First Substitute H.B. 76

Senator Wayne A. Harper proposes the following substitute bill:


             1     
INSURANCE RELATED REVISIONS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Jim Bird

             5     
Senate Sponsor: Wayne A. Harper

             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 coordinates with H.B. 141, Health Reform Amendments, by providing
             79      superseding and substantive amendments.
             80          This bill provides revisor instructions.
             81      Utah Code Sections Affected:
             82      AMENDS:
             83           31A-1-301 , as last amended by Laws of Utah 2013, Chapter 319
             84           31A-2-104 , as last amended by Laws of Utah 1999, Chapter 21
             85           31A-3-304 (Superseded 07/01/15), as last amended by Laws of Utah 2011, Chapter
             86      284
             87           31A-3-304 (Effective 07/01/15), as last amended by Laws of Utah 2013, Chapter 319


             88           31A-4-102 , as last amended by Laws of Utah 2008, Chapter 345
             89           31A-4-115 , as last amended by Laws of Utah 2002, Chapter 308
             90           31A-8-402.3 , as last amended by Laws of Utah 2004, Chapter 329
             91           31A-16-103 , as last amended by Laws of Utah 2004, Chapter 2
             92           31A-17-607 , as last amended by Laws of Utah 2001, Chapter 116
             93           31A-22-305 , as last amended by Laws of Utah 2013, Chapter 460
             94           31A-22-305.3 , as last amended by Laws of Utah 2013, Chapter 460
             95           31A-22-428 , as enacted by Laws of Utah 2008, Chapter 345
             96           31A-22-617 , as last amended by Laws of Utah 2013, Chapters 104 and 319
             97           31A-22-618.5 , as last amended by Laws of Utah 2013, Chapter 319
             98           31A-22-625 , as last amended by Laws of Utah 2012, Chapter 253
             99           31A-22-635 , as last amended by Laws of Utah 2012, Chapters 253 and 279
             100           31A-22-721 , as last amended by Laws of Utah 2011, Chapter 284
             101           31A-23a-102 , as last amended by Laws of Utah 2013, Chapter 319
             102           31A-23a-104 , as last amended by Laws of Utah 2012, Chapter 253
             103           31A-23a-105 , as last amended by Laws of Utah 2013, Chapter 319
             104           31A-23a-108 , as last amended by Laws of Utah 2012, Chapter 253
             105           31A-23a-112 , as last amended by Laws of Utah 2008, Chapter 382
             106           31A-23a-113 , as last amended by Laws of Utah 2012, Chapter 253
             107           31A-23a-202 , as last amended by Laws of Utah 2013, Chapter 319
             108           31A-23a-203 , as last amended by Laws of Utah 2012, Chapter 253
             109           31A-23a-402.5 , as last amended by Laws of Utah 2013, Chapter 319
             110           31A-23a-501 , as last amended by Laws of Utah 2013, Chapter 341
             111           31A-23b-102 , as enacted by Laws of Utah 2013, Chapter 341
             112           31A-23b-202 , as enacted by Laws of Utah 2013, Chapter 341
             113           31A-23b-205 , as enacted by Laws of Utah 2013, Chapter 341
             114           31A-23b-206 , as enacted by Laws of Utah 2013, Chapter 341
             115           31A-23b-301 , as enacted by Laws of Utah 2013, Chapter 341
             116           31A-23b-402 , as enacted by Laws of Utah 2013, Chapter 341
             117           31A-25-208 , as last amended by Laws of Utah 2011, Chapter 284
             118           31A-25-209 , as last amended by Laws of Utah 2008, Chapter 382


             119           31A-26-102 , as last amended by Laws of Utah 2012, Chapter 151
             120           31A-26-206 , as last amended by Laws of Utah 2011, Chapter 284
             121           31A-26-207 , as last amended by Laws of Utah 2001, Chapter 116
             122           31A-26-213 , as last amended by Laws of Utah 2011, Chapter 284
             123           31A-26-214 , as last amended by Laws of Utah 2008, Chapter 382
             124           31A-26-214.5 , as last amended by Laws of Utah 2009, Chapter 349
             125           31A-27a-102 , as last amended by Laws of Utah 2008, Chapter 382
             126           31A-27a-107 , as enacted by Laws of Utah 2007, Chapter 309
             127           31A-27a-201 , as enacted by Laws of Utah 2007, Chapter 309
             128           31A-27a-701 , as last amended by Laws of Utah 2011, Chapter 297
             129           31A-29-106 , as last amended by Laws of Utah 2013, Chapter 319
             130           31A-29-111 , as last amended by Laws of Utah 2012, Chapters 158 and 347
             131           31A-29-115 , as last amended by Laws of Utah 2004, Chapter 2
             132           31A-30-102 , as last amended by Laws of Utah 2009, Chapter 12
             133           31A-30-103 , as last amended by Laws of Utah 2013, Chapter 168
             134           31A-30-104 , as last amended by Laws of Utah 2013, Chapters 168 and 341
             135           31A-30-106 , as last amended by Laws of Utah 2011, Chapter 284
             136           31A-30-106.7 , as last amended by Laws of Utah 2008, Chapter 382
             137           31A-30-107 , as last amended by Laws of Utah 2009, Chapter 12
             138           31A-30-108 , as last amended by Laws of Utah 2011, Chapter 284
             139           31A-30-207 , as last amended by Laws of Utah 2011, Second Special Session, Chapter 5
             140           31A-30-209 , as last amended by Laws of Utah 2011, Chapter 400
             141           31A-30-211 , as last amended by Laws of Utah 2011, Second Special Session, Chapter 5
             142           31A-37-501 , as last amended by Laws of Utah 2008, Chapter 302
             143           31A-40-203 , as enacted by Laws of Utah 2008, Chapter 318
             144           31A-40-209 , as enacted by Laws of Utah 2008, Chapter 318
             145           31A-42-202 , as last amended by Laws of Utah 2011, Chapter 400
             146           31A-43-102 , as enacted by Laws of Utah 2013, Chapter 341
             147           31A-43-301 , as enacted by Laws of Utah 2013, Chapter 341
             148           31A-43-302 , as enacted by Laws of Utah 2013, Chapter 341
             149           31A-43-303 , as enacted by Laws of Utah 2013, Chapter 341


             150           31A-43-304 , as enacted by Laws of Utah 2013, Chapter 341
             151           53-13-103 , as last amended by Laws of Utah 2011, Chapter 58
             152      REPEALS:
             153           31A-30-110 , as last amended by Laws of Utah 2011, Chapters 284 and 297
             154           31A-30-111 , as last amended by Laws of Utah 2002, Chapter 308
             155      Utah Code Sections Affected by Coordination Clause:
             156           31A-23b-205 , as enacted by Laws of Utah 2013, Chapter 341
             157           31A-23b-206 , as enacted by Laws of Utah 2013, Chapter 341
             158      Utah Code Sections Affected by Revisor Instructions:
             159           31A-22-305 , as last amended by Laws of Utah 2013, Chapter 460
             160           31A-22-305.3 , as last amended by Laws of Utah 2013, Chapter 460
             161     
             162      Be it enacted by the Legislature of the state of Utah:
             163          Section 1. Section 31A-1-301 is amended to read:
             164           31A-1-301. Definitions.
             165          As used in this title, unless otherwise specified:
             166          (1) (a) "Accident and health insurance" means insurance to provide protection against
             167      economic losses resulting from:
             168          (i) a medical condition including:
             169          (A) a medical care expense; or
             170          (B) the risk of disability;
             171          (ii) accident; or
             172          (iii) sickness.
             173          (b) "Accident and health insurance":
             174          (i) includes a contract with disability contingencies including:
             175          (A) an income replacement contract;
             176          (B) a health care contract;
             177          (C) an expense reimbursement contract;
             178          (D) a credit accident and health contract;
             179          (E) a continuing care contract; and
             180          (F) a long-term care contract; and


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


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


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


             274          (II) a group member.
             275          (22) "Casualty insurance" means liability insurance.
             276          (23) "Certificate" means evidence of insurance given to:
             277          (a) an insured under a group insurance policy; or
             278          (b) a third party.
             279          (24) "Certificate of authority" is included within the term "license."
             280          (25) "Claim," unless the context otherwise requires, means a request or demand on an
             281      insurer for payment of a benefit according to the terms of an insurance policy.
             282          (26) "Claims-made coverage" means an insurance contract or provision limiting
             283      coverage under a policy insuring against legal liability to claims that are first made against the
             284      insured while the policy is in force.
             285          (27) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
             286      commissioner.
             287          (b) When appropriate, the terms listed in Subsection (27)(a) apply to the equivalent
             288      supervisory official of another jurisdiction.
             289          (28) (a) "Continuing care insurance" means insurance that:
             290          (i) provides board and lodging;
             291          (ii) provides one or more of the following:
             292          (A) a personal service;
             293          (B) a nursing service;
             294          (C) a medical service; or
             295          (D) any other health-related service; and
             296          (iii) provides the coverage described in this Subsection (28)(a) under an agreement
             297      effective:
             298          (A) for the life of the insured; or
             299          (B) for a period in excess of one year.
             300          (b) Insurance is continuing care insurance regardless of whether or not the board and
             301      lodging are provided at the same location as a service described in Subsection (28)(a)(ii).
             302          (29) (a) "Control," "controlling," "controlled," or "under common control" means the
             303      direct or indirect possession of the power to direct or cause the direction of the management
             304      and policies of a person. This control may be:


             305          (i) by contract;
             306          (ii) by common management;
             307          (iii) through the ownership of voting securities; or
             308          (iv) by a means other than those described in Subsections (29)(a)(i) through (iii).
             309          (b) There is no presumption that an individual holding an official position with another
             310      person controls that person solely by reason of the position.
             311          (c) A person having a contract or arrangement giving control is considered to have
             312      control despite the illegality or invalidity of the contract or arrangement.
             313          (d) There is a rebuttable presumption of control in a person who directly or indirectly
             314      owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
             315      voting securities of another person.
             316          (30) "Controlled insurer" means a licensed insurer that is either directly or indirectly
             317      controlled by a producer.
             318          (31) "Controlling person" means a person that directly or indirectly has the power to
             319      direct or cause to be directed, the management, control, or activities of a reinsurance
             320      intermediary.
             321          (32) "Controlling producer" means a producer who directly or indirectly controls an
             322      insurer.
             323          (33) (a) "Corporation" means an insurance corporation, except when referring to:
             324          (i) a corporation doing business:
             325          (A) as:
             326          (I) an insurance producer;
             327          (II) a surplus lines producer;
             328          (III) a limited line producer;
             329          (IV) a consultant;
             330          (V) a managing general agent;
             331          (VI) a reinsurance intermediary;
             332          (VII) a third party administrator; or
             333          (VIII) an adjuster; and
             334          (B) under:
             335          (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and


             336      Reinsurance Intermediaries;
             337          (II) Chapter 25, Third Party Administrators; or
             338          (III) Chapter 26, Insurance Adjusters; or
             339          (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
             340      Holding Companies.
             341          (b) "Stock corporation" means a stock insurance corporation.
             342          (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
             343          (34) (a) "Creditable coverage" has the same meaning as provided in federal regulations
             344      adopted pursuant to the Health Insurance Portability and Accountability Act.
             345          (b) "Creditable coverage" includes coverage that is offered through a public health plan
             346      such as:
             347          (i) the Primary Care Network Program under a Medicaid primary care network
             348      demonstration waiver obtained subject to Section 26-18-3 ;
             349          (ii) the Children's Health Insurance Program under Section 26-40-106 ; or
             350          (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
             351      101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. 109-415.
             352          (35) "Credit accident and health insurance" means insurance on a debtor to provide
             353      indemnity for payments coming due on a specific loan or other credit transaction while the
             354      debtor has a disability.
             355          (36) (a) "Credit insurance" means insurance offered in connection with an extension of
             356      credit that is limited to partially or wholly extinguishing that credit obligation.
             357          (b) "Credit insurance" includes:
             358          (i) credit accident and health insurance;
             359          (ii) credit life insurance;
             360          (iii) credit property insurance;
             361          (iv) credit unemployment insurance;
             362          (v) guaranteed automobile protection insurance;
             363          (vi) involuntary unemployment insurance;
             364          (vii) mortgage accident and health insurance;
             365          (viii) mortgage guaranty insurance; and
             366          (ix) mortgage life insurance.


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


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


             429          (iii) transferring;
             430          (iv) bathing; or
             431          (v) dressing.
             432          (49) "Disability income insurance" is defined in Subsection (79).
             433          (50) "Domestic insurer" means an insurer organized under the laws of this state.
             434          (51) "Domiciliary state" means the state in which an insurer:
             435          (a) is incorporated;
             436          (b) is organized; or
             437          (c) in the case of an alien insurer, enters into the United States.
             438          (52) (a) "Eligible employee" means:
             439          (i) an employee who:
             440          (A) works on a full-time basis; and
             441          (B) has a normal work week of 30 or more hours; or
             442          (ii) a person described in Subsection (52)(b).
             443          (b) "Eligible employee" includes, if the individual is included under a health benefit
             444      plan of a small employer:
             445          (i) a sole proprietor;
             446          (ii) a partner in a partnership; or
             447          (iii) an independent contractor.
             448          (c) "Eligible employee" does not include, unless eligible under Subsection (52)(b):
             449          (i) an individual who works on a temporary or substitute basis for a small employer;
             450          (ii) an employer's spouse; or
             451          (iii) a dependent of an employer.
             452          (53) "Employee" means an individual employed by an employer.
             453          (54) "Employee benefits" means one or more benefits or services provided to:
             454          (a) an employee; or
             455          (b) a dependent of an employee.
             456          (55) (a) "Employee welfare fund" means a fund:
             457          (i) established or maintained, whether directly or through a trustee, by:
             458          (A) one or more employers;
             459          (B) one or more labor organizations; or


             460          (C) a combination of employers and labor organizations; and
             461          (ii) that provides employee benefits paid or contracted to be paid, other than income
             462      from investments of the fund:
             463          (A) by or on behalf of an employer doing business in this state; or
             464          (B) for the benefit of a person employed in this state.
             465          (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
             466      revenues.
             467          (56) "Endorsement" means a written agreement attached to a policy or certificate to
             468      modify the policy or certificate coverage.
             469          (57) "Enrollment date," with respect to a health benefit plan, means:
             470          (a) the first day of coverage; or
             471          (b) if there is a waiting period, the first day of the waiting period.
             472          (58) (a) "Escrow" means:
             473          (i) a transaction that effects the sale, transfer, encumbering, or leasing of real property,
             474      when a person not a party to the transaction, and neither having nor acquiring an interest in the
             475      title, performs, in accordance with the written instructions or terms of the written agreement
             476      between the parties to the transaction, any of the following actions:
             477          (A) the explanation, holding, or creation of a document; or
             478          (B) the receipt, deposit, and disbursement of money;
             479          (ii) a settlement or closing involving:
             480          (A) a mobile home;
             481          (B) a grazing right;
             482          (C) a water right; or
             483          (D) other personal property authorized by the commissioner.
             484          (b) "Escrow" does not include:
             485          (i) the following notarial acts performed by a notary within the state:
             486          (A) an acknowledgment;
             487          (B) a copy certification;
             488          (C) jurat; and
             489          (D) an oath or affirmation;
             490          (ii) the receipt or delivery of a document; or


             491          (iii) the receipt of money for delivery to the escrow agent.
             492          (59) "Escrow agent" means an agency title insurance producer meeting the
             493      requirements of Sections 31A-4-107 , 31A-14-211 , and 31A-23a-204 , who is acting through an
             494      individual title insurance producer licensed with an escrow subline of authority.
             495          (60) (a) "Excludes" is not exhaustive and does not mean that another thing is not also
             496      excluded.
             497          (b) The items listed in a list using the term "excludes" are representative examples for
             498      use in interpretation of this title.
             499          (61) "Exclusion" means for the purposes of accident and health insurance that an
             500      insurer does not provide insurance coverage, for whatever reason, for one of the following:
             501          (a) a specific physical condition;
             502          (b) a specific medical procedure;
             503          (c) a specific disease or disorder; or
             504          (d) a specific prescription drug or class of prescription drugs.
             505          (62) "Expense reimbursement insurance" means insurance:
             506          (a) written to provide a payment for an expense relating to hospital confinement
             507      resulting from illness or injury; and
             508          (b) written:
             509          (i) as a daily limit for a specific number of days in a hospital; and
             510          (ii) to have a one or two day waiting period following a hospitalization.
             511          (63) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding
             512      a position of public or private trust.
             513          (64) (a) "Filed" means that a filing is:
             514          (i) submitted to the department as required by and in accordance with applicable
             515      statute, rule, or filing order;
             516          (ii) received by the department within the time period provided in applicable statute,
             517      rule, or filing order; and
             518          (iii) accompanied by the appropriate fee in accordance with:
             519          (A) Section 31A-3-103 ; or
             520          (B) rule.
             521          (b) "Filed" does not include a filing that is rejected by the department because it is not


             522      submitted in accordance with Subsection (64)(a).
             523          (65) "Filing," when used as a noun, means an item required to be filed with the
             524      department including:
             525          (a) a policy;
             526          (b) a rate;
             527          (c) a form;
             528          (d) a document;
             529          (e) a plan;
             530          (f) a manual;
             531          (g) an application;
             532          (h) a report;
             533          (i) a certificate;
             534          (j) an endorsement;
             535          (k) an actuarial certification;
             536          (l) a licensee annual statement;
             537          (m) a licensee renewal application;
             538          (n) an advertisement; or
             539          (o) an outline of coverage.
             540          (66) "First party insurance" means an insurance policy or contract in which the insurer
             541      agrees to pay a claim submitted to it by the insured for the insured's losses.
             542          (67) "Foreign insurer" means an insurer domiciled outside of this state, including an
             543      alien insurer.
             544          (68) (a) "Form" means one of the following prepared for general use:
             545          (i) a policy;
             546          (ii) a certificate;
             547          (iii) an application;
             548          (iv) an outline of coverage; or
             549          (v) an endorsement.
             550          (b) "Form" does not include a document specially prepared for use in an individual
             551      case.
             552          (69) "Franchise insurance" means an individual insurance policy provided through a


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


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


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


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


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


             708          (91) (a) "Insurance producer" or "producer" means a person licensed or required to be
             709      licensed under the laws of this state to sell, solicit, or negotiate insurance.
             710          (b) (i) "Producer for the insurer" means a producer who is compensated directly or
             711      indirectly by an insurer for selling, soliciting, or negotiating an insurance product of that
             712      insurer.
             713          (ii) "Producer for the insurer" may be referred to as an "agent."
             714          (c) (i) "Producer for the insured" means a producer who:
             715          (A) is compensated directly and only by an insurance customer or an insured; and
             716          (B) receives no compensation directly or indirectly from an insurer for selling,
             717      soliciting, or negotiating an insurance product of that insurer to an insurance customer or
             718      insured.
             719          (ii) "Producer for the insured" may be referred to as a "broker."
             720          (92) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
             721      promise in an insurance policy and includes:
             722          (i) a policyholder;
             723          (ii) a subscriber;
             724          (iii) a member; and
             725          (iv) a beneficiary.
             726          (b) The definition in Subsection (92)(a):
             727          (i) applies only to this title; and
             728          (ii) does not define the meaning of this word as used in an insurance policy or
             729      certificate.
             730          (93) (a) "Insurer" means a person doing an insurance business as a principal including:
             731          (i) a fraternal benefit society;
             732          (ii) an issuer of a gift annuity other than an annuity specified in Subsections
             733      31A-22-1305 (2) and (3);
             734          (iii) a motor club;
             735          (iv) an employee welfare plan; and
             736          (v) a person purporting or intending to do an insurance business as a principal on that
             737      person's own account.
             738          (b) "Insurer" does not include a governmental entity to the extent the governmental


             739      entity is engaged in an activity described in Section 31A-12-107 .
             740          (94) "Interinsurance exchange" is defined in Subsection [(146)] (147).
             741          (95) "Involuntary unemployment insurance" means insurance:
             742          (a) offered in connection with an extension of credit; and
             743          (b) that provides indemnity if the debtor is involuntarily unemployed for payments
             744      coming due on a:
             745          (i) specific loan; or
             746          (ii) credit transaction.
             747          (96) "Large employer," in connection with a health benefit plan, means an employer
             748      who, with respect to a calendar year and to a plan year:
             749          (a) employed an average of at least 51 eligible employees on each business day during
             750      the preceding calendar year; and
             751          (b) employs at least two employees on the first day of the plan year.
             752          (97) "Late enrollee," with respect to an employer health benefit plan, means an
             753      individual whose enrollment is a late enrollment.
             754          (98) "Late enrollment," with respect to an employer health benefit plan, means
             755      enrollment of an individual other than:
             756          (a) on the earliest date on which coverage can become effective for the individual
             757      under the terms of the plan; or
             758          (b) through special enrollment.
             759          (99) (a) Except for a retainer contract or legal assistance described in Section
             760      31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
             761      specified legal expense.
             762          (b) "Legal expense insurance" includes an arrangement that creates a reasonable
             763      expectation of an enforceable right.
             764          (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
             765      legal services incidental to other insurance coverage.
             766          (100) (a) "Liability insurance" means insurance against liability:
             767          (i) for death, injury, or disability of a human being, or for damage to property,
             768      exclusive of the coverages under:
             769          (A) Subsection (110) for medical malpractice insurance;


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


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


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


             863          (D) a prepaid health plan;
             864          (E) a health maintenance organization; or
             865          (F) an entity similar to the entities described in Subsections (109)(a)(iv)(A) through (E)
             866      to the extent that the entity is otherwise authorized to issue life or health care insurance.
             867          (b) "Long-term care insurance" includes:
             868          (i) any of the following that provide directly or supplement long-term care insurance:
             869          (A) a group or individual annuity or rider; or
             870          (B) a life insurance policy or rider;
             871          (ii) a policy or rider that provides for payment of benefits on the basis of:
             872          (A) cognitive impairment; or
             873          (B) functional capacity; or
             874          (iii) a qualified long-term care insurance contract.
             875          (c) "Long-term care insurance" does not include:
             876          (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
             877          (ii) basic hospital expense coverage;
             878          (iii) basic medical/surgical expense coverage;
             879          (iv) hospital confinement indemnity coverage;
             880          (v) major medical expense coverage;
             881          (vi) income replacement or related asset-protection coverage;
             882          (vii) accident only coverage;
             883          (viii) coverage for a specified:
             884          (A) disease; or
             885          (B) accident;
             886          (ix) limited benefit health coverage; or
             887          (x) a life insurance policy that accelerates the death benefit to provide the option of a
             888      lump sum payment:
             889          (A) if the following are not conditioned on the receipt of long-term care:
             890          (I) benefits; or
             891          (II) eligibility; and
             892          (B) the coverage is for one or more the following qualifying events:
             893          (I) terminal illness;


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


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


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


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


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


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


             1080          (iii) a joint underwriting group; or
             1081          (iv) an individual serving as an actuarial or legal consultant.
             1082          (144) "Rating manual" means any of the following used to determine initial and
             1083      renewal policy premiums:
             1084          (a) a manual of rates;
             1085          (b) a classification;
             1086          (c) a rate-related underwriting rule; and
             1087          (d) a rating formula that describes steps, policies, and procedures for determining
             1088      initial and renewal policy premiums.
             1089          (145) (a) "Rebate" means a licensee paying, allowing, giving, or offering to pay, allow,
             1090      or give, directly or indirectly:
             1091          (i) a refund of premium or portion of premium;
             1092          (ii) a refund of commission or portion of commission;
             1093          (iii) a refund of all or a portion of a consultant fee; or
             1094          (iv) providing services or other benefits not specified in an insurance or annuity
             1095      contract.
             1096          (b) "Rebate" does not include:
             1097          (i) a refund due to termination or changes in coverage;
             1098          (ii) a refund due to overcharges made in error by the licensee; or
             1099          (iii) savings or wellness benefits as provided in the contract by the licensee.
             1100          [(145)] (146) "Received by the department" means:
             1101          (a) the date delivered to and stamped received by the department, if delivered in
             1102      person;
             1103          (b) the post mark date, if delivered by mail;
             1104          (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
             1105          (d) the received date recorded on an item delivered, if delivered by:
             1106          (i) facsimile;
             1107          (ii) email; or
             1108          (iii) another electronic method; or
             1109          (e) a date specified in:
             1110          (i) a statute;


             1111          (ii) a rule; or
             1112          (iii) an order.
             1113          [(146)] (147) "Reciprocal" or "interinsurance exchange" means an unincorporated
             1114      association of persons:
             1115          (a) operating through an attorney-in-fact common to all of the persons; and
             1116          (b) exchanging insurance contracts with one another that provide insurance coverage
             1117      on each other.
             1118          [(147)] (148) "Reinsurance" means an insurance transaction where an insurer, for
             1119      consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
             1120      reinsurance transactions, this title sometimes refers to:
             1121          (a) the insurer transferring the risk as the "ceding insurer"; and
             1122          (b) the insurer assuming the risk as the:
             1123          (i) "assuming insurer"; or
             1124          (ii) "assuming reinsurer."
             1125          [(148)] (149) "Reinsurer" means a person licensed in this state as an insurer with the
             1126      authority to assume reinsurance.
             1127          [(149)] (150) "Residential dwelling liability insurance" means insurance against
             1128      liability resulting from or incident to the ownership, maintenance, or use of a residential
             1129      dwelling that is a detached single family residence or multifamily residence up to four units.
             1130          [(150)] (151) (a) "Retrocession" means reinsurance with another insurer of a liability
             1131      assumed under a reinsurance contract.
             1132          (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
             1133      liability assumed under a reinsurance contract.
             1134          [(151)] (152) "Rider" means an endorsement to:
             1135          (a) an insurance policy; or
             1136          (b) an insurance certificate.
             1137          [(152)] (153) (a) "Security" means a:
             1138          (i) note;
             1139          (ii) stock;
             1140          (iii) bond;
             1141          (iv) debenture;


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


             1173          (ii) an arrangement by which a person with a managed program of self-insurance and
             1174      risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
             1175      employees for liability or risk that is related to the relationship or employment.
             1176          (d) "Self-insurance" does not include an arrangement with an independent contractor.
             1177          [(155)] (156) "Sell" means to exchange a contract of insurance:
             1178          (a) by any means;
             1179          (b) for money or its equivalent; and
             1180          (c) on behalf of an insurance company.
             1181          [(156)] (157) "Short-term care insurance" means an insurance policy or rider
             1182      advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
             1183      insurance, but that provides coverage for less than 12 consecutive months for each covered
             1184      person.
             1185          [(157)] (158) "Significant break in coverage" means a period of 63 consecutive days
             1186      during each of which an individual does not have creditable coverage.
             1187          [(158)] (159) "Small employer[,]" means, in connection with a health benefit plan[,
             1188      means an employer who,] and with respect to a calendar year and to a plan year, an employer
             1189      who:
             1190          (a) employed [an average of] at least [two employees] one employee but not more than
             1191      an average of 50 eligible employees on [each] business [day] days during the preceding
             1192      calendar year; and
             1193          (b) employs at least [two employees] one employee on the first day of the plan year.
             1194          [(159)] (160) "Special enrollment period," in connection with a health benefit plan, has
             1195      the same meaning as provided in federal regulations adopted pursuant to the Health Insurance
             1196      Portability and Accountability Act.
             1197          [(160)] (161) (a) "Subsidiary" of a person means an affiliate controlled by that person
             1198      either directly or indirectly through one or more affiliates or intermediaries.
             1199          (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
             1200      shares are owned by that person either alone or with its affiliates, except for the minimum
             1201      number of shares the law of the subsidiary's domicile requires to be owned by directors or
             1202      others.
             1203          [(161)] (162) Subject to Subsection (86)(b), "surety insurance" includes:


             1204          (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
             1205      perform the principal's obligations to a creditor or other obligee;
             1206          (b) bail bond insurance; and
             1207          (c) fidelity insurance.
             1208          [(162)] (163) (a) "Surplus" means the excess of assets over the sum of paid-in capital
             1209      and liabilities.
             1210          (b) (i) "Permanent surplus" means the surplus of an insurer or organization that is
             1211      designated by the insurer or organization as permanent.
             1212          (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-205 require
             1213      that insurers or organizations doing business in this state maintain specified minimum levels of
             1214      permanent surplus.
             1215          (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
             1216      same as the minimum required capital requirement that applies to stock insurers.
             1217          (c) "Excess surplus" means:
             1218          (i) for a life insurer, accident and health insurer, health organization, or property and
             1219      casualty insurer as defined in Section 31A-17-601 , the lesser of:
             1220          (A) that amount of an insurer's or health organization's total adjusted capital that
             1221      exceeds the product of:
             1222          (I) 2.5; and
             1223          (II) the sum of the insurer's or health organization's minimum capital or permanent
             1224      surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
             1225          (B) that amount of an insurer's or health organization's total adjusted capital that
             1226      exceeds the product of:
             1227          (I) 3.0; and
             1228          (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
             1229          (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
             1230      that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
             1231          (A) 1.5; and
             1232          (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
             1233          [(163)] (164) "Third party administrator" or "administrator" means a person who
             1234      collects charges or premiums from, or who, for consideration, adjusts or settles claims of


             1235      residents of the state in connection with insurance coverage, annuities, or service insurance
             1236      coverage, except:
             1237          (a) a union on behalf of its members;
             1238          (b) a person administering a:
             1239          (i) pension plan subject to the federal Employee Retirement Income Security Act of
             1240      1974;
             1241          (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
             1242          (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
             1243          (c) an employer on behalf of the employer's employees or the employees of one or
             1244      more of the subsidiary or affiliated corporations of the employer;
             1245          (d) an insurer licensed under the following, but only for a line of insurance for which
             1246      the insurer holds a license in this state:
             1247          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             1248          (ii) Chapter 7, Nonprofit Health Service Insurance Corporations;
             1249          (iii) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1250          (iv) Chapter 9, Insurance Fraternals; or
             1251          (v) Chapter 14, Foreign Insurers;
             1252          (e) a person:
             1253          (i) licensed or exempt from licensing under:
             1254          (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             1255      Reinsurance Intermediaries; or
             1256          (B) Chapter 26, Insurance Adjusters; and
             1257          (ii) whose activities are limited to those authorized under the license the person holds
             1258      or for which the person is exempt; or
             1259          (f) an institution, bank, or financial institution:
             1260          (i) that is:
             1261          (A) an institution whose deposits and accounts are to any extent insured by a federal
             1262      deposit insurance agency, including the Federal Deposit Insurance Corporation or National
             1263      Credit Union Administration; or
             1264          (B) a bank or other financial institution that is subject to supervision or examination by
             1265      a federal or state banking authority; and


             1266          (ii) that does not adjust claims without a third party administrator license.
             1267          [(164)] (165) "Title insurance" means the insuring, guaranteeing, or indemnifying of an
             1268      owner of real or personal property or the holder of liens or encumbrances on that property, or
             1269      others interested in the property against loss or damage suffered by reason of liens or
             1270      encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity
             1271      or unenforceability of any liens or encumbrances on the property.
             1272          [(165)] (166) "Total adjusted capital" means the sum of an insurer's or health
             1273      organization's statutory capital and surplus as determined in accordance with:
             1274          (a) the statutory accounting applicable to the annual financial statements required to be
             1275      filed under Section 31A-4-113 ; and
             1276          (b) another item provided by the RBC instructions, as RBC instructions is defined in
             1277      Section 31A-17-601 .
             1278          [(166)] (167) (a) "Trustee" means "director" when referring to the board of directors of
             1279      a corporation.
             1280          (b) "Trustee," when used in reference to an employee welfare fund, means an
             1281      individual, firm, association, organization, joint stock company, or corporation, whether acting
             1282      individually or jointly and whether designated by that name or any other, that is charged with
             1283      or has the overall management of an employee welfare fund.
             1284          [(167)] (168) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted
             1285      insurer" means an insurer:
             1286          (i) not holding a valid certificate of authority to do an insurance business in this state;
             1287      or
             1288          (ii) transacting business not authorized by a valid certificate.
             1289          (b) "Admitted insurer" or "authorized insurer" means an insurer:
             1290          (i) holding a valid certificate of authority to do an insurance business in this state; and
             1291          (ii) transacting business as authorized by a valid certificate.
             1292          [(168)] (169) "Underwrite" means the authority to accept or reject risk on behalf of the
             1293      insurer.
             1294          [(169)] (170) "Vehicle liability insurance" means insurance against liability resulting
             1295      from or incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a
             1296      vehicle comprehensive or vehicle physical damage coverage under Subsection (139).


