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[Introduced][Amended][Status][Bill Documents][Fiscal Note][Bills Directory]
S.B. 122 Enrolled
This act modifies the Insurance Code by amending definitions, making technical changes,
and making the following changes. This act addresses the scope of the title. The act
addresses examination reports. The act addresses fees. The act addresses waiver of
retaliatory requirements. The act addresses withdrawal from a line of insurance. The act
addresses selection and removal of directors and officers of mutual insurers. This act
addresses health maintenance organizations. This act addresses the requirements for certain
insurers for minimum capital, deposits, and permanent surplus. This act addresses
cancellation, termination, nonrenewal, or changes in certain insurance coverage. This act
addresses reporting requirements for point of service or point of sales products. The act
addresses computation for minimum standards for annuities. This act addresses the scope
of the Utah Rate Regulation Act. This act addresses what constitutes an insurable interest.
This act addresses when information can be incorporated by reference. The act addresses
requirements for certificates of group insurance policies. The act addresses provisions
related to the regulation of life insurance, annuities, health insurance, and accident and
health insurance. This act addresses insurance marketing and licensing, including
requirements for title insurance, escrows, and title insurance agents. This act addresses the
regulation of third party administrators and insurance adjustors. This act addresses
rehabilitation and liquidation of insurers. This act modifies requirements for the account
maintained by the Utah Property and Casualty Health Insurance Guaranty Association.
This act addresses the Individual and Small Employer Health Insurance Act. This act
provides an effective date.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
31A-1-103, as last amended by Chapter 116, Laws of Utah 2001
31A-1-301, as last amended by Chapter 116, Laws of Utah 2001
31A-2-204, as last amended by Chapter 316, Laws of Utah 1994
31A-2-215, as enacted by Chapter 143, Laws of Utah 1999
31A-2-216, as enacted by Chapter 143, Laws of Utah 1999
31A-3-103, as last amended by Chapter 329, Laws of Utah 1998
31A-3-401, as last amended by Chapter 131, Laws of Utah 1999
31A-4-107, as last amended by Chapter 204, Laws of Utah 1986
31A-4-115, as last amended by Chapter 114, Laws of Utah 2000
31A-4-116, as last amended by Chapter 162, Laws of Utah 2000
31A-5-405, as last amended by Chapter 300, Laws of Utah 2000
31A-5-409, as last amended by Chapter 300, Laws of Utah 2000
31A-5-410, as last amended by Chapter 300, Laws of Utah 2000
31A-8-101, as last amended by Chapter 116, Laws of Utah 2001
31A-8-103, as last amended by Chapter 116, Laws of Utah 2001
31A-8-205, as enacted by Chapter 204, Laws of Utah 1986
31A-8-209, as last amended by Chapter 116, Laws of Utah 2001
31A-8-211, as last amended by Chapter 116, Laws of Utah 2001
31A-8-401, as last amended by Chapter 143, Laws of Utah 1999
31A-8-407, as last amended by Chapter 116, Laws of Utah 2001
31A-8-408, as last amended by Chapter 116, Laws of Utah 2001
31A-17-505, as last amended by Chapter 116, Laws of Utah 2001
31A-17-506, as last amended by Chapter 20, Laws of Utah 1995
31A-19a-101, as last amended by Chapter 116, Laws of Utah 2001
31A-19a-209, as renumbered and amended by Chapter 130, Laws of Utah 1999
31A-21-104, as last amended by Chapter 116, Laws of Utah 2001
31A-21-106, as last amended by Chapter 114, Laws of Utah 2000
31A-21-311, as enacted by Chapter 242, Laws of Utah 1985
31A-22-400, as enacted by Chapter 242, Laws of Utah 1985
31A-22-402, as last amended by Chapter 114, Laws of Utah 2000
31A-22-403, as last amended by Chapter 116, Laws of Utah 2001
31A-22-404, as last amended by Chapter 116, Laws of Utah 2001
31A-22-405, as enacted by Chapter 242, Laws of Utah 1985
31A-22-409, as last amended by Chapter 204, Laws of Utah 1986
31A-22-522, as enacted by Chapter 116, Laws of Utah 2001
31A-22-602, as last amended by Chapter 116, Laws of Utah 2001
31A-22-617, as last amended by Chapter 116, Laws of Utah 2001
31A-22-624, as last amended by Chapter 116, Laws of Utah 2001
31A-22-625, as last amended by Chapter 9, Laws of Utah 2001
31A-22-629, as enacted by Chapter 162, Laws of Utah 2000
31A-22-703, as last amended by Chapter 116, Laws of Utah 2001
31A-22-705, as last amended by Chapter 116, Laws of Utah 2001
31A-22-708, as repealed and reenacted by Chapter 329, Laws of Utah 1998
31A-22-714, as last amended by Chapter 329, Laws of Utah 1998
31A-23-102, as last amended by Chapters 9 and 116, Laws of Utah 2001
31A-23-204, as last amended by Chapter 116, Laws of Utah 2001
31A-23-206, as last amended by Chapter 116, Laws of Utah 2001
31A-23-211, as last amended by Chapter 9, Laws of Utah 1996, Second Special Session
31A-23-216, as last amended by Chapter 116, Laws of Utah 2001
31A-23-302, as last amended by Chapter 116, Laws of Utah 2001
31A-23-307, as last amended by Chapter 116, Laws of Utah 2001
31A-23-308, as enacted by Chapter 242, Laws of Utah 1985
31A-23-503, as last amended by Chapter 116, Laws of Utah 2001
31A-23-601, as last amended by Chapter 116, Laws of Utah 2001
31A-25-205, as last amended by Chapter 116, Laws of Utah 2001
31A-26-202 (Effective 07/01/02), as last amended by Chapter 8, Laws of Utah 2001, First
Special Session
31A-26-202 (Superseded 07/01/02), as last amended by Chapter 116, Laws of Utah 2001
31A-26-206, as last amended by Chapter 116, Laws of Utah 2001
31A-26-213, as last amended by Chapter 116, Laws of Utah 2001
31A-26-301.6, as enacted by Chapter 240, Laws of Utah 2001
31A-27-102, as last amended by Chapter 131, Laws of Utah 1999
31A-27-103, as enacted by Chapter 242, Laws of Utah 1985
31A-27-305, as last amended by Chapter 204, Laws of Utah 1986
31A-27-311.5, as repealed and reenacted by Chapter 116, Laws of Utah 2001
31A-27-315, as last amended by Chapter 375, Laws of Utah 1997
31A-27-317, as enacted by Chapter 242, Laws of Utah 1985
31A-27-332, as last amended by Chapter 131, Laws of Utah 1999
31A-27-337, as last amended by Chapter 204, Laws of Utah 1986
31A-27-340, as enacted by Chapter 242, Laws of Utah 1985
31A-27-341, as enacted by Chapter 242, Laws of Utah 1985
31A-28-203, as last amended by Chapter 363, Laws of Utah 2001
31A-28-205, as last amended by Chapter 363, Laws of Utah 2001
31A-28-207, as last amended by Chapter 363, Laws of Utah 2001
31A-28-208, as last amended by Chapter 363, Laws of Utah 2001
31A-28-222, as enacted by Chapter 363, Laws of Utah 2001
31A-29-113, as last amended by Chapter 329, Laws of Utah 1998
31A-30-101, as last amended by Chapter 321, Laws of Utah 1995
31A-30-103, as last amended by Chapter 116, Laws of Utah 2001
31A-30-104, as last amended by Chapter 116, Laws of Utah 2001
31A-30-106, as last amended by Chapter 116, Laws of Utah 2001
31A-30-106.7, as enacted by Chapter 265, Laws of Utah 1997
31A-30-107, as last amended by Chapter 116, Laws of Utah 2001
31A-30-108, as last amended by Chapter 329, Laws of Utah 1998
31A-30-110, as last amended by Chapter 53, Laws of Utah 2001
31A-30-111, as enacted by Chapter 321, Laws of Utah 1995
59-9-105, as last amended by Chapter 131, Laws of Utah 1999
63-55-231, as last amended by Chapter 116, Laws of Utah 2001
ENACTS:
31A-3-104, Utah Code Annotated 1953
31A-8-402.3, Utah Code Annotated 1953
31A-8-402.5, Utah Code Annotated 1953
31A-8-402.7, Utah Code Annotated 1953
31A-22-721, Utah Code Annotated 1953
31A-30-107.1, Utah Code Annotated 1953
31A-30-107.3, Utah Code Annotated 1953
31A-30-107.5, Utah Code Annotated 1953
31A-30-114, Utah Code Annotated 1953
REPEALS:
31A-8-402, as last amended by Chapter 116, Laws of Utah 2001
31A-15-206, as enacted by Chapter 258, Laws of Utah 1992
31A-22-720, as last amended by Chapter 116, Laws of Utah 2001
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 31A-1-103 is amended to read:
31A-1-103. Scope and applicability of title.
(1) This title does not apply to:
(a) a retainer [
(i) with an individual [
(ii) under which fees are based on estimates of the nature and amount of services to be
provided to the specific client[
(b) a contract similar to a contract described in Subsection (1)(a) made with a group of
clients involved in the same or closely related legal matters;
[
amount of consultations, advice on simple legal matters, either alone or in combination with referral
services, or the promise of fee discounts for handling other legal matters;
[
contractual obligation nor reasonable expectations, in the context of an employment, membership,
educational, or similar relationship; or
[
employment.
(2) (a) This title restricts otherwise legitimate business activity.
(b) What this title does not prohibit is permitted unless contrary to other provisions of Utah
law.
(3) Except as otherwise expressly provided, this title does not apply to:
(a) those activities of an insurer where state jurisdiction is preempted by Section 514 of the
federal Employee Retirement Income Security Act of 1974, as amended;
(b) ocean marine insurance;
(c) death and accident and health benefits provided by an organization [
organization:
(i) has as its principal purpose [
objectives rather than to provide death and accident and health benefits[
(ii) does not incur a legal obligation to pay a specified amount; and
(iii) does not create reasonable expectations of receiving a specified amount on the part of
an insured person;
(d) other business specified in rules adopted by the commissioner on a finding that:
(i) the transaction of [
protection of the interests of the residents of this state; or [
(ii) it would be impracticable to require compliance with this title;
(e) [
procured through negotiations under Section 31A-15-104 ;
[
(f) self-insurance;
(g) reinsurance;
(h) subject to Subsection [
covering risks in this state if:
(i) the policyholder exists primarily for purposes other than to procure insurance;
(ii) the policyholder:
(A) is not a resident of this state [
(B) is not a domestic corporation; or
(C) does not have its principal office in this state;
(iii) no more than 25% of the certificate holders or insureds are residents of this state;
(iv) on request of the commissioner, the insurer files with the department a copy of the
policy and a copy of each form or certificate; and
(v) (A) the insurer agrees to pay premium taxes on the Utah portion of its business, as if it
were authorized to do business in this state[
(B) the insurer provides the commissioner with the security the commissioner considers
necessary for the payment of premium taxes under Title 59, Chapter 9, Taxation of Admitted
Insurers; or
(i) to the extent provided in Subsection [
(i) a manufacturer's or seller's warranty; and
(ii) a manufacturer's or seller's service contract.
(4) A transaction described in Subsection (3)(e) is subject to taxation under Section
31A-3-301 .
[
blanket contracts to transfer the Utah portion of the business otherwise exempted under Subsection
(3)(h) to an authorized insurer if the contracts have been written by an unauthorized insurer.
(b) If the commissioner finds that the conditions required for the exemption of a group or
blanket insurer are not satisfied or that adequate protection to residents of this state is not provided,
the commissioner may require:
(i) the insurer to be authorized to do business in this state; or
(ii) that any of the insurer's transactions be subject to this title.
[
(i) "manufacturer's or seller's service contract" means a service contract:
(A) made available by:
(I) a manufacturer of a product[
(II) a seller of a product; or
(III) an affiliate of a manufacturer or seller of a product;
(B) made available:
(I) on one or more specific [
(II) on products that are components of a system; and
[
liable for services to be provided under the service contract including, if the manufacturer's or seller's
service contract designates, providing parts and labor;
(ii) "manufacturer's or seller's warranty" means the guaranty of:
(A) (I) the manufacturer of a product[
(II) a seller of a product; or
(III) an affiliate of a manufacturer or seller of a product;
[
(II) on products that are components of a system; and
[
liable for services to be provided under the warranty, including, if the manufacturer's or seller's
warranty designates, providing parts and labor; and
(iii) "service contract" is as defined in Section 31A-6a-101 .
(b) A manufacturer's or seller's warranty may be designated as:
(i) a warranty;
(ii) a guaranty; or
(iii) a term similar to a term described in Subsection [
(c) This title does not apply to:
(i) a manufacturer's or seller's warranty;
(ii) a manufacturer's or seller's service contract paid for with consideration that is in addition
to the consideration paid for the product itself; and
(iii) a service contract that is not a manufacturer's or seller's warranty or manufacturer's or
seller's service contract if:
(A) the service contract is paid for with consideration that is in addition to the consideration
paid for the product itself; [
(B) the service contract is for the repair or maintenance of goods;
(C) the cost of the product is equal to an amount determined in accordance with Subsection
[
(D) the product is not a motor vehicle.
(d) This title does not apply to a manufacturer's or seller's warranty or service contract paid
for with consideration that is in addition to the consideration paid for [
regardless of whether the manufacturer's or seller's warranty or service contract is sold:
(i) at the time of the purchase of the product; or
(ii) at a time other than the time of the purchase of the product.
(e) (i) For fiscal year 2001-02, the amount described in Subsection [
be equal to $3,700 or less.
(ii) For each fiscal year after fiscal year 2001-02, the commissioner shall annually determine
whether the amount described in Subsection [
with changes in the Consumer Price Index published by the United States Bureau of Labor Statistics
selected by the commissioner by rule, between:
(A) the Consumer Price Index for the February immediately preceding the adjustment; and
(B) the Consumer Price Index for February 2001.
(iii) If under Subsection [
should be made, the commissioner shall make the adjustment by rule.
Section 2. Section 31A-1-301 is amended to read:
31A-1-301. Definitions.
As used in this title, unless otherwise specified:
(1) (a) "Accident and health insurance" means insurance to provide protection against
economic losses resulting from:
(i) a medical condition including:
(A) medical care expenses; or
(B) the risk of disability;
(ii) accident; or
(iii) sickness.
(b) "Accident and health insurance":
(i) includes a contract with disability contingencies including:
(A) an income replacement contract;
(B) a health care contract;
(C) an expense reimbursement contract;
(D) a credit accident and health contract;
(E) a continuing care contract; and
(F) long-term care contracts; and
(ii) may provide:
(A) hospital coverage;
(B) surgical coverage;
(C) medical coverage; or
(D) loss of income coverage.
(c) "Accident and health insurance" does not include workers' compensation insurance.
(2) "Administrator" is defined in Subsection [
(3) "Adult" means a natural person who has attained the age of at least 18 years.
(4) "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.
(5) "Alien insurer" means an insurer domiciled outside the United States.
(6) "Amendment" means an endorsement to an insurance policy or certificate.
(7) "Annuity" means an agreement 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.
(8) "Application" means a document:
(a) completed by an applicant to provide information about the risk to be insured; and
(b) that contains information that is used by the insurer to:
(i) evaluate risk; and
(ii) decide whether to:
(A) insure the risk under:
(I) the coverages as originally offered; or
(II) a modification of the coverage as originally offered; or
(B) decline to insure the risk.
(9) "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.
(10) "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.
(11) "Binder" is defined in Section 31A-21-102 .
(12) "Board," "board of trustees," or "board of directors" means the group of persons with
responsibility over, or management of, a corporation, however designated.
(13) "Business of insurance" is defined in Subsection [
(14) "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:
(a) Section 31A-7-201 ;
(b) Section 31A-8-205 ; or
(c) Subsection 31A-9-205 (2).
(15) "Bylaws" means the rules adopted for the regulation or management of a corporation's
affairs, however designated and includes comparable rules for trusts and other entities that are not
corporations.
(16) "Casualty insurance" means liability insurance as defined in Subsection [
(17) "Certificate" means evidence of insurance given to:
(a) an insured under a group insurance policy; or
(b) a third party.
(18) "Certificate of authority" is included within the term "license."
(19) "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.
(20) "Claims-made coverage" means an 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.
(21) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
commissioner.
(b) When appropriate, the terms listed in Subsection (21)(a) apply to the equivalent
supervisory official of another jurisdiction.
(22) (a) "Continuing care insurance" means insurance that:
(i) provides board and lodging;
(ii) provides one or more of the following services:
(A) personal services;
(B) nursing services;
(C) medical services; or
(D) other health-related services; and
(iii) provides the coverage described in Subsection (22)(a)(i) under an agreement effective:
(A) for the life of the insured; or
(B) for a period in excess of one year.
(b) Insurance is continuing care insurance regardless of whether or not the board and lodging
are provided at the same location as the services described in Subsection (22)(a)(ii).
(23) (a) "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:
(i) by contract;
(ii) by common management;
(iii) through the ownership of voting securities; or
(iv) by a means other than those described in Subsections (23)(a)(i) through (iii).
(b) There is no presumption that an individual holding an official position with another
person controls that person solely by reason of the position.
(c) A person having a contract or arrangement giving control is considered to have control
despite the illegality or invalidity of the contract or arrangement.
(d) 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.
(24) (a) "Corporation" means insurance corporation, except when referring to:
(i) a corporation doing business as an insurance broker, consultant, or adjuster under:
(A) Chapter 23, Insurance Marketing - Licensing Agents, Brokers, Consultants, and
Reinsurance Intermediaries; and
(B) Chapter 26, Insurance Adjusters; or
(ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
Holding Companies.
(b) "Stock corporation" means stock insurance corporation.
(c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
(25) "Credit accident and health 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.
(26) "Credit insurance" means surety insurance under which mortgagees and other creditors
are indemnified against losses caused by the default of debtors.
(27) "Credit life insurance" means insurance on the life of a debtor in connection with a loan
or other credit transaction.
(28) "Creditor" means a person, including an insured, having any claim, whether:
(a) matured;
(b) unmatured;
(c) liquidated;
(d) unliquidated;
(e) secured;
(f) unsecured;
(g) absolute;
(h) fixed; or
(i) contingent.
(29) (a) "Customer service representative" means a person that provides insurance services
and insurance product information:
(i) for its agent, broker, or consultant employer; and
(ii) to its employer's customer, client, or organization.
(b) A customer service representative may only operate within the scope of authority of its
agent, broker, or consultant employer.
(30) "Deadline" means the final date or time:
(a) imposed by:
(i) statute;
(ii) rule; or
(iii) order; and
(b) by which a required filing or payment must be received by the department.
(31) "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.
(32) "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.
(33) "Department" means the Insurance Department.
(34) "Director" means a member of the board of directors of a corporation.
(35) "Disability" means a physiological or psychological condition that partially or totally
limits an individual's ability to:
(a) perform the duties of:
(i) that individual's occupation; or
(ii) any occupation for which the individual is reasonably suited by education, training, or
experience; or
(b) perform two or more of the following basic activities of daily living:
(i) eating;
(ii) toileting;
(iii) transferring;
(iv) bathing; or
(v) dressing.
(36) "Domestic insurer" means an insurer organized under the laws of this state.
(37) "Domiciliary state" means the state in which an insurer:
(a) is incorporated;
(b) is organized; or
(c) in the case of an alien insurer, enters into the United States.
(38) (a) "Eligible employee" means:
(i) an employee who:
(A) works on a full-time basis; and
(B) has a normal work week of 30 or more hours; or
(ii) a person described in Subsection (38)(b).
(b) "Eligible employee" includes, if the individual is included under a health benefit plan of
a small employer:
(i) a sole proprietor;
(ii) a partner in a partnership; or
(iii) an independent contractor.
(c) "Eligible employee" does not include, unless eligible under Subsection (38)(b):
(i) an individual who works on a temporary or substitute basis for a small employer;
(ii) an employer's spouse; or
(iii) a dependent of an employer.
(39) "Employee" means any individual employed by an employer.
[
(a) employees; or [
(b) dependents of employees.
[
(i) established or maintained, whether directly or through trustees, by:
(A) one or more employers;
(B) one or more labor organizations; or
(C) a combination of employers and labor organizations; and
(ii) that provides 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.
(b) "Employee welfare fund" includes a plan funded or subsidized by user fees or tax
revenues.
[
modify one or more of the provisions of the policy or certificate.
[
excluded. The items listed are representative examples for use in interpretation of this title.
[
(a) written to provide payments for expenses relating to hospital confinements resulting from
illness or injury; and
(b) written:
(i) as a daily limit for a specific number of days in a hospital; and
(ii) to have a one or two day waiting period following a hospitalization.
[
positions of public or private trust.
[
(i) submitted to the department in accordance with any applicable statute, rule, or filing
order;
(ii) received by the department within the time period provided in the applicable statute, rule,
or filing order; and
(iii) accompanied with the applicable one or more filing fees required by:
(A) Section 31A-3-103 ; or
(B) rule.
(b) "Filed" does not include a filing that is rejected by the department because it is not
submitted in accordance with Subsection [
[
department including:
(a) a policy;
(b) a rate;
(c) a form;
(d) a document;
(e) a plan;
(f) a manual;
(g) an application;
(h) a report;
(i) a certificate;
(j) an endorsement;
(k) an actuarial certification;
(l) a licensee annual statement;
(m) a licensee renewal application; or
(n) an advertisement.
[
agrees to pay claims submitted to it by the insured for the insured's losses.
[
alien insurer.
[
prepared for general use[
(i) a policy;
(ii) a certificate;
(iii) an application; or
(iv) an outline of coverage.
(b) "Form" does not include a document specially prepared for use in an individual case.
[
mass marketing arrangement involving a defined class of persons related in some way other than
through the purchase of insurance.
(52) "Group health plan" means an employee welfare benefit plan to the extent that the plan
provides medical care:
(a) (i) to employees; or
(ii) to a dependent of an employee; and
(b) (i) directly;
(ii) through insurance reimbursement; or
(iii) through any other method.
(53) "Health benefit plan" means a policy or certificate for health care insurance, except that
health benefit plan does not include coverage:
(a) solely for:
(i) accident;
(ii) dental;
(iii) vision;
(iv) Medicare supplement;
(v) long-term care; or
(vi) income replacement; or
(b) that is:
(i) offered and marketed as supplemental health insurance;
(ii) not offered or marketed as a substitute for:
(A) hospital or medical expense insurance; or
(B) major medical expense insurance; and
(iii) solely for:
(A) a specified disease;
(B) hospital confinement indemnity; or
(C) limited benefit plan.
[
treatment, mitigation, or prevention of a human ailment or impairment:
(a) professional services;
(b) personal services;
(c) facilities;
(d) equipment;
(e) devices;
(f) supplies; or
(g) medicine.
[
(i) health care benefits; or
(ii) payment of incurred health care expenses.
(b) "Health care insurance" or "health insurance" does not include accident and health
insurance providing benefits for:
(i) replacement of income;
(ii) short-term accident;
(iii) fixed indemnity;
(iv) credit accident and health;
(v) supplements to liability;
(vi) workers' compensation;
(vii) automobile medical payment;
(viii) no-fault automobile;
(ix) equivalent self-insurance; or
(x) any type of accident and health insurance coverage that is a part of or attached to another
type of policy.
[
insurance written to provide payments to replace income lost from accident or sickness.
[
loss.
[
Section 31A-26-201 who engages in insurance adjusting as a representative of insurers.
[
31A-15-104 .
[
[
(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.
[
(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 (8)(c); or
(c) an insurer is determined to be hazardous under this title.
[
(i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
persons to one or more other persons; or
(ii) an arrangement, contract, or plan for the distribution of a risk or risks among a group of
persons that includes the person seeking to distribute that person's risk.
(b) "Insurance" includes:
(i) risk distributing arrangements providing for compensation or replacement for damages
or loss through the provision of services or benefits in kind;
(ii) 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
(iii) 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.
[
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.
[
[
means a person who represents insurers in soliciting, negotiating, or placing insurance.
[
"broker" means a person who:
(a) acts in procuring insurance on behalf of an applicant for insurance or an insured; and
(b) does not act on behalf of the insurer except by collecting premiums or performing other
ministerial acts.
[
(a) providing health care insurance, as defined in Subsection [
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:
(i) by single employers or by multiple employer groups; or
(ii) 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 [
(e) providing other persons with insurance as defined in Subsection [
(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 [
(68)(a) through (g) in a manner designed to evade the provisions of this title.
[
"consultant" means a person who:
(a) advises other persons about insurance needs and coverages;
(b) is compensated by the person advised on a basis not directly related to the insurance
placed; and
(c) is not compensated directly or indirectly by an insurer, agent, or broker for advice given.
[
persons, at least one of whom is an insurer.
[
promise in an insurance policy and includes:
(i) policyholders;
(ii) subscribers;
(iii) members; and
(iv) beneficiaries.
(b) The definition in Subsection [
(i) applies only to this title; and
(ii) does not define the meaning of this word as used in insurance policies or certificates.
[
including:
(A) fraternal benefit societies;
(B) issuers of gift annuities other than those specified in Subsections 31A-22-1305 (2) and
(3);
(C) motor clubs;
(D) employee welfare plans; and
(E) any person purporting or intending to do an insurance business as a principal on that
person's own account.
(ii) "Insurer" does not include a governmental entity, as defined in Section 63-30-2 , to the
extent it is engaged in the activities described in Section 31A-12-107 .
(b) "Admitted insurer" is defined in Subsection [
(c) "Alien insurer" is defined in Subsection (5).
(d) "Authorized insurer" is defined in Subsection [
(e) "Domestic insurer" is defined in Subsection (36).
(f) "Foreign insurer" is defined in Subsection [
(g) "Nonadmitted insurer" is defined in Subsection [
(h) "Unauthorized insurer" is defined in Subsection [
(73) "Large employer," in connection with a health benefit plan, means an employer who,
with respect to a calendar year and to a plan year:
(a) employed an average of at least 51 eligible employees on each business day during the
preceding calendar year; and
(b) employs at least two employees on the first day of the plan year.
[
Section 31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for
specified legal expenses.
(b) "Legal expense insurance" includes arrangements that create reasonable expectations of
enforceable rights[
(c) "Legal expense insurance" does not include the provision of, or reimbursement for, legal
services incidental to other insurance coverages.
[
(i) for death, injury, or disability of any human being, or for damage to property, exclusive
of the coverages under:
(A) Subsection [
(B) Subsection [
(C) Subsection [
(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:
(A) Subsection [
(B) Subsection [
(C) Subsection [
(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:
(i) vehicle liability insurance as defined in Subsection [
(ii) residential dwelling liability insurance as defined in Subsection [
(iii) 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.
[
under this title to engage in some activity that is part of or related to the insurance business. [
(b) "License" includes certificates of authority issued to insurers.
[
to or connected with human life.
(b) The business of life insurance includes:
(i) granting death benefits;
(ii) granting annuity benefits;
(iii) granting endowment benefits;
(iv) granting additional benefits in the event of death by accident;
(v) granting additional benefits to safeguard the policy against lapse in the event of
disability; and
(vi) providing optional methods of settlement of proceeds.
[
marketed, offered, or designated to provide coverage:
(i) in a setting other than an acute care unit of a hospital;
(ii) for not less than 12 consecutive months for each covered person on the basis of:
(A) expenses incurred;
(B) indemnity;
(C) prepayment; or
(D) another method;
(iii) for one or more necessary or medically necessary services that are:
(A) diagnostic;
(B) preventative;
(C) therapeutic;
(D) rehabilitative;
(E) maintenance; or
(F) personal care; and
(iv) that may be issued by:
(A) an insurer;
(B) a fraternal benefit society;
(C) (I) a nonprofit health hospital; and
(II) a medical service corporation;
(D) a prepaid health plan;
(E) a health maintenance organization; or
(F) an entity similar to the entities described in Subsections [
to the extent that the entity is otherwise authorized to issue life or health care insurance.
(b) "Long-term care insurance" includes:
(i) any of the following that provide directly or supplement long-term care insurance:
(A) a group or individual annuity or rider; or
(B) a life insurance policy or rider;
(ii) a policy or rider that provides for payment of benefits based on:
(A) cognitive impairment; or
(B) functional capacity; or
(iii) a qualified long-term care insurance contract.
(c) "Long-term care insurance" does not include:
(i) a policy that is offered primarily to provide basic Medicare supplement coverage;
(ii) basic hospital expense coverage;
(iii) basic medical/surgical expense coverage;
(iv) hospital confinement indemnity coverage;
(v) major medical expense coverage;
(vi) income replacement or related asset-protection coverage;
(vii) accident only coverage;
(viii) coverage for a specified:
(A) disease; or
(B) accident;
(ix) limited benefit health coverage; or
(x) a life insurance policy that accelerates the death benefit to provide the option of a lump
sum payment:
(A) if [
of long-term care:
(I) benefits; or
(II) eligibility; and
(B) the coverage is for one or more the following qualifying events:
(I) terminal illness;
(II) medical conditions requiring extraordinary medical intervention; or
(III) permanent institutional confinement.
[
to the practice and provision of medical services other than the practice and provision of dental
services.
[
[
be constantly maintained by a stock insurance corporation as required by statute.
[
(a) licensed under:
(i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
(ii) Chapter 11, Motor Clubs; or
(iii) Chapter 14, Foreign Insurers; and
(b) that promises for an advance consideration to provide for a stated period of time:
(i) legal services under Subsection 31A-11-102 (1)(b);
(ii) bail services under Subsection 31A-11-102 (1)(c); or
(iii) 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).
[
(84) "Network plan" means health care insurance:
(a) that is issued by an insurer; and
(b) under which the financing and delivery of medical care is provided, in whole or in part,
through a defined set of providers under contract with the insurer, including the financing and
delivery of items paid for as medical care.
[
entitled to receive dividends representing shares of the surplus of the insurer.
[
(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.
[
[
insurance policy.
[
receive dividends representing shares of the surplus of the insurer.
(90) "Participation," as used in a health benefit plan, means a requirement relating to the
minimum percentage of eligible employees that must be enrolled in relation to the total number of
eligible employees of an employer reduced by each eligible employee who voluntarily declines
coverage under the plan because the employee has other health care insurance coverage.
[
unincorporated association, joint stock company, trust, reciprocal, syndicate, or any similar entity
or combination of entities acting in concert.
(92) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
(93) "Plan year" means:
(a) the year that is designated as the plan year in:
(i) the plan document of a group health plan; or
(ii) a summary plan description of a group health plan;
(b) if the plan document or summary plan description does not designate a plan year or there
is no plan document or summary plan description:
(i) the year used to determine deductibles or limits;
(ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis; or
(iii) the employer's taxable year if:
(A) the plan does not impose deductibles or limits on a yearly basis; and
(B) (I) the plan is not insured; or
(II) the insurance policy is not renewed on an annual basis; or
(c) in a case not described in Subsection (93)(a) or (b), the calendar year.
[
purporting to be an enforceable contract, which memorializes in writing some or all of the terms of
an insurance contract.
(ii) "Policy" includes a service contract issued by:
(A) a motor club under Chapter 11, Motor Clubs;
(B) a service contract provided under Chapter 6a, Service Contracts; and
(C) a corporation licensed under:
(I) Chapter 7, Nonprofit Health Service Insurance Corporations; or
(II) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
(iii) "Policy" does not include:
(A) a certificate under a group insurance contract; or
(B) a document that does not purport to have legal effect.
(b) (i) "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. [
(ii) A group insurance policy may 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.
[
by ownership, premium payment, or otherwise.
[
nonguaranteed elements of a policy of life insurance over a period of years.
[
policy.
(98) "Preexisting condition," in connection with a health benefit plan, means:
(a) a condition for which medical advice, diagnosis, care, or treatment was recommended
or received during the six months immediately preceding the earlier of:
(i) the enrollment date; or
(ii) the effective date of coverage; or
(b) for an individual insurance policy, a pregnancy existing on the effective date of coverage.
[
includes assessments, membership fees, required contributions, or monetary consideration, however
designated.
(b) 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."
[
Subsection 31A-5-203 (3).
[
[
to the practice of a profession and provision of any professional services.
[
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 [
[
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.
(b) 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.
[
long-term care insurance contract" means:
(a) an individual or group insurance contract that meets the requirements of Section
7702B(b), Internal Revenue Code; or
(b) the portion of a life insurance contract that provides long-term care insurance:
(i) (A) by rider; or
(B) as a part of the contract; and
(ii) that satisfies the requirements of Section 7702B(b) and (e), Internal Revenue Code.
[
(i) the cost of a given unit of insurance; or
(ii) for property-casualty insurance, that cost of insurance per exposure unit either expressed
as:
(A) a single number; or
(B) a pure premium rate, adjusted before any application of individual risk variations based
on loss or expense considerations to account for the treatment of:
(I) expenses;
(II) profit; and
(III) individual insurer variation in loss experience.
