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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      licenses to residents of this state on the same basis as this state awards licenses to residents of
             2990      that home state.]
             2991          (2) A nonresident applicant applying under Subsection (1) shall in addition to
             2992      complying with all license requirements for a license under this chapter execute, in a form
             2993      acceptable to the commissioner, an agreement to be subject to the jurisdiction of the Utah
             2994      commissioner and courts on any matter related to the applicant's insurance activities in this
             2995      state, on the basis of:
             2996          (a) service of process under Sections 31A-2-309 and 31A-2-310 ; or
             2997          (b) service authorized:
             2998          (i) in the Utah Rules of Civil Procedure; or
             2999          (ii) under Section 78-27-25 .
             3000          (3) The commissioner may verify [the] a producer's licensing status through the
             3001      producer database maintained by:
             3002          (a) the National Association of Insurance Commissioners; or
             3003          (b) an affiliate or subsidiary of the National Association of Insurance Commissioners.


             3004          (4) The commissioner may not assess a greater fee for an insurance license or related
             3005      service to a person not residing in this state solely on the fact that the person does not reside in
             3006      this state.
             3007          Section 45. Section 31A-23a-110 , which is renumbered from Section 31A-23-212 is
             3008      renumbered and amended to read:
             3009           [31A-23-212].     31A-23a-110. Form and contents of license.
             3010          (1) Licenses issued under this chapter shall be in the form the commissioner prescribes
             3011      and shall set forth:
             3012          (a) the name, address, and telephone number of the licensee;
             3013          (b) the license [classifications] types and lines of authority under Section [ 31A-23-204 ]
             3014      31A-23a-106 ;
             3015          (c) the date of license issuance; and
             3016          (d) any other information the commissioner considers necessary.
             3017          (2) [An insurance producer] A licensee under this chapter doing business under any
             3018      other name than the [producer's] licensee's legal name shall notify the commissioner prior to
             3019      using the assumed name in this state.
             3020          [(3) (a) An agency shall be licensed as an agency if the agency acts as:]
             3021          [(i) an agent;]
             3022          [(ii) a broker;]
             3023          [(iii) a surplus lines broker;]
             3024          [(iv) a managing general agent; or]
             3025          [(v) a consultant.]
             3026          [(b) The agency license issued under Subsection (3)(a) shall set forth the names of all
             3027      natural persons licensed under this chapter who are authorized to act in those capacities for the
             3028      agency in this state.]
             3029          [(4) (a) So far as is practicable, the commissioner shall issue a single license to each
             3030      agent, broker, or consultant for a single fee.]
             3031          [(b) For purposes of the fee described in Subsection (4)(a), the less expensive license is
             3032      included within the most expensive license.]
             3033          Section 46. Section 31A-23a-111 , which is renumbered from Section 31A-23-216 is
             3034      renumbered and amended to read:


             3035           [31A-23-216].     31A-23a-111. Termination of license.
             3036          (1) A license type issued under this chapter remains in force until:
             3037          (a) revoked[,] or suspended[, or limited under Subsection (2);(b) lapsed] under
             3038      Subsection [(3)] (4);
             3039          [(c)] (b) surrendered to and accepted by the commissioner in lieu of administrative
             3040      action; [or]
             3041          [(d)] (c) the licensee dies or is adjudicated incompetent as defined under:
             3042          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             3043          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             3044      Minors[.];
             3045          (d) lapsed under Section 31A-23a-113 ; or
             3046          (e) voluntarily surrendered.
             3047          (2) Lapsed or voluntarily surrendered licenses may be reinstated during the current
             3048      license period.
             3049          (3) A line of authority issued under this chapter remains in force until:
             3050          (a) the qualifications pertaining to a line of authority are no longer met by the licensee;
             3051      or
             3052          (b) the supporting license type is revoked or suspended under Subsection (4) or
             3053      voluntarily surrendered.
             3054          [(2)] (4) (a) If the commissioner makes a finding under Subsection [(2)] (4)(b), after an
             3055      adjudicative proceeding under Title 63, Chapter 46b, Administrative Procedures Act, the
             3056      commissioner may:
             3057          (i) revoke a license [of an agent, broker, surplus lines broker, or consultant] line of
             3058      authority;
             3059          (ii) suspend for a specified period of 12 months or less a license [of an agent, broker,
             3060      surplus lines broker, or consultant] or line of authority; or
             3061          (iii) limit in whole or in part [the] a license [of any agent, broker, surplus lines broker,
             3062      or consultant] or line of authority.
             3063          (b) The commissioner may take an action described in Subsection [(2)] (4)(a) if the
             3064      commissioner finds that the licensee:
             3065          (i) is unqualified for a license or line of authority under [Section 31A-23-203 ] Sections


             3066      31A-23a-104 and 31A-23a-105 ;
             3067          (ii) has violated:
             3068          (A) an insurance statute;
             3069          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             3070          (C) an order that is valid under Subsection 31A-2-201 (4);
             3071          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
             3072      delinquency proceedings in any state;
             3073          (iv) fails to pay any final judgment rendered against the person in this state within 60
             3074      days after the day the judgment became final;
             3075          (v) fails to meet the same good faith obligations in claims settlement that is required of
             3076      admitted insurers;
             3077          (vi) is affiliated with and under the same general management or interlocking
             3078      directorate or ownership as another insurance producer that transacts business in this state
             3079      without a license;
             3080          (vii) refuses to be examined or to produce its accounts, records, and files for
             3081      examination;
             3082          (viii) has an officer who refuses to:
             3083          (A) give information with respect to the administrator's affairs; or
             3084          (B) perform any other legal obligation as to an examination;
             3085          (ix) provided information in the license application that is:
             3086          (A) incorrect;
             3087          (B) misleading;
             3088          (C) incomplete; or
             3089          (D) materially untrue;
             3090          (x) has violated any insurance law, valid rule, or valid order of another state's insurance
             3091      department;
             3092          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             3093          (xii) has improperly withheld, misappropriated, or converted any monies or properties
             3094      received in the course of doing insurance business;
             3095          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             3096          (A) insurance contract; or


             3097          (B) application for insurance;
             3098          (xiv) has been convicted of a felony;
             3099          (xv) has admitted or been found to have committed any insurance unfair trade practice
             3100      or fraud;
             3101          (xvi) in the conduct of business in this state or elsewhere has:
             3102          (A) used fraudulent, coercive, or dishonest practices; or
             3103          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             3104          (xvii) has had an insurance license, or its equivalent, denied, suspended, or revoked in
             3105      any other state, province, district, or territory;
             3106          (xviii) has forged another's name to:
             3107          (A) an application for insurance; or
             3108          (B) any document related to an insurance transaction;
             3109          (xix) has improperly used notes or any other reference material to complete an
             3110      examination for an insurance license;
             3111          (xx) has knowingly accepted insurance business from an individual who is not
             3112      licensed;
             3113          (xxi) has failed to comply with an administrative or court order imposing a child
             3114      support obligation;
             3115          (xxii) has failed to:
             3116          (A) pay state income tax; or
             3117          (B) comply with any administrative or court order directing payment of state income
             3118      tax;
             3119          (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
             3120      Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034; or
             3121          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             3122      the legitimate interests of customers and the public.
             3123          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             3124      and any natural person named on the license are considered to be the holders of the license.
             3125          (d) If a natural person named on the agency license commits any act or fails to perform
             3126      any duty that is a ground for suspending, revoking, or limiting the natural person's license, the
             3127      commissioner may suspend, revoke, or limit the license of:


             3128          (i) the natural person;
             3129          (ii) the agency, if the agency:
             3130          (A) is reckless or negligent in its supervision of the natural person; or
             3131          (B) knowingly participated in the act or failure to act that is the ground for suspending,
             3132      revoking, or limiting the license; or
             3133          (iii) (A) the natural person; and
             3134          (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
             3135          [(3) (a) Any license issued under this chapter shall lapse if the licensee fails:]
             3136          [(i) to pay when due a fee under Section 31A-3-103 ;]
             3137          [(ii) to complete continuing education requirements under Section 31A-23-206 before
             3138      submitting the license renewal application;]
             3139          [(iii) to submit a completed renewal application as required by Section 31A-23-202 ;
             3140      or]
             3141          [(iv) to submit additional documentation required to complete the licensing process as
             3142      related to a specific license type.]
             3143          [(b) A licensee whose license lapses due to military service or some other extenuating
             3144      circumstances such as long-term medical disability may request:]
             3145          [(i) reinstatement of the license; and]
             3146          [(ii) waiver of any of the following imposed for failure to comply with renewal
             3147      procedures:]
             3148          [(A) an examination requirement;]
             3149          [(B) a fine; or]
             3150          [(C) other sanction imposed for failure to comply with renewal procedures.]
             3151          [(c) The commissioner shall by rule prescribe the license renewal and reinstatement
             3152      procedures, in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.]
             3153          [(4)] (5) A licensee under this chapter whose license is revoked, suspended, [revoked,
             3154      or] limited, surrendered in lieu of administrative action, lapsed, [but] or voluntarily
             3155      surrendered, who continues to act as a licensee or violates the terms of the license limitation, is
             3156      subject to the penalties for acting as a licensee without a license.
             3157          [(5)] (6) [Any person licensed in this state] A licensee under this chapter shall
             3158      immediately report to the commissioner:


             3159          (a) a revocation, suspension, or [revocation] limitation of [that] the person's license in
             3160      any other state, District of Columbia, or territory of the United States;
             3161          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             3162      District of Columbia, or territory of the United States; and
             3163          (c) a judgment or injunction entered against that person on the basis of conduct
             3164      involving fraud, deceit, misrepresentation, or violation of an insurance law or rule.
             3165          [(6)] (7) (a) An order revoking a license under Subsection [(2)] (4) may specify a time,
             3166      not to exceed five years, within which the former licensee may not apply for a new license.
             3167          (b) If no time is specified in an order revoking a license under Subsection [(2)] (4), the
             3168      former licensee may not apply for a new license for five years without express approval by the
             3169      commissioner.
             3170          [(7) (a) Any person whose license is suspended or revoked under Subsection (2) shall,
             3171      when the suspension ends or a new license is issued, pay all fees that would have been payable
             3172      if the license had not been suspended or revoked, unless the commissioner by order waives the
             3173      payment of the interim fees.]
             3174          [(b) If a new license is issued more than three years after the revocation of a similar
             3175      license, this Subsection (7) applies only to the fees that would have accrued during the three
             3176      years immediately following the revocation.]
             3177          (8) The division shall promptly withhold, suspend, restrict, or reinstate the use of a
             3178      license issued under this part if so ordered by a court.
             3179          Section 47. Section 31A-23a-112 , which is renumbered from Section 31A-23-217 is
             3180      renumbered and amended to read:
             3181           [31A-23-217].     31A-23a-112. Probation.
             3182          (1) The commissioner may place a licensee on probation for a period not to exceed 24
             3183      months as follows:
             3184          [(1) In] (a) After an adjudicative proceeding under Title 63, Chapter 46b,
             3185      Administrative Procedures Act, for any circumstances that would justify a suspension under
             3186      Section [ 31A-23-216 , the] 31A-23a-111 ; or
             3187          (b) at the issuance of a new license:
             3188          (i) with an admitted violation under 18 U.S.C. Sections 1033 and 1034; or
             3189          (ii) with a response to background information questions on any new license


             3190      application indicating that:
             3191          (A) the person has been convicted of a crime h , AS DEFINED BY RULE MADE IN
             3191a      ACCORDANCE WITH TITLE 63, CHAPTER 46a, UTAH ADMINISTRATIVE RULEMAKING ACT h ;
             3192          (B) the person is currently charged with a crime h , AS DEFINED BY RULE MADE IN
             3192a      ACCORDANCE WITH TITLE 63, CHAPTER 46a, UTAH ADMINISTRATIVE RULEMAKING ACT h ,
             3192b      regardless of whether adjudication
             3193      was withheld;
             3194          (C) the person has been involved in an administrative proceeding regarding any
             3195      professional or occupational license; or
             3196          (D) any business in which the person is or was an owner, partner, officer, or director
             3197      has been involved in an administrative proceeding regarding any professional or occupational
             3198      license.
             3199          (2) The commissioner may [instead, after a formal adjudicative proceeding,] put [the] a
             3200      new licensee on probation for a specified period no longer than [24] 12 months if the licensee
             3201      has admitted to violations under 18 U.S.C. Sections 1033 and 1034.
             3202          [(2)] (3) The probation order shall state the conditions for retention of the license,
             3203      which shall be reasonable.
             3204          [(3)] (4) Any violation of the probation is grounds for revocation pursuant to any
             3205      proceeding authorized under Title 63, Chapter 46b, Administrative Procedures Act.
             3206          Section 48. Section 31A-23a-113 is enacted to read:
             3207          31A-23a-113. License lapse and voluntary surrender.
             3208          (1) (a) A license issued under this chapter shall lapse if the licensee fails:
             3209          (i) to pay when due a fee under Section 31A-3-103 ;
             3210          (ii) to complete continuing education requirements under Section 31A-23a-202 before
             3211      submitting the license renewal application;
             3212          (iii) to submit a completed renewal application as required by Section 31A-23a-104 or
             3213      h [ 31A-23a-301 ] 31A-23a-302 h ; or
             3214          (iv) to submit additional documentation required to complete the licensing process as
             3215      related to a specific license type or line of authority.
             3216          (b) A licensee whose license lapses due to military service or some other extenuating
             3217      circumstances such as long-term medical disability may request:
             3218          (i) reinstatement of the license; and


             3219          (ii) waiver of any of the following imposed for failure to comply with renewal
             3220      procedures:


             3221          (A) an examination requirement;
             3222          (B) reinstatement fees; or
             3223          (C) other sanction imposed for failure to comply with renewal procedures.
             3224          (2) If a license type or line of authority issued under this chapter is voluntarily
             3225      surrendered, the license or line of authority may be reinstated during the current license period.
             3226          (3) The commissioner shall by rule prescribe the license renewal and reinstatement
             3227      procedures, in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
             3228          Section 49. Section 31A-23a-114 , which is renumbered from Section 31A-23-218 is
             3229      renumbered and amended to read:
             3230           [31A-23-218].     31A-23a-114. Temporary individual or agency license --
             3231      Trustee for terminated licensee's business.
             3232          (1) (a) The commissioner may issue a temporary [insurance producer] individual or
             3233      agency license:
             3234          (i) to a person listed in Subsection (1)(b):
             3235          (A) if the commissioner considers that the temporary license is necessary:
             3236          (I) for the servicing of an insurance business in the public interest; and
             3237          (II) to provide continued service to the insureds who procured insurance in a
             3238      circumstance described in Subsection (1)(b);
             3239          (B) for a period not to exceed 180 days; and
             3240          (C) without requiring an examination; or
             3241          (ii) in any other circumstance:
             3242          (A) if the commissioner considers the public interest will best be served by issuing the
             3243      temporary license;
             3244          (B) for a period not to exceed 180 days; and
             3245          (C) without requiring an examination.
             3246          (b) The commissioner may issue a temporary [insurance producer] individual or
             3247      agency license in accordance with Subsection (1)(a) to:
             3248          (i) the surviving spouse or court-appointed personal representative of a [licensed
             3249      insurance producer] licensee who dies or becomes mentally or physically disabled to allow
             3250      adequate time for:
             3251          (A) the sale of the insurance business owned by the [producer] licensee;


             3252          (B) recovery or return of the [producer] licensee to the business; or
             3253          (C) the training and licensing of new personnel to operate the [producer's] licensee's
             3254      business;
             3255          (ii) to a member or employee of a business entity licensed as an [insurance producer]
             3256      agency upon the death or disability of an individual designated in:
             3257          (A) the business entity application; or
             3258          (B) the license; or
             3259          (iii) the designee of a licensed [insurance producer] agency entering active service in
             3260      the armed forces of the United States of America.
             3261          (2) If a person's license is terminated under Section [ 31A-23-216 ] 31A-23a-111 or
             3262      31A-23a-113 , the commissioner may appoint a trustee to provide in the public interest
             3263      continuing service to the insureds who procured insurance through the person whose license is
             3264      terminated:
             3265          (a) at the request of the person whose license is terminated; or
             3266          (b) upon the commissioner's own initiative.
             3267          (3) This section does not apply if the deceased or disabled [agent or broker] licensee
             3268      does not or did not own any ownership interest in the accounts and associated expiration lists
             3269      that were previously serviced by the [agent or broker] licensee.
             3270          (4) (a) A person issued a temporary license under Subsection (1) receives the license
             3271      and shall perform the duties under the license subject to the commissioner's authority to:
             3272          (i) require a temporary licensee to have a suitable sponsor who:
             3273          (A) is a [licensed producer] licensee; and
             3274          (B) assumes responsibility for all acts of the temporary licensee; or
             3275          (ii) impose other requirements that are:
             3276          (A) designed to protect the insureds and the public; and
             3277          (B) similar to the condition described in Subsection (4)(a)(i).
             3278          (b) A trustee appointed under Subsection (2) shall be appointed and perform the
             3279      trustee's duties subject to the terms and conditions described in Subsections (4)(b)(i) through
             3280      (vi).
             3281          (i) (A) A trustee appointed under Subsection (2) shall be licensed under this chapter to
             3282      perform the services required by the trustor's clients.


             3283          (B) When possible, the commissioner shall appoint a trustee who is no longer actively
             3284      engaged on the trustee's own behalf in business as [an agent or broker] a licensee.
             3285          (C) The commissioner shall only select a person to act as trustee who is trustworthy
             3286      and competent to perform the necessary services.
             3287          (ii) (A) If the deceased, disabled, or unlicensed person for whom the trustee is acting
             3288      was [an agent] a producer, the insurers through which the former [agent's] producer's business
             3289      was written shall cooperate with the trustee in allowing the trustee to service the policies
             3290      written through the insurer.
             3291          (B) The trustee shall abide by the terms of the agency agreement between the former
             3292      [agent] producer and the issuing insurer, except that terms in those agreements terminating the
             3293      agreement upon the death, disability, or license termination of the former [agent] producer do
             3294      not bar the trustee from continuing to act under the agreement.
             3295          (iii) (A) The commissioner shall set the trustee's compensation, which:
             3296          (I) may be stated in terms of a percentage of commissions; and
             3297          (II) shall be equitable.
             3298          (B) The compensation shall be paid exclusively from:
             3299          (I) the commissions generated by the former [agent or broker's] licensee's insurance
             3300      accounts serviced by the trustee; and
             3301          (II) other funds the former [agent or broker] licensee or the [agent's or broker's]
             3302      licensee's successor in interest agree to pay.
             3303          (C) The trustee has no special priority to commissions over the former [agent or
             3304      broker's] licensee's creditors.
             3305          (iv) (A) The commissioner or the state may not be held liable for errors or omissions
             3306      of:
             3307          (I) the former [agent or broker] licensee; or
             3308          (II) the trustee.
             3309          (B) The trustee may not be held liable for errors and omissions that were caused in any
             3310      material way by the negligence of the former [agent or broker] licensee.
             3311          (C) The trustee may be held liable for errors and omissions which arise solely from the
             3312      trustee's negligence.
             3313          (D) The trustee's compensation level shall be sufficient to allow the trustee to purchase


             3314      errors and omissions coverage, if that coverage is not provided the trustee by:
             3315          (I) the former [agent or broker] licensee; or
             3316          (II) the [agent's or broker's] licensee's successor in interest.
             3317          (v) (A) It is a breach of the trustee's fiduciary duty to capture the accounts of trustor's
             3318      clients, either directly or indirectly.
             3319          (B) The trustee may not purchase the accounts or expiration lists of the former [agent
             3320      or broker] licensee, unless the commissioner expressly ratifies the terms of the sale.
             3321          (C) The commissioner may adopt rules that:
             3322          (I) further define the trustee's fiduciary duties; and
             3323          (II) explain how the trustee is to carry out the trustee's responsibilities.
             3324          (vi) (A) The trust may be terminated by:
             3325          (I) the commissioner; or
             3326          (II) the person that requested the trust be established.
             3327          (B) The trust is terminated by written notice being delivered to:
             3328          (I) the trustee; and
             3329          (II) the commissioner.
             3330          (5) (a) The commissioner may by order:
             3331          (i) limit the authority of any temporary licensee or trustee in any way the commissioner
             3332      considers necessary to protect insureds and the public; and
             3333          (ii) revoke a temporary license or trustee's appointment if the commissioner finds that
             3334      the insureds or the public are endangered.
             3335          (b) A temporary license or trustee's appointment may not continue after the owner or
             3336      personal representative disposes of the business.
             3337          Section 50. Section 31A-23a-115 is enacted to read:
             3338          31A-23a-115. Appointment and listing of individual and agency insurance
             3339      producer, limited line producer, or managing general agent.
             3340          (1) (a) An insurer shall appoint a natural person or agency that has an insurance
             3341      producer, limited line producer, or managing general agent license to act as an insurance
             3342      producer, limited line producer, or managing general agent on its behalf prior to any producer,
             3343      limited line producer, or managing general agent doing business for the insurer in this state.
             3344          (b) All insurers shall report to the commissioner, at intervals and in the form the


             3345      commissioner establishes by rule, all new appointments and all terminations of appointments.
             3346          (c) All insurers shall submit to the commissioner on or before July 1 of each
             3347      odd-numbered year a list of all appointments then in force in this state.
             3348          (2) (a) An insurer shall report to the commissioner the cause of termination of an
             3349      appointment. The information provided to the commissioner is a private record under Title 63,
             3350      Chapter 2, Government Records Access and Management Act.
             3351          (b) An insurer is immune from civil action, civil penalty, or damages if the insurer
             3352      complies in good faith with this Subsection (2) in reporting to the commissioner the cause of
             3353      termination of an appointment.
             3354          (c) Notwithstanding any other provision in this section, an insurer is not immune from
             3355      any action or resulting penalty imposed on the reporting insurer as a result of proceedings
             3356      brought by or on behalf of the department if the action is based on evidence other than the
             3357      report submitted in compliance with this Subsection (2).
             3358          (3) If an insurer appoints an agency, the insurer need not appoint, report, or pay
             3359      appointment reporting fees for natural persons designated on the agency's license under Section
             3360      31A-23a-302 .
             3361          (4) (a) Each insurer shall maintain with the department a list of natural persons with
             3362      authority to appoint and remove the company's producers, limited line producers, or managing
             3363      general agents in this state on forms:
             3364          (i) supplied by the department; and
             3365          (ii) signed by any officer of the insurer.
             3366          (b) The insurer shall submit the list required under Subsection (4)(a) to the
             3367      commissioner pursuant to Subsection (1).
             3368          (5) If an insurer lists a licensee in reports submitted under Subsection (2), there is a
             3369      rebuttable presumption that in placing a risk with the insurer the appointed licensee or any of
             3370      the licensee's licensed employees acted on behalf of the insurer.
             3371          Section 51. Section 31A-23a-116 , which is renumbered from Section 31A-23-405 is
             3372      renumbered and amended to read:
             3373           [31A-23-405].     31A-23a-116. Services performed for unauthorized insurers.
             3374          (1) A person licensed under Chapter [23] 23a, Insurance Marketing - Licensing
             3375      Producers, Consultants, and Reinsurance Intermediaries, may not perform any act that assists


             3376      any person not authorized as an insurer to act as an insurer.
             3377          (2) It is a violation of this section to assist any person purporting to be exempt from
             3378      state insurance regulation under Section 514 of the Employee Retirement Income Security Act
             3379      of 1974, unless that person has rebutted the presumption of jurisdiction under Section
             3380      31A-1-105 .
             3381          (3) It is not a violation of this section:
             3382          (a) to assist persons engaged in self insurance as defined under Section 31A-1-301 ; or
             3383          (b) for a surplus lines [broker] producer to engage in the placement of insurance under
             3384      Section 31A-15-103 .
             3385          Section 52. Section 31A-23a-201 , which is renumbered from Section 31A-23-201.5 is
             3386      renumbered and amended to read:
             3387     
Part 2. Producers and Consultants

             3388           [31A-23-201.5].     31A-23a-201. Exceptions to producer licensing.
             3389          (1) The commissioner may not require a license as an insurance producer of:
             3390          (a) an officer, director, or employee of an insurer or of an insurance producer if:
             3391          (i) the officer, director, or employee does not receive any commission on a policy
             3392      written or sold to insure risks residing, located, or to be performed in this state; and
             3393          (ii) (A) the officer's, director's, or employee's activities are:
             3394          (I) executive, administrative, managerial, clerical, or a combination of these activities;
             3395      and
             3396          (II) only indirectly related to the sale, solicitation, or negotiation of insurance;
             3397          (B) the officer's, director's, or employee's function relates to:
             3398          (I) underwriting;
             3399          (II) loss control;
             3400          (III) inspection; or
             3401          (IV) the processing, adjusting, investigating or settling of a claim on a contract of
             3402      insurance; or
             3403          (C) (I) the officer, director, or employee is acting in the capacity of a special agent or
             3404      agency supervisor assisting an insurance producer;
             3405          (II) the officer's, director's, or employee's activities are limited to providing technical
             3406      advice and assistance to a licensed insurance producer; and


             3407          (III) the officer's, director's, or employee's activities do not include the sale, solicitation,
             3408      or negotiation of insurance;
             3409          (b) a person who:
             3410          (i) is paid no commission for the services described in Subsection (1)(b)(ii); and
             3411          (ii) secures and furnishes information for the purpose of:
             3412          (A) group life insurance;
             3413          (B) group property and casualty insurance;
             3414          (C) group annuities;
             3415          (D) group or blanket accident and health insurance;
             3416          (E) enrolling individuals under plans;
             3417          (F) issuing certificates under plans; or
             3418          (G) otherwise assisting in administering plans;
             3419          (c) a person who:
             3420          (i) is paid no commission for the services described in Subsection (1)(c)(ii); and
             3421          (ii) performs administrative services related to mass marketed property and casualty
             3422      insurance;
             3423          (d) (i) any of the following if the conditions of Subsection (1)(d)(ii) are met:
             3424          (A) an employer or association; or
             3425          (B) an officer, director, employee, or trustee of an employee trust plan;
             3426          (ii) a person listed in Subsection (1)(d)(i):
             3427          (A) to the extent that the employer, officer, employee, director, or trustee is engaged in
             3428      the administration or operation of a program of employee benefits for:
             3429          (I) the employer's or association's own employees; or
             3430          (II) the employees of a subsidiary or affiliate of an employer or association;
             3431          (B) the program involves the use of insurance issued by an insurer; and
             3432          (C) the employer, association, officer, director, employee, or trustee is not in any
             3433      manner compensated, directly or indirectly, by the company issuing the contract;
             3434          (e) an employee of an insurer or organization employed by an insurer who:
             3435          (i) is engaging in:
             3436          (A) the inspection, rating, or classification of risks; or
             3437          (B) the supervision of the training of insurance producers; and


             3438          (ii) is not individually engaged in the sale, solicitation, or negotiation of insurance;
             3439          (f) a person whose activities in this state are limited to advertising:
             3440          (i) without the intent to solicit insurance in this state;
             3441          (ii) through communications in mass media including:
             3442          (A) a printed publication; or
             3443          (B) a form of electronic mass media;
             3444          (iii) that is distributed to residents outside of the state; and
             3445          (iv) if the person does not sell, solicit, or negotiate insurance that would insure risks
             3446      residing, located, or to be performed in this state;
             3447          (g) a person who:
             3448          (i) is not a resident of this state;
             3449          (ii) sells, solicits, or negotiates a contract of insurance:
             3450          (A) for commercial property and casualty risks to an insured with risks located in more
             3451      than one state insured under that contract; and
             3452          (B) insures risks located in a state in which the person is licensed as provided in
             3453      Subsection (1)(g)(iii); and
             3454          (iii) is licensed as an insurance producer to sell, solicit, or negotiate that insurance in
             3455      the state where the insured maintains its principal place of business; or
             3456          (h) if the employee does not sell, solicit, or receive a commission for a contract of
             3457      insurance, a salaried full-time employee who counsels or advises the employee's employer
             3458      relating to the insurance interests of:
             3459          (i) the employer; or
             3460          (ii) a subsidiary or business affiliate of the employer.
             3461          (2) The commissioner may by rule exempt a class of persons from the license
             3462      requirement of Subsection [ 31A-23-201 ] 31A-23a-103 (1) if:
             3463          (a) the functions performed by the class of persons does not require:
             3464          (i) special competence;
             3465          (ii) special trustworthiness; or
             3466          (iii) regulatory surveillance made possible by licensing; or
             3467          (b) other existing safeguards make regulation unnecessary.
             3468          Section 53. Section 31A-23a-202 , which is renumbered from Section 31A-23-206 is


             3469      renumbered and amended to read:
             3470           [31A-23-206].     31A-23a-202. Continuing education requirements --
             3471      Regulatory authority.
             3472          (1) The commissioner shall by rule prescribe the continuing education requirements for
             3473      [each class of agent's license under Subsection 31A-23-204 (1), except that the commissioner
             3474      may not impose a continuing education requirement on a holder of a license under:] a producer
             3475      and a consultant.
             3476          [(a) Subsection 31A-23-204 (2); or]
             3477          [(b) a license classification other than under Subsection 31A-23-204 (2) that is
             3478      recognized by the commissioner by rule as provided in Subsection 31A-23-204 (6).]
             3479          (2) (a) The commissioner may not state a continuing education requirement in terms of
             3480      formal education.
             3481          (b) The commissioner may state a continuing education requirement in terms of
             3482      classroom hours, or their equivalent, of insurance-related instruction received.
             3483          (c) Insurance-related formal education may be a substitute, in whole or in part, for
             3484      classroom hours, or their equivalent, required under Subsection (2)(b).
             3485          (3) (a) The commissioner shall impose continuing education requirements in
             3486      accordance with a two-year licensing period in which the licensee meets the requirements of
             3487      this Subsection (3).
             3488          [(b) Except as provided in Subsection (3)(c), for a two-year licensing period described
             3489      in Subsection (3)(a) the commissioner shall require that the licensee for each line of authority
             3490      held by the licensee:]
             3491          [(i) receive five hours of continuing education; or]
             3492          [(ii) pass a line of authority continuing education examination.]
             3493          [(c) Notwithstanding Subsection (3)(b):]
             3494          [(i) the commissioner may not require continuing education for more than four lines of
             3495      authority held by the licensee;]
             3496          [(ii) the commissioner shall require:]
             3497          [(A) a minimum of:]
             3498          [(I) 12 hours of continuing education;]
             3499          [(II) passage of two line of authority continuing education examinations; or]


             3500          [(III) a combination of Subsections (3)(c)(ii)(A)(I) and (II);]
             3501          [(B) that the minimum continuing education requirement of Subsection (3)(c)(ii)(A)
             3502      include:]
             3503          [(I) at least five hours or one line of authority continuing education examination for
             3504      each line of authority held by the licensee not to exceed four lines of authority held by the
             3505      licensee; and]
             3506          [(II) three hours of ethics training.]
             3507          [(d) (i) If a licensee completes the licensee's continuing education requirement without
             3508      taking a line of authority continuing education examination, the licensee shall complete at least
             3509      1/2 of the required hours through classroom hours of insurance-related instruction.]
             3510          [(ii) The hours not completed through classroom hours in accordance with Subsection
             3511      (3)(d)(i) may be obtained through:]
             3512          [(A) home study;]
             3513          [(B) video tape;]
             3514          [(C) experience credit; or]
             3515          [(D) other method provided by rule.]
             3516          [(e) (i) A licensee may obtain continuing education hours at any time during the
             3517      two-year licensing period.]
             3518          [(ii) The licensee may not take a line of authority continuing education examination
             3519      more than 90 calendar days before the date on which the licensee's license is renewed.]
             3520          [(f) The commissioner shall make rules for the content and procedures for line of
             3521      authority continuing education examinations.]
             3522          [(g) (i) Beginning May 3, 1999, a licensee is exempt from continuing education
             3523      requirements under this section if:]
             3524          [(A) as of April 1, 1990, the licensee has completed 20 years of licensure in good
             3525      standing;]
             3526          [(B) the licensee requests an exemption from the department; and]
             3527          [(C) the department approves the exemption.]
             3528          [(ii) If the department approves the exemption under Subsection (3)(g)(i), the licensee
             3529      is not required to apply again for the exemption.]
             3530          [(h) A licensee with a variable contract line of authority is exempt from the


             3531      requirement for continuing education for that line of authority so long as the:]
             3532          [(i) National Association of Securities Dealers requires continuing education for
             3533      licensees having a securities license; and]
             3534          [(ii) licensee complies with the National Association of Securities Dealers' continuing
             3535      education requirements for securities licensees.]
             3536          [(i) The commissioner shall, by rule:]
             3537          [(i) publish a list of insurance professional designations whose continuing education
             3538      requirements can be used to meet the requirements for continuing education under Subsection
             3539      (3)(c); and]
             3540          [(ii) authorize professional agent associations to:]
             3541          [(A) offer qualified programs for all classes of licenses on a geographically accessible
             3542      basis; and]
             3543          [(B) collect reasonable fees for funding and administration of the continuing education
             3544      program, subject to the review and approval of the commissioner.]
             3545          [(j) (i) The fees permitted under Subsection (3)(i)(ii) that are charged to fund and
             3546      administer the program shall reasonably relate to the costs of administering the program.]
             3547          [(ii) Nothing in this section prohibits a provider of continuing education programs or
             3548      courses from charging fees for attendance at courses offered for continuing education credit.]
             3549          [(iii) The fees permitted under Subsection (3)(i)(ii) that are charged for attendance at a
             3550      professional agent association program may be less for an association member, based on the
             3551      member's affiliation expense, but shall preserve the right of a nonmember to attend without
             3552      affiliation.]
             3553          (b) The continuing education requirement shall require:
             3554          (i) a minimum of 12 hours of continuing education;
             3555          (ii) a maximum of 23 hours of continuing education;
             3556          (iii) three hours of ethics continuing education; and
             3557          (iv) for each line of authority authorized for a producer or consultant, not to exceed
             3558      four lines of authority:
             3559          (A) five hours of continuing education;
             3560          (B) passing a line of authority examination; or
             3561          (C) a combination of Subsections (3)(b)(iv)(A) and (B).


             3562          (c) (i) If a licensee completes the licensee's continuing education requirement without
             3563      taking a line of authority continuing education examination, the licensee shall complete at least
             3564      half of the required hours through classroom hours of insurance-related instruction.
             3565          (ii) The hours not completed through classroom hours in accordance with Subsection
             3566      (2)(b) may be obtained through:
             3567          (A) home study;
             3568          (B) video recording;
             3569          (C) experience credit; or
             3570          (D) other methods provided by rule.
             3571          (d) (i) A licensee may obtain continuing education hours at any time during the
             3572      two-year licensing period.
             3573          (ii) The licensee may not take a line of authority continuing education examination
             3574      more than 90 calendar days before the date on which the licensee's license is renewed.
             3575          (e) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             3576      commissioner shall adopt rules for the content and procedures for line of authority continuing
             3577      education examinations.
             3578          (f) (i) Beginning May 3, 1999, a licensee is exempt from continuing education
             3579      requirements under this section if:
             3580          (A) as of April 1, 1990, the licensee has completed 20 years of licensure in good
             3581      standing;
             3582          (B) the licensee requests an exemption from the department; and
             3583          (C) the department approves the exemption.
             3584          (ii) If the department approves the exemption under Subsection (3)(f)(i), the licensee is
             3585      not required to apply again for the exemption.
             3586          (g) A licensee with a variable contract line of authority is exempt from the requirement
             3587      for continuing education for that line of authority so long as the:
             3588          (i) National Association of Securities Dealers requires continuing education for
             3589      licensees having a securities license; and
             3590          (ii) licensee complies with the National Association of Securities Dealers' continuing
             3591      education requirements for securities licensees.
             3592          (h) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the


             3593      commissioner shall, by rule:
             3594          (i) publish a list of insurance professional designations whose continuing education
             3595      requirements can be used to meet the requirements for continuing education under Subsection
             3596      (3)(b); and
             3597          (ii) authorize continuing education providers and professional producer or consultant
             3598      associations to:
             3599          (A) offer qualified programs for all license types and lines of authority on a
             3600      geographically accessible basis; and
             3601          (B) collect reasonable fees for funding and administration of the continuing education
             3602      program, subject to the review and approval of the commissioner.
             3603          (iii) The fees permitted under Subsection (3)(h)(ii)(B) that are charged for attendance
             3604      at a professional producer or consultant association program may be less for an association
             3605      member, based on the member's affiliation expense, but shall preserve the right of a
             3606      nonmember to attend without affiliation.
             3607          (4) The commissioner shall [designate courses, including those presented by insurers,]
             3608      approve continuing education providers and continuing education courses which satisfy the
             3609      requirements of this section.
             3610          (5) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             3611      commissioner shall by rule set the processes and procedures for continuing education provider
             3612      registration and course approval.
             3613          [(5)] (6) The requirements of this section apply only to [applicants] producers or
             3614      consultants who are natural persons.
             3615          [(6)] (7) A nonresident producer or consultant is considered to have satisfied this state's
             3616      continuing education requirements if[: (a)] the nonresident producer or consultant satisfies the
             3617      nonresident producer's or consultant's home state's continuing education requirements for a
             3618      licensed insurance producer[; and] or consultant.
             3619          [(b) on the same basis as under this Subsection (6) the nonresident producer's home
             3620      state considers satisfaction of Utah's continuing education requirements for a producer as
             3621      satisfying the continuing education requirements of the home state.]
             3622          Section 54. Section 31A-23a-203 , which is renumbered from Section 31A-23-208 is
             3623      renumbered and amended to read:


             3624           [31A-23-208].     31A-23a-203. Training period requirements.
             3625          (1) A [person is eligible to become a broker only if he has been an insurance agent in
             3626      this or another state in substantially the same license class for a period aggregating not less than
             3627      two years during the three] producer is eligible to add the surplus lines of authority to the
             3628      person's producer's license if the producer:
             3629          (a) has passed the applicable examination;
             3630          (b) has been a producer for at least three years during the four years immediately
             3631      preceding the date of application[, or has been regularly employed for that period by an insurer
             3632      in a capacity which would provide the person with comparable preparation to act as an
             3633      insurance broker. For the surplus lines broker license class, the applicable period is three of the
             3634      last four years.]; and
             3635          (c) has paid the applicable fee under Section 31A-3-303 .
             3636           (2) A person is eligible to become a consultant only if [he] the person has acted in a
             3637      capacity [which] that would provide the person with preparation to act as an insurance
             3638      consultant for a period aggregating not less than three years during the four years immediately
             3639      preceding the date of application.
             3640          (3) A title producer is eligible to become a title agency only if the title producer has
             3641      been licensed as a title producer in the search and escrow categories for at least three years
             3642      during the four years immediately preceding the date of application.
             3643          [(3)] (4) The training periods required under this section apply only to natural persons
             3644      applying for licenses under this chapter.
             3645          Section 55. Section 31A-23a-204 , which is renumbered from Section 31A-23-211 is
             3646      renumbered and amended to read:
             3647           [31A-23-211].     31A-23a-204. Special requirements for title insurance
             3648      producers.
             3649          Title insurance [agents] producers shall be licensed in accordance with this chapter,
             3650      with the additional requirements listed in this section.
             3651          (1) (a) Every title insurance agency or [agent] producer appointed by an insurer shall
             3652      maintain:
             3653          (i) a fidelity bond;
             3654          (ii) a professional liability insurance policy; or


             3655          (iii) a financial protection:
             3656          (A) equivalent to that described in Subsection (1)(a)(i) or (ii); and
             3657          (B) that the commissioner considers adequate.
             3658          (b) The bond or insurance required by this Subsection (1):
             3659          (i) shall be supplied under a contract approved by the commissioner to provide
             3660      protection against the improper performance of any service in conjunction with the issuance of
             3661      a contract or policy of title insurance; and
             3662          (ii) be in a face amount no less than $50,000.
             3663          (c) The commissioner may by rule exempt title insurance [agents] producers from the
             3664      requirements of this Subsection (1) upon a finding that, and only so long as, the required policy
             3665      or bond is generally unavailable at reasonable rates.
             3666          (2) (a) (i) Every title insurance agency or [agent] producer appointed by an insurer shall
             3667      maintain a reserve fund.
             3668          (ii) The reserve fund required by this Subsection (2) shall be:
             3669          (A) (I) composed of assets approved by the commissioner;
             3670          (II) maintained as a separate account; and
             3671          (III) charged as a reserve liability of the title insurance [agent] producer in determining
             3672      the [agent's] producer's financial condition; and
             3673          (B) accumulated by segregating 1% of all gross income received from the title
             3674      insurance business.
             3675          (iii) The reserve fund shall contain the accumulated assets for the immediately
             3676      preceding ten years as defined in Subsection (2)(a)(ii).
             3677          [(iii) Assets accumulated within the reserve fund for more than ten full years shall be:]
             3678          (iv) That portion of the assets held in the reserve fund over ten years may be:
             3679          (A) withdrawn from the reserve fund; and
             3680          (B) restored to the income of the [agent] title insurance producer.
             3681          [(iv)] (v) The title insurance [agent] producer may withdraw interest from the reserve
             3682      fund related to the principal amount as it accrues.
             3683          (b) (i) A disbursement may not be made from the reserve fund except as provided in
             3684      Subsection (2)(a) unless the title insurance [agent] producer ceases doing business as a result
             3685      of:


             3686          (A) sale of assets;
             3687          (B) merger of the [agent] producer with another [agent] producer;
             3688          (C) termination of the [agent's] producer's license;
             3689          (D) insolvency; or
             3690          (E) any cessation of business by the [agent] producer.
             3691          (ii) Any disbursements from the reserve fund may be made only to settle claims arising
             3692      from the improper performance of the title insurance [agent] producer in providing services
             3693      defined in Section [ 31A-23-307 ] 31A-23a-406 .
             3694          (iii) The commissioner shall be notified ten days before any disbursements from the
             3695      reserve fund.
             3696          (iv) The notice required by this Subsection (2)(b) shall contain:
             3697          (A) the amount of claim;
             3698          (B) the nature of the claim; and
             3699          (C) the name of the payee.
             3700          (c) (i) The reserve fund shall be maintained by the title insurance [agent] producer or
             3701      the title insurance [agent's] producer's representative for a period of two years after the [agent]
             3702      producer ceases doing business.
             3703          (ii) Any assets remaining in the reserve fund at the end of the two years specified in
             3704      Subsection (2)(c)(i) may be withdrawn and restored to the former [agent] producer.
             3705          (3) Any examination for licensure shall include questions regarding the search and
             3706      examination of title to real property.
             3707          (4) A title insurance [agent] producer may not perform the functions of escrow unless
             3708      the [agent] producer has been examined on the fiduciary duties and procedures involved in
             3709      those functions.
             3710          (5) The commissioner shall adopt rules outlining an examination that will satisfy this
             3711      section.
             3712          (6) A license may be issued to a title insurance [agent] producer who has qualified:
             3713          (a) to perform only searches and examinations of title as specified in Subsection (3);
             3714          (b) to handle only escrow arrangements as specified in Subsection (4); or
             3715          (c) to act as a title marketing representative.
             3716          (7) A person licensed to practice law in Utah is exempt from the requirements of


             3717      Subsections (1) and (2) if that person issues 12 or [fewer] less policies in any 12-month period.
             3718          (8) A person licensed to practice law in Utah, whether exempt under Subsection (7) or
             3719      not, shall maintain a trust account separate from a law firm trust account for all title and real
             3720      estate escrow transactions.
             3721          Section 56. Section 31A-23a-205 , which is renumbered from Section 31A-23-211.5 is
             3722      renumbered and amended to read:
             3723           [31A-23-211.5].     31A-23a-205. Special requirements for bail bond producers
             3724      and bail bond enforcement agents.
             3725          (1) As used in this section, "bail bond [agent] producer" and "bail enforcement agent"
             3726      have the same definitions as in Section 31A-35-102 .
             3727          (2) A bail bond [agent] producer may not operate in this state without an appointment
             3728      from one or more authorized bail bond surety insurers or licensed bail bond surety companies.
             3729          (3) A bail bond enforcement agent may not operate in this state without an appointment
             3730      from one or more licensed bail bond [agents] producers.
             3731          Section 57. Section 31A-23a-206 , which is renumbered from Section 31A-23-211.7 is
             3732      renumbered and amended to read:
             3733           [31A-23-211.7].     31A-23a-206. Special requirements for variable contracts
             3734      line of authority.
             3735          (1) Before applying for a variable contracts line of authority, [an agent, broker,] a
             3736      producer or consultant shall be licensed under Section 61-1-3 as a:
             3737          (a) broker-dealer; or
             3738          (b) agent.
             3739          (2) [An agent's, broker's,] A producer's or consultant's variable contracts line of
             3740      authority is revoked on the day [on which an agent's, broker's,] the producer's or consultant's
             3741      license under Section 61-1-3 is no longer valid.
             3742          Section 58. Section 31A-23a-207 , which is renumbered from Section 31A-23-214 is
             3743      renumbered and amended to read:
             3744           [31A-23-214].     31A-23a-207. Registration of motor club agents.
             3745          (1) Subsection [ 31A-23-201 ] 31A-23a-103 (1) does not apply to persons who sell no
             3746      insurance products other than motor club service contracts, if those contracts provide only for
             3747      those services described in Subsections 31A-11-102 (1)(b) through (f), and personal accident


             3748      insurance provided automatically with the purchase of the motor club contract.
             3749          (2) Section 31A-11-110 applies to those persons in Subsection (1).
             3750          (3) Subsection [ 31A-23-201 ] 31A-23a-103 (1) applies to persons selling motor club
             3751      contracts providing services in addition to those described under Subsections 31A-11-102 (1)(b)
             3752      through (1)(f).
             3753          Section 59. Section 31A-23a-301 is enacted to read:
             3754     
Part 3. Agencies

             3755          31A-23a-301. Agency license.
             3756          An insurance organization shall be licensed as an agency if the insurance organization
             3757      acts as:
             3758          (1) a producer;
             3759          (2) a limited line producer;
             3760          (3) a consultant;
             3761          (4) a managing general agent; or
             3762          (5) a reinsurance intermediary.
             3763          Section 60. Section 31A-23a-302 , which is renumbered from Section 31A-23-219 is
             3764      renumbered and amended to read:
             3765           [31A-23-219].     31A-23a-302. Agency designations.
             3766          [(1) As used in this section, "insurer" includes a bail bond surety as defined in Section
             3767      31A-35-102 .]
             3768          [(2) (a)] (1) [An insurer shall appoint a natural person or agency that has an insurance
             3769      agent or managing general agent] An agency shall designate a natural person that has a
             3770      producer, limited line producer, customer service representative, consultant, managing general
             3771      agent, or reinsurance intermediary license to act [as an insurance agent] on its behalf prior to
             3772      [any agent] the licensee doing business for the [insurer in this state] agency.
             3773          [(b)] (2) [All insurers] An agency shall report to the commissioner, at intervals and in
             3774      the form the commissioner establishes by rule, all new [appointments] designations, all
             3775      renewed designations, and all [terminations of appointments] terminated designations.
             3776          [(c) All insurers shall submit to the commissioner on or before July 1 of each
             3777      odd-numbered year a list of all agent appointments then in force in this state.]
             3778          (3) (a) An [insurer] agency licensed under this chapter shall report to the commissioner


             3779      the cause of termination of [an agent's appointment] a designation.
             3780          (b) The information provided [to] the commissioner under Subsection (3)(a) shall
             3781      remain confidential.
             3782          [(b)] (c) An [insurer] agency is immune from civil action, civil penalty, or damages if
             3783      the [insurer] agency complies in good faith with this Subsection (3) in reporting to the
             3784      commissioner the cause of termination of [agents' appointments] a designation.
             3785          [(c)] (d) Notwithstanding any other provision in this section, an [insurer] agency is not
             3786      immune from any action or resulting penalty imposed on the reporting [insurer] agency as a
             3787      result of proceedings brought by or on behalf of the department if the action is based on
             3788      evidence other than the report submitted in compliance with this Subsection (3).
             3789          [(4) If an insurer appoints an agency as its agent, the insurer need not appoint, report,
             3790      or pay appointment reporting fees for natural person agents designated on the agency's agent's
             3791      license under Section 31A-23-212 .]
             3792          (4) An agency licensed under this chapter may act in the capacities for which it is
             3793      licensed only through natural persons who are licensed under this chapter to act in the same
             3794      capacities.
             3795          [(5) (a) Each insurer shall maintain with the department a list of natural persons with
             3796      authority to appoint and remove the company's agents in this state on forms:]
             3797          [(i) supplied by the department; and]
             3798          [(ii) signed by any officer of the insurer.]
             3799          [(b) The insurer shall submit the list required under Subsection (5)(a) to the
             3800      commissioner pursuant to Subsection (2).]
             3801          (5) An agency licensed under this chapter shall report to the commissioner by rule the
             3802      name of at least one natural person who has authority to act on behalf of the agency in all
             3803      matters pertaining to compliance with this title and orders of the commissioner.
             3804          (6) If an [insurer lists] agency designates a licensee [as its agent] in reports submitted
             3805      under Subsection (2), there is a rebuttable presumption that [in placing a risk with the insurer
             3806      the appointed licensee or any of the licensee's licensed employees acted as the insurer's agent
             3807      and not as a broker] the designated licensee acted on behalf of the agency.
             3808          Section 61. Section 31A-23a-401 , which is renumbered from Section 31A-23-301 is
             3809      renumbered and amended to read:


             3810     
Part 4. Marketing Practices

             3811           [31A-23-301].     31A-23a-401. Disclosure of conflicting interests.
             3812          (1) (a) Except as provided under Subsection (1)(b), no licensee under this chapter may
             3813      act in the same or any directly related transaction as a producer for the insured or consultant
             3814      and [either agent or broker] producer for the insurer; nor may a producer for the insured or
             3815      consultant recommend or encourage the purchase of insurance from or through an insurer[,
             3816      agent,] or [broker] other producer of which the producer for the insured or consultant or
             3817      producer for the insured's or consultant's spouse is an owner, executive, or employee or to
             3818      which he has the type of relation that a material benefit would accrue to the consultant or
             3819      spouse as a result of the purchase.
             3820          (b) Subsection (1)(a) does not apply if the following three conditions are met:
             3821          (i) Prior to performing the consulting services, the producer for the insured or
             3822      consultant discloses to the client, prominently, in writing, the producer for the insured's or
             3823      consultant's interest as [an agent or broker] a producer for the insurer, or the relationship to an
             3824      insurer[, agent,] or [broker] other producer, and that as a result of those interests the
             3825      consultant's recommendations should be given appropriate scrutiny.
             3826          (ii) The producer for the insured's or consultant's fee is agreed upon, in writing, after
             3827      the disclosure required under Subsection (1)(b)(i), but prior to performing the [consulting]
             3828      requested services.
             3829          (iii) Any report resulting from [consulting] requested services contains a copy of the
             3830      disclosure made under Subsection (1)(b)(i).
             3831          (2) No licensee under this chapter may act as to the same client as both [an agent] a
             3832      producer for the insurer and [broker] a producer for the insured without the client's prior
             3833      written consent based on full disclosure.
             3834          (3) Whenever a person applies for insurance coverage through a [broker] producer for
             3835      the insured, the [broker] producer for the insured shall disclose to the applicant, in writing, that
             3836      the [broker] producer for the insured is not the [agent] producer for the insurer of the potential
             3837      insurer. This disclosure shall also inform the applicant that the applicant likely does not have
             3838      the benefit of an insurer being financially responsible for the [broker's] producer for the
             3839      insured's conduct.
             3840          Section 62. Section 31A-23a-402 , which is renumbered from Section 31A-23-302 is


             3841      renumbered and amended to read:
             3842           [31A-23-302].     31A-23a-402. Unfair marketing practices -- Communication
             3843      -- Inducement -- Unfair Discrimination -- Coercion or intimidation -- Restriction on
             3844      choice.
             3845          (1) (a) (i) Any of the following may not make or cause to be made any communication
             3846      that contains false or misleading information, relating to an insurance contract, any insurer, or
             3847      other licensee under this title, including information that is false or misleading because it is
             3848      incomplete:
             3849          (A) a person who is or should be licensed under this title;
             3850          (B) an employee or [agent] producer of a person described in Subsection (1)(a)(i)(A);
             3851          (C) a person whose primary interest is as a competitor of a person licensed under this
             3852      title; and
             3853          (D) a person on behalf of any of the persons listed in this Subsection (1)(a)(i).
             3854          (ii) As used in this Subsection (1), "false or misleading information" includes:
             3855          (A) assuring the nonobligatory payment of future dividends or refunds of unused
             3856      premiums in any specific or approximate amounts, but reporting fully and accurately past
             3857      experience is not false or misleading information; and
             3858          (B) with intent to deceive a person examining it, filing a report, making a false entry in
             3859      a record, or wilfully refraining from making a proper entry in a record.
             3860          (iii) [An insurer or other] A licensee under this title may not:
             3861          (A) use any business name, slogan, emblem, or related device that is misleading or
             3862      likely to cause the insurer or other licensee to be mistaken for another insurer or other licensee
             3863      already in business; or
             3864          (B) use any advertisement or other insurance promotional material that would cause a
             3865      reasonable person to mistakenly believe that a state or federal government agency:
             3866          (I) is responsible for the insurance sales activities of the person;
             3867          (II) stands behind the credit of the person;
             3868          (III) guarantees any returns on insurance products of or sold by the person; or
             3869          (IV) is a source of payment of any insurance obligation of or sold by the person.
             3870          (iv) A person who is not an insurer may not assume or use any name that deceptively
             3871      implies or suggests that it is an insurer.


             3872          (v) A person other than persons licensed as health maintenance organizations under
             3873      Chapter 8 may not use the term "Health Maintenance Organization" or "HMO" in referring to
             3874      itself.
             3875          (b) If [an insurance agent or third party administrator] a licensee under this title
             3876      distributes cards or documents, exhibits a sign, or publishes an advertisement that violates
             3877      Subsection (1) (a), with reference to a particular insurer that the [agent] licensee represents, or
             3878      for whom the [third party administrator] licensee processes claims, and if the cards, documents,
             3879      signs, or advertisements are supplied or approved by that insurer, the [agent's or the third party
             3880      administrator's] licensee's violation creates a rebuttable presumption that the violation was also
             3881      committed by the insurer.
             3882          (2) (a) (i) [An insurer or] A licensee under this [chapter] title, or an officer or employee
             3883      of [either] a licensee may not induce any person to enter into or continue an insurance contract
             3884      or to terminate an existing insurance contract by offering benefits not specified in the policy to
             3885      be issued or continued, including premium or commission rebates.
             3886          (ii) An insurer may not make or knowingly allow any agreement of insurance that is
             3887      not clearly expressed in the policy to be issued or renewed.
             3888          (iii) This Subsection (2)(a) does not preclude:
             3889          (A) insurers from reducing premiums because of expense savings;
             3890          (B) the usual kinds of social courtesies not related to particular transactions; or
             3891          (C) an insurer from receiving premiums under an installment payment plan.
             3892          (b) [An agent, broker, or insurer] A licensee under this title may not absorb the tax
             3893      under Section 31A-3-301 .
             3894          (c) (i) A title insurer or [agent] producer or any officer or employee of either may not
             3895      pay, allow, give, or offer to pay, allow, or give, directly or indirectly, as an inducement to
             3896      obtaining any title insurance business, any rebate, reduction, or abatement of any rate or charge
             3897      made incident to the issuance of the insurance, any special favor or advantage not generally
             3898      available to others, or any money or other consideration or material inducement.
             3899          (ii) "Charge made incident to the issuance of the insurance" includes escrow charges,
             3900      and any other services that are prescribed by the commissioner.
             3901          (iii) An insured or any other person connected, directly or indirectly, with the
             3902      transaction, including a mortgage lender, real estate broker, builder, attorney, or any officer,


             3903      employee, or agent of any of them, may not knowingly receive or accept, directly or indirectly,
             3904      any benefit referred to in Subsection (2)(c)(i).
             3905          (3) (a) An insurer may not unfairly discriminate among policyholders by charging
             3906      different premiums or by offering different terms of coverage, except on the basis of
             3907      classifications related to the nature and the degree of the risk covered or the expenses involved.
             3908          (b) Rates are not unfairly discriminatory if they are averaged broadly among persons
             3909      insured under a group, blanket, or franchise policy, and the terms of those policies are not
             3910      unfairly discriminatory merely because they are more favorable than in similar individual
             3911      policies.
             3912          (4) h [ (a) ] h A person who is or should be licensed under this title, an employee [or agent] of
             3913      that licensee or person who should be licensed, a person whose primary interest is as a
             3914      competitor of a person licensed under this title, and one acting on behalf of any of these
             3915      persons, may not commit or enter into any agreement to participate in any act of boycott,
             3916      coercion, or intimidation that:
             3917           h [ (i) ] (a) h tends to produce:
             3918           h [ (A) ] (i) h an unreasonable restraint of the business of insurance; or
             3919           h [ (B) ] (ii) h a monopoly in that business[.]; or
             3920           h [ (ii) ] (b) h results in an applicant purchasing or replacing an insurance contract.
             3921           h [ (b) A person found in violation of Subsection (4)(a) may be required to forfeit up to
             3922      three times the per violation forfeitures in Section 31A-2-308 .
] h

             3923          (5) (a) A person may not restrict in the choice of an insurer or [insurance agent or
             3924      broker] licensee under this chapter, another person who is required to pay for insurance as a
             3925      condition for the conclusion of a contract or other transaction or for the exercise of any right
             3926      under a contract. The person requiring the coverage may, however, reserve the right to
             3927      disapprove the insurer or the coverage selected on reasonable grounds.
             3928          (b) The form of corporate organization of an insurer authorized to do business in this
             3929      state is not a reasonable ground for disapproval, and the commissioner may by rule specify
             3930      additional grounds that are not reasonable. This Subsection (5) does not bar an insurer from
             3931      declining an application for insurance.
             3932          (6) A person may not make any charge other than insurance premiums and premium
             3933      financing charges for the protection of property or of a security interest in property, as a


             3934      condition for obtaining, renewing, or continuing the financing of a purchase of the property or
             3935      the lending of money on the security of an interest in the property.
             3936          (7) (a) [An agent] A licensee under this title may not refuse or fail to return promptly
             3937      all indicia of agency to the principal on demand.
             3938          (b) A licensee whose license is suspended, limited, or revoked under Section
             3939      31A-2-308 , [ 31A-23-216 , or 31A-23-217 ] 31A-23a-111 , or 31A-23a-112 may not refuse or fail
             3940      to return the license to the commissioner on demand.
             3941          (8) A person may not engage in any other unfair method of competition or any other
             3942      unfair or deceptive act or practice in the business of insurance, as defined by the commissioner
             3943      by rule, after a finding that they are misleading, deceptive, unfairly discriminatory, provide an
             3944      unfair inducement, or unreasonably restrain competition.
             3945          Section 63. Section 31A-23a-403 , which is renumbered from Section 31A-23-303 is
             3946      renumbered and amended to read:
             3947           [31A-23-303].     31A-23a-403. Inherent unsuitability.
             3948          (1) If the commissioner finds after a hearing that a certain type of accident and health
             3949      insurance, life insurance, or annuity product is inherently unsuitable for persons of certain ages
             3950      or in certain conditions of health, the commissioner shall make a rule declaring the accident
             3951      and health insurance, life insurance, or annuity product as inherently unsuitable for persons of
             3952      certain ages or in certain conditions of health.
             3953          (2) An accident and health insurance, life insurance, or annuity product that is subject
             3954      to the rule may not be sold to a person for whom the product has been determined as inherently
             3955      unsuitable unless that person purchasing the product signs a receipt acknowledging having
             3956      received a statement that expresses that the product has been determined by the commissioner
             3957      to be inherently unsuitable for persons of certain ages or in certain conditions of health.
             3958          (3) Unless the insurer or its [agent] appointed licensee establishes that its sale of
             3959      coverage is inconsistent with the rule made under Subsection (1) is due to excusable neglect,
             3960      the purchaser may treat the sale as voidable, if acted upon by the insured within a two-year
             3961      period from the date of sale.
             3962          Section 64. Section 31A-23a-404 , which is renumbered from Section 31A-23-304 is
             3963      renumbered and amended to read:
             3964           [31A-23-304].     31A-23a-404. Extension of credit on premiums.


             3965          The extension of credit upon a premium by [an agent or broker] a licensee under this
             3966      chapter to the insured, without interest for not exceeding 90 days from the effective date of the
             3967      policy, or after that time with interest on the unpaid balance at not less than the legal rate under
             3968      Section 15-1-1 , is not a violation of Subsection [ 31A-23-302 ] 31A-23a-402 (2). The
             3969      installment or payroll deduction payment of premiums on policies issued under an insurer's
             3970      mass marketing program is not an extension of credit.
             3971          Section 65. Section 31A-23a-405 , which is renumbered from Section 31A-23-305 is
             3972      renumbered and amended to read:
             3973           [31A-23-305].     31A-23a-405. Insurer liability.
             3974          (1) As used in this section, "insurer" includes bail bond surety companies as defined in
             3975      Section 31A-35-102 .
             3976          (2) There is a rebuttable presumption that every insurer is bound by any act of its
             3977      [agent] appointed licensee performed in this state that is within the scope of the [agent's]
             3978      appointed licensee's actual (express or implied) or apparent authority, until the insurer has
             3979      canceled the [agent's] appointed licensee's appointment and has made reasonable efforts to
             3980      recover from the [agent] appointed licensee its policy forms and other indicia of agency.
             3981      Reasonable efforts include a formal demand in writing for return of the indicia, and notice to
             3982      the commissioner if the [agent] appointed licensee does not promptly comply with the demand.
             3983      This Subsection (2) neither waives any common law defense available to insurers, nor
             3984      precludes the insured from seeking redress against the [agent] appointed licensee individually
             3985      or jointly against the insurer and [agent] licensee.
             3986          (3) When a [property/liability insurance agent] licensee under this chapter with
             3987      authority to bind more than one insurer on a particular risk agrees to bind coverage on a
             3988      particular risk, but fails to outwardly indicate the insurer with which the risk is placed, and
             3989      before the risk is placed with a particular insurer a loss occurs, if there is no conclusive
             3990      admissible evidence indicating the insurer with which the [agent] licensee exercised his
             3991      binding authority, a court may equitably apportion the loss among all insurers with which the
             3992      [agent] licensee had binding authority as to the particular type of risk.
             3993          Section 66. Section 31A-23a-406 , which is renumbered from Section 31A-23-307 is
             3994      renumbered and amended to read:
             3995           [31A-23-307].     31A-23a-406. Title insurance producer's business.


             3996          (1) A title insurance [agent] producer may [engage in the] do escrow [business]
             3997      involving real property transactions if all of the following exist:
             3998          (a) the title insurance [agent] producer is [properly] licensed [under this chapter] with
             3999      the title line of authority and the escrow subline of authority;
             4000          (b) the title insurance [agent] producer is appointed by a title insurer authorized to do
             4001      business in the state;
             4002          (c) one or more of the following is to be issued as part of the transaction:
             4003          (i) an owner's policy of title insurance; or
             4004          (ii) a lender's policy of title insurance;
             4005          (d) (i) all funds deposited with the [agent] producer in connection with any escrow:
             4006          (A) are deposited:
             4007          (I) in a federally insured financial institution; and
             4008          (II) in a trust account that is separate from all other trust account funds that are not
             4009      related to real estate transactions; and
             4010          (B) are the property of the persons entitled to them under the provisions of the escrow;
             4011      and
             4012          (ii) are segregated escrow by escrow in the records of the [agent] producer;
             4013          (e) earnings on funds held in escrow may be paid out of the escrow account to any
             4014      person in accordance with the conditions of the escrow; and
             4015          (f) the escrow does not require the [agent] producer to hold:
             4016          (i) construction funds; or
             4017          (ii) funds held for exchange under Section 1031, Internal Revenue Code.
             4018          (2) Notwithstanding Subsection (1), a title insurance [agent] producer may engage in
             4019      the escrow business if:
             4020          (a) the escrow involves:
             4021          (i) a mobile home;
             4022          (ii) a grazing right;
             4023          (iii) a water right; or
             4024          (iv) other personal property authorized by the commissioner; and
             4025          (b) the title insurance [agent] producer complies with all the requirements of this
             4026      section except for the requirement of Subsection (1)(c).


             4027          (3) Funds held in escrow:
             4028          (a) are not subject to any debts of the [agent] producer;
             4029          (b) may only be used to fulfill the terms of the individual escrow under which the funds
             4030      were accepted; and
             4031          (c) may not be used until all conditions of the escrow have been met.
             4032          (4) Assets or property other than escrow funds received by [an agent] a producer in
             4033      accordance with an escrow shall be maintained in a manner that will:
             4034          (a) reasonably preserve and protect the asset or property from loss, theft, or damages;
             4035      and
             4036          (b) otherwise comply with all general duties and responsibilities of a fiduciary or
             4037      bailee.
             4038          (5) (a) A check may not be drawn, executed or dated, or funds otherwise disbursed
             4039      unless the segregated escrow account from which funds are to be disbursed contains a
             4040      sufficient credit balance consisting of collected or cleared funds at the time the check is drawn,
             4041      executed or dated, or funds are otherwise disbursed.
             4042          (b) As used in this Subsection (5), funds are considered to be "collected or cleared,"
             4043      and may be disbursed as follows:
             4044          (i) cash may be disbursed on the same day the cash is deposited;
             4045          (ii) a wire transfer may be disbursed on the same day the wire transfer is deposited;
             4046          (iii) the following may be disbursed on the day following the date of deposit:
             4047          (A) a cashier's check;
             4048          (B) a certified check;
             4049          (C) a teller's check;
             4050          (D) a U.S. Postal Service money order; and
             4051          (E) a check drawn on a Federal Reserve Bank or Federal Home Loan Bank; and
             4052          (iv) any other check or deposit may be disbursed:
             4053          (A) within the time limits provided under the Expedited Funds Availability Act, 12
             4054      U.S.C. Section 4001 et seq., as amended, and related regulations of the Federal Reserve
             4055      System; or
             4056          (B) upon written notification from the financial institution to which the funds have
             4057      been deposited, that final settlement has occurred on the deposited item.


             4058          (6) The title insurance [agent] producer shall maintain records of all receipts and
             4059      disbursements of escrow funds.
             4060          (7) The title insurance [agent] producer shall comply with:
             4061          (a) Section [ 31A-23-310 ] 31A-23a-409 ; and
             4062          (b) any rules adopted by the commissioner in accordance with Title 63, Chapter 46a,
             4063      Utah Administrative Rulemaking Act, that govern escrows.
             4064          Section 67. Section 31A-23a-407 , which is renumbered from Section 31A-23-308 is
             4065      renumbered and amended to read:
             4066           [31A-23-308].     31A-23a-407. Liability of title insurers for acts of title
             4067      insurance producers.
             4068          Any title company, represented by one or more title insurance [agents] producers, is
             4069      directly and primarily liable to others dealing with the title insurance [agents] producers for the
             4070      receipt and disbursement of funds deposited in escrows with the title insurance [agents]
             4071      producers in all those transactions where a commitment or binder for or policy or contract of
             4072      title insurance of that title insurance company has been ordered, or a preliminary report of the
             4073      title insurance company has been issued or distributed. This liability does not modify, mitigate,
             4074      impair, or affect the contractual obligations between the title insurance [agents] producers and
             4075      the title insurance company.
             4076          Section 68. Section 31A-23a-408 , which is renumbered from Section 31A-23-309 is
             4077      renumbered and amended to read:
             4078           [31A-23-309].     31A-23a-408. Representations of agency.
             4079          No person may represent himself as [the agent] acting in behalf of an insurer unless a
             4080      written agency contract is in effect giving the person authority from the insurer and the insurer
             4081      has appointed that person [as its agent] to act in behalf of the insurer.
             4082          Section 69. Section 31A-23a-409 , which is renumbered from Section 31A-23-310 is
             4083      renumbered and amended to read:
             4084           [31A-23-310].     31A-23a-409. Trust obligation for funds collected.
             4085          (1) Every [agent or broker] licensee is a trustee for all funds received or collected [as
             4086      an agent or broker] for forwarding to insurers or to insureds. Except for amounts necessary to
             4087      pay bank charges, and except for funds paid by insureds and belonging in part to the [agent or
             4088      broker] licensee as fees or commissions, [an agent or broker] a licensee may not commingle


             4089      trust funds with the [agent or broker's] licensee's own funds or with funds held in any other
             4090      capacity. Except as provided under Subsection (4), every [agent or broker] licensee owes to
             4091      insureds and insurers the fiduciary duties of a trustee with respect to money to be forwarded to
             4092      insurers or insureds through the [agent or broker] licensee. Unless the funds are sent to the
             4093      appropriate payee by the close of the next business day after their receipt, the licensee shall
             4094      deposit them in an account authorized under Subsection (2). Funds so deposited shall remain
             4095      in an account authorized under Subsection (2) until sent to the appropriate payee.
             4096          (2) Funds required to be deposited under Subsection (1) shall be deposited:
             4097          (a) in a federally insured trust account with a financial institution located in this state;
             4098      or
             4099          (b) in some other account, approved by the commissioner by rule or order, providing
             4100      safety comparable to federally insured trust accounts.
             4101          (3) It is not a violation of Subsection (2)(a) if the amounts in the accounts exceed the
             4102      amount of the federal insurance on the accounts.
             4103          (4) A trust account into which funds are deposited may be interest bearing. The
             4104      interest accrued on the account may be paid to the [agent or broker] licensee, so long as the
             4105      [agent or broker] licensee otherwise complies with this section and with the contract with the
             4106      insurer.
             4107          (5) A financial institution or other organization holding trust funds under this section
             4108      may not offset or impound trust account funds against debts and obligations incurred by the
             4109      [agent or broker] licensee.
             4110          (6) Any licensee who, not being lawfully entitled thereto, diverts or appropriates any
             4111      portion of the funds held under Subsection (1) to the licensee's own use, is guilty of theft under
             4112      Title 76, Chapter 6, Part 4. Section 76-6-412 applies in determining the classification of the
             4113      offense. Sanctions under Section 31A-2-308 also apply.
             4114          Section 70. Section 31A-23a-410 , which is renumbered from Section 31A-23-311 is
             4115      renumbered and amended to read:
             4116           [31A-23-311].     31A-23a-410. Insurer's liability if insured pays premium to a
             4117      licensee or group policyholder.
             4118          (1) Subject to Subsections (2) and (5), as between the insurer and the insured, the
             4119      insurer is considered to have received the premium and is liable to the insured for losses


             4120      covered by the insurance and for any unearned premiums upon cancellation of the insurance if
             4121      an insurer, including a surplus lines insurer:
             4122          (a) has assumed a risk; and
             4123          (b) the premium for that insurance has been received by:
             4124          (i) [an agent or broker] a licensee who placed the insurance;
             4125          (ii) a group policyholder;
             4126          (iii) an employer who deducts part or all of the premium from an employee's wages or
             4127      salary; or
             4128          (iv) an employer who pays all or part of the premium for an employee.
             4129          (2) Subsection (1) does not apply if:
             4130          (a) the insured pays [an agent or broker] a licensee, knowing the [agent or broker]
             4131      licensee does not intend to submit the premium to the insurer; or
             4132          (b) the insured has premium withheld from the insured's wages or salary knowing the
             4133      employer does not intend to submit it to the insurer.
             4134          (3) In the case of an employer who has received the premium by deducting all or part
             4135      of it from the wages or salaries of the certificate holders, the insurer may terminate its liability
             4136      by giving certificate holders reasonable notice of coverage termination. The liability of the
             4137      insurer for the losses covered by the insurance terminates at the later of:
             4138          (a) the last day of the coverage period for which premium has been withheld by the
             4139      employer; or
             4140          (b) 15 days after the date the insurer mails actual notice to the certificate holder that
             4141      coverage has terminated, but in the event the insurer fails to provide actual notice as required
             4142      by this subsection, then the liability of the insurer for losses described in Subsection (1) shall
             4143      terminate 45 days from the last date for which premium was received. While the insurer shall
             4144      be liable for losses as herein provided, the provisions of this section apply only to apportion the
             4145      liability for those losses described and do not operate to extend any insurance contract policy or
             4146      coverage beyond its date of termination nor alter or amend provisions thereof.
             4147          (4) Despite an employer's collection of premium under Subsection (1), the
             4148      responsibility of an insurer to continue to cover the losses covered by the insurance to group
             4149      policy certificate holders terminates upon the effective date of notice from the policyholder
             4150      that:


             4151          (a) coverage of a similar kind and quality has been obtained from another insurer; or
             4152          (b) the policyholder is electing to voluntarily terminate the certificate holder's coverage
             4153      and has given the employees notice of the termination.
             4154          (5) If the insurer is obligated to pay any claims pursuant to the provisions of this
             4155      section, the [agent, broker,] licensee or employer who received the premium and failed to
             4156      forward it shall be obligated to the insurer for the entire unpaid premium due under the policy
             4157      of insurance together with reasonable expenses of suit and reasonable attorney's fees.
             4158          (6) If, under an employee health insurance plan, an employee builds up credit for future
             4159      coverage because the employee has not used the policy protection, or in some other way, the
             4160      insurer is obligated to the employee for that future coverage earned while the policy was in full
             4161      effect.
             4162          Section 71. Section 31A-23a-411 is enacted to read:
             4163          31A-23a-411. Person's liability if premium received is not forwarded to the
             4164      insurer.
             4165          (1) A person that knowingly fails to forward to the insurer a premium received from an
             4166      applicant, policyholder, or certificate holder has committed insurance fraud under Subsection
             4167      31A-31-103 (1)(c).
             4168          (2) A person that knowingly fails to forward to the insurer a premium collected from or
             4169      on behalf of an insured employee under an insured employee benefit plan has committed
             4170      insurance fraud under Subsection 31A-31-103 (1)(c).
             4171          Section 72. Section 31A-23a-412 , which is renumbered from Section 31A-23-312 is
             4172      renumbered and amended to read:
             4173           [31A-23-312].     31A-23a-412. Place of business and residence address --
             4174      Records.
             4175          (1) (a) All licensees under this chapter shall register with the commissioner the address
             4176      and telephone numbers of their principal place of business.
             4177          (b) If the licensee is an individual, in addition to complying with Subsection (1)(a) the
             4178      individual shall provide to the commissioner the individual's residence address and telephone
             4179      number.
             4180          (c) A licensee shall notify the commissioner[, in writing,] within 30 days of any change
             4181      of address or telephone number.


             4182          (2) (a) Except as provided under Subsection (3), every licensee under this chapter shall
             4183      keep at the principal place of business address registered under Subsection (1), separate and
             4184      distinct books and records of all transactions consummated under the Utah license.
             4185          (b) The books and records described in Subsection (2)(a) shall:
             4186          (i) be in an organized form;
             4187          (ii) be available to the commissioner for inspection upon reasonable notice; and
             4188          (iii) include all of the following:
             4189          (A) if the licensee is [an agent or broker] a producer, limited line producer, consultant,
             4190      managing general agent, or reinsurance intermediary:
             4191          (I) a record of each insurance contract procured by or issued through the licensee, with
             4192      the names of insurers and insureds, the amount of premium and commissions or other
             4193      compensation, and the subject of the insurance;
             4194          (II) the names of any other producers, limited line producers, consultants, managing
             4195      general agents, or [brokers] reinsurance intermediaries from whom business is accepted, and of
             4196      persons to whom commissions or allowances of any kind are promised or paid; and
             4197          (III) a record of all consumer complaints forwarded to the licensee by an insurance
             4198      regulator;
             4199          (B) if the licensee is a consultant, a record of each agreement outlining the work
             4200      performed and the fee for the work; and
             4201          (C) any additional information which:
             4202          (I) is customary for a similar business; or
             4203          (II) may reasonably be required by the commissioner by rule.
             4204          (3) Subsection (2) is satisfied if the books and records specified in Subsection (2) can
             4205      be obtained immediately from a central storage place or elsewhere by on-line computer
             4206      terminals located at the registered address.
             4207          (4) [An agent] A licensee who represents only a single insurer satisfies Subsection (2)
             4208      if the insurer maintains the books and records pursuant to Subsection (2) at a place satisfying
             4209      Subsections (1) and (5).
             4210          (5) (a) The books and records maintained under Subsection (2) or Section
             4211      [ 31A-23-313 ] 31A-23a-413 shall be available for the inspection of the commissioner during all
             4212      business hours for a period of time after the date of the transaction as specified by the


             4213      commissioner by rule, but in no case for less than the current calendar year plus three years.
             4214          (b) Discarding books and records after the applicable record retention period has
             4215      expired does not place the licensee in violation of a later-adopted longer record retention
             4216      period.
             4217          Section 73. Section 31A-23a-413 , which is renumbered from Section 31A-23-313 is
             4218      renumbered and amended to read:
             4219           [31A-23-313].     31A-23a-413. Title producer's annual report.
             4220          Every title insurance [agent] producer shall annually file with the commissioner, by a
             4221      date and in a form the commissioner specifies by rule, a verified statement of the [agent's]
             4222      producer's financial condition, transactions, and affairs as of the end of the preceding calendar
             4223      year.
             4224          Section 74. Section 31A-23a-414 , which is renumbered from Section 31A-23-314 is
             4225      renumbered and amended to read:
             4226           [31A-23-314].     31A-23a-414. Consultant's duty to report illegal insurance.
             4227          Section 31A-15-110 applies to a consultant's duty to report illegal insurance.
             4228          Section 75. Section 31A-23a-415 , which is renumbered from Section 31A-23-315 is
             4229      renumbered and amended to read:
             4230           [31A-23-315].     31A-23a-415. Assessment on title insurance agencies or title
             4231      insurers.
             4232          (1) For purposes of this section:
             4233          (a) "Premium" is as defined in Subsection 59-9-101 (3).
             4234          (b) "Title insurer" means a person:
             4235          (i) making any contract or policy of title insurance as:
             4236          (A) insurer;
             4237          (B) guarantor; or
             4238          (C) surety;
             4239          (ii) proposing to make any contract or policy of title insurance as:
             4240          (A) insurer;
             4241          (B) guarantor; or
             4242          (C) surety; or
             4243          (iii) transacting or proposing to transact any phase of title insurance, including:


             4244          (A) soliciting;
             4245          (B) negotiating preliminary to execution;
             4246          (C) executing of a contract of title insurance;
             4247          (D) insuring; and
             4248          (E) transacting matters subsequent to the execution of the contract and arising out of
             4249      the contract.
             4250          (c) "Utah risks" means insuring, guaranteeing, or indemnifying with regard to real or
             4251      personal property located in Utah, an owner of real or personal property, the holders of liens or
             4252      encumbrances on that property, or others interested in the property against loss or damage
             4253      suffered by reason of:
             4254          (i) liens or encumbrances upon, defects in, or the unmarketability of the title to the
             4255      property; or
             4256          (ii) invalidity or unenforceability of any liens or encumbrances on the property.
             4257          (2) (a) Beginning on July 1, 1998, the insurance commissioner may assess each title
             4258      insurer and each title insurance agency an annual assessment determined in accordance with
             4259      this Subsection (2) to be used for the purposes described in Subsection (3).
             4260          (b) A title insurance agency shall be assessed up to:
             4261          (i) $200 for the first office in each county in which the title insurance agency maintains
             4262      an office; and
             4263          (ii) $100 for each additional office the title insurance agency maintains in the county
             4264      described in Subsection (2)(b)(i).
             4265          (c) A title insurer shall be assessed up to:
             4266          (i) $200 for the first office in each county in which the title insurer maintains an office;
             4267          (ii) $100 for each additional office the title insurer maintains in the county described in
             4268      Subsection (2)(c)(i); and
             4269          (iii) an amount calculated by:
             4270          (A) aggregating the assessments imposed on:
             4271          (I) title insurance agencies under Subsection (2)(b); and
             4272          (II) title insurers under Subsections (2)(c)(i) and (2)(c)(ii);
             4273          (B) subtracting the amount determined under Subsection (2)(c)(iii)(A) from the total
             4274      costs and expenses determined under Subsection (2)(d); and


             4275          (C) multiplying:
             4276          (I) the amount calculated under Subsection (2)(c)(iii)(B); and
             4277          (II) the percentage of total premiums for title insurance on Utah risk that are premiums
             4278      of the title insurer.
             4279          (d) Notwithstanding Section 31A-3-103 and in accordance with Title 63, Chapter 46a,
             4280      Utah Administrative Rulemaking Act, the department by rule shall establish the amount of
             4281      costs and expenses described under Subsection (3) that will be covered by the assessment,
             4282      except the costs or expenses to be covered by the assessment may not exceed $75,000 annually.
             4283          (3) All money received by the state under this section:
             4284          (a) shall be deposited in the General Fund as a dedicated credit of the department; and
             4285          (b) may be expended by the department only to pay for any cost or expense incurred by
             4286      the department in the administration, investigation, and enforcement of Chapter [23] 23a, Parts
             4287      [III and IV] 4 and 5, related to:
             4288          (i) the marketing of title insurance; and
             4289          (ii) audits of agencies.
             4290          (4) The assessment imposed by this section shall be in addition to any premium
             4291      assessment imposed under Subsection 59-9-101 (3).
             4292          Section 76. Section 31A-23a-416 , which is renumbered from Section 31A-23-316 is
             4293      renumbered and amended to read:
             4294           [31A-23-316].     31A-23a-416. Solicitations to loan applicants.
             4295          (1) (a) A person authorized to engage in insurance activities in this state shall
             4296      prominently disclose in writing the information described in Subsection (1)(b) to a person
             4297      seeking an extension of credit if:
             4298          (i) the person authorized to engage in insurance activities also extends credit directly or
             4299      through a subsidiary or an affiliate;
             4300          (ii) the person requires a customer to obtain insurance in connection with an extension
             4301      of credit; and
             4302          (iii) the person offers to the person seeking an extension of credit the line of credit
             4303      insurance required in connection with the extension of credit.
             4304          (b) The disclosure required by Subsection (1)(a) shall be in a form substantially similar
             4305      to the following. "You may obtain insurance required in connection with your extension of


             4306      credit from any insurance [agent, broker,] producer[,] or approved insurer that sells such
             4307      insurance. Your choice of insurance provider will not affect our credit decision or your credit
             4308      terms."
             4309          (c) The person shall make the required disclosure under Subsection (1)(a):
             4310          (i) at the time of written application for an extension of credit; or
             4311          (ii) if there is no written application, before the closing of the extension of credit.
             4312          (2) The disclosure required by Subsection (1)(c)(ii) may be in a verbal, electronic, or
             4313      other unwritten form if a printed disclosure is included with the first printed statement of terms
             4314      and conditions of the extension of credit sent to the person seeking the extension of credit.
             4315          (3) This section does not apply when:
             4316          (a) a person is contacting a person in the course of direct or mass marketing to a group
             4317      of persons in a manner that bears no relation to the person's application for an extension of
             4318      credit or credit decision; and
             4319          (b) an agreement for the extension of credit is changed or extended, if the person who
             4320      originally sought the extension of credit is not required to purchase new or additional
             4321      insurance.
             4322          (4) (a) For purposes of this section, "approved insurer" means an insurer that is
             4323      approved to issue insurance related to the extension of credit by the person that extends the
             4324      credit.
             4325          (b) The commissioner shall make rules establishing standards that govern the approval
             4326      under Subsection (4)(a) of an insurer by a person that extends credit.
             4327          Section 77. Section 31A-23a-417 , which is renumbered from Section 31A-23-317 is
             4328      renumbered and amended to read:
             4329           [31A-23-317].     31A-23a-417. Financial services insurance activities
             4330      regulation.
             4331          (1) It is the intent of the Legislature that the regulation of insurance activities of any
             4332      person in this state be based on functional regulation principles established in the
             4333      Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-102.
             4334          (2) The insurance activities of any person in this state shall be functionally regulated by
             4335      the commissioner subject to Sections 104, 301-308, 501-507, and 509 of the
             4336      Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-102.


             4337          (3) Under Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             4338      commissioner may adopt rules consistent with Section 104(d) of the Gramm-Leach-Bliley Act
             4339      of 1999, Pub. L. No. 106-102, and the functional regulation of insurance activities of any
             4340      person otherwise subject to the jurisdiction of the commissioner in this state described in
             4341      Subsection (2).
             4342          (4) The commissioner shall consult and coordinate with the commissioner of the
             4343      Department of Financial Institutions and the director of the Division of Securities for the
             4344      purpose of assuring, to the extent possible, that the rules prescribed by the department are
             4345      consistent and comparable with federal regulations governing the insurance, banking, and
             4346      securities industries.
             4347          Section 78. Section 31A-23a-501 , which is renumbered from Section 31A-23-401 is
             4348      renumbered and amended to read:
             4349     
Part 5. Compensation of Producers and Consultants

             4350           [31A-23-401].     31A-23a-501. Licensee compensation.
             4351          (1) As used in this section:
             4352          (a) "Commission compensation" includes funds paid to or credited for the benefit of
             4353      [an agent or broker] a licensee from:
             4354          (i) commission amounts deducted from insurance premiums on insurance sold by or
             4355      placed through the [agent or broker] licensee; or
             4356          (ii) commission amounts received from an insurer[,] or another [agent, or a broker,
             4357      acting in their professional capacities,] licensee as a result of the sale or placement of
             4358      insurance.
             4359          (b) (i) "Noncommission compensation" includes all funds paid to or credited for the
             4360      benefit of [an agent or broker] a licensee other than commission compensation.
             4361          (ii) "Noncommission compensation" does not include charges for pass-through costs
             4362      incurred by the licensee in connection with obtaining, placing, or servicing an insurance policy.
             4363          (c) "Pass-through costs" include:
             4364          (i) costs for copying documents to be submitted to the insurer; and
             4365          (ii) bank costs for processing cash or credit card payments.
             4366          (2) [(a) Except as provided in Subsection (3), no insurance agent or broker] A licensee
             4367      may receive[, for acting as an agent or broker,] from an insured or from a person purchasing an


             4368      insurance policy, [compensation other than commission] noncommission compensation if the
             4369      noncommission compensation is stated on a separate, written disclosure.
             4370          (a) The disclosure shall:
             4371          (i) include the signature of the insured or prospective insured acknowledging the
             4372      noncommission compensation;
             4373          (ii) clearly specify the amount or extent of the noncommission compensation; and
             4374          (iii) be provided to the insured or prospective insured before the performance of the
             4375      service.
             4376          (b) Noncommission compensation shall be:
             4377          (i) limited to actual or reasonable expenses incurred for services; and
             4378          (ii) uniformly applied to all insureds or prospective insureds in a class or classes of
             4379      business or for a specific service or services.
             4380          (c) A copy of the signed disclosure must be maintained by any licensee who collects or
             4381      receives the noncommission compensation or any portion thereof.
             4382          (d) All accounting records relating to noncommission compensation shall be
             4383      maintained in a manner that facilitates an audit.
             4384          [(b) As used in this section, "acting as an agent or broker" includes the negotiation or
             4385      procurement of any insurance contract made or negotiated in this state, and thereafter providing
             4386      any other services on account of that insurance contract, including the adjustment of claims
             4387      arising from that insurance contract.]
             4388          [(3) Subsection (2) does not apply to:]
             4389          (3) (a) [a broker's receipt of] A licensee may receive noncommission compensation
             4390      when acting as a producer for the insured in connection with the actual sale or placement of
             4391      insurance[, but only if the broker] if:
             4392          (i) the producer and the insured have agreed on the [broker's] producer's
             4393      noncommission compensation[,]; and
             4394          (ii) the [broker] producer has disclosed to the insured the existence and source of [the
             4395      commission] any other compensation that accrues to the [broker] producer as a result of the
             4396      transaction[, which agreement and].
             4397          (b) The disclosure shall [be evidenced by]:
             4398          (i) [a written memorandum, signed by the broker and] include the signature of the


             4399      insured[, disclosing the existence and source of commission compensation and providing that
             4400      the insured will, in addition, pay] or prospective insured acknowledging the noncommission
             4401      compensation;
             4402          (ii) [an application for insurance, signed by the insured, that specifies] clearly specify
             4403      the amount or extent of the [broker's] noncommission compensation and [discloses] the
             4404      existence and source of [the commission] any other compensation; [or] and
             4405          [(iii) the insured's payment of an invoice from the broker for the noncommission
             4406      compensation, which invoice discloses the existence and source of the commission
             4407      compensation received by the broker with respect to the transaction;]
             4408          (iii) be provided to the insured or prospective insured before the performance of the
             4409      service.
             4410          (c) The following additional noncommission compensation is authorized:
             4411          [(b)] (i) compensation received by [an agent] a producer of a compensated corporate
             4412      surety who under procedures approved by a rule or order of the commissioner is paid by surety
             4413      bond principal debtors for extra services;
             4414          [(c)] (ii) compensation received by an insurance [broker] producer who is also licensed
             4415      as a public adjuster under Section 31A-26-203 , for services performed for an insured in
             4416      connection with a claim adjustment, so long as the [broker] producer does not receive or is not
             4417      promised compensation for aiding in the claim adjustment prior to the occurrence of the claim;
             4418          [(d)] (iii) compensation received by a consultant as a consulting fee, provided the
             4419      consultant complies with the requirements of Section [ 31A-23-301 ] 31A-23a-401 ; or
             4420          [(e)] (iv) other compensation arrangements approved by the commissioner after a
             4421      finding that they do not violate Section [ 31A-23-301 ] 31A-23a-401 and are not harmful to the
             4422      public.
             4423          (4) This section does not alter the right of any [agent or broker] licensee to recover
             4424      from an insured the amount of any premium due for insurance effected by or through that
             4425      [agent or broker] licensee or to charge a reasonable rate of interest upon past-due accounts.
             4426          (5) This section does not apply to bail bond [agents] producers or bail enforcement
             4427      agents as defined in Section 31A-35-102 .
             4428          Section 79. Section 31A-23a-502 , which is renumbered from Section 31A-23-402 is
             4429      renumbered and amended to read:


             4430           [31A-23-402].     31A-23a-502. Controlled business, except as to title
             4431      insurance.
             4432          (1) As used in this section, "controlled business" means insurance procured by:
             4433          (a) an insurance [agent or broker] producer who is a natural person upon the life,
             4434      person, or property of himself, his relative within the second degree by blood or marriage, his
             4435      employer, employees, or organization; or
             4436          (b) an insurance [agent or broker] producer that is an organization upon its own
             4437      property or upon the life, person, or property of its partners, shareholders, directors, or
             4438      employees, or their relatives within the second degree by blood or marriage.
             4439          (2) No [agent or broker] producer may receive any compensation from an insurer for
             4440      effecting insurance upon controlled business unless during the preceding 12 months the [agent
             4441      or broker] producer had effected other insurance with aggregate premiums exceeding the
             4442      premiums on the controlled business.
             4443          (3) This section does not apply to title insurance.
             4444          Section 80. Section 31A-23a-503 , which is renumbered from Section 31A-23-403 is
             4445      renumbered and amended to read:
             4446           [31A-23-403].     31A-23a-503. Controlled business in title insurance.
             4447          (1) As used in this section:
             4448          (a) "Associate" means any:
             4449          (i) business organized for profit in which a [producer of] person who refers title
             4450      business is a director, officer, partner, or employee;
             4451          (ii) spouse or relative within the second degree by blood or marriage of a [producer of]
             4452      person who refers title business, who is a natural person;
             4453          (iii) employee of a [producer of] person who refers title business; or
             4454          (iv) person with whom a [producer of] person who refers title business or any associate
             4455      of that producer has any agreement, arrangement, or understanding, or pursues any course of
             4456      conduct, designed to avoid the provisions of this chapter.
             4457          (b) "Controlled business" means that portion of the title insurance business of a title
             4458      insurer or [agent] producer in this state that is referred to it by all those producers of title
             4459      business who have a financial interest in the title insurer or [agent] producer and by all
             4460      associates of those producers. Business is referred if there is influence over the selection of the


             4461      person with whom the business is placed.
             4462          (c) "[Producer of] A person who refers title business" includes any person engaged in
             4463      this state in a business of:
             4464          (i) buying or selling interests in real property;
             4465          (ii) making loans secured by interests in real property; or
             4466          (iii) acting as a representative or employee of a person who buys or sells any interest in
             4467      real property or who lends or borrows money with interest as security, other than acting as a
             4468      licensed title insurer or [agent] producer doing the business of title insurance.
             4469          (d) "Financial interest" means any legal or beneficial interest that together with other
             4470      interests entitles the holder to more than 1% of the net profits or net worth of the business in
             4471      which the interest is held.
             4472          (2) A title insurer or [agent] producer or person having a financial interest in a title
             4473      insurer or [agent] producer may not knowingly be a party to or knowingly permit to continue in
             4474      any arrangement in which the title insurer, [agent] producer, or person knows or has reason to
             4475      believe that any [producer of] person who refers title business has or will have, directly or
             4476      indirectly, a financial interest in the title insurer or [agent] producer, if it reasonably appears
             4477      that a substantial factor in the [producer's] person who refers title business owning or acquiring
             4478      the financial interest is the expected realization of financial profit or gain derived in whole or in
             4479      part from controlled business.
             4480          (3) A title insurer may not appoint or knowingly continue its authorization of any title
             4481      insurance [agent] producer in which the company knows or has reason to believe that any
             4482      [producer of] person who refers title business has or will have, directly or indirectly, a financial
             4483      interest, if it reasonably appears that a substantial factor in the [producer's] person who refers
             4484      title business owning or acquiring the financial interest is the [producer's] person's expected
             4485      realization of financial profit or gain derived in whole or part from controlled business.
             4486          (4) If for any calendar quarter, the gross operating revenues of a title insurer or [agent]
             4487      producer derived from all sources of controlled business in this state amount to more than 1/3
             4488      of its gross operating revenues from all other sources of its business of title insurance in this
             4489      state, it is presumed that the expected realization of financial profit or gain derived in whole or
             4490      in part from controlled business was a substantial factor in the ownership of financial interest
             4491      in the title insurer or [agent by producers] producer. The title insurer or [agent] producer has


             4492      the burden of overcoming this presumption. Subsection (4) does not authorize any controlled
             4493      business if a violation of the standards set forth in Subsection (2) or (3) exists.
             4494          (5) No title insurance company or [agent] producer may accept any order for the
             4495      business of title insurance that it knows or has reason to believe constitutes controlled business,
             4496      unless it records and maintains in its permanent records on forms prescribed by the
             4497      commissioner the facts relating to the transactions.
             4498          (6) An applicant for qualification as a title insurance company or [agent] producer may
             4499      not be granted a license if it reasonably appears that the expected realization of financial profit
             4500      or gain to be derived in whole or in part from controlled business is or will be a substantial
             4501      factor in the applicant's plan of operation or in the ownership or acquisition of financial
             4502      interests in the applicant by any [producers of] person who refers title business.
             4503          (7) Each title insurer and [agent] producer shall maintain permanent records relating to
             4504      its controlled business on forms prescribed by the commissioner.
             4505          (8) (a) Each title insurer and [agent] producer shall file annually with the
             4506      commissioner, on forms prescribed by the commissioner, reports setting forth:
             4507          (i) the names and addresses of any persons owning a financial interest in the title
             4508      insurer or [agent] producer as of the last day of the calendar year, who are known or reasonably
             4509      believed by the title insurance company or [agent] producer to be [producers of] a person who
             4510      refers title business; and
             4511          (ii) a summary compiled from the title insurer's or [agent's] producer's records of the
             4512      controlled business, sufficient to inform the commissioner as to the proportion of the title
             4513      insurer's or [agent's] producer's gross operating revenues attributable to controlled business
             4514      during the preceding calendar year.
             4515          (b) The reports shall be filed with the reports required under Section [ 31A-23-313 ]
             4516      31A-23a-413 and shall contain the certification of an officer of the title insurer or [agent]
             4517      producer that the information contained in them is true to the best of the officer's knowledge,
             4518      information, and belief. Upon filing, the reports are public records.
             4519          (9) An attorney who is also a licensed title insurance [agent] producer and who issues
             4520      as [agent] producer a policy of title insurance to a client on behalf of whom the attorney is also
             4521      acting as an attorney and who, in so doing, acts consistently with the applicable ethical
             4522      standards of the Utah State Bar pertaining to the billing and receipt of legal fees and the receipt


             4523      of a commission on a policy of title insurance is not, without more, considered to be engaged in
             4524      controlled business.
             4525          Section 81. Section 31A-23a-504 , which is renumbered from Section 31A-23-404 is
             4526      renumbered and amended to read:
             4527           [31A-23-404].     31A-23a-504. Sharing commissions.
             4528          (1) (a) Except as provided in Subsection 31A-15-103 (3), a licensee under this chapter
             4529      or an insurer may only pay consideration or reimburse out-of-pocket expenses to a person if the
             4530      licensee knows that the person is licensed under this chapter to act as [an agent or broker] a
             4531      producer, limited line producer, customer service representative, consultant, managing general
             4532      agent, or reinsurance intermediary in Utah as to the particular type of insurance.
             4533          (b) A person may only accept commission compensation or other compensation as [an]
             4534      a producer, limited line producer, customer service representative, consultant, managing
             4535      general agent, [broker, or consultant] or reinsurance intermediary that is directly or indirectly
             4536      the result of any insurance transaction if that person is licensed under this chapter to act as [an]
             4537      a producer, limited line producer, customer service representative, consultant, managing
             4538      general agent, or [broker] reinsurance intermediary as to the particular type of insurance.
             4539          (2) (a) Except as provided in Section [ 31A-23-301 ] 31A-23a-501, a consultant may not
             4540      pay or receive any commission or other compensation that is directly or indirectly the result of
             4541      any insurance transaction.
             4542          (b) A consultant may share a consultant fee or other compensation received for
             4543      consulting services performed within Utah only with another consultant licensed under this
             4544      chapter, and only to the extent that the other consultant contributed to the services performed.
             4545          (3) This section does not prohibit the payment of renewal commissions to former
             4546      licensees under this chapter, former Title 31, Chapter 17, or their successors in interest under a
             4547      deferred compensation or agency sales agreement.
             4548          (4) This section does not prohibit compensation paid to or received by [an individual] a
             4549      person for referral of a potential customer that seeks to purchase or obtain an opinion or advice
             4550      on an insurance product if:
             4551          (a) the person is not licensed to sell insurance;
             4552          (b) the person sells or provides opinions or advice on the product; and
             4553          (c) the compensation does not depend on whether the referral results in a purchase or


             4554      sale.
             4555          (5) In selling any policy of title insurance, no sharing of commissions under Subsection
             4556      (1) may occur if it will result in an unlawful rebate, or in compensation in connection with
             4557      controlled business, or in payment of a forwarding fee or finder's fee. A person may share
             4558      compensation for the issuance of a title insurance policy only to the extent that he contributed
             4559      to the search and examination of the title or other services connected with it.
             4560          (6) This section does not apply to bail bond [agents] producers or bail enforcement
             4561      agents as defined in Section 31A-35-102 .
             4562          Section 82. Section 31A-23a-505 , which is renumbered from Section 31A-23-406 is
             4563      renumbered and amended to read:
             4564           [31A-23-406].     31A-23a-505. Benefit plans for producers.
             4565          An authorized insurer may establish retirement, insurance, and other benefit plans for
             4566      [agents] producers on a basis approved by the commissioner.
             4567          Section 83. Section 31A-23a-601 , which is renumbered from Section 31A-23-501 is
             4568      renumbered and amended to read:
             4569     
Part 6. Managing General Agents

             4570           [31A-23-501].     31A-23a-601. Licensure.
             4571          (1) A person, firm, association, or corporation may not act in the capacity of managing
             4572      general agent with respect to risks located in this state for an insurer licensed in this state
             4573      unless the person is a licensed producer in this state.
             4574          (2) A person, firm, association, or corporation may not act in the capacity of a
             4575      managing general agent representing an insurer domiciled in this state with respect to risks
             4576      located outside this state unless the person is licensed as a producer in this state pursuant to this
             4577      chapter. The license may be a nonresident license.
             4578          (3) The commissioner may require a bond in an amount he finds acceptable for the
             4579      protection of each insurer represented.
             4580          (4) The commissioner may require the managing general agent to maintain an errors
             4581      and omissions policy or other security acceptable to the commissioner.
             4582          Section 84. Section 31A-23a-602 , which is renumbered from Section 31A-23-502 is
             4583      renumbered and amended to read:
             4584           [31A-23-502].     31A-23a-602. Required contract provisions.


             4585          A person, firm, association, or corporation acting in the capacity of a managing general
             4586      agent may not place business with an insurer unless there is in force a written contract between
             4587      the parties which sets forth the responsibilities of each party, and where both parties share
             4588      responsibility for a particular function, the contract specifies the division of shared
             4589      responsibilities. The written contract shall contain the following minimum provisions:
             4590          (1) The insurer may terminate the contract for cause upon written notice to the
             4591      managing general agent. The insurer may suspend the underwriting authority of the managing
             4592      general agent during the pendency of any dispute regarding the cause for termination.
             4593          (2) The managing general agent will render accounts to the insurer detailing all
             4594      transactions and remit all funds due under the contract to the insurer at least monthly.
             4595          (3) All funds collected for the account of an insurer will be held by the managing
             4596      general agent in a fiduciary capacity in a bank which is insured by the FDIC. This account
             4597      shall be used for all payments on behalf of the insurer. The managing general agent may retain
             4598      no more than three months estimated claims payments and allocated loss adjustment expenses.
             4599          (4) Separate records of business written by the managing general agent shall be
             4600      maintained. The insurer shall have access and the right to copy all accounts and records related
             4601      to its business and shall have access to all books, bank accounts, and records of the managing
             4602      general agent. The records shall be retained according to Section [ 31A-23-312 ] 31A-23a-412
             4603      and shall be kept in a form usable by the insurer and the commissioner.
             4604          (5) The contract may not be assigned in whole or part by the managing general agent.
             4605          (6) The insurer shall have the right to cancel or nonrenew any policy of insurance
             4606      subject to the applicable laws and rules. The contract shall contain appropriate underwriting
             4607      guidelines including:
             4608          (a) the maximum annual premium volume;
             4609          (b) the basis of the rates to be charged;
             4610          (c) the types of risks which may be written;
             4611          (d) maximum limits of liability;
             4612          (e) applicable exclusions;
             4613          (f) territorial limitations;
             4614          (g) policy cancellation provisions; and
             4615          (h) the maximum policy period.


             4616          (7) If the contract permits the managing general agent to settle claims on behalf of the
             4617      insurer:
             4618          (a) All claims must be reported to the company in a timely manner.
             4619          (b) A copy of the claim file shall be sent to the insurer at its request, or as soon as it
             4620      becomes known that the claim:
             4621          (i) has the potential to exceed the lesser of an amount determined by the commissioner
             4622      or the limit set by the company;
             4623          (ii) involves a coverage dispute;
             4624          (iii) may exceed the managing general agent's claims settlement authority;
             4625          (iv) is open for more than six months; or
             4626          (v) is closed by payment the lesser of an amount set by the commissioner or an amount
             4627      set by the company.
             4628          (c) All claim files will be the joint property of the insurer and managing general agent.
             4629      However, upon an order of liquidation of the insurer, the files become the sole property of the
             4630      insurer or its estate. The managing general agent shall have reasonable access to and the right
             4631      to copy the files on a timely basis.
             4632          (d) Any settlement authority granted to the managing general agent may be terminated
             4633      for cause upon the insurer's written notice to the managing general agent or upon the
             4634      termination of the contract. The insurer may suspend the settlement authority during the
             4635      pendency of any dispute regarding the cause for termination.
             4636          (8) Where electronic claims files are in existence, the contract must address the timely
             4637      transmission of the data.
             4638          (9) If the contract provides for a sharing of interim profits by the managing general
             4639      agent, and the managing general agent has the authority to determine the amount of the interim
             4640      profits by establishing loss reserves, controlling claim payments, or in any other manner,
             4641      interim profits may not be paid to the managing general agent until one year after they are
             4642      earned for property insurance business, and five years after they are earned on casualty
             4643      business, but not until the profits have been verified by a review conducted pursuant to Section
             4644      [ 31A-23-503 ] 31A-23a-603 .
             4645          (10) The managing general agent may not:
             4646          (a) bind reinsurance or retrocessions on behalf of the insurer, except that the managing


             4647      general agent may bind facultative reinsurance contracts pursuant to obligatory facultative
             4648      agreements if the contract with the insurer contains reinsurance underwriting guidelines
             4649      including, for both reinsurance assumed and ceded, a list of reinsurers with which the
             4650      automatic agreements are in effect, the coverages and amounts or percentages that may be
             4651      reinsured, and commission schedules;
             4652          (b) commit the insurer to participate in insurance or reinsurance syndicates;
             4653          (c) appoint any producer without assuring that the producer is lawfully licensed to
             4654      transact the type of insurance for which he is appointed;
             4655          (d) without prior approval of the insurer, pay or commit the insurer to pay a claim over
             4656      a specified amount, net of reinsurance, which shall not exceed 1% of the insurer's
             4657      policyholder's surplus as of December 31 of the last completed calendar year;
             4658          (e) collect any payment from a reinsurer or commit the insurer to any claim settlement
             4659      with a reinsurer without prior approval of the insurer; if prior approval is given, a report must
             4660      be promptly forwarded to the insurer;
             4661          (f) permit its subproducer to serve on the insurer's board of directors;
             4662          (g) jointly employ an individual who is employed with the insurer; or
             4663          (h) appoint a submanaging general agent.
             4664          Section 85. Section 31A-23a-603 , which is renumbered from Section 31A-23-503 is
             4665      renumbered and amended to read:
             4666           [31A-23-503].     31A-23a-603. Duties of insurers.
             4667          (1) The insurer shall have on file an independent financial examination, in a form
             4668      acceptable to the commissioner, of each managing general agent with which the insurer has
             4669      done business.
             4670          (2) (a) If a managing general agent establishes loss reserves, the insurer shall annually
             4671      obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses
             4672      incurred and outstanding on business produced by the managing general agent.
             4673          (b) The requirement of Subsection (2)(a) is in addition to any other required loss
             4674      reserve certification.
             4675          (3) The insurer shall at least semiannually conduct an on-site review of the
             4676      underwriting and claims processing operations of the managing general agent.
             4677          (4) Binding authority for all reinsurance contracts or participation in insurance or


             4678      reinsurance syndicates shall rest with an officer of the insurer, who may not be affiliated with
             4679      the managing general agent.
             4680          (5) (a) Within 30 days after entering into or terminating a contract with a managing
             4681      general agent, the insurer shall provide written notification of the appointment or termination to
             4682      the commissioner.
             4683          (b) A notice of appointment of a managing general agent shall include:
             4684          (i) a statement of duties that the applicant is expected to perform on behalf of the
             4685      insurer;
             4686          (ii) the lines of insurance for which the applicant is to be authorized to act; and
             4687          (iii) any other information the commissioner may request.
             4688          (6) (a) An insurer shall review the insurer's books and records each quarter to
             4689      determine if any producer, as defined in Section [ 31A-23-102 ] 31A-1-301 , has become a
             4690      managing general agent as defined in Section [ 31A-23-102 ] 31A-23a-102 .
             4691          (b) If the insurer determines that a producer has become a managing general agent:
             4692          (i) the insurer shall promptly notify the producer and the commissioner of the
             4693      determination; and
             4694          (ii) the insurer and producer shall fully comply with the provisions of this chapter
             4695      within 30 days.
             4696          (7) (a) An insurer may not appoint officers, directors, employees, subproducers, or
             4697      controlling shareholders of the insurer's managing general agents to the insurer's board of
             4698      directors.
             4699          (b) This Subsection (7) does not apply to relationships governed by:
             4700          (i) Chapter 16, Insurance Holding Companies; or
             4701          (ii) Chapter [23] 23a, Part [6, Broker] 7, Producer Controlled Insurers, if it applies.
             4702          Section 86. Section 31A-23a-604 , which is renumbered from Section 31A-23-504 is
             4703      renumbered and amended to read:
             4704           [31A-23-504].     31A-23a-604. Examination authority.
             4705          The acts of the managing general agent are considered to be the acts of the insurer on
             4706      whose behalf it is acting. A managing general agent may be examined as if it were the insurer.
             4707          Section 87. Section 31A-23a-605 , which is renumbered from Section 31A-23-505 is
             4708      renumbered and amended to read:


             4709           [31A-23-505].     31A-23a-605. Penalties and liabilities.
             4710          (1) If the commissioner finds after a hearing that any person has violated any provision
             4711      of this part, the commissioner may order:
             4712          (a) for each separate violation, a penalty in an amount of $5,000;
             4713          (b) revocation or suspension of the producer's license; and
             4714          (c) the managing general agent to reimburse the insurer, the rehabilitator, or liquidator
             4715      of the insurer for any losses incurred by the insurer caused by the managing general agent's
             4716      violation.
             4717          (2) Nothing contained in this section affects the right of the commissioner to impose
             4718      any other penalties provided for in this title.
             4719          (3) Nothing contained in this part is intended to, or in any manner limits or restricts the
             4720      rights of policyholders, claimants, and auditors.
             4721          Section 88. Section 31A-23a-701 , which is renumbered from Section 31A-23-601 is
             4722      renumbered and amended to read:
             4723     
Part 7. Producer Controlled Insurers

             4724           [31A-23-601].     31A-23a-701. Applicability.
             4725          (1) This part applies to licensed insurers, as defined in Section [ 31A-23-102 ]
             4726      31A-23a-102 , that are domiciled:
             4727          (a) in this state; or
             4728          (b) in a state that does not have a substantially similar law.
             4729          (2) All provisions of Chapter 16, Insurance Holding Companies, to the extent they are
             4730      not superseded by this part, continue to apply to all parties within holding company systems
             4731      subject to this part.
             4732          Section 89. Section 31A-23a-702 , which is renumbered from Section 31A-23-602 is
             4733      renumbered and amended to read:
             4734           [31A-23-602].     31A-23a-702. Minimum standards.
             4735          (1) This section applies if, in any calendar year, the aggregate amount of gross written
             4736      premium on business placed with a controlled insurer by a controlling [broker] producer is
             4737      equal to or greater than 5% of the admitted assets of the controlled insurer, as reported in the
             4738      controlled insurer's quarterly statement filed as of September 30 of the prior year.
             4739          (2) Notwithstanding Subsection (1), this section does not apply if:


             4740          (a) the controlling [broker] producer places insurance only with the controlled insurer,
             4741      or only with the controlled insurer and members of the controlled insurer's holding company
             4742      system, or with the controlled insurer's parent, affiliate, or subsidiary and receives no
             4743      compensation based upon the amount of premiums written in connection with the insurance
             4744      placed;
             4745          (b) the controlling [broker] producer accepts insurance placements only from
             4746      nonaffiliated [subbrokers] producers who are not controlling producers, and not directly from
             4747      insureds; and
             4748          (c) the controlled insurer, except for insurance business written through a residual
             4749      market facility, accepts insurance business only from a controlling [broker] producer, a
             4750      [broker] producer controlled by the controlled insurer, or a [broker] producer that is a
             4751      subsidiary of the controlled insurer.
             4752          (3) A controlled insurer may not accept business from a controlling [broker] producer
             4753      and a controlling [broker] producer may not place business with a controlled insurer unless
             4754      there is a written contract between the controlling [broker] producer and the insurer that
             4755      specifies the responsibilities of each party and that has been approved by the board of directors
             4756      of the insurer. The contract shall contain the following minimum provisions:
             4757          (a) The controlled insurer may terminate the contract for cause, upon written notice to
             4758      the controlling [broker] producer. The controlled insurer shall suspend the authority of the
             4759      controlling [broker] producer to write business during the pendency of any dispute regarding
             4760      the cause for the termination.
             4761          (b) The controlling [broker] producer shall render accounts to the controlled insurer
             4762      detailing all material transactions, including information necessary to support all commissions,
             4763      charges, and other fees received by, or owing to, the controlling [broker] producer.
             4764          (c) The controlling [broker] producer shall remit all funds due under the terms of the
             4765      contract to the controlled insurer at least monthly. The due date shall be fixed so that
             4766      premiums or premium installments collected shall be remitted no later than 90 days after the
             4767      effective date of any policy placed with the controlled insurer under the contract.
             4768          (d) All funds collected for the controlled insurer's account shall be held by the
             4769      controlling [broker] producer in a fiduciary capacity, in one or more appropriately identified
             4770      bank accounts in banks that are members of the Federal Reserve System FDIC, in accordance


             4771      with applicable provisions of this title. However, funds of a controlling [broker] producer not
             4772      required to be licensed in this state shall be maintained in compliance with the requirements of
             4773      the controlling [broker's] producer's domiciliary jurisdiction.
             4774          (e) The controlling [broker] producer shall maintain separately identifiable records of
             4775      business written for the controlled insurer.
             4776          (f) The contract may not be assigned in whole or in part by the controlling [broker]
             4777      producer.
             4778          (g) The controlled insurer shall provide the controlling [broker] producer with its
             4779      underwriting standards, rules, procedures, and manuals setting forth the rates to be charged,
             4780      and the conditions for the acceptance or rejection of risks. The controlling [broker] producer
             4781      shall adhere to the standards, rules, procedures, rates, and conditions. The standards, rules,
             4782      procedures, rates, and conditions shall be the same as those applicable to comparable business
             4783      placed with the controlled insurer by a [broker] producer other than the controlling [broker]
             4784      producer.
             4785          (h) The contract shall state the rates and terms of the controlling [broker's] producer's
             4786      commissions, charges, or other fees and the purposes for those charges or fees. The rates of the
             4787      commissions, charges, and other fees may not be greater than those applicable to comparable
             4788      business and services placed with the controlled insurer by [brokers] producers other than
             4789      controlling [brokers] producers. For purposes of [this] Subsections [and Subsection (g)] (3)(g)
             4790      and (h), examples of "comparable business and services" include the same lines of insurance,
             4791      same kinds of insurance, same kinds of risks, similar policy limits, and similar quality of
             4792      business.
             4793          (i) If the contract provides that the controlling [broker] producer, on insurance business
             4794      placed with the insurer, is to be compensated contingent upon the insurer's profits on that
             4795      business, then the compensation may not be determined and paid until at least five years after
             4796      the premiums on liability insurance are earned, and at least one year after the premiums are
             4797      earned on any other insurance. In no event may the commissions be paid until the adequacy of
             4798      the controlled insurer's reserves on remaining claims has been independently verified pursuant
             4799      to Subsection [(3)] (5).
             4800          (j) The contract shall include a limit on the controlling [broker's] producer's writings in
             4801      relation to the controlled insurer's surplus and total writings. The insurer may establish a


             4802      different limit to each line or subline of business. The controlled insurer shall notify the
             4803      controlling [broker] producer when the applicable limit is approached and shall not accept
             4804      business from the controlling [broker] producer if the limit is reached. The controlling [broker]
             4805      producer may not place business with the controlled insurer if it has been notified by the
             4806      controlled insurer that the limit has been reached.
             4807          (k) The controlling [broker] producer may negotiate but may not bind reinsurance on
             4808      behalf of the controlled insurer on business the controlling [broker] producer places with the
             4809      controlled insurer. However, the controlling [broker] producer may bind facultative
             4810      reinsurance contracts pursuant to obligatory facultative agreements if the contract with the
             4811      controlled insurer contains underwriting guidelines including, for both reinsurance assumed
             4812      and ceded, a list of reinsurers with which the automatic agreements are in effect, the coverages
             4813      and amounts or percentages that may be reinsured, and commission schedules.
             4814          (4) Each controlled insurer shall have an audit committee of the board of directors.
             4815      The audit committee shall annually meet to review the adequacy of the insurer's loss reserves.
             4816      The committee shall meet with management, the insurer's independent certified public
             4817      accountants, and an independent casualty actuary or any other independent loss reserve
             4818      specialists acceptable to the commissioner.
             4819          (5) (a) In addition to any other required loss reserve certification, the controlled insurer
             4820      shall file with the commissioner on April 1 of each year an opinion of an independent casualty
             4821      actuary, or any other independent loss reserve specialist acceptable to the commissioner. The
             4822      opinion shall report loss ratios for each line of business written and shall attest to the adequacy
             4823      of loss reserves established for losses incurred and outstanding as of year-end on business
             4824      placed by the producer including losses incurred but not reported.
             4825          (b) The controlled insurer shall annually report to the commissioner the amount of
             4826      commissions paid to the [broker] producer, the percentage that amount represents of the net
             4827      premiums written, and comparable amounts and percentage paid to noncontrolling [brokers]
             4828      producers for placements of the same kinds of insurance.
             4829          Section 90. Section 31A-23a-703 , which is renumbered from Section 31A-23-603 is
             4830      renumbered and amended to read:
             4831           [31A-23-603].     31A-23a-703. Disclosure.
             4832          The [broker] producer, prior to the effective date of the policy, shall deliver written


             4833      notice to the prospective insured disclosing the relationship between the [broker] producer and
             4834      the controlled insurer. However, if the business is placed through a [sub-broker] producer who
             4835      is not a controlling [broker] producer, the controlling [broker] producer shall retain in his
             4836      records a signed commitment from the [sub-broker] noncontrolling producer that the
             4837      [sub-broker] noncontrolling producer is aware of the relationship between the insurer and the
             4838      [broker] producer and that the [sub-broker] noncontrolling producer has, or will, notify the
             4839      insured.
             4840          Section 91. Section 31A-23a-704 , which is renumbered from Section 31A-23-604 is
             4841      renumbered and amended to read:
             4842           [31A-23-604].     31A-23a-704. Penalties.
             4843          (1) (a) If, after notice and opportunity to be heard, the commissioner finds that the
             4844      controlling [broker] producer or any other person has not materially complied with this part, or
             4845      any rule made or order issued under the part, the commissioner may order the controlling
             4846      [broker] producer to cease placing business with the controlled insurer.
             4847          (b) If the commissioner finds that because of the material noncompliance that the
             4848      controlled insurer or any policyholder of the controlled insurer has suffered any loss or damage,
             4849      the commissioner may maintain a civil action or may intervene in an action brought by or on
             4850      behalf of the insurer or policyholder for recovery of compensatory damages for the benefit of
             4851      the insurer or policyholder or he may seek other appropriate relief.
             4852          (2) If an order for liquidation or rehabilitation of the controlled insurer has been
             4853      entered pursuant to Title 31A, Chapter 27, Insurers Rehabilitation and Liquidation, and the
             4854      receiver appointed under that order believes that the controlling [broker] producer or any other
             4855      person has not materially complied with this part, or any rule made or order issued under this
             4856      part, and the insurer suffered any loss or damage as a result of the noncompliance, the receiver
             4857      may maintain a civil action for recovery of damages or other appropriate sanctions for the
             4858      benefit of the insurer.
             4859          (3) Nothing in this section affects the right of the commissioner to impose any other
             4860      penalties provided for in this title.
             4861          (4) Nothing contained in this section is intended to or shall in any manner alter or
             4862      affect the rights of policyholders, claimants, creditors, or other third parties.
             4863          Section 92. Section 31A-23a-801 , which is renumbered from Section 31A-23-701 is


             4864      renumbered and amended to read:
             4865     
Part 8. Reinsurance Intermediaries

             4866           [31A-23-701].     31A-23a-801. Licensure.
             4867          (1) A person, firm, association, or corporation may not act as a reinsurance
             4868      intermediary-broker in this state if the reinsurance intermediary-broker maintains an office
             4869      either directly or as a member or employee of a firm or association, or an officer, director, or
             4870      employee of a corporation unless:
             4871          (a) in this state, the reinsurance intermediary-broker is a licensed producer in this state;
             4872      or
             4873          (b) in another state, the reinsurance intermediary-broker is a licensed producer in this
             4874      state or another state having a licensing law substantially similar to this part, or the reinsurance
             4875      intermediary-broker is licensed in this state as a nonresident reinsurance intermediary.
             4876          (2) A person, firm, association, or corporation may not act as a reinsurance
             4877      intermediary-manager:
             4878          (a) for a reinsurer domiciled in this state, unless the reinsurance intermediary-manager
             4879      is a licensed producer in this state;
             4880          (b) in this state, if the reinsurance intermediary-manager maintains an office either
             4881      directly or as a member or employee of a firm or association, or as an officer, director, or
             4882      employee of a corporation in this state, unless the reinsurance intermediary-manager is a
             4883      licensed producer in this state; or
             4884          (c) in another state for a nondomestic insurer, unless the reinsurance
             4885      intermediary-manager is a licensed producer in this state or another state having a licensing law
             4886      substantially similar to this chapter, or the person is licensed in this state as a nonresident
             4887      reinsurance intermediary.
             4888          (3) The commissioner may require a bond in an amount he finds acceptable for the
             4889      protection of each reinsurer represented.
             4890          (4) (a) The commissioner may issue a reinsurance intermediary license to any person,
             4891      firm, association, or corporation which has complied with the requirements of this chapter.
             4892          (i) Any license issued to a firm or association will authorize all the members of the
             4893      firm or association, and any designated employees, to act as reinsurance intermediaries under
             4894      the license. Each member, employee, or similar person shall be named in the application and


             4895      any supplements to the application.
             4896          (ii) Any license issued to a corporation shall authorize all of the officers, directors, and
             4897      any designated employees to act as reinsurance intermediaries on behalf of the corporation, and
             4898      all authorized persons shall be named in the application and any supplements to the
             4899      application.
             4900          (b) If the applicant for a reinsurance intermediary license is a nonresident, the
             4901      applicant, as a condition precedent to receiving or holding a license, shall designate the
             4902      commissioner as agent for service of process in the manner, and with the same legal effect,
             4903      provided for by this title for designation of service of process upon unauthorized insurers. The
             4904      applicant also shall furnish the commissioner with the name and address of a resident of this
             4905      state upon whom notices or orders of the commissioner or process affecting the nonresident
             4906      reinsurance intermediary may be served. The licensee shall promptly notify the commissioner
             4907      in writing of every change in its designated agent for service of process, and the change does
             4908      not become effective until acknowledged by the commissioner.
             4909          (5) The commissioner may refuse to issue a reinsurance intermediary license if he
             4910      determines that the applicant, any one named on the application, or any member, principal,
             4911      officer, or director of the applicant, is not trustworthy, or that any controlling person of the
             4912      applicant is not trustworthy to act as a reinsurance intermediary, or that any of the persons
             4913      named has given cause for revocation or suspension of the license, or has failed to comply with
             4914      any prerequisite for the issuance of the license. Upon written request the commissioner will
             4915      furnish a summary of the basis for his refusal to issue a license. The summary document shall
             4916      be confidential.
             4917          (6) Licensed attorneys-at-law of this state when acting in their professional capacity as
             4918      attorneys are exempt from this section.
             4919          Section 93. Section 31A-23a-802 , which is renumbered from Section 31A-23-702 is
             4920      renumbered and amended to read:
             4921           [31A-23-702].     31A-23a-802. Required contract provisions -- Reinsurance
             4922      intermediary-broker.
             4923          Transactions between a reinsurance intermediary-broker and the insurer it represents in
             4924      that capacity may only be entered into pursuant to a written authorization, which specifies the
             4925      responsibilities of each party. The authorization shall, at a minimum, provide that the


             4926      reinsurance intermediary-broker:
             4927          (1) may have his authority terminated by the insurer at any time;
             4928          (2) will render accounts to the insurer accurately detailing all material transactions,
             4929      including information necessary to support all commissions, charges and other fees received
             4930      by, or owing to the reinsurance intermediary-broker, and that he will remit all funds due to the
             4931      insurer within 30 days of receipt;
             4932          (3) shall hold, in a fiduciary capacity, all funds collected for the insurer's account in a
             4933      [bank] financial institution, which is a qualified United States financial institution;
             4934          (4) will comply with Section [ 31A-23-703 ] 31A-23a-803 ;
             4935          (5) will comply with the written standards established by the insurer for the cession or
             4936      retrocession of all risks; and
             4937          (6) will disclose to the insurer any relationship with any reinsurer to which business
             4938      will be ceded or retroceded.
             4939          Section 94. Section 31A-23a-803 , which is renumbered from Section 31A-23-703 is
             4940      renumbered and amended to read:
             4941           [31A-23-703].     31A-23a-803. Books and records -- Reinsurance
             4942      intermediary-broker.
             4943          (1) For at least ten years after expiration of each contract of reinsurance transacted by
             4944      the reinsurance intermediary-broker, he will keep a complete record for each transaction
             4945      showing:
             4946          (a) the type of contract, limits, underwriting restrictions, classes or risks, and territory;
             4947          (b) the period of coverage, including the effective and expiration dates, cancellation
             4948      provisions, and notice required of cancellation;
             4949          (c) reporting and settlement requirements of balances;
             4950          (d) the rate used to compute the reinsurance premium;
             4951          (e) the names and addresses of assuming reinsurers;
             4952          (f) the rates of all reinsurance commissions, including the commissions on any
             4953      retrocessions handled by the reinsurance intermediary-broker;
             4954          (g) related correspondence and memoranda;
             4955          (h) proof of placement;
             4956          (i) details regarding retrocessions handled by the reinsurance intermediary-broker,


             4957      including the identity of retrocessionaires and percentage of each contract assumed or ceded;
             4958          (j) financial records including premium and loss accounts; and
             4959          (k) when the reinsurance intermediary-broker procures a reinsurance contract on behalf
             4960      of a licensed ceding insurer:
             4961          (i) directly from any assuming reinsurer, written evidence that the assuming reinsurer
             4962      has agreed to assume the risk; or
             4963          (ii) if placed through a representative of the assuming reinsurer, other than an
             4964      employee, written evidence that the reinsurer has delegated binding authority to the
             4965      representative.
             4966          (2) The insurer will have access and the right to copy and audit all accounts and
             4967      records maintained by the reinsurance intermediary-broker related to its business in a form
             4968      usable by the insurer.
             4969          Section 95. Section 31A-23a-804 , which is renumbered from Section 31A-23-704 is
             4970      renumbered and amended to read:
             4971           [31A-23-704].     31A-23a-804. Duties of insurers utilizing the services of a
             4972      reinsurance intermediary-broker.
             4973          (1) An insurer may not engage the services of any person, firm, association, or
             4974      corporation to act as a reinsurance intermediary-broker on its behalf unless the person is
             4975      licensed as required by Subsection [ 31A-23-701 ] 31A-23a-801 (1).
             4976          (2) An insurer may not employ an individual who is employed by a reinsurance
             4977      intermediary-broker with which it transacts business, unless the reinsurance
             4978      intermediary-broker is under common control with the insurer and subject to Title 31A,
             4979      Chapter 16, Insurance Holding Companies.
             4980          (3) The insurer shall annually obtain a copy of statements of the financial condition of
             4981      each reinsurance intermediary-broker with which it transacts business.
             4982          Section 96. Section 31A-23a-805 , which is renumbered from Section 31A-23-705 is
             4983      renumbered and amended to read:
             4984           [31A-23-705].     31A-23a-805. Required contract provisions -- Reinsurance
             4985      intermediary-manager.
             4986          Transactions between a reinsurance intermediary-manager and the reinsurer it
             4987      represents in that capacity may only be entered into pursuant to a written contract, which


             4988      specifies the responsibilities of each party, and which shall be approved by the reinsurer's board
             4989      of directors. At least 30 days before the reinsurer assumes or cedes business through the
             4990      producer, a true copy of the approved contract shall be filed with the commissioner for
             4991      approval. The contract shall, at a minimum, provide or require the following:
             4992          (1) The reinsurer may terminate the contract for cause upon written notice to the
             4993      reinsurance intermediary-manager. The reinsurer may immediately suspend the authority of
             4994      the reinsurance intermediary-manager to assume or cede business during the pendency of any
             4995      dispute regarding the cause for termination.
             4996          (2) The reinsurance intermediary-manager will render accounts to the reinsurer
             4997      accurately detailing all material transactions, including information necessary to support all
             4998      commissions, charges, and other fees received by, or owing to the reinsurance
             4999      intermediary-manager, and he shall remit all funds due under the contract to the reinsurer at
             5000      least monthly.
             5001          (3) All funds collected for the reinsurer's account will be held by the reinsurance
             5002      intermediary-manager in a fiduciary capacity in a [bank] financial institution which is a
             5003      qualified United States financial institution. The reinsurance intermediary-manager may retain
             5004      no more than three months estimated claims payments and allocated loss adjustment expenses.
             5005      The reinsurance intermediary-manager shall maintain a separate [bank] account for each
             5006      reinsurer that it represents.
             5007          (4) For at least ten years after expiration of each contract of reinsurance transacted by
             5008      the reinsurance intermediary-manager, he shall keep a complete record for each transactions
             5009      showing:
             5010          (a) the type of contract, limits, underwriting restrictions, classes of risks, and territory;
             5011          (b) period of coverage, including effective and expiration dates, cancellation provisions
             5012      and notice required of cancellation, and disposition of outstanding reserves on covered risks;
             5013          (c) reporting and settlement requirements of balances;
             5014          (d) rates used to compute the reinsurance premium;
             5015          (e) names and addresses of reinsurers;
             5016          (f) rates of all reinsurance commissions, including the commissions on any
             5017      retrocessions handled by the reinsurance intermediary-manager;
             5018          (g) related correspondence and memoranda;


             5019          (h) proof of placement;
             5020          (i) details regarding retrocessions handled by the reinsurance intermediary-manager, as
             5021      permitted by Subsection [ 31A-23-707 ] 31A-23a-807 (4), including the identity of
             5022      retrocessionaires and percentage of each contract assumed or ceded;
             5023          (j) financial records, including premium and loss accounts; and
             5024          (k) when the reinsurance intermediary-manager places a reinsurance contract on behalf
             5025      of a ceding insurer:
             5026          (i) directly from any assuming reinsurer, written evidence that the assuming reinsurer
             5027      has agreed to assume the risk; or
             5028          (ii) if placed through a representative of the assuming reinsurer, other than an
             5029      employee, written evidence that the reinsurer has delegated binding authority to the
             5030      representative.
             5031          (5) The reinsurer will have access and the right to copy all accounts and records
             5032      maintained by the reinsurance intermediary-manager which are related to its business, in a form
             5033      usable by the reinsurer.
             5034          (6) The contract cannot be assigned in whole or in part by the reinsurance
             5035      intermediary-manager.
             5036          (7) The reinsurance intermediary-manager will comply with the written underwriting
             5037      and rating standards established by the insurer for the acceptance, rejection, or cession of all
             5038      risks.
             5039          (8) The contract shall set forth the rates, terms, and purposes of commissions, charges,
             5040      and other fees which the reinsurance intermediary-manager may levy against the reinsurer.
             5041          (9) If the contract permits the reinsurance intermediary-manager to settle claims on
             5042      behalf of the reinsurer:
             5043          (a) All claims will be reported to the reinsurer in a timely manner.
             5044          (b) A copy of the claim file will be sent to the reinsurer at its request or as soon as it
             5045      becomes known that the claim:
             5046          (i) has the potential to exceed the lesser of an amount determined by the commissioner
             5047      or the limit set by the reinsurer;
             5048          (ii) involves a coverage dispute;
             5049          (iii) may exceed the reinsurance intermediary-manager claims settlement authority;


             5050          (iv) is open for more than six months; or
             5051          (v) is closed by payment of the lesser of an amount set by the commissioner or an
             5052      amount set by the reinsurer.
             5053          (c) All claim files will be the joint property of the reinsurer and reinsurance
             5054      intermediary-manager. However, upon an order of liquidation of the reinsurer the files shall
             5055      become the sole property of the reinsurer or its estate. The reinsurance intermediary-manager
             5056      shall have reasonable access to and the right to copy the files on a timely basis.
             5057          (d) Any settlement authority granted to the reinsurance intermediary-manager may be
             5058      terminated for cause upon the reinsurer's written notice to the reinsurance
             5059      intermediary-manager, or upon the termination of the contract. The reinsurer may suspend the
             5060      settlement authority during the pendency of the dispute regarding the cause of termination.
             5061          (10) If the contract provides for a sharing of interim profits by the reinsurance
             5062      intermediary-manager, that the contract shall provide interim profits will not be paid until one
             5063      year after the end of each underwriting period for property business and five years after the end
             5064      of each underwriting period for casualty business, or a later time period set by the
             5065      commissioner for specified lines of insurance, and not until the adequacy of reserves on
             5066      remaining claims has been verified pursuant to Subsection [ 31A-23-707 ] 31A-23a-807 (3).
             5067          (11) The reinsurance intermediary-manager will annually provide the reinsurer with a
             5068      statement of its financial condition prepared by an independent certified public accountant.
             5069          (12) The reinsurer shall at least semi-annually conduct an on-site review of the
             5070      underwriting and claims processing operations of the reinsurance intermediary-manager.
             5071          (13) The reinsurance intermediary-manager will disclose to the reinsurer any
             5072      relationship it has with any insurer prior to ceding or assuming any business with the insurer
             5073      pursuant to this contract.
             5074          (14) Within the scope of its actual or apparent authority the acts of the reinsurance
             5075      intermediary-manager shall be considered to be the acts of the reinsurer on whose behalf it is
             5076      acting.
             5077          Section 97. Section 31A-23a-806 , which is renumbered from Section 31A-23-706 is
             5078      renumbered and amended to read:
             5079           [31A-23-706].     31A-23a-806. Prohibited acts.
             5080          (1) The reinsurance intermediary-manager may not cede retrocessions on behalf of the


             5081      reinsurer, except that the reinsurance intermediary-manager may cede facultative retrocessions
             5082      pursuant to obligatory facultative agreements if the contract with the reinsurer contains
             5083      reinsurance underwriting guidelines for facultative retrocessions. The guidelines shall include
             5084      a list of reinsurers with which automatic agreements are in effect, and for each listed reinsurer,
             5085      the coverages and amounts or percentages that may be reinsured, and commission schedules.
             5086          (2) The reinsurance intermediary-manager may not commit the reinsurer to participate
             5087      in reinsurance syndicates.
             5088          (3) The reinsurance intermediary-manager may not appoint any producer without
             5089      assuring that the producer is lawfully licensed to transact the type of reinsurance for which he
             5090      is appointed.
             5091          (4) The reinsurance intermediary-manager may not, without prior approval of the
             5092      reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the
             5093      lesser of an amount specified by the reinsurer or 1% of the reinsurer's policyholder's surplus as
             5094      of December 31 of the last complete calendar year.
             5095          (5) The reinsurance intermediary-manager may not collect any payment from a
             5096      retrocessionaire or commit the reinsurer to any claim settlement with a retrocessionaire,
             5097      without prior approval of the reinsurer. If prior approval is given, a report must be promptly
             5098      forwarded to the reinsurer.
             5099          (6) The reinsurance intermediary-manager may not jointly employ an individual who is
             5100      employed by the reinsurer unless the reinsurance intermediary-manager is under common
             5101      control with the reinsurer subject to Title 31A, Chapter 16, Insurance Holding Companies.
             5102          (7) The reinsurance intermediary-manager may not appoint a subreinsurance
             5103      intermediary-manager.
             5104          Section 98. Section 31A-23a-807 , which is renumbered from Section 31A-23-707 is
             5105      renumbered and amended to read:
             5106           [31A-23-707].     31A-23a-807. Duties of reinsurers utilizing the services of
             5107      reinsurance.
             5108          (1) A reinsurer may not engage the services of any person, firm, association, or
             5109      corporation to act as a reinsurance intermediary-manager on its behalf unless the person is
             5110      licensed as required by Subsection [ 31A-23-701 ] 31A-23a-801 (2).
             5111          (2) The reinsurer shall annually obtain a copy of statements of the financial condition


             5112      of each reinsurance intermediary-manager which the reinsurer has engaged, which shall be
             5113      prepared by an independent certified public accountant in a form acceptable to the
             5114      commissioner.
             5115          (3) If a reinsurance intermediary-manager establishes loss reserves, the reinsurer shall
             5116      annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established
             5117      for losses incurred and outstanding on business produced by the reinsurance
             5118      intermediary-manager. The actuary's opinion shall be in addition to any other required loss
             5119      reserve certification.
             5120          (4) Binding authority for all retrocessional contracts or participation in reinsurance
             5121      syndicates shall rest with an officer of the reinsurer, who may not be affiliated with the
             5122      reinsurance intermediary-manager.
             5123          (5) Within 30 days of termination of a contract with a reinsurance
             5124      intermediary-manager, the reinsurer shall provide written notification of the termination to the
             5125      commissioner.
             5126          (6) A reinsurer may not appoint to its board of directors, any officer, director,
             5127      employee, controlling shareholder, or subproducer of its reinsurance intermediary-manager.
             5128      This subsection does not apply to relationships governed by Title 31A, Chapter 16, Insurance
             5129      Holding Companies, or Chapter [23] 23a, Part [6, Broker] 7, Producer Controlled Insurers, if it
             5130      applies.
             5131          Section 99. Section 31A-23a-808 , which is renumbered from Section 31A-23-708 is
             5132      renumbered and amended to read:
             5133           [31A-23-708].     31A-23a-808. Examination authority.
             5134          (1) A reinsurance intermediary shall be subject to examination by the commissioner.
             5135      The commissioner shall have access to all books, bank accounts, and records of the reinsurance
             5136      intermediary, which shall be kept in a form usable to the commissioner.
             5137          (2) A reinsurance intermediary-manager may be examined as if it were the reinsurer.
             5138          Section 100. Section 31A-23a-809 , which is renumbered from Section 31A-23-709 is
             5139      renumbered and amended to read:
             5140           [31A-23-709].     31A-23a-809. Penalties and liabilities.
             5141          (1) A reinsurance intermediary, insurer, or reinsurer found by the commissioner, after a
             5142      hearing conducted in accordance with Title 63, Chapter 46b, Administrative Procedures Act, to


             5143      be in violation of any provisions of this title, shall:
             5144          (a) for each separate violation, pay a civil penalty in an amount not exceeding $5,000;
             5145          (b) be subject to revocation or suspension of its license; and
             5146          (c) if a violation was committed by the reinsurance intermediary, the reinsurance
             5147      intermediary shall make restitution to the insurer, reinsurer, rehabilitator, or liquidator of the
             5148      insurer or reinsurer for the net losses incurred by the insurer or reinsurer attributable to the
             5149      violation.
             5150          (2) Nothing contained in this section affects the right of the commissioner to impose
             5151      any other penalties provided in this title.
             5152          (3) Nothing contained in this part is intended to, or in any manner limits or restricts the
             5153      rights of policyholders, claimants, creditors, or other third parties; nor does it confer any rights
             5154      to such persons.
             5155          Section 101. Section 31A-26-201 is amended to read:
             5156           31A-26-201. Requirement of license.
             5157          (1) Except as provided in Subsection (2), no person may perform, offer to perform, or
             5158      solicit the opportunity to perform any act of insurance adjusting without a valid license under
             5159      Section 31A-26-203 ; and no person may use the insurance adjusting services of another if the
             5160      person knows or should know that the one providing these services does not have a license as
             5161      required by law.
             5162          (2) The following are exempt from the license requirement of Subsection (1), when
             5163      acting in the indicated capacities:
             5164          (a) a person engaged in insurance adjusting as a regular salaried employee of, and not
             5165      an independent contractor for, an insurer;
             5166          (b) an arbitrator or an umpire selected by the claimant and insurer to decide, alone or
             5167      with others, whether a claim should be paid and how much should be paid;
             5168          (c) an attorney at law acting in an attorney-client relationship;
             5169          (d) an insurance [agent] producer, but only as to the classes of insurance for which he
             5170      is licensed under Section [ 31A-23-204 ] 31A-23a-106 and only as to claims adjusted on the
             5171      request of an insurer for which he is [an agent] a producer;
             5172          (e) a regular salaried employee of, and not an independent contractor for, a
             5173      policyholder or claimant under an insurance policy;


             5174          (f) an employee of a licensed insurance adjuster who provides only administrative or
             5175      clerical assistance;
             5176          (g) person who does not do insurance adjusting under Section 31A-26-102 , but who is
             5177      specially employed to obtain facts about a loss for or furnish technical assistance to a licensed
             5178      adjuster or a company adjuster, including a photographer, estimator or appraiser, marine
             5179      surveyor, private detective, engineer, and handwriting expert;
             5180          (h) a holder of a group insurance policy, with respect to administrative activities in
             5181      connection with that policy, who receives no compensation for his services beyond the actual
             5182      expenses estimated on a reasonable basis;
             5183          (i) a person engaged in insurance adjusting as a regular salaried employee of, and not
             5184      an independent contractor for, an administrator licensed under Chapter 25; and
             5185          (j) a person who gives advice or assistance without compensation or expectation of
             5186      compensation, direct or indirect.
             5187          (3) No claim settlement between an insurer and an insured or a claimant under an
             5188      insurance contract is invalid as a result of a violation of this section.
             5189          Section 102. Section 31A-27-103 is amended to read:
             5190           31A-27-103. Jurisdiction and venue.
             5191          (1) Except as provided in Subsection (2), a delinquency proceeding may not be
             5192      commenced under this chapter by anyone other than the Utah commissioner.
             5193          (2) (a) Three or more judgment creditors holding unrelated judgments against an
             5194      insurer, which judgments aggregate more than $5,000 in excess of any security held by those
             5195      creditors may commence proceedings against the insurer under the conditions and in the
             5196      manner prescribed in this Subsection (2), by serving notice upon the commissioner and the
             5197      insurer of intention to file a petition for liquidation under Section 31A-27-307 or 31A-27-402 .
             5198          (b) Each of the judgments described in Subsection (2)(a):
             5199          (i) shall have been rendered against the insurer by a Utah court having jurisdiction over
             5200      the subject matter and the insurer;
             5201          (ii) shall have been entered more than 60 days before the service of notice under
             5202      Subsection (2)(a);
             5203          (iii) may not have been satisfied in full;
             5204          (iv) may not be the subject of a valid contract between the insurer and any judgment


             5205      creditor for payment of the judgment, unless that contract has been breached by the insurer;
             5206          (v) may not be a judgment assigned in order to institute proceedings under this
             5207      Subsection (2); and
             5208          (vi) may not be a judgment on which an appeal or review is pending or may yet be
             5209      brought.
             5210          (c) If any one of the judgments in favor of a petitioning creditor remains unpaid for 30
             5211      days after service of the notice under Subsection (2)(a), and the commissioner has not then
             5212      filed a petition for liquidation:
             5213          (i) the creditor may file a verified petition for liquidation of the insurer:
             5214          (A) in the manner prescribed by Section 31A-27-307 or 31A-27-402 ; and
             5215          (B) alleging the conditions stated in this Subsection (2); and
             5216          (ii) the commissioner shall be served and joined in the action.
             5217          (3) Except in accordance with this chapter, a court of this state does not have
             5218      jurisdiction to entertain, hear, or determine any complaint praying for:
             5219          (a) the dissolution, liquidation, rehabilitation, sequestration, conservation, or
             5220      receivership of any insurer; or
             5221          (b) an injunction or restraining order or other relief preliminary to, incidental to, or
             5222      relating to the type of proceedings described in Subsection (3)(a).
             5223          (4) (a) Venue for proceedings arising under this chapter shall be laid initially as
             5224      specified in the sections providing for those proceedings.
             5225          (b) All other actions and proceedings initiated by the receiver may be commenced and
             5226      tried where:
             5227          (i) the delinquency proceedings are then pending; or
             5228          (ii) venue would be laid by applicable Utah law.
             5229          (c) All other actions and proceedings against the receiver shall be commenced and tried
             5230      in the county where the delinquency proceedings are pending.
             5231          (d) Upon motion of any party, venue may be changed by order of the court or the
             5232      presiding judge of the court to any other district court in Utah, whenever the convenience of the
             5233      parties and witnesses and the ends of justice require it.
             5234          (e) This Subsection (4) relates only to venue and is not jurisdictional.
             5235          (5) In addition to other grounds for jurisdiction provided by the law of Utah, a Utah


             5236      court having jurisdiction of the subject matter has jurisdiction over a person properly served in
             5237      an action brought by the receiver of a domestic insurer or an alien insurer domiciled in Utah:
             5238          (a) if the person served is obligated to the insurer in any way as an incident to any
             5239      agency or brokerage arrangement that may exist or has existed between them, in any action on
             5240      or incident to the obligation;
             5241          (b) if the person served is a reinsurer who has at any time written a policy of
             5242      reinsurance for an insurer against which a rehabilitation or liquidation order is in effect when
             5243      the action is commenced;
             5244          (c) if the person served is [an agent of or broker] a producer for the reinsurer described
             5245      in Subsection (5)(b), in any action on or incident to the reinsurance contract; or
             5246          (d) if the person served is or has been an officer, manager, trustee, organizer, promoter,
             5247      or person in a position of comparable authority or influence in an insurer against which a
             5248      rehabilitation or liquidation order is in effect when the action is commenced, in any action
             5249      resulting from the relationship with the insurer.
             5250          (6) (a) Subject to Sections 31A-27-305 and 31A-27-317 , the court in which a
             5251      delinquency proceeding is pending has exclusive jurisdiction for:
             5252          (i) all actions and proceedings brought against the receiver of a rehabilitation or
             5253      liquidation estate of the insurer; or
             5254          (ii) any action or proceeding in any way related to a rehabilitation or liquidation estate
             5255      of an insurer.
             5256          (b) An action described in Subsection (6)(a) shall be commenced and tried in the court
             5257      having exclusive jurisdiction.
             5258          (7) If the court on the motion of any party finds that any action commenced under
             5259      Subsection (5) should, as a matter of substantial justice, be tried in a forum outside Utah, the
             5260      court may enter an order to stay further proceedings on the action in Utah.
             5261          Section 103. Section 31A-27-316 is amended to read:
             5262           31A-27-316. Duties of producers.
             5263          Any [agent or broker] producer doing business with an insurer subject to a liquidation
             5264      order shall, upon the liquidator's request, provide the liquidator with information in the [agent
             5265      or broker's] producer's possession relative to the policyholders of the insurer who is subject to
             5266      the liquidation order. The commissioner's request under this section shall impose a time limit


             5267      within which the requested information shall be provided. This time limit may not be less than
             5268      five working days.
             5269          Section 104. Section 31A-27-324 is amended to read:
             5270           31A-27-324. Recovery of premiums owed.
             5271          (1) An insured is obligated to pay any unpaid earned premium due the insurer at the
             5272      time of the termination of coverage under Subsection 31A-27-311 (1).
             5273          (2) Any person other than the insured who is responsible for the payment of a premium
             5274      is obligated to pay any unpaid premium, including the amount representing the commission for
             5275      the full policy term due the insurer at the time of the termination of coverage under Subsection
             5276      31A-27-311 (1), whether earned or unearned, as shown on the records of the insurer. Credits or
             5277      setoffs may not be allowed to [an agent, broker] a producer, or premium finance company for
             5278      any amounts advanced to the insurer by the [agent, broker,] producer or premium finance
             5279      company on behalf of, but in the absence of a payment by, the insured.
             5280          Section 105. Section 31A-30-104 is amended to read:
             5281           31A-30-104. Applicability and scope.
             5282          (1) This chapter applies to any:
             5283          (a) health benefit plan that provides coverage to:
             5284          (i) individuals;
             5285          (ii) small employers; or
             5286          (iii) both Subsections (1)(a)(i) and (ii); or
             5287          (b) individual conversion policy for purposes of Sections 31A-30-106.5 and
             5288      31A-30-107.5 .
             5289          (2) This chapter applies to a health benefit plan that provides coverage to small
             5290      employers or individuals regardless of:
             5291          (a) whether the contract is issued to:
             5292          (i) an association;
             5293          (ii) a trust;
             5294          (iii) a discretionary group; or
             5295          (iv) other similar grouping; or
             5296          (b) the situs of delivery of the policy or contract.
             5297          (3) This chapter does not apply to:


             5298          (a) a large employer health benefit plan; or
             5299          (b) short-term limited duration health insurance.
             5300          (4) (a) Except as provided in Subsection (4)(b), for the purposes of this chapter:
             5301          (i) carriers that are affiliated companies or that are eligible to file a consolidated tax
             5302      return shall be treated as one carrier; and
             5303          (ii) any restrictions or limitations imposed by this chapter shall apply as if all health
             5304      benefit plans delivered or issued for delivery to covered insureds in this state by the affiliated
             5305      carriers were issued by one carrier.
             5306          (b) Upon a finding of the commissioner, an affiliated carrier that is a health
             5307      maintenance organization having a certificate of authority under this title may be considered to
             5308      be a separate carrier for the purposes of this chapter.
             5309          (c) Unless otherwise authorized by the commissioner, a covered carrier may not enter
             5310      into one or more ceding arrangements with respect to health benefit plans delivered or issued
             5311      for delivery to covered insureds in this state if the ceding arrangements would result in less
             5312      than 50% of the insurance obligation or risk for the health benefit plans being retained by the
             5313      ceding carrier.
             5314          (d) Section 31A-22-1201 applies if a covered carrier cedes or assumes all of the
             5315      insurance obligation or risk with respect to one or more health benefit plans delivered or issued
             5316      for delivery to covered insureds in this state.
             5317          (5) (a) A Taft Hartley trust created in accordance with Section 302(c)(5) of the Federal
             5318      Labor Management Relations Act, or a carrier with the written authorization of such a trust,
             5319      may make a written request to the commissioner for a waiver from the application of any of the
             5320      provisions of Subsection 31A-30-106 (1) with respect to a health benefit plan provided to the
             5321      trust.
             5322          (b) The commissioner may grant a trust or carrier described in Subsection (5)(a) a
             5323      waiver if the commissioner finds that application with respect to the trust would:
             5324          (i) have a substantial adverse effect on the participants and beneficiaries of the trust;
             5325      and
             5326          (ii) require significant modifications to one or more collective bargaining arrangements
             5327      under which the trust is established or maintained.
             5328          (c) A waiver granted under this Subsection (5) may not apply to an individual if the


             5329      person participates in a Taft Hartley trust as an associate member of any employee
             5330      organization.
             5331          (6) Sections 31A-30-106 , 31A-30-106.5 , 31A-30-106.7 , 31A-30-107 , 31A-30-108 , and
             5332      31A-30-111 apply to:
             5333          (a) any insurer engaging in the business of insurance related to the risk of a small
             5334      employer for medical, surgical, hospital, or ancillary health care expenses of the small
             5335      employer's employees provided as an employee benefit; and
             5336          (b) any contract of an insurer, other than a workers' compensation policy, related to the
             5337      risk of a small employer for medical, surgical, hospital, or ancillary health care expenses of the
             5338      small employer's employees provided as an employee benefit.
             5339          (7) The commissioner may make rules requiring that the marketing practices be
             5340      consistent with this chapter for:
             5341          (a) a small employer carrier;
             5342          (b) a small employer carrier's agent;
             5343          (c) an insurance [broker] producer; and
             5344          (d) an insurance consultant.
             5345          Section 106. Section 31A-35-102 is amended to read:
             5346           31A-35-102. Definitions.
             5347          As used in this chapter:
             5348          (1) "Bail bond" means a bond for a specified monetary amount that is:
             5349          (a) executed by a bail bond [agent] producer licensed in accordance with Section
             5350      31A-35-401 ; and
             5351          (b) issued to a court, magistrate, or authorized officer as security for the subsequent
             5352      court appearance of the defendant upon the defendant's release from actual custody pending the
             5353      appearance.
             5354          (2) "Bail bond [agent] producer" means an individual who:
             5355          (a) is appointed by:
             5356          (i) a surety insurer that issues bail bonds; or
             5357          (ii) a bail bond surety company licensed under this chapter;
             5358          (b) is appointed to execute or countersign undertakings of bail in connection with
             5359      judicial proceedings; and


             5360          (c) receives or is promised money or other things of value for engaging in an act
             5361      described in Subsection (2)(b).
             5362          (3) "Bail bond surety" means a person that:
             5363          (a) (i) is a bail bond surety company licensed under this chapter; or
             5364          (ii) a surety insurer; and
             5365          (b) issues bonds to secure:
             5366          (i) the release of a person from incarceration; and
             5367          (ii) the appearance of that person at court hearings.
             5368          (4) "Bail bond surety company" means any sole proprietor or entity who:
             5369          (a) (i) is the agent of a surety insurer that issues a bail bond in connection with judicial
             5370      proceedings;
             5371          (ii) pledges the assets of a letter of credit from a Utah depository institution for a bail
             5372      bond in connection with judicial proceedings; or
             5373          (iii) pledges personal or real property, or both, as security for a bail bond in connection
             5374      with judicial proceedings; and
             5375          (b) receives or is promised money or other things of value for a service described in
             5376      Subsection (4)(a).
             5377          (5) "Bail enforcement agent" means an individual who:
             5378          (a) is employed or contracted with to:
             5379          (i) enforce the terms and conditions of a defendant's release on bail in a civil or
             5380      criminal proceeding;
             5381          (ii) apprehend a defendant or surrender a defendant to custody; or
             5382          (iii) both Subsections (5)(a)(i) and (ii); and
             5383          (b) receives or is promised monies or other things of value for the services described in
             5384      Subsection (5)(a).
             5385          (6) "Board" means the Bail Bond Surety Oversight Board created in Section
             5386      31A-35-201 .
             5387          (7) "Certificate" means a certificate of authority issued under this chapter to allow an
             5388      insurer to operate as a surety insurer.
             5389          (8) "Indemnitor" means an entity or natural person who enters into an agreement with a
             5390      bail bond surety to hold the bail bond surety harmless from loss incurred as a result of


             5391      executing a bail bond.
             5392          (9) "Liquid assets" means financial holdings that can be converted into cash in a timely
             5393      manner without the loss of principal.
             5394          (10) "Principal" means an individual or corporation whose performance is guaranteed
             5395      by bond.
             5396          (11) "Surety insurer" means an insurer that:
             5397          (a) is licensed under Chapter 4, 5, or 14;
             5398          (b) receives a certificate under this title; and
             5399          (c) issues bail bonds.
             5400          (12) "Utah depository institution" is a depository institution, as defined in Section
             5401      7-1-103 , that:
             5402          (a) has Utah as its home state; or
             5403          (b) operates a branch in Utah.
             5404          Section 107. Section 31A-35-301 is amended to read:
             5405           31A-35-301. The commissioner's authority.
             5406          (1) The commissioner shall:
             5407          (a) make rules as necessary for the administration of this chapter;
             5408          (b) with information as provided by the board, issue or deny licensure under this
             5409      chapter;
             5410          (c) take action regarding a license, including suspension or revocation; and
             5411          (d) maintain and publish a current list of licensed bail bond surety companies and
             5412      [agents] producers.
             5413          (2) The commissioner may establish fees for the issuance, renewal, and reinstatement
             5414      of a bail bond surety company license in accordance with Section 63-38-3.2 .
             5415          Section 108. Section 31A-35-401 is amended to read:
             5416           31A-35-401. Requirement for license or certificate of authority -- Process -- Fees
             5417      -- Limitations.
             5418          (1) (a) A person may not engage in the bail bond surety insurance business unless that
             5419      person:
             5420          (i) is a bail bond surety company licensed under this chapter;
             5421          (ii) is a surety insurer that is granted a certificate under this section in the same manner


             5422      as other insurers doing business in this state are granted certificates of authority under this title;
             5423      or
             5424          (iii) is a bail bond [agent] producer licensed in accordance with this section.
             5425          (b) A bail bond surety company shall be licensed under this chapter as an agency.
             5426          (c) A bail bond [agent] producer shall be licensed under Chapter [23] 23a, Insurance
             5427      Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries, as [an agent] a
             5428      limited lines producer.
             5429          (2) A person applying for a bail bond surety company license under this chapter shall
             5430      submit to the commissioner:
             5431          (a) a completed application form as prescribed by the commissioner;
             5432          (b) a fee as determined by the commissioner in accordance with Section 63-38-3.2 ; and
             5433          (c) any additional information required by rule.
             5434          (3) Fees required under this section are not refundable.
             5435          (4) Fees collected from a bail bond surety company shall be deposited in a restricted
             5436      account created in Section 31A-35-407 .
             5437          (5) (a) A bail bond surety company shall be domiciled in Utah.
             5438          (b) A bail bond [agent] producer shall be a resident of Utah.
             5439          (c) A foreign surety insurer that is granted a certificate to issue bail bonds may only
             5440      issue bail bonds through a bail bond surety company licensed under this chapter.
             5441          Section 109. Section 31A-35-402 is amended to read:
             5442           31A-35-402. Authority related to bail bonds.
             5443          (1) A bail bond surety company may only issue bail bonds.
             5444          (2) [A] In accordance with Section 31A-23a-205 , a bail bond [agent] producer may not
             5445      execute or issue a bail bond in this state without holding a current appointment from a bail
             5446      bond surety or current designation from a bail bond company.
             5447          (3) A bail bond surety may not allow any person who is not a bail bond [agent]
             5448      producer to engage in the bail bond surety business on the bail bond surety's behalf, except for
             5449      individuals:
             5450          (a) employed solely for the performance of clerical, stenographic, investigative, or
             5451      other administrative duties that do not require a license as:
             5452          (i) a bail bond surety company; or


             5453          (ii) a bail bond [agent] producer; and
             5454          (b) whose compensation is not related to or contingent upon the number of bonds
             5455      written.
             5456          Section 110. Section 31A-35-403 is amended to read:
             5457           31A-35-403. Exemptions to licensing requirements.
             5458          This chapter does not affect the negotiation through a licensed [broker or agent]
             5459      producer for, or the execution or delivery of, an undertaking of bail executed by an insurer for
             5460      its insured under a policy of automobile insurance or of liability insurance upon the automobile
             5461      of the insured.
             5462          Section 111. Section 31A-35-502 is amended to read:
             5463           31A-35-502. Notification of violation of chapter.
             5464          If the commissioner has reason to believe a person licensed as a bail bond surety
             5465      company or a bail bond [agent] producer has violated this chapter, written notice shall be sent
             5466      to that person, advising the person of:
             5467          (1) the alleged violation;
             5468          (2) the commissioner's authority to take action against the person's license;
             5469          (3) the person's right to an administrative hearing under Title 63, Chapter 46b,
             5470      Administrative Procedures Act; and
             5471          (4) the period of time within which the hearing described in Subsection (3) shall be
             5472      requested if the person requests a hearing.
             5473          Section 112. Section 31A-35-503 is amended to read:
             5474           31A-35-503. Disciplinary action -- Hearing -- Appeal.
             5475          (1) Based on information the commissioner receives during a hearing described in
             5476      Section 31A-35-502 regarding a person licensed as a bail bond surety company or bail bond
             5477      [agent] producer, the commissioner may:
             5478          (a) dismiss the complaint if the commissioner finds it is without merit;
             5479          (b) fix a period and terms of probation best adopted to educate the person;
             5480          (c) place the license on suspension for a period of not more than 12 months; or
             5481          (d) revoke the license.
             5482          (2) The commissioner shall advise the person described in Subsection (1) in writing of:
             5483          (a) the commissioner's findings based on the hearing; and


             5484          (b) the person's rights of appeal under this chapter.
             5485          (3)(a) Unless the conditions of Subsection (3)(b) are met, if a bail bond surety company
             5486      license is suspended or revoked under this chapter, a member, employee, officer, or director of
             5487      that corporation may not:
             5488          (i) be licensed as a bail bond surety company or bail bond [agent] producer; or
             5489          (ii) be designated in any license to exercise authority under this chapter during the
             5490      period of the suspension or revocation.
             5491          (b) Subsection (3)(a) does not apply if the commissioner determines upon substantial
             5492      evidence that the member, employee, officer, or director:
             5493          (i) was not personally at fault; and
             5494          (ii) did not acquiesce in the matter on account of which the license was suspended or
             5495      revoked.
             5496          Section 113. Section 31A-35-601 is amended to read:
             5497           31A-35-601. Acts of agent.
             5498          (1) As used in this section[;]:
             5499          (a) "Bail recovery agent" means an individual employed by a bail enforcement agent to
             5500      assist the bail enforcement agent regarding civil or criminal defendants released on bail by:
             5501          (i) presenting a defendant for required court appearances;
             5502          (ii) apprehending or surrendering a defendant to a court; or
             5503          (iii) keeping the defendant under necessary surveillance.
             5504          (b) "Bail recovery apprentice" means an individual who:
             5505          (i) is employed by a bail enforcement agent; and
             5506          (ii) works under the direct supervision of that bail enforcement agent or under the
             5507      direct supervision of a bail recovery agent employed also by the bail enforcement agent, unless
             5508      the bail recovery apprentice is conducting activities at the direction of the employing bail
             5509      enforcement agent that do not require direct supervision.
             5510          (2) The acts or conduct of any bail bond [agent] producer or bail enforcement agent,
             5511      bail recovery agent, or bail recovery apprentice who acts within the scope of the authority
             5512      delegated to him by the bail bond surety, are considered to be the acts or conduct of the bail
             5513      bond surety for which the bail bond [agent] producer or bail bond enforcement agent, bail
             5514      recovery agent, or bail recovery apprentice is acting as agent.


             5515          (3) The acts or conduct of any bail bond [agent] producer or bail enforcement agent,
             5516      bail recovery agent, or bail recovery apprentice who acts within the scope of the authority
             5517      delegated to him by the bail bond [agent] producer are considered to be the acts or conduct of
             5518      the bail bond [agent] producer for which the bail enforcement agent is acting as agent.
             5519          Section 114. Section 31A-35-603 is amended to read:
             5520           31A-35-603. Collateral security.
             5521          (1) A bail bond [agent] producer may accept collateral security in connection with a
             5522      bail transaction, if the collateral security is reasonable in relation to the face amount of the bail
             5523      bond.
             5524          (2) (a) The collateral security described in Subsection (1) shall be received by the bail
             5525      bond [agent] producer in the bail bond [agent's] producer's fiduciary capacity.
             5526          (b) Before any judgment of forfeiture of bail, the bail bond [agent] producer shall keep
             5527      the collateral separate and apart from any other funds or assets of the licensee.
             5528          (3) (a) Any collateral that is deposited with a bail bond [agent] producer or bail bond
             5529      surety shall be returned to the person who deposited it within ten days after the return is
             5530      requested by the person who deposited it if:
             5531          (i) the bail bond has been exonerated; and
             5532          (ii) all fees owed to the bail bond [agent] producer or bail bond surety have been paid.
             5533          (b) A certified copy of the minute order from the court stating the bail or undertaking
             5534      was ordered exonerated is prima facie evidence of exoneration or termination of liability.
             5535          (4) (a) If a bail bond [agent] producer accepts collateral, the bail bond [agent] producer
             5536      shall give a written receipt for the collateral.
             5537          (b) The receipt required by Subsection (4)(a) shall include a fully detailed account of
             5538      the collateral received.
             5539          (5) Upon return of collateral to the person who posted it, if any amount has been
             5540      deducted by the bail bond surety or bail bond [agent] producer as expense, the bail bond surety
             5541      or bail bond [agent] producer shall:
             5542          (a) include with the returned collateral an itemized statement of all expenses deducted
             5543      from the collateral; and
             5544          (b) maintain a copy of the statement required by Subsection (5)(a) in the records of the
             5545      bail bond surety or bail bond [agent] producer.


             5546          (6) If the bail bond secured by the collateral is forfeited and the bail bond [agent]
             5547      producer or bail bond surety retains possession of the collateral in payment of the forfeiture or
             5548      otherwise disposes of the collateral, the person retaining possession or disposing of the
             5549      property shall maintain a written record of the collateral, including any disposition.
             5550          (7) (a) If a document that conveys title to real property is used as collateral in a bail
             5551      bond transaction, the document shall state on its face that it is executed as part of a security
             5552      transaction.
             5553          (b) If the document described in Subsection (7)(a) is recorded, the bail bond [agent]
             5554      producer or the bail bond surety shall:
             5555          (i) execute a reconveyance of the property, executed so that the reconveyance can be
             5556      recorded; and
             5557          (ii) promptly deliver the reconveyance document to:
             5558          (A) the person executing the original conveyance; or
             5559          (B) the heirs, legal representative, or successor in interest of the person described in
             5560      Subsection (7)(b)(ii)(A).
             5561          Section 115. Section 31A-35-604 is amended to read:
             5562           31A-35-604. Records.
             5563          (1) A bail bond [agent] producer shall maintain at the bail bond [agent's] producer's
             5564      place of business:
             5565          (a) records of all bail bonds the bail bond [agent] producer executes or countersigns, so
             5566      the public may obtain all necessary information concerning those bail bonds for at least one
             5567      year after the liability of the bail bond surety has been terminated; and
             5568          (b) any additional information the commissioner may reasonably require by rule.
             5569          (2) Records required to be maintained under Subsection (1) shall be available for
             5570      examination by the commissioner or the commissioner's representatives during regular
             5571      business hours.
             5572          (3) The bail bond surety company shall maintain for three years after receipt all records
             5573      of any bail bond executed or countersigned by a bail bond [agent] producer appointed by the
             5574      bail bond surety company.
             5575          Section 116. Section 31A-35-605 is amended to read:
             5576           31A-35-605. Guarantors -- Agreement and enforcement.


             5577          (1) All agreements of persons to act as guarantor for a bail bond shall be in writing or
             5578      reduced to writing as soon as possible after completion.
             5579          (2) When a person executes an agreement to act as a guarantor, the bail bond surety
             5580      company or the bail bond [agent] producer shall deliver to that person a copy of the agreement
             5581      promptly upon that person's execution of the agreement.
             5582          (3) A bail bond [agent] producer may not enforce any guarantor agreement without
             5583      disclosing to the guarantor all collateral held by the bail bond [agent] producer indemnifying
             5584      the bond to which the agreement relates, and the identity of each other guarantor.
             5585          Section 117. Section 31A-35-606 is amended to read:
             5586           31A-35-606. Bail agreement prior to commission of offense prohibited.
             5587          A bail bond surety or bail bond [agent] producer may not enter into an agreement or
             5588      arrangement with any person, guaranteeing or assuring in advance of the commission of any
             5589      offense that bail will be furnished to that person or any other party if arrested.
             5590          Section 118. Section 31A-35-608 is amended to read:
             5591           31A-35-608. Premiums and authorized charges.
             5592          (1) A bail bond surety or bail bond [agent] producer may not, in any bail transaction or
             5593      in connection with that transaction, directly or indirectly, charge or collect money or other
             5594      valuable consideration from any person except to:
             5595          (a) pay the premium on the bail at the rates established by the bail bond surety;
             5596          (b) provide collateral;
             5597          (c) reimburse himself for actual expenses, as described in Subsection (2), incurred in
             5598      connection with the bail bond transaction; or
             5599          (d) to reimburse himself, or to establish a right of action against the principal or any
             5600      indemnitor, for actual expenses the bail bond surety or bail bond [agent] producer incurred:
             5601          (i) in good faith; and
             5602          (ii) which were by reason of breach by the defendant of any of the terms of the written
             5603      agreement under which the undertaking of bail or bail bond was written.
             5604          (2) (a) A bail bond surety may bring an action in a court of law to enforce its equitable
             5605      rights against the principal and the principal's indemnitors in exoneration if:
             5606          (i) a bail bond [agent] producer did not establish a written agreement; or
             5607          (ii) there is only an incomplete writing.


             5608          (b) Reimbursement claimed under this Subsection (2) may not exceed the sum of:
             5609          (i) the principal sum of the bail bond or undertaking; and
             5610          (ii) any reasonable expenses that:
             5611          (A) are verified by receipt;
             5612          (B) in total do not amount to more than the principal sum of the bail bond or
             5613      undertaking; and
             5614          (C) are incurred in good faith by the bail bond surety, its [agents] producers, and
             5615      employees by reason of the principal's breach.
             5616          (3) This section does not affect or impede the right of a bail bond [agent] producer to
             5617      execute undertaking of bail on behalf of a nonresident [agent] producer of the bail bond surety
             5618      the bail bond [agent] producer represents.
             5619          Section 119. Section 31A-35-701 is amended to read:
             5620           31A-35-701. Prohibited acts.
             5621          (1) A bail bond [agent] producer or bail bond surety may not:
             5622          (a) solicit business in or about:
             5623          (i) any place where persons in the custody of the state or any local law enforcement or
             5624      correctional agency are confined; or
             5625          (ii) any court;
             5626          (b) pay a fee or rebate or give or promise anything of value to any person in order to
             5627      secure a settlement, compromise, remission, or reduction of the amount of any undertaking or
             5628      bail bond;
             5629          (c) pay a fee or rebate or give anything of value to an attorney in regard to any bail
             5630      bond matter, except payment for legal services actually rendered for the bail bond [agent]
             5631      producer or bail bond surety;
             5632          (d) pay a fee or rebate or give or promise anything of value to the principal or anyone
             5633      in the principal's behalf; or
             5634          (e) engage in any other act prohibited by the commissioner by rule.
             5635          (2) The following persons may not act as bail bond [agents] producers and may not,
             5636      directly or indirectly, receive any benefits from the execution of any bail bond:
             5637          (a) a person employed at any jail, correctional facility, or other facility used for the
             5638      incarceration of persons;


             5639          (b) a peace officer;
             5640          (c) a judge; and
             5641          (d) a trustee or prisoner incarcerated in any jail, correctional facility, or other facility
             5642      used for the incarceration of persons.
             5643          (3) A bail bond [agent] producer may not:
             5644          (a) sign or countersign in blank any bail bond; or
             5645          (b) give the power of attorney to, or otherwise authorize anyone to, countersign in the
             5646      bail bond [agent's] producer's name to a bail bond.
             5647          (4) A bail bond [agent] producer may not advertise or hold himself out to be a bail
             5648      bond surety.
             5649          (5) The following persons or members of their immediate families may not solicit
             5650      business on behalf of a bail bond surety or bail bond [agent] producer:
             5651          (a) a person employed at any jail, correctional facility, or other facility used for the
             5652      incarceration of persons;
             5653          (b) a peace officer;
             5654          (c) a judge; and
             5655          (d) a trustee or prisoner incarcerated in any jail, correctional facility, or other facility
             5656      used for the incarceration of persons.
             5657          Section 120. Section 31A-35-702 is amended to read:
             5658           31A-35-702. Early surrender without cause.
             5659          (1) The bail or bail bond premium shall be returned in full if a bail bond [agent]
             5660      producer without good cause surrenders a defendant to custody before:
             5661          (a) the time specified in the undertaking of bail or the bail bond for the appearance of
             5662      the defendant; or
             5663          (b) any other occasion where the presence of the defendant in court is lawfully
             5664      required.
             5665          (2) As used in this section, "good cause" includes:
             5666          (a) the defendant providing materially false information on the application for bail or a
             5667      bail bond;
             5668          (b) the court's increasing the amount of bail beyond sound underwriting criteria
             5669      employed by:


             5670          (i) the bail bond [agent] producer; or
             5671          (ii) the bail bond surety;
             5672          (c) a material and detrimental change in the collateral posted by:
             5673          (i) the defendant; or
             5674          (ii) a person acting on the defendant's behalf;
             5675          (d) the defendant changing the defendant's address or telephone number without giving
             5676      reasonable notice to:
             5677          (i) the bail bond [agent] producer; or
             5678          (ii) the bail bond surety;
             5679          (e) the defendant commits another crime, other than a minor traffic violation, as
             5680      defined by department rule, while on bail;
             5681          (f) failure by the defendant to appear in court at the appointed time; or
             5682          (g) a finding of guilt against the defendant by a court of competent jurisdiction.
             5683          Section 121. Section 31A-35-703 is amended to read:
             5684           31A-35-703. Disciplinary action.
             5685          (1) A person found to be in violation of the statutes or rules governing the conduct of
             5686      bail bond [agents] producers and bail bond sureties under this chapter is subject to:
             5687          (a) disciplinary action by the commissioner against that person's:
             5688          (i) license, if the person is a bail bond surety company or bail bond [agent] producer; or
             5689          (ii) certificate, if the person is a surety insurer; and
             5690          (b) imposition of civil penalties, as authorized under Title 31A, Chapter 2,
             5691      Administration of the Insurance Laws.
             5692          (2) Penalties collected under this section shall be deposited in the restricted account
             5693      created in Section 31A-35-407 .
             5694          Section 122. Section 31A-35-704 is amended to read:
             5695           31A-35-704. Submission of bail bond sureties and producers to jurisdiction of
             5696      court.
             5697          By applying for and receiving a license or certificate to engage in the bail bond surety
             5698      insurance business in accordance with this chapter, a bail bond surety or bail bond [agent]
             5699      producer:
             5700          (1) submits to the jurisdiction of the court;


             5701          (2) irrevocably appoints the clerk of the court as agent upon whom any papers affecting
             5702      the bail bond surety's or bail bond [agent's] producer's liability on the undertaking may be
             5703      served; and
             5704          (3) acknowledges that liability may be enforced on motion and upon notice as the court
             5705      may require, without the necessity of an independent action.
             5706          Section 123. Section 34A-2-104 is amended to read:
             5707           34A-2-104. "Employee," "worker," and "operative" defined -- Mining lessees
             5708      and sublessees -- Corporate officers and directors -- Real estate agents and brokers --
             5709      Prison inmates -- Insurance producers -- Certain domestic workers.
             5710          (1) As used in this chapter and Chapter 3, Utah Occupational Disease Act, "employee,"
             5711      "worker," and "operative" mean:
             5712          (a) (i) each elective and appointive officer and any other person:
             5713          (A) in the service of:
             5714          (I) the state;
             5715          (II) a county, city, or town within the state; or
             5716          (III) a school district within the state;
             5717          (B) serving the state, or any county, city, town, or school district under:
             5718          (I) an election;
             5719          (II) appointment; or
             5720          (III) any contract of hire, express or implied, written or oral; and
             5721          (ii) including:
             5722          (A) an officer or employee of the state institutions of learning; and
             5723          (B) a member of the National Guard while on state active duty; and
             5724          (b) each person in the service of any employer, as defined in Section 34A-2-103 , who
             5725      employs one or more workers or operatives regularly in the same business, or in or about the
             5726      same establishment:
             5727          (i) under any contract of hire:
             5728          (A) express or implied; and
             5729          (B) oral or written;
             5730          (ii) including aliens and minors, whether legally or illegally working for hire; and
             5731          (iii) not including any person whose employment:


             5732          (A) is casual; and
             5733          (B) not in the usual course of the trade, business, or occupation of the employee's
             5734      employer.
             5735          (2) (a) Unless a lessee provides coverage as an employer under this chapter and
             5736      Chapter 3, any lessee in mines or of mining property and each employee and sublessee of the
             5737      lessee shall be:
             5738          (i) covered for compensation by the lessor under this chapter and Chapter 3;
             5739          (ii) subject to this chapter and Chapter 3; and
             5740          (iii) entitled to the benefits of this chapter and Chapter 3, to the same extent as if the
             5741      lessee, employee, or sublessee were employees of the lessor drawing the wages paid employees
             5742      for substantially similar work.
             5743          (b) The lessor may deduct from the proceeds of ores mined by the lessees an amount
             5744      equal to the insurance premium for that type of work.
             5745          (3) (a) A partnership or sole proprietorship may elect to include any partner of the
             5746      partnership or owner of the sole proprietorship as an employee of the partnership or sole
             5747      proprietorship under this chapter and Chapter 3.
             5748          (b) If a partnership or sole proprietorship makes an election under Subsection (3)(a),
             5749      the partnership or sole proprietorship shall serve written notice upon its insurance carrier
             5750      naming the persons to be covered.
             5751          (c) A partner of a partnership or owner of a sole proprietorship may not be considered
             5752      an employee of the partner's partnership or the owner's sole proprietorship under this chapter or
             5753      Chapter 3 until the notice described in Subsection (3)(b) is given.
             5754          (d) For premium rate making, the insurance carrier shall assume the salary or wage of
             5755      the partner or sole proprietor electing coverage under Subsection (3)(a) to be 100% of the
             5756      state's average weekly wage.
             5757          (4) (a) A corporation may elect not to include any director or officer of the corporation
             5758      as an employee under this chapter and Chapter 3.
             5759          (b) If a corporation makes an election under Subsection (4)(a), the corporation shall
             5760      serve written notice upon its insurance carrier naming the persons to be excluded from
             5761      coverage.
             5762          (c) A director or officer of a corporation is considered an employee under this chapter


             5763      and Chapter 3 until the notice described in Subsection (4)(b) is given.
             5764          (5) As used in this chapter and Chapter 3, "employee," "worker," and "operative" do
             5765      not include:
             5766          (a) a real estate sales agent or real estate broker, as defined in Section 61-2-2 , who
             5767      performs services in that capacity for a real estate broker if:
             5768          (i) substantially all of the real estate sales agent's or associated broker's income for
             5769      services is from real estate commissions; and
             5770          (ii) the services of the real estate sales agent or associated broker are performed under a
             5771      written contract that:
             5772          (A) the real estate agent is an independent contractor; and
             5773          (B) the real estate sales agent or associated broker is not to be treated as an employee
             5774      for federal income tax purposes;
             5775          (b) an offender performing labor under Section 64-13-16 or 64-13-19 , except as
             5776      required by federal statute or regulation;
             5777          (c) an individual who for an insurance [agent or broker] producer, as defined in Section
             5778      31A-1-301 , solicits, negotiates, places or procures insurance if:
             5779          (i) substantially all of the individual's income from those services is from insurance
             5780      commissions; and
             5781          (ii) the services of the individual are performed under a written contract that states that
             5782      the individual:
             5783          (A) is an independent contractor;
             5784          (B) is not to be treated as an employee for federal income tax purposes; and
             5785          (C) can derive income from more than one insurance company; or
             5786          (d) notwithstanding Subsection 34A-2-103 (4), an individual who provides domestic
             5787      work for a person if:
             5788          (i) the person for whom the domestic work is being provided receives or is eligible to
             5789      receive the domestic work under a state or federal program designed to pay the costs of
             5790      domestic work to prevent the person from being placed in:
             5791          (A) an institution; or
             5792          (B) a more restrictive placement than where that person resides at the time the person
             5793      receives the domestic work;


             5794          (ii) the individual is paid by a person designated by the Secretary of the Treasury in
             5795      accordance with Section 3504, Internal Revenue Code, as a fiduciary, agent, or other person
             5796      that has the control, receipt, custody, or disposal of, or pays the wages of the individual; and
             5797          (iii) the domestic work is performed under a written contract that notifies the
             5798      individual that the individual is not an employee under this chapter or Chapter 3.
             5799          (6) An individual described in Subsection (5)(d) may become an employee under this
             5800      chapter and Chapter 3 if the employer of the individual complies with:
             5801          (a) this chapter and Chapter 3; and
             5802          (b) commission rules.
             5803          Section 124. Section 35A-4-205 is amended to read:
             5804           35A-4-205. Exempt employment.
             5805          (1) If the services are also exempted under the Federal Unemployment Tax Act, as
             5806      amended, employment does not include:
             5807          (a) service performed prior to January 1, 1973, in the employ of a state, except as
             5808      provided in Subsection 35A-4-204 (2)(d);
             5809          (b) service performed in the employ of a political subdivision of a state, except as
             5810      provided in Subsection 35A-4-204 (2)(d);
             5811          (c) service performed in the employ of the United States Government or an
             5812      instrumentality of the United States immune under the United States Constitution from the
             5813      contributions imposed by this chapter, except that, to the extent that the Congress of the United
             5814      States shall permit, this chapter shall apply to those instrumentalities and to services performed
             5815      for the instrumentalities to the same extent as to all other employers, employing units,
             5816      individuals and services; provided, that if this state is not certified for any year by the Secretary
             5817      of Labor under Section 3304 of the Federal Internal Revenue Code of 1954, 26 U.S.C. 3304,
             5818      the payments required of the instrumentalities with respect to that year shall be refunded by the
             5819      division from the fund in the same manner and within the same period as is provided in
             5820      Subsection 35A-4-306 (5) with respect to contributions erroneously collected;
             5821          (d) service performed after June 30, 1939, as an employee representative as defined in
             5822      the Railroad Unemployment Insurance Act, 45 U.S.C. 351 et seq., and service performed after
             5823      June 30, 1939, for an employer as defined in that act except that if the division determines that
             5824      any employing unit which is principally engaged in activities not included in those definitions


             5825      constitutes such an employer only to the extent of an identifiable and separable portion of its
             5826      activities, this exemption applies only to services performed for the identifiable and separable
             5827      portion of its activities;
             5828          (e) agricultural labor as defined in Section 35A-4-206 ;
             5829          (f) domestic service in a private home, local college club, or local chapter of a college
             5830      fraternity or sorority, except as provided in Subsection 35A-4-204 (2)(k);
             5831          (g) (i) service performed in the employ of a school, college, or university, if the service
             5832      is performed:
             5833          (A) by a student who is enrolled and is regularly attending classes at that school,
             5834      college, or university; or
             5835          (B) by the spouse of the student, if the spouse is advised, at the time the spouse
             5836      commences to perform that service, that the employment of that spouse to perform that service
             5837      is provided under a program to provide financial assistance to the student by the school,
             5838      college, or university, and that the employment will not be covered by any program of
             5839      unemployment insurance;
             5840          (ii) service performed by an individual who is enrolled at a nonprofit or public
             5841      educational institution, that normally maintains a regular faculty and curriculum and normally
             5842      has a regularly organized body of students in attendance at the place where its educational
             5843      activities are carried on, as a student in a full-time program taken for credit at the institution,
             5844      that combines academic instruction with work experience, if the service is an integral part of
             5845      the program and the institution has so certified to the employer, but this Subsection (1) does
             5846      not apply to service performed in a program established for or on behalf of an employer or
             5847      group of employers; or
             5848          (iii) service performed in the employ of a hospital, if the service is performed by a
             5849      patient of the hospital;
             5850          (h) service performed by an individual in the employ of the individual's son, daughter,
             5851      or spouse, and service performed by a child under the age of 21 in the employ of the child's
             5852      parent;
             5853          (i) for the purposes of Subsections 35A-4-204 (2)(d) and (e), service performed:
             5854          (i) in the employ of:
             5855          (A) a church or convention or association of churches; or


             5856          (B) an organization that is operated primarily for religious purposes and that is
             5857      operated, supervised, controlled, or principally supported by a church or convention or
             5858      association of churches;
             5859          (ii) by a duly ordained, commissioned, or licensed minister of a church in the exercise
             5860      of the minister's ministry or by a member of a religious order in the exercise of duties required
             5861      by the order;
             5862          (iii) after December 31, 1977, in the employ of a governmental entity referred to in
             5863      Subsection 35A-4-204 (2) if the service is performed by an individual in the exercise of the
             5864      individual's duties:
             5865          (A) as an elected official;
             5866          (B) as a member of a legislative body or the judiciary of the state or its political
             5867      subdivisions;
             5868          (C) as a member of the National Guard or Air National Guard;
             5869          (D) as an employee serving on a temporary basis in case of fire, storm, snow,
             5870      earthquake, flood, or similar emergency; or
             5871          (E) in an advisory position or a policymaking position the performance of the duties of
             5872      which ordinarily does not require more than eight hours per week;
             5873          (iv) in a facility conducted for the purpose of carrying out a program of rehabilitation
             5874      for individuals whose earning capacity is impaired by age, physical or mental deficiency,
             5875      injury, or providing a remunerative work for individuals who, because of their impaired
             5876      physical or mental capacity, cannot be readily absorbed in the competitive labor market by an
             5877      individual receiving that rehabilitation or remunerative work;
             5878          (v) as part of an unemployment work-relief or work-training program, assisted or
             5879      financed in whole or in part by any federal agency or an agency of a state or political
             5880      subdivision of the state, by an individual receiving the work-relief or work-training; and
             5881          (vi) prior to January 1, 1978, for a hospital in a state prison or other state correctional
             5882      institution by an inmate of the prison or correctional institution and after December 31, 1977,
             5883      by an inmate of a custodial or penal institution;
             5884          (j) casual labor not in the course of the employing unit's trade or business;
             5885          (k) service performed in any calendar quarter in the employ of any organization exempt
             5886      from income tax under Subsection 501(a), Internal Revenue Code, other than an organization


             5887      described in Subsection 401(a) or Section 521 Internal Revenue Code, if the remuneration for
             5888      the service is less than $50;
             5889          (l) service is performed in the employ of a foreign government, including service as a
             5890      consular or other officer, other employee, or a nondiplomatic representative;
             5891          (m) service performed in the employ of an instrumentality wholly owned by a foreign
             5892      government:
             5893          (i) if the service is of a character similar to that performed in foreign countries by
             5894      employees of the United States government or its instrumentalities; and
             5895          (ii) if the division finds that the United States Secretary of State has certified to the
             5896      United States Secretary of the Treasury that the foreign government with respect to whose
             5897      instrumentality exemption is claimed grants an equivalent exemption with respect to similar
             5898      service performed in the foreign country by employees of the United States government and its
             5899      instrumentalities;
             5900          (n) service performed by an individual for a person as an insurance [agent] producer or
             5901      as an insurance solicitor, if all the service performed by the individual for that person is
             5902      performed for remuneration solely by way of commission;
             5903          (o) service performed by an individual in the delivery or distribution of newspapers or
             5904      shopping news, not including delivery or distribution to any point for subsequent delivery or
             5905      distribution;
             5906          (p) service covered by an arrangement between the division and the agency charged
             5907      with the administration of any other state or federal unemployment compensation law under
             5908      which all services performed by an individual for an employing unit during the period covered
             5909      by the employing unit's duly approved election, are considered to be performed entirely within
             5910      the agency's state or under the federal law;
             5911          (q) service performed by lessees engaged in metal mining under lease agreements,
             5912      unless the individual lease agreement, or the practice in actual operation under the agreement,
             5913      is such as would constitute the lessees' employees of the lessor at common law;
             5914          (r) service performed by an individual for a person as a licensed real estate agent or
             5915      salesman if all the service performed by the individual for that person is performed for
             5916      remuneration solely by way of commission;
             5917          (s) service performed by an individual for a person as a licensed securities agent or


             5918      salesman, registered representative, if the service performed by the individual for that person is
             5919      performed for remuneration solely by way of commission;
             5920          (t) services as an outside salesman paid solely by way of commission if the services
             5921      were performed outside of all places of business of the enterprises for which the services are
             5922      performed except:
             5923          (i) as provided in Subsection 35A-4-204 (2)(i); or
             5924          (ii) if the services would constitute employment at common law;
             5925          (u) service performed by an individual as a telephone survey conductor or pollster if:
             5926          (i) the individual does not perform the service on the principal's premises; and
             5927          (ii) the individual is paid for the service solely on a piece-rate or commission basis; or
             5928          (v) service performed by a nurse licensed or registered under Title 58, Chapter 31b,
             5929      Nurse Practice Act, if:
             5930          (i) the service of the nurse is performed in the home of the patient;
             5931          (ii) substantially all of the nurse's compensation for the service is from health insurance
             5932      proceeds; and
             5933          (iii) no compensation or fee for the service is paid to any agency or company as a
             5934      business furnishing nursing services.
             5935          (2) "Included and excluded service" means if the services performed during 1/2 or
             5936      more of any pay period by an individual for the person employing the individual constitute
             5937      employment, all the services of the individual for the period are considered to be employment;
             5938      but if the services performed during more than half of any such pay period by an individual for
             5939      the person employing the individual do not constitute employment, then none of the services of
             5940      the individual for the period are considered to be employment. As used in this Subsection (2),
             5941      "pay period" means a period of not more than 31 consecutive days for which payment of
             5942      remuneration is ordinarily made to the individual by the person employing the individual.
             5943          Section 125. Section 41-12a-303.2 is amended to read:
             5944           41-12a-303.2. Evidence of owner's or operator's security to be carried when
             5945      operating motor vehicle -- Defense -- Penalties.
             5946          (1) As used in this section:
             5947          (a) "Division" means the Motor Vehicle Division of the State Tax Commission.
             5948          (b) "Registration materials" means the evidences of motor vehicle registration,


             5949      including all registration cards, license plates, temporary permits, and nonresident temporary
             5950      permits.
             5951          (2) (a) (i) A person operating a motor vehicle shall:
             5952          (A) have in the person's immediate possession evidence of owner's or operator's
             5953      security for the motor vehicle the person is operating; and
             5954          (B) display it upon demand of a peace officer.
             5955          (ii) A person is exempt from the requirements of Subsection (2)(a)(i) if the person is
             5956      operating:
             5957          (A) a government-owned or leased motor vehicle; or
             5958          (B) an employer-owned or leased motor vehicle and is driving it with the employer's
             5959      permission.
             5960          (b) Evidence of owner's or operator's security includes any one of the following:
             5961          (i) a copy of the operator's valid:
             5962          (A) insurance policy;
             5963          (B) insurance policy declaration page;
             5964          (C) binder notice;
             5965          (D) renewal notice; or
             5966          (E) card issued by an insurance company as evidence of insurance;
             5967          (ii) a certificate of insurance issued under Section 41-12a-402 ;
             5968          (iii) a certified copy of a surety bond issued under Section 41-12a-405 ;
             5969          (iv) a certificate of the state treasurer issued under Section 41-12a-406 ;
             5970          (v) a certificate of self-funded coverage issued under Section 41-12a-407 ; or
             5971          (vi) information that the vehicle or driver is insured from the Uninsured Motorist
             5972      Identification Database Program created under Title 41, Chapter 12a, Part 8.
             5973          (c) Evidence of owner's or operator's security from the Uninsured Motorist
             5974      Identification Database Program described under Subsection (2)(b)(vi) supercedes any
             5975      evidence of owner's or operator's security described under Subsection (2)(b)(i)(D) or (E).
             5976          (3) It is an affirmative defense to a charge under this section that the person had
             5977      owner's or operator's security in effect for the vehicle the person was operating at the time of
             5978      the person's citation or arrest.
             5979          (4) (a) Evidence of owner's or operator's security as defined under Subsection (2)(b)


             5980      except Subsections (2)(b)(i)(D) and (E) or a written statement from an insurance [agent]
             5981      producer or company verifying that the person had the required motor vehicle insurance
             5982      coverage on the date specified is considered proof of owner's or operator's security for purposes
             5983      of Subsection (3) and Section 41-12a-804 .
             5984          (b) The court considering a citation issued under this section shall allow the evidence
             5985      or a written statement under Subsection (4)(a) and a copy of the citation to be faxed or mailed
             5986      to the clerk of the court to satisfy Subsection (3).
             5987          (c) The notice under Section 41-12a-804 shall specify that the written statement under
             5988      Subsection (4)(a) and a copy of the notice shall be faxed or mailed to the designated agent to
             5989      satisfy the proof of owner's or operator's security required under Section 41-12a-804 .
             5990          (5) A violation of this section is a class B misdemeanor, and the fine shall be not less
             5991      than:
             5992          (a) $400 for a first offense; and
             5993          (b) $1,000 for a second and subsequent offense within three years of a previous
             5994      conviction or bail forfeiture.
             5995          (6) Upon receiving notification from a court of a conviction for a violation of this
             5996      section, the department:
             5997          (a) shall suspend the person's driver license; and
             5998          (b) may not renew the person's driver license or issue a driver license to the person
             5999      until the person gives the department proof of owner's or operator's security.
             6000          (i) This proof of owner's or operator's security shall be given by any of the ways
             6001      required under Section 41-12a-401 .
             6002          (ii) This proof of owner's or operator's security shall be maintained with the department
             6003      for a three-year period.
             6004          (iii) An insurer that provides a certificate of insurance as provided under Section
             6005      41-12a-402 or 41-12a-403 may not terminate the insurance policy unless notice of termination
             6006      is filed with the department no later than ten days after termination as required under Section
             6007      41-12a-404 .
             6008          (iv) If a person who has canceled the certificate of insurance applies for a license
             6009      within three years from the date proof of owner's or operator's security was originally required,
             6010      the department shall refuse the application unless the person reestablishes proof of owner's or


             6011      operator's security and maintains the proof for the remainder of the three-year period.
             6012          Section 126. Section 57-1-39 is amended to read:
             6013           57-1-39. Definitions.
             6014          As used in Sections 57-1-40 and 57-1-44 :
             6015          (1) "Beneficiary" means the record owner of the beneficiary's interest under a trust
             6016      deed, including successors in interest.
             6017          (2) "Deliver" or "delivered" means:
             6018          (a) by overnight delivery by a reputable carrier; or
             6019          (b) by United States certified mail or express mail.
             6020          (3) "Mortgage" is as described in Section 57-1-14 .
             6021          (4) "Mortgagee" means the record owner of the mortgagee's interest under a mortgage,
             6022      including a successor in interest.
             6023          (5) "Satisfactory evidence of the full payment of the obligation secured by a trust deed
             6024      or mortgage" means written information adequate, in the opinion of a title insurer or title agent,
             6025      to establish that the obligation secured by the trust deed or mortgage has been paid in full.
             6026          (6) "Servicer" means a person or entity that collects loan payments on behalf of a
             6027      beneficiary or mortgagee.
             6028          (7) "Title agent" means a title insurance [agent] producer licensed as an organization
             6029      under Title 31A, Chapter [23, Part II, Licensing of Agents, Brokers] 23a, Part 2, Producers and
             6030      Consultants.
             6031          (8) "Title insurer" means a title insurer authorized to conduct business in the state
             6032      under Title 31A, Chapter [23, Part II, Licensing of Agents, Brokers] 23a, Part 2, Producers and
             6033      Consultants.
             6034          (9) "Trust deed" is as defined in Subsection 57-1-19 (3).
             6035          Section 127. Section 59-9-101 is amended to read:
             6036           59-9-101. Tax basis -- Rates -- Exemptions.
             6037          (1) (a) Except for annuity considerations, insurance premiums paid by institutions
             6038      within the state system of higher education as specified in Section 53B-1-102 , and ocean
             6039      marine insurance, every admitted insurer shall pay to the commission on or before March 31 in
             6040      each year, a tax of 2-1/4% of the total premiums received by it during the preceding calendar
             6041      year from insurance covering property or risks located in this state.


             6042          (b) This Subsection (1) does not apply to:
             6043          (i) workers' compensation insurance, assessed under Subsection (2); and
             6044          (ii) title insurance premiums taxed under Subsection (3).
             6045          (c) The taxable premium under this Subsection (1) shall be reduced by:
             6046          (i) all premiums returned or credited to policyholders on direct business subject to tax
             6047      in this state;
             6048          (ii) all premiums received for reinsurance of property or risks located in this state; and
             6049          (iii) the dividends, including premium reduction benefits maturing within the year, paid
             6050      or credited to policyholders in this state or applied in abatement or reduction of premiums due
             6051      during the preceding calendar year.
             6052          (2) (a) Every admitted insurer writing workers' compensation insurance in this state,
             6053      including the Workers' Compensation Fund created under Title 31A, Chapter 33, Workers'
             6054      Compensation Fund, shall pay to the tax commission, on or before March 31 in each year, a
             6055      premium assessment of between 1% and 8% of the total workers' compensation premium
             6056      income received by the insurer from workers' compensation insurance in this state during the
             6057      preceding calendar year.
             6058          (b) Total workers' compensation premium income means the net written premium as
             6059      calculated before any premium reduction for any insured employer's deductible, retention, or
             6060      reimbursement amounts and also those amounts equivalent to premiums as provided in Section
             6061      34A-2-202 .
             6062          (c) The percentage of premium assessment applicable for a calendar year shall be
             6063      determined by the Labor Commission under Subsection (2)(d). The total premium income
             6064      shall be reduced in the same manner as provided in Subsections (1)(c)(i) and (1)(c)(ii), but not
             6065      as provided in Subsection (1)(c)(iii). The tax commission shall promptly remit from the
             6066      premium assessment collected under Subsection (2):
             6067          (i) an amount of up to 7.25% of the premium income to the state treasurer for credit to
             6068      the Employers' Reinsurance Fund created under Subsection 34A-2-702 (1);
             6069          (ii) an amount equal to 0.25% of the premium income to the state treasurer for credit to
             6070      the restricted account in the General Fund, created by Section 34A-2-701 ; and
             6071          (iii) an amount of up to 0.50% and any remaining assessed percentage of the premium
             6072      income to the state treasurer for credit to the Uninsured Employers' Fund created under Section


             6073      34A-2-704 .
             6074          (d) (i) The Labor Commission shall determine the amount of the premium assessment
             6075      for each year on or before each October 15 of the preceding year. The Labor Commission shall
             6076      make this determination following a public hearing. The determination shall be based upon the
             6077      recommendations of a qualified actuary.
             6078          (ii) The actuary shall recommend a premium assessment rate sufficient to provide
             6079      payments of benefits and expenses from the Employers' Reinsurance Fund and to project a
             6080      funded condition with assets greater than liabilities by no later than June 30, 2025.
             6081          (iii) The actuary shall recommend a premium assessment rate sufficient to provide
             6082      payments of benefits and expenses from the Uninsured Employers' Fund and to maintain it at a
             6083      funded condition with assets equal to or greater than liabilities.
             6084          (iv) At the end of each fiscal year the minimum approximate assets in the Employers'
             6085      Reinsurance Fund shall be $5,000,000 which amount shall be adjusted each year beginning in
             6086      1990 by multiplying by the ratio that the total workers' compensation premium income for the
             6087      preceding calendar year bears to the total workers' compensation premium income for the
             6088      calendar year 1988.
             6089          (v) The requirements of Subsection (2)(d)(iv) cease when the future annual
             6090      disbursements from the Employers' Reinsurance Fund are projected to be less than the
             6091      calculations of the corresponding future minimum required assets. The Labor Commission
             6092      shall, after a public hearing, determine if the future annual disbursements are less than the
             6093      corresponding future minimum required assets from projections provided by the actuary.
             6094          (vi) At the end of each fiscal year the minimum approximate assets in the Uninsured
             6095      Employers' Fund shall be $2,000,000, which amount shall be adjusted each year beginning in
             6096      1990 by multiplying by the ratio that the total workers' compensation premium income for the
             6097      preceding calendar year bears to the total workers' compensation premium income for the
             6098      calendar year 1988.
             6099          (e) A premium assessment that is to be transferred into the General Fund may be
             6100      collected on premiums received from Utah public agencies.
             6101          (3) Every admitted insurer writing title insurance in this state shall pay to the
             6102      commission, on or before March 31 in each year, a tax of .45% of the total premium received
             6103      by either the insurer or by its agents during the preceding calendar year from title insurance


             6104      concerning property located in this state. In calculating this tax, "premium" includes the
             6105      charges made to an insured under or to an applicant for a policy or contract of title insurance
             6106      for:
             6107          (a) the assumption by the title insurer of the risks assumed by the issuance of the policy
             6108      or contract of title insurance; and
             6109          (b) abstracting title, title searching, examining title, or determining the insurability of
             6110      title, and every other activity, exclusive of escrow, settlement, or closing charges, whether
             6111      denominated premium or otherwise, made by a title insurer, an agent of a title insurer, a title
             6112      insurance [agent] producer, or any of them.
             6113          (4) Beginning July 1, 1986, former county mutuals and former mutual benefit
             6114      associations shall pay the premium tax or assessment due under this chapter. All premiums
             6115      received after July 1, 1986, shall be considered in determining the tax or assessment.
             6116          (5) The following insurers are not subject to the premium tax on health care insurance
             6117      that would otherwise be applicable under Subsection (1):
             6118          (a) insurers licensed under Title 31A, Chapter 5, Domestic Stock and Mutual Insurance
             6119      Corporations;
             6120          (b) insurers licensed under Title 31A, Chapter 7, Nonprofit Health Service Insurance
             6121      Corporations;
             6122          (c) insurers licensed under Title 31A, Chapter 8, Health Maintenance Organizations
             6123      and Limited Health Plans;
             6124          (d) insurers licensed under Title 31A, Chapter 9, Insurance Fraternals;
             6125          (e) insurers licensed under Title 31A, Chapter 11, Motor Clubs;
             6126          (f) insurers licensed under Title 31A, Chapter 13, Employee Welfare Funds and Plans;
             6127      and
             6128          (g) insurers licensed under Title 31A, Chapter 14, Foreign Insurers.
             6129          (6) An insurer issuing multiple policies to an insured may not artificially allocate the
             6130      premiums among the policies for purposes of reducing the aggregate premium tax or
             6131      assessment applicable to the policies.
             6132          (7) The retaliatory provisions of Title 31A, Chapter 3, Department Funding, Fees, and
             6133      Taxes, apply to the tax or assessment imposed under this chapter.
             6134          Section 128. Section 63-2-202 is amended to read:


             6135           63-2-202. Access to private, controlled, and protected documents.
             6136          (1) Upon request, a governmental entity shall disclose a private record to:
             6137          (a) the subject of the record;
             6138          (b) the parent or legal guardian of an unemancipated minor who is the subject of the
             6139      record;
             6140          (c) the legal guardian of a legally incapacitated individual who is the subject of the
             6141      record;
             6142          (d) any other individual who:
             6143          (i) has a power of attorney from the subject of the record;
             6144          (ii) submits a notarized release from the subject of the record or his legal representative
             6145      dated no more than 90 days before the date the request is made; or
             6146          (iii) if the record is a medical record described in Subsection 63-2-302 (1)(b), is a health
             6147      care provider, as defined in Section 26-33a-102 , if releasing the record or information in the
             6148      record is consistent with normal professional practice and medical ethics; or
             6149          (e) any person to whom the record must be provided pursuant to court order as
             6150      provided in Subsection (7) or a legislative subpoena as provided in Title 36, Chapter 14.
             6151          (2) (a) Upon request, a governmental entity shall disclose a controlled record to:
             6152          (i) a physician, psychologist, certified social worker, insurance provider or [agent]
             6153      producer, or a government public health agency upon submission of a release from the subject
             6154      of the record that is dated no more than 90 days prior to the date the request is made and a
             6155      signed acknowledgment of the terms of disclosure of controlled information as provided by
             6156      Subsection (2)(b); and
             6157          (ii) any person to whom the record must be disclosed pursuant to court order as
             6158      provided in Subsection (7) or a legislative subpoena as provided in Title 36, Chapter 14.
             6159          (b) A person who receives a record from a governmental entity in accordance with
             6160      Subsection (2)(a)(i) may not disclose controlled information from that record to any person,
             6161      including the subject of the record.
             6162          (3) If there is more than one subject of a private or controlled record, the portion of the
             6163      record that pertains to another subject shall be segregated from the portion that the requester is
             6164      entitled to inspect.
             6165          (4) Upon request, a governmental entity shall disclose a protected record to:


             6166          (a) the person who submitted the record;
             6167          (b) any other individual who:
             6168          (i) has a power of attorney from all persons, governmental entities, or political
             6169      subdivisions whose interests were sought to be protected by the protected classification; or
             6170          (ii) submits a notarized release from all persons, governmental entities, or political
             6171      subdivisions whose interests were sought to be protected by the protected classification or from
             6172      their legal representatives dated no more than 90 days prior to the date the request is made;
             6173          (c) any person to whom the record must be provided pursuant to a court order as
             6174      provided in Subsection (7) or a legislative subpoena as provided in Title 36, Chapter 14; or
             6175          (d) the owner of a mobile home park, subject to the conditions of Subsection
             6176      41-1a-116 (5).
             6177          (5) A governmental entity may disclose a private, controlled, or protected record to
             6178      another governmental entity, political subdivision, another state, the United States, or a foreign
             6179      government only as provided by Section 63-2-206 .
             6180          (6) Before releasing a private, controlled, or protected record, the governmental entity
             6181      shall obtain evidence of the requester's identity.
             6182          (7) A governmental entity shall disclose a record pursuant to the terms of a court order
             6183      signed by a judge from a court of competent jurisdiction, provided that:
             6184          (a) the record deals with a matter in controversy over which the court has jurisdiction;
             6185          (b) the court has considered the merits of the request for access to the record; and
             6186          (c) the court has considered and, where appropriate, limited the requester's use and
             6187      further disclosure of the record in order to protect privacy interests in the case of private or
             6188      controlled records, business confidentiality interests in the case of records protected under
             6189      Subsections 63-2-304 (1) and (2), and privacy interests or the public interest in the case of other
             6190      protected records;
             6191          (d) to the extent the record is properly classified private, controlled, or protected, the
             6192      interests favoring access, considering limitations thereon, outweigh the interests favoring
             6193      restriction of access; and
             6194          (e) where access is restricted by a rule, statute, or regulation referred to in Subsection
             6195      63-2-201 (3)(b), the court has authority independent of this chapter to order disclosure.
             6196          (8) (a) A governmental entity may disclose or authorize disclosure of private or


             6197      controlled records for research purposes if the governmental entity:
             6198          (i) determines that the research purpose cannot reasonably be accomplished without
             6199      use or disclosure of the information to the researcher in individually identifiable form;
             6200          (ii) determines that the proposed research is bona fide, and that the value of the
             6201      research outweighs the infringement upon personal privacy;
             6202          (iii) requires the researcher to assure the integrity, confidentiality, and security of the
             6203      records and requires the removal or destruction of the individual identifiers associated with the
             6204      records as soon as the purpose of the research project has been accomplished;
             6205          (iv) prohibits the researcher from disclosing the record in individually identifiable
             6206      form, except as provided in Subsection (8)(b), or from using the record for purposes other than
             6207      the research approved by the governmental entity; and
             6208          (v) secures from the researcher a written statement of his understanding of and
             6209      agreement to the conditions of this Subsection (8) and his understanding that violation of the
             6210      terms of this Subsection (8) may subject him to criminal prosecution under Section 63-2-801 .
             6211          (b) A researcher may disclose a record in individually identifiable form if the record is
             6212      disclosed for the purpose of auditing or evaluating the research program and no subsequent use
             6213      or disclosure of the record in individually identifiable form will be made by the auditor or
             6214      evaluator except as provided by this section.
             6215          (c) A governmental entity may require indemnification as a condition of permitting
             6216      research under this Subsection (8).
             6217          (9) (a) Under Subsections 63-2-201 (5)(b) and 63-2-401 (6), a governmental entity may
             6218      disclose records that are private under Section 63-2-302, or protected under Section 63-2-304
             6219      to persons other than those specified in this section.
             6220          (b) Under Subsection 63-2-403 (11)(b), the Records Committee may require the
             6221      disclosure of records that are private under Section 63-2-302 , controlled under Section
             6222      63-2-303 , or protected under Section 63-2-304 to persons other than those specified in this
             6223      section.
             6224          (c) Under Subsection 63-2-404 (8), the court may require the disclosure of records that
             6225      are private under Section 63-2-302 , controlled under Section 63-2-303 , or protected under
             6226      Section 63-2-304 to persons other than those specified in this section.
             6227          Section 129. Section 63-2-302 (Effective 07/01/03) is amended to read:


             6228           63-2-302 (Effective 07/01/03). Private records.
             6229          (1) The following records are private:
             6230          (a) records concerning an individual's eligibility for unemployment insurance benefits,
             6231      social services, welfare benefits, or the determination of benefit levels;
             6232          (b) records containing data on individuals describing medical history, diagnosis,
             6233      condition, treatment, evaluation, or similar medical data;
             6234          (c) records of publicly funded libraries that when examined alone or with other records
             6235      identify a patron;
             6236          (d) records received or generated for a Senate or House Ethics Committee concerning
             6237      any alleged violation of the rules on legislative ethics, prior to the meeting, and after the
             6238      meeting, if the ethics committee meeting was closed to the public;
             6239          (e) records received or generated for a Senate confirmation committee concerning
             6240      character, professional competence, or physical or mental health of an individual:
             6241          (i) if prior to the meeting, the chair of the committee determines release of the records:
             6242          (A) reasonably could be expected to interfere with the investigation undertaken by the
             6243      committee; or
             6244          (B) would create a danger of depriving a person of a right to a fair proceeding or
             6245      impartial hearing;
             6246          (ii) after the meeting, if the meeting was closed to the public;
             6247          (f) employment records concerning a current or former employee of, or applicant for
             6248      employment with, a governmental entity that would disclose that individual's home address,
             6249      home telephone number, Social Security number, insurance coverage, marital status, or payroll
             6250      deductions;
             6251          (g) records or parts of records under Section 63-2-302.5 that a current or former
             6252      employee identifies as private according to the requirements of that section;
             6253          (h) that part of a record indicating a person's Social Security number if provided under
             6254      Section [ 31A-23-202 ] 31A-23a-104 , 31A-26-202 , 58-1-301 , 61-1-4 , or 61-2-6 ;
             6255          (i) that part of a voter registration record identifying a voter's driver license or
             6256      identification card number, Social Security number, or last four digits of the Social Security
             6257      number; [and]
             6258          (j) a record that:


             6259          (i) contains information about an individual;
             6260          (ii) is voluntarily provided by the individual; and
             6261          (iii) goes into an electronic database that:
             6262          (A) is designated by and administered under the authority of the Chief Information
             6263      Officer; and
             6264          (B) acts as a repository of information about the individual that can be electronically
             6265      retrieved and used to facilitate the individual's online interaction with a state agency[.]; and
             6266          (k) information provided to the Commissioner of Insurance under Subsection
             6267      31A-23a-115 (2)(a).
             6268          (2) The following records are private if properly classified by a governmental entity:
             6269          (a) records concerning a current or former employee of, or applicant for employment
             6270      with a governmental entity, including performance evaluations and personal status information
             6271      such as race, religion, or disabilities, but not including records that are public under Subsection
             6272      63-2-301 (1)(b) or 63-2-301 (2)(o), or private under Subsection 63-2-302 (1)(b);
             6273          (b) records describing an individual's finances, except that the following are public:
             6274          (i) records described in Subsection 63-2-301 (1);
             6275          (ii) information provided to the governmental entity for the purpose of complying with
             6276      a financial assurance requirement; or
             6277          (iii) records that must be disclosed in accordance with another statute;
             6278          (c) records of independent state agencies if the disclosure of those records would
             6279      conflict with the fiduciary obligations of the agency;
             6280          (d) other records containing data on individuals the disclosure of which constitutes a
             6281      clearly unwarranted invasion of personal privacy; and
             6282          (e) records provided by the United States or by a government entity outside the state
             6283      that are given with the requirement that the records be managed as private records, if the
             6284      providing entity states in writing that the record would not be subject to public disclosure if
             6285      retained by it.
             6286          (3) (a) As used in this Subsection (3), "medical records" means medical reports,
             6287      records, statements, history, diagnosis, condition, treatment, and evaluation.
             6288          (b) Medical records in the possession of the University of Utah Hospital, its clinics,
             6289      doctors, or affiliated entities are not private records or controlled records under Section


             6290      63-2-303 when the records are sought:
             6291          (i) in connection with any legal or administrative proceeding in which the patient's
             6292      physical, mental, or emotional condition is an element of any claim or defense; or
             6293          (ii) after a patient's death, in any legal or administrative proceeding in which any party
             6294      relies upon the condition as an element of the claim or defense.
             6295          (c) Medical records are subject to production in a legal or administrative proceeding
             6296      according to state or federal statutes or rules of procedure and evidence as if the medical
             6297      records were in the possession of a nongovernmental medical care provider.
             6298          Section 130. Section 63-2-302 (Superseded 07/01/03) is amended to read:
             6299           63-2-302 (Superseded 07/01/03). Private records.
             6300          (1) The following records are private:
             6301          (a) records concerning an individual's eligibility for unemployment insurance benefits,
             6302      social services, welfare benefits, or the determination of benefit levels;
             6303          (b) records containing data on individuals describing medical history, diagnosis,
             6304      condition, treatment, evaluation, or similar medical data;
             6305          (c) records of publicly funded libraries that when examined alone or with other records
             6306      identify a patron;
             6307          (d) records received or generated for a Senate or House Ethics Committee concerning
             6308      any alleged violation of the rules on legislative ethics, prior to the meeting, and after the
             6309      meeting, if the ethics committee meeting was closed to the public;
             6310          (e) records received or generated for a Senate confirmation committee concerning
             6311      character, professional competence, or physical or mental health of an individual:
             6312          (i) if prior to the meeting, the chair of the committee determines release of the records:
             6313          (A) reasonably could be expected to interfere with the investigation undertaken by the
             6314      committee; or
             6315          (B) would create a danger of depriving a person of a right to a fair proceeding or
             6316      impartial hearing;
             6317          (ii) after the meeting, if the meeting was closed to the public;
             6318          (f) records concerning a current or former employee of, or applicant for employment
             6319      with, a governmental entity that would disclose that individual's home address, home telephone
             6320      number, social security number, insurance coverage, marital status, or payroll deductions;


             6321          (g) that part of a record indicating a person's social security number if provided under
             6322      Section [ 31A-23-202 ] 31A-23a-104 , 31A-26-202 , 58-1-301 , 61-1-4 , or 61-2-6 ;
             6323          (h) that part of a voter registration record identifying a voter's driver license or
             6324      identification card number, Social Security number, or last four digits of the Social Security
             6325      number; [and]
             6326          (i) a record that:
             6327          (i) contains information about an individual;
             6328          (ii) is voluntarily provided by the individual; and
             6329          (iii) goes into an electronic database that:
             6330          (A) is designated by and administered under the authority of the Chief Information
             6331      Officer; and
             6332          (B) acts as a repository of information about the individual that can be electronically
             6333      retrieved and used to facilitate the individual's online interaction with a state agency[.]; and
             6334          (j) information provided to the Commissioner of Insurance under Subsection
             6335      31A-23a-115 (2)(a).
             6336          (2) The following records are private if properly classified by a governmental entity:
             6337          (a) records concerning a current or former employee of, or applicant for employment
             6338      with a governmental entity, including performance evaluations and personal status information
             6339      such as race, religion, or disabilities, but not including records that are public under Subsection
             6340      63-2-301 (1)(b) or 63-2-301 (2)(o), or private under Subsection 63-2-302 (1)(b);
             6341          (b) records describing an individual's finances, except that the following are public:
             6342          (i) records described in Subsection 63-2-301 (1);
             6343          (ii) information provided to the governmental entity for the purpose of complying with
             6344      a financial assurance requirement; or
             6345          (iii) records that must be disclosed in accordance with another statute;
             6346          (c) records of independent state agencies if the disclosure of those records would
             6347      conflict with the fiduciary obligations of the agency;
             6348          (d) other records containing data on individuals the disclosure of which constitutes a
             6349      clearly unwarranted invasion of personal privacy; and
             6350          (e) records provided by the United States or by a government entity outside the state
             6351      that are given with the requirement that the records be managed as private records, if the


             6352      providing entity states in writing that the record would not be subject to public disclosure if
             6353      retained by it.
             6354          (3) (a) As used in this Subsection (3), "medical records" means medical reports,
             6355      records, statements, history, diagnosis, condition, treatment, and evaluation.
             6356          (b) Medical records in the possession of the University of Utah Hospital, its clinics,
             6357      doctors, or affiliated entities are not private records or controlled records under Section
             6358      63-2-303 when the records are sought:
             6359          (i) in connection with any legal or administrative proceeding in which the patient's
             6360      physical, mental, or emotional condition is an element of any claim or defense; or
             6361          (ii) after a patient's death, in any legal or administrative proceeding in which any party
             6362      relies upon the condition as an element of the claim or defense.
             6363          (c) Medical records are subject to production in a legal or administrative proceeding
             6364      according to state or federal statutes or rules of procedure and evidence as if the medical
             6365      records were in the possession of a nongovernmental medical care provider.
             6366          Section 131. Section 63-55b-131 is amended to read:
             6367           63-55b-131. Repeal dates, Title 31A.
             6368          (1) Section 31A-22-626 is repealed July 1, 2004.
             6369          (2) Section [ 31A-23-315 ] 31A-23a-415 is repealed July 1, 2006.
             6370          Section 132. Section 73-1-10 is amended to read:
             6371           73-1-10. Conveyance of water rights -- Deed -- Exceptions -- Filing and recording
             6372      of deed -- Report of water right conveyance.
             6373          (1) (a) A water right, whether evidenced by a decree, a certificate of appropriation, a
             6374      diligence claim to the use of surface or underground water, or a water user's claim filed in
             6375      general determination proceedings, shall be transferred by deed in substantially the same
             6376      manner as is real estate.
             6377          (b) The deed must be recorded in the office of the recorder of the county where the
             6378      point of diversion of the water is located and in the county where the water is used.
             6379          (c) A recorded deed of a water right shall from the time of its recording in the office of
             6380      the county recorder constitute notice of its contents to all persons.
             6381          (2) The right to the use of water evidenced by shares of stock in a corporation shall be
             6382      transferred in accordance with the procedures applicable to securities set forth in Title 70A,


             6383      Chapter 8, Uniform Commercial Code - Investment Securities.
             6384          (3) (a) To update water right ownership on the records of the state engineer, a water
             6385      right owner shall submit a report of water right conveyance to the state engineer.
             6386          (b) The report of water right conveyance shall be on forms provided by the state
             6387      engineer.
             6388          (c) The report shall be prepared by:
             6389          (i) or prepared under the direction of and certified by, any of the following persons
             6390      licensed in Utah:
             6391          (A) an attorney;
             6392          (B) a professional engineer;
             6393          (C) a title insurance [agent] producer; or
             6394          (D) a professional land surveyor; or
             6395          (ii) the water right owner as authorized by rule of the state engineer.
             6396          (d) The filing and processing of a report of water right conveyance with the state
             6397      engineer is neither an adjudication of water right ownership nor an opinion as to title or validity
             6398      of the water right.
             6399          (e) The state engineer shall adopt rules that specify:
             6400          (i) the information required in a report of water right conveyance; and
             6401          (ii) the procedures for processing the reports.
             6402          Section 133. Section 73-18c-304 is amended to read:
             6403           73-18c-304. Evidence of owner's or operator's security to be carried when
             6404      operating personal watercraft -- Defense -- Penalties.
             6405          (1) (a) (i) Except as provided in Subsection (1)(a)(ii), a person operating a personal
             6406      watercraft shall:
             6407          (A) have in the person's immediate possession evidence of owner's or operator's
             6408      security for the personal watercraft the person is operating; and
             6409          (B) display it upon demand of a peace officer.
             6410          (ii) A person operating a government-owned or government-leased personal watercraft
             6411      is exempt from the requirements of Subsection (1)(a)(i).
             6412          (b) Evidence of owner's or operator's security includes any one of the following:
             6413          (i) the operator's:


             6414          (A) insurance policy;
             6415          (B) binder notice;
             6416          (C) renewal notice; or
             6417          (D) card issued by an insurance company as evidence of insurance;
             6418          (ii) a copy of a surety bond, certified by the surety, which conforms to Section
             6419      73-18c-102 ;
             6420          (iii) a certificate of the state treasurer issued under Section 73-18c-305 ; or
             6421          (iv) a certificate of self-funded coverage issued under Section 73-18c-306 .
             6422          (2) It is an affirmative defense to a charge under this section that the person had
             6423      owner's or operator's security in effect for the personal watercraft the person was operating at
             6424      the time of the person's citation or arrest.
             6425          (3) (a) A letter from an insurance [agent] producer or company verifying that the
             6426      person had the required liability insurance coverage on the date specified is considered proof of
             6427      owner's or operator's security for purposes of Subsection (2).
             6428          (b) The court considering a citation issued under this section shall allow the letter
             6429      under Subsection (3)(a) and a copy of the citation to be faxed or mailed to the clerk of the court
             6430      to satisfy Subsection (2).
             6431          (4) A violation of this section is a class B misdemeanor.
             6432          (5) If a person is convicted of a violation of this section and if the person is the owner
             6433      of a personal watercraft, the court shall:
             6434          (a) require the person to surrender the person's registration materials to the court; and
             6435          (b) forward the registration materials, together with a copy of the conviction, to the
             6436      division.
             6437          (6) (a) Upon receiving notification from a court of a conviction for a violation of this
             6438      section, the division shall revoke the person's personal watercraft registration.
             6439          (b) Any registration revoked may not be renewed for a period of one year following the
             6440      date of revocation.
             6441          Section 134. Section 76-10-915 is amended to read:
             6442           76-10-915. Exempt activities.
             6443          (1) No provision of this act shall be construed to prohibit:
             6444          (a) the activities of any public utility to the extent that those activities are subject to


             6445      regulation by the public service commission, the state or federal department of transportation,
             6446      the federal energy regulatory commission, the federal communications commission, the
             6447      interstate commerce commission, or successor agencies;
             6448          (b) the activities of any insurer, insurance [agent, insurance broker] producer,
             6449      independent insurance adjuster or rating organization including, but not limited to, making or
             6450      participating in joint underwriting or reinsurance arrangements, to the extent that those
             6451      activities are subject to regulation by the commissioner of insurance;
             6452          (c) the activities of securities dealers, issuers or agents, to the extent that those
             6453      activities are subject to regulation under the laws of either this state or the United States;
             6454          (d) the activities of any state or national banking institution, to the extent that such
             6455      activities are regulated or supervised by state government officers or agencies under the
             6456      banking laws of this state or by federal government officers or agencies under the banking laws
             6457      of the United States;
             6458          (e) the activities of any state or federal savings and loan association to the extent that
             6459      those activities are regulated or supervised by state government officers or agencies under the
             6460      banking laws of this state or federal government officers or agencies under the banking laws of
             6461      the United States;
             6462          (f) the activities of a municipality to the extent authorized or directed by state law; or
             6463          (g) the activities of an emergency medical service provider licensed under Title 26,
             6464      Chapter 8a, Utah Emergency Medical Service System Act, to the extent that those activities are
             6465      regulated by state government officers or agencies under that act.
             6466          (2) The labor of a human being is not a commodity or article of commerce. Nothing
             6467      contained in the antitrust laws shall be construed to forbid the existence and operation of labor,
             6468      agricultural or horticultural organizations, instituted for the purpose of mutual help and not
             6469      having capital stock or conducted for profit, or to forbid or restrain individual members of such
             6470      organizations from lawfully carrying out the legitimate object thereof; nor shall such
             6471      organizations or membership in them be held to be illegal combinations or conspiracies in
             6472      restraint of trade under the antitrust laws.
             6473          Section 135. Repealer.
             6474          This act repeals:
             6475          Section 31A-23-103, Transition provisions.


             6476          Section 31A-23-215, Agency licensees -- Reports -- Suspension, revocation, or
             6477      limitation of license.
             6478          Section 136. Effective date.
             6479          This act takes effect May 5, 2003, except that the amendments to Section 63-2-302
             6480      (Effective 07/01/03) take effect on July 1, 2003.
             6481          Section 137. Coordination clause.
             6482          (1) If this bill and H.B. 4, Viatical Settlements, both pass, it is the intent of the
             6483      Legislature that the Office of Legislative Research and General Counsel in preparing the Utah
             6484      Code database for publication, shall:
             6485          (a) replace the references in Subsection 31A-36-104 (2) of H.B. 4 to "Sections
             6486      31A-23-216 and 31A-23-217 " with references to "Sections 31A-23a-111 , 31A-23a-112 , and
             6487      31A-23a-113 ";
             6488          (b) renumber Section 31A-23-221 , enacted in H.B. 4, as 31A-23a-117 ;
             6489          (c) merge the language from H.B. 4, Subsection 31A-23-203 (1)(g) into this bill as
             6490      Subsection 31A-23a-105 (1)(g), modify the language to read "(g) if an applicant for a license to
             6491      act as a provider or producer of viatical settlements, has satisfied the requirements of Section
             6492      31A-23a-117 ", and renumber remaining subsections accordingly; and
             6493          (d) merge the language from H.B. 4, Subsection 31A-23-204 (2)(h) into this bill as
             6494      Subsection 31A-23a-106 (2)(g).
             6495          (2) If this bill and H.B. 373, Insurance Law Revisions, both pass, it is the intent of the
             6496      Legislature that the Office of Legislative Research and General Counsel in preparing the Utah
             6497      Code database for publication, shall:
             6498          (a) replace the phrase "title insurance agent" in Subsection 31A-19a-209 (2)(a)(i) of
             6499      H.B. 373 with the phrase "title insurance producer"; and
             6500          (b) merge the language from H.B. 373, Subsection 31A-23-202 (4) into this bill as
             6501      Subsection 31A-23a-104 (4).





Legislative Review Note
    as of 2-20-03 12:40 PM


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

Office of Legislative Research and General Counsel


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