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6 LONG TITLE
7 General Description:
8 This bill amends provisions of the Insurance Code related to accident and health
9 insurance policies and the Comprehensive Health Insurance Pool Act.
10 Highlighted Provisions:
11 This bill:
12 . adds and amends Insurance Code definitions;
13 . eliminates a prohibition on requiring health maintenance organizations and limited
14 health plans to provide conversion policies to persons residing outside their service
16 . amends preexisting condition provisions for accident and health insurance policies;
17 . amends incontestability provisions for accident and health insurance policies;
18 . amends the definition of "Medicare Supplement Policy";
19 . amends the types of adverse benefit determinations which may be submitted for an
20 independent review;
21 . amends the application of group accident and health policy conversion
23 . amends notice of the right to an individual conversion policy;
24 . amends Comprehensive Health Insurance Pool Act definitions, pool administrator
25 provisions, eligibility requirements, and preexisting condition provisions; and
26 . makes technical changes.
27 Monies Appropriated in this Bill:
29 Other Special Clauses:
31 Utah Code Sections Affected:
33 31A-1-301, as last amended by Chapters 2 and 267, Laws of Utah 2004
34 31A-8-402.7, as last amended by Chapter 90, Laws of Utah 2004
35 31A-22-605, as last amended by Chapter 116, Laws of Utah 2001
36 31A-22-606, as last amended by Chapter 116, Laws of Utah 2001
37 31A-22-609, as last amended by Chapter 116, Laws of Utah 2001
38 31A-22-613, as last amended by Chapter 116, Laws of Utah 2001
39 31A-22-620, as last amended by Chapter 116, Laws of Utah 2001
40 31A-22-629, as last amended by Chapter 108, Laws of Utah 2004
41 31A-22-723, as enacted by Chapter 108, Laws of Utah 2004
42 31A-29-103, as last amended by Chapter 2, Laws of Utah 2004
43 31A-29-110, as last amended by Chapter 168, Laws of Utah 2003
44 31A-29-111, as last amended by Chapter 2, Laws of Utah 2004
45 31A-29-113, as last amended by Chapters 2 and 329, Laws of Utah 2004
46 31A-30-107.5, as last amended by Chapter 348, Laws of Utah 2004
48 31A-22-605.1, Utah Code Annotated 1953
50 Be it enacted by the Legislature of the state of Utah:
51 Section 1. Section 31A-1-301 is amended to read:
52 31A-1-301. Definitions.
53 As used in this title, unless otherwise specified:
54 (1) (a) "Accident and health insurance" means insurance to provide protection against
55 economic losses resulting from:
56 (i) a medical condition including:
57 (A) medical care expenses; or
58 (B) the risk of disability;
59 (ii) accident; or
60 (iii) sickness.
61 (b) "Accident and health insurance":
62 (i) includes a contract with disability contingencies including:
63 (A) an income replacement contract;
64 (B) a health care contract;
65 (C) an expense reimbursement contract;
66 (D) a credit accident and health contract;
67 (E) a continuing care contract; and
68 (F) a long-term care contract; and
69 (ii) may provide:
70 (A) hospital coverage;
71 (B) surgical coverage;
72 (C) medical coverage; or
73 (D) loss of income coverage.
74 (c) "Accident and health insurance" does not include workers' compensation insurance.
75 (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
76 63, Chapter 46a, Utah Administrative Rulemaking Act.
77 (3) "Administrator" is defined in Subsection [
78 (4) "Adult" means a natural person who has attained the age of at least 18 years.
79 (5) "Affiliate" means any person who controls, is controlled by, or is under common
80 control with, another person. A corporation is an affiliate of another corporation, regardless of
81 ownership, if substantially the same group of natural persons manages the corporations.
82 (6) "Agency" means:
83 (a) a person other than an individual, including a sole proprietorship by which a natural
84 person does business under an assumed name; and
85 (b) an insurance organization licensed or required to be licensed under Section
86 31A-23a-301 .
87 (7) "Alien insurer" means an insurer domiciled outside the United States.
88 (8) "Amendment" means an endorsement to an insurance policy or certificate.
89 (9) "Annuity" means an agreement to make periodical payments for a period certain or
90 over the lifetime of one or more natural persons if the making or continuance of all or some of
91 the series of the payments, or the amount of the payment, is dependent upon the continuance of
92 human life.
93 (10) "Application" means a document:
94 (a) (i) completed by an applicant to provide information about the risk to be insured;
96 (ii) that contains information that is used by the insurer to evaluate risk and decide
97 whether to:
98 (A) insure the risk under:
99 (I) the coverages as originally offered; or
100 (II) a modification of the coverage as originally offered; or
101 (B) decline to insure the risk; or
102 (b) used by the insurer to gather information from the applicant before issuance of an
103 annuity contract.
104 (11) "Articles" or "articles of incorporation" means the original articles, special laws,
105 charters, amendments, restated articles, articles of merger or consolidation, trust instruments,
106 and other constitutive documents for trusts and other entities that are not corporations, and
107 amendments to any of these.
108 (12) "Bail bond insurance" means a guarantee that a person will attend court when
109 required, or will obey the orders or judgment of the court, as a condition to the release of that
110 person from confinement.
111 (13) "Binder" is defined in Section 31A-21-102 .
112 (14) "Board," "board of trustees," or "board of directors" means the group of persons
113 with responsibility over, or management of, a corporation, however designated.
114 (15) "Business entity" means a corporation, association, partnership, limited liability
115 company, limited liability partnership, or other legal entity.
116 (16) "Business of insurance" is defined in Subsection [
117 (17) "Business plan" means the information required to be supplied to the
118 commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
119 when these subsections are applicable by reference under:
120 (a) Section 31A-7-201 ;
121 (b) Section 31A-8-205 ; or
122 (c) Subsection 31A-9-205 (2).
123 (18) "Bylaws" means the rules adopted for the regulation or management of a
124 corporation's affairs, however designated and includes comparable rules for trusts and other
125 entities that are not corporations.
126 (19) "Captive insurance company" means:
127 (a) an insurance company:
128 (i) owned by another organization; and
129 (ii) whose exclusive purpose is to insure risks of the parent organization and affiliated
130 companies; or
131 (b) in the case of groups and associations, an insurance organization:
132 (i) owned by the insureds; and
133 (ii) whose exclusive purpose is to insure risks of:
134 (A) member organizations;
135 (B) group members; and
136 (C) affiliates of:
137 (I) member organizations; or
138 (II) group members.
139 (20) "Casualty insurance" means liability insurance as defined in Subsection [
141 (21) "Certificate" means evidence of insurance given to:
142 (a) an insured under a group insurance policy; or
143 (b) a third party.
144 (22) "Certificate of authority" is included within the term "license."
145 (23) "Claim," unless the context otherwise requires, means a request or demand on an
146 insurer for payment of benefits according to the terms of an insurance policy.
147 (24) "Claims-made coverage" means an insurance contract or provision limiting
148 coverage under a policy insuring against legal liability to claims that are first made against the
149 insured while the policy is in force.
150 (25) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
152 (b) When appropriate, the terms listed in Subsection (25)(a) apply to the equivalent
153 supervisory official of another jurisdiction.
154 (26) (a) "Continuing care insurance" means insurance that:
155 (i) provides board and lodging;
156 (ii) provides one or more of the following services:
157 (A) personal services;
158 (B) nursing services;
159 (C) medical services; or
160 (D) other health-related services; and
161 (iii) provides the coverage described in Subsection (26)(a)(i) under an agreement
163 (A) for the life of the insured; or
164 (B) for a period in excess of one year.
165 (b) Insurance is continuing care insurance regardless of whether or not the board and
166 lodging are provided at the same location as the services described in Subsection (26)(a)(ii).
167 (27) (a) "Control," "controlling," "controlled," or "under common control" means the
168 direct or indirect possession of the power to direct or cause the direction of the management
169 and policies of a person. This control may be:
170 (i) by contract;
171 (ii) by common management;
172 (iii) through the ownership of voting securities; or
173 (iv) by a means other than those described in Subsections (27)(a)(i) through (iii).
174 (b) There is no presumption that an individual holding an official position with another
175 person controls that person solely by reason of the position.
176 (c) A person having a contract or arrangement giving control is considered to have
177 control despite the illegality or invalidity of the contract or arrangement.
178 (d) There is a rebuttable presumption of control in a person who directly or indirectly
179 owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
180 voting securities of another person.
181 (28) "Controlled insurer" means a licensed insurer that is either directly or indirectly
182 controlled by a producer.
183 (29) "Controlling person" means any person that directly or indirectly has the power to
184 direct or cause to be directed, the management, control, or activities of a reinsurance
186 (30) "Controlling producer" means a producer who directly or indirectly controls an
188 (31) (a) "Corporation" means an insurance corporation, except when referring to:
189 (i) a corporation doing business:
190 (A) as:
191 (I) an insurance producer;
192 (II) a limited line producer;
193 (III) a consultant;
194 (IV) a managing general agent;
195 (V) a reinsurance intermediary;
196 (VI) a third party administrator; or
197 (VII) an adjuster; and
198 (B) under:
199 (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
200 Reinsurance Intermediaries;
201 (II) Chapter 25, Third Party Administrators; or
202 (III) Chapter 26, Insurance Adjusters; or
203 (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
204 Holding Companies.
205 (b) "Stock corporation" means a stock insurance corporation.
206 (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
207 (32) "Creditable coverage" has the same meaning as provided in federal regulations
208 adopted pursuant to the Health Insurance Portability and Accountability Act of 1996, Pub. L.
209 No. 104-191, 110 Stat. 1936.
211 provide indemnity for payments coming due on a specific loan or other credit transaction while
212 the debtor is disabled.
214 extension of credit that is limited to partially or wholly extinguishing that credit obligation.
215 (b) "Credit insurance" includes:
216 (i) credit accident and health insurance;
217 (ii) credit life insurance;
218 (iii) credit property insurance;
219 (iv) credit unemployment insurance;
220 (v) guaranteed automobile protection insurance;
221 (vi) involuntary unemployment insurance;
222 (vii) mortgage accident and health insurance;
223 (viii) mortgage guaranty insurance; and
224 (ix) mortgage life insurance.
226 with an extension of credit that pays a person if the debtor dies.
228 (a) offered in connection with an extension of credit; and
229 (b) that protects the property until the debt is paid.
231 (a) offered in connection with an extension of credit; and
232 (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
233 (i) specific loan; or
234 (ii) credit transaction.
236 (38) "Creditor" means a person, including an insured, having any claim, whether:
237 (a) matured;
238 (b) unmatured;
239 (c) liquidated;
240 (d) unliquidated;
241 (e) secured;
242 (f) unsecured;
243 (g) absolute;
244 (h) fixed; or
245 (i) contingent.
246 (39) (a) "Customer service representative" means a person that provides insurance
247 services and insurance product information:
248 (i) for the customer service representative's:
249 (A) producer; or
250 (B) consultant employer; and
251 (ii) to the customer service representative's employer's:
252 (A) customer;
253 (B) client; or
254 (C) organization.
255 (b) A customer service representative may only operate within the scope of authority of
256 the customer service representative's producer or consultant employer.
257 (40) "Deadline" means the final date or time:
258 (a) imposed by:
259 (i) statute;
260 (ii) rule; or
261 (iii) order; and
262 (b) by which a required filing or payment must be received by the department.
263 (41) "Deemer clause" means a provision under this title under which upon the
264 occurrence of a condition precedent, the commissioner is deemed to have taken a specific
265 action. If the statute so provides, the condition precedent may be the commissioner's failure to
266 take a specific action.
267 (42) "Degree of relationship" means the number of steps between two persons
268 determined by counting the generations separating one person from a common ancestor and
269 then counting the generations to the other person.
270 (43) "Department" means the Insurance Department.
271 (44) "Director" means a member of the board of directors of a corporation.
