H.B. 342 Enrolled

1

INSURANCE CODE AMENDMENTS
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: James A. Dunnigan
5 Senate Sponsor: Sheldon L. Killpack
6
7 LONG TITLE
8 General Description:
9 This bill modifies the Insurance Code to make various amendments.
10 Highlighted Provisions:
11 This bill:
12 . modifies definition provisions;
13 . addresses the timing of examinations;
14 . changes the requirements for appointments to the Title and Escrow Commission;
15 . addresses requirements to conduct an insurance business in Utah;
16 . addresses filing of evidence of preemption;
17 . addresses service contract providers and service contract reimbursement insurance
18 policies including:
19 . requiring registration;
20 . requiring disclosures; and
21 . addressing prohibited acts;
22 . addresses how to calculate monies paid a beneficiary in certain circumstances where
23 a suicide occurs;
24 . addresses certain circumstances related to annuity payments;
25 . provides for the payment of interest on life insurance proceeds;
26 . provides for special enrollment for individuals receiving premium assistance;
27 . addresses the Basic Health Care Plan;
28 . clarifies language related to catastrophic coverage of mental health conditions;
29 . clarifies circumstances when the commissioner can prohibit a policy, contract,

30 certificate, or form;
31 . requires submission to criminal background checks in certain circumstances;
32 . modifies the contents of a form used in a license;
33 . addresses grounds involving a viatical settlement for action against a licensee;
34 . makes technical changes regarding delinquency proceedings;
35 . expands the purposes of the Individual, Small Employer, and Group Health
36 Insurance Act; and
37 . makes additional technical amendments.
38 Monies Appropriated in this Bill:
39 None
40 Other Special Clauses:
41 None
42 Utah Code Sections Affected:
43 AMENDS:
44 31A-1-301, as last amended by Laws of Utah 2007, Chapter 307
45 31A-2-203, as last amended by Laws of Utah 2007, Chapter 309
46 31A-2-403, as last amended by Laws of Utah 2007, Chapter 325
47 31A-4-102, as last amended by Laws of Utah 1998, Chapter 293
48 31A-4-106, as last amended by Laws of Utah 2003, Chapter 298
49 31A-6a-103, as last amended by Laws of Utah 2005, Chapter 124
50 31A-6a-104, as enacted by Laws of Utah 1992, Chapter 203
51 31A-6a-105, as enacted by Laws of Utah 1992, Chapter 203
52 31A-22-404, as last amended by Laws of Utah 2002, Chapter 308
53 31A-22-409, as last amended by Laws of Utah 2005, Chapter 125
54 31A-22-613.5, as last amended by Laws of Utah 2007, Chapter 307
55 31A-22-625, as last amended by Laws of Utah 2002, Chapter 308
56 31A-22-807, as last amended by Laws of Utah 2001, Chapter 116
57 31A-23a-105, as last amended by Laws of Utah 2007, Chapter 307

58 31A-23a-110, as renumbered and amended by Laws of Utah 2003, Chapter 298
59 31A-23a-111, as last amended by Laws of Utah 2006, Chapter 312
60 31A-23a-116, as renumbered and amended by Laws of Utah 2003, Chapter 298
61 31A-25-203, as last amended by Laws of Utah 2006, Chapter 312
62 31A-26-203, as last amended by Laws of Utah 2006, Chapter 312
63 31A-27a-513, as enacted by Laws of Utah 2007, Chapter 309
64 31A-27a-515, as enacted by Laws of Utah 2007, Chapter 309
65 31A-27a-516, as enacted by Laws of Utah 2007, Chapter 309
66 31A-30-102, as last amended by Laws of Utah 1997, Chapter 265
67 31A-30-112, as last amended by Laws of Utah 2007, Chapter 307
68 ENACTS:
69 31A-22-428, Utah Code Annotated 1953
70 31A-22-610.6, Utah Code Annotated 1953
71
72 Be it enacted by the Legislature of the state of Utah:
73 Section 1. Section 31A-1-301 is amended to read:
74 31A-1-301. Definitions.
75 As used in this title, unless otherwise specified:
76 (1) (a) "Accident and health insurance" means insurance to provide protection against
77 economic losses resulting from:
78 (i) a medical condition including:
79 (A) a medical care [expenses] expense; or
80 (B) the risk of disability;
81 (ii) accident; or
82 (iii) sickness.
83 (b) "Accident and health insurance":
84 (i) includes a contract with disability contingencies including:
85 (A) an income replacement contract;

