First Substitute H.B. 373

Senator Thomas V. Hatch proposes the following substitute bill:

1 INSURANCE LAW REVISIONS
2 2003 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: James A. Ferrin
5 This act modifies the Insurance Code and makes technical changes. This act addresses
6 when orders of the commissioner or the commissioner's designee are stayed. The act
7 addresses payment of tax. The act addresses certificates of authority. The act addresses
8 filing requirements related to the National Association of Insurance Commissioners. The
9 act addresses discontinuation or nonrenewal of certain health benefit plans. The act
10 addresses material transactions by insurers which are part of a holding company system.
11 The act addresses qualified assets. The act addresses what constitutes insurance fraud.
12 The act addresses continuance of coverage. The act increases assessments on insurers.
13 This act limits the use of certain clauses in policies. The act provides for filing of forms
14 procedures. The act requires exact name of insurer on group and blanket policies. The
15 act clarifies provisions relating to premium increases for new or renewal motor vehicle
16 coverage and household exclusion procedures as to motor vehicle coverage. This act
17 clarifies right of return. The act specifies newborn enrollment procedures. The act
18 specifies parameters of insurance adjustors compensation. This act provides an effective
19 date.
20 This act affects sections of Utah Code Annotated 1953 as follows:
21 AMENDS:
22 31A-3-303, as last amended by Chapter 230, Laws of Utah 1992
23 31A-4-103, as last amended by Chapter 116, Laws of Utah 2001
24 31A-4-113.5, as enacted by Chapter 258, Laws of Utah 1992
25 31A-8-217, as last amended by Chapter 258, Laws of Utah 1992

26 31A-8-402.3, as enacted by Chapter 308, Laws of Utah 2002
27 31A-8-402.5, as enacted by Chapter 308, Laws of Utah 2002
28 31A-8-407, as last amended by Chapter 308, Laws of Utah 2002
29 31A-17-201, as last amended by Chapter 116, Laws of Utah 2001
30 31A-19a-209, as last amended by Chapter 308, Laws of Utah 2002
31 31A-19a-212, as renumbered and amended by Chapter 130, Laws of Utah 1999
32 31A-21-106, as last amended by Chapter 308, Laws of Utah 2002
33 31A-21-201, as last amended by Chapter 116, Laws of Utah 2001
34 31A-21-311, as last amended by Chapter 308, Laws of Utah 2002
35 31A-22-403, as last amended by Chapter 308, Laws of Utah 2002
36 31A-22-423, as last amended by Chapter 116, Laws of Utah 2001
37 31A-22-517, as last amended by Chapter 116, Laws of Utah 2001
38 31A-22-610, as last amended by Chapter 116, Laws of Utah 2001
39 31A-22-721, as enacted by Chapter 308, Laws of Utah 2002
40 31A-23-202, as last amended by Chapters 185 and 191, Laws of Utah 2002
41 31A-26-202, as last amended by Chapters 191 and 308, Laws of Utah 2002
42 31A-26-310, as enacted by Chapter 242, Laws of Utah 1985
43 31A-27-302, as last amended by Chapter 204, Laws of Utah 1986
44 31A-27-311.5, as last amended by Chapter 308, Laws of Utah 2002
45 31A-30-106, as last amended by Chapter 308, Laws of Utah 2002
46 31A-30-107, as last amended by Chapter 308, Laws of Utah 2002
47 31A-30-107.1, as enacted by Chapter 308, Laws of Utah 2002
48 31A-30-107.5, as enacted by Chapter 308, Laws of Utah 2002
49 31A-31-103, as enacted by Chapter 243, Laws of Utah 1994
50 31A-31-108, as last amended by Chapters 185 and 375, Laws of Utah 1997
51 31A-33-108, as last amended by Chapter 375, Laws of Utah 1997
52 49-16-301, as renumbered and amended by Chapter 250, Laws of Utah 2002
53 53-7-204.2, as last amended by Chapter 6, Laws of Utah 2002, Sixth Special Session
54 63-2-302 (Effective 07/01/03), as last amended by Chapters 63 and 191, Laws of Utah
55 2002
56 63-2-302 (Superseded 07/01/03), as last amended by Chapter 63, Laws of Utah 2002

57 ENACTS:
58 31A-2-306.5, Utah Code Annotated 1953
59 31A-23-311.1, Utah Code Annotated 1953
60 Be it enacted by the Legislature of the state of Utah:
61 Section 1. Section 31A-2-306.5 is enacted to read:
62 31A-2-306.5. Stay of commissioner's decision pending administrative review or
63 judicial appeal.
64 (1) An order of the commissioner or a designee of the commissioner is not stayed by a
65 petition for:
66 (a) administrative review;
67 (b) rehearing; or
68 (c) judicial review.
69 (2) A person seeking to stay an order of the commissioner or a designee of the
70 commissioner shall seek a stay in accordance with:
71 (a) rules made by the commissioner in accordance with Title 63, Chapter 46a, Utah
72 Administrative Rulemaking Act, pending a petition for:
73 (i) administrative review; or
74 (ii) rehearing; or
75 (b) Section 63-46b-18 , pending judicial review.
76 Section 2. Section 31A-3-303 is amended to read:
77 31A-3-303. Payment of tax.
78 (1) The insurer, all brokers involved in the transaction, and the policyholder are jointly
79 and severally liable for the payment of the taxes required under Section 31A-3-301 . The
80 policyholder's liability for payment of the premium tax under Section 31A-3-301 ends when
81 the policyholder pays the tax to the broker or insurer. The insurer and all brokers involved in
82 the transaction are jointly and severally liable for the payment of the additional tax required
83 under Section 31A-3-302 . Except for the tax under Section 31A-3-302 , the taxes under this
84 part shall be paid by the policyholder who shall be billed specifically for the tax when billed for
85 the premium. Except for the tax imposed under Section 31A-3-302 , absorption of the tax by
86 the agent, broker, or insurer is an unfair method of competition under Section 31A-23-302 .
87 (2) The commissioner shall by rule prescribe accounting and reporting forms and

88 procedures for insurers, brokers, and policyholders to use in determining the amount of taxes
89 owed under this part, and the manner and time of payment. If a tax is not paid within the time
90 prescribed under the commissioner's rule, a penalty shall be imposed of 25% of the tax due,
91 plus 1-1/2% per month from the time of default until full payment of the tax.
92 (3) Upon making a record of its actions, and upon reasonable cause shown, the State
93 Tax [Commissioner] Commission may waive, reduce, or compromise any of the penalties or
94 interest imposed under this part.
95 (4) If a policy covers risks that are only partially located in this state, for computation
96 of tax under this part the premium shall be reasonably allocated among the states on the basis
97 of risk locations. However, all premiums with respect to surplus lines insurance received in this
98 state by a surplus lines broker or charged on policies written or negotiated in or from this state
99 are taxable in full under this part, subject to a credit for any tax actually paid in another state to
100 the extent of a reasonable allocation on the basis of risk locations.
101 (5) All premium taxes collected under this part by a broker or by an insurer are the
102 property of this state.
103 (6) If the property of any broker is seized under any process in a court in this state, or if
104 his business is suspended by the action of creditors or put into the hands of an assignee,
105 receiver, or trustee, all taxes and penalties due this state under this part are preferred claims and
106 the state is to that extent a preferred creditor.
107 Section 3. Section 31A-4-103 is amended to read:
108 31A-4-103. Certificate of authority.
109 (1) Each certificate of authority issued by the commissioner shall specify:
110 (a) the name of the insurer;
111 (b) the kinds of insurance [it] the insurer is authorized to transact in Utah; and
112 (c) any other information the commissioner requires.
113 (2) A certificate of authority issued under this chapter remains in force until[,]:
114 (a) the certificate is not renewed; or
115 (b) under Subsection (3), the certificate of authority is:
116 [(a)] (i) revoked; or
117 [(b)] (ii) suspended[; or].
118 [(c) limited.]

119 (3) (a) After an adjudicative proceeding under Title 63, Chapter 46b, Administrative
120 Procedures Act, if the commissioner makes a finding described in Subsection (3)(b), the
121 commissioner may:
122 (i) revoke[,] a certificate of authority;
123 (ii) suspend[,] a certificate of authority for a period not to exceed 12 months; or
124 (iii) limit [in whole or in part the] a certificate of authority [of any insurer if:].
125 [(i) the insurer is found to have:]
126 (b) The commissioner may take any action described in Subsection (3)(a) if the
127 commissioner finds the insurer has:
128 [(A)] (i) failed to pay when due any fee due under Section 31A-3-103 ;
129 [(B)] (ii) violated or failed to comply with:
130 [(I)] (A) this title;
131 [(II)] (B) a rule made under Subsection 31A-2-201 (3); or
132 [(III)] (C) an order issued under Subsection 31A-2-201 (4); or
133 [(ii) the insurer's] (iii) engaged in methods and practices in the conduct of business
134 that endanger the legitimate interests of customers and the public.
135 [(b)] (c) An order suspending [or limiting] a certificate of authority [issued under this
136 chapter] shall specify:
137 [(i) the period of the suspension or limitation, which in no event may be in excess of 12
138 months;]
139 [(ii)] (i) the conditions and [limitations] terms imposed on the insurer during the
140 suspension [or limitation]; and
141 [(iii)] (ii) the conditions and procedures for reinstatement from suspension [or
142 limitation].
143 (d) The commissioner may place limitations on a certificate of authority at the time the
144 certificate of authority is issued based on information contained in the application for the
145 certificate of authority.
146 (e) An order limiting a certificate of authority that is issued under Subsection (3)(a) or
147 (3)(d) shall specify:
148 (i) the period of the limitation;
149 (ii) the conditions of the limitation; and

150 (iii) the procedures for removing the limitation.
151 (4) Subject to the requirements of this section and in accordance with Title 63, Chapter
152 46a, Utah Administrative Rulemaking Act, the commissioner [shall] may by rule prescribe
153 procedures to renew or reinstate a certificate of authority.
154 (5) An insurer under this chapter whose certificate of authority is suspended or
155 revoked, but that continues to act as an authorized insurer, is subject to the penalties for acting
156 as an insurer without a certificate of authority.
157 (6) Any insurer holding a certificate of authority in this state shall immediately report
158 to the commissioner a suspension or revocation of that insurer's certificate of authority in any:
159 (a) state;
160 (b) the District of Columbia; or
161 (c) a territory of the United States.
162 (7) (a) An order revoking a certificate of authority under Subsection (3) may specify a
163 time within which the former authorized insurer may not apply for a new certificate of
164 authority, except that the time may not exceed five years from the date on which the certificate
165 of authority is revoked.
166 (b) If no time is specified in an order revoking a certificate of authority under
167 Subsection (3), the former authorized insurer may not apply for a new certificate of authority
168 for five years from the date on which the certificate of authority is revoked without express
169 approval by the commissioner.
170 (8) (a) Subject to Subsection (8)(b), the insurer shall pay all fees under Section
171 31A-3-103 that would have been payable if the certificate of authority had not been suspended
172 or revoked, unless the commissioner, in accordance with rule, waives the payment of the fees
173 by no later than the day [of] on which:
174 (i) a suspension under Subsection (3) of an insurer's certificate of authority ends; or
175 (ii) a new certificate of authority is issued to an insurer whose certificate of authority is
176 revoked under Subsection (3).
177 (b) If a new certificate of authority is issued more than three years after the [revocation
178 of] day on which a similar certificate of authority was revoked, this Subsection (8) applies only
179 to the fees that would have accrued during the three years immediately following the
180 revocation.

181 Section 4. Section 31A-4-113.5 is amended to read:
182 31A-4-113.5. Filing requirements -- National Association of Insurance
183 Commissioners.
184 (1) (a) Each domestic, foreign, and alien insurer who is authorized to transact insurance
185 business in this state shall annually, on or before March 1, file with the National Association of
186 Insurance Commissioners a copy of [its] the insurer's:
187 (i) annual statement convention blank [along with]; and
188 (ii) any additional filings required by the commissioner for the preceding year.
189 (b) The information filed with the National Association of Insurance Commissioners
190 under Subsection (1)(a) shall:
191 (i) be in the format and scope required by the commissioner; and [shall]
192 (ii) include:
193 (A) the signed jurat page; and
194 (B) the actuarial certification.
195 (c) Any amendments and addendums to [the] an annual statement [subsequently] that
196 are filed with the commissioner shall [also] be filed by the insurer with the National
197 Association of Insurance Commissioners.
198 (d) At the time an insurer makes a filing under this Subsection (1), the insurer shall pay
199 any filing fees assessed by the National Association of Insurance Commissioners.
200 [(b) Foreign insurers]
201 (e) A foreign insurer that [are] is domiciled in a state [which] that has a law
202 substantially similar to this section shall be considered to be in compliance with this section.
203 (2) All financial analysis ratios and examination synopses concerning insurance
204 companies that are submitted to the department by the Insurance Regulatory Information
205 System are confidential and may not be disclosed by the department.
206 (3) The commissioner may suspend, revoke, or refuse to renew the certificate of
207 authority of any insurer failing to:
208 (a) file [its] the annual statement as required by Subsection (1)(a) when due or within
209 any extension of time [which he may have] granted for good cause[.] by:
210 (i) the commissioner; or
211 (ii) the National Association of Insurance Commissioners; or

212 (b) pay by the time specified in Subsection (3)(a) a fee the insurer is required to pay
213 under this section to:
214 (i) the commissioner; or
215 (ii) the National Association of Insurance Commissioners.
216 Section 5. Section 31A-8-217 is amended to read:
217 31A-8-217. Material transactions by insurers which are part of holding company
218 system.
219 (1) [As] This section applies to [insurers] an insurer licensed under this chapter [which
220 are] that is part of a holding company system, for purposes of:
221 (a) the reporting requirements of Section 31A-16-105 ; and
222 (b) the material transaction standards of Section 31A-16-106 [, and unless].
223 (2) Unless otherwise provided by rule, [transactions are] a transaction is not material
224 under Subsection 31A-16-105 (4) if [they involve] the transaction involves an amount:
225 (a) of not more than:
226 (i) 10% for each transaction[,]; or
227 (ii) 20% for cumulative transactions during any one calendar year[,]; and
228 (b) calculated:
229 (i) on the basis of the organization's [compulsory] surplus requirement, determined in
230 accordance with Section 31A-5-211 ; and
231 (ii) as of December 31 [next] of the year immediately preceding the transaction.
232 Section 6. Section 31A-8-402.3 is amended to read:
233 31A-8-402.3. Discontinuance, nonrenewal, or changes to group health benefit
234 plans.
235 (1) Except as otherwise provided in this section, a group health benefit plan for a plan
236 sponsor is renewable and continues in force:
237 (a) with respect to all eligible employees and dependents; and
238 (b) at the option of the plan sponsor.
239 (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
240 (a) for a network plan, if:
241 (i) there is no longer any enrollee under the group health plan who lives, resides, or
242 works in:

243 (A) the service area of the insurer; or
244 (B) the area for which the insurer is authorized to do business; and
245 (ii) in the case of the small employer market, the insurer applies the same criteria the
246 insurer would apply in denying enrollment in the plan under Subsection 31A-30-108 (6); or
247 (b) for coverage made available in the small or large employer market only through an
248 association, if:
249 (i) the employer's membership in the association ceases; and
250 (ii) the coverage is terminated uniformly without regard to any health status-related
251 factor relating to any covered individual.
252 (3) A health benefit plan for a plan sponsor may be discontinued if:
253 (a) a condition described in Subsection (2) exists;
254 (b) the plan sponsor fails to pay premiums or contributions in accordance with the
255 terms of the contract;
256 (c) the plan sponsor:
257 (i) performs an act or practice that constitutes fraud; or
258 (ii) makes an intentional misrepresentation of material fact under the terms of the
259 coverage;
260 (d) the insurer:
261 (i) elects to discontinue offering a particular health benefit product delivered or issued
262 for delivery in this state; and
263 (ii) (A) provides notice of the discontinuation in writing:
264 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
265 (II) at least 90 days before the date the coverage will be discontinued;
266 (B) provides notice of the discontinuation in writing:
267 (I) to the commissioner; and
268 (II) at least three working days prior to the date the notice is sent to the affected plan
269 sponsors, employees, and dependents of the plan sponsors or employees;
270 (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase:
271 (I) all other health benefit products currently being offered by the insurer in the market;
272 or
273 (II) in the case of a large employer, any other health benefit product currently being

274 offered in that market; and
275 (D) in exercising the option to discontinue that product and in offering the option of
276 coverage in this section, acts uniformly without regard to:
277 (I) the claims experience of a plan sponsor;
278 (II) any health status-related factor relating to any covered participant or beneficiary; or
279 (III) any health status-related factor relating to any new participant or beneficiary who
280 may become eligible for the coverage; or
281 (e) the insurer:
282 (i) elects to discontinue all of the insurer's health benefit plans in:
283 (A) the small employer market;
284 (B) the large employer market; or
285 (C) both the small employer and large employer markets; and
286 (ii) (A) provides notice of the discontinuation in writing:
287 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
288 (II) at least 180 days before the date the coverage will be discontinued;
289 (B) provides notice of the discontinuation in writing:
290 (I) to the commissioner in each state in which an affected insured individual is known
291 to reside; and
292 (II) at least 30 working days prior to the date the notice is sent to the affected plan
293 sponsors, employees, and the dependents of the plan sponsors or employees;
294 (C) discontinues and nonrenews all plans issued or delivered for issuance in the
295 market; and
296 (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
297 (4) A large employer health benefit plan [for a plan sponsor] may be discontinued or
298 nonrenewed:
299 (a) if a condition described in Subsection (2) exists; or
300 (b) for noncompliance with the insurer's:
301 (i) minimum participation requirements; or
302 (ii) employer contribution requirements.
303 (5) A small employer health benefit plan may be discontinued or nonrenewed:
304 (a) if a condition described in Subsection (2) exists; or

305 (b) for noncompliance with the insurer's employer contribution requirements.
306 (6) A small employer health benefit plan may be nonrenewed:
307 (a) if a condition described in Subsection (2) exists; or
308 (b) for noncompliance with the insurer's minimum participation requirements.
309 [(5)] (7) (a) Except as provided in Subsection [(5)] (7)(d), an eligible employee may be
310 discontinued if after issuance of coverage the eligible employee:
311 (i) engages in an act or practice in connection with the coverage that constitutes fraud;
312 or
313 (ii) makes an intentional misrepresentation of material fact in connection with the
314 coverage.
315 (b) An eligible employee that is discontinued under Subsection [(5)] (7)(a) may
316 reenroll:
317 (i) 12 months after the date of discontinuance; and
318 (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
319 to reenroll.
320 (c) At the time the eligible employee's coverage is discontinued under Subsection [(5)]
321 (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
322 discontinued.
323 (d) An eligible employee may not be discontinued under this Subsection [(5)] (7)
324 because of a fraud or misrepresentation that relates to health status.
325 [(6)] (8) For purposes of this section, a reference to "plan sponsor" includes a reference
326 to the employer:
327 (a) with respect to coverage provided to an employer member of the association; and
328 (b) if the health benefit plan is made available by an insurer in the employer market
329 only through:
330 (i) an association;
331 (ii) a trust; or
332 (iii) a discretionary group.
333 [(7)] (9) An insurer may modify a health benefit plan for a plan sponsor only:
334 (a) at the time of coverage renewal; and
335 (b) if the modification is effective uniformly among all plans with that product.

336 Section 7. Section 31A-8-402.5 is amended to read:
337 31A-8-402.5. Individual discontinuance and nonrenewal.
338 (1) (a) Except as otherwise provided in this section, a health benefit plan offered on an
339 individual basis is renewable and continues in force:
340 (i) with respect to all individuals or dependents; and
341 (ii) at the option of the individual.
342 (b) Subsection (1)(a) applies regardless of:
343 (i) whether the contract is issued through:
344 (A) a trust;
345 (B) an association;
346 (C) a discretionary group; or
347 (D) other similar grouping; or
348 (ii) the situs of delivery of the policy or contract.
349 (2) A health benefit plan may be discontinued or nonrenewed:
350 (a) for a network plan, if:
351 (i) the individual no longer lives, resides, or works in:
352 (A) the service area of the insurer; or
353 (B) the area for which the insurer is authorized to do business; and
354 (ii) coverage is terminated uniformly without regard to any health status-related factor
355 relating to any covered individual; or
356 (b) for coverage made available through an association, if:
357 (i) the individual's membership in the association ceases; and
358 (ii) the coverage is terminated uniformly without regard to any health status-related
359 factor relating to any covered individual.
360 (3) A health benefit plan may be discontinued if:
361 (a) a condition described in Subsection (2) exists;
362 (b) the individual fails to pay premiums or contributions in accordance with the terms
363 of the health benefit plan, including any timeliness requirements;
364 (c) the individual:
365 (i) performs an act or practice in connection with the coverage that constitutes fraud; or
366 (ii) makes an intentional misrepresentation of material fact under the terms of the

367 coverage;
368 (d) the insurer:
369 (i) elects to discontinue offering a particular health benefit product delivered or issued
370 for delivery in this state; and
371 (ii) (A) provides notice of the discontinuation in writing:
372 (I) to each individual provided coverage; and
373 (II) at least 90 days before the date the coverage will be discontinued;
374 (B) provides notice of the discontinuation in writing:
375 (I) to the commissioner; and
376 (II) at least three working days prior to the date the notice is sent to the affected
377 individuals;
378 (C) offers to each covered individual on a guaranteed issue basis, the option to
379 purchase all other individual health benefit products currently being offered by the insurer for
380 individuals in that market; and
381 (D) acts uniformly without regard to any health status-related factor of covered
382 individuals or dependents of covered individuals who may become eligible for coverage; or
383 (e) the insurer:
384 (i) elects to discontinue all of the insurer's health benefit plans in the individual market;
385 and
386 (ii) (A) provides notice of the discontinuation in writing:
387 (I) to each individual provided coverage; and
388 (II) at least 180 days before the date the coverage will be discontinued;
389 (B) provides notice of the discontinuation in writing:
390 (I) to the commissioner in each state in which an affected insured individual is known
391 to reside; and
392 (II) at least 30 working days prior to the date the notice is sent to the affected
393 individuals;
394 (C) discontinues and nonrenews all health benefit plans the insurer issues or delivers
395 for [insurance] issuance in the individual market; and
396 (D) acts uniformly without regard to any health status-related factor of covered
397 individuals or dependents of covered individuals who may become eligible for coverage.

398 Section 8. Section 31A-8-407 is amended to read:
399 31A-8-407. Written contracts -- Limited liability of enrollee.
400 (1) (a) Every contract between an organization and a participating provider of health
401 care services shall be in writing and shall set forth that if the organization:
402 (i) fails to pay for health care services as set forth in the contract, the enrollee may not
403 be liable to the provider for any sums owed by the organization; and
404 (ii) becomes insolvent, the rehabilitator or liquidator may require the participating
405 provider of health care services to:
406 (A) continue to provide health care services under the contract between the
407 participating provider and the organization until the earlier of:
408 (I) 90 days after the date of the filing of a petition for rehabilitation or the petition for
409 liquidation; or
410 (II) the date the term of the contract ends; and
411 (B) subject to Subsection (1)(c), reduce the fees the participating provider is otherwise
412 entitled to receive from the organization under the contract between the participating provider
413 and the organization during the time period described in Subsection (1)(a)(ii)(A).
414 (b) If the conditions of Subsection (1)(c) are met, the participating provider shall:
415 (i) accept the reduced payment as payment in full; and
416 (ii) relinquish the right to collect additional amounts from the insolvent organization's
417 enrollee.
418 (c) Notwithstanding Subsection (1)(a)(ii)(B):
419 (i) the rehabilitator or liquidator may not reduce a fee to less than 75% of the regular
420 fee set forth in the participating provider contract; and
421 (ii) the enrollee shall continue to pay the same copayments, deductibles, and other
422 payments for services received from the participating provider that the enrollee was required to
423 pay before the filing of:
424 (A) the petition for [reorganization] rehabilitation; or
425 (B) the petition for liquidation.
426 (2) A participating provider may not collect or attempt to collect from the enrollee sums
427 owed by the organization or the amount of the regular fee reduction authorized under
428 Subsection (1)(a)(ii) if the participating provider contract:

429 (a) is not in writing as required in Subsection (1); or
430 (b) fails to contain the language required by Subsection (1).
431 (3) (a) A person listed in Subsection (3)(b) may not bill or maintain any action at law
432 against an enrollee to collect:
433 (i) sums owed by the organization; or
434 (ii) the amount of the regular fee reduction authorized under Subsection (1)(a)(ii).
435 (b) Subsection (3)(a) applies to:
436 (i) a participating provider;
437 (ii) an agent;
438 (iii) a trustee; or
439 (iv) an assignee of a person described in Subsections (3)(b)(i) through (iii).
440 Section 9. Section 31A-17-201 is amended to read:
441 31A-17-201. Qualified assets.
442 (1) Except as provided under Subsections (3) and (4), only the qualified assets listed in
443 Subsection (2) may be used in determining the financial condition of an insurer, except to the
444 extent an insurer has shown to the commissioner that the insurer has excess surplus, as defined
445 in Section 31A-1-301 .
446 (2) For purposes of Subsection (1), "qualified assets" means:
447 (a) any of the following acquired or held in accordance with Sections 31A-18-105 and
448 31A-18-106 :
449 (i) an investment;
450 (ii) a security;
451 (iii) property; or
452 (iv) a loan;
453 (b) the income due and accrued on an asset listed in Subsection (2)(a);
454 [(a)] (c) assets [as] other than an asset listed in Subsection (2)(a) that are determined to
455 be admitted in the Accounting Practices and Procedures Manual, published by the National
456 Association of Insurance Commissioners; and
457 [(b)] (d) other assets authorized by the commissioner by rule.
458 (3) (a) Subject to Subsection (5) and even if [they] the assets could not otherwise be
459 counted under this chapter, assets acquired in the bona fide enforcement of creditors' rights

460 may be counted for the purposes of Subsection (1) and Sections 31A-18-105 and 31A-18-106 :
461 (i) for five years after [their] the acquisition of the assets if [they] the assets are real
462 property; and
463 (ii) for one year if [they] the assets are not real property.
464 (b) (i) The commissioner may allow reasonable extensions of the periods described in
465 Subsection (3)(a), if disposal of the assets within the periods given is not possible without
466 substantial loss.
467 (ii) Extensions under Subsection (3)(b)(i) may not, as to any particular asset, exceed a
468 total of five years.
469 (4) Subject to Subsection (5), and even though under this chapter the assets could not
470 otherwise be counted, assets acquired in connection with mergers, consolidations, or bulk
471 reinsurance, or as a dividend or distribution of assets, may be counted for the same purposes, in
472 the same manner, and for the same periods as assets acquired under Subsection (3).
473 (5) Assets described under Subsection (3) or (4) may not be counted for the purposes
474 of Subsection (1), except to the extent they are counted as assets in determining insurer
475 solvency under the laws of the state of domicile of the creditor or acquired insurer.
476 Section 10. Section 31A-19a-209 is amended to read:
477 31A-19a-209. Special provisions for title insurance.
478 (1) In addition to the considerations in determining compliance with rate standards and
479 rating methods as set forth in Sections 31A-19a-201 and 31A-19a-202 , the commissioner shall
480 [also] consider the costs and expenses incurred by title insurance companies, agencies, and
481 agents peculiar to the business of title insurance including:
482 (a) the maintenance of title plants; and
483 (b) the searching and examining of public records to determine insurability of title to
484 real redevelopment property.
485 (2) (a) Every title insurance company, agency, and title insurance agent shall file with
486 the commissioner:
487 (i) a schedule of the escrow charges that [it] the title insurance company, agency, or
488 title insurance agent proposes to use in this state for services performed in connection with the
489 issuance of policies of title insurance[.]; and
490 [(b) The filing required by Subsection (2)(a) shall state the effective date of this

