an affiliate of a producer; or
             4067          (iii) a consultant.
             4068          (b) A producer may not accept or receive any compensation from an insurer or third
             4069      party administrator for the initial placement of a health benefit plan, other than a hospital
             4070      confinement indemnity policy, unless prior to the customer's initial purchase of the health
             4071      benefit plan the producer discloses in writing to the customer that the producer will receive
             4072      compensation from the insurer or third party administrator for the placement of insurance,
             4073      including the amount or type of compensation known to the producer at the time of the
             4074      disclosure.
             4075          (c) A producer shall:
             4076          (i) obtain the customer's signed acknowledgment that the disclosure under Subsection
             4077      (4)(b) was made to the customer; or
             4078          (ii) (A) sign a statement that the disclosure required by Subsection (4)(b) was made to
             4079      the customer; and
             4080          (B) keep the signed statement on file in the producer's office while the health benefit
             4081      plan placed with the customer is in force.
             4082          (d) (i) A licensee who collects or receives any part of the compensation from an insurer
             4083      or third party administrator in a manner that facilitates an audit shall, while the health benefit
             4084      plan placed with the customer is in force, maintain a copy of:
             4085          (A) the signed acknowledgment described in Subsection (4)(c)(i); or
             4086          (B) the signed statement described in Subsection (4)(c)(ii).


             4087          (ii) The standard application developed in accordance with Section 31A-22-635 shall
             4088      include a place for a producer to provide the disclosure required by this Subsection (4), and if
             4089      completed, shall satisfy the requirement of Subsection (4)(d)(i).
             4090          (e) Subsection (4)(c) does not apply to:
             4091          (i) a person licensed as a producer who acts only as an intermediary between an insurer
             4092      and the customer's producer, including a managing general agent; or
             4093          (ii) the placement of insurance in a secondary or residual market.
             4094          (5) This section does not alter the right of any licensee to recover from an insured the
             4095      amount of any premium due for insurance effected by or through that licensee or to charge a
             4096      reasonable rate of interest upon past-due accounts.
             4097          (6) This section does not apply to bail bond producers or bail enforcement agents as
             4098      defined in Section 31A-35-102 .
             4099          (7) A licensee may not receive noncommission compensation from an insured or
             4100      enrollee for providing a service or engaging in an act that is required to be provided or
             4101      performed in order to receive commission compensation, except for the surplus lines
             4102      transactions that do not receive commissions.
             4103          Section 28. Section 31A-23b-102 is amended to read:
             4104           31A-23b-102. Definitions.
             4105          As used in this chapter:
             4106          (1) "Compensation" is as defined in:
             4107          (a) Subsections 31A-23a-501 (1)(a), (b), and (d); and
             4108          (b) PPACA.
             4109          (2) "Enroll" and "enrollment" mean to:
             4110          (a) (i) obtain personally identifiable information about an individual; and
             4111          (ii) inform an individual about accident and health insurance plans or public programs
             4112      offered on an exchange;
             4113          (b) solicit insurance; or
             4114          (c) submit to the exchange:
             4115          (i) personally identifiable information about an individual; and
             4116          (ii) an individual's selection of a particular accident and health insurance plan or public
             4117      program offered on the exchange.


             4118          (3) (a) "Exchange" means an online marketplace[: (i) for an individual to purchase a
             4119      qualified health plan; and (ii)] that is certified by the United States Department of Health and
             4120      Human Services as either a state-based small employer exchange or a federally facilitated
             4121      individual exchange under PPACA.
             4122          (b) [(i)] "Exchange" does not include[: (A)] an online marketplace for the purchase of
             4123      health insurance if the online marketplace is not a certified exchange [under PPACA; or] in
             4124      accordance with Subsection (3)(a).
             4125          [(B) except as provided in Subsection (3)(b)(ii), an online marketplace for small
             4126      employers that is certified as a PPACA compliant SHOP exchange.]
             4127          [(ii) For purposes of this chapter, exchange does include a small employer SHOP
             4128      exchange described under Subsection (3)(b)(i)(B) if:]
             4129          [(A) federal regulations under PPACA require a small employer exchange to allow
             4130      navigators to assist small employers and their employees with selection of qualified health
             4131      plans on a small employer exchange; and]
             4132          [(B) the state has not entered into an agreement with the United States Department of
             4133      Health and Human Services that permits the state to limit the scope of practice of navigators to
             4134      only the individual PPACA exchange.]
             4135          (4) "Navigator":
             4136          (a) means a person who facilitates enrollment in an exchange by offering to assist, or
             4137      who advertises any services to assist, with:
             4138          (i) the selection of and enrollment in a qualified health plan or a public program
             4139      offered on an exchange; or
             4140          (ii) applying for premium subsidies through an exchange; and
             4141          (b) includes a person who is an in-person assister or [an] a certified application
             4142      [assister] counselor as described in[: (i)] federal regulations or guidance issued under PPACA[;
             4143      and].
             4144          [(ii) the state exchange blueprint published by the Center for Consumer Information
             4145      and Insurance Oversight within the Centers for Medicare and Medicaid Services in the United
             4146      States Department of Health and Human Services.]
             4147          (5) "Personally identifiable information" is as defined in 45 C.F.R. Sec. 155.260.
             4148          (6) "Public programs" means the state Medicaid program in Title 26, Chapter 18,


             4149      Medical Assistance Act, and Chapter 40, Utah Children's Health Insurance Act.
             4150          (7) "Resident" is as defined by rule made by the commissioner in accordance with Title
             4151      63G, Chapter 3, Utah Administrative Rulemaking Act.
             4152          [(7)] (8) "Solicit" is as defined in Section 31A-23a-102 .
             4153          Section 29. Section 31A-23b-202 is amended to read:
             4154           31A-23b-202. Qualifications for a license.
             4155          (1) (a) The commissioner shall issue or renew a license to a person to act as a navigator
             4156      if the person:
             4157          (i) satisfies the:
             4158          (A) application requirements under Section 31A-23b-203 ;
             4159          (B) character requirements under Section 31A-23b-204 ;
             4160          (C) examination and training requirements under Section 31A-23b-205 ; and
             4161          (D) continuing education requirements under Section 31A-23b-206 ;
             4162          (ii) certifies that, to the extent applicable, the applicant:
             4163          (A) is in compliance with the surety bond requirements of Section 31A-23b-207 ; and
             4164          (B) will maintain compliance with Section 31A-23b-207 during the period for which
             4165      the license is issued or renewed; and
             4166          (iii) has not committed an act that is a ground for denial, suspension, or revocation as
             4167      provided in Section 31A-23b-401 .
             4168          (b) A license issued under this chapter is valid for [two years] one year.
             4169          (2) (a) A person shall report to the commissioner:
             4170          (i) an administrative action taken against the person, including a denial of a new or
             4171      renewal license application:
             4172          (A) in another jurisdiction; or
             4173          (B) by another regulatory agency in this state; and
             4174          (ii) a criminal prosecution taken against the person in any jurisdiction.
             4175          (b) The report required by Subsection (2)(a) shall be filed:
             4176          (i) at the time the person files the application for an individual or agency license; and
             4177          (ii) for an action or prosecution that occurs on or after the day on which the person files
             4178      the application:
             4179          (A) for an administrative action, within 30 days of the final disposition of the


             4180      administrative action; or
             4181          (B) for a criminal prosecution, within 30 days of the initial appearance before a court.
             4182          (c) The report required by Subsection (2)(a) shall include a copy of the complaint or
             4183      other relevant legal documents related to the action or prosecution described in Subsection
             4184      (2)(a).
             4185          (3) (a) The department may:
             4186          (i) require a person applying for a license to submit to a criminal background check as
             4187      a condition of receiving a license; or
             4188          (ii) accept a background check conducted by another organization.
             4189          (b) A person, if required to submit to a criminal background check under Subsection
             4190      (3)(a), shall:
             4191          (i) submit a fingerprint card in a form acceptable to the department; and
             4192          (ii) consent to a fingerprint background check by:
             4193          (A) the Utah Bureau of Criminal Identification; and
             4194          (B) the Federal Bureau of Investigation.
             4195          (c) For a person who submits a fingerprint card and consents to a fingerprint
             4196      background check under Subsection (3)(b), the department may request:
             4197          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             4198      2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             4199          (ii) complete Federal Bureau of Investigation criminal background checks through the
             4200      national criminal history system.
             4201          (d) Information obtained by the department from the review of criminal history records
             4202      received under this Subsection (3) shall be used by the department for the purposes of:
             4203          (i) determining if a person satisfies the character requirements under Section
             4204      31A-23b-204 for issuance or renewal of a license;
             4205          (ii) determining if a person failed to maintain the character requirements under Section
             4206      31A-23b-204 ; and
             4207          (iii) preventing a person who violates the federal Violent Crime Control and Law
             4208      Enforcement Act of 1994, 18 U.S.C. Sec. 1033, from engaging in the business of a navigator or
             4209      in-person assistor in the state.
             4210          (e) If the department requests the criminal background information, the department


             4211      shall:
             4212          (i) pay to the Department of Public Safety the costs incurred by the Department of
             4213      Public Safety in providing the department criminal background information under Subsection
             4214      (3)(c)(i);
             4215          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             4216      of Investigation in providing the department criminal background information under
             4217      Subsection (3)(c)(ii); and
             4218          (iii) charge the person applying for a license a fee equal to the aggregate of Subsections
             4219      (3)(e)(i) and (ii).
             4220          (4) The commissioner may deny an application for a license under this chapter if the
             4221      person applying for the license:
             4222          (a) fails to satisfy the requirements of this section; or
             4223          (b) commits an act that is grounds for denial, suspension, or revocation as set forth in
             4224      Section 31A-23b-401 .
             4225          Section 30. Section 31A-23b-205 is amended to read:
             4226           31A-23b-205. Examination and training requirements.
             4227          (1) The commissioner may require [applicants] an applicant for a license to pass an
             4228      examination and complete a training program as a requirement for a license.
             4229          (2) The examination described in Subsection (1) shall reasonably relate to:
             4230          (a) the duties and functions of a navigator;
             4231          (b) requirements for navigators as established by federal regulation under PPACA; and
             4232          (c) other requirements that may be established by the commissioner by administrative
             4233      rule.
             4234          (3) The examination may be administered by the commissioner or as otherwise
             4235      specified by administrative rule.
             4236          (4) The training required by Subsection (1) shall be approved by the commissioner and
             4237      shall include:
             4238          (a) accident and health insurance plans;
             4239          (b) qualifications for and enrollment in public programs;
             4240          (c) qualifications for and enrollment in premium subsidies;
             4241          (d) cultural and linguistic competence;


             4242          (e) conflict of interest standards;
             4243          (f) exchange functions; and
             4244          (g) other requirements that may be adopted by the commissioner by administrative
             4245      rule.
             4246          (5) The training required by Subsection (1) shall consist of:
             4247          (a) at least 21 credit hours of training before obtaining a license;
             4248          (b) at least 1 of the 21 credit hours of training described in Subsection (5)(a) on defined
             4249      contribution arrangement and the small employer Health Insurance Exchange created in
             4250      accordance with Title 63M, Chapter 1, Part 25, Health System Reform Act; and
             4251          (c) the navigator training and certification program developed by the Centers for
             4252      Medicare and Medicaid Services.
             4253          [(5)] (6) This section applies only to [applicants who are natural persons] an applicant
             4254      who is a natural person.
             4255          Section 31. Section 31A-23b-206 is amended to read:
             4256           31A-23b-206. Continuing education requirements.
             4257          (1) The commissioner shall, by rule, prescribe continuing education requirements for a
             4258      navigator.
             4259          (2) (a) The commissioner may not require a degree from an institution of higher
             4260      education as part of continuing education.
             4261          (b) The commissioner may state a continuing education requirement in terms of hours
             4262      of instruction received in:
             4263          (i) accident and health insurance;
             4264          (ii) qualification for and enrollment in public programs;
             4265          (iii) qualification for and enrollment in premium subsidies;
             4266          (iv) cultural competency;
             4267          (v) conflict of interest standards; and
             4268          (vi) other exchange functions.
             4269          (3) (a) Continuing education requirements shall require:
             4270          (i) that a licensee complete [24] 12 credit hours of continuing education for every
             4271      [two-year] one-year licensing period;
             4272          (ii) that [3] at least 2 of the [24] 12 credit hours described in Subsection (3)(a)(i) be


             4273      ethics courses; [and]
             4274          [(iii) that the licensee complete at least half of the required hours through classroom
             4275      hours of insurance and exchange related instruction.]
             4276          (iii) that at least 1 of the 12 credit hours described in Subsection (3)(a)(i) be a defined
             4277      contribution course that includes training on use of the Health Insurance Exchange; and
             4278          (iv) that a licensee complete the annual navigator training and certification program
             4279      developed by the Centers for Medicare and Medicaid Services.
             4280          (b) An hour of continuing education in accordance with Subsection (3)(a)(i) may be
             4281      obtained through:
             4282          (i) classroom attendance;
             4283          (ii) home study;
             4284          (iii) watching a video recording; or
             4285          [(iv) experience credit; or]
             4286          [(v)] (iv) another method approved by rule.
             4287          (c) A licensee may obtain continuing education hours at any time during the [two-year]
             4288      one-year license period.
             4289          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             4290      commissioner shall[,] by rule[: (i) publish a list of insurance professional designations whose
             4291      continuing education requirements can be used to meet the requirements for continuing
             4292      education under Subsection (3)(b); and (ii)] authorize one or more continuing education
             4293      providers, including a state or national professional producer or consultant associations, to:
             4294          [(A)] (i) offer a qualified program on a geographically accessible basis; and
             4295          [(B)] (ii) collect a reasonable fee for funding and administration of a continuing
             4296      education program, subject to the review and approval of the commissioner.
             4297          (4) The commissioner shall approve a continuing education provider or a continuing
             4298      education course that satisfies the requirements of this section.
             4299          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             4300      commissioner shall by rule establish the procedures for continuing education provider
             4301      registration and course approval.
             4302          (6) This section applies only to a navigator who is a natural person.
             4303          (7) A navigator shall keep documentation of completing the continuing education


             4304      requirements of this section for two years after the end of the [two-year] one-year licensing
             4305      period to which the continuing education applies.
             4306          Section 32. Section 31A-23b-301 is amended to read:
             4307           31A-23b-301. Unfair practices -- Compensation -- Limit of scope of practice.
             4308          (1) As used in this section, "false or misleading information" includes, with intent to
             4309      deceive a person examining it:
             4310          (a) filing a report;
             4311          (b) making a false entry in a record; or
             4312          (c) willfully refraining from making a proper entry in a record.
             4313          (2) (a) Communication that contains false or misleading information relating to
             4314      enrollment in an insurance plan or a public program, including information that is false or
             4315      misleading because it is incomplete, may not be made by:
             4316          (i) a person who is or should be licensed under this title;
             4317          (ii) an employee of a person described in Subsection (2)(a)(i);
             4318          (iii) a person whose primary interest is as a competitor of a person licensed under this
             4319      title; and
             4320          (iv) a person on behalf of [any of the persons] a person listed in this Subsection (2)(a).
             4321          (b) A licensee under this chapter may not:
             4322          (i) use [any] a business name, slogan, emblem, or related device that is misleading or
             4323      likely to cause the exchange, insurer, or other licensee to be mistaken for another governmental
             4324      agency, a PPACA exchange, insurer, or other licensee already in business; or
             4325          (ii) use [any] an advertisement or other insurance promotional material that would
             4326      cause a reasonable person to mistakenly believe that a state or federal government agency,
             4327      public program, or insurer:
             4328          (A) is responsible for the insurance or public program enrollment assistance activities
             4329      of the person;
             4330          (B) stands behind the credit of the person; or
             4331          (C) is a source of payment of [any] an insurance obligation of or sold by the person.
             4332          (c) A person who is not an insurer may not assume or use [any] a name that deceptively
             4333      implies or suggests that person is an insurer.
             4334          (3) A person may not engage in an unfair method of competition or any other unfair or


             4335      deceptive act or practice in the business of insurance, as defined by the commissioner by rule,
             4336      after a finding that the method of competition, the act, or the practice:
             4337          (a) is misleading;
             4338          (b) is deceptive;
             4339          (c) is unfairly discriminatory;
             4340          (d) provides an unfair inducement; or
             4341          (e) unreasonably restrains competition.
             4342          (4) A navigator licensed under this chapter is subject to the unfair marketing practices
             4343      and inducement provisions of [Section] Sections 31A-23a-402 and 31A-23a-402.5 .
             4344          (5) A navigator licensed under this chapter or who should be licensed under this
             4345      chapter:
             4346          (a) may not receive direct or indirect compensation from an accident or health insurer
             4347      or from an individual who receives services from a navigator in accordance with:
             4348          (i) federal conflict of interest regulations established pursuant to PPACA; and
             4349          (ii) administrative rule adopted by the department;
             4350          (b) may be compensated by the exchange for performing the duties of a navigator;
             4351          (c) (i) may perform, offer to perform, or advertise a service as a navigator only for a
             4352      person selecting a qualified health plan or public program offered on an exchange; and
             4353          (ii) may not perform, offer to perform, or advertise [any] services as a navigator for
             4354      individuals or small employer groups selecting accident and health insurance plans, qualified
             4355      health plans, public programs, business, or services that are not offered on an exchange; and
             4356          (d) may not recommend a particular accident and health insurance plan or qualified
             4357      health plan.
             4358          Section 33. Section 31A-23b-402 is amended to read:
             4359           31A-23b-402. Probation -- Grounds for revocation.
             4360          (1) The commissioner may place a licensee on probation for a period not to exceed 24
             4361      months as follows:
             4362          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
             4363      Procedures Act, for any circumstances that would justify a suspension under this section; or
             4364          (b) at the issuance of a new license:
             4365          (i) with an admitted violation under 18 U.S.C. [Secs.] Sec. 1033 [and 1034]; or


             4366          (ii) with a response to background information questions on a new license application
             4367      indicating that:
             4368          (A) the person has been convicted of a crime that is listed by rule made in accordance
             4369      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is a ground for
             4370      probation;
             4371          (B) the person is currently charged with a crime that is listed by rule made in
             4372      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             4373      a ground for probation regardless of whether adjudication is withheld;
             4374          (C) the person has been involved in an administrative proceeding regarding any
             4375      professional or occupational license; or
             4376          (D) any business in which the person is or was an owner, partner, officer, or director
             4377      has been involved in an administrative proceeding regarding any professional or occupational
             4378      license.
             4379          (2) The commissioner may place a licensee on probation for a specified period no
             4380      longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [Secs.] Sec.
             4381      1033 [and 1034].
             4382          (3) The probation order shall state the conditions for revocation or retention of the
             4383      license, which shall be reasonable.
             4384          (4) Any violation of the probation is a ground for revocation pursuant to any
             4385      proceeding authorized under Title 63G, Chapter 4, Administrative Procedures Act.
             4386          Section 34. Section 31A-25-208 is amended to read:
             4387           31A-25-208. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             4388      terminating a license -- Rulemaking for renewal and reinstatement.
             4389          (1) A license type issued under this chapter remains in force until:
             4390          (a) revoked or suspended under Subsection (4);
             4391          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             4392      administrative action;
             4393          (c) the licensee dies or is adjudicated incompetent as defined under:
             4394          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             4395          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             4396      Minors;