272 (45) "Disability" means a physiological or psychological condition that partially or
273 totally limits an individual's ability to:
274 (a) perform the duties of:
275 (i) that individual's occupation; or
276 (ii) any occupation for which the individual is reasonably suited by education, training,
277 or experience; or
278 (b) perform two or more of the following basic activities of daily living:
279 (i) eating;
280 (ii) toileting;
281 (iii) transferring;
282 (iv) bathing; or
283 (v) dressing.
284 (46) "Disability income insurance" is defined in Subsection [
285 (47) "Domestic insurer" means an insurer organized under the laws of this state.
286 (48) "Domiciliary state" means the state in which an insurer:
287 (a) is incorporated;
288 (b) is organized; or
289 (c) in the case of an alien insurer, enters into the United States.
290 (49) (a) "Eligible employee" means:
291 (i) an employee who:
292 (A) works on a full-time basis; and
293 (B) has a normal work week of 30 or more hours; or
294 (ii) a person described in Subsection (49)(b).
295 (b) "Eligible employee" includes, if the individual is included under a health benefit
296 plan of a small employer:
297 (i) a sole proprietor;
298 (ii) a partner in a partnership; or
299 (iii) an independent contractor.
300 (c) "Eligible employee" does not include, unless eligible under Subsection (49)(b):
301 (i) an individual who works on a temporary or substitute basis for a small employer;
302 (ii) an employer's spouse; or
303 (iii) a dependent of an employer.
304 (50) "Employee" means any individual employed by an employer.
305 (51) "Employee benefits" means one or more benefits or services provided to:
306 (a) employees; or
307 (b) dependents of employees.
308 (52) (a) "Employee welfare fund" means a fund:
309 (i) established or maintained, whether directly or through trustees, by:
310 (A) one or more employers;
311 (B) one or more labor organizations; or
312 (C) a combination of employers and labor organizations; and
313 (ii) that provides employee benefits paid or contracted to be paid, other than income
314 from investments of the fund, by or on behalf of an employer doing business in this state or for
315 the benefit of any person employed in this state.
316 (b) "Employee welfare fund" includes a plan funded or subsidized by user fees or tax
318 (53) "Endorsement" means a written agreement attached to a policy or certificate to
319 modify one or more of the provisions of the policy or certificate.
320 (54) "Enrollment date," with respect to a health benefit plan, means the first day of
321 coverage or, if there is a waiting period, the first day of the waiting period.
323 (i) a real estate settlement or real estate closing conducted by a third party pursuant to
324 the requirements of a written agreement between the parties in a real estate transaction; or
325 (ii) a settlement or closing involving:
326 (A) a mobile home;
327 (B) a grazing right;
328 (C) a water right; or
329 (D) other personal property authorized by the commissioner.
330 (b) "Escrow" includes the act of conducting a:
331 (i) real estate settlement; or
332 (ii) real estate closing.
334 (a) an insurance producer with:
335 (i) a title insurance line of authority; and
336 (ii) an escrow subline of authority; or
337 (b) a person defined as an escrow agent in Section 7-22-101 .
339 also excluded. The items listed are representative examples for use in interpretation of this
342 (a) written to provide payments for expenses relating to hospital confinements resulting
343 from illness or injury; and
344 (b) written:
345 (i) as a daily limit for a specific number of days in a hospital; and
346 (ii) to have a one or two day waiting period following a hospitalization.
348 holding positions of public or private trust.
350 (i) submitted to the department as required by and in accordance with any applicable
351 statute, rule, or filing order;
352 (ii) received by the department within the time period provided in the applicable
353 statute, rule, or filing order; and
354 (iii) accompanied by the appropriate fee in accordance with:
355 (A) Section 31A-3-103 ; or
356 (B) rule.
357 (b) "Filed" does not include a filing that is rejected by the department because it is not
358 submitted in accordance with Subsection [
360 department including:
361 (a) a policy;
362 (b) a rate;
363 (c) a form;
364 (d) a document;
365 (e) a plan;
366 (f) a manual;
367 (g) an application;
368 (h) a report;
369 (i) a certificate;
370 (j) an endorsement;
371 (k) an actuarial certification;
372 (l) a licensee annual statement;
373 (m) a licensee renewal application; or
374 (n) an advertisement.
376 insurer agrees to pay claims submitted to it by the insured for the insured's losses.
378 an alien insurer.
380 (i) a policy;
381 (ii) a certificate;
382 (iii) an application; or
383 (iv) an outline of coverage.
384 (b) "Form" does not include a document specially prepared for use in an individual
387 a mass marketing arrangement involving a defined class of persons related in some way other
388 than through the purchase of insurance.
390 (a) the general lines of insurance in Subsection [
391 (b) title insurance under one of the following sublines of authority:
392 (i) search, including authority to act as a title marketing representative;
393 (ii) escrow, including authority to act as a title marketing representative;
394 (iii) search and escrow, including authority to act as a title marketing representative;
396 (iv) title marketing representative only;
397 (c) surplus lines;
398 (d) workers' compensation; and
399 (e) any other line of insurance that the commissioner considers necessary to recognize
400 in the public interest.
402 (a) accident and health;
403 (b) casualty;
404 (c) life;
405 (d) personal lines;
406 (e) property; and
407 (f) variable contracts, including variable life and annuity.
409 that the plan provides medical care:
410 (a) (i) to employees; or
411 (ii) to a dependent of an employee; and
412 (b) (i) directly;
413 (ii) through insurance reimbursement; or
414 (iii) through any other method.
416 connection with an extension of credit that pays the difference in amount between the
417 insurance settlement and the balance of the loan if the insured automobile is a total loss.
419 means a policy or certificate that:
420 (i) provides health care insurance;
421 (ii) provides major medical expense insurance; or
422 (iii) is offered as a substitute for hospital or medical expense insurance such as:
423 (A) a hospital confinement indemnity; or
424 (B) a limited benefit plan.
425 (b) "Health benefit plan" does not include a policy or certificate that:
426 (i) provides benefits solely for:
427 (A) accident;
428 (B) dental;
429 (C) income replacement;
430 (D) long-term care;
431 (E) a Medicare supplement;
432 (F) a specified disease;
433 (G) vision; or
434 (H) a short-term limited duration; or
435 (ii) is offered and marketed as supplemental health insurance.
437 treatment, mitigation, or prevention of a human ailment or impairment:
438 (a) professional services;
439 (b) personal services;
440 (c) facilities;
441 (d) equipment;
442 (e) devices;
443 (f) supplies; or
444 (g) medicine.
447 (i) health care benefits; or
448 (ii) payment of incurred health care expenses.
449 (b) "Health care insurance" or "health insurance" does not include accident and health
450 insurance providing benefits for:
451 (i) replacement of income;
452 (ii) short-term accident;
453 (iii) fixed indemnity;
454 (iv) credit accident and health;
455 (v) supplements to liability;
456 (vi) workers' compensation;
457 (vii) automobile medical payment;
458 (viii) no-fault automobile;
459 (ix) equivalent self-insurance; or
460 (x) any type of accident and health insurance coverage that is a part of or attached to
461 another type of policy.
463 insurance written to provide payments to replace income lost from accident or sickness.
465 insured loss.
467 under Section 31A-26-201 who engages in insurance adjusting as a representative of insurers.
469 Section 31A-15-104 .
472 (a) property in transit on or over land;
473 (b) property in transit over water by means other than boat or ship;
474 (c) bailee liability;
475 (d) fixed transportation property such as bridges, electric transmission systems, radio
476 and television transmission towers and tunnels; and
477 (e) personal and commercial property floaters.
479 (a) an insurer is unable to pay its debts or meet its obligations as they mature;
480 (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
481 RBC under Subsection 31A-17-601 (8)(c); or
482 (c) an insurer is determined to be hazardous under this title.
484 (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
485 persons to one or more other persons; or
486 (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
487 group of persons that includes the person seeking to distribute that person's risk.
488 (b) "Insurance" includes:
489 (i) risk distributing arrangements providing for compensation or replacement for
490 damages or loss through the provision of services or benefits in kind;
491 (ii) contracts of guaranty or suretyship entered into by the guarantor or surety as a
492 business and not as merely incidental to a business transaction; and
493 (iii) plans in which the risk does not rest upon the person who makes the arrangements,
494 but with a class of persons who have agreed to share it.
496 negotiation, or settlement of a claim under an insurance policy other than life insurance or an
497 annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
499 (a) providing health care insurance, as defined in Subsection [
500 organizations that are or should be licensed under this title;
501 (b) providing benefits to employees in the event of contingencies not within the control
502 of the employees, in which the employees are entitled to the benefits as a right, which benefits
503 may be provided either:
504 (i) by single employers or by multiple employer groups; or
505 (ii) through trusts, associations, or other entities;
506 (c) providing annuities, including those issued in return for gifts, except those provided
507 by persons specified in Subsections 31A-22-1305 (2) and (3);
508 (d) providing the characteristic services of motor clubs as outlined in Subsection
510 (e) providing other persons with insurance as defined in Subsection [
511 (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
512 or surety, any contract or policy of title insurance;
513 (g) transacting or proposing to transact any phase of title insurance, including:
514 (i) solicitation;
515 (ii) negotiation preliminary to execution;
516 (iii) execution of a contract of title insurance;
517 (iv) insuring; and
518 (v) transacting matters subsequent to the execution of the contract and arising out of
519 the contract, including reinsurance; and
520 (h) doing, or proposing to do, any business in substance equivalent to Subsections
523 (a) advises other persons about insurance needs and coverages;
524 (b) is compensated by the person advised on a basis not directly related to the insurance
525 placed; and
526 (c) except as provided in Section 31A-23a-501 , is not compensated directly or
527 indirectly by an insurer or producer for advice given.
529 affiliated persons, at least one of whom is an insurer.
531 to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
532 (b) With regards to the selling, soliciting, or negotiating of an insurance product to an
533 insurance customer or an insured:
534 (i) "producer for the insurer" means a producer who is compensated directly or
535 indirectly by an insurer for selling, soliciting, or negotiating any product of that insurer; and
536 (ii) "producer for the insured" means a producer who:
537 (A) is compensated directly and only by an insurance customer or an insured; and
538 (B) receives no compensation directly or indirectly from an insurer for selling,
539 soliciting, or negotiating any product of that insurer to an insurance customer or insured.
541 makes a promise in an insurance policy and includes:
542 (i) policyholders;
543 (ii) subscribers;
544 (iii) members; and
545 (iv) beneficiaries.
546 (b) The definition in Subsection [
547 (i) applies only to this title; and
548 (ii) does not define the meaning of this word as used in insurance policies or
551 principal including:
552 (A) fraternal benefit societies;
553 (B) issuers of gift annuities other than those specified in Subsections 31A-22-1305 (2)
554 and (3);
555 (C) motor clubs;
556 (D) employee welfare plans; and
557 (E) any person purporting or intending to do an insurance business as a principal on
558 that person's own account.
559 (ii) "Insurer" does not include a governmental entity to the extent it is engaged in the
560 activities described in Section 31A-12-107 .
561 (b) "Admitted insurer" is defined in Subsection [
562 (c) "Alien insurer" is defined in Subsection (7).
563 (d) "Authorized insurer" is defined in Subsection [
564 (e) "Domestic insurer" is defined in Subsection (47).
565 (f) "Foreign insurer" is defined in Subsection [
566 (g) "Nonadmitted insurer" is defined in Subsection [
567 (h) "Unauthorized insurer" is defined in Subsection [
570 (a) offered in connection with an extension of credit;
571 (b) that provides indemnity if the debtor is involuntarily unemployed for payments
572 coming due on a:
573 (i) specific loan; or
574 (ii) credit transaction.
576 employer who, with respect to a calendar year and to a plan year:
577 (a) employed an average of at least 51 eligible employees on each business day during
578 the preceding calendar year; and
579 (b) employs at least two employees on the first day of the plan year.
