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H.B. 374

This document includes House Committee Amendments incorporated into the bill on Tue, Feb 25, 2003 at 2:43 PM by kholt. --> This document includes House Floor Amendments incorporated into the bill on Wed, Feb 26, 2003 at 3:43 PM by kholt. -->              1     

INSURANCE PRODUCERS AMENDMENTS

             2     
2003 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: James A. Dunnigan

             5      This act modifies the Insurance Code. The act provides definitions and substitutes the
             6      term producer for the terms agent and broker with respect to certain insurance licenses.
             7      The act renumbers and modifies the chapter of the Insurance Code dealing with
             8      insurance marketing and licensing. The act further modifies insurance licensing and
             9      application procedures, licensing requirements, and license types. The act modifies
             10      guidelines for termination, lapsing, probation, or surrender with respect to a license.
             11      The act enacts guidelines for the appointment and listing of an individual or agency
             12      producer or managing general agent. The act modifies certain continuing education and
             13      training period requirements. The act modifies provisions relating to an agency license
             14      and designation. The act designates certain failures to forward a premium to an insured
             15      as insurance fraud. The act modifies guidelines for licensee compensation. The act
             16      makes technical changes. This act provides an effective date. This act contains a
             17      coordination clause.
             18      This act affects sections of Utah Code Annotated 1953 as follows:
             19      AMENDS:
             20          7-1-901, as enacted by Chapter 393, Laws of Utah 1998
             21          31A-1-104, as last amended by Chapter 131, Laws of Utah 1999
             22          31A-1-301, as last amended by Chapters 71 and 308, Laws of Utah 2002
             23          31A-2-205, as last amended by Chapter 2, Laws of Utah 1987
             24          31A-2-214, as last amended by Chapter 71, Laws of Utah 2002
             25          31A-2-308, as last amended by Chapters 130 and 131, Laws of Utah 1999
             26          31A-2-309, as last amended by Chapter 91, Laws of Utah 1987
             27          31A-3-303, as last amended by Chapter 230, Laws of Utah 1992


             28          31A-4-106, as last amended by Chapter 131, Laws of Utah 1999
             29          31A-5-207, as last amended by Chapter 277, Laws of Utah 1992
             30          31A-5-218, as last amended by Chapter 131, Laws of Utah 1999
             31          31A-6a-103, as last amended by Chapter 130, Laws of Utah 1999
             32          31A-6a-108, as enacted by Chapter 203, Laws of Utah 1992
             33          31A-8-103, as last amended by Chapter 308, Laws of Utah 2002
             34          31A-11-101, as last amended by Chapter 204, Laws of Utah 1986
             35          31A-11-102, as last amended by Chapter 116, Laws of Utah 2001
             36          31A-11-104, as last amended by Chapter 10, Laws of Utah 1997
             37          31A-11-107, as last amended by Chapter 204, Laws of Utah 1986
             38          31A-14-211, as last amended by Chapter 9, Laws of Utah 1996, Second Special Session
             39          31A-15-102, as enacted by Chapter 242, Laws of Utah 1985
             40          31A-15-103, as last amended by Chapter 185, Laws of Utah 2002
             41          31A-15-104, as enacted by Chapter 242, Laws of Utah 1985
             42          31A-15-111, as last amended by Chapter 185, Laws of Utah 1997
             43          31A-15-204, as last amended by Chapter 305, Laws of Utah 1993
             44          31A-15-207, as enacted by Chapter 258, Laws of Utah 1992
             45          31A-15-210, as enacted by Chapter 258, Laws of Utah 1992
             46          31A-15-212, as last amended by Chapter 305, Laws of Utah 1993
             47          31A-17-608, as last amended by Chapter 116, Laws of Utah 2001
             48          31A-19a-209, as last amended by Chapter 308, Laws of Utah 2002
             49          31A-19a-216, as enacted by Chapter 130, Laws of Utah 1999
             50          31A-20-110, as enacted by Chapter 242, Laws of Utah 1985
             51          31A-21-302, as last amended by Chapter 204, Laws of Utah 1986
             52          31A-21-305, as enacted by Chapter 242, Laws of Utah 1985
             53          31A-21-404, as last amended by Chapter 116, Laws of Utah 2001
             54          31A-26-201, as last amended by Chapter 20, Laws of Utah 1995
             55          31A-27-103, as last amended by Chapter 308, Laws of Utah 2002
             56          31A-27-316, as enacted by Chapter 242, Laws of Utah 1985
             57          31A-27-324, as enacted by Chapter 242, Laws of Utah 1985
             58          31A-30-104, as last amended by Chapter 308, Laws of Utah 2002


             59          31A-35-102, as last amended by Chapter 259, Laws of Utah 2000
             60          31A-35-301, as last amended by Chapter 259, Laws of Utah 2000
             61          31A-35-401, as last amended by Chapter 259, Laws of Utah 2000
             62          31A-35-402, as last amended by Chapter 259, Laws of Utah 2000
             63          31A-35-403, as enacted by Chapter 293, Laws of Utah 1998
             64          31A-35-502, as last amended by Chapter 259, Laws of Utah 2000
             65          31A-35-503, as last amended by Chapter 259, Laws of Utah 2000
             66          31A-35-601, as enacted by Chapter 293, Laws of Utah 1998
             67          31A-35-603, as last amended by Chapter 259, Laws of Utah 2000
             68          31A-35-604, as last amended by Chapter 259, Laws of Utah 2000
             69          31A-35-605, as enacted by Chapter 293, Laws of Utah 1998
             70          31A-35-606, as enacted by Chapter 293, Laws of Utah 1998
             71          31A-35-608, as last amended by Chapter 9, Laws of Utah 2001
             72          31A-35-701, as last amended by Chapter 259, Laws of Utah 2000
             73          31A-35-702, as last amended by Chapter 259, Laws of Utah 2000
             74          31A-35-703, as last amended by Chapter 259, Laws of Utah 2000
             75          31A-35-704, as last amended by Chapter 259, Laws of Utah 2000
             76          34A-2-104, as last amended by Chapter 171, Laws of Utah 2001
             77          35A-4-205, as last amended by Chapter 21, Laws of Utah 1999
             78          41-12a-303.2, as last amended by Chapter 345, Laws of Utah 2000
             79          57-1-39, as last amended by Chapter 40, Laws of Utah 2002
             80          59-9-101, as last amended by Chapter 71, Laws of Utah 2002
             81          63-2-202, as last amended by Chapter 256, Laws of Utah 2001
             82          63-2-302 (Effective 07/01/03), as last amended by Chapters 63 and 191, Laws of Utah
             83      2002
             84          63-2-302 (Superseded 07/01/03), as last amended by Chapter 63, Laws of Utah 2002
             85          63-55b-131, as last amended by Chapter 3, Laws of Utah 2001
             86          73-1-10, as last amended by Chapter 241, Laws of Utah 2001
             87          73-18c-304, as enacted by Chapter 348, Laws of Utah 1997
             88          76-10-915, as last amended by Chapter 141, Laws of Utah 1999
             89      ENACTS:


             90          31A-1-110, Utah Code Annotated 1953
             91          31A-23a-113, Utah Code Annotated 1953
             92          31A-23a-115, Utah Code Annotated 1953
             93          31A-23a-301, Utah Code Annotated 1953
             94          31A-23a-411, Utah Code Annotated 1953
             95      RENUMBERS AND AMENDS:
             96          31A-23a-101, (Renumbered from 31A-23-101, as last amended by Chapter 116, Laws
             97      of Utah 2001)
             98          31A-23a-102, (Renumbered from 31A-23-102, as last amended by Chapter 308, Laws
             99      of Utah 2002)
             100          31A-23a-103, (Renumbered from 31A-23-201, as last amended by Chapter 116, Laws
             101      of Utah 2001)
             102          31A-23a-104, (Renumbered from 31A-23-202, as last amended by Chapter 185, Laws
             103      of Utah 2002)
             104          31A-23a-105, (Renumbered from 31A-23-203, as last amended by Chapter 116, Laws
             105      of Utah 2001)
             106          31A-23a-106, (Renumbered from 31A-23-204, as last amended by Chapter 308, Laws
             107      of Utah 2002)
             108          31A-23a-107, (Renumbered from 31A-23-205, as last amended by Chapter 10, Laws of
             109      Utah 1997)
             110          31A-23a-108, (Renumbered from 31A-23-207, as last amended by Chapter 116, Laws
             111      of Utah 2001)
             112          31A-23a-109, (Renumbered from 31A-23-209, as last amended by Chapter 116, Laws
             113      of Utah 2001)
             114          31A-23a-110, (Renumbered from 31A-23-212, as last amended by Chapter 116, Laws
             115      of Utah 2001)
             116          31A-23a-111, (Renumbered from 31A-23-216, as last amended by Chapter 308, Laws
             117      of Utah 2002)
             118          31A-23a-112, (Renumbered from 31A-23-217, as last amended by Chapter 185, Laws
             119      of Utah 1997)
             120          31A-23a-114, (Renumbered from 31A-23-218, as last amended by Chapter 116, Laws


             121      of Utah 2001)
             122          31A-23a-116, (Renumbered from 31A-23-405, as last amended by Chapter 131, Laws
             123      of Utah 1999)
             124          31A-23a-201, (Renumbered from 31A-23-201.5, as enacted by Chapter 116, Laws of
             125      Utah 2001)
             126          31A-23a-202, (Renumbered from 31A-23-206, as last amended by Chapter 308, Laws
             127      of Utah 2002)
             128          31A-23a-203, (Renumbered from 31A-23-208, as last amended by Chapter 261, Laws
             129      of Utah 1989)
             130          31A-23a-204, (Renumbered from 31A-23-211, as last amended by Chapter 308, Laws
             131      of Utah 2002)
             132          31A-23a-205, (Renumbered from 31A-23-211.5, as enacted by Chapter 293, Laws of
             133      Utah 1998)
             134          31A-23a-206, (Renumbered from 31A-23-211.7, as last amended by Chapter 116, Laws
             135      of Utah 2001)
             136          31A-23a-207, (Renumbered from 31A-23-214, as enacted by Chapter 242, Laws of
             137      Utah 1985)
             138          31A-23a-302, (Renumbered from 31A-23-219, as last amended by Chapter 114, Laws
             139      of Utah 2000)
             140          31A-23a-401, (Renumbered from 31A-23-301, as last amended by Chapter 261, Laws
             141      of Utah 1989)
             142          31A-23a-402, (Renumbered from 31A-23-302, as last amended by Chapter 308, Laws
             143      of Utah 2002)
             144          31A-23a-403, (Renumbered from 31A-23-303, as last amended by Chapter 116, Laws
             145      of Utah 2001)
             146          31A-23a-404, (Renumbered from 31A-23-304, as enacted by Chapter 242, Laws of
             147      Utah 1985)
             148          31A-23a-405, (Renumbered from 31A-23-305, as last amended by Chapter 293, Laws
             149      of Utah 1998)
             150          31A-23a-406, (Renumbered from 31A-23-307, as last amended by Chapter 308, Laws
             151      of Utah 2002)


             152          31A-23a-407, (Renumbered from 31A-23-308, as last amended by Chapter 308, Laws
             153      of Utah 2002)
             154          31A-23a-408, (Renumbered from 31A-23-309, as last amended by Chapter 230, Laws
             155      of Utah 1992)
             156          31A-23a-409, (Renumbered from 31A-23-310, as last amended by Chapter 116, Laws
             157      of Utah 2001)
             158          31A-23a-410, (Renumbered from 31A-23-311, as last amended by Chapter 344, Laws
             159      of Utah 1995)
             160          31A-23a-412, (Renumbered from 31A-23-312, as last amended by Chapter 116, Laws
             161      of Utah 2001)
             162          31A-23a-413, (Renumbered from 31A-23-313, as enacted by Chapter 242, Laws of
             163      Utah 1985)
             164          31A-23a-414, (Renumbered from 31A-23-314, as enacted by Chapter 242, Laws of
             165      Utah 1985)
             166          31A-23a-415, (Renumbered from 31A-23-315, as last amended by Chapter 260, Laws
             167      of Utah 2002)
             168          31A-23a-416, (Renumbered from 31A-23-316, as enacted by Chapter 329, Laws of
             169      Utah 1998)
             170          31A-23a-417, (Renumbered from 31A-23-317, as enacted by Chapter 116, Laws of
             171      Utah 2001)
             172          31A-23a-501, (Renumbered from 31A-23-401, as last amended by Chapter 293, Laws
             173      of Utah 1998)
             174          31A-23a-502, (Renumbered from 31A-23-402, as last amended by Chapter 204, Laws
             175      of Utah 1986)
             176          31A-23a-503, (Renumbered from 31A-23-403, as last amended by Chapter 76, Laws of
             177      Utah 1995)
             178          31A-23a-504, (Renumbered from 31A-23-404, as last amended by Chapter 116, Laws
             179      of Utah 2001)
             180          31A-23a-505, (Renumbered from 31A-23-406, as enacted by Chapter 242, Laws of
             181      Utah 1985)
             182          31A-23a-601, (Renumbered from 31A-23-501, as last amended by Chapter 305, Laws


             183      of Utah 1993)
             184          31A-23a-602, (Renumbered from 31A-23-502, as enacted by Chapter 258, Laws of
             185      Utah 1992)
             186          31A-23a-603, (Renumbered from 31A-23-503, as last amended by Chapter 308, Laws
             187      of Utah 2002)
             188          31A-23a-604, (Renumbered from 31A-23-504, as enacted by Chapter 258, Laws of
             189      Utah 1992)
             190          31A-23a-605, (Renumbered from 31A-23-505, as enacted by Chapter 258, Laws of
             191      Utah 1992)
             192          31A-23a-701, (Renumbered from 31A-23-601, as last amended by Chapter 308, Laws
             193      of Utah 2002)
             194          31A-23a-702, (Renumbered from 31A-23-602, as last amended by Chapter 305, Laws
             195      of Utah 1993)
             196          31A-23a-703, (Renumbered from 31A-23-603, as enacted by Chapter 258, Laws of
             197      Utah 1992)
             198          31A-23a-704, (Renumbered from 31A-23-604, as enacted by Chapter 258, Laws of
             199      Utah 1992)
             200          31A-23a-801, (Renumbered from 31A-23-701, as enacted by Chapter 258, Laws of
             201      Utah 1992)
             202          31A-23a-802, (Renumbered from 31A-23-702, as last amended by Chapter 116, Laws
             203      of Utah 2001)
             204          31A-23a-803, (Renumbered from 31A-23-703, as enacted by Chapter 258, Laws of
             205      Utah 1992)
             206          31A-23a-804, (Renumbered from 31A-23-704, as enacted by Chapter 258, Laws of
             207      Utah 1992)
             208          31A-23a-805, (Renumbered from 31A-23-705, as last amended by Chapter 116, Laws
             209      of Utah 2001)
             210          31A-23a-806, (Renumbered from 31A-23-706, as enacted by Chapter 258, Laws of
             211      Utah 1992)
             212          31A-23a-807, (Renumbered from 31A-23-707, as enacted by Chapter 258, Laws of
             213      Utah 1992)


             214          31A-23a-808, (Renumbered from 31A-23-708, as enacted by Chapter 258, Laws of
             215      Utah 1992)
             216          31A-23a-809, (Renumbered from 31A-23-709, as enacted by Chapter 258, Laws of
             217      Utah 1992)
             218      REPEALS:
             219          31A-23-103, as last amended by Chapter 261, Laws of Utah 1989
             220          31A-23-215, as last amended by Chapter 131, Laws of Utah 1999
             221      Be it enacted by the Legislature of the state of Utah:
             222          Section 1. Section 7-1-901 is amended to read:
             223           7-1-901. Authorized insurance activities of depository institutions.
             224          (1) A depository institution authorized to do business in this state under this title may
             225      directly, or indirectly through a subsidiary or affiliate, engage in the following insurance
             226      activities:
             227          (a) engage in the insurance business as defined under Section 31A-1-301 except as may
             228      be limited by federal law;
             229          (b) act as an insurance [agent, broker,] producer or consultant as defined under Section
             230      31A-1-301 ; or
             231          (c) engage in insurance adjusting as defined in Section 31A-26-102 .
             232          (2) A depository institution, subsidiary, or affiliate, that engages in insurance activities
             233      authorized under Subsection (1) shall be subject to Title 31A, Insurance Code.
             234          Section 2. Section 31A-1-104 is amended to read:
             235           31A-1-104. Authorization to do insurance business.
             236          A person may not engage in the following without complying with this title:
             237          (1) do an insurance business as defined under Section 31A-1-301 ;
             238          (2) act as an insurance [agent, broker,] producer or consultant as defined under Section
             239      31A-1-301 ; or
             240          (3) engage in insurance adjusting as defined under Section 31A-26-102 .
             241          Section 3. Section 31A-1-110 is enacted to read:
             242          31A-1-110. Scope of a license.
             243          Unless a license is designated as limited, a license authorizes the person holding the
             244      license to transact business for all products within a line of authority.


             245          Section 4. Section 31A-1-301 is amended to read:
             246           31A-1-301. Definitions.
             247          As used in this title, unless otherwise specified:
             248          (1) (a) "Accident and health insurance" means insurance to provide protection against
             249      economic losses resulting from:
             250          (i) a medical condition including:
             251          (A) medical care expenses; or
             252          (B) the risk of disability;
             253          (ii) accident; or
             254          (iii) sickness.
             255          (b) "Accident and health insurance":
             256          (i) includes a contract with disability contingencies including:
             257          (A) an income replacement contract;
             258          (B) a health care contract;
             259          (C) an expense reimbursement contract;
             260          (D) a credit accident and health contract;
             261          (E) a continuing care contract; and
             262          (F) long-term care contracts; and
             263          (ii) may provide:
             264          (A) hospital coverage;
             265          (B) surgical coverage;
             266          (C) medical coverage; or
             267          (D) loss of income coverage.
             268          (c) "Accident and health insurance" does not include workers' compensation insurance.
             269          (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
             270      63, Chapter 46a, Utah Administrative Rulemaking Act.
             271          [(2)] (3) "Administrator" is defined in Subsection [(121)] (149).
             272          [(3)] (4) "Adult" means a natural person who has attained the age of at least 18 years.
             273          [(4)] (5) "Affiliate" means any person who controls, is controlled by, or is under
             274      common control with, another person. A corporation is an affiliate of another corporation,
             275      regardless of ownership, if substantially the same group of natural persons manages the


             276      corporations.
             277          (6) "Agency" means:
             278          (a) a person other than an individual, including a sole proprietorship by which a natural
             279      person does business under an assumed name; and
             280          (b) an insurance organization licensed or required to be licensed under Section
             281      31A-23a-301 .
             282          [(5)] (7) "Alien insurer" means an insurer domiciled outside the United States.
             283          [(6)] (8) "Amendment" means an endorsement to an insurance policy or certificate.
             284          [(7)] (9) "Annuity" means an agreement to make periodical payments for a period
             285      certain or over the lifetime of one or more natural persons if the making or continuance of all
             286      or some of the series of the payments, or the amount of the payment, is dependent upon the
             287      continuance of human life.
             288          [(8)] (10) "Application" means a document:
             289          (a) completed by an applicant to provide information about the risk to be insured; and
             290          (b) that contains information that is used by the insurer to:
             291          (i) evaluate risk; and
             292          (ii) decide whether to:
             293          (A) insure the risk under:
             294          (I) the coverages as originally offered; or
             295          (II) a modification of the coverage as originally offered; or
             296          (B) decline to insure the risk.
             297          [(9)] (11) "Articles" or "articles of incorporation" means the original articles, special
             298      laws, charters, amendments, restated articles, articles of merger or consolidation, trust
             299      instruments, and other constitutive documents for trusts and other entities that are not
             300      corporations, and amendments to any of these.
             301          [(10)] (12) "Bail bond insurance" means a guarantee that a person will attend court
             302      when required, or will obey the orders or judgment of the court, as a condition to the release of
             303      that person from confinement.
             304          [(11)] (13) "Binder" is defined in Section 31A-21-102 .
             305          [(12)] (14) "Board," "board of trustees," or "board of directors" means the group of
             306      persons with responsibility over, or management of, a corporation, however designated.


             307          (15) "Business entity" means a corporation, association, partnership, limited liability
             308      company, limited liability partnership, or other legal entity.
             309          [(13)] (16) "Business of insurance" is defined in Subsection [(68)] (80).
             310          [(14)] (17) "Business plan" means the information required to be supplied to the
             311      commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
             312      when these subsections are applicable by reference under:
             313          (a) Section 31A-7-201 ;
             314          (b) Section 31A-8-205 ; or
             315          (c) Subsection 31A-9-205 (2).
             316          [(15)] (18) "Bylaws" means the rules adopted for the regulation or management of a
             317      corporation's affairs, however designated and includes comparable rules for trusts and other
             318      entities that are not corporations.
             319          (19) "Captive insurance company" means:
             320          (a) an insurance company:
             321          (i) owned by another organization; and
             322          (ii) whose exclusive purpose is to insure risks of the parent organization and affiliated
             323      companies; or
             324          (b) in the case of groups and associations, an insurance organization:
             325          (i) owned by the insureds; and
             326          (ii) whose exclusive purpose is to insure risks of:
             327          (A) member organizations;
             328          (B) group members; and
             329          (C) affiliates of:
             330          (I) member organizations; or
             331          (II) group members.
             332          [(16)] (20) "Casualty insurance" means liability insurance as defined in Subsection
             333      [(75)] (90).
             334          [(17)] (21) "Certificate" means evidence of insurance given to:
             335          (a) an insured under a group insurance policy; or
             336          (b) a third party.
             337          [(18)] (22) "Certificate of authority" is included within the term "license."


