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S.B. 40

             1     

REGULATION OF TITLE INSURANCE

             2     
INDUSTRY

             3     
2005 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Thomas V. Hatch

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill enacts the Title and Escrow Commission Act and makes conforming
             10      amendments.
             11      Highlighted Provisions:
             12          This bill:
             13          .    defines terms;
             14          .    enacts the Title and Escrow Commission Act which creates the commission and sets
             15      out the duties of the commission and the commissioner;
             16          .    addresses special provisions related to rate standards and rating methods for title
             17      insurance insurers, agencies, and producers;
             18          .    requires the concurrence of the commission for licensing in the title insurance line
             19      of authority including adjusters;
             20          .    authorizes the commission to make rules creating different categories of the title
             21      insurance lines of authority with the concurrence of the commissioner;
             22          .    addresses special requirements for title insurance producers;
             23          .    authorizes the commission to make rules related to unfair practices;
             24          .    provides that a title insurance producer shall comply with rules adopted by the
             25      commission that govern escrows;
             26          .    authorizes the commission, after consulting with the commissioner, to set the
             27      assessment on title insurance agencies or insurers;


             28          .    addresses provisions related to controlled business;
             29          .    authorizes the commission by rule to recognize other independent adjustor or public
             30      adjuster license classifications related to title insurance and to create license
             31      classifications that grant only part of the authority arising under a license class; and
             32          .    makes technical changes.
             33      Monies Appropriated in this Bill:
             34          None
             35      Other Special Clauses:
             36          This bill provides an effective date.
             37      Utah Code Sections Affected:
             38      AMENDS:
             39          31A-19a-209, as last amended by Chapters 252 and 298, Laws of Utah 2003
             40          31A-23a-105, as last amended by Chapter 173, Laws of Utah 2004
             41          31A-23a-106, as last amended by Chapter 81 and renumbered and amended by Chapter
             42      298, Laws of Utah 2003
             43          31A-23a-108, as renumbered and amended by Chapter 298, Laws of Utah 2003
             44          31A-23a-204, as renumbered and amended by Chapter 298, Laws of Utah 2003
             45          31A-23a-402, as renumbered and amended by Chapter 298, Laws of Utah 2003
             46          31A-23a-406, as last amended by Chapter 117, Laws of Utah 2004
             47          31A-23a-415, as renumbered and amended by Chapter 298, Laws of Utah 2003
             48          31A-23a-503, as renumbered and amended by Chapter 298, Laws of Utah 2003
             49          31A-26-203, as last amended by Chapter 116, Laws of Utah 2001
             50          31A-26-204, as last amended by Chapter 116, Laws of Utah 2001
             51      ENACTS:
             52          31A-2-401, Utah Code Annotated 1953
             53          31A-2-402, Utah Code Annotated 1953
             54          31A-2-403, Utah Code Annotated 1953
             55          31A-2-404, Utah Code Annotated 1953
             56     
             57      Be it enacted by the Legislature of the state of Utah:
             58          Section 1. Section 31A-2-401 is enacted to read:


             59     
Part 4. Title and Escrow Commission Act

             60          31A-2-401. Title.
             61          This part is known as the "Title and Escrow Commission Act."
             62          Section 2. Section 31A-2-402 is enacted to read:
             63          31A-2-402. Definitions.
             64          As used in this part:
             65          (1) "Commission" means the Title and Escrow Commission created in Section
             66      31A-2-403 .
             67          (2) "Concurrence" means the entities given a concurring role must jointly agree for the
             68      action to be taken.
             69          (3) "Title licensee" means a person licensed under this title as:
             70          (a) an agency with a title insurance line of authority;
             71          (b) a producer with:
             72          (i) a general title insurance line of authority; or
             73          (ii) a specific category of authority for title insurance; or
             74          (c) a title insurance adjuster.
             75          Section 3. Section 31A-2-403 is enacted to read:
             76          31A-2-403. Title and Escrow Commission created.
             77          (1) (a) There is created within the department the Title and Escrow Commission that is
             78      comprised of five members appointed by the governor with the consent of the Senate as
             79      follows:
             80          (i) four members shall:
             81          (A) be or have been licensed under the title insurance line of authority; and
             82          (B) as of the day on which the member is appointed, be or have been licensed with the
             83      search or escrow subline of authority for at least five years; and
             84          (ii) one member shall be a member of the general public.
             85          (b) No more than one commission member may be appointed from:
             86          (i) any given county in the state; or
             87          (ii) any single company.
             88          (2) (a) Except as required by Subsection (2)(b), as terms of current commission
             89      members expire, the governor shall appoint each new member to a four-year term ending on


             90      June 30.
             91          (b) Notwithstanding the requirements of Subsection (2)(a), the governor shall, at the
             92      time of appointment, adjust the length of terms to ensure that the terms of the commission
             93      members are staggered so that approximately half of the commission is appointed every two
             94      years.
             95          (c) A commission member may not serve more than one consecutive term.
             96          (d) When a vacancy occurs in the membership for any reason, a replacement shall be
             97      appointed for the unexpired term.
             98          (3) (a) A member of the commission shall receive no compensation or benefits for the
             99      member's services, but may receive per diem and expenses incurred in the performance of the
             100      member's official duties at the rates established by the Division of Finance under Sections
             101      63A-3-106 and 63A-3-107 .
             102          (b) A member may decline to receive per diem and expenses for the member's service.
             103          (4) Members of the commission shall annually select one member to serve as chair.
             104          (5) (a) The commission shall meet at least monthly.
             105          (b) The commissioner may call additional meetings:
             106          (i) at the commissioner's discretion;
             107          (ii) upon the request of the chair of the commission; or
             108          (iii) upon the written request of three or more commission members.
             109          (c) (i) Three members of the commission constitute a quorum for the transaction of
             110      business.
             111          (ii) The action of a majority of the members when a quorum is present is the action of
             112      the commission.
             113          (6) The department shall staff the commission.
             114          Section 4. Section 31A-2-404 is enacted to read:
             115          31A-2-404. Duties of the commissioner and Title and Escrow Commission.
             116          (1) Notwithstanding the other provisions of this chapter, to the extent provided in this
             117      part, the commissioner shall administer and enforce the provisions in this title related to:
             118          (a) title insurance; and
             119          (b) escrow conducted by a title licensee or title insurer.
             120          (2) The commission shall:


             121          (a) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             122      make rules for the administration of the provisions in this title related to title insurance
             123      including rules related to:
             124          (i) rating standards and rating methods for title agencies and producers as provided in
             125      Section 31A-19a-209 ;
             126          (ii) the licensing for a title licensee including the licensing requirements of Sections
             127      31A-23a-203 and 31A-23a-204 ;
             128          (iii) continuing education requirements of Section 31A-23a-202 ;
             129          (iv) examination procedures, after consultation with the department and the
             130      department's test administrator when required by Section 31A-23a-204 ; and
             131          (v) standards of conduct for a title licensee;
             132          (b) concur in the issuance and renewal of licenses in accordance with Section
             133      31A-23a-105 or 31A-26-203 ;
             134          (c) in accordance with Section 31A-3-103 , establish, with the concurrence of the
             135      department, all fees imposed by this title on a title licensee;
             136          (d) in accordance with Section 31A-23a-415 determine, after consulting with the
             137      commissioner, the assessment on a title insurer as defined in Section 31A-23a-415 ;
             138          (e) conduct all administrative hearings not delegated by it to an administrative law
             139      judge related to the:
             140          (i) licensing of any applicant;
             141          (ii) conduct of any title licensee; or
             142          (iii) approval of continuing education programs required by Section 31A-23a-202 ;
             143          (f) with the concurrence of the commissioner, approve assets that can be included in a
             144      reserve fund required by Section 31A-23a-204 ;
             145          (g) with the concurrence of the commissioner, approve continuing education programs
             146      required by Section 31A-23a-202 ;
             147          (h) with the concurrence of the commissioner, impose penalties:
             148          (i) under this title related to:
             149          (A) title insurance; or
             150          (B) escrow conducted by a title licensee;
             151          (ii) after investigation by the department in accordance with Part 3, Procedures and


             152      Enforcement; and
             153          (iii) that are enforced by the commissioner;
             154          (i) advise the commissioner on the administration and enforcement of any matters
             155      affecting the title insurance industry;
             156          (j) advise the commissioner on matters affecting the department's budget related to title
             157      insurance; and
             158          (k) perform other duties as provided in this title.
             159          Section 5. Section 31A-19a-209 is amended to read:
             160           31A-19a-209. Special provisions for title insurance.
             161          (1) (a) (i) The Title and Escrow Commission shall adopt rules in accordance with Title
             162      63, Chapter 46a, Utah Administrative Rulemaking Act, establishing rate standards and rating
             163      methods for title agencies and producers.
             164          (ii) The commissioner shall determine compliance with rate standards and rating
             165      methods for title insurance insurers, agencies, and producers.
             166          [(1)] (b) In addition to the considerations in determining compliance with rate
             167      standards and rating methods as set forth in Sections 31A-19a-201 and 31A-19a-202 , including
             168      for title insurers , the commissioner and the Title and Escrow Commission shall consider the
             169      costs and expenses incurred by title insurance [companies] insurers, agencies, and producers
             170      peculiar to the business of title insurance including:
             171          [(a)] (i) the maintenance of title plants; and
             172          [(b)] (ii) the searching and examining of public records to determine insurability of title
             173      to real redevelopment property.
             174          (2) (a) Every title insurance [company] insurer, agency, and title insurance producer
             175      shall file with the commissioner:
             176          (i) a schedule of the escrow charges that the title insurance [company] insurer, agency,
             177      or title insurance producer proposes to use in this state for services performed in connection
             178      with the issuance of policies of title insurance; and
             179          (ii) any changes to the schedule of the escrow charges described in Subsection (2)(a)(i).
             180          (b) A schedule filed under this Subsection (2) is subject to review by the Title and
             181      Escrow Commission.
             182          [(b)] (c) (i) The schedule of escrow charges required to be filed by Subsection (2)(a)(i)


             183      takes effect on the day on which the schedule of escrow charges is filed.
             184          (ii) Any changes to the schedule of the escrow charges required to be filed by
             185      Subsection (2)(a)(ii) take effect on the day specified in the change to the schedule of escrow
             186      charges except that the effective date may not be less than 30 calendar days after the day on
             187      which the change to the schedule of escrow charges is filed.
             188          (3) A title insurance [company] insurer, agency, or producer may not file or use any
             189      rate or other charge relating to the business of title insurance, including rates or charges filed
             190      for escrow that would cause the title insurance company, agency, or producer to:
             191          (a) operate at less than the cost of doing:
             192          (i) the insurance business; or
             193          (ii) the escrow business; or
             194          (b) fail to adequately underwrite a title insurance policy.
             195          (4) (a) All or any of the schedule of rates or schedule of charges, including the schedule
             196      of escrow charges, may be changed or amended at any time, subject to the limitations in this
             197      Subsection (4).
             198          (b) Each change or amendment shall:
             199          (i) be filed with the commissioner, subject to review by the Title and Escrow
             200      Commission; and
             201          (ii) state the effective date of the change or amendment, which may not be less than 30
             202      calendar days after the day on which the change or amendment is filed.
             203          (c) Any change or amendment remains in force for a period of at least 90 calendar days
             204      from the change or amendment's effective date.
             205          (5) While the schedule of rates and schedule of charges are effective, a copy of each
             206      shall be:
             207          (a) retained in each of the offices of:
             208          (i) the title insurance [company] insurer in this state;
             209          (ii) the title insurance [company's] insurer's producers in this state; and
             210          (b) upon request, furnished to the public.
             211          (6) Except in accordance with the schedules of rates and charges filed with the
             212      commissioner, a title insurance [company] insurer, agency, or producer may not make or
             213      impose any premium or other charge:


             214          (a) in connection with the issuance of a policy of title insurance; or
             215          (b) for escrow services performed in connection with the issuance of a policy of title
             216      insurance.
             217          Section 6. Section 31A-23a-105 is amended to read:
             218           31A-23a-105. General requirements for individual and agency license issuance
             219      and renewal.
             220          (1) The commissioner shall issue or renew a license to act as a producer, limited line
             221      producer, customer service representative, consultant, managing general agent, or reinsurance
             222      intermediary to any person who, as to the license type and line of authority classification
             223      applied for under Section 31A-23a-106 :
             224          (a) has satisfied the application requirements under Section 31A-23a-104 ;
             225          (b) has satisfied the character requirements under Section 31A-23a-107 ;
             226          (c) has satisfied any applicable continuing education requirements under Section
             227      31A-23a-202 ;
             228          (d) has satisfied any applicable examination requirements under Section 31A-23a-108 ;
             229          (e) has satisfied any applicable training period requirements under Section
             230      31A-23a-203 ;
             231          (f) if a nonresident:
             232          (i) has complied with Section 31A-23a-109 ; and
             233          (ii) holds an active similar license in that person's state of residence;
             234          (g) if an applicant for a title insurance producer license, has satisfied the requirements
             235      of Sections 31A-23a-203 and 31A-23a-204 ;
             236          (h) if an applicant for a license to act as a provider or producer of viatical settlements,
             237      has satisfied the requirements of Section 31A-23a-117 ; and
             238          (i) has paid the applicable fees under Section 31A-3-103 .
             239          (2) (a) This Subsection (2) applies to the following persons:
             240          (i) an applicant for a pending individual or agency producer, limited line producer,
             241      customer service representative, consultant, managing general agent, or reinsurance
             242      intermediary license; or
             243          (ii) a licensed individual or agency producer, limited line producer, customer service
             244      representative, consultant, managing general agent, or reinsurance intermediary.