580 (91) "Late enrollee," with respect to an employer health benefit plan, means an
581 individual whose enrollment is a late enrollment.
582 (92) "Late enrollment," with respect to an employer health benefit plan, means
583 enrollment of an individual other than:
584 (a) on the earliest date on which coverage can become effective for the individual
585 under the terms of the plan; or
586 (b) through special enrollment.
588 31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for
589 specified legal expenses.
590 (b) "Legal expense insurance" includes arrangements that create reasonable
591 expectations of enforceable rights.
592 (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
593 legal services incidental to other insurance coverages.
595 (i) for death, injury, or disability of any human being, or for damage to property,
596 exclusive of the coverages under:
597 (A) Subsection [
598 (B) Subsection [
599 (C) Subsection [
600 (ii) for medical, hospital, surgical, and funeral benefits to persons other than the
601 insured who are injured, irrespective of legal liability of the insured, when issued with or
602 supplemental to insurance against legal liability for the death, injury, or disability of human
603 beings, exclusive of the coverages under:
604 (A) Subsection [
605 (B) Subsection [
606 (C) Subsection [
607 (iii) for loss or damage to property resulting from accidents to or explosions of boilers,
608 pipes, pressure containers, machinery, or apparatus;
609 (iv) for loss or damage to any property caused by the breakage or leakage of sprinklers,
610 water pipes and containers, or by water entering through leaks or openings in buildings; or
611 (v) for other loss or damage properly the subject of insurance not within any other kind
612 or kinds of insurance as defined in this chapter, if such insurance is not contrary to law or
613 public policy.
614 (b) "Liability insurance" includes:
615 (i) vehicle liability insurance as defined in Subsection [
616 (ii) residential dwelling liability insurance as defined in Subsection [
617 (iii) making inspection of, and issuing certificates of inspection upon, elevators,
618 boilers, machinery, and apparatus of any kind when done in connection with insurance on
621 in some activity that is part of or related to the insurance business.
622 (b) "License" includes certificates of authority issued to insurers.
624 pertaining to or connected with human life.
625 (b) The business of life insurance includes:
626 (i) granting death benefits;
627 (ii) granting annuity benefits;
628 (iii) granting endowment benefits;
629 (iv) granting additional benefits in the event of death by accident;
630 (v) granting additional benefits to safeguard the policy against lapse in the event of
631 disability; and
632 (vi) providing optional methods of settlement of proceeds.
634 (a) is issued for a specific product of insurance; and
635 (b) limits an individual or agency to transact only for that product or insurance.
637 (a) credit life;
638 (b) credit accident and health;
639 (c) credit property;
640 (d) credit unemployment;
641 (e) involuntary unemployment;
642 (f) mortgage life;
643 (g) mortgage guaranty;
644 (h) mortgage accident and health;
645 (i) guaranteed automobile protection; and
646 (j) any other form of insurance offered in connection with an extension of credit that:
647 (i) is limited to partially or wholly extinguishing the credit obligation; and
648 (ii) the commissioner determines by rule should be designated as a form of limited line
649 credit insurance.
651 or negotiates one or more forms of limited line credit insurance coverage to individuals through
652 a master, corporate, group, or individual policy.
654 (a) bail bond;
655 (b) limited line credit insurance;
656 (c) legal expense insurance;
657 (d) motor club insurance;
658 (e) rental car-related insurance;
659 (f) travel insurance; and
660 (g) any other form of limited insurance that the commissioner determines by rule
661 should be designated a form of limited line insurance.
663 (a) the lines of insurance listed in Subsection [
664 (b) a customer service representative.
666 limited lines insurance.
668 advertised, marketed, offered, or designated to provide coverage:
669 (i) in a setting other than an acute care unit of a hospital;
670 (ii) for not less than 12 consecutive months for each covered person on the basis of:
671 (A) expenses incurred;
672 (B) indemnity;
673 (C) prepayment; or
674 (D) another method;
675 (iii) for one or more necessary or medically necessary services that are:
676 (A) diagnostic;
677 (B) preventative;
678 (C) therapeutic;
679 (D) rehabilitative;
680 (E) maintenance; or
681 (F) personal care; and
682 (iv) that may be issued by:
683 (A) an insurer;
684 (B) a fraternal benefit society;
685 (C) (I) a nonprofit health hospital; and
686 (II) a medical service corporation;
687 (D) a prepaid health plan;
688 (E) a health maintenance organization; or
689 (F) an entity similar to the entities described in Subsections [
690 through (E) to the extent that the entity is otherwise authorized to issue life or health care
692 (b) "Long-term care insurance" includes:
693 (i) any of the following that provide directly or supplement long-term care insurance:
694 (A) a group or individual annuity or rider; or
695 (B) a life insurance policy or rider;
696 (ii) a policy or rider that provides for payment of benefits based on:
697 (A) cognitive impairment; or
698 (B) functional capacity; or
699 (iii) a qualified long-term care insurance contract.
700 (c) "Long-term care insurance" does not include:
701 (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
702 (ii) basic hospital expense coverage;
703 (iii) basic medical/surgical expense coverage;
704 (iv) hospital confinement indemnity coverage;
705 (v) major medical expense coverage;
706 (vi) income replacement or related asset-protection coverage;
707 (vii) accident only coverage;
708 (viii) coverage for a specified:
709 (A) disease; or
710 (B) accident;
711 (ix) limited benefit health coverage; or
712 (x) a life insurance policy that accelerates the death benefit to provide the option of a
713 lump sum payment:
714 (A) if the following are not conditioned on the receipt of long-term care:
715 (I) benefits; or
716 (II) eligibility; and
717 (B) the coverage is for one or more the following qualifying events:
718 (I) terminal illness;
719 (II) medical conditions requiring extraordinary medical intervention; or
720 (III) permanent institutional confinement.
722 incident to the practice and provision of medical services other than the practice and provision
723 of dental services.
727 must be constantly maintained by a stock insurance corporation as required by statute.
729 connection with an extension of credit that provides indemnity for payments coming due on a
730 mortgage while the debtor is disabled.
732 mortgagees and other creditors are indemnified against losses caused by the default of debtors.
734 connection with an extension of credit that pays if the debtor dies.
736 (a) licensed under:
737 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
738 (ii) Chapter 11, Motor Clubs; or
739 (iii) Chapter 14, Foreign Insurers; and
740 (b) that promises for an advance consideration to provide for a stated period of time:
741 (i) legal services under Subsection 31A-11-102 (1)(b);
742 (ii) bail services under Subsection 31A-11-102 (1)(c); or
743 (iii) trip reimbursement, towing services, emergency road services, stolen automobile
744 services, a combination of these services, or any other services given in Subsections
745 31A-11-102 (1)(b) through (f).
748 (a) that is issued by an insurer; and
749 (b) under which the financing and delivery of medical care is provided, in whole or in
750 part, through a defined set of providers under contract with the insurer, including the financing
751 and delivery of items paid for as medical care.
753 not entitled to receive dividends representing shares of the surplus of the insurer.
755 (a) ships or hulls of ships;
756 (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys,
757 securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
758 interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
759 (c) earnings such as freight, passage money, commissions, or profits derived from
760 transporting goods or people upon or across the oceans or inland waterways; or
761 (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
762 owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
763 in connection with maritime activity.
766 health insurance policy.
768 entitled to receive dividends representing shares of the surplus of the insurer.
770 relating to the minimum percentage of eligible employees that must be enrolled in relation to
771 the total number of eligible employees of an employer reduced by each eligible employee who
772 voluntarily declines coverage under the plan because the employee has other group health care
773 insurance coverage.
775 unincorporated association, joint stock company, trust, limited liability company, reciprocal,
776 syndicate, or any similar entity or combination of entities acting in concert.
778 coverage sold for primarily noncommercial purposes to:
779 (a) individuals; and
780 (b) families.
783 (a) the year that is designated as the plan year in:
784 (i) the plan document of a group health plan; or
785 (ii) a summary plan description of a group health plan;
786 (b) if the plan document or summary plan description does not designate a plan year or
787 there is no plan document or summary plan description:
788 (i) the year used to determine deductibles or limits;
789 (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
791 (iii) the employer's taxable year if:
792 (A) the plan does not impose deductibles or limits on a yearly basis; and
793 (B) (I) the plan is not insured; or
794 (II) the insurance policy is not renewed on an annual basis; or
795 (c) in a case not described in Subsection [
797 and riders, purporting to be an enforceable contract, which memorializes in writing some or all
798 of the terms of an insurance contract.
799 (ii) "Policy" includes a service contract issued by:
800 (A) a motor club under Chapter 11, Motor Clubs;
801 (B) a service contract provided under Chapter 6a, Service Contracts; and
802 (C) a corporation licensed under:
803 (I) Chapter 7, Nonprofit Health Service Insurance Corporations; or
804 (II) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
805 (iii) "Policy" does not include:
806 (A) a certificate under a group insurance contract; or
807 (B) a document that does not purport to have legal effect.
808 (b) (i) "Group insurance policy" means a policy covering a group of persons that is
809 issued to a policyholder on behalf of the group, for the benefit of group members who are
810 selected under procedures defined in the policy or in agreements which are collateral to the
812 (ii) A group insurance policy may include members of the policyholder's family or
814 (c) "Blanket insurance policy" means a group policy covering classes of persons
815 without individual underwriting, where the persons insured are determined by definition of the
816 class with or without designating the persons covered.
818 contract by ownership, premium payment, or otherwise.
820 nonguaranteed elements of a policy of life insurance over a period of years.
822 insurance policy.
825 (a) means[
826 coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended
827 or received [
832 (b) does not include a condition indicated by genetic information unless an actual
833 diagnosis of the condition by a physician has been made.
835 (b) "Premium" includes, however designated:
836 (i) assessments;
837 (ii) membership fees;
838 (iii) required contributions; or
839 (iv) monetary consideration.
840 (c) (i) Consideration paid to third party administrators for their services is not
842 (ii) Amounts paid by third party administrators to insurers for insurance on the risks
843 administered by the third party administrators are "premium."
845 Subsection 31A-5-203 (3).
848 incident to the practice of a profession and provision of any professional services.
850 personal property of every kind and any interest in that property, from all hazards or causes,
851 and against loss consequential upon the loss or damage including vehicle comprehensive and
852 vehicle physical damage coverages, but excluding inland marine insurance and ocean marine
853 insurance as defined under Subsections [
855 long-term care insurance contract" means:
856 (a) an individual or group insurance contract that meets the requirements of Section
857 7702B(b), Internal Revenue Code; or
858 (b) the portion of a life insurance contract that provides long-term care insurance:
859 (i) (A) by rider; or
860 (B) as a part of the contract; and
861 (ii) that satisfies the requirements of [
862 Revenue Code.
864 (a) is:
865 (i) organized under the laws of the United States or any state; or
866 (ii) in the case of a United States office of a foreign banking organization, licensed
867 under the laws of the United States or any state;
868 (b) is regulated, supervised, and examined by United States federal or state authorities
869 having regulatory authority over banks and trust companies; and
870 (c) meets the standards of financial condition and standing that are considered
871 necessary and appropriate to regulate the quality of financial institutions whose letters of credit
872 will be acceptable to the commissioner as determined by:
873 (i) the commissioner by rule; or
874 (ii) the Securities Valuation Office of the National Association of Insurance
877 (i) the cost of a given unit of insurance; or
878 (ii) for property-casualty insurance, that cost of insurance per exposure unit either
879 expressed as:
880 (A) a single number; or
881 (B) a pure premium rate, adjusted before any application of individual risk variations
882 based on loss or expense considerations to account for the treatment of:
883 (I) expenses;
884 (II) profit; and
885 (III) individual insurer variation in loss experience.
886 (b) "Rate" does not include a minimum premium.