491 schedule, which may not be less than 30 calendar days after the date of filing.]
492 (ii) any changes to the schedule of the escrow charges described in Subsection (2)(a)(i).
493 (b) (i) The schedule of escrow charges required to be filed by Subsection (2)(a)(i) takes
494 effect on the day on which the schedule of escrow charges is filed.
495 (ii) Any changes to the schedule of the escrow charges required to be filed by
496 Subsection (2)(a)(ii) take effect on the day specified in the change to the schedule of escrow
497 charges except that the effective date may not be less than 30 calendar days after the day on
498 which the change to the schedule of escrow charges is filed.
499 (3) A title insurance company, agency, or agent may not file or use any rate or other
500 charge relating to the business of title insurance, including rates or charges filed for escrow that
501 would cause the title insurance company, agency, or agent to:
502 (a) operate at less than the cost of doing:
503 (i) the insurance business; or
504 (ii) the escrow business; or
505 (b) fail to adequately underwrite a title insurance policy.
506 (4) (a) All or any of the schedule of rates or schedule of charges, including the schedule
507 of escrow charges, may be changed or amended at any time, subject to the limitations in this
508 Subsection (4).
509 (b) Each change or amendment shall:
510 (i) be filed with the commissioner; and
511 (ii) state the effective date of the change or amendment, which may not be less than 30
512 calendar days after the [date of filing] day on which the change or amendment is filed.
513 (c) Any change or amendment remains in force for a period of at least 90 calendar days
514 from [its] the change or amendment's effective date.
515 (5) While the schedule of rates and schedule of charges are effective, a copy of each
516 shall be:
517 (a) retained in each of the offices of:
518 (i) the insurance company in this state;
519 (ii) [its] the insurance company's agents in this state; and
520 (b) upon request, furnished to the public.
521 (6) Except in accordance with the schedules of rates and charges filed with the

522 commissioner, a title insurance company, agency, or agent may not make or impose any
523 premium or other charge:
524 (a) in connection with the issuance of a policy of title insurance; or
525 (b) for escrow services performed in connection with the issuance of a policy of title
526 insurance.
527 Section 11. Section 31A-19a-212 is amended to read:
528 31A-19a-212. Premium increases prohibited for certain claims or inquiries.
529 (1) Each rate, rating schedule, and rating manual filed with the commissioner for
530 insurance covering a vehicle or the operation of a vehicle may not permit a premium increase
531 due to:
532 (a) a telephone call or other inquiry that does not result in the payment of a claim; or
533 (b) a claim resulting from any incident, including acts of vandalism, in which the
534 person named in the policy or any other person using the insured motor vehicle with the
535 express or implied permission of the named insured is not at fault.
536 (2) Subsection (1) prohibits a premium increase when:
537 (a) a policy is issued; or
538 (b) a policy is renewed.
539 [(2)] (3) This section is an exception to Section 31A-19a-201 .
540 Section 12. Section 31A-21-106 is amended to read:
541 31A-21-106. Incorporation by reference.
542 (1) (a) Except as provided in Subsection (1)(b), an insurance policy may not contain
543 any agreement or incorporate any provision not fully set forth in the policy or in an application
544 or other document attached to and made a part of the policy at the time of its delivery, unless
545 the policy, application, or agreement accurately reflects the terms of the incorporated
546 agreement, provision, or attached document.
547 (b) (i) A policy may by reference incorporate rate schedules and classifications of risks
548 and short-rate tables filed with the commissioner.
549 (ii) By rule or order, the commissioner may authorize incorporation by reference of
550 provisions for:
551 (A) administrative arrangements;
552 (B) premium schedules; and

553 (C) payment procedures for complex contracts.
554 (c) (i) A policy of title insurance insuring the mortgage or deed of trust of an
555 institutional lender may, if requested by an institutional lender, incorporate by reference
556 generally applicable policy terms that are contained in a specifically identified policy that has
557 been filed with the commissioner.
558 (ii) As used in Subsection (1)(c)(i), "institutional lender" means a person that regularly
559 engages in the business of making loans secured by real estate.
560 (d) A policy may incorporate by reference the following by citing in the policy:
561 (i) a federal law or regulation;
562 (ii) a state law or rule; or
563 (iii) a public directive of a federal or state agency.
564 (2) A purported modification of a contract during the term of the policy may not affect
565 the obligations of a party to the contract:
566 (a) unless the modification is:
567 (i) in writing; and
568 (ii) agreed to by the party against whose interest the modification operates; and
569 (b) except:
570 (i) as provided in:
571 (A) Subsection (3) or (4);
572 (B) Subsection 31A-8-402.3 [(7)] (9);
573 (C) Subsection 31A-22-721 [(8)] (10); or
574 (D) Subsection 31A-30-107 [(7)] (8); or
575 (ii) as otherwise mandated by law.
576 (3) Subsection (2) does not prevent a change in coverage under group contracts
577 resulting from:
578 (a) provisions of an employer eligibility rule;
579 (b) the terms of a collective bargaining agreement; or
580 (c) provisions in federal Employee Retirement Income Security Act plan documents.
581 (4) Subsection (2) does not prevent a premium increase at any renewal date that is
582 applicable uniformly to all comparable persons.
583 Section 13. Section 31A-21-201 is amended to read:

584 31A-21-201. Filing and approval of forms.
585 (1) (a) [A form subject to Subsection 31A-21-101 (1), except] Except as exempted
586 under Subsections 31A-21-101 (2) through (6), a form may not be used, sold, or offered for sale
587 unless [it] the form has been filed with the commissioner.
588 (b) A form is considered filed with the commissioner when the commissioner receives:
589 (i) the form;
590 (ii) the applicable filing fee as prescribed under Section 31A-3-103 ; and
591 (iii) the applicable transmittal forms as required by the commissioner.
592 (2) In filing a form for use in this state the insurer is responsible for assuring that the
593 form is in compliance with this title and rules adopted by the commissioner.
594 (3) (a) The commissioner may prohibit the use of a form at any time upon a finding
595 that:
596 (i) [it] the form is:
597 (A) inequitable;
598 (B) unfairly discriminatory;
599 (C) misleading;
600 (D) deceptive;
601 (E) obscure;
602 (F) unfair;
603 (G) encourages misrepresentation; or
604 (H) not in the public interest;
605 (ii) [it] the form provides benefits or contains other provisions that endanger the
606 solidity of the insurer;
607 (iii) in the case of the basic policy and the application for a basic policy, [it] the basic
608 policy or application for the basic policy fails to conspicuously, as defined by rule, provide:
609 (A) the exact name of the insurer;
610 (B) [its] the state of domicile of the insurer filing the basic policy or application for the
611 basic policy; and
612 (C) for life insurance and annuity policies only, the address of [its] the administrative
613 office[.] of the insurer filing the basic policy or application for the basic policy;
614 (iv) [it] the form violates a statute or a rule adopted by the commissioner; or

615 (v) [it] the form is otherwise contrary to law.
616 (b) Subsection (3)(a)(iii) does not apply to riders and endorsements to a basic policy.
617 (c) (i) Whenever the commissioner prohibits the use of a form under Subsection (3)(a),
618 the commissioner may order that, on or before a date not less than 15 days after the order, the
619 use of the form be discontinued.
620 (ii) Once a form has been prohibited, [it] the form may not be used unless appropriate
621 changes are filed with and reviewed by the commissioner.
622 (iii) Whenever the commissioner prohibits the use of a form under Subsection (3)(a),
623 the commissioner may require the insurer to disclose contract deficiencies to existing
624 policyholders.
625 (d) [The commissioner's prohibition] If the commissioner prohibits use of a form under
626 this Subsection (3), the prohibition shall:
627 (i) be in writing;
628 (ii) constitute an order; and
629 (iii) state the reasons for the prohibition.
630 (4) (a) If, after a hearing, the commissioner determines that it is in the public interest,
631 the commissioner may require by rule or order that certain forms be subject to the
632 commissioner's approval prior to their use.
633 (b) The rule or order described in Subsection (4)(a) shall prescribe the filing
634 procedures for the forms if the procedures are different than the procedures stated in this
635 section.
636 (c) The types of forms that may be addressed under Subsection (4)(a) include:
637 (i) [forms] a form for a particular class of insurance;
638 (ii) [forms] a form for a specific line of insurance;
639 (iii) a specific type of form; or
640 (iv) [forms] a form for a specific market segment.
641 (5) (a) An insurer shall maintain a complete and accurate record of the following for
642 the time period described in Subsection (5)(b):
643 (i) any form:
644 (A) filed under this section for use; and
645 (B) that is in use; and

646 (ii) any document filed under this section with a form described in Subsection (5)(a)(i).
647 (b) The insurer shall maintain a record required under Subsection (5)(a) for the balance
648 of the current year, plus three years from:
649 (i) the last day on which the form is used; or
650 (ii) the last day any policy that is issued using the form is in effect.
651 Section 14. Section 31A-21-311 is amended to read:
652 31A-21-311. Group and blanket insurance.
653 (1) (a) (i) Except under Subsection (1)(d), an insurer issuing a group insurance policy
654 other than a blanket insurance policy shall, as soon as practicable after the coverage is
655 effective, provide a certificate for each member of the insured group, except that only one
656 certificate need be provided for the members of a family unit.
657 (ii) The certificate required by this Subsection (1) shall:
658 (A) provide the exact name of the insurer;
659 (B) state the state of domicile of the insurer; and
660 (C) contain a summary of the essential features of the insurance coverage, including:
661 [(A)] (I) any rights of conversion to an individual policy; [and]
662 [(B)] (II) in the case of group life insurance[, any: (I)], any continuation of coverage
663 during total disability; and
664 [(II)] (III) in the case of group life insurance, the incontestability provision.
665 (iii) Upon receiving a written request, the insurer shall inform any insured how the
666 insured may inspect, during normal business hours at a place reasonably convenient to the
667 insured[,]:
668 (A) a copy of the policy; or
669 (B) a summary of the policy containing all the details that are relevant to the certificate
670 holder.
671 (b) The commissioner may by rule impose a requirement similar to Subsection (1)(a)
672 on any class of blanket insurance policies for which the commissioner finds that the group of
673 persons covered is constant enough for that type of action to be practicable and not
674 unreasonably expensive.
675 (c) (i) A certificate shall be provided in a manner reasonably calculated to bring the
676 certificate to the attention of the certificate holder.

677 (ii) The insurer may deliver or mail a certificate:
678 (A) directly to the certificate holders; or
679 (B) in bulk to the policyholder to transmit to certificate holders.
680 (iii) An affidavit by the insurer that the insurer mailed the certificates in the usual
681 course of business creates a rebuttable presumption that the insurer has [done so.] mailed the
682 certificate to:
683 (A) a certificate holder; or
684 (B) a policyholder as provided in Subsection (1)(c)(ii)(B).
685 (d) The commissioner may by rule or order prescribe substitutes for delivery or mailing
686 of certificates that are reasonably calculated to inform a certificate holder of the certificate
687 holder's rights, including:
688 (i) booklets describing the coverage;
689 (ii) the posting of notices in the place of business; or
690 (iii) publication in a house organ.
691 (2) Unless a certificate or an authorized substitute has been made available to the
692 certificate holder when required by this section, an act or omission forbidden to or required of
693 the certificate holder by the certificate after the coverage has become effective as to the
694 certificate holder, other than intentionally causing the loss insured against or failing to make
695 required contributory premium payments, may not affect the insurer's obligations under the
696 insurance contract.
697 Section 15. Section 31A-22-403 is amended to read:
698 31A-22-403. Incontestability.
699 (1) This section does not apply to group policies.
700 (2) (a) Except as provided in Subsection (3), a life insurance policy is incontestable
701 after the policy has been in force for a period of two years from the policy's date of issue:
702 (i) during the lifetime of the insured; or
703 (ii) for a survivorship life insurance policy, during the lifetime of the surviving insured.
704 (b) A life insurance policy shall state that the life insurance policy is incontestable after
705 the time period described in Subsection (2)(a).
706 (3) (a) A life insurance policy described in Subsection (2) may be contested for
707 nonpayment of premiums.