             338          [(19)] (23) "Claim," unless the context otherwise requires, means a request or demand
             339      on an insurer for payment of benefits according to the terms of an insurance policy.
             340          [(20)] (24) "Claims-made coverage" means an insurance contract or provision limiting
             341      coverage under a policy insuring against legal liability to claims that are first made against the
             342      insured while the policy is in force.
             343          [(21)] (25) (a) "Commissioner" or "commissioner of insurance" means Utah's
             344      insurance commissioner.
             345          (b) When appropriate, the terms listed in Subsection [(21)] (25)(a) apply to the
             346      equivalent supervisory official of another jurisdiction.
             347          [(22)] (26) (a) "Continuing care insurance" means insurance that:
             348          (i) provides board and lodging;
             349          (ii) provides one or more of the following services:
             350          (A) personal services;
             351          (B) nursing services;
             352          (C) medical services; or
             353          (D) other health-related services; and
             354          (iii) provides the coverage described in Subsection [(22)] (26)(a)(i) under an agreement
             355      effective:
             356          (A) for the life of the insured; or
             357          (B) for a period in excess of one year.
             358          (b) Insurance is continuing care insurance regardless of whether or not the board and
             359      lodging are provided at the same location as the services described in Subsection [(22)]
             360      (26)(a)(ii).
             361          [(23)] (27) (a) "Control," "controlling," "controlled," or "under common control"
             362      means the direct or indirect possession of the power to direct or cause the direction of the
             363      management and policies of a person. This control may be:
             364          (i) by contract;
             365          (ii) by common management;
             366          (iii) through the ownership of voting securities; or
             367          (iv) by a means other than those described in Subsections [(23)] (27)(a)(i) through (iii).
             368          (b) There is no presumption that an individual holding an official position with another


             369      person controls that person solely by reason of the position.
             370          (c) A person having a contract or arrangement giving control is considered to have
             371      control despite the illegality or invalidity of the contract or arrangement.
             372          (d) There is a rebuttable presumption of control in a person who directly or indirectly
             373      owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
             374      voting securities of another person.
             375          (28) "Controlled insurer" means a licensed insurer that is either directly or indirectly
             376      controlled by a producer.
             377          (29) "Controlling person" means any person, firm, association, or corporation that
             378      directly or indirectly has the power to direct or cause to be directed, the management, control,
             379      or activities of a reinsurance intermediary.
             380          (30) "Controlling producer" means a producer who directly or indirectly controls an
             381      insurer.
             382          [(24)] (31) (a) "Corporation" means insurance corporation, except when referring to:
             383          (i) a corporation doing business as an insurance [broker, consultant,] producer, limited
             384      line producer, consultant, managing general agent, reinsurance intermediary, third party
             385      administrator, or adjuster under:
             386          (A) Chapter [23] 23a, Insurance Marketing - Licensing [Agents, Brokers] Producers,
             387      Consultants, and Reinsurance Intermediaries; [and]
             388          (B) Chapter 25, Third Party Administrators; and
             389          [(B)] (C) Chapter 26, Insurance Adjusters; or
             390          (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
             391      Holding Companies.
             392          (b) "Stock corporation" means stock insurance corporation.
             393          (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
             394          [(25)] (32) "Credit accident and health insurance" means insurance on a debtor to
             395      provide indemnity for payments coming due on a specific loan or other credit transaction while
             396      the debtor is disabled.
             397          [(26)] (33) (a) "Credit insurance" means [surety insurance under which mortgagees and
             398      other creditors are indemnified against losses caused by the default of debtors.] insurance
             399      offered in connection with an extension of credit that is limited to partially or wholly


             400      extinguishing that credit obligation.
             401          (b) "Credit insurance" includes:
             402          (i) credit accident and health insurance;
             403          (ii) credit life insurance;
             404          (iii) credit property insurance;
             405          (iv) credit unemployment insurance;
             406          (v) guaranteed automobile protection insurance;
             407          (vi) involuntary unemployment insurance;
             408          (vii) mortgage accident and health insurance;
             409          (viii) mortgage guaranty insurance; and
             410          (ix) mortgage life insurance.
             411          [(27)] (34) "Credit life insurance" means insurance on the life of a debtor in connection
             412      with [a loan or other credit transaction.] an extension of credit that pays a person if the debtor
             413      dies.
             414          (35) "Credit property insurance" means insurance:
             415          (a) offered in connection with an extension of credit; and
             416          (b) that protects the property until the debt is paid.
             417          (36) "Credit unemployment insurance" means insurance:
             418          (a) offered in connection with an extension of credit; and
             419          (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
             420          (i) specific loan; or
             421          (ii) credit transaction.
             422          (37) "Creditable coverage" is as defined in 45 CFR 146.113(a).
             423          [(28)] (38) "Creditor" means a person, including an insured, having any claim,
             424      whether:
             425          (a) matured;
             426          (b) unmatured;
             427          (c) liquidated;
             428          (d) unliquidated;
             429          (e) secured;
             430          (f) unsecured;


             431          (g) absolute;
             432          (h) fixed; or
             433          (i) contingent.
             434          [(29)] (39) (a) "Customer service representative" means a person that provides
             435      insurance services and insurance product information:
             436          (i) for [its agent, broker,] the customer service representative's producer or consultant
             437      employer; and
             438          (ii) to [its] the customer service representative's employer's customer, client, or
             439      organization.
             440          (b) A customer service representative may only operate within the scope of authority of
             441      [its agent, broker,] the customer service representative's producer or consultant employer.
             442          [(30)] (40) "Deadline" means the final date or time:
             443          (a) imposed by:
             444          (i) statute;
             445          (ii) rule; or
             446          (iii) order; and
             447          (b) by which a required filing or payment must be received by the department.
             448          [(31)] (41) "Deemer clause" means a provision under this title under which upon the
             449      occurrence of a condition precedent, the commissioner is deemed to have taken a specific
             450      action. If the statute so provides, the condition precedent may be the commissioner's failure to
             451      take a specific action.
             452          [(32)] (42) "Degree of relationship" means the number of steps between two persons
             453      determined by counting the generations separating one person from a common ancestor and
             454      then counting the generations to the other person.
             455          [(33)] (43) "Department" means the Insurance Department.
             456          [(34)] (44) "Director" means a member of the board of directors of a corporation.
             457          [(35)] (45) "Disability" means a physiological or psychological condition that partially
             458      or totally limits an individual's ability to:
             459          (a) perform the duties of:
             460          (i) that individual's occupation; or
             461          (ii) any occupation for which the individual is reasonably suited by education, training,


             462      or experience; or
             463          (b) perform two or more of the following basic activities of daily living:
             464          (i) eating;
             465          (ii) toileting;
             466          (iii) transferring;
             467          (iv) bathing; or
             468          (v) dressing.
             469          (46) "Disability income insurance" is defined in Subsection (71).
             470          [(36)] (47) "Domestic insurer" means an insurer organized under the laws of this state.
             471          [(37)] (48) "Domiciliary state" means the state in which an insurer:
             472          (a) is incorporated;
             473          (b) is organized; or
             474          (c) in the case of an alien insurer, enters into the United States.
             475          [(38)] (49) (a) "Eligible employee" means:
             476          (i) an employee who:
             477          (A) works on a full-time basis; and
             478          (B) has a normal work week of 30 or more hours; or
             479          (ii) a person described in Subsection [(38)] (49)(b).
             480          (b) "Eligible employee" includes, if the individual is included under a health benefit
             481      plan of a small employer:
             482          (i) a sole proprietor;
             483          (ii) a partner in a partnership; or
             484          (iii) an independent contractor.
             485          (c) "Eligible employee" does not include, unless eligible under Subsection [(38)]
             486      (49)(b):
             487          (i) an individual who works on a temporary or substitute basis for a small employer;
             488          (ii) an employer's spouse; or
             489          (iii) a dependent of an employer.
             490          [(39)] (50) "Employee" means any individual employed by an employer.
             491          [(40)] (51) "Employee benefits" means one or more benefits or services provided to:
             492          (a) employees; or


             493          (b) dependents of employees.
             494          [(41)] (52) (a) "Employee welfare fund" means a fund:
             495          (i) established or maintained, whether directly or through trustees, by:
             496          (A) one or more employers;
             497          (B) one or more labor organizations; or
             498          (C) a combination of employers and labor organizations; and
             499          (ii) that provides employee benefits paid or contracted to be paid, other than income
             500      from investments of the fund, by or on behalf of an employer doing business in this state or for
             501      the benefit of any person employed in this state.
             502          (b) "Employee welfare fund" includes a plan funded or subsidized by user fees or tax
             503      revenues.
             504          [(42)] (53) "Endorsement" means a written agreement attached to a policy or certificate
             505      to modify one or more of the provisions of the policy or certificate.
             506          (54) (a) "Escrow" means:
             507          (i) a real estate settlement or real estate closing conducted by a third party pursuant to
             508      the requirements of a written agreement between the parties in a real estate transaction; or
             509          (ii) a settlement or closing involving:
             510          (A) a mobile home;
             511          (B) a grazing right;
             512          (C) a water right; or
             513          (D) other personal property authorized by the commissioner.
             514          (b) "Escrow" includes the act of conducting a:
             515          (i) real estate settlement; or
             516          (ii) real estate closing.
             517          [(43)] (55) "Excludes" is not exhaustive and does not mean that other things are not
             518      also excluded. The items listed are representative examples for use in interpretation of this
             519      title.
             520          [(44)] (56) "Expense reimbursement insurance" means insurance:
             521          (a) written to provide payments for expenses relating to hospital confinements resulting
             522      from illness or injury; and
             523          (b) written:


             524          (i) as a daily limit for a specific number of days in a hospital; and
             525          (ii) to have a one or two day waiting period following a hospitalization.
             526          [(45)] (57) "Fidelity insurance" means insurance guaranteeing the fidelity of persons
             527      holding positions of public or private trust.
             528          [(46)] (58) (a) "Filed" means that a filing is:
             529          (i) submitted to the department as required by and in accordance with any applicable
             530      statute, rule, or filing order;
             531          (ii) received by the department within the time period provided in the applicable
             532      statute, rule, or filing order; and
             533          (iii) accompanied [with the applicable one or more filing fees required] by the
             534      appropriate fee in accordance with:
             535          (A) Section 31A-3-103 ; or
             536          (B) rule.
             537          (b) "Filed" does not include a filing that is rejected by the department because it is not
             538      submitted in accordance with Subsection [(46)] (58)(a).
             539          [(47)] (59) "Filing," when used as a noun, means an item required to be filed with the
             540      department including:
             541          (a) a policy;
             542          (b) a rate;
             543          (c) a form;
             544          (d) a document;
             545          (e) a plan;
             546          (f) a manual;
             547          (g) an application;
             548          (h) a report;
             549          (i) a certificate;
             550          (j) an endorsement;
             551          (k) an actuarial certification;
             552          (l) a licensee annual statement;
             553          (m) a licensee renewal application; or
             554          (n) an advertisement.


             555          [(48)] (60) "First party insurance" means an insurance policy or contract in which the
             556      insurer agrees to pay claims submitted to it by the insured for the insured's losses.
             557          [(49)] (61) "Foreign insurer" means an insurer domiciled outside of this state, including
             558      an alien insurer.
             559          [(50)] (62) (a) "Form" means one of the following prepared for general use:
             560          (i) a policy;
             561          (ii) a certificate;
             562          (iii) an application; or
             563          (iv) an outline of coverage.
             564          (b) "Form" does not include a document specially prepared for use in an individual
             565      case.
             566          [(51)] (63) "Franchise insurance" means individual insurance policies provided through
             567      a mass marketing arrangement involving a defined class of persons related in some way other
             568      than through the purchase of insurance.
             569          (64) "General lines of authority" include:
             570          (a) the general lines of insurance in Subsection (65);
             571          (b) title insurance under one of the following sublines of authority:
             572          (i) search, including authority to act as a title marketing representative;
             573          (ii) escrow, including authority to act as a title marketing representative;
             574          (iii) search and escrow, including authority to act as a title marketing representative;
             575      and
             576          (iv) title marketing representative only;
             577          (c) surplus lines;
             578          (d) workers' compensation; and
             579          (e) any other line of insurance that the commissioner considers necessary to recognize
             580      in the public interest.
             581          (65) "General lines of insurance" include:
             582          (a) accident and health;
             583          (b) casualty;
             584          (c) life;
             585          (d) personal lines;


             586          (e) property; and
             587          (f) variable contracts, including variable life and annuity.
             588          [(52)] (66) "Group health plan" means an employee welfare benefit plan to the extent
             589      that the plan provides medical care:
             590          (a) (i) to employees; or
             591          (ii) to a dependent of an employee; and
             592          (b) (i) directly;
             593          (ii) through insurance reimbursement; or
             594          (iii) through any other method.
             595          (67) "Guaranteed automobile protection insurance" means insurance offered in
             596      connection with an extension of credit that pays the difference in amount between the
             597      insurance settlement and the balance of the loan if the insured automobile is a total loss.
             598          [(53)] (68) "Health benefit plan" means a policy or certificate for health care insurance,
             599      except that health benefit plan does not include coverage:
             600          (a) solely for:
             601          (i) accident;
             602          (ii) dental;
             603          (iii) vision;
             604          (iv) Medicare supplement;
             605          (v) long-term care; or
             606          (vi) income replacement; or
             607          (b) that is:
             608          (i) offered and marketed as supplemental health insurance;
             609          (ii) not offered or marketed as a substitute for:
             610          (A) hospital or medical expense insurance; or
             611          (B) major medical expense insurance; and
             612          (iii) solely for:
             613          (A) a specified disease;
             614          (B) hospital confinement indemnity; or
             615          (C) limited benefit plan.
             616          [(54)] (69) "Health care" means any of the following intended for use in the diagnosis,


             617      treatment, mitigation, or prevention of a human ailment or impairment:
             618          (a) professional services;
             619          (b) personal services;
             620          (c) facilities;
             621          (d) equipment;
             622          (e) devices;
             623          (f) supplies; or
             624          (g) medicine.
             625          [(55)] (70) (a) "Health care insurance" or "health insurance" means insurance
             626      providing:
             627          (i) health care benefits; or
             628          (ii) payment of incurred health care expenses.
             629          (b) "Health care insurance" or "health insurance" does not include accident and health
             630      insurance providing benefits for:
             631          (i) replacement of income;
             632          (ii) short-term accident;
             633          (iii) fixed indemnity;
             634          (iv) credit accident and health;
             635          (v) supplements to liability;
             636          (vi) workers' compensation;
             637          (vii) automobile medical payment;
             638          (viii) no-fault automobile;
             639          (ix) equivalent self-insurance; or
             640          (x) any type of accident and health insurance coverage that is a part of or attached to
             641      another type of policy.
             642          [(56)] (71) "Income replacement insurance" or "disability income insurance" means
             643      insurance written to provide payments to replace income lost from accident or sickness.
             644          [(57)] (72) "Indemnity" means the payment of an amount to offset all or part of an
             645      insured loss.
             646          [(58)] (73) "Independent adjuster" means an insurance adjuster required to be licensed
             647      under Section 31A-26-201 who engages in insurance adjusting as a representative of insurers.


             648          [(59)] (74) "Independently procured insurance" means insurance procured under
             649      Section 31A-15-104 .
             650          [(60)] (75) "Individual" means a natural person.
             651          [(61)] (76) "Inland marine insurance" includes insurance covering:
             652          (a) property in transit on or over land;
             653          (b) property in transit over water by means other than boat or ship;
             654          (c) bailee liability;
             655          (d) fixed transportation property such as bridges, electric transmission systems, radio
             656      and television transmission towers and tunnels; and
             657          (e) personal and commercial property floaters.
             658          [(62)] (77) "Insolvency" means that:
             659          (a) an insurer is unable to pay its debts or meet its obligations as they mature;
             660          (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
             661      RBC under Subsection 31A-17-601 (8)(c); or
             662          (c) an insurer is determined to be hazardous under this title.
             663          [(63)] (78) (a) "Insurance" means:
             664          (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
             665      persons to one or more other persons; or
             666          (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
             667      group of persons that includes the person seeking to distribute that person's risk.
             668          (b) "Insurance" includes:
             669          (i) risk distributing arrangements providing for compensation or replacement for
             670      damages or loss through the provision of services or benefits in kind;
             671          (ii) contracts of guaranty or suretyship entered into by the guarantor or surety as a
             672      business and not as merely incidental to a business transaction; and
             673          (iii) plans in which the risk does not rest upon the person who makes the arrangements,
             674      but with a class of persons who have agreed to share it.
             675          [(64)] (79) "Insurance adjuster" means a person who directs the investigation,
             676      negotiation, or settlement of a claim under an insurance policy other than life insurance or an
             677      annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
             678          [(65) "Interinsurance exchange" is defined in Subsection (109).]


             679          [(66) Except as provided in Subsection 31A-23-201.5 (1), "insurance agent" or "agent"
             680      means a person who represents insurers in soliciting, negotiating, or placing insurance.]
             681          [(67) Except as provided in Subsection 31A-23-201.5 (1), "insurance broker" or
             682      "broker" means a person who:]
             683          [(a) acts in procuring insurance on behalf of an applicant for insurance or an insured;
             684      and]
             685          [(b) does not act on behalf of the insurer except by collecting premiums or performing
             686      other ministerial acts.]
             687          [(68)] (80) "Insurance business" or "business of insurance" includes:
             688          (a) providing health care insurance, as defined in Subsection [(55)] (70), by
             689      organizations that are or should be licensed under this title;
             690          (b) providing benefits to employees in the event of contingencies not within the control
             691      of the employees, in which the employees are entitled to the benefits as a right, which benefits
             692      may be provided either:
             693          (i) by single employers or by multiple employer groups; or
             694          (ii) through trusts, associations, or other entities;
             695          (c) providing annuities, including those issued in return for gifts, except those provided
             696      by persons specified in Subsections 31A-22-1305 (2) and (3);
             697          (d) providing the characteristic services of motor clubs as outlined in Subsection [(82)]
             698      (106);
             699          (e) providing other persons with insurance as defined in Subsection [(63)] (78);
             700          (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
             701      or surety, any contract or policy of title insurance;
             702          (g) transacting or proposing to transact any phase of title insurance, including
             703      solicitation, negotiation preliminary to execution, execution of a contract of title insurance,
             704      insuring, and transacting matters subsequent to the execution of the contract and arising out of
             705      it, including reinsurance; and
             706          (h) doing, or proposing to do, any business in substance equivalent to Subsections
             707      [(68)] (80)(a) through (g) in a manner designed to evade the provisions of this title.
             708          [(69)] (81) [Except as provided in Subsection 31A-23-201.5 (1), "insurance] "Insurance
             709      consultant" or "consultant" means a person who:


             710          (a) advises other persons about insurance needs and coverages;
             711          (b) is compensated by the person advised on a basis not directly related to the insurance
             712      placed; and
             713          (c) except as provided in Section 31A-23a-501 , is not compensated directly or
             714      indirectly by an insurer[, agent, or broker] or producer for advice given.
             715          [(70)] (82) "Insurance holding company system" means a group of two or more
             716      affiliated persons, at least one of whom is an insurer.
             717          (83) (a) "Insurance producer" or "producer" means a person licensed or required to be
             718      licensed under the laws of this state to sell, solicit, or negotiate insurance.
             719          (b) With regards to the selling, soliciting, or negotiating of an insurance product to an
             720      insurance customer or an insured:
             721          (i) "producer for the insurer" means a producer who is compensated directly or
             722      indirectly by an insurer for selling, soliciting, or negotiating any product of that insurer; and
             723          (ii) "producer for the insured" means a producer who:
             724          (A) is compensated directly and only by an insurance customer or an insured; and
             725          (B) receives no compensation directly or indirectly from an insurer for selling,
             726      soliciting, or negotiating any product of that insurer to an insurance customer or insured.
             727          [(71)] (84) (a) "Insured" means a person to whom or for whose benefit an insurer
             728      makes a promise in an insurance policy and includes:
             729          (i) policyholders;
             730          (ii) subscribers;
             731          (iii) members; and
             732          (iv) beneficiaries.
             733          (b) The definition in Subsection [(71)] (84)(a):
             734          (i) applies only to this title; and
             735          (ii) does not define the meaning of this word as used in insurance policies or
             736      certificates.
             737          [(72)] (85) (a) (i) "Insurer" means any person doing an insurance business as a
             738      principal including:
             739          (A) fraternal benefit societies;
             740          (B) issuers of gift annuities other than those specified in Subsections 31A-22-1305 (2)


             741      and (3);
             742          (C) motor clubs;
             743          (D) employee welfare plans; and
             744          (E) any person purporting or intending to do an insurance business as a principal on
             745      that person's own account.
             746          (ii) "Insurer" does not include a governmental entity, as defined in Section 63-30-2 , to
             747      the extent it is engaged in the activities described in Section 31A-12-107 .
             748          (b) "Admitted insurer" is defined in Subsection [(125)] (153)(b).
             749          (c) "Alien insurer" is defined in Subsection [(5)] (7).
             750          (d) "Authorized insurer" is defined in Subsection [(125)] (153)(b).
             751          (e) "Domestic insurer" is defined in Subsection [(36)] (47).
             752          (f) "Foreign insurer" is defined in Subsection [(49)] (61).
             753          (g) "Nonadmitted insurer" is defined in Subsection [(125)] (153)(a).
             754          (h) "Unauthorized insurer" is defined in Subsection [(125)] (153)(a).
             755          (86) "Interinsurance exchange" is defined in Subsection (135).
             756          (87) "Involuntary unemployment insurance" means insurance:
             757          (a) offered in connection with an extension of credit;
             758          (b) that provides indemnity if the debtor is involuntarily unemployed for payments
             759      coming due on a:
             760          (i) specific loan; or
             761          (ii) credit transaction.
             762          [(73)] (88) "Large employer," in connection with a health benefit plan, means an
             763      employer who, with respect to a calendar year and to a plan year:
             764          (a) employed an average of at least 51 eligible employees on each business day during
             765      the preceding calendar year; and
             766          (b) employs at least two employees on the first day of the plan year.
             767          [(74)] (89) (a) Except for a retainer contract or legal assistance described in Section
             768      31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for
             769      specified legal expenses.
             770          (b) "Legal expense insurance" includes arrangements that create reasonable
             771      expectations of enforceable rights.


             772          (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
             773      legal services incidental to other insurance coverages.
             774          [(75)] (90) (a) "Liability insurance" means insurance against liability:
             775          (i) for death, injury, or disability of any human being, or for damage to property,
             776      exclusive of the coverages under:
             777          (A) Subsection [(79)] (100) for medical malpractice insurance;
             778          (B) Subsection [(102)] (127) for professional liability insurance; and
             779          (C) Subsection [(128)] (157) for workers' compensation insurance;
             780          (ii) for medical, hospital, surgical, and funeral benefits to persons other than the
             781      insured who are injured, irrespective of legal liability of the insured, when issued with or
             782      supplemental to insurance against legal liability for the death, injury, or disability of human
             783      beings, exclusive of the coverages under:
             784          (A) Subsection [(79)] (100) for medical malpractice insurance;
             785          (B) Subsection [(102)] (127) for professional liability insurance; and
             786          (C) Subsection [(128)] (157) for workers' compensation insurance;
             787          (iii) for loss or damage to property resulting from accidents to or explosions of boilers,
             788      pipes, pressure containers, machinery, or apparatus;
             789          (iv) for loss or damage to any property caused by the breakage or leakage of sprinklers,
             790      water pipes and containers, or by water entering through leaks or openings in buildings; or
             791          (v) for other loss or damage properly the subject of insurance not within any other kind
             792      or kinds of insurance as defined in this chapter, if such insurance is not contrary to law or
             793      public policy.
             794          (b) "Liability insurance" includes:
             795          (i) vehicle liability insurance as defined in Subsection [(126)] (155);
             796          (ii) residential dwelling liability insurance as defined in Subsection [(111)] (138); and
             797          (iii) making inspection of, and issuing certificates of inspection upon, elevators,
             798      boilers, machinery, and apparatus of any kind when done in connection with insurance on
             799      them.
             800          [(76)] (91) (a) "License" means the authorization issued by the [insurance]
             801      commissioner [under this title] to engage in some activity that is part of or related to the
             802      insurance business.