888 organization" means any person who assists insurers in rate making or filing by:
889 (i) collecting, compiling, and furnishing loss or expense statistics;
890 (ii) recommending, making, or filing rates or supplementary rate information; or
891 (iii) advising about rate questions, except as an attorney giving legal advice.
892 (b) "Rate service organization" does not mean:
893 (i) an employee of an insurer;
894 (ii) a single insurer or group of insurers under common control;
895 (iii) a joint underwriting group; or
896 (iv) a natural person serving as an actuarial or legal consultant.
898 renewal policy premiums:
899 (a) a manual of rates;
900 (b) classifications;
901 (c) rate-related underwriting rules; and
902 (d) rating formulas that describe steps, policies, and procedures for determining initial
903 and renewal policy premiums.
905 (a) except as provided in Subsection [
906 stamped received by the department, whether delivered:
907 (i) in person; or
908 (ii) electronically; and
909 (b) if delivered to the department by a delivery service, the delivery service's postmark
910 date or pick-up date unless otherwise stated in:
911 (i) statute;
912 (ii) rule; or
913 (iii) a specific filing order.
915 association of persons:
916 (a) operating through an attorney-in-fact common to all of them; and
917 (b) exchanging insurance contracts with one another that provide insurance coverage
918 on each other.
920 consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
921 reinsurance transactions, this title sometimes refers to:
922 (a) the insurer transferring the risk as the "ceding insurer"; and
923 (b) the insurer assuming the risk as the:
924 (i) "assuming insurer"; or
925 (ii) "assuming reinsurer."
927 authority to assume reinsurance.
929 liability resulting from or incident to the ownership, maintenance, or use of a residential
930 dwelling that is a detached single family residence or multifamily residence up to four units.
932 assumed under a reinsurance contract. A reinsurer "retrocedes" when it reinsures with another
933 insurer part of a liability assumed under a reinsurance contract.
935 (a) an insurance policy; or
936 (b) an insurance certificate.
938 (i) note;
939 (ii) stock;
940 (iii) bond;
941 (iv) debenture;
942 (v) evidence of indebtedness;
943 (vi) certificate of interest or participation in any profit-sharing agreement;
944 (vii) collateral-trust certificate;
945 (viii) preorganization certificate or subscription;
946 (ix) transferable share;
947 (x) investment contract;
948 (xi) voting trust certificate;
949 (xii) certificate of deposit for a security;
950 (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
951 payments out of production under such a title or lease;
952 (xiv) commodity contract or commodity option;
953 (xv) any certificate of interest or participation in, temporary or interim certificate for,
954 receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
955 in Subsections [
956 (xvi) any other interest or instrument commonly known as a security.
957 (b) "Security" does not include:
958 (i) any of the following under which an insurance company promises to pay money in a
959 specific lump sum or periodically for life or some other specified period:
960 (A) insurance;
961 (B) endowment policy; or
962 (C) annuity contract; or
963 (ii) a burial certificate or burial contract.
965 for spreading its own risks by a systematic plan.
966 (a) Except as provided in this Subsection [
967 include an arrangement under which a number of persons spread their risks among themselves.
968 (b) "Self-insurance" includes:
969 (i) an arrangement by which a governmental entity undertakes to indemnify its
970 employees for liability arising out of the employees' employment; and
971 (ii) an arrangement by which a person with a managed program of self-insurance and
972 risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
973 employees for liability or risk which is related to the relationship or employment.
974 (c) "Self-insurance" does not include any arrangement with independent contractors.
976 (a) by any means;
977 (b) for money or its equivalent; and
978 (c) on behalf of an insurance company.
980 advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
981 insurance but that provides coverage for less than 12 consecutive months for each covered
983 (149) "Significant break in coverage" means a period of 63 consecutive days during
984 each of which an individual does not have any creditable coverage.
986 employer who, with respect to a calendar year and to a plan year:
987 (a) employed an average of at least two employees but not more than 50 eligible
988 employees on each business day during the preceding calendar year; and
989 (b) employs at least two employees on the first day of the plan year.
990 (151) "Special enrollment period," in connection with a health benefit plan, has the
991 same meaning as provided in federal regulations adopted pursuant to the Health Insurance
992 Portability and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936.
994 either directly or indirectly through one or more affiliates or intermediaries.
995 (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
996 shares are owned by that person either alone or with its affiliates, except for the minimum
997 number of shares the law of the subsidiary's domicile requires to be owned by directors or
1000 (a) a guarantee against loss or damage resulting from failure of principals to pay or
1001 perform their obligations to a creditor or other obligee;
1002 (b) bail bond insurance; and
1003 (c) fidelity insurance.
1005 and liabilities.
1006 (b) (i) "Permanent surplus" means the surplus of a mutual insurer that has been
1007 designated by the insurer as permanent.
1008 (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209 require
1009 that mutuals doing business in this state maintain specified minimum levels of permanent
1011 (iii) Except for assessable mutuals, the minimum permanent surplus requirement is
1012 essentially the same as the minimum required capital requirement that applies to stock insurers.
1013 (c) "Excess surplus" means:
1014 (i) for life or accident and health insurers, health organizations, and property and
1015 casualty insurers as defined in Section 31A-17-601 , the lesser of:
1016 (A) that amount of an insurer's or health organization's total adjusted capital, as defined
1017 in Subsection [
1018 (I) 2.5; and
1019 (II) the sum of the insurer's or health organization's minimum capital or permanent
1020 surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
1021 (B) that amount of an insurer's or health organization's total adjusted capital, as defined
1022 in Subsection [
1023 (I) 3.0; and
1024 (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
1025 (ii) for monoline mortgage guaranty insurers, financial guaranty insurers, and title
1026 insurers, that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
1027 (A) 1.5; and
1028 (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
1030 collects charges or premiums from, or who, for consideration, adjusts or settles claims of
1031 residents of the state in connection with insurance coverage, annuities, or service insurance
1032 coverage, except:
1033 (a) a union on behalf of its members;
1034 (b) a person administering any:
1035 (i) pension plan subject to the federal Employee Retirement Income Security Act of
1037 (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
1038 (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
1039 (c) an employer on behalf of the employer's employees or the employees of one or
1040 more of the subsidiary or affiliated corporations of the employer;
1041 (d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance
1042 for which the insurer holds a license in this state; or
1043 (e) a person:
1044 (i) licensed or exempt from licensing under:
1045 (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
1046 Reinsurance Intermediaries; or
1047 (B) Chapter 26, Insurance Adjusters; and
1048 (ii) whose activities are limited to those authorized under the license the person holds
1049 or for which the person is exempt.
1051 owners of real or personal property or the holders of liens or encumbrances on that property, or
1052 others interested in the property against loss or damage suffered by reason of liens or
1053 encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity
1054 or unenforceability of any liens or encumbrances on the property.
1056 organization's statutory capital and surplus as determined in accordance with:
1057 (a) the statutory accounting applicable to the annual financial statements required to be
1058 filed under Section 31A-4-113 ; and
1059 (b) any other items provided by the RBC instructions, as RBC instructions is defined in
1060 Section 31A-17-601 .
1062 a corporation.
1063 (b) "Trustee," when used in reference to an employee welfare fund, means an
1064 individual, firm, association, organization, joint stock company, or corporation, whether acting
1065 individually or jointly and whether designated by that name or any other, that is charged with
1066 or has the overall management of an employee welfare fund.
1068 insurer" means an insurer:
1069 (i) not holding a valid certificate of authority to do an insurance business in this state;
1071 (ii) transacting business not authorized by a valid certificate.
1072 (b) "Admitted insurer" or "authorized insurer" means an insurer:
1073 (i) holding a valid certificate of authority to do an insurance business in this state; and
1074 (ii) transacting business as authorized by a valid certificate.
1078 from or incident to ownership, maintenance, or use of any land vehicle or aircraft, exclusive of
1079 vehicle comprehensive and vehicle physical damage coverages under Subsection [
1081 security convertible into a security with a voting right associated with the security.
1082 (163) "Waiting period" for a health benefit plan means the period that must pass before
1083 coverage for an individual, who is otherwise eligible to enroll under the terms of the health
1084 benefit plan, can become effective.
1086 (a) insurance for indemnification of employers against liability for compensation based
1088 (i) compensable accidental injuries; and
1089 (ii) occupational disease disability;
1090 (b) employer's liability insurance incidental to workers' compensation insurance and
1091 written in connection with workers' compensation insurance; and
1092 (c) insurance assuring to the persons entitled to workers' compensation benefits the
1093 compensation provided by law.
1094 Section 2. Section 31A-8-402.7 is amended to read:
1095 31A-8-402.7. Discontinuance and nonrenewal limitations.
1096 (1) Subject to Section 31A-4-115 , an insurer that elects to discontinue offering a health
1097 benefit plan under Subsections 31A-8-402.3 (3)(e) and 31A-8-402.5 (3)(e) is prohibited from
1098 writing new business:
1099 (a) in the market in this state for which the insurer discontinues or does not renew; and
1100 (b) for a period of five years beginning on the date of discontinuation of the last
1101 coverage that is discontinued.
1102 (2) If an insurer is doing business in one established geographic service area of the
1103 state, Sections 31A-8-402.3 and 31A-8-402.5 apply only to the insurer's operations in that
1104 service area.
1110 Section 3. Section 31A-22-605 is amended to read:
1111 31A-22-605. Accident and health insurance standards.
1112 (1) The purposes of this section include:
1113 (a) reasonable standardization and simplification of terms and coverages of individual
1114 and franchise accident and health insurance policies, including accident and health insurance
1115 contracts of insurers licensed under Chapters 7 and 8, to facilitate public understanding and
1116 comparison in purchasing;
1117 (b) elimination of provisions contained in individual and franchise accident and health
1118 insurance contracts that may be misleading or confusing in connection with either the purchase
1119 of those types of coverages or the settlement of claims; and
1120 (c) full disclosure in the sale of individual and franchise accident and health insurance
1122 (2) As used in this section:
1123 (a) "Direct response insurance policy" means an individual insurance policy solicited
1124 and sold without the policyholder having direct contact with a natural person intermediary.
1125 (b) "Medicare" is defined in Subsection 31A-22-620 (1)(e).
1126 (c) "Medicare supplement policy" is defined in Subsection 31A-22-620 (1)(f).
1127 (3) This section applies to all individual and franchise accident and health policies.
1128 (4) The commissioner shall adopt rules relating to the following matters:
1129 (a) standards for the manner and content of policy provisions, and disclosures to be
1130 made in connection with the sale of policies covered by this section, dealing with at least the
1131 following matters:
1132 (i) terms of renewability;
1133 (ii) initial and subsequent conditions of eligibility;
1134 (iii) nonduplication of coverage provisions;
1135 (iv) coverage of dependents;
1136 (v) preexisting conditions;
1137 (vi) termination of insurance;
1138 (vii) probationary periods;
1139 (viii) limitations;
1140 (ix) exceptions;
1141 (x) reductions;
1142 (xi) elimination periods;
1143 (xii) requirements for replacement;
1144 (xiii) recurrent conditions;
1145 (xiv) coverage of persons eligible for Medicare; and
1146 (xv) definition of terms;
1147 (b) minimum standards for benefits under each of the following categories of coverage
1148 in policies covered in this section:
1149 (i) basic hospital expense coverage;
1150 (ii) basic medical-surgical expense coverage;
1151 (iii) hospital confinement indemnity coverage;
1152 (iv) major medical expense coverage;
1153 (v) income replacement coverage;
1154 (vi) accident only coverage;
1155 (vii) specified disease or specified accident coverage;
1156 (viii) limited benefit health coverage; and
1157 (ix) nursing home and long-term care coverage;
1158 (c) the content and format of the outline of coverage, in addition to that required under
1159 Subsection (6);
1160 (d) the method of identification of policies and contracts based upon coverages
1161 provided; and
1162 (e) rating practices.
