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S.B. 76 Enrolled
Corrected Version
AN ACT RELATING TO INSURANCE; ALLOWING REPLACEMENT OF CERTAIN
POLICIES OR ANNUITIES; AMENDING DEFINITIONS; AMENDING PROVISIONS FOR
LICENSING AGENTS; REQUIRING AN INSURANCE COMPANY FILE A PLAN IF IT
INTENDS TO WITHDRAW FROM THE UTAH MARKET; AMENDING MANDATORY
COVERAGE FOR RENTAL COMPANIES; MODIFYING FEE AND ASSESSMENT
PROVISIONS; REPLACING EXISTING HEALTH BENEFITS FOR AN ADOPTED CHILD
WITH AN INDEMNITY BENEFIT; MAKING CONVERSION COVERAGE BENEFITS
THE SAME AS BASIC COVERAGE OFFERED THROUGH OPEN ENROLLMENT;
ADDRESSING EXTENSION OF COVERAGE; EXPANDING HIGH RISK POOL
COVERAGE FOR PREEXISTING CONDITIONS; REQUIRING AN INSURED GIVE
NOTICE OF PREVIOUS HEALTH INSURANCE FOR COVERAGE OF PREEXISTING
CONDITIONS; AMENDING ELIGIBILITY FOR HEALTH INSURANCE POOL;
ADDRESSING MARKETING ISSUES; AMENDING WORKERS' COMPENSATION
FRAUD PROVISIONS; AND MAKING TECHNICAL CORRECTIONS; AND REPEALING
PROVISIONS ON CONVERSION COVERAGE.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
31A-1-104, as last amended by Chapter 20, Laws of Utah 1995
31A-1-301, as last amended by Chapter 185, Laws of Utah 1997
31A-3-103, as last amended by Chapter 10, Laws of Utah 1997
31A-8-105, as last amended by Chapter 261, Laws of Utah 1989
31A-22-314, as enacted by Chapter 316, Laws of Utah 1994
31A-22-423, as last amended by Chapter 261, Laws of Utah 1989
31A-22-610.1, as enacted by Chapter 206, Laws of Utah 1996
31A-22-703, as last amended by Chapter 230, Laws of Utah 1992
31A-22-711, as enacted by Chapter 242, Laws of Utah 1985
31A-22-714, as last amended by Chapters 102 and 344, Laws of Utah 1995
31A-23-102, as last amended by Chapter 9, Laws of Utah 1996, Second Special Session
31A-23-204, as last amended by Chapter 316, Laws of Utah 1994
31A-23-215, as last amended by Chapter 9, Laws of Utah 1996, Second Special Session
31A-29-111, as last amended by Chapter 265, Laws of Utah 1997
31A-29-113, as enacted by Chapter 232, Laws of Utah 1990
31A-30-107, as last amended by Chapter 265, Laws of Utah 1997
31A-30-108, as last amended by Chapter 265, Laws of Utah 1997
34A-2-110, as last amended by Chapter 185 and renumbered and amended by Chapter 375, Laws
of Utah 1997
ENACTS:
31A-4-115, Utah Code Annotated 1953
31A-23-315, Utah Code Annotated 1953
REPEALS AND REENACTS:
31A-22-708, as enacted by Chapter 242, Laws of Utah 1985
REPEALS:
31A-22-706, as enacted by Chapter 242, Laws of Utah 1985
31A-22-707, as last amended by Chapter 20, Laws of Utah 1995
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 31A-1-104 is amended to read:
31A-1-104. Authorization to do insurance business.
[
(1) do an insurance business as defined under Subsection 31A-1-301 (44);
(2) act as an insurance agent, broker, or consultant as defined under Section [
31A-1-301 ; or
(3) engage in insurance adjusting as defined under Section 31A-26-102 .
Section 2. Section 31A-1-301 is amended to read:
31A-1-301. Definitions.
As used in this title, unless otherwise specified:
(0.5) "Administrator" is defined in Subsection (77).
(1) "Adult" means a natural person who has attained the age of at least 18 years.
(2) "Affiliate" means any person who controls, is controlled by, or is under common control
with, another person. A corporation is an affiliate of another corporation, regardless of ownership,
if substantially the same group of natural persons manages the corporations.
(3) "Alien insurer" means an insurer domiciled outside the United States.
(4) "Annuities" means all agreements to make periodical payments for a period certain or
over the lifetime of one or more natural persons if the making or continuance of all or some of the
series of the payments, or the amount of the payment, is dependent upon the continuance of human
life.
(5) "Articles" or "articles of incorporation" means the original articles, special laws, charters,
amendments, restated articles, articles of merger or consolidation, trust instruments, and other
constitutive documents for trusts and other entities that are not corporations, and amendments to any
of these. Refer also to "bylaws" in this section and Section 31A-5-203 .
(6) "Bail bond insurance" means a guarantee that a person will attend court when required,
or will obey the orders or judgment of the court, as a condition to the release of that person from
confinement.
(7) "Binder" is defined in Section 31A-21-102 .
(8) "Board," "board of trustees," or "board of directors" means the group of persons with
responsibility over, or management of, a corporation, however designated. Refer also to "trustee"
in this section.
(9) "Business of insurance" is defined in Subsection (44).
(10) "Business plan" means the information required to be supplied to the commissioner
under Subsections 31A-5-204 (2)(i) and (j), including the information required when these
subsections are applicable by reference under Section 31A-7-201 , Section 31A-8-205 , or Subsection
31A-9-205 (2).
(11) "Bylaws" means the rules adopted for the regulation or management of a corporation's
affairs, however designated. It includes comparable rules for trusts and other entities that are not
corporations. Refer also to "articles" and Section 31A-5-203 .
(12) "Casualty insurance" means liability insurance as defined in Subsection (50).
(13) "Certificate" means the evidence of insurance given to an insured under a group policy.
(14) "Certificate of authority" is included within the term "license."
(14.5) "Claim," unless the context otherwise requires, means a request or demand on an
insurer for payment of benefits according to the terms of an insurance policy.
(14.6) "Claims-made coverage" means any insurance contract or provision limiting coverage
under a policy insuring against legal liability to claims that are first made against the insured while
the policy is in force.
(15) "Commissioner" or "commissioner of insurance" means Utah's insurance commissioner.
Where appropriate, these terms apply to the equivalent supervisory official of another jurisdiction.
(16) "Control," "controlling," "controlled," or "under common control" means the direct or
indirect possession of the power to direct or cause the direction of the management and policies of
a person. This control may be by contract, by common management, through the ownership of
voting securities, or otherwise. There is no presumption that an individual holding an official
position with another person controls that person solely by reason of the position. A person having
a contract or arrangement giving control is considered to have control despite the illegality or
invalidity of the contract or arrangement. There is a rebuttable presumption of control in a person
who directly or indirectly owns, controls, holds with the power to vote, or holds proxies to vote 10%
or more of the voting securities of another person. Refer also to "affiliate" in this section.
(17) (a) "Corporation" means insurance corporation, except where referring under Chapter
23, Insurance Marketing - Licensing Agents, Brokers and Consultants, and Reinsurance
Intermediaries, and Chapter 26, Insurance Adjusters, to corporations doing business as insurance
agents, brokers, consultants, or adjusters, or where referring under Chapter 16, Insurance Holding
Companies, to a noninsurer which is part of a holding company system.
(b) "Stock corporation" means stock insurance corporation.
(c) "Mutual" or "mutual corporation" means mutual insurance corporation.
(18) "Credit disability insurance" means insurance on a debtor to provide indemnity for
payments coming due on a specific loan or other credit transaction while the debtor is disabled.
Refer also to Subsection 31A-22-802 (1).
(19) "Credit insurance" means surety insurance under which mortgagees and other creditors
are indemnified against losses caused by the default of debtors.
(20) "Credit life insurance" means insurance on the life of a debtor in connection with a loan
or other credit transaction. Refer also to Subsection 31A-22-802 (2).
(21) "Creditor" means a person, including an insured, having any claim, whether matured,
unmatured, liquidated, unliquidated, secured, unsecured, absolute, fixed, or contingent.
(22) "Deemer clause" means a provision under this title under which upon the occurrence
of a condition precedent, the commissioner is deemed to have taken a specific action. If the statute
so provides, the condition precedent may be the commissioner's failure to take a specific action.
Refer also to Section 31A-2-302 .
(23) "Degree of relationship" means the number of steps between two persons determined
by counting the generations separating one person from a common ancestor and then counting the
generations to the other person.
(24) "Department" means the Insurance Department.
(25) "Director" means a member of the board of directors of a corporation.