             1297          [(170)] (171) "Voting security" means a security with voting rights, and includes a
             1298      security convertible into a security with a voting right associated with the security.
             1299          [(171)] (172) "Waiting period" for a health benefit plan means the period that must
             1300      pass before coverage for an individual, who is otherwise eligible to enroll under the terms of
             1301      the health benefit plan, can become effective.
             1302          [(172)] (173) "Workers' compensation insurance" means:
             1303          (a) insurance for indemnification of an employer against liability for compensation
             1304      based on:
             1305          (i) a compensable accidental injury; and
             1306          (ii) occupational disease disability;
             1307          (b) employer's liability insurance incidental to workers' compensation insurance and
             1308      written in connection with workers' compensation insurance; and
             1309          (c) insurance assuring to a person entitled to workers' compensation benefits the
             1310      compensation provided by law.
             1311          Section 2. Section 31A-2-104 is amended to read:
             1312           31A-2-104. Other employees -- Insurance fraud investigators.
             1313          (1) The department shall employ a chief examiner and such other professional,
             1314      technical, and clerical employees as necessary to carry out the duties of the department.
             1315          (2) An insurance fraud investigator employed pursuant to Subsection (1) may as
             1316      approved by the commissioner:
             1317          (a) be designated a [special function] law enforcement officer, as defined in Section
             1318      [53-13-105 , by the commissioner, but is not] 53-13-103 ; and
             1319          (b) be eligible for retirement benefits under the Public Safety Employee's Retirement
             1320      System.
             1321          Section 3. Section 31A-3-304 (Superseded 07/01/15) is amended to read:
             1322           31A-3-304 (Superseded 07/01/15). Annual fees -- Other taxes or fees prohibited --
             1323      Captive Insurance Restricted Account.
             1324          (1) (a) A captive insurance company shall pay an annual fee imposed under this section
             1325      to obtain or renew a certificate of authority.
             1326          (b) The commissioner shall:
             1327          (i) determine the annual fee pursuant to Section 31A-3-103 ; and


             1328          (ii) consider whether the annual fee is competitive with fees imposed by other states on
             1329      captive insurance companies.
             1330          (2) A captive insurance company that fails to pay the fee required by this section is
             1331      subject to the relevant sanctions of this title.
             1332          (3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter
             1333      9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
             1334      the laws of this state that may be levied or assessed on a captive insurance company:
             1335          (i) a fee under this section;
             1336          (ii) a fee under Chapter 37, Captive Insurance Companies Act; and
             1337          (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
             1338      Act.
             1339          (b) The state or a county, city, or town within the state may not levy or collect an
             1340      occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
             1341      against a captive insurance company.
             1342          (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
             1343      against a captive insurance company.
             1344          (d) A captive insurance company is subject to real and personal property taxes.
             1345          (4) A captive insurance company shall pay the fee imposed by this section to the
             1346      commissioner by June [20] 1 of each year.
             1347          (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
             1348      deposited into the Captive Insurance Restricted Account.
             1349          (b) There is created in the General Fund a restricted account known as the "Captive
             1350      Insurance Restricted Account."
             1351          (c) The Captive Insurance Restricted Account shall consist of the fees described in
             1352      Subsection (3)(a).
             1353          (d) The commissioner shall administer the Captive Insurance Restricted Account.
             1354      Subject to appropriations by the Legislature, the commissioner shall use the money deposited
             1355      into the Captive Insurance Restricted Account to:
             1356          (i) administer and enforce:
             1357          (A) Chapter 37, Captive Insurance Companies Act; and
             1358          (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and


             1359          (ii) promote the captive insurance industry in Utah.
             1360          (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
             1361      except that at the end of each fiscal year, money received by the commissioner in excess of
             1362      $950,000 shall be treated as free revenue in the General Fund.
             1363          Section 4. Section 31A-3-304 (Effective 07/01/15) is amended to read:
             1364           31A-3-304 (Effective 07/01/15). Annual fees -- Other taxes or fees prohibited --
             1365      Captive Insurance Restricted Account.
             1366          (1) (a) A captive insurance company shall pay an annual fee imposed under this section
             1367      to obtain or renew a certificate of authority.
             1368          (b) The commissioner shall:
             1369          (i) determine the annual fee pursuant to Section 31A-3-103 ; and
             1370          (ii) consider whether the annual fee is competitive with fees imposed by other states on
             1371      captive insurance companies.
             1372          (2) A captive insurance company that fails to pay the fee required by this section is
             1373      subject to the relevant sanctions of this title.
             1374          (3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter
             1375      9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
             1376      the laws of this state that may be levied or assessed on a captive insurance company:
             1377          (i) a fee under this section;
             1378          (ii) a fee under Chapter 37, Captive Insurance Companies Act; and
             1379          (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
             1380      Act.
             1381          (b) The state or a county, city, or town within the state may not levy or collect an
             1382      occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
             1383      against a captive insurance company.
             1384          (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
             1385      against a captive insurance company.
             1386          (d) A captive insurance company is subject to real and personal property taxes.
             1387          (4) A captive insurance company shall pay the fee imposed by this section to the
             1388      commissioner by June [20] 1 of each year.
             1389          (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be


             1390      deposited into the Captive Insurance Restricted Account.
             1391          (b) There is created in the General Fund a restricted account known as the "Captive
             1392      Insurance Restricted Account."
             1393          (c) The Captive Insurance Restricted Account shall consist of the fees described in
             1394      Subsection (3)(a).
             1395          (d) The commissioner shall administer the Captive Insurance Restricted Account.
             1396      Subject to appropriations by the Legislature, the commissioner shall use the money deposited
             1397      into the Captive Insurance Restricted Account to:
             1398          (i) administer and enforce:
             1399          (A) Chapter 37, Captive Insurance Companies Act; and
             1400          (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
             1401          (ii) promote the captive insurance industry in Utah.
             1402          (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
             1403      except that at the end of each fiscal year, money received by the commissioner in excess of
             1404      $1,250,000 shall be treated as free revenue in the General Fund.
             1405          Section 5. Section 31A-4-102 is amended to read:
             1406           31A-4-102. Qualified insurers.
             1407          (1) A person may not conduct an insurance business in Utah in person, through an
             1408      agent, through a broker, through the mail, or through another method of communication,
             1409      except:
             1410          (a) an insurer:
             1411          (i) authorized to do business in Utah under [Chapter 5, 7, 8, 9, 10, 11, 13, or 14; and]:
             1412          (A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             1413          (B) Chapter 7, Nonprofit Health Service Insurance Corporations;
             1414          (C) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1415          (D) Chapter 9, Insurance Fraternals;
             1416          (E) Chapter 10, Annuities;
             1417          (F) Chapter 11, Motor Clubs;
             1418          (G) Chapter 13, Employee Welfare Funds and Plans;
             1419          (H) Chapter 14, Foreign Insurers;
             1420          (I) Chapter 37, Captive Insurance Companies Act; or


             1421          (J) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
             1422          (ii) within the limits of its certificate of authority;
             1423          (b) a joint underwriting group under Section 31A-2-214 or 31A-20-102 ;
             1424          (c) an insurer doing business under Section 31A-15-103 ;
             1425          (d) a person who submits to the commissioner a certificate from the United States
             1426      Department of Labor, or such other evidence as satisfies the commissioner, that the laws of
             1427      Utah are preempted with respect to specified activities of that person by Section 514 of the
             1428      Employee Retirement Income Security Act of 1974 or other federal law; or
             1429          (e) a person exempt from this title under Section 31A-1-103 or another applicable
             1430      statute.
             1431          (2) As used in this section, "insurer" includes a bail bond surety company, as defined in
             1432      Section 31A-35-102 .
             1433          Section 6. Section 31A-4-115 is amended to read:
             1434           31A-4-115. Plan of orderly withdrawal.
             1435          (1) (a) When an insurer intends to withdraw from writing a line of insurance in this
             1436      state or to reduce its total annual premium volume by 75% or more, the insurer shall file with
             1437      the commissioner a plan of orderly withdrawal.
             1438          (b) For purposes of this section, a discontinuance of a health benefit plan pursuant to
             1439      one of the following provisions is a withdrawal from a line of insurance:
             1440          (i) Subsection 31A-30-107 (3)(e); or
             1441          (ii) Subsection 31A-30-107.1 (3)(e).
             1442          (2) An insurer's plan of orderly withdrawal shall:
             1443          (a) indicate the date the insurer intends to begin and complete its withdrawal plan; and
             1444          (b) include provisions for:
             1445          (i) meeting the insurer's contractual obligations;
             1446          (ii) providing services to its Utah policyholders and claimants;
             1447          (iii) meeting [any] applicable statutory obligations; and
             1448          (iv) [(A)] the payment of a withdrawal fee of $50,000 to the [Utah Comprehensive
             1449      Health Insurance Pool if: (I) the insurer is an accident and health insurer; and (II) the insurer's
             1450      line of business is not assumed or placed with another insurer approved by the commissioner;
             1451      or (B) the payment of a withdrawal fee of $50,000 to the department if: (I) the insurer is not


             1452      an accident and health insurer; and (II)] department if the insurer's line of business is not
             1453      assumed or placed with another insurer approved by the commissioner.
             1454          (3) The commissioner shall approve a plan of orderly withdrawal if the plan of orderly
             1455      withdrawal adequately demonstrates that the insurer will:
             1456          (a) protect the interests of the people of the state;
             1457          (b) meet the insurer's contractual obligations;
             1458          (c) provide service to the insurer's Utah policyholders and claimants; and
             1459          (d) meet [any] applicable statutory obligations.
             1460          (4) Section 31A-2-302 governs the commissioner's approval or disapproval of a plan for
             1461      orderly withdrawal.
             1462          (5) The commissioner may require an insurer to increase the deposit maintained in
             1463      accordance with Section 31A-4-105 or Section 31A-4-105.5 and place the deposit in trust in
             1464      the name of the commissioner upon finding, after an adjudicative proceeding that:
             1465          (a) there is reasonable cause to conclude that the interests of the people of the state are
             1466      best served by such action; and
             1467          (b) the insurer:
             1468          (i) has filed a plan of orderly withdrawal; or
             1469          (ii) intends to:
             1470          (A) withdraw from writing a line of insurance in this state; or
             1471          (B) reduce the insurer's total annual premium volume by 75% or more.
             1472          (6) An insurer is subject to the civil penalties under Section 31A-2-308 , if the insurer:
             1473          (a) withdraws from writing insurance in this state without receiving the commissioner's
             1474      approval of a plan of orderly withdrawal; or
             1475          (b) reduces its total annual premium volume by 75% or more in any year without
             1476      [having submitted a plan or receiving the commissioner's approval] receiving the
             1477      commissioner's approval of a plan of orderly withdrawal.
             1478          (7) An insurer that withdraws from writing all lines of insurance in this state may not
             1479      resume writing insurance in this state for five years unless[: (a)] the commissioner finds that
             1480      the prohibition should be waived because the waiver is:
             1481          [(i)] (a) in the public interest to promote competition; or
             1482          [(ii)] (b) to resolve inequity in the marketplace[; and].


             1483          [(b) the insurer complies with Subsection 31A-30-108 (5), if applicable.]
             1484          (8) The commissioner shall adopt rules necessary to implement this section.
             1485          Section 7. Section 31A-8-402.3 is amended to read:
             1486           31A-8-402.3. Discontinuance, nonrenewal, or changes to group health benefit
             1487      plans.
             1488          (1) Except as otherwise provided in this section, a group health benefit plan for a plan
             1489      sponsor is renewable and continues in force:
             1490          (a) with respect to all eligible employees and dependents; and
             1491          (b) at the option of the plan sponsor.
             1492          (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
             1493          (a) for a network plan, if[: (i)] there is no longer any enrollee under the group health
             1494      plan who lives, resides, or works in:
             1495          [(A)] (i) the service area of the insurer; or
             1496          [(B)] (ii) the area for which the insurer is authorized to do business; [and] or
             1497          [(ii) in the case of the small employer market, the insurer applies the same criteria the
             1498      insurer would apply in denying enrollment in the plan under Subsection 31A-30-108 (7); or]
             1499          (b) for coverage made available in the small or large employer market only through an
             1500      association, if:
             1501          (i) the employer's membership in the association ceases; and
             1502          (ii) the coverage is terminated uniformly without regard to any health status-related
             1503      factor relating to any covered individual.
             1504          (3) A health benefit plan for a plan sponsor may be discontinued if:
             1505          (a) a condition described in Subsection (2) exists;
             1506          (b) the plan sponsor fails to pay premiums or contributions in accordance with the
             1507      terms of the contract;
             1508          (c) the plan sponsor:
             1509          (i) performs an act or practice that constitutes fraud; or
             1510          (ii) makes an intentional misrepresentation of material fact under the terms of the
             1511      coverage;
             1512          (d) the insurer:
             1513          (i) elects to discontinue offering a particular health benefit product delivered or issued


             1514      for delivery in this state; and
             1515          (ii) (A) provides notice of the discontinuation in writing:
             1516          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             1517          (II) at least 90 days before the date the coverage will be discontinued;
             1518          (B) provides notice of the discontinuation in writing:
             1519          (I) to the commissioner; and
             1520          (II) at least three working days prior to the date the notice is sent to the affected plan
             1521      sponsors, employees, and dependents of the plan sponsors or employees;
             1522          (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase:
             1523          (I) all other health benefit products currently being offered by the insurer in the market;
             1524      or
             1525          (II) in the case of a large employer, any other health benefit product currently being
             1526      offered in that market; and
             1527          (D) in exercising the option to discontinue that product and in offering the option of
             1528      coverage in this section, acts uniformly without regard to:
             1529          (I) the claims experience of a plan sponsor;
             1530          (II) any health status-related factor relating to any covered participant or beneficiary; or
             1531          (III) any health status-related factor relating to any new participant or beneficiary who
             1532      may become eligible for the coverage; or
             1533          (e) the insurer:
             1534          (i) elects to discontinue all of the insurer's health benefit plans in:
             1535          (A) the small employer market;
             1536          (B) the large employer market; or
             1537          (C) both the small employer and large employer markets; and
             1538          (ii) (A) provides notice of the discontinuation in writing:
             1539          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             1540          (II) at least 180 days before the date the coverage will be discontinued;
             1541          (B) provides notice of the discontinuation in writing:
             1542          (I) to the commissioner in each state in which an affected insured individual is known
             1543      to reside; and
             1544          (II) at least 30 working days prior to the date the notice is sent to the affected plan


             1545      sponsors, employees, and the dependents of the plan sponsors or employees;
             1546          (C) discontinues and nonrenews all plans issued or delivered for issuance in the
             1547      market; and
             1548          (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
             1549          (4) A large 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:
             1552          (i) minimum participation requirements; or
             1553          (ii) employer contribution requirements.
             1554          (5) A small employer health benefit plan may be discontinued or nonrenewed:
             1555          (a) if a condition described in Subsection (2) exists; or
             1556          (b) for noncompliance with the insurer's employer contribution requirements.
             1557          (6) A small employer health benefit plan may be nonrenewed:
             1558          (a) if a condition described in Subsection (2) exists; or
             1559          (b) for noncompliance with the insurer's minimum participation requirements.
             1560          (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
             1561      discontinued if after issuance of coverage the eligible employee:
             1562          (i) engages in an act or practice in connection with the coverage that constitutes fraud;
             1563      or
             1564          (ii) makes an intentional misrepresentation of material fact in connection with the
             1565      coverage.
             1566          (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
             1567          (i) 12 months after the date of discontinuance; and
             1568          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
             1569      to reenroll.
             1570          (c) At the time the eligible employee's coverage is discontinued under Subsection
             1571      (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
             1572      discontinued.
             1573          (d) An eligible employee may not be discontinued under this Subsection (7) because of
             1574      a fraud or misrepresentation that relates to health status.
             1575          (8) For purposes of this section, a reference to "plan sponsor" includes a reference to


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


             1607      through its affiliates primarily engaged in business other than the business of insurance.
             1608          (ii) The controlling person described in Subsection (1)(d)(i) shall file with the
             1609      commissioner a preacquisition notification containing the information required in Subsection
             1610      (2) 30 calendar days before the proposed effective date of the acquisition.
             1611          (iii) For the purposes of this section, "person" does not include any securities broker
             1612      that in the usual and customary brokers function holds less than 20% of:
             1613          (A) the voting securities of an insurance company; or
             1614          (B) any person that controls an insurance company.
             1615          (iv) This section applies to all domestic insurers and other entities licensed under
             1616      Chapters 5, 7, 8, 9, and 11.
             1617          (e) (i) An agreement for acquisition of control or merger as contemplated by this
             1618      Subsection (1) is not valid or enforceable unless the agreement:
             1619          (A) is in writing; and
             1620          (B) includes a provision that the agreement is subject to the approval of the
             1621      commissioner upon the filing of any applicable statement required under this chapter.
             1622          (ii) A written agreement for acquisition or control that includes the provision described
             1623      in Subsection (1)(e)(i) satisfies the requirements of this Subsection (1).
             1624          (2) The statement to be filed with the commissioner under Subsection (1) shall be
             1625      made under oath or affirmation and shall contain the following information:
             1626          (a) the name and address of the "acquiring party," which means each person by whom
             1627      or on whose behalf the merger or other acquisition of control referred to in Subsection (1) is to
             1628      be effected; and
             1629          (i) if the person is an individual:
             1630          (A) the person's principal occupation;
             1631          (B) a listing of all offices and positions held by the person during the past five years;
             1632      and
             1633          (C) any conviction of crimes other than minor traffic violations during the past 10
             1634      years; and
             1635          (ii) if the person is not an individual:
             1636          (A) a report of the nature of its business operations during:
             1637          (I) the past five years; or


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


             1669          (B) corporate structure; or
             1670          (C) management;
             1671          (e) (i) the number of shares of any security referred to in Subsection (1) that each
             1672      acquiring party proposes to acquire;
             1673          (ii) the terms of the offer, request, invitation, agreement, or acquisition referred to in
             1674      Subsection (1); and
             1675          (iii) a statement as to the method by which the fairness of the proposal was arrived at;
             1676          (f) the amount of each class of any security referred to in Subsection (1) that:
             1677          (i) is beneficially owned; or
             1678          (ii) concerning which there is a right to acquire beneficial ownership by each acquiring
             1679      party;
             1680          (g) a full description of any contract, arrangement, or understanding with respect to any
             1681      security referred to in Subsection (1) in which any acquiring party is involved, including:
             1682          (i) the transfer of any of the securities;
             1683          (ii) joint ventures;
             1684          (iii) loan or option arrangements;
             1685          (iv) puts or calls;
             1686          (v) guarantees of loans;
             1687          (vi) guarantees against loss or guarantees of profits;
             1688          (vii) division of losses or profits; or
             1689          (viii) the giving or withholding of proxies;
             1690          (h) a description of the purchase by any acquiring party of any security referred to in
             1691      Subsection (1) during the 12 calendar months preceding the filing of the statement including:
             1692          (i) the dates of purchase;
             1693          (ii) the names of the purchasers; and
             1694          (iii) the consideration paid or agreed to be paid for the purchase;
             1695          (i) a description of:
             1696          (i) any recommendations to purchase by any acquiring party any security referred to in
             1697      Subsection (1) made during the 12 calendar months preceding the filing of the statement; or
             1698          (ii) any recommendations made by anyone based upon interviews or at the suggestion
             1699      of the acquiring party;


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


             1731      (3)(a)(i);
             1732          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             1733      of Investigation in providing the department criminal background information under
             1734      Subsection (3)(a)(ii); and
             1735          (iii) charge the person required to file the statement referred to in Subsection (1) a fee
             1736      equal to the aggregate of Subsections (3)(c)(i) and (ii).
             1737          (4) (a) If the source of the consideration under Subsection (2)(b)(i) is a loan made in
             1738      the lender's ordinary course of business, the identity of the lender shall remain confidential, if
             1739      the person filing the statement so requests.
             1740          (b) (i) Under Subsection (2)(e), the commissioner may require a statement of the
             1741      adjusted book value assigned by the acquiring party to each security in arriving at the terms of
             1742      the offer.
             1743          (ii) For purposes of this Subsection (4)(b), "adjusted book value" means each security's
             1744      proportional interest in the capital and surplus of the insurer with adjustments that reflect:
             1745          (A) market conditions;
             1746          (B) business in force; and
             1747          (C) other intangible assets or liabilities of the insurer.
             1748          (c) The description required by Subsection (2)(g) shall identify the persons with whom
             1749      the contracts, arrangements, or understandings have been entered into.
             1750          (5) (a) If the person required to file the statement referred to in Subsection (1) is a
             1751      partnership, limited partnership, syndicate, or other group, the commissioner may require that
             1752      all the information called for by Subsections (2), (3), or (4) shall be given with respect to each:
             1753          (i) partner of the partnership or limited partnership;
             1754          (ii) member of the syndicate or group; and
             1755          (iii) person who controls the partner or member.
             1756          (b) If any partner, member, or person referred to in Subsection (5)(a) is a corporation,
             1757      or if the person required to file the statement referred to in Subsection (1) is a corporation, the
             1758      commissioner may require that the information called for by Subsection (2) shall be given with
             1759      respect to:
             1760          (i) the corporation;
             1761          (ii) each officer and director of the corporation; and


             1762          (iii) each person who is directly or indirectly the beneficial owner of more than 10% of
             1763      the outstanding voting securities of the corporation.
             1764          (6) If any material change occurs in the facts set forth in the statement filed with the
             1765      commissioner and sent to the insurer pursuant to Subsection (2), an amendment setting forth
             1766      the change, together with copies of all documents and other material relevant to the change,
             1767      shall be filed with the commissioner and sent to the insurer within two business days after the
             1768      filing person learns of such change.
             1769          (7) If any offer, request, invitation, agreement, or acquisition referred to in Subsection
             1770      (1) is proposed to be made by means of a registration statement under the Securities Act of
             1771      1933, or under circumstances requiring the disclosure of similar information under the
             1772      Securities Exchange Act of 1934, or under a state law requiring similar registration or
             1773      disclosure, a person required to file the statement referred to in Subsection (1) may use copies
             1774      of any registration or disclosure documents in furnishing the information called for by the
             1775      statement.
             1776          (8) (a) The commissioner shall approve any merger or other acquisition of control
             1777      referred to in Subsection (1) unless, after a public hearing on the merger or acquisition, the
             1778      commissioner finds that:
             1779          (i) after the change of control, the domestic insurer referred to in Subsection (1) would
             1780      not be able to satisfy the requirements for the issuance of a license to write the line or lines of
             1781      insurance for which it is presently licensed;
             1782          (ii) the effect of the merger or other acquisition of control would:
             1783          (A) substantially lessen competition in insurance in this state; or
             1784          (B) tend to create a monopoly in insurance;
             1785          (iii) the financial condition of any acquiring party might:
             1786          (A) jeopardize the financial stability of the insurer; or
             1787          (B) prejudice the interest of:
             1788          (I) its policyholders; or
             1789          (II) any remaining securityholders who are unaffiliated with the acquiring party;
             1790          (iv) the terms of the offer, request, invitation, agreement, or acquisition referred to in
             1791      Subsection (1) are unfair and unreasonable to the securityholders of the insurer;
             1792          (v) the plans or proposals which the acquiring party has to liquidate the insurer, sell its


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


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


             1855      the dissenting shareholder and appraisal rights otherwise applicable under Title 16, Chapter
             1856      10a, Part 13, Dissenters' Rights.
             1857          (d) (i) This Subsection (11) provides an elective procedure for dissenting
             1858      securityholders to resolve their objections to the plan of merger.
             1859          (ii) This section does not restrict the rights of dissenting securityholders under Title 16,
             1860      Chapter 10a, Utah Revised Business Corporation Act, unless this election is made under this
             1861      Subsection (11).
             1862          (12) (a) All statements, amendments, or other material filed under Subsection (1), and
             1863      all notices of public hearings held under Subsection (8), shall be mailed by the insurer to its
             1864      securityholders within five business days after the insurer has received the statements,
             1865      amendments, other material, or notices.
             1866          (b) (i) Mailing expenses shall be paid by the person making the filing.
             1867          (ii) As security for the payment of mailing expenses, that person shall file with the
             1868      commissioner an acceptable bond or other deposit in an amount determined by the
             1869      commissioner.
             1870          (13) This section does not apply to any offer, request, invitation, agreement, or
             1871      acquisition that the commissioner by order exempts from the requirements of this section as:
             1872          (a) not having been made or entered into for the purpose of, and not having the effect
             1873      of, changing or influencing the control of a domestic insurer; or
             1874          (b) [as] otherwise not comprehended within the purposes of this section.
             1875          (14) The following are violations of this section:
             1876          (a) the failure to file any statement, amendment, or other material required to be filed
             1877      pursuant to Subsections (1), (2), and (5); or
             1878          (b) the effectuation, or any attempt to effectuate, an acquisition of control of or merger
             1879      with a domestic insurer unless the commissioner has given the commissioner's approval to the
             1880      acquisition or merger.
             1881          (15) (a) The courts of this state are vested with jurisdiction over:
             1882          (i) a person who:
             1883          (A) files a statement with the commissioner under this section; and
             1884          (B) is not resident, domiciled, or authorized to do business in this state; and
             1885          (ii) overall actions involving persons described in Subsection (15)(a)(i) arising out of a


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


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


             1948      60 days; or
             1949          (d) (i) an insured motor vehicle if, before or after the accident, the liability insurer of
             1950      the motor vehicle is declared insolvent by a court of competent jurisdiction; and
             1951          (ii) the motor vehicle described in Subsection (2)(d)(i) is uninsured only to the extent
             1952      that the claim against the insolvent insurer is not paid by a guaranty association or fund.
             1953          (3) Uninsured motorist coverage under Subsection 31A-22-302 (1)(b) provides
             1954      coverage for covered persons who are legally entitled to recover damages from owners or
             1955      operators of uninsured motor vehicles because of bodily injury, sickness, disease, or death.
             1956          (4) (a) For new policies written on or after January 1, 2001, the limits of uninsured
             1957      motorist coverage shall be equal to the lesser of the limits of the named insured's motor vehicle
             1958      liability coverage or the maximum uninsured motorist coverage limits available by the insurer
             1959      under the named insured's motor vehicle policy, unless a named insured rejects or purchases
             1960      coverage in a lesser amount by signing an acknowledgment form that:
             1961          (i) is filed with the department;
             1962          (ii) is provided by the insurer;
             1963          (iii) waives the higher coverage;
             1964          (iv) need only state in this or similar language that uninsured motorist coverage
             1965      provides benefits or protection to you and other covered persons for bodily injury resulting
             1966      from an accident caused by the fault of another party where the other party has no liability
             1967      insurance; and
             1968          (v) discloses the additional premiums required to purchase uninsured motorist
             1969      coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
             1970      liability coverage or the maximum uninsured motorist coverage limits available by the insurer
             1971      under the named insured's motor vehicle policy.
             1972          (b) Any selection or rejection under this Subsection (4) continues for that issuer of the
             1973      liability coverage until the insured requests, in writing, a change of uninsured motorist
             1974      coverage from that liability insurer.
             1975          (c) (i) Subsections (4)(a) and (b) apply retroactively to any claim arising on or after
             1976      January 1, 2001, for which, as of May 14, 2013, an insured has not made a written demand for
             1977      arbitration or filed a complaint in a court of competent jurisdiction.
             1978          (ii) The Legislature finds that the retroactive application of Subsections (4)(a) and (b)


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


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


             2041          (iii) This rejection continues for that issuer of the liability coverage until the insured in
             2042      writing requests uninsured motorist coverage from that liability insurer.
             2043          (b) (i) All persons, including governmental entities, that are engaged in the business of,
             2044      or that accept payment for, transporting natural persons by motor vehicle, and all school
             2045      districts that provide transportation services for their students, shall provide coverage for all
             2046      motor vehicles used for that purpose, by purchase of a policy of insurance or by self-insurance,
             2047      uninsured motorist coverage of at least $25,000 per person and $500,000 per accident.
             2048          (ii) This coverage is secondary to any other insurance covering an injured covered
             2049      person.
             2050          (c) Uninsured motorist coverage:
             2051          (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
             2052      Compensation Act;
             2053          (ii) may not be subrogated by the workers' compensation insurance carrier;
             2054          (iii) may not be reduced by any benefits provided by workers' compensation insurance;
             2055          (iv) may be reduced by health insurance subrogation only after the covered person has
             2056      been made whole;
             2057          (v) may not be collected for bodily injury or death sustained by a person:
             2058          (A) while committing a violation of Section 41-1a-1314 ;
             2059          (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
             2060      in violation of Section 41-1a-1314 ; or
             2061          (C) while committing a felony; and
             2062          (vi) notwithstanding Subsection (5)(c)(v), may be recovered:
             2063          (A) for a person under 18 years of age who is injured within the scope of Subsection
             2064      (5)(c)(v) but limited to medical and funeral expenses; or
             2065          (B) by a law enforcement officer as defined in Section 53-13-103 , who is injured
             2066      within the course and scope of the law enforcement officer's duties.
             2067          (d) As used in this Subsection (5), "motor vehicle" has the same meaning as under
             2068      Section 41-1a-102 .
             2069          (6) When a covered person alleges that an uninsured motor vehicle under Subsection
             2070      (2)(b) proximately caused an accident without touching the covered person or the motor
             2071      vehicle occupied by the covered person, the covered person shall show the existence of the


             2072      uninsured motor vehicle by clear and convincing evidence consisting of more than the covered
             2073      person's testimony.
             2074          (7) (a) The limit of liability for uninsured motorist coverage for two or more motor
             2075      vehicles may not be added together, combined, or stacked to determine the limit of insurance
             2076      coverage available to an injured person for any one accident.
             2077          (b) (i) Subsection (7)(a) applies to all persons except a covered person as defined under
             2078      Subsection (8)(b)(ii).
             2079          (ii) A covered person as defined under Subsection (8)(b)(ii) is entitled to the highest
             2080      limits of uninsured motorist coverage afforded for any one motor vehicle that the covered
             2081      person is the named insured or an insured family member.
             2082          (iii) This coverage shall be in addition to the coverage on the motor vehicle the covered
             2083      person is occupying.
             2084          (iv) Neither the primary nor the secondary coverage may be set off against the other.
             2085          (c) Coverage on a motor vehicle occupied at the time of an accident shall be primary
             2086      coverage, and the coverage elected by a person described under Subsections (1)(a) [and], (b),
             2087      and (c) shall be secondary coverage.
             2088          (8) (a) Uninsured motorist coverage under this section applies to bodily injury,
             2089      sickness, disease, or death of covered persons while occupying or using a motor vehicle only if
             2090      the motor vehicle is described in the policy under which a claim is made, or if the motor
             2091      vehicle is a newly acquired or replacement motor vehicle covered under the terms of the policy.
             2092      Except as provided in Subsection (7) or this Subsection (8), a covered person injured in a
             2093      motor vehicle described in a policy that includes uninsured motorist benefits may not elect to
             2094      collect uninsured motorist coverage benefits from any other motor vehicle insurance policy
             2095      under which the person is a covered person.
             2096          (b) Each of the following persons may also recover uninsured motorist benefits under
             2097      any one other policy in which they are described as a "covered person" as defined in Subsection
             2098      (1):
             2099          (i) a covered person injured as a pedestrian by an uninsured motor vehicle; and
             2100          (ii) except as provided in Subsection (8)(c), a covered person injured while occupying
             2101      or using a motor vehicle that is not owned, leased, or furnished:
             2102          (A) to the covered person;


             2103          (B) to the covered person's spouse; or
             2104          (C) to the covered person's resident parent or resident sibling.
             2105          (c) (i) A covered person may recover benefits from no more than two additional
             2106      policies, one additional policy from each parent's household if the covered person is:
             2107          (A) a dependent minor of parents who reside in separate households; and
             2108          (B) injured while occupying or using a motor vehicle that is not owned, leased, or
             2109      furnished:
             2110          (I) to the covered person;
             2111          (II) to the covered person's resident parent; or
             2112          (III) to the covered person's resident sibling.
             2113          (ii) Each parent's policy under this Subsection (8)(c) is liable only for the percentage of
             2114      the damages that the limit of liability of each parent's policy of uninsured motorist coverage
             2115      bears to the total of both parents' uninsured coverage applicable to the accident.
             2116          (d) A covered person's recovery under any available policies may not exceed the full
             2117      amount of damages.
             2118          (e) A covered person in Subsection (8)(b) is not barred against making subsequent
             2119      elections if recovery is unavailable under previous elections.
             2120          (f) (i) As used in this section, "interpolicy stacking" means recovering benefits for a
             2121      single incident of loss under more than one insurance policy.
             2122          (ii) Except to the extent permitted by Subsection (7) and this Subsection (8),
             2123      interpolicy stacking is prohibited for uninsured motorist coverage.
             2124          (9) (a) When a claim is brought by a named insured or a person described in
             2125      Subsection (1) and is asserted against the covered person's uninsured motorist carrier, the
             2126      claimant may elect to resolve the claim:
             2127          (i) by submitting the claim to binding arbitration; or
             2128          (ii) through litigation.
             2129          (b) Unless otherwise provided in the policy under which uninsured benefits are
             2130      claimed, the election provided in Subsection (9)(a) is available to the claimant only, except that
             2131      if the policy under which insured benefits are claimed provides that either an insured or the
             2132      insurer may elect arbitration, the insured or the insurer may elect arbitration and that election to
             2133      arbitrate shall stay the litigation of the claim under Subsection (9)(a)(ii).


             2134          (c) Once the claimant has elected to commence litigation under Subsection (9)(a)(ii),
             2135      the claimant may not elect to resolve the claim through binding arbitration under this section
             2136      without the written consent of the uninsured motorist carrier.
             2137          (d) (i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
             2138      binding arbitration under Subsection (9)(a)(i) shall be resolved by a single arbitrator.
             2139          (ii) All parties shall agree on the single arbitrator selected under Subsection (9)(d)(i).
             2140          (iii) If the parties are unable to agree on a single arbitrator as required under Subsection
             2141      (9)(d)(ii), the parties shall select a panel of three arbitrators.
             2142          (e) If the parties select a panel of three arbitrators under Subsection (9)(d)(iii):
             2143          (i) each side shall select one arbitrator; and
             2144          (ii) the arbitrators appointed under Subsection (9)(e)(i) shall select one additional
             2145      arbitrator to be included in the panel.
             2146          (f) Unless otherwise agreed to in writing:
             2147          (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
             2148      under Subsection (9)(d)(i); or
             2149          (ii) if an arbitration panel is selected under Subsection (9)(d)(iii):
             2150          (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
             2151          (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
             2152      under Subsection (9)(e)(ii).
             2153          (g) Except as otherwise provided in this section or unless otherwise agreed to in
             2154      writing by the parties, an arbitration proceeding conducted under this section shall be governed
             2155      by Title 78B, Chapter 11, Utah Uniform Arbitration Act.
             2156          (h) (i) The arbitration shall be conducted in accordance with Rules 26(a)(4) through (f),
             2157      27 through 37, 54, and 68 of the Utah Rules of Civil Procedure, once the requirements of
             2158      Subsections (10)(a) through (c) are satisfied.
             2159          (ii) The specified tier as defined by Rule 26(c)(3) of the Utah Rules of Civil Procedure
             2160      shall be determined based on the claimant's specific monetary amount in the written demand
             2161      for payment of uninsured motorist coverage benefits as required in Subsection (10)(a)(i)(A).
             2162          (iii) Rules 26.1 and 26.2 of the Utah Rules of Civil Procedure do not apply to
             2163      arbitration claims under this part.
             2164          (i) All issues of discovery shall be resolved by the arbitrator or the arbitration panel.


             2165          (j) A written decision by a single arbitrator or by a majority of the arbitration panel
             2166      shall constitute a final decision.
             2167          (k) (i) Except as provided in Subsection (10), the amount of an arbitration award may
             2168      not exceed the uninsured motorist policy limits of all applicable uninsured motorist policies,
             2169      including applicable uninsured motorist umbrella policies.
             2170          (ii) If the initial arbitration award exceeds the uninsured motorist policy limits of all
             2171      applicable uninsured motorist policies, the arbitration award shall be reduced to an amount
             2172      equal to the combined uninsured motorist policy limits of all applicable uninsured motorist
             2173      policies.
             2174          (l) The arbitrator or arbitration panel may not decide the issues of coverage or
             2175      extra-contractual damages, including:
             2176          (i) whether the claimant is a covered person;
             2177          (ii) whether the policy extends coverage to the loss; or
             2178          (iii) any allegations or claims asserting consequential damages or bad faith liability.
             2179          (m) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or
             2180      class-representative basis.
             2181          (n) If the arbitrator or arbitration panel finds that the action was not brought, pursued,
             2182      or defended in good faith, the arbitrator or arbitration panel may award reasonable attorney fees
             2183      and costs against the party that failed to bring, pursue, or defend the claim in good faith.
             2184          (o) An arbitration award issued under this section shall be the final resolution of all
             2185      claims not excluded by Subsection (9)(l) between the parties unless:
             2186          (i) the award was procured by corruption, fraud, or other undue means;
             2187          (ii) either party, within 20 days after service of the arbitration award:
             2188          (A) files a complaint requesting a trial de novo in the district court; and
             2189          (B) serves the nonmoving party with a copy of the complaint requesting a trial de novo
             2190      under Subsection (9)(o)(ii)(A).
             2191          (p) (i) Upon filing a complaint for a trial de novo under Subsection (9)(o), the claim
             2192      shall proceed through litigation pursuant to the Utah Rules of Civil Procedure and Utah Rules
             2193      of Evidence in the district court.
             2194          (ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
             2195      request a jury trial with a complaint requesting a trial de novo under Subsection (9)(o)(ii)(A).