86 (B) a health care contract;
87 (C) an expense reimbursement contract;
88 (D) a credit accident and health contract;
89 (E) a continuing care contract; and
90 (F) a long-term care contract; and
91 (ii) may provide:
92 (A) hospital coverage;
93 (B) surgical coverage;
94 (C) medical coverage; [or]
95 (D) loss of income coverage[.];
96 (E) prescription drug coverage;
97 (F) dental coverage; or
98 (G) vision coverage.
99 (c) "Accident and health insurance" does not include workers' compensation insurance.
100 (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
101 63, Chapter 46a, Utah Administrative Rulemaking Act.
102 (3) "Administrator" is defined in Subsection [(157)] (159).
103 (4) "Adult" means a natural person who has attained the age of at least 18 years.
104 (5) "Affiliate" means [any] a person who controls, is controlled by, or is under common
105 control with, another person. A corporation is an affiliate of another corporation, regardless of
106 ownership, if substantially the same group of natural persons manages the corporations.
107 (6) "Agency" means:
108 (a) a person other than an individual, including a sole proprietorship by which a natural
109 person does business under an assumed name; and
110 (b) an insurance organization licensed or required to be licensed under Section
111 31A-23a-301 .
112 (7) "Alien insurer" means an insurer domiciled outside the United States.
113 (8) "Amendment" means an endorsement to an insurance policy or certificate.

114 (9) "Annuity" means an agreement to make periodical payments for a period certain or
115 over the lifetime of one or more natural persons if the making or continuance of all or some of
116 the series of the payments, or the amount of the payment, is dependent upon the continuance of
117 human life.
118 (10) "Application" means a document:
119 (a) (i) completed by an applicant to provide information about the risk to be insured;
120 and
121 (ii) that contains information that is used by the insurer to evaluate risk and decide
122 whether to:
123 (A) insure the risk under:
124 (I) the [coverages] coverage as originally offered; or
125 (II) a modification of the coverage as originally offered; or
126 (B) decline to insure the risk; or
127 (b) used by the insurer to gather information from the applicant before issuance of an
128 annuity contract.
129 (11) "Articles" or "articles of incorporation" means:
130 (a) the original articles[,];
131 (b) a special [laws, charters, amendments,] law;
132 (c) a charter;
133 (d) an amendment;
134 (e) restated articles[,];
135 (f) articles of merger or consolidation[, trust instruments, and other constitutive
136 documents for trusts and other entities that are not corporations, and amendments to any of
137 these.];
138 (g) a trust instrument;
139 (h) another constitutive document for a trust or other entity that is not a corporation;
140 and
141 (i) an amendment to an item listed in Subsections (11)(a) through (h).

142 (12) "Bail bond insurance" means a guarantee that a person will attend court when
143 required, up to and including surrender of the person in execution of [any] a sentence imposed
144 under Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
145 (13) "Binder" is defined in Section 31A-21-102 .
146 (14) "Blanket insurance policy" means a group policy covering [classes] a defined class
147 of persons:
148 (a) without individual underwriting[, where the persons insured are] or application; and
149 (b) that is determined by definition [of the class] with or without designating [the
150 persons] each person covered.
151 (15) "Board," "board of trustees," or "board of directors" means the group of persons
152 with responsibility over, or management of, a corporation, however designated.
153 (16) "Business entity" means:
154 (a) a corporation[,];
155 (b) an association[,];
156 (c) a partnership[,];
157 (d) a limited liability company[,];
158 (e) a limited liability partnership[,]; or [other]
159 (f) another legal entity.
160 (17) "Business of insurance" is defined in Subsection [(84)] (85).
161 (18) "Business plan" means the information required to be supplied to the commissioner
162 under Subsections 31A-5-204 (2)(i) and (j), including the information required when these
163 subsections [are applicable] apply by reference under:
164 (a) Section 31A-7-201 ;
165 (b) Section 31A-8-205 ; or
166 (c) Subsection 31A-9-205 (2).
167 (19) (a) "Bylaws" means the rules adopted for the regulation or management of a
168 corporation's affairs, however designated [and].
169 (b) "Bylaws" includes comparable rules for [trusts and other entities that are not