(26) "Disability insurance" means insurance written to indemnify for losses and expenses
resulting from accident or sickness, to provide payments to replace income lost from accident or
sickness, and to pay for services resulting directly from accident or sickness, including medical,
surgical, hospital, and other ancillary expenses.
(27) "Domestic insurer" means an insurer organized under the laws of this state.
(28) "Domiciliary state" means the state in which an insurer is incorporated or organized or,
in the case of an alien insurer, the state of entry into the United States.
(29) "Employee benefits" means one or more benefits or services provided employees or
their dependents.
(30) "Employee welfare fund" means a fund established or maintained by one or more
employers, one or more labor organizations, or a combination of employers and labor organizations,
whether directly or through trustees. This fund is to provide employee benefits paid or contracted
to be paid, other than income from investments of the fund, by or on behalf of an employer doing
business in this state or for the benefit of any person employed in this state. It includes plans funded
or subsidized by user fees or tax revenues.
(31) "Excludes" is not exhaustive and does not mean that other things are not also excluded.
The items listed are representative examples for use in interpretation of this title.
(31.5) "Fidelity insurance" means insurance guaranteeing the fidelity of persons holding
positions of public or private trust.
(31.7) "First party insurance" means an insurance policy or contract in which the insurer
agrees to pay claims submitted to it by the insured for the insured's losses.
(32) "Foreign insurer" means an insurer domiciled outside of this state, including an alien
insurer.
(33) "Form" means a policy, certificate, or application prepared for general use. It does not
include one specially prepared for use in an individual case. Refer also to "policy" in this section.
(34) "Franchise insurance" means individual insurance policies provided through a mass
marketing arrangement involving a defined class of persons related in some way other than through
the purchase of insurance.
(35) "Health care insurance" or "health insurance" means disability insurance providing
benefits solely of medical, surgical, hospital, or other ancillary services or payment of medical,
surgical, hospital, or other ancillary expenses incurred. "Health care insurance" or "health insurance"
does not include disability insurance providing benefits for:
(a) replacement of income;
(b) short-term accident;
(c) fixed indemnity;
(d) credit disability;
(e) supplements to liability;
(f) workers' compensation;
(g) automobile medical payment;
(h) no-fault automobile;
(i) equivalent self-insurance; or
(j) any type of disability insurance coverage that is a part of or attached to another type of
policy.
(35.5) "Indemnity" means the payment of an amount to offset all or part of an insured loss.
(36) "Independent adjuster" means an insurance adjuster required to be licensed under
Section 31A-26-201 who engages in insurance adjusting as a representative of insurers. Refer also
to Section 31A-26-102 .
(37) "Independently procured insurance" means insurance procured under Section
31A-15-104 .
(37.5) "Individual" means a natural person.
(38) "Inland marine insurance" includes insurance covering:
(a) property in transit on or over land;
(b) property in transit over water by means other than boat or ship;
(c) bailee liability;
(d) fixed transportation property such as bridges, electric transmission systems, radio and
television transmission towers and tunnels; and
(e) personal and commercial property floaters.
(39) "Insolvency" means that:
(a) an insurer is unable to pay its debts or meet its obligations as they mature;
(b) an insurer's total adjusted capital is less than the insurer's mandatory control level RBC
under Subsection 31A-17-601 (7)(c); or
(c) an insurer is determined to be hazardous under this title.
(40) "Insurance" means any arrangement, contract, or plan for the transfer of a risk or risks
from one or more persons to one or more other persons, or any arrangement, contract, or plan for the
distribution of a risk or risks among a group of persons that includes the person seeking to distribute
his risk. "Insurance" includes:
(a) risk distributing arrangements providing for compensation or replacement for damages
or loss through the provision of services or benefits in kind;
(b) contracts of guaranty or suretyship entered into by the guarantor or surety as a business
and not as merely incidental to a business transaction; and
(c) plans in which the risk does not rest upon the person who makes the arrangements, but
with a class of persons who have agreed to share it.
(41) "Insurance adjuster" means a person who directs the investigation, negotiation, or
settlement of a claim under an insurance policy other than life insurance or an annuity, on behalf of
an insurer, policyholder, or a claimant under an insurance policy. Refer also to Section 31A-26-102 .
(41.5) "Interinsurance exchange" is defined in Subsection (69).
(42) "Insurance agent" or "agent" means a person who represents insurers in soliciting,
negotiating, or placing insurance. Refer to Subsection 31A-23-102 [
definition.
(43) "Insurance broker" or "broker" means a person who acts in procuring insurance on
behalf of an applicant for insurance or an insured, and does not act on behalf of the insurer except
by collecting premiums or performing other ministerial acts. Refer [
31A-23-102 [
(44) "Insurance business" or "business of insurance" includes:
(a) providing health care insurance, as defined in Subsection (35), by organizations that are
or should be licensed under this title;
(b) providing benefits to employees in the event of contingencies not within the control of
the employees, in which the employees are entitled to the benefits as a right, which benefits may be
provided either by single employers or by multiple employer groups through trusts, associations, or
other entities;
(c) providing annuities, including those issued in return for gifts, except those provided by
persons specified in Subsections 31A-22-1305 (2) and (3);
(d) providing the characteristic services of motor clubs as outlined in Subsection (56);
(e) providing other persons with insurance as defined in Subsection (40);
(f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor, or
surety, any contract or policy of title insurance;
(g) transacting or proposing to transact any phase of title insurance, including solicitation,
negotiation preliminary to execution, execution of a contract of title insurance, insuring, and
transacting matters subsequent to the execution of the contract and arising out of it, including
reinsurance; and
(h) doing, or proposing to do, any business in substance equivalent to Subsections (44)(a)
through (g) in a manner designed to evade the provisions of this title.
(45) "Insurance consultant" or "consultant" means a person who advises other persons about
insurance needs and coverages, is compensated by the person advised on a basis not directly related
to the insurance placed, and is not compensated directly or indirectly by an insurer, agent, or broker
for advice given. Refer [
(46) "Insurance holding company system" means a group of two or more affiliated persons,
at least one of whom is an insurer.
(47) "Insured" means a person to whom or for whose benefit an insurer makes a promise in
an insurance policy. The term includes policyholders, subscribers, members, and beneficiaries. This
definition applies only to the provisions of this title and does not define the meaning of this word
as used in insurance policies or certificates.
(48) (a) "Insurer" means any person doing an insurance business as a principal, including
fraternal benefit societies, issuers of gift annuities other than those specified in Subsections
31A-22-1305 (2) and (3), motor clubs, employee welfare plans, and any person purporting or
intending to do an insurance business as a principal on his own account. It does not include a
governmental entity, as defined in Subsection 63-30-2 (3), to the extent it is engaged in the activities
described in Section 31A-12-107 .
(b) "Admitted insurer" is defined in Subsection (80)(b).
(c) "Alien insurer" is defined in Subsection (3).
(d) "Authorized insurer" is defined in Subsection (80)(b).
(e) "Domestic insurer" is defined in Subsection (27).
(f) "Foreign insurer" is defined in Subsection (32).
(g) "Nonadmitted insurer" is defined in Subsection (80)(a).
(h) "Unauthorized insurer" is defined in Subsection (80)(a).
(49) "Legal expense insurance" means insurance written to indemnify or pay for specified
legal expenses. It includes arrangements that create reasonable expectations of enforceable rights,
but it does not include the provision of, or reimbursement for, legal services incidental to other
insurance coverages. Refer to Section 31A-1-103 for a list of exemptions.
(50) (a) "Liability insurance" means insurance against liability:
(i) for death, injury, or disability of any human being, or for damage to property, exclusive
of the coverages under Subsection (53) for medical malpractice insurance, Subsection (66) for
professional liability insurance, and Subsection (83) for workers' compensation insurance;
(ii) for medical, hospital, surgical, and funeral benefits to persons other than the insured who
are injured, irrespective of legal liability of the insured, when issued with or supplemental to
insurance against legal liability for the death, injury, or disability of human beings, exclusive of the
coverages under Subsection (53) for medical malpractice insurance, Subsection (66) for professional
liability insurance, and Subsection (83) for workers' compensation insurance;
(iii) for loss or damage to property resulting from accidents to or explosions of boilers, pipes,
pressure containers, machinery, or apparatus;
(iv) for loss or damage to any property caused by the breakage or leakage of sprinklers,
water pipes and containers, or by water entering through leaks or openings in buildings; or
(v) for other loss or damage properly the subject of insurance not within any other kind or
kinds of insurance as defined in this chapter, if such insurance is not contrary to law or public policy.