(b) "Rate" does not include a minimum premium.
[
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.
(b) "Rate service organization" does not mean:
(i) an employee of an insurer;
(ii) a single insurer or group of insurers under common control;
(iii) a joint underwriting group; or
(iv) a natural person serving as an actuarial or legal consultant.
[
renewal policy premiums:
(a) a manual of rates;
(b) classifications;
(c) rate-related underwriting rules; and
(d) rating formulas that describe steps, policies, and procedures for determining initial and
renewal policy premiums.
[
(a) except as provided in Subsection [
received by the department, whether delivered:
(i) in person;
(ii) by a delivery service; or
(iii) electronically; and
(b) if an item with a department imposed deadline is delivered to the department by a
delivery service, the delivery service's postmark date or pick-up date unless otherwise stated in:
(i) statute;
(ii) rule; or
(iii) a specific filing order.
[
association of persons:
(a) operating through an attorney-in-fact common to all of them; and
(b) exchanging insurance contracts with one another that provide insurance coverage on each
other.
[
consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
reinsurance transactions, this title sometimes refers to:
(a) the insurer transferring the risk as the "ceding insurer"; and
(b) the insurer assuming the risk as the:
(i) "assuming insurer"; or
(ii) "assuming reinsurer."
[
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.
[
under a reinsurance contract. A reinsurer "retrocedes" when it reinsures with another insurer part
of a liability assumed under a reinsurance contract.
[
(a) an insurance policy; or
(b) an insurance certificate.
[
(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
[
(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.
[
spreading its own risks by a systematic plan.
(a) Except as provided in this Subsection [
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.
(d) Self-insurance does not include any arrangement with independent contractors.
[
marketed, offered, or designed to provide coverage that is similar to long-term care insurance but
that provides coverage for less than 12 consecutive months for each covered person.
(118) "Small employer," in connection with a health benefit plan, means an employer who,
with respect to a calendar year and to a plan year:
(a) employed an average of at least two employees but not more than 50 eligible employees
on each business day during the preceding calendar year; and
(b) employs at least two employees on the first day of the plan year.
[
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.
[
(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.
[
liabilities.
(b) (i) "Permanent surplus" means the surplus of a mutual insurer that has been designated
by the insurer as permanent.
(ii) 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.
(iii) Except for assessable mutuals, the minimum permanent surplus requirement is
essentially the same as the minimum required capital requirement that applies to stock insurers.
(c) "Excess surplus" means:
(i) for life or accident and health insurers, health organizations, and property and casualty
insurers as defined in Section 31A-17-601 , the lesser of:
(A) that amount of an insurer's or health organization's total adjusted capital, as defined in
Subsection [
(I) 2.5; and
(II) the sum of the insurer's or health organization's minimum capital or permanent surplus
required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
(B) that amount of an insurer's or health organization's total adjusted capital, as defined in
Subsection [
(I) 3.0; and
(II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(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:
(A) 1.5; and
(B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
[
charges or premiums from, or who, for consideration, adjusts or settles claims of residents of the
state in connection with insurance coverage, annuities, or service insurance coverage, except:
(a) a union on behalf of its members;
(b) a person administering any:
(i) pension plan subject to the federal Employee Retirement Income Security Act of 1974;
(ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
(iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
(c) an employer on behalf of the employer's 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 for a line of insurance for
which the insurer holds a license in this state; 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.
[
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.
[
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
Section 31A-17-601 .
[
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.
[
means an insurer:
(i) not holding a valid certificate of authority to do an insurance business in this state; or
(ii) transacting business not authorized by a valid certificate.
(b) "Admitted insurer" or "authorized insurer" means an insurer:
(i) holding a valid certificate of authority to do an insurance business in this state; and
(ii) transacting business as authorized by a valid certificate.
[
or incident to ownership, maintenance, or use of any land vehicle or aircraft, exclusive of vehicle
comprehensive and vehicle physical damage coverages under Subsection [
[
convertible into a security with a voting right associated with it.
[
(a) insurance for indemnification of employers against liability for compensation based on:
(i) compensable accidental injuries; and
(ii) occupational disease disability;
(b) employer's liability insurance incidental to [
and written in connection with it; and
(c) insurance assuring to the persons entitled to [
the compensation provided by law.
Section 3. Section 31A-2-204 is amended to read:
31A-2-204. Conducting examinations.
(1) (a) For each examination under Section 31A-2-203 , the commissioner shall issue an
order:
(i) stating the scope of the examination; and
(ii) designating the examiner in charge.
(b) The commissioner need not give advance notice of an examination to an examinee.
(c) The examiner in charge shall give the examinee a copy of the order issued under this
Subsection (1).
(d) (i) The commissioner may alter the scope or nature of [
without advance notice to the examinee [
(ii) If the commissioner amends an order described in this Subsection (1), the commissioner
shall provide a copy of any amended order to the examinee.
(e) Statements in the commissioner's examination order concerning examination scope are
for the examiner's guidance only.
(f) Examining relevant matters not mentioned in [
(1) is not a violation of this title.
(2) The commissioner shall, whenever practicable, cooperate with the insurance regulators
of other states by conducting joint examinations of multistate insurers doing business in this state.
(3) An examiner authorized by the commissioner shall, when necessary to the purposes of
the examination, have access at all reasonable hours to the premises and to any books, records, files,
securities, documents, or property of:
(a) the examinee; and [
(b) any of the following if the premises, books, records, files, securities, documents, or
property relate to the affairs of the examinee:
(i) an officer [
(ii) any other person who:
(A) has executive authority over the examinee; or
(B) is in charge of any segment of the examinee's affairs[
(iii) any affiliate of the examinee under Subsection 31A-2-203 (1)(b)[
(4) (a) The officers, employees, and agents of the examinee and of persons under Subsection
31A-2-203 (1)(b) shall comply with every reasonable request of the examiners for assistance in any
matter relating to the examination. [
(b) A person may not obstruct or interfere with the examination except by legal process.
(5) If the commissioner finds the accounts or records to be inadequate for proper
examination of the condition and affairs of the examinee or improperly kept or posted, the
commissioner may employ experts to rewrite, post, or balance the accounts or records at the expense
of the examinee.
(6) (a) The examiner in charge of an examination shall make a report of the examination no
later than 60 days after the completion of the examination that shall include:
(i) the information and analysis ordered under Subsection (1)[
(ii) the examiner's recommendations.
(b) At the option of the examiner in charge, preparation of the report may include
conferences with the examinee or [
(c) The report is confidential until [
Subsection (7), [
action under Chapter 27, Insurers Rehabilitation and Liquidation.
(7) (a) The commissioner shall serve a copy of the examination report described in
Subsection (6) upon the examinee.
(b) Within 20 days after service, the examinee shall [
(i) accept the examination report as written; or
(ii) request agency action to modify the examination report.
(c) The report is considered accepted under this Subsection (7) if the examinee does not file
a request for agency action to modify the report within 20 days after service of the report.
(d) If the examination report is accepted[
(i) the examination report immediately becomes a public document; and
(ii) the commissioner shall distribute [
the examinee is authorized to do business.
(e) (i) Any adjudicative proceeding held as a result of the examinee's request for agency
action shall, upon the examinee's demand, be closed to the public, [
need not exclude any participating examiner from this closed hearing.
(ii) Within 20 days after the hearing held under this Subsection (7)(e), the commissioner
shall:
(A) adopt the examination report with any necessary modifications; and
(B) serve a copy of the adopted report upon the examinee. [
(iii) Unless the examinee seeks judicial relief, the adopted examination report:
(A) shall become a public document ten days after service[
(B) may be distributed as described in this section[
(8) The examinee shall promptly furnish copies of the adopted examination report described
in Subsection (7) to each member of [
(9) [
commissioner may furnish, without cost or at a reasonable price set under Section 31A-3-103 , a copy
of the examination report to interested persons, including:
(a) a member of the board of the examinee; or
(b) one or more newspapers in this state[
(10) (a) In a proceeding by or against the examinee, or any officer or agent of the examinee,
the examination report as adopted by the commissioner is admissible as evidence of the facts stated
in the report.
(b) In any proceeding commenced under Chapter 27, Insurers Rehabilitation and Liquidation,
the examination report, whether adopted by the commissioner or not, is admissible as evidence of
the facts stated in [
Section 4. Section 31A-2-215 is amended to read:
31A-2-215. Consumer education.
(1) In furtherance of the purposes in Section 31A-1-102 , the commissioner may educate
consumers about insurance and provide consumer assistance.
(2) Consumer education may include:
(a) outreach activities; and
(b) the production or collection and dissemination of educational materials.
(3) (a) Consumer assistance may include explaining:
(i) the terms of a policy;
(ii) a policy's complaint, [
(iii) the fundamentals of self-advocacy.
(b) Notwithstanding Subsection (3)(a), consumer assistance may not include testifying or
representing a consumer in any grievance or adverse benefit determination, arbitration, judicial, or
related proceeding, unless the proceeding is in connection with an enforcement action brought under
Section 31A-2-308 .
(4) The commissioner may adopt rules necessary to implement the requirements of this
section.
Section 5. Section 31A-2-216 is amended to read:
31A-2-216. Office of Consumer Health Assistance.
(1) The commissioner shall establish:
(a) an Office of Consumer Health Assistance before July 1, 1999; and
(b) a committee to advise the commissioner on consumer assistance rendered under this
section.
(2) The office shall:
(a) be a resource for health care consumers concerning health care coverage or the need for
such coverage;
(b) help health care consumers understand:
(i) contractual rights and responsibilities;
(ii) statutory protections; and
(iii) available remedies;
(c) educate health care consumers:
(i) by producing or collecting and disseminating educational materials to consumers, health
insurers, and health benefit plans; and
(ii) through outreach and other educational activities;
(d) for health care consumers that have difficulty in accessing their health insurance policies
because of language, disability, age, or ethnicity, provide services, directly or through referral, such
as:
(i) information and referral; and
(ii) [
(e) analyze and monitor federal and state consumer health-related statutes, rules, and
regulations; and
(f) summarize information gathered under this section and make the summaries available
to the public, government agencies, and the Legislature.
(3) The office may:
(a) obtain data from health care consumers as necessary to further the office's duties under
this section;
(b) investigate complaints and attempt to resolve complaints at the lowest possible level; and
(c) assist, but not testify or represent, a consumer in [
determination, arbitration, judicial, or related proceeding, unless the proceeding is in connection with
an enforcement action brought under Section 31A-2-308 .
(4) The commissioner may adopt rules necessary to implement the requirements of this
section.
Section 6. Section 31A-3-103 is amended to read:
31A-3-103. Fees.
(1) [
(a) "Regulatory fee" is as defined in Section 63-38-3.2.
(b) "Services" means functions that are reasonable and necessary to enable the commissioner
to perform the duties imposed by this title including:
(i) issuing and renewing licenses and certificates of authority;
(ii) filing policy forms;
(iii) reporting agent appointments and terminations; and
(iv) filing annual statements.
(c) Fees related to the renewal of licenses may be imposed no more frequently than once
each year.
(2) (a) A regulatory fee charged by the department shall be set in accordance with Section
63-38-3.2 .
(b) Fees shall be set and collected for services provided by the department.
(3) (a) For a fee authorized by this chapter that is not a regulatory fee, the department may
adopt a schedule of fees provided that each fee in the schedule of fees is:
(i) reasonable and fair; and
(ii) submitted to the Legislature as part of the department's annual appropriations request.
(b) If a fee schedule described in Subsection (3)(a) is submitted as part of the department's
annual appropriations request, the Legislature may, in a manner substantially similar to Section
63-38-3.2 :
(i) approve any fee in the fee schedule;
(ii) (A) increase or decrease any fee in the fee schedule; and
(B) approve any fee in the fee schedule as changed by the Legislature; or
(iii) reject any fee in the fee schedule.
(c) (i) Except as provided in Subsection (3)(c)(ii), a fee approved by the Legislature pursuant
to this Subsection (3) shall be deposited into the General Fund for appropriation by the Legislature.
(ii) Beginning on July 1, 2002 and ending on June 30, 2006, a fee approved by the
Legislature pursuant to this Subsection (3) that relates to the use of electronic or other similar
technology to provide the services of the department shall be deposited into the General Fund as a
dedicated credit to be used by the department to provide services through use of electronic commerce
or other similar technology.
[
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.
[
[
[
Section 7. Section 31A-3-104 is enacted to read:
31A-3-104. Electronic commerce dedicated fees.
(1) The department may charge a fee for requests for information:
(a) that is obtained from an electronic database of the department; or
(b) derived from data that is generated by electronic means.
(2) In addition to any fee authorized in this title, the department shall impose a supplemental
fee on the issuance or renewal of any of the following issued by the department:
(a) a license;
(b) a registration; or
(c) a certificate of authority.
(3) A fee imposed under this section shall be:
(a) established in accordance with Subsection 31A-3-103 (3); and
(b) deposited into the General Fund as a dedicated credit in accordance with Subsection
31A-3-103 (3).
(4) In accordance with Section 63-55-231 , this section is repealed on July 1, 2006.
Section 8. Section 31A-3-401 is amended to read:
31A-3-401. Retaliation against insurers of foreign state or country.
(1) Except as provided in Section 31A-3-402 , when, under the laws of another state or
foreign country any taxes, licenses, other fees, deposit requirements, or other material obligations,
prohibitions, or restrictions are or would be imposed on Utah insurers, or on the agents or
representatives of Utah insurers, [
requirements, or other obligations, prohibitions, or restrictions directly imposed upon similar
insurers, or upon the agents or representatives of those insurers, of that other state or country under
the statutes of this state, as long as the laws of that other state or country continue in force or are so
applied, the same taxes, licenses, other fees, deposit requirements, or other material obligations,
prohibitions, or restrictions of any kind shall be imposed, collected, and enforced by the State Tax
Commission, with the assistance of the commissioner, upon the insurers, or upon the agents or
representatives of those insurers, of that other state or country doing business or seeking to do
business in this state.
(2) Any tax, license, or other obligation imposed by any city, county, or other political
subdivision or agency of another state or country on Utah insurers, their agents, or representatives
is considered as being imposed by that state or country within the meaning of this section.
(3) The commissioner may by rule waive the retaliatory requirements for [
(a) doing business in this state; or
(b) seeking to do business in this state.
Section 9. Section 31A-4-107 is amended to read:
31A-4-107. Other business.
(1) As used in this section, "business reasonably incidental to insurance business" includes:
(a) in the case of an insurer authorized to transact title insurance:
(i) preparing or selling abstracts of title and related documents; and
(ii) providing escrow[
transactions, or other services incidental to the sale or transfer of insurance related to the sale or
transfer of real property, except the sale of other kinds of insurance related to the sale or transfer of
real property; and
(b) the business that could be done through subsidiaries authorized under Subsection
31A-5-218 (3) or, in the case of a nondomestic insurer, through corporations that would be authorized
under Subsection 31A-5-218 (3) if the insurer were a domestic insurer.
(2) No domestic insurer may engage, directly or indirectly, in any business other than
insurance and business reasonably incidental to its insurance business, except as specifically
authorized by Section 31A-5-218 or other law in this state.
(3) No nondomestic insurer may engage in this state in any business forbidden to a domestic
insurer, nor may the insurer engage in that type of business elsewhere if the commissioner orders the
nondomestic insurer to cease doing that type of business upon finding that doing that business is not
consistent with the interests of its insureds, creditors, or the public in this state.
Section 10. Section 31A-4-115 is amended to read:
31A-4-115. Plan of orderly withdrawal.
(1) (a) 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, [
commissioner a plan of orderly withdrawal.
(b) For purposes of this section, a discontinuance of a health benefit plan pursuant to one of
the following provisions is a withdrawal from a line of insurance:
(i) Subsection 31A-30-107 (3)(e); or
(ii) Subsection 31A-30-107.1 (3)(e).
(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; [
(iii) meeting any applicable statutory obligations[
(iv) (A) the payment of a withdrawal fee of $50,000 to the Utah Comprehensive Health
Insurance Pool if:
(I) the insurer is an accident and health insurer; and
(II) the insurer's line of business is not assumed or placed with another insurer approved by
the commissioner; or
(B) the payment of a withdrawal fee of $50,000 to the department if:
(I) the insurer is not an accident and health insurer; and
(II) the insurer's line of business is not assumed or placed with another insurer approved by
the commissioner.
(3) The commissioner shall approve a plan of orderly withdrawal if [
demonstrates that the insurer will:
(a) protect the interests of the people of the state;
(b) meet [
(c) provide service to [
(d) meet any applicable statutory obligations.
(4) Section 31A-2-302 governs 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:
(A) withdraw from writing a line of insurance in this state; or
(B) reduce [
(6) An insurer [
(a) withdraws from writing insurance in this state; or [
(b) reduces its total annual premium volume by 75% or more in any year without having
submitted a plan or receiving the commissioner's approval [
(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 [
(a) [
the waiver is:
(i) in the public interest to promote competition; or
(ii) to resolve inequity in the marketplace; and
(b) [
(8) The commissioner shall adopt rules necessary to implement [
section.
Section 11. Section 31A-4-116 is amended to read:
31A-4-116. Adverse benefit determination procedures.
(1) If an insurer has established a complaint resolution body or grievance appeal board, the
body or board shall include at least one consumer representative.
(2) [
health maintenance organization contracts shall be established in accordance Section 31A-22-629 .
Section 12. Section 31A-5-405 is amended to read:
31A-5-405. Meetings of mutuals and mutual policyholders' and members' voting
rights.
(1) (a) Subject to this section, Sections 16-6a-701 , 16-6a-702 , 16-6a-704 , and 16-6a-714
apply to the meetings of members, the notice, and the voting in mutuals.
(b) Subject to this section and Section 31A-5-409 , Section 16-6a-711 applies to the voting
of members of mutuals.
(2) (a) Policyholders or voting members in all mutuals have the right to vote on:
(i) conversion[
(ii) voluntary dissolution[
(iii) amendment of the articles[
(iv) the election of directors except public directors appointed [
accordance with Subsections 31A-5-409 (1) and (2).
(b) The mutual may adopt reasonable provisions in its bylaws to determine:
(i) which individual among joint policyholders may exercise a voting right; and
(ii) how to deal with cases where the same individual is one of several joint policyholders
in various policies.
[
voting rights. These articles may require a greater percentage of affirmative votes to approve an
action than the statutes require.
(3) (a) The articles or bylaws shall contain rules governing voting procedures and voting
eligibility consistent with Subsection (1). [
(b) An amendment to [
until at least 30 days after [
(4) (a) The articles or bylaws may provide for regular or special meetings of the
policyholders or voting members, and, if meetings are not provided for, then mail elections shall be
provided for in lieu of elections at meetings.
(b) Notice of the time and place of regular meetings or elections shall be given to each
policyholder or voting member in a reasonable manner as the commissioner approves or requires.
Changes may be made by written notice mailed, properly addressed, and stamped, to the last-known
address of all policyholders or voting members.
(5) (a) The articles may provide that representatives or delegates selected by the
policyholders or voting members shall be from specific geographical districts or defined classes of
policyholders or voting members, as determined on a reasonable basis.
(b) After the representative assembly has been selected by the policyholder or voting
members, the assembly or the respective classes of policyholders or voting members may choose
replacements for members unable to complete their terms, if the articles provide for their
replacement.
(c) The vote of a person holding a valid proxy is treated as the vote of the policyholders or
voting members who gave the proxy.
Section 13. Section 31A-5-409 is amended to read:
31A-5-409. Selection and removal of directors and officers of mutuals.
(1) The articles or bylaws of a mutual [
(a) the number of directors of the mutual including the directors that are:
(i) appointed as public directors under this Subsection (1) and Subsection (2); or
(ii) elected under Subsection (3);
(b) the number of [
[
(c) the plan that specifies the manner in which:
(i) a public director is to be appointed; and
(ii) a director who is not a public director is to be elected.
(2) (a) The plan for the appointment of public directors specified in Subsection (1) shall
assure true public representation on the board. [
(b) A person appointed as a public director shall have insurance business or [
business or professional experience that qualifies [
impartially as a director.
(c) A public director may be an uncompensated member of the board of directors.
(d) Notwithstanding Subsection (2)(c), a public director shall meet the qualifications of
Subsection (2)(b).
[
director shall be elected by:
(i) the policyholders; or
(ii) voting members.
(b) If the directors who are not public directors are divided into classes, one class shall be
elected:
(i) at least every four years[
(ii) for a term not exceeding six years.
[
majority of the full board at a meeting of the board called for that purpose.
[
vacancies on the governing board.
Section 14. Section 31A-5-410 is amended to read:
31A-5-410. Supervision of management changes.
(1) (a) [
insurer shall report to the commissioner:
(i) the name of [
(ii) pertinent biographical and other data that the commissioner requires by rule[
(b) For five years after the initial issuance of a certificate of authority to a corporation, the
commissioner may, within 30 days after receipt of a report under Subsection (1)(a), disapprove any
person selected who fails to satisfy the commissioner that [
(i) is trustworthy; and
(ii) has the competence and experience necessary to discharge [
responsibilities.
(2) (a) Whenever a director or principal officer of a corporation is removed under [
Subsection (2)(b), the insurer shall immediately report to the commissioner:
(i) the removal [
(ii) a statement of the reasons for the removal.
(b) Subsection (2)(a) applies to a removal under:
(i) Subsection 16-6a-820 (4);
(ii) Section 16-10a-808 ;
(iii) Section 16-10a-832 ; and
(iv) Subsection 31A-5-409 (4).
(3) [
finds, after a hearing, that:
(a) a director or officer:
(i) is incompetent [
(ii) untrustworthy[
(iii) is not qualified under Section 31A-5-409 ; or
(iv) has wilfully violated:
(A) this [
(B) a rule adopted under Subsection 31A-2-201 (3)[
(C) an order issued under Subsection 31A-2-201 (4)[
(b) the circumstances described in Subsection (3)(a) endangers the interests of:
(i) insureds; or
(ii) the public[
Section 15. Section 31A-8-101 is amended to read:
31A-8-101. Definitions.
For purposes of this chapter:
(1) "Basic health care services" means:
(a) emergency care;
(b) inpatient hospital and physician care;
(c) outpatient medical services; and
(d) out-of-area coverage.
(2) "Director of health" means:
(a) the executive director of the Department of Health; or [
(b) the authorized representative of the executive director of the Department of Health.
(3) "Enrollee" means an individual:
(a) who has entered into a contract with an organization for health care; or
(b) in whose behalf an arrangement for health care has been made.
(4) "Health care" is as defined in Section 31A-1-301 .
(5) "Health maintenance organization" means any person:
(a) other than:
(i) an insurer licensed under Chapter 7, Nonprofit Health Service Insurance Corporations;
or
(ii) an individual who contracts to render professional or personal services that the individual
directly performs; and
(b) that:
(i) furnishes at a minimum, either directly or through arrangements with others, basic health
care services to an enrollee in return for prepaid periodic payments agreed to in amount prior to the
time during which the health care may be furnished; and
(ii) is obligated to the enrollee to arrange for or to directly provide available and accessible
health care.
(6) (a) "Limited health plan" means, except as limited under Subsection (6)(b), any person
who furnishes, either directly or through arrangements with others, services:
(i) of:
(A) dentists;
(B) optometrists;
(C) physical therapists;
(D) podiatrists;
(E) psychologists;
(F) physicians;
(G) chiropractic physicians;
(H) naturopathic physicians;
(I) osteopathic physicians;
(J) social workers;
(K) family counselors;
(L) other health care providers; or
(M) reasonable combinations of the services described in this Subsection [
(ii) to an enrollee;
(iii) in return for prepaid periodic payments agreed to in amount prior to the time during
which the services may be furnished; and
(iv) for which the person is obligated to the enrollee to arrange for or directly provide the
available and accessible [
(b) "Limited health plan" does not include:
(i) a health maintenance organization;
(ii) an insurer licensed under Chapter 7, Nonprofit Health Service Insurance Corporations;
or
(iii) an individual who contracts to render professional or personal services that [
individual performs [
(7) (a) "Nonprofit organization" or "nonprofit corporation" means an organization no part
of the income of which is distributable to its members, trustees, or officers, or a nonprofit
cooperative association, except in a manner allowed under Section 31A-8-406 .
(b) "Nonprofit health maintenance organization" and "nonprofit limited health plan" are used
when referring specifically to one of the types of organizations with "nonprofit" status.
(8) "Organization" means a health maintenance organization and limited health plan, unless
used in the context of:
(a) "organization permit," [
31A-8-206 ; or
(b) "organization expenses," [
(9) "Participating provider" means a provider as defined in Subsection (10) who, under a
contract with the health maintenance organization, [
to enrollees with an expectation of receiving payment, directly or indirectly, from the health
maintenance organization, other than copayment.
(10) "Provider" means any person who:
(a) furnishes health care directly to the enrollee; and [
(b) is licensed or otherwise authorized to furnish [
(11) "Uncovered expenditures" means the costs of health care services that are covered by
an organization for which an enrollee is liable in the event of the organization's insolvency.
(12) "Unusual or infrequently used health services" means those health services [
are projected to involve fewer than 10% of the organization's enrollees' encounters with providers,
measured on an annual basis over the organization's entire enrollment.
Section 16. Section 31A-8-103 is amended to read:
31A-8-103. Applicability to other provisions of law.
(1) (a) Except for exemptions specifically granted under this title, an organization is subject
to regulation under all of the provisions of this title.
(b) Notwithstanding any provision of this title, an organization licensed under this chapter:
(i) is wholly exempt from [
(A) Chapter 7,[
Corporations;
(B) Chapter 9, Insurance Fraternals;
(C) Chapter 10, Annuities;
(D) Chapter 11, Motor Clubs;
(E) Chapter 12, State Risk Management Fund;
(F) Chapter 13, Employee Welfare Funds and Plans;
(G) Chapter 19a, Utah Rate Regulation Act; and
(H) Chapter 28, Guaranty Associations; and
(ii) not subject to:
[
[
[
provisions specifically made applicable by this chapter;
[
by this chapter;
[
[
[
[
consistent with this chapter; and
[
(2) The commissioner may by rule waive other specific provisions of this title that the
commissioner considers inapplicable to health maintenance organizations or limited health plans,
upon a finding that the waiver will not endanger the interests of:
(a) enrollees;
(b) investors; or
(c) the public.
(3) Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, and Title 16, Chapter 10a,
Utah Revised Business Corporation Act, do not apply to an organization except as specifically made
applicable by:
(a) this chapter;
(b) a provision referenced under this chapter; or
(c) a rule adopted by the commissioner to deal with corporate law issues of health
maintenance organizations that are not settled under this chapter.
(4) (a) Whenever in this chapter, Chapter 5, or Chapter 14 is made applicable to an
organization, the application is:
(i) of those provisions that apply to a mutual corporation if the organization is nonprofit; and
(ii) of those that apply to a stock corporation if the organization is for profit.
(b) When Chapter 5 or 14 is made applicable to an organization under this chapter, "mutual"
means nonprofit organization.
(5) Solicitation of enrollees by an organization is not a violation of any provision of law
relating to solicitation or advertising by health professionals if that solicitation is made in accordance
with:
(a) this chapter; and
(b) Chapter 23, Insurance Marketing - Licensing Agents, Brokers, Consultants, and
Reinsurance Intermediaries.
(6) [
organization from meeting the requirements of any federal law that enables the health maintenance
organization to:
(a) receive federal funds; or
(b) obtain or maintain federal qualification status.
(7) Except as provided in Section 31A-8-501 , an organization is exempt from statutes in this
title or department rules that restrict or limit [
with or selecting health care providers, including Section 31A-22-618 .
(8) An organization is exempt from the assessment or payment of premium taxes imposed
by Sections 59-9-101 through 59-9-104 .
Section 17. Section 31A-8-205 is amended to read:
31A-8-205. Organization permit and certificate of incorporation.
(1) Section 31A-5-204 applies to the formation of organizations, except that "Section
31A-5-211 " in Subsection 31A-5-204 (5) shall be read "Section 31A-8-209 ."
(2) In addition to the requirements of Section 31A-5-204 , the application for a permit shall
include a description of the initial locations of facilities where health care will be available to
enrollees, the hours during which various services will be provided, the types of health care
personnel to be used at each location and the approximate number of each personnel type to be
available at each location, the methods to be used to monitor the quality of health care furnished, the
method of resolving [
the method used to give enrollees an opportunity to participate in matters of policy, the medical
records system, and the method for documentation of utilization of health care by persons insured.
Section 18. Section 31A-8-209 is amended to read:
31A-8-209. Minimum capital or minimum permanent surplus.
(1) (a) A health maintenance organization being organized or operating under this chapter
shall have and maintain a minimum capital or minimum permanent surplus of $100,000.
(b) Each health maintenance organization authorized to do business in this state shall have
and maintain qualified assets as defined in Subsection 31A-17-201 (2) in an amount not less than the
total of:
(i) the health maintenance organization's liabilities;
(ii) the health maintenance organization's minimum capital or minimum permanent surplus
required by Subsection (1)(a); and
(iii) the greater of:
(A) the company action level RBC as defined in Subsection 31A-17-601 (8)(b); or
(B) $1,300,000.
(2) (a) The minimum required capital or minimum permanent surplus for a limited health
plan may not:
(i) [
(ii) [
(b) The initial minimum required capital or minimum permanent surplus for a limited health
plan required by Subsection (2)(a) shall be set by the commissioner, after:
(i) a hearing; and
(ii) consideration of:
(A) the services to be provided by the limited health plan;
(B) the size and geographical distribution of the population the limited health plan
anticipates serving;
(C) the nature of the limited health plan's arrangements with providers; and
(D) the arrangements, agreements, and relationships of the limited health plan in place or
reasonably anticipated with respect to:
(I) insolvency insurance;
(II) reinsurance;
(III) lenders subordinating to the interests of enrollees and trade creditors;
(IV) personal and corporate financial guarantees;
(V) provider withholds and assessments;
(VI) surety bonds;
(VII) hold harmless agreements in provider contracts; and
(VIII) other arrangements, agreements, and relationships impacting the security of enrollees.
(c) Upon a material change in the scope or nature of a limited health plan's operations, the
commissioner may, after a hearing, alter the limited health plan's minimum required capital or
minimum permanent surplus.
[
[
[
[
[
[
[
of an organization to be designated by some other name.
[
under this section may be grounds for the commissioner to find that the one or more persons with
authority to make the organization's accounting or investment decisions are incompetent for purposes
of Subsection 31A-5-410 (3).
Section 19. Section 31A-8-211 is amended to read:
31A-8-211. Deposit.
(1) Except as provided in Subsection (2), each health maintenance organization authorized
in this state shall maintain a deposit with the commissioner under Section 31A-2-206 in an amount
equal to the sum of:
(a) [
(b) 50% of the greater of:
(i) $900,000;
(ii) 2% of the annual premium revenues as reported on the most recent annual financial
statement filed with the commissioner; or
(iii) an amount equal to the sum of three months uncovered health care expenditures as
reported on the most recent financial statement filed with the commissioner.
(2) (a) After a hearing the commissioner may exempt a health maintenance organization
from the deposit requirement of Subsection (1) if:
(i) the commissioner determines that the enrollees' interests are adequately protected;
(ii) the health maintenance organization has been continuously authorized to do business in
this state for at least five years; and
(iii) the health maintenance organization has $5,000,000 surplus in excess of [
maintenance organization's company action level RBC as defined in Subsection 31A-17-601 (8)(b).
(b) The commissioner may rescind an exemption given under Subsection (2)(a).
(3) (a) Each limited health plan authorized in this state shall maintain a deposit with the
commissioner under Section 31A-2-206 in an amount equal to the minimum capital or permanent
surplus plus 50% of the greater of:
(i) .5 times minimum required capital or minimum permanent surplus; or
(ii) (A) during the first year of operation, 10% of the limited health plan's projected
uncovered expenditures for the first year of operation;
(B) during the second year of operation, 12% of the limited health plan's projected uncovered
expenditures for the second year of operation;
(C) during the third year of operation, 14% of the limited health plan's projected uncovered
expenditures for the third year of operation;
(D) during the fourth year of operation, 18% of the limited health plan's projected uncovered
expenditures during the fourth year of operation; or
(E) during the fifth year of operation, and during all subsequent years, 20% of the limited
health plan's projected uncovered expenditures for the previous 12 months.
(b) Projections of future uncovered expenditures shall be established in a manner that is
approved by the commissioner.
(4) A deposit required by this section may be counted toward the minimum capital or
minimum permanent surplus required under Section 31A-8-209 .
