H.B. 374

1

INSURANCE PRODUCERS AMENDMENTS
2 2003 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: James A. Dunnigan
5 This act modifies the Insurance Code. The act provides definitions and substitutes the
6 term producer for the terms agent and broker with respect to certain insurance licenses.
7 The act renumbers and modifies the chapter of the Insurance Code dealing with
8 insurance marketing and licensing. The act further modifies insurance licensing and
9 application procedures, licensing requirements, and license types. The act modifies
10 guidelines for termination, lapsing, probation, or surrender with respect to a license.
11 The act enacts guidelines for the appointment and listing of an individual or agency
12 producer or managing general agent. The act modifies certain continuing education and
13 training period requirements. The act modifies provisions relating to an agency license
14 and designation. The act designates certain failures to forward a premium to an insured
15 as insurance fraud. The act modifies guidelines for licensee compensation. The act
16 makes technical changes. This act provides an effective date. This act contains a
17 coordination clause.
18 This act affects sections of Utah Code Annotated 1953 as follows:
19 AMENDS:
20 7-1-901, as enacted by Chapter 393, Laws of Utah 1998
21 31A-1-104, as last amended by Chapter 131, Laws of Utah 1999
22 31A-1-301, as last amended by Chapters 71 and 308, Laws of Utah 2002
23 31A-2-205, as last amended by Chapter 2, Laws of Utah 1987
24 31A-2-214, as last amended by Chapter 71, Laws of Utah 2002
25 31A-2-308, as last amended by Chapters 130 and 131, Laws of Utah 1999
26 31A-2-309, as last amended by Chapter 91, Laws of Utah 1987
27 31A-3-303, as last amended by Chapter 230, Laws of Utah 1992

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2167 fraudulent practices. The commissioner may only obtain an injunction regarding the conduct
2168 described in this subsection from a court of competent jurisdiction.
2169 (6) If the commissioner of the jurisdiction in which the group is chartered and licensed
2170 has not initiated an examination or does not initiate an examination within 60 days after a
2171 request by the commissioner of this state, the risk retention group shall submit to an
2172 examination by the commissioner of this state to determine its financial condition. Any
2173 examination conducted under this subsection shall be coordinated to avoid unjustified
2174 repetition and shall be conducted in an expeditious manner and in accordance with the NAIC's
2175 Examiner Handbook.
2176 (7) Each application form for insurance from a risk retention group and each policy and
2177 certificate issued by a risk retention group shall contain the following notice in ten-point type
2178 on its front and declaration pages:
2179 "NOTICE
2180 This policy is issued by your risk retention group. Your risk retention group may not be
2181 subject to all of the insurance laws and regulations of your state. State insurance insolvency
2182 guaranty funds are not available for your risk retention group."
2183 (8) The following acts by a risk retention group are prohibited:
2184 (a) the solicitation or sale of insurance by a risk retention group to any person who is
2185 not eligible for membership in the group; and
2186 (b) the solicitation or sale of insurance by, or operation of, a risk retention group that is
2187 in hazardous financial condition or financially impaired.
2188 (9) A risk retention group may not do business in this state if an insurance company is
2189 directly or indirectly a member or owner of the risk retention group, unless all members of the
2190 group are insurance companies.
2191 (10) The terms of any insurance policy issued by a risk retention group may not
2192 provide, or be construed to provide, coverage prohibited generally by statute of this state or
2193 declared unlawful by the Utah Supreme Court.
2194 (11) A risk retention group not chartered in this state and doing business in this state
2195 shall comply with a lawful order issued in a voluntary dissolution proceeding or in a
2196 delinquency proceeding commenced by any state's insurance commissioner if there has been a
2197 finding of financial impairment after an examination under Subsection (6).

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

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

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

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

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

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

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

2415 receives the notice of cancellation from the premium finance company. When any statutory,
2416 rule, or contractual restrictions require the continuation of insurance beyond the effective date
2417 of cancellation specified by the premium finance company, the insurance is limited to the
2418 coverage required by those restrictions and to the persons those restrictions are designed to
2419 protect.
2420 (d) Whenever a financed insurance policy is cancelled, the insurer shall return any
2421 unearned premiums due under the insurance policy to the insurance premium finance company
2422 for the account of the insured, and this action by the insurer satisfies the insurer's obligations
2423 under the insurance policy which relate to the return of unearned premiums. If the crediting of
2424 return premiums to the account of the insured results in a surplus over the amount due from the
2425 insured, the premium finance company shall refund that excess to the insured if it exceeds $5.
2426 (3) No filing of the premium finance agreement or recording of a premium finance
2427 transaction is necessary to perfect the validity of the agreement as a secured transaction as
2428 against creditors, subsequent purchasers, pledgees, encumbrancers, successors, or assigns.
2429 Section 35. Section 31A-21-404 is amended to read:
2430 31A-21-404. Out-of-state insurers.
2431 Any insurer extending mass marketed life or accident and health insurance under a
2432 group or blanket policy issued outside of this state to residents of this state shall, with respect
2433 to the mass marketed life or accident and health insurance policy:
2434 (1) comply with Sections [ 31A-23-302 and 31A-23-303 ] 31A-23a-402 and
2435 31A-23a-403 and Part III of Chapter 26; and
2436 (2) upon the commissioner's request, deliver to the commissioner a copy of any mass
2437 marketed life or accident and health insurance policy, certificates issued under these policies,
2438 and advertising material used in this state in connection with the policy.
2439 Section 36. Section 31A-23a-101 , which is renumbered from Section 31A-23-101 is
2440 renumbered and amended to read:
2441 CHAPTER 23a. INSURANCE MARKETING - LICENSING PRODUCERS,
2442 CONSULTANTS, AND REINSURANCE INTERMEDIARIES
2443 Part 1. General Provisions
2444 [31A-23-101]. 31A-23a-101. Purposes.
2445 The purposes of this chapter include:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2973 (ii) issue the nonresident license applicant a nonresident [producer] license.
2974 (b) Subsection (1)(a) applies if:
2975 (i) the nonresident license applicant:
2976 (A) is licensed as a resident in the nonresident license applicant's home state at the time
2977 the nonresident license applicant applies for a nonresident producer, limited line producer,
2978 customer service representative, consultant, managing general agent, or reinsurance
2979 intermediary license;
2980 (B) has submitted the proper request for licensure;
2981 (C) has submitted to the commissioner:
2982 (I) the application for licensure that the nonresident license applicant submitted to the
2983 applicant's home state; or
2984 (II) a completed uniform application; and
2985 (D) has paid the applicable fees under Section 31A-3-103 ; and
2986 (ii) the nonresident license applicant's license in the applicant's home state is in good
2987 standing[; and].
2988 [(iii) the nonresident license applicant's home state awards nonresident producer
2989 licenses to residents of this state on the same basis as this state awards licenses to residents of
2990 that home state.]
2991 (2) A nonresident applicant applying under Subsection (1) shall in addition to
2992 complying with all license requirements for a license under this chapter execute, in a form
2993 acceptable to the commissioner, an agreement to be subject to the jurisdiction of the Utah
2994 commissioner and courts on any matter related to the applicant's insurance activities in this
2995 state, on the basis of:
2996 (a) service of process under Sections 31A-2-309 and 31A-2-310 ; or
2997 (b) service authorized:
2998 (i) in the Utah Rules of Civil Procedure; or
2999