First Substitute S.B. 129

Representative James A. Dunnigan proposes the following substitute bill:


             1     
INSURANCE AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Curtis S. Bramble

             5     
House Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Insurance Code to address electronic delivery of certain insurance
             10      documents.
             11      Highlighted Provisions:
             12          This bill:
             13          .    provides for electronic delivery of notices and other documents.
             14      Money Appropriated in this Bill:
             15          None
             16      Other Special Clauses:
             17          This bill takes effect on July 1, 2014.
             18      Utah Code Sections Affected:
             19      ENACTS:
             20           31A-21-316 , Utah Code Annotated 1953
             21     
             22      Be it enacted by the Legislature of the state of Utah:
             23          Section 1. Section 31A-21-316 is enacted to read:
             24          31A-21-316. Electronic notices and documents.
             25          (1) As used in this section:


             26          (a) "Delivered by electronic means" includes:
             27          (i) delivery to an electronic mail address at which a party has consented to receive a
             28      notice or document; or
             29          (ii) posting on an electronic network or site accessible by way of the Internet, a mobile
             30      application, a computer, a mobile device, a tablet, or any other electronic device, together with
             31      separate notice of the posting that is provided by:
             32          (A) electronic mail to the address at which the party has consented to receive notice; or
             33          (B) any other delivery method that has been consented to by the party.
             34          (b) (i) "Party" means a recipient of a notice or document required as part of an
             35      insurance transaction.
             36          (ii) "Party" includes an applicant, an insured, or a policyholder.
             37          (2) Subject to Subsection (4), a notice to a party or another document required under
             38      applicable law in an insurance transaction or that serves as evidence of insurance coverage may
             39      be delivered, stored, and presented by electronic means if it meets the requirements of Title 46,
             40      Chapter 4, Uniform Electronic Transactions Act.
             41          (3) Delivery of a notice or document in accordance with this section is considered
             42      equivalent to any delivery method required under applicable law.
             43          (4) Subject to Subsection (5), a notice or document may be delivered by electronic
             44      means by an insurer to a party under this section if:
             45          (a) the party has affirmatively consented to that method of delivery and has not
             46      withdrawn the consent;
             47          (b) the party, before giving consent, is provided with a clear and conspicuous statement
             48      informing the party of:
             49          (i) any right or option of the party to have the notice or document provided or made
             50      available in paper or another non-electronic form;
             51          (ii) the right of the party to withdraw consent to have a notice or document delivered
             52      by electronic means, including:
             53          (A) a condition or consequence imposed if consent is withdrawn;
             54          (B) when the insurer will make the party's withdrawal effective, during or at the
             55      conclusion of the policy term; and
             56          (C) the procedure a party is to follow to withdraw consent to have a notice or document


             57      delivered by electronic means;
             58          (iii) whether the party's consent applies:
             59          (A) only to the particular transaction as to which the notice or document must be given;
             60      or
             61          (B) to identified categories of notices or documents that may be delivered by electronic
             62      means during the course of the party's relationship with the insured; and
             63          (iv) the means, after consent is given, by which a party may obtain a paper copy of a
             64      notice or document delivered by electronic means;
             65          (c) the party:
             66          (i) before giving consent, is provided with a statement of the electronic delivery and
             67      retrieval method requirements for access to and retention of a notice or document delivered by
             68      electronic means;
             69          (ii) consents electronically, or confirms consent electronically, in a manner that
             70      reasonably demonstrates that the party can access information in the electronic form that will
             71      be used for a notice or document delivered by electronic means as to which the party has given
             72      consent; and
             73          (iii) is provided a process to update information needed to contact the party
             74      electronically;
             75          (d) after consent of the party is given and if a change in the electronic delivery or
             76      retrieval methods creates a substantial risk that the party will not be able to access or retain a
             77      subsequent notice or document to which the consent applies, the insurer shall:
             78          (i) provide the party with a statement of:
             79          (A) the revised electronic delivery or retrieval methods; and
             80          (B) the right of the party to withdraw consent without the imposition of any condition
             81      or consequence that was not disclosed under Subsection (4)(b)(ii); and
             82          (ii) comply with Subsection (4)(b);
             83          (e) failure by an insurer to comply with Subsection (4)(d) is treated, at the election of
             84      the party, as a withdrawal of consent for purposes of this section; and
             85          (f) when an email address provided by the party to facilitate delivery by electronic
             86      means is returned with a message as undeliverable each time electronic delivery is attempted
             87      over a period not to exceed two business days, the party is presumed to have withdrawn


             88      consent for the purposes of this section.
             89          (5) (a) An insurer shall file with the department a notice or document described under
             90      Subsection (4), that includes conditions or consequences for a party to revoke the party's
             91      consent to conduct an insurance transaction, electronically.
             92          (b) An insurer shall file the notice or document described in Subsection (5)(a) before
             93      the insurer uses the notice or document.
             94          (c) The insurer shall communicate to the party in accordance with Subsection (4)(b) the
             95      conditions or consequences for a party to revoke the party's consent.
             96          (6) A withdrawal of consent by a party does not affect the legal effectiveness, validity,
             97      or enforceability of a notice or document delivered by electronic means to the party before the
             98      withdrawal of consent is effective.
             99          (7) This section does not affect requirements related to content or timing of any notice
             100      or document required under applicable law.
             101          (8) If a provision of this title or applicable law requiring a notice or document to be
             102      provided to a party expressly requires verification or acknowledgment of receipt of the notice
             103      or document, the notice or document may be delivered by electronic means only if the method
             104      used provides for verification or acknowledgment of receipt.
             105          (9) The legal effectiveness, validity, or enforceability of a contract or policy of
             106      insurance executed by a party may not be denied solely because of the failure to obtain
             107      electronic consent or confirmation of consent of the party in accordance with Subsection
             108      (5)(c)(ii).
             109          (10) This section does not apply to a notice or document delivered by an insurer in an
             110      electronic form before May 13, 2014, to a party who, before May 13, 2014, has consented to
             111      receive notice or document in an electronic form otherwise allowed by law.
             112          (11) If the consent of a party to receive certain notices or documents in an electronic
             113      form is on file with an insurer before May 13, 2014, and pursuant to this section, an insurer
             114      intends to deliver an additional notice or document to the party in an electronic form, then
             115      before delivering the additional notices or documents electronically, the insurer shall notify the
             116      party of:
             117          (a) the notices or documents that may be delivered by electronic means under this
             118      section that were not previously delivered electronically; and


             119          (b) the party's right to withdraw consent to have notices or documents delivered by
             120      electronic means.
             121          (12) (a) Except as otherwise provided by Section 31A-21-102 , if an oral
             122      communication or a recording of an oral communication from a party can be reliably stored and
             123      reproduced by an insurer, the oral communication or recording may qualify as a notice or
             124      document delivered by electronic means for purposes of this section.
             125          (b) If a provisions of this title or applicable law requires a signature, notice, or
             126      document to be notarized, acknowledged, verified, or made under oath, the requirement is
             127      satisfied if the electronic signature of the party authorized to perform those acts together with
             128      all other information required to be included by the provision, is attached to or logically
             129      associated with the signature, notice, or document.
             130          (13) This section may not be construed to modify, limit, or supersede the federal
             131      Electronic Signatures in Global and National Commerce Act, P. Law 106-229, as amended.
             132          Section 2. Effective date.
             133          This bill takes effect on July 1, 2014.


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