708 (b) A life insurance policy described in Subsection (2) may be contested as to:
709 (i) provisions relating to accident and health benefits allowed under Section
710 31A-22-609 ; and
711 (ii) additional benefits in the event of death by accident.
712 (c) If a life insurance policy described in Subsection (2) allows the insured, after the
713 policy's issuance and for an additional premium, to obtain a death benefit that is larger than
714 when the policy was originally issued, the payment of the additional increment of benefit is
715 contestable:
716 (i) until two years after the incremental increase of benefits; and
717 (ii) based only on a ground that may arise in connection with the incremental increase.
718 (4) (a) A reinstated life insurance policy [or annuity contract] may be contested:
719 (i) for two years following reinstatement on the same basis as at original issuance; and
720 (ii) only as to matters arising in connection with the reinstatement.
721 (b) Any grounds for contest available at original issuance continue to be available for
722 contest until the policy has been in force for a total of two years:
723 (i) during the lifetime of the insured; and
724 (ii) for a survivorship life insurance policy, during the lifetime of the surviving insured.
725 (5) (a) The limitations on incontestability under this section:
726 (i) preclude only a contest of the validity of the policy; and
727 (ii) do not preclude the good faith assertion at any time of defenses based upon
728 provisions in the policy that exclude or qualify coverage, whether or not those qualifications or
729 exclusions are specifically excepted in the policy's incontestability clause.
730 (b) A provision on which the contestable period would normally run may not be
731 reformulated as a coverage exclusion or restriction to take advantage of this Subsection (5).
732 (6) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
733 commissioner may make rules to implement this section.
734 Section 16. Section 31A-22-423 is amended to read:
735 31A-22-423. Policy and annuity examination period.
736 (1) (a) Except as provided under Subsection (2), all life insurance policies [and], life
737 insurance certificates, annuities, and annuities certificates shall contain a notice prominently
738 printed on or attached to the cover or front page stating that the policyholder or certificate

739 holder has the right to return the policy or certificate for any reason on or before:
740 (i) ten days after delivery; or
741 (ii) in case of a replacement policy or certificate, 20 days after the replacement policy
742 or certificate is delivered.
743 (b) For purposes of this section, "return" means a writing that:
744 (i) the policy or certificate is being returned for termination of coverage;
745 (ii) is:
746 (A) a written statement on the policy or certificate; or [an accompanying]
747 (B) a writing that accompanies the policy [is being returned for termination of coverage
748 that is] or certificate; and
749 (iii) is delivered to or mailed first class to the insurer or [its] the insurer's agent.
750 (c) A policy or certificate returned under this section is void from the date of issuance.
751 (d) A policyholder or certificate holder returning a policy or certificate is entitled to a
752 refund of any premium paid.
753 (2) This section does not apply to:
754 (a) group term life insurance issued under Section 31A-22-502 ;
755 [(a)] (b) a group [policies; and] master policy;
756 (c) a noncontributory certificate;
757 (d) a credit life insurance certificate; and
758 [(b)] (e) other classes of life insurance policies that the commissioner specifies by rule
759 after finding that a right to return those policies would be impracticable or unnecessary to
760 protect the policyholder's interests.
761 Section 17. Section 31A-22-517 is amended to read:
762 31A-22-517. Conversion on termination of eligibility.
763 (1) [If any portion of the insurance on a person covered under the policy ceases because
764 of termination of employment or of membership in the classes eligible for coverage, the] A
765 person is entitled to be issued by the insurer, without evidence of insurability, an individual
766 policy of life insurance without accident and health or other supplementary benefits, if:
767 (a) any portion of insurance on a person covered by a policy ceases because of:
768 (i) termination of employment; or
769 (ii) termination of membership in the classes eligible for coverage;

770 (b) an application for the individual policy is made; and
771 (c) the first premium is paid to the insurer within 31 days after the termination
772 described in Subsection (1)(a).
773 (2) The individual policy described in Subsection (1) shall, at the option of the person
774 entitled, be on any form then customarily [issued] provided by the insurer at the age and for the
775 amount applied for, except that the group policy may exclude the option to elect:
776 (a) term insurance[.]; or
777 (b) flexible premium insurance.
778 (3) (a) The individual policy described in Subsection (1) shall be for an amount not in
779 excess of the life insurance which ceases because of the termination, less the amount of any life
780 insurance for which the person is eligible because of the termination and within 30 days after
781 [it] the termination.
782 (b) Any amount of insurance [which] that matures on or before the termination, as an
783 endowment payable to the person insured, whether in one sum, in installments, or in the form
784 of an annuity, is not included in the amount [which] that is considered to cease because of the
785 termination.
786 (4) The premium on the individual policy described in Subsection (1) shall be at the
787 insurer's customary rate at the time of termination, which is applicable to:
788 (a) the form and amount of the individual policy[, to];
789 (b) the class of risk to which the person belonged when terminated from the group
790 policy[,]; and [to]
791 (c) the age attained on the effective date of the individual policy.
792 (5) Subject to the conditions of this section, the conversion privilege described in this
793 section is available:
794 (a) to a surviving dependent, if any, at the death of the employee or member, with
795 respect to the survivor's coverage under the group policy [which] that terminates by reason of
796 the death; and
797 (b) to the dependent of the employee or member upon termination of coverage of the
798 dependent, while the employee or member remains insured, because the dependent ceases to be
799 a qualified dependent under the group policy.
800 Section 18. Section 31A-22-610 is amended to read:

801 31A-22-610. Dependent coverage from moment of birth or adoption.
802 (1) As used in this section:
803 (a) "Child" means, in connection with any adoption, or placement for adoption of the
804 child, an individual who is younger than 18 years of age as of the date of the adoption or
805 placement for adoption.
806 (b) "Placement for adoption" means the assumption and retention by a person of a legal
807 obligation for total or partial support of a child in anticipation of the adoption of the child.
808 (2) (a) If any accident and health insurance policy provides coverage for any members
809 of the policyholder's or certificate holder's family, the policy shall [also] provide that any health
810 insurance benefits applicable to dependents of the insured are applicable on the same basis to:
811 (i) a newly born child from the moment of birth[,]; and [to]
812 (ii) an adopted child:
813 [(i)] (A) beginning from the moment of birth, if placement for adoption occurs within
814 30 days of the child's birth; or
815 [(ii)] (B) beginning from the date of placement, if placement for adoption occurs 30
816 days or more after the child's birth.
817 (b) [This] The coverage described in this Subsection (2):
818 (i) is not subject to any preexisting conditions[,]; and
819 (ii) includes any injury or sickness, including the necessary care and treatment of
820 medically diagnosed:
821 (A) congenital defects [and];
822 (B) birth abnormalities; or
823 (C) prematurity.
824 [(c) If the payment of a specific premium is required to provide coverage for a child of
825 the policyholder or certificate holder, the policy may require that the insurer be notified of the
826 birth or placement for the purpose of adoption, and that the required premium be paid within
827 30 days after the date of birth or placement for the purpose of adoption, in order to have the
828 coverage extend beyond that 30-day period.]
829 (c) (i) Subject to Subsection (2)(c)(ii), a claim for services for a newly born child or an
830 adopted child may be denied until the child is enrolled.
831 (ii) Notwithstanding Subsection (2)(c)(i), an otherwise eligible claim denied under

832 Subsection (2)(c)(i) is eligible for payment and may be resubmitted or reprocessed once a child
833 is enrolled pursuant to Subsection (2)(d) or (e).
834 (d) If the payment of a specific premium is required to provide coverage for a child of a
835 policyholder or certificate holder, for there to be coverage for the child, the policyholder or
836 certificate holder shall enroll:
837 (i) a newly born child within 30 days after the date of birth of the child; or
838 (ii) an adopted child within 30 days after the day of placement of adoption.
839 (e) If the payment of a specific premium is not required to provide coverage for a child
840 of a policyholder or certificate holder, for the child to receive coverage the policyholder or
841 certificate holder shall enroll a newly born child or an adopted child no later than 30 days after
842 the first notification of denial of a claim for services for that child.
843 (3) (a) The coverage required by Subsection (2) as to children placed for the purpose of
844 adoption with a policyholder or certificate holder continues in the same manner as it would
845 with respect to a child of the policyholder or certificate holder unless:
846 (i) the placement is disrupted prior to legal adoption; and
847 (ii) the child is removed from placement.
848 (b) The coverage [requirement] required by Subsection (2) ends if the child is removed
849 from placement prior to being legally adopted.
850 (4) The provisions of this section apply to employee welfare benefit plans as defined in
851 Section 26-19-2 .
852 Section 19. Section 31A-22-721 is amended to read:
853 31A-22-721. A health benefit plan for a plan sponsor -- Discontinuance and
854 nonrenewal.
855 (1) Except as otherwise provided in this section, a health benefit plan for a plan
856 sponsor is renewable and continues in force:
857 (a) with respect to all eligible employees and dependents; and
858 (b) at the option of the plan sponsor.
859 (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
860 (a) for a network plan, if:
861 (i) there is no longer any enrollee under the group health plan who lives, resides, or
862 works in:

863 (A) the service area of the insurer; or
864 (B) the area for which the insurer is authorized to do business; and
865 (ii) in the case of the small employer market, the insurer applies the same criteria the
866 insurer would apply in denying enrollment in the plan under Subsection 31A-30-108 (6); or
867 (b) for coverage made available in the small or large employer market only through an
868 association, if:
869 (i) the employer's membership in the association ceases; and
870 (ii) the coverage is terminated uniformly without regard to any health status-related
871 factor relating to any covered individual.
872 (3) A health benefit plan for a plan sponsor may be discontinued if:
873 (a) a condition described in Subsection (2) exists;
874 (b) the plan sponsor fails to pay premiums or contributions in accordance with the
875 terms of the contract;
876 (c) the plan sponsor:
877 (i) performs an act or practice that constitutes fraud; or
878 (ii) makes an intentional misrepresentation of material fact under the terms of the
879 coverage;
880 (d) the insurer:
881 (i) elects to discontinue offering a particular health benefit product delivered or issued
882 for delivery in this state;
883 (ii) (A) provides notice of the discontinuation in writing:
884 (I) to each plan sponsor, employee, and dependent of a plan sponsor or employee; and
885 (II) at least 90 days before the date the coverage will be discontinued;
886 (B) provides notice of the discontinuation in writing:
887 (I) to the commissioner; and
888 (II) at least three working days prior to the date the notice is sent to the affected plan
889 sponsors, employees, and dependents of plan sponsors or employees;
890 (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase any
891 other health benefit products currently being offered:
892 (I) by the insurer in the market; or
893 (II) in the case of a large employer, any other health benefit plan currently being

894 offered in that market; and
895 (D) in exercising the option to discontinue that product and in offering the option of
896 coverage in this section, the insurer acts uniformly without regard to:
897 (I) the claims experience of a plan sponsor;
898 (II) any health status-related factor relating to any covered participant or beneficiary; or
899 (III) any health status-related factor relating to a new participant or beneficiary who
900 may become eligible for coverage; or
901 (e) the insurer:
902 (i) elects to discontinue all of the insurer's health benefit plans:
903 (A) in the small employer market; or
904 (B) the large employer market; or
905 (C) both the small and large employer markets;
906 (ii) (A) provides notice of the discontinuance in writing:
907 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
908 (II) at least 180 days before the date the coverage will be discontinued;
909 (B) provides notice of the discontinuation in writing:
910 (I) to the commissioner in each state in which an affected insured individual is known
911 to reside; and
912 (II) at least 30 business days prior to the date the notice is sent to the affected plan
913 sponsors, employees, and dependents of a plan sponsor or employee;
914 (C) discontinues and nonrenews all plans issued or delivered for issuance in the
915 market; and
916 (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
917 (4) A large employer health benefit plan [for a plan sponsor] may be discontinued or
918 nonrenewed:
919 (a) if a condition described in Subsection (2) exists; or
920 (b) for noncompliance with the insurer's:
921 (i) minimum participation requirements; or
922 (ii) employer contribution requirements.
923 (5) A small employer health benefit plan may be discontinued or nonrenewed:
924 (a) if a condition described in Subsection (2) exists; or

925 (b) for noncompliance with the insurer's employer contribution requirements.
926 (6) A small employer health benefit plan may be nonrenewed:
927 (a) if a condition described in Subsection (2) exists; or
928 (b) for noncompliance with the insurer's minimum participation requirements.
929 [(5)] (7) (a) Except as provided in Subsection [(5)] (7)(d), an eligible employee may be
930 discontinued if after issuance of coverage the eligible employee:
931 (i) engages in an act or practice that constitutes fraud in connection with the coverage;
932 or
933 (ii) makes an intentional misrepresentation of material fact in connection with the
934 coverage.
935 (b) An eligible employee that is discontinued under Subsection [(5)] (7)(a) may
936 reenroll:
937 (i) 12 months after the date of discontinuance; and
938 (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
939 to reenroll.
940 (c) At the time the eligible employee's coverage is discontinued under Subsection [(5)]
941 (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
942 discontinued.
943 (d) An eligible employee may not be discontinued under this Subsection [(5)] (7)
944 because of a fraud or misrepresentation that relates to health status.
945 [(6)] (8) (a) Except as provided in Subsection [(6)] (8)(b), an insurer that elects to
946 discontinue offering a health benefit plan under Subsection (3)(e) shall be prohibited from
947 writing new business in such market in this state for a period of five years beginning on the
948 date of discontinuation of the last coverage that is discontinued.
949 (b) The commissioner may waive the prohibition under Subsection [(6)] (8)(a) when
950 the commissioner finds that waiver is in the public interest:
951 (i) to promote competition; or
952 (ii) to resolve inequity in the marketplace.
953 [(7)] (9) If an insurer is doing business in one established geographic service area of
954 the state, this section applies only to the insurer's operations in that geographic service area.
955 [(8)] (10) An insurer may modify a health benefit plan for a plan sponsor only:

956 (a) at the time of coverage renewal; and
957 (b) if the modification is effective uniformly among all plans with a particular product
958 or service.
959 [(9)] (11) For purposes of this section, a reference to "plan sponsor" includes a
960 reference to the employer:
961 (a) with respect to coverage provided to an employer member of the association; and
962 (b) if the health benefit plan is made available by an insurer in the employer market
963 only through:
964 (i) an association;
965 (ii) a trust; or
966 (iii) a discretionary group.
967 [(10)] (12) (a) A small employer that, after purchasing a health benefit plan in the small
968 group market, employs on average more than 50 eligible employees on each business day in a
969 calendar year may continue to renew the health benefit plan purchased in the small group
970 market.
971 (b) A large employer that, after purchasing a health benefit plan in the large group
972 market, employs on average less than 51 eligible employees on each business day in a calendar
973 year may continue to renew the health benefit plan purchased in the large group market.
974 [(11)] (13) An insurer offering employer sponsored health benefit plans shall comply
975 with the Health Insurance Portability and Accountability Act, P. L. 104-191, 110 Stat. 1962,
976 Sec. 2701 and 2702.
977 Section 20. Section 31A-23-202 is amended to read:
978 31A-23-202. Application for license.
979 (1) (a) Subject to Subsection (2) the application for a resident license as an agent, a
980 broker, or a consultant shall be:
981 (i) made to the commissioner on forms and in a manner the commissioner prescribes;
982 and
983 (ii) accompanied by an applicable fee that is not refunded if the application is denied;
984 and
985 (b) the application for a nonresident license as an agent, a broker, or a consultant shall
986 be:

987 (i) made on the uniform application; and
988 (ii) accompanied by an applicable fee that is not refunded if the application is denied.
989 (2) An application described in Subsection (1) shall provide:
990 (a) information about the applicant's identity;
991 (b) the applicant's:
992 (i) Social Security number; or
993 (ii) federal employer identification number;
994 (c) the applicant's personal history, experience, education, and business record;
995 (d) if the applicant is a natural person, whether the applicant is 18 years of age or older;
996 (e) whether the applicant has committed an act that is a ground for denial, suspension,
997 or revocation as set forth in Section 31A-23-216 ; and
998 (f) any other information the commissioner reasonably requires.
999 (3) The commissioner may require any documents reasonably necessary to verify the
1000 information contained in an application.
1001 [(4) The following are private records under Subsection 63-2-302 (1)(a)(vii), an
1002 applicant's :]
1003 [(a) Social Security number ; or]
1004 [(b) federal employer identification number.]
1005 (4) The following information contained in an application filed under this section is a
1006 private record under Title 63, Chapter 2, Government Records Access and Management Act:
1007 (a) an applicant's Social Security number; or
1008 (b) an applicant's federal employer identification number.
1009 Section 21. Section 31A-23-311.1 is enacted to read:
1010 31A-23-311.1. Person's liability if premium received is not forwarded to the
1011 insurer.
1012 A person commits insurance fraud as described in Subsection 31A-31-103 (1)(f) if that
1013 person knowingly fails to forward to the insurer a premium:
1014 (1) received from one of the following in partial or total payment of the premium due
1015 from:
1016 (a) an applicant;
1017 (b) a policyholder; or

1018 (c) a certificate holder; or
1019 (2) collected from or on behalf of an insured employee under an insured employee
1020 benefit plan.
1021 Section 22. Section 31A-26-202 is amended to read:
1022 31A-26-202. Application for license.
1023 (1) (a) The application for a license as an independent adjuster or public adjuster shall
1024 be:
1025 (i) made to the commissioner on forms and in a manner the commissioner prescribes;
1026 and
1027 (ii) accompanied by the applicable fee, which is not refunded if the application is
1028 denied.
1029 (b) The application shall provide:
1030 (i) information about the applicant's identity, including:
1031 (A) the applicant's:
1032 (I) Social Security number; or
1033 (II) federal employer identification number;
1034 (B) the applicant's personal history, experience, education, and business record;
1035 (C) if the applicant is a natural person, whether the applicant is 18 years of age or
1036 older; and
1037 (D) whether the applicant has committed an act that is a ground for denial, suspension,
1038 or revocation as set forth in Section 31A-25-208 ; and
1039 (ii) any other information as the commissioner reasonably requires.
1040 (2) The commissioner may require documents reasonably necessary to verify the
1041 information contained in the application.
1042 [(3) The following are private records under Subsection 63-2-302 (1)(a)(vii):]
1043 [(a) the applicant's Social Security number; and]
1044 [(b) the applicant's federal employer identification number.]
1045 (3) The following information contained in an application filed under this section is a
1046 private record under Title 63, Chapter 2, Government Records Access and Management Act:
1047 (a) an applicant's Social Security number; or
1048 (b) an applicant's federal employer identification number.

1049 Section 23. Section 31A-26-310 is amended to read:
1050 31A-26-310. Compensation of insurers' claims adjusters.
1051 (1) (a) Except as provided in Subsection (2), [insurers] an insurer or an insured may
1052 not pay a person[, whether an employee or independent contractor,] who is representing [it] the
1053 insurer or insured in connection with an insurance claim [adjustments] adjustment on [a] any
1054 basis that is dependent, in whole or in part, upon the amounts paid [insureds] an insured or
1055 [claimants] claimant under an insurance [policies] policy.
1056 (b) Subsection (1)(a) includes payments to:
1057 (i) an employee of:
1058 (A) the insurer; or
1059 (B) the insured;
1060 (ii) an independent contractor; or
1061 (iii) a public adjuster.
1062 (2) Subsection (1) does not prohibit a compensation arrangement:
1063 (a) based upon the overall profitability of the insurer;
1064 (b) based upon the discovery or proof of fraudulent insurance claims; or
1065 (c) conforming to an order or rule of the commissioner [which deals with] that
1066 addresses the compensation of persons engaged in insurance adjusting on behalf of:
1067 (i) an insurer[.]; or
1068 (ii) an insured.
1069 Section 24. Section 31A-27-302 is amended to read:
1070 31A-27-302. Answering the petition -- Hearing -- Appeal.
1071 (1) (a) The insurer shall answer the petition described in Section 31A-27-301 within
1072 five working days after receiving [the] notice.
1073 (b) If the insurer does not answer within [this] the time described in Subsection (1)(a),
1074 the court shall issue a rehabilitation order under Section 31A-27-303 .
1075 (2) If the insurer answers and objects to the petition described in Section 31A-27-301 ,
1076 the court shall:
1077 (a) hear the case as soon as it is convenient[,]; and [shall]
1078 (b) proceed expeditiously to grant or deny the petition.
1079 (3) (a) The judgment of the court granting or denying the petition may be appealed

1080 under the Utah Rules of Civil Procedure.
1081 (b) If the court's judgment is to grant a petition for rehabilitation, the judgment remains
1082 in effect pending the decision on appeal.
1083 (c) The Supreme Court shall give expeditious review of appeals made under this
1084 Subsection (3).
1085 Section 25. Section 31A-27-311.5 is amended to read:
1086 31A-27-311.5. Continuance of coverage -- Health maintenance organizations.
1087 (1) As used in this section:
1088 (a) "basic health care services" is as defined in Section 31A-8-101 ;
1089 (b) "enrollee" is as defined in Section 31A-8-101 ;
1090 (c) "health care" is as defined in Section 31A-1-301 ;
1091 (d) "health maintenance organization" is as defined in Section 31A-8-101 ;
1092 (e) "limited health plan" is as defined in Section 31A-8-101 ;
1093 (f) (i) "managed care organization" means any entity licensed by, or holding a
1094 certificate of authority from, the department to furnish health care services or health insurance;
1095 (ii) "managed care organization" includes:
1096 (A) a limited health plan;
1097 (B) a health maintenance organization;
1098 (C) a preferred provider organization;
1099 (D) a fraternal benefit society; or
1100 (E) any entity similar to an entity described in Subsections (1)(f)(ii)(A) through (D);
1101 (iii) "managed care organization" does not include:
1102 (A) an insurer or other person that is eligible for membership in a guaranty association
1103 under Chapter 28, Guaranty Associations;
1104 (B) a mandatory state pooling plan;
1105 (C) a mutual assessment company or any entity that operates on an assessment basis; or
1106 (D) any entity similar to an entity described in Subsections (1)(f)(iii)(A) through (C);
1107 (g) "participating provider" means a provider who, under a contract with a managed
1108 care organization authorized under Section 31A-8-407 , agrees to provide health care services to
1109 enrollees with an expectation of receiving payment, directly or indirectly, from the managed
1110 care organization, other than copayment;

1111 (h) "participating provider contract" means the agreement between a participating
1112 provider and a managed care organization authorized under Section 31A-8-407 ;
1113 (i) "preferred provider" means a provider who agrees to provide health care services
1114 under an agreement authorized under Subsection 31A-22-617 (1);
1115 (j) "preferred provider contract" means the written agreement between a preferred
1116 provider and a managed care organization authorized under Subsection 31A-22-617 (1);
1117 (k) (i) except as provided in Subsection (1)(k)(ii), "preferred provider organization"
1118 means any person that:
1119 (A) furnishes at a minimum, through preferred providers, basic health care services to
1120 an enrollee in return for prepaid periodic payments in an amount agreed to prior to the time
1121 during which the health care may be furnished;
1122 (B) is obligated to the enrollee to arrange for the services described in Subsection
1123 (1)(k)(i)(A); and
1124 (C) permits the enrollee to obtain health care services from providers who are not
1125 preferred providers; and
1126 (ii) "preferred provider organization" does not include:
1127 (A) an insurer licensed under Chapter 7, Nonprofit Health Service Insurance
1128 [Corporation] Corporations; or
1129 (B) an individual who contracts to render professional or personal services that the
1130 individual performs[.];
1131 (l) "provider" is as defined in Section 31A-8-101 ; and
1132 (m) "uncovered expenditure" means the costs of health care services that are covered
1133 by an organization for which an enrollee is liable in the event of the managed care
1134 organization's insolvency.
1135 (2) The rehabilitator or liquidator may take one or more of the actions described in
1136 Subsections (2)(a) through (f) to assure continuation of health care coverage for enrollees of an
1137 insolvent managed care organization.
1138 (a) (i) Subject to Subsection (2)(a)(ii), a rehabilitator or liquidator may require a
1139 participating provider and preferred provider of health care services to continue to provide the
1140 health care services the provider is required to provide under the provider's participating
1141 provider contract or preferred provider contract until the earlier of:

1142 (A) 90 days after the date of the filing of:
1143 (I) a petition for rehabilitation; or
1144 (II) a petition for liquidation; or
1145 (B) the date the term of the contract ends.
1146 (ii) A requirement by the rehabilitator or liquidator under Subsection (2)(a)(i) that a
1147 participating provider or preferred provider continue to provide health care services under a
1148 provider's participating provider contract or preferred providers contract expires when health
1149 care coverage for all enrollees of the insolvent managed care organization is obtained from
1150 another managed care organization or insurer.
1151 (b) (i) Subject to Subsection (2)(b)(ii), a rehabilitator or liquidator may reduce the fees
1152 a participating provider or preferred provider is otherwise entitled to receive from the managed
1153 care organization under its participating provider contract or preferred provider contract during
1154 the time period in Subsection (2)(a)(i).
1155 (ii) Notwithstanding Subsection (2)(b)(i) a rehabilitator or liquidator may not reduce a
1156 fee to less than 75% of the regular fee set forth in the respective participating provider contract
1157 or preferred provider contract.
1158 (iii) An enrollee shall continue to pay the same copayments, deductibles, and other
1159 payments for services received from the participating provider or preferred provider that the
1160 enrollee was required to pay before the date of filing of:
1161 (A) the petition for rehabilitation; or
1162 (B) the petition for liquidation.
1163 (c) (i) A participating provider or preferred provider shall:
1164 (A) accept the amounts specified in Subsection (2)(b) as payment in full; and
1165 (B) relinquish the right to collect additional amounts from the insolvent managed care
1166 organization's enrollee.
1167 (ii) Subsections (2)(b) and (2)(c)(i) shall apply to the fees paid to a provider who agrees
1168 to provide health care services to an enrollee but is not a preferred or participating provider.
1169 (d) If the managed care organization is a health maintenance organization, Subsections
1170 (2)(d)(i) through (vi) apply.
1171 (i) Subject to Subsections (2)(d)(ii), (iii), and (v), upon notification from and subject to
1172 the direction of the rehabilitator or liquidator of a health maintenance organization licensed

1173 under Chapter 8, Health Maintenance Organizations and Limited Health Plans, a solvent health
1174 maintenance organization licensed under Chapter 8, Health Maintenance Organizations and
1175 Limited Health Plans, and operating within a portion of the insolvent health maintenance
1176 organization's service area shall extend to the enrollees all rights, privileges, and obligations of
1177 being an enrollee in the accepting health maintenance organization.
1178 (ii) Notwithstanding Subsection (2)(d)(i), the accepting health maintenance
1179 organization shall give credit to an enrollee for any waiting period already satisfied under the
1180 provisions of the enrollee's contract with the insolvent health maintenance organization.
1181 (iii) A health maintenance organization accepting an enrollee of an insolvent health
1182 maintenance organization under Subsection (2)(d)(i) shall charge the enrollee the premiums
1183 applicable to the existing business of the accepting health maintenance organization.
1184 (iv) A health maintenance organization's obligation to accept an enrollee under
1185 Subsection (2)(d)(i) is limited in number to the accepting health maintenance organization's pro
1186 rata share of all health maintenance organization enrollees in this state, as determined after
1187 excluding the enrollees of the insolvent insurer.
1188 (v) (A) The rehabilitator or liquidator of an insolvent health maintenance organization
1189 shall take those measures that are possible to ensure that no health maintenance organization is
1190 required to accept more than its pro rata share of the adverse risk represented by the enrollees
1191 of the insolvent health maintenance organization.
1192 (B) If the methodology used by the rehabilitator or liquidator to assign an enrollee is
1193 one that can be expected to produce a reasonably equitable distribution of adverse risk, that
1194 methodology and its results are acceptable under this Subsection (2)(d)(v).
1195 (vi) (A) Notwithstanding Section 31A-27-311 , the rehabilitator or liquidator may
1196 require all solvent health maintenance organizations to pay for the covered claims incurred by
1197 the enrollees of the insolvent health maintenance organization.
1198 (B) As determined by the rehabilitator or liquidator, payments required under this
1199 Subsection (2)(d)(vi) may:
1200 (I) begin as of the filing of the petition for [reorganization] rehabilitation or the petition
1201 for liquidation; and
1202 (II) continue for a maximum period through the time all enrollees are assigned pursuant
1203 to this section.