             803          (b) "License" includes certificates of authority issued to insurers.
             804          [(77)] (92) (a) "Life insurance" means insurance on human lives and insurances
             805      pertaining to or connected with human life.
             806          (b) The business of life insurance includes:
             807          (i) granting death benefits;
             808          (ii) granting annuity benefits;
             809          (iii) granting endowment benefits;
             810          (iv) granting additional benefits in the event of death by accident;
             811          (v) granting additional benefits to safeguard the policy against lapse in the event of
             812      disability; and
             813          (vi) providing optional methods of settlement of proceeds.
             814          (93) "Limited license" means a license that:
             815          (a) is issued for a specific product of insurance; and
             816          (b) limits an individual or agency to transact only for that product or insurance.
             817          (94) "Limited line credit insurance" includes the following forms of insurance:
             818          (a) credit life;
             819          (b) credit accident and health;
             820          (c) credit property;
             821          (d) credit unemployment;
             822          (e) involuntary unemployment;
             823          (f) mortgage life;
             824          (g) mortgage guaranty;
             825          (h) mortgage accident and health;
             826          (i) guaranteed automobile protection; and
             827          (j) any other form of insurance offered in connection with an extension of credit that:
             828          (i) is limited to partially or wholly extinguishing the credit obligation; and
             829          (ii) the commissioner determines by rule should be designated as a form of limited line
             830      credit insurance.
             831          (95) "Limited line credit insurance producer" means a person who sells, solicits, or
             832      negotiates one or more forms of limited line credit insurance coverage to individuals through a
             833      master, corporate, group, or individual policy.


             834          (96) "Limited line insurance" includes:
             835          (a) bail bond;
             836          (b) limited line credit insurance;
             837          (c) legal expense insurance;
             838          (d) motor club insurance;
             839          (e) rental car-related insurance;
             840          (f) travel insurance; and
             841          (g) any other form of limited insurance that the commissioner determines by rule
             842      should be designated a form of limited line insurance.
             843          (97) "Limited lines authority" includes:
             844          (a) the lines of insurance listed in Subsection (96); and
             845          (b) a customer service representative.
             846          (98) "Limited lines producer" means a person who sells, solicits, or negotiates limited
             847      lines insurance.
             848          [(78)] (99) (a) "Long-term care insurance" means an insurance policy or rider
             849      advertised, marketed, offered, or designated to provide coverage:
             850          (i) in a setting other than an acute care unit of a hospital;
             851          (ii) for not less than 12 consecutive months for each covered person on the basis of:
             852          (A) expenses incurred;
             853          (B) indemnity;
             854          (C) prepayment; or
             855          (D) another method;
             856          (iii) for one or more necessary or medically necessary services that are:
             857          (A) diagnostic;
             858          (B) preventative;
             859          (C) therapeutic;
             860          (D) rehabilitative;
             861          (E) maintenance; or
             862          (F) personal care; and
             863          (iv) that may be issued by:
             864          (A) an insurer;


             865          (B) a fraternal benefit society;
             866          (C) (I) a nonprofit health hospital; and
             867          (II) a medical service corporation;
             868          (D) a prepaid health plan;
             869          (E) a health maintenance organization; or
             870          (F) an entity similar to the entities described in Subsections [(78)] (99)(a)(iv)(A)
             871      through (E) to the extent that the entity is otherwise authorized to issue life or health care
             872      insurance.
             873          (b) "Long-term care insurance" includes:
             874          (i) any of the following that provide directly or supplement long-term care insurance:
             875          (A) a group or individual annuity or rider; or
             876          (B) a life insurance policy or rider;
             877          (ii) a policy or rider that provides for payment of benefits based on:
             878          (A) cognitive impairment; or
             879          (B) functional capacity; or
             880          (iii) a qualified long-term care insurance contract.
             881          (c) "Long-term care insurance" does not include:
             882          (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
             883          (ii) basic hospital expense coverage;
             884          (iii) basic medical/surgical expense coverage;
             885          (iv) hospital confinement indemnity coverage;
             886          (v) major medical expense coverage;
             887          (vi) income replacement or related asset-protection coverage;
             888          (vii) accident only coverage;
             889          (viii) coverage for a specified:
             890          (A) disease; or
             891          (B) accident;
             892          (ix) limited benefit health coverage; or
             893          (x) a life insurance policy that accelerates the death benefit to provide the option of a
             894      lump sum payment:
             895          (A) if the following are not conditioned on the receipt of long-term care:


             896          (I) benefits; or
             897          (II) eligibility; and
             898          (B) the coverage is for one or more the following qualifying events:
             899          (I) terminal illness;
             900          (II) medical conditions requiring extraordinary medical intervention; or
             901          (III) permanent institutional confinement.
             902          [(79)] (100) "Medical malpractice insurance" means insurance against legal liability
             903      incident to the practice and provision of medical services other than the practice and provision
             904      of dental services.
             905          [(80)] (101) "Member" means a person having membership rights in an insurance
             906      corporation.
             907          [(81)] (102) "Minimum capital" or "minimum required capital" means the capital that
             908      must be constantly maintained by a stock insurance corporation as required by statute.
             909          (103) "Mortgage accident and health insurance" means insurance offered in connection
             910      with an extension of credit that provides indemnity for payments coming due on a mortgage
             911      while the debtor is disabled.
             912          (104) "Mortgage guaranty insurance" means surety insurance under which mortgagees
             913      and other creditors are indemnified against losses caused by the default of debtors.
             914          (105) "Mortgage life insurance" means insurance on the life of a debtor in connection
             915      with an extension of credit that pays if the debtor dies.
             916          [(82)] (106) "Motor club" means a person:
             917          (a) licensed under:
             918          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             919          (ii) Chapter 11, Motor Clubs; or
             920          (iii) Chapter 14, Foreign Insurers; and
             921          (b) that promises for an advance consideration to provide for a stated period of time:
             922          (i) legal services under Subsection 31A-11-102 (1)(b);
             923          (ii) bail services under Subsection 31A-11-102 (1)(c); or
             924          (iii) trip reimbursement, towing services, emergency road services, stolen automobile
             925      services, a combination of these services, or any other services given in Subsections
             926      31A-11-102 (1)(b) through (f).


             927          [(83)] (107) "Mutual" means mutual insurance corporation.
             928          [(84)] (108) "Network plan" means health care insurance:
             929          (a) that is issued by an insurer; and
             930          (b) under which the financing and delivery of medical care is provided, in whole or in
             931      part, through a defined set of providers under contract with the insurer, including the financing
             932      and delivery of items paid for as medical care.
             933          [(85)] (109) "Nonparticipating" means a plan of insurance under which the insured is
             934      not entitled to receive dividends representing shares of the surplus of the insurer.
             935          [(86)] (110) "Ocean marine insurance" means insurance against loss of or damage to:
             936          (a) ships or hulls of ships;
             937          (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys,
             938      securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
             939      interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
             940          (c) earnings such as freight, passage money, commissions, or profits derived from
             941      transporting goods or people upon or across the oceans or inland waterways; or
             942          (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
             943      owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
             944      in connection with maritime activity.
             945          [(87)] (111) "Order" means an order of the commissioner.
             946          [(88)] (112) "Outline of coverage" means a summary that explains an accident and
             947      health insurance policy.
             948          [(89)] (113) "Participating" means a plan of insurance under which the insured is
             949      entitled to receive dividends representing shares of the surplus of the insurer.
             950          [(90)] (114) "Participation," as used in a health benefit plan, means a requirement
             951      relating to the minimum percentage of eligible employees that must be enrolled in relation to
             952      the total number of eligible employees of an employer reduced by each eligible employee who
             953      voluntarily declines coverage under the plan because the employee has other health care
             954      insurance coverage.
             955          [(91)] (115) "Person" includes an individual, partnership, corporation, incorporated or
             956      unincorporated association, joint stock company, trust, reciprocal, syndicate, or any similar
             957      entity or combination of entities acting in concert.


             958          (116) "Personal lines insurance" means property and casualty insurance coverage sold
             959      for primarily noncommercial purposes to:
             960          (a) individuals; and
             961          (b) families.
             962          [(92)] (117) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
             963          [(93)] (118) "Plan year" means:
             964          (a) the year that is designated as the plan year in:
             965          (i) the plan document of a group health plan; or
             966          (ii) a summary plan description of a group health plan;
             967          (b) if the plan document or summary plan description does not designate a plan year or
             968      there is no plan document or summary plan description:
             969          (i) the year used to determine deductibles or limits;
             970          (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
             971      or
             972          (iii) the employer's taxable year if:
             973          (A) the plan does not impose deductibles or limits on a yearly basis; and
             974          (B) (I) the plan is not insured; or
             975          (II) the insurance policy is not renewed on an annual basis; or
             976          (c) in a case not described in Subsection [(93)] (118)(a) or (b), the calendar year.
             977          [(94)] (119) (a) (i) "Policy" means any document, including attached endorsements and
             978      riders, purporting to be an enforceable contract, which memorializes in writing some or all of
             979      the terms of an insurance contract.
             980          (ii) "Policy" includes a service contract issued by:
             981          (A) a motor club under Chapter 11, Motor Clubs;
             982          (B) a service contract provided under Chapter 6a, Service Contracts; and
             983          (C) a corporation licensed under:
             984          (I) Chapter 7, Nonprofit Health Service Insurance Corporations; or
             985          (II) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
             986          (iii) "Policy" does not include:
             987          (A) a certificate under a group insurance contract; or
             988          (B) a document that does not purport to have legal effect.


             989          (b) (i) "Group insurance policy" means a policy covering a group of persons that is
             990      issued to a policyholder on behalf of the group, for the benefit of group members who are
             991      selected under procedures defined in the policy or in agreements which are collateral to the
             992      policy.
             993          (ii) A group insurance policy may include members of the policyholder's family or
             994      dependents.
             995          (c) "Blanket insurance policy" means a group policy covering classes of persons
             996      without individual underwriting, where the persons insured are determined by definition of the
             997      class with or without designating the persons covered.
             998          [(95)] (120) "Policyholder" means the person who controls a policy, binder, or oral
             999      contract by ownership, premium payment, or otherwise.
             1000          [(96)] (121) "Policy illustration" means a presentation or depiction that includes
             1001      nonguaranteed elements of a policy of life insurance over a period of years.
             1002          [(97)] (122) "Policy summary" means a synopsis describing the elements of a life
             1003      insurance policy.
             1004          [(98)] (123) "Preexisting condition," in connection with a health benefit plan, means:
             1005          (a) a condition for which medical advice, diagnosis, care, or treatment was
             1006      recommended or received during the six months immediately preceding the earlier of:
             1007          (i) the enrollment date; or
             1008          (ii) the effective date of coverage; or
             1009          (b) for an individual insurance policy, a pregnancy existing on the effective date of
             1010      coverage.
             1011          [(99)] (124) (a) "Premium" means the monetary consideration for an insurance policy,
             1012      and includes assessments, membership fees, required contributions, or monetary consideration,
             1013      however designated.
             1014          (b) Consideration paid to third party administrators for their services is not "premium,"
             1015      though amounts paid by third party administrators to insurers for insurance on the risks
             1016      administered by the third party administrators are "premium."
             1017          [(100)] (125) "Principal officers" of a corporation means the officers designated under
             1018      Subsection 31A-5-203 (3).
             1019          [(101)] (126) "Proceedings" includes actions and special statutory proceedings.


             1020          [(102)] (127) "Professional liability insurance" means insurance against legal liability
             1021      incident to the practice of a profession and provision of any professional services.
             1022          [(103)] (128) "Property insurance" means insurance against loss or damage to real or
             1023      personal property of every kind and any interest in that property, from all hazards or causes,
             1024      and against loss consequential upon the loss or damage including vehicle comprehensive and
             1025      vehicle physical damage coverages, but excluding inland marine insurance and ocean marine
             1026      insurance as defined under Subsections [(61)] (76) and [(86)] (110).
             1027          [(104)] (129) "Qualified long-term care insurance contract" or "federally tax qualified
             1028      long-term care insurance contract" means:
             1029          (a) an individual or group insurance contract that meets the requirements of Section
             1030      7702B(b), Internal Revenue Code; or
             1031          (b) the portion of a life insurance contract that provides long-term care insurance:
             1032          (i) (A) by rider; or
             1033          (B) as a part of the contract; and
             1034          (ii) that satisfies the requirements of Section 7702B(b) and (e), Internal Revenue Code.
             1035          (130) "Qualified United States financial institution" means an institution that:
             1036          (a) is:
             1037          (i) organized under the laws of the United States or any state; or
             1038          (ii) in the case of a United States office of a foreign banking organization, licensed
             1039      under the laws of the United States or any state;
             1040          (b) is regulated, supervised, and examined by United States federal or state authorities
             1041      having regulatory authority over banks and trust companies; and
             1042          (c) meets the standards of financial condition and standing that are considered
             1043      necessary and appropriate to regulate the quality of financial institutions whose letters of credit
             1044      will be acceptable to the commissioner as determined by:
             1045          (i) the commissioner by rule; or
             1046          (ii) the Securities Valuation Office of the National Association of Insurance
             1047      Commissioners.
             1048          [(105)] (131) (a) "Rate" means:
             1049          (i) the cost of a given unit of insurance; or
             1050          (ii) for property-casualty insurance, that cost of insurance per exposure unit either


             1051      expressed as:
             1052          (A) a single number; or
             1053          (B) a pure premium rate, adjusted before any application of individual risk variations
             1054      based on loss or expense considerations to account for the treatment of:
             1055          (I) expenses;
             1056          (II) profit; and
             1057          (III) individual insurer variation in loss experience.
             1058          (b) "Rate" does not include a minimum premium.
             1059          [(106)] (132) (a) Except as provided in Subsection [(106)] (132)(b), "rate service
             1060      organization" means any person who assists insurers in rate making or filing by:
             1061          (i) collecting, compiling, and furnishing loss or expense statistics;
             1062          (ii) recommending, making, or filing rates or supplementary rate information; or
             1063          (iii) advising about rate questions, except as an attorney giving legal advice.
             1064          (b) "Rate service organization" does not mean:
             1065          (i) an employee of an insurer;
             1066          (ii) a single insurer or group of insurers under common control;
             1067          (iii) a joint underwriting group; or
             1068          (iv) a natural person serving as an actuarial or legal consultant.
             1069          [(107)] (133) "Rating manual" means any of the following used to determine initial and
             1070      renewal policy premiums:
             1071          (a) a manual of rates;
             1072          (b) classifications;
             1073          (c) rate-related underwriting rules; and
             1074          (d) rating formulas that describe steps, policies, and procedures for determining initial
             1075      and renewal policy premiums.
             1076          [(108)] (134) "Received by the department" means:
             1077          (a) except as provided in Subsection [(108)] (134)(b), the date delivered to and
             1078      stamped received by the department, whether delivered:
             1079          (i) in person; or
             1080          [(ii) by a delivery service; or]
             1081          [(iii)] (ii) electronically; and


             1082          (b) if [an item with a department imposed deadline is] delivered to the department by a
             1083      delivery service, the delivery service's postmark date or pick-up date unless otherwise stated in:
             1084          (i) statute;
             1085          (ii) rule; or
             1086          (iii) a specific filing order.
             1087          [(109)] (135) "Reciprocal" or "interinsurance exchange" means any unincorporated
             1088      association of persons:
             1089          (a) operating through an attorney-in-fact common to all of them; and
             1090          (b) exchanging insurance contracts with one another that provide insurance coverage
             1091      on each other.
             1092          [(110)] (136) "Reinsurance" means an insurance transaction where an insurer, for
             1093      consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
             1094      reinsurance transactions, this title sometimes refers to:
             1095          (a) the insurer transferring the risk as the "ceding insurer"; and
             1096          (b) the insurer assuming the risk as the:
             1097          (i) "assuming insurer"; or
             1098          (ii) "assuming reinsurer."
             1099          (137) "Reinsurer" means any person, firm, association, or corporation licensed in this
             1100      state as an insurer with the authority to assume reinsurance.
             1101          [(111)] (138) "Residential dwelling liability insurance" means insurance against
             1102      liability resulting from or incident to the ownership, maintenance, or use of a residential
             1103      dwelling that is a detached single family residence or multifamily residence up to four units.
             1104          [(112)] (139) "Retrocession" means reinsurance with another insurer of a liability
             1105      assumed under a reinsurance contract. A reinsurer "retrocedes" when it reinsures with another
             1106      insurer part of a liability assumed under a reinsurance contract.
             1107          [(113)] (140) "Rider" means an endorsement to:
             1108          (a) an insurance policy; or
             1109          (b) an insurance certificate.
             1110          [(114)] (141) (a) "Security" means any:
             1111          (i) note;
             1112          (ii) stock;


             1113          (iii) bond;
             1114          (iv) debenture;
             1115          (v) evidence of indebtedness;
             1116          (vi) certificate of interest or participation in any profit-sharing agreement;
             1117          (vii) collateral-trust certificate;
             1118          (viii) preorganization certificate or subscription;
             1119          (ix) transferable share;
             1120          (x) investment contract;
             1121          (xi) voting trust certificate;
             1122          (xii) certificate of deposit for a security;
             1123          (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
             1124      payments out of production under such a title or lease;
             1125          (xiv) commodity contract or commodity option;
             1126          (xv) any certificate of interest or participation in, temporary or interim certificate for,
             1127      receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
             1128      in Subsections [(114)] (141)(a)(i) through (xiv); or
             1129          (xvi) any other interest or instrument commonly known as a security.
             1130          (b) "Security" does not include:
             1131          (i) any insurance or endowment policy or annuity contract under which an insurance
             1132      company promises to pay money in a specific lump sum or periodically for life or some other
             1133      specified period; or
             1134          (ii) a burial certificate or burial contract.
             1135          [(115)] (142) "Self-insurance" means any arrangement under which a person provides
             1136      for spreading its own risks by a systematic plan.
             1137          (a) Except as provided in this Subsection [(115)] (142), self-insurance does not include
             1138      an arrangement under which a number of persons spread their risks among themselves.
             1139          (b) Self-insurance does include an arrangement by which a governmental entity, as
             1140      defined in Section 63-30-2 , undertakes to indemnify its employees for liability arising out of
             1141      the employees' employment.
             1142          (c) Self-insurance does include an arrangement by which a person with a managed
             1143      program of self-insurance and risk management undertakes to indemnify its affiliates,


             1144      subsidiaries, directors, officers, or employees for liability or risk which is related to the
             1145      relationship or employment.
             1146          (d) Self-insurance does not include any arrangement with independent contractors.
             1147          (143) "Sell" means to exchange a contract of insurance:
             1148          (a) by any means;
             1149          (b) for money or its equivalent; and
             1150          (c) on behalf of an insurance company.
             1151          [(116)] (144) "Short-term care insurance" means any insurance policy or rider
             1152      advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
             1153      insurance but that provides coverage for less than 12 consecutive months for each covered
             1154      person.
             1155          [(117)] (145) "Small employer," in connection with a health benefit plan, means an
             1156      employer who, with respect to a calendar year and to a plan year:
             1157          (a) employed an average of at least two employees but not more than 50 eligible
             1158      employees on each business day during the preceding calendar year; and
             1159          (b) employs at least two employees on the first day of the plan year.
             1160          [(118)] (146) (a) "Subsidiary" of a person means an affiliate controlled by that person
             1161      either directly or indirectly through one or more affiliates or intermediaries.
             1162          (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
             1163      shares are owned by that person either alone or with its affiliates, except for the minimum
             1164      number of shares the law of the subsidiary's domicile requires to be owned by directors or
             1165      others.
             1166          [(119)] (147) Subject to Subsection [(63)] (78)(b), "surety insurance" includes:
             1167          (a) a guarantee against loss or damage resulting from failure of principals to pay or
             1168      perform their obligations to a creditor or other obligee;
             1169          (b) bail bond insurance; and
             1170          (c) fidelity insurance.
             1171          [(120)] (148) (a) "Surplus" means the excess of assets over the sum of paid-in capital
             1172      and liabilities.
             1173          (b) (i) "Permanent surplus" means the surplus of a mutual insurer that has been
             1174      designated by the insurer as permanent.


