31A-5-209. Termination and revocation of organization permit and payment of
organization expenses.
(1) The organization permit terminates upon:
(a) issuance of a certificate of authority under Section 31A-5-212;
(b) revocation of the organization permit under Subsection (2); or
(c) expiration of one year after issuance, except that
(i) filing with the commissioner a good-faith application for a certificate of authority tolls
the running of the expiration period for 30 days or until the commissioner rejects the application,
whichever is earlier; and
(ii) on application before expiration of the year the commissioner may grant a reasonable
extension if he states that he expects the corporation to be able to satisfy the requirements for a
certificate of authority within the extended period.
(2) The commissioner may revoke an organization permit if:
(a) he finds, after a hearing, that because of changes in circumstances, or because the
facts are not as represented in the application, the conditions for issuance of a permit are not
satisfied; or
(b) he denies an application for a certificate of authority and finds that the corporation
cannot reasonably be expected to satisfy the requirements for a certificate of authority within the
remaining term of the organization permit or extension allowable under Subsection (1)(c).
(3) (a) Except in cases under Subsections (3)(b) and (3)(c), if the organization permit is
revoked or expires before a certificate of authority is granted, after payment of the expenses of
the state and payments to creditors under Section 31A-5-205, incorporators who have advanced
money for the reasonable and authorized expenses of organization, including underwriting
expenses, may be reimbursed in cash from the proceeds of share, mutual bond, or contribution
note subscriptions under the organization permit, on itemized receipts audited by the
commissioner. The total reimbursement may not exceed 5% of the amount received from
subscribers. The remainder in the escrow account shall then be distributed among the subscribers
in proportion to their contributions, valued as of the time the contributions were made. The bond
under Section 31A-5-205 shall be discharged or the deposits under Section 31A-5-205 shall be
released to the extent they are not needed for other purposes.
(b) Reimbursement may be refused to any incorporator under Subsection (3), if the
commissioner finds that in connection with the organization of the corporation, the incorporator
has wilfully or negligently violated in a material way any provision of this chapter.
(c) No reimbursement may be made under Subsection (3)(a) to an incorporator of an
assessable mutual until all advance premiums collected under Subsection 31A-5-211(5) have been
repaid in full.
(4) The legal existence of the corporation terminates upon completion of the payments
under Subsection (3).
(5) This section does not apply to stock or mutual insurance corporations already in
existence on July 1, 1986.
Enacted by Chapter 242, 1985 General Session
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Last revised: Thursday, May 28, 2009