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STANDING COMMITTEE
MONDAY, FEBRUARY 5, 2007, 8:3O A.M.
ROOM W015, WEST OFFICE BUILDING
STATE CAPITOL COMPLEX
Sen. Dan Eastman
Sen. Bill Hickman
Sen.Wayne Niederhauser Sen. Carlene Walker
Sen. Ed Mayne
Members Excused: Sen. Gene Davis
Staff Present: Allison Nicholson, Policy Analyst
Karen Allred, Committee Secretary
Public Speakers Present: Mark Dykes, Attorney, Parsons Behle & Latimer
Alan Spriggs, Summit County Recorder
Paul Newton, President, Utah Land Title Association
Burt Matthews, Vice President, Sales, eGlobal ATM
A list of visitors and a copy of handouts are filed with the committee minutes.
Chair VanTassell called the meeting to order at 8:35 a.m.
Approval of Minutes
MOTION: Sen. Hickman moved to approve the minutes of February 1, 2007.
The motion passed unanimously with Sen. Mayne absent for the vote.
1. S.B. 77 Insurable Interest Amendments (R. Romero)
Sen. Romero introduced the bill and the following amendments were distributed:
1. Page 2, Lines 28 through 37 :
28 (1) As used in this chapter:
(a) For purposes of this section, "exchange" means an exchange made pursuant to
Section 1035, Internal Revenue Code, as may be amended.
29
{
(a)
}
(b)
"Insurable interest" in a person means the following, including a
circumstance
30 described in Subsection (3):
31 (i) for persons closely related by blood or by law, a substantial interest engendered by
32 love and affection; or
33 (ii) in the case of other persons, a lawful and substantial interest in having the life,
34 health, and bodily safety of the person insured continue.
35
{
(b)
}
(c)
"Insurable interest" in property or liability means any lawful and
substantial
36 economic interest in the nonoccurrence of the event insured against.
37
{
(c)
}
(d)
"Viatical settlement" is as defined in Section
31A-36-102
.
2. Page 3, Lines 59 through 62 :
59 [
{
contract
}
policy
60 does not need an insurable interest if a certificate [
61 than the group
{
policyholders who are
}
policyholder who is
specified by the
certificate [holders are the recipients]
62 holder is the recipient of the proceeds of the [
{
contract
}
policy
.
3. Page 3, Line 69 through Page 4, Line 117 :
69 [
(c) A trust has an insurable interest in the subject of the insurance to the extent
that a beneficiary of the trsut has the insurable interest.
70 [
{
(c)
}
(d)
(i) Subject to Subsection [(9)] (3)
{
(c)
}
(d)
(v), an
employer or an employer
71 sponsored trust [
72 (A) has an insurable interest in the lives of the employer's:
73 (I) directors;
74 (II) officers;
75 (III) managers;
76 (IV) nonmanagement employees; and
77 (V) retired employees; and
78 (B) may insure the lives listed in Subsection [
{
(c)
}
(d)
(i)(A):
79 (I) on an individual or group basis; and
80 (II) with the written consent of the insured.
81 [
82
83 [
84 (ii) (A) A trustee of a trust established by an employer for the sole benefit of the
85 employer has the same insurable interest in the life and health of any person as does the
86 employer.
87 (B) Without limiting the general principle in Subsection (3)
{
(c)
}
(d)
(ii)(A), a trustee of a
88 trust established by an employer that provides life, health, disability, retirement, or similar
89 benefits has an insurable interest in the lives of the following individuals if the individual is to
90 be provided life, health, disability, retirement, or similar benefits from the trust:
91 (I) an individual described in Subsection (3)
{
(c)
}
(d)
(i)(A); or
92 (II) a dependent or beneficiary of an individual described in Subsection (3)
{
(c)
}
(d)
(i)(A).
93 (iii) (A) For the purpose of exchanging life insurance, the individuals described in
94 Subsection (3)
{
(c)
}
(d)
(i)(A) include an individual who was formerly included
under Subsection
95 (3)
{
(c)
}
(d)
(i)(A) if the life insurance to be exchanged:
96 (I) is purchased or acquired while the individual is a current director, officer, manager,
97 or employee; and
98 (II) is exchanged for life insurance in an amount that does not exceed the amount of the
99 insurance being exchanged.