Section 20. Section 31A-8-401 is amended to read:
31A-8-401. Enrollee participation.
Every organization shall provide a reasonable procedure, consistent with Section 31A-4-116 ,
for allowing enrollees to participate in matters of policy of the organization and for resolving
complaints and [
Section 21. Section 31A-8-402.3 is enacted to read:
31A-8-402.3. Discontinuance, nonrenewal, or changes to group health benefit plans.
(1) Except as otherwise provided in this section, a group health benefit plan for a plan
sponsor is renewable and continues in force:
(a) with respect to all eligible employees and dependents; and
(b) at the option of the plan sponsor.
(2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
(a) for a network plan, if:
(i) there is no longer any enrollee under the group health plan who lives, resides, or works
in:
(A) the service area of the insurer; or
(B) the area for which the insurer is authorized to do business; and
(ii) in the case of the small employer market, the insurer applies the same criteria the insurer
would apply in denying enrollment in the plan under Subsection 31A-30-108 (6); or
(b) for coverage made available in the small or large employer market only through an
association, if:
(i) the employer's membership in the association ceases; and
(ii) the coverage is terminated uniformly without regard to any health status-related factor
relating to any covered individual.
(3) A health benefit plan for a plan sponsor may be discontinued if:
(a) a condition described in Subsection (2) exists;
(b) the plan sponsor fails to pay premiums or contributions in accordance with the terms of
the contract;
(c) the plan sponsor:
(i) performs an act or practice that constitutes fraud; or
(ii) makes an intentional misrepresentation of material fact under the terms of the coverage;
(d) the insurer:
(i) elects to discontinue offering a particular health benefit product delivered or issued for
delivery in this state; and
(ii) (A) provides notice of the discontinuation in writing:
(I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
(II) at least 90 days before the date the coverage will be discontinued;
(B) provides notice of the discontinuation in writing:
(I) to the commissioner; and
(II) at least three working days prior to the date the notice is sent to the affected plan
sponsors, employees, and dependents of the plan sponsors or employees;
(C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase:
(I) all other health benefit products currently being offered by the insurer in the market; or
(II) in the case of a large employer, any other health benefit product currently being offered
in that market; and
(D) in exercising the option to discontinue that product and in offering the option of
coverage in this section, acts uniformly without regard to:
(I) the claims experience of a plan sponsor;
(II) any health status-related factor relating to any covered participant or beneficiary; or
(III) any health status-related factor relating to any new participant or beneficiary who may
become eligible for the coverage; or
(e) the insurer:
(i) elects to discontinue all of the insurer's health benefit plans in:
(A) the small employer market;
(B) the large employer market; or
(C) both the small employer and large employer markets; and
(ii) (A) provides notice of the discontinuation in writing:
(I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
(II) at least 180 days before the date the coverage will be discontinued;
(B) provides notice of the discontinuation in writing:
(I) to the commissioner in each state in which an affected insured individual is known to
reside; and
(II) at least 30 working days prior to the date the notice is sent to the affected plan sponsors,
employees, and the dependents of the plan sponsors or employees;
(C) discontinues and nonrenews all plans issued or delivered for issuance in the market; and
(D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
(4) A health benefit plan for a plan sponsor may be nonrenewed:
(a) if a condition described in Subsection (2) exists; or
(b) for noncompliance with the insurer's:
(i) minimum participation requirements; or
(ii) employer contribution requirements.
(5) (a) Except as provided in Subsection (5)(d), an eligible employee may be discontinued
if after issuance of coverage the eligible employee:
(i) engages in an act or practice in connection with the coverage that constitutes fraud; or
(ii) makes an intentional misrepresentation of material fact in connection with the coverage.
(b) An eligible employee that is discontinued under Subsection (5)(a) may reenroll:
(i) 12 months after the date of discontinuance; and
(ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies to
reenroll.
(c) At the time the eligible employee's coverage is discontinued under Subsection (5)(a), the
insurer shall notify the eligible employee of the right to reenroll when coverage is discontinued.
(d) An eligible employee may not be discontinued under this Subsection (5) because of a
fraud or misrepresentation that relates to health status.
(6) For purposes of this section, a reference to "plan sponsor" includes a reference to the
employer:
(a) with respect to coverage provided to an employer member of the association; and
(b) if the health benefit plan is made available by an insurer in the employer market only
through:
(i) an association;
(ii) a trust; or
(iii) a discretionary group.
(7) An insurer may modify a health benefit plan for a plan sponsor only:
(a) at the time of coverage renewal; and
(b) if the modification is effective uniformly among all plans with that product.
Section 22. Section 31A-8-402.5 is enacted to read:
31A-8-402.5. Individual discontinuance and nonrenewal.
(1) (a) Except as otherwise provided in this section, a health benefit plan offered on an
individual basis is renewable and continues in force:
(i) with respect to all individuals or dependents; and
(ii) at the option of the individual.
(b) Subsection (1)(a) applies regardless of:
(i) whether the contract is issued through:
(A) a trust;
(B) an association;
(C) a discretionary group; or
(D) other similar grouping; or
(ii) the situs of delivery of the policy or contract.
(2) A health benefit plan may be discontinued or nonrenewed:
(a) for a network plan, if:
(i) the individual no longer lives, resides, or works in:
(A) the service area of the insurer; or
(B) the area for which the insurer is authorized to do business; and
(ii) coverage is terminated uniformly without regard to any health status-related factor
relating to any covered individual; or
(b) for coverage made available through an association, if:
(i) the individual's membership in the association ceases; and
(ii) the coverage is terminated uniformly without regard to any health status-related factor
relating to any covered individual.
(3) A health benefit plan may be discontinued if:
(a) a condition described in Subsection (2) exists;
(b) the individual fails to pay premiums or contributions in accordance with the terms of the
health benefit plan, including any timeliness requirements;
(c) the individual:
(i) performs an act or practice in connection with the coverage that constitutes fraud; or
(ii) makes an intentional misrepresentation of material fact under the terms of the coverage;
(d) the insurer:
(i) elects to discontinue offering a particular health benefit product delivered or issued for
delivery in this state; and
(ii) (A) provides notice of the discontinuation in writing:
(I) to each individual provided coverage; and
(II) at least 90 days before the date the coverage will be discontinued;
(B) provides notice of the discontinuation in writing:
(I) to the commissioner; and
(II) at least three working days prior to the date the notice is sent to the affected individuals;
(C) offers to each covered individual on a guaranteed issue basis, the option to purchase all
other individual health benefit products currently being offered by the insurer for individuals in that
market; and
(D) acts uniformly without regard to any health status-related factor of covered individuals
or dependents of covered individuals who may become eligible for coverage; or
(e) the insurer:
(i) elects to discontinue all of the insurer's health benefit plans in the individual market; and
(ii) (A) provides notice of the discontinuation in writing:
(I) to each individual provided coverage; and
(II) at least 180 days before the date the coverage will be discontinued;
(B) provides notice of the discontinuation in writing:
(I) to the commissioner in each state in which an affected insured individual is known to
reside; and
(II) at least 30 working days prior to the date the notice is sent to the affected individuals;
(C) discontinues and nonrenews all health benefit plans the insurer issues or delivers for
insurance in the individual market; and
(D) acts uniformly without regard to any health status-related factor of covered individuals
or dependents of covered individuals who may become eligible for coverage.
Section 23. Section 31A-8-402.7 is enacted to read:
31A-8-402.7. Discontinuance and nonrenewal limitations.
(1) Subject to Section 31A-4-115 , an insurer that elects to discontinue offering a health
benefit plan under Subsections 31A-8-402.3 (3)(e) and 31A-8-402.5 (3)(e) is prohibited from writing
new business:
(a) in the market in this state for which the insurer discontinues or does not renew; and
(b) for a period of five years beginning on the date of discontinuation of the last coverage
that is discontinued.
(2) If an insurer is doing business in one established geographic service area of the state,
Sections 31A-8-402.3 and 31A-8-402.5 apply only to the insurer's operations in that service area.
(3) Notwithstanding whether Chapter 22, Part VII, Group Accident and Health Insurance,
requires a conversion policy be available for certain persons who are no longer entitled to group
coverage, an organization may not be required to provide a conversion policy to a person residing
outside of the organization's service area.
(4) The commissioner may, by rule or order, define the scope of service area.
Section 24. Section 31A-8-407 is amended to read:
31A-8-407. Written contracts -- Limited liability of enrollee.
(1) (a) Every contract between an organization and a participating provider of health care
services shall be in writing and shall set forth that if the organization:
(i) fails to pay for health care services as set forth in the contract, the enrollee may not be
liable to the provider for any sums owed by the organization; and
(ii) the organization becomes insolvent, the rehabilitator or liquidator may require the
participating provider of health care services to:
(A) continue to provide health care services under the contract between the participating
provider and the organization until the [
(I) 90 days [
liquidation; or
(II) the date the term of the contract ends; and
(B) subject to Subsection (1)(c), reduce the fees the participating provider is otherwise
entitled to receive from the organization under the contract between the participating provider and
the organization during the time period described in Subsection (1)(a)(ii)(A).
(b) If the conditions of Subsection (1)(c) are met, the participating provider shall:
(i) accept the reduced payment as payment in full; and
(ii) relinquish the right to collect additional amounts from the insolvent organization's
enrollee.
(c) Notwithstanding Subsection (1)(a)(ii)(B):
(i) the rehabilitator or liquidator may not reduce a fee to less than 75% of the regular fee set
forth in the participating provider contract; and
(ii) the enrollee shall continue to pay the same copayments, deductibles, and other payments
for services received from the participating provider that the enrollee was required to pay before the
filing of:
(A) the petition for reorganization; or
(B) the petition for liquidation.
(2) A participating provider may not collect or attempt to collect from the enrollee sums
owed by the organization or the amount of the regular fee reduction authorized under Subsection
(1)(a)(ii) if the participating provider contract:
(a) is not in writing as required in Subsection (1); or
(b) fails to contain the language required by Subsection (1).
(3) (a) A person listed in Subsection (3)(b) may not bill or maintain any action at law against
an enrollee to collect:
(i) sums owed by the organization; or
(ii) the amount of the regular fee reduction authorized under Subsection (1)(a)(ii).
(b) Subsection (3)(a) applies to:
(i) a participating provider;
(ii) an agent;
(iii) a trustee; or
(iv) an assignee of a person described in Subsections (3)(b)(i) through (iii).
Section 25. Section 31A-8-408 is amended to read:
31A-8-408. Organizations offering point of service or point of sales products.
Effective July 1, 1991, a health maintenance organization offering products that permit
members the option of obtaining covered services from a noncontracted provider, which is a point
of service or point of sale product, shall comply with the requirements of Subsections (1) through
(7).
(1) The cost of an encounter with a noncontracted provider is considered an uncovered
expenditure as defined in Section 31A-8-101 .
(2) [
commissioner on a monthly basis the number of encounters with contracted and noncontracted
providers [
(i) point of service product; or
(ii) point of sale product.
(b) The commissioner shall:
(i) define the form, content, and due date of the report required by this Subsection (2); and
[
(ii) require audited reports of the information on a yearly basis.
(3) An organization may not offer a point of service [
product unless [
the organization's service area for each covered service other than those unusual or infrequently used
health services that are not available from the organization's health care providers.
(4) An organization may not enroll [
in the service area as defined by rule, except this Subsection (4) does not apply to [
dependent of [
(5) Any organization that exceeds the 10% limit of unusual or infrequently used health
services as defined in Section 31A-8-101 is subject to a forfeiture of up to $50 per encounter.
(6) An organization shall disclose to employees and members the existence of the 10% limit:
(a) at enrollment; or
(b) prior to enrollment.
(7) The commissioner shall hold hearings and adopt rules providing any additional
limitations or requirements necessary to secure the public interest in conformity with this section.
Section 26. Section 31A-17-505 is amended to read:
31A-17-505. Computation of minimum standard for annuities.
(1) Except as provided in Section 31A-17-506 , the minimum standard for the valuation of
all individual annuity and pure endowment contracts issued on or after the operative date of this
section, as defined in Subsection (2), and for all annuities and pure endowments purchased on or
after such operative date under group annuity and pure endowment contracts, shall be the
commissioner's reserve valuation methods defined in Sections 31A-17-507 and 31A-17-508 and the
following tables and interest rates:
(a) [
excluding any accident and health and accidental death benefits in [
(i) (A) the 1971 Individual Annuity Mortality Table[
(B) any modification of [
by the commissioner[
(ii) 6% interest for single premium immediate annuity contracts[
(iii) 4% interest for all other individual annuity and pure endowment contracts[
(b) [
2, 1980, excluding any accident and health and accidental death benefits in [
(i) (A) any individual annuity mortality table[
commissioner for use in determining the minimum standard of valuation for such contracts[
(B) any modification of [
by the commissioner[
(ii) 7.5% interest[
(c) [
1980, other than single premium immediate annuity contracts, excluding any accident and health and
accidental death benefits in [
(i) (A) any individual annuity mortality table [
in determining the minimum standard of valuation for such contracts[
(B) any modification of [
by the commissioner[
(ii) 5.5% interest for single premium deferred annuity and pure endowment contracts; and
(iii) 4.5% interest for all other such individual annuity and pure endowment contracts[
(d) [
group annuity and pure endowment contracts, excluding any accident and health and accidental death
benefits purchased under [
(i) (A) the 1971 Group Annuity Mortality Table; or
(B) any modification of [
the commissioner[
(ii) 6.5% interest[
(e) [
group annuity and pure endowment contracts, excluding any accident and health and accidental death
benefits purchased under [
(i) (A) any group annuity mortality table [
use in determining the minimum standard of valuation for such annuities and pure endowments[
or
(B) any modification of [
by the commissioner[
(ii) 7.5% interest.
(2) (a) After June 1, 1973, any company may file with the commissioner a written notice of
its election to comply with [
1979, which shall be the operative date of this section for [
(b) If a company [
operative date of this section for [
Section 27. Section 31A-17-506 is amended to read:
31A-17-506. Computation of minimum standard by calendar year of issue.
(1) Applicability of Section 31A-17-506 : The interest rates used in determining the
minimum standard for the valuation shall be the calendar year statutory valuation interest rates as
defined in this section for:
(a) all life insurance policies issued in a particular calendar year, on or after the operative
date of Subsection 31A-22-408 (6)(d);
(b) all individual annuity and pure endowment contracts issued in a particular calendar year
on or after January 1, [
(c) all annuities and pure endowments purchased in a particular calendar year on or after
January 1, [
(d) the net increase, if any, in a particular calendar year after January 1, [
amounts held under guaranteed interest contracts.
(2) Calendar year statutory valuation interest rates:
(a) The calendar year statutory valuation interest rates, "I," shall be determined as follows
and the results rounded to the nearer 1/4 of 1%:
(i) For life insurance:
I =.03 + W(R1 -.03) + (W/2)(R2 -.09);
(ii) For single premium immediate annuities and for annuity benefits involving life
contingencies arising from other annuities with cash settlement options and from guaranteed interest
contracts with cash settlement options:
I =.03 + W(R -.03),
where R1 is the lesser of R and.09,
R2 is the greater of R and.09,
R is the reference interest rate defined in Subsection (4), and
W is the weighting factor defined in this section;
(iii) For other annuities with cash settlement options and guaranteed interest contracts with
cash settlement options, valued on an issue year basis, except as stated in Subsection (ii), the formula
for life insurance stated in Subsection (i) shall apply to annuities and guaranteed interest contracts
with guarantee durations in excess of ten years, and the formula for single premium immediate
annuities stated in Subsection (ii) shall apply to annuities and guaranteed interest contracts with
guarantee duration of ten years or less;
(iv) For other annuities with no cash settlement options and for guaranteed interest contracts
with no cash settlement options, the formula for single premium immediate annuities stated in
Subsection (ii) shall apply.
(v) For other annuities with cash settlement options and guaranteed interest contracts with
cash settlement options, valued on a change in fund basis, the formula for single premium immediate
annuities stated in Subsection (ii) shall apply.
(b) However, if the calendar year statutory valuation interest rate for any life insurance
policies issued in any calendar year determined without reference to this sentence differs from the
corresponding actual rate for similar policies issued in the immediately preceding calendar year by
less than 1/2 of 1% the calendar year statutory valuation interest rate for such life insurance policies
shall be equal to the corresponding actual rate for the immediately preceding calendar year. For
purposes of applying the immediately preceding sentence, the calendar year statutory valuation
interest rate for life insurance policies issued in a calendar year shall be determined for 1980, using
the reference interest rate defined in 1979, and shall be determined for each subsequent calendar year
regardless of when Subsection 31A-22-408 (6)(d) becomes operative.
(3) Weighting factors:
(a) The weighting factors referred to in the formulas stated in Subsection (2) are given in the
following tables:
(i) Weighting factors for life insurance:
Guarantee Duration (Years) Weighting Factors
10 or less: .50
More than 10, but less than 20: .45
More than 20: .35
For life insurance, the guarantee duration is the maximum number of years the life insurance
can remain in force on a basis guaranteed in the policy or under options to convert to plans of life
insurance with premium rates or nonforfeiture values or both which are guaranteed in the original
policy;
(ii) Weighting factor for single premium immediate annuities and for annuity benefits
involving life contingencies arising from other annuities with cash settlement options and guaranteed
interest contracts with cash settlement options: .80
(iii) Weighting factors for other annuities and for guaranteed interest contracts, except as
stated in Subsection (ii), shall be as specified in Tables (A), (B), and (C) below, according to the
rules and definitions in (D), (E), and (F) below:
(A) For annuities and guaranteed interest contracts valued on an issue year basis:
Guarantee Duration (Years) Weighting Factors for Plan Type
A B C
5 or less: .80 .60 .50
More than 5, but not more than 10: .75 .60 .50
More than 10, but not more than 20: .65 .50 .45
More than 20: .45 .35 .35
Plan Type
A B C
(B) For annuities and guaranteed interest
contracts valued on a change in fund basis, the
factors shown in (A) above increased by: .15 .25 .05
Plan Type
A B C
(C) For annuities and guaranteed interest
contracts valued on an issue year basis, other than
those with no cash settlement options, which do
not guarantee interest on considerations received
more than one year after issue or purchase and for
annuities and guaranteed interest contracts valued
on a change in fund basis which do not guarantee
interest rates on considerations received more
than 12 months beyond the valuation date, the
factors shown in (A) or derived in (B) increased
by: .05 .05 .05
(D) For other annuities with cash settlement options and guaranteed interest contracts with
cash settlement options, the guarantee duration is the number of years for which the contract
guarantees interest rates in excess of the calendar year statutory valuation interest rate for life
insurance policies with guarantee duration in excess of 20 years. For other annuities with no cash
settlement options and for guaranteed interest contracts with no cash settlement options, the
guaranteed duration is the number of years from the date of issue or date of purchase to the date
annuity benefits are scheduled to commence.
(E) Plan type as used in the above tables is defined as follows:
Plan Type A: At any time policyholder may withdraw funds only:
(I) with an adjustment to reflect changes in interest rates or asset values since receipt of the
funds by the insurance company, or (II) without such adjustment but installments over five years or
more, or (III) as an immediate life annuity, or (IV) no withdrawal permitted.
Plan Type B: Before expiration of the interest rate guarantee, policyholder withdraw funds
only:
(I) with an adjustment to reflect changes in interest rates or asset values since receipt of the
funds by the insurance company, or (II) without such adjustment but in installments over five years
or more, or (III) no withdrawal permitted. At the end of interest rate guarantee, funds may be
withdrawn without such adjustment in a single sum or installments over less than five years.
Plan Type C: Policyholder may withdraw funds before expiration of interest rate guarantee
in a single sum or installments over less than five years either:
(I) without adjustment to reflect changes in interest rates or asset values since receipt of the
funds by the insurance company, or (II) subject only to a fixed surrender charge stipulated in the
contract as a percentage of the fund.
(F) A company may elect to value guaranteed interest contracts with cash settlement options
and annuities with cash settlement options on either an issue year basis or on a change in fund basis.
Guaranteed interest contracts with no cash settlement options and other annuities with no cash
settlement options must be valued on an issue year basis. As used in this section, an issue year basis
of valuation refers to a valuation basis under which the interest rate used to determine the minimum
valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar
year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed
interest contract, and the change in fund basis of valuation refers to a valuation basis under which
the interest rate used to determine the minimum valuation standard applicable to each change in the
fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate
for the year of the change in the fund.
(4) Reference interest rate: "Reference interest rate" referred to in Subsection (2)(a) is
defined as follows:
(a) For all life insurance, the lesser of the average over a period of 36 months and the
average over a period of 12 months, ending on June 30 of the calendar year next preceding the year
of issue, of the Monthly Average of the composite Yield on Seasoned Corporate Bonds, as published
by Moody's Investors Service, Inc.
(b) For single premium immediate annuities and for annuity benefits involving life
contingencies arising from other annuities with cash settlement options and guaranteed interest
contracts with cash settlement options, the average over a period of 12 months, ending on June 30
of the calendar year of issue or year of purchase, of the Monthly Average of the Composite Yield on
Seasoned Corporate Bonds, as published by Moody's Investors Service, Inc.
(c) For other annuities with cash settlement options and guaranteed interest contracts with
cash settlement options, valued on a year of issue basis, except as stated in Subsection (b), with
guarantee duration in excess of ten years, the lesser of the average over a period of 36 months and
the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase,
of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by
Moody's Investors Service, Inc.
(d) For other annuities with cash settlement options and guaranteed interest contracts with
cash settlement options, valued on a year of issue basis, except as stated in Subsection (b), with
guarantee duration of ten years or less, the average over a period of 12 months, ending on June 30
of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on
Seasoned Corporate Bonds, as published by Moody's Investors Service, Inc.
(e) For other annuities with no cash settlement options and for guaranteed interest contracts
with no cash settlement options, the average over a period of 12 months, ending on June 30 of the
calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned
Corporate Bonds, as published by Moody's Investors Service, Inc.
(f) For other annuities with cash settlement options and guaranteed interest contracts with
cash settlement options, valued on a change in fund basis, except as stated in Subsection (b), the
average over a period of 12 months, ending on June 30 of the calendar year of the change in the fund,
of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by
Moody's Investors Service, Inc.
(5) Alternative method for determining reference interest rates: In the event that the Monthly
Average of the Composite Yield on Seasoned Corporate Bonds is no longer published by Moody's
Investors Service, Inc. or in the event that the National Association of Insurance Commissioners
determines that the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as
published by Moody's Investors Service, Inc. is no longer appropriate for the determination of the
reference interest rate, then an alternative method for determination of the reference interest rate,
which is adopted by the National Association of Insurance Commissioners and approved by rule
promulgated by the commissioner, may be substituted.
Section 28. Section 31A-19a-101 is amended to read:
31A-19a-101. Title -- Scope and purposes.
(1) This chapter is known as the "Utah Rate Regulation Act."
(2) (a) (i) Except as provided in Subsection (2)(a)(ii), this chapter applies to all kinds and
lines of direct insurance written on risks or operations in this state by an insurer authorized to do
business in this state.
(ii) This chapter does not apply to:
(A) life insurance [
(B) credit life insurance;
[
[
(E) credit accident and health insurance; and
[
(b) This chapter applies to all insurers authorized to do any line of business, except those
specified in Subsection (2)(a)(ii).
(3) It is the purpose of this chapter to:
(a) protect policyholders and the public against the adverse effects of excessive, inadequate,
or unfairly discriminatory rates;
(b) encourage independent action by and reasonable price competition among insurers so
that rates are responsive to competitive market conditions;
(c) provide formal regulatory controls for use if independent action and price competition
fail;
(d) provide regulatory procedures for the maintenance of appropriate data reporting systems;
(e) authorize cooperative action among insurers in the rate-making process, and regulate that
cooperation to prevent practices that bring about a monopoly or lessen or destroy competition;
(f) encourage the most efficient and economic marketing practices; and
(g) regulate the business of insurance in a manner that, under the McCarran-Ferguson Act,
15 U.S.C. Secs. 1011 through 1015, will preclude application of federal antitrust laws.
(4) Rate filings made prior to July 1, 1986, under former Title 31, Chapter 18, are continued.
Rate filings made after July 1, 1986, are subject to the requirements of this chapter.
Section 29. Section 31A-19a-209 is amended to read:
31A-19a-209. Special provisions for title insurance.
(1) In addition to the considerations in determining compliance with rate standards and rating
methods as set forth in Sections 31A-19a-201 and 31A-19a-202 , the commissioner shall also
consider the costs and expenses incurred by title insurance companies, agencies, and agents peculiar
to the business of title insurance including:
(a) the maintenance of title plants; and
(b) the searching and examining of public records to determine insurability of title to real
redevelopment property.
(2) (a) Every title insurance company, agency, and title insurance agent shall file with the
commissioner a schedule of the escrow[
this state for services performed in connection with the issuance of policies of title insurance.
(b) The filing required by Subsection (2)(a) shall state the effective date of this schedule,
which may not be less than 30 calendar days after the date of filing.
(3) A title insurance company, agency, or agent may not file or use any rate or other charge
relating to the business of title insurance, including rates or charges filed for escrow[
(a) operate at less than the cost of doing:
(i) the insurance business; or
(ii) the escrow[
(b) fail to adequately underwrite a title insurance policy.
(4) (a) All or any of the schedule of rates or schedule of charges, including the schedule of
escrow[
limitations in this Subsection (4).
(b) Each change or amendment shall:
(i) be filed with the commissioner; and
(ii) state the effective date of the change or amendment, which may not be less than 30
calendar days after the date of filing.
(c) Any change or amendment remains in force for a period of at least 90 calendar days from
its effective date.
(5) While the schedule of rates and schedule of charges are effective, a copy of each shall
be:
(a) retained in each of the offices of:
(i) the insurance company in this state;
(ii) its agents in this state; and
[
(6) Except in accordance with the schedules of rates and charges filed with the commissioner,
a title insurance company, agency, or agent may not make or impose any premium or other charge:
(a) in connection with the issuance of a policy of title insurance; or
(b) for escrow[
of a policy of title insurance.
Section 30. Section 31A-21-104 is amended to read:
31A-21-104. Insurable interest and consent.
(1) (a) An insurer may not knowingly provide insurance to a person who does not have or
expect to have an insurable interest in the subject of the insurance.
(b) A person may not knowingly procure, directly, by assignment, or otherwise, an interest
in the proceeds of an insurance policy unless [
interest in the subject of the insurance.
(c) Except as provided in Subsections (6), (7), and (8), any insurance provided in violation
of this Subsection (1) is subject to Subsection (5).
(2) As used in this chapter:
(a) (i) "Insurable interest" in a person means[
(A) for persons closely related by blood or by law, a substantial interest engendered by love
and affection[
(B) in the case of other persons, a lawful and substantial interest in having the life, health,
and bodily safety of the person insured continue.
(ii) Policyholders in group insurance contracts do not need [
certificate holders or persons other than group policyholders who are specified by the certificate
holders are the recipients of the proceeds of the policies.
(iii) Each person has an unlimited insurable interest in [
(iv) A shareholder or partner has an insurable interest in the life of other shareholders or
partners for purposes of insurance contracts that are an integral part of a legitimate buy-sell
agreement respecting shares or a partnership interest in the business.
(v) Subject to Subsection (9), an employer or an employer sponsored trust for the benefit of
the employer's employees:
(A) has an insurable interest in the lives of the employer's:
(I) directors;
(II) officers;
(III) managers;
(IV) nonmanagement employees; and
(V) retired employees; and
(B) may insure the lives listed in Subsection (2)(a)(v)(A):
(I) on an individual or group basis; and
(II) with the written consent of the insured.
(b) "Insurable interest" in property or liability means any lawful and substantial economic
interest in the nonoccurrence of the event insured against.
(c) "Viatical settlement" means a written contract:
(i) entered into by a person who is the policyholder of a life insurance policy insuring the
life of a terminally ill person[
(ii) under which the insured assigns, transfers ownership, irrevocably designates a specific
person or otherwise alienates all control and right in the insurance policy to another person[
and
(iii) the proceeds or a part of the proceeds of the contract is paid to the policyholder of the
insurance policy or the policyholder's designee prior to the death of the subject.
(3) (a) Except as provided in Subsection (4), an insurer may not knowingly issue an
individual life or accident and health insurance policy to a person other than the one whose life or
health is at risk unless that person, who is 18 years of age or older and not under guardianship under
Title 75, Chapter 5, Protection of Persons Under Disability and Their Property, has given written
consent to the issuance of the policy. [
(b) A person shall express consent [
(i) by signing an application for the insurance with knowledge of the nature of the
document[
(ii) in any other reasonable way.
(c) Any insurance provided in violation of this Subsection (3) is subject to Subsection (5).
(4) (a) A life or accident and health insurance policy may be taken out without consent in
[
(i) A person may obtain insurance on a dependent who does not have legal capacity.
(ii) A creditor may, at the creditor's expense, obtain insurance on the debtor in an amount
reasonably related to the amount of the debt.
(iii) A person may obtain life and accident and health insurance on an immediate family
[
(iv) A person may obtain an accident and health insurance policy on others that would
merely indemnify the policyholder against expenses [
obligated to pay.
(v) The commissioner may adopt rules permitting issuance of insurance for a limited term
on the life or health of a person serving outside the continental United States who is in the public
service of the United States, if the policyholder is related within the second degree by blood or by
marriage to the person whose life or health is insured.
(b) Consent may be given by another in [
this Subsection (4)(b).
(i) A parent, a person having legal custody of a minor, or a guardian of [
Title 75, Chapter 5, Protection of Persons Under Disability and Their Property, may consent to the
issuance of a policy on a dependent child or on a person under guardianship under Title 75, Chapter
5, Protection of Persons Under Disability and Their Property.
(ii) A grandparent may consent to the issuance of life or accident and health insurance on
a grandchild.
(iii) A court of general jurisdiction may give consent to the issuance of a life or accident and
health insurance policy on an ex parte application showing facts the court considers sufficient to
justify the issuance of that insurance.
(5) (a) An insurance policy is not invalid because the policyholder lacks insurable interest
or because consent has not been given[
(b) Notwithstanding Subsection (5)(a), a court with appropriate jurisdiction may:
(i) order the proceeds to be paid to some person who is equitably entitled to [
proceeds, other than the one to whom the policy is designated to be payable[
(ii) create a constructive trust in the proceeds or a part of [
such a person, subject to all the valid terms and conditions of the policy other than those relating to
insurable interest or consent.
(6) This section does not prevent any organization described under 26 U.S.C. Sec. 501(c)(3),
(e), or (f), as amended, and the regulations made under this section, and which is regulated under
Title 13, Chapter 22, Charitable Solicitations Act, from soliciting and procuring, by assignment or
designation as beneficiary, a gift or assignment of an interest in life insurance on the life of the donor
or assignor or from enforcing payment of proceeds from that interest.
(7) This section does not prevent:
(a) any policyholder of life insurance, whether or not the policyholder is also the subject of
the insurance, from entering into a viatical settlement;
(b) any person from soliciting a person to enter into a viatical settlement; or
(c) a person from enforcing payment of proceeds from the interest obtained under a viatical
settlement.
(8) Notwithstanding Subsection (1), an insurer authorized under this title to issue a workers'
compensation policy may issue a workers' compensation policy to a sole proprietorship, corporation,
or partnership that elects not to include any owner, corporate officer, or partner as an employee under
the policy even if at the time the policy is issued the sole proprietorship, corporation, or partnership
has no employees.
(9) The extent of an employer's or employer sponsored trust's insurable interest for a
nonmanagement and retired employee under Subsection (2)(a)(v) is limited to an amount
commensurate with the employer's unfunded liabilities.
Section 31. Section 31A-21-106 is amended to read:
31A-21-106. Incorporation by reference.
(1) (a) Except as provided in Subsection (1)(b), an insurance policy may not contain any
agreement or incorporate any provision not fully set forth in the policy or in an application or other
document attached to and made a part of the policy at the time of its delivery, unless the policy,
application, or agreement accurately reflects the terms of the incorporated agreement, provision, or
attached document.
(b) (i) A policy may by reference incorporate rate schedules and classifications of risks and
short-rate tables filed with the commissioner.
(ii) By rule or order, the commissioner may authorize incorporation by reference of
provisions for:
(A) administrative arrangements[
(B) premium schedules[
(C) payment procedures for complex contracts.
(c) (i) A policy of title insurance insuring the mortgage or deed of trust of an institutional
lender may, if requested by an institutional lender, incorporate by reference generally applicable
policy terms that are contained in a specifically identified policy that has been filed with the
commissioner.
(ii) As used in Subsection (1)(c)(i), "institutional lender" means a person that regularly
engages in the business of making loans secured by real estate.
(d) A policy may incorporate by reference the following by citing in the policy:
(i) a federal law or regulation;
(ii) a state law or rule; or
(iii) a public directive of a federal or state agency.
