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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.
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