1204 (C) If the rehabilitator or liquidator makes an assessment under this Subsection
1205 (2)(d)(vi), the rehabilitator or liquidator shall assess each solvent health maintenance
1206 organization its pro rata share of the total assessment based upon its premiums from the
1207 previous calendar year.
1208 (D) (I) A solvent health maintenance organization required to pay for covered claims
1209 under this Subsection (2)(d)(vi) shall be entitled to file a claim against the estate of the
1210 insolvent health maintenance organization.
1211 (II) Any claim described in Subsection (2)(a)(vi)(D)(I), if allowed by the rehabilitator
1212 or liquidator, shall share in any distributions from the estate of the insolvent health
1213 maintenance organization as a Class 3 claim.
1214 (e) (i) A rehabilitator or liquidator may transfer, through sale, or otherwise, the group
1215 and individual health care obligations of the insolvent managed care organization to other
1216 managed care organizations or other insurers, if those other managed care organizations and
1217 other insurers are licensed or have a certificate of authority to provide the same health care
1218 services in this state that is held by the insolvent managed care organization.
1219 (ii) The rehabilitator or liquidator may combine group and individual health care
1220 obligations of the insolvent managed care organization in any manner the rehabilitator or
1221 liquidator considers best to provide for continuous health care coverage for the maximum
1222 number of enrollees of the insolvent managed care organization.
1223 (iii) If the terms of a proposed transfer of the same combination of group and
1224 individual policy obligations to more than one other managed care organization or insurer are
1225 otherwise equal, the rehabilitator or liquidator shall give preference to the transfer of the group
1226 and individual policy obligations of an insolvent managed care organization as follows:
1227 (A) from one category of managed care organization to another managed care
1228 organization of the same category, as follows:
1229 (I) from a limited health plan to a limited health plan;
1230 (II) from a health maintenance organization to a health maintenance organization;
1231 (III) from a preferred provider organization to a preferred provider organization;
1232 (IV) from a fraternal benefit society to a fraternal benefit society; and
1233 (V) from any entity similar to any of the above to a category that is similar;
1234 (B) from one category of managed care organization to another managed care

1235 organization, regardless of the category of the transferee managed care organization; and
1236 (C) from a managed care organization to a nonmanaged care provider of health care
1237 coverage, including insurers.
1238 (f) [A] If an insolvent managed care organization has required surplus, a rehabilitator
1239 or liquidator may use the insolvent managed care organization's required [capital or permanent
1240 surplus, and compulsory] surplus[,] to continue to provide coverage for the insolvent managed
1241 care organization's enrollees, including paying uncovered expenditures.
1242 Section 26. Section 31A-30-106 is amended to read:
1243 31A-30-106. Premiums -- Rating restrictions -- Disclosure.
1244 (1) Premium rates for health benefit plans under this chapter are subject to the
1245 provisions of this Subsection (1).
1246 (a) The index rate for a rating period for any class of business may not exceed the
1247 index rate for any other class of business by more than 20%.
1248 (b) (i) For a class of business, the premium rates charged during a rating period to
1249 covered insureds with similar case characteristics for the same or similar coverage, or the rates
1250 that could be charged to such employers under the rating system for that class of business, may
1251 not vary from the index rate by more than 30% of the index rate, except as provided in Section
1252 31A-22-625 .
1253 (ii) A covered carrier that offers individual and small employer health benefit plans
1254 may use the small employer index rates to establish the rate limitations for individual policies,
1255 even if some individual policies are rated below the small employer base rate.
1256 (c) The percentage increase in the premium rate charged to a covered insured for a new
1257 rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
1258 the following:
1259 (i) the percentage change in the new business premium rate measured from the first day
1260 of the prior rating period to the first day of the new rating period;
1261 (ii) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
1262 of less than one year, due to the claim experience, health status, or duration of coverage of the
1263 covered individuals as determined from the covered carrier's rate manual for the class of
1264 business, except as provided in Section 31A-22-625 ; and
1265 (iii) any adjustment due to change in coverage or change in the case characteristics of

1266 the covered insured as determined from the covered carrier's rate manual for the class of
1267 business.
1268 (d) (i) Adjustments in rates for claims experience, health status, and duration from
1269 issue may not be charged to individual employees or dependents.
1270 (ii) Any adjustment described in Subsection (1)(d)(i) shall be applied uniformly to the
1271 rates charged for all employees and dependents of the small employer.
1272 (e) A covered carrier may use industry as a case characteristic in establishing premium
1273 rates, provided that the highest rate factor associated with any industry classification does not
1274 exceed the lowest rate factor associated with any industry classification by more than 15%.
1275 (f) (i) Covered carriers shall apply rating factors, including case characteristics,
1276 consistently with respect to all covered insureds in a class of business.
1277 (ii) Rating factors shall produce premiums for identical groups that:
1278 (A) differ only by the amounts attributable to plan design; and
1279 (B) do not reflect differences due to the nature of the groups assumed to select
1280 particular health benefit products.
1281 (iii) A covered carrier shall treat all health benefit plans issued or renewed in the same
1282 calendar month as having the same rating period.
1283 (g) For the purposes of this Subsection (1), a health benefit plan that uses a restricted
1284 network provision may not be considered similar coverage to a health benefit plan that does not
1285 use such a network, provided that use of the restricted network provision results in substantial
1286 difference in claims costs.
1287 (h) The covered carrier may not, without prior approval of the commissioner, use case
1288 characteristics other than:
1289 (i) age;
1290 (ii) gender;
1291 (iii) industry;
1292 (iv) geographic area;
1293 (v) family composition; and
1294 (vi) group size.
1295 (i) (i) The commissioner may establish rules in accordance with Title 63, Chapter 46a,
1296 Utah Administrative Rulemaking Act, to:

1297 (A) implement this chapter; and
1298 (B) assure that rating practices used by covered carriers are consistent with the
1299 purposes of this chapter.
1300 (ii) The rules described in Subsection (1)(i)(i) may include rules that:
1301 (A) assure that differences in rates charged for health benefit products by covered
1302 carriers are reasonable and reflect objective differences in plan design, not including
1303 differences due to the nature of the groups assumed to select particular health benefit products;
1304 (B) prescribe the manner in which case characteristics may be used by covered carriers;
1305 (C) implement the individual enrollment cap under Section 31A-30-110 , including
1306 specifying:
1307 (I) the contents for certification;
1308 (II) auditing standards;
1309 (III) underwriting criteria for uninsurable classification; and
1310 (IV) limitations on high risk enrollees under Section 31A-30-111 ; and
1311 (D) establish the individual enrollment cap under Subsection 31A-30-110 (1).
1312 (j) Before implementing regulations for underwriting criteria for uninsurable
1313 classification, the commissioner shall contract with an independent consulting organization to
1314 develop industry-wide underwriting criteria for uninsurability based on an individual's expected
1315 claims under open enrollment coverage exceeding 200% of that expected for a standard
1316 insurable individual with the same case characteristics.
1317 (k) The commissioner shall revise rules issued for Sections 31A-22-602 and
1318 31A-22-605 regarding individual accident and health policy rates to allow rating in accordance
1319 with this section.
1320 (2) For purposes of Subsection (1)(c)(i), if a health benefit product is a health benefit
1321 product into which the covered carrier is no longer enrolling new covered insureds, the covered
1322 carrier shall use the percentage change in the base premium rate, provided that the change does
1323 not exceed, on a percentage basis, the change in the new business premium rate for the most
1324 similar health benefit product into which the covered carrier is actively enrolling new covered
1325 insureds.
1326 (3) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
1327 a class of business.

1328 (b) A covered carrier may not offer to transfer a covered insured into or out of a class
1329 of business unless the offer is made to transfer all covered insureds in the class of business
1330 without regard:
1331 (i) to case characteristics;
1332 (ii) claim experience;
1333 (iii) health status; or
1334 (iv) duration of coverage since issue.
1335 (4) (a) Each covered carrier shall maintain at the covered carrier's principal place of
1336 business a complete and detailed description of its rating practices and renewal underwriting
1337 practices, including information and documentation that demonstrate that the covered carrier's
1338 rating methods and practices are:
1339 (i) based upon commonly accepted actuarial assumptions; and
1340 (ii) in accordance with sound actuarial principles.
1341 (b) (i) Each covered carrier shall file with the commissioner, on or before March 15 of
1342 each year, in a form, manner, and containing such information as prescribed by the
1343 commissioner, an actuarial certification certifying that:
1344 (A) the covered carrier is in compliance with this chapter; and
1345 (B) the rating methods of the covered carrier are actuarially sound.
1346 (ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by the
1347 covered carrier at the covered carrier's principal place of business.
1348 (c) A covered carrier shall make the information and documentation described in this
1349 Subsection (4) available to the commissioner upon request.
1350 (d) Records submitted to the commissioner under this section shall be maintained by
1351 the commissioner as protected records under Title 63, Chapter 2, Government Records Access
1352 and Management Act.
1353 Section 27. Section 31A-30-107 is amended to read:
1354 31A-30-107. Renewal -- Limitations -- Exclusions -- Discontinuance and
1355 nonrenewal.
1356 (1) Except as otherwise provided in this section, a small employer health benefit plan is
1357 renewable and continues in force:
1358 (a) with respect to all eligible employees and dependents; and

1359 (b) at the option of the plan sponsor.
1360 (2) A small employer health benefit plan may be discontinued or nonrenewed:
1361 (a) for a network plan, if:
1362 (i) there is no longer any enrollee under the group health plan who lives, resides, or
1363 works in:
1364 (A) the service area of the covered carrier; or
1365 (B) the area for which the covered carrier is authorized to do business; and
1366 (ii) in the case of the small employer market, the small employer carrier applies the
1367 same criteria the small employer carrier would apply in denying enrollment in the plan under
1368 Subsection 31A-30-108 (6); or
1369 (b) for coverage made available in the small or large employer market only through an
1370 association, if:
1371 (i) the employer's membership in the association ceases; and
1372 (ii) the coverage is terminated uniformly without regard to any health status-related
1373 factor relating to any covered individual.
1374 (3) A small employer health benefit plan may be discontinued if:
1375 (a) a condition described in Subsection (2) exists;
1376 (b) the plan sponsor fails to pay premiums or contributions in accordance with the
1377 terms of the contract;
1378 (c) the plan sponsor:
1379 (i) performs an act or practice that constitutes fraud; or
1380 (ii) makes an intentional misrepresentation of material fact under the terms of the
1381 coverage;
1382 (d) the covered carrier:
1383 (i) elects to discontinue offering a particular small employer health benefit product
1384 delivered or issued for delivery in this state; and
1385 (ii) (A) provides notice of the discontinuation in writing:
1386 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
1387 (II) at least 90 days before the date the coverage will be discontinued;
1388 (B) provides notice of the discontinuation in writing:
1389 (I) to the commissioner; and

1390 (II) at least three working days prior to the date the notice is sent to the affected plan
1391 sponsors, employees, and dependents of the plan sponsors or employees;
1392 (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase all
1393 other small employer health benefit products currently being offered by the small employer
1394 carrier in the market; and
1395 (D) in exercising the option to discontinue that product and in offering the option of
1396 coverage in this section, acts uniformly without regard to:
1397 (I) the claims experience of a plan sponsor;
1398 (II) any health status-related factor relating to any covered participant or beneficiary; or
1399 (III) any health status-related factor relating to any new participant or beneficiary who
1400 may become eligible for the coverage; or
1401 (e) the covered carrier:
1402 (i) elects to discontinue all of the covered carrier's small employer health benefit plans
1403 in:
1404 (A) the small employer market;
1405 (B) the large employer market; or
1406 (C) both the small employer and large employer markets; and
1407 (ii) (A) provides notice of the discontinuation in writing:
1408 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
1409 (II) at least 180 days before the date the coverage will be discontinued;
1410 (B) provides notice of the discontinuation in writing:
1411 (I) to the commissioner in each state in which an affected insured individual is known
1412 to reside; and
1413 (II) at least 30 working days prior to the date the notice is sent to the affected plan
1414 sponsors, employees, and the dependents of the plan sponsors or employees;
1415 (C) discontinues and nonrenews all plans issued or delivered for issuance in the
1416 market; and
1417 (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
1418 (4) A small employer health benefit plan may be discontinued or nonrenewed:
1419 (a) if a condition described in Subsection (2) exists; or
1420 (b) for noncompliance with the [covered carrier's: (i) minimum participation

1421 requirements; or (ii)] insurer's employer contribution requirements.
1422 (5) A small employer health benefit plan may be nonrenewed:
1423 (a) if a condition described in Subsection (2) exists; or
1424 (b) for noncompliance with the insurer's minimum participation requirements.
1425 [(5)] (6) (a) Except as provided in Subsection [(5)] (6)(d), an eligible employee may be
1426 discontinued if after issuance of coverage the eligible employee:
1427 (i) engages in an act or practice that constitutes fraud in connection with the coverage;
1428 or
1429 (ii) makes an intentional misrepresentation of material fact in connection with the
1430 coverage.
1431 (b) An eligible employee that is discontinued under Subsection [(5)] (6)(a) may
1432 reenroll:
1433 (i) 12 months after the date of discontinuance; and
1434 (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
1435 to reenroll.
1436 (c) At the time the eligible employee's coverage is discontinued under Subsection [(5)]
1437 (6)(a), the covered carrier shall notify the eligible employee of the right to reenroll when
1438 coverage is discontinued.
1439 (d) An eligible employee may not be discontinued under this Subsection [(5)] (6)
1440 because of a fraud or misrepresentation that relates to health status.
1441 [(6)] (7) For purposes of this section, a reference to "plan sponsor" includes a reference
1442 to the employer:
1443 (a) with respect to coverage provided to an employer member of the association; and
1444 (b) if the small employer health benefit plan is made available by a covered carrier in
1445 the employer market only through:
1446 (i) an association;
1447 (ii) a trust; or
1448 (iii) a discretionary group.
1449 [(7)] (8) A covered carrier may modify a small employer health benefit plan only:
1450 (a) at the time of coverage renewal; and
1451 (b) if the modification is effective uniformly among all plans with that product.

1452 Section 28. Section 31A-30-107.1 is amended to read:
1453 31A-30-107.1. Individual discontinuance and nonrenewal.
1454 (1) (a) Except as otherwise provided in this section, a health benefit plan offered on an
1455 individual basis is renewable and continues in force:
1456 (i) with respect to all individuals or dependents; and
1457 (ii) at the option of the individual.
1458 (b) Subsection (1)(a) applies regardless of:
1459 (i) whether the contract is issued through:
1460 (A) a trust;
1461 (B) an association;
1462 (C) a discretionary group; or
1463 (D) other similar grouping; or
1464 (ii) the situs of delivery of the policy or contract.
1465 (2) A health benefit plan may be discontinued or nonrenewed:
1466 (a) for a network plan, if:
1467 (i) the individual no longer lives, resides, or works in:
1468 (A) the service area of the covered carrier; or
1469 (B) the area for which the covered carrier is authorized to do business; and
1470 (ii) coverage is terminated uniformly without regard to any health status-related factor
1471 relating to any covered individual; or
1472 (b) for coverage made available through an association, if:
1473 (i) the individual's membership in the association ceases; and
1474 (ii) the coverage is terminated uniformly without regard to any health status-related
1475 factor of covered individuals.
1476 (3) A health benefit plan may be discontinued if:
1477 (a) a condition described in Subsection (2) exists;
1478 (b) the individual fails to pay premiums or contributions in accordance with the terms
1479 of the health benefit plan, including any timeliness requirements;
1480 (c) the individual:
1481 (i) performs an act or practice that constitutes fraud in connection with the coverage; or
1482 (ii) makes an intentional misrepresentation of material fact under the terms of the

1483 coverage;
1484 (d) the covered carrier:
1485 (i) elects to discontinue offering a particular health benefit product delivered or issued
1486 for delivery in this state; and
1487 (ii) (A) provides notice of the discontinuance in writing:
1488 (I) to each individual provided coverage; and
1489 (II) at least 90 days before the date the coverage will be discontinued;
1490 (B) provides notice of the discontinuation in writing:
1491 (I) to the commissioner; and
1492 (II) at least three working days prior to the date the notice is sent to the affected
1493 individuals;
1494 (C) offers to each covered individual on a guaranteed issue basis the option to purchase
1495 all other individual health benefit products currently being offered by the covered carrier for
1496 individuals in that market; and
1497 (D) acts uniformly without regard to any health status-related factor of a covered
1498 individual or dependent of a covered individual who may become eligible for coverage; or
1499 (e) the covered carrier:
1500 (i) elects to discontinue all of the covered carrier's health benefit plans in the individual
1501 market; and
1502 (ii) (A) provides notice of the discontinuation in writing:
1503 (I) to each covered individual; and
1504 (II) at least 180 days before the date the coverage will be discontinued;
1505 (B) provides notice of the discontinuation in writing:
1506 (I) to the commissioner in each state in which an affected insured individual is known
1507 to reside; and
1508 (II) at least 30 working days prior to the date the notice is sent to the affected
1509 individuals;
1510 (C) discontinues and nonrenews all health benefit plans the covered carrier issues or
1511 delivers for [insurance] issuance in the individual market; and
1512 (D) acts uniformly without regard to any health status-related factor of a covered
1513 individual or a dependent of a covered individual who may become eligible for coverage.