1163 (5) Nothing in Subsection (4)(b) precludes the issuance of policies that combine
1164 categories of coverage in that subsection provided that any combination of categories meets the
1165 standards of a component category of coverage.
1166 (6) The commissioner may adopt rules relating to the following matters:
1167 (a) establishing disclosure requirements for insurance policies covered in this section,
1168 designed to adequately inform the prospective insured of the need for and extent of the
1169 coverage offered, and requiring that this disclosure be furnished to the prospective insured with
1170 the application form, unless it is a direct response insurance policy;
1171 (b) (i) prescribing caption or notice requirements designed to inform prospective
1172 insureds that particular insurance coverages are not Medicare Supplement coverages;
1173 (ii) the requirements of Subsection (6)(b)(i) apply to all insurance policies and
1174 certificates sold to persons eligible for Medicare; and
1175 (c) requiring the disclosures or information brochures to be furnished to the
1176 prospective insured on direct response insurance policies, upon his request or, in any event, no
1177 later than the time of the policy delivery.
1178 (7) A policy covered by this section may be issued only if it meets the minimum
1179 standards established by the commissioner under Subsection (4), an outline of coverage
1180 accompanies the policy or is delivered to the applicant at the time of the application, and,
1181 except with respect to direct response insurance policies, an acknowledged receipt is provided
1182 to the insurer. The outline of coverage shall include:
1183 (a) a statement identifying the applicable categories of coverage provided by the policy
1184 as prescribed under Subsection (4);
1185 (b) a description of the principal benefits and coverage;
1186 (c) a statement of the exceptions, reductions, and limitations contained in the policy;
1187 (d) a statement of the renewal provisions, including any reservation by the insurer of a
1188 right to change premiums;
1189 (e) a statement that the outline is a summary of the policy issued or applied for and that
1190 the policy should be consulted to determine governing contractual provisions; and
1191 (f) any other contents the commissioner prescribes.
1192 (8) If a policy is issued on a basis other than that applied for, the outline of coverage
1193 shall accompany the policy when it is delivered and it shall clearly state that it is not the policy
1194 for which application was made.
1211 policies or certificates issued to persons eligible for Medicare shall contain a notice
1212 prominently printed on or attached to the cover or front page which states that the policyholder
1213 or certificate holder has the right to return the policy for any reason within 30 days after its
1214 delivery and to have the premium refunded.
1215 Section 4. Section 31A-22-605.1 is enacted to read:
1216 31A-22-605.1. Preexisting condition limitations.
1217 (1) Any provision dealing with preexisting conditions shall be consistent with this
1218 section, Section 31A-22-609 , and rules adopted by the commissioner.
1219 (2) Except as provided in this section, an insurer that elects to use an application form
1220 without questions concerning the insured's health or medical treatment history shall provide
1221 coverage under the policy for any loss which occurs more than 12 months after the effective
1222 date of coverage due to a preexisting condition which is not specifically excluded from
1224 (3) (a) An insurer that issues a specified disease policy may not deny a claim for loss
1225 due to a preexisting condition that occurs more than six months after the effective date of
1227 (b) A specified disease policy may impose a preexisting condition exclusion only if the
1228 exclusion relates to a preexisting condition which first manifested itself within six months prior
1229 to the effective date of coverage or which was diagnosed by a physician at any time prior to the
1230 effective date of coverage.
1231 (4) (a) Except as provided in this Subsection (4), a health benefit plan may impose a
1232 preexisting condition exclusion only if:
1233 (i) the exclusion relates to a preexisting condition for which medical advice, diagnosis,
1234 care, or treatment was recommended or received within the six-month period ending on the
1235 enrollment date from an individual licensed or similarly authorized to provide those services
1236 under state law and operating within the scope of practice authorized by state law;
1237 (ii) the exclusion period ends no later than 12 months after the enrollment date, or in
1238 the case of a late enrollee, 18 months after the enrollment date; and
1239 (iii) the exclusion period is reduced by the number of days of creditable coverage the
1240 enrollee has as of the enrollment date, in accordance with Subsection (4)(b).
1241 (b) (i) The amount of creditable coverage allowed under Subsection (4)(a)(iii) is
1242 determined by counting all the days on which the individual has one or more types of creditable
1244 (ii) Days of creditable coverage that occur before a significant break in coverage are
1245 not required to be counted.
1246 (A) Days in a waiting period or affiliation period are not taken into account in
1247 determining whether a significant break in coverage has occurred.
1248 (B) For an individual who elects federal COBRA continuation coverage during the
1249 second election period provided under the federal Trade Act of 2002, the days between the date
1250 the individual lost group health plan coverage and the first day of the second COBRA election
1251 period are not taken into account in determining whether a significant break in coverage has
1253 (C) In the case of an individual whose coverage ceases, if a certificate of creditable
1254 coverage with respect to that cessation is not provided on or before the date coverage ceases,
1255 then the period that begins on the first date that an individual has no creditable coverage and
1256 that continues through the earlier of the following two dates is not taken into account in
1257 determining whether a significant break in coverage has occurred:
1258 (I) the date that a certificate of creditable coverage with respect to that cessation is
1259 provided; or
1260 (II) the date 44 days after coverage ceases.
1261 (c) A group health benefit plan may not impose a preexisting condition exclusion
1262 relating to pregnancy.
1263 (d) (i) An insurer imposing a preexisting condition exclusion shall provide a written
1264 general notice of preexisting condition exclusion as part of any written application materials.
1265 (ii) The general notice shall include:
1266 (A) a description of the existence and terms of any preexisting condition exclusion
1267 under the plan, including the six-month period ending on the enrollment date, the maximum
1268 preexisting condition exclusion period, and how the insurer will reduce the maximum
1269 preexisting condition exclusion period by creditable coverage;
1270 (B) a description of the rights of individuals:
1271 (I) to demonstrate creditable coverage, including any applicable waiting periods,
1272 through a certificate of creditable coverage or through other means; and
1273 (II) to request a certificate of creditable coverage from a prior plan;
1274 (C) a statement that the current plan will assist in obtaining a certificate of creditable
1275 coverage from any prior plan or issuer if necessary; and
1276 (D) a person to contact, and an address and telephone number for the person, for
1277 obtaining additional information or assistance regarding the preexisting condition exclusion.
1278 (e) An insurer may not impose any limit on the amount of time that an individual has to
1279 present a certificate or other evidence of creditable coverage.
1280 (f) This Subsection (4) does not preclude application of any waiting period applicable
1281 to all new enrollees under the plan.
1282 Section 5. Section 31A-22-606 is amended to read:
1283 31A-22-606. Policy examination period.
1284 (1) (a) Except as provided in Subsection (2), all accident and health policies shall
1285 contain a notice prominently printed on or attached to the cover or front page stating that the
1286 policyholder has the right to return the policy for any reason within ten days after its delivery.
1287 (b) "Return" means delivery to the insurer or its agent or mailing of the policy to either,
1288 properly addressed and stamped for first class handling, with a written statement on the policy
1289 or an accompanying communication that it is being returned for termination of coverage. A
1290 policy returned under this Subsection (1) is void from the beginning and a policyholder
1291 returning his policy is entitled to a refund of any premium paid.
1292 (2) This section does not apply to:
1293 (a) group policies;
1294 (b) policies issued to persons entitled to a 30-day examination period under Subsection
1295 31A-22-605 [
1296 (c) single premium nonrenewable policies issued for terms not longer than 60 days;
1297 (d) policies covering accidents only or accidental bodily injury only; and
1298 (e) other classes of policies which the commissioner by rule specifies after a finding
1299 that a right to return those policies would be impracticable or unnecessary to protect the
1300 policyholder's interests.
1301 Section 6. Section 31A-22-609 is amended to read:
1302 31A-22-609. Incontestability for accident and health insurance.
1303 (1) (a) A statement made by an applicant [
1306 basis for avoidance of [
1307 disability commencing after the coverage has been in effect for two years.
1308 (b) The insurer has the burden of proving fraud by clear and convincing evidence.
1310 (2) Except as [
1311 claim for loss incurred or disability commencing after two years from the date of issue of the
1312 policy may not be reduced or denied on the ground that a disease or physical condition existed
1313 prior to the effective date of coverage, unless the condition was excluded from coverage by
1314 name or specific description in a provision that was in effect on the date of loss.
1315 (3) Except as provided in Subsection (1)(a), a specified disease policy may not include
1316 wording that provides a defense based upon a disease or physical condition that existed prior to
1317 the effective date of coverage except as allowed under Subsection 31A-22-605.1 (2).
1318 Section 7. Section 31A-22-613 is amended to read:
1319 31A-22-613. Permitted provisions for accident and health insurance policies.
1320 The following provisions may be contained in an accident and health insurance policy,
1321 but if they are in that policy, they shall conform to at least the minimum requirements for the
1322 policyholder in this section.
1323 (1) Any provision respecting change of occupation may provide only for a lower
1324 maximum benefit payment and for reduction of loss payments proportionate to the change in
1325 appropriate premium rates, if the change is to a higher rated occupation, and this provision
1326 shall provide for retroactive reduction of premium rates from the date of change of occupation
1327 or the last policy anniversary date, whichever is the more recent, if the change is to a lower
1328 rated occupation.
1329 (2) Section 31A-22-405 applies to misstatement of age in accident and health policies,
1330 with the appropriate modifications of terminology.
1331 (3) Any policy which contains a provision establishing, as an age limit or otherwise, a
1332 date after which the coverage provided by the policy is not effective, and if that date falls
1333 within a period for which a premium is accepted by the insurer or if the insurer accepts a
1334 premium after that date, the coverage provided by the policy continues in force, subject to any
1335 right of cancellation, until the end of the period for which the premium was accepted. This
1336 Subsection (3) does not apply if the acceptance of premium would not have occurred but for a
1337 misstatement of age by the insured.
1342 contain language which requires an insured to obtain any additional preauthorization or
1343 preapproval for customary and reasonable maternity care expenses or for the delivery of the
1344 child after an initial preauthorization or preapproval has been obtained from the insurer for
1345 prenatal care. A requirement for notice of admission for delivery is not a requirement for
1346 preauthorization or preapproval, however, the maternity benefit may not be denied or
1347 diminished for failure to provide admission notice. The policy may not require the provision of
1348 admission notice by only the insured patient.
1349 (b) This Subsection [
1350 (i) requiring a referral before maternity care can be obtained;
1351 (ii) specifying a group of providers or a particular location from which an insured is
1352 required to obtain maternity care; or
1353 (iii) limiting reimbursement for maternity expenses and benefits in accordance with the
1354 terms and conditions of the insurance contract so long as such terms do not conflict with
1355 Subsection [
1357 (a) offers a vision benefit if the policy:
1358 (i) charges a premium for the benefit; and
1359 (ii) provides reimbursement for materials or services provided under the policy; and
1360 (b) covers laser vision correction, whether photorefractive keratectomy, laser assisted
1361 in-situ keratomelusis, or related procedure, if the policy:
1362 (i) charges a premium for the benefit; and
1363 (ii) the procedure is at least a partially covered benefit.
1364 Section 8. Section 31A-22-620 is amended to read:
1365 31A-22-620. Medicare Supplement Insurance Minimum Standards Act.
1366 (1) As used in this section:
1367 (a) "Applicant" means:
1368 (i) in the case of an individual Medicare supplement policy, the person who seeks to
1369 contract for insurance benefits; and
1370 (ii) in the case of a group Medicare supplement policy, the proposed certificate holder.
1371 (b) "Certificate" means any certificate delivered or issued for delivery in this state
1372 under a group Medicare supplement policy.
1373 (c) "Certificate form" means the form on which the certificate is delivered or issued for
1374 delivery by the issuer.
1375 (d) "Issuer" includes insurance companies, fraternal benefit societies, health care
1376 service plans, health maintenance organizations, and any other entity delivering, or issuing for
1377 delivery in this state, Medicare supplement policies or certificates.