(2) [
purported modification of a contract during the term of the policy [
obligations of a party to the contract:
(a) unless the modification is:
(i) in writing; and
(ii) agreed to by the party against whose interest the modification operates[
(b) except:
(i) as provided in:
(A) Subsection (3) or (4);
(B) Subsection 31A-8-402.3 (7);
(C) Subsection 31A-22-721 (8); or
(D) Subsection 31A-30-107 (7); or
(ii) as otherwise mandated by law.
(3) Subsection (2) does not prevent a change in coverage under group contracts resulting
from:
(a) provisions of an employer eligibility rule;
(b) the terms of a collective bargaining agreement; or
(c) provisions in federal Employee Retirement Income Security Act plan documents.
(4) Subsection (2) does not prevent a premium increase at any renewal date that is applicable
uniformly to all comparable persons.
Section 32. Section 31A-21-311 is amended to read:
31A-21-311. Group and blanket insurance.
(1) (a) (i) Except under Subsection (1)(d), an insurer issuing a group insurance policy other
than a blanket insurance policy shall, as soon as practicable after the coverage is effective, provide
a certificate for each member of the insured group, except that only one certificate need be provided
for the members of a family unit.
(ii) The certificate required by this Subsection (1) shall contain a summary of the essential
features of the insurance coverage, including:
(A) any rights of conversion to an individual policy; and[
(B) in the case of group life insurance, any:
(I) continuation of coverage during total disability[
(II) incontestability provision.
(iii) Upon receiving a written request, the insurer shall [
insured may inspect, during normal business hours at a place reasonably convenient to the insured,
a copy of the policy or a summary of the policy containing all the details [
to the certificate holder.
(b) The commissioner may by rule impose a [
(1)(a) on any class of blanket insurance policies for which the commissioner finds that the group of
persons covered is constant enough for that type of action to be practicable and not unreasonably
expensive.
(c) [
the certificate to the attention of the certificate holder.
(ii) The insurer may deliver or mail [
(A) directly to the certificate holders[
(B) in bulk to the policyholder to transmit to certificate holders.
(iii) An affidavit by the insurer that [
course of business creates a rebuttable presumption that [
(d) The commissioner may by rule or order prescribe substitutes for delivery or mailing of
certificates that are reasonably calculated to inform a certificate holder of the certificate holder's
rights, including:
(i) booklets describing the coverage[
(ii) the posting of notices in the place of business[
(iii) publication in a house organ[
(2) Unless a certificate or an authorized substitute has been made available to the certificate
holder when required by this section, [
certificate holder by the certificate after the coverage has become effective as to the certificate
holder, other than intentionally causing the loss insured against or failing to make required
contributory premium payments, [
contract.
Section 33. Section 31A-22-400 is amended to read:
31A-22-400. Scope of part.
Part IV applies to all life insurance policies and contracts, including:
(1) an annuity contract;
(2) a credit life[
(3) a franchise[
(4) a group[
(5) a blanket [
contract.
Section 34. Section 31A-22-402 is amended to read:
31A-22-402. Grace period.
(1) (a) Every life insurance policy other than a group policy shall contain a provision
entitling the policyholder to a grace period within which the payment of any premium may be made
after the first payment of any premium.
(b) During the grace period described in Subsection (1)(a), the policy continues in full force.
(2) The grace period required by Subsection (1) may not be less than:
(a) 31 days; or
(b) four weeks for policies whose premiums are payable more frequently than monthly.
(3) The insurer may impose an interest charge during the grace period not in excess of the
interest rate:
(a) set by the policy for policy loans; or
(b) in the absence of a provision described in Subsection (3)(a), a rate set by the
commissioner by rule.
(4) If a claim arises under the policy during the grace period, an insurer may deduct from the
policy proceeds:
(a) the amount of any premium due or overdue;
(b) interest at the rate provided in this section; and
(c) any deferred installment of the annual premium.
(5) The insurer shall send written notice of termination of coverage:
(a) to the policyholder's last-known address; and
(b) at least 30 days before the date that the coverage is terminated.
Section 35. Section 31A-22-403 is amended to read:
31A-22-403. Incontestability.
(1) This section does not apply to group policies.
(2) [
a period of two years from [
(i) during the lifetime of the insured; or
(ii) for a survivorship life insurance policy, during the lifetime of the surviving insured.
(b) A life insurance policy shall state that the life insurance policy is incontestable after the
time period described in Subsection (2)(a).
[
for nonpayment of premiums.
[
as to:
(i) provisions relating to accident and health benefits allowed under Section 31A-22-609 ;
and
(ii) additional benefits in the event of death by accident.
(c) If [
the policy's issuance and for an additional premium, to obtain a death benefit [
than when the policy was originally issued, [
is contestable:
(i) until two years after the incremental increase of benefits[
(ii) based only on a ground [
increase.
[
(i) for two years following reinstatement on the same basis as at original issuance[
(ii) only as to matters arising in connection with the reinstatement.
(b) Any grounds for contest available at original issuance continue to be available for contest
until the policy has been in force for a total of two years:
(i) during the lifetime of the insured[
(ii) for a survivorship life insurance policy, during the lifetime of the surviving insured.
[
(i) preclude only a contest of the validity of the policy[
(ii) do not preclude the good faith assertion at any time of defenses based upon provisions
in the policy [
exclusions are specifically excepted in the policy's incontestability clause. [
(b) A provision on which the contestable period would normally run may not be
reformulated as a coverage [
this Subsection [
(6) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commissioner may make rules to implement this section.
Section 36. Section 31A-22-404 is amended to read:
31A-22-404. Suicide.
(1) (a) Suicide is not a defense to a claim under a life insurance policy that has been in force
as to a policyholder or certificate holder for two years from the date of issuance of the later of:
(i) the policy[
(ii) the certificate.
(b) Subsection (1)(a) applies whether:
(i) the suicide was voluntary or involuntary; or
(ii) the insured was sane or insane.
[
insurer shall pay to the beneficiary an amount not less than the premium paid for the life insurance
policy.
(2) (a) If after a life insurance policy is in effect the policy allows the insured to obtain a
death benefit that is larger than when the policy was originally effective for an additional premium,
the payment of the additional increment of benefit may be limited in the event of a suicide within
a two-year period beginning on the date the increment increase takes effect.
(b) If a suicide occurs within the two-year period described in Subsection (2)(a), the insurer
shall pay to the beneficiary an amount not less than the additional premium paid for the additional
increment of benefit.
(3) This section does not apply to:
(a) [
(b) the accident or double indemnity provisions of an insurance policy.
Section 37. Section 31A-22-405 is amended to read:
31A-22-405. Misstated age or gender.
(1) Subject to Subsection (2), if the age or gender of the person whose life is at risk is
misstated in an application for a policy of life insurance, and the error is not adjusted during the
person's lifetime, the amount payable under the policy is what the premium paid would have
purchased if the age or gender had been stated correctly.
(2) If the person whose life is at risk was, at the time the insurance was applied for, beyond
the maximum age limit designated by the insurer, the insurer shall refund at least the amount of the
premiums collected under the policy.
Section 38. Section 31A-22-409 is amended to read:
31A-22-409. Standard Nonforfeiture Law for Individual Deferred Annuities.
(1) This section is known as the "Standard Nonforfeiture Law for Individual Deferred
Annuities."
(2) This section does not apply to:
(a) any reinsurance group annuity purchased under a retirement plan or plan of deferred
compensation established or maintained by an employer, [
proprietorship[
retirement accounts or individual retirement annuities under Section 408 [
Code[
(b) a premium deposit fund[
(c) a variable annuity[
(d) an investment annuity[
(e) an immediate annuity[
(f) a deferred annuity contract after annuity payments have commenced[
(g) a reversionary annuity[
(h) any contract [
representative of the company issuing the contract.
(3) (a) [
in Subsection (12), [
delivered or issued for delivery in this state unless [
(i) the [
(ii) provisions [
in the opinion of the commissioner are at least as favorable to the contractholder, governing cessation
of payment of consideration under the contract[
(b) Subsection (3)(a)(i) requires the following provisions:
[
grant a paid-up annuity benefit on a plan stipulated in the contract of such a value as specified in
Subsections (5), (6), (7), (8), and (10)[
[
[
company will pay in lieu of any paid-up annuity benefit a cash surrender benefit of such amount as
is specified in Subsections (5), (6), (8), and (10)[
(iii) the company shall reserve the right to defer the payment of the cash surrender benefit
under Subsection (3)(b)(ii) for a period of six months after demand [
cash surrender benefit with surrender of the contract[
[
any of the following that are guaranteed under the contract:
(A) minimum paid-up annuity[
(B) cash surrender benefits; or
(C) death benefits [
(v) sufficient information to determine the amounts of [
Subsection (3)(b)(iv);
[
be available under the contract are not less than the minimum benefits required by any statute of the
state in which the contract is delivered; and
(vii) an explanation of the manner in which the benefits described in Subsection (3)(b)(vi)
are altered by the existence of any:
(A) additional amounts credited by the company to the contract[
(B) indebtedness to the company on the contract; or [
(C) prior withdrawals from or partial surrender of the contract.
(c) Notwithstanding the requirements of this Subsection (3), any deferred annuity contract
may provide that if no consideration has been received under a contract for a period of two full years
and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising
from consideration paid before the period would be less than $20 monthly[
(i) the company may at [
of the then present value of such portion of the paid-up annuity benefit, calculated on the basis of
the mortality table specified in the contract, if any, and the interest rate specified in the contract for
determining the paid-up annuity benefit[
(ii) the payment [
of any further obligation under the contract.
(4) The minimum values as specified in Subsections (5), (6), (7), (8), and (10) of any paid-up
annuity, cash surrender, or death benefits available under an annuity contract shall be based upon
minimum nonforfeiture amounts as established in this section.
(a) (i) With respect to contracts providing for flexible considerations, the minimum
nonforfeiture amount at any time at or before the commencement of any annuity payments shall be
equal to an accumulation up to such time, at a rate of interest of 3% per annum of percentages of the
net considerations [
(A) decreased by the sum of: [
(I) any prior withdrawals from or partial surrenders of the contract accumulated at a rate of
interest of 3% per annum[
(II) the amount of any indebtedness to the company on the contract, including interest due
and accrued[
(B) increased by any existing additional amounts credited by the company to the contract.
[
year used to define the minimum nonforfeiture amount shall be:
(A) an amount not less than zero; and [
(B) equal to the corresponding gross considerations credited to the contract during that
contract year less:
(I) an annual contract charge of $30; and [
(II) a collection charge of $1.25 per consideration credited to the contract during that contract
year.
(iii) The percentages of net considerations shall be:
(A) 65% of the net consideration for the first contract year; and
(B) 87-1/2% of the net considerations for the second and later contract years.
(iv) Notwithstanding [
percentage shall be 65% of the portion of the total net consideration for any renewal contract year
[
in all prior contract years for which the percentage was 65%.
(b) [
providing for fixed scheduled consideration, minimum nonforfeiture amounts shall be:
(A) calculated on the assumption that considerations are paid annually in advance; and [
(B) defined as for contracts with flexible considerations [
[
shall be equal to an amount that is the sum of:
(A) 65% of the net consideration for the first contract year [
(B) 22-1/2% of the excess of the net consideration for the first contract year over the lesser
of the net considerations for:
(I) the second contract year; and
(II) the third contract [
[
consideration.
(c) With respect to contracts providing for a single consideration payment, minimum
nonforfeiture amounts shall be defined as for contracts with flexible considerations except that:
(i) the percentage of net consideration used to determine the minimum nonforfeiture amount
shall be equal to 90%; and
(ii) the net consideration shall be the gross consideration less a contract charge of $75.
(5) (a) Any paid-up annuity benefit available under a contract shall be such that [
contract's present value on the date annuity payments are to commence is at least equal to the
minimum nonforfeiture amount on that date. [
(b) The present value described in Subsection (5)(a) shall be computed using the mortality
table, if any, and the interest rate specified in the contract for determining the minimum paid-up
annuity benefits guaranteed in the contract.
(6) (a) For contracts [
available before maturity may not be less than the present value as of the date of surrender of that
portion of the cash surrender value [
arising from considerations paid before the time of cash surrender reduced by the amount appropriate
to reflect any prior withdrawals from or partial surrender of the contract, the present value being
calculated on the basis of an interest rate not more than 1% higher than the interest rate specified in
the contract for accumulating the net considerations to determine the maturity value, decreased by
the amount of any indebtedness to the company on the contract, including interest due and accrued,
and increased by any existing additional amounts credited by the company to the contract.
(b) In no event shall any cash surrender benefit be less than the minimum nonforfeiture
amount at that time.
(c) The death benefit under these contracts shall be at least equal to the cash surrender
benefit.
(7) (a) For contracts [
of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity may
not be less than the present value of that portion of the maturity value of the paid-up annuity benefit
provided under the contract arising from considerations paid before the time the contract is
surrendered in exchange for, or changed to, a deferred paid-up annuity, this present value being
calculated for the period prior to the maturity date on the basis of the interest rate specified in the
contract for accumulating the net considerations to determine maturity value, and increased by any
existing additional amounts credited by the company to the contract.
(b) For contracts [
any annuity payments, the present values shall be calculated on the basis of the interest rate and the
mortality table specified in the contract for determining the maturity value of the paid-up annuity
benefit. [
(c) In no event shall the present value of a paid-up annuity benefit be less than the minimum
nonforfeiture amount at that time.
(8) (a) For the purpose of determining the benefits calculated under Subsections (6) and (7),
[
later than the later of:
(i) the anniversary of the contract next following the annuitant's 70th birthday; or
(ii) the tenth anniversary of the contract[
(b) For a contract that provides cash surrender benefits on or past the maturity date, the cash
surrender value shall be equal to the amount used to determine the annuity benefit payments.
(c) A surrender charge may not be imposed on or past maturity.
(9) Any contract [
death benefits at least equal to the minimum nonforfeiture amount before the commencement of any
annuity payments shall include a statement in a prominent place in the contract that [
benefits are not provided.
(10) Any paid-up annuity, cash surrender, or death benefits available at any time, other than
on the contract anniversary under any contract with fixed scheduled considerations, shall be
calculated with allowance for the lapse of time and the payment of any scheduled considerations
beyond the beginning of the contract year in which cessation of payment of considerations under the
contract occurs.
(11) (a) For any contract [
supplemental contract provisions, both annuity benefits and life insurance benefits that are in excess
of the greater of cash surrender benefits or a return of the gross considerations with interest, the
minimum nonforfeiture benefits shall:
(i) be equal to the sum of:
(A) the minimum nonforfeiture benefits for the annuity portion; and
(B) the minimum nonforfeiture benefits, if any, for the life insurance portion; and
(ii) computed as if each portion were a separate contract.
(b) (i) Notwithstanding [
benefits payable[
in Subsection (11)(b)(ii), and consideration for the additional benefits payable, shall be disregarded
in ascertaining, if required by this section:
(A) the minimum nonforfeiture amounts[
(B) paid-up annuity[
(C) cash surrender[
(D) death benefits [
(ii) For purposes of this Subsection (11), an additional benefit is a benefit payable:
(A) in the event of total and permanent disability;
(B) as reversionary annuity or deferred reversionary annuity benefits; or
(C) as other policy benefits additional to life insurance, endowment, and annuity benefits.
(iii) The inclusion of [
not be required in any paid-up benefits, unless the additional benefits separately would require:
(A) minimum nonforfeiture amounts[
(B) paid-up annuity[
(C) cash surrender; and
(D) death benefits.
(12) (a) After this section takes effect, any company may file with the commissioner a
written notice of its election to comply with [
before [
1988.
(b) This section [
the company specifies in the notice.
(c) If a company makes no [
this section for such company is [
1, 1988.
Section 39. Section 31A-22-522 is amended to read:
31A-22-522. Required provision for notice of termination.
(1) A policy for group or blanket life insurance coverage issued or renewed after July 1,
2001, shall include a provision that obligates the policyholder to notify each employee or group
member:
(a) in writing;
(b) 30 days before the date the coverage is terminated; and
(c) (i) that the group or blanket life insurance coverage is being terminated; and
(ii) the rights the employee or group member has to [
termination.
(2) For a policy for group or blanket life insurance coverage described in Subsection (1), an
insurer shall:
(a) include a statement of a policyholder's obligations under Subsection (1) in the insurer's
monthly notice to the policyholder of premium payments due; and
(b) provide a sample notice to the policyholder at least once a year.
Section 40. Section 31A-22-602 is amended to read:
31A-22-602. Premium rates.
(1) This section does not apply to group accident and health insurance.
(2) The benefits in an accident and health insurance policy shall be reasonable in relation to
the premiums charged.
(3) The commissioner shall [
policy form or rates if [
Section 41. Section 31A-22-617 is amended to read:
31A-22-617. Preferred provider contract provisions.
Health insurance policies may provide for insureds to receive services or reimbursement
under the policies in accordance with preferred health care provider contracts as follows:
(1) Subject to restrictions under this section, any insurer or third party administrator may
enter into contracts with health care providers as defined in Section 78-14-3 under which the health
care providers agree to supply services, at prices specified in the contracts, to persons insured by an
insurer.
(a) A health care provider contract may require the health care provider to accept the
specified payment as payment in full, relinquishing the right to collect additional amounts from the
insured person.
(b) The insurance contract may reward the insured for selection of preferred health care
providers by:
(i) reducing premium rates;
(ii) reducing deductibles;
(iii) coinsurance;
(iv) other copayments; or
(v) in any other reasonable manner.
(c) If the insurer is a managed care organization, as defined in Subsection
31A-27-311.5 (1)(f):
(i) the insurance contract and the health care provider contract shall provide that in the event
the managed care organization becomes insolvent, the rehabilitator or liquidator may:
(A) require the health care provider to continue to provide health care services under the
contract until the [
(I) 90 days [
liquidation; or
(II) the date the term of the contract ends; and
(B) subject to Subsection (1)(c)(v), reduce the fees the provider is otherwise entitled to
receive from the managed care organization during the time period described in Subsection
(1)(c)(i)(A);
(ii) the provider is required to:
(A) accept the reduced payment under Subsection (1)(c)(i)(B) as payment in full; and
(B) relinquish the right to collect additional amounts from the insolvent managed care
organization's enrollee, as defined in Section 31A-27-311.5 (1)(b);
(iii) if the contract between the health care provider and the managed care organization has
not been reduced to writing, or the contract fails to contain the language required by Subsection
(1)(c)(i), the provider may not collect or attempt to collect from the enrollee:
(A) sums owed by the insolvent managed care organization; or
(B) the amount of the regular fee reduction authorized under Subsection (1)(c)(i)(B);
(iv) the following may not bill or maintain any action at law against an enrollee to collect
sums owed by the insolvent managed care organization or the amount of the regular fee reduction
authorized under Subsection (1)(c)(i)(B):
(A) a provider;
(B) an agent;
(C) a trustee; or
(D) an assignee of a person described in Subsections (1)(c)(iv)(A) through (C); and
(v) notwithstanding Subsection (1)(c)(i):
(A) a rehabilitator or liquidator may not reduce a fee by less than 75% of the provider's
regular fee set forth in the contract; and
(B) the enrollee shall continue to pay the copayments, deductibles, and other payments for
services received from the provider that the enrollee was required to pay before the filing of:
(I) a petition for rehabilitation; or
(II) a petition for liquidation.
(2) (a) Subject to Subsections (2)(b) through (2)(f), an insurer using preferred health care
provider contracts shall pay for the services of health care providers not under the contract, unless
the illnesses or injuries treated by the health care provider are not within the scope of the insurance
contract. As used in this section, "class of health care providers" means all health care providers
licensed or licensed and certified by the state within the same professional, trade, occupational, or
facility licensure or licensure and certification category established pursuant to Titles 26 and 58.
(b) When the insured receives services from a health care provider not under contract, the
insurer shall reimburse the insured for at least 75% of the average amount paid by the insurer for
comparable services of preferred health care providers who are members of the same class of health
care providers. The commissioner may adopt a rule dealing with the determination of what
constitutes 75% of the average amount paid by the insurer for comparable services of preferred
health care providers who are members of the same class of health care providers.
(c) When reimbursing for services of health care providers not under contract, the insurer
may make direct payment to the insured.
(d) Notwithstanding Subsection (2)(b), an insurer using preferred health care provider
contracts may impose a deductible on coverage of health care providers not under contract.
(e) When selecting health care providers with whom to contract under Subsection (1), an
insurer may not unfairly discriminate between classes of health care providers, but may discriminate
within a class of health care providers, subject to Subsection (7).
(f) For purposes of this section, unfair discrimination between classes of health care
providers shall include:
(i) refusal to contract with class members in reasonable proportion to the number of insureds
covered by the insurer and the expected demand for services from class members; and
(ii) refusal to cover procedures for one class of providers that are:
(A) commonly utilized by members of the class of health care providers for the treatment
of illnesses, injuries, or conditions;
(B) otherwise covered by the insurer; and
(C) within the scope of practice of the class of health care providers.
(3) Before the insured consents to the insurance contract, the insurer shall fully disclose to
the insured that it has entered into preferred health care provider contracts. The insurer shall provide
sufficient detail on the preferred health care provider contracts to permit the insured to agree to the
terms of the insurance contract. The insurer shall provide at least the following information:
(a) a list of the health care providers under contract and if requested their business locations
and specialties;
(b) a description of the insured benefits, including any deductibles, coinsurance, or other
copayments;
(c) a description of the quality assurance program required under Subsection (4); and
(d) a description of the [
Subsection (5).
(4) (a) An insurer using preferred health care provider contracts shall maintain a quality
assurance program for assuring that the care provided by the health care providers under contract
meets prevailing standards in the state.
(b) The commissioner in consultation with the executive director of the Department of
Health may designate qualified persons to perform an audit of the quality assurance program. The
auditors shall have full access to all records of the organization and its health care providers,
including medical records of individual patients.
(c) The information contained in the medical records of individual patients shall remain
confidential. All information, interviews, reports, statements, memoranda, or other data furnished
for purposes of the audit and any findings or conclusions of the auditors are privileged. The
information is not subject to discovery, use, or receipt in evidence in any legal proceeding except
hearings before the commissioner concerning alleged violations of this section.
(5) An insurer using preferred health care provider contracts shall provide a reasonable
procedure for resolving complaints and [
insureds and health care providers.
(6) An insurer may not contract with a health care provider for treatment of illness or injury
unless the health care provider is licensed to perform that treatment.
(7) (a) A health care provider or insurer may not discriminate against a preferred health care
provider for agreeing to a contract under Subsection (1).
(b) Any health care provider licensed to treat any illness or injury within the scope of the
health care provider's practice, who is willing and able to meet the terms and conditions established
by the insurer for designation as a preferred health care provider, shall be able to apply for and
receive the designation as a preferred health care provider. Contract terms and conditions may
include reasonable limitations on the number of designated preferred health care providers based
upon substantial objective and economic grounds, or expected use of particular services based upon
prior provider-patient profiles.
(8) Upon the written request of a provider excluded from a provider contract, the
commissioner may hold a hearing to determine if the insurer's exclusion of the provider is based on
the criteria set forth in Subsection (7)(b).
(9) Insurers are subject to the provisions of Sections 31A-22-613.5 , 31A-22-614.5 , and
31A-22-618 .
(10) Nothing in this section is to be construed as to require an insurer to offer a certain
benefit or service as part of a health benefit plan.
(11) This section does not apply to catastrophic mental health coverage provided in
accordance with Section 31A-22-625 .
Section 42. Section 31A-22-624 is amended to read:
31A-22-624. Primary care physician.
An accident and health insurance policy that requires an insured to select a primary care
physician to receive optimum coverage:
(1) shall permit an insured to select a participating provider who:
(a) is an:
(i) obstetrician[
(ii) gynecologist; or
(iii) pediatrician; and
(b) is qualified and willing to provide primary care services, as defined by the health care
plan, as the insured's provider from whom primary care services are received;
(2) shall clearly state in literature explaining the policy the option available to [
insureds under Subsection (1); and
(3) may not impose a higher premium, higher copayment requirement, or any other
additional expense on an insured [
care physician in accordance with Subsection (1).
Section 43. Section 31A-22-625 is amended to read:
31A-22-625. Catastrophic coverage of mental health conditions.
(1) As used in this section:
(a) (i) "Catastrophic mental health coverage" means coverage in a health insurance policy
or health maintenance organization contract that does not impose any lifetime limit, annual payment
limit, episodic limit, inpatient or outpatient service limit, or maximum out-of-pocket limit that places
a greater financial burden on an insured for the evaluation and treatment of a mental health condition
than for the evaluation and treatment of a physical health condition.
(ii) "Catastrophic mental health coverage" may include a restriction on cost sharing factors,
such as deductibles, copayments, or coinsurance, prior to reaching any maximum out-of-pocket limit.
(iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket limit
for physical health conditions and another maximum out-of-pocket limit for mental health
conditions, provided that, if separate out-of-pocket limits are established, the out-of-pocket limit for
mental health conditions may not exceed the out-of-pocket limit for physical health conditions.
(b) (i) "50/50 mental health coverage" means coverage in a health insurance policy or health
maintenance organization contract that pays for at least 50% of covered services for the diagnosis
and treatment of mental health conditions.
(ii) "50/50 mental health coverage" may include a restriction on episodic limits, inpatient
or outpatient service limits, or maximum out-of-pocket limits.
(c) "Large employer" [
(d) (i) "Mental health condition" means any condition or disorder involving mental illness
that falls under any of the diagnostic categories listed in the Diagnostic and Statistical Manual, as
periodically revised.
(ii) "Mental health condition" does not include the following when diagnosed as the primary
or substantial reason or need for treatment:
(A) marital or family problem;
(B) social, occupational, religious, or other social maladjustment;
(C) conduct disorder;
(D) chronic adjustment disorder;
(E) psychosexual disorder;
(F) chronic organic brain syndrome;
(G) personality disorder;
(H) specific developmental disorder or learning disability; or
(I) mental retardation.
(e) "Small employer" is as defined in Section [
(2) (a) At the time of purchase and renewal, an insurer shall offer to each small employer
that it insures or seeks to insure a choice between catastrophic mental health coverage and 50/50
mental health coverage.
(b) In addition to Subsection (2)(a), an insurer may offer to provide:
(i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels that
exceed the minimum requirements of this section; or
(ii) coverage that excludes benefits for mental health conditions.
(c) A small employer may, at its option, choose either catastrophic mental health coverage,
50/50 mental health coverage, or coverage offered under Subsection (2)(b), regardless of the
employer's previous coverage for mental health conditions.
(d) An insurer is exempt from the 30% index rating restriction in Subsection
31A-30-106 (1)(b) and, for the first year only that catastrophic mental health coverage is chosen, the
15% annual adjustment restriction in Subsection 31A-30-106 (1)(c)(ii), for any small employer with
20 or less enrolled employees who chooses coverage that meets or exceeds catastrophic mental
health coverage.
(3) (a) At the time of purchase and renewal, an insurer shall offer catastrophic mental health
coverage to each large employer that it insures or seeks to insure.
(b) In addition to Subsection (3)(a), an insurer may offer to provide catastrophic mental
health coverage at levels that exceed the minimum requirements of this section.
(c) A large employer may, at its option, choose either catastrophic mental health coverage,
coverage that excludes benefits for mental health conditions, or coverage offered under Subsection
(3)(b).
(4) (a) An insurer may provide catastrophic mental health coverage through a managed care
organization or system in a manner consistent with the provisions in Chapter 8, Health Maintenance
Organizations and Limited Health Plans, regardless of whether the policy or contract uses a managed
care organization or system for the treatment of physical health conditions.
(b) (i) Notwithstanding any other provision of this title, an insurer may:
(A) establish a closed panel of providers for catastrophic mental health coverage; and
(B) refuse to provide any benefit to be paid for services rendered by a nonpanel provider
unless:
(I) the insured is referred to a nonpanel provider with the prior authorization of the insurer;
and
(II) the nonpanel provider agrees to follow the insurer's protocols and treatment guidelines.
(ii) If an insured receives services from a nonpanel provider in the manner permitted by
Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the average
amount paid by the insurer for comparable services of panel providers under a noncapitated
arrangement who are members of the same class of health care providers.
(iii) Nothing in this Subsection (4)(b) may be construed as requiring an insurer to authorize
a referral to a nonpanel provider.
(c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
mental health condition must be rendered:
(i) by a mental health therapist as defined in Section 58-60-102 ; or
(ii) in a health care facility licensed or otherwise authorized to provide mental health services
pursuant to Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act, or Title 62A,
Chapter 2, Licensure of Programs and Facilities, that provides a program for the treatment of a
mental health condition pursuant to a written plan.
(5) The commissioner may disapprove any policy or contract that provides mental health
coverage in a manner that is inconsistent with the provisions of this section.
(6) The commissioner shall:
(a) adopt rules as necessary to ensure compliance with this section; and
(b) provide general figures on the percentage of contracts and policies that include no mental
health coverage, 50/50 mental health coverage, catastrophic mental health coverage, and coverage
that exceeds the minimum requirements of this section.
(7) The Health and Human Services Interim Committee shall review:
(a) the impact of this section on insurers, employers, providers, and consumers of mental
health services before January 1, 2004; and
(b) make a recommendation as to whether the provisions of this section should be modified
and whether the cost-sharing requirements for mental health conditions should be the same as for
physical health conditions.
(8) (a) An insurer shall offer catastrophic mental health coverage as part of a health
maintenance organization contract that is governed by Chapter 8, Health Maintenance Organizations
and Limited Health Plans, that is in effect on or after January 1, 2001.
(b) An insurer shall offer catastrophic mental health coverage as a part of a health insurance
policy that is not governed by Chapter 8, Health Maintenance Organizations and Limited Health
Plans, that is in effect on or after July 1, 2001.
(c) This section does not apply to the purchase or renewal of an individual insurance policy
or contract.
(d) Notwithstanding Subsection (8)(c), nothing in this section may be construed as
discouraging or otherwise preventing insurers from continuing to provide mental health coverage
in connection with an individual policy or contract.
(9) This section shall be repealed in accordance with Section 63-55-231 .
Section 44. Section 31A-22-629 is amended to read:
31A-22-629. Adverse benefit determination review process.
(1) As used in this section:
[
(a) (i) "Adverse benefit determination" means the:
(A) denial of a benefit;
(B) reduction of a benefit;
(C) termination of a benefit; or
(D) failure to provide or make payment, in whole or in part, for a benefit.
(ii) "Adverse benefit determination" includes:
(A) denial, reduction, termination, or failure to provide or make payment that is based on
a determination of an insured's or a beneficiary's eligibility to participate in a plan;
(B) with respect to group health plans, a denial, reduction, or termination of, or a failure to
provide or make payment, in whole or in part, for, a benefit resulting from the application of a
utilization review; and
(C) failure to cover an item or service for which benefits are otherwise provided because it
is determined to be:
(I) experimental;
(II) investigational; or
(III) not medically necessary or appropriate.
(b) "Independent review" means a process that:
(i) [
voluntary option for the resolution of an adverse benefit determination;
(ii) [
claimant;
(iii) [
designated by the insurer;
(iv) renders an independent and impartial decision on [
determination submitted by an insured; and
(v) may not require the insured to pay a fee for requesting the independent review.
(c) "Insured" is as defined in Section 31A-1-301 and includes a person who is authorized to
act on the insured's behalf.
(d) "Insurer" is as defined in Section 31A-1-301 and includes:
(i) a health maintenance organization; and
(ii) a third-party administrator that offers, sells, manages, or administers a health insurance
policy or health maintenance organization contract that is subject to this title.
(e) "Internal review" means the process an insurer uses to review an insured's [
adverse benefit determination before the [
independent review.
(2) This section applies generally to health insurance policies and health maintenance
organization contracts in effect on or after January 1, 2001.
(3) (a) An insured may submit [
(b) The insurer shall conduct an internal review of the insured's [
determination.
[
(4) Before October 1, 2000, the commissioner shall adopt rules that[
[
[
(b) independent reviews to ensure independence and impartiality;
[
an independent review; and
[
necessary.
(5) Nothing in this section may be construed as:
(a) expanding, extending, or modifying the terms of a policy or contract with respect to
benefits or coverage;
(b) permitting an insurer to charge an insured for the internal review of [
adverse benefit determination;
(c) restricting the use of arbitration in connection with or subsequent to an independent
review; or
(d) altering the legal rights of any party to seek court or other redress in connection with:
(i) an adverse decision resulting from an independent review, except that if the insurer is the
party seeking legal redress, the insurer shall pay for the reasonable attorneys fees of the insured
related to the action and court costs; or
(ii) [
submission to independent review.