             245          (b) A person described in Subsection (2)(a) shall report to the commissioner:
             246          (i) any administrative action taken against the person:
             247          (A) in another jurisdiction; or
             248          (B) by another regulatory agency in this state; and
             249          (ii) any criminal prosecution taken against the person in any jurisdiction.
             250          (c) The report required by Subsection (2)(b) shall:
             251          (i) be filed:
             252          (A) at the time the person files the application for an individual or agency license; or
             253          (B) within 30 days of the initiation of an action or prosecution described in Subsection
             254      (2)(b); and
             255          (ii) include a copy of the complaint or other relevant legal documents related to the
             256      action or prosecution described in Subsection (2)(b).
             257          (3) (a) The department may request:
             258          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             259      2, from the Bureau of Criminal Identification; and
             260          (ii) complete Federal Bureau of Investigation criminal background checks through the
             261      national criminal history system.
             262          (b) Information obtained by the department from the review of criminal history records
             263      received under Subsection (3)(a) shall be used by the department for the purposes of:
             264          (i) determining if a person satisfies the character requirements under Section
             265      31A-23a-107 for issuance or renewal of a license;
             266          (ii) determining if a person has failed to maintain the character requirements under
             267      Section 31A-23a-107 ; and
             268          (iii) preventing persons who violate the federal Violent Crime Control and Law
             269      Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in the business of
             270      insurance in the state.
             271          (c) If the department requests the criminal background information, the department
             272      shall:
             273          (i) pay to the Department of Public Safety the costs incurred by the Department of
             274      Public Safety in providing the department criminal background information under Subsection
             275      (3)(a)(i);


             276          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             277      of Investigation in providing the department criminal background information under
             278      Subsection (3)(a)(ii); and
             279          (iii) charge the person applying for a license or for renewal of a license a fee equal to
             280      the aggregate of Subsections (3)(c)(i) and (ii).
             281          (4) To become a resident licensee in accordance with Section 31A-23a-104 and this
             282      section, a person licensed as an insurance producer, limited line producer, customer service
             283      representative, consultant, managing general agent, or reinsurance intermediary in another state
             284      who moves to this state shall apply within 90 days of establishing legal residence in this state.
             285          (5) Notwithstanding the other provisions of this section, the commissioner may:
             286          (a) issue a license to an applicant for a license for a title insurance line of authority only
             287      with the concurrence of the Title and Escrow Commission; and
             288          (b) renew a license for a title insurance line of authority only with the concurrence of
             289      the Title and Escrow Commission.
             290          Section 7. Section 31A-23a-106 is amended to read:
             291           31A-23a-106. License types.
             292          (1) (a) A resident or nonresident license issued under this chapter shall be issued under
             293      the license types described under [Subsections (1) through (7)] Subsection (2).
             294          (b) License types and lines of authority pertaining to each license type describe the type
             295      of licensee and the lines of business that licensee may sell, solicit, or negotiate. License types
             296      are intended to describe the matters to be considered under any education, examination, and
             297      training required of license applicants under Sections 31A-23a-108 , 31A-23a-202 , and
             298      31A-23a-203 .
             299          [(1)] (2) (a) A producer license type includes the following lines of authority:
             300          [(a)] (i) life insurance, including nonvariable contracts;
             301          [(b)] (ii) variable contracts, including variable life and annuity, if the producer has the
             302      life insurance line of authority;
             303          [(c)] (iii) accident and health insurance, including contracts issued to policyholders
             304      under Chapter 7 or 8;
             305          [(d)] (iv) property insurance;
             306          [(e)] (v) casualty insurance, including surety and other bonds;


             307          [(f)] (vi) title insurance under one or more of the following categories:
             308          [(i)] (A) search, including authority to act as a title marketing representative;
             309          [(ii)] (B) escrow, including authority to act as a title marketing representative;
             310          [(iii)] (C) search and escrow, including authority to act as a title marketing
             311      representative; and
             312          [(iv)] (D) title marketing representative only;
             313          [(g)] (vii) workers' compensation insurance;
             314          [(h)] (viii) personal lines insurance; and
             315          [(i)] (ix) surplus lines, if the producer has the property or casualty or both lines of
             316      authority.
             317          [(2)] (b) A limited line producer license type includes the following limited lines of
             318      authority:
             319          [(a)] (i) limited line credit insurance;
             320          [(b)] (ii) travel insurance;
             321          [(c)] (iii) motor club insurance;
             322          [(d)] (iv) car rental related insurance;
             323          [(e)] (v) legal expense insurance;
             324          [(f)] (vi) bail bond producer; and
             325          [(g)] (vii) viatical settlements.
             326          [(3)] (c) A customer service representative license type includes the following lines of
             327      authority, if held by the customer service representative's employer producer:
             328          [(a)] (i) life insurance, including nonvariable contracts;
             329          [(b)] (ii) accident and health insurance, including contracts issued to policyholders
             330      under Chapter 7 or 8;
             331          [(c)] (iii) property insurance;
             332          [(d)] (iv) casualty insurance, including surety and other bonds;
             333          [(e)] (v) workers' compensation insurance;
             334          [(f)] (vi) personal lines insurance; and
             335          [(g)] (vii) surplus lines, if the employer producer has the property or casualty or both
             336      lines of authority.
             337          [(4)] (d) A consultant license type includes the following lines of authority:


             338          [(a)] (i) life insurance, including nonvariable contracts;
             339          [(b)] (ii) variable contracts, including variable life and annuity, if the consultant has the
             340      life insurance line of authority;
             341          [(c)] (iii) accident and health insurance, including contracts issued to policyholders
             342      under Chapter 7 or 8;
             343          [(d)] (iv) property insurance;
             344          [(e)] (v) casualty insurance, including surety and other bonds;
             345          [(f)] (vi) workers' compensation insurance; and
             346          [(g)] (vii) personal lines insurance.
             347          [(5)] (e) A managing general agent license type includes the following lines of
             348      authority:
             349          [(a)] (i) life insurance, including nonvariable contracts;
             350          [(b)] (ii) variable contracts, including variable life and annuity, if the managing general
             351      agent has the life insurance line of authority;
             352          [(c)] (iii) accident and health insurance, including contracts issued to policyholders
             353      under Chapter 7 or 8;
             354          [(d)] (iv) property insurance;
             355          [(e)] (v) casualty insurance, including surety and other bonds;
             356          [(f)] (vi) workers' compensation insurance; and
             357          [(g)] (vii) personal lines insurance.
             358          [(6)] (f) A reinsurance intermediary license type includes the following lines of
             359      authority:
             360          [(a)] (i) life insurance, including nonvariable contracts;
             361          [(b)] (ii) variable contracts, including variable life and annuity, if the reinsurance
             362      intermediary has the life insurance line of authority;
             363          [(c)] (iii) accident and health insurance, including contracts issued to policyholders
             364      under Chapter 7 or 8;
             365          [(d)] (iv) property insurance;
             366          [(e)] (v) casualty insurance, including surety and other bonds;
             367          [(f)] (vi) workers' compensation insurance; and
             368          [(g)] (vii) personal lines insurance.