170 corporations] a trust or other entity that is not a corporation.
171 (20) "Captive insurance company" means:
172 (a) an [insurance company] insurer:
173 (i) owned by another organization; and
174 (ii) whose exclusive purpose is to insure risks of the parent organization and an
175 affiliated [companies] company; or
176 (b) in the case of [groups and associations, an insurance organization] a group or
177 association, an insurer:
178 (i) owned by the insureds; and
179 (ii) whose exclusive purpose is to insure risks of:
180 (A) a member [organizations] organization;
181 (B) a group [members; and] member; or
182 (C) [affiliates] an affiliate of:
183 (I) a member [organizations] organization; or
184 (II) a group [members] member.
185 (21) "Casualty insurance" means liability insurance as defined in Subsection [(96)] (97).
186 (22) "Certificate" means evidence of insurance given to:
187 (a) an insured under a group insurance policy; or
188 (b) a third party.
189 (23) "Certificate of authority" is included within the term "license."
190 (24) "Claim," unless the context otherwise requires, means a request or demand on an
191 insurer for payment of [benefits] a benefit according to the terms of an insurance policy.
192 (25) "Claims-made coverage" means an insurance contract or provision limiting
193 coverage under a policy insuring against legal liability to claims that are first made against the
194 insured while the policy is in force.
195 (26) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
196 commissioner.
197 (b) When appropriate, the terms listed in Subsection (26)(a) apply to the equivalent

198 supervisory official of another jurisdiction.
199 (27) (a) "Continuing care insurance" means insurance that:
200 (i) provides board and lodging;
201 (ii) provides one or more of the following [services]:
202 (A) a personal [services] service;
203 (B) a nursing [services] service;
204 (C) a medical [services] service; or
205 (D) any other health-related [services] service; and
206 (iii) provides the coverage described in Subsection (27)(a)(i) under an agreement
207 effective:
208 (A) for the life of the insured; or
209 (B) for a period in excess of one year.
210 (b) Insurance is continuing care insurance regardless of whether or not the board and
211 lodging are provided at the same location as [the services] a service described in Subsection
212 (27)(a)(ii).
213 (28) (a) "Control," "controlling," "controlled," or "under common control" means the
214 direct or indirect possession of the power to direct or cause the direction of the management
215 and policies of a person. This control may be:
216 (i) by contract;
217 (ii) by common management;
218 (iii) through the ownership of voting securities; or
219 (iv) by a means other than those described in Subsections (28)(a)(i) through (iii).
220 (b) There is no presumption that an individual holding an official position with another
221 person controls that person solely by reason of the position.
222 (c) A person having a contract or arrangement giving control is considered to have
223 control despite the illegality or invalidity of the contract or arrangement.
224 (d) There is a rebuttable presumption of control in a person who directly or indirectly
225 owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the

226 voting securities of another person.
227 (29) "Controlled insurer" means a licensed insurer that is either directly or indirectly
228 controlled by a producer.
229 (30) "Controlling person" means [any] a person that directly or indirectly has the power
230 to direct or cause to be directed, the management, control, or activities of a reinsurance
231 intermediary.
232 (31) "Controlling producer" means a producer who directly or indirectly controls an
233 insurer.
234 (32) (a) "Corporation" means an insurance corporation, except when referring to:
235 (i) a corporation doing business:
236 (A) as:
237 (I) an insurance producer;
238 (II) a limited line producer;
239 (III) a consultant;
240 (IV) a managing general agent;
241 (V) a reinsurance intermediary;
242 (VI) a third party administrator; or
243 (VII) an adjuster; and
244 (B) under:
245 (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
246 Reinsurance Intermediaries;
247 (II) Chapter 25, Third Party Administrators; or
248 (III) Chapter 26, Insurance Adjusters; or
249 (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
250 Holding Companies.
251 (b) "Stock corporation" means a stock insurance corporation.
252 (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
253 (33) "Creditable coverage" has the same meaning as provided in federal regulations

254 adopted pursuant to the Health Insurance Portability and Accountability Act of 1996, Pub. L.
255 104-191, 110 Stat. 1936.
256 (34) "Credit accident and health insurance" means insurance on a debtor to provide
257 indemnity for payments coming due on a specific loan or other credit transaction while the
258 debtor is disabled.
259 (35) (a) "Credit insurance" means insurance offered in connection with an extension of
260 credit that is limited to partially or wholly extinguishing that credit obligation.
261 (b) "Credit insurance" includes:
262 (i) credit accident and health insurance;
263 (ii) credit life insurance;
264 (iii) credit property insurance;
265 (iv) credit unemployment insurance;
266 (v) guaranteed automobile protection insurance;
267 (vi) involuntary unemployment insurance;
268 (vii) mortgage accident and health insurance;
269 (viii) mortgage guaranty insurance; and
270 (ix) mortgage life insurance.
271 (36) "Credit life insurance" means insurance on the life of a debtor in connection with
272 an extension of credit that pays a person if the debtor dies.
273 (37) "Credit property insurance" means insurance:
274 (a) offered in connection with an extension of credit; and
275 (b) that protects the property until the debt is paid.
276 (38) "Credit unemployment insurance" means insurance:
277 (a) offered in connection with an extension of credit; and
278 (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
279 (i) specific loan; or
280 (ii) credit transaction.
281 (39) "Creditor" means a person, including an insured, having [any] a claim, whether:

282 (a) matured;
283 (b) unmatured;
284 (c) liquidated;
285 (d) unliquidated;
286 (e) secured;
287 (f) unsecured;
288 (g) absolute;
289 (h) fixed; or
290 (i) contingent.
291 (40) (a) "Customer service representative" means a person that provides an insurance
292 [services] service and insurance product information:
293 (i) for the customer service representative's:
294 (A) producer; or
295 (B) consultant employer; and
296 (ii) to the customer service representative's employer's:
297 (A) customer;
298 (B) client; or
299 (C) organization.
300 (b) A customer service representative may only operate within the scope of authority of
301 the customer service representative's producer or consultant employer.
302 (41) "Deadline" means the final date or time:
303 (a) imposed by:
304 (i) statute;
305 (ii) rule; or
306 (iii) order; and
307 (b) by which a required filing or payment must be received by the department.
308 (42) "Deemer clause" means a provision under this title under which upon the
309 occurrence of a condition precedent, the commissioner is [deemed] considered to have taken a

310 specific action. If the statute so provides, [the] a condition precedent may be the
311 commissioner's failure to take a specific action.
312 (43) "Degree of relationship" means the number of steps between two persons
313 determined by counting the generations separating one person from a common ancestor and
314 then counting the generations to the other person.
315 (44) "Department" means the Insurance Department.
316 (45) "Director" means a member of the board of directors of a corporation.
317 (46) "Disability" means a physiological or psychological condition that partially or
318 totally limits an individual's ability to:
319 (a) perform the duties of:
320 (i) that individual's occupation; or
321 (ii) any occupation for which the individual is reasonably suited by education, training,
322 or experience; or
323 (b) perform two or more of the following basic activities of daily living:
324 (i) eating;
325 (ii) toileting;
326 (iii) transferring;
327 (iv) bathing; or
328 (v) dressing.
329 (47) "Disability income insurance" is defined in Subsection [(75)] (76).
330 (48) "Domestic insurer" means an insurer organized under the laws of this state.
331 (49) "Domiciliary state" means the state in which an insurer:
332 (a) is incorporated;
333 (b) is organized; or
334 (c) in the case of an alien insurer, enters into the United States.
335 (50) (a) "Eligible employee" means:
336 (i) an employee who:
337 (A) works on a full-time basis; and

338 (B) has a normal work week of 30 or more hours; or
339 (ii) a person described in Subsection (50)(b).
340 (b) "Eligible employee" includes, if the individual is included under a health benefit plan
341 of a small employer:
342 (i) a sole proprietor;
343 (ii) a partner in a partnership; or
344 (iii) an independent contractor.
345 (c) "Eligible employee" does not include, unless eligible under Subsection (50)(b):
346 (i) an individual who works on a temporary or substitute basis for a small employer;
347 (ii) an employer's spouse; or
348 (iii) a dependent of an employer.
349 (51) "Employee" means [any] an individual employed by an employer.
350 (52) "Employee benefits" means one or more benefits or services provided to:
351 (a) [employees] an employee; or
352 (b) [dependents of employees] a dependent of an employee.
353 (53) (a) "Employee welfare fund" means a fund:
354 (i) established or maintained, whether directly or through [trustees] a trustee, by:
355 (A) one or more employers;
356 (B) one or more labor organizations; or
357 (C) a combination of employers and labor organizations; and
358 (ii) that provides employee benefits paid or contracted to be paid, other than income
359 from investments of the fund[,]:
360 (A) by or on behalf of an employer doing business in this state; or
361 (B) for the benefit of [any] a person employed in this state.
362 (b) "Employee welfare fund" includes a plan funded or subsidized by a user [fees] fee or
363 tax revenues.
364 (54) "Endorsement" means a written agreement attached to a policy or certificate to
365 modify one or more of the provisions of the policy or certificate.

366 (55) "Enrollment date," with respect to a health benefit plan, means:
367 (a) the first day of coverage; or[,]
368 (b) if there is a waiting period, the first day of the waiting period.
369 (56) (a) "Escrow" means:
370 (i) a real estate settlement or real estate closing conducted by a third party pursuant to
371 the requirements of a written agreement between the parties in a real estate transaction; or
372 (ii) a settlement or closing involving:
373 (A) a mobile home;
374 (B) a grazing right;
375 (C) a water right; or
376 (D) other personal property authorized by the commissioner.
377 (b) "Escrow" includes the act of conducting a:
378 (i) real estate settlement; or
379 (ii) real estate closing.
380 (57) "Escrow agent" means:
381 (a) an insurance producer with:
382 (i) a title insurance line of authority; and
383 (ii) an escrow subline of authority; or
384 (b) a person defined as an escrow agent in Section 7-22-101 .
385 (58) (a) "Excludes" is not exhaustive and does not mean that [other things are] another
386 thing is not also excluded.
387 (b) The items listed in a list using the term "excludes" are representative examples for
388 use in interpretation of this title.
389 (59) "Exclusion" means for the purposes of accident and health insurance that an insurer
390 does not provide insurance coverage, for whatever reason, for one of the following:
391 (a) a specific physical condition;
392 (b) a specific medical procedure;
393 (c) a specific disease or disorder; or

394 (d) a specific prescription drug or class of prescription drugs.
395 [(59)] (60) "Expense reimbursement insurance" means insurance:
396 (a) written to provide [payments for expenses] a payment for an expense relating to
397 hospital [confinements] confinement resulting from illness or injury; and
398 (b) written:
399 (i) as a daily limit for a specific number of days in a hospital; and
400 (ii) to have a one or two day waiting period following a hospitalization.
401 [(60)] (61) "Fidelity insurance" means insurance guaranteeing the fidelity of [persons] a
402 person holding [positions] a position of public or private trust.
403 [(61)] (62) (a) "Filed" means that a filing is:
404 (i) submitted to the department as required by and in accordance with [any] applicable
405 statute, rule, or filing order;
406 (ii) received by the department within the time period provided in [the] applicable
407 statute, rule, or filing order; and
408 (iii) accompanied by the appropriate fee in accordance with:
409 (A) Section 31A-3-103 ; or
410 (B) rule.
411 (b) "Filed" does not include a filing that is rejected by the department because it is not
412 submitted in accordance with Subsection [(61)] (62)(a).
413 [(62)] (63) "Filing," when used as a noun, means an item required to be filed with the
414 department including:
415 (a) a policy;
416 (b) a rate;
417 (c) a form;
418 (d) a document;
419 (e) a plan;
420 (f) a manual;
421 (g) an application;

422 (h) a report;
423 (i) a certificate;
424 (j) an endorsement;
425 (k) an actuarial certification;
426 (l) a licensee annual statement;
427 (m) a licensee renewal application; [or]
428 (n) an advertisement; or
429 (o) an outline of coverage.
430 [(63)] (64) "First party insurance" means an insurance policy or contract in which the
431 insurer agrees to pay [claims] a claim submitted to it by the insured for the insured's losses.
432 [(64)] (65) "Foreign insurer" means an insurer domiciled outside of this state, including
433 an alien insurer.
434 [(65)] (66) (a) "Form" means one of the following prepared for general use:
435 (i) a policy;
436 (ii) a certificate;
437 (iii) an application; [or]
438 (iv) an outline of coverage; or
439 (v) an endorsement.
440 (b) "Form" does not include a document specially prepared for use in an individual case.
441 [(66)] (67) "Franchise insurance" means an individual insurance [policies] policy
442 provided through a mass marketing arrangement involving a defined class of persons related in
443 some way other than through the purchase of insurance.
444 [(67)] (68) "General lines of authority" include:
445 (a) the general lines of insurance in Subsection [(68)] (69);
446 (b) title insurance under one of the following sublines of authority:
447 (i) search, including authority to act as a title marketing representative;
448 (ii) escrow, including authority to act as a title marketing representative;
449 (iii) search and escrow, including authority to act as a title marketing representative;

450 and
451 (iv) title marketing representative only;
452 (c) surplus lines;
453 (d) workers' compensation; and
454 (e) any other line of insurance that the commissioner considers necessary to recognize
455 in the public interest.
456 [(68)] (69) "General lines of insurance" include:
457 (a) accident and health;
458 (b) casualty;
459 (c) life;
460 (d) personal lines;
461 (e) property; and
462 (f) variable contracts, including variable life and annuity.
463 [(69)] (70) "Group health plan" means an employee welfare benefit plan to the extent
464 that the plan provides medical care:
465 (a) (i) to [employees] an employee; or
466 (ii) to a dependent of an employee; and
467 (b) (i) directly;
468 (ii) through insurance reimbursement; or
469 (iii) through [any other] another method.
470 [(70)] (71) (a) "Group insurance policy" means a policy covering a group of persons
471 that is issued:
472 (i) to a policyholder on behalf of the group; and
473 (ii) for the benefit of [group members who are] a member of the group who is selected
474 under [procedures] a procedure defined in:
475 (A) the policy; or
476 (B) [agreements which are] an agreement that is collateral to the policy.
477 (b) A group insurance policy may include [members] a member of the policyholder's

478 family or [dependents] a dependent.
479 [(71)] (72) "Guaranteed automobile protection insurance" means insurance offered in
480 connection with an extension of credit that pays the difference in amount between the insurance
481 settlement and the balance of the loan if the insured automobile is a total loss.
482 [(72)] (73) (a) Except as provided in Subsection [(72)] (73)(b), "health benefit plan"
483 means a policy or certificate that:
484 (i) provides health care insurance;
485 (ii) provides major medical expense insurance; or
486 (iii) is offered as a substitute for hospital or medical expense insurance such as:
487 (A) a hospital confinement indemnity; or
488 (B) a limited benefit plan.
489 (b) "Health benefit plan" does not include a policy or certificate that:
490 (i) provides benefits solely for:
491 (A) accident;
492 (B) dental;
493 (C) income replacement;
494 (D) long-term care;
495 (E) a Medicare supplement;
496 (F) a specified disease;
497 (G) vision; or
498 (H) a short-term limited duration; or
499 (ii) is offered and marketed as supplemental health insurance.
500 [(73)] (74) "Health care" means any of the following intended for use in the diagnosis,
501 treatment, mitigation, or prevention of a human ailment or impairment:
502 (a) a professional [services] service;
503 (b) a personal [services] service;
504 (c) [facilities] a facility;
505 (d) equipment;

506 (e) [devices] a device;
507 (f) supplies; or
508 (g) medicine.
509 [(74)] (75) (a) "Health care insurance" or "health insurance" means insurance providing:
510 (i) a health care [benefits] benefit; or
511 (ii) payment of an incurred health care [expenses] expense.
512 (b) "Health care insurance" or "health insurance" does not include accident and health
513 insurance providing [benefits] a benefit for:
514 (i) replacement of income;
515 (ii) short-term accident;
516 (iii) fixed indemnity;
517 (iv) credit accident and health;
518 (v) supplements to liability;
519 (vi) workers' compensation;
520 (vii) automobile medical payment;
521 (viii) no-fault automobile;
522 (ix) equivalent self-insurance; or
523 (x) [any] a type of accident and health insurance coverage that is a part of or attached
524 to another type of policy.
525 [(75)] (76) "Income replacement insurance" or "disability income insurance" means
526 insurance written to provide payments to replace income lost from accident or sickness.
527 [(76)] (77) "Indemnity" means the payment of an amount to offset all or part of an
528 insured loss.
529 [(77)] (78) "Independent adjuster" means an insurance adjuster required to be licensed
530 under Section 31A-26-201 who engages in insurance adjusting as a representative of [insurers]
531 an insurer.
532 [(78)] (79) "Independently procured insurance" means insurance procured under
533 Section 31A-15-104 .

534 [(79)] (80) "Individual" means a natural person.
535 [(80)] (81) "Inland marine insurance" includes insurance covering:
536 (a) property in transit on or over land;
537 (b) property in transit over water by means other than boat or ship;
538 (c) bailee liability;
539 (d) fixed transportation property such as bridges, electric transmission systems, radio
540 and television transmission towers and tunnels; and
541 (e) personal and commercial property floaters.
542 [(81)] (82) "Insolvency" means that:
543 (a) an insurer is unable to pay its debts or meet its obligations as [they] the debts and
544 obligations mature;
545 (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
546 RBC under Subsection 31A-17-601 (8)(c); or
547 (c) an insurer is determined to be hazardous under this title.
548 [(82)] (83) (a) "Insurance" means:
549 (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
550 persons to one or more other persons; or
551 (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
552 group of persons that includes the person seeking to distribute that person's risk.
553 (b) "Insurance" includes:
554 (i) a risk distributing [arrangements] arrangement providing for compensation or
555 replacement for damages or loss through the provision of [services or benefits] a service or a
556 benefit in kind;
557 (ii) [contracts] a contract of guaranty or suretyship entered into by the guarantor or
558 surety as a business and not as merely incidental to a business transaction; and
559 (iii) [plans] a plan in which the risk does not rest upon the person who makes [the
560 arrangements] an arrangement, but with a class of persons who have agreed to share [it] the
561 risk.

562 [(83)] (84) "Insurance adjuster" means a person who directs the investigation,
563 negotiation, or settlement of a claim under an insurance policy other than life insurance or an
564 annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
565 [(84)] (85) "Insurance business" or "business of insurance" includes:
566 (a) providing health care insurance, as defined in Subsection [(74)] (75), by
567 [organizations that are] an organization that is or should be licensed under this title;
568 (b) providing [benefits to employees] a benefit to an employee in the event of
569 [contingencies] a contingency not within the control of the [employees] employee, in which the
570 [employees are] employee is entitled to the [benefits] benefit as a right, which [benefits] benefit
571 may be provided either:
572 (i) by a single [employers] employer or by multiple employer groups; or
573 (ii) through one or more trusts, associations, or other entities;
574 (c) providing [annuities,] an annuity:
575 (i) including [those] an annuity issued in return for [gifts,] a gift; and
576 (ii) except [those] an annuity provided by [persons] a person specified in Subsections
577 31A-22-1305 (2) and (3);
578 (d) providing the characteristic services of a motor [clubs] club as outlined in
579 Subsection [(112)] (113);
580 (e) providing [other persons] another person with insurance as defined in Subsection
581 [(82)] (83);
582 (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
583 or surety, [any] a contract or policy of title insurance;
584 (g) transacting or proposing to transact any phase of title insurance, including:
585 (i) solicitation;
586 (ii) negotiation preliminary to execution;
587 (iii) execution of a contract of title insurance;
588 (iv) insuring; and
589 (v) transacting matters subsequent to the execution of the contract and arising out of

590 the contract, including reinsurance; and
591 (h) doing, or proposing to do, any business in substance equivalent to Subsections
592 [(84)] (85)(a) through (g) in a manner designed to evade the provisions of this title.
593 [(85)] (86) "Insurance consultant" or "consultant" means a person who:
594 (a) advises [other persons] another person about insurance needs and coverages;
595 (b) is compensated by the person advised on a basis not directly related to the insurance
596 placed; and
597 (c) except as provided in Section 31A-23a-501 , is not compensated directly or
598 indirectly by an insurer or producer for advice given.
599 [(86)] (87) "Insurance holding company system" means a group of two or more
600 affiliated persons, at least one of whom is an insurer.
601 [(87)] (88) (a) "Insurance producer" or "producer" means a person licensed or required
602 to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
603 (b) With regards to the selling, soliciting, or negotiating of an insurance product to an
604 insurance customer or an insured:
605 (i) "producer for the insurer" means a producer who is compensated directly or
606 indirectly by an insurer for selling, soliciting, or negotiating [any] a product of that insurer; and
607 (ii) "producer for the insured" means a producer who:
608 (A) is compensated directly and only by an insurance customer or an insured; and
609 (B) receives no compensation directly or indirectly from an insurer for selling, soliciting,
610 or negotiating [any] a product of that insurer to an insurance customer or insured.
611 [(88)] (89) (a) "Insured" means a person to whom or for whose benefit an insurer
612 makes a promise in an insurance policy and includes:
613 (i) [policyholders] a policyholder;
614 (ii) [subscribers] a subscriber;
615 (iii) [members] a member; and
616 (iv) [beneficiaries] a beneficiary.
617 (b) The definition in Subsection [(88)] (89)(a):

618 (i) applies only to this title; and
619 (ii) does not define the meaning of this word as used in an insurance [policies or
620 certificates] policy or certificate.
621 [(89)] (90) (a) (i) "Insurer" means [any] a person doing an insurance business as a
622 principal including:
623 (A) a fraternal benefit [societies] society;
624 (B) [issuers of gift annuities other than those] an issuer of a gift annuity other than an
625 annuity specified in Subsections 31A-22-1305 (2) and (3);
626 (C) a motor [clubs] club;
627 (D) an employee welfare [plans] plan; and
628 (E) [any] a person purporting or intending to do an insurance business as a principal on
629 that person's own account.
630 (ii) "Insurer" does not include a governmental entity to the extent [it] the governmental
631 entity is engaged in [the activities] an activity described in Section 31A-12-107 .
632 (b) "Admitted insurer" is defined in Subsection [(161)] (163)(b).
633 (c) "Alien insurer" is defined in Subsection (7).
634 (d) "Authorized insurer" is defined in Subsection [(161)] (163)(b).
635 (e) "Domestic insurer" is defined in Subsection (48).
636 (f) "Foreign insurer" is defined in Subsection [(64)] (65).
637 (g) "Nonadmitted insurer" is defined in Subsection [(161)] (163)(a).
638 (h) "Unauthorized insurer" is defined in Subsection [(161)] (163)(a).
639 [(90)] (91) "Interinsurance exchange" is defined in Subsection [(141)] (142).
640 [(91)] (92) "Involuntary unemployment insurance" means insurance:
641 (a) offered in connection with an extension of credit; and
642 (b) that provides indemnity if the debtor is involuntarily unemployed for payments
643 coming due on a:
644 (i) specific loan; or
645 (ii) credit transaction.