Section 45. Section 31A-22-703 is amended to read:
31A-22-703. Conversion rights on termination of group accident and health insurance
coverage.
(1) Except as provided in Subsections (2) through (5), all policies of accident and health
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:
(a) a converted individual policy of accident and health insurance from the insurer [
that conforms to Section 31A-22-708 ; or
(b) an extension of benefits under the group policy as provided in Section 31A-22-714 .
(2) Subsection (1) does not apply if the policy:
(a) provides:
(i) catastrophic[
(ii) aggregate stop loss[
(iii) specific stop loss benefits; or
[
(A) specific diseases [
(B) accidental injuries only[
(C) dental 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 [
failed 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 has:
(i) performed an act or practice that constitutes fraud; or
(ii) made an intentional misrepresentation of material fact under the terms of the coverage.
(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 [
the terms of [
(5) (a) Notwithstanding Subsection 31A-22-613 (1), an insurer may reduce benefits under
a converted 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 coverage that would result in payment of more than 100%
of the amount of the claim.
(b) The benefits sources referred to under Subsection (5)(a) include benefits under:
(i) [
(ii) [
insured or an uninsured basis.
(6) (a) The conversion policy shall provide maternity benefits equal to the lesser of the
maternity benefits of the group policy or the conversion policy until termination of a pregnancy that
exists on the date of conversion if:
(i) one of the following is pregnant on the date of the conversion:
(A) the insured;
(B) a spouse of the insured; or
(C) a dependent of the insured; and
(ii) the accident and health policy had maternity benefits.
(b) The requirements of this Subsection (6) do not apply to a pregnancy that occurs after the
date of conversion.
Section 46. Section 31A-22-705 is amended to read:
31A-22-705. Provisions in conversion policies.
(1) A converted policy may include a provision under which the insurer may request from
the person covered, information in advance of any premium due date as to whether there is other
coverage as specified under Subsection 31A-22-703 (4).
[
[
[
(2) (a) Except as provided in Subsection (2)(b), a converted policy is renewable with respect
to all individuals or dependents at the option of the individual.
(b) A converted policy may be discontinued if:
(i) the individual fails to pay premiums or contributions in accordance with the terms of the
health benefit plan, including any timeliness requirements;
(ii) the individual:
(A) performs an act or practice that constitutes fraud; or
(B) made an intentional misrepresentation of material fact under the terms of the coverage;
or
(iii) for network plans:
(A) the individual no longer resides, lives, or works in:
(I) the service area of the insurer; or
(II) the area for which the insurer is authorized to do business; and
(B) coverage is terminated uniformly without regard to any health status-related factor of
covered individuals.
(3) An insurer may not be required to issue a converted policy which provides benefits in
excess of those provided under the group policy from which conversion is made.
(4) A converted policy may not exclude a preexisting condition not excluded under the group
policy.
(5) During the first policy year, the converted policy may provide that the benefits payable
under the converted policy, together with the benefits paid for the individual under the group policy,
do not exceed those that would have been payable had the individual's insurance under the group
policy remained in force and effect.
Section 47. Section 31A-22-708 is amended 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 [
offered at least basic coverage as defined in [
Section 48. 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; or
(ii) is eligible for any extension of coverage required by federal law.
(b) This right to continue coverage includes any dependent coverages.
(2) In addition to the terminated insured, those classes of persons defined in Section
31A-22-710 are [
(3) (a) (i) 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.
(ii) The notice required by this Subsection (3):
(A) may be sent to the terminated insured's home address as shown on the records of the
employer[
(B) shall be given not more than 30 days after the termination date of the group coverage.
(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) The insurer shall provide the employee or any eligible dependent the opportunity to
continue the group coverage at the payment amount stated in Subsection (3)(b) if:
(a) the employer policyholder does not provide the terminated insured the written
notification as required by Subsection (3); and
(b) the employee or other insured eligible for extension contacts the insurer within 30 days
of coverage termination.
[
Subsection (5)(b) continues without interruption and may not terminate if the terminated insured or,
with respect to a minor, the parent or guardian of the terminated insured:
(i) elects to continue group coverage; and
(ii) tenders the amount required:
(A) (I) to the employer [
(II) to the insurer if the right to continue notice is received from the insurer; and
(B) within 30 days after receiving notice as prescribed by this section[
(b) Subsection (5)(a) applies to coverage of:
(i) the terminated insured [
(ii) the covered spouse of the terminated insured; and
(iii) dependents of the terminated insured [
(c) A coverage described in Subsection (5)(b) may be terminated if:
[
(A) establishes residence outside of this state; or
(B) moves out of the insurer's service area;
[
[
[
policy; or
[
[
without interruption, the terminated insured has the right to obtain coverage under the replacement
group policy:
(a) for the balance of the period the terminated insured would have continued coverage under
the replaced group policy[
(b) if the terminated insured is otherwise eligible for continuation of coverage.
[
person:
(a) remains eligible for a converted policy under this chapter; and
(b) shall be [
(i) by the employer; and
(ii) in the same manner and according to the same terms as required by Section 31A-22-703 .
Section 49. Section 31A-22-721 is enacted to read:
31A-22-721. A health benefit plan for a plan sponsor -- Discontinuance and
nonrenewal.
(1) Except as otherwise provided in this section, a health benefit plan for a plan sponsor is
renewable and continues in force:
(a) with respect to all eligible employees and dependents; and
(b) at the option of the plan sponsor.
(2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
(a) for a network plan, if:
(i) there is no longer any enrollee under the group health plan who lives, resides, or works
in:
(A) the service area of the insurer; or
(B) the area for which the insurer is authorized to do business; and
(ii) in the case of the small employer market, the insurer applies the same criteria the insurer
would apply in denying enrollment in the plan under Subsection 31A-30-108 (6); or
(b) for coverage made available in the small or large employer market only through an
association, if:
(i) the employer's membership in the association ceases; and
(ii) the coverage is terminated uniformly without regard to any health status-related factor
relating to any covered individual.
(3) A health benefit plan for a plan sponsor may be discontinued if:
(a) a condition described in Subsection (2) exists;
(b) the plan sponsor fails to pay premiums or contributions in accordance with the terms of
the contract;
(c) the plan sponsor:
(i) performs an act or practice that constitutes fraud; or
(ii) makes an intentional misrepresentation of material fact under the terms of the coverage;
(d) the insurer:
(i) elects to discontinue offering a particular health benefit product delivered or issued for
delivery in this state;
(ii) (A) provides notice of the discontinuation in writing:
(I) to each plan sponsor, employee, and dependent of a plan sponsor or employee; and
(II) at least 90 days before the date the coverage will be discontinued;
(B) provides notice of the discontinuation in writing:
(I) to the commissioner; and
(II) at least three working days prior to the date the notice is sent to the affected plan
sponsors, employees, and dependents of plan sponsors or employees;
(C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase any other
health benefit products currently being offered:
(I) by the insurer in the market; or
(II) in the case of a large employer, any other health benefit plan currently being offered in
that market; and
(D) in exercising the option to discontinue that product and in offering the option of
coverage in this section, the insurer acts uniformly without regard to:
(I) the claims experience of a plan sponsor;
(II) any health status-related factor relating to any covered participant or beneficiary; or
(III) any health status-related factor relating to a new participant or beneficiary who may
become eligible for coverage; or
(e) the insurer:
(i) elects to discontinue all of the insurer's health benefit plans:
(A) in the small employer market; or
(B) the large employer market; or
(C) both the small and large employer markets;
(ii) (A) provides notice of the discontinuance in writing:
(I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
(II) at least 180 days before the date the coverage will be discontinued;
(B) provides notice of the discontinuation in writing:
(I) to the commissioner in each state in which an affected insured individual is known to
reside; and
(II) at least 30 business days prior to the date the notice is sent to the affected plan sponsors,
employees, and dependents of a plan sponsor or employee;
(C) discontinues and nonrenews all plans issued or delivered for issuance in the market; and
(D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
(4) A health benefit plan for a plan sponsor may be nonrenewed:
(a) if a condition described in Subsection (2) exists; or
(b) for noncompliance with the insurer's:
(i) minimum participation requirements; or
(ii) employer contribution requirements.
(5) (a) Except as provided in Subsection (5)(d), an eligible employee may be discontinued
if after issuance of coverage the eligible employee:
(i) engages in an act or practice that constitutes fraud in connection with the coverage; or
(ii) makes an intentional misrepresentation of material fact in connection with the coverage.
(b) An eligible employee that is discontinued under Subsection (5)(a) may reenroll:
(i) 12 months after the date of discontinuance; and
(ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies to
reenroll.
(c) At the time the eligible employee's coverage is discontinued under Subsection (5)(a), the
insurer shall notify the eligible employee of the right to reenroll when coverage is discontinued.
(d) An eligible employee may not be discontinued under this Subsection (5) because of a
fraud or misrepresentation that relates to health status.
(6) (a) Except as provided in Subsection (6)(b), an insurer that elects to discontinue offering
a health benefit plan under Subsection (3)(e) shall be prohibited from writing new business in such
market in this state for a period of five years beginning on the date of discontinuation of the last
coverage that is discontinued.
(b) The commissioner may waive the prohibition under Subsection (6)(a) when the
commissioner finds that waiver is in the public interest:
(i) to promote competition; or
(ii) to resolve inequity in the marketplace.
(7) If an insurer is doing business in one established geographic service area of the state, this
section applies only to the insurer's operations in that geographic service area.
(8) An insurer may modify a health benefit plan for a plan sponsor only:
(a) at the time of coverage renewal; and
(b) if the modification is effective uniformly among all plans with a particular product or
service.
(9) For purposes of this section, a reference to "plan sponsor" includes a reference to the
employer:
(a) with respect to coverage provided to an employer member of the association; and
(b) if the health benefit plan is made available by an insurer in the employer market only
through:
(i) an association;
(ii) a trust; or
(iii) a discretionary group.
(10) (a) A small employer that, after purchasing a health benefit plan in the small group
market, employs on average more than 50 eligible employees on each business day in a calendar year
may continue to renew the health benefit plan purchased in the small group market.
(b) A large employer that, after purchasing a health benefit plan in the large group market,
employs on average less than 51 eligible employees on each business day in a calendar year may
continue to renew the health benefit plan purchased in the large group market.
(11) An insurer offering employer sponsored health benefit plans shall comply with the
Health Insurance Portability and Accountability Act, P. L. 104-191, 110 Stat. 1962, Sec. 2701 and
2702.
Section 50. Section 31A-23-102 is amended to read:
31A-23-102. Definitions.
As used in this chapter:
(1) "Actuary" means a person who is a member in good standing of the American Academy
of Actuaries.
(2) "Agency" means a person other than an individual, and includes a sole proprietorship by
which a natural person does business under an assumed name.
(3) "Broker" means an insurance broker or any other person, firm, association, or 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.
(4) "Bail bond agent" means an individual:
(a) appointed by an authorized bail bond surety insurer or appointed by a licensed bail bond
surety company to execute or countersign undertakings of bail in connection with judicial
proceedings; and
(b) who receives or is promised money or other things of value for this service.
(5) "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.
(6) "Controlled insurer" means a licensed insurer that is either directly or indirectly
controlled by a broker.
(7) "Controlling broker" means a broker who either directly or indirectly controls an insurer.
(8) "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.
(9) (a) "Escrow" means [
(i) a real estate settlement or real estate closing conducted by a third party pursuant to the
requirements of a written agreement between the parties in a real estate transaction; or
(ii) a settlement or closing involving:
(A) a mobile home;
(B) a grazing right;
(C) a water right; or
(D) other personal property authorized by the commissioner.
[
[
(b) "Escrow" includes the act of conducting a:
(i) real estate settlement; or
(ii) real estate closing.
(10) "Home state" means any state or territory of the United States or the District of
Columbia in which an insurance producer:
(a) maintains the insurance producer's principal:
(i) place of residence; or
(ii) place of business; and
(b) is licensed to act as an insurance producer.
(11) "Insurer" is as defined in Section 31A-1-301 , except the following persons or similar
persons are not insurers for purposes of Part 6, Broker Controlled Insurers:
(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.; and
(iii) Chapter 15, Part II, Risk Retention Groups Act;
(b) all residual market pools and joint underwriting authorities or associations; and
(c) all captive insurers.
(12) "License" is defined in Section 31A-1-301 .
(13) "Limited license" means a license that:
(a) is issued for a specific product of insurance; and
(b) limits an individual or agency to transact only for that product or insurance.
(14) "Limited line insurance" includes:
(a) bail bond;
(b) limited line credit [
[
[
[
[
[
[
[
[
[
[
[
[
insurance.
(15) "Limited line credit insurance" includes the following forms of insurance:
(a) credit life;
(b) credit accident and health;
(c) credit property;
(d) credit unemployment;
(e) involuntary unemployment;
(f) mortgage life;
(g) mortgage guaranty;
(h) mortgage accident and health;
(i) guaranteed automobile protection; and
(j) any other form of insurance offered in connection with an extension of credit that:
(i) is limited to partially or wholly extinguishing that credit obligation; and
(ii) the commissioner determines by rule should be designated as a form of limited line credit
insurance.
(16) "Limited line credit insurance producer" means a person who sells, solicits, or
negotiates one or more forms of limited line credit insurance coverage to individuals through a
master, corporate, group, or individual policy.
(17) "Limited lines insurance" includes:
(a) the lines of insurance listed in Subsection (14); or
(b) any other line of insurance that the commissioner considers necessary to recognize in the
public interest.
(18) "Limited lines producer" means a person authorized to sell, solicit, or negotiate limited
lines insurance.
[
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; and
(iv) (A) adjusts or pays claims in excess of an amount determined by the commissioner; or
(B) negotiates reinsurance on behalf of the insurer.
(b) Notwithstanding Subsection [
as managing general agent for the purposes of this chapter:
(i) an employee of the insurer;
(ii) a United States manager of the United States branch of an alien insurer;
(iii) an underwriting manager that, pursuant to contract:
(A) manages all the insurance operations of the insurer;
(B) is under common control with the insurer;
(C) is subject to Chapter 16, Insurance Holding Companies; and
(D) is not compensated based on the volume of premiums written; and
(iv) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer
or inter-insurance exchange under powers of attorney.
[
to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the
substantive benefits, terms, or conditions of the contract if the person engaged in that act:
(a) sells insurance; or
(b) obtains insurance from insurers for purchasers.
(21) "Personal lines" means property and casualty insurance coverage sold to individuals and
families for primarily noncommercial purposes.
[
to sell, solicit, or negotiate insurance.
[
(a) is organized or, in the case of a United States office of a foreign banking organization
licensed, under the laws of the United States or any state;
(b) is regulated, supervised, and examined by United States federal or state authorities
having regulatory authority over banks and trust companies; and
(c) meets the standards of financial condition and standing that are considered necessary and
appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable
to the commissioner as determined by:
(i) the commissioner; or
(ii) the Securities Valuation Office of the National Association of Insurance Commissioners.
[
reinsurance intermediary-manager as these terms are defined in Subsections [
(26).
[
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.
[
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 the person, firm, association, or corporation
is known as a reinsurance intermediary-manager, manager, or other similar term.
(b) Notwithstanding Subsection [
reinsurance intermediary-managers for the purpose of this chapter with respect to the reinsurer:
(i) an employee of the reinsurer;
(ii) a United States 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 Chapter 16, Insurance Holding Companies; and
(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.
[
this state as an insurer with the authority to assume reinsurance.
[
commitments or policies on behalf of a title insurer.
[
(a) by any means;
(b) for money or its equivalent; and
(c) on behalf of an insurance company.
[
(a) attempting to sell insurance; or
(b) asking or urging a person to apply:
(i) for a particular kind of insurance; and
(ii) from a particular insurance company.
[
to place insurance with unauthorized insurers in accordance with Section 31A-15-103 .
[
(a) the cancellation of the relationship between:
(i) an insurance producer; and
(ii) a particular insurer; or
(b) the termination of the producer's authority to transact insurance on behalf of a particular
insurance company.
[
(a) represents a title insurer in soliciting, requesting, or negotiating the placing of:
(i) title insurance; or
(ii) escrow[
(b) does not have a search or escrow license as provided in Section 31A-23-204 .
[
[
Insurance Commissioner's uniform application for resident and nonresident producer licensing at the
time the application is filed.
[
Association of Insurance Commissioner's uniform business entity application for resident and
nonresident business entities at the time the application is filed.
Section 51. Section 31A-23-204 is amended to read:
31A-23-204. License classifications.
A resident or nonresident license 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) An agent and broker license classification includes:
(a) life insurance, including nonvariable contracts;
(b) variable contracts;
(c) accident and health 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;
(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; [
(f) workers' compensation insurance[
(g) personal lines.
(2) A limited license classification includes:
(a) limited line credit [
(b) travel insurance;
(c) motor club insurance;
(d) car rental related insurance;
[
[
(e) legal expense insurance;
[
[
(3) A consultant license classification includes:
(a) life insurance, including nonvariable contracts;
(b) variable contracts;
(c) accident and health 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) workers' compensation insurance.
(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) (a) Upon satisfying the additional applicable requirements, a holder of a brokers license
may obtain a license to act as a surplus lines broker.
(b) A license to act as a surplus lines broker 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 the broker 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 52. Section 31A-23-206 is amended to read:
31A-23-206. Continuing education requirements -- Regulatory authority.
(1) The commissioner shall by rule prescribe the continuing education requirements for each
class of agent's license under Subsection 31A-23-204 (1), except that the commissioner may not
impose a continuing education requirement on a holder of a license under:
(a) Subsection 31A-23-204 (2); or
(b) a license classification other than under Subsection 31A-23-204 (2) that is recognized by
the commissioner by rule as provided in Subsection 31A-23-204 (6).
(2) (a) The commissioner may not state a continuing education requirement in terms of
formal education.
(b) The commissioner may state a continuing education requirement in terms of classroom
hours, or their equivalent, of insurance-related instruction received.
(c) Insurance-related formal education may be a substitute, in whole or in part, for classroom
hours, or their equivalent, required under Subsection (2)(b).
(3) (a) The commissioner shall impose continuing education requirements in accordance with
a two-year licensing period in which the licensee meets the requirements of this Subsection (3).
(b) Except as provided in Subsection (3)(c), for a two-year licensing period described in
Subsection (3)(a) the commissioner shall require that the licensee for each line of authority held by
the licensee:
(i) receive [
(ii) pass a line of authority continuing education examination.
(c) Notwithstanding Subsection (3)(b):
(i) the commissioner may not require continuing education for more than four lines of
authority held by the licensee;
(ii) the commissioner shall require:
(A) a minimum of:
(I) 12 hours of continuing education;
(II) passage of two line of authority continuing education examinations; or
(III) a combination of Subsections (3)(c)(ii)(A)(I) and (II);
(B) that the minimum continuing education requirement of Subsection (3)(c)(ii)(A) include:
(I) at least [
line of authority held by the licensee not to exceed four lines of authority held by the licensee; and
(II) three hours of ethics training[
(d) (i) If a licensee completes the licensee's continuing education requirement without taking
a line of authority continuing education examination, the licensee shall complete at least 1/2 of the
required hours through classroom hours of insurance-related instruction.
(ii) The hours not completed through classroom hours in accordance with Subsection
(3)(d)(i) may be obtained through:
(A) home study;
(B) video tape;
(C) experience credit; or
(D) other method provided by rule.
(e) (i) A licensee may obtain continuing education hours at any time during the two-year
licensing period.
(ii) The licensee may not take a line of authority continuing education examination more
than 90 calendar days before the date on which the licensee's license is renewed.
(f) The commissioner shall make rules for the content and procedures for line of authority
continuing education examinations.
(g) (i) Beginning May 3, 1999, a licensee is exempt from continuing education requirements
under this section if:
(A) as of April 1, 1990, the licensee has completed 20 years of licensure in good standing;
(B) the licensee requests an exemption from the department; and
(C) the department approves the exemption.
(ii) If the department approves the exemption under Subsection (3)(g)(i), the licensee is not
required to apply again for the exemption.
(h) A licensee with a variable contract line of authority is exempt from the requirement for
continuing education for that line of authority so long as the:
(i) National Association of Securities Dealers requires continuing education for licensees
having a securities license; and
(ii) licensee complies with the National Association of Securities Dealers' continuing
education requirements for securities licensees.
(i) The commissioner shall, by rule:
(i) publish a list of insurance professional designations whose continuing education
requirements can be used to meet the requirements for continuing education under Subsection (3)(c);
and
(ii) authorize professional agent associations to:
(A) offer qualified programs for all classes of licenses on a geographically accessible basis;
and
(B) collect reasonable fees for funding and administration of the continuing education
program, subject to the review and approval of the commissioner.
(j) (i) The fees permitted under Subsection (3)(i)(ii) that are charged to fund and administer
the program shall reasonably relate to the costs of administering the program.
(ii) Nothing in this section prohibits a provider of continuing education programs or courses
from charging fees for attendance at courses offered for continuing education credit.
(iii) The fees permitted under Subsection (3)(i)(ii) that are charged for attendance at a
professional agent association program may be less for an association member, based on the
member's affiliation expense, but shall preserve the right of a nonmember to attend without
affiliation.
(4) The commissioner shall designate courses, including those presented by insurers, which
satisfy the requirements of this section.
(5) The requirements of this section apply only to applicants who are natural persons.
(6) A nonresident producer is considered to have satisfied this state's continuing education
requirements if:
(a) the nonresident producer satisfies the nonresident producer's home state's continuing
education requirements for a licensed insurance producer; and
(b) on the same basis as under this Subsection (6) the nonresident producer's home state
considers satisfaction of Utah's continuing education requirements for a producer as satisfying the
continuing education requirements of the home state.
Section 53. Section 31A-23-211 is amended to read:
31A-23-211. Special requirements for title insurance agents.
Title insurance agents shall be licensed in accordance with this chapter, with the [
additional requirements[
(1) (a) Every title insurance agency or agent appointed by an insurer shall maintain:
(i) a fidelity bond [
(ii) a professional liability insurance policy[
(iii) a financial protection:
(A) equivalent to that described in Subsection (1)(a)(i) or (ii); and
(B) that the commissioner considers adequate. [
(b) The bond or insurance required by this Subsection (1):
(i) shall be supplied under a contract approved by the commissioner to provide protection
against the improper performance of any service in conjunction with the issuance of a contract or
policy of title insurance[
(ii) be in a face amount no less than $50,000.
(c) The commissioner may by rule exempt title insurance agents from the requirements of
this Subsection (1) upon a finding that, and only so long as, the required policy or bond is generally
unavailable at reasonable rates.
(2) (a) (i) Every title insurance agency or agent appointed by an insurer shall maintain a
reserve fund. [
(ii) The reserve fund required by this Subsection (2) shall be:
(A) (I) composed of assets approved by the commissioner [
(II) maintained as a separate account; and
(III) charged as a reserve liability of the title insurance agent in determining the agent's
financial condition[
(B) accumulated by segregating 1% of all gross income received from the title insurance
business.
(iii) Assets accumulated within the reserve fund for more than ten full years shall be:
(A) withdrawn from the fund; and
(B) restored to the income of the agent.
(iv) The title insurance agent may withdraw interest from the reserve fund related to the
principal amount as it accrues.
(b) (i) A disbursement may not be made from the reserve fund except as provided in
Subsection (2)(a) unless the title insurance agent ceases doing business as a result of:
(A) sale of assets[
(B) merger of the agent with another agent[
(C) termination of the agent's license[
(D) insolvency[
(E) any cessation of business by the agent.
(ii) Any disbursements from the reserve fund may be made only to settle claims arising from
the improper performance of the title insurance agent in providing services defined in Section
31A-23-307 .
(iii) The commissioner shall be notified ten days before any disbursements from the reserve
fund.
(iv) The notice [
(A) the amount of claim[
(B) the nature of the claim[
(C) the name of the payee.
(c) (i) The reserve fund shall be maintained by the title insurance agent or [
insurance agent's representative for a period of two years after the agent ceases doing business.
(ii) Any assets remaining in the reserve fund at the end of the two years specified in
Subsection (2)(c)(i) may be withdrawn and restored to the former agent.
(3) Any examination for licensure shall include questions regarding the search and
examination of title to real property.
(4) A title insurance agent may not perform the functions of escrow[
unless the agent has been examined on the fiduciary duties and procedures involved in those
functions.
(5) The commissioner shall adopt rules outlining an examination that will satisfy this
section.
(6) [
qualified:
(a) to perform only searches and examinations of title as specified in Subsection (3)[
(b) to handle only escrow[
(4)[
(c) to act as a title marketing [
(7) A person licensed to practice law in Utah is exempt from the requirements of Subsections
(1) and (2) if[
[
[
[
Section 54. Section 31A-23-216 is amended to read:
31A-23-216. Termination of license.
(1) A license issued under this chapter remains in force until:
(a) revoked, suspended, or limited under Subsection (2);
(b) lapsed under Subsection (3);
(c) surrendered to and accepted by the commissioner; or
(d) the licensee dies or is adjudicated incompetent as defined under:
(i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
(ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
Minors.
(2) (a) If the commissioner makes a finding under Subsection (2)(b), after an adjudicative
proceeding under Title 63, Chapter 46b, Administrative Procedures Act, the commissioner may:
(i) revoke a license of an agent, broker, surplus lines broker, or consultant;
(ii) suspend for a specified period of 12 months or less a license of an agent, broker, surplus
lines broker, or consultant; or
(iii) limit in whole or in part the license of any agent, broker, surplus lines broker, or
consultant.
(b) The commissioner may take an action described in Subsection (2)(a) if the commissioner
finds that the licensee:
(i) is unqualified for a license under Section 31A-23-203 ;
(ii) has violated:
(A) an insurance statute;
(B) a rule that is valid under Subsection 31A-2-201 (3); or
(C) an order that is valid under Subsection 31A-2-201 (4);
(iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
delinquency proceedings in any state;
(iv) fails to pay any final judgment rendered against the person in this state within 60 days
after the day the judgment became final;
(v) fails to meet the same good faith obligations in claims settlement that is required of
admitted insurers;
(vi) is affiliated with and under the same general management or interlocking directorate or
ownership as another insurance producer that transacts business in this state without a license;
(vii) refuses to be examined or to produce its accounts, records, and files for examination;
(viii) has an officer who refuses to:
(A) give information with respect to the administrator's affairs; or
(B) perform any other legal obligation as to an examination;
(ix) provided information in the license application that is:
(A) incorrect;
(B) misleading;
(C) incomplete; or
(D) materially untrue;
(x) has violated any insurance law, valid rule, or valid order of another state's insurance
department;
(xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
(xii) has improperly withheld, misappropriated, or converted any monies or properties
received in the course of doing insurance business;
(xiii) has intentionally misrepresented the terms of an actual or proposed:
(A) insurance contract; or
(B) application for insurance;
(xiv) has been convicted of a felony;
(xv) has admitted or been found to have committed any insurance unfair trade practice or
fraud;
(xvi) in the conduct of business in this state or elsewhere has:
(A) used fraudulent, coercive, or dishonest practices; or
(B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
(xvii) has had an insurance license, or its equivalent, denied, suspended, or revoked in any
other state, province, district, or territory;
(xviii) has forged another's name to:
(A) an application for insurance; or
(B) any document related to an insurance transaction;
(xix) has improperly used notes or any other reference material to complete an examination
for an insurance license;
(xx) has knowingly accepted insurance business from an individual who is not licensed;
(xxi) has failed to comply with an administrative or court order imposing a child support
obligation;
(xxii) has failed to:
(A) pay state income tax; or
(B) comply with any administrative or court order directing payment of state income tax;
(xxiii) has violated or permitted others to violate the federal Violent Crime Control and Law
Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034; or
(xxiv) has engaged in methods and practices in the conduct of business that endanger the
legitimate interests of customers and the public.
(3) (a) Any license issued under this chapter shall lapse if the licensee fails:
(i) to pay when due a fee under Section 31A-3-103 [
(ii) to complete continuing education requirements under Section 31A-23-206 before
submitting the license renewal application;
(iii) to submit a completed renewal application as required by Section 31A-23-202 ; or
(iv) to submit additional documentation required to complete the licensing process as related
to a specific license type.
(b) A licensee whose license lapses due to military service or some other extenuating
circumstances such as long-term medical disability may request:
(i) reinstatement of the license; and
(ii) waiver of any of the following imposed for failure to comply with renewal procedures:
(A) an examination requirement;
(B) a fine; or
(C) other sanction imposed for failure to comply with renewal procedures.
(c) The commissioner shall by rule prescribe the license renewal and reinstatement
procedures, in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
(4) A licensee under this chapter whose license is suspended, revoked, or lapsed, but who
continues to act as a licensee, is subject to the penalties for acting as a licensee without a license.
(5) Any person licensed in this state shall immediately report to the commissioner:
(a) a suspension or revocation of that person's license in any other state, District of
Columbia, or territory of the United States;
(b) the imposition of a disciplinary sanction imposed on that person by any other state,
District of Columbia, or territory of the United States; and
(c) a judgment or injunction entered against that person on the basis of conduct involving
fraud, deceit, misrepresentation, or violation of an insurance law or rule.
(6) (a) An order revoking a license under Subsection (2) may specify a time, not to exceed
five years, within which the former licensee may not apply for a new license.
(b) If no time is specified in an order revoking a license under Subsection (2), the former
licensee may not apply for a new license for five years without express approval by the
commissioner.
(7) (a) Any person whose license is suspended or revoked under Subsection (2) shall, when
the suspension ends or a new license is issued, pay all fees that would have been payable if the
license had not been suspended or revoked, unless the commissioner by order waives the payment
of the interim fees.
(b) If a new license is issued more than three years after the revocation of a similar license,
this Subsection (7) applies only to the fees that would have accrued during the three years
immediately following the revocation.
(8) The division shall promptly withhold, suspend, restrict, or reinstate the use of a license
issued under this part if so ordered by a court.
Section 55. Section 31A-23-302 is amended to read:
31A-23-302. Unfair marketing practices.
(1) (a) (i) Any of the following may not make or cause to be made any communication that
contains false or misleading information, relating to an insurance contract, any insurer, or other
licensee under this title, including information that is false or misleading because it is incomplete:
(A) a person who is or should be licensed under this title;
(B) an employee or agent of a person described in Subsection (1)(a)(i)(A);
(C) a person whose primary interest is as a competitor of a person licensed under this title;
and
(D) a person on behalf of any of the persons listed in this Subsection (1)(a)(i).
(ii) As used in this Subsection (1), "false or misleading information" includes:
(A) assuring the nonobligatory payment of future dividends or refunds of unused premiums
in any specific or approximate amounts, but reporting fully and accurately past experience is not
false or misleading information; and
(B) with intent to deceive a person examining it, filing a report, making a false entry in a
record, or wilfully refraining from making a proper entry in a record.
(iii) An insurer or other licensee under this title may not:
(A) use any business name, slogan, emblem, or related device that is misleading or likely
to cause the insurer or other licensee to be mistaken for another insurer or other licensee already in
business; or
(B) use any advertisement or other insurance promotional material that would cause a
reasonable person to mistakenly believe that a state or federal government agency:
(I) is responsible for the insurance sales activities of the person;
(II) stands behind the credit of the person;
(III) guarantees any returns on insurance products of or sold by the person; or
(IV) is a source of payment of any insurance obligation of or sold by the person.
(iv) A person who is not an insurer may not assume or use any name that deceptively implies
or suggests that it is an insurer.
(v) A person other than persons licensed as health maintenance organizations under Chapter
8 may not use the term "Health Maintenance Organization" or "HMO" in referring to itself.
(b) If an insurance agent or third party administrator distributes cards or documents, exhibits
a sign, or publishes an advertisement that violates Subsection (1) (a), with reference to a particular
insurer that the agent represents, or for whom the third party administrator processes claims, and if
the cards, documents, signs, or advertisements are supplied or approved by that insurer, the agent's
or the third party administrator's violation creates a rebuttable presumption that the violation was
also committed by the insurer.
(2) (a) (i) An insurer or licensee under this chapter, or an officer or employee of either may
not induce any person to enter into or continue an insurance contract or to terminate an existing
insurance contract by offering benefits not specified in the policy to be issued or continued, including
premium or commission rebates.
(ii) An insurer may not make or knowingly allow any agreement of insurance that is not
clearly expressed in the policy to be issued or renewed.
(iii) This Subsection (2)(a) does not preclude:
(A) insurers from reducing premiums because of expense savings;
(B) the usual kinds of social courtesies not related to particular transactions; or
(C) an insurer from receiving premiums under an installment payment plan.
(b) An agent, broker, or insurer may not absorb the tax under Section 31A-3-301 .
