S.B. 124

1

TIMELY PAYMENTS OF INSURANCE CLAIMS
2 2002 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: John L. Valentine
5 This act modifies the Insurance Code to address the scope of claims that are subject to
6 requirements for timely payments and to make technical changes.
7 This act affects sections of Utah Code Annotated 1953 as follows:
8 AMENDS:
9 31A-26-301, as last amended by Chapter 121, Laws of Utah 2001
10 Be it enacted by the Legislature of the state of Utah:
11 Section 1. Section 31A-26-301 is amended to read:
12 31A-26-301. Timely payment of claims.
13 (1) (a) Unless otherwise provided by law, an insurer shall timely pay every valid insurance
14 claim made by an insured.
15 (b) By rule the commissioner may prescribe:
16 (i) the kinds of notice and proof of loss that will establish validity[,];
17 (ii) the manner in which an insurer may make a bona fide denial of a claim[,];
18 (iii) the periods of time within which payment is required to be made to be timely[,]; and
19 (iv) the reasonable interest rates to be charged upon late claim payments.
20 (2) (a) Notwithstanding Subsection (1) and subject to Subsection (2)(b), the payment of
21 a claim is not overdue during any period in which:
22 (i) the insurer is unable to pay the claim because there is no recipient legally able to give
23 a valid release for the payment[,]; or [in which]
24 (ii) the insurer is unable to determine who is entitled to receive the payment[, provided that
25 has].
26 (b) Subsection (2)(a) applies only if the insurer:
27 (i) promptly [notified] notifies the claimant of the inability to pay the claim; and [has

Text Box
- 2 -

Senate Committee Amendments 1-30-2002 rd/po 28

offered]
29 (ii) offers in good faith to pay the claim promptly when the inability to pay the claim is
30 removed.
31 (3) This section applies only to [claims] a claim S [ :
32 (a) ] s for first party benefits made by[: (a)] a person who is:
33 S [ (i )] (a) s named or defined as an insured under the terms of an insurance policy; S [ or ] s
33a [(b) a person
34 who is]
35 S [ (ii )] (b) s described as a covered person under the terms of a policy of health care insurance
36 [policy] as defined in Section 31A-1-301 [.]; or
37 S [ (b) made under :] (c) NAMED, DEFINED, OR DESCRIBED:
37a (i) AS:
37b (A) AN INSURED;
37c (B) A BENEFICIARY;
37d (C) A POLICYHOLDER; OR
37e (D) OTHERWISE COVERED PERSON; AND
37f (ii) UNDER THE TERMS OF: s
38 S [ (i) ] (A) s a life insurance policy; or
39 S [ (ii) ] (B) s an annuity.

Legislative Review Note
as of 1-17-02 12:30 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel