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H.B. 146

This document includes House Committee Amendments incorporated into the bill on Wed, Feb 12, 2003 at 8:57 AM by kholt. -->              1     




Sponsor: James A. Ferrin

             5      This act modifies the Insurance Code to replace the definition for a nonprofit educational
             6      insurer with a definition for a nontraditional insurer, and to continue the exemption of
             7      nonprofit educational insurers from certain provisions of the Insurance Code to
             8      nontraditional insurers.
             9      This act affects sections of Utah Code Annotated 1953 as follows:
             10      AMENDS:
             11          31A-10-201, as enacted by Chapter 204, Laws of Utah 1986
             12          31A-10-202, as enacted by Chapter 204, Laws of Utah 1986
             13          31A-10-203, as last amended by Chapter 245, Laws of Utah 1994
             14      Be it enacted by the Legislature of the state of Utah:
             15          Section 1. Section 31A-10-201 is amended to read:
Part II. Nontraditional Insurers

             17           31A-10-201. Definition.
             18          As used in this part[, "nonprofit educational]:
             19          (1) "Nontraditional insurer" means h [ a nonprofit ] AN h insurer incorporated under Chapter
             19a      5,
             20      Domestic Stock and Mutual Insurers Corporations, or admitted under Chapter 14 [which],
             21      Foreign Insurers, that:
             22          (a) exists for the purpose of aiding and strengthening [nonprofit educational and
             23      research institutions by providing them and their employees with annuities and insurance. An
             24      insurer is not a nonprofit educational insurer if it provides annuities or insurance to persons
             25      other than nonprofit educational and research institutions and their employees.] the following
             26      by providing them with annuities:

             27          (i) nonprofit entities;

             28          (ii) employees of nonprofit entities;
             29          (iii) governmental entities; and
             30          (iv) employees of governmental entities;
             31          (b) issues only annuities and no other insurance product; and
             32          (c) does not pay any benefit based on a guarantee as to principal, interest rate, return on
             33      investment, mortality, and morbidity.
             34          (2) "Nontraditional insurer" does not include an insurer that provides annuities to
             35      persons other than:
             36          (a) nonprofit entities;
             37          (b) employees of nonprofit entities;
             38          (c) governmental entities; and
             39          (d) employees of governmental entities.
             40          Section 2. Section 31A-10-202 is amended to read:
             41           31A-10-202. Purposes of part.
             42          The purposes of this part are:
             43          (1) to provide for the continued operation in this state, subject to the provisions of this
             44      title, of [nonprofit organizations] nontraditional insurers providing annuities [and insurance to
             45      the educational and research institutions] to the nonprofit entities and governmental entities of
             46      this state and their employees; and
             47          (2) to specify provisions which equitably deal with the operational, structural, and
             48      functional differences between [nonprofit educational] nontraditional insurers and other
             49      insurers, without compromising the interests of policyholders.
             50          Section 3. Section 31A-10-203 is amended to read:
             51           31A-10-203. Applicability of other provisions.
             52          (1) Except as provided in this section, domestic [nonprofit educational] nontraditional
             53      insurers are subject to the same provisions applicable to other domestic insurers, and
             54      nondomestic [nonprofit educational] nontraditional insurers are subject to the same provisions
             55      applicable to other nondomestic insurers.
             56          [(2) Chapter 28 does not apply to the annuity business nor to annuitants of nonprofit
             57      educational insurers.]
             58          [(3)] (2) [Nonprofit educational insurers that do not issue contracts containing

             59      guarantees as to principal, interest rate, return on investment, mortality, and morbidity]
             60      Nontraditional insurers are not subject to:
             61          (a) Section 31A-5-211 ;
             62          (b) Section 31A-5-217 ;
             63          (c) Subsection 31A-14-205 (1)(a);
             64          (d) Chapter 17, Determination of Financial Condition;
             65          (e) Chapter 18, Investments;
             66          (f) Section 31A-20-106 ;
             67          (g) Chapter 21, Insurance Contracts in General, if:
             68          (i) their contract forms have been approved by the appropriate regulatory authorities in
             69      their state of domicile; and
             70          (ii) these contract forms are standard forms generally issued by those [nonprofit
             71      educational] nontraditional insurers in the United States; [or]
             72          (h) Chapter 22[.], Contracts in Specific Lines; or
             73          (i) Chapter 28, Guaranty Associations.

Legislative Review Note
    as of 1-30-03 7:50 AM

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

Office of Legislative Research and General Counsel

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