(c) (i) A title insurer or agent or any officer or employee of either may not pay, allow, give,
or offer to pay, allow, or give, directly or indirectly, as an inducement to obtaining any title insurance
business, any rebate, reduction, or abatement of any rate or charge made incident to the issuance of
the insurance, any special favor or advantage not generally available to others, or any money or other
consideration or material inducement.
(ii) "Charge made incident to the issuance of the insurance" includes escrow[
(iii) An insured or any other person connected, directly or indirectly, with the transaction,
including a mortgage lender, real estate broker, builder, attorney, or any officer, employee, or agent
of any of them, may not knowingly receive or accept, directly or indirectly, any benefit referred to
in Subsection (2)(c)(i).
(3) (a) An insurer may not unfairly discriminate among policyholders by charging different
premiums or by offering different terms of coverage, except on the basis of classifications related
to the nature and the degree of the risk covered or the expenses involved.
(b) Rates are not unfairly discriminatory if they are averaged broadly among persons insured
under a group, blanket, or franchise policy, and the terms of those policies are not unfairly
discriminatory merely because they are more favorable than in similar individual policies.
(4) A person who is or should be licensed under this title, an employee or agent of that
licensee or person who should be licensed, a person whose primary interest is as a competitor of a
person licensed under this title, and one acting on behalf of any of these persons, may not commit
or enter into any agreement to participate in any act of boycott, coercion, or intimidation that tends
to produce an unreasonable restraint of the business of insurance or a monopoly in that business.
(5) (a) A person may not restrict in the choice of an insurer or insurance agent or broker,
another person who is required to pay for insurance as a condition for the conclusion of a contract
or other transaction or for the exercise of any right under a contract. The person requiring the
coverage may, however, reserve the right to disapprove the insurer or the coverage selected on
reasonable grounds.
(b) The form of corporate organization of an insurer authorized to do business in this state
is not a reasonable ground for disapproval, and the commissioner may by rule specify additional
grounds that are not reasonable. This Subsection (5) does not bar an insurer from declining an
application for insurance.
(6) A person may not make any charge other than insurance premiums and premium
financing charges for the protection of property or of a security interest in property, as a condition
for obtaining, renewing, or continuing the financing of a purchase of the property or the lending of
money on the security of an interest in the property.
(7) (a) An agent may not refuse or fail to return promptly all indicia of agency to the
principal on demand.
(b) A licensee whose license is suspended, limited, or revoked under Section 31A-2-308 ,
31A-23-216 , or 31A-23-217 may not refuse or fail to return the license to the commissioner on
demand.
(8) A person may not engage in any other unfair method of competition or any other unfair
or deceptive act or practice in the business of insurance, as defined by the commissioner by rule,
after a finding that they are misleading, deceptive, unfairly discriminatory, provide an unfair
inducement, or unreasonably restrain competition.
Section 56. Section 31A-23-307 is amended to read:
31A-23-307. Title insurance agents' business.
(1) A title insurance agent may engage in the escrow[
[
(b) the title insurance agent is appointed by a title insurer authorized to do business in the
state;
(c) one or more of the following is to be issued as part of the transaction:
(i) an owner's policy of title insurance; or
(ii) a lender's policy of title insurance;
[
(A) are deposited:
(I) in a federally insured financial institution; and
(II) in [
other trust account funds that are not related to real estate transactions; and
(B) are the property of the persons entitled to them under the provisions of the escrow[
(ii) [
[
to any person in accordance with the [
(f) the escrow does not require the agent to hold:
(i) construction funds; or
(ii) funds held for exchange under Section 1031, Internal Revenue Code.
(2) Notwithstanding Subsection (1), a title insurance agent may engage in the escrow
business if:
(a) the escrow involves:
(i) a mobile home;
(ii) a grazing right;
(iii) a water right; or
(iv) other personal property authorized by the commissioner; and
(b) the title insurance agent complies with all the requirements of this section except for the
requirement of Subsection (1)(c).
[
[
[
[
(c) may not be used until all conditions of the escrow[
met.
[
an escrow [
[
and
[
bailee.
[
unless the segregated escrow account from which funds are to be disbursed contains a sufficient
credit balance consisting of collected or cleared funds at the time the check is drawn, executed or
dated, or funds are otherwise disbursed.
[
cleared," and may be disbursed as follows:
(i) cash may be disbursed on the same day [
(ii) a wire [
is deposited;
(iii) [
disbursed on the day following the date of deposit:
(A) a cashier's check;
(B) a certified check;
(C) a teller's check;
(D) a U.S. Postal Service money order; and
(E) a check drawn on a Federal Reserve Bank or Federal Home Loan Bank; and
(iv) any other [
(A) within the time limits provided under the Expedited Funds Availability Act, 12 U.S.C.
Section 4001 et seq., as amended, and related regulations of the Federal Reserve System; or
(B) upon written notification from the financial institution to which the funds have been
deposited, that final settlement has occurred on the deposited item.
[
of escrow[
[
(a) Section 31A-23-310; and
(b) any rules adopted by the commissioner [
46a, Utah Administrative Rulemaking Act, that govern escrows[
Section 57. Section 31A-23-308 is amended to read:
31A-23-308. Liability of title insurers for acts of title insurance agents.
Any title company, represented by one or more title insurance agents, is directly and primarily
liable to others dealing with the title insurance agents for the receipt and disbursement of funds
deposited in escrows[
transactions where a commitment or binder for or policy or contract of title insurance of that title
insurance company has been ordered, or a preliminary report of the title insurance company has been
issued or distributed. This liability does not modify, mitigate, impair, or affect the contractual
obligations between the title insurance agents and the title insurance company.
Section 58. Section 31A-23-503 is amended to read:
31A-23-503. Duties of insurers.
(1) The insurer shall have on file an independent financial examination, in a form acceptable
to the commissioner, of each managing general agent with which [
(2) (a) If a managing general agent establishes loss reserves, the insurer shall annually obtain
the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred
and outstanding on business produced by the managing general agent. [
(b) The requirement of Subsection (2)(a) is in addition to any other required loss reserve
certification.
(3) The insurer shall at least semiannually conduct an on-site review of the underwriting and
claims processing operations of the managing general agent.
(4) Binding authority for all reinsurance contracts or participation in insurance or reinsurance
syndicates shall rest with an officer of the insurer, who may not be affiliated with the managing
general agent.
(5) (a) Within 30 days after entering into or terminating a contract with a managing general
agent, the insurer shall provide written notification of the appointment or termination to the
commissioner.
(b) A notice of appointment of a managing general agent shall include:
[
insurer;
[
[
(6) (a) An insurer shall review [
if any producer, as defined [
general agent as defined in [
(b) If the insurer determines that a producer has become a managing general agent[
(i) the insurer shall promptly notify the producer and the commissioner of the
determination[
(ii) the insurer and producer shall fully comply with the provisions of this chapter within 30
days.
(7) (a) An insurer may not appoint officers, directors, employees, subproducers, or
controlling shareholders of [
directors.
(b) This Subsection (7) does not apply to relationships governed by [
(i) Chapter 16, Insurance Holding Companies[
(ii) Chapter 23, Part 6, Broker Controlled Insurers, if it applies.
Section 59. Section 31A-23-601 is amended to read:
31A-23-601. Applicability.
(1) This part applies to licensed insurers, as defined in [
31A-23-102 [
(a) in this state; or [
(b) in a state that does not have a substantially similar law.
(2) All provisions of [
they are not superseded by this part, continue to apply to all parties within holding company systems
subject to this part.
Section 60. Section 31A-25-205 is amended to read:
31A-25-205. Financial responsibility.
(1) Every person licensed under this chapter shall[
(a) (i) while licensed; and
(ii) for one year after the person is licensed; and
(b) issued:
(i) by an authorized insurer[
(ii) in an amount specified under Subsection (2)[
(iii) on a policy or contract form [
(2) (a) Insurance policies or surety bonds satisfying the requirement of Subsection (1) shall
be in a face amount equal to:
(i) at least the greater of:
(A) 10% of the total funds handled by the administrator[
(B) $5,000 [
(ii) may not exceed $500,000.
(b) In fixing the policy or bond face amount under Subsection (2)(a), the total funds handled
is:
(i) the greater of:
(A) the premiums received during the previous calendar year; or
(B) claims paid through the administrator during the previous calendar year; or
(ii) if no funds were handled during the preceding year, the total funds reasonably anticipated
to be handled by the administrator during the current calendar year.
(c) This section does not prohibit any person dealing with the administrator from requiring,
by contract, insurance coverage in amounts greater than the insurance coverage required under this
section.
(3) (a) Insurance policies or surety bonds issued to satisfy Subsection (1) shall:
(i) be on forms approved by the commissioner[
(ii) require the insurer to pay, up to the policy or bond face amount, any judgment:
(A) obtained by participants in or beneficiaries of plans administered by the insured licensee
[
(B) that arises from the negligence or culpable acts of the licensee or any employee or agent
of the licensee in connection with the activities [
administrator as defined in Section 31A-1-301 [
(b) The commissioner may require that policies or bonds issued to satisfy the requirements
of this section require the insurer to give the commissioner 20 day prior notice of policy cancellation.
(4) The commissioner shall establish annual reporting requirements and forms to monitor
compliance with this section.
(5) This section may not be construed as limiting any cause of action an insured would
otherwise have against the insurer.
Section 61. Section 31A-26-202 (Effective 07/01/02) is amended to read:
31A-26-202 (Effective 07/01/02). Application for license.
(1) (a) The application for a license as an independent adjuster or public adjuster shall be:
(i) made to the commissioner on forms and in a manner the commissioner prescribes; and
(ii) accompanied by the applicable fee, which is not refunded if the application is denied.
(b) The application shall provide:
(i) information about the applicant's identity[
[
[
[
[
[
older; and
[
or revocation as set forth in Section 31A-25-208 ; and
[
(2) The commissioner may require documents reasonably necessary to verify the information
contained in the application.
(3) The following are private records under Subsection 63-2-302 (1)(a)(vii):
(a) the applicant's social security number; and
(b) the applicant's federal employer identification number.
Section 62. Section 31A-26-202 (Superseded 07/01/02) is amended to read:
31A-26-202 (Superseded 07/01/02). Application for license.
(1) (a) The application for a license as an independent adjuster or public adjuster shall be:
(i) made to the commissioner on forms and in a manner the commissioner prescribes; and
(ii) accompanied by the applicable fee, which is not refunded if the application is denied.
(b) The application shall provide:
(i) information about the applicant's identity[
[
[
[
[
[
older; and
[
or revocation as set forth in Section 31A-25-208 ; and
[
(2) The commissioner may require documents reasonably necessary to verify the information
contained in the application.
(3) The following are private records under Subsection 63-2-302 (1)(g):
(a) the applicant's social security number; and
(b) the applicant's federal employer identification number.
Section 63. Section 31A-26-206 is amended to read:
31A-26-206. Continuing education requirements.
(1) The commissioner shall by rule prescribe continuing education requirements for each
class of license under Section 31A-26-204 .
(2) (a) The commissioner shall impose continuing education requirements in accordance
with a two-year licensing period in which the licensee meets the requirements of this Subsection (2).
(b) Except as provided in Subsection (2)(c), for a two-year licensing period described in
Subsection (2)(a) the commissioner shall require that the licensee for each line of authority held by
the licensee:
(i) receive [
(ii) pass a line of authority continuing education examination.
(c) Notwithstanding Subsection (2)(b):
(i) the commissioner may not require continuing education for more than four lines of
authority held by the licensee;
(ii) the commissioner shall require:
(A) a minimum of:
(I) 12 hours of continuing education;
(II) passage of two line of authority continuing education examinations; or
(III) a combination of Subsection (2)(c)(ii)(A)(I) and (II);
(B) that the minimum continuing education requirement of Subsection (2)(c)(ii)(A) include:
(I) at least [
line of authority held by the licensee not to exceed four lines of authority held by the licensee; and
(II) three hours of ethics training[
(d) (i) If a licensee completes the licensee's continuing education requirement without taking
a line of authority continuing education examination, the licensee shall complete at least 1/2 of the
required hours through classroom hours of insurance-related instruction.
(ii) The hours not completed through classroom hours in accordance with Subsection
(2)(d)(i) may be obtained through:
(A) home study;
(B) video tape;
(C) experience credit; or
(D) other method provided by rule.
(e) (i) A licensee may obtain continuing education hours at any time during the two-year
licensing period.
(ii) The licensee may not take a line of authority continuing education examination more
than 90 calendar days before the date on which the licensee's license is renewed.
(f) The commissioner shall make rules for the content and procedures for line of authority
continuing education examinations.
(g) (i) Beginning May 3, 1999, a licensee is exempt from the continuing education
requirements of this section if:
(A) as of April 1, 1990, the licensee has completed 20 years of licensure in good standing;
(B) the licensee requests an exemption from the department; and
(C) the department approves the exemption.
(ii) If the department approves the exemption under Subsection (2)(g)(i), the licensee is not
required to apply again for the exemption.
(h) A licensee with a variable annuity line of authority is exempt from the requirement for
continuing education for that line of authority so long as:
(i) the National Association of Securities Dealers requires continuing education for licensees
having a securities license; and
(ii) the licensee complies with the National Association of Securities Dealers' continuing
education requirements for securities licensees.
(i) The commissioner shall by rule:
(i) publish a list of insurance professional designations whose continuing education
requirements can be used to meet the requirements for continuing education under Subsection (2)(c);
and
(ii) authorize professional adjuster associations to:
(A) offer qualified programs for all classes of licenses on a geographically accessible basis;
and
(B) collect reasonable fees for funding and administration of the continuing education
programs, subject to the review and approval of the commissioner.
(j) (i) The fees permitted under Subsection (2)(i) that are charged to fund and administer a
program shall reasonably relate to the costs of administering the program.
(ii) Nothing in this section shall prohibit a provider of continuing education programs or
courses from charging fees for attendance at courses offered for continuing education credit.
(iii) The fees permitted under Subsection (2)(i)(ii) that are charged for attendance at an
association program may be less for an association member, based on the member's affiliation
expense, but shall preserve the right of a nonmember to attend without affiliation.
(3) The requirements of this section apply only to licensees who are natural persons.
(4) The requirements of this section do not apply to members of the Utah State Bar.
(5) The commissioner shall designate courses that satisfy the requirements of this section,
including those presented by insurers.
(6) A nonresident adjuster is considered to have satisfied this state's continuing education
requirements if:
(a) the nonresident adjuster satisfies the nonresident producer's home state's continuing
education requirements for a licensed insurance adjuster; and
(b) on the same basis the nonresident adjuster's home state considers satisfaction of Utah's
continuing education requirements for a producer as satisfying the continuing education requirements
of the home state.
Section 64. Section 31A-26-213 is amended to read:
31A-26-213. Termination of license.
(1) A license issued under this chapter remains in force until:
(a) revoked, suspended, or limited under Subsection (2);
(b) lapsed under Subsection (3);
(c) surrendered to and accepted by the commissioner; or
(d) the licensee dies or is adjudicated incompetent as defined under Title 75, Chapter 5, Part
3 or 4.
(2) (a) After an adjudicative proceeding under Title 63, Chapter 46b, Administrative
Procedures Act, if the commissioner makes a finding described in Subsection (2)(b), the
commissioner may:
(i) revoke[
(ii) suspend a license of an adjustor for a specified period of 12 months or less[
(iii) limit in whole or in part the license of any adjuster[
(b) The commissioner may take an action described in Subsection (2)(a) if the commissioner
finds that the adjustor:
[
[
[
[
[
[
other delinquency proceedings in any state;
[
state within 60 days after the judgment became final;
[
required of admitted insurers;
[
directorate or ownership as another adjuster [
license;
[
and files for examination;
[
[
[
[
information in the license application;
[
insurance department;
[
fraud;
[
properties received in the course of doing insurance business;
[
insurance contract or application for insurance;
[
[
practice or fraud;
[
business in this state or elsewhere;
[
irresponsibility in the conduct of business in this state or elsewhere;
[
revoked in any other state, province, district, or territory;
[
[
[
[
examination for an insurance license;
[
licensed;
[
support obligation;
[
[
[
tax;
[
Control and Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034; or
[
that endanger the legitimate interests of customers and the public.
(3) (a) Any license issued under this chapter [
(i) pay [
(ii) complete continuing education requirements under Section 31A-26-206 before
submitting the license renewal application; or
(iii) submit a completed renewal application as required by Section 31A-26-202 .
(b) A licensee whose license lapses due to military service or some other extenuating
circumstance such as a long-term medical disability may request:
(i) reinstatement; and
(ii) a waiver of any of the following imposed for failure to comply with renewal procedures:
(A) an examination requirement;
(B) a fine; or
(C) other sanction.
(c) The commissioner shall by rule prescribe the license renewal and reinstatement
procedures, in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
(4) A licensee under this chapter whose license is suspended, revoked, or lapsed, but who
continues to act as a licensee, is subject to the penalties for conducting an insurance business without
a license.
(5) (a) An order revoking a license under Subsection (2) may specify a time not to exceed
five years within which the former licensee may not apply for a new license.
(b) If no time is specified in the order revoking a license under Subsection (2), the former
licensee may not apply for a new license for five years without the express approval of the
commissioner.
(6) (a) Any person whose license is suspended or revoked under Subsection (2) shall, when
the suspension ends or a new license is issued, pay all fees that would have been payable if the
license had not been suspended or revoked, unless the commissioner by order waives the payment
of the interim fees.
(b) If a new license is issued more than three years after the revocation of a similar license,
this Subsection (6) applies only to the fees that would have accrued during the three years
immediately following the revocation.
(7) The [
use of a license issued under this part if so ordered by a court.
Section 65. Section 31A-26-301.6 is amended to read:
31A-26-301.6. Health care provider claims practices.
(1) As used in this section:
(a) "Articulable reason" may include a determination regarding:
(i) eligibility for coverage;
(ii) preexisting conditions;
(iii) applicability of other public or private insurance;
(iv) medical necessity; and
(v) any other reason that would justify an extension of the time to investigate a claim.
(b) "Health care provider" means a person licensed to provide health care under:
(i) Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act[
(ii) Title 58, Occupations and Professions.
(c) "Insurer" means an admitted or authorized insurer, as defined in Section 31A-1-301 , and
includes:
(i) a health maintenance organization; and
(ii) a third-party administrator that is subject to this title, provided that nothing in this section
may be construed as requiring a third party administrator to use its own funds to pay claims that have
not been funded by the entity for which the third party administrator is paying claims.
(d) "Provider" means a health care provider to whom an insurer is obligated to pay directly
in connection with a claim by virtue of:
(i) an agreement between the insurer and the provider;
(ii) a health insurance policy or contract of the insurer; or
(iii) state or federal law.
(2) An insurer shall timely pay every valid insurance claim submitted by a provider in
accordance with this section.
(3) (a) Within 30 days of receiving a written claim, an insurer shall do one of the following:
(i) pay the claim unless Subsection (3)(a)(ii), (iii), (iv), or (v) applies;
(ii) provide a written explanation if the claim is denied;
(iii) specifically describe and request any additional information from the provider that is
necessary to process the claim;
(iv) inform the provider, pursuant to Subsection (4), of the 30-day extension of the insurer's
investigation of the claim; or
(v) request additional information and inform the provider of the 30-day extension if both
Subsections (3)(a)(iii) and (iv) apply.
(b) A provider shall respond to each request by an insurer for additional necessary
information made under Subsection (3)(a)(iii) or (v) within 30 days of receipt of the request by
providing the requested information that is in the possession of the provider, unless:
(i) the provider has requested and received the permission of the insurer to extend the 30-day
period; or
(ii) the provider explains to the insurer in writing that additional time, which may not exceed
30 days, is necessary to comply with the request for information.
(c) Subsection (7) shall apply after an insurer has received the information requested.
(4) The time to investigate a claim may be extended by the insurer for an additional 30-days
if:
(a) the investigation of the claim cannot reasonably be completed within the initial 30-day
period of Subsection (3)(a);
(b) before the end of the 30-day period in Subsection (3)(a), the insurer informs the provider
in writing of the reason for the payment delay, the nature of the investigation, the timelines for
investigations established in this section, and the anticipated completion date.
(5) Notwithstanding Subsection (4), the time to investigate a claim may be extended beyond
the initial 30-day period and the extended 30-day period if:
(a) due to matters beyond the control of the insurer, the investigation cannot reasonably be
completed within 60 days as to some part or all of the claim;
(b) before the end of the combined 60-day period, the insurer makes a written request to the
commissioner for an extension, including the reason for the delay, the nature of the investigation,
the anticipated completion date, and the amount of any partial payment of the claim made pursuant
to Subsection (5)(d);
(c) before the end of the combined 60-day period, the commissioner informs the insurer
that the request for an extension has been granted, based on a finding that:
(i) there is a good faith and articulable reason to believe that the insurer is not obligated to
pay some part or all of the claim; and
(ii) the investigation cannot reasonably be completed within 60 days; and
(d) the insurer identifies and pays all sums the insurer is obligated to pay on the claim and
which are not subject to the extension requested under this Subsection (5).
(6) An extension granted by the commissioner under Subsection (5)(c) shall include the
completion date for the investigation.
(7) (a) An insurer shall pay all sums to the provider that the insurer is obligated to pay on
the claim, and provide a written explanation of any part of the claim that is denied within 20 days
of:
(i) receiving the information requested under Subsection (3)(a)(iii);
(ii) completing an investigation under Subsection (4) or (5); or
(iii) the latter of Subsection (3)(a)(iii) or (iv), if Subsection (3)(a)(v) applies.
(b) (i) Except as provided in Subsection (7)(c), an insurer may send a follow-up request for
additional information within the 20-day time period in Subsection (7)(a) if the previous response
of the provider was not sufficient for the insurer to make a decision on the claim.
(ii) A follow-up request for additional necessary information shall state with specificity:
(A) the reason why the previous response was insufficient;
(B) the information that is necessary to comply with the request for information; and
(C) the reason why the requested information is necessary to process the claim.
(c) Unless an insurer has an extension for an investigation pursuant to Subsection (4) or (5),
the insurer shall pay all sums it is obligated to pay on a claim and provide a written explanation of
any part of the claim that is denied within [
the provider has submitted all requested information in the provider's possession that is related to
the claim.
(8) (a) Whenever an insurer makes a payment to a provider on any part of a claim under this
section, the insurer shall also send to the insured an explanation of benefits paid.
(b) Whenever an insurer denies any part of a claim under this section, the insurer shall also
send to the insured a written explanation of the part of the claim that was denied and notice of the
[
(c) This Subsection (8) does not apply to a person receiving benefits under the state
Medicaid program as defined in Section 26-18-2 , unless required by the Department of Health or
federal law.
(9) (a) Beginning with health care claims submitted on or after January 1, 2002, a late fee
shall be imposed on:
(i) an insurer that fails to timely pay a claim in accordance with this section; and
(ii) a provider that fails to timely provide information on a claim in accordance with this
section.
(b) For the first 90 days that a claim payment or a provider response to a request for
information is late, the late fee shall be determined by multiplying together:
(i) the total amount of the claim;
(ii) the total number of days the response or the payment is late; and
(iii) .1%.
(c) For a claim payment or a provider response to a request for information that is 91 or more
days late, the late fee shall be determined by adding together:
(i) the late fee for a 90-day period under Subsection (9)(b); and
(ii) the following [
(A) the total amount of the claim;
(B) the total number of days the response or payment was late beyond the initial 90-day
period; and
(C) the rate of interest set in accordance with Section 15-1-1 .
(d) Any late fee paid or collected under this section shall be separately identified on the
documentation used by the insurer to pay the claim.
(e) For purposes of this Subsection (9), "late fee" does not include an amount that is less than
$1.
(10) Each insurer shall establish a [
disputes between the insurer and providers.
(11) No insurer or person representing an insurer may engage in any unfair claim settlement
practice with respect to a provider. Unfair claim settlement practices include:
(a) knowingly misrepresenting a material fact or the contents of an insurance policy in
connection with a claim;
(b) failing to acknowledge and substantively respond within 15 days to any written
communication from a provider relating to a pending claim;
(c) denying or threatening to deny the payment of a claim for any reason that is not clearly
described in the insured's policy;
(d) failing to maintain a payment process sufficient to comply with this section;
(e) failing to maintain claims documentation sufficient to demonstrate compliance with this
section;
(f) failing, upon request, to give to the provider written information regarding the specific
rate and terms under which the provider will be paid for health care services;
(g) failing to timely pay a valid claim in accordance with this section as a means of
influencing, intimidating, retaliating, or gaining an advantage over the provider with respect to an
unrelated claim, an undisputed part of a pending claim, or some other aspect of the contractual
relationship;
(h) failing to pay the sum when required and as required under Subsection (9) when a
violation has occurred;
(i) threatening to retaliate or actual retaliation against a provider for availing himself of the
provisions of this section;
(j) any material violation of this section; and
(k) any other unfair claim settlement practice established in rule or law.
(12) (a) The provisions of this section shall apply to each contract between an insurer and
a provider for the duration of the contract.
(b) Notwithstanding Subsection (12)(a), this section may not be the basis for a bad faith
insurance claim.
(c) Nothing in Subsection (12)(a) may be construed as limiting the ability of an insurer and
a provider from including provisions in their contract that are more stringent than the provisions of
this section.
(13) (a) Pursuant to Chapter 2, Part 2, Duties and Powers of Commissioner, and beginning
January 1, 2002, the commissioner may conduct examinations to determine an insurer's level of
compliance with this section and impose sanctions for each violation.
(b) The commissioner may adopt rules only as necessary to implement this section.
(c) After December 31, 2002, the commissioner may establish rules to facilitate the exchange
of electronic confirmations when claims-related information has been received.
(d) Notwithstanding the provisions of Subsection (13)(b), the commissioner may not adopt
rules regarding the [
(14) Nothing in this section may be construed as limiting the collection rights of a provider
under Section 31A-26-301.5 .
(15) Nothing in this section may be construed as limiting the ability of an insurer to:
(a) recover any amount improperly paid to a provider:
(i) in accordance with Section 31A-31-103 or any other provision of state or federal law;
(ii) within 36 months for a coordination of benefits error; or
(iii) within 18 months for any other reason not identified in Subsection (15)(a)(i) or (ii);
(b) take any action against a provider that is permitted under the terms of the provider
contract and not prohibited by this section;
(c) report the provider to a state or federal agency with regulatory authority over the provider
for unprofessional, unlawful, or fraudulent conduct; or
(d) enter into a mutual agreement with a provider to resolve alleged violations of this section
through mediation or binding arbitration.
Section 66. Section 31A-27-102 is amended to read:
31A-27-102. Definitions.
(1) As used in this chapter:
(a) "Alien insurer domiciled in Utah" means an insurer domiciled outside the United States
whose entry into the United States is through Utah.
(b) "Ancillary state" means any state other than an insurer's state of domicile.
(c) "Contingent claims" means a claim or demand upon which:
(i) a right of action has accrued at the date of the order of liquidation; and
(ii) liability has not been determined.
(d) "Date of liquidation" means the date of the filing of a petition for liquidation that results
in an order for liquidation.
(e) "Delinquency proceeding" means any:
(i) proceeding commenced against an insurer for the purpose of liquidating, rehabilitating,
reorganizing, or conserving the insurer; and
(ii) summary proceeding under Sections 31A-27-201 through 31A-27-203 .
(f) "Domestic insurer" includes, for purposes of this chapter, foreign insurers commercially
domiciled in this state under Section 31A-14-206 .
(g) (i) "Estate" or "property of the estate" means:
(A) all legal or equitable interests of an insurer that are the subject of a rehabilitation,
liquidation, conservation, or other proceeding under this chapter in property as of the date of filing
of the petition for rehabilitation, liquidation, or conservation;
(B) any interest in property recoverable by the receiver under the provisions of this title;
(C) any interest in property acquired after the date of filing of the petition; and
(D) all proceeds, products, rents, and profits from this property.
(ii) "Estate" or "property of the estate" includes property in which the insurer holds only legal
title, but no equitable interest, only to the extent of the insolvent insurer's interest.
(h) "Fair consideration" is given for property or an obligation:
(i) when in exchange for the property or obligation, as a fair equivalent for it, and in good
faith:
(A) property is conveyed;
(B) services are rendered;
(C) an obligation is incurred; or
(D) an antecedent debt is satisfied; or
(ii) when the property or obligation is received in good faith to secure a present advance or
an antecedent debt in amount not disproportionately small compared to the value of the property or
obligation obtained.
(i) (i) "General assets" means all property not encumbered by a security agreement for the
security or benefit of specified persons or classes of persons.
(ii) "General assets" does not include separate account assets under Section 31A-5-217 .
(iii) For encumbered property, "general assets" includes all that property or its proceeds
which is in excess of the amount necessary to discharge the sums secured by the property.
(iv) Assets held in trust or on deposit for the security or benefit of all policyholders, or all
policyholders and creditors, in more than a single state, are general assets.
(j) "Guaranty association" means:
(i) the applicable association under Chapter 28, Guaranty Associations; or
(ii) the similar association under the laws of another state.
(k) "Immature claim" means a claim or demand upon which payment is due, except for the
passage of time.
(l) "Insolvency" has the same meaning as in Section 31A-1-301 .
(m) "Insurer" means any person who is doing, has done, purports to do, or is licensed to do
an insurance business on its own account and is or has been subject to the authority of, or to
liquidation, rehabilitation, reorganization, or supervision by, a commissioner. A separate account
created under Section 31A-5-217 is an "insurer" for purposes of Chapter 27, Insurers Rehabilitation
and Liquidation.
(n) "Preferred claim" means any claim that the law gives priority of payment from the
general assets of the insurer.
(o) "Receiver" means receiver, liquidator, rehabilitator, or conservator[
(i) as the context requires[
(ii) is consistent with the definition of "receiver" in Subsections 31A-27-110 (1)(c)(i) through
(vii).
(p) "Reciprocal state" means any state other than this state:
(i) in which in substance Subsection 31A-27-310 (1), Subsections 31A-27-403 (1) and (3),
Sections 31A-27-404 and 31A-27-406 through 31A-27-409 are in force;
(ii) which has laws requiring the commissioner to be the receiver of a delinquent insurer; and
(iii) which has laws for the avoidance of fraudulent conveyances and preferential transfers
by the receiver of a delinquent insurer.
(q) "Secured claim" means any claim secured by mortgage, trust deed, security agreement,
pledge, deposit as security, escrow or otherwise, but not including special deposit claims. The term
also includes claims that have become liens upon specific assets through judicial processes.
(r) "Separate account assets" means those assets allocated to separate accounts under Section
31A-5-217 .
(s) "Special deposit claim" means any claim secured by a deposit in trust made pursuant to
this title for the security or benefit of one or more limited classes of persons.
(t) "Transfer" means every mode, direct or indirect, absolute or conditional, voluntarily or
involuntarily, by or without judicial proceedings, of disposing of or parting with property or with an
interest in property. The retention of a security interest in or title to property delivered to a debtor
is considered a transfer by the debtor.
(u) "Unliquidated claim" means a claim or demand upon which:
(i) a right of action has accrued at the date of the order of liquidation; and
(ii) liability has been established but the amount of which has not been determined.
(2) If the subject of a rehabilitation or liquidation proceeding under this chapter is an insurer
engaged in a surety business, then as used in this chapter:
(a) "Policy" includes a bond issued by a surety.
(b) "Policyholder" includes a principal on a bond.
(c) "Beneficiary" includes an obligee of a bond.
(d) "Insured" includes both the principal and obligee of a bond.
Section 67. Section 31A-27-103 is amended to read:
31A-27-103. Jurisdiction and venue.
(1) Except as provided in Subsection (2), [
commenced under this chapter by anyone other than the Utah commissioner.
(2) (a) Three or more judgment creditors holding unrelated judgments against an insurer,
which judgments aggregate more than $5,000 in excess of any security held by those creditors may
commence proceedings against the insurer under the conditions and in the manner prescribed in this
Subsection (2), by serving notice upon the commissioner and the insurer of intention to file a petition
for liquidation under Section 31A-27-307 or 31A-27-402 .
(b) Each of the judgments described in Subsection (2)(a):
(i) shall have been rendered against the insurer by a Utah court having jurisdiction over the
subject matter and the insurer;
(ii) shall have been entered more than 60 days before the service of notice under Subsection
(2)(a);
(iii) may not have been satisfied in full;
(iv) may not be the subject of a valid contract between the insurer and any judgment creditor
for payment of the judgment, unless that contract has been breached by the insurer;
(v) may not be a judgment assigned in order to institute proceedings under this Subsection
(2); and
(vi) may not be a judgment on which an appeal or review is pending or may yet be brought.