             2196          (q) (i) If the claimant, as the moving party in a trial de novo requested under
             2197      Subsection (9)(o), does not obtain a verdict that is at least $5,000 and is at least 20% greater
             2198      than the arbitration award, the claimant is responsible for all of the nonmoving party's costs.
             2199          (ii) If the uninsured motorist carrier, as the moving party in a trial de novo requested
             2200      under Subsection (9)(o), does not obtain a verdict that is at least 20% less than the arbitration
             2201      award, the uninsured motorist carrier is responsible for all of the nonmoving party's costs.
             2202          (iii) Except as provided in Subsection (9)(q)(iv), the costs under this Subsection (9)(q)
             2203      shall include:
             2204          (A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
             2205          (B) the costs of expert witnesses and depositions.
             2206          (iv) An award of costs under this Subsection (9)(q) may not exceed $2,500 unless
             2207      Subsection (10)(h)(iii) applies.
             2208          (r) For purposes of determining whether a party's verdict is greater or less than the
             2209      arbitration award under Subsection (9)(q), a court may not consider any recovery or other relief
             2210      granted on a claim for damages if the claim for damages:
             2211          (i) was not fully disclosed in writing prior to the arbitration proceeding; or
             2212          (ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil
             2213      Procedure.
             2214          (s) If a district court determines, upon a motion of the nonmoving party, that the
             2215      moving party's use of the trial de novo process was filed in bad faith in accordance with
             2216      Section 78B-5-825 , the district court may award reasonable attorney fees to the nonmoving
             2217      party.
             2218          (t) Nothing in this section is intended to limit any claim under any other portion of an
             2219      applicable insurance policy.
             2220          (u) If there are multiple uninsured motorist policies, as set forth in Subsection (8), the
             2221      claimant may elect to arbitrate in one hearing the claims against all the uninsured motorist
             2222      carriers.
             2223          (10) (a) Within 30 days after a covered person elects to submit a claim for uninsured
             2224      motorist benefits to binding arbitration or files litigation, the covered person shall provide to
             2225      the uninsured motorist carrier:
             2226          (i) a written demand for payment of uninsured motorist coverage benefits, setting forth:


             2227          (A) subject to Subsection (10)(l), the specific monetary amount of the demand,
             2228      including a computation of the covered person's claimed past medical expenses, claimed past
             2229      lost wages, and the other claimed past economic damages; and
             2230          (B) the factual and legal basis and any supporting documentation for the demand;
             2231          (ii) a written statement under oath disclosing:
             2232          (A) (I) the names and last known addresses of all health care providers who have
             2233      rendered health care services to the covered person that are material to the claims for which
             2234      uninsured motorist benefits are sought for a period of five years preceding the date of the event
             2235      giving rise to the claim for uninsured motorist benefits up to the time the election for
             2236      arbitration or litigation has been exercised; and
             2237          (II) [whether the covered person has seen other] the names and last known addresses of
             2238      the health care providers who have rendered health care services to the covered person, which
             2239      the covered person claims are immaterial to the claims for which uninsured motorist benefits
             2240      are sought, for a period of five years preceding the date of the event giving rise to the claim for
             2241      uninsured motorist benefits up to the time the election for arbitration or litigation has been
             2242      exercised that have not been disclosed under Subsection (10)(a)(ii)(A)(I);
             2243          (B) (I) the names and last known addresses of all health insurers or other entities to
             2244      whom the covered person has submitted claims for health care services or benefits material to
             2245      the claims for which uninsured motorist benefits are sought, for a period of five years
             2246      preceding the date of the event giving rise to the claim for uninsured motorist benefits up to the
             2247      time the election for arbitration or litigation has been exercised; and
             2248          (II) [whether the identity of any] the names and last known addresses of the health
             2249      insurers or other entities to whom the covered person has submitted claims for health care
             2250      services or benefits, which the covered person claims are immaterial to the claims for which
             2251      uninsured motorist benefits are sought, for a period of five years preceding the date of the event
             2252      giving rise to the claim for uninsured motorist benefits up to the time the election for
             2253      arbitration or litigation have not been disclosed;
             2254          (C) if lost wages, diminished earning capacity, or similar damages are claimed, all
             2255      employers of the covered person for a period of five years preceding the date of the event
             2256      giving rise to the claim for uninsured motorist benefits up to the time the election for
             2257      arbitration or litigation has been exercised;


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


             2289      uninsured motorist carrier's determination of the amount owed to the covered person; and
             2290          (C) if the covered person is a recipient of Medicare or Medicaid benefits or Utah
             2291      Children's Health Insurance Program benefits under Title 26, Chapter 40, Utah Children's
             2292      Health Insurance Act, or if the claim is subject to any other state or federal statutory liens,
             2293      tender the amount, if any, of the uninsured motorist carrier's determination of the amount owed
             2294      to the covered person less:
             2295          (I) if the amount of the state or federal statutory lien is established, the amount of the
             2296      lien; or
             2297          (II) if the amount of the state or federal statutory lien is not established, two times the
             2298      amount of the medical expenses subject to the state or federal statutory lien until such time as
             2299      the amount of the state or federal statutory lien is established.
             2300          (ii) If the amount tendered by the uninsured motorist carrier under Subsection (10)(c)(i)
             2301      is the total amount of the uninsured motorist policy limits, the tendered amount shall be
             2302      accepted by the covered person.
             2303          (d) A covered person who receives a written response from an uninsured motorist
             2304      carrier as provided for in Subsection (10)(c)(i), may:
             2305          (i) elect to accept the amount tendered in Subsection (10)(c)(i) as payment in full of all
             2306      uninsured motorist claims; or
             2307          (ii) elect to:
             2308          (A) accept the amount tendered in Subsection (10)(c)(i) as partial payment of all
             2309      uninsured motorist claims; and
             2310          (B) continue to litigate or arbitrate the remaining claim in accordance with the election
             2311      made under Subsections (9)(a), (b), and (c).
             2312          (e) If a covered person elects to accept the amount tendered under Subsection (10)(c)(i)
             2313      as partial payment of all uninsured motorist claims, the final award obtained through
             2314      arbitration, litigation, or later settlement shall be reduced by any payment made by the
             2315      uninsured motorist carrier under Subsection (10)(c)(i).
             2316          (f) In an arbitration proceeding on the remaining uninsured claims:
             2317          (i) the parties may not disclose to the arbitrator or arbitration panel the amount paid
             2318      under Subsection (10)(c)(i) until after the arbitration award has been rendered; and
             2319          (ii) the parties may not disclose the amount of the limits of uninsured motorist benefits


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


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


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


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


             2444          (i) $10,000 for one person in any one accident; and
             2445          (ii) at least $20,000 for two or more persons in any one accident.
             2446          (j) An acknowledgment under Subsection (3)(a) continues for that issuer of the
             2447      underinsured motorist coverage until the named insured, in writing, requests different
             2448      underinsured motorist coverage from the insurer.
             2449          (k) (i) The named insured's underinsured motorist coverage, as described in Subsection
             2450      (2), is secondary to the liability coverage of an owner or operator of an underinsured motor
             2451      vehicle, as described in Subsection (1).
             2452          (ii) Underinsured motorist coverage may not be set off against the liability coverage of
             2453      the owner or operator of an underinsured motor vehicle, but shall be added to, combined with,
             2454      or stacked upon the liability coverage of the owner or operator of the underinsured motor
             2455      vehicle to determine the limit of coverage available to the injured person.
             2456          (l) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
             2457      policies existing on that date, the insurer shall disclose in the same medium as the premium
             2458      renewal notice, an explanation of:
             2459          (A) the purpose of underinsured motorist coverage in the same manner as described in
             2460      Subsection (3)(a)(iv); and
             2461          (B) a disclosure of the additional premiums required to purchase underinsured motorist
             2462      coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
             2463      liability coverage or the maximum underinsured motorist coverage limits available by the
             2464      insurer under the named insured's motor vehicle policy.
             2465          (ii) The disclosure required under this Subsection (3)(l) shall be sent to all named
             2466      insureds that carry underinsured motorist coverage limits in an amount less than the named
             2467      insured's motor vehicle liability policy limits or the maximum underinsured motorist coverage
             2468      limits available by the insurer under the named insured's motor vehicle policy.
             2469          (m) For purposes of this Subsection (3), a notice or disclosure sent to a named insured
             2470      in a household constitutes notice or disclosure to all insureds within the household.
             2471          (4) (a) (i) Except as provided in this Subsection (4), a covered person injured in a
             2472      motor vehicle described in a policy that includes underinsured motorist benefits may not elect
             2473      to collect underinsured motorist coverage benefits from another motor vehicle insurance policy.
             2474          (ii) The limit of liability for underinsured motorist coverage for two or more motor


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


             2506      single incident of loss under more than one insurance policy.
             2507          (B) Except to the extent permitted by this Subsection (4), interpolicy stacking is
             2508      prohibited for underinsured motorist coverage.
             2509          (c) Underinsured motorist coverage:
             2510          (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
             2511      Compensation Act;
             2512          (ii) may not be subrogated by a workers' compensation insurance carrier;
             2513          (iii) may not be reduced by benefits provided by workers' compensation insurance;
             2514          (iv) may be reduced by health insurance subrogation only after the covered person is
             2515      made whole;
             2516          (v) may not be collected for bodily injury or death sustained by a person:
             2517          (A) while committing a violation of Section 41-1a-1314 ;
             2518          (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
             2519      in violation of Section 41-1a-1314 ; or
             2520          (C) while committing a felony; and
             2521          (vi) notwithstanding Subsection (4)(c)(v), may be recovered:
             2522          (A) for a person under 18 years of age who is injured within the scope of Subsection
             2523      (4)(c)(v), but is limited to medical and funeral expenses; or
             2524          (B) by a law enforcement officer as defined in Section 53-13-103 , who is injured
             2525      within the course and scope of the law enforcement officer's duties.
             2526          (5) The inception of the loss under Subsection 31A-21-313 (1) for underinsured
             2527      motorist claims occurs upon the date of the last liability policy payment.
             2528          (6) (a) Within five business days after notification that all liability insurers have
             2529      tendered their liability policy limits, the underinsured carrier shall either:
             2530          (i) waive any subrogation claim the underinsured carrier may have against the person
             2531      liable for the injuries caused in the accident; or
             2532          (ii) pay the insured an amount equal to the policy limits tendered by the liability carrier.
             2533          (b) If neither option is exercised under Subsection (6)(a), the subrogation claim is
             2534      considered to be waived by the underinsured carrier.
             2535          (c) The notification under Subsection (6)(a) shall include:
             2536          (i) the name, address, and phone number for all liability insurers;


             2537          (ii) the liability insurers' liability policy limits; and
             2538          (iii) the claim number associated with each liability insurer.
             2539          (7) Except as otherwise provided in this section, a covered person may seek, subject to
             2540      the terms and conditions of the policy, additional coverage under any policy:
             2541          (a) that provides coverage for damages resulting from motor vehicle accidents; and
             2542          (b) that is not required to conform to Section 31A-22-302 .
             2543          (8) (a) When a claim is brought by a named insured or a person described in
             2544      Subsection 31A-22-305 (1) and is asserted against the covered person's underinsured motorist
             2545      carrier, the claimant may elect to resolve the claim:
             2546          (i) by submitting the claim to binding arbitration; or
             2547          (ii) through litigation.
             2548          (b) Unless otherwise provided in the policy under which underinsured benefits are
             2549      claimed, the election provided in Subsection (8)(a) is available to the claimant only, except that
             2550      if the policy under which insured benefits are claimed provides that either an insured or the
             2551      insurer may elect arbitration, the insured or the insurer may elect arbitration and that election to
             2552      arbitrate shall stay the litigation of the claim under Subsection (8)(a)(ii).
             2553          (c) Once a claimant elects to commence litigation under Subsection (8)(a)(ii), the
             2554      claimant may not elect to resolve the claim through binding arbitration under this section
             2555      without the written consent of the underinsured motorist coverage carrier.
             2556          (d) (i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
             2557      binding arbitration under Subsection (8)(a)(i) shall be resolved by a single arbitrator.
             2558          (ii) All parties shall agree on the single arbitrator selected under Subsection (8)(d)(i).
             2559          (iii) If the parties are unable to agree on a single arbitrator as required under Subsection
             2560      (8)(d)(ii), the parties shall select a panel of three arbitrators.
             2561          (e) If the parties select a panel of three arbitrators under Subsection (8)(d)(iii):
             2562          (i) each side shall select one arbitrator; and
             2563          (ii) the arbitrators appointed under Subsection (8)(e)(i) shall select one additional
             2564      arbitrator to be included in the panel.
             2565          (f) Unless otherwise agreed to in writing:
             2566          (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
             2567      under Subsection (8)(d)(i); or


             2568          (ii) if an arbitration panel is selected under Subsection (8)(d)(iii):
             2569          (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
             2570          (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
             2571      under Subsection (8)(e)(ii).
             2572          (g) Except as otherwise provided in this section or unless otherwise agreed to in
             2573      writing by the parties, an arbitration proceeding conducted under this section is governed by
             2574      Title 78B, Chapter 11, Utah Uniform Arbitration Act.
             2575          (h) (i) The arbitration shall be conducted in accordance with Rules 26(a)(4) through (f),
             2576      27 through 37, 54, and 68 of the Utah Rules of Civil Procedure, once the requirements of
             2577      Subsections (9)(a) through (c) are satisfied.
             2578          (ii) The specified tier as defined by Rule 26(c)(3) of the Utah Rules of Civil Procedure
             2579      shall be determined based on the claimant's specific monetary amount in the written demand
             2580      for payment of uninsured motorist coverage benefits as required in Subsection (9)(a)(i)(A).
             2581          (iii) Rules 26.1 and 26.2 of the Utah Rules of Civil Procedure do not apply to
             2582      arbitration claims under this part.
             2583          (i) An issue of discovery shall be resolved by the arbitrator or the arbitration panel.
             2584          (j) A written decision by a single arbitrator or by a majority of the arbitration panel
             2585      constitutes a final decision.
             2586          (k) (i) Except as provided in Subsection (9), the amount of an arbitration award may
             2587      not exceed the underinsured motorist policy limits of all applicable underinsured motorist
             2588      policies, including applicable underinsured motorist umbrella policies.
             2589          (ii) If the initial arbitration award exceeds the underinsured motorist policy limits of all
             2590      applicable underinsured motorist policies, the arbitration award shall be reduced to an amount
             2591      equal to the combined underinsured motorist policy limits of all applicable underinsured
             2592      motorist policies.
             2593          (l) The arbitrator or arbitration panel may not decide an issue of coverage or
             2594      extra-contractual damages, including:
             2595          (i) whether the claimant is a covered person;
             2596          (ii) whether the policy extends coverage to the loss; or
             2597          (iii) an allegation or claim asserting consequential damages or bad faith liability.
             2598          (m) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or


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


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


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


             2692          (ii) If the covered person does not provide the requested information within 10 days:
             2693          (A) the covered person shall disclose, in writing, the legal or factual basis for the
             2694      failure to disclose the health care providers or health care insurers; and
             2695          (B) either the covered person or the underinsured motorist carrier may request the
             2696      arbitrator or arbitration panel to resolve the issue of whether the identities or records are to be
             2697      provided if the covered person has elected arbitration.
             2698          (iii) The time periods imposed by Subsection (9)(c)(i) are tolled pending resolution of
             2699      the dispute concerning the disclosure and production of records of the health care providers or
             2700      health care insurers.
             2701          (c) (i) An underinsured motorist carrier that receives an election for arbitration or a
             2702      notice of filing litigation and the demand for payment of underinsured motorist benefits under
             2703      Subsection (9)(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the
             2704      demand and receipt of the items specified in Subsections (9)(a)(i) through (iii), to:
             2705          (A) provide a written response to the written demand for payment provided for in
             2706      Subsection (9)(a)(i);
             2707          (B) except as provided in Subsection (9)(c)(i)(C), tender the amount, if any, of the
             2708      underinsured motorist carrier's determination of the amount owed to the covered person; and
             2709          (C) if the covered person is a recipient of Medicare or Medicaid benefits or Utah
             2710      Children's Health Insurance Program benefits under Title 26, Chapter 40, Utah Children's
             2711      Health Insurance Act, or if the claim is subject to any other state or federal statutory liens,
             2712      tender the amount, if any, of the underinsured motorist carrier's determination of the amount
             2713      owed to the covered person less:
             2714          (I) if the amount of the state or federal statutory lien is established, the amount of the
             2715      lien; or
             2716          (II) if the amount of the state or federal statutory lien is not established, two times the
             2717      amount of the medical expenses subject to the state or federal statutory lien until such time as
             2718      the amount of the state or federal statutory lien is established.
             2719          (ii) If the amount tendered by the underinsured motorist carrier under Subsection
             2720      (9)(c)(i) is the total amount of the underinsured motorist policy limits, the tendered amount
             2721      shall be accepted by the covered person.
             2722          (d) A covered person who receives a written response from an underinsured motorist


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


             2754          (ii) (A) Objection to the affidavit of costs shall specify with particularity the costs to
             2755      which the underinsured motorist carrier objects.
             2756          (B) The objection shall be resolved by the arbitrator or arbitration panel.
             2757          (iii) The award of costs by the arbitrator or arbitration panel under Subsection (9)(g)(ii)
             2758      may not exceed $5,000.
             2759          (i) (i) A covered person shall disclose all material information, other than rebuttal
             2760      evidence, within 30 days after a covered person elects to submit a claim for underinsured
             2761      motorist coverage benefits to binding arbitration or files litigation as specified in Subsection
             2762      (9)(a).
             2763          (ii) If the information under Subsection (9)(i)(i) is not disclosed, the covered person
             2764      may not recover costs or any amounts in excess of the policy under Subsection (9)(g).
             2765          (j) This Subsection (9) does not limit any other cause of action that arose or may arise
             2766      against the underinsured motorist carrier from the same dispute.
             2767          (k) The provisions of this Subsection (9) only apply to motor vehicle accidents that
             2768      occur on or after March 30, 2010.
             2769          (l) (i) The written demand requirement in Subsection (9)(a)(i)(A) does not affect the
             2770      covered person's requirement to provide a computation of any other economic damages
             2771      claimed, and the one or more respondents shall have a reasonable time after the receipt of the
             2772      computation of any other economic damages claimed to conduct fact and expert discovery as to
             2773      any additional damages claimed. The changes made by this bill to this Subsection (9)(l) and
             2774      Subsection (9)(a)(i)(A) apply to a claim submitted to binding arbitration or through litigation
             2775      on or after May 13, 2014.
             2776          (ii) The changes made by this bill under Subsections (9)(a)(ii)(A)(II) and (B)(II) apply
             2777      to a claim submitted to binding arbitration or through litigation on or after May 13, 2014.
             2778          Section 12. Section 31A-22-428 is amended to read:
             2779           31A-22-428. Interest payable on life insurance proceeds.
             2780          (1) For a life insurance policy delivered or issued for delivery in this state on or after
             2781      May 5, 2008, the insurer shall pay interest on the death proceeds payable upon the death of the
             2782      insured.
             2783          (2) (a) Except as provided in Subsection (4), for the period beginning on the date of
             2784      death and ending the day before the day described in Subsection (3)(b), interest under


             2785      Subsection (1) shall accrue at a rate no less than the greater of:
             2786          (i) the rate applicable to policy funds left on deposit; [or] and
             2787          (ii) [if there is no rate described in Subsection (2)(a)(i), at] the Two Year Treasury
             2788      Constant Maturity Rate as published by the Federal Reserve.
             2789          (b) If there is no rate applicable to policy funds on deposit as stated in Subsection
             2790      (2)(a)(i), then the Two Year Treasury Constant Maturity Rates as published by the Federal
             2791      Reserve applies.
             2792          [(b)] (c) The rate described in Subsection (2)(a) or (b) is the rate in effect on the day on
             2793      which the death occurs.
             2794          [(c)] (d) Interest is payable until the day on which the claim is paid.
             2795          (3) (a) Unless the claim is paid and except as provided in Subsection (4), beginning on
             2796      the day described in Subsection (3)(b) and ending the day on which the claim is paid, interest
             2797      shall accrue at the rate in Subsection (2) plus additional interest at the rate of 10% annually.
             2798          (b) Interest accrues under Subsection (3)(a) beginning with the day that is 31 days from
             2799      the latest of:
             2800          (i) the day on which the insurer receives proof of death;
             2801          (ii) the day on which the insurer receives sufficient information to determine:
             2802          (A) liability;
             2803          (B) the extent of the liability; and
             2804          (C) the appropriate payee legally entitled to the proceeds; and
             2805          (iii) the day on which:
             2806          (A) legal impediments to payment of proceeds that depend on the action of parties
             2807      other than the insurer are resolved; and
             2808          (B) the insurer receives sufficient evidence of the resolution of the legal impediments
             2809      described in Subsection (3)(b)(iii)(A).
             2810          (4) A court of competent jurisdiction may require payment of interest from the date of
             2811      death to the day on which a claim is paid at a rate equal to the sum of:
             2812          (a) the rate specified in Subsection (2); and
             2813          (b) the legal rate identified in Subsection 15-1-1 (2).
             2814          Section 13. Section 31A-22-617 is amended to read:
             2815           31A-22-617. Preferred provider contract provisions.


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


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


             2878          (A) a rehabilitator or liquidator may not reduce a fee by less than 75% of the provider's
             2879      regular fee set forth in the contract; and
             2880          (B) the enrollee shall continue to pay the copayments, deductibles, and other payments
             2881      for services received from the provider that the enrollee was required to pay before the filing
             2882      of:
             2883          (I) a petition for rehabilitation; or
             2884          (II) a petition for liquidation.
             2885          (2) (a) Subject to Subsections (2)(b) through (2)(e), an insurer using preferred health
             2886      care provider contracts is subject to the reimbursement requirements in Section 31A-8-501 on
             2887      or after January 1, 2014.
             2888          (b) When reimbursing for services of health care providers not under contract, the
             2889      insurer may make direct payment to the insured.
             2890          (c) An insurer using preferred health care provider contracts may impose a deductible
             2891      on coverage of health care providers not under contract.
             2892          (d) When selecting health care providers with whom to contract under Subsection (1),
             2893      an insurer may not unfairly discriminate between classes of health care providers, but may
             2894      discriminate within a class of health care providers, subject to Subsection (7).
             2895          (e) For purposes of this section, unfair discrimination between classes of health care
             2896      providers includes:
             2897          (i) refusal to contract with class members in reasonable proportion to the number of
             2898      insureds covered by the insurer and the expected demand for services from class members; and
             2899          (ii) refusal to cover procedures for one class of providers that are:
             2900          (A) commonly used by members of the class of health care providers for the treatment
             2901      of illnesses, injuries, or conditions;
             2902          (B) otherwise covered by the insurer; and
             2903          (C) within the scope of practice of the class of health care providers.
             2904          (3) Before the insured consents to the insurance contract, the insurer shall fully disclose
             2905      to the insured that it has entered into preferred health care provider contracts. The insurer shall
             2906      provide sufficient detail on the preferred health care provider contracts to permit the insured to
             2907      agree to the terms of the insurance contract. The insurer shall provide at least the following
             2908      information:


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


             2940      terms and conditions may include reasonable limitations on the number of designated preferred
             2941      health care providers based upon substantial objective and economic grounds, or expected use
             2942      of particular services based upon prior provider-patient profiles.
             2943          (8) Upon the written request of a provider excluded from a provider contract, the
             2944      commissioner may hold a hearing to determine if the insurer's exclusion of the provider is
             2945      based on the criteria set forth in Subsection (7)(b).
             2946          [(9) Except as provided in Subsection 31A-22-618.5 (3)(a), insurers are subject to
             2947      Sections 31A-22-613.5 , 31A-22-614.5 , and 31A-22-618 .]
             2948          [(10)] (9) Nothing in this section is to be construed as to require an insurer to offer a
             2949      certain benefit or service as part of a health benefit plan.
             2950          [(11)] (10) This section does not apply to catastrophic mental health coverage provided
             2951      in accordance with Section 31A-22-625 .
             2952          [(12)] (11) Notwithstanding [the provisions of] Subsection (1), Subsection (7)(b), and
             2953      Section 31A-22-618 , an insurer or third party administrator is not required to, but may, enter
             2954      into [contracts] a contract with a licensed athletic [trainers] trainer, licensed under Title 58,
             2955      Chapter 40a, Athletic Trainer Licensing Act.
             2956          Section 14. Section 31A-22-618.5 is amended to read:
             2957           31A-22-618.5. Health benefit plan offerings.
             2958          (1) The purpose of this section is to increase the range of health benefit plans available
             2959      in the small group, small employer group, large group, and individual insurance markets.
             2960          (2) A health maintenance organization that is subject to Chapter 8, Health Maintenance
             2961      Organizations and Limited Health Plans:
             2962          (a) shall offer to potential purchasers at least one health benefit plan that is subject to
             2963      the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             2964      and
             2965          (b) may offer to a potential purchaser one or more health benefit plans that:
             2966          (i) are not subject to one or more of the following:
             2967          (A) the limitations on insured indemnity benefits in Subsection 31A-8-105 (4);
             2968          (B) the limitation on point of service products in Subsections 31A-8-408 (3) through
             2969      (6);
             2970          (C) except as provided in Subsection (2)(b)(ii), basic health care services as defined in


             2971      Section 31A-8-101 ; or
             2972          (D) coverage mandates enacted after January 1, 2009 that are not required by federal
             2973      law, provided that the insurer offers one plan under Subsection (2)(a) that covers the mandate
             2974      enacted after January 1, 2009; and
             2975          (ii) when offering a health plan under this section, provide coverage for an emergency
             2976      medical condition as required by Section 31A-22-627 as follows:
             2977          (A) within the organization's service area, covered services shall include health care
             2978      services from nonaffiliated providers when medically necessary to stabilize an emergency
             2979      medical condition; and
             2980          (B) outside the organization's service area, covered services shall include medically
             2981      necessary health care services for the treatment of an emergency medical condition that are
             2982      immediately required while the enrollee is outside the geographic limits of the organization's
             2983      service area.
             2984          (3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
             2985      Maintenance Organizations and Limited Health Plans:
             2986          (a) [notwithstanding Subsection 31A-22-617 (9),] may offer a health benefit plan that is
             2987      not subject to Section 31A-22-618 ;
             2988          (b) when offering a health plan under this Subsection (3), shall provide coverage of
             2989      emergency care services as required by Section 31A-22-627 ; and
             2990          (c) is not subject to coverage mandates enacted after January 1, 2009 that are not
             2991      required by federal law, provided that an insurer offers one plan that covers a mandate enacted
             2992      after January 1, 2009.
             2993          (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
             2994      Subsection (2)(b).
             2995          (5) (a) Any difference in price between a health benefit plan offered under Subsections
             2996      (2)(a) and (b) shall be based on actuarially sound data.
             2997          (b) Any difference in price between a health benefit plan offered under Subsection
             2998      (3)(a) shall be based on actuarially sound data.
             2999          (6) Nothing in this section limits the number of health benefit plans that an insurer may
             3000      offer.
             3001          Section 15. Section 31A-22-625 is amended to read:


             3002           31A-22-625. Catastrophic coverage of mental health conditions.
             3003          (1) As used in this section:
             3004          (a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
             3005      that does not impose a lifetime limit, annual payment limit, episodic limit, inpatient or
             3006      outpatient service limit, or maximum out-of-pocket limit that places a greater financial burden
             3007      on an insured for the evaluation and treatment of a mental health condition than for the
             3008      evaluation and treatment of a physical health condition.
             3009          (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
             3010      factors, such as deductibles, copayments, or coinsurance, before reaching a maximum
             3011      out-of-pocket limit.
             3012          (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
             3013      limit for physical health conditions and another maximum out-of-pocket limit for mental health
             3014      conditions, except that if separate out-of-pocket limits are established, the out-of-pocket limit
             3015      for mental health conditions may not exceed the out-of-pocket limit for physical health
             3016      conditions.
             3017          (b) (i) "50/50 mental health coverage" means coverage in a health benefit plan that
             3018      pays for at least 50% of covered services for the diagnosis and treatment of mental health
             3019      conditions.
             3020          (ii) "50/50 mental health coverage" may include a restriction on:
             3021          (A) episodic limits;
             3022          (B) inpatient or outpatient service limits; or
             3023          (C) maximum out-of-pocket limits.
             3024          (c) "Large employer" is as defined in 42 U.S.C. Sec. 300gg-91.
             3025          (d) (i) "Mental health condition" means a condition or disorder involving mental illness
             3026      that falls under a diagnostic category listed in the Diagnostic and Statistical Manual, as
             3027      periodically revised.
             3028          (ii) "Mental health condition" does not include the following when diagnosed as the
             3029      primary or substantial reason or need for treatment:
             3030          (A) a marital or family problem;
             3031          (B) a social, occupational, religious, or other social maladjustment;
             3032          (C) a conduct disorder;


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


             3064      of the Public Health Service Act, 42 U.S.C. Sec. 300gg-26, and federal regulations adopted
             3065      pursuant to that act.
             3066          (4) (a) An insurer may provide catastrophic mental health coverage to a small employer
             3067      through a managed care organization or system in a manner consistent with Chapter 8, Health
             3068      Maintenance Organizations and Limited Health Plans, regardless of whether the insurance
             3069      policy uses a managed care organization or system for the treatment of physical health
             3070      conditions.
             3071          (b) (i) Notwithstanding any other provision of this title, an insurer may:
             3072          (A) establish a closed panel of providers for catastrophic mental health coverage; and
             3073          (B) refuse to provide a benefit to be paid for services rendered by a nonpanel provider
             3074      unless:
             3075          (I) the insured is referred to a nonpanel provider with the prior authorization of the
             3076      insurer; and
             3077          (II) the nonpanel provider agrees to follow the insurer's protocols and treatment
             3078      guidelines.
             3079          (ii) If an insured receives services from a nonpanel provider in the manner permitted by
             3080      Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
             3081      average amount paid by the insurer for comparable services of panel providers under a
             3082      noncapitated arrangement who are members of the same class of health care providers.
             3083          (iii) This Subsection (4)(b) may not be construed as requiring an insurer to authorize a
             3084      referral to a nonpanel provider.
             3085          (c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
             3086      mental health condition shall be rendered:
             3087          (i) by a mental health therapist as defined in Section 58-60-102 ; or
             3088          (ii) in a health care facility:
             3089          (A) licensed or otherwise authorized to provide mental health services pursuant to:
             3090          (I) Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act; or
             3091          (II) Title 62A, Chapter 2, Licensure of Programs and Facilities; and
             3092          (B) that provides a program for the treatment of a mental health condition pursuant to a
             3093      written plan.
             3094          (5) The commissioner may prohibit an insurance policy that provides mental health


             3095      coverage in a manner that is inconsistent with this section.
             3096          (6) The commissioner [shall: (a)] may adopt rules, in accordance with Title 63G,
             3097      Chapter 3, Utah Administrative Rulemaking Act, as necessary to ensure compliance with this
             3098      section[; and].
             3099          [(b) provide general figures on the percentage of insurance policies that include:]
             3100          [(i) no mental health coverage;]
             3101          [(ii) 50/50 mental health coverage;]
             3102          [(iii) catastrophic mental health coverage; and]
             3103          [(iv) coverage that exceeds the minimum requirements of this section.]
             3104          [(7) This section may not be construed as discouraging or otherwise preventing an
             3105      insurer from providing mental health coverage in connection with an individual insurance
             3106      policy.]
             3107          Section 16. Section 31A-22-635 is amended to read:
             3108           31A-22-635. Uniform application -- Uniform waiver of coverage -- Information
             3109      on Health Insurance Exchange.
             3110          (1) For purposes of this section, "insurer":
             3111          (a) is defined in Subsection 31A-22-634 (1); and
             3112          (b) includes the state employee's risk pool under Section 49-20-202 .
             3113          (2) (a) Insurers offering a health benefit plan to an individual or small employer shall
             3114      use a uniform application form.
             3115          (b) The uniform application form:
             3116          (i) [except for cancer and transplants,] may not include questions about an applicant's
             3117      health history [prior to the previous five years]; and
             3118          (ii) shall be shortened and simplified in accordance with rules adopted by the
             3119      commissioner.
             3120          (c) Insurers offering a health benefit plan to a small employer shall use a uniform
             3121      waiver of coverage form, which may not include health status related questions [other than
             3122      pregnancy], and is limited to:
             3123          (i) information that identifies the employee;
             3124          (ii) proof of the employee's insurance coverage; and
             3125          (iii) a statement that the employee declines coverage with a particular employer group.


             3126          (3) Notwithstanding the requirements of Subsection (2)(a), the uniform application and
             3127      uniform waiver of coverage forms may, if the combination or modification is approved by the
             3128      commissioner, be combined or modified to facilitate a more efficient and consumer friendly
             3129      experience for:
             3130          (a) enrollees using the Health Insurance Exchange; or
             3131          (b) insurers using electronic applications.
             3132          (4) The uniform application form, and uniform waiver form, shall be adopted and
             3133      approved by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
             3134      Rulemaking Act.
             3135          (5) (a) An insurer who offers a health benefit plan [in either the group or individual
             3136      market] on the Health Insurance Exchange created in Section 63M-1-2504 , shall:
             3137          (i) accept and process an electronic submission of the uniform application or uniform
             3138      waiver from the Health Insurance Exchange using the electronic standards adopted pursuant to
             3139      Section 63M-1-2506 ;
             3140          (ii) if requested, provide the applicant with a copy of the completed application either
             3141      by mail or electronically;
             3142          (iii) post all health benefit plans offered by the insurer in the defined contribution
             3143      arrangement market on the Health Insurance Exchange; and
             3144          (iv) post the information required by Subsection (6) on the Health Insurance Exchange
             3145      for every health benefit plan the insurer offers on the Health Insurance Exchange.
             3146          (b) Except as provided in Subsection (5)(c), an insurer who posts health benefit plans
             3147      on the Health Insurance Exchange may not directly or indirectly offer products on the Health
             3148      Insurance Exchange that are not health benefit plans.
             3149          (c) Notwithstanding Subsection (5)(b):
             3150          (i) an insurer may offer a health savings account on the Health Insurance Exchange;
             3151      [and]
             3152          (ii) an insurer may offer dental [and vision] plans on the Health Insurance Exchange
             3153      [if:]; and
             3154          [(A) the department determines, after study and consultation with the Health System
             3155      Reform Task Force, that the department is able to establish standards for dental and vision
             3156      policies offered on the Health Insurance Exchange, and the department determines whether a


             3157      risk adjuster mechanism is necessary for a defined contribution vision and dental plan market
             3158      on the Health Insurance Exchange; and]
             3159          [(B)] (iii) the department[, in accordance with recommendations from the Health
             3160      System Reform Task Force, adopts] may make administrative rules to regulate the offer of
             3161      dental [and vision] plans on the Health Insurance Exchange.
             3162          (6) An insurer shall provide the commissioner and the Health Insurance Exchange with
             3163      the following information for each health benefit plan submitted to the Health Insurance
             3164      Exchange, in the electronic format required by Subsection 63M-1-2506 (1):
             3165          (a) plan design, benefits, and options offered by the health benefit plan including state
             3166      mandates the plan does not cover;
             3167          (b) information and Internet address to online provider networks;
             3168          (c) wellness programs and incentives;
             3169          (d) descriptions of prescription drug benefits, exclusions, or limitations;
             3170          (e) the percentage of claims paid by the insurer within 30 days of the date a claim is
             3171      submitted to the insurer for the prior year; and
             3172          (f) the claims denial and insurer transparency information developed in accordance
             3173      with Subsection 31A-22-613.5 (4).
             3174          (7) The department shall post on the Health Insurance Exchange the department's
             3175      solvency rating for each insurer who posts a health benefit plan on the Health Insurance
             3176      Exchange. The solvency rating for each insurer shall be based on methodology established by
             3177      the department by administrative rule and shall be updated each calendar year.
             3178          (8) (a) The commissioner may request information from an insurer under Section
             3179      31A-22-613.5 to verify the data submitted to the department and to the Health Insurance
             3180      Exchange.
             3181          (b) The commissioner shall regulate [any] the fees charged by insurers to an enrollee
             3182      for a uniform application form or electronic submission of the application forms.
             3183          Section 17. Section 31A-22-721 is amended to read:
             3184           31A-22-721. A health benefit plan for a plan sponsor -- Discontinuance and
             3185      nonrenewal.
             3186          (1) Except as otherwise provided in this section, a health benefit plan for a plan
             3187      sponsor is renewable and continues in force:


             3188          (a) with respect to all eligible employees and dependents; and
             3189          (b) at the option of the plan sponsor.
             3190          (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
             3191          (a) for a network plan, if[: (i)] there is no longer any enrollee under the group health
             3192      plan who lives, resides, or works in:
             3193          [(A)] (i) the service area of the insurer; or
             3194          [(B)] (ii) the area for which the insurer is authorized to do business; [and] or
             3195          [(ii) in the case of the small employer market, the insurer applies the same criteria the
             3196      insurer would apply in denying enrollment in the plan under Subsection 31A-30-108 (7); or]
             3197          (b) for coverage made available in the small or large employer market only through an
             3198      association, if:
             3199          (i) the employer's membership in the association ceases; and
             3200          (ii) the coverage is terminated uniformly without regard to any health status-related
             3201      factor relating to any covered individual.
             3202          (3) A health benefit plan for a plan sponsor may be discontinued if:
             3203          (a) a condition described in Subsection (2) exists;
             3204          (b) the plan sponsor fails to pay premiums or contributions in accordance with the
             3205      terms of the contract;
             3206          (c) the plan sponsor:
             3207          (i) performs an act or practice that constitutes fraud; or
             3208          (ii) makes an intentional misrepresentation of material fact under the terms of the
             3209      coverage;
             3210          (d) the insurer:
             3211          (i) elects to discontinue offering a particular health benefit product delivered or issued
             3212      for delivery in this state;
             3213          (ii) (A) provides notice of the discontinuation in writing:
             3214          (I) to each plan sponsor, employee, and dependent of a plan sponsor or employee; and
             3215          (II) at least 90 days before the date the coverage will be discontinued;
             3216          (B) provides notice of the discontinuation in writing:
             3217          (I) to the commissioner; and
             3218          (II) at least three working days prior to the date the notice is sent to the affected plan


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


             3250          (i) minimum participation requirements; or
             3251          (ii) employer contribution requirements.
             3252          (5) A small employer health benefit plan may be discontinued or nonrenewed:
             3253          (a) if a condition described in Subsection (2) exists; or
             3254          (b) for noncompliance with the insurer's employer contribution requirements.
             3255          (6) A small employer health benefit plan may be nonrenewed:
             3256          (a) if a condition described in Subsection (2) exists; or
             3257          (b) for noncompliance with the insurer's minimum participation requirements.
             3258          (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
             3259      discontinued if after issuance of coverage the eligible employee:
             3260          (i) engages in an act or practice that constitutes fraud in connection with the coverage;
             3261      or
             3262          (ii) makes an intentional misrepresentation of material fact in connection with the
             3263      coverage.
             3264          (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
             3265          (i) 12 months after the date of discontinuance; and
             3266          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
             3267      to reenroll.
             3268          (c) At the time the eligible employee's coverage is discontinued under Subsection
             3269      (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
             3270      discontinued.
             3271          (d) An eligible employee may not be discontinued under this Subsection (7) because of
             3272      a fraud or misrepresentation that relates to health status.
             3273          (8) (a) Except as provided in Subsection (8)(b), an insurer that elects to discontinue
             3274      offering a health benefit plan under Subsection (3)(e) shall be prohibited from writing new
             3275      business in such market in this state for a period of five years beginning on the date of
             3276      discontinuation of the last coverage that is discontinued.
             3277          (b) The commissioner may waive the prohibition under Subsection (8)(a) when the
             3278      commissioner finds that waiver is in the public interest:
             3279          (i) to promote competition; or
             3280          (ii) to resolve inequity in the marketplace.