(b) "Liability insurance" includes vehicle liability insurance as defined in Subsection (81),
residential dwelling liability insurance as defined in Subsection (70.3), and also includes making
inspection of, and issuing certificates of inspection upon, elevators, boilers, machinery, and
apparatus of any kind when done in connection with insurance on them.
(51) "License" means the authorization issued by the insurance commissioner under this title
to engage in some activity that is part of or related to the insurance business. It includes certificates
of authority issued to insurers.
(52) "Life insurance" means insurance on human lives and insurances pertaining to or
connected with human life. The business of life insurance includes granting annuity benefits,
granting endowment benefits, granting additional benefits in the event of death by accident or
accidental means, granting additional benefits in the event of the total and permanent disability of
the insured, and providing optional methods of settlement of proceeds.
(53) "Medical malpractice insurance" means insurance against legal liability incident to the
practice and provision of medical services other than the practice and provision of dental services.
(54) "Member" means a person having membership rights in an insurance corporation.
Refer also to "insured" in Subsection (47).
(55) "Minimum capital" or "minimum required capital" means the capital that must be
constantly maintained by a stock insurance corporation as required by statute. Refer also to
"permanent surplus" under Subsection (76)(a) and Sections 31A-5-211 , 31A-8-209 , and 31A-9-209 .
(56) "Motor club" means a person licensed under Chapter 5, Domestic Stock and Mutual
Insurance Corporations, Chapter 11, Motor Clubs, or Chapter 14, Foreign Insurers, that promises
for an advance consideration to provide legal services under Subsection 31A-11-102 (1)(b), bail
services under Subsection 31A-11-102 (1)(c), trip reimbursement, towing services, emergency road
services, stolen automobile services, a combination of these services, or any other services given in
Subsections 31A-11-102 (1)(b) through (f) for a stated period of time.
(57) "Mutual" means mutual insurance corporation.
(57.5) "Nonparticipating" means a plan of insurance under which the insured is not entitled
to receive dividends representing shares of the surplus of the insurer.
(58) "Ocean marine insurance" means insurance against loss of or damage to:
(a) ships or hulls of ships;
(b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys, securities,
choses in action, evidences of debt, valuable papers, bottomry, respondentia interests, or other
cargoes in or awaiting transit over the oceans or inland waterways;
(c) earnings such as freight, passage money, commissions, or profits derived from
transporting goods or people upon or across the oceans or inland waterways; or
(d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
owners of other vessels, owners of fixed objects, customs or other authorities, or other persons in
connection with maritime activity.
(59) "Order" means an order of the commissioner.
(59.5) "Participating" means a plan of insurance under which the insured is entitled to
receive dividends representing shares of the surplus of the insurer.
(60) "Person" includes an individual, partnership, corporation, incorporated or
unincorporated association, joint stock company, trust, reciprocal, syndicate, or any similar entity
or combination of entities acting in concert.
(61) (a) "Policy" means any document, including attached endorsements and riders,
purporting to be an enforceable contract, which memorializes in writing some or all of the terms of
an insurance contract. Service contracts issued by motor clubs under Chapter 11, Motor Clubs, and
by corporations licensed under Chapter 7, Nonprofit Health Service Insurance Corporations, or
Chapter 8, Health Maintenance Organizations and Limited Health Plans, are policies. A certificate
under a group insurance contract is not a policy. A document which does not purport to have legal
effect is not a policy.
(b) "Group insurance policy" means a policy covering a group of persons that is issued to
a policyholder on behalf of the group, for the benefit of group members who are selected under
procedures defined in the policy or in agreements which are collateral to the policy. This type of
policy may, but is not required to, include members of the policyholder's family or dependents.
(c) "Blanket insurance policy" means a group policy covering classes of persons without
individual underwriting, where the persons insured are determined by definition of the class with or
without designating the persons covered.
(62) "Policyholder" means the person who controls a policy, binder, or oral contract by
ownership, premium payment, or otherwise. Refer also to "insured" in Subsection (47).
(63) "Premium" means the monetary consideration for an insurance policy, and includes
assessments, membership fees, required contributions, or monetary consideration, however
designated. Consideration paid to third party administrators for their services is not "premium,"
though amounts paid by third party administrators to insurers for insurance on the risks administered
by the third party administrators are "premium."
(64) "Principal officers" of a corporation means the officers designated under Subsection
31A-5-203 (3).
(65) "Proceedings" includes actions and special statutory proceedings.
(66) "Professional liability insurance" means insurance against legal liability incident to the
practice of a profession and provision of any professional services.
(67) "Property insurance" means insurance against loss or damage to real or personal
property of every kind and any interest in that property, from all hazards or causes, and against loss
consequential upon the loss or damage including vehicle comprehensive and vehicle physical
damage coverages, but excluding inland marine insurance and ocean marine insurance as defined
under Subsections (38) and (58).
(67.5) "Public agency insurance mutual" means any entity formed by joint venture or
interlocal cooperation agreement by two or more political subdivisions or public agencies of the state
for the purpose of providing insurance coverage for the political subdivisions or public agencies.
Any public agency insurance mutual created under this title and Title 11, Chapter 13, Interlocal
Cooperation Act, is considered to be a governmental entity and political subdivision of the state with
all of the rights, privileges, and immunities of a governmental entity or political subdivision of the
state.
(68) (a) Except as provided in Subsection (68)(b), "rate service organization" means any
person who assists insurers in rate making or filing by:
(i) collecting, compiling, and furnishing loss or expense statistics;
(ii) recommending, making, or filing rates or supplementary rate information; or
(iii) advising about rate questions, except as an attorney giving legal advice. Refer also to
Subsection 31A-19-102 (2).
(b) "Rate service organization" does not mean an employee of an insurer, a single insurer
or group of insurers under common control, a joint underwriting group, or a natural person serving
as an actuarial or legal consultant.
(69) "Reciprocal" or "interinsurance exchange" means any unincorporated association of
persons operating through an attorney-in-fact common to all of them and exchanging insurance
contracts with one another that provide insurance coverage on each other.
(70) "Reinsurance" means an insurance transaction where an insurer, for consideration,
transfers any portion of the risk it has assumed to another insurer. In referring to reinsurance
transactions, this title sometimes refers to the insurer transferring the risk as the "ceding insurer,"
and to the insurer assuming the risk as the "assuming insurer" or the "assuming reinsurer."
(70.3) "Residential dwelling liability insurance" means insurance against liability resulting
from or incident to the ownership, maintenance, or use of a residential dwelling that is a detached
single family residence or multifamily residence up to four units.
(71) "Retrocession" means reinsurance with another insurer of a liability assumed under a
reinsurance contract. A reinsurer "retrocedes" when it reinsures with another insurer part of a
liability assumed under a reinsurance contract.
(72) (a) "Security" means any:
(i) note;
(ii) stock;
(iii) bond;
(iv) debenture;
(v) evidence of indebtedness;
(vi) certificate of interest or participation in any profit-sharing agreement;
(vii) collateral-trust certificate;
(viii) preorganization certificate or subscription;
(ix) transferable share;
(x) investment contract;
(xi) voting trust certificate;
(xii) certificate of deposit for a security;
(xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
payments out of production under such a title or lease;
(xiv) commodity contract or commodity option;
(xv) any certificate of interest or participation in, temporary or interim certificate for, receipt
for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in
Subsections (72)(a)(i) through (xiv); or
(xvi) any other interest or instrument commonly known as a security.
(b) "Security" does not include:
(i) any insurance or endowment policy or annuity contract under which an insurance
company promises to pay money in a specific lump sum or periodically for life or some other
specified period; or
(ii) a burial certificate or burial contract.
(73) "Self-insurance" means any arrangement under which a person provides for spreading
its own risks by a systematic plan.
(a) Except as provided in this subsection, self-insurance does not include an arrangement
under which a number of persons spread their risks among themselves.
(b) Self-insurance does include an arrangement by which a governmental entity, as defined
in Section 63-30-2 , undertakes to indemnify its employees for liability arising out of the employees'
employment.
(c) Self-insurance does include an arrangement by which a person with a managed program
of self-insurance and risk management undertakes to indemnify its affiliates, subsidiaries, directors,
officers, or employees for liability or risk which is related to the relationship or employment.
Self-insurance does not include any arrangement with independent contractors.
(74) (a) "Subsidiary" of a person means an affiliate controlled by that person either directly
or indirectly through one or more affiliates or intermediaries.
(b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting shares
are owned by that person either alone or with its affiliates, except for the minimum number of shares
the law of the subsidiary's domicile requires to be owned by directors or others.
(75) Subject to Subsection (40)(b), "surety insurance" includes:
(a) a guarantee against loss or damage resulting from failure of principals to pay or perform
their obligations to a creditor or other obligee;
(b) bail bond insurance; and
(c) fidelity insurance.
