Title 31A Chapter 23a Section 401

Insurance Code
Insurance Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries
Section 401
Disclosure of conflicting interests.

            

31A-23a-401.   Disclosure of conflicting interests.

            (1) (a) Except as provided under Subsection (1)(b):

            (i) a licensee under this chapter may not act in the same or any directly related transaction as:

            (A) a producer for the insured or consultant; and

            (B) producer for the insurer; and

            (ii) a producer for the insured or consultant may not recommend or encourage the purchase of insurance from or through an insurer or other producer:

            (A) of which the producer for the insured or consultant or producer for the insured's or consultant's spouse is an owner, executive, or employee; or

            (B) to which the producer for the insured or consultant has the type of relation that a material benefit would accrue to the producer for the insured or consultant or spouse as a result of the purchase.

            (b) Subsection (1)(a) does not apply if the following three conditions are met:

            (i) Prior to performing the consulting services, the producer for the insured or consultant shall disclose to the client, prominently, in writing:

            (A) the producer for the insured's or consultant's interest as a producer for the insurer, or the relationship to an insurer or other producer; and

            (B) that as a result of those interests, the producer for the insured's or the consultant's recommendations should be given appropriate scrutiny.

            (ii) The producer for the insured's or consultant's fee shall be agreed upon, in writing, after the disclosure required under Subsection (1)(b)(i), but before performing the requested services.

            (iii) Any report resulting from requested services shall contain a copy of the disclosure made under Subsection (1)(b)(i).

            (2) A licensee under this chapter may not act as to the same client as both a producer for the insurer and a producer for the insured without the client's prior written consent based on full disclosure.

            (3) Whenever a person applies for insurance coverage through a producer for the insured, the producer for the insured shall disclose to the applicant, in writing, that the producer for the insured is not the producer for the insurer or the potential insurer. This disclosure shall also inform the applicant that the applicant likely does not have the benefit of an insurer being financially responsible for the conduct of the producer for the insured.

            (4) If a licensee is subject to both this section and Subsection 31A-23a-501(4), the licensee shall provide the disclosure required under each statute.


Amended by Chapter 12, 2009 General Session