             1175          (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209 require
             1176      that mutuals doing business in this state maintain specified minimum levels of permanent
             1177      surplus.
             1178          (iii) Except for assessable mutuals, the minimum permanent surplus requirement is
             1179      essentially the same as the minimum required capital requirement that applies to stock insurers.
             1180          (c) "Excess surplus" means:
             1181          (i) for life or accident and health insurers, health organizations, and property and
             1182      casualty insurers as defined in Section 31A-17-601 , the lesser of:
             1183          (A) that amount of an insurer's or health organization's total adjusted capital, as defined
             1184      in Subsection [(123)] (151), that exceeds the product of:
             1185          (I) 2.5; and
             1186          (II) the sum of the insurer's or health organization's minimum capital or permanent
             1187      surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
             1188          (B) that amount of an insurer's or health organization's total adjusted capital, as defined
             1189      in Subsection [(123)] (151), that exceeds the product of:
             1190          (I) 3.0; and
             1191          (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
             1192          (ii) for monoline mortgage guaranty insurers, financial guaranty insurers, and title
             1193      insurers, that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
             1194          (A) 1.5; and
             1195          (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
             1196          [(121)] (149) "Third party administrator" or "administrator" means any person who
             1197      collects charges or premiums from, or who, for consideration, adjusts or settles claims of
             1198      residents of the state in connection with insurance coverage, annuities, or service insurance
             1199      coverage, except:
             1200          (a) a union on behalf of its members;
             1201          (b) a person administering any:
             1202          (i) pension plan subject to the federal Employee Retirement Income Security Act of
             1203      1974;
             1204          (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
             1205          (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;


             1206          (c) an employer on behalf of the employer's employees or the employees of one or
             1207      more of the subsidiary or affiliated corporations of the employer;
             1208          (d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance
             1209      for which the insurer holds a license in this state; or
             1210          (e) a person licensed or exempt from licensing under Chapter [23] 23a, Insurance
             1211      Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries, or Chapter 26,
             1212      Insurance Adjusters, whose activities are limited to those authorized under the license the
             1213      person holds or for which the person is exempt.
             1214          [(122)] (150) "Title insurance" means the insuring, guaranteeing, or indemnifying of
             1215      owners of real or personal property or the holders of liens or encumbrances on that property, or
             1216      others interested in the property against loss or damage suffered by reason of liens or
             1217      encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity
             1218      or unenforceability of any liens or encumbrances on the property.
             1219          [(123)] (151) "Total adjusted capital" means the sum of an insurer's or health
             1220      organization's statutory capital and surplus as determined in accordance with:
             1221          (a) the statutory accounting applicable to the annual financial statements required to be
             1222      filed under Section 31A-4-113 ; and
             1223          (b) any other items provided by the RBC instructions, as RBC instructions is defined in
             1224      Section 31A-17-601 .
             1225          [(124)] (152) (a) "Trustee" means "director" when referring to the board of directors of
             1226      a corporation.
             1227          (b) "Trustee," when used in reference to an employee welfare fund, means an
             1228      individual, firm, association, organization, joint stock company, or corporation, whether acting
             1229      individually or jointly and whether designated by that name or any other, that is charged with
             1230      or has the overall management of an employee welfare fund.
             1231          [(125)] (153) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted
             1232      insurer" means an insurer:
             1233          (i) not holding a valid certificate of authority to do an insurance business in this state;
             1234      or
             1235          (ii) transacting business not authorized by a valid certificate.
             1236          (b) "Admitted insurer" or "authorized insurer" means an insurer:


             1237          (i) holding a valid certificate of authority to do an insurance business in this state; and
             1238          (ii) transacting business as authorized by a valid certificate.
             1239          (154) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.
             1240          [(126)] (155) "Vehicle liability insurance" means insurance against liability resulting
             1241      from or incident to ownership, maintenance, or use of any land vehicle or aircraft, exclusive of
             1242      vehicle comprehensive and vehicle physical damage coverages under Subsection [(103)] (128).
             1243          [(127)] (156) "Voting security" means a security with voting rights, and includes any
             1244      security convertible into a security with a voting right associated with it.
             1245          [(128)] (157) "Workers' compensation insurance" means:
             1246          (a) insurance for indemnification of employers against liability for compensation based
             1247      on:
             1248          (i) compensable accidental injuries; and
             1249          (ii) occupational disease disability;
             1250          (b) employer's liability insurance incidental to workers' compensation insurance and
             1251      written in connection with it; and
             1252          (c) insurance assuring to the persons entitled to workers' compensation benefits the
             1253      compensation provided by law.
             1254          Section 5. Section 31A-2-205 is amended to read:
             1255           31A-2-205. Examination costs.
             1256          (1) (a) Except as provided in Subsection (3), examinees that are insurers, rate service
             1257      organizations, or the subsidiaries of either shall reimburse the Insurance Department for the
             1258      reasonable costs of examinations made under Sections 31A-2-203 and 31A-2-204 . The
             1259      following costs shall be reimbursed:
             1260          (i) actual travel expenses[,];
             1261          (ii) reasonable living expense allowance[,];
             1262          (iii) compensation at reasonable rates for all professionals reasonably employed for the
             1263      examination under Subsection (4)[,];
             1264          (iv) the administration and supervisory expense of the Insurance Department and the
             1265      attorney general's office[,]; and
             1266          (v) an amount necessary to cover fringe benefits authorized by the commissioner or
             1267      provided by law. In determining rates, the commissioner shall consider the rates recommended


             1268      by the National Association of Insurance Commissioners and outlined in the examination
             1269      manual sponsored by the association.
             1270          (b) Subsection (1) applies to surplus lines [brokers] producers to the extent that the
             1271      examinations are of their surplus lines business.
             1272          (2) An insurer requesting the examination of one of its [agents] producers shall pay the
             1273      cost of the examination. Otherwise, the department shall pay the cost of examining licensees
             1274      other than those specified under Subsection (1).
             1275          (3) On the examinee's request or at the commissioner's discretion, the Insurance
             1276      Department may pay all or part of the costs of an examination whenever the commissioner
             1277      finds that because of the frequency of examinations or the financial condition of the examinee,
             1278      imposition of the costs would place an unreasonable burden on the examinee. The
             1279      commissioner shall include in his annual report information about any instance in which the
             1280      commissioner has applied this Subsection (3).
             1281          (4) Technical experts employed under Subsection 31A-2-203 (3) shall present to the
             1282      commissioner a statement of all expenses incurred by them in conjunction with an
             1283      examination. The examined insurer shall, at the commissioner's direction, pay to the technical
             1284      experts or specialists the actual travel expenses, reasonable living expenses, and compensation
             1285      at customary rates for expenses necessarily incurred as approved by the commissioner. The
             1286      examined insurer shall reimburse department examiners for their actual travel expenses and
             1287      reasonable living expenses and shall reimburse the department for the compensation of
             1288      department examiners involved in the examination. The examined insurer shall certify the
             1289      consolidated account of all charges and expenses for the examination. One copy shall be
             1290      retained by the insurer and the other shall be filed with the department as a public record. An
             1291      annual report of examination charges paid by examined insurers directly to persons employed
             1292      under Subsection 31A-2-203 (3) or to department examiners shall be included with the
             1293      department's budget request, but amounts paid directly by examined insurers to persons
             1294      employed under Subsection 31A-2-203 (3) or to department examiners may not be deducted
             1295      from the department's appropriation.
             1296          (5) The amount payable under Subsection (1) is due ten days after the examinee has
             1297      been served with a detailed account of the costs. Payments received by the department under
             1298      this Subsection (5) shall be handled as provided by Subsection 31A-3-101 .


             1299          (6) The commissioner may require an examinee under Subsection (1), or an insurer
             1300      requesting an examination under Subsection (2), either before or during an examination, to
             1301      make deposits with the state treasurer to pay the costs of examination. Any deposit made under
             1302      this Subsection (6) shall be held in trust by the state treasurer until applied to pay the Insurance
             1303      Department the costs payable under this section. If a deposit exceeds examination costs, the
             1304      state treasurer shall refund the surplus.
             1305          (7) Domestic insurers may offset the examination expenses paid under this section
             1306      against premium taxes under Subsection 59-9-102 (2).
             1307          Section 6. Section 31A-2-214 is amended to read:
             1308           31A-2-214. Market assistance programs -- Joint underwriting associations.
             1309          (1) (a) The commissioner may by rule implement a market assistance program whereby
             1310      all licensed insurers and [agents] producers may pool their information as to the available
             1311      markets if the commissioner finds that in any part of this state:
             1312          (i) a line of insurance:
             1313          (A) is not generally available in the marketplace; or
             1314          (B) is priced in such a manner as to severely limit its availability; and
             1315          (ii) the public interest requires availability of the line of insurance described in
             1316      Subsection (1)(a)(i).
             1317          (b) Insurers doing business in this state may, at their own instance or at the request of
             1318      the commissioner, prepare and submit to the commissioner, for the commissioner's approval
             1319      and adoption, voluntary plans providing any line of insurance coverage for all or any part of
             1320      this state in which:
             1321          (i) the line of insurance:
             1322          (A) is not generally available in the voluntary market; or
             1323          (B) is priced in such a manner as to severely limit its availability; and
             1324          (ii) the public interest requires the availability of the coverage described in Subsection
             1325      (1)(b)(i).
             1326          (2) (a) If the commissioner finds after notice and hearing that a market assistance
             1327      program formed under Subsection (1)(a) or (b) has not met the needs it was intended to
             1328      address, the commissioner may by rule form a joint underwriting association to make available
             1329      the insurance to applicants who are in good faith entitled to but unable to procure this insurance


             1330      through ordinary methods.
             1331          (b) The commissioner shall allow any market assistance program formed under
             1332      Subsection (1)(a) or (b) a minimum of 30 days operation before the commissioner forms a joint
             1333      underwriting association.
             1334          (c) The commissioner may not adopt a rule forming a joint underwriting association
             1335      under Subsection (2)(a) unless the commissioner finds as a result of the hearing that:
             1336          (i) a certain coverage is not available or that the price for that coverage is no longer
             1337      commensurate with the risk in this state; and
             1338          (ii) the coverage is:
             1339          (A) vital to the economic health of this state;
             1340          (B) vital to the quality of life in this state;
             1341          (C) vital in maintaining competition in insurance in this state; or
             1342          (D) the number of people affected is significant enough to justify its creation.
             1343          (d) The commissioner may not adopt a rule forming a joint underwriting association
             1344      under Subsection (2)(a) on the basis that:
             1345          (i) applicants for particular lines of insurance are unable to pay a premium that is
             1346      commensurate with the risk involved; or
             1347          (ii) the number of applicants or people affected is too small to justify its creation.
             1348          (e) Each joint underwriting association formed under Subsection (2)(a) shall require
             1349      participation by all insurers licensed and engaged in writing that line of insurance or any
             1350      component of that line of insurance within this state.
             1351          (f) Each association formed under Subsection (2)(a) shall:
             1352          (i) give consideration to:
             1353          (A) the need for adequate and readily accessible coverage;
             1354          (B) alternative methods of improving the market affected;
             1355          (C) the preference of the insurers and [agents] producers;
             1356          (D) the inherent limitations of the insurance mechanism;
             1357          (E) the need for reasonable underwriting standards; and
             1358          (F) the requirement of reasonable loss prevention measures;
             1359          (ii) establish procedures that will create minimum interference with the voluntary
             1360      market;


             1361          (iii) allocate the burden imposed by the association equitably and efficiently among the
             1362      insurers doing business in this state;
             1363          (iv) establish procedures for applicants and participants to have grievances reviewed by
             1364      an impartial body;
             1365          (v) provide for the method of classifying risks and making and filing applicable rates;
             1366      and
             1367          (vi) specify:
             1368          (A) the basis of participation of insurers and [agents] producers in the association;
             1369          (B) the conditions under which risks must be accepted; and
             1370          (C) the commission rates to be paid for insurance business placed with the association.
             1371          (g) Any deficit in an association in any year shall be recouped by rate increases for the
             1372      association, applicable prospectively.
             1373          (h) Any surplus in excess of the loss reserves of the association in any year shall be
             1374      distributed either by rate decreases or by distribution to the members of the association on a
             1375      pro-rata basis.
             1376          (3) Notwithstanding Subsection (2), the commissioner may not create a joint
             1377      underwriting association under Subsection (2) for:
             1378          (a) life insurance;
             1379          (b) annuities;
             1380          (c) accident and health insurance;
             1381          (d) ocean marine insurance;
             1382          (e) medical malpractice insurance;
             1383          (f) earthquake insurance;
             1384          (g) workers' compensation insurance; or
             1385          (h) private passenger automobile liability insurance.
             1386          (4) Every insurer and [agent] producer participating in a joint underwriting association
             1387      adopted by the commissioner under Subsection (2) shall provide the services prescribed by the
             1388      association to any person seeking coverage of the kind available in the plan, including full
             1389      information about the requirements and procedures for obtaining coverage with the association.
             1390          (5) If the commissioner finds that the lack of cooperating insurers or [agents] producers
             1391      in an area makes the functioning of the association difficult, the commissioner may order the


             1392      association to:
             1393          (a) establish branch service offices;
             1394          (b) make special contracts for provision of the service; or
             1395          (c) take other appropriate steps to ensure that service is available.
             1396          (6) (a) The association may issue policies for a period of one year.
             1397          (b) If, at the end of any one year period, the commissioner determines that the market
             1398      conditions justify the continued existence of the association, the commissioner may reauthorize
             1399      its existence.
             1400          (c) In reauthorizing the association in accordance with this Subsection (6), the
             1401      commissioner shall follow the procedure set forth in Subsection (2).
             1402          Section 7. Section 31A-2-308 is amended to read:
             1403           31A-2-308. Enforcement penalties and procedures.
             1404          (1) (a) A person who violates any insurance statute or rule or any order issued under
             1405      Subsection 31A-2-201 (4) shall forfeit to the state twice the amount of any profit gained from
             1406      the violation, in addition to any other forfeiture or penalty imposed.
             1407          (b) (i) The commissioner may order an individual [agent, broker] producer, limited line
             1408      producer, customer service representative, managing general agent, reinsurance intermediary,
             1409      adjuster, or insurance consultant who violates an insurance statute or rule to forfeit to the state
             1410      not more than $2,500 for each violation.
             1411          (ii) The commissioner may order any other person who violates an insurance statute or
             1412      rule to forfeit to the state not more than $5,000 for each violation.
             1413          (c) (i) The commissioner may order an individual [agent, broker] producer, limited line
             1414      producer, customer service representative, managing general agent, reinsurance intermediary,
             1415      adjuster, or insurance consultant who violates an order issued under Subsection 31A-2-201 (4)
             1416      to forfeit to the state not more than $2,500 for each violation. Each day the violation continues
             1417      is a separate violation.
             1418          (ii) The commissioner may order any other person who violates an order issued under
             1419      Subsection 31A-2-201 (4) to forfeit to the state not more than $5,000 for each violation. Each
             1420      day the violation continues is a separate violation.
             1421          (d) The commissioner may accept or compromise any forfeiture under this Subsection
             1422      (1) until after a complaint is filed under Subsection (2). After the filing of the complaint, only


             1423      the attorney general may compromise the forfeiture.
             1424          (2) When a person fails to comply with an order issued under Subsection 31A-2-201 (4),
             1425      including a forfeiture order, the commissioner may file an action in any court of competent
             1426      jurisdiction or obtain a court order or judgment:
             1427          (a) enforcing the commissioner's order;
             1428          (b) (i) directing compliance with the commissioner's order and restraining further
             1429      violation of the order; and
             1430          (ii) subjecting the person ordered to the procedures and sanctions available to the court
             1431      for punishing contempt if the failure to comply continues; or
             1432          (c) imposing a forfeiture in an amount the court considers just, up to $10,000 for each
             1433      day the failure to comply continues after the filing of the complaint until judgment is rendered.
             1434          (3) The Utah Rules of Civil Procedure govern actions brought under Subsection (2),
             1435      except that the commissioner may file a complaint seeking a court-ordered forfeiture under
             1436      Subsection (2)(c) no sooner than two weeks after giving written notice of the commissioner's
             1437      intention to proceed under Subsection (2)(c). The commissioner's order issued under
             1438      Subsection 31A-2-201 (4) may contain a notice of intention to seek a court-ordered forfeiture if
             1439      the commissioner's order is disobeyed.
             1440          (4) If, after a court order is issued under Subsection (2), the person fails to comply with
             1441      the commissioner's order or judgment:
             1442          (a) the commissioner may certify the fact of the failure to the court by affidavit; and
             1443          (b) the court may, after a hearing following at least five days written notice to the
             1444      parties subject to the order or judgment, amend the order or judgment to add the forfeiture or
             1445      forfeitures, as prescribed in Subsection (2)(c), until the person complies.
             1446          (5) (a) The proceeds of all forfeitures under this section, including collection expenses,
             1447      shall be paid into the General Fund.
             1448          (b) The expenses of collection shall be credited to the Insurance Department's budget.
             1449          (c) The attorney general's budget shall be credited to the extent the Insurance
             1450      Department reimburses the attorney general's office for its collection expenses under this
             1451      section.
             1452          (6) (a) Forfeitures and judgments under this section bear interest at the rate charged by
             1453      the United States Internal Revenue Service for past due taxes on the:


             1454          (i) date of entry of the commissioner's order under Subsection (1); or
             1455          (ii) date of judgment under Subsection (2).
             1456          (b) Interest accrues from the later of the dates described in Subsection (6)(a) until the
             1457      forfeiture and accrued interest are fully paid.
             1458          (7) A forfeiture may not be imposed under Subsection (2)(c) if:
             1459          (a) at the time the forfeiture action is commenced, the person was in compliance with
             1460      the commissioner's order; or
             1461          (b) the violation of the order occurred during the order's suspension.
             1462          (8) The commissioner may seek an injunction as an alternative to issuing an order
             1463      under Subsection 31A-2-201 (4).
             1464          (9) (a) A person is guilty of a class B misdemeanor if that person:
             1465          (i) intentionally violates:
             1466          (A) an insurance statute or rule of this state; or
             1467          (B) an order issued under Subsection 31A-2-201 (4);
             1468          (ii) intentionally permits a person over whom that person has authority to violate:
             1469          (A) an insurance statute or rule of this state; or
             1470          (B) an order issued under Subsection 31A-2-201 (4); or
             1471          (iii) intentionally aids any person in violating:
             1472          (A) an insurance statute or rule of this state; or
             1473          (B) an order issued under Subsection 31A-2-201 (4).
             1474          (b) Unless a specific criminal penalty is provided elsewhere in this title, the person may
             1475      be fined not more than:
             1476          (i) $10,000 if a corporation; or
             1477          (ii) $5,000 if a person other than a corporation.
             1478          (c) If the person is an individual, the person may, in addition, be imprisoned for up to
             1479      one year.
             1480          (d) As used in this Subsection (9), "intentionally" has the same meaning as under
             1481      Subsection 76-2-103 (1).
             1482          (10)(a) After a hearing, the commissioner may, in whole or in part, revoke, suspend,
             1483      place on probation, limit, or refuse to renew the licensee's license or certificate of authority:
             1484          (i) when a licensee of the department, other than a domestic insurer:


             1485          (A) persistently or substantially violates the insurance law; or
             1486          (B) violates an order of the commissioner under Subsection 31A-2-201 (4);
             1487          (ii) if there are grounds for delinquency proceedings against the licensee under Section
             1488      31A-27-301 or Section 31A-27-307 ; or
             1489          (iii) if the licensee's methods and practices in the conduct of the licensee's business
             1490      endanger, or the licensee's financial resources are inadequate to safeguard, the legitimate
             1491      interests of the licensee's customers and the public.
             1492          (b) Additional license termination or probation provisions for licensees other than
             1493      insurers are set forth in Sections 31A-19a-303 , 31A-19a-304 , [ 31A-23-216 ] 31A-23a-111 ,
             1494      [ 31A-23-217 ] 31A-23a-112 , 31A-25-208 , 31A-25-209 , 31A-26-213 , 31A-26-214 ,
             1495      31A-35-501 , and 31A-35-503 .
             1496          (11) The enforcement penalties and procedures set forth in this section are not
             1497      exclusive, but are cumulative of other rights and remedies the commissioner has pursuant to
             1498      applicable law.
             1499          Section 8. Section 31A-2-309 is amended to read:
             1500           31A-2-309. Service of process through state officer.
             1501          (1) The commissioner, or the lieutenant governor when the subject proceeding is
             1502      brought by the state, is the agent for receipt of service of any summons, notice, order, pleading,
             1503      or any other legal process relating to a Utah court or administrative agency upon the following:
             1504          (a) all insurers authorized to do business in this state, while authorized to do business
             1505      in this state, and thereafter in any proceeding arising from or related to any transaction having a
             1506      connection with this state;
             1507          (b) all surplus lines insurers for any proceeding arising out of a contract of insurance
             1508      that is subject to the surplus lines law, or out of a certificate, cover note, or other confirmation
             1509      of that type of insurance;
             1510          (c) all unauthorized insurers or other persons assisting unauthorized insurers under
             1511      Subsection 31A-15-102 (1) by doing an act specified in Subsection 31A-15-102 (2), for a
             1512      proceeding arising out of the transaction that is subject to the unauthorized insurance law;
             1513          (d) any nonresident [agent, broker] producer, consultant, adjuster, and third party
             1514      administrator, while authorized to do business in this state, and thereafter in any proceeding
             1515      arising from or related to any transaction having a connection with this state; and


             1516          (e) any reinsurer submitting to the commissioner's jurisdiction under Subsection
             1517      31A-17-404 (7).
             1518          (2) Each licensed insurer by applying for and receiving a certificate of authority, each
             1519      surplus lines insurer by entering into a contract subject to the surplus lines law, each
             1520      unauthorized insurer by doing in this state any of the acts prohibited by Section 31A-15-101 ,
             1521      and each nonresident [agent, broker] producer, consultant, adjuster, and third party
             1522      administrator is considered to have irrevocably appointed the commissioner and lieutenant
             1523      governor as his agents in accordance with Subsection (1).
             1524          (3) The commissioner and lieutenant governor are also agents for the executors,
             1525      administrators or personal representatives, receivers, trustees, or other successors in interest of
             1526      the persons specified under Subsection (1).
             1527          (4) Litigants serving process on the commissioner or lieutenant governor under this
             1528      section shall pay the fee applicable under Section 31A-3-103 .
             1529          (5) The right to substituted service under this section does not limit the right to serve a
             1530      summons, notice, order, pleading, demand, or other process upon a person in any other manner
             1531      provided by law.
             1532          Section 9. Section 31A-3-303 is amended to read:
             1533           31A-3-303. Payment of tax.
             1534          (1) The insurer, all [brokers] producers involved in the transaction, and the
             1535      policyholder are jointly and severally liable for the payment of the taxes required under Section
             1536      31A-3-301 . The policyholder's liability for payment of the premium tax under Section
             1537      31A-3-301 ends when the policyholder pays the tax to the [broker] producer or insurer. The
             1538      insurer and all [brokers] producers involved in the transaction are jointly and severally liable
             1539      for the payment of the additional tax required under Section 31A-3-302 . Except for the tax
             1540      under Section 31A-3-302 , the taxes under this part shall be paid by the policyholder who shall
             1541      be billed specifically for the tax when billed for the premium. Except for the tax imposed
             1542      under Section 31A-3-302 , absorption of the tax by the [agent, broker,] producer or insurer is an
             1543      unfair method of competition under Section [ 31A-23-302 ] 31A-23a-402 .
             1544          (2) The commissioner shall by rule prescribe accounting and reporting forms and
             1545      procedures for insurers, [brokers] producers, and policyholders to use in determining the
             1546      amount of taxes owed under this part, and the manner and time of payment. If a tax is not paid


             1547      within the time prescribed under the commissioner's rule, a penalty shall be imposed of 25% of
             1548      the tax due, plus 1-1/2% per month from the time of default until full payment of the tax.
             1549          (3) Upon making a record of its actions, and upon reasonable cause shown, the Tax
             1550      Commissioner may waive, reduce, or compromise any of the penalties or interest imposed
             1551      under this part.
             1552          (4) If a policy covers risks that are only partially located in this state, for computation
             1553      of tax under this part the premium shall be reasonably allocated among the states on the basis
             1554      of risk locations. However, all premiums with respect to surplus lines insurance received in this
             1555      state by a surplus lines [broker] producer or charged on policies written or negotiated in or
             1556      from this state are taxable in full under this part, subject to a credit for any tax actually paid in
             1557      another state to the extent of a reasonable allocation on the basis of risk locations.
             1558          (5) All premium taxes collected under this part by a [broker] producer or by an insurer
             1559      are the property of this state.
             1560          (6) If the property of any [broker] producer is seized under any process in a court in
             1561      this state, or if his business is suspended by the action of creditors or put into the hands of an
             1562      assignee, receiver, or trustee, all taxes and penalties due this state under this part are preferred
             1563      claims and the state is to that extent a preferred creditor.
             1564          Section 10. Section 31A-4-106 is amended to read:
             1565           31A-4-106. Provision of health care.
             1566          (1) As used in this section, "health care provider" has the same definition as in Section
             1567      78-14-3 .
             1568          (2) Except under Subsection (3) or (4), a person may not directly or indirectly provide
             1569      health care, or arrange for, manage, or administer the provision or arrangement of, collect
             1570      advance payments for, or compensate providers of health care unless authorized to do so or
             1571      employed by someone authorized to do so under Chapter 5, 7, 8, 9, or 14.
             1572          (3) Subsection (2) does not apply to:
             1573          (a) a natural person or professional corporation that alone or with others professionally
             1574      associated with the natural person or professional corporation, and without receiving
             1575      consideration for services in advance of the need for a particular service, provides the service
             1576      personally with the aid of nonprofessional assistants;
             1577          (b) a health care facility as defined in Section 26-21-2 which:


             1578          (i) is licensed or exempt from licensing under Title 26, Chapter 21; and
             1579          (ii) does not engage in health care insurance as defined under Section 31A-1-301 ;
             1580          (c) a person who files with the commissioner under Section 31A-1-105 a certificate
             1581      from the United States Department of Labor, or other evidence satisfactory to the
             1582      commissioner, showing that the laws of Utah are preempted under Section 514 of the
             1583      Employee Retirement Income Security Act of 1974 or other federal law;
             1584          (d) a person licensed under Chapter [23] 23a, Insurance Marketing - Licensing
             1585      Producers, Consultants, and Reinsurance Intermediaries, who:
             1586          (i) has arranged for the insurance of all services under:
             1587          (A) Subsection (2) by an insurer authorized to do business in Utah;
             1588          (B) Section 31A-15-103 ; or
             1589          (C) works for an uninsured employer that complies with Chapter 13; or
             1590          (e) an employer that self-funds its obligations to provide health care services or
             1591      indemnity for its employees if the employer complies with Chapter 13.
             1592          (4) A person may not provide administrative or management services for any other
             1593      person subject to Subsection (2) and not exempt under Subsection (3) unless the person is an
             1594      authorized insurer under Chapter 5, 7, 8, 9, or 14, or complies with Chapter 25.
             1595          (5) It is unlawful for any insurer or person providing, administering, or managing
             1596      health care insurance under Chapter 5, 7, 8, 9, or 14 to enter into a contract that limits a health
             1597      care provider's ability to advise the health care provider's patients or clients fully about
             1598      treatment options or other issues that affect the health care of the health care provider's patients
             1599      or clients.
             1600          Section 11. Section 31A-5-207 is amended to read:
             1601           31A-5-207. Powers under organization permit.
             1602          (1) While its organization permit is in effect a stock corporation may:
             1603          (a) register stock under Section 31A-5-302 , solicit subscriptions subject to Section
             1604      16-10a-620 , accept payment for the subscriptions in cash or, with the approval of the
             1605      commissioner, in other property constituting a permitted investment under Chapter 18, and
             1606      issue receipts for payments made at values approved by the commissioner, but no certificates
             1607      for shares may be issued until a certificate of authority has been issued; and
             1608          (b) transact all other business necessary and appropriate in the organization of the


             1609      planned insurance enterprise.
             1610          (2) While its organization permit is in effect a mutual may:
             1611          (a) register mutual bonds under Section 31A-5-302 , solicit applications for qualifying
             1612      insurance policies under Subsection 31A-5-211 (5), solicit subscriptions for mutual bonds and
             1613      contribution notes and accept payment for the subscriptions in cash or, with the approval of the
             1614      commissioner, in property constituting a permitted investment under Chapter 18, and issue
             1615      receipts for payments made at values approved by the commissioner, but no policies or bonds
             1616      are effective or may be issued until a certificate of authority has been issued; and
             1617          (b) transact all other business necessary and appropriate in the organization of the
             1618      planned insurance enterprise.
             1619          (3) (a) The existence of the organization permit may not be used as an inducement in
             1620      any solicitation.
             1621          (b) No person may knowingly, with intent to deceive, exhibit any false document or
             1622      account regarding the affairs of any organization under Section 31A-5-204 or make any
             1623      misrepresentation about its affairs.
             1624          (4) Solicitations under this section may be made for stock or bond subscriptions only
             1625      by persons registered under Title 61, Chapter 1, as broker-dealers or agents. Solicitations
             1626      under this section may be made for qualifying insurance policies only by persons licensed
             1627      under Chapter [23] 23a, Insurance Marketing - Licensing Producers, Consultants, and
             1628      Reinsurance Intermediaries, as insurance [agents] producers. Before any solicitation, the
             1629      solicitor shall obtain from the commissioner a license to solicit, after paying the fee applicable
             1630      under Section 31A-3-103 .
             1631          (5) This section does not apply to stock or mutual insurance corporations already in
             1632      existence on July 1, 1986.
             1633          Section 12. Section 31A-5-218 is amended to read:
             1634           31A-5-218. Subsidiaries.
             1635          (1) Subject to the limitations under Subsection 31A-18-106 (1)(k), an insurance
             1636      corporation may form or acquire subsidiaries to do any lawful insurance business.
             1637          (2) An insurance corporation may form or acquire subsidiaries to hold or manage any
             1638      assets that it might hold or manage directly.
             1639          (3) (a) An insurance corporation may form or acquire subsidiaries to perform functions


             1640      or provide services that are ancillary to its insurance operations.
             1641          (b) A subsidiary is an ancillary subsidiary if it is engaged principally in one or more of
             1642      the following:
             1643          (i) acting as an insurance [agent or broker] producer;
             1644          (ii) investing, reinvesting, or trading in securities, or acting as a securities broker,
             1645      dealer, or marketing representative;
             1646          (iii) managing investment companies registered under the federal Investment Company
             1647      Act of 1940, as amended, including related sales and services;
             1648          (iv) providing investment advice and services;
             1649          (v) acting as administrative agent for a government instrumentality performing an
             1650      insurance, public assistance, or related function;
             1651          (vi) providing services related to insurance operations, including accounting, actuarial,
             1652      pension administration, appraisal, auditing, claims adjusting, collection, data processing,
             1653      communications, loss prevention, premium financing, safety engineering, and underwriting
             1654      services;
             1655          (vii) holding or managing property used by the corporation, alone or with its affiliates
             1656      for the convenient transaction of its business;
             1657          (viii) engaging in the motor club business under Chapter 11, Motor Clubs;
             1658          (ix) engaging in the business of any institution subject to the jurisdiction of the
             1659      Department of Financial Institutions under Title 7, Financial Institutions;
             1660          (x) providing similar services or performing similar activities which the commissioner
             1661      declares ancillary by rule; and
             1662          (xi) owning corporations that would be authorized as subsidiaries under Subsections
             1663      (3)(b)(i) through (3)(b)(ix) and under Subsections (1) and (2).
             1664          (4) An insurance corporation may form or acquire subsidiaries other than those under
             1665      Subsections (1) through (3), but only to the extent the insurer has excess surplus as defined
             1666      under Section 31A-1-301 .
             1667          (5) (a) An insurance corporation shall notify the commissioner immediately following
             1668      the formation or acquisition of a subsidiary under this section.
             1669          (b) Chapter 16 provides additional requirements that are applicable to the acquisition
             1670      of certain subsidiaries.


             1671          Section 13. Section 31A-6a-103 is amended to read:
             1672           31A-6a-103. Requirements for doing business.
             1673          (1) Service contracts may not be issued, sold, or offered for sale in this state unless the
             1674      service contract is insured under a service contract reimbursement insurance policy issued by
             1675      an insurer authorized to do business in this state, or a recognized surplus lines carrier.
             1676          (2) (a) Service contracts may not be issued, sold, or offered for sale unless a true and
             1677      correct copy of the service contract and the provider's reimbursement insurance policy have
             1678      been filed with the commissioner. Copies of contracts and policies must be filed no less than
             1679      30 days prior to the issuance, sale offering for sale, or use of the service contract or
             1680      reimbursement insurance policy in this state.
             1681          (b) Each modification of the terms of any service contract or reimbursement insurance
             1682      policy must also be filed 30 days prior to its use in this state. Each filing must be accompanied
             1683      by a filing fee as required under Subsection 31A-3-103 , or the filing shall be rejected.
             1684          (c) Persons complying with this chapter are not required to comply with:
             1685          (i) Subsections 31A-21-201 (1) and [ 31A-23-302 ] 31A-23a-402 (3); or
             1686          (ii) Chapter 19a, Utah Rate Regulation Act.
             1687          (3) (a) Premiums collected on service contracts are not subject to premium taxes.
             1688          (b) Premiums collected by issuers of reimbursement insurance policies are subject to
             1689      premium taxes.
             1690          (4) Persons marketing, selling, or offering to sell service contracts for service contract
             1691      providers that comply with this chapter are exempt from the licensing requirements of this title.
             1692          (5) Service contract providers complying with this chapter are not required to comply
             1693      with:
             1694          (a) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             1695          (b) Chapter 7, Nonprofit Health Service Insurance Corporations;
             1696          (c) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1697          (d) Chapter 9, Insurance Fraternals;
             1698          (e) Chapter 10, Annuities;
             1699          (f) Chapter 11, Motor Clubs;
             1700          (g) Chapter 12, State Risk Management Fund;
             1701          (h) Chapter 13, Employee Welfare Funds and Plans;


             1702          (i) Chapter 14, Foreign Insurers;
             1703          (j) Chapter 19a, Utah Rate Regulation Act;
             1704          (k) Chapter 25, Third Party Administrators; and
             1705          (l) Chapter 28, Guaranty Associations.
             1706          Section 14. Section 31A-6a-108 is amended to read:
             1707           31A-6a-108. Obligation of reimbursement insurance issuers.
             1708          Providers under this chapter are considered to be the agent of the issuer of the
             1709      reimbursement insurance for purposes of Section [ 31A-23-311 ] 31A-23a-410 . In cases where a
             1710      provider is acting as an administrator and enlists other providers, the provider acting as the
             1711      administrator shall notify the issuer of the reimbursement insurance of the other providers.
             1712          Section 15. Section 31A-8-103 is amended to read:
             1713           31A-8-103. Applicability to other provisions of law.
             1714          (1) (a) Except for exemptions specifically granted under this title, an organization is
             1715      subject to regulation under all of the provisions of this title.
             1716          (b) Notwithstanding any provision of this title, an organization licensed under this
             1717      chapter:
             1718          (i) is wholly exempt from:
             1719          (A) Chapter 7, Nonprofit Health Service Insurance Corporations;
             1720          (B) Chapter 9, Insurance Fraternals;
             1721          (C) Chapter 10, Annuities;
             1722          (D) Chapter 11, Motor Clubs;
             1723          (E) Chapter 12, State Risk Management Fund;
             1724          (F) Chapter 13, Employee Welfare Funds and Plans;
             1725          (G) Chapter 19a, Utah Rate Regulation Act; and
             1726          (H) Chapter 28, Guaranty Associations; and
             1727          (ii) not subject to:
             1728          (A) Chapter 3, Department Funding, Fees, and Taxes, except for Part I;
             1729          (B) Section 31A-4-107 ;
             1730          (C) Chapter 5, Domestic Stock and Mutual Insurance Corporations, except for
             1731      provisions specifically made applicable by this chapter;
             1732          (D) Chapter 14, Foreign Insurers, except for provisions specifically made applicable by


             1733      this chapter;
             1734          (E) Chapter 17, Determination of Financial Condition, except:
             1735          (I) Parts II and VI; or
             1736          (II) as made applicable by the commissioner by rule consistent with this chapter;
             1737          (F) Chapter 18, Investments, except as made applicable by the commissioner by rule
             1738      consistent with this chapter; and
             1739          (G) Chapter 22, Contracts in Specific Lines, except for Parts VI, VII, and XII.
             1740          (2) The commissioner may by rule waive other specific provisions of this title that the
             1741      commissioner considers inapplicable to health maintenance organizations or limited health
             1742      plans, upon a finding that the waiver will not endanger the interests of:
             1743          (a) enrollees;
             1744          (b) investors; or
             1745          (c) the public.
             1746          (3) Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, and Title 16,
             1747      Chapter 10a, Utah Revised Business Corporation Act, do not apply to an organization except as
             1748      specifically made applicable by:
             1749          (a) this chapter;
             1750          (b) a provision referenced under this chapter; or
             1751          (c) a rule adopted by the commissioner to deal with corporate law issues of health
             1752      maintenance organizations that are not settled under this chapter.
             1753          (4) (a) Whenever in this chapter, Chapter 5, or Chapter 14 is made applicable to an
             1754      organization, the application is:
             1755          (i) of those provisions that apply to a mutual corporation if the organization is
             1756      nonprofit; and
             1757          (ii) of those that apply to a stock corporation if the organization is for profit.
             1758          (b) When Chapter 5 or 14 is made applicable to an organization under this chapter,
             1759      "mutual" means nonprofit organization.
             1760          (5) Solicitation of enrollees by an organization is not a violation of any provision of
             1761      law relating to solicitation or advertising by health professionals if that solicitation is made in
             1762      accordance with:
             1763          (a) this chapter; and


             1764          (b) Chapter [23] 23a, Insurance Marketing - Licensing [Agents, Brokers] Producers,
             1765      Consultants, and Reinsurance Intermediaries.
             1766          (6) This title does not prohibit any health maintenance organization from meeting the
             1767      requirements of any federal law that enables the health maintenance organization to:
             1768          (a) receive federal funds; or
             1769          (b) obtain or maintain federal qualification status.
             1770          (7) Except as provided in Section 31A-8-501 , an organization is exempt from statutes
             1771      in this title or department rules that restrict or limit the organization's freedom of choice in
             1772      contracting with or selecting health care providers, including Section 31A-22-618 .
             1773          (8) An organization is exempt from the assessment or payment of premium taxes
             1774      imposed by Sections 59-9-101 through 59-9-104 .
             1775          Section 16. Section 31A-11-101 is amended to read:
             1776           31A-11-101. Prohibition of unauthorized motor clubs.
             1777          (1) No person may act as a motor club, except:
             1778          (a) a corporation authorized under Chapter 5 or 14 which actually engages in the
             1779      insurance of automobiles against liability, physical damage, or both; or
             1780          (b) a corporation or division of a corporation authorized under this chapter.
             1781          (2) No person is acting as a motor club merely by offering travel-related services that
             1782      do not constitute insurance, or by arranging, through [agents] producers qualified under
             1783      Chapter [23,] 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance
             1784      Intermediaries, for insurance coverages underwritten by insurers authorized to do business in
             1785      this state.
             1786          Section 17. Section 31A-11-102 is amended to read:
             1787           31A-11-102. Activities of motor clubs.
             1788          (1) Motor clubs authorized under this chapter may provide or arrange for the following
             1789      services:
             1790          (a) service as [agent or broker] producer in obtaining insurance coverage from
             1791      authorized insurers, subject to Chapter [23] 23a, Insurance Marketing - Licensing Producers,
             1792      Consultants, and Reinsurance Intermediaries;
             1793          (b) provision of, or payment for, legal services and costs in the defense of traffic
             1794      offenses or other legal problems connected with the ownership or use of a motor vehicle,


             1795      provided the maximum amount payable for any one incident is not more than 100 times the
             1796      annual charge for the motor club contract;
             1797          (c) guaranteed arrest bond certificates and cash bond guarantees as specified under
             1798      Section 31A-11-112 ;
             1799          (d) payment of specified expenses resulting from an automobile accident, other than
             1800      expenses for personal injury or for damage to an automobile, provided the maximum amount
             1801      payable for any one accident is not more than 100 times the annual charge for the motor club
             1802      contract;
             1803          (e) towing and emergency road services and theft services; and
             1804          (f) any services relating to travel not involving the transfer and distribution of risk.
             1805          (2) Unless they are also insurers under Chapter 5 or 14, motor clubs may not provide
             1806      any liability or physical damage insurance or insurance of life or accident and health, whether
             1807      or not related to motor vehicles.
             1808          (3) If a motor club is a separate division of a corporation, the activities of the other
             1809      divisions of the corporation are not limited by this section, if the motor club division complies
             1810      with Subsection 31A-11-106 (3).
             1811          Section 18. Section 31A-11-104 is amended to read:
             1812           31A-11-104. Applicability of other portions of the Insurance Code.
             1813          In addition to this chapter, motor clubs are subject to the applicable sections of
             1814      Chapters 1, 2, 4, 16, 21, 22, 26, and 27, Part I of Chapter 3, Parts I, [III] IV, and [IV] V of
             1815      Chapter [23] 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance
             1816      Intermediaries, and Section [ 31A-23-214 ] 31A-23a-207 . Sections 31A-14-204 and
             1817      31A-14-216 apply to nondomestic motor clubs. Section 31A-5-401 applies to domestic motor
             1818      clubs. Sections 31A-5-105 , 31A-5-106 , and 31A-5-216 apply to both domestic and
             1819      nondomestic motor clubs. Both domestic and nondomestic motor clubs are subject to the
             1820      Insurance Department fees under Section 31A-3-103 . Other provisions of the Insurance Code
             1821      apply to motor clubs only as specifically provided in this chapter.
             1822          Section 19. Section 31A-11-107 is amended to read:
             1823           31A-11-107. Issuance of certificate of authority -- Reinsurance of excess services.
             1824          (1) The commissioner shall issue a certificate applied for under Section 31A-11-106 if
             1825      he finds that:


             1826          (a) the corporation is able to negotiate, execute, and carry out the motor club business
             1827      in a sound, reliable, and ongoing manner;
             1828          (b) the reinsurance requirements of Subsection (2) are satisfied; and
             1829          (c) all other applicable requirements of law are satisfied.
             1830          (2) If a motor club provides legal expense service other than that authorized in
             1831      Subsection 31A-11-102 (1)(b), or other trip reimbursement service than that authorized in
             1832      Subsection 31A-11-102 (1)(d), or bail service other than that authorized under Section
             1833      31A-11-112 , it must fully reinsure the excess service with an insurer authorized under Chapter
             1834      5 or 14. That insurer must assume direct liability to the insured, and must fully comply with
             1835      Chapter [23] 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance
             1836      Intermediaries.
             1837          Section 20. Section 31A-14-211 is amended to read:
             1838           31A-14-211. Restrictions on foreign title insurers.
             1839          (1) An authorized foreign title insurer may not insure property in this state except:
             1840          (a) through a title insurance [agent] producer who is a resident in Utah;
             1841          (b) through a bona fide branch office in Utah under the direction and control of the title
             1842      insurer that pays all the expenses of the branch office including compensation of all employees;
             1843      or
             1844          (c) through a subsidiary title insurer authorized to do business in Utah.
             1845          (2) This section does not apply to reinsurance.
             1846          Section 21. Section 31A-15-102 is amended to read:
             1847           31A-15-102. Assisting unauthorized insurers.
             1848          (1) No person may do any act enumerated under Subsection (2) who knows or should
             1849      know that the act may assist in the illegal placement of insurance with an unauthorized insurer
             1850      or the subsequent servicing of an insurance policy illegally placed with an unauthorized
             1851      insurer.
             1852          (2) An act performed by mail is performed both at the place of mailing and at the place
             1853      of delivery. Any of the following acts, whether performed by mail or otherwise, fall within the
             1854      prohibition of Subsection (1):
             1855          (a) soliciting, making, or proposing to make an insurance contract;
             1856          (b) taking, receiving, or forwarding an application for insurance;


             1857          (c) collecting or receiving, in full or in part, an insurance premium;
             1858          (d) issuing or delivering an insurance policy or other evidence of an insurance contract
             1859      except as a messenger not employed by the insurer, or an insurance [agent, or a broker]
             1860      producer;
             1861          (e) doing any of the following in connection with the solicitation, negotiation,
             1862      procuring, or effectuation of insurance coverage for another: inspecting risks, setting rates,
             1863      advertising, disseminating information, or advising on risk management;
             1864          (f) publishing or disseminating any advertisement encouraging the placement or
             1865      servicing of insurance that would violate Subsection (1); however this provision does not apply
             1866      to publication or dissemination to an audience primarily outside Utah that also reaches persons
             1867      in Utah unless the extension to persons inside Utah can be conveniently avoided without
             1868      substantial expense other than loss of revenue; nor does it apply to regional or national network
             1869      programs on radio or television unless they originate in Utah;
             1870          (g) investigating, settling, adjusting, or litigating claims; or
             1871          (h) representing or assisting any person to do an unauthorized insurance business or to
             1872      procure insurance from an unauthorized insurer.
             1873          (3) Subsection (1) does not prohibit:
             1874          (a) an attorney acting for a client;
             1875          (b) a full-time salaried employee of an insured acting in the capacity of an insurance
             1876      buyer or manager; or
             1877          (c) insurance activities described under Section 31A-15-103 .
             1878          (4) Any act performed in Utah which is prohibited under this section constitutes
             1879      appointment of the commissioner or the lieutenant governor as agent for service of process
             1880      under Sections 31A-2-309 and 31A-2-310 .
             1881          Section 22. Section 31A-15-103 is amended to read:
             1882           31A-15-103. Surplus lines insurance -- Unauthorized insurers.
             1883          (1) Notwithstanding Section 31A-15-102 , a foreign insurer that has not obtained a
             1884      certificate of authority to do business in this state under Section 31A-14-202 may negotiate for
             1885      and make insurance contracts with persons in this state and on risks located in this state,
             1886      subject to the limitations and requirements of this section.
             1887          (2) For contracts made under this section, the insurer may, in this state, inspect the


             1888      risks to be insured, collect premiums and adjust losses, and do all other acts reasonably
             1889      incidental to the contract, through employees or through independent contractors.
             1890          (3) (a) Subsections (1) and (2) do not permit any person to solicit business in this state
             1891      on behalf of an insurer that has no certificate of authority.
             1892          (b) Any insurance placed with a nonadmitted insurer shall be placed with a surplus
             1893      lines [broker] producer licensed under Chapter [23] 23a, Insurance Marketing - Licensing
             1894      Producers, Consultants, and Reinsurance Intermediaries.
             1895          (c) The commissioner may by rule prescribe how a surplus lines [broker] producer
             1896      may:
             1897          (i) pay or permit the payment, commission, or other remuneration on insurance placed
             1898      by the surplus lines [broker] producer under authority of the surplus lines [broker's] producer's
             1899      license to one holding a license to act as an insurance [agent] producer; and
             1900          (ii) advertise the availability of the surplus lines [broker's] producer's services in
             1901      procuring, on behalf of persons seeking insurance, contracts with nonadmitted insurers.
             1902          (4) For contracts made under this section, nonadmitted insurers are subject to Sections
             1903      [ 31A-23-302 ] 31A-23a-402 and [ 31A-26-303 ] 31A-23a-403 and the rules adopted under those
             1904      sections.
             1905          (5) A nonadmitted insurer may not issue workers' compensation insurance coverage to
             1906      employers located in this state, except for stop loss coverages issued to employers securing
             1907      workers' compensation under Subsection 34A-2-201 (3).
             1908          (6) (a) The commissioner may by rule prohibit making contracts under Subsection (1)
             1909      for a specified class of insurance if authorized insurers provide an established market for the
             1910      class in this state that is adequate and reasonably competitive.
             1911          (b) The commissioner may by rule place restrictions and limitations on and create
             1912      special procedures for making contracts under Subsection (1) for a specified class of insurance
             1913      if there have been abuses of placements in the class or if the policyholders in the class, because
             1914      of limited financial resources, business experience, or knowledge, cannot protect their own
             1915      interests adequately.
             1916          (c) The commissioner may prohibit an individual insurer from making any contract
             1917      under Subsection (1) and all insurance [agents and brokers] producers from dealing with the
             1918      insurer if:


             1919          (i) the insurer has willfully violated this section, Section 31A-4-102 , [ 31A-23-302 ]
             1920      31A-23a-402 , or 31A-26-303 , or any rule adopted under any of these sections;
             1921          (ii) the insurer has failed to pay the fees and taxes specified under Section 31A-3-301 ;
             1922      or
             1923          (iii) the commissioner has reason to believe that the insurer is in an unsound condition
             1924      or is operated in a fraudulent, dishonest, or incompetent manner or in violation of the law of its
             1925      domicile.
             1926          (d) (i) The commissioner may issue lists of unauthorized foreign insurers whose
             1927      solidity the commissioner doubts, or whose practices the commissioner considers
             1928      objectionable.
             1929          (ii) The commissioner shall issue lists of unauthorized foreign insurers the
             1930      commissioner considers to be reliable and solid.
             1931          (iii) In addition to the lists described in Subsections (6)(d)(i) and (ii), the commissioner
             1932      may issue other relevant evaluations of unauthorized insurers.
             1933          (iv) An action may not lie against the commissioner or any employee of the department
             1934      for any written or oral communication made in, or in connection with the issuance of, the lists
             1935      or evaluations described in this Subsection (6)(d).
             1936          (e) A foreign unauthorized insurer shall be listed on the commissioner's "reliable" list
             1937      only if the unauthorized insurer:
             1938          (i) has delivered a request to the commissioner to be on the list;
             1939          (ii) has established satisfactory evidence of good reputation and financial integrity;
             1940          (iii) has delivered to the commissioner a copy of its current annual statement certified
             1941      by the insurer and continues each subsequent year to file its annual statements with the
             1942      commissioner within 60 days of its filing with the insurance regulatory authority where it is
             1943      domiciled;
             1944          (iv) (A) is in substantial compliance with the solvency standards in Chapter 17, Part
             1945      VI, Risk-Based Capital, or maintains capital and surplus of at least $15,000,000, whichever is
             1946      greater, and maintains in the United States an irrevocable trust fund in either a national bank or
             1947      a member of the Federal Reserve System, or maintains a deposit meeting the statutory deposit
             1948      requirements for insurers in the state where it is made, which trust fund or deposit:
             1949          (I) shall be in an amount not less than $2,500,000 for the protection of all of the


             1950      insurer's policyholders in the United States;
             1951          (II) may consist of cash, securities, or investments of substantially the same character
             1952      and quality as those which are "qualified assets" under Section 31A-17-201 ; and
             1953          (III) may include as part of the trust arrangement a letter of credit that qualifies as
             1954      acceptable security under Subsection 31A-17-404 (3)(c)(iii); or
             1955          (B) in the case of any "Lloyd's" or other similar incorporated or unincorporated group
             1956      of alien individual insurers, maintains a trust fund that:
             1957          (I) shall be in an amount not less than $50,000,000 as security to its full amount for all
             1958      policyholders and creditors in the United States of each member of the group;
             1959          (II) may consist of cash, securities, or investments of substantially the same character
             1960      and quality as those which are "qualified assets" under Section 31A-17-201 ; and
             1961          (III) may include as part of this trust arrangement a letter of credit that qualifies as
             1962      acceptable security under Subsection 31A-17-404 (3)(c)(iii); and
             1963          (v) for an alien insurer not domiciled in the United States or a territory of the United
             1964      States, is listed on the Quarterly Listing of Alien Insurers maintained by the National
             1965      Association of Insurance Commissioners International Insurers Department.
             1966          (7) A surplus lines [broker] producer may not, either knowingly or without reasonable
             1967      investigation of the financial condition and general reputation of the insurer, place insurance
             1968      under this section with financially unsound insurers or with insurers engaging in unfair
             1969      practices, or with otherwise substandard insurers, unless the [broker] producer gives the
             1970      applicant notice in writing of the known deficiencies of the insurer or the limitations on his
             1971      investigation, and explains the need to place the business with that insurer. A copy of this
             1972      notice shall be kept in the office of the [broker] producer for at least five years. To be
             1973      financially sound, an insurer shall satisfy standards that are comparable to those applied under
             1974      the laws of this state to authorized insurers. Insurers on the "doubtful or objectionable" list
             1975      under Subsection (6)(d) and insurers not on the commissioner's "reliable" list under Subsection
             1976      (6)(e) are presumed substandard.
             1977          (8) A policy issued under this section shall include a description of the subject of the
             1978      insurance and indicate the coverage, conditions, and term of the insurance, the premium
             1979      charged and premium taxes to be collected from the policyholder, and the name and address of
             1980      the policyholder and insurer. If the direct risk is assumed by more than one insurer, the policy


             1981      shall state the names and addresses of all insurers and the portion of the entire direct risk each
             1982      has assumed. All policies issued under the authority of this section shall have attached or
             1983      affixed to the policy the following statement: "The insurer issuing this policy does not hold a
             1984      certificate of authority to do business in this state and thus is not fully subject to regulation by
             1985      the Utah insurance commissioner. This policy receives no protection from any of the guaranty
             1986      associations created under Title 31A, Chapter 28."
             1987          (9) Upon placing a new or renewal coverage under this section, the [broker] surplus
             1988      lines producer shall promptly deliver to the policyholder or his agent evidence of the insurance
             1989      consisting either of the policy as issued by the insurer or, if the policy is not then available, a
             1990      certificate, cover note, or other confirmation of insurance complying with Subsection (8).
             1991          (10) If the commissioner finds it necessary to protect the interests of insureds and the
             1992      public in this state, the commissioner may by rule subject policies issued under this section to
             1993      as much of the regulation provided by this title as is required for comparable policies written by
             1994      authorized foreign insurers.
             1995          (11) (a) Each surplus lines transaction in this state shall be examined to determine
             1996      whether it complies with:
             1997          (i) the surplus lines tax levied under Chapter 3;
             1998          (ii) the solicitation limitations of Subsection (3);
             1999          (iii) the requirement of Subsection (3) that placement be through a surplus lines
             2000      [broker] producer;
             2001          (iv) placement limitations imposed under Subsections (6)(a), (b), and (c); and
             2002          (v) the policy form requirements of Subsections (8) and (10).
             2003          (b) The examination described in Subsection (11)(a) shall take place as soon as
             2004      practicable after the transaction. The surplus lines [broker] producer shall submit to the
             2005      examiner information necessary to conduct the examination within a period specified by rule.
             2006          (c) The examination described in Subsection (11)(a) may be conducted by the
             2007      commissioner or by an advisory organization created under Section 31A-15-111 and authorized
             2008      by the commissioner to conduct these examinations. The commissioner is not required to
             2009      authorize any additional advisory organizations to conduct examinations under this Subsection
             2010      (11)(c). The commissioner's authorization of one or more advisory organizations to act as
             2011      examiners under this Subsection (11)(c) shall be by rule. In addition, the authorization shall be


             2012      evidenced by a contract, on a form provided by the commissioner, between the authorized
             2013      advisory organization and the department.
             2014          (d) The person conducting the examination described in Subsection (11)(a) shall
             2015      collect a stamping fee of an amount not to exceed 1% of the policy premium payable in
             2016      connection with the transaction. Stamping fees collected by the commissioner shall be
             2017      deposited in the General Fund. The commissioner shall establish this fee by rule. Stamping
             2018      fees collected by an advisory organization are the property of the advisory organization to be
             2019      used in paying the expenses of the advisory organization. Liability for paying the stamping fee
             2020      is as required under Subsection 31A-3-303 (1) for taxes imposed under Section 31A-3-301 .
             2021      The commissioner shall adopt a rule dealing with the payment of stamping fees. If stamping
             2022      fees are not paid when due, the commissioner or advisory organization may impose a penalty
             2023      of 25% of the fee due, plus 1-1/2% per month from the time of default until full payment of the
             2024      fee. Fees relative to policies covering risks located partially in this state shall be allocated in
             2025      the same manner as under Subsection 31A-3-303 (4).
             2026          (e) The commissioner, representatives of the department, advisory organizations,
             2027      representatives and members of advisory organizations, authorized insurers, and surplus lines
             2028      insurers are not liable for damages on account of statements, comments, or recommendations
             2029      made in good faith in connection with their duties under this Subsection (11)(e) or under
             2030      Section 31A-15-111 .
             2031          (f) Examinations conducted under this Subsection (11) and the documents and
             2032      materials related to the examinations are confidential.
             2033          Section 23. Section 31A-15-104 is amended to read:
             2034           31A-15-104. Direct placement of insurance.
             2035          (1) Subject to this section, any person seeking insurance may obtain it from an
             2036      unauthorized insurer if no [agent or broker] producer resident doing business in Utah is
             2037      involved and if negotiations occur primarily outside Utah. Negotiations by mail occur within
             2038      Utah if a letter or other document containing insurance-related solicitations or negotiations is
             2039      sent from or to a Utah address. Negotiations by telephone take place within Utah if one of the
             2040      parties to the conversation is in Utah.
             2041          (2) Each policyholder who procures or renews insurance otherwise subject to this code
             2042      from any insurer not authorized to do business in Utah, other than insurance procured under


             2043      Section 31A-15-103 and the renewal of guaranteed renewable insurance lawfully issued
             2044      outside Utah, shall within 60 days after the insurance is procured or renewed, report to the
             2045      commissioner in the form required by the commissioner and pay the taxes specified by Section
             2046      31A-3-301 .
             2047          (3) (a) Any insurance on personal property sold on the installment plan, under a
             2048      conditional sales contract, or an equivalent security agreement under the Uniform Commercial
             2049      Code which charges the buyer, as a part of the consideration in the agreement of sale for
             2050      insurance on the property, shall be placed with an insurer authorized to do business in Utah.
             2051          (b) Whenever the law of Utah requires a person to purchase insurance on risks in Utah,
             2052      it shall be obtained from an insurer authorized to do business in Utah, or under Section
             2053      31A-15-103 .
             2054          Section 24. Section 31A-15-111 is amended to read:
             2055           31A-15-111. Surplus lines advisory organizations.
             2056          (1) Advisory organizations of surplus lines [brokers] producers may be formed to:
             2057          (a) facilitate and encourage compliance by its members with the laws of this state and
             2058      the rules of the commissioner relative to surplus lines insurance;
             2059          (b) if authorized by the commissioner, perform and report to the commissioner on the
             2060      confidential examinations and assess and receive the stamping fees described in Subsection
             2061      31A-15-103 (11);
             2062          (c) make recommendations to the commissioner concerning classes of insurance for
             2063      which a rule under Subsection 31A-15-103 (6)(a) is appropriate;
             2064          (d) investigate "abuses of placements," as described in Subsection 31A-15-103 (6)(b),
             2065      and provide recommendations to the commissioner concerning rules under Subsection
             2066      31A-15-103 (6)(b);
             2067          (e) bring to the commissioner's attention the existence of grounds for issuing an order
             2068      under Subsection 31A-15-103 (6)(c) concerning a particular unauthorized insurer;
             2069          (f) provide recommendations to the commissioner concerning unauthorized insurers
             2070      which should be listed on a "doubtful or objectionable" list under Subsection
             2071      31A-15-103 (6)(d);
             2072          (g) provide comments to the commissioner concerning whether an unauthorized
             2073      insurer has a good reputation and financial integrity under Subsection 31A-15-103 (6)(d)(ii);


             2074          (h) provide recommendations to the commissioner concerning rules under Subsection
             2075      31A-15-103 (10) necessary to protect the interests of insureds and the public; and
             2076          (i) receive and disseminate to its members information relative to surplus lines
             2077      coverages.
             2078          (2) Every advisory organization formed under this section shall file with the
             2079      commissioner:
             2080          (a) a copy of its constitution, articles of agreement or association or articles of
             2081      incorporation, and any amendments to these documents;
             2082          (b) a copy of its bylaws and any other writing governing the organization's activities
             2083      and any amendments to these documents;
             2084          (c) a list of the names and addresses of residents of this state upon whom notices or
             2085      orders of the commissioner or processes issued at his direction may be served, with changes in
             2086      this list to be filed within ten days of a change; and
             2087          (d) an agreement, on a form provided by the commissioner and executed by the
             2088      advisory organization, that the commissioner may examine the advisory organization in
             2089      accordance with the provisions of Sections 31A-2-203 , 31A-2-204 , and 31A-2-205 .
             2090          (3) The commissioner may by rule or order require each person licensed as a surplus
             2091      lines [broker] producer under Chapter [23] 23a, Insurance Marketing - Licensing Producers,
             2092      Consultants, and Reinsurance Intermediaries, to be a member of one or more specified advisory
             2093      organizations operating under this section. The commissioner may make compliance with the
             2094      rule or order a condition to continued licensure as a surplus lines [broker] producer.
             2095          (4) The comments and recommendations given the commissioner under Subsection (1)
             2096      are merely advisory. The formation of an advisory organization under this section does not
             2097      alter the commissioner's authority under this chapter.
             2098          Section 25. Section 31A-15-204 is amended to read:
             2099           31A-15-204. Risk retention groups not chartered in this state -- Designation of
             2100      commissioner as agent -- Compliance with unfair claims settlement practices act --
             2101      Deceptive, false, or fraudulent practices -- Examination regarding financial condition --
             2102      Prohibitions -- Penalties -- Operation prior to enactment of this part.
             2103          (1) Risk retention groups chartered and licensed in other states and seeking to do
             2104      business as a risk retention group in this state shall comply with the following:


             2105          (a) Before offering insurance in this state a risk retention group shall submit to the
             2106      commissioner:
             2107          (i) a statement identifying the states in which the group is chartered and licensed as a
             2108      liability insurance company, its charter date, its principal place of business, and any other
             2109      information, including information on its membership, the commissioner may require to verify
             2110      that the group is a qualified risk retention group as defined in Subsection 31A-15-202 (11); and
             2111          (ii) a copy of its plan of operations or feasibility study and revisions of the plan or
             2112      study submitted to the state in which the risk retention group is chartered and licensed, except a
             2113      plan or study is not required for any line or classification of liability insurance that:
             2114          (A) was defined in the Product Liability Risk Retention Act of 1981 before October 27,
             2115      1986; and
             2116          (B) was offered before that date by any risk retention group that had been chartered
             2117      and operating for not less than three years before that date.
             2118          (b) The risk retention group shall submit to the commissioner a copy of any revision to
             2119      its plan or study required by Subsection 31A-15-203 (2) at the same time it submits the revision
             2120      of its chartering state.
             2121          (c) The risk retention group shall submit, on a form approved by the commissioner, a
             2122      statement of registration and a notice designating the commissioner as agent for the purpose of
             2123      receiving service of legal documents or process.
             2124          (d) The risk retention group shall pay annual license fees [in this state equal to the
             2125      license fees required of an admitted liability insurer licensed to transact business in this state]
             2126      required by Section 31A-3-103 .
             2127          (2) Any risk retention group doing business in this state shall submit to the
             2128      commissioner:
             2129          (a) a copy of the group's financial statement submitted to the state in which the risk
             2130      retention group is chartered and licensed, which shall be certified by an independent public
             2131      accountant and shall contain a statement of opinion on loss and loss adjustment expense
             2132      reserves made by a member of the American Academy of Actuaries or a loss reserve specialist
             2133      qualified under criteria approved by the commissioner;
             2134          (b) a copy of each examination of the risk retention group as certified by the
             2135      commissioner or public official conducting the examination;


             2136          (c) if the commissioner requests, a copy of any information or document pertaining to
             2137      any outside audit performed with respect to the risk retention group; and
             2138          (d) any other information required to verify the group's continuing qualification as a
             2139      risk retention group within the definition in Subsection 31A-15-202 (11).
             2140          (3) (a) Each risk retention group shall pay premium taxes and taxes on premiums of
             2141      direct business for risks resident or located within this state, and shall report to the Utah State
             2142      Tax Commission the net premiums written for risks resident or located within this state. Each
             2143      risk retention group shall be subject to taxation, and any applicable fines and penalties related
             2144      to taxation, on the same basis as a foreign admitted insurer.
             2145          (b) To the extent licensed [agents or brokers] producers are utilized pursuant to Section
             2146      31A-15-212 , they shall report to the commissioner the premiums for direct business for all
             2147      risks resident or located within this state that the [agents or brokers] producers have placed
             2148      with, or on behalf of, a risk retention group not chartered in this state.
             2149          (c) To the extent that insurance [agents or brokers] producers are utilized pursuant to
             2150      Section 31A-15-212 they shall keep a complete and separate record of all policies procured
             2151      from each risk retention group. The record shall be open to examination by the commissioner,
             2152      as provided under Section [ 31A-23-312 ] 31A-23a-412 . These records shall include the
             2153      following for each policy and each kind of insurance provided under each policy:
             2154          (i) the limit of liability;
             2155          (ii) the time period covered;
             2156          (iii) the effective date;
             2157          (iv) the name of the risk retention group that issued the policy;
             2158          (v) the gross premium charged;
             2159          (vi) the amount of any returned premiums; and
             2160          (vii) additional information required by the insurance commissioner.
             2161          (4) Each risk retention group and its agents and representatives shall comply with the
             2162      Unfair Claims Settlement Practices Act, including Section 31A-15-207 , Title 31A, Chapter 26,
             2163      Part 3, Claim Practices, and any other provision of law relating to claims settlement practices.
             2164          (5) Each risk retention group shall comply with the laws of this state regarding
             2165      deceptive, false, and fraudulent acts, practices regulated under Title 31A, Chapter [23] 23a,
             2166      Part [3] 4, Marketing Practices, and any other provision of law relating to deceptive, false, or


             2167      fraudulent practices. The commissioner may only obtain an injunction regarding the conduct
             2168      described in this subsection from a court of competent jurisdiction.
             2169          (6) If the commissioner of the jurisdiction in which the group is chartered and licensed
             2170      has not initiated an examination or does not initiate an examination within 60 days after a
             2171      request by the commissioner of this state, the risk retention group shall submit to an
             2172      examination by the commissioner of this state to determine its financial condition. Any
             2173      examination conducted under this subsection shall be coordinated to avoid unjustified
             2174      repetition and shall be conducted in an expeditious manner and in accordance with the NAIC's
             2175      Examiner Handbook.
             2176          (7) Each application form for insurance from a risk retention group and each policy and
             2177      certificate issued by a risk retention group shall contain the following notice in ten-point type
             2178      on its front and declaration pages:
             2179     
"NOTICE

             2180          This policy is issued by your risk retention group. Your risk retention group may not be
             2181      subject to all of the insurance laws and regulations of your state. State insurance insolvency
             2182      guaranty funds are not available for your risk retention group."
             2183          (8) The following acts by a risk retention group are prohibited:
             2184          (a) the solicitation or sale of insurance by a risk retention group to any person who is
             2185      not eligible for membership in the group; and
             2186          (b) the solicitation or sale of insurance by, or operation of, a risk retention group that is
             2187      in hazardous financial condition or financially impaired.
             2188          (9) A risk retention group may not do business in this state if an insurance company is
             2189      directly or indirectly a member or owner of the risk retention group, unless all members of the
             2190      group are insurance companies.
             2191          (10) The terms of any insurance policy issued by a risk retention group may not
             2192      provide, or be construed to provide, coverage prohibited generally by statute of this state or
             2193      declared unlawful by the Utah Supreme Court.
             2194          (11) A risk retention group not chartered in this state and doing business in this state
             2195      shall comply with a lawful order issued in a voluntary dissolution proceeding or in a
             2196      delinquency proceeding commenced by any state's insurance commissioner if there has been a
             2197      finding of financial impairment after an examination under Subsection (6).


             2198          (12) A risk retention group that violates any provision of this part is subject to fines
             2199      and penalties applicable to licensed insurers generally, including revocation of its right to do
             2200      business in this state.
             2201          (13) In addition to complying with the requirements of this section, each risk retention
             2202      group operating in this state before the effective date of this part shall comply with Subsection
             2203      (1)(a) within 30 days after the effective date of this part.
             2204          Section 26. Section 31A-15-207 is amended to read:
             2205           31A-15-207. Purchasing groups -- Exemption from certain laws.
             2206          A purchasing group and its insurers are subject to all applicable laws of this state,
             2207      except that a purchasing group and its insurers are exempt, in regard to liability insurance for
             2208      the purchasing group, from any law that would:
             2209          (1) prohibit the establishment of a purchasing group;
             2210          (2) make it unlawful for an insurer to provide, or offer to provide, to a purchasing
             2211      group or its members insurance on a basis providing advantages based on their loss and
             2212      expense experience not afforded to other persons with respect to rates, policy forms, coverages,
             2213      or other matters;
             2214          (3) prohibit a purchasing group or its members from purchasing insurance on a group
             2215      basis described in Subsection (2);
             2216          (4) prohibit a purchasing group from obtaining insurance on a group basis because the
             2217      group has not been in existence for a minimum period of time or because any member has not
             2218      belonged to the group for a minimum period of time;
             2219          (5) require that a purchasing group must have a minimum number of members,
             2220      common ownership or affiliation, or certain legal form;
             2221          (6) require that a certain percentage of a purchasing group must obtain insurance on a
             2222      group basis;
             2223          (7) otherwise discriminate against a purchasing group or any of its members; or
             2224          (8) require that any insurance policy issued to a purchasing group or any of its
             2225      members be countersigned by an insurance [agent or broker] producer residing in this state.
             2226          Section 27. Section 31A-15-210 is amended to read:
             2227           31A-15-210. Purchasing group taxation.
             2228          Premium taxes and taxes on premiums paid for coverage of risks resident or located in


             2229      this state by a purchasing group or any members of the purchasing groups are imposed and
             2230      must be paid as follows:
             2231          (1) If the insurer is an admitted insurer, taxes are imposed on the insurer at the same
             2232      rate and in the same manner and subject to the same procedures, interest, and penalties that
             2233      apply to premium taxes and other taxes imposed on other admitted liability insurers relative to
             2234      coverage of risks resident or located in this state.
             2235          (2) If the insurer is an approved, nonadmitted surplus lines insurer, taxes are imposed
             2236      on the licensed [broker] producer who effected coverage on risks resident or located in this
             2237      state at the same rate and in the same manner and subject to the same procedures, interest, and
             2238      penalties that apply to taxes imposed on other licensed [brokers] producers effecting coverage
             2239      with approved, nonadmitted surplus lines insurers on risks resident or located in this state.
             2240          Section 28. Section 31A-15-212 is amended to read:
             2241           31A-15-212. Duty of producers to obtain license -- Risk retention groups --
             2242      Purchasing groups.
             2243          (1) A person may do the following only if he is licensed as an insurance agent or
             2244      broker or is exempt from licensure under Title 31A, Chapter [23] 23a, Insurance Marketing -
             2245      Licensing [Agents, Brokers] Producers, Consultants, and Reinsurance Intermediaries:
             2246          (a) solicit, negotiate, or procure liability insurance in this state from a risk retention
             2247      group;
             2248          (b) solicit, negotiate, or procure liability insurance in this state for a purchasing group
             2249      from an authorized insurer or a risk retention group; and
             2250          (c) solicit, negotiate, or procure liability insurance coverage in this state for any
             2251      member of a purchasing group under a purchasing group's policy.
             2252          (2) A person may solicit, negotiate, or procure liability insurance from an insurer not
             2253      authorized to do business in this state on behalf of a purchasing group located in this state only
             2254      if he is licensed as a surplus lines [broker] producer or is exempt for licensure under Title 31A,
             2255      Chapter [23] 23a, Insurance Marketing - Licensing [Agents, Brokers] Producers, Consultants,
             2256      and Reinsurance Intermediaries.
             2257          (3) The requirement of residence in this state does not apply for purposes of acting as
             2258      [an agent or broker] a producer for a risk retention group or purchasing group under
             2259      Subsections (1) and (2).