(76) (a) "Surplus" means the excess of assets over the sum of paid-in capital and liabilities.
(b) "Permanent surplus" means the surplus of a mutual insurer that has been designated by
the insurer as permanent. Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209
require that mutuals doing business in this state maintain specified minimum levels of permanent
surplus. Except for assessable mutuals, the minimum permanent surplus requirement is essentially
the same as the minimum required capital requirement that applies to stock insurers. Refer also to
Subsection (55) on "minimum capital."
(c) "Excess surplus" means:
(i) for life or disability insurers, as defined in Subsection 31A-17-601 (3), and property and
casualty insurers, as defined in Subsection 31A-17-601 (4), the lesser of:
(A) that amount of an insurer's total adjusted capital, as defined in Subsection
[
permanent surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
(B) that amount of an insurer's total adjusted capital, as defined in Subsection
[
in Subsection 31A-17-601 (7)(a); and
(ii) for monoline mortgage guaranty insurers, financial guaranty insurers, and title insurers,
that amount of an insurer's paid-in-capital and surplus that exceeds the product of 1.5 and the
insurer's total adjusted capital required by Subsection 31A-17-609 (1).
(77) "Third party administrator" or "administrator" means any person who collects charges
or premiums from, or who, for consideration, adjusts or settles claims of residents of the state in
connection with life or disability insurance coverage, annuities, or service insurance coverage,
except:
(a) a union on behalf of its members;
(b) a person exempt as a trust under Section 514 of the federal Employee Retirement Income
Security Act of 1974;
(c) an employer on behalf of his employees or the employees of one or more of the
subsidiary or affiliated corporations of the employer;
(d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only with respect to insurance
issued by the insurer; or
(e) a person licensed or exempt from licensing under Chapter 23 or 26 whose activities are
limited to those authorized under the license the person holds or for which the person is exempt.
Refer also to Section 31A-25-101 .
(78) "Title insurance" means the insuring, guaranteeing, or indemnifying of owners of real
or personal property or the holders of liens or encumbrances on that property, or others interested
in the property against loss or damage suffered by reason of liens or encumbrances upon, defects in,
or the unmarketability of the title to the property, or invalidity or unenforceability of any liens or
encumbrances on the property.
(78.5) "Total adjusted capital" means the sum of an insurer's statutory capital and surplus
as determined in accordance with:
(a) the statutory accounting applicable to the annual financial statements required to be filed
under Section 31A-4-113 ; and
(b) any other items provided by the RBC instructions, as RBC instructions is defined in
Subsection 31A-17-601 (6).
(79) (a) "Trustee" means "director" when referring to the board of directors of a corporation.
(b) "Trustee," when used in reference to an employee welfare fund, means an individual,
firm, association, organization, joint stock company, or corporation, whether acting individually or
jointly and whether designated by that name or any other, that is charged with or has the overall
management of an employee welfare fund.
(80) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted insurer" means an
insurer not holding a valid certificate of authority to do an insurance business in this state, or an
insurer transacting business not authorized by a valid certificate.
(b) "Admitted insurer" or "authorized insurer" means an insurer holding a valid certificate
of authority to do an insurance business in this state and transacting business as authorized by a valid
certificate.
(81) "Vehicle liability insurance" means insurance against liability resulting from or incident
to ownership, maintenance, or use of any land vehicle or aircraft, exclusive of vehicle comprehensive
and vehicle physical damage coverages under Subsection (67).
(82) "Voting security" means a security with voting rights, and includes any security
convertible into a security with a voting right associated with it.
(83) "Workers' compensation insurance" means:
(a) insurance for indemnification of employers against liability for compensation:
(i) based upon compensable accidental injuries; and
(ii) based on occupational disease disability;
(b) employer's liability insurance incidental to workers' compensation insurance and written
in connection with it; and
(c) insurance assuring to the persons entitled to workers' compensation benefits the
compensation provided by law.
Section 3. Section 31A-3-103 is amended to read:
31A-3-103. Fees.
(1) The fees charged by the department shall be set [
[
[
Legislature and make it available upon request for $1 per copy. This fee schedule shall also be
included in any compilation of rules promulgated by the commissioner.
[
"Services" include issuing and renewing licenses and certificates of authority, filing policy forms,
reporting agent appointments and terminations, filing annual statements, and other functions that are
reasonable and necessary to enable the commissioner to perform the duties imposed by the Insurance
Code.
[
[
once each year.
[
various fees.
Section 4. Section 31A-4-115 is enacted to read:
31A-4-115. Plan of orderly withdrawal.
(1) When an insurer intends to withdraw from writing a line of insurance in this state or to
reduce its total annual premium volume by 75% or more, it shall file with the commissioner a plan
of orderly withdrawal.
(2) An insurer's plan of orderly withdrawal shall:
(a) indicate the date the insurer intends to begin and complete its withdrawal plan; and
(b) include provisions for:
(i) meeting the insurer's contractual obligations;
(ii) providing services to its Utah policyholders and claimants; and
(iii) meeting any applicable statutory obligations.
(3) The commissioner shall approve a plan of orderly withdrawal if it adequately
demonstrates that the insurer will:
(a) protect the interests of the people of the state;
(b) meet its contractual obligations;
(c) provide service to its Utah policyholders and claimants; and
(d) meet any applicable statutory obligations.
(4) The provisions of Section 31A-2-302 govern the commissioner's approval or disapproval
of a plan for orderly withdrawal.
(5) The commissioner may require an insurer to increase the deposit maintained in
accordance with Section 31A-4-105 or Section 31A-4-105.5 and place the deposit in trust in the
name of the commissioner upon finding, after an adjudicative proceeding that:
(a) there is reasonable cause to conclude that the interests of the people of the state are best
served by such action; and
(b) the insurer:
(i) has filed a plan of orderly withdrawal; or
(ii) intends to withdraw from writing a line of insurance in this state or to reduce its total
annual premium volume by 75% or more.
(6) An insurer that withdraws from writing insurance in this state or that reduces its total
annual premium volume by 75% or more in any year without having submitted a plan or receiving
the commissioner's approval is subject to the civil penalties under Section 31A-2-308 .
(7) An insurer that withdraws from writing all lines of insurance in this state may not resume
writing insurance in this state for five years without:
(a) the approval of the commissioner; and
(b) complying with Subsection 31A-30-109 (5), if applicable.
(8) The commissioner shall adopt rules necessary to implement the provisions of this
section.
Section 5. Section 31A-8-105 is amended to read:
31A-8-105. General powers of organizations.
Organizations may:
(1) buy, sell, lease, encumber, construct, renovate, operate, or maintain hospitals, health care
clinics, other health care facilities, and other real and personal property incidental to and reasonably
necessary for the transaction of the business and for the accomplishment of the purposes of the
organization;
(2) furnish health care through providers which are under contract with the organization;
(3) contract with insurance companies licensed in this state or with health service
corporations authorized to do business in this state for insurance, indemnity, or reimbursement for
the cost of health care furnished by the organization;
(4) offer to its enrollees, in addition to health care, insured indemnity benefits, but only for
emergency care, out-of-area coverage, [
in Section 31A-8-101 , and adoption benefits as provided in Section 31A-22-610.1 ;
(5) receive from governmental or private agencies payments covering all or part of the cost
of the health care furnished by the organization;
(6) lend money to a medical group under contract with it or with a corporation under its
control to acquire or construct health care facilities or for other uses to further its program of
providing health care services to its enrollees;
(7) be owned jointly by health care professionals and persons not professionally licensed
without violating Utah law; and
(8) do all other things necessary for the accomplishment of the purposes of the organization.
Section 6. Section 31A-22-314 is amended to read:
31A-22-314. Mandatory coverage.
(1) A rental company shall provide its renters with primary coverage meeting the
requirements of Title 41, Chapter 12a, Financial Responsibility of Motor Vehicle Owners and
Operators Act, unless there is other valid or collectible insurance coverage.
(2) All coverage shall include primary defense costs and may not be waived.
Section 7. Section 31A-22-423 is amended to read:
31A-22-423. Policy and annuity examination period.
(1) (a) Except as provided under Subsection (2), all life insurance policies and annuities shall
contain a notice prominently printed on or attached to the cover or front page stating that the
policyholder has the right to return the policy for any reason [
(i) ten days after delivery; or
(ii) in case of a replacement policy, 20 days after [
delivered. [
(b) For purposes of this section, "return" means [
written statement on the policy or an accompanying writing that [
termination of coverage that is delivered to or mailed first class to the insurer or its agent. [
(c) A policy returned under this section [
(d) A policyholder returning [
premium paid, except that the insurer may retain an amount not exceeding that determined by rule
adopted by the commissioner.