1514 Section 29. Section 31A-30-107.5 is amended to read:
1515 31A-30-107.5. Limitations and exclusions.
1516 (1) A health benefit plan may impose a preexisting condition exclusion only if:
1517 (a) the exclusion relates to a condition, regardless of the cause of the condition, for
1518 which medical advise, diagnosis, care, or treatment was recommended or received within the
1519 six-month period ending on the enrollment date;
1520 (b) the exclusion extends for a period of:
1521 (i) not more than 12 months after the enrollment date; or
1522 (ii) in the case of a late enrollee, 18 months after the enrollment date; and
1523 (c) the period [of the preexisting condition exclusion] described in Subsection (1)(b) is
1524 reduced by the aggregate of the periods of creditable coverage applicable to the participant or
1525 beneficiary as of the enrollment date.
1526 (2) Creditable coverage shall be provided for the period of time the individual was
1527 previously covered by:
1528 (a) public or private health insurance; or
1529 (b) any other group health plan as defined in 42 U.S.C. Section 300gg-91.
1530 [(2)] (3) (a) The period of continuous coverage under Subsection (1)(c) may not
1531 include any waiting period for the effective date of the new coverage applied by the employer
1532 or the carrier.
1533 (b) This Subsection [(2)] (3) does not preclude application of any waiting period
1534 applicable to all new enrollees under the plan.
1535 [(3)] (4) (a) Credit for previous coverage as provided under Subsection (1)(c) need not
1536 be given for any condition that was previously excluded under a condition-specific exclusion
1537 rider issued pursuant to Subsection [(5)] (6).
1538 (b) A new preexisting waiting period may be applied to any condition that was
1539 excluded by a rider under the terms of previous individual coverage.
1540 [(4)] (5) (a) For purposes of Subsection (1)(c), a period of creditable coverage may not
1541 be counted with respect to enrollment of an individual under a health benefit plan, if:
1542 (i) after the period and before the enrollment date, there was a 63-day period during all
1543 of which the individual was not covered under any creditable coverage; or
1544 (ii) the insured fails to provide notification of previous coverage to the covered carrier

1545 within 36 months of the coverage effective date if the covered carrier has previously requested
1546 the notification.
1547 (b) (i) Credit for previous coverage as provided under Subsection (1)(c) need not be
1548 given for any condition that was previously excluded in compliance with Subsection [(5)] (6).
1549 (ii) A new preexisting waiting period may be applied to any condition that was
1550 excluded under the terms of previous individual coverage.
1551 [(5)] (6) (a) An individual carrier:
1552 (i) shall offer a health benefit plan in compliance with Subsection (1); and
1553 (ii) may, when the individual carrier and the insured mutually agree in writing to a
1554 condition-specific exclusion rider, offer to issue an individual policy that excludes a specific
1555 physical condition consistent with Subsection [(5)] (6)(b).
1556 (b) (i) The commissioner shall establish by rule a list of life threatening physical
1557 conditions that may not be the subject of a condition-specific exclusion rider.
1558 (ii) A condition-specific exclusion rider:
1559 (A) shall be limited to the excluded condition; and
1560 (B) may not extend to any secondary medical condition that may or may not be directly
1561 related to the excluded condition.
1562 (7) Notwithstanding the other provisions of this section, a health benefit plan may
1563 impose a limitation period if:
1564 (a) each policy that imposes a limitation period under the health benefit plan specifies
1565 the physical condition that is excluded from coverage during the limitation period;
1566 (b) the limitation period does not exceed 12 months;
1567 (c) the limitation period is applied uniformly; and
1568 (d) the limitation period is reduced in compliance with Subsection (1)(c).
1569 Section 30. Section 31A-31-103 is amended to read:
1570 31A-31-103. Insurance fraud.
1571 (1) A person commits a fraudulent insurance act if that person with intent to deceive or
1572 defraud:
1573 (a) knowingly presents or causes to be presented to an insurer any oral or written
1574 statement or representation knowing that the statement or representation contains false,
1575 incomplete, or misleading information concerning any fact material to an application for the

1576 issuance or renewal of an insurance policy, certificate, or contract;
1577 (b) knowingly presents or causes to be presented to an insurer any oral or written
1578 statement or representation as part of, or in support of, a claim for payment or other benefit
1579 pursuant to an insurance policy, certificate, or contract, or in connection with any civil claim
1580 asserted for recovery of damages for personal or bodily injuries or property damage, knowing
1581 that the statement or representation contains false, incomplete, or misleading information
1582 concerning any fact or thing material to the claim;
1583 (c) knowingly accepts a benefit from the proceeds derived from a fraudulent insurance
1584 act;
1585 (d) assists, abets, solicits, or conspires with another to commit a fraudulent insurance
1586 act; [or]
1587 (e) knowingly supplies false or fraudulent material information in any document or
1588 statement required by the department[.]; or
1589 (f) knowingly fails to forward a premium to an insurer in violation of Section
1590 31A-23-311.1 .
1591 (2) A service provider commits a fraudulent insurance act if that service provider with
1592 intent to deceive or defraud:
1593 (a) knowingly submits or causes to be submitted a bill or request for payment
1594 containing charges or costs for an item or service that are substantially in excess of customary
1595 charges or costs for the item or service or containing itemized or delineated fees for what
1596 would customarily be considered a single procedure or service;
1597 (b) knowingly furnishes or causes to be furnished an item or service to a person
1598 substantially in excess of the needs of the person or of a quality that fails to meet professionally
1599 recognized standards;
1600 (c) knowingly accepts a benefit from the proceeds derived from a fraudulent insurance
1601 act; or
1602 (d) assists, abets, solicits, or conspires with another to commit a fraudulent insurance
1603 act.
1604 (3) An insurer commits a fraudulent insurance act if that insurer with intent to deceive
1605 or defraud:
1606 (a) knowingly withholds information or provides false or misleading information with

1607 respect to an application, coverage, benefits, or claims under a policy or certificate;
1608 (b) assists, abets, solicits, or conspires with another to commit a fraudulent insurance
1609 act;
1610 (c) knowingly accepts a benefit from the proceeds derived from a fraudulent insurance
1611 act; or
1612 (d) knowingly supplies false or fraudulent material information in any document or
1613 statement required by the department.
1614 (4) An insurer or service provider is not liable for any fraudulent insurance act
1615 committed by an employee without the authority of the insurer or service provider unless the
1616 insurer or service provider knew or should have known of the fraudulent insurance act.
1617 Section 31. Section 31A-31-108 is amended to read:
1618 31A-31-108. Assessment of insurers.
1619 (1) For purposes of this section:
1620 (a) The commission shall by rule made in accordance with Title 63, Chapter 46a, Utah
1621 Administrative Rulemaking Act, define:
1622 (i) "annuity consideration";
1623 (ii) "membership fees";
1624 (iii) "other fees";
1625 (iv) "deposit-type contract funds"; and
1626 (v) "other considerations in Utah."
1627 (b) "Utah consideration" means:
1628 (i) the total premiums written for Utah risks;
1629 (ii) annuity consideration;
1630 (iii) membership fees collected by the insurer;
1631 (iv) other fees collected by the insurer;
1632 (v) deposit-type contract funds; and
1633 (vi) other considerations in Utah;
1634 (c) "Utah risks" means insurance coverage on the lives, health, or against the liability
1635 of persons residing in Utah, or on property located in Utah, other than property temporarily in
1636 transit through Utah.
1637 [(1)] (2) To implement this chapter, Section 34A-2-110 , and Section 76-6-521 , the

1638 commissioner may assess each admitted insurer and each nonadmitted insurer transacting
1639 insurance under Chapter 15, Parts 1 and 2, an annual fee as follows:
1640 [(a) $75 for an insurer with total premiums for Utah risks of $1,000,000 or less;]
1641 [(b) $263 for an insurer with total premiums for Utah risks of less than $2,500,000 but
1642 more than $1,000,000;]
1643 [(c) $563 for an insurer with total premiums for Utah risks of less than $5,000,000 but
1644 more than $2,500,000;]
1645 [(d) $1,125 for an insurer with total premiums for Utah risks of less than $10,000,000
1646 but more than $5,000,000;]
1647 [(e) $4,500 for an insurer with total premiums for Utah risks of less than $50,000,000
1648 but more than $10,000,000; and]
1649 [(f) $11,250 for an insurer with total premiums for Utah risks of $50,000,000 or more.]
1650 (a) $150 for an insurer if the sum of the Utah consideration for that insurer is less than
1651 or equal to $1,000,000;
1652 (b) $400 for an insurer if the sum of the Utah consideration for that insurer is greater
1653 than $1,000,000 but is less than or equal to $2,500,000;
1654 (c) $700 for an insurer if the sum of the Utah consideration for that insurer is greater
1655 than $2,500,000 but is less than or equal to $5,000,000;
1656 (d) $1,350 for an insurer if the sum of the Utah consideration for that insurer is greater
1657 than $5,000,000 but less than or equal to $10,000,000;
1658 (e) $5,150 for an insurer if the sum of the Utah consideration for that insurer is greater
1659 than $10,000,000 but less than $50,000,000; and
1660 (f) $12,350 for an insurer if the sum of the Utah consideration for that insurer equals or
1661 exceeds $50,000,000.
1662 [(2)] (3) All money received by the state under this section shall be deposited in the
1663 General Fund as a nonlapsing dedicated credit of the Insurance Department for the purpose of
1664 providing funds to pay for any costs and expenses incurred by the Insurance Department in the
1665 administration, investigation, and enforcement of this chapter, Section 34A-2-110 , and Section
1666 76-6-521 .
1667 [(3) As used in this section, "Utah risks" means insurance coverage on the lives, health,
1668 or against the liability of persons residing in Utah, or on property located in Utah, other than

1669 property temporarily in transit through Utah.]
1670 Section 32. Section 31A-33-108 is amended to read:
1671 31A-33-108. Powers and duties of chief executive officer.
1672 (1) The chief executive officer shall:
1673 (a) administer all operations of the Workers' Compensation Fund under the direction of
1674 the board;
1675 (b) recommend to the board any necessary or desirable changes in the workers'
1676 compensation law;
1677 (c) recommend to the board an annual administrative budget covering the operations of
1678 the Workers' Compensation Fund and, upon approval, submit the administrative budget,
1679 financial status, and actuarial condition of the fund to the governor and the Legislature for their
1680 examination;
1681 (d) direct and control all expenditures of the approved budget;
1682 (e) from time to time, upon the recommendation of a consulting actuary, recommend to
1683 the board rating plans, the amount of deviation, if any, from standard rates, and the amount of
1684 dividends, if any, to be returned to policyholders;
1685 (f) invest the Injury Fund's assets under the guidance of the board and in accordance
1686 with Chapter 18;
1687 (g) recommend general policies and procedures to the board to guide the operations of
1688 the fund;
1689 (h) formulate and administer a system of personnel administration and employee
1690 compensation that uses merit principles of personnel management, includes employee benefits
1691 and grievance procedures consistent with those applicable to state agencies, and includes
1692 inservice training programs;
1693 (i) prepare and administer fiscal, payroll, accounting, data processing, and procurement
1694 procedures for the operation of the Workers' Compensation Fund;
1695 (j) conduct studies of the workers' compensation insurance business, including the
1696 preparation of recommendations and reports;
1697 (k) develop uniform procedures for the management of the Workers' Compensation
1698 Fund;
1699 (l) maintain contacts with governmental and other public or private groups having an

1700 interest in workers' compensation insurance;
1701 (m) within the limitations of the budget, employ necessary staff personnel and
1702 consultants, including actuaries, attorneys, medical examiners, adjusters, investment
1703 counselors, accountants, and clerical and other assistants to accomplish the purpose of the
1704 Workers' Compensation Fund;
1705 (n) maintain appropriate levels of property, casualty, and liability insurance as
1706 approved by the board to protect the fund, its directors, officers, employees, and assets; and
1707 (o) develop self-insurance programs as approved by the board to protect the fund, its
1708 directors, officers, employees, and assets to supersede or supplement insurance maintained
1709 under Subsection (1)(n).
1710 (2) The chief executive officer may:
1711 (a) enter into contracts of workers' compensation and occupational disease insurance,
1712 which may include employer's liability insurance to cover the exposure of a policyholder to his
1713 Utah employees and their dependents for liability claims, including the cost of defense in the
1714 event of suit, for claims based upon bodily injury to the policyholder's Utah employees;
1715 (b) reinsure any risk or part of any risk;
1716 (c) cause to be inspected and audited the payrolls of policyholders or employers
1717 applying to the Workers' Compensation Fund for insurance;
1718 (d) establish procedures for adjusting claims against the Workers' Compensation Fund
1719 that comply with Title 34A, Chapters 2 and 3, and determine the persons to whom and through
1720 whom the payments of compensation are to be made;
1721 (e) contract with physicians, surgeons, hospitals, and other health care providers for
1722 medical and surgical treatment and the care and nursing of injured persons entitled to benefits
1723 from the Workers' Compensation Fund;
1724 (f) require policyholders to maintain an adequate deposit to provide security for periods
1725 of coverage for which premiums have not been paid;
1726 (g) contract with self-insured entities for the administration of workers' compensation
1727 claims and safety consultation services; and
1728 (h) with the approval of the board, adopt the calendar year or any other reporting period
1729 to report claims and payments made or reserves established on claims that are necessary to
1730 accommodate the reporting requirements of the Labor Commission, [Insurance Commission]