             4397          (d) lapsed under Section 31A-25-210 ; or
             4398          (e) voluntarily surrendered.
             4399          (2) The following may be reinstated within one year after the day on which the license
             4400      is no longer in force:
             4401          (a) a lapsed license; or
             4402          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             4403      not be reinstated after the license period in which the license is voluntarily surrendered.
             4404          (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
             4405      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             4406      department from pursuing additional disciplinary or other action authorized under:
             4407          (a) this title; or
             4408          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             4409      Administrative Rulemaking Act.
             4410          (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
             4411      adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             4412      commissioner may:
             4413          (i) revoke a license;
             4414          (ii) suspend a license for a specified period of 12 months or less;
             4415          (iii) limit a license in whole or in part; or
             4416          (iv) deny a license application.
             4417          (b) The commissioner may take an action described in Subsection (4)(a) if the
             4418      commissioner finds that the licensee:
             4419          (i) is unqualified for a license under Section 31A-25-202 , 31A-25-203 , or 31A-25-204 ;
             4420          (ii) has violated:
             4421          (A) an insurance statute;
             4422          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             4423          (C) an order that is valid under Subsection 31A-2-201 (4);
             4424          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
             4425      delinquency proceedings in any state;
             4426          (iv) fails to pay a final judgment rendered against the person in this state within 60
             4427      days after the day on which the judgment became final;


             4428          (v) fails to meet the same good faith obligations in claims settlement that is required of
             4429      admitted insurers;
             4430          (vi) is affiliated with and under the same general management or interlocking
             4431      directorate or ownership as another third party administrator that transacts business in this state
             4432      without a license;
             4433          (vii) refuses:
             4434          (A) to be examined; or
             4435          (B) to produce its accounts, records, and files for examination;
             4436          (viii) has an officer who refuses to:
             4437          (A) give information with respect to the third party administrator's affairs; or
             4438          (B) perform any other legal obligation as to an examination;
             4439          (ix) provides information in the license application that is:
             4440          (A) incorrect;
             4441          (B) misleading;
             4442          (C) incomplete; or
             4443          (D) materially untrue;
             4444          (x) has violated an insurance law, valid rule, or valid order of another state's insurance
             4445      department;
             4446          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             4447          (xii) has improperly withheld, misappropriated, or converted money or properties
             4448      received in the course of doing insurance business;
             4449          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             4450          (A) insurance contract; or
             4451          (B) application for insurance;
             4452          (xiv) has been convicted of a felony;
             4453          (xv) has admitted or been found to have committed an insurance unfair trade practice
             4454      or fraud;
             4455          (xvi) in the conduct of business in this state or elsewhere has:
             4456          (A) used fraudulent, coercive, or dishonest practices; or
             4457          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             4458          (xvii) has had an insurance license or its equivalent, denied, suspended, or revoked in


             4459      any other state, province, district, or territory;
             4460          (xviii) has forged another's name to:
             4461          (A) an application for insurance; or
             4462          (B) a document related to an insurance transaction;
             4463          (xix) has improperly used notes or any other reference material to complete an
             4464      examination for an insurance license;
             4465          (xx) has knowingly accepted insurance business from an individual who is not
             4466      licensed;
             4467          (xxi) has failed to comply with an administrative or court order imposing a child
             4468      support obligation;
             4469          (xxii) has failed to:
             4470          (A) pay state income tax; or
             4471          (B) comply with an administrative or court order directing payment of state income
             4472      tax;
             4473          (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
             4474      Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 [and 1034] and therefore under 18 U.S.C.
             4475      Sec. 1033 is prohibited from engaging in the business of insurance; or
             4476          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             4477      the legitimate interests of customers and the public.
             4478          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             4479      and any individual designated under the license are considered to be the holders of the agency
             4480      license.
             4481          (d) If an individual designated under the agency license commits an act or fails to
             4482      perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
             4483      the commissioner may suspend, revoke, or limit the license of:
             4484          (i) the individual;
             4485          (ii) the agency if the agency:
             4486          (A) is reckless or negligent in its supervision of the individual; or
             4487          (B) knowingly participated in the act or failure to act that is the ground for suspending,
             4488      revoking, or limiting the license; or
             4489          (iii) (A) the individual; and


             4490          (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
             4491          (5) A licensee under this chapter is subject to the penalties for acting as a licensee
             4492      without a license if:
             4493          (a) the licensee's license is:
             4494          (i) revoked;
             4495          (ii) suspended;
             4496          (iii) limited;
             4497          (iv) surrendered in lieu of administrative action;
             4498          (v) lapsed; or
             4499          (vi) voluntarily surrendered; and
             4500          (b) the licensee:
             4501          (i) continues to act as a licensee; or
             4502          (ii) violates the terms of the license limitation.
             4503          (6) A licensee under this chapter shall immediately report to the commissioner:
             4504          (a) a revocation, suspension, or limitation of the person's license in any other state, the
             4505      District of Columbia, or a territory of the United States;
             4506          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             4507      the District of Columbia, or a territory of the United States; or
             4508          (c) a judgment or injunction entered against the person on the basis of conduct
             4509      involving:
             4510          (i) fraud;
             4511          (ii) deceit;
             4512          (iii) misrepresentation; or
             4513          (iv) a violation of an insurance law or rule.
             4514          (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
             4515      license in lieu of administrative action may specify a time, not to exceed five years, within
             4516      which the former licensee may not apply for a new license.
             4517          (b) If no time is specified in the order or agreement described in Subsection (7)(a), the
             4518      former licensee may not apply for a new license for five years from the day on which the order
             4519      or agreement is made without the express approval of the commissioner.
             4520          (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of


             4521      a license issued under this part if so ordered by the court.
             4522          (9) The commissioner shall by rule prescribe the license renewal and reinstatement
             4523      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             4524          Section 35. Section 31A-25-209 is amended to read:
             4525           31A-25-209. Probation -- Grounds for revocation.
             4526          (1) The commissioner may place a licensee on probation for a period not to exceed 24
             4527      months as follows:
             4528          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
             4529      Procedures Act, for any circumstances that would justify a suspension under Section
             4530      31A-25-208 ; or
             4531          (b) at the issuance of a new license:
             4532          (i) with an admitted violation under 18 U.S.C. [Sections] Sec. 1033 [and 1034]; or
             4533          (ii) with a response to a background information question on a new license application
             4534      indicating that:
             4535          (A) the person has been convicted of a crime that is listed by rule made in accordance
             4536      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
             4537      probation;
             4538          (B) the person is currently charged with a crime that is listed by rule made in
             4539      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             4540      grounds for probation regardless of whether adjudication is withheld;
             4541          (C) the person has been involved in an administrative proceeding regarding any
             4542      professional or occupational license; or
             4543          (D) any business in which the person is or was an owner, partner, officer, or director
             4544      has been involved in an administrative proceeding regarding any professional or occupational
             4545      license.
             4546          (2) The commissioner may place a licensee on probation for a specified period no
             4547      longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [Sections]
             4548      Sec. 1033 [and 1034].
             4549          (3) A probation order under this section shall state the conditions for retention of the
             4550      license, which shall be reasonable.
             4551          (4) A violation of the probation is grounds for revocation pursuant to any proceeding


             4552      authorized under Title 63G, Chapter 4, Administrative Procedures Act.
             4553          Section 36. Section 31A-26-102 is amended to read:
             4554           31A-26-102. Definitions.
             4555          As used in this chapter, unless expressly provided otherwise:
             4556          (1) "Company adjuster" means a person employed by an insurer whose regular duties
             4557      include insurance adjusting.
             4558          (2) "Designated home state" means the state or territory of the United States or the
             4559      District of Columbia:
             4560          (a) in which an insurance adjuster does not maintain the adjuster's principal:
             4561          (i) place of residence; or
             4562          (ii) place of business;
             4563          (b) if the resident state, territory, or District of Columbia of the adjuster does not
             4564      license adjusters for the line of authority sought, the adjuster has qualified for the license as if
             4565      the person were a resident in the state, territory, or District of Columbia described in
             4566      Subsection (2)(a), including an applicable:
             4567          (i) examination requirement;
             4568          (ii) fingerprint background check requirement; and
             4569          (iii) continuing education requirement; and
             4570          (c) the adjuster has designated the state, territory, or District of Columbia as the
             4571      designated home state.
             4572          (3) "Home state" means:
             4573          (a) a state or territory of the United States or the District of Columbia in which an
             4574      insurance adjuster:
             4575          (i) maintains the adjuster's principal:
             4576          (A) place of residence; or
             4577          (B) place of business; and
             4578          (ii) is licensed to act as a resident adjuster; or
             4579          (b) if the resident state, territory, or the District of Columbia described in Subsection
             4580      (3)(a) does not license adjusters for the line of authority sought, a state, territory, or the District
             4581      of Columbia:
             4582          (i) in which the adjuster is licensed;


             4583          (ii) in which the adjuster is in good standing; and
             4584          (iii) that the adjuster has designated as the adjuster's designated home state.
             4585          [(2)] (4) "Independent adjuster" means an insurance adjuster required to be licensed
             4586      under Section 31A-26-201 , who engages in insurance adjusting as a representative of one or
             4587      more insurers.
             4588          [(3)] (5) "Insurance adjusting" or "adjusting" means directing or conducting the
             4589      investigation, negotiation, or settlement of a claim under an insurance policy, on behalf of an
             4590      insurer, policyholder, or a claimant under an insurance policy.
             4591          [(4)] (6) "Organization" means a person other than a natural person, and includes a sole
             4592      proprietorship by which a natural person does business under an assumed name.
             4593          [(5)] (7) "Portable electronics insurance" is as defined in Section 31A-22-1802 .
             4594          [(6)] (8) "Public adjuster" means a person required to be licensed under Section
             4595      31A-26-201 , who engages in insurance adjusting as a representative of insureds and claimants
             4596      under insurance policies.
             4597          Section 37. Section 31A-26-206 is amended to read:
             4598           31A-26-206. Continuing education requirements.
             4599          (1) Pursuant to this section, the commissioner shall by rule prescribe continuing
             4600      education requirements for each class of license under Section 31A-26-204 .
             4601          (2) (a) The commissioner shall impose continuing education requirements in
             4602      accordance with a two-year licensing period in which the licensee meets the requirements of
             4603      this Subsection (2).
             4604          (b) (i) Except as otherwise provided in this section, the continuing education
             4605      requirements shall require:
             4606          (A) that a licensee complete 24 credit hours of continuing education for every two-year
             4607      licensing period;
             4608          (B) that 3 of the 24 credit hours described in Subsection (2)(b)(i)(A) be ethics courses;
             4609      and
             4610          (C) that the licensee complete at least half of the required hours through classroom
             4611      hours of insurance-related instruction.
             4612          (ii) A continuing education hour completed in accordance with Subsection (2)(b)(i)
             4613      may be obtained through:


             4614          (A) classroom attendance;
             4615          (B) home study;
             4616          (C) watching a video recording;
             4617          (D) experience credit; or
             4618          (E) other methods provided by rule.
             4619          (iii) Notwithstanding Subsections (2)(b)(i)(A) and (B), a title insurance adjuster is
             4620      required to complete 12 credit hours of continuing education for every two-year licensing
             4621      period, with 3 of the credit hours being ethics courses.
             4622          (c) A licensee may obtain continuing education hours at any time during the two-year
             4623      licensing period.
             4624          (d) (i) A licensee is exempt from the continuing education requirements of this section
             4625      if:
             4626          (A) the licensee was first licensed before [April 1, 1978] December 31, 1982;
             4627          (B) the license does not have a continuous lapse for a period of more than one year,
             4628      except for a license for which the licensee has had an exemption approved before May 11,
             4629      2011;
             4630          (C) the licensee requests an exemption from the department; and
             4631          (D) the department approves the exemption.
             4632          (ii) If the department approves the exemption under Subsection (2)(d)(i), the licensee is
             4633      not required to apply again for the exemption.
             4634          (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             4635      commissioner shall by rule:
             4636          (i) publish a list of insurance professional designations whose continuing education
             4637      requirements can be used to meet the requirements for continuing education under Subsection
             4638      (2)(b); and
             4639          (ii) authorize a professional adjuster association to:
             4640          (A) offer a qualified program for a classification of license on a geographically
             4641      accessible basis; and
             4642          (B) collect a reasonable fee for funding and administration of a qualified program,
             4643      subject to the review and approval of the commissioner.
             4644          (f) (i) A fee permitted under Subsection (2)(e)(ii)(B) that is charged to fund and


             4645      administer a qualified program shall reasonably relate to the cost of administering the qualified
             4646      program.
             4647          (ii) Nothing in this section shall prohibit a provider of a continuing education program
             4648      or course from charging a fee for attendance at a course offered for continuing education credit.
             4649          (iii) A fee permitted under Subsection (2)(e)(ii)(B) that is charged for attendance at an
             4650      association program may be less for an association member, on the basis of the member's
             4651      affiliation expense, but shall preserve the right of a nonmember to attend without affiliation.
             4652          (3) The continuing education requirements of this section apply only to a licensee who
             4653      is an individual.
             4654          (4) The continuing education requirements of this section do not apply to a member of
             4655      the Utah State Bar.
             4656          (5) The commissioner shall designate a course that satisfies the requirements of this
             4657      section, including a course presented by an insurer.
             4658          (6) A nonresident adjuster is considered to have satisfied this state's continuing
             4659      education requirements if:
             4660          (a) the nonresident adjuster satisfies the nonresident producer's home state's continuing
             4661      education requirements for a licensed insurance adjuster; and
             4662          (b) on the same basis the nonresident adjuster's home state considers satisfaction of
             4663      Utah's continuing education requirements for a producer as satisfying the continuing education
             4664      requirements of the home state.
             4665          (7) A licensee subject to this section shall keep documentation of completing the
             4666      continuing education requirements of this section for two years after the end of the two-year
             4667      licensing period to which the continuing education requirement applies.
             4668          Section 38. Section 31A-26-207 is amended to read:
             4669           31A-26-207. Examination requirements.
             4670          (1) The commissioner may require applicants for [any] a particular class of license
             4671      under Section 31A-26-204 to pass an examination as a requirement to receiving a license. The
             4672      examination shall reasonably relate to the specific license class for which it is prescribed. The
             4673      examinations may be administered by the commissioner or as specified by rule.
             4674          (2) The commissioner shall waive the requirement of an examination for a nonresident
             4675      applicant who:


             4676          (a) applies for an insurance adjuster license in this state;
             4677          (b) has been licensed for the same line of authority in another state; and
             4678          (c) (i) is licensed in the state described in Subsection (2)(b) at the time the applicant
             4679      applies for an insurance producer license in this state; or
             4680          (ii) if the application is received within 90 days of the cancellation of the applicant's
             4681      previous license:
             4682          (A) the prior state certifies that at the time of cancellation, the applicant was in good
             4683      standing in that state; or
             4684          (B) the state's producer database records maintained by the National Association of
             4685      Insurance Commissioners or the National Association of Insurance Commissioner's affiliates or
             4686      subsidiaries, indicates that the producer is or was licensed in good standing for the line of
             4687      authority requested.
             4688          (3) (a) To become a resident licensee in accordance with Sections 31A-26-202 and
             4689      31A-26-203 , a person licensed as an insurance producer in another state who moves to this
             4690      state shall make application within 90 days of establishing legal residence in this state.
             4691          (b) A person who becomes a resident licensee under Subsection (3)(a) may not be
             4692      required to meet prelicensing education or examination requirements to obtain any line of
             4693      authority previously held in the prior state unless:
             4694          (i) the prior state would require a prior resident of this state to meet the prior state's
             4695      prelicensing education or examination requirements to become a resident licensee; or
             4696          (ii) the commissioner imposes the requirements by rule.
             4697          (4) The requirements of this section only apply to [applicants who are natural persons]
             4698      an applicant who is a natural person.
             4699          (5) The requirements of this section do not apply to [members]:
             4700          (a) a member of the Utah State Bar[.]; or
             4701          (b) an applicant for the crop insurance license class who has satisfactorily completed:
             4702          (i) a national crop adjuster program, as adopted by the commissioner by rule; or
             4703          (ii) the loss adjustment training curriculum and competency testing required by the
             4704      Federal Crop Insurance Corporation Standard Reinsurance Agreement through the Risk
             4705      Management Agency of the United States Department of Agriculture.
             4706          Section 39. Section 31A-26-213 is amended to read:


             4707           31A-26-213. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             4708      terminating a license -- Rulemaking for renewal or reinstatement.
             4709          (1) A license type issued under this chapter remains in force until:
             4710          (a) revoked or suspended under Subsection (5);
             4711          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             4712      administrative action;
             4713          (c) the licensee dies or is adjudicated incompetent as defined under:
             4714          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             4715          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             4716      Minors;
             4717          (d) lapsed under Section 31A-26-214.5 ; or
             4718          (e) voluntarily surrendered.
             4719          (2) The following may be reinstated within one year after the day on which the license
             4720      is no longer in force:
             4721          (a) a lapsed license; or
             4722          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             4723      not be reinstated after the license period in which it is voluntarily surrendered.
             4724          (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
             4725      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             4726      department from pursuing additional disciplinary or other action authorized under:
             4727          (a) this title; or
             4728          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             4729      Administrative Rulemaking Act.
             4730          (4) A license classification issued under this chapter remains in force until:
             4731          (a) the qualifications pertaining to a license classification are no longer met by the
             4732      licensee; or
             4733          (b) the supporting license type:
             4734          (i) is revoked or suspended under Subsection (5); or
             4735          (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
             4736      administrative action.
             4737          (5) (a) If the commissioner makes a finding under Subsection (5)(b) as part of an


             4738      adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             4739      commissioner may:
             4740          (i) revoke:
             4741          (A) a license; or
             4742          (B) a license classification;
             4743          (ii) suspend for a specified period of 12 months or less:
             4744          (A) a license; or
             4745          (B) a license classification;
             4746          (iii) limit in whole or in part:
             4747          (A) a license; or
             4748          (B) a license classification; or
             4749          (iv) deny a license application.
             4750          (b) The commissioner may take an action described in Subsection (5)(a) if the
             4751      commissioner finds that the licensee:
             4752          (i) is unqualified for a license or license classification under Section 31A-26-202 ,
             4753      31A-26-203 , 31A-26-204 , or 31A-26-205 ;
             4754          (ii) has violated:
             4755          (A) an insurance statute;
             4756          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             4757          (C) an order that is valid under Subsection 31A-2-201 (4);
             4758          (iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
             4759      delinquency proceedings in any state;
             4760          (iv) fails to pay a final judgment rendered against the person in this state within 60
             4761      days after the judgment became final;
             4762          (v) fails to meet the same good faith obligations in claims settlement that is required of
             4763      admitted insurers;
             4764          (vi) is affiliated with and under the same general management or interlocking
             4765      directorate or ownership as another insurance adjuster that transacts business in this state
             4766      without a license;
             4767          (vii) refuses:
             4768          (A) to be examined; or