             369          [(7)] (g) A holder of licenses under Subsections [(1), (4), (5), and (6)] (2)(a), (d), (e),
             370      and (f) has all qualifications necessary to act as a holder of a license under Subsections [(2) and
             371      (3)] (2)(b) and (c).
             372          [(8)] (3) (a) The commissioner may by rule recognize other producer, limited line
             373      producer, customer service representative, consultant, managing general agent, or reinsurance
             374      intermediary lines of authority as to kinds of insurance not listed under Subsections [(1)
             375      through (6)] (2)(a) through (f).
             376          (b) Notwithstanding Subsection (3)(a), for purposes of title insurance the Title and
             377      Escrow Commission may by rule, with the concurrence of the commissioner, recognize other
             378      categories for a title insurance producer line of authority not listed under Subsection (2)(a)(vi).
             379          [(9)] (4) The variable contracts, including variable life and annuity line of authority
             380      requires:
             381          (a) licensure as a registered agent or broker by the National Association of Securities
             382      Dealers [(NASD)]; and
             383          (b) current registration with a securities broker/dealer.
             384          [(10)] (5) A surplus lines producer is a producer who has a surplus lines line of
             385      authority.
             386          Section 8. Section 31A-23a-108 is amended to read:
             387           31A-23a-108. Examination requirements.
             388          (1) (a) The commissioner may require applicants for any particular license type under
             389      Section 31A-23a-106 to pass a line of authority examination as a requirement for a license,
             390      except that an examination may not be required of applicants for:
             391          (i) licenses under Subsections 31A-23a-106 (2)[and (3)] (b) and (c); or
             392          (ii) other limited line license lines of authority recognized by the commissioner or the
             393      Title and Escrow Commission by rule as provided in Subsection 31A-23a-106 [(8)](3).
             394          (b) The examination described in Subsection (1)(a):
             395          (i) shall reasonably relate to the line of authority for which it is prescribed; and
             396          (ii) may be administered by the commissioner or as otherwise specified by rule.
             397          (2) The commissioner shall waive the requirement of an examination for a nonresident
             398      applicant who:
             399          (a) applies for an insurance producer license in this state;


             400          (b) has been licensed for the same line of authority in another state; and
             401          (c) (i) is licensed in the state described in Subsection (2)(b) at the time the applicant
             402      applies for an insurance producer license in this state; or
             403          (ii) if the application is received within 90 days of the cancellation of the applicant's
             404      previous license:
             405          (A) the prior state certifies that at the time of cancellation, the applicant was in good
             406      standing in that state; or
             407          (B) the state's producer database records maintained by the National Association of
             408      Insurance Commissioners or the National Association of Insurance Commissioner's affiliates or
             409      subsidiaries, indicates that the producer is or was licensed in good standing for the line of
             410      authority requested.
             411          (3) A nonresident producer licensee who moves to this state and applies for a resident
             412      license within 90 days of establishing legal residence in this state shall be exempt from any line
             413      of authority examination that the producer was authorized on the producer's nonresident
             414      producer license, except where the commissioner determines otherwise by rule.
             415          (4) This section's requirement may only be applied to applicants who are natural
             416      persons.
             417          Section 9. Section 31A-23a-204 is amended to read:
             418           31A-23a-204. Special requirements for title insurance producers.
             419          Title insurance producers shall be licensed in accordance with this chapter, with the
             420      additional requirements listed in this section.
             421          (1) (a) Every title insurance agency or producer appointed by an insurer shall maintain:
             422          (i) a fidelity bond;
             423          (ii) a professional liability insurance policy; or
             424          (iii) a financial protection:
             425          (A) equivalent to that described in Subsection (1)(a)(i) or (ii); and
             426          (B) that the commissioner considers adequate.
             427          (b) The bond or insurance required by this Subsection (1):
             428          (i) shall be supplied under a contract approved by the commissioner to provide
             429      protection against the improper performance of any service in conjunction with the issuance of
             430      a contract or policy of title insurance; and


             431          (ii) be in a face amount no less than $50,000.
             432          (c) The [commissioner] Title and Escrow Commission may by rule made in accordance
             433      with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, exempt title insurance
             434      producers from the requirements of this Subsection (1) upon a finding that, and only so long as,
             435      the required policy or bond is generally unavailable at reasonable rates.
             436          (2) (a) (i) Every title insurance agency or producer appointed by an insurer shall
             437      maintain a reserve fund.
             438          (ii) The reserve fund required by this Subsection (2) shall be:
             439          (A) (I) composed of assets approved by the commissioner and the Title and Escrow
             440      Commission;
             441          (II) maintained as a separate account; and
             442          (III) charged as a reserve liability of the title insurance producer in determining the
             443      producer's financial condition; and
             444          (B) accumulated by segregating 1% of all gross income received from the title
             445      insurance business.
             446          (iii) The reserve fund shall contain the accumulated assets for the immediately
             447      preceding ten years as defined in Subsection (2)(a)(ii).
             448          (iv) That portion of the assets held in the reserve fund over ten years may be:
             449          (A) withdrawn from the reserve fund; and
             450          (B) restored to the income of the title insurance producer.
             451          (v) The title insurance producer may withdraw interest from the reserve fund related to
             452      the principal amount as it accrues.
             453          (b) (i) A disbursement may not be made from the reserve fund except as provided in
             454      Subsection (2)(a) unless the title insurance producer ceases doing business as a result of:
             455          (A) sale of assets;
             456          (B) merger of the producer with another producer;
             457          (C) termination of the producer's license;
             458          (D) insolvency; or
             459          (E) any cessation of business by the producer.
             460          (ii) Any disbursements from the reserve fund may be made only to settle claims arising
             461      from the improper performance of the title insurance producer in providing services defined in