1378 (e) "Medicare" means the "Health Insurance for the Aged Act," Title XVIII of the
1379 Social Security Amendments of 1965, as then constituted or later amended.
1380 (f) "Medicare Supplement Policy":
1381 (i) means a group or individual policy of disability insurance, other than a policy issued
1382 pursuant to a contract under Section 1876 of the federal Social Security Act, 42 U.S.C. Section
1383 1395 et seq., or an issued policy under a demonstration project specified in 41 U.S.C. Section
1384 1395ss(g)(1), that is advertised, marketed, or designed primarily as a supplement to
1385 reimbursements under Medicare for the hospital, medical, or surgical expenses of persons
1386 eligible for Medicare[
1387 (ii) does not include Medicare Advantage plans established under Medicare Part C,
1388 outpatient prescription drug plans established under Medicare Part D, or any health care
1389 prepayment plan that provides benefits pursuant to an agreement under Section 1833(a)(1)(A)
1390 of the Social Security Act.
1391 (g) "Policy form" means the form on which the policy is delivered or issued for
1392 delivery by the issuer.
1393 (2) (a) Except as otherwise specifically provided, this section applies to:
1394 (i) all Medicare supplement policies delivered or issued for delivery in this state on or
1395 after the effective date of this section;
1396 (ii) all certificates issued under group Medicare supplement policies, that have been
1397 delivered or issued for delivery in this state on or after the effective date of this section; and
1398 (iii) policies or certificates that were in force prior to the effective date of this section,
1399 with respect to requirements for benefits, claims payment, and policy reporting practice under
1400 Subsection (3)(d), and loss ratios under Subsection (4).
1401 (b) This section does not apply to a policy of one or more employers or labor
1402 organizations, or of the trustees of a fund established by one or more employers or labor
1403 organizations, or a combination of employers and labor unions, for employees or former
1404 employees or a combination of employees and former employees, or for members or former
1405 members of the labor organizations, or a combination of members and former members of
1406 labor organizations.
1407 (c) This section does not prohibit, nor does it apply to insurance policies or health care
1408 benefit plans, including group conversion policies, provided to Medicare eligible persons that
1409 are not marketed or held out to be Medicare supplement policies or benefit plans.
1410 (3) (a) A Medicare supplement policy or certificate in force in the state may not contain
1411 benefits that duplicate benefits provided by Medicare.
1412 (b) Notwithstanding any other provision of law of this state, a Medicare supplement
1413 policy or certificate may not exclude or limit benefits for loss incurred more than six months
1414 from the effective date of coverage because it involved a preexisting condition. The policy or
1415 certificate may not define a preexisting condition more restrictively than: "A condition for
1416 which medical advice was given or treatment was recommended by or received from a
1417 physician within six months before the effective date of coverage."
1418 (c) The commissioner shall adopt rules to establish specific standards for policy
1419 provisions of Medicare supplement policies and certificates. The standards adopted shall be in
1420 addition to and in accordance with applicable laws of this state. A requirement of this title
1421 relating to minimum required policy benefits, other than the minimum standards contained in
1422 this section, may not apply to Medicare supplement policies and certificates. The standards
1423 may include:
1424 (i) terms of renewability;
1425 (ii) initial and subsequent conditions of eligibility;
1426 (iii) nonduplication of coverage;
1427 (iv) probationary periods;
1428 (v) benefit limitations, exceptions, and reductions;
1429 (vi) elimination periods;
1430 (vii) requirements for replacement;
1431 (viii) recurrent conditions; and
1432 (ix) definitions of terms.
1433 (d) The commissioner shall adopt rules establishing minimum standards for benefits,
1434 claims payment, marketing practices, compensation arrangements, and reporting practices for
1435 Medicare supplement policies and certificates.
1436 (e) The commissioner may adopt [
1437 supplement policies and certificates to the requirements of federal law and regulations
1439 (i) requiring refunds or credits if the policies do not meet loss ratio requirements;
1440 (ii) establishing a uniform methodology for calculating and reporting loss ratios;
1441 (iii) assuring public access to policies, premiums, and loss ratio information of issuers
1442 of Medicare supplement insurance;
1443 (iv) establishing a process for approving or disapproving policy forms and certificate
1444 forms and proposed premium increases;
1445 (v) establishing a policy for holding public hearings prior to approval of premium
1446 increases; and
1447 (vi) establishing standards for Medicare select policies and certificates.
1448 (f) The commissioner may adopt rules that prohibit policy provisions not otherwise
1449 specifically authorized by statute that, in the opinion of the commissioner, are unjust, unfair, or
1450 unfairly discriminatory to any person insured or proposed to be insured under a Medicare
1451 supplement policy or certificate.
1452 (4) Medicare supplement policies shall return to policyholders benefits that are
1453 reasonable in relation to the premium charged. The commissioner shall make rules to establish
1454 minimum standards for loss ratios of Medicare supplement policies on the basis of incurred
1455 claims experience, or incurred health care expenses where coverage is provided by a health
1456 maintenance organization on a service basis rather than on a reimbursement basis, and earned
1457 premiums in accordance with accepted actuarial principles and practices.
1458 (5) (a) To provide for full and fair disclosure in the sale of Medicare supplement
1459 policies, a Medicare supplement policy or certificate may not be delivered in this state unless
1460 an outline of coverage is delivered to the applicant at the time application is made.
1461 (b) The commissioner shall prescribe the format and content of the outline of coverage
1462 required by Subsection (5)(a).
1463 (c) For purposes of this section, "format" means style arrangements and overall
1464 appearance, including such items as the size, color, and prominence of type and arrangement of
1465 text and captions. The outline of coverage shall include:
1466 (i) a description of the principal benefits and coverage provided in the policy;
1467 (ii) a statement of the renewal provisions, including any reservation by the issuer of a
1468 right to change premiums; and disclosure of the existence of any automatic renewal premium
1469 increases based on the policyholder's age; and
1470 (iii) a statement that the outline of coverage is a summary of the policy issued or
1471 applied for and that the policy should be consulted to determine governing contractual
1473 (d) The commissioner may make rules for captions or notice if the commissioner finds
1474 that the rules are:
1475 (i) in the public interest; and
1476 (ii) designed to inform prospective insureds that particular insurance coverages are not
1477 Medicare supplement coverages, for all accident and health insurance policies sold to persons
1478 eligible for Medicare, other than:
1479 (A) a medicare supplement policy; or
1480 (B) a disability income policy.
1481 (e) The commissioner may prescribe by rule a standard form and the contents of an
1482 informational brochure for persons eligible for Medicare, that is intended to improve the
1483 buyer's ability to select the most appropriate coverage and improve the buyer's understanding of
1484 Medicare. Except in the case of direct response insurance policies, the commissioner may
1485 require by rule that the informational brochure be provided concurrently with delivery of the
1486 outline of coverage to any prospective insureds eligible for Medicare. With respect to direct
1487 response insurance policies, the commissioner may require by rule that the prescribed brochure
1488 be provided upon request to any prospective insureds eligible for Medicare, but in no event
1489 later than the time of policy delivery.
1490 (f) The commissioner may adopt reasonable rules to govern the full and fair disclosure
1491 of the information in connection with the replacement of accident and health policies,
1492 subscriber contracts, or certificates by persons eligible for Medicare.
1493 (6) Notwithstanding Subsection (1), Medicare supplement policies and certificates
1494 shall have a notice prominently printed on the first page of the policy or certificate, or attached
1495 to the front page, stating in substance that the applicant has the right to return the policy or
1496 certificate within 30 days of its delivery and to have the premium refunded if, after examination
1497 of the policy or certificate, the applicant is not satisfied for any reason. Any refund made
1498 pursuant to this section shall be paid directly to the applicant by the issuer in a timely manner.
1499 (7) Every issuer of Medicare supplement insurance policies or certificates in this state
1500 shall provide a copy of any Medicare supplement advertisement intended for use in this state,
1501 whether through written or broadcast medium, to the commissioner for review.
1502 Section 9. Section 31A-22-629 is amended to read:
1503 31A-22-629. Adverse benefit determination review process.
1504 (1) As used in this section:
1505 (a) (i) "Adverse benefit determination" means the:
1506 (A) denial of a benefit;
1507 (B) reduction of a benefit;
1508 (C) termination of a benefit; or
1509 (D) failure to provide or make payment, in whole or in part, for a benefit.
1510 (ii) "Adverse benefit determination" includes:
1511 (A) denial, reduction, termination, or failure to provide or make payment that is based
1512 on a determination of an insured's or a beneficiary's eligibility to participate in a plan;
1513 (B) with respect to individual or group health plans, and income replacement or
1514 disability income policies, a denial, reduction, or termination of, or a failure to provide or make
1515 payment, in whole or in part, for, a benefit resulting from the application of a utilization
1516 review; and
1517 (C) failure to cover an item or service for which benefits are otherwise provided
1518 because it is determined to be:
1519 (I) experimental;
1520 (II) investigational; or
1521 (III) not medically necessary or appropriate.
1522 (b) "Independent review" means a process that:
1523 (i) is a voluntary option for the resolution of an adverse benefit determination;
1524 (ii) is conducted at the discretion of the claimant;
1525 (iii) is conducted by an independent review organization designated by the insurer;
1526 (iv) renders an independent and impartial decision on an adverse benefit determination
1527 submitted by an insured; and
1528 (v) may not require the insured to pay a fee for requesting the independent review.
1529 (c) "Insured" is as defined in Section 31A-1-301 and includes a person who is
1530 authorized to act on the insured's behalf.
1531 (d) "Insurer" is as defined in Section 31A-1-301 and includes:
1532 (i) a health maintenance organization; and
1533 (ii) a third-party administrator that offers, sells, manages, or administers a health
1534 insurance policy or health maintenance organization contract that is subject to this title.
1535 (e) "Internal review" means the process an insurer uses to review an insured's adverse
1536 benefit determination before the adverse benefit determination is submitted for independent
1538 (2) This section applies generally to health insurance policies, health maintenance
1539 organization contracts, and income replacement or disability income policies.
1540 (3) (a) An insured may submit an adverse benefit determination to the insurer.
1541 (b) The insurer shall conduct an internal review of the insured's adverse benefit
1543 (c) An insured who disagrees with the results of an internal review may submit the
1544 adverse benefit determination for an independent review if the adverse benefit determination
1545 involves payment of a claim regarding medical necessity or denial of [
1546 regarding medical necessity.
1547 (4) Before October 1, 2000, the commissioner shall adopt rules that establish minimum
1548 standards for:
1549 (a) internal reviews;
1550 (b) independent reviews to ensure independence and impartiality;
1551 (c) the types of adverse benefit determinations that may be submitted to an independent
1552 review; and
1553 (d) the timing of the review process, including an expedited review when medically
1555 (5) Nothing in this section may be construed as:
1556 (a) expanding, extending, or modifying the terms of a policy or contract with respect to
1557 benefits or coverage;
1558 (b) permitting an insurer to charge an insured for the internal review of an adverse
1559 benefit determination;
1560 (c) restricting the use of arbitration in connection with or subsequent to an independent
1561 review; or
1562 (d) altering the legal rights of any party to seek court or other redress in connection
1564 (i) an adverse decision resulting from an independent review, except that if the insurer
1565 is the party seeking legal redress, the insurer shall pay for the reasonable attorneys' fees of the
1566 insured related to the action and court costs; or
1567 (ii) an adverse benefit determination or other claim that is not eligible for submission
1568 to independent review.
1569 Section 10. Section 31A-22-723 is amended to read:
1570 31A-22-723. Group and blanket conversion coverage.
1571 (1) Notwithstanding Subsection 31A-1-103 (3)(f), and except as provided in Subsection
1572 (3), all policies of accident and health insurance offered on a group basis under this title, or
1573 Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act, shall provide that
1574 a person whose insurance under the group policy has been terminated is entitled to choose a
1575 converted individual policy of similar accident and health insurance.