             3281          (9) If an insurer is doing business in one established geographic service area of the
             3282      state, this section applies only to the insurer's operations in that geographic service area.
             3283          (10) An insurer may modify a health benefit plan for a plan sponsor only:
             3284          (a) at the time of coverage renewal; and
             3285          (b) if the modification is effective uniformly among all plans with a particular product
             3286      or service.
             3287          (11) For purposes of this section, a reference to "plan sponsor" includes a reference to
             3288      the employer:
             3289          (a) with respect to coverage provided to an employer member of the association; and
             3290          (b) if the health benefit plan is made available by an insurer in the employer market
             3291      only through:
             3292          (i) an association;
             3293          (ii) a trust; or
             3294          (iii) a discretionary group.
             3295          (12) (a) A small employer that, after purchasing a health benefit plan in the small group
             3296      market, employs on average more than 50 eligible employees on each business day in a
             3297      calendar year may continue to renew the health benefit plan purchased in the small group
             3298      market.
             3299          (b) A large employer that, after purchasing a health benefit plan in the large group
             3300      market, employs on average less than 51 eligible employees on each business day in a calendar
             3301      year may continue to renew the health benefit plan purchased in the large group market.
             3302          (13) An insurer offering employer sponsored health benefit plans shall comply with the
             3303      Health Insurance Portability and Accountability Act, 42 U.S.C. Sec. 300gg and 300gg-1.
             3304          Section 18. Section 31A-23a-102 is amended to read:
             3305           31A-23a-102. Definitions.
             3306          As used in this chapter:
             3307          (1) "Bail bond producer" is as defined in Section 31A-35-102 .
             3308          (2) "Home state" means a state or territory of the United States or the District of
             3309      Columbia in which an insurance producer:
             3310          (a) maintains the insurance producer's principal:
             3311          (i) place of residence; or


             3312          (ii) place of business; and
             3313          (b) is licensed to act as an insurance producer.
             3314          (3) "Insurer" is as defined in Section 31A-1-301 , except that the following persons or
             3315      similar persons are not insurers for purposes of Part 7, Producer Controlled Insurers:
             3316          (a) a risk retention group as defined in:
             3317          (i) the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499;
             3318          (ii) the Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.; and
             3319          (iii) Chapter 15, Part 2, Risk Retention Groups Act;
             3320          (b) a residual market pool;
             3321          (c) a joint underwriting authority or association; and
             3322          (d) a captive insurer.
             3323          (4) "License" is defined in Section 31A-1-301 .
             3324          (5) (a) "Managing general agent" means a person that:
             3325          (i) manages all or part of the insurance business of an insurer, including the
             3326      management of a separate division, department, or underwriting office;
             3327          (ii) acts as an agent for the insurer whether it is known as a managing general agent,
             3328      manager, or other similar term;
             3329          (iii) produces and underwrites an amount of gross direct written premium equal to, or
             3330      more than, 5% of[,] the policyholder surplus as reported in the last annual statement of the
             3331      insurer in any one quarter or year:
             3332          (A) with or without the authority;
             3333          (B) separately or together with an affiliate; and
             3334          (C) directly or indirectly; and
             3335          (iv) (A) adjusts or pays claims in excess of an amount determined by the
             3336      commissioner; or
             3337          (B) negotiates reinsurance on behalf of the insurer.
             3338          (b) Notwithstanding Subsection (5)(a), the following persons may not be considered as
             3339      managing general agent for the purposes of this chapter:
             3340          (i) an employee of the insurer;
             3341          (ii) a United States manager of the United States branch of an alien insurer;
             3342          (iii) an underwriting manager that, pursuant to contract:


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


             3374          (C) is subject to Chapter 16, Insurance Holding Companies; and
             3375          (D) is not compensated based on the volume of premiums written; and
             3376          (iv) the manager of a group, association, pool, or organization of insurers that:
             3377          (A) engage in joint underwriting or joint reinsurance; and
             3378          (B) are subject to examination by the insurance commissioner of the state in which the
             3379      manager's principal business office is located.
             3380          (10) "Resident" is as defined by rule made by the commissioner in accordance with
             3381      Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             3382          [(10)] (11) "Search" means a license subline of authority in conjunction with the title
             3383      insurance line of authority that allows a person to issue title insurance commitments or policies
             3384      on behalf of a title insurer.
             3385          [(11)] (12) "Sell" means to exchange a contract of insurance:
             3386          (a) by any means;
             3387          (b) for money or its equivalent; and
             3388          (c) on behalf of an insurance company.
             3389          [(12)] (13) "Solicit" means:
             3390          (a) attempting to sell insurance;
             3391          (b) asking or urging a person to apply for:
             3392          (i) a particular kind of insurance; and
             3393          (ii) insurance from a particular insurance company;
             3394          (c) advertising insurance, including advertising for the purpose of obtaining leads for
             3395      the sale of insurance; or
             3396          (d) holding oneself out as being in the insurance business.
             3397          [(13)] (14) "Terminate" means:
             3398          (a) the cancellation of the relationship between:
             3399          (i) an individual licensee or agency licensee and a particular insurer; or
             3400          (ii) an individual licensee and a particular agency licensee; or
             3401          (b) the termination of:
             3402          (i) an individual licensee's or agency licensee's authority to transact insurance on behalf
             3403      of a particular insurance company; or
             3404          (ii) an individual licensee's authority to transact insurance on behalf of a particular


             3405      agency licensee.
             3406          [(14)] (15) "Title marketing representative" means a person who:
             3407          (a) represents a title insurer in soliciting, requesting, or negotiating the placing of:
             3408          (i) title insurance; or
             3409          (ii) escrow services; and
             3410          (b) does not have a search or escrow license as provided in Section 31A-23a-106 .
             3411          [(15)] (16) "Uniform application" means the version of the National Association of
             3412      Insurance Commissioners' uniform application for resident and nonresident producer licensing
             3413      at the time the application is filed.
             3414          [(16)] (17) "Uniform business entity application" means the version of the National
             3415      Association of Insurance Commissioners' uniform business entity application for resident and
             3416      nonresident business entities at the time the application is filed.
             3417          Section 19. Section 31A-23a-104 is amended to read:
             3418           31A-23a-104. Application for individual license -- Application for agency license.
             3419          (1) This section applies to an initial or renewal license as a:
             3420          (a) producer;
             3421          (b) surplus lines producer;
             3422          (c) limited line producer;
             3423          (d) consultant;
             3424          (e) managing general agent; or
             3425          (f) reinsurance intermediary.
             3426          (2) (a) Subject to Subsection (2)(b), to obtain or renew an individual license, an
             3427      individual shall:
             3428          (i) file an application for an initial or renewal individual license with the commissioner
             3429      on forms and in a manner the commissioner prescribes; and
             3430          (ii) pay a license fee that is not refunded if the application:
             3431          (A) is denied; or
             3432          (B) is incomplete when filed and is never completed by the applicant.
             3433          (b) An application described in this Subsection (2) shall provide:
             3434          (i) information about the applicant's identity;
             3435          (ii) the applicant's Social Security number;


             3436          (iii) the applicant's personal history, experience, education, and business record;
             3437          (iv) whether the applicant is 18 years of age or older;
             3438          (v) whether the applicant has committed an act that is a ground for denial, suspension,
             3439      or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ;
             3440          (vi) if the application is for a resident individual producer license, certification that the
             3441      applicant complies with Section 31A-23a-203.5 ; and
             3442          (vii) any other information the commissioner reasonably requires.
             3443          (3) The commissioner may require a document reasonably necessary to verify the
             3444      information contained in an application filed under this section.
             3445          (4) An applicant's Social Security number contained in an application filed under this
             3446      section is a private record under Section 63G-2-302 .
             3447          (5) (a) Subject to Subsection (5)(b), to obtain or renew an agency license, a person
             3448      shall:
             3449          (i) file an application for an initial or renewal agency license with the commissioner on
             3450      forms and in a manner the commissioner prescribes; and
             3451          (ii) pay a license fee that is not refunded if the application:
             3452          (A) is denied; or
             3453          (B) is incomplete when filed and is never completed by the applicant.
             3454          (b) An application described in Subsection (5)(a) shall provide:
             3455          (i) information about the applicant's identity;
             3456          (ii) the applicant's federal employer identification number;
             3457          (iii) the designated responsible licensed [producer] individual;
             3458          (iv) the identity of the owners, partners, officers, and directors;
             3459          (v) whether the applicant has committed an act that is a ground for denial, suspension,
             3460      or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ; and
             3461          (vi) any other information the commissioner reasonably requires.
             3462          Section 20. Section 31A-23a-105 is amended to read:
             3463           31A-23a-105. General requirements for individual and agency license issuance
             3464      and renewal.
             3465          (1) (a) The commissioner shall issue or renew a license to a person described in
             3466      Subsection (1)(b) to act as:


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


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


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


             3560      Subsection (3)(c)(ii); and
             3561          (iii) charge the person applying for a license or for consent to engage in the business of
             3562      insurance a fee equal to the aggregate of Subsections (3)(e)(i) and (ii).
             3563          (4) To become a resident licensee in accordance with Section 31A-23a-104 and this
             3564      section, a person licensed as one of the following in another state who moves to this state shall
             3565      apply within 90 days of establishing legal residence in this state:
             3566          (a) insurance producer;
             3567          (b) surplus lines producer;
             3568          (c) limited line producer;
             3569          (d) consultant;
             3570          (e) managing general agent; or
             3571          (f) reinsurance intermediary.
             3572          (5) (a) The commissioner may deny a license application for a license listed in
             3573      Subsection (5)(b) if the person applying for the license, as to the license type and line of
             3574      authority classification applied for under Section 31A-23a-106 :
             3575          (i) fails to satisfy the requirements as set forth in this section; or
             3576          (ii) commits an act that is grounds for denial, suspension, or revocation as set forth in
             3577      Section 31A-23a-111 .
             3578          (b) This Subsection (5) applies to the following licenses:
             3579          (i) producer;
             3580          (ii) surplus lines producer;
             3581          (iii) limited line producer;
             3582          (iv) consultant;
             3583          (v) managing general agent; or
             3584          (vi) reinsurance intermediary.
             3585          (6) Notwithstanding the other provisions of this section, the commissioner may:
             3586          (a) issue a license to an applicant for a license for a title insurance line of authority only
             3587      with the concurrence of the Title and Escrow Commission; and
             3588          (b) renew a license for a title insurance line of authority only with the concurrence of
             3589      the Title and Escrow Commission.
             3590          Section 21. Section 31A-23a-108 is amended to read:


             3591           31A-23a-108. Examination requirements.
             3592          (1) (a) The commissioner may require [applicants] an applicant for [any] a particular
             3593      license type under Section 31A-23a-106 to pass a line of authority examination as a
             3594      requirement for a license, except that an examination may not be required of [applicants] an
             3595      applicant for:
             3596          (i) [licenses] a license under Subsection 31A-23a-106 (2)(c); or
             3597          (ii) [other] another limited line license [lines] line of authority recognized by the
             3598      commissioner or the Title and Escrow Commission by rule as provided in Subsection
             3599      31A-23a-106 (3).
             3600          (b) The examination described in Subsection (1)(a):
             3601          (i) shall reasonably relate to the line of authority for which it is prescribed; and
             3602          (ii) may be administered by the commissioner or as otherwise specified by rule.
             3603          (2) The commissioner shall waive the requirement of an examination for a nonresident
             3604      applicant who:
             3605          (a) applies for an insurance producer license in this state within 90 days of establishing
             3606      legal residence in this state;
             3607          (b) has been licensed for the same line of authority in another state; and
             3608          (c) (i) is licensed in the state described in Subsection (2)(b) at the time the applicant
             3609      applies for an insurance producer license in this state; or
             3610          (ii) if the application is received within 90 days of the cancellation of the applicant's
             3611      previous license:
             3612          (A) the prior state certifies that at the time of cancellation, the applicant was in good
             3613      standing in that state; or
             3614          (B) the state's producer database records maintained by the National Association of
             3615      Insurance Commissioners or the National Association of Insurance Commissioner's affiliates or
             3616      subsidiaries, indicates that the producer is or was licensed in good standing for the line of
             3617      authority requested.
             3618          [(3) A nonresident producer licensee who moves to this state and applies for a resident
             3619      license within 90 days of establishing legal residence in this state shall be exempt from any line
             3620      of authority examination that the producer was authorized on the producer's nonresident
             3621      producer license, except where the commissioner determines otherwise by rule.]


             3622          [(4)] (3) This section's requirement may only be applied to [applicants who are natural
             3623      persons] an applicant who is a natural person.
             3624          Section 22. Section 31A-23a-112 is amended to read:
             3625           31A-23a-112. Probation -- Grounds for revocation.
             3626          (1) The commissioner may place a licensee on probation for a period not to exceed 24
             3627      months as follows:
             3628          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
             3629      Procedures Act, for [any] circumstances that would justify a suspension under Section
             3630      31A-23a-111 ; or
             3631          (b) at the issuance or renewal of a [new] license:
             3632          (i) with an admitted violation under 18 U.S.C. [Sections] Sec. 1033 [and 1034]; or
             3633          (ii) with a response to background information questions on a new or renewal license
             3634      application [indicating that] or information received from a background check conducted in
             3635      connection with a new or renewal license application that indicates:
             3636          (A) the person has been convicted of a crime, that is listed by rule made in accordance
             3637      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
             3638      probation;
             3639          (B) the person is currently charged with a crime, that is listed by rule made in
             3640      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             3641      grounds for probation regardless of whether adjudication is withheld;
             3642          (C) the person has been involved in an administrative proceeding regarding [any] a
             3643      professional or occupational license; or
             3644          (D) [any] a business in which the person is or was an owner, partner, officer, or
             3645      director has been involved in an administrative proceeding regarding [any] a professional or
             3646      occupational license.
             3647          (2) The commissioner may place a licensee on probation for a specified period no
             3648      longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [Sections]
             3649      Sec. 1033 [and 1034].
             3650          (3) The probation order shall state the conditions for retention of the license, which
             3651      shall be reasonable.
             3652          (4) [Any] A violation of the probation is grounds for revocation pursuant to [any] a


             3653      proceeding authorized under Title 63G, Chapter 4, Administrative Procedures Act.
             3654          Section 23. Section 31A-23a-113 is amended to read:
             3655           31A-23a-113. License lapse and voluntary surrender.
             3656          (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
             3657          (i) pay when due a fee under Section 31A-3-103 ;
             3658          (ii) complete continuing education requirements under Section 31A-23a-202 before
             3659      submitting the license renewal application;
             3660          (iii) submit a completed renewal application as required by Section 31A-23a-104 ;
             3661          (iv) submit additional documentation required to complete the licensing process as
             3662      related to a specific license type or line of authority; or
             3663          (v) maintain an active license in a [resident] licensee's home state if the licensee is a
             3664      nonresident licensee.
             3665          (b) (i) A licensee whose license lapses due to the following may request an action
             3666      described in Subsection (1)(b)(ii):
             3667          (A) military service;
             3668          (B) voluntary service for a period of time designated by the person for whom the
             3669      licensee provides voluntary service; or
             3670          (C) some other extenuating circumstances, such as long-term medical disability.
             3671          (ii) A licensee described in Subsection (1)(b)(i) may request:
             3672          (A) reinstatement of the license no later than one year after the day on which the
             3673      license lapses; and
             3674          (B) waiver of any of the following imposed for failure to comply with renewal
             3675      procedures:
             3676          (I) an examination requirement;
             3677          (II) reinstatement fees set under Section 31A-3-103 ;
             3678          (III) continuing education requirements; or
             3679          (IV) other sanction imposed for failure to comply with renewal procedures.
             3680          (2) If a license issued under this chapter is voluntarily surrendered, the license or line
             3681      of authority may be reinstated:
             3682          (a) during the license period in which the license is voluntarily surrendered; and
             3683          (b) no later than one year after the day on which the license is voluntarily surrendered.


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


             3715          (E) another method provided by rule.
             3716          (iii) (A) Notwithstanding Subsections (3)(b)(i)(A) and (B), an individual title insurance
             3717      producer is required to complete 12 credit hours of continuing education for every two-year
             3718      licensing period, with 3 of the credit hours being ethics courses unless the individual title
             3719      insurance producer is licensed in this state as an individual title insurance producer for 20 or
             3720      more consecutive years.
             3721          (B) If an individual title insurance producer is licensed in this state as an individual
             3722      title insurance producer for 20 or more consecutive years, the individual title insurance
             3723      producer is required to complete 6 credit hours of continuing education for every two-year
             3724      licensing period, with 3 of the credit hours being ethics courses.
             3725          (C) Notwithstanding Subsection (3)(b)(iii)(A) or (B), an individual title insurance
             3726      producer is considered to have met the continuing education requirements imposed under
             3727      Subsection (3)(b)(iii)(A) or (B) if the individual title insurance producer:
             3728          (I) is an active member in good standing with the Utah State Bar;
             3729          (II) is in compliance with the continuing education requirements of the Utah State Bar;
             3730      and
             3731          (III) if requested by the department, provides the department evidence that the
             3732      individual title insurance producer complied with the continuing education requirements of the
             3733      Utah State Bar.
             3734          (c) A licensee may obtain continuing education hours at any time during the two-year
             3735      licensing period.
             3736          (d) (i) A licensee is exempt from continuing education requirements under this section
             3737      if:
             3738          (A) the licensee was first licensed before [April 1, 1978] December 31, 1982;
             3739          (B) the license does not have a continuous lapse for a period of more than one year,
             3740      except for a license for which the licensee has had an exemption approved before May 11,
             3741      2011;
             3742          (C) the licensee requests an exemption from the department; and
             3743          (D) the department approves the exemption.
             3744          (ii) If the department approves the exemption under Subsection (3)(d)(i), the licensee is
             3745      not required to apply again for the exemption.


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


             3777      licensed insurance producer or consultant.
             3778          (8) A producer or consultant subject to this section shall keep documentation of
             3779      completing the continuing education requirements of this section for two years after the end of
             3780      the two-year licensing period to which the continuing education applies.
             3781          Section 25. Section 31A-23a-203 is amended to read:
             3782           31A-23a-203. Training period requirements.
             3783          (1) A producer is eligible to become a surplus lines producer only if the producer:
             3784          (a) has passed the applicable surplus lines producer examination;
             3785          (b) has been a producer with property [and] or casualty or both lines of authority for at
             3786      least three years during the four years immediately preceding the date of application; and
             3787          (c) has paid the applicable fee under Section 31A-3-103 .
             3788          (2) A person is eligible to become a consultant only if the person has acted in a
             3789      capacity that would provide the person with preparation to act as an insurance consultant for a
             3790      period aggregating not less than three years during the four years immediately preceding the
             3791      date of application.
             3792          (3) (a) A resident producer with an accident and health line of authority may only sell
             3793      long-term care insurance if the producer:
             3794          (i) initially completes a minimum of three hours of long-term care training before
             3795      selling long-term care coverage; and
             3796          (ii) after completing the training required by Subsection (3)(a)(i), completes a
             3797      minimum of three hours of long-term care training during each subsequent two-year licensing
             3798      period.
             3799          (b) A course taken to satisfy a long-term care training requirement may be used toward
             3800      satisfying a producer continuing education requirement.
             3801          (c) Long-term care training is not a continuing education requirement to renew a
             3802      producer license.
             3803          (d) An insurer that issues long-term care insurance shall demonstrate to the
             3804      commissioner, upon request, that a producer who is appointed by the insurer and who sells
             3805      long-term care insurance coverage is in compliance with this Subsection (3).
             3806          (4) The training periods required under this section apply only to an individual
             3807      applying for a license under this chapter.


             3808          Section 26. Section 31A-23a-402.5 is amended to read:
             3809           31A-23a-402.5. Inducements.
             3810          (1) (a) Except as provided in Subsection (2), a producer, consultant, or other licensee
             3811      under this title, or an officer or employee of a licensee, may not induce a person to enter into,
             3812      continue, or terminate an insurance contract by offering a benefit that is not:
             3813          (i) specified in the insurance contract; or
             3814          (ii) directly related to the insurance contract.
             3815          (b) An insurer may not make or knowingly allow an agreement of insurance that is not
             3816      clearly expressed in the insurance contract to be issued or renewed.
             3817          (c) A licensee under this title may not absorb the tax under Section 31A-3-301 .
             3818          (2) This section does not apply to a title insurer, an individual title insurance producer,
             3819      or agency title insurance producer, or an officer or employee of a title insurer, an individual
             3820      title insurance producer, or an agency title insurance producer.
             3821          (3) Items not prohibited by Subsection (1) include an insurer:
             3822          (a) reducing premiums because of expense savings;
             3823          (b) providing to a policyholder or insured one or more incentives, as defined by the
             3824      commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             3825      Rulemaking Act, to participate in a program or activity designed to reduce claims or claim
             3826      expenses, including:
             3827          (i) a premium discount offered to a small or large employer group based on a wellness
             3828      program if:
             3829          (A) the premium discount for the employer group does not exceed 20% of the group
             3830      premium; and
             3831          (B) the premium discount based on the wellness program is offered uniformly by the
             3832      insurer to all employer groups in the large or small group market;
             3833          (ii) a premium discount offered to employees of a small or large employer group in an
             3834      amount that does not exceed federal limits on wellness program incentives; or
             3835          (iii) a combination of premium discounts offered to the employer group and the
             3836      employees of an employer group, based on a wellness program, if:
             3837          (A) the premium discounts for the employer group comply with Subsection (3)(b)(i);
             3838      and


             3839          (B) the premium discounts for the employees of an employer group comply with
             3840      Subsection (3)(b)(ii); or
             3841          (c) receiving premiums under an installment payment plan.
             3842          (4) Items not prohibited by Subsection (1) include a producer, consultant, or other
             3843      licensee, or an officer or employee of a licensee, either directly or through a third party:
             3844          (a) engaging in a usual kind of social courtesy if receipt of the social courtesy is not
             3845      conditioned on a quote or the purchase of a particular insurance product;
             3846          (b) extending credit on a premium to the insured:
             3847          (i) without interest, for no more than 90 days from the effective date of the insurance
             3848      contract;
             3849          (ii) for interest that is not less than the legal rate under Section 15-1-1 , on the unpaid
             3850      balance after the time period described in Subsection (4)(b)(i); and
             3851          (iii) except that an installment or payroll deduction payment of premiums on an
             3852      insurance contract issued under an insurer's mass marketing program is not considered an
             3853      extension of credit for purposes of this Subsection (4)(b);
             3854          (c) preparing or conducting a survey that:
             3855          (i) is directly related to an accident and health insurance policy purchased from the
             3856      licensee; or
             3857          (ii) is used by the licensee to assess the benefit needs and preferences of insureds,
             3858      employers, or employees directly related to an insurance product sold by the licensee;
             3859          (d) providing limited human resource services that are directly related to an insurance
             3860      product sold by the licensee, including:
             3861          (i) answering questions directly related to:
             3862          (A) an employee benefit offering or administration, if the insurance product purchased
             3863      from the licensee is accident and health insurance or health insurance; and
             3864          (B) employment practices liability, if the insurance product offered by or purchased
             3865      from the licensee is property or casualty insurance; and
             3866          (ii) providing limited human resource compliance training and education directly
             3867      pertaining to an insurance product purchased from the licensee;
             3868          (e) providing the following types of information or guidance:
             3869          (i) providing guidance directly related to compliance with federal and state laws for an


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


             3901      services directly related to an insurance product purchased from the licensee;
             3902          (q) assisting with a summary plan description, including providing a summary plan
             3903      description wraparound;
             3904          (r) providing information necessary for the preparation of documents directly related to
             3905      the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq., as
             3906      amended;
             3907          (s) providing information or services directly related to the Health Insurance Portability
             3908      and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended, such as services
             3909      directly related to health care access, portability, and renewability when offered in connection
             3910      with accident and health insurance sold by a licensee;
             3911          (t) sending proof of coverage to a third party with a legitimate interest in coverage;
             3912          (u) providing information in a form approved by the commissioner and directly related
             3913      to determining whether an insurance product sold by the licensee meets the requirements of a
             3914      third party contract that requires or references insurance coverage;
             3915          (v) facilitating risk management services directly related to property and casualty
             3916      insurance products sold or offered for sale by the licensee, including:
             3917          (i) risk management;
             3918          (ii) claims and loss control services;
             3919          (iii) risk assessment consulting, including analysis of:
             3920          (A) employer's job descriptions; or
             3921          (B) employer's safety procedures or manuals; and
             3922          (iv) providing information and training on best practices;
             3923          (w) otherwise providing services that are legitimately part of servicing an insurance
             3924      product purchased from a licensee; and
             3925          (x) providing other directly related services approved by the department.
             3926          (5) An inducement prohibited under Subsection (1) includes a producer, consultant, or
             3927      other licensee, or an officer or employee of a licensee:
             3928          (a) (i) providing a [premium or commission] rebate;
             3929          (ii) paying the salary of an employee of a person who purchases an insurance product
             3930      from the licensee; or
             3931          (iii) if the licensee is an insurer, or a third party administrator who contracts with an


             3932      insurer, paying the salary for an onsite staff member to perform an act prohibited under
             3933      Subsection (5)(b)(xii); or
             3934          (b) engaging in one or more of the following unless a fee is paid in accordance with
             3935      Subsection (8):
             3936          (i) performing background checks of prospective employees;
             3937          (ii) providing legal services by a person licensed to practice law;
             3938          (iii) performing drug testing that is directly related to an insurance product purchased
             3939      from the licensee;
             3940          (iv) preparing employer or employee handbooks, except that a licensee may:
             3941          (A) provide information for a medical benefit section of an employee handbook;
             3942          (B) provide information for the section of an employee handbook directly related to an
             3943      employment practices liability insurance product purchased from the licensee; or
             3944          (C) prepare or print an employee benefit enrollment guide;
             3945          (v) providing job descriptions, postings, and applications for a person;
             3946          (vi) providing payroll services;
             3947          (vii) providing performance reviews or performance review training;
             3948          (viii) providing union advice;
             3949          (ix) providing accounting services;
             3950          (x) providing data analysis information technology programs, except as provided in
             3951      Subsection (4)(h)(ii);
             3952          (xi) providing administration of health reimbursement accounts or health savings
             3953      accounts; or
             3954          (xii) if the licensee is an insurer, or a third party administrator who contracts with an
             3955      insurer, the insurer issuing an insurance policy that lists in the insurance policy one or more of
             3956      the following prohibited benefits:
             3957          (A) performing background checks of prospective employees;
             3958          (B) providing legal services by a person licensed to practice law;
             3959          (C) performing drug testing that is directly related to an insurance product purchased
             3960      from the insurer;
             3961          (D) preparing employer or employee handbooks;
             3962          (E) providing job descriptions postings, and applications;


             3963          (F) providing payroll services;
             3964          (G) providing performance reviews or performance review training;
             3965          (H) providing union advice;
             3966          (I) providing accounting services;
             3967          (J) providing discrimination testing; or
             3968          (K) providing data analysis information technology programs.
             3969          (6) A producer, consultant, or other licensee or an officer or employee of a licensee
             3970      shall itemize and bill separately from any other insurance product or service offered or
             3971      provided under Subsection (5)(b).
             3972          (7) (a) A de minimis gift or meal not to exceed a fair market value of $25 for each
             3973      individual receiving the gift or meal is presumed to be a social courtesy not conditioned on a
             3974      quote or purchase of a particular insurance product for purposes of Subsection (4)(a).
             3975          (b) Notwithstanding Subsection (4)(a), a de minimis gift or meal not to exceed $10
             3976      may be conditioned on receipt of a quote of a particular insurance product [if the de minimis
             3977      gift or meal is provided by the insurer and not by a producer or consultant].
             3978          (8) If as provided under Subsection (5)(b) a producer, consultant, or other licensee is
             3979      paid a fee to provide an item listed in Subsection (5)(b), the licensee shall comply with
             3980      Subsection 31A-23a-501 (2) in charging the fee, except that the fee paid for the item shall equal
             3981      or exceed the fair market value of the item.
             3982          (9) For purposes of this section, "fair market value" is determined on the basis of what
             3983      an individual insured or policyholder would pay on the open market for that item.
             3984          Section 27. Section 31A-23a-501 is amended to read:
             3985           31A-23a-501. Licensee compensation.
             3986          (1) As used in this section:
             3987          (a) "Commission compensation" includes funds paid to or credited for the benefit of a
             3988      licensee from:
             3989          (i) commission amounts deducted from insurance premiums on insurance sold by or
             3990      placed through the licensee; [or]
             3991          (ii) commission amounts received from an insurer or another licensee as a result of the
             3992      sale or placement of insurance[.]; or
             3993          (iii) overrides, bonuses, contingent bonuses, or contingent commissions received from


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


             4025          (a) The disclosure required by this Subsection (2) shall:
             4026          (i) include the signature of the insured or prospective insured acknowledging the
             4027      noncommission compensation;
             4028          (ii) clearly specify the amount or extent of the noncommission compensation; and
             4029          (iii) be provided to the insured or prospective insured before the performance of the
             4030      service.
             4031          (b) Noncommission compensation shall be:
             4032          (i) limited to actual or reasonable expenses incurred for services; and
             4033          (ii) uniformly applied to all insureds or prospective insureds in a class or classes of
             4034      business or for a specific service or services.
             4035          (c) A copy of the signed disclosure required by this Subsection (2) shall be maintained
             4036      by any licensee who collects or receives the noncommission compensation or any portion of
             4037      the noncommission compensation.
             4038          (d) All accounting records relating to noncommission compensation shall be
             4039      maintained by the person described in Subsection (2)(c) in a manner that facilitates an audit.
             4040          (3) (a) A licensee may receive noncommission compensation when acting as a
             4041      producer for the insured in connection with the actual sale or placement of insurance if:
             4042          (i) the producer and the insured have agreed on the producer's noncommission
             4043      compensation; and
             4044          (ii) the producer has disclosed to the insured the existence and source of any other
             4045      compensation that accrues to the producer as a result of the transaction.
             4046          (b) The disclosure required by this Subsection (3) shall:
             4047          (i) include the signature of the insured or prospective insured acknowledging the
             4048      noncommission compensation;
             4049          (ii) clearly specify the amount or extent of the noncommission compensation and the
             4050      existence and source of any other compensation; and
             4051          (iii) be provided to the insured or prospective insured before the performance of the
             4052      service.
             4053          (c) The following additional noncommission compensation is authorized:
             4054          (i) compensation received by a producer of a compensated corporate surety who under
             4055      procedures approved by a rule or order of the commissioner is paid by surety bond principal


             4056      debtors for extra services;
             4057          (ii) compensation received by an insurance producer who is also licensed as a public
             4058      adjuster under Section 31A-26-203 , for services performed for an insured in connection with a
             4059      claim adjustment, so long as the producer does not receive or is not promised compensation for
             4060      aiding in the claim adjustment prior to the occurrence of the claim;
             4061          (iii) compensation received by a consultant as a consulting fee, provided the consultant
             4062      complies with the requirements of Section 31A-23a-401 ; or
             4063          (iv) other compensation arrangements approved by the commissioner after a finding
             4064      that they do not violate Section 31A-23a-401 and are not harmful to the public.
             4065          (d) Subject to Section 31A-23a-402.5 , a producer for the insured may receive
             4066      compensation from an insured through an insurer, for the negotiation and sale of a health
             4067      benefit plan, if there is a separate written agreement between the insured and the licensee for
             4068      the compensation. An insurer who passes through the compensation from the insured to the
             4069      licensee under this Subsection (3)(d) is not providing direct or indirect compensation or
             4070      commission compensation to the licensee.
             4071          (4) (a) For purposes of this Subsection (4), "producer" includes:
             4072          (i) a producer;
             4073          (ii) an affiliate of a producer; or
             4074          (iii) a consultant.
             4075          (b) A producer may not accept or receive any compensation from an insurer or third
             4076      party administrator for the initial placement of a health benefit plan, other than a hospital
             4077      confinement indemnity policy, unless prior to the customer's initial purchase of the health
             4078      benefit plan the producer discloses in writing to the customer that the producer will receive
             4079      compensation from the insurer or third party administrator for the placement of insurance,
             4080      including the amount or type of compensation known to the producer at the time of the
             4081      disclosure.
             4082          (c) A producer shall:
             4083          (i) obtain the customer's signed acknowledgment that the disclosure under Subsection
             4084      (4)(b) was made to the customer; or
             4085          (ii) (A) sign a statement that the disclosure required by Subsection (4)(b) was made to
             4086      the customer; and