             462      Section 31A-23a-406 .
             463          (iii) The commissioner shall be notified ten days before any disbursements from the
             464      reserve fund.
             465          (iv) The notice required by this Subsection (2)(b) shall contain:
             466          (A) the amount of claim;
             467          (B) the nature of the claim; and
             468          (C) the name of the payee.
             469          (c) (i) The reserve fund shall be maintained by the title insurance producer or the title
             470      insurance producer's representative for a period of two years after the title insurance producer
             471      ceases doing business.
             472          (ii) Any assets remaining in the reserve fund at the end of the two years specified in
             473      Subsection (2)(c)(i) may be withdrawn and restored to the former title insurance producer.
             474          (3) Any examination for licensure shall include questions regarding the search and
             475      examination of title to real property.
             476          (4) A title insurance producer may not perform the functions of escrow unless the title
             477      insurance producer has been examined on the fiduciary duties and procedures involved in those
             478      functions.
             479          (5) The [commissioner] Title and Escrow Commission shall adopt rules [outlining], in
             480      accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, after consulting
             481      with the department and the department's test administrator, establishing an examination for a
             482      license that will satisfy this section.
             483          (6) A license may be issued to a title insurance producer who has qualified:
             484          (a) to perform only searches and examinations of title as specified in Subsection (3);
             485          (b) to handle only escrow arrangements as specified in Subsection (4); or
             486          (c) to act as a title marketing representative.
             487          (7) A person licensed to practice law in Utah is exempt from the requirements of
             488      Subsections (1) and (2) if that person issues 12 or less policies in any 12-month period.
             489          (8) A person licensed to practice law in Utah, whether exempt under Subsection (7) or
             490      not, shall maintain a trust account separate from a law firm trust account for all title and real
             491      estate escrow transactions.
             492          Section 10. Section 31A-23a-402 is amended to read:


             493           31A-23a-402. Unfair marketing practices -- Communication -- Inducement --
             494      Unfair discrimination -- Coercion or intimidation -- Restriction on choice.
             495          (1) (a) (i) Any of the following may not make or cause to be made any communication
             496      that contains false or misleading information, relating to an insurance contract, any insurer, or
             497      other licensee under this title, including information that is false or misleading because it is
             498      incomplete:
             499          (A) a person who is or should be licensed under this title;
             500          (B) an employee or producer of a person described in Subsection (1)(a)(i)(A);
             501          (C) a person whose primary interest is as a competitor of a person licensed under this
             502      title; and
             503          (D) a person on behalf of any of the persons listed in this Subsection (1)(a)(i).
             504          (ii) As used in this Subsection (1), "false or misleading information" includes:
             505          (A) assuring the nonobligatory payment of future dividends or refunds of unused
             506      premiums in any specific or approximate amounts, but reporting fully and accurately past
             507      experience is not false or misleading information; and
             508          (B) with intent to deceive a person examining it, filing a report, making a false entry in
             509      a record, or wilfully refraining from making a proper entry in a record.
             510          (iii) A licensee under this title may not:
             511          (A) use any business name, slogan, emblem, or related device that is misleading or
             512      likely to cause the insurer or other licensee to be mistaken for another insurer or other licensee
             513      already in business; or
             514          (B) use any advertisement or other insurance promotional material that would cause a
             515      reasonable person to mistakenly believe that a state or federal government agency:
             516          (I) is responsible for the insurance sales activities of the person;
             517          (II) stands behind the credit of the person;
             518          (III) guarantees any returns on insurance products of or sold by the person; or
             519          (IV) is a source of payment of any insurance obligation of or sold by the person.
             520          (iv) A person who is not an insurer may not assume or use any name that deceptively
             521      implies or suggests that [it] person is an insurer.
             522          (v) A person other than persons licensed as health maintenance organizations under
             523      Chapter 8 may not use the term "Health Maintenance Organization" or "HMO" in referring to


             524      itself.
             525          (b) If a licensee under this title distributes cards or documents, exhibits a sign, or
             526      publishes an advertisement that violates Subsection (1)(a), with reference to a particular insurer
             527      that the licensee represents, or for whom the licensee processes claims, and if the cards,
             528      documents, signs, or advertisements are supplied or approved by that insurer, the licensee's
             529      violation creates a rebuttable presumption that the violation was also committed by the insurer.
             530          (2) (a) (i) A licensee under this title, or an officer or employee of a licensee may not
             531      induce any person to enter into or continue an insurance contract or to terminate an existing
             532      insurance contract by offering benefits not specified in the policy to be issued or continued,
             533      including premium or commission rebates.
             534          (ii) An insurer may not make or knowingly allow any agreement of insurance that is
             535      not clearly expressed in the policy to be issued or renewed.
             536          (iii) This Subsection (2)(a) does not preclude:
             537          (A) insurers from reducing premiums because of expense savings;
             538          (B) the usual kinds of social courtesies not related to particular transactions; or
             539          (C) an insurer from receiving premiums under an installment payment plan.
             540          (b) A licensee under this title may not absorb the tax under Section 31A-3-301 .
             541          (c) (i) A title insurer or producer or any officer or employee of either may not pay,
             542      allow, give, or offer to pay, allow, or give, directly or indirectly, as an inducement to obtaining
             543      any title insurance business[,]:
             544          (A) any rebate, reduction, or abatement of any rate or charge made incident to the
             545      issuance of the title insurance[,];
             546          (B) any special favor or advantage not generally available to others[,]; or
             547          (C) any money or other consideration or material inducement.
             548          (ii) "Charge made incident to the issuance of the title insurance" includes escrow
             549      charges, and any other services that are prescribed in rule by the [commissioner] Title and
             550      Escrow Commission after consultation with the commissioner.
             551          (iii) An insured or any other person connected, directly or indirectly, with the
             552      transaction, including a mortgage lender, real estate broker, builder, attorney, or any officer,
             553      employee, or agent of any of them, may not knowingly receive or accept, directly or indirectly,
             554      any benefit referred to in Subsection (2)(c)(i).


             555          (3) (a) An insurer may not unfairly discriminate among policyholders by charging
             556      different premiums or by offering different terms of coverage, except on the basis of
             557      classifications related to the nature and the degree of the risk covered or the expenses involved.
             558          (b) Rates are not unfairly discriminatory if they are averaged broadly among persons
             559      insured under a group, blanket, or franchise policy, and the terms of those policies are not
             560      unfairly discriminatory merely because they are more favorable than in similar individual
             561      policies.
             562          (4) A person who is or should be licensed under this title, an employee of that licensee
             563      or person who should be licensed, a person whose primary interest is as a competitor of a
             564      person licensed under this title, and one acting on behalf of any of these persons, may not
             565      commit or enter into any agreement to participate in any act of boycott, coercion, or
             566      intimidation that:
             567          (a) tends to produce:
             568          (i) an unreasonable restraint of the business of insurance; or
             569          (ii) a monopoly in that business; or
             570          (b) results in an applicant purchasing or replacing an insurance contract.
             571          (5) (a) A person may not restrict in the choice of an insurer or licensee under this
             572      chapter, another person who is required to pay for insurance as a condition for the conclusion
             573      of a contract or other transaction or for the exercise of any right under a contract. The person
             574      requiring the coverage may, however, reserve the right to disapprove the insurer or the
             575      coverage selected on reasonable grounds.
             576          (b) The form of corporate organization of an insurer authorized to do business in this
             577      state is not a reasonable ground for disapproval, and the commissioner may by rule specify
             578      additional grounds that are not reasonable. This Subsection (5) does not bar an insurer from
             579      declining an application for insurance.
             580          (6) A person may not make any charge other than insurance premiums and premium
             581      financing charges for the protection of property or of a security interest in property, as a
             582      condition for obtaining, renewing, or continuing the financing of a purchase of the property or
             583      the lending of money on the security of an interest in the property.
             584          (7) (a) A licensee under this title may not refuse or fail to return promptly all indicia of
             585      agency to the principal on demand.