             2260          (4) On business placed with a risk retention group or written through a purchasing
             2261      group, each person licensed under this title shall provide to each prospective insured the notice
             2262      required by Subsection 31A-15-204 (7) in the case of a risk retention group, and by Subsection
             2263      31A-15-209 (1) in the case of a purchasing group.
             2264          (5) Solicitation for membership in a purchasing group is not of itself a solicitation for
             2265      insurance.
             2266          Section 29. Section 31A-17-608 is amended to read:
             2267           31A-17-608. Confidentiality -- Prohibition on announcements -- Prohibition on
             2268      use in ratemaking.
             2269          (1) (a) The commissioner shall keep confidential to the extent that information in a
             2270      report or plan is not required to be included in a publicly available annual statement schedule,
             2271      any detail in an RBC report or RBC plan including the results or report of any examination or
             2272      analysis of an insurer or health organization performed pursuant to this part, that is filed by a
             2273      domestic or foreign insurer or health organization with the commissioner or any corrective
             2274      order issued by the commissioner pursuant to examination or analysis.
             2275          (b) Information kept confidential under Subsection (1)(a) may not be made public or be
             2276      subject to subpoena, other than by the commissioner and then only for the purpose of
             2277      enforcement actions taken by the commissioner pursuant to this part or any other provision of
             2278      the insurance laws of this state.
             2279          (2) (a) Except as otherwise required under this part, any insurer or health organization,
             2280      [agent, broker] producer, or other person engaged in any manner in the insurance business may
             2281      not publish, disseminate, circulate or place before the public, or cause, directly or indirectly,
             2282      the publishing, disseminating, circulating or placing before the public including, in a
             2283      newspaper, magazine, other publication, a notice, circular, pamphlet, letter, or poster, or over
             2284      any radio or television station, an advertisement, announcement, or statement containing an
             2285      assertion, representation, or statement with regard to the RBC levels of any insurer or health
             2286      organization, or of any component derived in the calculation.
             2287          (b) If any materially false statement with respect to the comparison regarding an
             2288      insurer's or health organization's total adjusted capital to its RBC levels, or an inappropriate
             2289      comparison of any other amount to the insurer's or health organization's RBC levels is
             2290      published in any written publication and the insurer or health organization is able to


             2291      demonstrate to the commissioner with substantial proof the falsity of the statement or the
             2292      inappropriateness, the insurer or health organization may publish an announcement in a written
             2293      publication if the sole purpose of the announcement is to rebut the materially false statement or
             2294      inappropriate comparison.
             2295          (3) The commissioner may not use an RBC instruction, report, plan, or revised plan:
             2296          (a) for ratemaking;
             2297          (b) as evidence in any rate proceeding; or
             2298          (c) to calculate or derive any element of an appropriate premium level or rate of return
             2299      for any line of insurance or coverage that an insurer or health organization or any affiliate is
             2300      authorized to write or cover.
             2301          Section 30. Section 31A-19a-209 is amended to read:
             2302           31A-19a-209. Special provisions for title insurance.
             2303          (1) In addition to the considerations in determining compliance with rate standards and
             2304      rating methods as set forth in Sections 31A-19a-201 and 31A-19a-202 , the commissioner shall
             2305      also consider the costs and expenses incurred by title insurance companies, agencies, and
             2306      [agents] producers peculiar to the business of title insurance including:
             2307          (a) the maintenance of title plants; and
             2308          (b) the searching and examining of public records to determine insurability of title to
             2309      real redevelopment property.
             2310          (2) (a) Every title insurance company, agency, and title insurance [agent] producer
             2311      shall file with the commissioner a schedule of the escrow charges that it proposes to use in this
             2312      state for services performed in connection with the issuance of policies of title insurance.
             2313          (b) The filing required by Subsection (2)(a) shall state the effective date of this
             2314      schedule, which may not be less than 30 calendar days after the date of filing.
             2315          (3) A title insurance company, agency, or [agent] producer may not file or use any rate
             2316      or other charge relating to the business of title insurance, including rates or charges filed for
             2317      escrow that would cause the title insurance company, agency, or [agent] producer to:
             2318          (a) operate at less than the cost of doing:
             2319          (i) the insurance business; or
             2320          (ii) the escrow business; or
             2321          (b) fail to adequately underwrite a title insurance policy.


             2322          (4) (a) All or any of the schedule of rates or schedule of charges, including the schedule
             2323      of escrow charges, may be changed or amended at any time, subject to the limitations in this
             2324      Subsection (4).
             2325          (b) Each change or amendment shall:
             2326          (i) be filed with the commissioner; and
             2327          (ii) state the effective date of the change or amendment, which may not be less than 30
             2328      calendar days after the date of filing.
             2329          (c) Any change or amendment remains in force for a period of at least 90 calendar days
             2330      from its effective date.
             2331          (5) While the schedule of rates and schedule of charges are effective, a copy of each
             2332      shall be:
             2333          (a) retained in each of the offices of:
             2334          (i) the insurance company in this state;
             2335          (ii) its [agents] producers in this state; and
             2336          (b) upon request, furnished to the public.
             2337          (6) Except in accordance with the schedules of rates and charges filed with the
             2338      commissioner, a title insurance company, agency, or [agent] producer may not make or impose
             2339      any premium or other charge:
             2340          (a) in connection with the issuance of a policy of title insurance; or
             2341          (b) for escrow services performed in connection with the issuance of a policy of title
             2342      insurance.
             2343          Section 31. Section 31A-19a-216 is amended to read:
             2344           31A-19a-216. Charging of rates.
             2345          An authorized insurer, licensed insurance [agent] producer, employee, other
             2346      representative of an authorized insurer[, or licensed insurance broker] may not knowingly:
             2347          (1) charge or demand a rate or receive a premium that departs from the rates, rating
             2348      plans, classifications, schedules, rules, and standards in effect on behalf of the insurer; or
             2349          (2) issue or make any policy or contract involving a violation of Subsection (1).
             2350          Section 32. Section 31A-20-110 is amended to read:
             2351           31A-20-110. Underwriting rules for title insurance.
             2352          (1) No title insurance policy may be written until the title insurer or its [agent]


             2353      producer has conducted a reasonable search and examination of the title and has made a
             2354      determination of insurability of title under sound underwriting principles. Evidence of this
             2355      search and reasonable determination shall be retained in the files of the title insurer or its
             2356      [agent] producer for not less than 15 years after the policy has been issued, either in its original
             2357      form or as recorded by any process which can accurately and reliably reproduce the original.
             2358      This section does not apply to a company assuming liability through a contract of reinsurance,
             2359      or to a company acting as coinsurer, if another coinsuring company has complied with this
             2360      section.
             2361          (2) No title insurance policy may be issued except by a title insurance company or by
             2362      [an agent] a producer licensed under Section [ 31A-23-203 ] 31A-23a-105 .
             2363          (3) This section is enforceable only by the commissioner. It does not create, eliminate,
             2364      or modify any private cause of action or remedy.
             2365          Section 33. Section 31A-21-302 is amended to read:
             2366           31A-21-302. Premiums.
             2367          (1) Subject to Section 31A-21-310 and Subsection 31A-21-106 (1), the policy shall
             2368      clearly state the amount of the total premium or shall explain in detail how it is calculated.
             2369      Any fee, charge, or other consideration that is not part of the premium shall be disclosed and
             2370      explained in writing to the insured. The disclosure and explanation shall be clearly stated
             2371      either on the policy, or on the insurer's billing to the insured. The premium need not be
             2372      contained in a certificate issued under a group policy. This Subsection (1) does not preclude
             2373      premium adjustments or changes upon the renewal or endorsement of an existing policy.
             2374      However, the renewal or endorsement notice shall contain or be accompanied by a statement of
             2375      the renewal or endorsement premium or credit.
             2376          (2) Except as provided in Chapter [23] 23a, Insurance Marketing - Licensing
             2377      Producers, Consultants, and Reinsurance Intermediaries, no person may charge or receive any
             2378      consideration for the insurance policy which is not stated in Subsection (1).
             2379          (3) No person may knowingly collect any excessive amount as a premium or any
             2380      amount for insurance which is not in the course of processing. Any amount unknowingly
             2381      collected shall be returned immediately on learning of the mistake. Prepayment of premiums
             2382      pursuant to the policy is not an excessive collection. Insurance is in the course of processing if
             2383      an application has been made for it which is being considered by the insurer, even though it has


             2384      not yet been accepted or rejected.
             2385          Section 34. Section 31A-21-305 is amended to read:
             2386           31A-21-305. Cancellation upon request of a premium finance company.
             2387          (1) As used in this section:
             2388          (a) "Insurance premium finance company" means a person engaged in the business of
             2389      entering into premium finance agreements.
             2390          (b) "Premium finance agreement" means an agreement by which an insured or
             2391      prospective insured promises to pay to an insurance premium finance company the amount
             2392      advanced or to be advanced under the agreement to an insurer or to an insurance [agent or
             2393      broker] producer in payment of premiums on an insurance policy, together with a service
             2394      charge, an interest charge, or both.
             2395          (2) When a premium finance agreement contains a power of attorney or other authority
             2396      enabling the insurance premium finance company to cancel any insurance policy listed in the
             2397      agreement, the following applies:
             2398          (a) Not less than ten days' written notice of the intent of the insurance premium finance
             2399      company to order cancellation of the insurance policy, unless the policyholder's default is cured
             2400      prior to the date stated in the notice, shall be delivered or mailed first-class to the policyholder.
             2401      The insurance [agent or insurance broker] producer indicated on the premium finance
             2402      agreement shall also be given the same notice.
             2403          (b) Pursuant to the power of attorney or other authority, evidence of which is delivered
             2404      to the insurer, the insurance premium finance company may order cancellation on behalf of the
             2405      insured. This cancellation shall be effected by mailing to the insurer a written notice stating
             2406      when the cancellation is effective. The insurance policy shall be cancelled as if the notice of
             2407      cancellation had been given by the insured, but without requiring the return of the insurance
             2408      policy. The insurance premium finance company shall also send a copy of the same notice to
             2409      the insured at his last known address and to the insurance [agent or insurance broker] producer
             2410      indicated on the premium finance agreement.
             2411          (c) Where statutory, rule, or contractual restrictions provide that the insurance policy
             2412      may not be cancelled unless notice is given to a governmental agency, mortgagee, or other third
             2413      party, the insurer shall give the prescribed notice on behalf of itself or the insured to that
             2414      governmental agency, mortgagee, or other third party within a reasonable time after the day it


             2415      receives the notice of cancellation from the premium finance company. When any statutory,
             2416      rule, or contractual restrictions require the continuation of insurance beyond the effective date
             2417      of cancellation specified by the premium finance company, the insurance is limited to the
             2418      coverage required by those restrictions and to the persons those restrictions are designed to
             2419      protect.
             2420          (d) Whenever a financed insurance policy is cancelled, the insurer shall return any
             2421      unearned premiums due under the insurance policy to the insurance premium finance company
             2422      for the account of the insured, and this action by the insurer satisfies the insurer's obligations
             2423      under the insurance policy which relate to the return of unearned premiums. If the crediting of
             2424      return premiums to the account of the insured results in a surplus over the amount due from the
             2425      insured, the premium finance company shall refund that excess to the insured if it exceeds $5.
             2426          (3) No filing of the premium finance agreement or recording of a premium finance
             2427      transaction is necessary to perfect the validity of the agreement as a secured transaction as
             2428      against creditors, subsequent purchasers, pledgees, encumbrancers, successors, or assigns.
             2429          Section 35. Section 31A-21-404 is amended to read:
             2430           31A-21-404. Out-of-state insurers.
             2431          Any insurer extending mass marketed life or accident and health insurance under a
             2432      group or blanket policy issued outside of this state to residents of this state shall, with respect
             2433      to the mass marketed life or accident and health insurance policy:
             2434          (1) comply with Sections [ 31A-23-302 and 31A-23-303 ] 31A-23a-402 and
             2435      31A-23a-403 and Part III of Chapter 26; and
             2436          (2) upon the commissioner's request, deliver to the commissioner a copy of any mass
             2437      marketed life or accident and health insurance policy, certificates issued under these policies,
             2438      and advertising material used in this state in connection with the policy.
             2439          Section 36. Section 31A-23a-101 , which is renumbered from Section 31A-23-101 is
             2440      renumbered and amended to read:
             2441     
CHAPTER 23a. INSURANCE MARKETING - LICENSING PRODUCERS,

             2442     
CONSULTANTS, AND REINSURANCE INTERMEDIARIES

             2443     
Part 1. General Provisions

             2444           [31A-23-101].     31A-23a-101. Purposes.
             2445          The purposes of this chapter include:


             2446          (1) promoting the professional competence of insurance [agents, brokers, and]
             2447      producers, limited line producers, customer service representatives, consultants, managing
             2448      general agents, and reinsurance intermediaries;
             2449          (2) providing maximum freedom of marketing methods for insurance, consistent with
             2450      the interests of the Utah public;
             2451          (3) preserving and encouraging competition at the consumer level;
             2452          (4) regulating insurance marketing practices in conformity with the general purposes of
             2453      this title; [and]
             2454          (5) governing the qualifications and procedures for the licensing of insurance
             2455      producers[.], limited line producers, customer service representatives, consultants, managing
             2456      general agents, and reinsurance intermediaries; and
             2457          (6) promoting uniform licensing requirements between the several states.
             2458          Section 37. Section 31A-23a-102 , which is renumbered from Section 31A-23-102 is
             2459      renumbered and amended to read:
             2460           [31A-23-102].     31A-23a-102. Definitions.
             2461          As used in this chapter:
             2462          [(1) "Actuary" means a person who is a member in good standing of the American
             2463      Academy of Actuaries.]
             2464          [(2) "Agency" means a person other than an individual, and includes a sole
             2465      proprietorship by which a natural person does business under an assumed name.]
             2466          [(3) "Broker" means an insurance broker or any other person, firm, association, or
             2467      corporation that for any compensation, commission, or other thing of value acts or aids in any
             2468      manner in soliciting, negotiating, or procuring the making of any insurance contract on behalf
             2469      of an insured other than itself.]
             2470          [(4)] (1) "Bail bond [agent] producer" means [an individual] a person who:
             2471          (a) is appointed by [an authorized bail bond]:
             2472          (i) a surety insurer [or appointed by a licensed] that issues bail bonds; or
             2473          (ii) a bail bond surety company licensed under Chapter 35;
             2474          (b) is designated to execute or countersign undertakings of bail in connection with
             2475      judicial proceedings; and
             2476          [(b)] (c) [who] receives or is promised money or other things of value for [this service]


             2477      engaging in an act described in Subsection (1)(b).
             2478          [(5) "Captive insurer" means:]
             2479          [(a) an insurance company owned by another organization whose exclusive purpose is
             2480      to insure risks of the parent organization and affiliated companies; or]
             2481          [(b) in the case of groups and associations, an insurance organization owned by the
             2482      insureds whose exclusive purpose is to insure risks of member organizations, group members,
             2483      and their affiliates.]
             2484          [(6) "Controlled insurer" means a licensed insurer that is either directly or indirectly
             2485      controlled by a broker.]
             2486          [(7) "Controlling broker" means a broker who either directly or indirectly controls an
             2487      insurer.]
             2488          [(8) "Controlling person" means any person, firm, association, or corporation that
             2489      directly or indirectly has the power to direct or cause to be directed, the management, control,
             2490      or activities of a reinsurance intermediary.]
             2491          [(9) (a) "Escrow" means:]
             2492          [(i) a real estate settlement or real estate closing conducted by a third party pursuant to
             2493      the requirements of a written agreement between the parties in a real estate transaction; or]
             2494          [(ii) a settlement or closing involving:]
             2495          [(A) a mobile home;]
             2496          [(B) a grazing right;]
             2497          [(C) a water right; or]
             2498          [(D) other personal property authorized by the commissioner.]
             2499          [(b) "Escrow" includes the act of conducting a:]
             2500          [(i) real estate settlement; or]
             2501          [(ii) real estate closing.]
             2502          (2) "Escrow" means a license subline of authority in conjunction with the title
             2503      insurance line of authority that allows a person to conduct escrow as defined in Section
             2504      31A-1-301 .
             2505          [(10)] (3) "Home state" means any state or territory of the United States or the District
             2506      of Columbia in which an insurance producer:
             2507          (a) maintains the insurance producer's principal:


             2508          (i) place of residence; or
             2509          (ii) place of business; and
             2510          (b) is licensed to act as an insurance producer.
             2511          [(11)] (4) "Insurer" is as defined in Section 31A-1-301 , except the following persons or
             2512      similar persons are not insurers for purposes of Part h [ 6 ] 7 h , [Broker] Producer Controlled
             2512a      Insurers:
             2513          (a) all risk retention groups as defined in:
             2514          (i) the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499;
             2515          (ii) the Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.; and
             2516          (iii) Chapter 15, Part II, Risk Retention Groups Act;
             2517          (b) all residual market pools and joint underwriting authorities or associations; and
             2518          (c) all captive insurers.
             2519          [(12)] (5) "License" is defined in Section 31A-1-301 .
             2520          [(13) "Limited license" means a license that:]
             2521          [(a) is issued for a specific product of insurance; and]
             2522          [(b) limits an individual or agency to transact only for that product or insurance.]
             2523          [(14) "Limited line insurance" includes:]
             2524          [(a) bail bond;]
             2525          [(b) limited line credit insurance;]
             2526          [(c) legal expense insurance;]
             2527          [(d) motor club insurance;]
             2528          [(e) rental car-related insurance;]
             2529          [(f) travel insurance; and]
             2530          [(g) any other form of limited insurance that the commissioner determines by rule
             2531      should be designated a form of limited line insurance.]
             2532          [(15) "Limited line credit insurance" includes the following forms of insurance:]
             2533          [(a) credit life;]
             2534          [(b) credit accident and health;]
             2535          [(c) credit property;]
             2536          [(d) credit unemployment;]
             2537          [(e) involuntary unemployment;]
             2538          [(f) mortgage life;]


             2539          [(g) mortgage guaranty;]
             2540          [(h) mortgage accident and health;]
             2541          [(i) guaranteed automobile protection; and]
             2542          [(j) any other form of insurance offered in connection with an extension of credit that:]
             2543          [(i) is limited to partially or wholly extinguishing that credit obligation; and]
             2544          [(ii) the commissioner determines by rule should be designated as a form of limited
             2545      line credit insurance.]
             2546          [(16) "Limited line credit insurance producer" means a person who sells, solicits, or
             2547      negotiates one or more forms of limited line credit insurance coverage to individuals through a
             2548      master, corporate, group, or individual policy.]
             2549          [(17) "Limited lines insurance" includes:]
             2550          [(a) the lines of insurance listed in Subsection (14); or]
             2551          [(b) any other line of insurance that the commissioner considers necessary to recognize
             2552      in the public interest.]
             2553          [(18) "Limited lines producer" means a person authorized to sell, solicit, or negotiate
             2554      limited lines insurance.]
             2555          [(19)] (6) (a) "Managing general agent" means any person, firm, association, or
             2556      corporation that:
             2557          (i) manages all or part of the insurance business of an insurer, including the
             2558      management of a separate division, department, or underwriting office;
             2559          (ii) acts as an agent for the insurer whether it is known as a managing general agent,
             2560      manager, or other similar term;
             2561          (iii) with or without the authority, either separately or together with affiliates, directly
             2562      or indirectly produces and underwrites an amount of gross direct written premium equal to, or
             2563      more than 5% of, the policyholder surplus as reported in the last annual statement of the insurer
             2564      in any one quarter or year; and
             2565          (iv) (A) adjusts or pays claims in excess of an amount determined by the
             2566      commissioner; or
             2567          (B) negotiates reinsurance on behalf of the insurer.
             2568          (b) Notwithstanding Subsection h [ (19) ] 6 h (a), the following persons may not be
             2568a      considered
             2569      as managing general agent for the purposes of this chapter:


             2570          (i) an employee of the insurer;
             2571          (ii) a United States manager of the United States branch of an alien insurer;
             2572          (iii) an underwriting manager that, pursuant to contract:
             2573          (A) manages all the insurance operations of the insurer;
             2574          (B) is under common control with the insurer;
             2575          (C) is subject to Chapter 16, Insurance Holding Companies; and
             2576          (D) is not compensated based on the volume of premiums written; and
             2577          (iv) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal
             2578      insurer or inter-insurance exchange under powers of attorney.
             2579          [(20)] (7) "Negotiate" means the act of conferring directly with or offering advice
             2580      directly to a purchaser or prospective purchaser of a particular contract of insurance concerning
             2581      any of the substantive benefits, terms, or conditions of the contract if the person engaged in that
             2582      act:
             2583          (a) sells insurance; or
             2584          (b) obtains insurance from insurers for purchasers.
             2585          [(21) "Personal lines" means property and casualty insurance coverage sold to
             2586      individuals and families for primarily noncommercial purposes.]
             2587          [(22) "Producer" means a person required to be licensed under the laws of this state to
             2588      sell, solicit, or negotiate insurance.]
             2589          [(23) "Qualified United States financial institution" means an institution that:]
             2590          [(a) is organized or, in the case of a United States office of a foreign banking
             2591      organization licensed, under the laws of the United States or any state;]
             2592          [(b) is regulated, supervised, and examined by United States federal or state authorities
             2593      having regulatory authority over banks and trust companies; and]
             2594          [(c) meets the standards of financial condition and standing that are considered
             2595      necessary and appropriate to regulate the quality of financial institutions whose letters of credit
             2596      will be acceptable to the commissioner as determined by:]
             2597          [(i) the commissioner; or]
             2598          [(ii) the Securities Valuation Office of the National Association of Insurance
             2599      Commissioners.]
             2600          [(24)] (8) "Reinsurance intermediary" means a reinsurance intermediary-broker or a


             2601      reinsurance intermediary-manager as these terms are defined in Subsections [(25)] (9) and
             2602      [(26)] (10).
             2603          [(25)] (9) "Reinsurance intermediary-broker" means a person other than an officer or
             2604      employee of the ceding insurer, firm, association, or corporation who solicits, negotiates, or
             2605      places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority
             2606      or power to bind reinsurance on behalf of the insurer.
             2607          [(26)] (10) (a) "Reinsurance intermediary-manager" means a person, firm, association,
             2608      or corporation who:
             2609          (i) has authority to bind or who manages all or part of the assumed reinsurance
             2610      business of a reinsurer, including the management of a separate division, department, or
             2611      underwriting office; and
             2612          (ii) acts as an agent for the reinsurer whether the person, firm, association, or
             2613      corporation is known as a reinsurance intermediary-manager, manager, or other similar term.
             2614          (b) Notwithstanding Subsection [(26)] (10)(a), the following persons may not be
             2615      considered reinsurance intermediary-managers for the purpose of this chapter with respect to
             2616      the reinsurer:
             2617          (i) an employee of the reinsurer;
             2618          (ii) a United States manager of the United States branch of an alien reinsurer;
             2619          (iii) an underwriting manager that, pursuant to contract:
             2620          (A) manages all the reinsurance operations of the reinsurer;
             2621          (B) is under common control with the reinsurer;
             2622          (C) is subject to Chapter 16, Insurance Holding Companies; and
             2623          (D) is not compensated based on the volume of premiums written; and
             2624          (iv) the manager of a group, association, pool, or organization of insurers that:
             2625          (A) engage in joint underwriting or joint reinsurance; and
             2626          (B) are subject to examination by the insurance commissioner of the state in which the
             2627      manager's principal business office is located.
             2628          [(27) "Reinsurer" means any person, firm, association, or corporation duly licensed in
             2629      this state as an insurer with the authority to assume reinsurance.]
             2630          [(28)] (11) "Search" means a license [category] subline of authority in conjunction with
             2631      the title insurance line of authority that allows a person to issue title insurance commitments or


             2632      policies on behalf of a title insurer.
             2633          [(29)] (12) "Sell" means to exchange a contract of insurance:
             2634          (a) by any means;
             2635          (b) for money or its equivalent; and
             2636          (c) on behalf of an insurance company.
             2637          [(30)] (13) "Solicit" means[:    (a)] attempting to sell [insurance; or]:
             2638          [(b) asking or urging a person to apply:]
             2639          [(i) for] (a) a particular kind of insurance; and
             2640          [(ii)] (b) from a particular insurance company.
             2641          [(31) "Surplus lines broker" means a person licensed under Subsection 31A-23-204 (5)
             2642      to place insurance with unauthorized insurers in accordance with Section 31A-15-103 .]
             2643          [(32)] (14) "Terminate" means:
             2644          (a) the cancellation of the relationship between:
             2645          (i) an insurance producer; and
             2646          (ii) a particular insurer; or
             2647          (b) the termination of the producer's authority to transact insurance on behalf of a
             2648      particular insurance company.
             2649          [(33)] (15) "Title marketing representative" means a person who:
             2650          (a) represents a title insurer in soliciting, requesting, or negotiating the placing of:
             2651          (i) title insurance; or
             2652          (ii) escrow services; and
             2653          (b) does not have a search or escrow license as provided in Section [ 31A-23-204 ]
             2654      31A-23a-106 .
             2655          [(34) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.]
             2656          [(35)] (16) "Uniform application" means the version of the National Association of
             2657      Insurance Commissioner's uniform application for resident and nonresident producer licensing
             2658      at the time the application is filed.
             2659          [(36)] (17) "Uniform business entity application" means the version of the National
             2660      Association of Insurance Commissioner's uniform business entity application for resident and
             2661      nonresident business entities at the time the application is filed.
             2662          Section 38. Section 31A-23a-103 , which is renumbered from Section 31A-23-201 is


             2663      renumbered and amended to read:
             2664           [31A-23-201].     31A-23a-103. Requirement of license.
             2665          (1) (a) Unless exempted from the licensing requirement under Section [ 31A-23-201.5 ]
             2666      31A-23a-201 or [ 31A-23-214 ] 31A-23a-207 , a person may not perform, offer to perform, or
             2667      advertise any service as [an agent, broker, or] a producer, limited line producer, customer
             2668      service representative, consultant, managing general agent, or reinsurance intermediary in Utah,
             2669      without a valid individual or agency license issued under [Section 31A-23-203 ] this chapter.
             2670          (b) A valid license includes at least one license type and one line of authority
             2671      pertaining to that license type.
             2672          [(b)] (c) A person may not utilize the services of another as [an] a producer, limited
             2673      line producer, customer service representative, consultant, managing general agent, [broker,] or
             2674      [consultant] reinsurance intermediary if that person knows or should know that the other does
             2675      not have a license as required by law.
             2676          (2) This part may not be construed to require an insurer to obtain an insurance producer
             2677      license.
             2678          (3) An insurance contract is not invalid as a result of a violation of this section.
             2679          Section 39. Section 31A-23a-104 , which is renumbered from Section 31A-23-202 is
             2680      renumbered and amended to read:
             2681           [31A-23-202].     31A-23a-104. Application for resident or nonresident
             2682      individual license -- Application for resident or nonresident agency license.
             2683          (1) (a) Subject to Subsection (2) [the] an application for [a resident] an individual
             2684      license as [an agent, a broker, or a] a producer, limited line producer, customer service
             2685      representative, consultant, managing general agent, or reinsurance intermediary shall be:
             2686          (i) made to the commissioner on forms and in a manner the commissioner prescribes;
             2687      and
             2688          (ii) accompanied by [an applicable] a license fee that is not refunded if the application
             2689      is denied[; and] or, if incomplete, is never completed by the applicant.
             2690          [(b) the application for a nonresident license as an agent, a broker, or a consultant shall
             2691      be:]
             2692          [(i) made on the uniform application; and]
             2693          [(ii) accompanied by an applicable fee that is not refunded if the application is denied.]


             2694          (b) Nonresident individual producer applicants may use the National Association of
             2695      Insurance Commissioners Uniform Application for Individual Nonresident License.
             2696          (2) An application described in Subsection (1)(a) shall provide:
             2697          (a) information about the applicant's identity;
             2698          (b) the applicant's[: (i)] Social Security number[; or];
             2699          [(ii) federal employer identification number;]
             2700          (c) the applicant's personal history, experience, education, and business record;
             2701          (d) [if the applicant is a natural person,] whether the applicant is 18 years of age or
             2702      older;
             2703          (e) whether the applicant has committed an act that is a ground for denial, suspension,
             2704      or revocation as set forth in Section [ 31A-23-216 ] 31A-23a-105 or 31A-23a-111 ; and
             2705          (f) any other information the commissioner reasonably requires.
             2706          (3) The commissioner may require any documents reasonably necessary to verify the
             2707      information contained in an application.
             2708          (4) The following [are private records under Subsection 63-2-302 (1)(a)(vii), an
             2709      applicant's] information contained in an application filed under this section is a private record
             2710      under Title 63, Chapter 2, Government Records Access and Management Act:
             2711          (a) an applicant's Social Security number; or
             2712          (b) an applicant's federal employer identification number.
             2713          (5) (a) Subject to Subsection (5)(c) an application for an agency license as a producer,
             2714      limited line producer, customer service representative, consultant, managing general agent, or
             2715      reinsurance intermediary shall be:
             2716          (i) made to the commissioner on forms and in a manner the commissioner prescribes;
             2717      and
             2718          (ii) accompanied by a license fee that is not refunded if the application is denied, or, if
             2719      incomplete, is never completed by the applicant.
             2720          (b) Nonresident producer agency applicants may use the National Association of
             2721      Insurance Commissioners Uniform Application for Business Entity Nonresident
             2722      License/Registration.
             2723          (c) An application described in Subsection (5)(a) shall provide:
             2724          (i) information about the applicant's identity;


             2725          (ii) the applicant's federal employer identification number;
             2726          (iii) the designated responsible licensed producer;
             2727          (iv) the identity of all owners, partners, officers, and directors;
             2728          (v) whether the applicant has committed an act that is a ground for denial, suspension,
             2729      or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ; and
             2730          (vi) any other information the commissioner reasonably requires.
             2731          (d) The commissioner may require any documents reasonably necessary to verify the
             2732      information contained in an application.
             2733          (e) An applicant's federal employer identification number is a private record under
             2734      h [ Subsection 63-2-302 (1)(a)(vii) ] TITLE 63, CHAPTER 2, GOVERNMENT RECORDS ACCESS AND
             2734a      MANAGEMENT ACT h .
             2735          Section 40. Section 31A-23a-105 , which is renumbered from Section 31A-23-203 is
             2736      renumbered and amended to read:
             2737           [31A-23-203].     31A-23a-105. General requirements for individual and
             2738      agency license issuance and renewal.
             2739          (1) The commissioner shall issue or renew a license to act as [an agent, broker, or] a
             2740      producer, limited line producer, customer service representative, consultant, managing general
             2741      agent, or reinsurance intermediary to any person who, as to the license type and line of
             2742      authority classification applied for under Section [ 31A-23-204 ] 31A-23a-106 :
             2743          (a) has satisfied the character requirements under Section [ 31A-23-205 ] 31A-23a-107 ;
             2744          (b) has satisfied any applicable continuing education requirements under Section
             2745      [ 31A-23-206 ] 31A-23a-202 ;
             2746          (c) has satisfied any applicable examination requirements under Section [ 31A-23-207 ]
             2747      31A-23a-108 ;
             2748          (d) has satisfied any applicable training period requirements under Section
             2749      [ 31A-23-208 ] 31A-23a-203 ;
             2750          (e) if a nonresident:
             2751          (i) has complied with Section [ 31A-23-209 ] 31A-23a-109 ; and
             2752          (ii) holds an active similar license in that person's state of residence;
             2753          (f) [as to applicants] if an applicant for [licenses to act as] a title insurance [agents]
             2754      producer license, has satisfied the requirements of [Section 31A-23-211 ] Sections
             2755      31A-23a-203 and 31A-23a-204 ; and


             2756          (g) has paid the applicable fees under Section 31A-3-103 .
             2757          (2) (a) This Subsection (2) applies to the following persons:
             2758          (i) an applicant for a pending [producer's] individual or agency producer, limited line
             2759      producer, customer service representative, consultant, managing general agent, or reinsurance
             2760      intermediary license; or
             2761          (ii) a licensed individual or agency producer, limited line producer, customer service
             2762      representative, consultant, managing general agent, or reinsurance intermediary.
             2763          (b) A person described in Subsection (2)(a) shall report to the commissioner:
             2764          (i) any administrative action taken against the person:
             2765          (A) in another jurisdiction; or
             2766          (B) by another regulatory agency in this state; and
             2767          (ii) any criminal prosecution taken against the person in any jurisdiction.
             2768          (c) The report required by Subsection (2)(b) shall:
             2769          (i) be filed:
             2770          (A) at the time the person files the application for [a producer's] an individual or
             2771      agency license; or
             2772          (B) within 30 days of the initiation of an action or prosecution described in Subsection
             2773      (2)(b); and
             2774          (ii) include a copy of the complaint or other relevant legal documents related to the
             2775      action or prosecution described in Subsection (2)(b).
             2776          (3) (a) The department may request:
             2777          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             2778      2, from the Bureau of Criminal Identification; and
             2779          (ii) complete Federal Bureau of Investigation criminal background checks through the
             2780      national criminal history system.
             2781          (b) Information obtained by the department from the review of criminal history records
             2782      received under Subsection (3)(a) shall be used by the department for the purposes of:
             2783          (i) determining if a person satisfies the character requirements under Section
             2784      [ 31A-23-205 ] 31A-23a-107 for issuance or renewal of a license;
             2785          (ii) determining if a person has failed to maintain the character requirements under
             2786      Section [ 31A-23-205 ] 31A-23a-107 ; and


             2787          (iii) preventing persons who violate the federal Violent Crime Control and Law
             2788      Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in the business of
             2789      insurance in the state.
             2790          (c) If the department requests the criminal background information, the department
             2791      shall:
             2792          (i) pay to the Department of Public Safety the costs incurred by the Department of
             2793      Public Safety in providing the department criminal background information under Subsection
             2794      (3)(a)(i);
             2795          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             2796      of Investigation in providing the department criminal background information under
             2797      Subsection (3)(a)(ii); and
             2798          (iii) charge the person applying for a license or for renewal of a license a fee equal to
             2799      the aggregate of Subsections (3)(c)(i) and (ii).
             2800          (4) To become a resident licensee in accordance with Section 31A-23a-104 and this
             2801      section, a person licensed as an insurance producer, limited line producer, customer service
             2802      representative, consultant, managing general agent, or reinsurance intermediary in another state
             2803      who moves to this state shall apply within 90 days of establishing legal residence in this state.
             2804          Section 41. Section 31A-23a-106 , which is renumbered from Section 31A-23-204 is
             2805      renumbered and amended to read:
             2806           [31A-23-204].     31A-23a-106. License types.
             2807          A resident or nonresident license issued under this chapter shall be issued under the
             2808      [classifications] license types described under Subsections (1) through [(6)] (7). [These
             2809      classifications] License types and lines of authority pertaining to each license type describe the
             2810      type of licensee and the lines of business that licensee may sell, solicit, or negotiate. License
             2811      types are intended to describe the matters to be considered under any education, examination,
             2812      and training required of license applicants under Sections [ 31A-23-206 through 31A-23-208 ]
             2813      31A-23a-108 , 31A-23a-202 , and 31A-23a-203 .
             2814          (1) [An agent and broker] A producer license [classification] type includes the
             2815      following lines of authority:
             2816          (a) life insurance, including nonvariable contracts;
             2817          (b) variable contracts, including variable life and annuity, if the producer has the life


             2818      insurance line of authority;
             2819          (c) accident and health insurance, including contracts issued to policyholders under
             2820      Chapter 7 or 8;
             2821          (d) property[/liability] insurance[, which includes:];
             2822          [(i) property insurance;]
             2823          [(ii) liability insurance;]
             2824          [(iii)] (e) casualty insurance, including surety and other bonds; [and]
             2825          [(iv) policies containing any combination of these coverages;]
             2826          [(e)] (f) title insurance under one or more of the following categories:
             2827          (i) search, including authority to act as a title marketing representative;
             2828          (ii) escrow, including authority to act as a title marketing representative;
             2829          (iii) search and escrow, including authority to act as a title marketing representative;
             2830      and
             2831          (iv) title marketing representative only;
             2832          [(f)] (g) workers' compensation insurance; [and]
             2833          [(g)] (h) personal lines insurance; and
             2834          (i) surplus lines, if the producer has the property or casualty or both lines of authority.
             2835          (2) A limited line producer license [classification] type includes the following limited
             2836      lines of authority:
             2837          (a) limited line credit insurance;
             2838          (b) travel insurance;
             2839          (c) motor club insurance;
             2840          (d) car rental related insurance;
             2841          (e) legal expense insurance; and
             2842          (f) bail bond [agent; and] producer.
             2843          [(g) customer service representative.]
             2844          (3) A [consultant] customer service representative license [classification] type includes
             2845      the following lines of authority, if held by the customer service representative's employer
             2846      producer:
             2847          (a) life insurance, including nonvariable contracts;
             2848          [(b) variable contracts;]


             2849          [(c)] (b) accident and health insurance, including contracts issued to policyholders
             2850      under Chapter 7 or 8;
             2851          [(d)] (c) property[/liability] insurance[, which includes:];
             2852          (d) casualty insurance, including surety and other bonds;
             2853          [(i) property insurance;]
             2854          [(ii) liability insurance;]
             2855          [(iii) surety and other bonds; and]
             2856          [(iv) policies containing any combination of these coverages; and]
             2857          (e) workers' compensation insurance[.];
             2858          (f) personal lines insurance; and
             2859          (g) surplus lines, if the employer producer has the property or casualty or both lines of
             2860      authority.
             2861          (4) A consultant license type includes the following lines of authority:
             2862          (a) life insurance, including nonvariable contracts;
             2863          (b) variable contracts, including variable life and annuity, if the consultant has the life
             2864      insurance line of authority;
             2865          (c) accident and health insurance, including contracts issued to policyholders under
             2866      Chapter 7 or 8;
             2867          (d) property insurance;
             2868          (e) casualty insurance, including surety and other bonds;
             2869          (e) workers' compensation insurance; and
             2870          (f) personal lines insurance.
             2871          (5) A managing general agent license type includes the following lines of authority:
             2872          (a) life insurance, including nonvariable contracts;
             2873          (b) variable contracts, including variable life and annuity, if the managing general
             2874      agent has the life insurance line of authority;
             2875          (c) accident and health insurance, including contracts issued to policyholders under
             2876      Chapter 7 or 8;
             2877          (d) property insurance;
             2878          (e) casualty insurance, including surety and other bonds;
             2879          (f) workers' compensation insurance; and


             2880          (g) personal lines insurance.
             2881          (6) A reinsurance intermediary license type includes the following lines of authority:
             2882          (a) life insurance, including nonvariable contracts;
             2883          (b) variable contracts, including variable life and annuity, if the reinsurance
             2884      intermediary has the life insurance line of authority;
             2885          (c) accident and health insurance, including contracts issued to policyholders under
             2886      Chapter 7 or 8;
             2887          (d) property insurance;
             2888          (e) casualty insurance, including surety and other bonds;
             2889          (f) workers' compensation insurance; and
             2890          (g) personal lines insurance.
             2891          [(4)] (7) A holder of licenses under Subsections (1)[(a)], (4), (5), and [(1)(c)] (6) has all
             2892      qualifications necessary to act as a holder of a license under [Subsection] Subsections (2)[(a)]
             2893      and (3).
             2894          [(5) (a) Upon satisfying the additional applicable requirements, a holder of a brokers
             2895      license may obtain a license to act as a surplus lines broker.]
             2896          [(b) A license to act as a surplus lines broker gives the holder the authority to arrange
             2897      insurance contracts with unauthorized insurers under Section 31A-15-103 , but only as to the
             2898      types of insurance under Subsection (1) for which the broker holds a brokers license.]
             2899          [(6)] (8) The commissioner may by rule recognize other [agent, broker,] producer,
             2900      limited [license] line producer, [or] customer service representative, consultant [license
             2901      classifications], managing general agent, or reinsurance intermediary lines of authority as to
             2902      kinds of insurance not listed under Subsections (1)[, (2), and (3)] through (6).
             2903          (9) The variable contracts, including variable life and annuity line of authority requires:
             2904          (a) licensure as a registered agent or broker by the National Association of Securities
             2905      Dealers (NASD); and
             2906          (b) current registration with a securities broker/dealer.
             2907          (10) A surplus lines producer is a producer who has a surplus lines line of authority.
             2908          Section 42. Section 31A-23a-107 , which is renumbered from Section 31A-23-205 is
             2909      renumbered and amended to read:
             2910           [31A-23-205].     31A-23a-107. Character requirements.


             2911          Each applicant for a license under this chapter shall show to the commissioner that:
             2912          (1) the applicant has the intent in good faith, to engage in the type of business that the
             2913      license applied for would permit;
             2914          (2) if a natural person, the applicant is competent and trustworthy; or, if the applicant is
             2915      an agency, all the partners, directors, or principal officers or persons having comparable powers
             2916      are trustworthy, and that it will transact business in such a way that all acts that may only be
             2917      performed by a licensed [agent] producer, limited line producer, customer service
             2918      representative, consultant, managing general agent, [broker, surplus lines broker, or consultant]
             2919      or reinsurance intermediary are performed exclusively by natural persons who are licensed
             2920      under this chapter to transact that type of business and [listed] designated on the agency's
             2921      license [under Subsection 31A-23-212 (1)(d)];
             2922          (3) the applicant intends to comply with Section [ 31A-23-402 ] 31A-23a-502 ; and
             2923          (4) if a natural person, the applicant is at least 18 years of age.
             2924          Section 43. Section 31A-23a-108 , which is renumbered from Section 31A-23-207 is
             2925      renumbered and amended to read:
             2926           [31A-23-207].     31A-23a-108. Examination requirements.
             2927          (1) (a) The commissioner may require applicants for any particular [class of] license
             2928      type under Section [ 31A-23-204 ] 31A-23a-106 to pass [an] a line of authority examination as a
             2929      requirement for a license, except that an examination may not be required of applicants for:
             2930          (i) licenses under [Subsection 31A-23-204 ] Subsections 31A-23a-106 (2) and (3); or
             2931          (ii) other limited line license [classifications] lines of authority recognized by the
             2932      commissioner by rule as provided in Subsection [ 31A-23-204 (6)] 31A-23a-106 (8).
             2933          (b) The examination described in Subsection (1)(a):
             2934          (i) shall reasonably relate to the [specific classes] line of authority for which it is
             2935      prescribed; and
             2936          (ii) may be administered by the commissioner or as otherwise specified by rule.
             2937          (2) The commissioner shall waive the requirement of an examination for a nonresident
             2938      applicant who:
             2939          (a) applies for an insurance producer license in this state;
             2940          (b) has been licensed for the same line of authority in another state; and
             2941          (c) (i) is licensed in the state described in Subsection (2)(b) at the time the applicant


             2942      applies for an insurance producer license in this state; or
             2943          (ii) if the application is received within 90 days of the cancellation of the applicant's
             2944      previous license:
             2945          (A) the prior state certifies that at the time of cancellation, the applicant was in good
             2946      standing in that state; or
             2947          (B) the state's producer database records maintained by the National Association of
             2948      Insurance Commissioners or the National Association of Insurance Commissioner's affiliates or
             2949      subsidiaries, indicates that the producer is or was licensed in good standing for the line of
             2950      authority requested.
             2951          (3) [(a) To become a resident licensee in accordance with Sections 31A-23-202 and
             2952      31A-23-203 , a person licensed as an insurance producer in another state] A nonresident
             2953      producer licensee who moves to this state [shall make application] and applies for a resident
             2954      license within 90 days of establishing legal residence in this state shall be exempt from any line
             2955      of authority examination that the producer was authorized on the producer's nonresident
             2956      producer license, except where the commissioner determines otherwise by rule.
             2957          [(b) A person who becomes a resident licensee under Subsection (3)(a) may not be
             2958      required to meet prelicensing education or examination requirements to obtain any line of
             2959      authority previously held in the prior state unless:]
             2960          [(i) the prior state would require a prior resident of this state to meet the prior state's
             2961      prelicensing education or examination requirements to become a resident licensee; or]
             2962          [(ii) the commissioner imposes the requirements by rule.]
             2963          (4) This section's requirement may only be applied to applicants who are natural
             2964      persons.
             2965          Section 44. Section 31A-23a-109 , which is renumbered from Section 31A-23-209 is
             2966      renumbered and amended to read:
             2967           [31A-23-209].     31A-23a-109. Nonresident jurisdictional agreement.
             2968          (1) (a) If a nonresident license applicant has a valid producer, limited line producer,
             2969      customer service representative, consultant, managing general agent, or reinsurance
             2970      intermediary license from the nonresident license applicant's home state and the conditions of
             2971      Subsection (1)(b) are met, the commissioner shall:
             2972          (i) waive [any] all license requirement for a license under this chapter; and


             2973          (ii) issue the nonresident license applicant a nonresident [producer] license.
             2974          (b) Subsection (1)(a) applies if:
             2975          (i) the nonresident license applicant:
             2976          (A) is licensed as a resident in the nonresident license applicant's home state at the time
             2977      the nonresident license applicant applies for a nonresident producer, limited line producer,
             2978      customer service representative, consultant, managing general agent, or reinsurance
             2979      intermediary license;
             2980          (B) has submitted the proper request for licensure;
             2981          (C) has submitted to the commissioner:
             2982          (I) the application for licensure that the nonresident license applicant submitted to the
             2983      applicant's home state; or
             2984          (II) a completed uniform application; and
             2985          (D) has paid the applicable fees under Section 31A-3-103 ; and
             2986          (ii) the nonresident license applicant's license in the applicant's home state is in good
             2987      standing[; and].
             2988          [(iii) the nonresident license applicant's home state awards nonresident producer
             2989