(2) This section does not apply to:
(a) group policies; and
(b) other classes of life insurance policies [
after finding that a right to return those policies would be impracticable or unnecessary to protect
the policyholder's interests.
Section 8. Section 31A-22-610.1 is amended to read:
31A-22-610.1. Adoption indemnity benefit.
(1) (a) If an insured has coverage for maternity benefits, the policy shall [
insured, if the child is placed for adoption with the insured within 30 days of the child's birth.
[
[
[
[
[
[
(b) An insurer that has paid the benefit under Subsection (1)(a) may seek reimbursement of
the benefit if:
(i) the post-placement evaluation disapproves the adoption placement; and
(ii) a court rules the adoption may not be finalized because of an act or omission of an
adoptive parent or parents that affects the child's health or safety.
(c) The commissioner shall:
(i) establish, by rule, the amount of the adoption indemnity benefit provided under
Subsection (1) at a minimum of $2,500; and
(ii) review the amount of the adoption indemnity benefit every two years to make any
necessary and reasonable adjustments, taking into account the average insurance cost of an
uncomplicated birth.
(d) Each insurer shall pay its pro rata share of the adoption indemnity benefit if each
adoptive parent:
(i) has coverage for maternity benefits with a different insurer; and
(ii) makes a claim for the adoption indemnity benefit provided in Subsection (1)(a).
(2) If a policy offers optional maternity benefits, [
(a) the child is [
of the child's birth; and
(b) the adoption is finalized within [
[
Section 9. Section 31A-22-703 is amended to read:
31A-22-703. Conversion rights on termination of group disability insurance coverage.
(1) Except as provided in Subsections (2) through (5), all policies of disability insurance
offered on a group basis under this title or Title 49, Chapter 8, Group Insurance Program Act, shall
provide that a person whose insurance under the group policy has been terminated for any reason,
and who has been continuously insured under the group policy or its predecessor for at least six
months immediately prior to termination, is entitled to choose either a converted individual or group
policy of disability insurance from the insurer which conforms to [
provided in Section 31A-22-714 .
(2) Subsection (1) does not apply if the policy:
[
[
[
service; or
[
(3) An employee or group member does not have conversion rights under Subsection (1) if:
(a) termination of the group coverage occurred because of failure of the group member to
pay any required individual contribution;
(b) the individual group member acquires other group coverage covering all preexisting
conditions including maternity, if the coverage existed under the replaced group coverage; or
(c) the person who would be covered is or could be covered by Medicare.
(4) Notwithstanding Subsections (1), (2), and (3), an employee or group member does not
have conversion rights under Subsection (1) if the individual or group member qualifies to continue
coverage under his existing group policy in accordance with the terms of his policy.
(5) (a) Notwithstanding Subsection 31A-22-613 (1), an insurer may reduce benefits under
a converted disability policy covering any person to the extent the benefits provided or available to
that person under one or more of the sources listed under Subsection (5)(b), together with the
benefits provided by the converted policy, would result in overinsurance according to the insurer's
standards. The insurer's standards shall bear a reasonable relationship to actual health care costs in
the area in which the insured lives at the time of conversion and shall be filed with the commissioner
prior to their use in denying coverage.
(b) The benefits sources referred to under Subsection (5)(a) include:
(i) benefits under another insurance policy;
(ii) benefits under any arrangement of coverage for individuals in a group, whether on an
insured or an uninsured basis; and
(iii) benefits provided for or available to that person, in accordance with the requirements
of any state or federal law.
Section 10. Section 31A-22-708 is repealed and reenacted to read:
31A-22-708. Conversion of health benefit plan.
If the group insurance policy from which the conversion is made is a health benefit plan, as
defined in Subsection 31A-30-103 (15), the employee or member must be offered basic coverage as
defined in Subsection 31A-30-103 (4).
Section 11. Section 31A-22-711 is amended to read:
31A-22-711. If conversion plan benefits exceed group policy benefits.
If the benefit levels required under [
exceed the benefit levels provided under the group policy, the conversion policy may offer benefits
which are substantially similar to those provided under the group policy in lieu of those required
under [
Section 12. Section 31A-22-714 is amended to read:
31A-22-714. Extension of benefits.
(1) (a) In addition to the right of the employee to have a converted policy issued to the
employee, and on the same bases of eligibility as for conversion of coverage under Sections
31A-22-703 and 31A-22-704 , the employee has the right to continue the employee's coverage under
the group policy for a period of six months, unless the employee:
(i) was terminated for gross misconduct[
(ii) is eligible for any extension of coverage required by federal law.
(b) [
dependent coverages.
(2) In addition to the terminated insured, those classes of persons defined in Section
31A-22-710 are also entitled to the continuation of coverage as provided in this section.
(3) (a) The employer shall provide the terminated insured written notification of the right
to continue group coverage and the payment amounts required for continued coverage, including the
manner, place, and time in which the payments shall be made. The notice may be sent to the
terminated insured's home address as shown on the records of the employer. This notice shall be
given not more than [
(b) The payment amount for continued group coverage may not exceed 102% of the group
rate in effect for a group member, including an employer's contribution, if any, for a group insurance
policy[
(4) If the terminated insured or, with respect to a minor, the parent or guardian of the
terminated insured elects to continue group coverage and tenders to the employer the amount
required within 30 days after receiving notice as prescribed by this section, coverage of the
terminated insured and coverage of the covered spouse and dependents of the terminated insured
continues without interruption and may not terminate unless:
(a) the terminated insured establishes residence outside of this state;
(b) the terminated insured fails to make timely payment of a required contribution;
(c) the terminated insured violates a material condition of the contract;
(d) the terminated insured becomes eligible for similar coverage under another group policy;
or
(e) the employer's coverage is terminated.
(5) If the employer replaces coverage with similar coverage under another group policy,
without interruption, the terminated insured has the right to obtain coverage under the replacement
group policy for the balance of the period the terminated insured would have continued coverage
under the replaced group policy, provided the terminated insured is otherwise eligible for
continuation of coverage.
(6) At the end of the continued benefit period as provided in this section, the covered person
remains eligible for a converted policy under this chapter and shall be so informed by the employer
in the same manner and according to the same terms as required by Section 31A-22-703 .
Section 13. Section 31A-23-102 is amended to read:
31A-23-102. Definitions.
As used in this chapter:
(1) Except as provided in Subsection (3):
(a) "Escrow" is a license category that allows a person to conduct escrows, settlements, or
closings on behalf of a title insurance agency or a title insurer.
[
[
[
and limits an individual or agency to transact only for those products.
[
commitments or policies on behalf of a title insurer.
[
(i) represents a title insurer in soliciting, requesting, or negotiating the placing of:
(A) title insurance; or
(B) escrow, settlement, or closing services; and [
(ii) does not have a search or escrow license.
[
[
representatives, or consultants when acting in the following capacities:
(a) any regular salaried officer, employee, or other representative of an insurer or licensee
under this chapter who devotes substantially all of [
working time to activities other than those described in [
and Subsections 31A-1-301 (42), (43), and (45) including the clerical employees of persons required
to be licensed under this chapter;
(b) a regular salaried officer or employee of a person seeking to purchase insurance, who
receives no compensation that is directly dependent upon the amount of insurance coverage
purchased;
(c) a person who gives incidental advice in the normal course of a business or professional
activity, other than insurance consulting, if neither that person nor that person's employer receives
direct or indirect compensation on account of any insurance transaction that results from that advice;
(d) a person who, without special compensation, performs incidental services for another
at the other's request, without providing advice or technical or professional services of a kind
normally provided by an agent, broker, or consultant;
(e) (i) a holder of a group insurance policy, or any other person involved in mass marketing,
but only:
(A) with respect to administrative activities in connection with that type of policy, including
the collection of premiums; and
[
Subsection (3)(e)(i) beyond reasonable expenses including a fair payment for the use of capital; and
(f) a person who gives advice or assistance without direct or indirect compensation or any
expectation of direct or indirect compensation.
[
Academy of Actuaries.
[
proprietorship by which a natural person does business under an assumed name.
[
corporation that for any compensation, commission, or other thing of value acts or aids in any
manner in soliciting, negotiating, or procuring the making of any insurance contract on behalf of an
insured other than itself.
(6) "Captive insurer" means:
(a) an insurance company owned by another organization whose exclusive purpose is to
insure risks of the parent organization and affiliated companies; or
(b) in the case of groups and associations, an insurance organization owned by the insureds
whose exclusive purpose is to insure risks of member organizations, group members, and their
affiliates.