             586          (b) A licensee whose license is suspended, limited, or revoked under Section
             587      31A-2-308 , 31A-23a-111 , or 31A-23a-112 may not refuse or fail to return the license to the
             588      commissioner on demand.
             589          (8) (a) A person may not engage in any other unfair method of competition or any other
             590      unfair or deceptive act or practice in the business of insurance, as defined by the commissioner
             591      by rule, after a finding that they:
             592          (i) are misleading[,];
             593          (ii) are deceptive[,];
             594          (iii) are unfairly discriminatory[,];
             595          (iv) provide an unfair inducement[,]; or
             596          (v) unreasonably restrain competition.
             597          (b) Notwithstanding Subsection (8)(a), for purpose of the title insurance industry, the
             598      Title and Escrow Commission shall make rules, in accordance with Title 63, Chapter 46a, Utah
             599      Administrative Rulemaking Act, that define any other unfair method of competition or any
             600      other unfair or deceptive act or practice after a finding that they:
             601          (i) are misleading;
             602          (ii) are deceptive;
             603          (iii) are unfairly discriminatory;
             604          (iv) provide an unfair inducement; or
             605          (v) unreasonably restrain competition.
             606          Section 11. Section 31A-23a-406 is amended to read:
             607           31A-23a-406. Title insurance producer's business.
             608          (1) A title insurance producer may do escrow involving real property transactions if all
             609      of the following exist:
             610          (a) the title insurance producer is licensed with:
             611          (i) the title line of authority; and
             612          (ii) the escrow subline of authority;
             613          (b) the title insurance producer is appointed by a title insurer authorized to do business
             614      in the state;
             615          (c) one or more of the following is to be issued as part of the transaction:
             616          (i) an owner's policy of title insurance; or


             617          (ii) a lender's policy of title insurance;
             618          (d) (i) all funds deposited with the producer in connection with any escrow:
             619          (A) are deposited:
             620          (I) in a federally insured financial institution; and
             621          (II) in a trust account that is separate from all other trust account funds that are not
             622      related to real estate transactions; and
             623          (B) are the property of the persons entitled to them under the provisions of the escrow;
             624      and
             625          (ii) are segregated escrow by escrow in the records of the producer;
             626          (e) earnings on funds held in escrow may be paid out of the escrow account to any
             627      person in accordance with the conditions of the escrow; and
             628          (f) the escrow does not require the producer to hold:
             629          (i) construction funds; or
             630          (ii) funds held for exchange under Section 1031, Internal Revenue Code.
             631          (2) Notwithstanding Subsection (1), a title insurance producer may engage in the
             632      escrow business if:
             633          (a) the escrow involves:
             634          (i) a mobile home;
             635          (ii) a grazing right;
             636          (iii) a water right; or
             637          (iv) other personal property authorized by the commissioner; and
             638          (b) the title insurance producer complies with all the requirements of this section
             639      except for the requirement of Subsection (1)(c).
             640          (3) Funds held in escrow:
             641          (a) are not subject to any debts of the producer;
             642          (b) may only be used to fulfill the terms of the individual escrow under which the funds
             643      were accepted; and
             644          (c) may not be used until all conditions of the escrow have been met.
             645          (4) Assets or property other than escrow funds received by a producer in accordance
             646      with an escrow shall be maintained in a manner that will:
             647          (a) reasonably preserve and protect the asset or property from loss, theft, or damages;


             648      and
             649          (b) otherwise comply with all general duties and responsibilities of a fiduciary or
             650      bailee.
             651          (5) (a) A check may not be drawn, executed, or dated, or funds otherwise disbursed
             652      unless the segregated escrow account from which funds are to be disbursed contains a
             653      sufficient credit balance consisting of collected or cleared funds at the time the check is drawn,
             654      executed, or dated, or funds are otherwise disbursed.
             655          (b) As used in this Subsection (5), funds are considered to be "collected or cleared,"
             656      and may be disbursed as follows:
             657          (i) cash may be disbursed on the same day the cash is deposited;
             658          (ii) a wire transfer may be disbursed on the same day the wire transfer is deposited;
             659          (iii) the following may be disbursed on the day following the date of deposit:
             660          (A) a cashier's check;
             661          (B) a certified check;
             662          (C) a teller's check;
             663          (D) a U.S. Postal Service money order; and
             664          (E) a check drawn on a Federal Reserve Bank or Federal Home Loan Bank; and
             665          (iv) any other check or deposit may be disbursed:
             666          (A) within the time limits provided under the Expedited Funds Availability Act, 12
             667      U.S.C. Section 4001 et seq., as amended, and related regulations of the Federal Reserve
             668      System; or
             669          (B) upon written notification from the financial institution to which the funds have
             670      been deposited, that final settlement has occurred on the deposited item.
             671          (c) Subject to Subsections (5)(a) and (b), before the disbursement of funds, any
             672      changes to any settlement statement made after the final closing documents are executed shall
             673      be authorized or acknowledged by signature of the party or parties affected by the change.
             674          (6) The title insurance producer shall maintain records of all receipts and
             675      disbursements of escrow funds.
             676          (7) The title insurance producer shall comply with:
             677          (a) Section 31A-23a-409 ; and
             678          (b) any rules adopted by the [commissioner] Title and Escrow Commission in