             4769          (B) to produce its accounts, records, and files for examination;
             4770          (viii) has an officer who refuses to:
             4771          (A) give information with respect to the insurance adjuster's affairs; or
             4772          (B) perform any other legal obligation as to an examination;
             4773          (ix) provides information in the license application that is:
             4774          (A) incorrect;
             4775          (B) misleading;
             4776          (C) incomplete; or
             4777          (D) materially untrue;
             4778          (x) has violated an insurance law, valid rule, or valid order of another state's insurance
             4779      department;
             4780          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             4781          (xii) has improperly withheld, misappropriated, or converted money or properties
             4782      received in the course of doing insurance business;
             4783          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             4784          (A) insurance contract; or
             4785          (B) application for insurance;
             4786          (xiv) has been convicted of a felony;
             4787          (xv) has admitted or been found to have committed an insurance unfair trade practice
             4788      or fraud;
             4789          (xvi) in the conduct of business in this state or elsewhere has:
             4790          (A) used fraudulent, coercive, or dishonest practices; or
             4791          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             4792          (xvii) has had an insurance license, or its equivalent, denied, suspended, or revoked in
             4793      any other state, province, district, or territory;
             4794          (xviii) has forged another's name to:
             4795          (A) an application for insurance; or
             4796          (B) a document related to an insurance transaction;
             4797          (xix) has improperly used notes or any other reference material to complete an
             4798      examination for an insurance license;
             4799          (xx) has knowingly accepted insurance business from an individual who is not


             4800      licensed;
             4801          (xxi) has failed to comply with an administrative or court order imposing a child
             4802      support obligation;
             4803          (xxii) has failed to:
             4804          (A) pay state income tax; or
             4805          (B) comply with an administrative or court order directing payment of state income
             4806      tax;
             4807          (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
             4808      Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 [and 1034] and therefore under 18 U.S.C.
             4809      Sec. 1033 is prohibited from engaging in the business of insurance; or
             4810          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             4811      the legitimate interests of customers and the public.
             4812          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             4813      and any individual designated under the license are considered to be the holders of the license.
             4814          (d) If an individual designated under the agency license commits an act or fails to
             4815      perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
             4816      the commissioner may suspend, revoke, or limit the license of:
             4817          (i) the individual;
             4818          (ii) the agency, if the agency:
             4819          (A) is reckless or negligent in its supervision of the individual; or
             4820          (B) knowingly participated in the act or failure to act that is the ground for suspending,
             4821      revoking, or limiting the license; or
             4822          (iii) (A) the individual; and
             4823          (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
             4824          (6) A licensee under this chapter is subject to the penalties for conducting an insurance
             4825      business without a license if:
             4826          (a) the licensee's license is:
             4827          (i) revoked;
             4828          (ii) suspended;
             4829          (iii) limited;
             4830          (iv) surrendered in lieu of administrative action;


             4831          (v) lapsed; or
             4832          (vi) voluntarily surrendered; and
             4833          (b) the licensee:
             4834          (i) continues to act as a licensee; or
             4835          (ii) violates the terms of the license limitation.
             4836          (7) A licensee under this chapter shall immediately report to the commissioner:
             4837          (a) a revocation, suspension, or limitation of the person's license in any other state, the
             4838      District of Columbia, or a territory of the United States;
             4839          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             4840      the District of Columbia, or a territory of the United States; or
             4841          (c) a judgment or injunction entered against that person on the basis of conduct
             4842      involving:
             4843          (i) fraud;
             4844          (ii) deceit;
             4845          (iii) misrepresentation; or
             4846          (iv) a violation of an insurance law or rule.
             4847          (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
             4848      license in lieu of administrative action may specify a time not to exceed five years within
             4849      which the former licensee may not apply for a new license.
             4850          (b) If no time is specified in the order or agreement described in Subsection (8)(a), the
             4851      former licensee may not apply for a new license for five years without the express approval of
             4852      the commissioner.
             4853          (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
             4854      a license issued under this part if so ordered by a court.
             4855          (10) The commissioner shall by rule prescribe the license renewal and reinstatement
             4856      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             4857          Section 40. Section 31A-26-214 is amended to read:
             4858           31A-26-214. Probation -- Grounds for revocation.
             4859          (1) The commissioner may place a licensee on probation for a period not to exceed 24
             4860      months as follows:
             4861          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative


             4862      Procedures Act, for any circumstances that would justify a suspension under Section
             4863      31A-26-213 ; or
             4864          (b) at the issuance of a new license:
             4865          (i) with an admitted violation under 18 U.S.C. [Sections] Sec. 1033 [and 1034]; or
             4866          (ii) with a response to a background information question on any new license
             4867      application indicating that:
             4868          (A) the person has been convicted of a crime, that is listed by rule made in accordance
             4869      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
             4870      probation;
             4871          (B) the person is currently charged with a crime, that is listed by rule made in
             4872      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             4873      grounds for probation regardless of whether adjudication was withheld;
             4874          (C) the person has been involved in an administrative proceeding regarding any
             4875      professional or occupational license; or
             4876          (D) any business in which the person is or was an owner, partner, officer, or director
             4877      has been involved in an administrative proceeding regarding any professional or occupational
             4878      license.
             4879          (2) The commissioner may put a licensee on probation for a specified period no longer
             4880      than 24 months if the licensee has admitted to violations under 18 U.S.C. [Sections] Sec. 1033
             4881      [and 1034].
             4882          (3) A probation order under this section shall state the conditions for retention of the
             4883      license, which shall be reasonable.
             4884          (4) A violation of the probation is grounds for revocation pursuant to any proceeding
             4885      authorized under Title 63G, Chapter 4, Administrative Procedures Act.
             4886          Section 41. Section 31A-26-214.5 is amended to read:
             4887           31A-26-214.5. License lapse and voluntary surrender.
             4888          (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
             4889          (i) pay when due a fee under Section 31A-3-103 ;
             4890          (ii) complete continuing education requirements under Section 31A-26-206 before
             4891      submitting the license renewal application;
             4892          (iii) submit a completed renewal application as required by Section 31A-26-202 ;


             4893          (iv) submit additional documentation required to complete the licensing process as
             4894      related to a specific license type or license classification; or
             4895          (v) maintain an active license in [a resident] the licensee's home state if the licensee is
             4896      a nonresident licensee.
             4897          (b) (i) A licensee whose license lapses due to the following may request an action
             4898      described in Subsection (1)(b)(ii):
             4899          (A) military service;
             4900          (B) voluntary service for a period of time designated by the person for whom the
             4901      licensee provides voluntary service; or
             4902          (C) some other extenuating circumstances, such as long-term medical disability.
             4903          (ii) A licensee described in Subsection (1)(b)(i) may request:
             4904          (A) reinstatement of the license no later than one year after the day on which the
             4905      license lapses; and
             4906          (B) waiver of any of the following imposed for failure to comply with renewal
             4907      procedures:
             4908          (I) an examination requirement;
             4909          (II) reinstatement fees set under Section 31A-3-103 ;
             4910          (III) continuing education requirements; or
             4911          (IV) other sanction imposed for failure to comply with renewal procedures.
             4912          (2) If a license issued under this chapter is voluntarily surrendered, the license may be
             4913      reinstated:
             4914          (a) during the license period in which it is voluntarily surrendered; and
             4915          (b) no later than one year after the day on which the license is voluntarily surrendered.
             4916          Section 42. Section 31A-27a-102 is amended to read:
             4917           31A-27a-102. Definitions.
             4918          As used in this chapter:
             4919          (1) "Admitted assets" is as defined by and is measured in accordance with the National
             4920      Association of Insurance Commissioner's Statements of Statutory Accounting Principles, as
             4921      incorporated in this state by rules made by the department in accordance with Title 63G,
             4922      Chapter 3, Utah Administrative Rulemaking Act, for the purposes of Subsection
             4923      31A-4-113 (1)(b)(ii).


             4924          (2) "Affected guaranty association" means a guaranty association that is or may
             4925      become liable for payment of a covered claim.
             4926          (3) "Affiliate" is as defined in Section 31A-1-301 .
             4927          (4) Notwithstanding Section 31A-1-301 , "alien insurer" means an insurer incorporated
             4928      or organized under the laws of a jurisdiction that is not a state.
             4929          (5) Notwithstanding Section 31A-1-301 , "claimant" or "creditor" means a person
             4930      having a claim against an insurer whether the claim is:
             4931          (a) matured or not matured;
             4932          (b) liquidated or unliquidated;
             4933          (c) secured or unsecured;
             4934          (d) absolute; or
             4935          (e) fixed or contingent.
             4936          (6) "Commissioner" is as defined in Section 31A-1-301 .
             4937          (7) "Commodity contract" means:
             4938          (a) a contract for the purchase or sale of a commodity for future delivery on, or subject
             4939      to the rules of:
             4940          (i) a board of trade or contract market under the Commodity Exchange Act, 7 U.S.C.
             4941      Sec. 1 et seq.; or
             4942          (ii) a board of trade outside the United States;
             4943          (b) an agreement that is:
             4944          (i) subject to regulation under Section 19 of the Commodity Exchange Act, 7 U.S.C.
             4945      Sec. 1 et seq.; and
             4946          (ii) commonly known to the commodities trade as:
             4947          (A) a margin account;
             4948          (B) a margin contract;
             4949          (C) a leverage account; or
             4950          (D) a leverage contract;
             4951          (c) an agreement or transaction that is:
             4952          (i) subject to regulation under Section 4c(b) of the Commodity Exchange Act, 7 U.S.C.
             4953      Sec. 1 et seq.; and
             4954          (ii) commonly known to the commodities trade as a commodity option;


             4955          (d) a combination of the agreements or transactions referred to in this Subsection (7);
             4956      or
             4957          (e) an option to enter into an agreement or transaction referred to in this Subsection (7).
             4958          (8) "Control" is as defined in Section 31A-1-301 .
             4959          (9) "Delinquency proceeding" means a:
             4960          (a) proceeding instituted against an insurer for the purpose of rehabilitating or
             4961      liquidating the insurer; and
             4962          (b) summary proceeding under Section 31A-27a-201 .
             4963          (10) "Department" is as defined in Section 31A-1-301 unless the context requires
             4964      otherwise.
             4965          (11) "Doing business," "doing insurance business," and "business of insurance"
             4966      includes any of the following acts, whether effected by mail, electronic means, or otherwise:
             4967          (a) issuing or delivering a contract, certificate, or binder relating to insurance or
             4968      annuities:
             4969          (i) to a person who is resident in this state; or
             4970          (ii) covering a risk located in this state;
             4971          (b) soliciting an application for the contract, certificate, or binder described in
             4972      Subsection (11)(a);
             4973          (c) negotiating preliminary to the execution of the contract, certificate, or binder
             4974      described in Subsection (11)(a);
             4975          (d) collecting premiums, membership fees, assessments, or other consideration for the
             4976      contract, certificate, or binder described in Subsection (11)(a);
             4977          (e) transacting matters:
             4978          (i) subsequent to execution of the contract, certificate, or binder described in
             4979      Subsection (11)(a); and
             4980          (ii) arising out of the contract, certificate, or binder described in Subsection (11)(a);
             4981          (f) operating as an insurer under a license or certificate of authority issued by the
             4982      department; or
             4983          (g) engaging in an act identified in Chapter 15, Unauthorized Insurers, Surplus Lines,
             4984      and Risk Retention Groups.
             4985          (12) Notwithstanding Section 31A-1-301 , "domiciliary state" means the state in which


             4986      an insurer is incorporated or organized, except that "domiciliary state" means:
             4987          (a) in the case of an alien insurer, its state of entry; or
             4988          (b) in the case of a risk retention group, the state in which the risk retention group is
             4989      chartered as contemplated in the Liability Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.
             4990          (13) "Estate" has the same meaning as "property of the insurer" as defined in
             4991      Subsection (30).
             4992          (14) "Fair consideration" is given for property or an obligation:
             4993          (a) when in exchange for the property or obligation, as a fair equivalent for it, and in
             4994      good faith:
             4995          (i) property is conveyed;
             4996          (ii) services are rendered;
             4997          (iii) an obligation is incurred; or
             4998          (iv) an antecedent debt is satisfied; or
             4999          (b) when the property or obligation is received in good faith to secure a present
             5000      advance or an antecedent debt in amount not disproportionately small compared to the value of
             5001      the property or obligation obtained.
             5002          (15) Notwithstanding Section 31A-1-301 , "foreign insurer" means an insurer domiciled
             5003      in another state.
             5004          (16) "Formal delinquency proceeding" means a rehabilitation or liquidation
             5005      proceeding.
             5006          (17) "Forward contract" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.
             5007      Sec. 1821(e)(8)(D).
             5008          (18) (a) "General assets" include all property of the estate that is not:
             5009          (i) subject to a properly perfected secured claim;
             5010          (ii) subject to a valid and existing express trust for the security or benefit of a specified
             5011      person or class of person; or
             5012          (iii) required by the insurance laws of this state or any other state to be held for the
             5013      benefit of a specified person or class of person.
             5014          (b) "General assets" [include all] includes the property of the estate or its proceeds in
             5015      excess of the amount necessary to discharge a claim described in Subsection (18)(a).
             5016          (19) "Good faith" means honesty in fact and intention, and in regard to Part 5, Asset


             5017      Recovery, also requires the absence of:
             5018          (a) information that would lead a reasonable person in the same position to know that
             5019      the insurer is financially impaired or insolvent; and
             5020          (b) knowledge regarding the imminence or pendency of a delinquency proceeding
             5021      against the insurer.
             5022          (20) "Guaranty association" means:
             5023          (a) a mechanism mandated by Chapter 28, Guaranty Associations; or
             5024          (b) a similar mechanism in another state that is created for the payment of claims or
             5025      continuation of policy obligations of a financially impaired or insolvent insurer.
             5026          (21) "Impaired" means that an insurer:
             5027          (a) does not have admitted assets at least equal to the sum of:
             5028          (i) all its liabilities; and
             5029          (ii) the minimum surplus required to be maintained by Section 31A-5-211 or
             5030      31A-8-209 ; or
             5031          (b) has a total adjusted capital that is less than its authorized control level RBC, as
             5032      defined in Section 31A-17-601 .
             5033          (22) "Insolvency" or "insolvent" means that an insurer:
             5034          (a) is unable to pay its obligations when they are due;
             5035          (b) does not have admitted assets at least equal to all of its liabilities; or
             5036          (c) has a total adjusted capital that is less than its mandatory control level RBC, as
             5037      defined in Section 31A-17-601 .
             5038          (23) Notwithstanding Section 31A-1-301 , "insurer" means a person who:
             5039          (a) is doing, has done, purports to do, or is licensed to do the business of insurance;
             5040          (b) is or has been subject to the authority of, or to rehabilitation, liquidation,
             5041      reorganization, supervision, or conservation by an insurance commissioner; or
             5042          (c) is included under Section 31A-27a-104 .
             5043          (24) "Liabilities" is as defined by and is measured in accordance with the National
             5044      Association of Insurance Commissioner's Statements of Statutory Accounting Principles, as
             5045      incorporated in this state by rules made by the department in accordance with Title 63G,
             5046      Chapter 3, Utah Administrative Rulemaking Act, for the purposes of Subsection
             5047      31A-4-113 (1)(b)(ii).


             5048          (25) (a) Subject to Subsection (21)(b), "netting agreement" means:
             5049          (i) a contract or agreement that:
             5050          (A) documents one or more transactions between the parties to the agreement for or
             5051      involving one or more qualified financial contracts; and
             5052          (B) provides for the netting, liquidation, setoff, termination, acceleration, or close out
             5053      under or in connection with:
             5054          (I) one or more qualified financial contracts; or
             5055          (II) present or future payment or delivery obligations or payment or delivery
             5056      entitlements under the agreement, including liquidation or close-out values relating to the
             5057      obligations or entitlements, among the parties to the netting agreement;
             5058          (ii) a master agreement or bridge agreement for one or more master agreements
             5059      described in Subsection (25)(a)(i); or
             5060          (iii) any of the following related to a contract or agreement described in Subsection
             5061      (25)(a)(i) or (ii):
             5062          (A) a security agreement;
             5063          (B) a security arrangement;
             5064          (C) other credit enhancement or guarantee; or
             5065          (D) a reimbursement obligation.
             5066          (b) If a contract or agreement described in Subsection (25)(a)(i) or (ii) relates to an
             5067      agreement or transaction that is not a qualified financial contract, the contract or agreement
             5068      described in Subsection (25)(a)(i) or (ii) is considered a netting agreement only with respect to
             5069      an agreement or transaction that is a qualified financial contract.
             5070          (c) "Netting agreement" includes:
             5071          (i) a term or condition incorporated by reference in the contract or agreement described
             5072      in Subsection (25)(a); or
             5073          (ii) a master agreement described in Subsection (25)(a).
             5074          (d) A master agreement described in Subsection (25)(a), together with all schedules,
             5075      confirmations, definitions, and addenda to that master agreement and transactions under any of
             5076      the items described in this Subsection (25)(d), are treated as one netting agreement.
             5077          (26) (a) "New value" means:
             5078          (i) money;


             5079          (ii) money's worth in goods, services, or new credit; or
             5080          (iii) release by a transferee of property previously transferred to the transferee in a
             5081      transaction that is neither void nor voidable by the insurer or the receiver under [any]
             5082      applicable law, including proceeds of the property.
             5083          (b) "New value" does not include an obligation substituted for an existing obligation.
             5084          (27) "Party in interest" means:
             5085          (a) the commissioner;
             5086          (b) a nondomiciliary commissioner in whose state the insurer has outstanding claims
             5087      liabilities;
             5088          (c) an affected guaranty association; and
             5089          (d) the following parties if the party files a request with the receivership court for
             5090      inclusion as a party in interest and to be on the service list:
             5091          (i) an insurer that ceded to or assumed business from the insurer;
             5092          (ii) a policyholder;
             5093          (iii) a third party claimant;
             5094          (iv) a creditor;
             5095          (v) a 10% or greater equity security holder in the insolvent insurer; and
             5096          (vi) a person, including an indenture trustee, with a financial or regulatory interest in
             5097      the delinquency proceeding.
             5098          (28) (a) Notwithstanding Section 31A-1-301 , "policy" means, notwithstanding what it
             5099      is called:
             5100          (i) a written contract of insurance;
             5101          (ii) a written agreement for or affecting insurance; or
             5102          (iii) a certificate of a written contract or agreement described in this Subsection (28)(a).
             5103          (b) "Policy" includes all clauses, riders, endorsements, and papers that are a part of a
             5104      policy.
             5105          (c) "Policy" does not include a contract of reinsurance.
             5106          (29) "Preference" means a transfer of property of an insurer to or for the benefit of a
             5107      creditor:
             5108          (a) for or on account of an antecedent debt, made or allowed by the insurer within one
             5109      year before the day on which a successful petition for rehabilitation or liquidation is filed under