(7) "Controlled insurer" means a licensed insurer that is either directly or indirectly
controlled by a broker.
(8) "Controlling broker" means a broker who either directly or indirectly controls an insurer.
(9) "Controlling person" means any person, firm, association, or corporation that directly
or indirectly has the power to direct or cause to be directed, the management, control, or activities
of a reinsurance intermediary.
(10) "Insurer" is as defined in Subsection 31A-1-301 (48)[
persons or similar persons are not insurers for purposes of Part 6 of this chapter:
(a) all risk retention groups as defined in:
(i) the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499[
(ii) the Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.[
(iii) Title 31A, Chapter 15, Part 2, Risk Retention Groups;
(b) all residual market pools and joint underwriting authorities or associations; and
(c) all captive insurers[
(11) (a) "Managing general agent" means any person, firm, association, or corporation that:
(i) manages all or part of the insurance business of an insurer, including the management of
a separate division, department, or underwriting office[
(ii) acts as an agent for the insurer whether it is known as a managing general agent,
manager, or other similar term[
(iii) with or without the authority, either separately or together with affiliates, directly or
indirectly produces and underwrites an amount of gross direct written premium equal to, or more
than 5% of, the policyholder surplus as reported in the last annual statement of the insurer in any one
quarter or year[
(iv) either adjusts or pays claims in excess of an amount determined by the commissioner,
or that negotiates reinsurance on behalf of the insurer.
(b) Notwithstanding Subsection (11)(a), the following persons may not be considered as
managing general agent for the purposes of this chapter:
(i) an employee of the insurer;
(ii) a U.S. manager of the United States branch of an alien insurer;
(iii) an underwriting manager [
(A) manages all the insurance operations of the insurer;
(B) is under common control with the insurer;
(C) is subject to Title 31A, Chapter 16, Insurance Holding Companies; and
(D) [
and
[
insurer or inter-insurance exchange under powers of attorney.
(12) "Producer" is a person who arranges for insurance coverages between insureds and
insurers.
(13) "Qualified U.S. financial institution" means an institution that:
(a) is organized or, in the case of a U.S. office of a foreign banking organization licensed,
under the laws of the United States or any state;
(b) is regulated, supervised, and examined by U.S. federal or state authorities having
regulatory authority over banks and trust companies; and
(c) has been determined by either the commissioner, or the Securities Valuation Office of
the National Association of Insurance Commissioners, to meet the standards of financial condition
and standing [
financial institutions whose letters of credit will be acceptable to the commissioner.
(14) "Reinsurance intermediary" means a reinsurance intermediary-broker or a reinsurance
intermediary-manager as these terms are defined in Subsections (15) and (16).
(15) "Reinsurance intermediary-broker" means a person other than an officer or employee
of the ceding insurer, firm, association, or corporation who solicits, negotiates, or places reinsurance
cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind
reinsurance on behalf of the insurer.
(16) (a) "Reinsurance intermediary-manager" means a person, firm, association, or
corporation who:
(i) has authority to bind or who manages all or part of the assumed reinsurance business of
a reinsurer, including the management of a separate division, department, or underwriting office; and
[
(ii) acts as an agent for the reinsurer whether [
corporation is known as a reinsurance intermediary-manager, manager, or other similar term.
(b) Notwithstanding Subsection (16)(a), the following persons may not be considered
reinsurance intermediary-managers for the purpose of this chapter with respect to the reinsurer:
(i) an employee of the reinsurer;
(ii) a U.S. manager of the United States branch of an alien reinsurer;
(iii) an underwriting manager that, pursuant to contract[
(A) manages all the reinsurance operations of the reinsurer[
(B) is under common control with the reinsurer[
(C) is subject to Title 31A, Chapter 16, Insurance Holding Companies[
(D) is not compensated based on the volume of premiums written; and
(iv) the manager of a group, association, pool, or organization of insurers that:
(A) engage in joint underwriting or joint reinsurance; and
(B) are subject to examination by the insurance commissioner of the state in which the
manager's principal business office is located.
(17) "Reinsurer" means any person, firm, association, or corporation duly licensed in this
state as an insurer with the authority to assume reinsurance.
(18) "Surplus lines broker" means a person licensed under Subsection 31A-23-204 (5) to
place insurance with unauthorized insurers in accordance with Section 31A-15-103 .
(19) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.
Section 14. Section 31A-23-204 is amended to read:
31A-23-204. License classifications.
Licenses issued under this chapter shall be issued under the classifications described under
Subsections (1) through (6). These classifications are intended to describe the matters to be
considered under any education, examination, and training required of license applicants under
Sections 31A-23-206 through 31A-23-208 .
(1) Agent and broker license classifications include:
(a) life insurance, including nonvariable annuities;
(b) variable annuities;
(c) disability insurance, including contracts issued to policyholders under Chapter 7 or 8;
(d) property/liability insurance, which includes:
(i) property insurance;
(ii) liability insurance;
(iii) surety and other bonds; and
(iv) policies containing any combination of these coverages; and
(e) title insurance under one of the following categories:
(i) search, including authority to act as a title marketing representative;
(ii) escrow, including authority to act as a title marketing representative;
(iii) search and escrow, including authority to act as a title marketing representative; and
(iv) title marketing representative only.
(2) Limited license product classification includes:
(a) credit life and credit disability insurance;
(b) travel; [
(c) motor club;
(d) car rental related; and
(e) credit involuntary unemployment insurance and credit property insurance.
(3) Consultant license classification includes:
(a) life insurance, including nonvariable annuities;
(b) variable annuities;
(c) disability insurance, including contracts issued to policyholders under Chapter 7 or 8;
and
(d) property/liability insurance, which includes:
(i) property insurance;
(ii) liability insurance;
(iii) surety and other bonds; and
(iv) policies containing any combination of these coverages.
(4) A holder of licenses under Subsections (1)(a) and (1)(c) has all qualifications necessary
to act as a holder of a license under Subsection (2)(a).
(5) Upon satisfying the additional applicable requirements, a holder of a brokers license may
obtain a license to act as a surplus lines broker. This type of license gives the holder the authority
to arrange insurance contracts with unauthorized insurers under Section 31A-15-103 , but only as to
the types of insurance under Subsection (1) for which he holds a brokers license.
(6) The commissioner may by rule recognize other agent, broker, limited license, or
consultant license classifications as to kinds of insurance not listed under Subsections (1), (2), and
(3).
Section 15. Section 31A-23-215 is amended to read:
31A-23-215. Agency licensees -- Reports -- Suspension, revocation, or limitation of
license.
(1) (a) Every two years[
managing general agent, broker, or consultant shall report to the commissioner[
capacities for the organization.
(b) The report required by Subsection (1)(a) shall be made:
(i) on a date specified by rule; and
(ii) in a form the commissioner establishes by rule.
(2) An agency licensed under this chapter shall report to the commissioner promptly, in the
detail and form prescribed by rule, every change in the list of natural person agents, managing
general agents, brokers, or consultants authorized to act in those capacities for the agency.
(3) (a) An agency licensed under this chapter shall report to the commissioner the cause of
termination of a designated licensee's appointment. The information provided the commissioner
shall remain confidential.
(b) An agency is immune from civil action, civil penalty, or damages if the agency complies
in good faith with Subsection (3)(a) in reporting to the commissioner the cause of termination of
licensees' appointments.
(c) Notwithstanding any other provision in this section, an agency is not immune from any
action or resulting penalty imposed on the reporting agency as a result of proceedings brought by
or on behalf of the department if the action is based on evidence other than the report submitted in
compliance with this Subsection (3).
(4) [
is licensed only through natural persons who are licensed under this chapter to act in the same
manner.
(5) [
to the commissioner the name of at least one natural person who has authority to act on behalf of the
agency in all matters pertaining to compliance with this title and orders of the commissioner.
(6) [
itself and any [
are considered to be the holders of the license.
(7) If a natural person named on the agency license commits any act or fails to perform any
duty that is a ground for suspending, revoking, or limiting the [
commissioner may suspend, revoke, or limit the license of:
(a) that natural person [
(b) the agency, if the agency:
(i) is reckless or negligent in its supervision of the natural person; or
(ii) knowingly participated in the act or failure to act that is the ground for suspending,
revoking, or limiting the license; or
(c) both the natural person and the agency.
Section 16. Section 31A-23-315 is enacted to read:
31A-23-315. Solicitations to loan applicants.
(1) (a) A person authorized to engage in insurance activities in this state shall prominently
disclose in writing the information described in Subsection (1)(b) to a person seeking an extension
of credit if:
(i) the person authorized to engage in insurance activities also extends credit directly or
through a subsidiary or an affiliate;
(ii) the person requires a customer to obtain insurance in connection with an extension of
credit; and
(iii) the person offers to the person seeking an extension of credit the line of insurance
required in connection with the extension of credit.