             679      accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, that govern
             680      escrows.
             681          Section 12. Section 31A-23a-415 is amended to read:
             682           31A-23a-415. Assessment on title insurance agencies or title insurers.
             683          (1) For purposes of this section:
             684          (a) "Premium" is as defined in Subsection 59-9-101 (3).
             685          (b) "Title insurer" means a person:
             686          (i) making any contract or policy of title insurance as:
             687          (A) insurer;
             688          (B) guarantor; or
             689          (C) surety;
             690          (ii) proposing to make any contract or policy of title insurance as:
             691          (A) insurer;
             692          (B) guarantor; or
             693          (C) surety; or
             694          (iii) transacting or proposing to transact any phase of title insurance, including:
             695          (A) soliciting;
             696          (B) negotiating preliminary to execution;
             697          (C) executing of a contract of title insurance;
             698          (D) insuring; and
             699          (E) transacting matters subsequent to the execution of the contract and arising out of
             700      the contract.
             701          (c) "Utah risks" means insuring, guaranteeing, or indemnifying with regard to real or
             702      personal property located in Utah, an owner of real or personal property, the holders of liens or
             703      encumbrances on that property, or others interested in the property against loss or damage
             704      suffered by reason of:
             705          (i) liens or encumbrances upon, defects in, or the unmarketability of the title to the
             706      property; or
             707          (ii) invalidity or unenforceability of any liens or encumbrances on the property.
             708          (2) (a) Beginning on July 1, 1998, the [insurance] commissioner may assess each title
             709      insurer and each title insurance agency an annual assessment:


             710          (i) determined by the Title and Escrow Commission:
             711          (A) after consultation with the commissioner; and
             712          (B) in accordance with this Subsection (2); and
             713          (ii) to be used for the purposes described in Subsection (3).
             714          (b) A title insurance agency shall be assessed up to:
             715          (i) $200 for the first office in each county in which the title insurance agency maintains
             716      an office; and
             717          (ii) $100 for each additional office the title insurance agency maintains in the county
             718      described in Subsection (2)(b)(i).
             719          (c) A title insurer shall be assessed up to:
             720          (i) $200 for the first office in each county in which the title insurer maintains an office;
             721          (ii) $100 for each additional office the title insurer maintains in the county described in
             722      Subsection (2)(c)(i); and
             723          (iii) an amount calculated by:
             724          (A) aggregating the assessments imposed on:
             725          (I) title insurance agencies under Subsection (2)(b); and
             726          (II) title insurers under Subsections (2)(c)(i) and (2)(c)(ii);
             727          (B) subtracting the amount determined under Subsection (2)(c)(iii)(A) from the total
             728      costs and expenses determined under Subsection (2)(d); and
             729          (C) multiplying:
             730          (I) the amount calculated under Subsection (2)(c)(iii)(B); and
             731          (II) the percentage of total premiums for title insurance on Utah risk that are premiums
             732      of the title insurer.
             733          (d) Notwithstanding Section 31A-3-103 and in accordance with Title 63, Chapter 46a,
             734      Utah Administrative Rulemaking Act, the [department] Title and Escrow Commission by rule
             735      shall establish the amount of costs and expenses described under Subsection (3) that will be
             736      covered by the assessment, except the costs or expenses to be covered by the assessment may
             737      not exceed $75,000 annually.
             738          (3) All money received by the state under this section:
             739          (a) shall be deposited in the General Fund as a dedicated credit of the department; and
             740          (b) may be expended by the department only to pay for any cost or expense incurred by


             741      the department in the administration, investigation, and enforcement of Chapter 23a, Parts 4
             742      and 5, related to:
             743          (i) the marketing of title insurance; and
             744          (ii) audits of agencies.
             745          (4) The assessment imposed by this section shall be in addition to any premium
             746      assessment imposed under Subsection 59-9-101 (3).
             747          Section 13. Section 31A-23a-503 is amended to read:
             748           31A-23a-503. Controlled business in title insurance.
             749          (1) As used in this section:
             750          (a) "Associate" means any:
             751          (i) business organized for profit in which a person who refers title business is a
             752      director, officer, partner, or employee;
             753          (ii) spouse or relative within the second degree by blood or marriage of a person who
             754      refers title business, who is a natural person;
             755          (iii) employee of a person who refers title business; or
             756          (iv) person with whom a person who refers title business or any associate of that
             757      producer has any agreement, arrangement, or understanding, or pursues any course of conduct,
             758      designed to avoid the provisions of this chapter.
             759          (b) "Controlled business" means that portion of the title insurance business of a title
             760      insurer or producer in this state that is referred to it by all those producers of title business who
             761      have a financial interest in the title insurer or producer and by all associates of those producers.
             762      Business is referred if there is influence over the selection of the person with whom the
             763      business is placed.
             764          (c) "A person who refers title business" includes any person engaged in this state in a
             765      business of:
             766          (i) buying or selling interests in real property;
             767          (ii) making loans secured by interests in real property; or
             768          (iii) acting as a representative or employee of a person who buys or sells any interest in
             769      real property or who lends or borrows money with interest as security, other than acting as a
             770      licensed title insurer or producer doing the business of title insurance.
             771          (d) "Financial interest" means any legal or beneficial interest that together with other


             772      interests entitles the holder to more than 1% of the net profits or net worth of the business in
             773      which the interest is held.
             774          (2) A title insurer or producer or person having a financial interest in a title insurer or
             775      producer may not knowingly be a party to or knowingly permit to continue in any arrangement
             776      in which the title insurer, producer, or person knows or has reason to believe that any person
             777      who refers title business has or will have, directly or indirectly, a financial interest in the title
             778      insurer or producer, if it reasonably appears that a substantial factor in the person who refers
             779      title business owning or acquiring the financial interest is the expected realization of financial
             780      profit or gain derived in whole or in part from controlled business.
             781          (3) A title insurer may not appoint or knowingly continue its authorization of any title
             782      insurance producer in which the company knows or has reason to believe that any person who
             783      refers title business has or will have, directly or indirectly, a financial interest, if it reasonably
             784      appears that a substantial factor in the person who refers title business owning or acquiring the
             785      financial interest is the person's expected realization of financial profit or gain derived in whole
             786      or part from controlled business.
             787          (4) (a) If for any calendar quarter, the gross operating revenues of a title insurer or
             788      producer derived from all sources of controlled business in this state amount to more than 1/3
             789      of its gross operating revenues from all other sources of its business of title insurance in this
             790      state, it is presumed that the expected realization of financial profit or gain derived in whole or
             791      in part from controlled business was a substantial factor in the ownership of financial interest
             792      in the title insurer or producer.
             793          (b) The title insurer or producer has the burden of overcoming [this] the presumption
             794      described in Subsection (4)(a).
             795          (c) This Subsection (4) does not authorize any controlled business if a violation of the
             796      standards set forth in Subsection (2) or (3) exists.
             797          (5) [No] A title [insurance company] insurer or producer may not accept any order for
             798      the business of title insurance that it knows or has reason to believe constitutes controlled
             799      business, unless it records and maintains in its permanent records on forms prescribed by the
             800      commissioner the facts relating to the transactions.
             801          (6) An applicant for qualification as a title [insurance company] insurer or producer
             802      may not be granted a license if it reasonably appears that the expected realization of financial