             5110      this chapter;
             5111          (b) the effect of which transfer may enable the creditor to obtain a greater percentage of
             5112      the creditor's debt than another creditor of the same class would receive; and
             5113          (c) if a liquidation order is entered while the insurer is already subject to a
             5114      rehabilitation order and the transfer otherwise qualifies, that is made or allowed within the
             5115      shorter of:
             5116          (i) one year before the day on which a successful petition for rehabilitation is filed; or
             5117          (ii) two years before the day on which a successful petition for liquidation is filed.
             5118          (30) "Property of the insurer" or "property of the estate" includes:
             5119          (a) a right, title, or interest of the insurer in property:
             5120          (i) whether:
             5121          (A) legal or equitable;
             5122          (B) tangible or intangible; or
             5123          (C) choate or inchoate; and
             5124          (ii) including choses in action, contract rights, and any other interest recognized under
             5125      the laws of this state;
             5126          (b) entitlements that exist before the entry of an order of rehabilitation or liquidation;
             5127          (c) entitlements that may arise by operation of this chapter or other provisions of law
             5128      allowing the receiver to avoid prior transfers or assert other rights; and
             5129          (d) (i) records or data that is otherwise the property of the insurer; and
             5130          (ii) records or data similar to those described in Subsection (30)(d)(i) that are within
             5131      the possession, custody, or control of a managing general agent, a third party administrator, a
             5132      management company, a data processing company, an accountant, an attorney, an affiliate, or
             5133      other person.
             5134          (31) Subject to Subsection 31A-27a-611 (10), "qualified financial contract" means any
             5135      of the following:
             5136          (a) a commodity contract;
             5137          (b) a forward contract;
             5138          (c) a repurchase agreement;
             5139          (d) a securities contract;
             5140          (e) a swap agreement; or


             5141          (f) [any] a similar agreement that the commissioner determines by rule or order to be a
             5142      qualified financial contract for purposes of this chapter.
             5143          (32) As the context requires, "receiver" means the commissioner or the commissioner's
             5144      designee, including a rehabilitator, liquidator, or ancillary receiver.
             5145          (33) As the context requires, "receivership" means a rehabilitation, liquidation, or
             5146      ancillary receivership.
             5147          (34) Unless the context requires otherwise, "receivership court" refers to the court in
             5148      which a delinquency proceeding is pending.
             5149          (35) "Reciprocal state" means [any] a state other than this state that:
             5150          (a) enforces a law substantially similar to this chapter;
             5151          (b) requires the commissioner to be the receiver of a delinquent insurer; and
             5152          (c) has laws for the avoidance of fraudulent conveyances and preferential transfers by
             5153      the receiver of a delinquent insurer.
             5154          (36) "Record," when used as a noun, means [any] information or data, in whatever
             5155      form maintained, including:
             5156          (a) a book;
             5157          (b) a document;
             5158          (c) a paper;
             5159          (d) a file;
             5160          (e) an application file;
             5161          (f) a policyholder list;
             5162          (g) policy information;
             5163          (h) a claim or claim file;
             5164          (i) an account;
             5165          (j) a voucher;
             5166          (k) a litigation file;
             5167          (l) a premium record;
             5168          (m) a rate book;
             5169          (n) an underwriting manual;
             5170          (o) a personnel record;
             5171          (p) a financial record; or


             5172          (q) other material.
             5173          (37) "Reinsurance" means a transaction or contract under which an assuming insurer
             5174      agrees to indemnify a ceding insurer against all, or a part, of [any] a loss that the ceding insurer
             5175      may sustain under the one or more policies that the ceding insurer issues or will issue.
             5176          (38) "Repurchase agreement" is as defined in the Federal Deposit Insurance Act, 12
             5177      U.S.C. Sec. 1821(e)(8)(D).
             5178          (39) (a) "Secured claim" means, subject to Subsection (39)(b):
             5179          (i) a claim secured by an asset that is not a general asset; or
             5180          (ii) the right to set off as provided in Section 31A-27a-510 .
             5181          (b) "Secured claim" does not include:
             5182          (i) a special deposit claim;
             5183          (ii) a claim based on mere possession; or
             5184          (iii) a claim arising from a constructive or resulting trust.
             5185          (40) "Securities contract" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.
             5186      Sec. 1821(e)(8)(D).
             5187          (41) "Special deposit" means a deposit established pursuant to statute for the security
             5188      or benefit of a limited class or classes of persons.
             5189          (42) (a) Subject to Subsection (42)(b), "special deposit claim" means a claim secured
             5190      by a special deposit.
             5191          (b) "Special deposit claim" does not include a claim against the general assets of the
             5192      insurer.
             5193          (43) "State" means a state, district, or territory of the United States.
             5194          (44) "Subsidiary" is as defined in Section 31A-1-301 .
             5195          (45) "Swap agreement" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.
             5196      Sec. 1821(e)(8)(D).
             5197          (46) (a) "Transfer" includes the sale and every other and different mode of disposing of
             5198      or parting with property or with an interest in property, whether:
             5199          (i) directly or indirectly;
             5200          (ii) absolutely or conditionally;
             5201          (iii) voluntarily or involuntarily; or
             5202          (iv) by or without judicial proceedings.


             5203          (b) An interest in property includes:
             5204          (i) a set off;
             5205          (ii) having possession of the property; or
             5206          (iii) fixing a lien on the property or on an interest in the property.
             5207          (c) The retention of a security title in property delivered to an insurer and foreclosure
             5208      of the insurer's equity of redemption is considered a transfer suffered by the insurer.
             5209          (47) Notwithstanding Section 31A-1-301 , "unauthorized insurer" means an insurer
             5210      transacting the business of insurance in this state that has not received a certificate of authority
             5211      from this state, or some other type of authority that allows for the transaction of the business of
             5212      insurance in this state.
             5213          Section 43. Section 31A-27a-107 is amended to read:
             5214           31A-27a-107. Notice and hearing on matters submitted by the receiver for
             5215      receivership court approval.
             5216          (1) (a) Upon written request to the receiver, a person shall be placed on the service list
             5217      to receive notice of matters filed by the receiver. The person shall include in a written request
             5218      under this Subsection (1)(a) the person's address, facsimile number, or electronic mail address.
             5219          (b) It is the responsibility of the person requesting notice to:
             5220          (i) inform the receiver in writing of any changes in the person's address, facsimile
             5221      number, or electronic mail address; or
             5222          (ii) request that the person's name be deleted from the service list.
             5223          (c) (i) The receiver may serve on a person on the service list a request to confirm
             5224      continuation on the service list by returning a form.
             5225          (ii) The request to confirm continuation may be served periodically but not more
             5226      frequently than every 12 months.
             5227          (iii) A person who fails to return the form described in this Subsection (1)(c) may be
             5228      removed from the service list.
             5229          (d) Inclusion on the service list does not confer standing in the delinquency proceeding
             5230      to raise, appear, or be heard on any issue.
             5231          (e) The receiver shall:
             5232          (i) file a copy of the service list with the receivership court; and
             5233          (ii) periodically provide to the receivership court notice of changes to the service list.


             5234          (f) Notice may be provided by first-class mail postage paid, electronic mail, or
             5235      facsimile transmission, at the receiver's discretion.
             5236          (2) Except as otherwise provided by this chapter, notice and hearing of any matter
             5237      submitted by the receiver to the receivership court for approval under this chapter shall be
             5238      conducted in accordance with this Subsection (2).
             5239          (a) The receiver:
             5240          (i) shall file a motion:
             5241          (A) explaining the proposed action; and
             5242          (B) the basis for the proposed action; and
             5243          (ii) may include any evidence in support of the motion.
             5244          (b) If a document, material, or other information supporting the motion is confidential,
             5245      the document, material, or other information may be submitted to the receivership court under
             5246      seal for in camera inspection.
             5247          (c) (i) The receiver shall provide notice and a copy of the motion to:
             5248          (A) all persons on the service list; and
             5249          (B) any other person as may be required by the receivership court.
             5250          (ii) Notice may be provided by first-class mail postage paid, electronic mail, or
             5251      facsimile transmission, at the receiver's discretion.
             5252          (iii) For purposes of this section, notice is considered to be given on the day on which
             5253      it is deposited with the United States Postmaster or transmitted, as applicable, to the
             5254      last-known address as shown on the service list.
             5255          (d) (i) A party in interest objecting to the motion shall:
             5256          (A) file an objection specifying the grounds for the objection within:
             5257          (I) 10 days of the day on which the notice of the filing of the motion is sent; or
             5258          (II) such other time as the receivership court may specify; and
             5259          (B) serve copies on:
             5260          (I) the receiver; and
             5261          (II) any other person served with the motion within the time period described in this
             5262      Subsection (2)(d)(i).
             5263          (ii) In accordance with the Utah Rules of Civil Procedure, days may be added to the
             5264      time for filing an objection if the notice of the motion is sent only by way of United States


             5265      mail.
             5266          (iii) An objecting party has the burden of showing why the receivership court should
             5267      not authorize the proposed action.
             5268          (e) (i) If no objection to the motion is timely filed:
             5269          (A) the receivership court may:
             5270          (I) enter an order approving the motion without a hearing; or
             5271          (II) hold a hearing to determine if the receiver's motion should be approved; and
             5272          (B) the receiver may request that the receivership court enter an order or hold a hearing
             5273      on an expedited basis.
             5274          (ii) (A) If an objection is timely filed, the receivership court may hold a hearing.
             5275          (B) If the receivership court approves the motion and, upon a motion by the receiver,
             5276      determines that the objection is frivolous or filed merely for delay or for other improper
             5277      purpose, the receivership court may order the objecting party to pay the receiver's reasonable
             5278      costs and fees of defending against the objection.
             5279          Section 44. Section 31A-27a-201 is amended to read:
             5280           31A-27a-201. Receivership court's seizure order.
             5281          (1) The commissioner may file in the Third District Court for Salt Lake County a
             5282      petition:
             5283          (a) with respect to:
             5284          (i) an insurer domiciled in this state;
             5285          (ii) an unauthorized insurer; or
             5286          (iii) pursuant to Section 31A-27a-901 , a foreign insurer;
             5287          (b) alleging that:
             5288          (i) there exists grounds that would justify a court order for a formal delinquency
             5289      proceeding against the insurer under this chapter; and
             5290          (ii) the interests of policyholders, creditors, or the public will be endangered by delay;
             5291      and
             5292          (c) setting forth the contents of a seizure order considered necessary by the
             5293      commissioner.
             5294          (2) (a) Upon a filing under Subsection (1), the receivership court may issue the
             5295      requested seizure order:


             5296          (i) immediately, ex parte, and without notice or hearing;
             5297          (ii) that directs the commissioner to take possession and control of:
             5298          (A) all or a part of the property, accounts, and records of an insurer; and
             5299          (B) the premises occupied by the insurer for transaction of the insurer's business; and
             5300          (iii) that until further order of the receivership court, enjoins the insurer and its officers,
             5301      managers, agents, and employees from disposition of its property and from the transaction of
             5302      its business except with the written consent of the commissioner.
             5303          (b) [Any] A person having possession or control of and refusing to deliver any of the
             5304      records or assets of a person against whom a seizure order is issued under this Subsection (2) is
             5305      guilty of a class B misdemeanor.
             5306          (3) (a) A petition that requests injunctive relief:
             5307          (i) shall be verified by the commissioner or the commissioner's designee; and
             5308          (ii) is not required to plead or prove irreparable harm or inadequate remedy at law.
             5309          (b) The commissioner shall provide only the notice that the receivership court may
             5310      require.
             5311          (4) (a) The receivership court shall specify in the seizure order the duration of the
             5312      seizure, which shall be the time the receivership court considers necessary for the
             5313      commissioner to ascertain the condition of the insurer.
             5314          (b) The receivership court may from time to time:
             5315          (i) hold a hearing that the receivership court considers desirable:
             5316          (A) (I) on motion of the commissioner;
             5317          (II) on motion of the insurer; or
             5318          (III) on its own motion; and
             5319          (B) after the notice the receivership court considers appropriate; and
             5320          (ii) extend, shorten, or modify the terms of the seizure order.
             5321          (c) The receivership court shall vacate the seizure order if the commissioner fails to
             5322      commence a formal proceeding under this chapter after having had a reasonable opportunity to
             5323      commence a formal proceeding under this chapter.
             5324          (d) An order of the receivership court pursuant to a formal proceeding under this
             5325      chapter vacates the seizure order.
             5326          (5) Entry of a seizure order under this section does not constitute a breach or an


             5327      anticipatory breach of [any] a contract of the insurer.
             5328          (6) (a) An insurer subject to an ex parte seizure order under this section may petition
             5329      the receivership court at any time after the issuance of a seizure order for a hearing and review
             5330      of the basis for the seizure order.
             5331          (b) The receivership court shall hold the hearing and review requested under this
             5332      Subsection (6) not more than 15 days after the day on which the request is received or as soon
             5333      thereafter as the court may allow.
             5334          (c) A hearing under this Subsection (6):
             5335          (i) may be held privately in chambers; and
             5336          (ii) shall be held privately in chambers if the insurer proceeded against requests that it
             5337      be private.
             5338          (7) (a) If, at any time after the issuance of a seizure order, it appears to the receivership
             5339      court that a person whose interest is or will be substantially affected by the seizure order did
             5340      not appear at the hearing and has not been served, the receivership court may order that notice
             5341      be given to the person.
             5342          (b) An order under this Subsection (7) that notice be given may not stay the effect of
             5343      [any] a seizure order previously issued by the receivership court.
             5344          (8) Whenever the commissioner makes a seizure as provided in Subsection (2), on the
             5345      demand of the commissioner, it shall be the duty of the sheriff of a county of this state, and of
             5346      the police department of a municipality in the state to furnish the commissioner with necessary
             5347      deputies or officers to assist the commissioner in making and enforcing the seizure order.
             5348          (9) The commissioner may appoint a receiver under this section. The insurer shall pay
             5349      the costs and expenses of the receiver appointed.
             5350          Section 45. Section 31A-27a-701 is amended to read:
             5351           31A-27a-701. Priority of distribution.
             5352          (1) (a) The priority of payment of distributions on unsecured claims shall be in
             5353      accordance with the order in which each class of claim is set forth in this section except as
             5354      provided in Section 31A-27a-702 .
             5355          (b) All claims in each class shall be paid in full or adequate funds retained for the
             5356      claim's payment before a member of the next class receives payment.
             5357          (c) All claims within a class shall be paid substantially the same percentage.


             5358          (d) Except as provided in Subsections (2)(a)(i)(E), (2)(k), and (2)(m), subclasses may
             5359      not be established within a class.
             5360          (e) A claim by a shareholder, policyholder, or other creditor may not be permitted to
             5361      circumvent the priority classes through the use of equitable remedies.
             5362          (2) The order of distribution of claims shall be as follows:
             5363          (a) a Class 1 claim, which:
             5364          (i) is a cost or expense of administration expressly approved or ratified by the
             5365      liquidator, including the following:
             5366          (A) the actual and necessary costs of preserving or recovering the property of the
             5367      insurer;
             5368          (B) reasonable compensation for all services rendered on behalf of the administrative
             5369      supervisor or receiver;
             5370          (C) a necessary filing fee;
             5371          (D) the fees and mileage payable to a witness;
             5372          (E) an unsecured loan obtained by the receiver, which:
             5373          (I) unless its terms otherwise provide, has priority over all other costs of
             5374      administration; and
             5375          (II) absent agreement to the contrary, shares pro rata with all other claims described in
             5376      this Subsection (2)(a)(i)(E); and
             5377          (F) an expense approved by the rehabilitator of the insurer, if any, incurred in the
             5378      course of the rehabilitation that is unpaid at the time of the entry of the order of liquidation; and
             5379          (ii) except as expressly approved by the receiver, excludes any expense arising from a
             5380      duty to indemnify a director, officer, or employee of the insurer which expense, if allowed, is a
             5381      Class 7 claim;
             5382          (b) a Class 2 claim, which:
             5383          (i) is a reasonable expense of a guaranty association, including overhead, salaries, or
             5384      other general administrative expenses allocable to the receivership such as:
             5385          (A) an administrative or claims handling expense;
             5386          (B) an expense in connection with arrangements for ongoing coverage; and
             5387          (C) in the case of a property and casualty guaranty association, a loss adjustment
             5388      expense, including:


             5389          (I) an adjusting or other expense; and
             5390          (II) a defense or cost containment expense; and
             5391          (ii) excludes an expense incurred in the performance of duties under Section
             5392      31A-28-112 or similar duties under the statute governing a similar organization in another
             5393      state;
             5394          (c) a Class 3 claim, which:
             5395          (i) is:
             5396          (A) a claim under a policy of insurance including a third party claim;
             5397          (B) a claim under an annuity contract or funding agreement;
             5398          (C) a claim under a nonassessable policy for unearned premium;
             5399          (D) a claim of an obligee and, subject to the discretion of the receiver, a completion
             5400      contractor under a surety bond or surety undertaking, except for:
             5401          (I) a bail bond;
             5402          (II) a mortgage guaranty;
             5403          (III) a financial guaranty; or
             5404          (IV) other form of insurance offering protection against investment risk or warranties;
             5405          (E) a claim by a principal under a surety bond or surety undertaking for wrongful
             5406      dissipation of collateral by the insurer or its agents;
             5407          (F) an indemnity payment on:
             5408          (I) a covered claim; or
             5409          [(II) unearned premium; or]
             5410          [(III)] (II) a payment for the continuation of coverage made by an entity responsible for
             5411      the payment of a claim or continuation of coverage of an insolvent health maintenance
             5412      organization;
             5413          (G) a claim for unearned premium;
             5414          [(G)] (H) a claim incurred during the extension of coverage provided for in Sections
             5415      31A-27a-402 and 31A-27a-403 ; or
             5416          [(H)] (I) all other claims incurred in fulfilling the statutory obligations of a guaranty
             5417      association not included in Class 2, including:
             5418          (I) an indemnity payment on covered claims; and
             5419          (II) in the case of a life and health guaranty association, a claim:


             5420          (Aa) as a creditor of the impaired or insolvent insurer for a payment of and liabilities
             5421      incurred on behalf of a covered claim or covered obligation of the insurer; and
             5422          (Bb) for the funds needed to reinsure the obligations described under this Subsection
             5423      (2)(c)(i)(H)(II) with a solvent insurer; and
             5424          (ii) notwithstanding any other provision of this chapter, excludes the following which
             5425      shall be paid under Class 7, except as provided in this section:
             5426          (A) an obligation of the insolvent insurer arising out of a reinsurance contract;
             5427          (B) an obligation that is incurred pursuant to an occurrence policy or reported pursuant
             5428      to a claims made policy after:
             5429          (I) the expiration date of the policy;
             5430          (II) the policy is replaced by the insured;
             5431          (III) the policy is canceled at the insured's request; or
             5432          (IV) the policy is canceled as provided in this chapter;
             5433          (C) an obligation to an insurer, insurance pool, or underwriting association and the
             5434      insurer's, insurance pool's, or underwriting association's claim for contribution, indemnity, or
             5435      subrogation, equitable or otherwise, except for direct claims under a policy where the insurer is
             5436      the named insured;
             5437          (D) an amount accrued as punitive or exemplary damages unless expressly covered
             5438      under the terms of the policy, which shall be paid as a claim in Class 9;
             5439          (E) a tort claim of any kind against the insurer;
             5440          (F) a claim against the insurer for bad faith or wrongful settlement practices; and
             5441          (G) a claim of a guaranty association for assessments not paid by the insurer, which
             5442      claims shall be paid as claims in Class 7; and
             5443          (iii) notwithstanding Subsection (2)(c)(ii)(B), does not exclude an unearned premium
             5444      claim on a policy, other than a reinsurance agreement;
             5445          (d) a Class 4 claim, which is a claim under a policy for mortgage guaranty, financial
             5446      guaranty, or other forms of insurance offering protection against investment risk or warranties;
             5447          (e) a Class 5 claim, which is a claim of the federal government not included in Class 3
             5448      or 4;
             5449          (f) a Class 6 claim, which is a debt due an employee for services or benefits:
             5450          (i) to the extent that the expense:


             5451          (A) does not exceed the lesser of:
             5452          (I) $5,000; or
             5453          (II) two months' salary; and
             5454          (B) represents payment for services performed within one year before the day on which
             5455      the initial order of receivership is issued; and
             5456          (ii) which priority is in lieu of any other similar priority that may be authorized by law
             5457      as to wages or compensation of employees;
             5458          (g) a Class 7 claim, which is a claim of an unsecured creditor not included in Classes 1
             5459      through 6, including:
             5460          (i) a claim under a reinsurance contract;
             5461          (ii) a claim of a guaranty association for an assessment not paid by the insurer; and
             5462          (iii) other claims excluded from Class 3 or 4, unless otherwise assigned to Classes 8
             5463      through 13;
             5464          (h) subject to Subsection (3), a Class 8 claim, which is:
             5465          (i) a claim of a state or local government, except a claim specifically classified
             5466      elsewhere in this section; or
             5467          (ii) a claim for services rendered and expenses incurred in opposing a formal
             5468      delinquency proceeding;
             5469          (i) a Class 9 claim, which is a claim for penalties, punitive damages, or forfeitures,
             5470      unless expressly covered under the terms of a policy of insurance;
             5471          (j) a Class 10 claim, which is, except as provided in Subsections 31A-27a-601 (2) and
             5472      31A-27a-601 (3), a late filed claim that would otherwise be classified in Classes 3 through 9;
             5473          (k) subject to Subsection (4), a Class 11 claim, which is:
             5474          (i) a surplus note;
             5475          (ii) a capital note;
             5476          (iii) a contribution note;
             5477          (iv) a similar obligation;
             5478          (v) a premium refund on an assessable policy; or
             5479          (vi) any other claim specifically assigned to this class;
             5480          (l) a Class 12 claim, which is a claim for interest on an allowed claim of Classes 1
             5481      through 11, according to the terms of a plan to pay interest on allowed claims proposed by the


             5482      liquidator and approved by the receivership court; and
             5483          (m) subject to Subsection (4), a Class 13 claim, which is a claim of a shareholder or
             5484      other owner arising out of:
             5485          (i) the shareholder's or owner's capacity as shareholder or owner or any other capacity;
             5486      and
             5487          (ii) except as the claim may be qualified in Class 3, 4, 7, or 12.
             5488          (3) To prove a claim described in Class 8, the claimant shall show that:
             5489          (a) the insurer that is the subject of the delinquency proceeding incurred the fee or
             5490      expense on the basis of the insurer's best knowledge, information, and belief:
             5491          (i) formed after reasonable inquiry indicating opposition is in the best interests of the
             5492      insurer;
             5493          (ii) that is well grounded in fact; and
             5494          (iii) is warranted by existing law or a good faith argument for the extension,
             5495      modification, or reversal of existing law; and
             5496          (b) opposition is not pursued for any improper purpose, such as to harass, to cause
             5497      unnecessary delay, or to cause needless increase in the cost of the litigation.
             5498          (4) (a) A claim in Class 11 is subject to a subordination agreement related to other
             5499      claims in Class 11 that exist before the entry of a liquidation order.
             5500          (b) A claim in Class 13 is subject to a subordination agreement, related to other claims
             5501      in Class 13 that exist before the entry of a liquidation order.
             5502          Section 46. Section 31A-29-106 is amended to read:
             5503           31A-29-106. Powers of board.
             5504          (1) The board shall have the general powers and authority granted under the laws of
             5505      this state to insurance companies licensed to transact health care insurance business. In
             5506      addition, the board shall have the specific authority to:
             5507          (a) enter into contracts to carry out the provisions and purposes of this chapter,
             5508      including, with the approval of the commissioner, contracts with:
             5509          (i) similar pools of other states for the joint performance of common administrative
             5510      functions; or
             5511          (ii) persons or other organizations for the performance of administrative functions;
             5512          (b) sue or be sued, including taking such legal action necessary to avoid the payment of


             5513      improper claims against the pool or the coverage provided through the pool;
             5514          (c) establish appropriate rates, rate schedules, rate adjustments, expense allowances,
             5515      agents' referral fees, claim reserve formulas, and any other actuarial function appropriate to the
             5516      operation of the pool;
             5517          (d) issue policies of insurance in accordance with the requirements of this chapter;
             5518          (e) retain an executive director and appropriate legal, actuarial, and other personnel as
             5519      necessary to provide technical assistance in the operations of the pool;
             5520          (f) establish rules, conditions, and procedures for reinsuring risks under this chapter;
             5521          (g) cause the pool to have an annual audit of its operations by the state auditor;
             5522          (h) coordinate with the Department of Health in seeking to obtain from the Centers for
             5523      Medicare and Medicaid Services, or other appropriate office or agency of government, all
             5524      appropriate waivers, authority, and permission needed to coordinate the coverage available
             5525      from the pool with coverage available under Medicaid, either before or after Medicaid
             5526      coverage, or as a conversion option upon completion of Medicaid eligibility, without the
             5527      necessity for requalification by the enrollee;
             5528          (i) provide for and employ cost containment measures and requirements including
             5529      preadmission certification, concurrent inpatient review, and individual case management for
             5530      the purpose of making the pool more cost-effective;
             5531          (j) offer pool coverage through contracts with health maintenance organizations,
             5532      preferred provider organizations, and other managed care systems that will manage costs while
             5533      maintaining quality care;
             5534          (k) establish annual limits on benefits payable under the pool to or on behalf of any
             5535      enrollee;
             5536          (l) exclude from coverage under the pool specific benefits, medical conditions, and
             5537      procedures for the purpose of protecting the financial viability of the pool;
             5538          (m) administer the Pool Fund;
             5539          (n) make rules in accordance with Title 63G, Chapter 3, Utah Administrative
             5540      Rulemaking Act, to implement this chapter;
             5541          (o) adopt, trademark, and copyright a trade name for the pool for use in marketing and
             5542      publicizing the pool and its products; and
             5543          (p) transition health care coverage for all individuals covered under the pool as part of


             5544      the conversion to health insurance coverage, regardless of preexisting conditions, under
             5545      PPACA.
             5546          (2) (a) The board shall prepare and submit an annual report to the Legislature which
             5547      shall include:
             5548          (i) the net premiums anticipated;
             5549          (ii) actuarial projections of payments required of the pool;
             5550          (iii) the expenses of administration; and
             5551          (iv) the anticipated reserves or losses of the pool.
             5552          (b) The budget for operation of the pool is subject to the approval of the board.
             5553          (c) The administrative budget of the board and the commissioner under this chapter
             5554      shall comply with the requirements of Title 63J, Chapter 1, Budgetary Procedures Act, and is
             5555      subject to review and approval by the Legislature.
             5556          [(3) (a) The board shall on or before September 1, 2004, require the plan administrator
             5557      or an independent actuarial consultant retained by the plan administrator to redetermine the
             5558      reasonable equivalent of the criteria for uninsurability required under Subsection
             5559      31A-30-106 (1)(h) that is used by the board to determine eligibility for coverage in the pool.]
             5560          [(b) The board shall redetermine the criteria established in Subsection (3)(a) at least
             5561      every five years thereafter.]
             5562          Section 47. Section 31A-29-111 is amended to read:
             5563           31A-29-111. Eligibility -- Limitations.
             5564          (1) (a) Except as provided in Subsection (1)(b), an individual who is not HIPAA
             5565      eligible is eligible for pool coverage if the individual:
             5566          (i) pays the established premium;
             5567          (ii) is a resident of this state; and
             5568          (iii) meets the health underwriting criteria under Subsection (5)(a).
             5569          (b) Notwithstanding Subsection (1)(a), an individual who is not HIPAA eligible is not
             5570      eligible for pool coverage if one or more of the following conditions apply:
             5571          (i) the individual is eligible for health care benefits under Medicaid or Medicare,
             5572      except as provided in Section 31A-29-112 ;
             5573          (ii) the individual has terminated coverage in the pool, unless:
             5574          (A) 12 months have elapsed since the termination date; or


             5575          (B) the individual demonstrates that creditable coverage has been involuntarily
             5576      terminated for any reason other than nonpayment of premium;
             5577          (iii) the pool has paid the maximum lifetime benefit to or on behalf of the individual;
             5578          (iv) the individual is an inmate of a public institution;
             5579          (v) the individual is eligible for a public health plan, as defined in federal regulations
             5580      adopted pursuant to 42 U.S.C. Sec. 300gg;
             5581          (vi) the individual's health condition does not meet the criteria established under
             5582      Subsection (5);
             5583          (vii) the individual is eligible for coverage under an employer group that offers a health
             5584      benefit plan or a self-insurance arrangement to its eligible employees, dependents, or members
             5585      as:
             5586          (A) an eligible employee;
             5587          (B) a dependent of an eligible employee; or
             5588          (C) a member;
             5589          (viii) the individual is covered under any other health benefit plan;
             5590          (ix) except as provided in Subsections (3) and (6), at the time of application, the
             5591      individual has not resided in Utah for at least 12 consecutive months preceding the date of
             5592      application; or
             5593          (x) the individual's employer pays any part of the individual's health benefit plan
             5594      premium, either as an insured or a dependent, for pool coverage.
             5595          (2) (a) Except as provided in Subsection (2)(b), an individual who is HIPAA eligible is
             5596      eligible for pool coverage if the individual:
             5597          (i) pays the established premium; and
             5598          (ii) is a resident of this state.
             5599          (b) Notwithstanding Subsection (2)(a), a HIPAA eligible individual is not eligible for
             5600      pool coverage if one or more of the following conditions apply:
             5601          (i) the individual is eligible for health care benefits under Medicaid or Medicare,
             5602      except as provided in Section 31A-29-112 ;
             5603          (ii) the individual is eligible for a public health plan, as defined in federal regulations
             5604      adopted pursuant to 42 U.S.C. Sec. 300gg;
             5605          (iii) the individual is covered under any other health benefit plan;


             5606          (iv) the individual is eligible for coverage under an employer group that offers a health
             5607      benefit plan or self-insurance arrangements to its eligible employees, dependents, or members
             5608      as:
             5609          (A) an eligible employee;
             5610          (B) a dependent of an eligible employee; or
             5611          (C) a member;
             5612          (v) the pool has paid the maximum lifetime benefit to or on behalf of the individual;
             5613          (vi) the individual is an inmate of a public institution; or
             5614          (vii) the individual's employer pays any part of the individual's health benefit plan
             5615      premium, either as an insured or a dependent, for pool coverage.
             5616          (3) (a) Notwithstanding Subsection (1)(b)(ix), if otherwise eligible under Subsection
             5617      (1)(a), an individual whose health care insurance coverage from a state high risk pool with
             5618      similar coverage is terminated because of nonresidency in another state is eligible for coverage
             5619      under the pool subject to the conditions of Subsections (1)(b)(i) through (viii).
             5620          (b) Coverage under Subsection (3)(a) shall be applied for within 63 days after the
             5621      termination date of the previous high risk pool coverage.
             5622          (c) The effective date of this state's pool coverage shall be the date of termination of
             5623      the previous high risk pool coverage.
             5624          (d) The waiting period of an individual with a preexisting condition applying for
             5625      coverage under this chapter shall be waived:
             5626          (i) to the extent to which the waiting period was satisfied under a similar plan from
             5627      another state; and
             5628          (ii) if the other state's benefit limitation was not reached.
             5629          (4) (a) If an eligible individual applies for pool coverage within 30 days of being
             5630      denied coverage by an individual carrier, the effective date for pool coverage shall be no later
             5631      than the first day of the month following the date of submission of the completed insurance
             5632      application to the carrier.
             5633          (b) Notwithstanding Subsection (4)(a), for individuals eligible for coverage under
             5634      Subsection (3), the effective date shall be the date of termination of the previous high risk pool
             5635      coverage.
             5636          (5) (a) The board shall establish and adjust, as necessary, health underwriting criteria


             5637      based on:
             5638          (i) health condition; and
             5639          (ii) expected claims so that the expected claims are anticipated to remain within
             5640      available funding.
             5641          (b) The board, with approval of the commissioner, may contract with one or more
             5642      providers under Title 63G, Chapter 6a, Utah Procurement Code, to develop underwriting
             5643      criteria under Subsection (5)(a).
             5644          [(c) If an individual is denied coverage by the pool under the criteria established in
             5645      Subsection (5)(a), the pool shall issue a certificate of insurability to the individual for coverage
             5646      under Subsection 31A-30-108 (3).]
             5647          (6) (a) Notwithstanding Subsection (1)(b)(ix), if otherwise eligible under Subsection
             5648      (1)(a), an individual whose individual health care insurance coverage was involuntarily
             5649      terminated, is eligible for coverage under the pool subject to the conditions of Subsections
             5650      (1)(b)(i) through (viii) and (x).
             5651          (b) Coverage under Subsection (6)(a) shall be applied for within 63 days after the
             5652      termination date of the previous individual health care insurance coverage.
             5653          (c) The effective date of this state's pool coverage shall be the date of termination of
             5654      the previous individual coverage.
             5655          (d) The waiting period of an individual with a preexisting condition applying for
             5656      coverage under this chapter shall be waived to the extent to which the waiting period was
             5657      satisfied under the individual health insurance plan.
             5658          Section 48. Section 31A-29-115 is amended to read:
             5659           31A-29-115. Cancellation -- Notice.
             5660          (1) [(a)] On the date of renewal, the pool may cancel an enrollee's policy if:
             5661          [(i)] (a) the enrollee's health condition does not meet the criteria established in
             5662      Subsection 31A-29-111 (5); and
             5663          [(ii)] (b) the pool has provided written notice to the enrollee's last-known address no
             5664      less than 60 days before cancellation[; and].
             5665          [(iii) at least one individual carrier has not reached the individual enrollment cap
             5666      established in Section 31A-30-110 .]
             5667          [(b) The pool shall issue a certificate of insurability to an enrollee whose policy is


             5668      cancelled under Subsection (1)(a) for coverage under Subsection 31A-30-108 (3) if the
             5669      requirements of Subsection 31A-29-111 (5) are met.]
             5670          (2) The pool may cancel an enrollee's policy at any time if:
             5671          (a) the pool has provided written notice to the enrollee's last-known address no less
             5672      than 15 days before cancellation; and
             5673          (b) (i) the enrollee establishes a residency outside of Utah for three consecutive
             5674      months;
             5675          (ii) there is nonpayment of premiums; or
             5676          (iii) the pool determines that the enrollee does not meet the eligibility requirements set
             5677      forth in Section 31A-29-111 , in which case:
             5678          (A) the policy may be retroactively terminated for the period of time in which the
             5679      enrollee was not eligible;
             5680          (B) retroactive termination may not exceed three years; and
             5681          (C) the board's remedy under this Subsection (2)(b) shall be a cause of action against
             5682      the enrollee for benefits paid during the period of ineligibility in accordance with Subsection
             5683      31A-29-119 (3).
             5684          Section 49. Section 31A-30-102 is amended to read:
             5685           31A-30-102. Purpose statement.
             5686          The purpose of this chapter is to:
             5687          (1) prevent abusive rating practices;
             5688          (2) require disclosure of rating practices to purchasers;
             5689          (3) establish rules regarding:
             5690          (a) a universal individual and small group application; and
             5691          (b) renewability of coverage;
             5692          (4) improve the overall fairness and efficiency of the individual and small group
             5693      insurance market;
             5694          (5) provide increased access for individuals and small employers to health insurance;
             5695      and
             5696          (6) provide an employer with the opportunity to establish a defined contribution
             5697      arrangement for an employee to purchase a health benefit plan through the [Internet portal]
             5698      Health Insurance Exchange created by Section 63M-1-2504 .


             5699          Section 50. Section 31A-30-103 is amended to read:
             5700           31A-30-103. Definitions.
             5701          As used in this chapter:
             5702          (1) "Actuarial certification" means a written statement by a member of the American
             5703      Academy of Actuaries or other individual approved by the commissioner that a covered carrier
             5704      is in compliance with [Sections 31A-30-106 and 31A-30-106.1 ] this chapter, based upon the
             5705      examination of the covered carrier, including review of the appropriate records and of the
             5706      actuarial assumptions and methods used by the covered carrier in establishing premium rates
             5707      for applicable health benefit plans.
             5708          (2) "Affiliate" or "affiliated" means [any entity or] a person who directly or indirectly
             5709      through one or more intermediaries, controls or is controlled by, or is under common control
             5710      with, a specified [entity or] person.
             5711          (3) "Base premium rate" means, for each class of business as to a rating period, the
             5712      lowest premium rate charged or that could have been charged under a rating system for that
             5713      class of business by the covered carrier to covered insureds with similar case characteristics for
             5714      health benefit plans with the same or similar coverage.
             5715          (4) (a) "Bona fide employer association" means an association of employers:
             5716          (i) that meets the requirements of Subsection 31A-22-701 (2)(b);
             5717          (ii) in which the employers of the association, either directly or indirectly, exercise
             5718      control over the plan;
             5719          (iii) that is organized:
             5720          (A) based on a commonality of interest between the employers and their employees
             5721      that participate in the plan by some common economic or representation interest or genuine
             5722      organizational relationship unrelated to the provision of benefits; and
             5723          (B) to act in the best interests of its employers to provide benefits for the employer's
             5724      employees and their spouses and dependents, and other benefits relating to employment; and
             5725          (iv) whose association sponsored health plan complies with 45 C.F.R. 146.121.
             5726          (b) The commissioner shall consider the following with regard to determining whether
             5727      an association of employers is a bona fide employer association under Subsection (4)(a):
             5728          (i) how association members are solicited;
             5729          (ii) who participates in the association;


             5730          (iii) the process by which the association was formed;
             5731          (iv) the purposes for which the association was formed, and what, if any, were the
             5732      pre-existing relationships of its members;
             5733          (v) the powers, rights and privileges of employer members; and
             5734          (vi) who actually controls and directs the activities and operations of the benefit
             5735      programs.
             5736          (5) "Carrier" means [any] a person [or entity] that provides health insurance in this
             5737      state including:
             5738          (a) an insurance company;
             5739          (b) a prepaid hospital or medical care plan;
             5740          (c) a health maintenance organization;
             5741          (d) a multiple employer welfare arrangement; and
             5742          (e) [any other] another person [or entity] providing a health insurance plan under this
             5743      title.
             5744          (6) (a) Except as provided in Subsection (6)(b), "case characteristics" means
             5745      demographic or other objective characteristics of a covered insured that are considered by the
             5746      carrier in determining premium rates for the covered insured.
             5747          (b) "Case characteristics" do not include:
             5748          (i) duration of coverage since the policy was issued;
             5749          (ii) claim experience; and
             5750          (iii) health status.
             5751          (7) "Class of business" means all or a separate grouping of covered insureds that is
             5752      permitted by the commissioner in accordance with Section 31A-30-105 .
             5753          [(8) "Conversion policy" means a policy providing coverage under the conversion
             5754      provisions required in Chapter 22, Part 7, Group Accident and Health Insurance.]
             5755          [(9)] (8) "Covered carrier" means [any] an individual carrier or small employer carrier
             5756      subject to this chapter.
             5757          [(10)] (9) "Covered individual" means [any] an individual who is covered under a
             5758      health benefit plan subject to this chapter.
             5759          [(11)] (10) "Covered insureds" means small employers and individuals who are issued
             5760      a health benefit plan that is subject to this chapter.