(b) The disclosure required by Subsection (1)(a) shall be in a form substantially similar to
the following. "You may obtain insurance required in connection with your extension of credit from
any insurance agent, broker, producer, or approved insurer that sells such insurance. Your choice
of insurance provider will not affect our credit decision or your credit terms."
(c) The person shall make the required disclosure under Subsection (1)(a):
(i) at the time of written application for an extension of credit; or
(ii) if there is no written application, before the closing of the extension of credit.
(2) The disclosure required by Subsection (1)(c)(ii) may be in a verbal, electronic, or other
unwritten form if a printed disclosure is included with the first printed statement of terms and
conditions of the extension of credit sent to the person seeking the extension of credit.
(3) This section does not apply when:
(a) a person is contacting a person in the course of direct or mass marketing to a group of
persons in a manner that bears no relation to the person's application for an extension of credit or
credit decision; and
(b) an agreement for the extension of credit is changed or extended, if the person who
originally sought the extension of credit is not required to purchase new or additional insurance.
(4) (a) For purposes of this section, "approved insurer" means an insurer that is approved to
issue insurance related to the extension of credit by the person that extends the credit.
(b) The commissioner shall make rules establishing standards that govern the approval under
Subsection (4)(a) of an insurer by a person that extends credit.
Section 17. Section 31A-29-111 is amended to read:
31A-29-111. Eligibility -- Limitations.
(1) (a) [
(i) (A) the person pays the established premium[
(B) is a resident of this state; or
(ii) is a dependent child 25 years of age or less of a person described in Subsection (1)(a)(i).
(b) Notwithstanding Subsection (1)(a), a person is not eligible for pool coverage if one of
the following conditions apply:
[
Medicaid or Medicare, except as provided in Section 31A-29-112 ;
[
[
[
terminated for any reason other than nonpayment of premium;
[
[
[
[
(4); [
[
health insurance or a self-insurance arrangement to all its eligible employees or members[
(viii) at the time of application, the person:
(A) is not eligible for coverage that is subject to the Health Insurance Portability and
Accountability Act, P.L. 104-91, 110 Stat. 1962; and
(B) has not resided in Utah for at least 12 consecutive months preceding the date of
application.
(2) (a) [
risk pool with similar coverage is terminated because of nonresidency in another state may apply for
coverage under the pool subject to the conditions of Subsections (1)(b)(i) through (vii).
(b) If the coverage is applied for under Subsection (2)(a) within 31 days after the termination
and if premiums are paid for the entire coverage period under the pool, the effective date of the
pool's coverage shall be the date of termination of previous coverage.
(c) The waiting period of a person with a preexisting condition applying for coverage under
this chapter shall be waived if:
(i) the waiting period was satisfied under a similar plan from another state; and [
(ii) the other state's benefit limitation was not reached.
(3) If an eligible person applies for pool coverage within 30 days of being denied coverage
by an individual carrier, the effective date for pool coverage shall be set at the first day of the month
following the submission of the completed insurance application to the carrier.
(4) (a) The board shall establish and adjust, as necessary, underwriting criteria based on:
(i) health condition; and
(ii) expected claims so that [
available funding.
(b) The commissioner may contract with one or more providers under Title 63, Chapter 56,
Utah Procurement Code, to develop underwriting criteria under Subsection (4)(a).
(c) If a person is denied coverage under the criteria established in Subsection (4)(a), the pool
shall issue a certificate to the applicant for coverage under Subsection 31A-30-108 (3).
Section 18. Section 31A-29-113 is amended to read:
31A-29-113. Benefits -- Additional types of pool insurance -- Preexisting conditions --
Waiver -- Maximum benefits.
(1) (a) The pool policy shall pay for eligible expenses rendered or furnished for the
diagnoses or treatment of illness or injury which exceed the deductible and copayment amounts
applicable under Section 31A-29-114 and which are not otherwise limited or excluded.
(b) Eligible expenses are the charges for the health care services and items rendered during
times for which benefits are extended under the pool policy.
(2) The coverage to be issued by the pool, its schedule of benefits, exclusions, and other
limitations shall be established by the board.
(3) The commissioner shall approve the benefit package developed by the board to ensure
its compliance with this chapter.
(4) The pool shall offer at least one benefit plan through a managed care program as
authorized under Section 31A-29-106 .
(5) This chapter shall not be construed to prohibit the pool from issuing additional types of
health insurance policies with different types of benefits which in the opinion of the board may be
of benefit to the citizens of Utah.
(6) The board shall design and require an administrator to employ cost containment
measures and requirements including preadmission certification and concurrent inpatient review for
the purpose of making the pool more cost effective. The provisions of Sections 31A-22-617 and
31A-22-618 of this title do not apply to coverage issued under this chapter.
(7) A pool policy may contain provisions under which coverage is excluded during a
six-month period following the effective date of plan coverage as to a given individual for a
preexisting condition, as long as either of the following exists:
(a) the condition has manifested itself within a period of six months before the effective date
of coverage in such a manner as would cause an ordinary, prudent person to seek diagnosis or
treatment; or
(b) medical advice or treatment was recommended or received for the condition within a
period of six months before the effective date of coverage.
(8) A pool policy may exclude coverage for pregnancies for ten months following the
effective date of coverage.
(9) (a) The preexisting condition exclusion described in Subsection (7) shall be waived to
the extent to which similar exclusions have been satisfied under any prior health insurance coverage:
(i) which was involuntarily terminated, other than for nonpayment of premium, if the
application for pool coverage is made not later than 31 days following the involuntary termination[
or
(ii) whose premium rate exceeds the rate of the pool for equal or lesser benefits.
(b) If Subsection (9)(a) applies, coverage in the pool shall be effective from the date on
which the prior coverage was terminated.
(10) The board shall establish a policy allowing for the waiver of the preexisting condition
exclusion set forth in Subsection (7) for coverage of medically necessary outpatient medical care.
(11) Benefits available under the pool may not exceed $1,000,000 paid to or on behalf of
any person.
Section 19. Section 31A-30-107 is amended to read:
31A-30-107. Renewal -- Limitations -- Exclusions.
(1) A health benefit plan subject to this chapter is renewable with respect to all covered
individuals at the option of the covered insured except in any of the following cases:
(a) nonpayment of the required premiums;
(b) fraud or misrepresentation of the employer or, with respect to coverage of individual
insureds, the insureds or their representatives;
(c) noncompliance with the covered carrier's minimum participation requirements;
(d) noncompliance with the covered carrier's employer contribution requirements;
(e) repeated misuse of a provider network provision; or
(f) an election by the covered carrier to nonrenew all of its health benefit plans issued to
covered insureds in this state, in which case the covered carrier shall:
(i) provide advanced notice of its decision under this subsection to the commissioner in each
state in which it is licensed; and
(ii) provide notice of the decision not to renew coverage to all affected covered insureds and
to the commissioner in each state in which an affected insured individual is known to reside at least
180 days prior to the nonrenewal of any health benefit plans by the covered carrier. Notice to the
commissioner under this subsection shall be provided at least three working days prior to the notice
to the affected covered insureds.
(2) A covered carrier that elects not to renew a health benefit plan under Subsection (1)(f)
is prohibited from writing new business subject to this chapter in this state for a period of five years
from the date of notice to the commissioner.
(3) When a covered carrier is doing business subject to this chapter in one service area of
this state, Subsections (1) and (2) apply only to the covered carrier's operations in that service area.
(4) Health benefit plans covering covered insureds shall comply with the following
provisions:
(a) (i) A health benefit plan may not deny, exclude, or limit benefits for a covered individual
for losses incurred more than 12 months, or 18 months in the case of a late enrollee, as defined in
P.L. 104-191, 110 Stat. 1940, Sec. 101, following the effective date of the individual's coverage due
to a preexisting condition.
(ii) A health benefit plan may not define a preexisting condition more restrictively than:
(A) a condition for which medical advice, diagnosis, care, or treatment was recommended
or received during the six months immediately preceding the effective date of coverage; or
(B) for an individual insurance policy, a pregnancy existing on the effective date of
coverage.
(b) (i) A covered carrier shall waive any time period applicable to a preexisting condition
exclusion or limitation period with respect to particular services in a health benefit plan for the
period of time the individual was previously covered by public or private health insurance or by any
other health benefit arrangement that provided benefits with respect to such services, provided that:
(A) the previous coverage was continuous to a date not more than 62 days prior to the
effective date of the new coverage; and
(B) the insured provides notification of previous coverage to the covered carrier within 36
months of the coverage effective date if the insurer has previously requested such notification.