[
days after service of the notice under Subsection (2)(a), and the commissioner has not then filed a
petition for liquidation[
(i) the creditor may file a verified petition for liquidation of the insurer:
(A) in the manner prescribed by Section 31A-27-307 or 31A-27-402 [
(B) alleging the conditions stated in this Subsection[
(ii) the commissioner shall be served and joined in the action.
(3) [
jurisdiction to entertain, hear, or determine any complaint praying for:
(a) the dissolution, liquidation, rehabilitation, sequestration, conservation, or receivership
of any insurer[
(b) an injunction or restraining order or other relief preliminary to, incidental to, or relating
to [
(3)(a).
(4) (a) Venue for proceedings arising under this chapter shall be laid initially as specified
in the sections providing for those proceedings.
(b) All other actions and proceedings initiated by the receiver may be commenced and tried
where:
(i) the delinquency proceedings are then pending[
(ii) venue would be laid by applicable Utah law.
(c) All other actions and proceedings against the receiver shall be commenced and tried in
the county where the delinquency proceedings are pending.
(d) Upon motion of any party, venue may be changed by order of the court or the presiding
judge of the court to any other district court in Utah, whenever the convenience of the parties and
witnesses and the ends of justice require it.
(e) This Subsection (4) relates only to venue and is not jurisdictional.
(5) In addition to other grounds for jurisdiction provided by the law of Utah, a Utah court
having jurisdiction of the subject matter has jurisdiction over a person properly served in an action
brought by the receiver of a domestic insurer or an alien insurer domiciled in Utah:
(a) if the person served is obligated to the insurer in any way as an incident to any agency
or brokerage arrangement that may exist or has existed between them, in any action on or incident
to the obligation;
(b) if the person served is a reinsurer who has at any time written a policy of reinsurance for
an insurer against which a rehabilitation or liquidation order is in effect when the action is
commenced[
(c) if the person served is an agent of or broker for the reinsurer described in Subsection
(5)(b), in any action on or incident to the reinsurance contract; or
[
or person in a position of comparable authority or influence in an insurer against which a
rehabilitation or liquidation order is in effect when the action is commenced, in any action resulting
from the relationship with the insurer.
(6) (a) Subject to Sections 31A-27-305 and 31A-27-317 , the court in which a delinquency
proceeding is pending has exclusive jurisdiction for:
(i) all actions and proceedings brought against the receiver of a rehabilitation or liquidation
estate of the insurer; or
(ii) any action or proceeding in any way related to a rehabilitation or liquidation estate of an
insurer.
(b) An action described in Subsection (6)(a) shall be commenced and tried in the court
having exclusive jurisdiction.
[
Subsection (5) should, as a matter of substantial justice, be tried in a forum outside Utah, the court
may enter an order to stay further proceedings on the action in Utah.
Section 68. Section 31A-27-305 is amended to read:
31A-27-305. Actions by and against a rehabilitator.
(1) [
action or proceeding [
(i) (A) at law;
(B) in equity; or
(C) in arbitration;
(ii) brought against the insurer or rehabilitator; and
(iii) regardless of whether the action is brought in this state or elsewhere.
(b) An action or proceeding existing at the time the order for rehabilitation is issued may not
be enforced, perfected, maintained, or further presented after issuance of the order for rehabilitation.
(c) The stay of all actions or proceedings provided in this Subsection (1) is automatic.
(d) The rehabilitator may not intervene or defend in an action or proceeding except as
provided in this section.
(2) (a) If the rehabilitator determines that the protection of the estate of the insurer
necessitates intervention in an action pending against the insurer, the rehabilitator may intervene in
the action.
(b) An action described in Subsection (1)(a) is not stayed if:
(i) the rehabilitator applies to the court for:
(A) leave to intervene or defend; or
(B) ratification by the court of intervention; and
(ii) the court grants the application.
(c) The estate of the insurer may be charged for the expenses incurred if the rehabilitator is
defending any action in which the rehabilitator intervenes under this section.
[
action by or against an insurer between the filing of a petition for rehabilitation against an insurer
and the denial of the petition or an order of rehabilitation.
(b) Any action by the insurer that might have been commenced when the petition was filed
may be commenced by the insurer or rehabilitator for:
(i) at least 60 days after:
(A) the order of rehabilitation is entered; or
(B) the petition is denied[
(ii) a longer period if ordered by the court.
(c) This Subsection (3) does not limit the powers of the rehabilitator to bring actions under
Sections 31A-27-319 , 31A-27-320 , 31A-27-321 , 31A-27-322 , and other provisions of this chapter.
Section 69. Section 31A-27-311.5 is amended to read:
31A-27-311.5. Continuance of coverage -- Health maintenance organizations.
(1) As used in this section:
(a) "basic health care services" is as defined in Section 31A-8-101 ;
(b) "enrollee" is as defined in Section 31A-8-101 ;
(c) "health care" is as defined in Section 31A-1-301 ;
(d) "health maintenance organization" is as defined in Section 31A-8-101 ;
(e) "limited health plan" is as defined in Section 31A-8-101 ;
(f) (i) "managed care organization" means any entity licensed by, or holding a certificate of
authority from, the department to furnish health care services or health insurance;
(ii) "managed care organization" includes:
(A) a limited health plan;
(B) a health maintenance organization;
(C) a preferred provider organization;
(D) a fraternal benefit society; or
(E) any entity similar to an entity described in Subsections (1)(f)(ii)(A) through (D);
(iii) "managed care organization" does not include:
(A) an insurer or other person that is eligible for membership in a guaranty association under
Chapter 28, Guaranty Associations;
(B) a mandatory state pooling plan;
(C) a mutual assessment company or any entity that operates on an assessment basis; or
(D) any entity similar to an entity described in Subsections (1)(f)(iii)(A) through (C);
(g) "participating provider" means a provider who, under a contract with a managed care
organization authorized under Section 31A-8-407 , [
to enrollees with an expectation of receiving payment, directly or indirectly, from the managed care
organization, other than copayment;
(h) "participating provider contract" means the agreement between a participating provider
and a managed care organization authorized under Section 31A-8-407 ;
(i) "preferred provider" means a provider who agrees to provide health care services under
an agreement authorized under Subsection 31A-22-617 (1);
(j) "preferred provider contract" means the written agreement between a preferred provider
and a managed care organization authorized under Subsection 31A-22-617 (1);
(k) (i) except as provided in Subsection (1)(k)(ii), "preferred provider organization" means
any person[
[
an enrollee in return for prepaid periodic payments in an amount agreed to prior to the time during
which the health care may be furnished;
[
(1)(k)(i)(A); and
[
preferred providers; and
(ii) "preferred provider organization" does not include:
(A) an insurer licensed under Chapter 7, Nonprofit Health Service Insurance Corporation;
or
(B) an individual who contracts to render professional or personal services that the
individual performs.
(l) "provider" is as defined in Section 31A-8-101 ; and
(m) "uncovered expenditure" means the costs of health care services that are covered by an
organization for which an enrollee is liable in the event of the managed care organization's
insolvency.
(2) The rehabilitator or liquidator may take one or more of the actions described in
Subsections (2)(a) through (f) to assure continuation of health care coverage for enrollees of an
insolvent managed care organization.
(a) (i) Subject to Subsection (2)(a)(ii), a rehabilitator or liquidator may require a participating
provider and preferred provider of health care services to continue to provide the health care services
the provider is required to provide under the [
or preferred provider contract until the [
(A) 90 days [
(I) a petition for rehabilitation; or [
(II) a petition for liquidation; or
(B) the date the term of the contract ends.
(ii) A requirement by the rehabilitator or liquidator under Subsection (2)(a)(i) that a
participating provider or preferred provider continue to provide health care services under a
provider's participating provider contract or preferred providers contract expires when health care
coverage for all enrollees of the insolvent managed care organization is obtained from another
managed care organization or insurer.
(b) (i) Subject to Subsection (2)(b)(ii), a rehabilitator or liquidator may reduce the fees a
participating provider or preferred provider is otherwise entitled to receive from the managed care
organization under its participating provider contract or preferred provider contract during the time
period in Subsection (2)(a)(i).
(ii) Notwithstanding Subsection (2)(b)(i) a rehabilitator or liquidator may not reduce a fee
to less than 75% of the regular fee set forth in the respective participating provider contract or
preferred provider contract.
(iii) An enrollee shall continue to pay the same copayments, deductibles, and other payments
for services received from the participating provider or preferred provider that the enrollee was
required to pay before the date of filing of:
(A) the petition for rehabilitation; or
(B) the petition for liquidation.
(c) (i) A participating provider or preferred provider shall:
(A) accept the amounts specified in Subsection (2)(b) as payment in full; and
(B) relinquish the right to collect additional amounts from the insolvent managed care
organization's enrollee.
(ii) [
the fees paid to a provider who agrees to provide health care services to an enrollee but is not a
preferred or participating provider.
(d) If the managed care organization is a health maintenance organization, Subsections
(2)(d)(i) through [
(i) Subject to Subsections (2)(d)(ii), (iii), and [
to the direction of the rehabilitator or liquidator of a health maintenance organization licensed under
Chapter 8, Health Maintenance Organizations and Limited Health Plans, a solvent health
maintenance organization licensed under Chapter 8, Health Maintenance Organizations and Limited
Health Plans, and operating within a portion of the insolvent health maintenance organization's
service area shall extend to the enrollees all rights, privileges, and obligations of being an enrollee
in the accepting health maintenance organization[
(ii) Notwithstanding Subsection (2)(d)(i), the accepting health maintenance organization
shall give credit to an enrollee for any waiting period already satisfied under the provisions of the
enrollee's contract with the insolvent health maintenance organization.
[
maintenance organization under Subsection (2)(d)(i) shall charge the enrollee the premiums
applicable to the existing business of the accepting health maintenance organization.
[
Subsection (2)(d)(i) is limited in number to [
rata share of all health maintenance organization enrollees in this state, as determined after excluding
the enrollees of the insolvent insurer.
[
shall take those measures that are possible to ensure that no health maintenance organization is
required to accept more than its pro rata share of the adverse risk represented by the enrollees of the
insolvent health maintenance organization. [
(B) If the methodology used by the rehabilitator or liquidator to assign an enrollee is one
[
methodology and its results are acceptable under this Subsection (2)(d)[
[
require all solvent health maintenance organizations to pay for the covered claims incurred by the
enrollees of the insolvent health maintenance organization.
(B) As determined by the rehabilitator or liquidator, payments required under this Subsection
(2)(d)[
(I) begin as of the filing of the petition for reorganization or the petition for liquidation; and
(II) continue for a maximum period through the time all enrollees are assigned pursuant to
this section.
(C) If the rehabilitator or liquidator makes an assessment under this Subsection
(2)(d)[
organization its pro rata share of the total assessment based upon its premiums from the previous
calendar year.
(D) (I) A solvent health maintenance organization required to pay for covered claims under
this Subsection (2)(d)(vi) shall be entitled to file a claim against the estate of the insolvent health
maintenance organization.
(II) Any claim described in Subsection (2)(a)(vi)(D)(I), if allowed by the rehabilitator or
liquidator, shall share in any distributions from the estate of the insolvent health maintenance
organization as a Class 3 claim.
(e) (i) A rehabilitator or liquidator may transfer, through sale, or otherwise, the group and
individual health care obligations of the insolvent managed care organization to other managed care
organizations or other insurers, if those other managed care organizations and other insurers are
licensed or have a certificate of authority to provide the same health care services in this state that
is held by the insolvent managed care organization [
[
obligations of the insolvent managed care organization in any manner the rehabilitator or liquidator
considers best to provide for continuous health care coverage for the maximum number of enrollees
of the insolvent managed care organization.
[
policy obligations to more than one other managed care organization or insurer are otherwise equal,
the rehabilitator or liquidator shall give preference to the transfer of the group and individual policy
obligations of an insolvent managed care organization as follows:
(A) from one category of managed care organization to another managed care organization
of the same category, as follows:
(I) from a limited health plan to a limited health plan;
(II) from a health maintenance organization to a health maintenance organization;
(III) from a preferred provider organization to a preferred provider organization;
(IV) from a fraternal benefit society to a fraternal benefit society; and
(V) from any entity similar to any of the above to a category that is similar;
(B) from one category of managed care organization to another managed care organization,
regardless of the category of the transferee managed care organization; and
(C) from a managed care organization to a nonmanaged care provider of health care
coverage, including insurers.
(f) A rehabilitator or liquidator may use the insolvent managed care organization's required
capital or permanent surplus, and compulsory surplus, to continue to provide coverage for the
insolvent managed care organization's enrollees, including paying uncovered expenditures.
Section 70. Section 31A-27-315 is amended to read:
31A-27-315. Notice to creditors and others.
(1) (a) The liquidator shall give notice of the liquidation order as soon as possible:
(i) by first-class mail and [
insurance commissioner of each jurisdiction in which the insurer is [
(ii) by first-class mail and [
association [
[
[
business with the insurer;
[
insurer does a surety business;
[
expected from the insurer's records to have claims against the insurer, including all policyholders;
and
[
the last publication being not less than three months before the earliest deadline specified in the
notice under Subsection (2).
(b) Notice to policyholders shall include:
(i) notice of impairment and termination of coverage under Section 31A-27-311 [
(ii) when applicable[
[
insured is interested; and
[
(I) applicable assigned risk plans or residual market facilities [
(II) guaranty [
another state.
(c) (i) Within [
report to the court what notice has been given.
(ii) The court may order [
Subsection (1) that the court considers appropriate.
(2) (a) Notice to potential claimants under Subsection (1) shall require claimants to file with
the liquidator [
date the liquidator specifies in the notice[
(i) the claimants' claims; and
(ii) proper proofs under Section 31A-27-329 .
(b) The liquidator need not require [
(i) a person claiming unearned premium [
(ii) a person claiming cash surrender values or other investment values in life insurance and
annuities [
(c) The liquidator may specify different dates for filing the different kinds of claims.
(3) If notice is given in accordance with this section, the distribution of the assets of the
insurer under this chapter is conclusive with respect to all claimants, whether or not [
claimants received actual notice.
Section 71. Section 31A-27-317 is amended to read:
31A-27-317. Actions by and against a liquidator.
(1) (a) The filing of a petition for liquidation of a domestic insurer or of an alien insurer
domiciled in this state stays all actions and all proceedings [
(i) (A) at law;
(B) in equity; or
(C) in arbitration;
(ii) against the insurer or liquidator; and
(iii) regardless of whether the action is brought in this state or elsewhere.
(b) Any action or proceeding existing at the time the petition for liquidation is filed may not
be enforced, perfected, maintained, or further presented after the filing of the petition.
(c) The stay of all actions under this Subsection (1) is automatic.
(d) The liquidator may not intervene or defend in an action or proceeding except as provided
in this section.
(2) Except as provided under Section 31A-27-323 , filing a petition for liquidation stays the
exercise of any right of setoff against the insurer.
(3) (a) If the liquidator determines that protection of the estate of the insurer necessitates
intervention in an action pending against the insurer, the liquidator may intervene in the action.
(b) An action described in Subsection (1)(a) is not stayed if:
(i) the liquidator applies to the court for:
(A) leave to intervene or defend; or
(B) ratification by the court of intervention; and
(ii) the court grants the application.
(c) The estate of the insurer may be charged for the expenses incurred by the liquidator in
defending any action in which the liquidator intervenes under this section.
[
estate of the insurer upon any cause of action against which the period of limitation fixed by
applicable law had not expired at the time of the filing of the petition.
(b) Where, by any agreement, a period of limitation is fixed for instituting [
or proceeding upon any claim or for filing any claim, proof of claim, proof of loss, demand, notice,
or the like, or where in any proceeding, judicial or otherwise, a period of limitation is fixed, either
in the proceeding or by applicable law, for taking any action, filing any claim or pleading, or doing
any act, and where in any of these sections the period had not expired at the date of the filing of the
petition for liquidation, the liquidator may, for the benefit of the estate, take any action or do any act,
required of or permitted to the insurer, within a period of 180 days subsequent to the entry of an
order for liquidation, or within any further period as is permitted by the agreement, in the proceeding,
or by applicable law, or within any further time period as is shown to the satisfaction of the court not
to be unfairly prejudicial to the other party.
[
to any action against an insurer between the filing of a petition for liquidation and the denial of the
petition.
(b) Any action against the insurer that might have been commenced when the petition was
filed may be commenced for at least 60 days after the petition is denied.
[
liquidation of an insurer may intervene in any court proceeding concerning the liquidation of the
insurer.
Section 72. Section 31A-27-332 is amended to read:
31A-27-332. Disputed claims.
(1) (a) When a claim is disallowed in whole or in part by the liquidator, written notice of the
determination and of the right to object shall be given promptly to the claimant or the claimant's
attorney of record, if any, by first-class mail at the addresses shown in the proof of claim.
(b) (i) Within 60 days from the mailing of the notice required by Subsection (1)(a), the
claimant may file objections with the court.
(ii) If objections are not filed within the period provided in Subsection (1)(b)(i), the claimant
may not further object to the determination.
(2) (a) Whenever objections are filed with the court and the liquidator does not alter the
liquidator's ruling, the liquidator shall ask the court for a hearing as soon as practicable.
(b) [
an order setting a date as early as possible.
(c) At the request of the liquidator, the court may establish procedures for the objections
hearing.
(d) The liquidator shall give notice of [
mail to:
(i) the claimant or the claimant's attorney; and
(ii) any other persons directly affected.
(e) A hearing under this Subsection (2):
(i) shall be heard without a jury[
[
[
[
[
Subsection (2) shall[
determination of the claims[
[
court:
(i) findings of fact [
(ii) recommendations.
(h) Consistent with Subsection 31A-27-336 (2), the court may approve, disapprove, or
modify:
(i) the liquidator's determination of a claim; or
(ii) a referee's recommendations on a claim.
(3) A court order issued after a hearing and pursuant to this section may be appealed as a
final order for purposes of Rule 54 [
Section 73. Section 31A-27-337 is amended to read:
31A-27-337. Distribution of assets.
(1) (a) Subject to any instructions the court may give, the liquidator shall make distributions
in a manner that will assure the proper recognition of priorities and a reasonable balance between
the expeditious completion of the liquidation and the protection of unliquidated and undetermined
claims, including third party claims.
(b) Distribution of assets in kind may be made at valuations set by agreement between the
liquidator and the creditor and approved by the court in advance of the distribution.
(2) (a) The liquidator shall make distributions to guaranty funds and associations under
Subsection (1) to satisfy their claims under Chapter 28, Guaranty Associations, or similar laws of
other states, if the claims have been filed pursuant to rules established under Subsections
31A-27-328 (1) and (4).
(b) The total distributions to guaranty funds and associations paid under this Subsection (2)
may not exceed the total of the claims properly made by the funds and associations under
Subsections 31A-27-328 (1) and (4).
(c) The liquidator shall pay distributions as frequently as is practicable and in sums as large
as possible without sacrificing asset values by untimely disposition or inequitable allocation of
available assets.
(d) The liquidator may protect against inequitable allocations by making payments to funds
and associations subject to binding agreements by [
portions of the distributions [
(e) If assets are available, the liquidator may [
subject to express advance court approval.
(3) (a) The liquidator shall report to the court within [
[
(b) (i) After the report required by Subsection (3)(a), the liquidator will report to the court
on the status of the liquidation on a calendar quarter basis.
(ii) A report required by this Subsection (3)(b) shall be due within 45 days of the end of the
calendar quarter unless the court orders otherwise.
(c) The court may order the liquidator to make distributions to guaranty funds and
associations under Subsection (2) more expeditiously to minimize the need for assessments under
Chapter 28, Guaranty Associations, or similar laws of other states.
(4) (a) Upon liquidation of a domestic nonlife mutual insurance company, any assets held
in excess of [
company's members as provided under Subsection (4)(b) shall be paid into the state treasury to the
credit of the Uniform School Fund.
(b) The maximum amount payable upon liquidation to any member for and on account of
[
insurance benefits promised in the policy, is the total of all premium payments made by the member
within the past five years with interest at the legal rate compounded annually.
Section 74. Section 31A-27-340 is amended to read:
31A-27-340. Reopening liquidation.
(1) After the liquidation proceeding has been terminated and the liquidator discharged, [
following may petition the court to reopen the proceedings for good cause, including the discovery
of additional assets[
(a) the commissioner;
(b) a policyholder;
(c) a creditor; or
(d) a claimant of the closed liquidation estate.
(2) If the court is satisfied that there is justification for reopening, [
[
Section 75. Section 31A-27-341 is amended to read:
31A-27-341. Disposition of records.
[
liquidation or completely liquidated under this chapter may be disposed of in the [
Section 76. Section 31A-28-203 is amended to read:
31A-28-203. Definitions.
As used in this part:
(1) "Affiliate" is as defined in Section 31A-1-301 .
(2) "Association account" means the Utah Property and Casualty Insurance Guaranty
Association Account created by Section 31A-28-205 .
[
(i) an insured making a first-party claim; or
(ii) a person instituting a liability claim.
(b) A person who is an affiliate of the insolvent insurer may not be a claimant.
[
personal lines policy for unearned premiums submitted by a claimant, if:
(i) the claim arises out of the coverage;
(ii) the claim is within the coverage;
(iii) the claim is not in excess of the applicable limits of an insurance policy to which this
part applies;
(iv) the insurer who issued the policy becomes an insolvent insurer; and
(v) (A) the claimant or insured is a resident of this state at the time of the insured event; or
(B) the claim is a first-party claim for damage to property that is permanently located in this
state.
(b) "Covered claim" does not include:
(i) any amount awarded as punitive or exemplary damages or any amount due any reinsurer,
insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise, nor does
it include any supplementary payment obligation, including adjustment fees and expenses, attorneys'
fees and expenses, court costs, interest, and bond premiums, prior to the appointment of a liquidator;
(ii) any amount sought as a return of premium under a retrospective rating plan;
(iii) any first-party claim by an insured if:
(A) the insured's net worth exceeds $25,000,000 on December 31 of the year preceding the
date the insurer becomes an insolvent insurer; and
(B) the insured's net worth includes the aggregate net worth of the insured and all of its
subsidiaries as calculated on a consolidated basis; or
(iv) any first-party claims by an insured that is an affiliate of the insolvent insurer.
[
liquidation by a court of competent jurisdiction with a finding of insolvency.
[
(a) writes any kind of insurance to which this part applies under Section 31A-28-202 ,
including the exchange of reciprocal or inter-insurance contracts; and
(b) is licensed to transact insurance in this state.
[
on insurance policies that this part applies to, less return premiums and dividends paid or credited
to policyholders on the direct business.
(b) "Net direct written premiums" does not include premiums on contracts between insurers
or reinsurers.
[
(a) insures a motor vehicle used for personal purposes and not used in trade or business; or
(b) insures a residential dwelling.
[
principal place of business of a claimant, insured, or policyholder is located at the time of the insured
event.
Section 77. Section 31A-28-205 is amended to read:
31A-28-205. Creation of the association.
(1) (a) The Utah Property and Casualty Insurance Guaranty Association shall continue as a
nonprofit legal entity.
(b) All member insurers of the association are, and remain, members of the association as
a condition of their authority to transact insurance business in this state.
(c) The association shall:
(i) perform its functions under the plan of operation established and approved under Section
31A-28-209 ; and
(ii) exercise its powers through a board of directors established under Section 31A-28-206 .
(d) For the purposes of administration and assessment, the association shall maintain[
Guaranty Association Account.
[
[
(e) (i) If as of May 6, 2002, the association has more than one account, the association shall
consolidate all accounts into the Property and Casualty Insurance Guaranty Association Account.
(ii) The Property and Casualty Insurance Guaranty Association Account:
(A) succeeds to all funds held by the association in an account existing on May 6, 2002; and
(B) is subject to any liability or obligation attributable to an account of the association
existing on May 6, 2002.
(2) (a) An insurer shall cease to be a member insurer on the day following the termination
or expiration of the insurer's license to transact the kinds of insurance to which this part applies.
(b) Notwithstanding Subsection (2)(a), the insurer shall remain liable as a member insurer
for all obligations, including assessments levied:
(i) before the termination or expiration of the insurer's license; and
(ii) after the termination or expiration of the insurer's license but that relate to an insurer that
became an insolvent insurer before the termination or expiration of the insurer's license.
(3) Meetings or records of the association shall be open to the public upon a majority vote
of the board of directors of the association.
(4) The association is not an agency of the state.
Section 78. Section 31A-28-207 is amended to read:
31A-28-207. Powers and duties of the association.
(1) (a) The association is obligated on the amount of the covered claims:
(i) existing prior to the order of liquidation; and
(ii) arising:
(A) within 30 days after the order of liquidation; or
(B) (I) before the policy expiration date if it is less than 30 days after the order of liquidation;
or
(II) before the insured replaces the policy or causes its cancellation, if the insured does so
within 30 days of the order of liquidation.
(b) The obligation under Subsection (1)(a) includes only that amount of each covered claim
that is less than $300,000.
(c) A claim under a personal lines policy for unearned premiums shall include only those
claims that exceed $100 in amount, subject to a maximum of $10,000 per policy.
(d) The association shall pay the full amount of any covered claim arising out of a workers'
compensation policy. The association is not obligated to a policyholder or claimant in an amount in
excess of the obligation of the insolvent insurer under the policy from which the claim arises.
(e) Any obligation of the association to defend an insured on a covered claim shall cease:
(i) upon payment by the association, as part of a settlement releasing the insured; or
(ii) on a judgment, of the lesser of:
(A) the association's covered claim obligation limit; or
(B) the applicable policy limit.
(f) The association:
(i) is considered as the insurer only to the extent of its obligation on the covered claims,
subject to the limitations provided in this part;
(ii) has all the rights, duties, and obligations of the insolvent insurer as if the insurer had not
yet become insolvent, including the right to pursue and retain salvage and subrogation recoverable
on paid covered claim obligations; and
(iii) may not be considered the insolvent insurer for any purpose relating to whether the
association is subject to personal jurisdiction in the courts of any state.
(g) (i) Notwithstanding any other provisions of this part, except in the case of a claim for
benefits under workers' compensation coverage, any obligation of the association to or on behalf of
a particular insured and its affiliates on covered claims shall cease when:
(A) a total amount of $10,000,000 has been paid to or on behalf of the insured and its
affiliates on covered claims by the association or a similar association; and
(B) all payments on covered claims arise under one or more policies of a single insolvent
insurer.
(ii) The association may establish a plan to allocate the amounts payable by the association
in a manner the association considers equitable if the association determines that:
(A) there is more than one claimant asserting a covered claim against:
(I) the association;
(II) a similar association; or
(III) a property or casualty insurance security fund in another state; and
(B) all claims arise under the policy or policies of a single insolvent insurer.
(h) The association shall [
(i) the obligations of the association under Subsection (1)(a), as limited by Subsections (1)(e)
through (g), subsequent to the liquidation of an insolvent insurer;
(ii) the expenses of handling covered claims subsequent to the liquidation of an insolvent
insurer;
(iii) the cost of examinations under Section 31A-28-214 ; and
(iv) other expenses authorized by this part.
(i) (i) The association shall:
(A) investigate claims brought against the association; and
(B) adjust, compromise, settle, and pay covered claims to the extent of the association's
obligation and deny all other claims.
(ii) The association is not bound by a settlement, release, compromise, waiver, or judgment
executed or entered into by the insolvent insurer:
(A) less than 12 months before the entry of an order of liquidation; or
(B) more than 12 months before the entry of an order of liquidation if the settlement, release,
compromise, waiver, or judgment is:
(I) based on a claim that is not a covered claim; or
(II) the result of fraud, collusion, default, or failure to defend.
(iii) The association may assert all defenses available including defenses applicable to
determining and enforcing the association's statutory rights and obligations to a claim.
(iv) The association may appoint and direct legal counsel retained under a liability insurance
policy for the defense of a covered claim.
(j) (i) The association shall handle claims through:
(A) its employees;
(B) one or more insurers; or
(C) other persons designated as servicing facilities.
(ii) Designation of a servicing facility is subject to the approval of the commissioner, but this
designation may be declined by a member insurer.
(k) The association shall:
(i) reimburse each servicing facility for:
(A) obligations of the association paid by the facility; and
(B) expenses incurred by the facility while handling claims on behalf of the association; and
(ii) pay the other expenses of the association as authorized by this title.
(2) The association may:
(a) employ or retain the persons, including private legal counsel, necessary to handle claims
and perform other duties of the association;
(b) borrow funds necessary to implement the purposes of this part in accord with the plan
of operation;
(c) sue or be sued;
(d) negotiate and become a party to the contracts necessary to carry out the purpose of this
part;
(e) perform any other acts necessary or proper to accomplish the purposes of this chapter;
or
(f) refund to the member insurers, in proportion to the contribution of each member insurer
to [
at the end of any calendar year, the board of directors finds that:
(i) the assets of the association in [
(ii) the excess assets are not needed for other purposes of this part.
(3) For a refund due to a member insurer for an assessment that has been offset against
premium taxes, the association may pay the amount of the refund directly to the State Tax
Commission.
(4) The courts of the state shall have exclusive jurisdiction over all actions brought against
the association that relate to or arise out of this part.
(5) (a) Any person recovering under this part is considered to have assigned that person's
rights under the policy to the association to the extent of that person's recovery from the association.
(b) Every insured or claimant seeking the protection of this chapter shall cooperate with the
association to the same extent the person would have been required to cooperate with the insolvent
insurer.
(c) Except as provided in Subsection (5)(e), the association has no cause of action against
the insured of the insolvent insurer for any sums the association has paid out except those causes of
action the insolvent insurer would have had if the sums had been paid by the insolvent insurer.
(d) When an insolvent insurer operates on a plan with assessment liability, payments of
claims of the association do not reduce the liability for unpaid assessments of the insurer to:
(i) the receiver;
(ii) liquidator; or
(iii) statutory successor.
(e) The association may recover from the following persons the amount of any "covered
claim" paid on behalf of that person pursuant to this part:
(i) any insured whose:
(A) net worth on December 31 of the year next preceding the date the insurer becomes
insolvent, exceeds $25,000,000; and
(B) liability obligations to other persons are satisfied in whole or in part by payments made
under this part; and
(ii) any person:
(A) who is an affiliate of the insolvent insurer; and
(B) whose liability obligations to other persons are satisfied in whole or in part by payments
made under this part.
(f) (i) The receiver, liquidator, or statutory successor of an insolvent insurer is bound by:
(A) a determination of a covered claim eligibility under this part; and
(B) a settlement of a covered claim by the association or a similar organization in another
state.
(ii) The court having jurisdiction shall grant settled claims a priority equal to that which the
claimant would have been entitled to in the absence of this part, against the assets of the insolvent
insurer.
(g) The association or any similar organization in another state shall:
(i) be recognized as a claimant in the liquidation of an insolvent insurer for any amounts paid
on a covered claim obligation as determined under this part or a similar law in another state; and
(ii) receive dividends or distributions at the priority set forth in Section 31A-27-335 .
(h) (i) The association shall periodically file with the receiver or liquidator of the insolvent
insurer:
(A) statements of the covered claims paid by the association; and
(B) estimates of anticipated claims on the association.
(ii) The filing under this Subsection (5)(h) preserves the rights of the association for claims
against the assets of the insolvent insurer.
(i) The association need not pay any claim filed after the final date under Sections
31A-27-315 and 31A-27-328 , or similar statutes of other states, for filing the same type of claim with
the liquidator of the insolvent insurer.
Section 79. Section 31A-28-208 is amended to read:
31A-28-208. Assessments.
(1) (a) To provide the funds necessary to carry out the powers and duties of the association,
the board of directors shall assess the member insurers[
(b) An assessment under this section:
(i) is due not less than 30 days after written notice to the member insurers; and
(ii) accrues interest to the extent unpaid after the due date at the greater of:
(A) 10% per annum; or
(B) the then legal rate of interest provided in Section 15-1-1 .
[
(2) An assessment [
powers and duties of the association under Section 31A-28-207 for an insolvent insurer.
(3) An assessment against a member insurer [
net direct written premiums of the member insurer for the preceding calendar year on the kinds of
insurance [
member insurers for the preceding calendar year on [
which this part applies.
(4) A member insurer may not be assessed in any year [
greater than 2% of that member insurer's net direct written premiums for the preceding calendar year
on the kinds of insurance [
(5) If the maximum assessment, together with the other assets of the association in [
association account, do not provide in any one year [
all necessary payments [
portion shall be paid as soon as funds become available.
(6) The association may exempt or defer, in whole or in part, the assessment of any member
insurer, if the assessment would cause the member insurer's financial statement to reflect amounts
of capital or surplus less than the minimum amounts required for a certificate of authority by any
jurisdiction in which the member insurer is authorized to transact insurance.
(7) Each member insurer may set off against any assessment authorized payments made on
covered claims and expenses incurred in the payment of the claims by the member insurer, if they
are chargeable to the association account [
Section 80. Section 31A-28-222 is amended to read:
31A-28-222. Application of amendments.