             5761          [(12)] (11) "Dependent" means an individual to the extent that the individual is defined
             5762      to be a dependent by:
             5763          (a) the health benefit plan covering the covered individual; and
             5764          (b) Chapter 22, Part 6, Accident and Health Insurance.
             5765          [(13)] (12) "Established geographic service area" means a geographical area approved
             5766      by the commissioner within which the carrier is authorized to provide coverage.
             5767          [(14)] (13) "Index rate" means, for each class of business as to a rating period for
             5768      covered insureds with similar case characteristics, the arithmetic average of the applicable base
             5769      premium rate and the corresponding highest premium rate.
             5770          [(15)] (14) "Individual carrier" means a carrier that provides coverage on an individual
             5771      basis through a health benefit plan regardless of whether:
             5772          (a) coverage is offered through:
             5773          (i) an association;
             5774          (ii) a trust;
             5775          (iii) a discretionary group; or
             5776          (iv) other similar groups; or
             5777          (b) the policy or contract is situated out-of-state.
             5778          [(16)] (15) "Individual conversion policy" means a conversion policy issued to:
             5779          (a) an individual; or
             5780          (b) an individual with a family.
             5781          [(17) "Individual coverage count" means the number of natural persons covered under
             5782      a carrier's health benefit products that are individual policies.]
             5783          [(18) "Individual enrollment cap" means the percentage set by the commissioner in
             5784      accordance with Section 31A-30-110 .]
             5785          [(19)] (16) "New business premium rate" means, for each class of business as to a
             5786      rating period, the lowest premium rate charged or offered, or that could have been charged or
             5787      offered, by the carrier to covered insureds with similar case characteristics for newly issued
             5788      health benefit plans with the same or similar coverage.
             5789          [(20)] (17) "Premium" means money paid by covered insureds and covered individuals
             5790      as a condition of receiving coverage from a covered carrier, including [any] fees or other
             5791      contributions associated with the health benefit plan.


             5792          [(21)] (18) (a) "Rating period" means the calendar period for which premium rates
             5793      established by a covered carrier are assumed to be in effect, as determined by the carrier.
             5794          (b) A covered carrier may not have:
             5795          (i) more than one rating period in any calendar month; and
             5796          (ii) no more than 12 rating periods in any calendar year.
             5797          [(22) "Resident" means an individual who has resided in this state for at least 12
             5798      consecutive months immediately preceding the date of application.]
             5799          [(23)] (19) "Short-term limited duration insurance" means a health benefit product that:
             5800          (a) is not renewable; and
             5801          (b) has an expiration date specified in the contract that is less than 364 days after the
             5802      date the plan became effective.
             5803          [(24)] (20) "Small employer carrier" means a carrier that provides health benefit plans
             5804      covering eligible employees of one or more small employers in this state, regardless of
             5805      whether:
             5806          (a) coverage is offered through:
             5807          (i) an association;
             5808          (ii) a trust;
             5809          (iii) a discretionary group; or
             5810          (iv) other similar grouping; or
             5811          (b) the policy or contract is situated out-of-state.
             5812          [(25) "Uninsurable" means an individual who:]
             5813          [(a) is eligible for the Comprehensive Health Insurance Pool coverage under the
             5814      underwriting criteria established in Subsection 31A-29-111 (5); or]
             5815          [(b) (i) is issued a certificate for coverage under Subsection 31A-30-108 (3); and]
             5816          [(ii) has a condition of health that does not meet consistently applied underwriting
             5817      criteria as established by the commissioner in accordance with Subsections 31A-30-106 (1)(g)
             5818      and (h) for which coverage the applicant is applying.]
             5819          [(26) "Uninsurable percentage" for a given calendar year equals UC/CI where, for
             5820      purposes of this formula:]
             5821          [(a) "CI" means the carrier's individual coverage count as of December 31 of the
             5822      preceding year; and]


             5823          [(b) "UC" means the number of uninsurable individuals who were issued an individual
             5824      policy on or after July 1, 1997.]
             5825          Section 51. Section 31A-30-104 is amended to read:
             5826           31A-30-104. Applicability and scope.
             5827          (1) This chapter applies to any:
             5828          (a) health benefit plan that provides coverage to:
             5829          (i) individuals;
             5830          (ii) small employers, except as provided in Subsection (3); or
             5831          (iii) both Subsections (1)(a)(i) and (ii); or
             5832          (b) individual conversion policy for purposes of Sections 31A-30-106.5 and
             5833      31A-30-107.5 .
             5834          (2) This chapter applies to a health benefit plan that provides coverage to small
             5835      employers or individuals regardless of:
             5836          (a) whether the contract is issued to:
             5837          (i) an association, except as provided in Subsection (3);
             5838          (ii) a trust;
             5839          (iii) a discretionary group; or
             5840          (iv) other similar grouping; or
             5841          (b) the situs of delivery of the policy or contract.
             5842          (3) This chapter does not apply to:
             5843          (a) short-term limited duration health insurance;
             5844          (b) federally funded or partially funded programs; or
             5845          (c) a bona fide employer association.
             5846          (4) (a) Except as provided in Subsection (4)(b), for the purposes of this chapter:
             5847          (i) carriers that are affiliated companies or that are eligible to file a consolidated tax
             5848      return shall be treated as one carrier; and
             5849          (ii) any restrictions or limitations imposed by this chapter shall apply as if all health
             5850      benefit plans delivered or issued for delivery to covered insureds in this state by the affiliated
             5851      carriers were issued by one carrier.
             5852          (b) Upon a finding of the commissioner, an affiliated carrier that is a health
             5853      maintenance organization having a certificate of authority under this title may be considered to


             5854      be a separate carrier for the purposes of this chapter.
             5855          (c) Unless otherwise authorized by the commissioner or by Chapter 42, Defined
             5856      Contribution Risk Adjuster Act, a covered carrier may not enter into one or more ceding
             5857      arrangements with respect to health benefit plans delivered or issued for delivery to covered
             5858      insureds in this state if the ceding arrangements would result in less than 50% of the insurance
             5859      obligation or risk for the health benefit plans being retained by the ceding carrier.
             5860          (d) Section 31A-22-1201 applies if a covered carrier cedes or assumes all of the
             5861      insurance obligation or risk with respect to one or more health benefit plans delivered or issued
             5862      for delivery to covered insureds in this state.
             5863          (5) (a) A Taft Hartley trust created in accordance with Section 302(c)(5) of the Federal
             5864      Labor Management Relations Act, or a carrier with the written authorization of such a trust,
             5865      may make a written request to the commissioner for a waiver from the application of any of the
             5866      provisions of [Subsection] Subsections 31A-30-106 (1) and 31A-30-106.1 (1) with respect to a
             5867      health benefit plan provided to the trust.
             5868          (b) The commissioner may grant a trust or carrier described in Subsection (5)(a) a
             5869      waiver if the commissioner finds that application with respect to the trust would:
             5870          (i) have a substantial adverse effect on the participants and beneficiaries of the trust;
             5871      and
             5872          (ii) require significant modifications to one or more collective bargaining arrangements
             5873      under which the trust is established or maintained.
             5874          (c) A waiver granted under this Subsection (5) may not apply to an individual if the
             5875      person participates in a Taft Hartley trust as an associate member of any employee
             5876      organization.
             5877          (6) Sections 31A-30-106 , 31A-30-106.1 , 31A-30-106.5 , 31A-30-106.7 , 31A-30-107 ,
             5878      and 31A-30-108 , [and 31A-30-111 ] apply to:
             5879          (a) any insurer engaging in the business of insurance related to the risk of a small
             5880      employer for medical, surgical, hospital, or ancillary health care expenses of the small
             5881      employer's employees provided as an employee benefit; and
             5882          (b) any contract of an insurer, other than a workers' compensation policy, related to the
             5883      risk of a small employer for medical, surgical, hospital, or ancillary health care expenses of the
             5884      small employer's employees provided as an employee benefit.


             5885          (7) The commissioner may make rules requiring that the marketing practices be
             5886      consistent with this chapter for:
             5887          (a) a small employer carrier;
             5888          (b) a small employer carrier's agent;
             5889          (c) an insurance producer;
             5890          (d) an insurance consultant; and
             5891          (e) a navigator.
             5892          Section 52. Section 31A-30-106 is amended to read:
             5893           31A-30-106. Individual premiums -- Rating restrictions -- Disclosure.
             5894          (1) Premium rates for health benefit plans for individuals under this chapter are subject
             5895      to this section.
             5896          (a) The index rate for a rating period for any class of business may not exceed the
             5897      index rate for any other class of business by more than 20%.
             5898          (b) (i) For a class of business, the premium rates charged during a rating period to
             5899      covered insureds with similar case characteristics for the same or similar coverage, or the rates
             5900      that could be charged to the individual under the rating system for that class of business, may
             5901      not vary from the index rate by more than 30% of the index rate except as provided under
             5902      Subsection (1)(b)(ii).
             5903          (ii) A carrier that offers individual and small employer health benefit plans may use the
             5904      small employer index rates to establish the rate limitations for individual policies, even if some
             5905      individual policies are rated below the small employer base rate.
             5906          (c) The percentage increase in the premium rate charged to a covered insured for a new
             5907      rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
             5908      the following:
             5909          (i) the percentage change in the new business premium rate measured from the first day
             5910      of the prior rating period to the first day of the new rating period;
             5911          (ii) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
             5912      of less than one year, due to the claim experience, health status, or duration of coverage of the
             5913      covered individuals as determined from the rate manual for the class of business of the carrier
             5914      offering an individual health benefit plan; and
             5915          (iii) any adjustment due to change in coverage or change in the case characteristics of


             5916      the covered insured as determined from the rate manual for the class of business of the carrier
             5917      offering an individual health benefit plan.
             5918          (d) (i) A carrier offering an individual health benefit plan shall apply rating factors,
             5919      including case characteristics, consistently with respect to all covered insureds in a class of
             5920      business.
             5921          (ii) Rating factors shall produce premiums for identical individuals that:
             5922          (A) differ only by the amounts attributable to plan design; and
             5923          (B) do not reflect differences due to the nature of the individuals assumed to select
             5924      particular health benefit products.
             5925          (iii) A carrier offering an individual health benefit plan shall treat all health benefit
             5926      plans issued or renewed in the same calendar month as having the same rating period.
             5927          (e) For the purposes of this Subsection (1), a health benefit plan that uses a restricted
             5928      network provision may not be considered similar coverage to a health benefit plan that does not
             5929      use a restricted network provision, provided that use of the restricted network provision results
             5930      in substantial difference in claims costs.
             5931          (f) A carrier offering a health benefit plan to an individual may not, without prior
             5932      approval of the commissioner, use case characteristics other than:
             5933          (i) age;
             5934          (ii) gender;
             5935          (iii) geographic area; and
             5936          (iv) family composition.
             5937          (g) (i) The commissioner shall establish rules in accordance with Title 63G, Chapter 3,
             5938      Utah Administrative Rulemaking Act, to:
             5939          (A) implement this chapter; [and]
             5940          (B) assure that rating practices used by carriers who offer health benefit plans to
             5941      individuals are consistent with the purposes of this chapter[.]; and
             5942          (C) promote transparency of rating practices of health benefit plans, except that a
             5943      carrier may not be required to disclose proprietary information.
             5944          (ii) The rules described in Subsection (1)(g)(i) may include rules that:
             5945          (A) assure that differences in rates charged for health benefit products by carriers who
             5946      offer health benefit plans to individuals are reasonable and reflect objective differences in plan


             5947      design, not including differences due to the nature of the individuals assumed to select
             5948      particular health benefit products; and
             5949          (B) prescribe the manner in which case characteristics may be used by carriers who
             5950      offer health benefit plans to individuals[;].
             5951          [(C) implement the individual enrollment cap under Section 31A-30-110 , including
             5952      specifying:]
             5953          [(I) the contents for certification;]
             5954          [(II) auditing standards;]
             5955          [(III) underwriting criteria for uninsurable classification; and]
             5956          [(IV) limitations on high risk enrollees under Section 31A-30-111 ; and]
             5957          [(D) establish the individual enrollment cap under Subsection 31A-30-110 (1).]
             5958          [(h) Before implementing regulations for underwriting criteria for uninsurable
             5959      classification, the commissioner shall contract with an independent consulting organization to
             5960      develop industry-wide underwriting criteria for uninsurability based on an individual's expected
             5961      claims under open enrollment coverage exceeding 325% of that expected for a standard
             5962      insurable individual with the same case characteristics.]
             5963          [(i)] (h) The commissioner shall revise rules issued for Sections 31A-22-602 and
             5964      31A-22-605 regarding individual accident and health policy rates to allow rating in accordance
             5965      with this section.
             5966          (2) For purposes of Subsection (1)(c)(i), if a health benefit product is a health benefit
             5967      product into which the covered carrier is no longer enrolling new covered insureds, the covered
             5968      carrier shall use the percentage change in the base premium rate, provided that the change does
             5969      not exceed, on a percentage basis, the change in the new business premium rate for the most
             5970      similar health benefit product into which the covered carrier is actively enrolling new covered
             5971      insureds.
             5972          (3) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
             5973      a class of business.
             5974          (b) A covered carrier may not offer to transfer a covered insured into or out of a class
             5975      of business unless the offer is made to transfer all covered insureds in the class of business
             5976      without regard to:
             5977          (i) case characteristics;


             5978          (ii) claim experience;
             5979          (iii) health status; or
             5980          (iv) duration of coverage since issue.
             5981          (4) (a) A carrier who offers a health benefit plan to an individual shall maintain at the
             5982      carrier's principal place of business a complete and detailed description of its rating practices
             5983      and renewal underwriting practices, including information and documentation that demonstrate
             5984      that the carrier's rating methods and practices are:
             5985          (i) based upon commonly accepted actuarial assumptions; and
             5986          (ii) in accordance with sound actuarial principles.
             5987          (b) (i) [Each] A carrier subject to this section shall file with the commissioner, on or
             5988      before April 1 of each year, in a form, manner, and containing such information as prescribed
             5989      by the commissioner, an actuarial certification certifying that:
             5990          (A) the carrier is in compliance with this chapter; and
             5991          (B) the rating methods of the carrier are actuarially sound.
             5992          (ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by the
             5993      carrier at the carrier's principal place of business.
             5994          (c) A carrier shall make the information and documentation described in this
             5995      Subsection (4) available to the commissioner upon request.
             5996          (d) [Records] Except as provided in Subsection (1)(g) or required by PPACA, a record
             5997      submitted to the commissioner under this section shall be maintained by the commissioner as a
             5998      protected [records] record under Title 63G, Chapter 2, Government Records Access and
             5999      Management Act.
             6000          Section 53. Section 31A-30-106.7 is amended to read:
             6001           31A-30-106.7. Surcharge for groups changing carriers.
             6002          (1) (a) Except as provided in Subsection (1)(b), if prior notice is given, a covered
             6003      carrier may impose upon a small group that changes coverage to that carrier from another
             6004      carrier a one-time surcharge of up to 25% of the annualized premium that the carrier could
             6005      otherwise charge under Section [ 31A-30-106 ] 31A-30-106.1 .
             6006          (b) A covered carrier may not impose the surcharge described in Subsection (1)(a) if:
             6007          (i) the change in carriers occurs on the anniversary of the plan year, as defined in
             6008      Section 31A-1-301 ;


             6009          (ii) the previous coverage was terminated under Subsection 31A-30-107 (3)(e); [or]
             6010          (iii) employees from an existing group form a new business[.]; and
             6011          (iv) the surcharge is not applied uniformly to all similarly situated small groups.
             6012          (2) A covered carrier may not impose the surcharge described in Subsection (1) if the
             6013      offer to cover the group occurs at a time other than the anniversary of the plan year because:
             6014          (a) (i) the application for coverage is made prior to the anniversary date in accordance
             6015      with the covered carrier's published policies; and
             6016          (ii) the offer to cover the group is not issued until after the anniversary date; or
             6017          (b) (i) the application for coverage is made prior to the anniversary date in accordance
             6018      with the covered carrier's published policies; and
             6019          (ii) additional underwriting or rating information requested by the covered carrier is not
             6020      received until after the anniversary date.
             6021          (3) If a covered carrier chooses to apply a surcharge under Subsection (1), the
             6022      application of the surcharge and the criteria for incurring or avoiding the surcharge shall be
             6023      clearly stated in the:
             6024          (a) written application materials provided to the applicant at the time of application;
             6025      and
             6026          (b) written producer guidelines.
             6027          (4) The commissioner shall adopt rules in accordance with Title 63G, Chapter 3, Utah
             6028      Administrative Rulemaking Act, to ensure compliance with this section.
             6029          Section 54. Section 31A-30-107 is amended to read:
             6030           31A-30-107. Renewal -- Limitations -- Exclusions -- Discontinuance and
             6031      nonrenewal.
             6032          (1) Except as otherwise provided in this section, a small employer health benefit plan is
             6033      renewable and continues in force:
             6034          (a) with respect to all eligible employees and dependents; and
             6035          (b) at the option of the plan sponsor.
             6036          (2) A small employer health benefit plan may be discontinued or nonrenewed:
             6037          (a) for a network plan, if[: (i)] there is no longer any enrollee under the group health
             6038      plan who lives, resides, or works in:
             6039          [(A)] (i) the service area of the covered carrier; or