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


             4118          (ii) inform an individual about accident and health insurance plans or public programs
             4119      offered on an exchange;
             4120          (b) solicit insurance; or
             4121          (c) submit to the exchange:
             4122          (i) personally identifiable information about an individual; and
             4123          (ii) an individual's selection of a particular accident and health insurance plan or public
             4124      program offered on the exchange.
             4125          (3) (a) "Exchange" means an online marketplace[: (i) for an individual to purchase a
             4126      qualified health plan; and (ii)] that is certified by the United States Department of Health and
             4127      Human Services as either a state-based small employer exchange or a federally facilitated
             4128      individual exchange under PPACA.
             4129          (b) [(i)] "Exchange" does not include[: (A)] an online marketplace for the purchase of
             4130      health insurance if the online marketplace is not a certified exchange [under PPACA; or] in
             4131      accordance with Subsection (3)(a).
             4132          [(B) except as provided in Subsection (3)(b)(ii), an online marketplace for small
             4133      employers that is certified as a PPACA compliant SHOP exchange.]
             4134          [(ii) For purposes of this chapter, exchange does include a small employer SHOP
             4135      exchange described under Subsection (3)(b)(i)(B) if:]
             4136          [(A) federal regulations under PPACA require a small employer exchange to allow
             4137      navigators to assist small employers and their employees with selection of qualified health
             4138      plans on a small employer exchange; and]
             4139          [(B) the state has not entered into an agreement with the United States Department of
             4140      Health and Human Services that permits the state to limit the scope of practice of navigators to
             4141      only the individual PPACA exchange.]
             4142          (4) "Navigator":
             4143          (a) means a person who facilitates enrollment in an exchange by offering to assist, or
             4144      who advertises any services to assist, with:
             4145          (i) the selection of and enrollment in a qualified health plan or a public program
             4146      offered on an exchange; or
             4147          (ii) applying for premium subsidies through an exchange; and
             4148          (b) includes a person who is an in-person assister or [an] a certified application


             4149      [assister] counselor as described in[: (i)] federal regulations or guidance issued under PPACA[;
             4150      and].
             4151          [(ii) the state exchange blueprint published by the Center for Consumer Information
             4152      and Insurance Oversight within the Centers for Medicare and Medicaid Services in the United
             4153      States Department of Health and Human Services.]
             4154          (5) "Personally identifiable information" is as defined in 45 C.F.R. Sec. 155.260.
             4155          (6) "Public programs" means the state Medicaid program in Title 26, Chapter 18,
             4156      Medical Assistance Act, and Chapter 40, Utah Children's Health Insurance Act.
             4157          (7) "Resident" is as defined by rule made by the commissioner in accordance with Title
             4158      63G, Chapter 3, Utah Administrative Rulemaking Act.
             4159          [(7)] (8) "Solicit" is as defined in Section 31A-23a-102 .
             4160          Section 29. Section 31A-23b-202 is amended to read:
             4161           31A-23b-202. Qualifications for a license.
             4162          (1) (a) The commissioner shall issue or renew a license to a person to act as a navigator
             4163      if the person:
             4164          (i) satisfies the:
             4165          (A) application requirements under Section 31A-23b-203 ;
             4166          (B) character requirements under Section 31A-23b-204 ;
             4167          (C) examination and training requirements under Section 31A-23b-205 ; and
             4168          (D) continuing education requirements under Section 31A-23b-206 ;
             4169          (ii) certifies that, to the extent applicable, the applicant:
             4170          (A) is in compliance with the surety bond requirements of Section 31A-23b-207 ; and
             4171          (B) will maintain compliance with Section 31A-23b-207 during the period for which
             4172      the license is issued or renewed; and
             4173          (iii) has not committed an act that is a ground for denial, suspension, or revocation as
             4174      provided in Section 31A-23b-401 .
             4175          (b) A license issued under this chapter is valid for [two years] one year.
             4176          (2) (a) A person shall report to the commissioner:
             4177          (i) an administrative action taken against the person, including a denial of a new or
             4178      renewal license application:
             4179          (A) in another jurisdiction; or


             4180          (B) by another regulatory agency in this state; and
             4181          (ii) a criminal prosecution taken against the person in any jurisdiction.
             4182          (b) The report required by Subsection (2)(a) shall be filed:
             4183          (i) at the time the person files the application for an individual or agency license; and
             4184          (ii) for an action or prosecution that occurs on or after the day on which the person files
             4185      the application:
             4186          (A) for an administrative action, within 30 days of the final disposition of the
             4187      administrative action; or
             4188          (B) for a criminal prosecution, within 30 days of the initial appearance before a court.
             4189          (c) The report required by Subsection (2)(a) shall include a copy of the complaint or
             4190      other relevant legal documents related to the action or prosecution described in Subsection
             4191      (2)(a).
             4192          (3) (a) The department may:
             4193          (i) require a person applying for a license to submit to a criminal background check as
             4194      a condition of receiving a license; or
             4195          (ii) accept a background check conducted by another organization.
             4196          (b) A person, if required to submit to a criminal background check under Subsection
             4197      (3)(a), shall:
             4198          (i) submit a fingerprint card in a form acceptable to the department; and
             4199          (ii) consent to a fingerprint background check by:
             4200          (A) the Utah Bureau of Criminal Identification; and
             4201          (B) the Federal Bureau of Investigation.
             4202          (c) For a person who submits a fingerprint card and consents to a fingerprint
             4203      background check under Subsection (3)(b), the department may request:
             4204          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             4205      2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             4206          (ii) complete Federal Bureau of Investigation criminal background checks through the
             4207      national criminal history system.
             4208          (d) Information obtained by the department from the review of criminal history records
             4209      received under this Subsection (3) shall be used by the department for the purposes of:
             4210          (i) determining if a person satisfies the character requirements under Section


             4211      31A-23b-204 for issuance or renewal of a license;
             4212          (ii) determining if a person failed to maintain the character requirements under Section
             4213      31A-23b-204 ; and
             4214          (iii) preventing a person who violates the federal Violent Crime Control and Law
             4215      Enforcement Act of 1994, 18 U.S.C. Sec. 1033, from engaging in the business of a navigator or
             4216      in-person assistor in the state.
             4217          (e) If the department requests the criminal background information, the department
             4218      shall:
             4219          (i) pay to the Department of Public Safety the costs incurred by the Department of
             4220      Public Safety in providing the department criminal background information under Subsection
             4221      (3)(c)(i);
             4222          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             4223      of Investigation in providing the department criminal background information under
             4224      Subsection (3)(c)(ii); and
             4225          (iii) charge the person applying for a license a fee equal to the aggregate of Subsections
             4226      (3)(e)(i) and (ii).
             4227          (4) The commissioner may deny an application for a license under this chapter if the
             4228      person applying for the license:
             4229          (a) fails to satisfy the requirements of this section; or
             4230          (b) commits an act that is grounds for denial, suspension, or revocation as set forth in
             4231      Section 31A-23b-401 .
             4232          Section 30. Section 31A-23b-205 is amended to read:
             4233           31A-23b-205. Examination and training requirements.
             4234          (1) The commissioner may require [applicants] an applicant for a license to pass an
             4235      examination and complete a training program as a requirement for a license.
             4236          (2) The examination described in Subsection (1) shall reasonably relate to:
             4237          (a) the duties and functions of a navigator;
             4238          (b) requirements for navigators as established by federal regulation under PPACA; and
             4239          (c) other requirements that may be established by the commissioner by administrative
             4240      rule.
             4241          (3) The examination may be administered by the commissioner or as otherwise


             4242      specified by administrative rule.
             4243          (4) The training required by Subsection (1) shall be approved by the commissioner and
             4244      shall include:
             4245          (a) accident and health insurance plans;
             4246          (b) qualifications for and enrollment in public programs;
             4247          (c) qualifications for and enrollment in premium subsidies;
             4248          (d) cultural and linguistic competence;
             4249          (e) conflict of interest standards;
             4250          (f) exchange functions; and
             4251          (g) other requirements that may be adopted by the commissioner by administrative
             4252      rule.
             4253          (5) The training required by Subsection (1) shall consist of:
             4254          (a) at least 21 credit hours of training before obtaining a license;
             4255          (b) at least 1 of the 21 credit hours of training described in Subsection (5)(a) on defined
             4256      contribution arrangement and the small employer Health Insurance Exchange created in
             4257      accordance with Title 63M, Chapter 1, Part 25, Health System Reform Act; and
             4258          (c) the navigator training and certification program developed by the Centers for
             4259      Medicare and Medicaid Services.
             4260          [(5)] (6) This section applies only to [applicants who are natural persons] an applicant
             4261      who is a natural person.
             4262          Section 31. Section 31A-23b-206 is amended to read:
             4263           31A-23b-206. Continuing education requirements.
             4264          (1) The commissioner shall, by rule, prescribe continuing education requirements for a
             4265      navigator.
             4266          (2) (a) The commissioner may not require a degree from an institution of higher
             4267      education as part of continuing education.
             4268          (b) The commissioner may state a continuing education requirement in terms of hours
             4269      of instruction received in:
             4270          (i) accident and health insurance;
             4271          (ii) qualification for and enrollment in public programs;
             4272          (iii) qualification for and enrollment in premium subsidies;


             4273          (iv) cultural competency;
             4274          (v) conflict of interest standards; and
             4275          (vi) other exchange functions.
             4276          (3) (a) Continuing education requirements shall require:
             4277          (i) that a licensee complete [24] 12 credit hours of continuing education for every
             4278      [two-year] one-year licensing period;
             4279          (ii) that [3] at least 2 of the [24] 12 credit hours described in Subsection (3)(a)(i) be
             4280      ethics courses; [and]
             4281          [(iii) that the licensee complete at least half of the required hours through classroom
             4282      hours of insurance and exchange related instruction.]
             4283          (iii) that at least 1 of the 12 credit hours described in Subsection (3)(a)(i) be a defined
             4284      contribution course that includes training on use of the Health Insurance Exchange; and
             4285          (iv) that a licensee complete the annual navigator training and certification program
             4286      developed by the Centers for Medicare and Medicaid Services.
             4287          (b) An hour of continuing education in accordance with Subsection (3)(a)(i) may be
             4288      obtained through:
             4289          (i) classroom attendance;
             4290          (ii) home study;
             4291          (iii) watching a video recording; or
             4292          [(iv) experience credit; or]
             4293          [(v)] (iv) another method approved by rule.
             4294          (c) A licensee may obtain continuing education hours at any time during the [two-year]
             4295      one-year license period.
             4296          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             4297      commissioner shall[,] by rule[: (i) publish a list of insurance professional designations whose
             4298      continuing education requirements can be used to meet the requirements for continuing
             4299      education under Subsection (3)(b); and (ii)] authorize one or more continuing education
             4300      providers, including a state or national professional producer or consultant associations, to:
             4301          [(A)] (i) offer a qualified program on a geographically accessible basis; and
             4302          [(B)] (ii) collect a reasonable fee for funding and administration of a continuing
             4303      education program, subject to the review and approval of the commissioner.


             4304          (4) The commissioner shall approve a continuing education provider or a continuing
             4305      education course that satisfies the requirements of this section.
             4306          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             4307      commissioner shall by rule establish the procedures for continuing education provider
             4308      registration and course approval.
             4309          (6) This section applies only to a navigator who is a natural person.
             4310          (7) A navigator shall keep documentation of completing the continuing education
             4311      requirements of this section for two years after the end of the [two-year] one-year licensing
             4312      period to which the continuing education applies.
             4313          Section 32. Section 31A-23b-301 is amended to read:
             4314           31A-23b-301. Unfair practices -- Compensation -- Limit of scope of practice.
             4315          (1) As used in this section, "false or misleading information" includes, with intent to
             4316      deceive a person examining it:
             4317          (a) filing a report;
             4318          (b) making a false entry in a record; or
             4319          (c) willfully refraining from making a proper entry in a record.
             4320          (2) (a) Communication that contains false or misleading information relating to
             4321      enrollment in an insurance plan or a public program, including information that is false or
             4322      misleading because it is incomplete, may not be made by:
             4323          (i) a person who is or should be licensed under this title;
             4324          (ii) an employee of a person described in Subsection (2)(a)(i);
             4325          (iii) a person whose primary interest is as a competitor of a person licensed under this
             4326      title; and
             4327          (iv) a person on behalf of [any of the persons] a person listed in this Subsection (2)(a).
             4328          (b) A licensee under this chapter may not:
             4329          (i) use [any] a business name, slogan, emblem, or related device that is misleading or
             4330      likely to cause the exchange, insurer, or other licensee to be mistaken for another governmental
             4331      agency, a PPACA exchange, insurer, or other licensee already in business; or
             4332          (ii) use [any] an advertisement or other insurance promotional material that would
             4333      cause a reasonable person to mistakenly believe that a state or federal government agency,
             4334      public program, or insurer:


             4335          (A) is responsible for the insurance or public program enrollment assistance activities
             4336      of the person;
             4337          (B) stands behind the credit of the person; or
             4338          (C) is a source of payment of [any] an insurance obligation of or sold by the person.
             4339          (c) A person who is not an insurer may not assume or use [any] a name that deceptively
             4340      implies or suggests that person is an insurer.
             4341          (3) A person may not engage in an unfair method of competition or any other unfair or
             4342      deceptive act or practice in the business of insurance, as defined by the commissioner by rule,
             4343      after a finding that the method of competition, the act, or the practice:
             4344          (a) is misleading;
             4345          (b) is deceptive;
             4346          (c) is unfairly discriminatory;
             4347          (d) provides an unfair inducement; or
             4348          (e) unreasonably restrains competition.
             4349          (4) A navigator licensed under this chapter is subject to the unfair marketing practices
             4350      and inducement provisions of [Section] Sections 31A-23a-402 and 31A-23a-402.5 .
             4351          (5) A navigator licensed under this chapter or who should be licensed under this
             4352      chapter:
             4353          (a) may not receive direct or indirect compensation from an accident or health insurer
             4354      or from an individual who receives services from a navigator in accordance with:
             4355          (i) federal conflict of interest regulations established pursuant to PPACA; and
             4356          (ii) administrative rule adopted by the department;
             4357          (b) may be compensated by the exchange for performing the duties of a navigator;
             4358          (c) (i) may perform, offer to perform, or advertise a service as a navigator only for a
             4359      person selecting a qualified health plan or public program offered on an exchange; and
             4360          (ii) may not perform, offer to perform, or advertise [any] services as a navigator for
             4361      individuals or small employer groups selecting accident and health insurance plans, qualified
             4362      health plans, public programs, business, or services that are not offered on an exchange; and
             4363          (d) may not recommend a particular accident and health insurance plan or qualified
             4364      health plan.
             4365          Section 33. Section 31A-23b-402 is amended to read:


             4366           31A-23b-402. Probation -- Grounds for revocation.
             4367          (1) The commissioner may place a licensee on probation for a period not to exceed 24
             4368      months as follows:
             4369          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
             4370      Procedures Act, for any circumstances that would justify a suspension under this section; or
             4371          (b) at the issuance of a new license:
             4372          (i) with an admitted violation under 18 U.S.C. [Secs.] Sec. 1033 [and 1034]; or
             4373          (ii) with a response to background information questions on a new license application
             4374      indicating that:
             4375          (A) the person has been convicted of a crime that is listed by rule made in accordance
             4376      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is a ground for
             4377      probation;
             4378          (B) the person is currently charged with a crime that is listed by rule made in
             4379      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             4380      a ground for probation regardless of whether adjudication is withheld;
             4381          (C) the person has been involved in an administrative proceeding regarding any
             4382      professional or occupational license; or
             4383          (D) any business in which the person is or was an owner, partner, officer, or director
             4384      has been involved in an administrative proceeding regarding any professional or occupational
             4385      license.
             4386          (2) The commissioner may place a licensee on probation for a specified period no
             4387      longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [Secs.] Sec.
             4388      1033 [and 1034].
             4389          (3) The probation order shall state the conditions for revocation or retention of the
             4390      license, which shall be reasonable.
             4391          (4) Any violation of the probation is a ground for revocation pursuant to any
             4392      proceeding authorized under Title 63G, Chapter 4, Administrative Procedures Act.
             4393          Section 34. Section 31A-25-208 is amended to read:
             4394           31A-25-208. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             4395      terminating a license -- Rulemaking for renewal and reinstatement.
             4396          (1) A license type issued under this chapter remains in force until:


             4397          (a) revoked or suspended under Subsection (4);
             4398          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             4399      administrative action;
             4400          (c) the licensee dies or is adjudicated incompetent as defined under:
             4401          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             4402          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             4403      Minors;
             4404          (d) lapsed under Section 31A-25-210 ; or
             4405          (e) voluntarily surrendered.
             4406          (2) The following may be reinstated within one year after the day on which the license
             4407      is no longer in force:
             4408          (a) a lapsed license; or
             4409          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             4410      not be reinstated after the license period in which the license is voluntarily surrendered.
             4411          (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
             4412      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             4413      department from pursuing additional disciplinary or other action authorized under:
             4414          (a) this title; or
             4415          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             4416      Administrative Rulemaking Act.
             4417          (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
             4418      adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             4419      commissioner may:
             4420          (i) revoke a license;
             4421          (ii) suspend a license for a specified period of 12 months or less;
             4422          (iii) limit a license in whole or in part; or
             4423          (iv) deny a license application.
             4424          (b) The commissioner may take an action described in Subsection (4)(a) if the
             4425      commissioner finds that the licensee:
             4426          (i) is unqualified for a license under Section 31A-25-202 , 31A-25-203 , or 31A-25-204 ;
             4427          (ii) has violated:


             4428          (A) an insurance statute;
             4429          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             4430          (C) an order that is valid under Subsection 31A-2-201 (4);
             4431          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
             4432      delinquency proceedings in any state;
             4433          (iv) fails to pay a final judgment rendered against the person in this state within 60
             4434      days after the day on which the judgment became final;
             4435          (v) fails to meet the same good faith obligations in claims settlement that is required of
             4436      admitted insurers;
             4437          (vi) is affiliated with and under the same general management or interlocking
             4438      directorate or ownership as another third party administrator that transacts business in this state
             4439      without a license;
             4440          (vii) refuses:
             4441          (A) to be examined; or
             4442          (B) to produce its accounts, records, and files for examination;
             4443          (viii) has an officer who refuses to:
             4444          (A) give information with respect to the third party administrator's affairs; or
             4445          (B) perform any other legal obligation as to an examination;
             4446          (ix) provides information in the license application that is:
             4447          (A) incorrect;
             4448          (B) misleading;
             4449          (C) incomplete; or
             4450          (D) materially untrue;
             4451          (x) has violated an insurance law, valid rule, or valid order of another state's insurance
             4452      department;
             4453          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             4454          (xii) has improperly withheld, misappropriated, or converted money or properties
             4455      received in the course of doing insurance business;
             4456          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             4457          (A) insurance contract; or
             4458          (B) application for insurance;


             4459          (xiv) has been convicted of a felony;
             4460          (xv) has admitted or been found to have committed an insurance unfair trade practice
             4461      or fraud;
             4462          (xvi) in the conduct of business in this state or elsewhere has:
             4463          (A) used fraudulent, coercive, or dishonest practices; or
             4464          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             4465          (xvii) has had an insurance license or its equivalent, denied, suspended, or revoked in
             4466      any other state, province, district, or territory;
             4467          (xviii) has forged another's name to:
             4468          (A) an application for insurance; or
             4469          (B) a document related to an insurance transaction;
             4470          (xix) has improperly used notes or any other reference material to complete an
             4471      examination for an insurance license;
             4472          (xx) has knowingly accepted insurance business from an individual who is not
             4473      licensed;
             4474          (xxi) has failed to comply with an administrative or court order imposing a child
             4475      support obligation;
             4476          (xxii) has failed to:
             4477          (A) pay state income tax; or
             4478          (B) comply with an administrative or court order directing payment of state income
             4479      tax;
             4480          (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
             4481      Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 [and 1034] and therefore under 18 U.S.C.
             4482      Sec. 1033 is prohibited from engaging in the business of insurance; or
             4483          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             4484      the legitimate interests of customers and the public.
             4485          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             4486      and any individual designated under the license are considered to be the holders of the agency
             4487      license.
             4488          (d) If an individual designated under the agency license commits an act or fails to
             4489      perform a duty that is a ground for suspending, revoking, or limiting the individual's license,


             4490      the commissioner may suspend, revoke, or limit the license of:
             4491          (i) the individual;
             4492          (ii) the agency if the agency:
             4493          (A) is reckless or negligent in its supervision of the individual; or
             4494          (B) knowingly participated in the act or failure to act that is the ground for suspending,
             4495      revoking, or limiting the license; or
             4496          (iii) (A) the individual; and
             4497          (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
             4498          (5) A licensee under this chapter is subject to the penalties for acting as a licensee
             4499      without a license if:
             4500          (a) the licensee's license is:
             4501          (i) revoked;
             4502          (ii) suspended;
             4503          (iii) limited;
             4504          (iv) surrendered in lieu of administrative action;
             4505          (v) lapsed; or
             4506          (vi) voluntarily surrendered; and
             4507          (b) the licensee:
             4508          (i) continues to act as a licensee; or
             4509          (ii) violates the terms of the license limitation.
             4510          (6) A licensee under this chapter shall immediately report to the commissioner:
             4511          (a) a revocation, suspension, or limitation of the person's license in any other state, the
             4512      District of Columbia, or a territory of the United States;
             4513          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             4514      the District of Columbia, or a territory of the United States; or
             4515          (c) a judgment or injunction entered against the person on the basis of conduct
             4516      involving:
             4517          (i) fraud;
             4518          (ii) deceit;
             4519          (iii) misrepresentation; or
             4520          (iv) a violation of an insurance law or rule.


             4521          (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
             4522      license in lieu of administrative action may specify a time, not to exceed five years, within
             4523      which the former licensee may not apply for a new license.
             4524          (b) If no time is specified in the order or agreement described in Subsection (7)(a), the
             4525      former licensee may not apply for a new license for five years from the day on which the order
             4526      or agreement is made without the express approval of the commissioner.
             4527          (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
             4528      a license issued under this part if so ordered by the court.
             4529          (9) The commissioner shall by rule prescribe the license renewal and reinstatement
             4530      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             4531          Section 35. Section 31A-25-209 is amended to read:
             4532           31A-25-209. Probation -- Grounds for revocation.
             4533          (1) The commissioner may place a licensee on probation for a period not to exceed 24
             4534      months as follows:
             4535          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
             4536      Procedures Act, for any circumstances that would justify a suspension under Section
             4537      31A-25-208 ; or
             4538          (b) at the issuance of a new license:
             4539          (i) with an admitted violation under 18 U.S.C. [Sections] Sec. 1033 [and 1034]; or
             4540          (ii) with a response to a background information question on a new license application
             4541      indicating that:
             4542          (A) the person has been convicted of a crime that is listed by rule made in accordance
             4543      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
             4544      probation;
             4545          (B) the person is currently charged with a crime that is listed by rule made in
             4546      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             4547      grounds for probation regardless of whether adjudication is withheld;
             4548          (C) the person has been involved in an administrative proceeding regarding any
             4549      professional or occupational license; or
             4550          (D) any business in which the person is or was an owner, partner, officer, or director
             4551      has been involved in an administrative proceeding regarding any professional or occupational


             4552      license.
             4553          (2) The commissioner may place a licensee on probation for a specified period no
             4554      longer than 24 months if the licensee has admitted to a violation under 18 U.S.C. [Sections]
             4555      Sec. 1033 [and 1034].
             4556          (3) A probation order under this section shall state the conditions for retention of the
             4557      license, which shall be reasonable.
             4558          (4) A violation of the probation is grounds for revocation pursuant to any proceeding
             4559      authorized under Title 63G, Chapter 4, Administrative Procedures Act.
             4560          Section 36. Section 31A-26-102 is amended to read:
             4561           31A-26-102. Definitions.
             4562          As used in this chapter, unless expressly provided otherwise:
             4563          (1) "Company adjuster" means a person employed by an insurer whose regular duties
             4564      include insurance adjusting.
             4565          (2) "Designated home state" means the state or territory of the United States or the
             4566      District of Columbia:
             4567          (a) in which an insurance adjuster does not maintain the adjuster's principal:
             4568          (i) place of residence; or
             4569          (ii) place of business;
             4570          (b) if the resident state, territory, or District of Columbia of the adjuster does not
             4571      license adjusters for the line of authority sought, the adjuster has qualified for the license as if
             4572      the person were a resident in the state, territory, or District of Columbia described in
             4573      Subsection (2)(a), including an applicable:
             4574          (i) examination requirement;
             4575          (ii) fingerprint background check requirement; and
             4576          (iii) continuing education requirement; and
             4577          (c) the adjuster has designated the state, territory, or District of Columbia as the
             4578      designated home state.
             4579          (3) "Home state" means:
             4580          (a) a state or territory of the United States or the District of Columbia in which an
             4581      insurance adjuster:
             4582          (i) maintains the adjuster's principal:


             4583          (A) place of residence; or
             4584          (B) place of business; and
             4585          (ii) is licensed to act as a resident adjuster; or
             4586          (b) if the resident state, territory, or the District of Columbia described in Subsection
             4587      (3)(a) does not license adjusters for the line of authority sought, a state, territory, or the District
             4588      of Columbia:
             4589          (i) in which the adjuster is licensed;
             4590          (ii) in which the adjuster is in good standing; and
             4591          (iii) that the adjuster has designated as the adjuster's designated home state.
             4592          [(2)] (4) "Independent adjuster" means an insurance adjuster required to be licensed
             4593      under Section 31A-26-201 , who engages in insurance adjusting as a representative of one or
             4594      more insurers.
             4595          [(3)] (5) "Insurance adjusting" or "adjusting" means directing or conducting the
             4596      investigation, negotiation, or settlement of a claim under an insurance policy, on behalf of an
             4597      insurer, policyholder, or a claimant under an insurance policy.
             4598          [(4)] (6) "Organization" means a person other than a natural person, and includes a sole
             4599      proprietorship by which a natural person does business under an assumed name.
             4600          [(5)] (7) "Portable electronics insurance" is as defined in Section 31A-22-1802 .
             4601          [(6)] (8) "Public adjuster" means a person required to be licensed under Section
             4602      31A-26-201 , who engages in insurance adjusting as a representative of insureds and claimants
             4603      under insurance policies.
             4604          Section 37. Section 31A-26-206 is amended to read:
             4605           31A-26-206. Continuing education requirements.
             4606          (1) Pursuant to this section, the commissioner shall by rule prescribe continuing
             4607      education requirements for each class of license under Section 31A-26-204 .
             4608          (2) (a) The commissioner shall impose continuing education requirements in
             4609      accordance with a two-year licensing period in which the licensee meets the requirements of
             4610      this Subsection (2).
             4611          (b) (i) Except as otherwise provided in this section, the continuing education
             4612      requirements shall require:
             4613          (A) that a licensee complete 24 credit hours of continuing education for every two-year


             4614      licensing period;
             4615          (B) that 3 of the 24 credit hours described in Subsection (2)(b)(i)(A) be ethics courses;
             4616      and
             4617          (C) that the licensee complete at least half of the required hours through classroom
             4618      hours of insurance-related instruction.
             4619          (ii) A continuing education hour completed in accordance with Subsection (2)(b)(i)
             4620      may be obtained through:
             4621          (A) classroom attendance;
             4622          (B) home study;
             4623          (C) watching a video recording;
             4624          (D) experience credit; or
             4625          (E) other methods provided by rule.
             4626          (iii) Notwithstanding Subsections (2)(b)(i)(A) and (B), a title insurance adjuster is
             4627      required to complete 12 credit hours of continuing education for every two-year licensing
             4628      period, with 3 of the credit hours being ethics courses.
             4629          (c) A licensee may obtain continuing education hours at any time during the two-year
             4630      licensing period.
             4631          (d) (i) A licensee is exempt from the continuing education requirements of this section
             4632      if:
             4633          (A) the licensee was first licensed before [April 1, 1978] December 31, 1982;
             4634          (B) the license does not have a continuous lapse for a period of more than one year,
             4635      except for a license for which the licensee has had an exemption approved before May 11,
             4636      2011;
             4637          (C) the licensee requests an exemption from the department; and
             4638          (D) the department approves the exemption.
             4639          (ii) If the department approves the exemption under Subsection (2)(d)(i), the licensee is
             4640      not required to apply again for the exemption.
             4641          (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             4642      commissioner shall by rule:
             4643          (i) publish a list of insurance professional designations whose continuing education
             4644      requirements can be used to meet the requirements for continuing education under Subsection


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


             4676           31A-26-207. Examination requirements.
             4677          (1) The commissioner may require applicants for [any] a particular class of license
             4678      under Section 31A-26-204 to pass an examination as a requirement to receiving a license. The
             4679      examination shall reasonably relate to the specific license class for which it is prescribed. The
             4680      examinations may be administered by the commissioner or as specified by rule.
             4681          (2) The commissioner shall waive the requirement of an examination for a nonresident
             4682      applicant who:
             4683          (a) applies for an insurance adjuster license in this state;
             4684          (b) has been licensed for the same line of authority in another state; and
             4685          (c) (i) is licensed in the state described in Subsection (2)(b) at the time the applicant
             4686      applies for an insurance producer license in this state; or
             4687          (ii) if the application is received within 90 days of the cancellation of the applicant's
             4688      previous license:
             4689          (A) the prior state certifies that at the time of cancellation, the applicant was in good
             4690      standing in that state; or
             4691          (B) the state's producer database records maintained by the National Association of
             4692      Insurance Commissioners or the National Association of Insurance Commissioner's affiliates or
             4693      subsidiaries, indicates that the producer is or was licensed in good standing for the line of
             4694      authority requested.
             4695          (3) (a) To become a resident licensee in accordance with Sections 31A-26-202 and
             4696      31A-26-203 , a person licensed as an insurance producer in another state who moves to this
             4697      state shall make application within 90 days of establishing legal residence in this state.
             4698          (b) A person who becomes a resident licensee under Subsection (3)(a) may not be
             4699      required to meet prelicensing education or examination requirements to obtain any line of
             4700      authority previously held in the prior state unless:
             4701          (i) the prior state would require a prior resident of this state to meet the prior state's
             4702      prelicensing education or examination requirements to become a resident licensee; or
             4703          (ii) the commissioner imposes the requirements by rule.
             4704          (4) The requirements of this section only apply to [applicants who are natural persons]
             4705      an applicant who is a natural person.
             4706          (5) The requirements of this section do not apply to [members]:


             4707          (a) a member of the Utah State Bar[.]; or
             4708          (b) an applicant for the crop insurance license class who has satisfactorily completed:
             4709          (i) a national crop adjuster program, as adopted by the commissioner by rule; or
             4710          (ii) the loss adjustment training curriculum and competency testing required by the
             4711      Federal Crop Insurance Corporation Standard Reinsurance Agreement through the Risk
             4712      Management Agency of the United States Department of Agriculture.
             4713          Section 39. Section 31A-26-213 is amended to read:
             4714           31A-26-213. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             4715      terminating a license -- Rulemaking for renewal or reinstatement.
             4716          (1) A license type issued under this chapter remains in force until:
             4717          (a) revoked or suspended under Subsection (5);
             4718          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             4719      administrative action;
             4720          (c) the licensee dies or is adjudicated incompetent as defined under:
             4721          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             4722          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             4723      Minors;
             4724          (d) lapsed under Section 31A-26-214.5 ; or
             4725          (e) voluntarily surrendered.
             4726          (2) The following may be reinstated within one year after the day on which the license
             4727      is no longer in force:
             4728          (a) a lapsed license; or
             4729          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             4730      not be reinstated after the license period in which it is voluntarily surrendered.
             4731          (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
             4732      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             4733      department from pursuing additional disciplinary or other action authorized under:
             4734          (a) this title; or
             4735          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             4736      Administrative Rulemaking Act.
             4737          (4) A license classification issued under this chapter remains in force until:


             4738          (a) the qualifications pertaining to a license classification are no longer met by the
             4739      licensee; or
             4740          (b) the supporting license type:
             4741          (i) is revoked or suspended under Subsection (5); or
             4742          (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
             4743      administrative action.
             4744          (5) (a) If the commissioner makes a finding under Subsection (5)(b) as part of an
             4745      adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             4746      commissioner may:
             4747          (i) revoke:
             4748          (A) a license; or
             4749          (B) a license classification;
             4750          (ii) suspend for a specified period of 12 months or less:
             4751          (A) a license; or
             4752          (B) a license classification;
             4753          (iii) limit in whole or in part:
             4754          (A) a license; or
             4755          (B) a license classification; or
             4756          (iv) deny a license application.
             4757          (b) The commissioner may take an action described in Subsection (5)(a) if the
             4758      commissioner finds that the licensee:
             4759          (i) is unqualified for a license or license classification under Section 31A-26-202 ,
             4760      31A-26-203 , 31A-26-204 , or 31A-26-205 ;
             4761          (ii) has violated:
             4762          (A) an insurance statute;
             4763          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             4764          (C) an order that is valid under Subsection 31A-2-201 (4);
             4765          (iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
             4766      delinquency proceedings in any state;
             4767          (iv) fails to pay a final judgment rendered against the person in this state within 60
             4768      days after the judgment became final;


             4769          (v) fails to meet the same good faith obligations in claims settlement that is required of
             4770      admitted insurers;
             4771          (vi) is affiliated with and under the same general management or interlocking
             4772      directorate or ownership as another insurance adjuster that transacts business in this state
             4773      without a license;
             4774          (vii) refuses:
             4775          (A) to be examined; or
             4776          (B) to produce its accounts, records, and files for examination;
             4777          (viii) has an officer who refuses to:
             4778          (A) give information with respect to the insurance adjuster's affairs; or
             4779          (B) perform any other legal obligation as to an examination;
             4780          (ix) provides information in the license application that is:
             4781          (A) incorrect;
             4782          (B) misleading;
             4783          (C) incomplete; or
             4784          (D) materially untrue;
             4785          (x) has violated an insurance law, valid rule, or valid order of another state's insurance
             4786      department;
             4787          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             4788          (xii) has improperly withheld, misappropriated, or converted money or properties
             4789      received in the course of doing insurance business;
             4790          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             4791          (A) insurance contract; or
             4792          (B) application for insurance;
             4793          (xiv) has been convicted of a felony;
             4794          (xv) has admitted or been found to have committed an insurance unfair trade practice
             4795      or fraud;
             4796          (xvi) in the conduct of business in this state or elsewhere has:
             4797          (A) used fraudulent, coercive, or dishonest practices; or
             4798          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             4799          (xvii) has had an insurance license, or its equivalent, denied, suspended, or revoked in


             4800      any other state, province, district, or territory;
             4801          (xviii) has forged another's name to:
             4802          (A) an application for insurance; or
             4803          (B) a document related to an insurance transaction;
             4804          (xix) has improperly used notes or any other reference material to complete an
             4805      examination for an insurance license;
             4806          (xx) has knowingly accepted insurance business from an individual who is not
             4807      licensed;
             4808          (xxi) has failed to comply with an administrative or court order imposing a child
             4809      support obligation;
             4810          (xxii) has failed to:
             4811          (A) pay state income tax; or
             4812          (B) comply with an administrative or court order directing payment of state income
             4813      tax;
             4814          (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
             4815      Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 [and 1034] and therefore under 18 U.S.C.
             4816      Sec. 1033 is prohibited from engaging in the business of insurance; or
             4817          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             4818      the legitimate interests of customers and the public.
             4819          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             4820      and any individual designated under the license are considered to be the holders of the license.
             4821          (d) If an individual designated under the agency license commits an act or fails to
             4822      perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
             4823      the commissioner may suspend, revoke, or limit the license of:
             4824          (i) the individual;
             4825          (ii) the agency, if the agency:
             4826          (A) is reckless or negligent in its supervision of the individual; or
             4827          (B) knowingly participated in the act or failure to act that is the ground for suspending,
             4828      revoking, or limiting the license; or
             4829          (iii) (A) the individual; and
             4830          (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).


