H.B. 146

1

NONTRADITIONAL INSURERS
2 2003 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: James A. Ferrin
5 This act modifies the Insurance Code to replace the definition for a nonprofit educational
6 insurer with a definition for a nontraditional insurer, and to continue the exemption of
7 nonprofit educational insurers from certain provisions of the Insurance Code to
8 nontraditional insurers.
9 This act affects sections of Utah Code Annotated 1953 as follows:
10 AMENDS:
11 31A-10-201, as enacted by Chapter 204, Laws of Utah 1986
12 31A-10-202, as enacted by Chapter 204, Laws of Utah 1986
13 31A-10-203, as last amended by Chapter 245, Laws of Utah 1994
14 Be it enacted by the Legislature of the state of Utah:
15 Section 1. Section 31A-10-201 is amended to read:
16 Part II. Nontraditional Insurers
17 31A-10-201. Definition.
18 As used in this part[, "nonprofit educational]:
19 (1) "Nontraditional insurer" means a nonprofit insurer incorporated under Chapter 5,
20 Domestic Stock and Mutual Insurers Corporations, or admitted under Chapter 14 [which],
21 Foreign Insurers, that:
22 (a) exists for the purpose of aiding and strengthening [nonprofit educational and
23 research institutions by providing them and their employees with annuities and insurance. An
24 insurer is not a nonprofit educational insurer if it provides annuities or insurance to persons
25 other than nonprofit educational and research institutions and their employees.] the following
26 by providing them with annuities:
27 (i) nonprofit entities;

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

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




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

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

Office of Legislative Research and General Counsel