             6040          [(B)] (ii) the area for which the covered carrier is authorized to do business; [and] or
             6041          [(ii) in the case of the small employer market, the small employer carrier applies the
             6042      same criteria the small employer carrier would apply in denying enrollment in the plan under
             6043      Subsection 31A-30-108 (7); or]
             6044          (b) for coverage made available in the small or large employer market only through an
             6045      association, if:
             6046          (i) the employer's membership in the association ceases; and
             6047          (ii) the coverage is terminated uniformly without regard to any health status-related
             6048      factor relating to any covered individual.
             6049          (3) A small employer health benefit plan may be discontinued if:
             6050          (a) a condition described in Subsection (2) exists;
             6051          (b) except as prohibited by Section 31A-30-206 , the plan sponsor fails to pay
             6052      premiums or contributions in accordance with the terms of the contract;
             6053          (c) the plan sponsor:
             6054          (i) performs an act or practice that constitutes fraud; or
             6055          (ii) makes an intentional misrepresentation of material fact under the terms of the
             6056      coverage;
             6057          (d) the covered carrier:
             6058          (i) elects to discontinue offering a particular small employer health benefit product
             6059      delivered or issued for delivery in this state; and
             6060          (ii) (A) provides notice of the discontinuation in writing:
             6061          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             6062          (II) at least 90 days before the date the coverage will be discontinued;
             6063          (B) provides notice of the discontinuation in writing:
             6064          (I) to the commissioner; and
             6065          (II) at least three working days prior to the date the notice is sent to the affected plan
             6066      sponsors, employees, and dependents of the plan sponsors or employees;
             6067          (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase all
             6068      other small employer health benefit products currently being offered by the small employer
             6069      carrier in the market; and
             6070          (D) in exercising the option to discontinue that product and in offering the option of


             6071      coverage in this section, acts uniformly without regard to:
             6072          (I) the claims experience of a plan sponsor;
             6073          (II) any health status-related factor relating to any covered participant or beneficiary; or
             6074          (III) any health status-related factor relating to any new participant or beneficiary who
             6075      may become eligible for the coverage; or
             6076          (e) the covered carrier:
             6077          (i) elects to discontinue all of the covered carrier's small employer health benefit plans
             6078      in:
             6079          (A) the small employer market;
             6080          (B) the large employer market; or
             6081          (C) both the small employer and large employer markets; and
             6082          (ii) (A) provides notice of the discontinuation in writing:
             6083          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             6084          (II) at least 180 days before the date the coverage will be discontinued;
             6085          (B) provides notice of the discontinuation in writing:
             6086          (I) to the commissioner in each state in which an affected insured individual is known
             6087      to reside; and
             6088          (II) at least 30 working days prior to the date the notice is sent to the affected plan
             6089      sponsors, employees, and the dependents of the plan sponsors or employees;
             6090          (C) discontinues and nonrenews all plans issued or delivered for issuance in the
             6091      market; and
             6092          (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
             6093          (4) A small employer health benefit plan may be discontinued or nonrenewed:
             6094          (a) if a condition described in Subsection (2) exists; or
             6095          (b) except as prohibited by Section 31A-30-206 , for noncompliance with the insurer's
             6096      employer contribution requirements.
             6097          (5) A small employer health benefit plan may be nonrenewed:
             6098          (a) if a condition described in Subsection (2) exists; or
             6099          (b) except as prohibited by Section 31A-30-206 , for noncompliance with the insurer's
             6100      minimum participation requirements.
             6101          (6) (a) Except as provided in Subsection (6)(d), an eligible employee may be


             6102      discontinued if after issuance of coverage the eligible employee:
             6103          (i) engages in an act or practice that constitutes fraud in connection with the coverage;
             6104      or
             6105          (ii) makes an intentional misrepresentation of material fact in connection with the
             6106      coverage.
             6107          (b) An eligible employee that is discontinued under Subsection (6)(a) may reenroll:
             6108          (i) 12 months after the date of discontinuance; and
             6109          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
             6110      to reenroll.
             6111          (c) At the time the eligible employee's coverage is discontinued under Subsection
             6112      (6)(a), the covered carrier shall notify the eligible employee of the right to reenroll when
             6113      coverage is discontinued.
             6114          (d) An eligible employee may not be discontinued under this Subsection (6) because of
             6115      a fraud or misrepresentation that relates to health status.
             6116          (7) For purposes of this section, a reference to "plan sponsor" includes a reference to
             6117      the employer:
             6118          (a) with respect to coverage provided to an employer member of the association; and
             6119          (b) if the small employer health benefit plan is made available by a covered carrier in
             6120      the employer market only through:
             6121          (i) an association;
             6122          (ii) a trust; or
             6123          (iii) a discretionary group.
             6124          (8) A covered carrier may modify a small employer health benefit plan only:
             6125          (a) at the time of coverage renewal; and
             6126          (b) if the modification is effective uniformly among all plans with that product.
             6127          Section 55. Section 31A-30-108 is amended to read:
             6128           31A-30-108. Eligibility for small employer and individual market.
             6129          (1) (a) [Small employer carriers shall accept residents] A small employer carrier shall
             6130      accept a small employer that applies for small group coverage as set forth in the Health
             6131      Insurance Portability and Accountability Act, Sec. 2701(f) and 2711(a), and PPACA, Sec.
             6132      2702.


             6133          [(b) Individual carriers shall accept residents for individual coverage pursuant to:]
             6134          [(i) Health Insurance Portability and Accountability Act, Sec. 2741(a)-(b); and]
             6135          [(ii) Subsection (3).]
             6136          (b) An individual carrier shall accept an individual that applies for individual coverage
             6137      as set forth in PPACA, Sec. 2702.
             6138          (2) (a) [Small] A small employer [carriers] carrier shall offer to accept all eligible
             6139      employees and their dependents at the same level of benefits under any health benefit plan
             6140      provided to a small employer.
             6141          (b) [Small] A small employer [carriers] carrier may:
             6142          (i) request a small employer to submit a copy of the small employer's quarterly income
             6143      tax withholdings to determine whether the employees for whom coverage is provided or
             6144      requested are bona fide employees of the small employer; and
             6145          (ii) deny or terminate coverage if the small employer refuses to provide documentation
             6146      requested under Subsection (2)(b)(i).
             6147          [(3) Except as provided in Subsections (5) and (6) and Section 31A-30-110 , individual
             6148      carriers shall accept for coverage individuals to whom all of the following conditions apply:]
             6149          [(a) the individual is not covered or eligible for coverage:]
             6150          [(i) (A) as an employee of an employer;]
             6151          [(B) as a member of an association; or]
             6152          [(C) as a member of any other group; and]
             6153          [(ii) under:]
             6154          [(A) a health benefit plan; or]
             6155          [(B) a self-insured arrangement that provides coverage similar to that provided by a
             6156      health benefit plan as defined in Section 31A-1-301 ;]
             6157          [(b) the individual is not covered and is not eligible for coverage under any public
             6158      health benefits arrangement including:]
             6159          [(i) the Medicare program established under Title XVIII of the Social Security Act;]
             6160          [(ii) any act of Congress or law of this or any other state that provides benefits
             6161      comparable to the benefits provided under this chapter; or]
             6162          [(iii) coverage under the Comprehensive Health Insurance Pool Act created in Chapter
             6163      29, Comprehensive Health Insurance Pool Act;]


             6164          [(c) unless the maximum benefit has been reached the individual is not covered or
             6165      eligible for coverage under any:]
             6166          [(i) Medicare supplement policy;]
             6167          [(ii) conversion option;]
             6168          [(iii) continuation or extension under COBRA; or]
             6169          [(iv) state extension;]
             6170          [(d) the individual has not terminated or declined coverage described in Subsection
             6171      (3)(a), (b), or (c) within 93 days of application for coverage, unless the individual is eligible for
             6172      individual coverage under Health Insurance Portability and Accountability Act, Sec. 2741(b),
             6173      in which case, the requirement of this Subsection (3)(d) does not apply; and]
             6174          [(e) the individual is certified as ineligible for the Health Insurance Pool if:]
             6175          [(i) the individual applies for coverage with the Comprehensive Health Insurance Pool
             6176      within 30 days after being rejected or refused coverage by the covered carrier and reapplies for
             6177      coverage with that covered carrier within 30 days after the date of issuance of a certificate
             6178      under Subsection 31A-29-111 (5)(c); or]
             6179          [(ii) the individual applies for coverage with any individual carrier within 45 days
             6180      after:]
             6181          [(A) notice of cancellation of coverage under Subsection 31A-29-115 (1); or]
             6182          [(B) the date of issuance of a certificate under Subsection 31A-29-111 (5)(c) if the
             6183      individual applied first for coverage with the Comprehensive Health Insurance Pool.]
             6184          [(4) (a) If coverage is obtained under Subsection (3)(e)(i) and the required premium is
             6185      paid, the effective date of coverage shall be the first day of the month following the individual's
             6186      submission of a completed insurance application to that covered carrier.]
             6187          [(b) If coverage is obtained under Subsection (3)(e)(ii) and the required premium is
             6188      paid, the effective date of coverage shall be the day following the:]
             6189          [(i) cancellation of coverage under Subsection 31A-29-115 (1); or]
             6190          [(ii) submission of a completed insurance application to the Comprehensive Health
             6191      Insurance Pool.]
             6192          [(5) (a) An individual carrier is not required to accept individuals for coverage under
             6193      Subsection (3) if the carrier issues no new individual policies in the state after July 1, 1997.]
             6194          [(b) A carrier described in Subsection (5)(a) may not issue new individual policies in


             6195      the state for five years from July 1, 1997.]
             6196          [(c) Notwithstanding Subsection (5)(b), a carrier may request permission to issue new
             6197      policies after July 1, 1999, which may only be granted if:]
             6198          [(i) the carrier accepts uninsurables as is required of a carrier entering the market under
             6199      Subsection 31A-30-110 ; and]
             6200          [(ii) the commissioner finds that the carrier's issuance of new individual policies:]
             6201          [(A) is in the best interests of the state; and]
             6202          [(B) does not provide an unfair advantage to the carrier.]
             6203          [(6) (a) If the Comprehensive Health Insurance Pool, as set forth under Chapter 29,
             6204      Comprehensive Health Insurance Pool Act, is dissolved or discontinued, or if enrollment is
             6205      capped or suspended, an individual carrier may decline to accept individuals applying for
             6206      individual enrollment, other than individuals applying for coverage as set forth in Health
             6207      Insurance Portability and Accountability Act, Sec. 2741 (a)-(b).]
             6208          [(b) Within two calendar days of taking action under Subsection (6)(a), an individual
             6209      carrier will provide written notice to the department.]
             6210          [(7) (a) If a small employer carrier offers health benefit plans to small employers
             6211      through a network plan, the small employer carrier may:]
             6212          [(i) limit the employers that may apply for the coverage to those employers with
             6213      eligible employees who live, reside, or work in the service area for the network plan; and]
             6214          [(ii) within the service area of the network plan, deny coverage to an employer if the
             6215      small employer carrier has demonstrated to the commissioner that the small employer carrier:]
             6216          [(A) will not have the capacity to deliver services adequately to enrollees of any
             6217      additional groups because of the small employer carrier's obligations to existing group contract
             6218      holders and enrollees; and]
             6219          [(B) applies this section uniformly to all employers without regard to:]
             6220          [(I) the claims experience of an employer, an employer's employee, or a dependent of
             6221      an employee; or]
             6222          [(II) any health status-related factor relating to an employee or dependent of an
             6223      employee.]
             6224          [(b) (i) A small employer carrier that denies a health benefit product to an employer in
             6225      any service area in accordance with this section may not offer coverage in the small employer


             6226      market within the service area to any employer for a period of 180 days after the date the
             6227      coverage is denied.]
             6228          [(ii) This Subsection (7)(b) does not:]
             6229          [(A) limit the small employer carrier's ability to renew coverage that is in force; or]
             6230          [(B) relieve the small employer carrier of the responsibility to renew coverage that is in
             6231      force.]
             6232          [(c) Coverage offered within a service area after the 180-day period specified in
             6233      Subsection (7)(b) is subject to the requirements of this section.]
             6234          Section 56. Section 31A-30-207 is amended to read:
             6235           31A-30-207. Rating and underwriting restrictions for health plans in the defined
             6236      contribution arrangement market.
             6237          (1) Except as provided in Subsection (2), rating and underwriting restrictions for
             6238      defined contribution arrangement health benefit plans offered in the Health Insurance
             6239      Exchange shall be in accordance with Section 31A-30-106.1 , and the plan adopted under
             6240      Chapter 42, Defined Contribution Risk Adjuster Act.
             6241          (2) Notwithstanding [the provisions of] Subsections 31A-30-106.1 (9)(b)(ii) and (iii), a
             6242      carrier offering a defined contribution arrangement in the Health Insurance Exchange under
             6243      this part[: (a)] shall calculate rates based on a family tier rating structure that includes four tiers
             6244      in compliance with Subsection 31A-30-106.1 (9)(b)(i)[; and].
             6245          [(b) may not calculate rates based on a family tier rating structure that includes five or
             6246      six tiers as described in Subsection 31A-30-106 (9)(b)(ii) or (iii).]
             6247          (3) All insurers who participate in the defined contribution market shall:
             6248          (a) participate in the risk adjuster mechanism developed under Chapter 42, Defined
             6249      Contribution Risk Adjuster Act for all defined contribution arrangement health benefit plans;
             6250          (b) provide the risk adjuster board with:
             6251          (i) an employer group's risk factor; and
             6252          (ii) carrier enrollment data; and
             6253          (c) submit rates to the exchange that are net of commissions.
             6254          (4) When an employer group enters the defined contribution arrangement market and
             6255      the employer group has a health plan with an insurer who is participating in the defined
             6256      contribution arrangement market, the risk factor applied to the employer group when it enters


             6257      the defined contribution arrangement market may not be greater than the employer group's
             6258      renewal risk factor for the same group of covered employees and the same effective date, as
             6259      determined by the employer group's insurer.
             6260          Section 57. Section 31A-30-209 is amended to read:
             6261           31A-30-209. Insurance producers and the Health Insurance Exchange.
             6262          (1) A producer may be listed on the Health Insurance Exchange as a credentialed
             6263      producer [for the defined contribution arrangement market in accordance with Section
             6264      63M-1-2504 ,] if the producer is designated as [an appointed] a credentialed agent for the
             6265      [defined contribution arrangement market] Health Insurance Exchange in accordance with
             6266      Subsection (2).
             6267          (2) A producer whose license under this title authorizes the producer to sell [defined
             6268      contribution arrangement health benefit plans may be appointed to the defined contribution
             6269      arrangement market on] accident and health insurance may be credentialed by the Health
             6270      Insurance Exchange [by the Insurance Department] and may sell any product on the Health
             6271      Insurance Exchange, if the producer:
             6272          [(a) submits an application to the Insurance Department to be appointed as a producer
             6273      for the defined contribution arrangement market on the Health Insurance Exchange;]
             6274          [(b) is an appointed agent in accordance with Subsection (3), for products offered in
             6275      the defined contribution arrangement market of the Health Insurance Exchange, with the
             6276      carriers that offer a defined contribution arrangement health benefit plan on the Health
             6277      Insurance Exchange; and]
             6278          [(c) has completed continuing education for the defined contribution arrangement
             6279      market that:]
             6280          [(i) is required by administrative rule adopted by the commissioner; and]
             6281          [(ii) provides training on premium assistance programs.]
             6282          (a) is an appointed producer with:
             6283          (i) all carriers that offer a plan in the defined contribution market on the Health
             6284      Insurance Exchange; and
             6285          (ii) at least one carrier that offers a dental plan on the Health Insurance Exchange; and
             6286          (b) completes each year the Health Insurance Exchange training that includes training
             6287      on premium assistance programs.


             6288          (3) A carrier shall appoint a producer to sell the carrier's products in the defined
             6289      contribution arrangement market of the Health Insurance Exchange, within 30 days of the
             6290      notice required in Subsection (3)(b), if:
             6291          (a) the producer is currently appointed by a majority of the carriers in the Health
             6292      Insurance Exchange to sell products either outside or inside of the Health Insurance Exchange;
             6293      and
             6294          (b) the producer informs the carrier that the producer is:
             6295          (i) applying to be appointed to the defined contribution arrangement market in the
             6296      Health Insurance Exchange;
             6297          (ii) appointed by a majority of the carriers in the defined contribution arrangement
             6298      market in the Health Insurance Exchange;
             6299          (iii) willing to complete training regarding the carrier's products offered on the defined
             6300      contribution arrangement market in the Health Insurance Exchange; and
             6301          (iv) willing to sign the contracts and business associate's agreements that the carrier
             6302      requires for appointed producers in the Health Insurance Exchange.
             6303          Section 58. Section 31A-30-211 is amended to read:
             6304           31A-30-211. Insurer disclosure.
             6305          [(1) The Health Insurance Exchange shall provide an employer's producer with the
             6306      group's risk factor used to calculate the employer group's premium at the time of:]
             6307          [(a) the initial offering of a health benefit plan; and]
             6308          [(b) the renewal of a health benefit plan.]
             6309          [(2) For health benefit plans that renew on or after March 1, 2012:]
             6310          (1) (a) [a] A carrier shall provide an employer and the employer's producer with
             6311      premium renewal rates at least 60 days [prior to] before the group's renewal date for a plan
             6312      offered under Part 1, Individual and Small Employer Group[; and].
             6313          (b) [the] The Health Insurance Exchange shall provide an employer and the employer's
             6314      producer with premium renewal rates at least 60 days [prior to] before the group's renewal date
             6315      for a plan offered under Part 2, Defined Contribution Arrangements.
             6316          [(3)] (2) An insurer does not have to provide additional notice of premium renewal
             6317      rates to the employer or the employer's producer if the Health Insurance Exchange provides
             6318      notice in accordance with Subsection [(2)] (1)(b).