             803      profit or gain to be derived in whole or in part from controlled business is or will be a
             804      substantial factor in the applicant's plan of operation or in the ownership or acquisition of
             805      financial interests in the applicant by any person who refers title business.
             806          (7) Each title insurer and producer shall maintain permanent records relating to its
             807      controlled business on forms prescribed by the commissioner.
             808          (8) (a) Each title insurer and producer shall file annually with the commissioner, on
             809      forms prescribed by the commissioner, reports setting forth:
             810          (i) the names and addresses of any persons owning a financial interest in the title
             811      insurer or producer as of the last day of the calendar year, who are known or reasonably
             812      believed by the title [insurance company] insurer or producer to be a person who refers title
             813      business; and
             814          (ii) a summary compiled from the title insurer's or producer's records of the controlled
             815      business, sufficient to inform the commissioner and the Title and Escrow Commission as to the
             816      proportion of the title insurer's or producer's gross operating revenues attributable to controlled
             817      business during the preceding calendar year.
             818          (b) The reports shall be filed with the reports required under Section 31A-23a-413 and
             819      shall contain the certification of an officer of the title insurer or producer that the information
             820      contained in them is true to the best of the officer's knowledge, information, and belief. Upon
             821      filing, the reports are public records.
             822          (c) A report filed pursuant to Subsection (8)(a) is subject to review by the Title and
             823      Escrow Commission.
             824          (9) An attorney who is also a licensed title insurance producer and who issues as
             825      producer a policy of title insurance to a client on behalf of whom the attorney is also acting as
             826      an attorney and who, in so doing, acts consistently with the applicable ethical standards of the
             827      Utah State Bar pertaining to the billing and receipt of legal fees and the receipt of a
             828      commission on a policy of title insurance is not, without more, considered to be engaged in
             829      controlled business.
             830          Section 14. Section 31A-26-203 is amended to read:
             831           31A-26-203. Adjuster's license required.
             832          (1) The commissioner shall issue a license to act as an independent adjuster or public
             833      adjuster to any person who, as to the license classification applied for under Section


             834      31A-26-204 , has:
             835          (a) satisfied the character requirements under Section 31A-26-205 ;
             836          (b) satisfied the applicable continuing education requirements under Section
             837      31A-26-206 ;
             838          (c) satisfied the applicable examination requirements under Section 31A-26-207 ;
             839          (d) if a nonresident, complied with Section 31A-26-208 ; and
             840          (e) paid the applicable fees under Section 31A-3-103 .
             841          (2) (a) This Subsection (2) applies to the following persons:
             842          (i) an applicant for:
             843          (A) an independent adjuster's license; or
             844          (B) a public adjuster's license;
             845          (ii) a licensed independent adjuster; or
             846          (iii) a licensed public adjuster.
             847          (b) A person described in Subsection (2)(a) shall report to the commissioner:
             848          (i) any administrative action taken against the person:
             849          (A) in another jurisdiction; or
             850          (B) by another regulatory agency in this state; and
             851          (ii) any criminal prosecution taken against the person in any jurisdiction.
             852          (c) The report required by Subsection (2)(b) shall:
             853          (i) be filed:
             854          (A) at the time the person applies for a third party administrator's license; or
             855          (B) within 30 days of the initiation of an action or prosecution described in Subsection
             856      (2)(b); and
             857          (ii) include a copy of the complaint or other relevant legal documents related to the
             858      action or prosecution described in Subsection (2)(b).
             859          (3) (a) The department may request concerning a person applying for an independent or
             860      public adjuster's license:
             861          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             862      2, from the Bureau of Criminal Identification; and
             863          (ii) complete Federal Bureau of Investigation criminal background checks through the
             864      national criminal history system.


             865          (b) Information obtained by the department from the review of criminal history records
             866      received under Subsection (3)(a) shall be used by the department for the purposes of:
             867          (i) determining if a person satisfies the character requirements under Section
             868      31A-26-205 for issuance or renewal of a license;
             869          (ii) determining if a person has failed to maintain the character requirements under
             870      Section 31A-25-204 ; and
             871          (iii) preventing persons who violate the federal Violent Crime Control and Law
             872      Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in the business of
             873      insurance in the state.
             874          (c) If the department requests the criminal background information, the department
             875      shall:
             876          (i) pay to the Department of Public Safety the costs incurred by the Department of
             877      Public Safety in providing the department criminal background information under Subsection
             878      (3)(a)(i);
             879          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             880      of Investigation in providing the department criminal background information under
             881      Subsection (3)(a)(ii); and
             882          (iii) charge the person applying for a license or for renewal of a license a fee equal to
             883      the aggregate of Subsections (3)(c)(i) and (ii).
             884          (4) Notwithstanding the other provisions of this section, the commissioner may:
             885          (a) issue a license to an applicant for a license for a title insurance classification only
             886      with the concurrence of the Title and Escrow Commission; or
             887          (b) renew a license for a title insurance classification only with the concurrence of the
             888      Title and Escrow Commission.
             889          Section 15. Section 31A-26-204 is amended to read:
             890           31A-26-204. License classifications.
             891          A resident or nonresident license issued under this chapter shall be issued under the
             892      classifications described under Subsections (1), (2), and (3). These classifications are intended
             893      to describe the matters to be considered under any prerequisite education and examination
             894      required of license applicants under Sections 31A-26-206 and 31A-26-207 .
             895          (1) Independent adjuster license classifications include:


             896          (a) accident and health insurance, including related service insurance under Chapter 7
             897      or 8;
             898          (b) property and liability insurance, which includes:
             899          (i) property insurance;
             900          (ii) liability insurance;
             901          (iii) surety bonds; and
             902          (iv) policies containing combinations or variations of these coverages;
             903          (c) service insurance;
             904          (d) title insurance;
             905          (e) credit insurance; and
             906          (f) workers' compensation insurance.
             907          (2) Public adjuster license classifications include:
             908          (a) accident and health insurance, including related service insurance under Chapter 7
             909      or 8;
             910          (b) property and liability insurance, which includes:
             911          (i) property insurance;
             912          (ii) liability insurance;
             913          (iii) surety bonds; and
             914          (iv) policies containing combinations or variations of these coverages;
             915          (c) service insurance;
             916          (d) title insurance;
             917          (e) credit insurance; and
             918          (f) workers' compensation insurance.
             919          (3) (a) The commissioner may by rule:
             920          (i) recognize other independent adjuster or public adjuster license classifications as to
             921      other kinds of insurance not listed under Subsection (1)[. The commissioner may also by rule];
             922      and
             923          (ii) create license classifications [which] that grant only part of the authority arising
             924      under another license class.
             925          (b) Notwithstanding Subsection (3)(a), for purpose of title insurance, the Title and
             926      Escrow Commission may make the rules provided for in Subsection (3)(a).


             927          Section 16. Effective date.
             928          This bill takes effect on July 1, 2005, except that Section 31A-2-403 takes effect on
             929      May 2, 2005.




Legislative Review Note
    as of 1-7-05 12:33 PM


Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel


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