1576 (2) A person who has lost group coverage may elect conversion coverage with the
1577 insurer that provided prior group coverage if the person:
1578 (a) has been continuously covered under a group policy for a period of six months
1579 immediately prior to termination; [
1580 (b) has exhausted either Utah mini-COBRA coverage as required in Section
1581 31A-22-722 or federal COBRA coverage, if offered; and
1582 (c) has not acquired or is not covered under any other group coverage that covers all
1583 preexisting conditions, including maternity, if the coverage exists.
1584 (3) This section does not apply if the person's prior group coverage:
1585 (a) is a stand alone policy that only provides one of the following:
1586 (i) catastrophic benefits;
1587 (ii) aggregate stop loss benefits;
1588 (iii) specific stop loss benefits;
1589 (iv) benefits for specific diseases;
1590 (v) accidental injuries only;
1591 (vi) dental; or
1592 (vii) vision;
1593 (b) is an income replacement policy; [
1594 (c) was terminated because the insured:
1595 (i) failed to pay any required individual contribution;
1596 (ii) performed an act or practice that constitutes fraud in connection with the coverage;
1598 (iii) made intentional misrepresentation of material fact under the terms of coverage[
1600 (d) was terminated pursuant to Subsection 31A-8-402.3 (2)(a), 31A-22-721 (2)(a), or
1601 31A-30-107 (2)(a).
1602 (4) (a) The employer shall provide written notification of the right to an individual
1603 conversion policy within 30 days of the insured's termination of coverage to:
1604 (i) the terminated insured;
1605 (ii) the ex-spouse; or
1606 (iii) in the case of the death of the insured:
1607 (A) the surviving spouse; [
1608 (B) the guardian of any dependents, if different from a surviving spouse.
1609 (b) The notification required by Subsection (4)(a) shall:
1610 (i) be sent by first class mail;
1611 (ii) contain the name, address, and telephone number of the insurer that will provide
1612 the conversion coverage; and
1613 (iii) be sent to the insured's last-known address as shown on the records of the
1614 employer of:
1615 (A) the insured;
1616 (B) the ex-spouse; and
1617 (C) if the policy terminates by reason of the death of the insured to:
1618 (I) the surviving spouse; [
1619 (II) the guardian of any dependents, if different from a surviving spouse.
1620 (5) (a) An insurer is not required to issue a converted policy which provides benefits in
1621 excess of those provided under the group policy from which conversion is made.
1622 (b) Except as provided in Subsection (5)(c), if the conversion is made from a health
1623 benefit plan, the employee or member must be offered at least the basic benefit plan as
1624 provided in Subsection 31A-22-613.5 (2)(a).
1625 (c) If the benefit levels required under Subsection (5)(b) exceed the benefit levels
1626 provided under the group policy, the conversion policy may offer benefits which are
1627 substantially similar to those provided under the group policy.
1628 (6) Written application for the converted policy shall be made and the first premium
1629 paid to the insurer no later than 60 days after termination of the group accident and health
1631 (7) The converted policy shall be issued without evidence of insurability.
1632 (8) (a) The initial premium for the converted policy for the first 12 months and
1633 subsequent renewal premiums shall be determined in accordance with premium rates
1634 applicable to age, class of risk of the person, and the type and amount of insurance provided.
1635 (b) The initial premium for the first 12 months may not be raised based on pregnancy
1636 of a covered insured.
1637 (c) The premium for converted policies shall be payable monthly or quarterly as
1638 required by the insurer for the policy form and plan selected, unless another mode or premium
1639 payment is mutually agreed upon.
1640 (9) The converted policy becomes effective at the time the insurance under the group
1641 policy terminates.
1642 (10) (a) A newly issued converted policy covers the employee or the member and must
1643 also cover all dependents covered by the group policy at the date of termination of the group
1645 (b) The only dependents that may be added after the policy has been issued are children
1646 and dependents as required by Section 31A-22-610 and Subsections 31A-22-610.5 (6) and (7).
1647 (c) At the option of the insurer, a separate converted policy may be issued to cover any
1649 (11) (a) To the extent the group policy provided maternity benefits, the conversion
1650 policy shall provide maternity benefits equal to the lesser of the maternity benefits of the group
1651 policy or the conversion policy until termination of a pregnancy that exists on the date of
1652 conversion if one of the following is pregnant on the date of the conversion:
1653 (i) the insured;
1654 (ii) a spouse of the insured; or
1655 (iii) a dependent of the insured.
1656 (b) The requirements of this Subsection (11) do not apply to a pregnancy that occurs
1657 after the date of conversion.
1658 (12) Except as provided in this Subsection (12), a converted policy is renewable with
1659 respect to all individuals or dependents at the option of the insured. An insured may be
1660 terminated from a converted policy for the following reasons:
1661 (a) a dependent is no longer eligible under the policy;
1662 (b) for a network plan, if the individual no longer lives, resides, or works in:
1663 (i) the insured's service area; or
1664 (ii) the area for which the covered carrier is authorized to do business; or
1665 (c) the individual fails to pay premiums or contributions in accordance with the terms
1666 of the converted policy, including any timeliness requirements;
1667 (d) the individual performs an act or practice that constitutes fraud in connection with
1668 the coverage;
1669 (e) the individual makes an intentional misrepresentation of material fact under the
1670 terms of the coverage; or
1671 (f) coverage is terminated uniformly without regard to any health status-related factor
1672 relating to any covered individual.
1673 (13) Conditions pertaining to health may not be used as a basis for classification under
1674 this section.
1675 Section 11. Section 31A-29-103 is amended to read:
1676 31A-29-103. Definitions.
1677 As used in this chapter:
1678 (1) "Board" means the board of directors of the pool created in Section 31A-29-104 .
1679 (2) (a) "Creditable coverage" has the same meaning as provided in [
1682 (b) "Creditable coverage" does not include a period of time in which there is a
1683 significant break in coverage [
1685 Section 31A-1-301 .
1686 (3) "Domicile" means the place where an individual has a fixed and permanent home
1687 and principal establishment:
1688 (a) to which the individual, if absent, intends to return; and
1689 (b) in which the individual, and the individual's family voluntarily reside, not for a
1690 special or temporary purpose, but with the intention of making a permanent home.
1691 (4) "Enrollee" means an individual who has met the eligibility requirements of the pool
1692 and is covered by a pool policy under this chapter.
1693 (5) "Health care facility" means any entity providing health care services which is
1694 licensed under Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act.
1695 (6) "Health care provider" has the same meaning as provided in Section 78-14-3 .
1696 (7) "Health care services" means:
1697 (a) any service or product:
1698 (i) used in furnishing to any individual medical care or hospitalization; or
1699 (ii) incidental to furnishing medical care or hospitalization; and
1700 (b) any other service or product furnished for the purpose of preventing, alleviating,
1701 curing, or healing human illness or injury.
1702 (8) (a) "Health insurance" means any:
1703 (i) hospital and medical expense-incurred policy;
1704 (ii) nonprofit health care service plan contract; or
1705 (iii) health maintenance organization subscriber contract.
1706 (b) "Health insurance" does not mean:
1707 (i) any insurance arising out of Title 34A, Chapter 2 or 3, or similar law;
1708 (ii) automobile medical payment insurance; or
1709 (iii) insurance under which benefits are payable with or without regard to fault and
1710 which is required by law to be contained in any liability insurance policy.
1711 (9) "Health maintenance organization" has the same meaning as provided in Section
1712 31A-8-101 .
1713 (10) (a) "Health plan" means any arrangement by which an individual, including a
1714 dependent or spouse, covered or making application to be covered under the pool has:
1715 (i) access to hospital and medical benefits or reimbursement including group or
1716 individual insurance or subscriber contract;
1717 (ii) coverage through:
1718 (A) a health maintenance organization;
1719 (B) a preferred provider prepayment;
1720 (C) group practice; or
1721 (D) individual practice plan;
1722 (iii) coverage under an uninsured arrangement of group or group-type contracts
1723 including employer self-insured, cost-plus, or other benefits methodologies not involving
1725 (iv) coverage under a group type contract which is not available to the general public
1726 and can be obtained only because of connection with a particular organization or group; and
1727 (v) coverage by Medicare or other governmental benefit.
1728 (b) "Health plan" includes coverage through health insurance.
1729 (11) "HIPAA" means the Health Insurance Portability and Accountability Act of 1996,
1730 Pub. L. [
1731 (12) "HIPAA eligible" means an individual who is eligible under the provisions of the
1732 Health Insurance Portability and Accountability Act of 1996, Pub. L. [
1734 (13) "Insurer" means:
1735 (a) an insurance company authorized to transact accident and health insurance business
1736 in this state;
1737 (b) a health maintenance organization; and
1738 (c) a self-insurer not subject to federal preemption.
1739 (14) "Medicaid" means coverage under Title XIX of the Social Security Act, 42 U.S.C.
1740 Sec. 1396 et seq., as amended.
1741 (15) "Medicare" means coverage under both Part A and B of Title XVIII of the Social
1742 Security Act, 42 U.S.C. 1395 et seq., as amended.
1743 (16) "Plan of operation" means the plan developed by the board in accordance with
1744 Section 31A-29-105 and includes the articles, bylaws, and operating rules adopted by the board
1745 under Section 31A-29-106 .
1746 (17) "Pool" means the Utah Comprehensive Health Insurance Pool created in Section
1747 31A-29-104 .
1748 (18) "Pool fund" means the Comprehensive Health Insurance Pool Enterprise Fund
1749 created in Section 31A-29-120 .
1750 (19) "Pool policy" means a health insurance policy issued under this chapter.
1751 (20) "Preexisting condition" [
1754 meaning as defined in Section 31A-1-301 .
1755 (21) (a) "Resident" or "residency" means a person who is domiciled in this state.
1756 (b) A resident retains residency if that resident leaves this state:
1757 (i) to serve in the armed forces of the United States; or
1758 (ii) for religious or educational purposes.
1759 (22) "Third-party administrator" has the same meaning as provided in Section
1760 31A-1-301 .
1761 Section 12. Section 31A-29-110 is amended to read:
1762 31A-29-110. Pool administrator -- Selection -- Powers.
1763 (1) The board shall select a pool administrator in accordance with Title 63, Chapter 56,
1764 Utah Procurement Code. The board shall evaluate bids based on criteria established by the
1765 board, which shall include:
1766 (a) ability to manage medical expenses;
1767 (b) proven ability to handle accident and health insurance;
1768 (c) efficiency of claim paying procedures;
1769 (d) marketing and underwriting;
1770 (e) proven ability for managed care and quality assurance;
1771 (f) provider contracting and discounts;
1772 (g) pharmacy benefit management;
1773 (h) an estimate of total charges for administering the pool; and
1774 (i) ability to administer the pool in a cost-efficient manner.
1775 (2) A pool administrator may be:
1776 (a) a health insurer;
1777 (b) a health maintenance organization;
1778 (c) a third-party administrator; or
1779 (d) any person or entity which has demonstrated ability to meet the criteria in
1780 Subsection (1).
1781 (3) (a) The pool administrator shall serve for a period of three years [
1783 limitations of the contract between the board and the administrator.
1784 (b) At least one year prior to the expiration of [
1785 contract between the board and the pool administrator, the board shall invite all interested
1786 parties, including the current pool administrator, to submit bids to serve as the pool
1787 administrator [
1788 (c) Selection of the pool administrator for a succeeding period shall be made at least
1789 six months prior to the expiration of a three-year period of service by the pool administrator.