             6319          Section 59. Section 31A-37-501 is amended to read:
             6320           31A-37-501. Reports to commissioner.
             6321          (1) A captive insurance company is not required to make a report except those
             6322      provided in this chapter.
             6323          (2) (a) Before March 1 of each year, a captive insurance company shall submit to the
             6324      commissioner a report of the financial condition of the captive insurance company, verified by
             6325      oath of two of the executive officers of the captive insurance company.
             6326          (b) Except as provided in Sections 31A-37-204 and 31A-37-205 , a captive insurance
             6327      company shall report:
             6328          (i) using generally accepted accounting principles, except to the extent that the
             6329      commissioner requires, approves, or accepts the use of a statutory accounting principle;
             6330          (ii) using a useful or necessary modification or adaptation to an accounting principle
             6331      that is required, approved, or accepted by the commissioner for the type of insurance and kind
             6332      of insurer to be reported upon; and
             6333          (iii) supplemental or additional information required by the commissioner.
             6334          (c) Except as otherwise provided:
             6335          (i) [an association captive insurance company and an industrial insured group] a
             6336      licensed captive insurance company shall file the report required by Section 31A-4-113 ; and
             6337          (ii) an industrial insured group shall comply with Section 31A-4-113.5 .
             6338          (3) (a) A pure captive insurance company may make written application to file the
             6339      required report on a fiscal year end that is consistent with the fiscal year of the parent company
             6340      of the pure captive insurance company.
             6341          (b) If the commissioner grants an alternative reporting date for a pure captive insurance
             6342      company requested under Subsection (3)(a), the annual report is due 60 days after the fiscal
             6343      year end.
             6344          (4) (a) Sixty days after the fiscal year end, a branch captive insurance company shall
             6345      file with the commissioner a copy of [all] the reports and statements required to be filed under
             6346      the laws of the jurisdiction in which the alien captive insurance company is formed, verified by
             6347      oath by two of the alien captive insurance company's executive officers.
             6348          (b) If the commissioner is satisfied that the annual report filed by the alien captive
             6349      insurance company in the jurisdiction in which the alien captive insurance company is formed


             6350      provides adequate information concerning the financial condition of the alien captive insurance
             6351      company, the commissioner may waive the requirement for completion of the annual statement
             6352      required for a captive insurance company under this section with respect to business written in
             6353      the alien jurisdiction.
             6354          (c) A waiver by the commissioner under Subsection (4)(b):
             6355          (i) shall be in writing; and
             6356          (ii) is subject to public inspection.
             6357          Section 60. Section 31A-40-203 is amended to read:
             6358           31A-40-203. Covered employee.
             6359          (1) (a) An individual is a covered employee of a professional employer organization if
             6360      the individual is coemployed pursuant to a professional employer agreement subject to this
             6361      chapter.
             6362          (b) An individual who is a covered employee under a professional employer agreement
             6363      is a covered [employer] employee, whether or not the professional employer organization
             6364      provides the notice required by Subsection 31A-40-202 (3), the earlier of the day on which:
             6365          (i) the employee is first compensated by the professional employer organization; or
             6366          (ii) the client notifies the professional employer organization of a new hire.
             6367          (2) An individual who is an officer, director, shareholder, partner, or manager of a
             6368      client is a covered employee:
             6369          (a) to the extent that the client and the professional employer organization expressly
             6370      agree in the professional employer agreement that the individual is a covered employee;
             6371          (b) if the conditions of Subsection (1) are met; and
             6372          (c) if the individual acts as an operational manager or performs day-to-day an
             6373      operational service for the client.
             6374          Section 61. Section 31A-40-209 is amended to read:
             6375           31A-40-209. Workers' compensation.
             6376          (1) In accordance with Section 34A-2-103 , a client is responsible for securing workers'
             6377      compensation coverage for a covered employee.
             6378          (2) Subject to the requirements of Section 34A-2-103 , if a professional employer
             6379      organization obtains or assists a client in obtaining workers' compensation insurance pursuant
             6380      to a professional employer agreement:


             6381          (a) the professional employer organization shall ensure that the client maintains and
             6382      provides workers' compensation coverage for a covered employee in accordance with
             6383      Subsection 34A-2-201 (1) or (2) and rules of the Labor Commission, made in accordance with
             6384      Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             6385          (b) the workers' compensation coverage may show the professional employer
             6386      organization as the named insured through a [multiple coordinated] master policy, if:
             6387          (i) the client is shown as an insured by means of an endorsement for each individual
             6388      client;
             6389          (ii) the experience modification of a client is used; and
             6390          (iii) the insurer files the endorsement with the Division of Industrial Accidents as
             6391      directed by a rule of the Labor Commission, made in accordance with Title 63G, Chapter 3,
             6392      Utah Administrative Rulemaking Act;
             6393          (c) at the termination of the professional employer agreement, if requested by the
             6394      client, the insurer shall provide the client records regarding the loss experience related to
             6395      workers' compensation insurance provided to a covered employee pursuant to the professional
             6396      employer agreement; and
             6397          (d) the insurer shall notify a client if the workers' compensation coverage for the client
             6398      is terminated.
             6399          (3) In accordance with Section 34A-2-105 , the exclusive remedy provisions of Section
             6400      34A-2-105 apply to both the client and the professional employer organization under a
             6401      professional employer agreement regulated under this chapter.
             6402          (4) Notwithstanding the other provisions in this section, an insurer may choose whether
             6403      to issue:
             6404          (a) a policy for a client; or
             6405          (b) a [multiple coordinated] master policy with the client shown as an additional
             6406      insured by means of an individual endorsement.
             6407          Section 62. Section 31A-42-202 is amended to read:
             6408           31A-42-202. Contents of plan.
             6409          (1) The board shall submit a plan of operation for the risk adjuster to the
             6410      commissioner. The plan shall:
             6411          (a) establish the methodology for implementing:


             6412          (i) Subsection (2) for the defined contribution arrangement market established under
             6413      Chapter 30, Part 2, Defined Contribution Arrangements; and
             6414          (ii) the participation of small employer group defined contribution arrangement health
             6415      benefit plans;
             6416          (b) establish regular times and places for meetings of the board;
             6417          (c) establish procedures for keeping records of all financial transactions and for
             6418      sending annual fiscal reports to the commissioner;
             6419          (d) contain additional provisions necessary and proper for the execution of the powers
             6420      and duties of the risk adjuster; and
             6421          (e) establish procedures in compliance with Title 63A, Utah Administrative Services
             6422      Code, to pay for administrative expenses incurred.
             6423          (2) (a) The plan adopted by the board for the defined contribution arrangement market
             6424      shall include:
             6425          (i) parameters an employer may use to designate eligible employees for the defined
             6426      contribution arrangement market; and
             6427          (ii) underwriting mechanisms and employer eligibility guidelines:
             6428          (A) consistent with the federal Health Insurance Portability and Accountability Act;
             6429      and
             6430          (B) necessary to protect insurance carriers from adverse selection in the defined
             6431      contribution market.
             6432          (b) The plan required by Subsection (2)(a) shall outline how premium rates for a
             6433      qualified individual in the defined contribution arrangement market are determined, including:
             6434          (i) the identification of an initial rate for a qualified individual based on:
             6435          (A) standardized age bands submitted by participating insurers; and
             6436          (B) wellness incentives for the individual as permitted by federal law; and
             6437          (ii) the identification of a group risk factor to be applied to the initial age rate of a
             6438      qualified individual based on the health conditions of all qualified individuals in the same
             6439      employer group and, for small employers, in accordance with Sections 31A-30-105 and
             6440      31A-30-106.1 .
             6441          (c) The plan adopted under Subsection (2)(a) for the defined contribution arrangement
             6442      market shall outline how:


             6443          (i) premium contributions for qualified individuals shall be submitted to the Health
             6444      Insurance Exchange in the amount determined under Subsection (2)(b); and
             6445          (ii) the Health Insurance Exchange shall distribute premiums to the insurers selected by
             6446      qualified individuals within an employer group based on each individual's rating factor
             6447      determined in accordance with the plan.
             6448          (d) The plan adopted under Subsection (2)(a) shall outline a mechanism for adjusting
             6449      risk between defined contribution arrangement market insurers that:
             6450          (i) identifies health care conditions subject to risk adjustment;
             6451          (ii) establishes an adjustment amount for each identified health care condition;
             6452          (iii) determines the extent to which an insurer has more or less individuals with an
             6453      identified health condition than would be expected; and
             6454          (iv) computes all risk adjustments.
             6455          (e) The board may amend the plan if necessary to:
             6456          (i) maintain the proper functioning and solvency of the defined contribution
             6457      arrangement market and the risk adjuster mechanism;
             6458          (ii) mitigate significant issues of risk selection; or
             6459          (iii) improve the administration of the risk adjuster mechanism.
             6460          (3) The board shall establish a mechanism in which the defined contribution
             6461      arrangement market participating carriers shall submit their plan base rates, rating factors, and
             6462      premiums to the commissioner for an actuarial review under [the provisions of] Section
             6463      31A-30-115 [prior to] before the publication of the premium rates on the Health Insurance
             6464      Exchange.
             6465          Section 63. Section 31A-43-102 is amended to read:
             6466           31A-43-102. Definitions.
             6467          For purposes of this chapter:
             6468          (1) "Actuarial certification" means a written statement by a member of the American
             6469      Academy of Actuaries, or by another individual acceptable to the commissioner, that an insurer
             6470      is in compliance with [the provisions of] this chapter, based upon the individual's examination
             6471      and including a review of the appropriate records and the actuarial assumptions and methods
             6472      used by the stop-loss insurer in establishing attachment points and other applicable
             6473      determinations in conjunction with the provision of stop-loss insurance coverage.


             6474          (2) "Aggregate attachment point" means the dollar amount [in losses for eligible
             6475      expenses] of covered claims incurred by a small employer plan beyond which the stop-loss
             6476      insurer incurs liability for [all or part of the] losses incurred by the small employer plan, subject
             6477      to limitations included in the contract.
             6478          (3) "Coverage" means the combination of the employer plan design and the stop-loss
             6479      contract design.
             6480          (4) "Expected claims" means the amount of claims that, in the absence of [a] aggregate
             6481      stop-loss [contract] insurance, are projected to be incurred by a small employer health plan
             6482      using reasonable and accepted actuarial principles.
             6483          (5) "Lasering":
             6484          (a) means increasing or removing stop-loss coverage for a specific individual within an
             6485      employer group; and
             6486          (b) includes other practices that are prohibited by the commissioner by administrative
             6487      rule that result in lowering the stop-loss premium for the employer by transferring the risk for
             6488      an [individual] individual's claims back to the employer.
             6489          (6) "Small employer" means an employer who, with respect to a calendar year and to a
             6490      plan year:
             6491          (a) employed an average of at least two employees but not more than 50 eligible
             6492      employees on each business day during the preceding calendar year; and
             6493          (b) employs at least two employees on the first day of the plan year.
             6494          (7) "Specific attachment point" means the dollar amount [in losses for eligible
             6495      expenses] of covered claims attributable to a single individual covered by a small employer
             6496      plan in a contract year beyond which the stop-loss insurer assumes [all or part of] the liability
             6497      for losses incurred by the small employer plan, subject to limitations included in the contract.
             6498          (8) "Stop-loss insurance" means insurance purchased by a small employer for which
             6499      the stop-loss insurer assumes[, on a per-loss basis,] all loss amounts of the small employer's
             6500      plan in excess of a stated amount, subject to the policy limit.
             6501          Section 64. Section 31A-43-301 is amended to read:
             6502           31A-43-301. Stop-loss insurance coverage standards.
             6503          (1) A small employer stop-loss insurance contract shall:
             6504          (a) be issued to the small employer to provide insurance to the group health benefit


             6505      plan, not the employees of the small employer;
             6506          (b) use a standard application form developed by the commissioner by administrative
             6507      rule;
             6508          (c) have a contract term with guaranteed rates for at least 12 months, without
             6509      adjustment, unless there is a change in the benefits provided under the small employer's health
             6510      plan during the contract period;
             6511          (d) include both a specific attachment point and an aggregate attachment point in a
             6512      contract;
             6513          (e) align stop-loss plan benefit limitations and exclusions with a small employer's
             6514      health plan benefit limitations and exclusions, including any annual or lifetime limits in the
             6515      employer's health plan;
             6516          (f) have an annual specific attachment point that is at least $10,000;
             6517          (g) have an annual aggregate attachment point that may not be less than [90%] 85% of
             6518      expected claims;
             6519          (h) pay stop-loss claims:
             6520          (i) incurred during the contract period; and
             6521          (ii) [submitted] paid within 12 months after the expiration date of the contract; and
             6522          (i) include provisions to cover incurred and unpaid claims if a small employer plan
             6523      terminates.
             6524          (2) A small employer stop-loss contract shall not:
             6525          (a) include lasering; and
             6526          (b) pay claims directly to an individual employee, member, or participant.
             6527          Section 65. Section 31A-43-302 is amended to read:
             6528           31A-43-302. Stop-loss restrictions -- Filing requirements.
             6529          [(1) A stop-loss insurer shall demonstrate to the commissioner that the rates associated
             6530      with specific and aggregate attachment points retained by a small employer group under the
             6531      insurer's stop-loss plan are actuarially sound.]
             6532          [(2)] (1) A stop-loss insurer shall file the stop-loss insurance contract form and [rates]
             6533      rate methodology with the commissioner pursuant to Sections 31A-2-201 and 31A-2-201.1
             6534      before the stop-loss insurance contract may be issued or delivered in the state.
             6535          [(3)] (2) A stop-loss insurer shall file with the commissioner, annually on or before


             6536      April 1, in a form and manner required by the commissioner by administrative rule adopted by
             6537      the commissioner:
             6538          (a) an actuarial memorandum and certification which demonstrates that the insurer is in
             6539      compliance with this chapter; and
             6540          (b) the stop-loss insurer's stop-loss experience.
             6541          [(4) Each] (3) An insurer shall maintain at its principal place of business:
             6542          (a) a complete and detailed description of its rating practices and renewal underwriting
             6543      practices, including information and documentation that demonstrate the rating methods and
             6544      practices are:
             6545          (i) based upon commonly accepted actuarial assumptions; and
             6546          (ii) in accordance with sound actuarial principles; and
             6547          (b) a copy of the [actuarial certification] annual filing required by Subsection [(3)] (2).
             6548          Section 66. Section 31A-43-303 is amended to read:
             6549           31A-43-303. Stop-loss insurance disclosure.
             6550          A stop-loss insurance contract delivered, issued for delivery, or entered into shall
             6551      include the disclosure exhibit required by the commissioner through administrative rule, which
             6552      shall include at least the following information:
             6553          (1) the complete costs for the stop-loss contract;
             6554          (2) the date on which the insurance takes effect and terminates, including renewability
             6555      provisions;
             6556          (3) the aggregate attachment point and the specific attachment point;
             6557          (4) [any] limitations on coverage;
             6558          (5) an explanation of monthly accommodation and disclosure about any monthly
             6559      accommodation features included in the stop-loss contract; [and]
             6560          (6) a description of terminal liability funding, including[: (a)] the cost of processing
             6561      claims before and after the termination of the contract; and
             6562          [(b)] (7) maximum claims liability to the employer.
             6563          Section 67. Section 31A-43-304 is amended to read:
             6564           31A-43-304. Administrative rules.
             6565          The commissioner may adopt administrative rules in accordance with Title 63G,
             6566      Chapter 3, Utah Administrative Rulemaking Act, to:


             6567          (1) implement this chapter;
             6568          [(2) assure that differences in rates charged are reasonable and reflect objective
             6569      differences in plan design;]
             6570          [(3)] (2) define lasering practices that are prohibited by this chapter;
             6571          [(4)] (3) establish the form and manner of the actuarial certification and the annual
             6572      report on stop-loss experience required by Section 31A-43-302 ;
             6573          [(5)] (4) establish the form and manner of the disclosure required by Section
             6574      31A-43-303 ;
             6575          [(6)] (5) assure the rates associated with the specific attachment points and aggregate
             6576      attachment points are actuarially sound and are not against the public interest; and
             6577          [(7)] (6) assure that stop-loss contracts include provisions to cover incurred and unpaid
             6578      claims if a small employer plan terminates.
             6579          Section 68. Section 53-13-103 is amended to read:
             6580           53-13-103. Law enforcement officer.
             6581          (1) (a) "Law enforcement officer" means a sworn and certified peace officer who is an
             6582      employee of a law enforcement agency that is part of or administered by the state or any of its
             6583      political subdivisions, and whose primary and principal duties consist of the prevention and
             6584      detection of crime and the enforcement of criminal statutes or ordinances of this state or any of
             6585      its political subdivisions.
             6586          (b) "Law enforcement officer" specifically includes the following:
             6587          (i) any sheriff or deputy sheriff, chief of police, police officer, or marshal of any
             6588      county, city, or town;
             6589          (ii) the commissioner of public safety and any member of the Department of Public
             6590      Safety certified as a peace officer;
             6591          (iii) all persons specified in Sections 23-20-1.5 and 79-4-501 ;
             6592          (iv) any police officer employed by any college or university;
             6593          (v) investigators for the Motor Vehicle Enforcement Division;
             6594          (vi) investigators for the Department of Insurance, Fraud Division;
             6595          [(vi)] (vii) special agents or investigators employed by the attorney general, district
             6596      attorneys, and county attorneys;
             6597          [(vii)] (viii) employees of the Department of Natural Resources designated as peace


             6598      officers by law;
             6599          [(viii)] (ix) school district police officers as designated by the board of education for
             6600      the school district;
             6601          [(ix)] (x) the executive director of the Department of Corrections and any correctional
             6602      enforcement or investigative officer designated by the executive director and approved by the
             6603      commissioner of public safety and certified by the division;
             6604          [(x)] (xi) correctional enforcement, investigative, or adult probation and parole officers
             6605      employed by the Department of Corrections serving on or before July 1, 1993;
             6606          [(xi)] (xii) members of a law enforcement agency established by a private college or
             6607      university provided that the college or university has been certified by the commissioner of
             6608      public safety according to rules of the Department of Public Safety;
             6609          [(xii)] (xiii) airport police officers of any airport owned or operated by the state or any
             6610      of its political subdivisions; and
             6611          [(xiii)] (xiv) transit police officers designated under Section 17B-2a-823 .
             6612          (2) Law enforcement officers may serve criminal process and arrest violators of any
             6613      law of this state and have the right to require aid in executing their lawful duties.
             6614          (3) (a) A law enforcement officer has statewide full-spectrum peace officer authority,
             6615      but the authority extends to other counties, cities, or towns only when the officer is acting
             6616      under Title 77, Chapter 9, Uniform Act on Fresh Pursuit, unless the law enforcement officer is
             6617      employed by the state.
             6618          (b) (i) A local law enforcement agency may limit the jurisdiction in which its law
             6619      enforcement officers may exercise their peace officer authority to a certain geographic area.
             6620          (ii) Notwithstanding Subsection (3)(b)(i), a law enforcement officer may exercise
             6621      authority outside of the limited geographic area, pursuant to Title 77, Chapter 9, Uniform Act
             6622      on Fresh Pursuit, if the officer is pursuing an offender for an offense that occurred within the
             6623      limited geographic area.
             6624          (c) The authority of law enforcement officers employed by the Department of
             6625      Corrections is regulated by Title 64, Chapter 13, Department of Corrections - State Prison.
             6626          (4) A law enforcement officer shall, prior to exercising peace officer authority:
             6627          (a) (i) have satisfactorily completed the requirements of Section 53-6-205 ; or
             6628          (ii) have met the waiver requirements in Section 53-6-206 ; and


             6629          (b) have satisfactorily completed annual certified training of at least 40 hours per year
             6630      as directed by the director of the division, with the advice and consent of the council.
             6631          Section 69. Repealer.
             6632          This bill repeals:
             6633          Section 31A-30-110 , Individual enrollment cap.
             6634          Section 31A-30-111 , Limitations on high risk enrollees.
             6635          Section 70. Effective date.
             6636          This bill takes effect on May 13, 2014, except that the amendments to Section
             6637      31A-3-304 (Effective 07/01/15) take effect on July 1, 2015.
             6638          Section 71. Revisor instructions.
             6639          The Legislature intends that the Office of Legislative Research and General Counsel, in
             6640      preparing the Utah Code database for publication, replace the language in Subsections
             6641      31A-22-305 (10) and 31A-22-305.3 (9), from "this bill" with the bill's designated chapter and
             6642      section number in the Laws of Utah.


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