(1) The amendments in [
on April 30, 2001 and apply to the association's obligations under policies of insolvent insurers as
they exist on or after April [
(2) Notwithstanding Subsection (1), the amendments to Subsections 31A-28-203 (3) and
31A-28-207 (1)(a) in Chapter 363, Laws of Utah 2001, that add coverage for unearned premium
claims shall apply only to insurers that become insolvent after [
Section 81. 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 [
(i) exceed the deductible and copayment amounts applicable under Section 31A-29-114 ; and
[
(ii) 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 [
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[
under the Health Insurance Portability and Accountability Act, P. L. 104-91, 110 Stat. 1962.
(9) (a) [
Subsection 31A-29-103 (5), to the health insurance pool, 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 [
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) (a) The pool may not apply any preexisting condition exclusion to an individual that is
changing group health coverage to the health insurance pool if:
(i) the individual applies not later than 63 days following the date of involuntary termination
from group health coverage;
(ii) the individual has at least 18 months of creditable coverage as of the date the individual
seeks coverage from:
(A) the health insurance pool; or
(B) an individual health plan;
(iii) the individual's most recent prior creditable coverage was under:
(A) a group health plan;
(B) a government plan; or
(C) a church plan;
(iv) the individual is not eligible for coverage under:
(A) a group health plan;
(B) Part A or Part B of Title XVIII of the Social Security Act; or
(C) a state plan under Title XIX of the Social Security Act;
(v) the individual does not have other health insurance coverage;
(vi) the individual's most recent coverage was not terminated because of:
(A) nonpayment of premiums; or
(B) fraud;
(vii) the individual has been offered the option of continuing coverage under:
(A) a continuation provision; or
(B) a similar state extension program; and
(viii) the individual's premium rate exceeds the rate of the pool for equal or lesser coverage.
(b) If Subsection (10)(a) applies, coverage in the pool shall be effective from the date on
which the prior coverage was terminated.
[
condition exclusion set forth in Subsection (7) for coverage of medically necessary outpatient
medical care.
[
of any person.
Section 82. Section 31A-30-101 is amended to read:
31A-30-101. Title.
This chapter [
Insurance Act."
Section 83. Section 31A-30-103 is amended to read:
31A-30-103. Definitions.
As used in this [
(1) "Actuarial certification" means a written statement by a member of the American
Academy of Actuaries or other individual approved by the commissioner that a covered carrier is in
compliance with [
carrier, including review of the appropriate records and of the actuarial assumptions and methods
[
plans.
(2) "Affiliate" or "affiliated" means any entity or person who directly or indirectly through
one or more intermediaries, controls or is controlled by, or is under common control with, a specified
entity or person.
(3) "Base premium rate" means, for each class of business as to a rating period, the lowest
premium rate charged or that could have been charged under a rating system for that class of
business by the covered carrier to covered insureds with similar case characteristics for health benefit
plans with the same or similar coverage.
(4) "Basic coverage" means the coverage provided in the Basic Health Care Plan established
by the Health Benefit Plan Committee under Subsection 31A-22-613.5 (6).
(5) "Carrier" means any person or entity that provides health insurance in this state
including:
(a) an insurance company[
(b) a prepaid hospital or medical care plan[
(c) a health maintenance organization[
(d) a multiple employer welfare arrangement[
(e) any other person or entity providing a health insurance plan under this title.
(6) (a) Except as provided in Subsection (6)(b), "case characteristics" means demographic
or other objective characteristics of a covered insured that are considered by the carrier in
determining premium rates for the covered insured. [
(b) "Case characteristics" does not include:
(i) duration of coverage since the policy was issued[
(ii) claim experience[
(iii) health status[
(7) "Class of business" means all or a separate grouping of covered insureds established
under Section 31A-30-105 .
(8) "Conversion policy" means a policy providing coverage under the conversion provisions
required in [
(9) "Covered carrier" means any individual carrier or small employer carrier subject to this
[
(10) "Covered individual" means any individual who is covered under a health benefit plan
subject to this [
(11) "Covered insureds" means small employers and individuals who are issued a health
benefit plan that is subject to this [
(12) "Dependent" means [
individual is defined to be a dependent by:
(a) the health benefit plan covering the covered individual; and
(b) [
[
[
[
[
[
[
[
commissioner within which the carrier is authorized to provide coverage.
[
[
[
[
[
[
[
[
[
[
[
insureds with similar case characteristics, the arithmetic average of the applicable base premium rate
and the corresponding highest premium rate.
[
individual basis through a health benefit [
(a) coverage is offered through:
(i) an association;
(ii) a trust;
(iii) a discretionary group; or
(iv) other similar groups; or
(b) the policy or contract is situated out-of-state.
[
(a) an individual; or
(b) an individual with a family.
[
a carrier's health benefit [
[
accordance with Section 31A-30-110 .
[
period, the lowest premium rate charged or offered, or that could have been charged or offered, by
the carrier to covered insureds with similar case characteristics for newly issued health benefit plans
with the same or similar coverage.
(20) "Preexisting condition" is as defined in Section 31A-1-301 .
[
as a condition of receiving coverage from a covered carrier, including any fees or other contributions
associated with the health benefit plan.
[
established by a covered carrier are assumed to be in effect, as determined by the carrier. [
(b) A covered carrier may not have:
(i) more than one rating period in any calendar month[
(ii) no more than 12 rating periods in any calendar year.
[
consecutive months immediately preceding the date of application.
[
(24) "Short-term limited duration insurance" means a health benefit product that:
(a) is not renewable; and
(b) has an expiration date specified in the contract that is less than 364 days after the date
the plan became effective.
[
plans covering eligible employees of one or more small employers in this state[
whether:
(a) coverage is offered through:
(i) an association;
(ii) a trust;
(iii) a discretionary group; or
(iv) other similar grouping; or
(b) the policy or contract is situated out-of-state.
[
(a) is eligible for the Comprehensive Health Insurance Pool coverage under the underwriting
criteria established in Subsection 31A-29-111 (4); or
(b) (i) is issued a certificate for coverage under Subsection 31A-30-108 (3); and
(ii) has a condition of health that does not meet consistently applied underwriting criteria as
established by the commissioner in accordance with Subsections 31A-30-106 (1)[
for which coverage the applicant is applying.
[
purposes of this formula:
(a) "UC" means the number of uninsurable individuals who were issued an individual policy
on or after July 1, 1997; and
(b) "CI" means the carrier's individual coverage count as of December 31 of the preceding
year.
Section 84. Section 31A-30-104 is amended to read:
31A-30-104. Applicability and scope.
(1) This chapter applies to any:
(a) health benefit plan that provides coverage to:
(i) individuals;
(ii) small [
(iii) both Subsections (1)(a)(i) and (ii); or
(b) individual conversion policy for purposes of Sections 31A-30-106.5 and [
31A-30-107.5 .
(2) This chapter applies to a health benefit plan that provides coverage to small employers
or individuals regardless of:
(a) whether the contract is issued to:
(i) an association;
(ii) a trust;
(iii) a discretionary group; or
(iv) other similar grouping; or
(b) the situs of delivery of the policy or contract.
(3) This chapter does not apply to:
(a) a large employer health benefit plan; or
(b) short-term limited duration health insurance.
[
(i) carriers that are affiliated companies or that are eligible to file a consolidated tax return
shall be treated as one carrier; and
(ii) any restrictions or limitations imposed by this chapter shall apply as if all health benefit
plans delivered or issued for delivery to covered insureds in this state by the affiliated carriers were
issued by one carrier.
(b) [
maintenance organization having a certificate of authority under this title may be considered to be
a separate carrier for the purposes of this chapter.
(c) Unless otherwise authorized by the commissioner, a covered carrier may not enter into
one or more ceding arrangements with respect to health benefit plans delivered or issued for delivery
to covered insureds in this state if [
the insurance obligation or risk for [
carrier.
(d) [
assumes all of the insurance obligation or risk with respect to one or more health benefit plans
delivered or issued for delivery to covered insureds in this state.
[
Labor Management Relations Act, or a carrier with the written authorization of such a trust, may
make a written request to the commissioner for a waiver from the application of any of the
provisions of Subsection 31A-30-106 (1) with respect to a health benefit plan provided to the trust.
(b) The commissioner may grant [
waiver if the commissioner finds that application with respect to the trust would:
(i) have a substantial adverse effect on the participants and beneficiaries of the trust; and
(ii) require significant modifications to one or more collective bargaining arrangements
under which the trust is established or maintained.
(c) A waiver granted under this Subsection [
person participates in [
organization.
[
[
31A-30-111 apply to:
(a) any insurer engaging in the business of insurance related to the risk of a small employer
for medical, surgical, hospital, or ancillary health care expenses of [
employees provided as an employee benefit; and
(b) any contract of an insurer, other than a workers' compensation policy, related to the risk
of a small employer for medical, surgical, hospital, or ancillary health care expenses of [
employer's employees provided as an employee benefit.
[
consistent with this chapter for:
(a) [
(b) a small employer carrier's agent;
[
[
Section 85. Section 31A-30-106 is amended to read:
31A-30-106. Premiums -- Rating restrictions -- Disclosure.
(1) Premium rates for health benefit plans under this chapter are subject to the [
provisions[
(a) The index rate for a rating period for any class of business [
index rate for any other class of business by more than 20%.
(b) (i) For a class of business, the premium rates charged during a rating period to covered
insureds with similar case characteristics for the same or similar coverage, or the rates that could be
charged to such employers under the rating system for that class of business, may not vary from the
index rate by more than 30% of the index rate, except as provided in Section 31A-22-625 .
(ii) A covered carrier that offers individual and small employer health benefit plans may use
the small employer index rates to establish the rate limitations for individual policies, even if some
individual policies are rated below the small employer base rate.
(c) The percentage increase in the premium rate charged to a covered insured for a new
rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of the
following:
(i) the percentage change in the new business premium rate measured from the first day of
the prior rating period to the first day of the new rating period[
(ii) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods of
less than one year, due to the claim experience, health status, or duration of coverage of the covered
individuals as determined from the covered carrier's rate manual for the class of business, except as
provided in Section 31A-22-625 ; and
(iii) any adjustment due to change in coverage or change in the case characteristics of the
covered insured as determined from the covered carrier's rate manual for the class of business.
(d) (i) Adjustments in rates for claims experience, health status, and duration from issue
may not be charged to individual employees or dependents.
(ii) Any [
the rates charged for all employees and dependents of the small employer.
(e) A covered carrier may [
premium rates, provided that the highest rate factor associated with any industry classification does
not exceed the lowest rate factor associated with any industry classification by more than 15%.
[
[
[
[
[
consistently with respect to all covered insureds in a class of business.
(ii) Rating factors shall produce premiums for identical groups [
(A) differ only by the amounts attributable to plan design; and
(B) do not reflect differences due to the nature of the groups assumed to select particular
health benefit [
[
calendar month as having the same rating period.
[
restricted network provision [
that does not [
provision results in substantial difference in claims costs.
[
use case characteristics other than:
(i) age[
(ii) gender[
(iii) industry[
(iv) geographic area[
(v) family composition[
(vi) group size.
[
Chapter 46a, Utah Administrative Rulemaking Act, to:
(A) implement [
(B) assure that rating practices used by covered carriers are consistent with the purposes of
this chapter[
(ii) The rules described in Subsection (1)(i)(i) may include rules that:
[
covered carriers are reasonable and reflect objective differences in plan design, [
differences due to the nature of the groups assumed to select particular health benefit [
products;
[
[
[
specifying:
(I) the contents for certification[
(II) auditing standards[
(III) underwriting criteria for uninsurable classification[
(IV) limitations on high risk enrollees under Section 31A-30-111 ; and
[
[
classification, the commissioner shall contract with an independent consulting organization to
develop industry-wide underwriting criteria for uninsurability based on an individual's expected
claims under open enrollment coverage exceeding 200% of that expected for a standard insurable
individual with the same case characteristics.
[
31A-22-605 regarding individual accident and health policy rates to allow rating in accordance with
this section.
(2) For purposes of Subsection (1)(c)(i), if a health benefit product into which the covered
carrier is no longer enrolling new covered insureds, the covered carrier shall use the percentage
change in the base premium rate, provided that the change does not exceed, on a percentage basis,
the change in the new business premium rate for the most similar health benefit product into which
the covered carrier is actively enrolling new covered insureds.
[
or out of a class of business.
(b) A covered carrier [
of business unless [
without regard:
(i) to case characteristics[
(ii) claim experience[
(iii) health status[
(iv) duration of coverage since issue.
[
[
[
[
[
(4) (a) Each covered carrier shall maintain at [
business a complete and detailed description of its rating practices and renewal underwriting
practices, including information and documentation that demonstrate that [
rating methods and practices are:
(i) based upon commonly accepted actuarial assumptions; and [
(ii) in accordance with sound actuarial principles.
(b) (i) Each covered carrier shall file with the commissioner, on or before March 15 of each
year, in a form, manner, and containing such information as prescribed by the commissioner, an
actuarial certification certifying that:
(A) the covered carrier is in compliance with this chapter; and [
(B) the rating methods of the covered carrier are actuarially sound.
(ii) A copy of [
covered carrier at [
(c) A covered carrier shall make the information and documentation described in this
Subsection (4) available to the commissioner upon request.
(d) Records submitted to the commissioner under [
maintained by the commissioner as protected records under Title 63, Chapter 2, Government
Records Access and Management Act.
Section 86. Section 31A-30-106.7 is amended to read:
31A-30-106.7. Surcharge for groups changing carriers.
[
carrier may impose upon a small group that changes coverage to that carrier from another carrier a
one-time surcharge of up to 25% of the annualized premium that the carrier could otherwise charge
under Section 31A-30-106 [
(b) A covered carrier may not impose the surcharge described in Subsection (1)(a) if:
(i) the change in carriers occurs on the anniversary of the plan year, as defined in Section
31A-1-301 ;
(ii) the previous coverage was terminated under Subsection 31A-30-107 (3)(e); or
(iii) employees from an existing group form a new business.
(2) A covered carrier may not impose the surcharge described in Subsection (1) if the offer
to cover the group occurs at a time other than the anniversary of the plan year because:
(a) (i) the application for coverage is made prior to the anniversary date in accordance with
the covered carrier's published policies; and
(ii) the offer to cover the group is not issued until after the anniversary date; or
(b) (i) the application for coverage is made prior to the anniversary date in accordance with
the covered carrier's published policies; and
(ii) additional underwriting or rating information requested by the covered carrier is not
received until after the anniversary date.
(3) If a covered carrier chooses to apply a surcharge under Subsection (1), the application
of the surcharge and the criteria for incurring or avoiding the surcharge shall be clearly stated in the:
(a) written application materials provided to the applicant at the time of application; and
(b) written producer guidelines.
(4) The commissioner shall adopt rules in accordance with Title 63, Chapter 46a, Utah
Administrative Rulemaking Act, to ensure compliance with this section.
Section 87. Section 31A-30-107 is amended to read:
31A-30-107. Renewal -- Limitations -- Exclusions -- Discontinuance and nonrenewal.
(1) [
[
(a) with respect to all [
(b) at the option of the [
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
(2) A small employer health benefit plan may be discontinued or nonrenewed:
(a) for a network plan, if:
(i) there is no longer any enrollee under the group health plan who lives, resides, or works
in:
(A) the service area of the covered carrier; or
(B) the area for which the covered carrier is authorized to do business; and
(ii) in the case of the small employer market, the small employer carrier applies the same
criteria the small employer carrier would apply in denying enrollment in the plan under Subsection
31A-30-108 (6); or
(b) for coverage made available in the small or large employer market only through an
association, if:
(i) the employer's membership in the association ceases; and
(ii) the coverage is terminated uniformly without regard to any health status-related factor
relating to any covered individual.
(3) A small employer health benefit plan may be discontinued if:
(a) a condition described in Subsection (2) exists;
(b) the plan sponsor fails to pay premiums or contributions in accordance with the terms of
the contract;
(c) the plan sponsor:
(i) performs an act or practice that constitutes fraud; or
(ii) makes an intentional misrepresentation of material fact under the terms of the coverage;
(d) the covered carrier:
(i) elects to discontinue offering a particular small employer health benefit product delivered
or issued for delivery in this state; and
(ii) (A) provides notice of the discontinuation in writing:
(I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
(II) at least 90 days before the date the coverage will be discontinued;
(B) provides notice of the discontinuation in writing:
(I) to the commissioner; and
(II) at least three working days prior to the date the notice is sent to the affected plan
sponsors, employees, and dependents of the plan sponsors or employees;
(C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase all other
small employer health benefit products currently being offered by the small employer carrier in the
market; and
(D) in exercising the option to discontinue that product and in offering the option of
coverage in this section, acts uniformly without regard to:
(I) the claims experience of a plan sponsor;
(II) any health status-related factor relating to any covered participant or beneficiary; or
(III) any health status-related factor relating to any new participant or beneficiary who may
become eligible for the coverage; or
(e) the covered carrier:
(i) elects to discontinue all of the covered carrier's small employer health benefit plans in:
(A) the small employer market;
(B) the large employer market; or
(C) both the small employer and large employer markets; and
(ii) (A) provides notice of the discontinuation in writing:
(I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
(II) at least 180 days before the date the coverage will be discontinued;
(B) provides notice of the discontinuation in writing:
(I) to the commissioner in each state in which an affected insured individual is known to
reside; and
(II) at least 30 working days prior to the date the notice is sent to the affected plan sponsors,
employees, and the dependents of the plan sponsors or employees;
(C) discontinues and nonrenews all plans issued or delivered for issuance in the market; and
(D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
(4) A small employer health benefit plan may be nonrenewed:
(a) if a condition described in Subsection (2) exists; or
(b) for noncompliance with the covered carrier's:
(i) minimum participation requirements; or
(ii) employer contribution requirements.
(5) (a) Except as provided in Subsection (5)(d), an eligible employee may be discontinued
if after issuance of coverage the eligible employee:
(i) engages in an act or practice that constitutes fraud in connection with the coverage; or
(ii) makes an intentional misrepresentation of material fact in connection with the coverage.
(b) An eligible employee that is discontinued under Subsection (5)(a) may reenroll:
(i) 12 months after the date of discontinuance; and
(ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies to
reenroll.
(c) At the time the eligible employee's coverage is discontinued under Subsection (5)(a), the
covered carrier shall notify the eligible employee of the right to reenroll when coverage is
discontinued.
(d) An eligible employee may not be discontinued under this Subsection (5) because of a
fraud or misrepresentation that relates to health status.
(6) For purposes of this section, a reference to "plan sponsor" includes a reference to the
employer:
(a) with respect to coverage provided to an employer member of the association; and
(b) if the small employer health benefit plan is made available by a covered carrier in the
employer market only through:
(i) an association;
(ii) a trust; or
(iii) a discretionary group.
(7) A covered carrier may modify a small employer health benefit plan only:
(a) at the time of coverage renewal; and
(b) if the modification is effective uniformly among all plans with that product.
Section 88. Section 31A-30-107.1 is enacted to read:
31A-30-107.1. Individual discontinuance and nonrenewal.
(1) (a) Except as otherwise provided in this section, a health benefit plan offered on an
individual basis is renewable and continues in force:
(i) with respect to all individuals or dependents; and
(ii) at the option of the individual.
(b) Subsection (1)(a) applies regardless of:
(i) whether the contract is issued through:
(A) a trust;
(B) an association;
(C) a discretionary group; or
(D) other similar grouping; or
(ii) the situs of delivery of the policy or contract.
(2) A health benefit plan may be discontinued or nonrenewed:
(a) for a network plan, if:
(i) the individual no longer lives, resides, or works in:
(A) the service area of the covered carrier; or
(B) the area for which the covered carrier is authorized to do business; and
(ii) coverage is terminated uniformly without regard to any health status-related factor
relating to any covered individual; or
(b) for coverage made available through an association, if:
(i) the individual's membership in the association ceases; and
(ii) the coverage is terminated uniformly without regard to any health status-related factor
of covered individuals.
(3) A health benefit plan may be discontinued if:
(a) a condition described in Subsection (2) exists;
(b) the individual fails to pay premiums or contributions in accordance with the terms of the
health benefit plan, including any timeliness requirements;
(c) the individual:
(i) performs an act or practice that constitutes fraud in connection with the coverage; or
(ii) makes an intentional misrepresentation of material fact under the terms of the coverage;
(d) the covered carrier:
(i) elects to discontinue offering a particular health benefit product delivered or issued for
delivery in this state; and
(ii) (A) provides notice of the discontinuance in writing:
(I) to each individual provided coverage; and
(II) at least 90 days before the date the coverage will be discontinued;
(B) provides notice of the discontinuation in writing:
(I) to the commissioner; and
(II) at least three working days prior to the date the notice is sent to the affected individuals;
(C) offers to each covered individual on a guaranteed issue basis the option to purchase all
other individual health benefit products currently being offered by the covered carrier for individuals
in that market; and
(D) acts uniformly without regard to any health status-related factor of a covered individual
or dependent of a covered individual who may become eligible for coverage; or
(e) the covered carrier:
(i) elects to discontinue all of the covered carrier's health benefit plans in the individual
market; and
(ii) (A) provides notice of the discontinuation in writing:
(I) to each covered individual; and
(II) at least 180 days before the date the coverage will be discontinued;
(B) provides notice of the discontinuation in writing:
(I) to the commissioner in each state in which an affected insured individual is known to
reside; and
(II) at least 30 working days prior to the date the notice is sent to the affected individuals;
(C) discontinues and nonrenews all health benefit plans the covered carrier issues or delivers
for insurance in the individual market; and
(D) acts uniformly without regard to any health status-related factor of a covered individual
or a dependent of a covered individual who may become eligible for coverage.
Section 89. Section 31A-30-107.3 is enacted to read:
31A-30-107.3. Discontinuance and nonrenewal limitations.
(1) (a) A carrier that elects to discontinue offering a health benefit plan under Subsection
31A-30-107 (3)(e) or 31A-30-107.1 (3)(e) is prohibited from writing new business:
(i) in the small employer and individual market in this state; and
(ii) for a period of five years beginning on the date of discontinuation of the last coverage
that is discontinued.
(b) The prohibition described in Subsection (1)(a) may be waived if the commissioner finds
that waiver is in the public interest:
(i) to promote competition; or
(ii) to resolve inequity in the marketplace.
(2) If a carrier is doing business in one established geographic service area of the state,
Sections 31A-30-107 and 31A-30-107.1 apply only to the carrier's operations in that geographic
service area.
(3) If a small employer employs less than two employees, a carrier may not discontinue or
not renew the health benefit plan until the first renewal date following the beginning of a new plan
year, even if the carrier knows as of the beginning of the plan year that the employer no longer has
at least two current employees.
Section 90. Section 31A-30-107.5 is enacted to read:
31A-30-107.5. Limitations and exclusions.
(1) A health benefit plan may impose a preexisting condition exclusion only if:
(a) the exclusion relates to a condition, regardless of the cause of the condition, for which
medical advise, diagnosis, care, or treatment was recommended or received within the six-month
period ending on the enrollment date;
(b) the exclusion extends for a period of:
(i) not more than 12 months after the enrollment date; or
(ii) in the case of a late enrollee, 18 months after the enrollment date; and
(c) the period of the preexisting condition exclusion is reduced by the aggregate of the
periods of creditable coverage applicable to the participant or beneficiary as of the enrollment date.
(2) (a) The period of continuous coverage under Subsection (1)(c) may not include any
waiting period for the effective date of the new coverage applied by the employer or the carrier.
(b) This Subsection (2) does not preclude application of any waiting period applicable to all
new enrollees under the plan.
(3) (a) Credit for previous coverage as provided under Subsection (1)(c) need not be given
for any condition that was previously excluded under a condition-specific exclusion rider issued
pursuant to Subsection (5).
(b) A new preexisting waiting period may be applied to any condition that was excluded by
a rider under the terms of previous individual coverage.
(4) (a) For purposes of Subsection (1)(c), a period of creditable coverage may not be counted
with respect to enrollment of an individual under a health benefit plan, if:
(i) after the period and before the enrollment date, there was a 63-day period during all of
which the individual was not covered under any creditable coverage; or
(ii) the insured fails to provide notification of previous coverage to the covered carrier within
36 months of the coverage effective date if the covered carrier has previously requested the
notification.
(b) (i) Credit for previous coverage as provided under Subsection (1)(c) need not be given
for any condition that was previously excluded in compliance with Subsection (5).
(ii) A new preexisting waiting period may be applied to any condition that was excluded
under the terms of previous individual coverage.
(5) (a) An individual carrier:
(i) shall offer a health benefit plan in compliance with Subsection (1); and
(ii) may, when the individual carrier and the insured mutually agree in writing to a
condition-specific exclusion rider, offer to issue an individual policy that excludes a specific physical
condition consistent with Subsection (5)(b).
(b) (i) The commissioner shall establish by rule a list of life threatening physical conditions
that may not be the subject of a condition-specific exclusion rider.
(ii) A condition-specific exclusion rider:
(A) shall be limited to the excluded condition; and
(B) may not extend to any secondary medical condition that may or may not be directly
related to the excluded condition.
Section 91. 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.
1701(f) and 2711(a).
(b) Individual carriers shall accept residents for individual coverage pursuant:
(i) to P.L. 104-191, 110 Stat. 1979, Sec. 2741(a)-(b); and
(ii) 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 [
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[
(i) (A) as an employee of an employer[
(B) as a member of an association[
(C) as a member of any other group; and
(ii) under:
[
[
health benefit plan as defined in Section [
(b) the individual is not covered and is not eligible for coverage under any public health
benefits arrangement including:
(i) the Medicare program established under Title XVIII [
(ii) the Medicaid program established under Title XIX of the Social Security Act[
(iii) any [
comparable to the benefits provided under this [
(iv) coverage under the Comprehensive Health Insurance Pool Act created in Chapter 29,
Comprehensive Health Insurance Pool Act;
(c) unless the maximum benefit has been reached the individual is not covered or eligible
for coverage under any:
(i) Medicare supplement policy[
(ii) conversion option[
(iii) continuation or extension under COBRA[
(iv) state extension [
(d) the individual has not terminated or declined coverage described in Subsection (3)(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)(c); or
(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)(c) if the 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.
(6) (a) If a small employer carrier offers health benefit plans to small employers through a
network plan, the small employer carrier may:
(i) limit the employers that may apply for the coverage to those employers with eligible
employees who live, reside, or work in the service area for the network plan; and
(ii) within the service area of the network plan, deny coverage to an employer if the small
employer carrier has demonstrated to the commissioner that the small employer carrier:
(A) will not have the capacity to deliver services adequately to enrollees of any additional
groups because of the small employer carrier's obligations to existing group contract holders and
enrollees; and
(B) applies this section uniformly to all employers without regard to:
(I) the claims experience of an employer, an employer's employee, or a dependent of an
employee; or
(II) any health status-related factor relating to an employee or dependent of an employee.
(b) (i) A small employer carrier that denies a health benefit product to an employer in any
service area in accordance with this section may not offer coverage in the small employer market
within the service area to any employer for a period of 180 days after the date the coverage is denied.
(ii) This Subsection (6)(b) does not:
(A) limit the small employer carrier's ability to renew coverage that is in force; or
(B) relieve the small employer carrier of the responsibility to renew coverage that is in force.
(c) Coverage offered within a service area after the 180-day period specified in Subsection
(6)(b) is subject to the requirements of this section.
Section 92. Section 31A-30-110 is amended to read:
31A-30-110. Individual enrollment cap.
(1) The commissioner shall set the individual enrollment cap at .5% on July 1, 1997.
(2) The commissioner shall raise the individual enrollment cap by .5% at the later of the
following dates:
(a) six months from the last increase in the individual enrollment cap; or
(b) the date when CCI/TI is greater than .90, where:
(i) "CCI" is the total individual coverage count for all carriers certifying that their
uninsurable percentage has reached the individual enrollment cap; and
(ii) "TI" is the total individual coverage count for all carriers.
(3) The commissioner may establish a minimum number of uninsurable individuals that a
carrier entering the market who is subject to this chapter must accept under the individual enrollment
provisions of this chapter.
(4) Beginning July 1, 1997, an individual carrier may decline to accept individuals applying
for individual enrollment under Subsection 31A-30-108 (3), other than individuals applying for
coverage as set forth in P.L. 104-191, 110 Stat. 1979, Sec. 2741 (a)-(b), if:
(a) the uninsurable percentage for that carrier equals or exceeds the cap established in
Subsection (1); and
(b) the covered carrier has certified on forms provided by the commissioner that its
uninsurable percentage equals or exceeds the individual enrollment cap.
(5) The department may audit a carrier's records to verify whether the carrier's uninsurable
classification meets industry standards for underwriting criteria as established by the commissioner
in accordance with Subsection 31A-30-106 (1)[
(6) (a) If the commissioner determines that individual enrollment is causing a substantial
adverse effect on premiums, enrollment, or experience, the commissioner may suspend, limit, or
delay further individual enrollment for up to 12 months.
(b) The commissioner shall adopt rules to establish a uniform methodology for calculating
and reporting loss ratios for individual policies for determining whether the individual enrollment
provisions of Section 31A-30-108 should be waived for an individual carrier experiencing significant
and adverse financial impact as a result of complying with those provisions.
Section 93. Section 31A-30-111 is amended to read:
31A-30-111. Limitations on high risk enrollees.
(1) (a) The requirements of this chapter do not apply to any carrier that is currently in a state
of supervision, insolvency, or liquidation.
(b) If a carrier demonstrates to the satisfaction of the commissioner that the requirements of
this chapter would place the carrier in a state of supervision, insolvency, or liquidation the
commissioner may waive or modify the requirements of Sections 31A-30-108 and 31A-30-110 .
(2) (a) A modification or waiver by the commissioner under [
shall be effective for a period of not more than one year.
(b) At the end of the [
satisfaction of the commissioner the need for [
Subsection (1)(b).
(3) Notwithstanding the requirements of this chapter, a carrier may deny health benefit plan
coverage in the small employer and individual market if the carrier demonstrates to the satisfaction
of the commissioner that the carrier:
(a) does not have the financial reserves necessary to underwrite additional coverage;
(b) is applying this section uniformly to all small employers and individuals without regard
to:
(i) any health status-related factor of the individuals; or
(ii) whether the individuals are eligible individuals.
Section 94. Section 31A-30-114 is enacted to read:
31A-30-114. Disclosure.
(1) A covered carrier shall make the information described in Subsection (2) available:
(a) to:
(i) a small employer; or
(ii) an individual; and
(b) (i) at the time of solicitation; or
(ii) upon the request of:
(A) a small employer; or
(B) an individual;
(c) as part of the covered carrier's solicitation and sales materials.
(2) The following information is required to be disclosed or made available under Subsection
(1):
(a) the provisions of the coverage concerning the covered carrier's right to change premium
rates; and
(b) the factors that may effect changes in premium rates;
(c) the provisions of the coverage relating to renewability of coverage; and
(d) the provisions of the coverage relating to any preexisting condition exclusion.
Section 95. Section 59-9-105 is amended to read:
59-9-105. Tax on certain insurers to pay for relative value study and other publications
or services.
(1) Each insurer providing coverage for motor vehicle liability, uninsured motorist, and
personal injury protection shall pay to the State Tax Commission on or before March 31 of each year,
a tax of .01% on the total premiums received for these coverages during the preceding calendar year
from policies covering motor vehicle risks in this state.
(2) The taxable premium under this section shall be reduced by all premiums returned or
credited to policyholders on direct business subject to tax in this state.
(3) All money received by the state under this section shall be deposited in the General Fund
as a dedicated credit for the purpose of providing funds to pay for any costs and expenses incurred
by the Insurance Department:
(a) in conducting, maintaining, and administering the relative value study referred to in
Section 31A-22-307 ; [
(b) to prepare, publish, and distribute publications relating to insurance and consumers of
insurance as provided in Section 31A-2-208 [
(c) in providing the services of the Insurance Department through the use of:
(i) electronic commerce; and
(ii) other information technology.
Section 96. Section 63-55-231 is amended to read:
63-55-231. Repeal dates, Title 31A.
(1) Section 31A-3-104 , Electronic Commerce Dedicated Fees, is repealed July 1, 2006.
[
[
[
[
repealed July 1, 2011.
[
Section 97. Repealer.
This act repeals:
Section 31A-8-402, Contract cancellation or nonrenewal.
Section 31A-15-206, Countersignatures not required.
Section 31A-22-720, Mental health parity.
Section 98. Effective date.
This act takes effect on May 6, 2002, except that the amendments to Section 31A-26-202
(Effective 07/01/02) take effect on July 1, 2002.
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