1731 department, State Tax Commission, or National Council on Compensation Insurance.
1732 Section 33. Section 49-16-301 is amended to read:
1733 49-16-301. Contributions -- Two divisions -- Election by employer to pay
1734 employee contributions -- Accounting for and vesting of worker contributions --
1735 Deductions.
1736 (1) In addition to the monies paid to this system under Subsection (6), participating
1737 employers and firefighter service employees shall jointly pay the certified contribution rates to
1738 the office to maintain this system on a financially and actuarially sound basis.
1739 (2) For purposes of determining contribution rates, this system is divided into two
1740 divisions according to Social Security coverage as follows:
1741 (a) members of this system with on-the-job Social Security coverage are in Division A;
1742 and
1743 (b) members of this system without on-the-job Social Security coverage are in Division
1744 B.
1745 (3) (a) A participating employer may elect to pay all or part of the required member
1746 contributions, in addition to the required participating employer contributions.
1747 (b) Any amount contributed by a participating employer under this section shall vest to
1748 the member's benefit as though the member had made the contribution.
1749 (c) The required member contributions shall be reduced by the amount that is paid by
1750 the participating employer.
1751 (4) (a) All member contributions are credited by the office to the account of the
1752 individual member.
1753 (b) This amount is held in trust for the payment of benefits to the member or the
1754 member's beneficiaries.
1755 (c) All member contributions are vested and nonforfeitable.
1756 (5) (a) Each member is considered to consent to payroll deductions of member
1757 contributions.
1758 (b) The payment of compensation less these payroll deductions is considered to be full
1759 payment for services rendered by the member.
1760 (6) (a) In addition to contribution rates described under this section, there shall be paid
1761 to the Firefighters' Retirement Trust Fund created under Section 49-16-104 :

1762 (i) 50% of the annual tax levied, assessed, and collected under Title 59, Chapter 9,
1763 Taxation of Admitted Insurers, upon premiums for property insurance [premiums], as defined
1764 under Section 31A-1-301 , and as applied to fire and allied lines insurance collected by
1765 insurance companies within the state; and
1766 (ii) 10% of all money assessed and collected under Title 59, Chapter 9, Taxation of
1767 Admitted Insurers, upon premiums for life insurance [premiums], as defined in Section
1768 31A-1-301 , within the state.
1769 (b) Payments to the fund shall be made annually until the service liability is liquidated,
1770 after which the tax revenue provided in this Subsection (6) for the Firefighters' Retirement
1771 Trust Fund ceases.
1772 Section 34. Section 53-7-204.2 is amended to read:
1773 53-7-204.2. Fire Academy -- Establishment -- Fire Academy Support Fund --
1774 Funding.
1775 (1) In this section:
1776 (a) "Account" means the Fire Academy Support Account created in Subsection (4).
1777 (b) "Property insurance premium" [has the same meaning as provided] means premium
1778 paid as consideration for property insurance as defined in Section 31A-1-301 .
1779 (2) The board shall:
1780 (a) establish a fire academy that:
1781 (i) provides instruction and training for paid, volunteer, institutional, and industrial
1782 firefighters;
1783 (ii) develops new methods of firefighting and fire prevention;
1784 (iii) provides training for fire and arson detection and investigation;
1785 (iv) provides public education programs to promote fire safety;
1786 (v) provides for certification of firefighters, pump operators, instructors, and officers;
1787 and
1788 (vi) provides facilities for teaching fire-fighting skills;
1789 (b) establish a cost recovery fee in accordance with Section 63-38-3.2 for training
1790 commercially employed firefighters; and
1791 (c) request funding for the academy.
1792 (3) The board may:

1793 (a) accept gifts, donations, and grants of property and services on behalf of the fire
1794 academy; and
1795 (b) enter into contractual agreements necessary to facilitate establishment of the school.
1796 (4) (a) To provide a funding source for the academy and for the general operation of
1797 the State Fire Marshal Division, there is created in the General Fund a restricted account
1798 known as the Fire Academy Support Account.
1799 (b) The following revenue shall be deposited in the account to implement this section:
1800 (i) the percentage specified in Subsection (5) of the annual tax for each year that is
1801 levied, assessed, and collected under Title 59, Chapter 9, Taxation of Admitted Insurers, upon
1802 property insurance premiums and as applied to fire and allied lines insurance collected by
1803 insurance companies within the state;
1804 (ii) the percentage specified in Subsection (6) of all money assessed and collected upon
1805 life insurance premiums within the state;
1806 (iii) the cost recovery fees established by the board;
1807 (iv) gifts, donations, and grants of property on behalf of the fire academy; and
1808 (v) appropriations made by the Legislature.
1809 (5) The percentage of the tax specified in Subsection (4)(b)(i) to be deposited in the
1810 account each fiscal year is 25%.
1811 (6) The percentage of the money specified in Subsection (4)(b)(ii) to be deposited in
1812 the account each fiscal year is 5%.
1813 Section 35. Section 63-2-302 (Effective 07/01/03) is amended to read:
1814 63-2-302 (Effective 07/01/03). Private records.
1815 (1) The following records are private:
1816 (a) records concerning an individual's eligibility for unemployment insurance benefits,
1817 social services, welfare benefits, or the determination of benefit levels;
1818 (b) records containing data on individuals describing medical history, diagnosis,
1819 condition, treatment, evaluation, or similar medical data;
1820 (c) records of publicly funded libraries that when examined alone or with other records
1821 identify a patron;
1822 (d) records received or generated for a Senate or House Ethics Committee concerning
1823 any alleged violation of the rules on legislative ethics, prior to the meeting, and after the

1824 meeting, if the ethics committee meeting was closed to the public;
1825 (e) records received or generated for a Senate confirmation committee concerning
1826 character, professional competence, or physical or mental health of an individual:
1827 (i) if prior to the meeting, the chair of the committee determines release of the records:
1828 (A) reasonably could be expected to interfere with the investigation undertaken by the
1829 committee; or
1830 (B) would create a danger of depriving a person of a right to a fair proceeding or
1831 impartial hearing;
1832 (ii) after the meeting, if the meeting was closed to the public;
1833 (f) employment records concerning a current or former employee of, or applicant for
1834 employment with, a governmental entity that would disclose that individual's home address,
1835 home telephone number, Social Security number, insurance coverage, marital status, or payroll
1836 deductions;
1837 (g) records or parts of records under Section 63-2-302.5 that a current or former
1838 employee identifies as private according to the requirements of that section;
1839 (h) that part of a record indicating a person's Social Security number or federal
1840 employer identification number if provided under Section 31A-23-202 , 31A-26-202 , 58-1-301 ,
1841 61-1-4 , or 61-2-6 ;
1842 (i) that part of a voter registration record identifying a voter's driver license or
1843 identification card number, Social Security number, or last four digits of the Social Security
1844 number; and
1845 (j) a record that:
1846 (i) contains information about an individual;
1847 (ii) is voluntarily provided by the individual; and
1848 (iii) goes into an electronic database that:
1849 (A) is designated by and administered under the authority of the Chief Information
1850 Officer; and
1851 (B) acts as a repository of information about the individual that can be electronically
1852 retrieved and used to facilitate the individual's online interaction with a state agency.
1853 (2) The following records are private if properly classified by a governmental entity:
1854 (a) records concerning a current or former employee of, or applicant for employment

1855 with a governmental entity, including performance evaluations and personal status information
1856 such as race, religion, or disabilities, but not including records that are public under Subsection
1857 63-2-301 (1)(b) or 63-2-301 (2)(o), or private under Subsection 63-2-302 (1)(b);
1858 (b) records describing an individual's finances, except that the following are public:
1859 (i) records described in Subsection 63-2-301 (1);
1860 (ii) information provided to the governmental entity for the purpose of complying with
1861 a financial assurance requirement; or
1862 (iii) records that must be disclosed in accordance with another statute;
1863 (c) records of independent state agencies if the disclosure of those records would
1864 conflict with the fiduciary obligations of the agency;
1865 (d) other records containing data on individuals the disclosure of which constitutes a
1866 clearly unwarranted invasion of personal privacy; and
1867 (e) records provided by the United States or by a government entity outside the state
1868 that are given with the requirement that the records be managed as private records, if the
1869 providing entity states in writing that the record would not be subject to public disclosure if
1870 retained by it.
1871 (3) (a) As used in this Subsection (3), "medical records" means medical reports,
1872 records, statements, history, diagnosis, condition, treatment, and evaluation.
1873 (b) Medical records in the possession of the University of Utah Hospital, its clinics,
1874 doctors, or affiliated entities are not private records or controlled records under Section
1875 63-2-303 when the records are sought:
1876 (i) in connection with any legal or administrative proceeding in which the patient's
1877 physical, mental, or emotional condition is an element of any claim or defense; or
1878 (ii) after a patient's death, in any legal or administrative proceeding in which any party
1879 relies upon the condition as an element of the claim or defense.
1880 (c) Medical records are subject to production in a legal or administrative proceeding
1881 according to state or federal statutes or rules of procedure and evidence as if the medical
1882 records were in the possession of a nongovernmental medical care provider.
1883 Section 36. Section 63-2-302 (Superseded 07/01/03) is amended to read:
1884 63-2-302 (Superseded 07/01/03). Private records.
1885 (1) The following records are private:

1886 (a) records concerning an individual's eligibility for unemployment insurance benefits,
1887 social services, welfare benefits, or the determination of benefit levels;
1888 (b) records containing data on individuals describing medical history, diagnosis,
1889 condition, treatment, evaluation, or similar medical data;
1890 (c) records of publicly funded libraries that when examined alone or with other records
1891 identify a patron;
1892 (d) records received or generated for a Senate or House Ethics Committee concerning
1893 any alleged violation of the rules on legislative ethics, prior to the meeting, and after the
1894 meeting, if the ethics committee meeting was closed to the public;
1895 (e) records received or generated for a Senate confirmation committee concerning
1896 character, professional competence, or physical or mental health of an individual:
1897 (i) if prior to the meeting, the chair of the committee determines release of the records:
1898 (A) reasonably could be expected to interfere with the investigation undertaken by the
1899 committee; or
1900 (B) would create a danger of depriving a person of a right to a fair proceeding or
1901 impartial hearing;
1902 (ii) after the meeting, if the meeting was closed to the public;
1903 (f) records concerning a current or former employee of, or applicant for employment
1904 with, a governmental entity that would disclose that individual's home address, home telephone
1905 number, Social Security number, insurance coverage, marital status, or payroll deductions;
1906 (g) that part of a record indicating a person's Social Security number or federal
1907 employer identification number if provided under Section 31A-23-202 , 31A-26-202 , 58-1-301 ,
1908 61-1-4 , or 61-2-6 ;
1909 (h) that part of a voter registration record identifying a voter's driver license or
1910 identification card number, Social Security number, or last four digits of the Social Security
1911 number; and
1912 (i) a record that:
1913 (i) contains information about an individual;
1914 (ii) is voluntarily provided by the individual; and
1915 (iii) goes into an electronic database that:
1916 (A) is designated by and administered under the authority of the Chief Information

1917 Officer; and
1918 (B) acts as a repository of information about the individual that can be electronically
1919 retrieved and used to facilitate the individual's online interaction with a state agency.
1920 (2) The following records are private if properly classified by a governmental entity:
1921 (a) records concerning a current or former employee of, or applicant for employment
1922 with a governmental entity, including performance evaluations and personal status information
1923 such as race, religion, or disabilities, but not including records that are public under Subsection
1924 63-2-301 (1)(b) or 63-2-301 (2)(o), or private under Subsection 63-2-302 (1)(b);
1925 (b) records describing an individual's finances, except that the following are public:
1926 (i) records described in Subsection 63-2-301 (1);
1927 (ii) information provided to the governmental entity for the purpose of complying with
1928 a financial assurance requirement; or
1929 (iii) records that must be disclosed in accordance with another statute;
1930 (c) records of independent state agencies if the disclosure of those records would
1931 conflict with the fiduciary obligations of the agency;
1932 (d) other records containing data on individuals the disclosure of which constitutes a
1933 clearly unwarranted invasion of personal privacy; and
1934 (e) records provided by the United States or by a government entity outside the state
1935 that are given with the requirement that the records be managed as private records, if the
1936 providing entity states in writing that the record would not be subject to public disclosure if
1937 retained by it.
1938 (3) (a) As used in this Subsection (3), "medical records" means medical reports,
1939 records, statements, history, diagnosis, condition, treatment, and evaluation.
1940 (b) Medical records in the possession of the University of Utah Hospital, its clinics,
1941 doctors, or affiliated entities are not private records or controlled records under Section
1942 63-2-303 when the records are sought:
1943 (i) in connection with any legal or administrative proceeding in which the patient's
1944 physical, mental, or emotional condition is an element of any claim or defense; or
1945 (ii) after a patient's death, in any legal or administrative proceeding in which any party
1946 relies upon the condition as an element of the claim or defense.
1947 (c) Medical records are subject to production in a legal or administrative proceeding

1948 according to state or federal statutes or rules of procedure and evidence as if the medical
1949 records were in the possession of a nongovernmental medical care provider.
1950 Section 37. Effective date.
1951 The amendments in this act to Section 63-2-302 (Effective 07/01/03) take effect on July
1952 1, 2003.