             4831          (6) A licensee under this chapter is subject to the penalties for conducting an insurance
             4832      business without a license if:
             4833          (a) the licensee's license is:
             4834          (i) revoked;
             4835          (ii) suspended;
             4836          (iii) limited;
             4837          (iv) surrendered in lieu of administrative action;
             4838          (v) lapsed; or
             4839          (vi) voluntarily surrendered; and
             4840          (b) the licensee:
             4841          (i) continues to act as a licensee; or
             4842          (ii) violates the terms of the license limitation.
             4843          (7) A licensee under this chapter shall immediately report to the commissioner:
             4844          (a) a revocation, suspension, or limitation of the person's license in any other state, the
             4845      District of Columbia, or a territory of the United States;
             4846          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             4847      the District of Columbia, or a territory of the United States; or
             4848          (c) a judgment or injunction entered against that person on the basis of conduct
             4849      involving:
             4850          (i) fraud;
             4851          (ii) deceit;
             4852          (iii) misrepresentation; or
             4853          (iv) a violation of an insurance law or rule.
             4854          (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
             4855      license in lieu of administrative action may specify a time not to exceed five years within
             4856      which the former licensee may not apply for a new license.
             4857          (b) If no time is specified in the order or agreement described in Subsection (8)(a), the
             4858      former licensee may not apply for a new license for five years without the express approval of
             4859      the commissioner.
             4860          (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
             4861      a license issued under this part if so ordered by a court.


             4862          (10) The commissioner shall by rule prescribe the license renewal and reinstatement
             4863      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             4864          Section 40. Section 31A-26-214 is amended to read:
             4865           31A-26-214. Probation -- Grounds for revocation.
             4866          (1) The commissioner may place a licensee on probation for a period not to exceed 24
             4867      months as follows:
             4868          (a) after an adjudicative proceeding under Title 63G, Chapter 4, Administrative
             4869      Procedures Act, for any circumstances that would justify a suspension under Section
             4870      31A-26-213 ; or
             4871          (b) at the issuance of a new license:
             4872          (i) with an admitted violation under 18 U.S.C. [Sections] Sec. 1033 [and 1034]; or
             4873          (ii) with a response to a background information question on any new license
             4874      application indicating that:
             4875          (A) the person has been convicted of a crime, that is listed by rule made in accordance
             4876      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is grounds for
             4877      probation;
             4878          (B) the person is currently charged with a crime, that is listed by rule made in
             4879      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as a crime that is
             4880      grounds for probation regardless of whether adjudication was withheld;
             4881          (C) the person has been involved in an administrative proceeding regarding any
             4882      professional or occupational license; or
             4883          (D) any business in which the person is or was an owner, partner, officer, or director
             4884      has been involved in an administrative proceeding regarding any professional or occupational
             4885      license.
             4886          (2) The commissioner may put a licensee on probation for a specified period no longer
             4887      than 24 months if the licensee has admitted to violations under 18 U.S.C. [Sections] Sec. 1033
             4888      [and 1034].
             4889          (3) A probation order under this section shall state the conditions for retention of the
             4890      license, which shall be reasonable.
             4891          (4) A violation of the probation is grounds for revocation pursuant to any proceeding
             4892      authorized under Title 63G, Chapter 4, Administrative Procedures Act.


             4893          Section 41. Section 31A-26-214.5 is amended to read:
             4894           31A-26-214.5. License lapse and voluntary surrender.
             4895          (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
             4896          (i) pay when due a fee under Section 31A-3-103 ;
             4897          (ii) complete continuing education requirements under Section 31A-26-206 before
             4898      submitting the license renewal application;
             4899          (iii) submit a completed renewal application as required by Section 31A-26-202 ;
             4900          (iv) submit additional documentation required to complete the licensing process as
             4901      related to a specific license type or license classification; or
             4902          (v) maintain an active license in [a resident] the licensee's home state if the licensee is
             4903      a nonresident licensee.
             4904          (b) (i) A licensee whose license lapses due to the following may request an action
             4905      described in Subsection (1)(b)(ii):
             4906          (A) military service;
             4907          (B) voluntary service for a period of time designated by the person for whom the
             4908      licensee provides voluntary service; or
             4909          (C) some other extenuating circumstances, such as long-term medical disability.
             4910          (ii) A licensee described in Subsection (1)(b)(i) may request:
             4911          (A) reinstatement of the license no later than one year after the day on which the
             4912      license lapses; and
             4913          (B) waiver of any of the following imposed for failure to comply with renewal
             4914      procedures:
             4915          (I) an examination requirement;
             4916          (II) reinstatement fees set under Section 31A-3-103 ;
             4917          (III) continuing education requirements; or
             4918          (IV) other sanction imposed for failure to comply with renewal procedures.
             4919          (2) If a license issued under this chapter is voluntarily surrendered, the license may be
             4920      reinstated:
             4921          (a) during the license period in which it is voluntarily surrendered; and
             4922          (b) no later than one year after the day on which the license is voluntarily surrendered.
             4923          Section 42. Section 31A-27a-102 is amended to read:


             4924           31A-27a-102. Definitions.
             4925          As used in this chapter:
             4926          (1) "Admitted assets" is as defined by and is measured in accordance with the National
             4927      Association of Insurance Commissioner's Statements of Statutory Accounting Principles, as
             4928      incorporated in this state by rules made by the department in accordance with Title 63G,
             4929      Chapter 3, Utah Administrative Rulemaking Act, for the purposes of Subsection
             4930      31A-4-113 (1)(b)(ii).
             4931          (2) "Affected guaranty association" means a guaranty association that is or may
             4932      become liable for payment of a covered claim.
             4933          (3) "Affiliate" is as defined in Section 31A-1-301 .
             4934          (4) Notwithstanding Section 31A-1-301 , "alien insurer" means an insurer incorporated
             4935      or organized under the laws of a jurisdiction that is not a state.
             4936          (5) Notwithstanding Section 31A-1-301 , "claimant" or "creditor" means a person
             4937      having a claim against an insurer whether the claim is:
             4938          (a) matured or not matured;
             4939          (b) liquidated or unliquidated;
             4940          (c) secured or unsecured;
             4941          (d) absolute; or
             4942          (e) fixed or contingent.
             4943          (6) "Commissioner" is as defined in Section 31A-1-301 .
             4944          (7) "Commodity contract" means:
             4945          (a) a contract for the purchase or sale of a commodity for future delivery on, or subject
             4946      to the rules of:
             4947          (i) a board of trade or contract market under the Commodity Exchange Act, 7 U.S.C.
             4948      Sec. 1 et seq.; or
             4949          (ii) a board of trade outside the United States;
             4950          (b) an agreement that is:
             4951          (i) subject to regulation under Section 19 of the Commodity Exchange Act, 7 U.S.C.
             4952      Sec. 1 et seq.; and
             4953          (ii) commonly known to the commodities trade as:
             4954          (A) a margin account;


             4955          (B) a margin contract;
             4956          (C) a leverage account; or
             4957          (D) a leverage contract;
             4958          (c) an agreement or transaction that is:
             4959          (i) subject to regulation under Section 4c(b) of the Commodity Exchange Act, 7 U.S.C.
             4960      Sec. 1 et seq.; and
             4961          (ii) commonly known to the commodities trade as a commodity option;
             4962          (d) a combination of the agreements or transactions referred to in this Subsection (7);
             4963      or
             4964          (e) an option to enter into an agreement or transaction referred to in this Subsection (7).
             4965          (8) "Control" is as defined in Section 31A-1-301 .
             4966          (9) "Delinquency proceeding" means a:
             4967          (a) proceeding instituted against an insurer for the purpose of rehabilitating or
             4968      liquidating the insurer; and
             4969          (b) summary proceeding under Section 31A-27a-201 .
             4970          (10) "Department" is as defined in Section 31A-1-301 unless the context requires
             4971      otherwise.
             4972          (11) "Doing business," "doing insurance business," and "business of insurance"
             4973      includes any of the following acts, whether effected by mail, electronic means, or otherwise:
             4974          (a) issuing or delivering a contract, certificate, or binder relating to insurance or
             4975      annuities:
             4976          (i) to a person who is resident in this state; or
             4977          (ii) covering a risk located in this state;
             4978          (b) soliciting an application for the contract, certificate, or binder described in
             4979      Subsection (11)(a);
             4980          (c) negotiating preliminary to the execution of the contract, certificate, or binder
             4981      described in Subsection (11)(a);
             4982          (d) collecting premiums, membership fees, assessments, or other consideration for the
             4983      contract, certificate, or binder described in Subsection (11)(a);
             4984          (e) transacting matters:
             4985          (i) subsequent to execution of the contract, certificate, or binder described in


             4986      Subsection (11)(a); and
             4987          (ii) arising out of the contract, certificate, or binder described in Subsection (11)(a);
             4988          (f) operating as an insurer under a license or certificate of authority issued by the
             4989      department; or
             4990          (g) engaging in an act identified in Chapter 15, Unauthorized Insurers, Surplus Lines,
             4991      and Risk Retention Groups.
             4992          (12) Notwithstanding Section 31A-1-301 , "domiciliary state" means the state in which
             4993      an insurer is incorporated or organized, except that "domiciliary state" means:
             4994          (a) in the case of an alien insurer, its state of entry; or
             4995          (b) in the case of a risk retention group, the state in which the risk retention group is
             4996      chartered as contemplated in the Liability Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.
             4997          (13) "Estate" has the same meaning as "property of the insurer" as defined in
             4998      Subsection (30).
             4999          (14) "Fair consideration" is given for property or an obligation:
             5000          (a) when in exchange for the property or obligation, as a fair equivalent for it, and in
             5001      good faith:
             5002          (i) property is conveyed;
             5003          (ii) services are rendered;
             5004          (iii) an obligation is incurred; or
             5005          (iv) an antecedent debt is satisfied; or
             5006          (b) when the property or obligation is received in good faith to secure a present
             5007      advance or an antecedent debt in amount not disproportionately small compared to the value of
             5008      the property or obligation obtained.
             5009          (15) Notwithstanding Section 31A-1-301 , "foreign insurer" means an insurer domiciled
             5010      in another state.
             5011          (16) "Formal delinquency proceeding" means a rehabilitation or liquidation
             5012      proceeding.
             5013          (17) "Forward contract" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.
             5014      Sec. 1821(e)(8)(D).
             5015          (18) (a) "General assets" include all property of the estate that is not:
             5016          (i) subject to a properly perfected secured claim;


             5017          (ii) subject to a valid and existing express trust for the security or benefit of a specified
             5018      person or class of person; or
             5019          (iii) required by the insurance laws of this state or any other state to be held for the
             5020      benefit of a specified person or class of person.
             5021          (b) "General assets" [include all] includes the property of the estate or its proceeds in
             5022      excess of the amount necessary to discharge a claim described in Subsection (18)(a).
             5023          (19) "Good faith" means honesty in fact and intention, and in regard to Part 5, Asset
             5024      Recovery, also requires the absence of:
             5025          (a) information that would lead a reasonable person in the same position to know that
             5026      the insurer is financially impaired or insolvent; and
             5027          (b) knowledge regarding the imminence or pendency of a delinquency proceeding
             5028      against the insurer.
             5029          (20) "Guaranty association" means:
             5030          (a) a mechanism mandated by Chapter 28, Guaranty Associations; or
             5031          (b) a similar mechanism in another state that is created for the payment of claims or
             5032      continuation of policy obligations of a financially impaired or insolvent insurer.
             5033          (21) "Impaired" means that an insurer:
             5034          (a) does not have admitted assets at least equal to the sum of:
             5035          (i) all its liabilities; and
             5036          (ii) the minimum surplus required to be maintained by Section 31A-5-211 or
             5037      31A-8-209 ; or
             5038          (b) has a total adjusted capital that is less than its authorized control level RBC, as
             5039      defined in Section 31A-17-601 .
             5040          (22) "Insolvency" or "insolvent" means that an insurer:
             5041          (a) is unable to pay its obligations when they are due;
             5042          (b) does not have admitted assets at least equal to all of its liabilities; or
             5043          (c) has a total adjusted capital that is less than its mandatory control level RBC, as
             5044      defined in Section 31A-17-601 .
             5045          (23) Notwithstanding Section 31A-1-301 , "insurer" means a person who:
             5046          (a) is doing, has done, purports to do, or is licensed to do the business of insurance;
             5047          (b) is or has been subject to the authority of, or to rehabilitation, liquidation,


             5048      reorganization, supervision, or conservation by an insurance commissioner; or
             5049          (c) is included under Section 31A-27a-104 .
             5050          (24) "Liabilities" is as defined by and is measured in accordance with the National
             5051      Association of Insurance Commissioner's Statements of Statutory Accounting Principles, as
             5052      incorporated in this state by rules made by the department in accordance with Title 63G,
             5053      Chapter 3, Utah Administrative Rulemaking Act, for the purposes of Subsection
             5054      31A-4-113 (1)(b)(ii).
             5055          (25) (a) Subject to Subsection (21)(b), "netting agreement" means:
             5056          (i) a contract or agreement that:
             5057          (A) documents one or more transactions between the parties to the agreement for or
             5058      involving one or more qualified financial contracts; and
             5059          (B) provides for the netting, liquidation, setoff, termination, acceleration, or close out
             5060      under or in connection with:
             5061          (I) one or more qualified financial contracts; or
             5062          (II) present or future payment or delivery obligations or payment or delivery
             5063      entitlements under the agreement, including liquidation or close-out values relating to the
             5064      obligations or entitlements, among the parties to the netting agreement;
             5065          (ii) a master agreement or bridge agreement for one or more master agreements
             5066      described in Subsection (25)(a)(i); or
             5067          (iii) any of the following related to a contract or agreement described in Subsection
             5068      (25)(a)(i) or (ii):
             5069          (A) a security agreement;
             5070          (B) a security arrangement;
             5071          (C) other credit enhancement or guarantee; or
             5072          (D) a reimbursement obligation.
             5073          (b) If a contract or agreement described in Subsection (25)(a)(i) or (ii) relates to an
             5074      agreement or transaction that is not a qualified financial contract, the contract or agreement
             5075      described in Subsection (25)(a)(i) or (ii) is considered a netting agreement only with respect to
             5076      an agreement or transaction that is a qualified financial contract.
             5077          (c) "Netting agreement" includes:
             5078          (i) a term or condition incorporated by reference in the contract or agreement described


             5079      in Subsection (25)(a); or
             5080          (ii) a master agreement described in Subsection (25)(a).
             5081          (d) A master agreement described in Subsection (25)(a), together with all schedules,
             5082      confirmations, definitions, and addenda to that master agreement and transactions under any of
             5083      the items described in this Subsection (25)(d), are treated as one netting agreement.
             5084          (26) (a) "New value" means:
             5085          (i) money;
             5086          (ii) money's worth in goods, services, or new credit; or
             5087          (iii) release by a transferee of property previously transferred to the transferee in a
             5088      transaction that is neither void nor voidable by the insurer or the receiver under [any]
             5089      applicable law, including proceeds of the property.
             5090          (b) "New value" does not include an obligation substituted for an existing obligation.
             5091          (27) "Party in interest" means:
             5092          (a) the commissioner;
             5093          (b) a nondomiciliary commissioner in whose state the insurer has outstanding claims
             5094      liabilities;
             5095          (c) an affected guaranty association; and
             5096          (d) the following parties if the party files a request with the receivership court for
             5097      inclusion as a party in interest and to be on the service list:
             5098          (i) an insurer that ceded to or assumed business from the insurer;
             5099          (ii) a policyholder;
             5100          (iii) a third party claimant;
             5101          (iv) a creditor;
             5102          (v) a 10% or greater equity security holder in the insolvent insurer; and
             5103          (vi) a person, including an indenture trustee, with a financial or regulatory interest in
             5104      the delinquency proceeding.
             5105          (28) (a) Notwithstanding Section 31A-1-301 , "policy" means, notwithstanding what it
             5106      is called:
             5107          (i) a written contract of insurance;
             5108          (ii) a written agreement for or affecting insurance; or
             5109          (iii) a certificate of a written contract or agreement described in this Subsection (28)(a).


             5110          (b) "Policy" includes all clauses, riders, endorsements, and papers that are a part of a
             5111      policy.
             5112          (c) "Policy" does not include a contract of reinsurance.
             5113          (29) "Preference" means a transfer of property of an insurer to or for the benefit of a
             5114      creditor:
             5115          (a) for or on account of an antecedent debt, made or allowed by the insurer within one
             5116      year before the day on which a successful petition for rehabilitation or liquidation is filed under
             5117      this chapter;
             5118          (b) the effect of which transfer may enable the creditor to obtain a greater percentage of
             5119      the creditor's debt than another creditor of the same class would receive; and
             5120          (c) if a liquidation order is entered while the insurer is already subject to a
             5121      rehabilitation order and the transfer otherwise qualifies, that is made or allowed within the
             5122      shorter of:
             5123          (i) one year before the day on which a successful petition for rehabilitation is filed; or
             5124          (ii) two years before the day on which a successful petition for liquidation is filed.
             5125          (30) "Property of the insurer" or "property of the estate" includes:
             5126          (a) a right, title, or interest of the insurer in property:
             5127          (i) whether:
             5128          (A) legal or equitable;
             5129          (B) tangible or intangible; or
             5130          (C) choate or inchoate; and
             5131          (ii) including choses in action, contract rights, and any other interest recognized under
             5132      the laws of this state;
             5133          (b) entitlements that exist before the entry of an order of rehabilitation or liquidation;
             5134          (c) entitlements that may arise by operation of this chapter or other provisions of law
             5135      allowing the receiver to avoid prior transfers or assert other rights; and
             5136          (d) (i) records or data that is otherwise the property of the insurer; and
             5137          (ii) records or data similar to those described in Subsection (30)(d)(i) that are within
             5138      the possession, custody, or control of a managing general agent, a third party administrator, a
             5139      management company, a data processing company, an accountant, an attorney, an affiliate, or
             5140      other person.


             5141          (31) Subject to Subsection 31A-27a-611 (10), "qualified financial contract" means any
             5142      of the following:
             5143          (a) a commodity contract;
             5144          (b) a forward contract;
             5145          (c) a repurchase agreement;
             5146          (d) a securities contract;
             5147          (e) a swap agreement; or
             5148          (f) [any] a similar agreement that the commissioner determines by rule or order to be a
             5149      qualified financial contract for purposes of this chapter.
             5150          (32) As the context requires, "receiver" means the commissioner or the commissioner's
             5151      designee, including a rehabilitator, liquidator, or ancillary receiver.
             5152          (33) As the context requires, "receivership" means a rehabilitation, liquidation, or
             5153      ancillary receivership.
             5154          (34) Unless the context requires otherwise, "receivership court" refers to the court in
             5155      which a delinquency proceeding is pending.
             5156          (35) "Reciprocal state" means [any] a state other than this state that:
             5157          (a) enforces a law substantially similar to this chapter;
             5158          (b) requires the commissioner to be the receiver of a delinquent insurer; and
             5159          (c) has laws for the avoidance of fraudulent conveyances and preferential transfers by
             5160      the receiver of a delinquent insurer.
             5161          (36) "Record," when used as a noun, means [any] information or data, in whatever
             5162      form maintained, including:
             5163          (a) a book;
             5164          (b) a document;
             5165          (c) a paper;
             5166          (d) a file;
             5167          (e) an application file;
             5168          (f) a policyholder list;
             5169          (g) policy information;
             5170          (h) a claim or claim file;
             5171          (i) an account;


             5172          (j) a voucher;
             5173          (k) a litigation file;
             5174          (l) a premium record;
             5175          (m) a rate book;
             5176          (n) an underwriting manual;
             5177          (o) a personnel record;
             5178          (p) a financial record; or
             5179          (q) other material.
             5180          (37) "Reinsurance" means a transaction or contract under which an assuming insurer
             5181      agrees to indemnify a ceding insurer against all, or a part, of [any] a loss that the ceding insurer
             5182      may sustain under the one or more policies that the ceding insurer issues or will issue.
             5183          (38) "Repurchase agreement" is as defined in the Federal Deposit Insurance Act, 12
             5184      U.S.C. Sec. 1821(e)(8)(D).
             5185          (39) (a) "Secured claim" means, subject to Subsection (39)(b):
             5186          (i) a claim secured by an asset that is not a general asset; or
             5187          (ii) the right to set off as provided in Section 31A-27a-510 .
             5188          (b) "Secured claim" does not include:
             5189          (i) a special deposit claim;
             5190          (ii) a claim based on mere possession; or
             5191          (iii) a claim arising from a constructive or resulting trust.
             5192          (40) "Securities contract" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.
             5193      Sec. 1821(e)(8)(D).
             5194          (41) "Special deposit" means a deposit established pursuant to statute for the security
             5195      or benefit of a limited class or classes of persons.
             5196          (42) (a) Subject to Subsection (42)(b), "special deposit claim" means a claim secured
             5197      by a special deposit.
             5198          (b) "Special deposit claim" does not include a claim against the general assets of the
             5199      insurer.
             5200          (43) "State" means a state, district, or territory of the United States.
             5201          (44) "Subsidiary" is as defined in Section 31A-1-301 .
             5202          (45) "Swap agreement" is as defined in the Federal Deposit Insurance Act, 12 U.S.C.


             5203      Sec. 1821(e)(8)(D).
             5204          (46) (a) "Transfer" includes the sale and every other and different mode of disposing of
             5205      or parting with property or with an interest in property, whether:
             5206          (i) directly or indirectly;
             5207          (ii) absolutely or conditionally;
             5208          (iii) voluntarily or involuntarily; or
             5209          (iv) by or without judicial proceedings.
             5210          (b) An interest in property includes:
             5211          (i) a set off;
             5212          (ii) having possession of the property; or
             5213          (iii) fixing a lien on the property or on an interest in the property.
             5214          (c) The retention of a security title in property delivered to an insurer and foreclosure
             5215      of the insurer's equity of redemption is considered a transfer suffered by the insurer.
             5216          (47) Notwithstanding Section 31A-1-301 , "unauthorized insurer" means an insurer
             5217      transacting the business of insurance in this state that has not received a certificate of authority
             5218      from this state, or some other type of authority that allows for the transaction of the business of
             5219      insurance in this state.
             5220          Section 43. Section 31A-27a-107 is amended to read:
             5221           31A-27a-107. Notice and hearing on matters submitted by the receiver for
             5222      receivership court approval.
             5223          (1) (a) Upon written request to the receiver, a person shall be placed on the service list
             5224      to receive notice of matters filed by the receiver. The person shall include in a written request
             5225      under this Subsection (1)(a) the person's address, facsimile number, or electronic mail address.
             5226          (b) It is the responsibility of the person requesting notice to:
             5227          (i) inform the receiver in writing of any changes in the person's address, facsimile
             5228      number, or electronic mail address; or
             5229          (ii) request that the person's name be deleted from the service list.
             5230          (c) (i) The receiver may serve on a person on the service list a request to confirm
             5231      continuation on the service list by returning a form.
             5232          (ii) The request to confirm continuation may be served periodically but not more
             5233      frequently than every 12 months.


             5234          (iii) A person who fails to return the form described in this Subsection (1)(c) may be
             5235      removed from the service list.
             5236          (d) Inclusion on the service list does not confer standing in the delinquency proceeding
             5237      to raise, appear, or be heard on any issue.
             5238          (e) The receiver shall:
             5239          (i) file a copy of the service list with the receivership court; and
             5240          (ii) periodically provide to the receivership court notice of changes to the service list.
             5241          (f) Notice may be provided by first-class mail postage paid, electronic mail, or
             5242      facsimile transmission, at the receiver's discretion.
             5243          (2) Except as otherwise provided by this chapter, notice and hearing of any matter
             5244      submitted by the receiver to the receivership court for approval under this chapter shall be
             5245      conducted in accordance with this Subsection (2).
             5246          (a) The receiver:
             5247          (i) shall file a motion:
             5248          (A) explaining the proposed action; and
             5249          (B) the basis for the proposed action; and
             5250          (ii) may include any evidence in support of the motion.
             5251          (b) If a document, material, or other information supporting the motion is confidential,
             5252      the document, material, or other information may be submitted to the receivership court under
             5253      seal for in camera inspection.
             5254          (c) (i) The receiver shall provide notice and a copy of the motion to:
             5255          (A) all persons on the service list; and
             5256          (B) any other person as may be required by the receivership court.
             5257          (ii) Notice may be provided by first-class mail postage paid, electronic mail, or
             5258      facsimile transmission, at the receiver's discretion.
             5259          (iii) For purposes of this section, notice is considered to be given on the day on which
             5260      it is deposited with the United States Postmaster or transmitted, as applicable, to the
             5261      last-known address as shown on the service list.
             5262          (d) (i) A party in interest objecting to the motion shall:
             5263          (A) file an objection specifying the grounds for the objection within:
             5264          (I) 10 days of the day on which the notice of the filing of the motion is sent; or


             5265          (II) such other time as the receivership court may specify; and
             5266          (B) serve copies on:
             5267          (I) the receiver; and
             5268          (II) any other person served with the motion within the time period described in this
             5269      Subsection (2)(d)(i).
             5270          (ii) In accordance with the Utah Rules of Civil Procedure, days may be added to the
             5271      time for filing an objection if the notice of the motion is sent only by way of United States
             5272      mail.
             5273          (iii) An objecting party has the burden of showing why the receivership court should
             5274      not authorize the proposed action.
             5275          (e) (i) If no objection to the motion is timely filed:
             5276          (A) the receivership court may:
             5277          (I) enter an order approving the motion without a hearing; or
             5278          (II) hold a hearing to determine if the receiver's motion should be approved; and
             5279          (B) the receiver may request that the receivership court enter an order or hold a hearing
             5280      on an expedited basis.
             5281          (ii) (A) If an objection is timely filed, the receivership court may hold a hearing.
             5282          (B) If the receivership court approves the motion and, upon a motion by the receiver,
             5283      determines that the objection is frivolous or filed merely for delay or for other improper
             5284      purpose, the receivership court may order the objecting party to pay the receiver's reasonable
             5285      costs and fees of defending against the objection.
             5286          Section 44. Section 31A-27a-201 is amended to read:
             5287           31A-27a-201. Receivership court's seizure order.
             5288          (1) The commissioner may file in the Third District Court for Salt Lake County a
             5289      petition:
             5290          (a) with respect to:
             5291          (i) an insurer domiciled in this state;
             5292          (ii) an unauthorized insurer; or
             5293          (iii) pursuant to Section 31A-27a-901 , a foreign insurer;
             5294          (b) alleging that:
             5295          (i) there exists grounds that would justify a court order for a formal delinquency


             5296      proceeding against the insurer under this chapter; and
             5297          (ii) the interests of policyholders, creditors, or the public will be endangered by delay;
             5298      and
             5299          (c) setting forth the contents of a seizure order considered necessary by the
             5300      commissioner.
             5301          (2) (a) Upon a filing under Subsection (1), the receivership court may issue the
             5302      requested seizure order:
             5303          (i) immediately, ex parte, and without notice or hearing;
             5304          (ii) that directs the commissioner to take possession and control of:
             5305          (A) all or a part of the property, accounts, and records of an insurer; and
             5306          (B) the premises occupied by the insurer for transaction of the insurer's business; and
             5307          (iii) that until further order of the receivership court, enjoins the insurer and its officers,
             5308      managers, agents, and employees from disposition of its property and from the transaction of
             5309      its business except with the written consent of the commissioner.
             5310          (b) [Any] A person having possession or control of and refusing to deliver any of the
             5311      records or assets of a person against whom a seizure order is issued under this Subsection (2) is
             5312      guilty of a class B misdemeanor.
             5313          (3) (a) A petition that requests injunctive relief:
             5314          (i) shall be verified by the commissioner or the commissioner's designee; and
             5315          (ii) is not required to plead or prove irreparable harm or inadequate remedy at law.
             5316          (b) The commissioner shall provide only the notice that the receivership court may
             5317      require.
             5318          (4) (a) The receivership court shall specify in the seizure order the duration of the
             5319      seizure, which shall be the time the receivership court considers necessary for the
             5320      commissioner to ascertain the condition of the insurer.
             5321          (b) The receivership court may from time to time:
             5322          (i) hold a hearing that the receivership court considers desirable:
             5323          (A) (I) on motion of the commissioner;
             5324          (II) on motion of the insurer; or
             5325          (III) on its own motion; and
             5326          (B) after the notice the receivership court considers appropriate; and


             5327          (ii) extend, shorten, or modify the terms of the seizure order.
             5328          (c) The receivership court shall vacate the seizure order if the commissioner fails to
             5329      commence a formal proceeding under this chapter after having had a reasonable opportunity to
             5330      commence a formal proceeding under this chapter.
             5331          (d) An order of the receivership court pursuant to a formal proceeding under this
             5332      chapter vacates the seizure order.
             5333          (5) Entry of a seizure order under this section does not constitute a breach or an
             5334      anticipatory breach of [any] a contract of the insurer.
             5335          (6) (a) An insurer subject to an ex parte seizure order under this section may petition
             5336      the receivership court at any time after the issuance of a seizure order for a hearing and review
             5337      of the basis for the seizure order.
             5338          (b) The receivership court shall hold the hearing and review requested under this
             5339      Subsection (6) not more than 15 days after the day on which the request is received or as soon
             5340      thereafter as the court may allow.
             5341          (c) A hearing under this Subsection (6):
             5342          (i) may be held privately in chambers; and
             5343          (ii) shall be held privately in chambers if the insurer proceeded against requests that it
             5344      be private.
             5345          (7) (a) If, at any time after the issuance of a seizure order, it appears to the receivership
             5346      court that a person whose interest is or will be substantially affected by the seizure order did
             5347      not appear at the hearing and has not been served, the receivership court may order that notice
             5348      be given to the person.
             5349          (b) An order under this Subsection (7) that notice be given may not stay the effect of
             5350      [any] a seizure order previously issued by the receivership court.
             5351          (8) Whenever the commissioner makes a seizure as provided in Subsection (2), on the
             5352      demand of the commissioner, it shall be the duty of the sheriff of a county of this state, and of
             5353      the police department of a municipality in the state to furnish the commissioner with necessary
             5354      deputies or officers to assist the commissioner in making and enforcing the seizure order.
             5355          (9) The commissioner may appoint a receiver under this section. The insurer shall pay
             5356      the costs and expenses of the receiver appointed.
             5357          Section 45. Section 31A-27a-701 is amended to read:


             5358           31A-27a-701. Priority of distribution.
             5359          (1) (a) The priority of payment of distributions on unsecured claims shall be in
             5360      accordance with the order in which each class of claim is set forth in this section except as
             5361      provided in Section 31A-27a-702 .
             5362          (b) All claims in each class shall be paid in full or adequate funds retained for the
             5363      claim's payment before a member of the next class receives payment.
             5364          (c) All claims within a class shall be paid substantially the same percentage.
             5365          (d) Except as provided in Subsections (2)(a)(i)(E), (2)(k), and (2)(m), subclasses may
             5366      not be established within a class.
             5367          (e) A claim by a shareholder, policyholder, or other creditor may not be permitted to
             5368      circumvent the priority classes through the use of equitable remedies.
             5369          (2) The order of distribution of claims shall be as follows:
             5370          (a) a Class 1 claim, which:
             5371          (i) is a cost or expense of administration expressly approved or ratified by the
             5372      liquidator, including the following:
             5373          (A) the actual and necessary costs of preserving or recovering the property of the
             5374      insurer;
             5375          (B) reasonable compensation for all services rendered on behalf of the administrative
             5376      supervisor or receiver;
             5377          (C) a necessary filing fee;
             5378          (D) the fees and mileage payable to a witness;
             5379          (E) an unsecured loan obtained by the receiver, which:
             5380          (I) unless its terms otherwise provide, has priority over all other costs of
             5381      administration; and
             5382          (II) absent agreement to the contrary, shares pro rata with all other claims described in
             5383      this Subsection (2)(a)(i)(E); and
             5384          (F) an expense approved by the rehabilitator of the insurer, if any, incurred in the
             5385      course of the rehabilitation that is unpaid at the time of the entry of the order of liquidation; and
             5386          (ii) except as expressly approved by the receiver, excludes any expense arising from a
             5387      duty to indemnify a director, officer, or employee of the insurer which expense, if allowed, is a
             5388      Class 7 claim;


             5389          (b) a Class 2 claim, which:
             5390          (i) is a reasonable expense of a guaranty association, including overhead, salaries, or
             5391      other general administrative expenses allocable to the receivership such as:
             5392          (A) an administrative or claims handling expense;
             5393          (B) an expense in connection with arrangements for ongoing coverage; and
             5394          (C) in the case of a property and casualty guaranty association, a loss adjustment
             5395      expense, including:
             5396          (I) an adjusting or other expense; and
             5397          (II) a defense or cost containment expense; and
             5398          (ii) excludes an expense incurred in the performance of duties under Section
             5399      31A-28-112 or similar duties under the statute governing a similar organization in another
             5400      state;
             5401          (c) a Class 3 claim, which:
             5402          (i) is:
             5403          (A) a claim under a policy of insurance including a third party claim;
             5404          (B) a claim under an annuity contract or funding agreement;
             5405          (C) a claim under a nonassessable policy for unearned premium;
             5406          (D) a claim of an obligee and, subject to the discretion of the receiver, a completion
             5407      contractor under a surety bond or surety undertaking, except for:
             5408          (I) a bail bond;
             5409          (II) a mortgage guaranty;
             5410          (III) a financial guaranty; or
             5411          (IV) other form of insurance offering protection against investment risk or warranties;
             5412          (E) a claim by a principal under a surety bond or surety undertaking for wrongful
             5413      dissipation of collateral by the insurer or its agents;
             5414          (F) an indemnity payment on:
             5415          (I) a covered claim; or
             5416          [(II) unearned premium; or]
             5417          [(III)] (II) a payment for the continuation of coverage made by an entity responsible for
             5418      the payment of a claim or continuation of coverage of an insolvent health maintenance
             5419      organization;


             5420          (G) a claim for unearned premium;
             5421          [(G)] (H) a claim incurred during the extension of coverage provided for in Sections
             5422      31A-27a-402 and 31A-27a-403 ; or
             5423          [(H)] (I) all other claims incurred in fulfilling the statutory obligations of a guaranty
             5424      association not included in Class 2, including:
             5425          (I) an indemnity payment on covered claims; and
             5426          (II) in the case of a life and health guaranty association, a claim:
             5427          (Aa) as a creditor of the impaired or insolvent insurer for a payment of and liabilities
             5428      incurred on behalf of a covered claim or covered obligation of the insurer; and
             5429          (Bb) for the funds needed to reinsure the obligations described under this Subsection
             5430      (2)(c)(i)(H)(II) with a solvent insurer; and
             5431          (ii) notwithstanding any other provision of this chapter, excludes the following which
             5432      shall be paid under Class 7, except as provided in this section:
             5433          (A) an obligation of the insolvent insurer arising out of a reinsurance contract;
             5434          (B) an obligation that is incurred pursuant to an occurrence policy or reported pursuant
             5435      to a claims made policy after:
             5436          (I) the expiration date of the policy;
             5437          (II) the policy is replaced by the insured;
             5438          (III) the policy is canceled at the insured's request; or
             5439          (IV) the policy is canceled as provided in this chapter;
             5440          (C) an obligation to an insurer, insurance pool, or underwriting association and the
             5441      insurer's, insurance pool's, or underwriting association's claim for contribution, indemnity, or
             5442      subrogation, equitable or otherwise, except for direct claims under a policy where the insurer is
             5443      the named insured;
             5444          (D) an amount accrued as punitive or exemplary damages unless expressly covered
             5445      under the terms of the policy, which shall be paid as a claim in Class 9;
             5446          (E) a tort claim of any kind against the insurer;
             5447          (F) a claim against the insurer for bad faith or wrongful settlement practices; and
             5448          (G) a claim of a guaranty association for assessments not paid by the insurer, which
             5449      claims shall be paid as claims in Class 7; and
             5450          (iii) notwithstanding Subsection (2)(c)(ii)(B), does not exclude an unearned premium


