31A-1-106. Residual unlicensed domestic insurers.
(1) Every person doing an insurance business in Utah not covered under another section
of this title, that does not hold a valid certificate of authority or license under this title shall, by
July 1, 1987, complete one of the actions prescribed in Subsections (2) through (5). This section
does not apply to an unauthorized foreign insurer doing an insurance business in Utah in full
compliance with Section 31A-15-103.
(2) An insurer under Subsection (1) may incorporate and apply, or if already
incorporated, may apply for a certificate of authority under Chapter 5, 6, 7, 8, or 9. If the
commissioner is satisfied that the insurer substantially complies with the requirements of the
appropriate chapter necessary for the protection of insureds and the public, the commissioner
shall issue a certificate of authority.
(3) An insurer under Subsection (1) may transfer all its obligations to a corporation
authorized under this title to assume them, according to a plan approved by the commissioner.
The commissioner may disapprove the plan on a finding, after a hearing, that it is contrary to the
interests of insureds, the public, or the law.
(4) An insurer under Subsection (1) may adopt a plan to run off existing obligations
without accepting any new policyholders or new obligations. The commissioner may disapprove
the plan on a finding, after a hearing, that it is contrary to the interests of insureds, the public, or
the law.
(5) The commissioner may, by order, exempt an insurer from the requirements of
Subsection (1) or extend the deadline under Subsection (1) on a finding that:
(a) incorporation, licensing, reinsurance, or run off would cause disproportionate
expense, loss, or substantial hardship; and
(b) the nature of the existing and prospective business, the assets, or the business plan of
the insurer can be reasonably expected to continue to operate in a sound manner and can be
subjected to adequate regulatory controls.
(6) Whenever the commissioner grants an exemption under Subsection (5), the
commissioner shall issue to the insurer a certificate of authority. The commissioner may amend
the certificate at any time, specifying the business that the insurer may transact and specifying in
detail the controls to which the insurer shall be subject. These controls shall correspond as nearly
as practicable to the controls applicable to corporations transacting a like business.
(7) It is a ground for liquidation under Section 31A-27a-207 if an insurer has not
completed action under one of Subsections (2) through (4) and has not applied for and been
granted exemption under Subsection (5) before July 1, 1987.
Amended by Chapter 309, 2007 General Session
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Last revised: Thursday, May 28, 2009