100 (B) Written consent of an individual described in this Subsection (3)
{
(c)
}
(d)
(iii) is not
101 required at the time of the exchange of the life insurance.
102 (C) This Subsection (3)
{
(c)
}
(d)
(iii) shall be interpreted in a manner
consistent with
103 Subsection (2)(c).
104 (iv) (A) If an employer or trustee establishes an insurable interest as provided in this
105 Subsection (3)
{
(c)
}
(d)
and all of the employer's business is acquired,
purchased, merged into, or
106 otherwise transferred to a subsequent employer, the insurable interest of the original employer
107 or trustee in an individual described in Subsection (3)
{
(c)
}
(d)
(i)(A) is
automatically transferred to:
108 (I) the subsequent employer; or
109 (II) the trustee of a trust established by the subsequent employer for the subsequent
110 employer's sole benefit.
111 (B) A subsequent employer or a trustee of a trust described in Subsection
112 (3)
{
(c)
}
(d)
(iv)(A)(II) may exchange life insurance that is purchased or acquired
in an individual
113 described in Subsection (3)
{
(c)
}
(d)
(i)(A) by the original employer or trustee
without establishing a
114 new insurable interest at the time of the exchange of the insurance.
115 (v) The extent of an employer's or employer sponsored trust's insurable interest for a
116 nonmanagement
{
and
}
or
retired employee under Subsection
(3)
{
(c)
}
(d)
(i) is limited to an amount
117 commensurate with the employer's unfunded liabilities
at the time insurance on the
nonmanagement or retired employee is procured
.
4. Page 6, Lines 156 through 157 :
156 [
{
the policyholder lacks
insurable
157 interest or because }
:
(i) the insurance policy is issued or procured in violation of Subsection (2); or
(ii)
consent has not been given.
5. Page 7, Lines 198 through 199 :
198 (iii)
{
is
}
are
not in lieu of an insurable interest that is not expressly
included in this section
199 but exists in common law.
MOTION: Sen. Walker moved to adopt the amendments.
The motion passed unanimously with Sen. Mayne absent for the vote.
Sen. Romero proposed to further amend the bill as follows:
On line 46, delete "or" and insert "and"
MOTION: Sen. Hickman moved to adopt the amendment.
The motion passed unanimously with Sen. Mayne absent for the vote.
Mark Dykes, attorney, Parsons Behle & Lattimer, further clarified the bill.
MOTION: Sen. Walker moved to pass the bill out favorably as amended.
The motion passed unanimously with Sen. Mayne absent for the vote.
Chair Van Tassell and Sen. Hickman declared a conflict of interest.
2. S.B. 219 Real Estate Modifications (D. Stowell)
Sen. Stowell introduced the bill and proposed to amend the bill as follows:
1. Page 3, Lines 84 through 85 :
84 (9)
{
Neither
}
Subject to federal bankruptcy law, neither
the recordation
of an affidavit under Subsection (8) nor the reexecution and
85 rerecording of a document under Subsection (7)
shall
:
MOTION: Sen. Hickman moved to adopt the amendment.
The motion passed unanimously.
Alan Spriggs, Summit County Recorder, further clarified the bill and answered questions from the committee.
Paul Newton, President, Utah Land Title Association, spoke in support of the bill.
MOTION: Sen. Neiderhauser moved to pass the bill out favorably as amended.
The motion passed unanimously.
MOTION: Sen. Hickman moved to place S.B. 219 on the Consent Calendar.
The motion passed unanimously.
3. H.B. 88 Automated Teller Machine Changes for International Accounts (Julie Fisher)
Rep. Julie Fisher introduced the bill.
Burt Matthews, Vice President, Sales, eGlobal ATM, spoke in support of the bill and answered questions from the committee.
MOTION: Sen. Eastman moved to pass the bill out favorably.
The motion passed unanimously.
MOTION: Sen. Hickman moved to adjourn.
The motion passed unanimously at 9:17 a.m.
_________________________________
Sen. Kevin VanTassell, Committee Chair