(ii) The period of continuous coverage under Subsection (4)(b)(i)(A) shall not include any
waiting period for the effective date of the new coverage applied by the employer or the carrier. This
subsection does not preclude application of any waiting period applicable to all new enrollees under
such plan.
Section 20. Section 31A-30-108 is amended to read:
31A-30-108. Eligibility for small employer and individual market.
(1) (a) Small employer carriers shall accept residents for small group coverage as set forth
in the Health Insurance Portability and Accountability Act, P.L. 104-191, 110 Stat. 1962, Sec.
2711(a).
(b) Individual carriers shall accept residents for individual coverage pursuant to P.L.
104-191, 110 Stat. 1979, Sec. 2741(a)-(b) and Subsection (3).
(2) (a) Small employer carriers shall offer to accept all eligible employees and their
dependents at the same level of benefits under any health benefit plan provided to a small employer.
(b) Small employer carriers may:
(i) request a small employer to submit a copy of its quarterly income tax withholdings to
determine whether the employees for whom coverage is provided or requested are bona fide
employees of the small employer; and
(ii) deny or terminate coverage if the small employer refuses to provide documentation
requested under Subsection (2)(b)(i).
(3) Except as provided in Subsection (5) and Section 31A-30-110 , individual carriers shall
accept for coverage individuals to whom all of the following conditions apply:
(a) the individual is not covered or eligible for coverage, as an employee of an employer, as
a member of an association, or as a member of any other group under:
(i) a health benefit plan; or
(ii) a self-insured arrangement that provides coverage similar to that provided by a health
benefit plan as defined in Section 31A-30-103 ;
(b) the individual is not covered and is not eligible for coverage under any public health
benefits arrangement including the Medicare program established under Title XVIII or the Medicaid
program established under Title XIX of the Social Security Act, or any other act of congress or law
of this or any other state that provides benefits comparable to the benefits provided under this part,
including coverage under the Comprehensive Health Insurance Pool Act created in Chapter 29;
(c) the individual is not covered or eligible for coverage under any Medicare supplement
policy, conversion option, continuation or extension under COBRA, or state extension unless the
maximum benefit has been reached;
(d) the individual has not terminated or declined coverage described in Subsection (a), (b),
or (c) within 93 days of application for coverage, unless the individual is eligible for individual
coverage under P.L. 104-191, 110 Stat. 1979, Sec. 2741(b), in which case, the requirement of this
Subsection (3)(d) does not apply; and
(e) the individual is certified as ineligible for the Health Insurance Pool if:
(i) the individual applies for coverage with the Comprehensive Health Insurance Pool within
30 days after being rejected or refused coverage by the covered carrier and reapplies for coverage
with that covered carrier within 30 days after the date of issuance of a certificate under Subsection
31A-29-111 (4)[
(ii) the individual applies for coverage with any individual carrier within 45 days after:
(A) notice of cancellation of coverage under Subsection 31A-29-115 (1); or
(B) the date of issuance of a certificate under Subsection 31A-29-111 (4)[
individual applied first for coverage with the Comprehensive Health Insurance Pool.
(4) (a) If coverage is obtained under Subsection (3)(e)(i) and the required premium is paid,
the effective date of coverage shall be the first day of the month following the individual's
submission of a completed insurance application to that covered carrier.
(b) If coverage is obtained under Subsection (3)(e)(ii) and the required premium is paid, the
effective date of coverage shall be the day following the:
(i) cancellation of coverage under Subsection 31A-29-115 (1); or
(ii) submission of a completed insurance application to the Comprehensive Health Insurance
Pool.
(5) (a) An individual carrier is not required to accept individuals for coverage under
Subsection (3) if the carrier issues no new individual policies in the state after July 1, 1997.
(b) A carrier described in Subsection (5)(a) may not issue new individual policies in the state
for five years from July 1, 1997.
(c) Notwithstanding Subsection (5)(b), a carrier may request permission to issue new
policies after July 1, 1999, which may only be granted if:
(i) the carrier accepts uninsurables as is required of a carrier entering the market under
Subsection 31A-30-110 ; and
(ii) the commissioner finds that the carrier's issuance of new individual policies:
(A) is in the best interests of the state; and
(B) does not provide an unfair advantage to the carrier.
Section 21. Section 34A-2-110 is amended to read:
34A-2-110. Workers' compensation insurance fraud -- Elements -- Penalties -- Notice.
(1) As used in this section:
(a) "Corporation" has the same meaning as in Subsection 76-2-201 (3).
(b) "Intentionally" has the same meaning as in Subsection 76-2-103 (1).
(c) "Knowingly" has the same meaning as in Subsection 76-2-103 (2).
(d) "Person" has the same meaning as in Subsection 76-1-601 (8).
(e) "Recklessly" has the same meaning as in Subsection 76-2-103 (3).
(2) (a) Any person is guilty of workers' compensation insurance fraud if that person
intentionally, knowingly, or recklessly:
(i) devises any scheme or artifice to obtain workers' compensation insurance coverage,
disability compensation, medical benefits, goods, professional services, fees for professional
services, or anything of value under this chapter or Chapter 3, Utah Occupational Disease Act, by
means of false or fraudulent pretenses, representations, promises, or material omissions; and
(ii) communicates or causes a communication with another in furtherance of the scheme or
artifice.
(b) Workers' compensation insurance fraud under Subsection (2)(a) is punishable in the
manner prescribed by Section 76-10-1801 for communication fraud.
(3) A corporation or association is guilty of the offense of workers' compensation insurance
fraud under the same conditions as those set forth in Section 76-2-204 .
(4) The determination of the degree of any offense under Subsection (2) shall be measured
by the total value of all property, money, or other things obtained or sought to be obtained by the
scheme or artifice described in Subsection (2), except as provided in Subsection 76-10-1801 (1)(e).
(5) Reliance on the part of any person is not a necessary element of the offense described
in Subsection (2).
(6) An intent on the part of the perpetrator of any offense described in Subsection (2) to
permanently deprive any person of property, money, or anything of value is not a necessary element
of this offense.
(7) An insurer or self-insured employer giving written notice in accordance with Subsection
(10) that workers' compensation insurance fraud is a crime is not a necessary element of the offense
described in Subsection (2).
(8) A scheme or artifice to obtain workers' compensation insurance coverage includes any
scheme or artifice to make or cause to be made any false written or oral statement or business
reorganization, incorporation, or change in ownership intended to obtain insurance coverage as
mandated by this chapter or Chapter 3, Utah Occupational Disease Act, at rates that do not reflect
the risk, industry, employer, or class codes actually covered by the policy.
(9) A scheme or artifice to obtain disability compensation includes a scheme or artifice to
collect or make a claim for temporary disability compensation as provided in Section 34A-2-410
while working for gain.
(10) (a) Each insurer or self-insured employer who, in connection with this chapter or
Chapter 3, Utah Occupational Disease Act, prints, reproduces, or furnishes a form to any person
upon which that person applies for insurance coverage, reports payroll, makes a claim by reason of
accident, injury, death, disease, or other claimed loss, or otherwise reports or gives notice to the
insurer or self-insured employer, shall cause to be printed or displayed in comparative prominence
with other content the statement: "Any person who knowingly presents false or fraudulent
underwriting information, files or causes to be filed a false or fraudulent claim for disability
compensation or medical benefits, or submits a false or fraudulent report or billing for health care
fees or other professional services is guilty of a crime and may be subject to fines and confinement
in state prison."
(b) Each insurer or self-insured employer who issues a check, warrant, or other financial
instrument in payment of compensation issued under this chapter or Chapter 3, Utah Occupational
Disease Act, shall cause to be printed or displayed in comparative prominence above the area for
endorsement [
insurance fraud is a crime punishable by Utah law."
(c) (i) [
an insurer or a self-insured employer.
(ii) A person who violates Subsection (2) is guilty of workers' compensation insurance
fraud, and the failure of an insurer or a self-insured employer to fully comply with [
(A) a defense to violating Subsection (2); or
(B) grounds for suppressing evidence.
(11) In the absence of malice, a person, employer, insurer, or governmental entity that
reports a suspected fraudulent act relating to a workers' compensation insurance policy or claim is
not subject to any civil liability for libel, slander, or any other relevant cause of action.
(12) In any action involving workers' compensation, this section supersedes Title 31A,
Chapter 31, Insurance Fraud Act.
Section 22. Repealer.
This act repeals:
Section 31A-22-706, Basic hospital or medical-surgical coverage conversion options.
Section 31A-22-707, Conversion of major medical coverage.
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