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


             5482          (ii) a capital note;
             5483          (iii) a contribution note;
             5484          (iv) a similar obligation;
             5485          (v) a premium refund on an assessable policy; or
             5486          (vi) any other claim specifically assigned to this class;
             5487          (l) a Class 12 claim, which is a claim for interest on an allowed claim of Classes 1
             5488      through 11, according to the terms of a plan to pay interest on allowed claims proposed by the
             5489      liquidator and approved by the receivership court; and
             5490          (m) subject to Subsection (4), a Class 13 claim, which is a claim of a shareholder or
             5491      other owner arising out of:
             5492          (i) the shareholder's or owner's capacity as shareholder or owner or any other capacity;
             5493      and
             5494          (ii) except as the claim may be qualified in Class 3, 4, 7, or 12.
             5495          (3) To prove a claim described in Class 8, the claimant shall show that:
             5496          (a) the insurer that is the subject of the delinquency proceeding incurred the fee or
             5497      expense on the basis of the insurer's best knowledge, information, and belief:
             5498          (i) formed after reasonable inquiry indicating opposition is in the best interests of the
             5499      insurer;
             5500          (ii) that is well grounded in fact; and
             5501          (iii) is warranted by existing law or a good faith argument for the extension,
             5502      modification, or reversal of existing law; and
             5503          (b) opposition is not pursued for any improper purpose, such as to harass, to cause
             5504      unnecessary delay, or to cause needless increase in the cost of the litigation.
             5505          (4) (a) A claim in Class 11 is subject to a subordination agreement related to other
             5506      claims in Class 11 that exist before the entry of a liquidation order.
             5507          (b) A claim in Class 13 is subject to a subordination agreement, related to other claims
             5508      in Class 13 that exist before the entry of a liquidation order.
             5509          Section 46. Section 31A-29-106 is amended to read:
             5510           31A-29-106. Powers of board.
             5511          (1) The board shall have the general powers and authority granted under the laws of
             5512      this state to insurance companies licensed to transact health care insurance business. In


             5513      addition, the board shall have the specific authority to:
             5514          (a) enter into contracts to carry out the provisions and purposes of this chapter,
             5515      including, with the approval of the commissioner, contracts with:
             5516          (i) similar pools of other states for the joint performance of common administrative
             5517      functions; or
             5518          (ii) persons or other organizations for the performance of administrative functions;
             5519          (b) sue or be sued, including taking such legal action necessary to avoid the payment of
             5520      improper claims against the pool or the coverage provided through the pool;
             5521          (c) establish appropriate rates, rate schedules, rate adjustments, expense allowances,
             5522      agents' referral fees, claim reserve formulas, and any other actuarial function appropriate to the
             5523      operation of the pool;
             5524          (d) issue policies of insurance in accordance with the requirements of this chapter;
             5525          (e) retain an executive director and appropriate legal, actuarial, and other personnel as
             5526      necessary to provide technical assistance in the operations of the pool;
             5527          (f) establish rules, conditions, and procedures for reinsuring risks under this chapter;
             5528          (g) cause the pool to have an annual audit of its operations by the state auditor;
             5529          (h) coordinate with the Department of Health in seeking to obtain from the Centers for
             5530      Medicare and Medicaid Services, or other appropriate office or agency of government, all
             5531      appropriate waivers, authority, and permission needed to coordinate the coverage available
             5532      from the pool with coverage available under Medicaid, either before or after Medicaid
             5533      coverage, or as a conversion option upon completion of Medicaid eligibility, without the
             5534      necessity for requalification by the enrollee;
             5535          (i) provide for and employ cost containment measures and requirements including
             5536      preadmission certification, concurrent inpatient review, and individual case management for
             5537      the purpose of making the pool more cost-effective;
             5538          (j) offer pool coverage through contracts with health maintenance organizations,
             5539      preferred provider organizations, and other managed care systems that will manage costs while
             5540      maintaining quality care;
             5541          (k) establish annual limits on benefits payable under the pool to or on behalf of any
             5542      enrollee;
             5543          (l) exclude from coverage under the pool specific benefits, medical conditions, and


             5544      procedures for the purpose of protecting the financial viability of the pool;
             5545          (m) administer the Pool Fund;
             5546          (n) make rules in accordance with Title 63G, Chapter 3, Utah Administrative
             5547      Rulemaking Act, to implement this chapter;
             5548          (o) adopt, trademark, and copyright a trade name for the pool for use in marketing and
             5549      publicizing the pool and its products; and
             5550          (p) transition health care coverage for all individuals covered under the pool as part of
             5551      the conversion to health insurance coverage, regardless of preexisting conditions, under
             5552      PPACA.
             5553          (2) (a) The board shall prepare and submit an annual report to the Legislature which
             5554      shall include:
             5555          (i) the net premiums anticipated;
             5556          (ii) actuarial projections of payments required of the pool;
             5557          (iii) the expenses of administration; and
             5558          (iv) the anticipated reserves or losses of the pool.
             5559          (b) The budget for operation of the pool is subject to the approval of the board.
             5560          (c) The administrative budget of the board and the commissioner under this chapter
             5561      shall comply with the requirements of Title 63J, Chapter 1, Budgetary Procedures Act, and is
             5562      subject to review and approval by the Legislature.
             5563          [(3) (a) The board shall on or before September 1, 2004, require the plan administrator
             5564      or an independent actuarial consultant retained by the plan administrator to redetermine the
             5565      reasonable equivalent of the criteria for uninsurability required under Subsection
             5566      31A-30-106 (1)(h) that is used by the board to determine eligibility for coverage in the pool.]
             5567          [(b) The board shall redetermine the criteria established in Subsection (3)(a) at least
             5568      every five years thereafter.]
             5569          Section 47. Section 31A-29-111 is amended to read:
             5570           31A-29-111. Eligibility -- Limitations.
             5571          (1) (a) Except as provided in Subsection (1)(b), an individual who is not HIPAA
             5572      eligible is eligible for pool coverage if the individual:
             5573          (i) pays the established premium;
             5574          (ii) is a resident of this state; and


             5575          (iii) meets the health underwriting criteria under Subsection (5)(a).
             5576          (b) Notwithstanding Subsection (1)(a), an individual who is not HIPAA eligible is not
             5577      eligible for pool coverage if one or more of the following conditions apply:
             5578          (i) the individual is eligible for health care benefits under Medicaid or Medicare,
             5579      except as provided in Section 31A-29-112 ;
             5580          (ii) the individual has terminated coverage in the pool, unless:
             5581          (A) 12 months have elapsed since the termination date; or
             5582          (B) the individual demonstrates that creditable coverage has been involuntarily
             5583      terminated for any reason other than nonpayment of premium;
             5584          (iii) the pool has paid the maximum lifetime benefit to or on behalf of the individual;
             5585          (iv) the individual is an inmate of a public institution;
             5586          (v) the individual is eligible for a public health plan, as defined in federal regulations
             5587      adopted pursuant to 42 U.S.C. Sec. 300gg;
             5588          (vi) the individual's health condition does not meet the criteria established under
             5589      Subsection (5);
             5590          (vii) the individual is eligible for coverage under an employer group that offers a health
             5591      benefit plan or a self-insurance arrangement to its eligible employees, dependents, or members
             5592      as:
             5593          (A) an eligible employee;
             5594          (B) a dependent of an eligible employee; or
             5595          (C) a member;
             5596          (viii) the individual is covered under any other health benefit plan;
             5597          (ix) except as provided in Subsections (3) and (6), at the time of application, the
             5598      individual has not resided in Utah for at least 12 consecutive months preceding the date of
             5599      application; or
             5600          (x) the individual's employer pays any part of the individual's health benefit plan
             5601      premium, either as an insured or a dependent, for pool coverage.
             5602          (2) (a) Except as provided in Subsection (2)(b), an individual who is HIPAA eligible is
             5603      eligible for pool coverage if the individual:
             5604          (i) pays the established premium; and
             5605          (ii) is a resident of this state.


             5606          (b) Notwithstanding Subsection (2)(a), a HIPAA eligible individual is not eligible for
             5607      pool coverage if one or more of the following conditions apply:
             5608          (i) the individual is eligible for health care benefits under Medicaid or Medicare,
             5609      except as provided in Section 31A-29-112 ;
             5610          (ii) the individual is eligible for a public health plan, as defined in federal regulations
             5611      adopted pursuant to 42 U.S.C. Sec. 300gg;
             5612          (iii) the individual is covered under any other health benefit plan;
             5613          (iv) the individual is eligible for coverage under an employer group that offers a health
             5614      benefit plan or self-insurance arrangements to its eligible employees, dependents, or members
             5615      as:
             5616          (A) an eligible employee;
             5617          (B) a dependent of an eligible employee; or
             5618          (C) a member;
             5619          (v) the pool has paid the maximum lifetime benefit to or on behalf of the individual;
             5620          (vi) the individual is an inmate of a public institution; or
             5621          (vii) the individual's employer pays any part of the individual's health benefit plan
             5622      premium, either as an insured or a dependent, for pool coverage.
             5623          (3) (a) Notwithstanding Subsection (1)(b)(ix), if otherwise eligible under Subsection
             5624      (1)(a), an individual whose health care insurance coverage from a state high risk pool with
             5625      similar coverage is terminated because of nonresidency in another state is eligible for coverage
             5626      under the pool subject to the conditions of Subsections (1)(b)(i) through (viii).
             5627          (b) Coverage under Subsection (3)(a) shall be applied for within 63 days after the
             5628      termination date of the previous high risk pool coverage.
             5629          (c) The effective date of this state's pool coverage shall be the date of termination of
             5630      the previous high risk pool coverage.
             5631          (d) The waiting period of an individual with a preexisting condition applying for
             5632      coverage under this chapter shall be waived:
             5633          (i) to the extent to which the waiting period was satisfied under a similar plan from
             5634      another state; and
             5635          (ii) if the other state's benefit limitation was not reached.
             5636          (4) (a) If an eligible individual applies for pool coverage within 30 days of being


             5637      denied coverage by an individual carrier, the effective date for pool coverage shall be no later
             5638      than the first day of the month following the date of submission of the completed insurance
             5639      application to the carrier.
             5640          (b) Notwithstanding Subsection (4)(a), for individuals eligible for coverage under
             5641      Subsection (3), the effective date shall be the date of termination of the previous high risk pool
             5642      coverage.
             5643          (5) (a) The board shall establish and adjust, as necessary, health underwriting criteria
             5644      based on:
             5645          (i) health condition; and
             5646          (ii) expected claims so that the expected claims are anticipated to remain within
             5647      available funding.
             5648          (b) The board, with approval of the commissioner, may contract with one or more
             5649      providers under Title 63G, Chapter 6a, Utah Procurement Code, to develop underwriting
             5650      criteria under Subsection (5)(a).
             5651          [(c) If an individual is denied coverage by the pool under the criteria established in
             5652      Subsection (5)(a), the pool shall issue a certificate of insurability to the individual for coverage
             5653      under Subsection 31A-30-108 (3).]
             5654          (6) (a) Notwithstanding Subsection (1)(b)(ix), if otherwise eligible under Subsection
             5655      (1)(a), an individual whose individual health care insurance coverage was involuntarily
             5656      terminated, is eligible for coverage under the pool subject to the conditions of Subsections
             5657      (1)(b)(i) through (viii) and (x).
             5658          (b) Coverage under Subsection (6)(a) shall be applied for within 63 days after the
             5659      termination date of the previous individual health care insurance coverage.
             5660          (c) The effective date of this state's pool coverage shall be the date of termination of
             5661      the previous individual coverage.
             5662          (d) The waiting period of an individual with a preexisting condition applying for
             5663      coverage under this chapter shall be waived to the extent to which the waiting period was
             5664      satisfied under the individual health insurance plan.
             5665          Section 48. Section 31A-29-115 is amended to read:
             5666           31A-29-115. Cancellation -- Notice.
             5667          (1) [(a)] On the date of renewal, the pool may cancel an enrollee's policy if:


             5668          [(i)] (a) the enrollee's health condition does not meet the criteria established in
             5669      Subsection 31A-29-111 (5); and
             5670          [(ii)] (b) the pool has provided written notice to the enrollee's last-known address no
             5671      less than 60 days before cancellation[; and].
             5672          [(iii) at least one individual carrier has not reached the individual enrollment cap
             5673      established in Section 31A-30-110 .]
             5674          [(b) The pool shall issue a certificate of insurability to an enrollee whose policy is
             5675      cancelled under Subsection (1)(a) for coverage under Subsection 31A-30-108 (3) if the
             5676      requirements of Subsection 31A-29-111 (5) are met.]
             5677          (2) The pool may cancel an enrollee's policy at any time if:
             5678          (a) the pool has provided written notice to the enrollee's last-known address no less
             5679      than 15 days before cancellation; and
             5680          (b) (i) the enrollee establishes a residency outside of Utah for three consecutive
             5681      months;
             5682          (ii) there is nonpayment of premiums; or
             5683          (iii) the pool determines that the enrollee does not meet the eligibility requirements set
             5684      forth in Section 31A-29-111 , in which case:
             5685          (A) the policy may be retroactively terminated for the period of time in which the
             5686      enrollee was not eligible;
             5687          (B) retroactive termination may not exceed three years; and
             5688          (C) the board's remedy under this Subsection (2)(b) shall be a cause of action against
             5689      the enrollee for benefits paid during the period of ineligibility in accordance with Subsection
             5690      31A-29-119 (3).
             5691          Section 49. Section 31A-30-102 is amended to read:
             5692           31A-30-102. Purpose statement.
             5693          The purpose of this chapter is to:
             5694          (1) prevent abusive rating practices;
             5695          (2) require disclosure of rating practices to purchasers;
             5696          (3) establish rules regarding:
             5697          (a) a universal individual and small group application; and
             5698          (b) renewability of coverage;


             5699          (4) improve the overall fairness and efficiency of the individual and small group
             5700      insurance market;
             5701          (5) provide increased access for individuals and small employers to health insurance;
             5702      and
             5703          (6) provide an employer with the opportunity to establish a defined contribution
             5704      arrangement for an employee to purchase a health benefit plan through the [Internet portal]
             5705      Health Insurance Exchange created by Section 63M-1-2504 .
             5706          Section 50. Section 31A-30-103 is amended to read:
             5707           31A-30-103. Definitions.
             5708          As used in this chapter:
             5709          (1) "Actuarial certification" means a written statement by a member of the American
             5710      Academy of Actuaries or other individual approved by the commissioner that a covered carrier
             5711      is in compliance with [Sections 31A-30-106 and 31A-30-106.1 ] this chapter, based upon the
             5712      examination of the covered carrier, including review of the appropriate records and of the
             5713      actuarial assumptions and methods used by the covered carrier in establishing premium rates
             5714      for applicable health benefit plans.
             5715          (2) "Affiliate" or "affiliated" means [any entity or] a person who directly or indirectly
             5716      through one or more intermediaries, controls or is controlled by, or is under common control
             5717      with, a specified [entity or] person.
             5718          (3) "Base premium rate" means, for each class of business as to a rating period, the
             5719      lowest premium rate charged or that could have been charged under a rating system for that
             5720      class of business by the covered carrier to covered insureds with similar case characteristics for
             5721      health benefit plans with the same or similar coverage.
             5722          (4) (a) "Bona fide employer association" means an association of employers:
             5723          (i) that meets the requirements of Subsection 31A-22-701 (2)(b);
             5724          (ii) in which the employers of the association, either directly or indirectly, exercise
             5725      control over the plan;
             5726          (iii) that is organized:
             5727          (A) based on a commonality of interest between the employers and their employees
             5728      that participate in the plan by some common economic or representation interest or genuine
             5729      organizational relationship unrelated to the provision of benefits; and


             5730          (B) to act in the best interests of its employers to provide benefits for the employer's
             5731      employees and their spouses and dependents, and other benefits relating to employment; and
             5732          (iv) whose association sponsored health plan complies with 45 C.F.R. 146.121.
             5733          (b) The commissioner shall consider the following with regard to determining whether
             5734      an association of employers is a bona fide employer association under Subsection (4)(a):
             5735          (i) how association members are solicited;
             5736          (ii) who participates in the association;
             5737          (iii) the process by which the association was formed;
             5738          (iv) the purposes for which the association was formed, and what, if any, were the
             5739      pre-existing relationships of its members;
             5740          (v) the powers, rights and privileges of employer members; and
             5741          (vi) who actually controls and directs the activities and operations of the benefit
             5742      programs.
             5743          (5) "Carrier" means [any] a person [or entity] that provides health insurance in this
             5744      state including:
             5745          (a) an insurance company;
             5746          (b) a prepaid hospital or medical care plan;
             5747          (c) a health maintenance organization;
             5748          (d) a multiple employer welfare arrangement; and
             5749          (e) [any other] another person [or entity] providing a health insurance plan under this
             5750      title.
             5751          (6) (a) Except as provided in Subsection (6)(b), "case characteristics" means
             5752      demographic or other objective characteristics of a covered insured that are considered by the
             5753      carrier in determining premium rates for the covered insured.
             5754          (b) "Case characteristics" do not include:
             5755          (i) duration of coverage since the policy was issued;
             5756          (ii) claim experience; and
             5757          (iii) health status.
             5758          (7) "Class of business" means all or a separate grouping of covered insureds that is
             5759      permitted by the commissioner in accordance with Section 31A-30-105 .
             5760          [(8) "Conversion policy" means a policy providing coverage under the conversion


             5761      provisions required in Chapter 22, Part 7, Group Accident and Health Insurance.]
             5762          [(9)] (8) "Covered carrier" means [any] an individual carrier or small employer carrier
             5763      subject to this chapter.
             5764          [(10)] (9) "Covered individual" means [any] an individual who is covered under a
             5765      health benefit plan subject to this chapter.
             5766          [(11)] (10) "Covered insureds" means small employers and individuals who are issued
             5767      a health benefit plan that is subject to this chapter.
             5768          [(12)] (11) "Dependent" means an individual to the extent that the individual is defined
             5769      to be a dependent by:
             5770          (a) the health benefit plan covering the covered individual; and
             5771          (b) Chapter 22, Part 6, Accident and Health Insurance.
             5772          [(13)] (12) "Established geographic service area" means a geographical area approved
             5773      by the commissioner within which the carrier is authorized to provide coverage.
             5774          [(14)] (13) "Index rate" means, for each class of business as to a rating period for
             5775      covered insureds with similar case characteristics, the arithmetic average of the applicable base
             5776      premium rate and the corresponding highest premium rate.
             5777          [(15)] (14) "Individual carrier" means a carrier that provides coverage on an individual
             5778      basis through a health benefit plan regardless of whether:
             5779          (a) coverage is offered through:
             5780          (i) an association;
             5781          (ii) a trust;
             5782          (iii) a discretionary group; or
             5783          (iv) other similar groups; or
             5784          (b) the policy or contract is situated out-of-state.
             5785          [(16)] (15) "Individual conversion policy" means a conversion policy issued to:
             5786          (a) an individual; or
             5787          (b) an individual with a family.
             5788          [(17) "Individual coverage count" means the number of natural persons covered under
             5789      a carrier's health benefit products that are individual policies.]
             5790          [(18) "Individual enrollment cap" means the percentage set by the commissioner in
             5791      accordance with Section 31A-30-110 .]


             5792          [(19)] (16) "New business premium rate" means, for each class of business as to a
             5793      rating period, the lowest premium rate charged or offered, or that could have been charged or
             5794      offered, by the carrier to covered insureds with similar case characteristics for newly issued
             5795      health benefit plans with the same or similar coverage.
             5796          [(20)] (17) "Premium" means money paid by covered insureds and covered individuals
             5797      as a condition of receiving coverage from a covered carrier, including [any] fees or other
             5798      contributions associated with the health benefit plan.
             5799          [(21)] (18) (a) "Rating period" means the calendar period for which premium rates
             5800      established by a covered carrier are assumed to be in effect, as determined by the carrier.
             5801          (b) A covered carrier may not have:
             5802          (i) more than one rating period in any calendar month; and
             5803          (ii) no more than 12 rating periods in any calendar year.
             5804          [(22) "Resident" means an individual who has resided in this state for at least 12
             5805      consecutive months immediately preceding the date of application.]
             5806          [(23)] (19) "Short-term limited duration insurance" means a health benefit product that:
             5807          (a) is not renewable; and
             5808          (b) has an expiration date specified in the contract that is less than 364 days after the
             5809      date the plan became effective.
             5810          [(24)] (20) "Small employer carrier" means a carrier that provides health benefit plans
             5811      covering eligible employees of one or more small employers in this state, regardless of
             5812      whether:
             5813          (a) coverage is offered through:
             5814          (i) an association;
             5815          (ii) a trust;
             5816          (iii) a discretionary group; or
             5817          (iv) other similar grouping; or
             5818          (b) the policy or contract is situated out-of-state.
             5819          [(25) "Uninsurable" means an individual who:]
             5820          [(a) is eligible for the Comprehensive Health Insurance Pool coverage under the
             5821      underwriting criteria established in Subsection 31A-29-111 (5); or]
             5822          [(b) (i) is issued a certificate for coverage under Subsection 31A-30-108 (3); and]


             5823          [(ii) has a condition of health that does not meet consistently applied underwriting
             5824      criteria as established by the commissioner in accordance with Subsections 31A-30-106 (1)(g)
             5825      and (h) for which coverage the applicant is applying.]
             5826          [(26) "Uninsurable percentage" for a given calendar year equals UC/CI where, for
             5827      purposes of this formula:]
             5828          [(a) "CI" means the carrier's individual coverage count as of December 31 of the
             5829      preceding year; and]
             5830          [(b) "UC" means the number of uninsurable individuals who were issued an individual
             5831      policy on or after July 1, 1997.]
             5832          Section 51. Section 31A-30-104 is amended to read:
             5833           31A-30-104. Applicability and scope.
             5834          (1) This chapter applies to any:
             5835          (a) health benefit plan that provides coverage to:
             5836          (i) individuals;
             5837          (ii) small employers, except as provided in Subsection (3); or
             5838          (iii) both Subsections (1)(a)(i) and (ii); or
             5839          (b) individual conversion policy for purposes of Sections 31A-30-106.5 and
             5840      31A-30-107.5 .
             5841          (2) This chapter applies to a health benefit plan that provides coverage to small
             5842      employers or individuals regardless of:
             5843          (a) whether the contract is issued to:
             5844          (i) an association, except as provided in Subsection (3);
             5845          (ii) a trust;
             5846          (iii) a discretionary group; or
             5847          (iv) other similar grouping; or
             5848          (b) the situs of delivery of the policy or contract.
             5849          (3) This chapter does not apply to:
             5850          (a) short-term limited duration health insurance;
             5851          (b) federally funded or partially funded programs; or
             5852          (c) a bona fide employer association.
             5853          (4) (a) Except as provided in Subsection (4)(b), for the purposes of this chapter:


             5854          (i) carriers that are affiliated companies or that are eligible to file a consolidated tax
             5855      return shall be treated as one carrier; and
             5856          (ii) any restrictions or limitations imposed by this chapter shall apply as if all health
             5857      benefit plans delivered or issued for delivery to covered insureds in this state by the affiliated
             5858      carriers were issued by one carrier.
             5859          (b) Upon a finding of the commissioner, an affiliated carrier that is a health
             5860      maintenance organization having a certificate of authority under this title may be considered to
             5861      be a separate carrier for the purposes of this chapter.
             5862          (c) Unless otherwise authorized by the commissioner or by Chapter 42, Defined
             5863      Contribution Risk Adjuster Act, a covered carrier may not enter into one or more ceding
             5864      arrangements with respect to health benefit plans delivered or issued for delivery to covered
             5865      insureds in this state if the ceding arrangements would result in less than 50% of the insurance
             5866      obligation or risk for the health benefit plans being retained by the ceding carrier.
             5867          (d) Section 31A-22-1201 applies if a covered carrier cedes or assumes all of the
             5868      insurance obligation or risk with respect to one or more health benefit plans delivered or issued
             5869      for delivery to covered insureds in this state.
             5870          (5) (a) A Taft Hartley trust created in accordance with Section 302(c)(5) of the Federal
             5871      Labor Management Relations Act, or a carrier with the written authorization of such a trust,
             5872      may make a written request to the commissioner for a waiver from the application of any of the
             5873      provisions of [Subsection] Subsections 31A-30-106 (1) and 31A-30-106.1 (1) with respect to a
             5874      health benefit plan provided to the trust.
             5875          (b) The commissioner may grant a trust or carrier described in Subsection (5)(a) a
             5876      waiver if the commissioner finds that application with respect to the trust would:
             5877          (i) have a substantial adverse effect on the participants and beneficiaries of the trust;
             5878      and
             5879          (ii) require significant modifications to one or more collective bargaining arrangements
             5880      under which the trust is established or maintained.
             5881          (c) A waiver granted under this Subsection (5) may not apply to an individual if the
             5882      person participates in a Taft Hartley trust as an associate member of any employee
             5883      organization.
             5884          (6) Sections 31A-30-106 , 31A-30-106.1 , 31A-30-106.5 , 31A-30-106.7 , 31A-30-107 ,


             5885      and 31A-30-108 , [and 31A-30-111 ] apply to:
             5886          (a) any insurer engaging in the business of insurance related to the risk of a small
             5887      employer for medical, surgical, hospital, or ancillary health care expenses of the small
             5888      employer's employees provided as an employee benefit; and
             5889          (b) any contract of an insurer, other than a workers' compensation policy, related to the
             5890      risk of a small employer for medical, surgical, hospital, or ancillary health care expenses of the
             5891      small employer's employees provided as an employee benefit.
             5892          (7) The commissioner may make rules requiring that the marketing practices be
             5893      consistent with this chapter for:
             5894          (a) a small employer carrier;
             5895          (b) a small employer carrier's agent;
             5896          (c) an insurance producer;
             5897          (d) an insurance consultant; and
             5898          (e) a navigator.
             5899          Section 52. Section 31A-30-106 is amended to read:
             5900           31A-30-106. Individual premiums -- Rating restrictions -- Disclosure.
             5901          (1) Premium rates for health benefit plans for individuals under this chapter are subject
             5902      to this section.
             5903          (a) The index rate for a rating period for any class of business may not exceed the
             5904      index rate for any other class of business by more than 20%.
             5905          (b) (i) For a class of business, the premium rates charged during a rating period to
             5906      covered insureds with similar case characteristics for the same or similar coverage, or the rates
             5907      that could be charged to the individual under the rating system for that class of business, may
             5908      not vary from the index rate by more than 30% of the index rate except as provided under
             5909      Subsection (1)(b)(ii).
             5910          (ii) A carrier that offers individual and small employer health benefit plans may use the
             5911      small employer index rates to establish the rate limitations for individual policies, even if some
             5912      individual policies are rated below the small employer base rate.
             5913          (c) The percentage increase in the premium rate charged to a covered insured for a new
             5914      rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
             5915      the following:


             5916          (i) the percentage change in the new business premium rate measured from the first day
             5917      of the prior rating period to the first day of the new rating period;
             5918          (ii) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
             5919      of less than one year, due to the claim experience, health status, or duration of coverage of the
             5920      covered individuals as determined from the rate manual for the class of business of the carrier
             5921      offering an individual health benefit plan; and
             5922          (iii) any adjustment due to change in coverage or change in the case characteristics of
             5923      the covered insured as determined from the rate manual for the class of business of the carrier
             5924      offering an individual health benefit plan.
             5925          (d) (i) A carrier offering an individual health benefit plan shall apply rating factors,
             5926      including case characteristics, consistently with respect to all covered insureds in a class of
             5927      business.
             5928          (ii) Rating factors shall produce premiums for identical individuals that:
             5929          (A) differ only by the amounts attributable to plan design; and
             5930          (B) do not reflect differences due to the nature of the individuals assumed to select
             5931      particular health benefit products.
             5932          (iii) A carrier offering an individual health benefit plan shall treat all health benefit
             5933      plans issued or renewed in the same calendar month as having the same rating period.
             5934          (e) For the purposes of this Subsection (1), a health benefit plan that uses a restricted
             5935      network provision may not be considered similar coverage to a health benefit plan that does not
             5936      use a restricted network provision, provided that use of the restricted network provision results
             5937      in substantial difference in claims costs.
             5938          (f) A carrier offering a health benefit plan to an individual may not, without prior
             5939      approval of the commissioner, use case characteristics other than:
             5940          (i) age;
             5941          (ii) gender;
             5942          (iii) geographic area; and
             5943          (iv) family composition.
             5944          (g) (i) The commissioner shall establish rules in accordance with Title 63G, Chapter 3,
             5945      Utah Administrative Rulemaking Act, to:
             5946          (A) implement this chapter; [and]


             5947          (B) assure that rating practices used by carriers who offer health benefit plans to
             5948      individuals are consistent with the purposes of this chapter[.]; and
             5949          (C) promote transparency of rating practices of health benefit plans, except that a
             5950      carrier may not be required to disclose proprietary information.
             5951          (ii) The rules described in Subsection (1)(g)(i) may include rules that:
             5952          (A) assure that differences in rates charged for health benefit products by carriers who
             5953      offer health benefit plans to individuals are reasonable and reflect objective differences in plan
             5954      design, not including differences due to the nature of the individuals assumed to select
             5955      particular health benefit products; and
             5956          (B) prescribe the manner in which case characteristics may be used by carriers who
             5957      offer health benefit plans to individuals[;].
             5958          [(C) implement the individual enrollment cap under Section 31A-30-110 , including
             5959      specifying:]
             5960          [(I) the contents for certification;]
             5961          [(II) auditing standards;]
             5962          [(III) underwriting criteria for uninsurable classification; and]
             5963          [(IV) limitations on high risk enrollees under Section 31A-30-111 ; and]
             5964          [(D) establish the individual enrollment cap under Subsection 31A-30-110 (1).]
             5965          [(h) Before implementing regulations for underwriting criteria for uninsurable
             5966      classification, the commissioner shall contract with an independent consulting organization to
             5967      develop industry-wide underwriting criteria for uninsurability based on an individual's expected
             5968      claims under open enrollment coverage exceeding 325% of that expected for a standard
             5969      insurable individual with the same case characteristics.]
             5970          [(i)] (h) The commissioner shall revise rules issued for Sections 31A-22-602 and
             5971      31A-22-605 regarding individual accident and health policy rates to allow rating in accordance
             5972      with this section.
             5973          (2) For purposes of Subsection (1)(c)(i), if a health benefit product is a health benefit
             5974      product into which the covered carrier is no longer enrolling new covered insureds, the covered
             5975      carrier shall use the percentage change in the base premium rate, provided that the change does
             5976      not exceed, on a percentage basis, the change in the new business premium rate for the most
             5977      similar health benefit product into which the covered carrier is actively enrolling new covered


             5978      insureds.
             5979          (3) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
             5980      a class of business.
             5981          (b) A covered carrier may not offer to transfer a covered insured into or out of a class
             5982      of business unless the offer is made to transfer all covered insureds in the class of business
             5983      without regard to:
             5984          (i) case characteristics;
             5985          (ii) claim experience;
             5986          (iii) health status; or
             5987          (iv) duration of coverage since issue.
             5988          (4) (a) A carrier who offers a health benefit plan to an individual shall maintain at the
             5989      carrier's principal place of business a complete and detailed description of its rating practices
             5990      and renewal underwriting practices, including information and documentation that demonstrate
             5991      that the carrier's rating methods and practices are:
             5992          (i) based upon commonly accepted actuarial assumptions; and
             5993          (ii) in accordance with sound actuarial principles.
             5994          (b) (i) [Each] A carrier subject to this section shall file with the commissioner, on or
             5995      before April 1 of each year, in a form, manner, and containing such information as prescribed
             5996      by the commissioner, an actuarial certification certifying that:
             5997          (A) the carrier is in compliance with this chapter; and
             5998          (B) the rating methods of the carrier are actuarially sound.
             5999          (ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by the
             6000      carrier at the carrier's principal place of business.
             6001          (c) A carrier shall make the information and documentation described in this
             6002      Subsection (4) available to the commissioner upon request.
             6003          (d) [Records] Except as provided in Subsection (1)(g) or required by PPACA, a record
             6004      submitted to the commissioner under this section shall be maintained by the commissioner as a
             6005      protected [records] record under Title 63G, Chapter 2, Government Records Access and
             6006      Management Act.
             6007          Section 53. Section 31A-30-106.7 is amended to read:
             6008           31A-30-106.7. Surcharge for groups changing carriers.