1790 (4) The pool administrator is responsible for all operational functions of the pool and
1792 (a) have access to all nonpatient specific experience data, statistics, treatment criteria,
1793 and guidelines compiled or adopted by the Medicaid program, the Public Employees Health
1794 Plan, the Department of Health, or the Insurance Department, and which are not otherwise
1795 declared by statute to be confidential;
1796 (b) perform all marketing, eligibility, enrollment, member agreements, and
1797 administrative claim payment functions relating to the pool;
1798 (c) establish, administer, and operate a monthly premium billing procedure for
1799 collection of premiums from enrollees;
1800 (d) perform all necessary functions to assure timely payment of benefits to enrollees,
1802 (i) making information available relating to the proper manner of submitting a claim
1803 for benefits to the pool administrator and distributing forms upon which submission shall be
1804 made; and
1805 (ii) evaluating the eligibility of each claim for payment by the pool;
1806 (e) submit regular reports to the board regarding the operation of the pool, the
1807 frequency, content, and form of which reports shall be determined by the board;
1808 (f) following the close of each calendar year, determine net written and earned
1809 premiums, the expense of administration, and the paid and incurred losses for the year and
1810 submit a report of this information to the board, the commissioner, and the Division of Finance
1811 on a form prescribed by the commissioner; and
1812 (g) be paid as provided in the plan of operation for expenses incurred in the
1813 performance of the pool administrator's services.
1814 Section 13. Section 31A-29-111 is amended to read:
1815 31A-29-111. Eligibility -- Limitations.
1816 (1) (a) Except as provided in Subsections (1)(b) and (2), an individual who is not
1817 HIPAA eligible is eligible for pool coverage if the individual:
1818 (i) pays the established premium;
1819 (ii) is a resident of this state; and
1820 (iii) meets the health underwriting criteria under Subsection (5)(a).
1821 (b) Notwithstanding Subsection (1)(a), an individual who is not HIPAA eligible is not
1822 eligible for pool coverage if one or more of the following conditions apply:
1823 (i) the individual is eligible for health care benefits under Medicaid or Medicare,
1824 except as provided in Section 31A-29-112 ;
1825 (ii) the individual has terminated coverage in the pool, unless:
1826 (A) 12 months have elapsed since the termination date; or
1827 (B) the individual demonstrates that creditable coverage has been involuntarily
1828 terminated for any reason other than nonpayment of premium;
1829 (iii) the pool has paid the maximum lifetime benefit to or on behalf of the individual;
1830 (iv) the individual is an inmate of a public institution;
1831 (v) the individual is eligible for [
1833 (vi) the individual's health condition does not meet the criteria established under
1834 Subsection (5);
1835 (vii) the individual is eligible for coverage under an employer group that offers health
1836 insurance or a self-insurance arrangement to its eligible employees, dependents, or members as:
1837 (A) an eligible employee;
1838 (B) a dependent of an eligible employee; or
1839 (C) a member;
1840 (viii) the individual:
1841 (A) has coverage substantially equivalent to a pool policy, as established by the board
1842 in administrative rule, either as an insured or a covered dependent; or
1843 (B) would be eligible for the substantially equivalent coverage if the individual elected
1844 to obtain the coverage; or
1845 (ix) at the time of application, the individual has not resided in Utah for at least 12
1846 consecutive months preceding the date of application.
1847 (2) (a) Except as provided in Subsections (1) and (2)(b), an individual who is HIPAA
1848 eligible is eligible for pool coverage if the individual:
1849 (i) pays the established premium; and
1850 (ii) is a resident of this state.
1851 (b) Notwithstanding Subsections (1) and (2)(a), a HIPAA eligible individual is not
1852 eligible for pool coverage if one or more of the following conditions apply:
1853 (i) the individual is eligible for health care benefits under Medicaid or Medicare,
1854 except as provided in Section 31A-29-112 ;
1855 (ii) the individual is eligible for [
1858 (iii) the individual is covered under any other health insurance;
1859 (iv) the individual is eligible for coverage under an employer group that offers health
1860 insurance or self-insurance arrangements to its eligible employees, dependents, or members as:
1861 (A) an eligible employee;
1862 (B) a dependent of an eligible employee; or
1863 (C) a member;
1864 (v) the pool has paid the maximum lifetime benefit to or on behalf of the individual; or
1865 (vi) the individual is an inmate of a public institution.
1866 (3) (a) Notwithstanding Subsection (1)(b)(ix), if otherwise eligible under Subsection
1867 (1)(a), an individual whose health insurance coverage from a state high risk pool with similar
1868 coverage is terminated because of nonresidency in another state [
1869 coverage under the pool subject to the conditions of Subsections (1)(b)(i) through (viii).
1870 (b) Coverage sought under Subsection (3)(a) shall be applied for within 63 days after
1871 the termination date of the previous high risk pool coverage.
1872 (c) The effective date of this state's pool coverage shall be the date of termination of the
1873 previous high risk pool coverage.
1874 (d) The waiting period of an individual with a preexisting condition applying for
1875 coverage under this chapter shall be waived:
1876 (i) to the extent to which the waiting period was satisfied under a similar plan from
1877 another state; and
1878 (ii) if the other state's benefit limitation was not reached.
1879 (4) (a) If an eligible individual applies for pool coverage within 30 days of being
1880 denied coverage by an individual carrier, the effective date for pool coverage shall be no later
1881 than the first day of the month following the date of submission of the completed insurance
1882 application to the carrier.
1883 (b) Notwithstanding Subsection (4)(a), for individuals eligible for coverage under
1884 Subsection (3), the effective date shall be the date of termination of the previous high risk pool
1886 (5) (a) The board shall establish and adjust, as necessary, health underwriting criteria
1887 based on:
1888 (i) health condition; and
1889 (ii) expected claims so that the expected claims are anticipated to remain within
1890 available funding.
1891 (b) The board, with approval of the commissioner, may contract with one or more
1892 providers under Title 63, Chapter 56, Utah Procurement Code, to develop underwriting criteria
1893 under Subsection (5)(a).
1894 (c) If an individual is denied coverage by the pool under the criteria established in
1895 Subsection (5)(a), the pool shall issue a certificate of insurability to the individual for coverage
1896 under Subsection 31A-30-108 (3).
1897 Section 14. Section 31A-29-113 is amended to read:
1898 31A-29-113. Benefits -- Additional types of pool insurance -- Preexisting
1899 conditions -- Waiver -- Maximum benefits.
1900 (1) (a) The pool policy shall pay for eligible medical expenses rendered or furnished
1901 for the diagnoses or treatment of illness or injury that:
1902 (i) exceed the deductible and copayment amounts applicable under Section
1903 31A-29-114 ; and
1904 (ii) are not otherwise limited or excluded.
1905 (b) Eligible medical expenses are the allowed charges established by the board for the
1906 health care services and items rendered during times for which benefits are extended under the
1907 pool policy.
1908 (2) The coverage to be issued by the pool, its schedule of benefits, exclusions, and
1909 other limitations shall be established by the board.
1910 (3) The commissioner shall approve the benefit package developed by the board to
1911 ensure its compliance with this chapter.
1912 (4) The pool shall offer at least one benefit plan through a managed care program as
1913 authorized under Section 31A-29-106 .
1914 (5) This chapter may not be construed to prohibit the pool from issuing additional types
1915 of pool policies with different types of benefits which in the opinion of the board may be of
1916 benefit to the citizens of Utah.
1917 (6) (a) The board shall design and require an administrator to employ cost containment
1918 measures and requirements including preadmission certification and concurrent inpatient
1919 review for the purpose of making the pool more cost effective.
1920 (b) Sections 31A-22-617 and 31A-22-618 do not apply to coverage issued under this
1922 (7) (a) A pool policy may contain provisions under which coverage for a preexisting
1923 condition is excluded [
1924 (i) the exclusion relates to a condition, regardless of the cause of the condition, for
1925 which medical advice, diagnosis, care, or treatment was recommended or received, from an
1926 individual licensed or similarly authorized to provide such services under state law and
1927 operating within the scope of practice authorized by state law, within the six-month period
1928 ending on the effective date of plan coverage; and
1929 (ii) except as provided in Subsection (8), the exclusion extends for a period no longer
1930 than the six-month period following the effective date of plan coverage for a given individual.
1931 (b) Subsection (7)(a) does not apply to a HIPAA eligible individual.
1932 (8) (a) A pool policy may contain provisions under which coverage for a preexisting
1933 pregnancy is excluded during a ten-month period following the effective date of plan coverage
1934 for a given individual.
1935 (b) Subsection (8)(a) does not apply to a HIPAA eligible individual.
1936 (9) (a) The pool will waive the preexisting condition exclusion described in
1937 Subsections (7)(a) and (8)(a) for an individual that is changing health coverage to the pool, to
1938 the extent to which similar exclusions have been satisfied under any prior health insurance
1939 coverage if the individual applies not later than 63 days following the date of involuntary
1940 termination, other than for nonpayment of premiums, from health coverage.
1941 (b) If this Subsection (9) applies, coverage in the pool shall be effective from the date
1942 on which the prior coverage was terminated.
1943 (10) Covered benefits available from the pool may not exceed a $1,000,000 lifetime
1944 maximum, which includes a per enrollee calendar year maximum established by the board.
1945 Section 15. Section 31A-30-107.5 is amended to read:
1946 31A-30-107.5. Preexisting condition exclusion -- Condition-specific exclusion
1947 riders -- Limitation periods.
1948 (1) A health benefit plan may impose a preexisting condition exclusion only if[
1949 provision complies with Subsection 31A-22-605.1 (4).
1986 condition-specific exclusion rider, offer to issue an individual policy that excludes all treatment
1987 and prescription drugs related to a specific physical condition, or any specific or class of
1988 prescription drugs consistent with Subsection [
1990 requirements including, deductibles and maximum limits that are specific to covered services
1991 and supplies, including specific drugs, when utilized for the treatment and care of the
1992 conditions listed in Subsection [
1993 (b) (i) The following may be the subject of a condition-specific exclusion rider except
1994 when a mastectomy has been performed or the condition is due to cancer:
1995 (A) conditions of the bones or joints of the ankle, arm, elbow, foot, hand, hip, knee,
1996 leg, wrist, shoulder, spine, and toes, including bone spurs, bunions, carpal tunnel syndrome,
1997 club foot, hammertoe, syndactylism, and treatment and prosthetic devices related to
1999 (B) anal fistula, breast implants, breast reduction, cystocele, rectocele enuresis,
2000 hemorrhoids, hydrocele, hypospadius, uterine leiomyoma, varicocele, spermatocele,
2002 (C) deviated nasal septum, and other sinus related conditions;
2003 (D) goiter and other thyroid related conditions, hemangioma, hernia, keloids,
2004 migraines, scar revisions, varicose veins, abdominoplasty;
2005 (E) cataracts, cornia transplant, detached retina, glaucoma, keratoconus, macular
2006 degeneration, strabismus;
2007 (F) Baker's cyst;
2008 (G) allergies; and
2009 (H) any specific or class of prescription drugs.
2010 (ii) A condition-specific exclusion rider:
2011 (A) shall be limited to the excluded condition;
2012 (B) may not extend to any secondary medical condition that may or may not be directly
2013 related to the excluded condition; and
2014 (C) must include the following informed consent paragraph: "I agree by signing below,
2015 to the terms of this rider, which excludes coverage for all treatment, including medications,
2016 related to specific condition(s) stated herein and that if treatment or medications are received
2017 that I have the responsibility for payment for those services and items. I further understand that
2018 this rider does not extend to any secondary medical condition that may or may not be directly
2019 related to the excluded condition(s) herein.
2021 impose a limitation period if:
2022 (a) each policy that imposes a limitation period under the health benefit plan specifies
2023 the physical condition that is excluded from coverage during the limitation period;
2024 (b) the limitation period does not exceed 12 months;
2025 (c) the limitation period is applied uniformly; and
2026 (d) the limitation period is reduced in compliance with [
2027 31A-22-605.1 (4)(a) and (4)(b).
Legislative Review Note
as of 1-25-05 6:56 AM
Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.