             6009          (1) (a) Except as provided in Subsection (1)(b), if prior notice is given, a covered
             6010      carrier may impose upon a small group that changes coverage to that carrier from another
             6011      carrier a one-time surcharge of up to 25% of the annualized premium that the carrier could
             6012      otherwise charge under Section [ 31A-30-106 ] 31A-30-106.1 .
             6013          (b) A covered carrier may not impose the surcharge described in Subsection (1)(a) if:
             6014          (i) the change in carriers occurs on the anniversary of the plan year, as defined in
             6015      Section 31A-1-301 ;
             6016          (ii) the previous coverage was terminated under Subsection 31A-30-107 (3)(e); [or]
             6017          (iii) employees from an existing group form a new business[.]; and
             6018          (iv) the surcharge is not applied uniformly to all similarly situated small groups.
             6019          (2) A covered carrier may not impose the surcharge described in Subsection (1) if the
             6020      offer to cover the group occurs at a time other than the anniversary of the plan year because:
             6021          (a) (i) the application for coverage is made prior to the anniversary date in accordance
             6022      with the covered carrier's published policies; and
             6023          (ii) the offer to cover the group is not issued until after the anniversary date; or
             6024          (b) (i) the application for coverage is made prior to the anniversary date in accordance
             6025      with the covered carrier's published policies; and
             6026          (ii) additional underwriting or rating information requested by the covered carrier is not
             6027      received until after the anniversary date.
             6028          (3) If a covered carrier chooses to apply a surcharge under Subsection (1), the
             6029      application of the surcharge and the criteria for incurring or avoiding the surcharge shall be
             6030      clearly stated in the:
             6031          (a) written application materials provided to the applicant at the time of application;
             6032      and
             6033          (b) written producer guidelines.
             6034          (4) The commissioner shall adopt rules in accordance with Title 63G, Chapter 3, Utah
             6035      Administrative Rulemaking Act, to ensure compliance with this section.
             6036          Section 54. Section 31A-30-107 is amended to read:
             6037           31A-30-107. Renewal -- Limitations -- Exclusions -- Discontinuance and
             6038      nonrenewal.
             6039          (1) Except as otherwise provided in this section, a small employer health benefit plan is


             6040      renewable and continues in force:
             6041          (a) with respect to all eligible employees and dependents; and
             6042          (b) at the option of the plan sponsor.
             6043          (2) A small employer health benefit plan may be discontinued or nonrenewed:
             6044          (a) for a network plan, if[: (i)] there is no longer any enrollee under the group health
             6045      plan who lives, resides, or works in:
             6046          [(A)] (i) the service area of the covered carrier; or
             6047          [(B)] (ii) the area for which the covered carrier is authorized to do business; [and] or
             6048          [(ii) in the case of the small employer market, the small employer carrier applies the
             6049      same criteria the small employer carrier would apply in denying enrollment in the plan under
             6050      Subsection 31A-30-108 (7); or]
             6051          (b) for coverage made available in the small or large employer market only through an
             6052      association, if:
             6053          (i) the employer's membership in the association ceases; and
             6054          (ii) the coverage is terminated uniformly without regard to any health status-related
             6055      factor relating to any covered individual.
             6056          (3) A small employer health benefit plan may be discontinued if:
             6057          (a) a condition described in Subsection (2) exists;
             6058          (b) except as prohibited by Section 31A-30-206 , the plan sponsor fails to pay
             6059      premiums or contributions in accordance with the terms of the contract;
             6060          (c) the plan sponsor:
             6061          (i) performs an act or practice that constitutes fraud; or
             6062          (ii) makes an intentional misrepresentation of material fact under the terms of the
             6063      coverage;
             6064          (d) the covered carrier:
             6065          (i) elects to discontinue offering a particular small employer health benefit product
             6066      delivered or issued for delivery in this state; and
             6067          (ii) (A) provides notice of the discontinuation in writing:
             6068          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             6069          (II) at least 90 days before the date the coverage will be discontinued;
             6070          (B) provides notice of the discontinuation in writing:


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


             6102          (b) except as prohibited by Section 31A-30-206 , for noncompliance with the insurer's
             6103      employer contribution requirements.
             6104          (5) A small employer health benefit plan may be nonrenewed:
             6105          (a) if a condition described in Subsection (2) exists; or
             6106          (b) except as prohibited by Section 31A-30-206 , for noncompliance with the insurer's
             6107      minimum participation requirements.
             6108          (6) (a) Except as provided in Subsection (6)(d), an eligible employee may be
             6109      discontinued if after issuance of coverage the eligible employee:
             6110          (i) engages in an act or practice that constitutes fraud in connection with the coverage;
             6111      or
             6112          (ii) makes an intentional misrepresentation of material fact in connection with the
             6113      coverage.
             6114          (b) An eligible employee that is discontinued under Subsection (6)(a) may reenroll:
             6115          (i) 12 months after the date of discontinuance; and
             6116          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
             6117      to reenroll.
             6118          (c) At the time the eligible employee's coverage is discontinued under Subsection
             6119      (6)(a), the covered carrier shall notify the eligible employee of the right to reenroll when
             6120      coverage is discontinued.
             6121          (d) An eligible employee may not be discontinued under this Subsection (6) because of
             6122      a fraud or misrepresentation that relates to health status.
             6123          (7) For purposes of this section, a reference to "plan sponsor" includes a reference to
             6124      the employer:
             6125          (a) with respect to coverage provided to an employer member of the association; and
             6126          (b) if the small employer health benefit plan is made available by a covered carrier in
             6127      the employer market only through:
             6128          (i) an association;
             6129          (ii) a trust; or
             6130          (iii) a discretionary group.
             6131          (8) A covered carrier may modify a small employer health benefit plan only:
             6132          (a) at the time of coverage renewal; and


             6133          (b) if the modification is effective uniformly among all plans with that product.
             6134          Section 55. Section 31A-30-108 is amended to read:
             6135           31A-30-108. Eligibility for small employer and individual market.
             6136          (1) (a) [Small employer carriers shall accept residents] A small employer carrier shall
             6137      accept a small employer that applies for small group coverage as set forth in the Health
             6138      Insurance Portability and Accountability Act, Sec. 2701(f) and 2711(a), and PPACA, Sec.
             6139      2702.
             6140          [(b) Individual carriers shall accept residents for individual coverage pursuant to:]
             6141          [(i) Health Insurance Portability and Accountability Act, Sec. 2741(a)-(b); and]
             6142          [(ii) Subsection (3).]
             6143          (b) An individual carrier shall accept an individual that applies for individual coverage
             6144      as set forth in PPACA, Sec. 2702.
             6145          (2) (a) [Small] A small employer [carriers] carrier shall offer to accept all eligible
             6146      employees and their dependents at the same level of benefits under any health benefit plan
             6147      provided to a small employer.
             6148          (b) [Small] A small employer [carriers] carrier may:
             6149          (i) request a small employer to submit a copy of the small employer's quarterly income
             6150      tax withholdings to determine whether the employees for whom coverage is provided or
             6151      requested are bona fide employees of the small employer; and
             6152          (ii) deny or terminate coverage if the small employer refuses to provide documentation
             6153      requested under Subsection (2)(b)(i).
             6154          [(3) Except as provided in Subsections (5) and (6) and Section 31A-30-110 , individual
             6155      carriers shall accept for coverage individuals to whom all of the following conditions apply:]
             6156          [(a) the individual is not covered or eligible for coverage:]
             6157          [(i) (A) as an employee of an employer;]
             6158          [(B) as a member of an association; or]
             6159          [(C) as a member of any other group; and]
             6160          [(ii) under:]
             6161          [(A) a health benefit plan; or]
             6162          [(B) a self-insured arrangement that provides coverage similar to that provided by a
             6163      health benefit plan as defined in Section 31A-1-301 ;]


             6164          [(b) the individual is not covered and is not eligible for coverage under any public
             6165      health benefits arrangement including:]
             6166          [(i) the Medicare program established under Title XVIII of the Social Security Act;]
             6167          [(ii) any act of Congress or law of this or any other state that provides benefits
             6168      comparable to the benefits provided under this chapter; or]
             6169          [(iii) coverage under the Comprehensive Health Insurance Pool Act created in Chapter
             6170      29, Comprehensive Health Insurance Pool Act;]
             6171          [(c) unless the maximum benefit has been reached the individual is not covered or
             6172      eligible for coverage under any:]
             6173          [(i) Medicare supplement policy;]
             6174          [(ii) conversion option;]
             6175          [(iii) continuation or extension under COBRA; or]
             6176          [(iv) state extension;]
             6177          [(d) the individual has not terminated or declined coverage described in Subsection
             6178      (3)(a), (b), or (c) within 93 days of application for coverage, unless the individual is eligible for
             6179      individual coverage under Health Insurance Portability and Accountability Act, Sec. 2741(b),
             6180      in which case, the requirement of this Subsection (3)(d) does not apply; and]
             6181          [(e) the individual is certified as ineligible for the Health Insurance Pool if:]
             6182          [(i) the individual applies for coverage with the Comprehensive Health Insurance Pool
             6183      within 30 days after being rejected or refused coverage by the covered carrier and reapplies for
             6184      coverage with that covered carrier within 30 days after the date of issuance of a certificate
             6185      under Subsection 31A-29-111 (5)(c); or]
             6186          [(ii) the individual applies for coverage with any individual carrier within 45 days
             6187      after:]
             6188          [(A) notice of cancellation of coverage under Subsection 31A-29-115 (1); or]
             6189          [(B) the date of issuance of a certificate under Subsection 31A-29-111 (5)(c) if the
             6190      individual applied first for coverage with the Comprehensive Health Insurance Pool.]
             6191          [(4) (a) If coverage is obtained under Subsection (3)(e)(i) and the required premium is
             6192      paid, the effective date of coverage shall be the first day of the month following the individual's
             6193      submission of a completed insurance application to that covered carrier.]
             6194          [(b) If coverage is obtained under Subsection (3)(e)(ii) and the required premium is


             6195      paid, the effective date of coverage shall be the day following the:]
             6196          [(i) cancellation of coverage under Subsection 31A-29-115 (1); or]
             6197          [(ii) submission of a completed insurance application to the Comprehensive Health
             6198      Insurance Pool.]
             6199          [(5) (a) An individual carrier is not required to accept individuals for coverage under
             6200      Subsection (3) if the carrier issues no new individual policies in the state after July 1, 1997.]
             6201          [(b) A carrier described in Subsection (5)(a) may not issue new individual policies in
             6202      the state for five years from July 1, 1997.]
             6203          [(c) Notwithstanding Subsection (5)(b), a carrier may request permission to issue new
             6204      policies after July 1, 1999, which may only be granted if:]
             6205          [(i) the carrier accepts uninsurables as is required of a carrier entering the market under
             6206      Subsection 31A-30-110 ; and]
             6207          [(ii) the commissioner finds that the carrier's issuance of new individual policies:]
             6208          [(A) is in the best interests of the state; and]
             6209          [(B) does not provide an unfair advantage to the carrier.]
             6210          [(6) (a) If the Comprehensive Health Insurance Pool, as set forth under Chapter 29,
             6211      Comprehensive Health Insurance Pool Act, is dissolved or discontinued, or if enrollment is
             6212      capped or suspended, an individual carrier may decline to accept individuals applying for
             6213      individual enrollment, other than individuals applying for coverage as set forth in Health
             6214      Insurance Portability and Accountability Act, Sec. 2741 (a)-(b).]
             6215          [(b) Within two calendar days of taking action under Subsection (6)(a), an individual
             6216      carrier will provide written notice to the department.]
             6217          [(7) (a) If a small employer carrier offers health benefit plans to small employers
             6218      through a network plan, the small employer carrier may:]
             6219          [(i) limit the employers that may apply for the coverage to those employers with
             6220      eligible employees who live, reside, or work in the service area for the network plan; and]
             6221          [(ii) within the service area of the network plan, deny coverage to an employer if the
             6222      small employer carrier has demonstrated to the commissioner that the small employer carrier:]
             6223          [(A) will not have the capacity to deliver services adequately to enrollees of any
             6224      additional groups because of the small employer carrier's obligations to existing group contract
             6225      holders and enrollees; and]


             6226          [(B) applies this section uniformly to all employers without regard to:]
             6227          [(I) the claims experience of an employer, an employer's employee, or a dependent of
             6228      an employee; or]
             6229          [(II) any health status-related factor relating to an employee or dependent of an
             6230      employee.]
             6231          [(b) (i) A small employer carrier that denies a health benefit product to an employer in
             6232      any service area in accordance with this section may not offer coverage in the small employer
             6233      market within the service area to any employer for a period of 180 days after the date the
             6234      coverage is denied.]
             6235          [(ii) This Subsection (7)(b) does not:]
             6236          [(A) limit the small employer carrier's ability to renew coverage that is in force; or]
             6237          [(B) relieve the small employer carrier of the responsibility to renew coverage that is in
             6238      force.]
             6239          [(c) Coverage offered within a service area after the 180-day period specified in
             6240      Subsection (7)(b) is subject to the requirements of this section.]
             6241          Section 56. Section 31A-30-207 is amended to read:
             6242           31A-30-207. Rating and underwriting restrictions for health plans in the defined
             6243      contribution arrangement market.
             6244          (1) Except as provided in Subsection (2), rating and underwriting restrictions for
             6245      defined contribution arrangement health benefit plans offered in the Health Insurance
             6246      Exchange shall be in accordance with Section 31A-30-106.1 , and the plan adopted under
             6247      Chapter 42, Defined Contribution Risk Adjuster Act.
             6248          (2) Notwithstanding [the provisions of] Subsections 31A-30-106.1 (9)(b)(ii) and (iii), a
             6249      carrier offering a defined contribution arrangement in the Health Insurance Exchange under
             6250      this part[: (a)] shall calculate rates based on a family tier rating structure that includes four tiers
             6251      in compliance with Subsection 31A-30-106.1 (9)(b)(i)[; and].
             6252          [(b) may not calculate rates based on a family tier rating structure that includes five or
             6253      six tiers as described in Subsection 31A-30-106 (9)(b)(ii) or (iii).]
             6254          (3) All insurers who participate in the defined contribution market shall:
             6255          (a) participate in the risk adjuster mechanism developed under Chapter 42, Defined
             6256      Contribution Risk Adjuster Act for all defined contribution arrangement health benefit plans;


             6257          (b) provide the risk adjuster board with:
             6258          (i) an employer group's risk factor; and
             6259          (ii) carrier enrollment data; and
             6260          (c) submit rates to the exchange that are net of commissions.
             6261          (4) When an employer group enters the defined contribution arrangement market and
             6262      the employer group has a health plan with an insurer who is participating in the defined
             6263      contribution arrangement market, the risk factor applied to the employer group when it enters
             6264      the defined contribution arrangement market may not be greater than the employer group's
             6265      renewal risk factor for the same group of covered employees and the same effective date, as
             6266      determined by the employer group's insurer.
             6267          Section 57. Section 31A-30-209 is amended to read:
             6268           31A-30-209. Insurance producers and the Health Insurance Exchange.
             6269          (1) A producer may be listed on the Health Insurance Exchange as a credentialed
             6270      producer [for the defined contribution arrangement market in accordance with Section
             6271      63M-1-2504 ,] if the producer is designated as [an appointed] a credentialed agent for the
             6272      [defined contribution arrangement market] Health Insurance Exchange in accordance with
             6273      Subsection (2).
             6274          (2) A producer whose license under this title authorizes the producer to sell [defined
             6275      contribution arrangement health benefit plans may be appointed to the defined contribution
             6276      arrangement market on] accident and health insurance may be credentialed by the Health
             6277      Insurance Exchange [by the Insurance Department] and may sell any product on the Health
             6278      Insurance Exchange, if the producer:
             6279          [(a) submits an application to the Insurance Department to be appointed as a producer
             6280      for the defined contribution arrangement market on the Health Insurance Exchange;]
             6281          [(b) is an appointed agent in accordance with Subsection (3), for products offered in
             6282      the defined contribution arrangement market of the Health Insurance Exchange, with the
             6283      carriers that offer a defined contribution arrangement health benefit plan on the Health
             6284      Insurance Exchange; and]
             6285          [(c) has completed continuing education for the defined contribution arrangement
             6286      market that:]
             6287          [(i) is required by administrative rule adopted by the commissioner; and]


             6288          [(ii) provides training on premium assistance programs.]
             6289          (a) is an appointed producer with:
             6290          (i) all carriers that offer a plan in the defined contribution market on the Health
             6291      Insurance Exchange; and
             6292          (ii) at least one carrier that offers a dental plan on the Health Insurance Exchange; and
             6293          (b) completes each year the Health Insurance Exchange training that includes training
             6294      on premium assistance programs.
             6295          (3) A carrier shall appoint a producer to sell the carrier's products in the defined
             6296      contribution arrangement market of the Health Insurance Exchange, within 30 days of the
             6297      notice required in Subsection (3)(b), if:
             6298          (a) the producer is currently appointed by a majority of the carriers in the Health
             6299      Insurance Exchange to sell products either outside or inside of the Health Insurance Exchange;
             6300      and
             6301          (b) the producer informs the carrier that the producer is:
             6302          (i) applying to be appointed to the defined contribution arrangement market in the
             6303      Health Insurance Exchange;
             6304          (ii) appointed by a majority of the carriers in the defined contribution arrangement
             6305      market in the Health Insurance Exchange;
             6306          (iii) willing to complete training regarding the carrier's products offered on the defined
             6307      contribution arrangement market in the Health Insurance Exchange; and
             6308          (iv) willing to sign the contracts and business associate's agreements that the carrier
             6309      requires for appointed producers in the Health Insurance Exchange.
             6310          Section 58. Section 31A-30-211 is amended to read:
             6311           31A-30-211. Insurer disclosure.
             6312          [(1) The Health Insurance Exchange shall provide an employer's producer with the
             6313      group's risk factor used to calculate the employer group's premium at the time of:]
             6314          [(a) the initial offering of a health benefit plan; and]
             6315          [(b) the renewal of a health benefit plan.]
             6316          [(2) For health benefit plans that renew on or after March 1, 2012:]
             6317          (1) (a) [a] A carrier shall provide an employer and the employer's producer with
             6318      premium renewal rates at least 60 days [prior to] before the group's renewal date for a plan


             6319      offered under Part 1, Individual and Small Employer Group[; and].
             6320          (b) [the] The Health Insurance Exchange shall provide an employer and the employer's
             6321      producer with premium renewal rates at least 60 days [prior to] before the group's renewal date
             6322      for a plan offered under Part 2, Defined Contribution Arrangements.
             6323          [(3)] (2) An insurer does not have to provide additional notice of premium renewal
             6324      rates to the employer or the employer's producer if the Health Insurance Exchange provides
             6325      notice in accordance with Subsection [(2)] (1)(b).
             6326          Section 59. Section 31A-37-501 is amended to read:
             6327           31A-37-501. Reports to commissioner.
             6328          (1) A captive insurance company is not required to make a report except those
             6329      provided in this chapter.
             6330          (2) (a) Before March 1 of each year, a captive insurance company shall submit to the
             6331      commissioner a report of the financial condition of the captive insurance company, verified by
             6332      oath of two of the executive officers of the captive insurance company.
             6333          (b) Except as provided in Sections 31A-37-204 and 31A-37-205 , a captive insurance
             6334      company shall report:
             6335          (i) using generally accepted accounting principles, except to the extent that the
             6336      commissioner requires, approves, or accepts the use of a statutory accounting principle;
             6337          (ii) using a useful or necessary modification or adaptation to an accounting principle
             6338      that is required, approved, or accepted by the commissioner for the type of insurance and kind
             6339      of insurer to be reported upon; and
             6340          (iii) supplemental or additional information required by the commissioner.
             6341          (c) Except as otherwise provided:
             6342          (i) [an association captive insurance company and an industrial insured group] a
             6343      licensed captive insurance company shall file the report required by Section 31A-4-113 ; and
             6344          (ii) an industrial insured group shall comply with Section 31A-4-113.5 .
             6345          (3) (a) A pure captive insurance company may make written application to file the
             6346      required report on a fiscal year end that is consistent with the fiscal year of the parent company
             6347      of the pure captive insurance company.
             6348          (b) If the commissioner grants an alternative reporting date for a pure captive insurance
             6349      company requested under Subsection (3)(a), the annual report is due 60 days after the fiscal


             6350      year end.
             6351          (4) (a) Sixty days after the fiscal year end, a branch captive insurance company shall
             6352      file with the commissioner a copy of [all] the reports and statements required to be filed under
             6353      the laws of the jurisdiction in which the alien captive insurance company is formed, verified by
             6354      oath by two of the alien captive insurance company's executive officers.
             6355          (b) If the commissioner is satisfied that the annual report filed by the alien captive
             6356      insurance company in the jurisdiction in which the alien captive insurance company is formed
             6357      provides adequate information concerning the financial condition of the alien captive insurance
             6358      company, the commissioner may waive the requirement for completion of the annual statement
             6359      required for a captive insurance company under this section with respect to business written in
             6360      the alien jurisdiction.
             6361          (c) A waiver by the commissioner under Subsection (4)(b):
             6362          (i) shall be in writing; and
             6363          (ii) is subject to public inspection.
             6364          Section 60. Section 31A-40-203 is amended to read:
             6365           31A-40-203. Covered employee.
             6366          (1) (a) An individual is a covered employee of a professional employer organization if
             6367      the individual is coemployed pursuant to a professional employer agreement subject to this
             6368      chapter.
             6369          (b) An individual who is a covered employee under a professional employer agreement
             6370      is a covered [employer] employee, whether or not the professional employer organization
             6371      provides the notice required by Subsection 31A-40-202 (3), the earlier of the day on which:
             6372          (i) the employee is first compensated by the professional employer organization; or
             6373          (ii) the client notifies the professional employer organization of a new hire.
             6374          (2) An individual who is an officer, director, shareholder, partner, or manager of a
             6375      client is a covered employee:
             6376          (a) to the extent that the client and the professional employer organization expressly
             6377      agree in the professional employer agreement that the individual is a covered employee;
             6378          (b) if the conditions of Subsection (1) are met; and
             6379          (c) if the individual acts as an operational manager or performs day-to-day an
             6380      operational service for the client.


             6381          Section 61. Section 31A-40-209 is amended to read:
             6382           31A-40-209. Workers' compensation.
             6383          (1) In accordance with Section 34A-2-103 , a client is responsible for securing workers'
             6384      compensation coverage for a covered employee.
             6385          (2) Subject to the requirements of Section 34A-2-103 , if a professional employer
             6386      organization obtains or assists a client in obtaining workers' compensation insurance pursuant
             6387      to a professional employer agreement:
             6388          (a) the professional employer organization shall ensure that the client maintains and
             6389      provides workers' compensation coverage for a covered employee in accordance with
             6390      Subsection 34A-2-201 (1) or (2) and rules of the Labor Commission, made in accordance with
             6391      Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             6392          (b) the workers' compensation coverage may show the professional employer
             6393      organization as the named insured through a [multiple coordinated] master policy, if:
             6394          (i) the client is shown as an insured by means of an endorsement for each individual
             6395      client;
             6396          (ii) the experience modification of a client is used; and
             6397          (iii) the insurer files the endorsement with the Division of Industrial Accidents as
             6398      directed by a rule of the Labor Commission, made in accordance with Title 63G, Chapter 3,
             6399      Utah Administrative Rulemaking Act;
             6400          (c) at the termination of the professional employer agreement, if requested by the
             6401      client, the insurer shall provide the client records regarding the loss experience related to
             6402      workers' compensation insurance provided to a covered employee pursuant to the professional
             6403      employer agreement; and
             6404          (d) the insurer shall notify a client if the workers' compensation coverage for the client
             6405      is terminated.
             6406          (3) In accordance with Section 34A-2-105 , the exclusive remedy provisions of Section
             6407      34A-2-105 apply to both the client and the professional employer organization under a
             6408      professional employer agreement regulated under this chapter.
             6409          (4) Notwithstanding the other provisions in this section, an insurer may choose whether
             6410      to issue:
             6411          (a) a policy for a client; or


             6412          (b) a [multiple coordinated] master policy with the client shown as an additional
             6413      insured by means of an individual endorsement.
             6414          Section 62. Section 31A-42-202 is amended to read:
             6415           31A-42-202. Contents of plan.
             6416          (1) The board shall submit a plan of operation for the risk adjuster to the
             6417      commissioner. The plan shall:
             6418          (a) establish the methodology for implementing:
             6419          (i) Subsection (2) for the defined contribution arrangement market established under
             6420      Chapter 30, Part 2, Defined Contribution Arrangements; and
             6421          (ii) the participation of small employer group defined contribution arrangement health
             6422      benefit plans;
             6423          (b) establish regular times and places for meetings of the board;
             6424          (c) establish procedures for keeping records of all financial transactions and for
             6425      sending annual fiscal reports to the commissioner;
             6426          (d) contain additional provisions necessary and proper for the execution of the powers
             6427      and duties of the risk adjuster; and
             6428          (e) establish procedures in compliance with Title 63A, Utah Administrative Services
             6429      Code, to pay for administrative expenses incurred.
             6430          (2) (a) The plan adopted by the board for the defined contribution arrangement market
             6431      shall include:
             6432          (i) parameters an employer may use to designate eligible employees for the defined
             6433      contribution arrangement market; and
             6434          (ii) underwriting mechanisms and employer eligibility guidelines:
             6435          (A) consistent with the federal Health Insurance Portability and Accountability Act;
             6436      and
             6437          (B) necessary to protect insurance carriers from adverse selection in the defined
             6438      contribution market.
             6439          (b) The plan required by Subsection (2)(a) shall outline how premium rates for a
             6440      qualified individual in the defined contribution arrangement market are determined, including:
             6441          (i) the identification of an initial rate for a qualified individual based on:
             6442          (A) standardized age bands submitted by participating insurers; and


             6443          (B) wellness incentives for the individual as permitted by federal law; and
             6444          (ii) the identification of a group risk factor to be applied to the initial age rate of a
             6445      qualified individual based on the health conditions of all qualified individuals in the same
             6446      employer group and, for small employers, in accordance with Sections 31A-30-105 and
             6447      31A-30-106.1 .
             6448          (c) The plan adopted under Subsection (2)(a) for the defined contribution arrangement
             6449      market shall outline how:
             6450          (i) premium contributions for qualified individuals shall be submitted to the Health
             6451      Insurance Exchange in the amount determined under Subsection (2)(b); and
             6452          (ii) the Health Insurance Exchange shall distribute premiums to the insurers selected by
             6453      qualified individuals within an employer group based on each individual's rating factor
             6454      determined in accordance with the plan.
             6455          (d) The plan adopted under Subsection (2)(a) shall outline a mechanism for adjusting
             6456      risk between defined contribution arrangement market insurers that:
             6457          (i) identifies health care conditions subject to risk adjustment;
             6458          (ii) establishes an adjustment amount for each identified health care condition;
             6459          (iii) determines the extent to which an insurer has more or less individuals with an
             6460      identified health condition than would be expected; and
             6461          (iv) computes all risk adjustments.
             6462          (e) The board may amend the plan if necessary to:
             6463          (i) maintain the proper functioning and solvency of the defined contribution
             6464      arrangement market and the risk adjuster mechanism;
             6465          (ii) mitigate significant issues of risk selection; or
             6466          (iii) improve the administration of the risk adjuster mechanism.
             6467          (3) The board shall establish a mechanism in which the defined contribution
             6468      arrangement market participating carriers shall submit their plan base rates, rating factors, and
             6469      premiums to the commissioner for an actuarial review under [the provisions of] Section
             6470      31A-30-115 [prior to] before the publication of the premium rates on the Health Insurance
             6471      Exchange.
             6472          Section 63. Section 31A-43-102 is amended to read:
             6473           31A-43-102. Definitions.


             6474          For purposes of this chapter:
             6475          (1) "Actuarial certification" means a written statement by a member of the American
             6476      Academy of Actuaries, or by another individual acceptable to the commissioner, that an insurer
             6477      is in compliance with [the provisions of] this chapter, based upon the individual's examination
             6478      and including a review of the appropriate records and the actuarial assumptions and methods
             6479      used by the stop-loss insurer in establishing attachment points and other applicable
             6480      determinations in conjunction with the provision of stop-loss insurance coverage.
             6481          (2) "Aggregate attachment point" means the dollar amount [in losses for eligible
             6482      expenses] of covered claims incurred by a small employer plan beyond which the stop-loss
             6483      insurer incurs liability for [all or part of the] losses incurred by the small employer plan, subject
             6484      to limitations included in the contract.
             6485          (3) "Coverage" means the combination of the employer plan design and the stop-loss
             6486      contract design.
             6487          (4) "Expected claims" means the amount of claims that, in the absence of [a] aggregate
             6488      stop-loss [contract] insurance, are projected to be incurred by a small employer health plan
             6489      using reasonable and accepted actuarial principles.
             6490          (5) "Lasering":
             6491          (a) means increasing or removing stop-loss coverage for a specific individual within an
             6492      employer group; and
             6493          (b) includes other practices that are prohibited by the commissioner by administrative
             6494      rule that result in lowering the stop-loss premium for the employer by transferring the risk for
             6495      an [individual] individual's claims back to the employer.
             6496          (6) "Small employer" means an employer who, with respect to a calendar year and to a
             6497      plan year:
             6498          (a) employed an average of at least two employees but not more than 50 eligible
             6499      employees on each business day during the preceding calendar year; and
             6500          (b) employs at least two employees on the first day of the plan year.
             6501          (7) "Specific attachment point" means the dollar amount [in losses for eligible
             6502      expenses] of covered claims attributable to a single individual covered by a small employer
             6503      plan in a contract year beyond which the stop-loss insurer assumes [all or part of] the liability
             6504      for losses incurred by the small employer plan, subject to limitations included in the contract.


             6505          (8) "Stop-loss insurance" means insurance purchased by a small employer for which
             6506      the stop-loss insurer assumes[, on a per-loss basis,] all loss amounts of the small employer's
             6507      plan in excess of a stated amount, subject to the policy limit.
             6508          Section 64. Section 31A-43-301 is amended to read:
             6509           31A-43-301. Stop-loss insurance coverage standards.
             6510          (1) A small employer stop-loss insurance contract shall:
             6511          (a) be issued to the small employer to provide insurance to the group health benefit
             6512      plan, not the employees of the small employer;
             6513          (b) use a standard application form developed by the commissioner by administrative
             6514      rule;
             6515          (c) have a contract term with guaranteed rates for at least 12 months, without
             6516      adjustment, unless there is a change in the benefits provided under the small employer's health
             6517      plan during the contract period;
             6518          (d) include both a specific attachment point and an aggregate attachment point in a
             6519      contract;
             6520          (e) align stop-loss plan benefit limitations and exclusions with a small employer's
             6521      health plan benefit limitations and exclusions, including any annual or lifetime limits in the
             6522      employer's health plan;
             6523          (f) have an annual specific attachment point that is at least $10,000;
             6524          (g) have an annual aggregate attachment point that may not be less than [90%] 85% of
             6525      expected claims;
             6526          (h) pay stop-loss claims:
             6527          (i) incurred during the contract period; and
             6528          (ii) [submitted] paid within 12 months after the expiration date of the contract; and
             6529          (i) include provisions to cover incurred and unpaid claims if a small employer plan
             6530      terminates.
             6531          (2) A small employer stop-loss contract shall not:
             6532          (a) include lasering; and
             6533          (b) pay claims directly to an individual employee, member, or participant.
             6534          Section 65. Section 31A-43-302 is amended to read:
             6535           31A-43-302. Stop-loss restrictions -- Filing requirements.


             6536          [(1) A stop-loss insurer shall demonstrate to the commissioner that the rates associated
             6537      with specific and aggregate attachment points retained by a small employer group under the
             6538      insurer's stop-loss plan are actuarially sound.]
             6539          [(2)] (1) A stop-loss insurer shall file the stop-loss insurance contract form and [rates]
             6540      rate methodology with the commissioner pursuant to Sections 31A-2-201 and 31A-2-201.1
             6541      before the stop-loss insurance contract may be issued or delivered in the state.
             6542          [(3)] (2) A stop-loss insurer shall file with the commissioner, annually on or before
             6543      April 1, in a form and manner required by the commissioner by administrative rule adopted by
             6544      the commissioner:
             6545          (a) an actuarial memorandum and certification which demonstrates that the insurer is in
             6546      compliance with this chapter; and
             6547          (b) the stop-loss insurer's stop-loss experience.
             6548          [(4) Each] (3) An insurer shall maintain at its principal place of business:
             6549          (a) a complete and detailed description of its rating practices and renewal underwriting
             6550      practices, including information and documentation that demonstrate the rating methods and
             6551      practices are:
             6552          (i) based upon commonly accepted actuarial assumptions; and
             6553          (ii) in accordance with sound actuarial principles; and
             6554          (b) a copy of the [actuarial certification] annual filing required by Subsection [(3)] (2).
             6555          Section 66. Section 31A-43-303 is amended to read:
             6556           31A-43-303. Stop-loss insurance disclosure.
             6557          A stop-loss insurance contract delivered, issued for delivery, or entered into shall
             6558      include the disclosure exhibit required by the commissioner through administrative rule, which
             6559      shall include at least the following information:
             6560          (1) the complete costs for the stop-loss contract;
             6561          (2) the date on which the insurance takes effect and terminates, including renewability
             6562      provisions;
             6563          (3) the aggregate attachment point and the specific attachment point;
             6564          (4) [any] limitations on coverage;
             6565          (5) an explanation of monthly accommodation and disclosure about any monthly
             6566      accommodation features included in the stop-loss contract; [and]


             6567          (6) a description of terminal liability funding, including[: (a)] the cost of processing
             6568      claims before and after the termination of the contract; and
             6569          [(b)] (7) maximum claims liability to the employer.
             6570          Section 67. Section 31A-43-304 is amended to read:
             6571           31A-43-304. Administrative rules.
             6572          The commissioner may adopt administrative rules in accordance with Title 63G,
             6573      Chapter 3, Utah Administrative Rulemaking Act, to:
             6574          (1) implement this chapter;
             6575          [(2) assure that differences in rates charged are reasonable and reflect objective
             6576      differences in plan design;]
             6577          [(3)] (2) define lasering practices that are prohibited by this chapter;
             6578          [(4)] (3) establish the form and manner of the actuarial certification and the annual
             6579      report on stop-loss experience required by Section 31A-43-302 ;
             6580          [(5)] (4) establish the form and manner of the disclosure required by Section
             6581      31A-43-303 ;
             6582          [(6)] (5) assure the rates associated with the specific attachment points and aggregate
             6583      attachment points are actuarially sound and are not against the public interest; and
             6584          [(7)] (6) assure that stop-loss contracts include provisions to cover incurred and unpaid
             6585      claims if a small employer plan terminates.
             6586          Section 68. Section 53-13-103 is amended to read:
             6587           53-13-103. Law enforcement officer.
             6588          (1) (a) "Law enforcement officer" means a sworn and certified peace officer who is an
             6589      employee of a law enforcement agency that is part of or administered by the state or any of its
             6590      political subdivisions, and whose primary and principal duties consist of the prevention and
             6591      detection of crime and the enforcement of criminal statutes or ordinances of this state or any of
             6592      its political subdivisions.
             6593          (b) "Law enforcement officer" specifically includes the following:
             6594          (i) any sheriff or deputy sheriff, chief of police, police officer, or marshal of any
             6595      county, city, or town;
             6596          (ii) the commissioner of public safety and any member of the Department of Public
             6597      Safety certified as a peace officer;


             6598          (iii) all persons specified in Sections 23-20-1.5 and 79-4-501 ;
             6599          (iv) any police officer employed by any college or university;
             6600          (v) investigators for the Motor Vehicle Enforcement Division;
             6601          (vi) investigators for the Department of Insurance, Fraud Division;
             6602          [(vi)] (vii) special agents or investigators employed by the attorney general, district
             6603      attorneys, and county attorneys;
             6604          [(vii)] (viii) employees of the Department of Natural Resources designated as peace
             6605      officers by law;
             6606          [(viii)] (ix) school district police officers as designated by the board of education for
             6607      the school district;
             6608          [(ix)] (x) the executive director of the Department of Corrections and any correctional
             6609      enforcement or investigative officer designated by the executive director and approved by the
             6610      commissioner of public safety and certified by the division;
             6611          [(x)] (xi) correctional enforcement, investigative, or adult probation and parole officers
             6612      employed by the Department of Corrections serving on or before July 1, 1993;
             6613          [(xi)] (xii) members of a law enforcement agency established by a private college or
             6614      university provided that the college or university has been certified by the commissioner of
             6615      public safety according to rules of the Department of Public Safety;
             6616          [(xii)] (xiii) airport police officers of any airport owned or operated by the state or any
             6617      of its political subdivisions; and
             6618          [(xiii)] (xiv) transit police officers designated under Section 17B-2a-823 .
             6619          (2) Law enforcement officers may serve criminal process and arrest violators of any
             6620      law of this state and have the right to require aid in executing their lawful duties.
             6621          (3) (a) A law enforcement officer has statewide full-spectrum peace officer authority,
             6622      but the authority extends to other counties, cities, or towns only when the officer is acting
             6623      under Title 77, Chapter 9, Uniform Act on Fresh Pursuit, unless the law enforcement officer is
             6624      employed by the state.
             6625          (b) (i) A local law enforcement agency may limit the jurisdiction in which its law
             6626      enforcement officers may exercise their peace officer authority to a certain geographic area.
             6627          (ii) Notwithstanding Subsection (3)(b)(i), a law enforcement officer may exercise
             6628      authority outside of the limited geographic area, pursuant to Title 77, Chapter 9, Uniform Act


             6629      on Fresh Pursuit, if the officer is pursuing an offender for an offense that occurred within the
             6630      limited geographic area.
             6631          (c) The authority of law enforcement officers employed by the Department of
             6632      Corrections is regulated by Title 64, Chapter 13, Department of Corrections - State Prison.
             6633          (4) A law enforcement officer shall, prior to exercising peace officer authority:
             6634          (a) (i) have satisfactorily completed the requirements of Section 53-6-205 ; or
             6635          (ii) have met the waiver requirements in Section 53-6-206 ; and
             6636          (b) have satisfactorily completed annual certified training of at least 40 hours per year
             6637      as directed by the director of the division, with the advice and consent of the council.
             6638          Section 69. Repealer.
             6639          This bill repeals:
             6640          Section 31A-30-110 , Individual enrollment cap.
             6641          Section 31A-30-111 , Limitations on high risk enrollees.
             6642          Section 70. Effective date.
             6643          This bill takes effect on May 13, 2014, except that the amendments to Section
             6644      31A-3-304 (Effective 07/01/15) take effect on July 1, 2015.
             6645          Section 71. Coordinating H.B. 76 with H.B. 141 -- Superseding and substantive
             6646      amendments.
             6647          If this H.B. 76 and H.B. 141, Health Reform Amendments, both pass and become law,
             6648      it is the intent of the Legislature that the amendments to Sections 31A-23b-205 and
             6649      31A-23b-206 in H.B. 141, supersede the amendments to Sections 31A-23b-205 and
             6650      31A-23b-206 in this H.B. 76, when the Office of Legislative Research and General Counsel
             6651      prepares the Utah Code database for publication.
             6652          Section 72. Revisor instructions.
             6653          The Legislature intends that the Office of Legislative Research and General Counsel, in
             6654      preparing the Utah Code database for publication, replace the language in Subsections
             6655      31A-22-305 (10)(l) and 31A-22-305.3 (9)(l), from "this bill" with the bill's designated chapter
             6656      and section number in the Laws of Utah.


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