646 [(92)] (93) "Large employer," in connection with a health benefit plan, means an
647 employer who, with respect to a calendar year and to a plan year:
648 (a) employed an average of at least 51 eligible employees on each business day during
649 the preceding calendar year; and
650 (b) employs at least two employees on the first day of the plan year.
651 [(93)] (94) "Late enrollee," with respect to an employer health benefit plan, means an
652 individual whose enrollment is a late enrollment.
653 [(94)] (95) "Late enrollment," with respect to an employer health benefit plan, means
654 enrollment of an individual other than:
655 (a) on the earliest date on which coverage can become effective for the individual under
656 the terms of the plan; or
657 (b) through special enrollment.
658 [(95)] (96) (a) Except for a retainer contract or legal assistance described in Section
659 31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
660 specified legal [expenses] expense.
661 (b) "Legal expense insurance" includes [arrangements that create] an arrangement that
662 creates a reasonable [expectations of ] expectation of an enforceable [rights] right.
663 (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
664 legal services incidental to other insurance [coverages] coverage.
665 [(96)] (97) (a) "Liability insurance" means insurance against liability:
666 (i) for death, injury, or disability of [any] a human being, or for damage to property,
667 exclusive of the coverages under:
668 (A) Subsection [(106)] (107) for medical malpractice insurance;
669 (B) Subsection [(133)] (134) for professional liability insurance; and
670 (C) Subsection [(166)] (168) for workers' compensation insurance;
671 (ii) for a medical, hospital, surgical, and funeral [benefits to persons] benefit to a person
672 other than the insured who [are] is injured, irrespective of legal liability of the insured, when
673 issued with or supplemental to insurance against legal liability for the death, injury, or disability

674 of a human [beings] being, exclusive of the coverages under:
675 (A) Subsection [(106)] (107) for medical malpractice insurance;
676 (B) Subsection [(133)] (134) for professional liability insurance; and
677 (C) Subsection [(166)] (168) for workers' compensation insurance;
678 (iii) for loss or damage to property resulting from [accidents to or explosions of boilers,
679 pipes, pressure containers] an accident to or explosion of a boiler, pipe, pressure container,
680 machinery, or apparatus;
681 (iv) for loss or damage to [any] property caused by:
682 (A) the breakage or leakage of [sprinklers, water pipes and containers, or by] a
683 sprinkler, water pipe, or water container; or
684 (B) water entering through [leaks or openings in buildings] a leak or opening in a
685 building; or
686 (v) for other loss or damage properly the subject of insurance not within [any other]
687 another kind [or kinds] of insurance as defined in this chapter, if [such] the insurance is not
688 contrary to law or public policy.
689 (b) "Liability insurance" includes:
690 (i) vehicle liability insurance as defined in Subsection [(163)] (165);
691 (ii) residential dwelling liability insurance as defined in Subsection [(144)] (145); and
692 (iii) making inspection of, and issuing [certificates] a certificate of inspection upon,
693 [elevators, boilers] an elevator, boiler, machinery, [and] or apparatus of any kind when done in
694 connection with insurance on [them] the elevator, boiler, machinery, or apparatus.
695 [(97)] (98) (a) "License" means the authorization issued by the commissioner to engage
696 in [some] an activity that is part of or related to the insurance business.
697 (b) "License" includes [certificates] a certificate of authority issued to [insurers] an
698 insurer.
699 [(98)] (99) (a) "Life insurance" means:
700 (i) insurance on a human [lives] life; and [insurances]
701 (ii) insurance pertaining to or connected with human life.

702 (b) The business of life insurance includes:
703 (i) granting a death [benefits] benefit;
704 (ii) granting an annuity [benefits] benefit;
705 (iii) granting an endowment [benefits] benefit;
706 (iv) granting an additional [benefits] benefit in the event of death by accident;
707 (v) granting an additional [benefits] benefit to safeguard the policy against lapse; and
708 (vi) providing an optional [methods] method of settlement of proceeds.
709 [(99)] (100) "Limited license" means a license that:
710 (a) is issued for a specific product of insurance; and
711 (b) limits an individual or agency to transact only for that product or insurance.
712 [(100)] (101) "Limited line credit insurance" includes the following forms of insurance:
713 (a) credit life;
714 (b) credit accident and health;
715 (c) credit property;
716 (d) credit unemployment;
717 (e) involuntary unemployment;
718 (f) mortgage life;
719 (g) mortgage guaranty;
720 (h) mortgage accident and health;
721 (i) guaranteed automobile protection; and
722 (j) [any other] another form of insurance offered in connection with an extension of
723 credit that:
724 (i) is limited to partially or wholly extinguishing the credit obligation; and
725 (ii) the commissioner determines by rule should be designated as a form of limited line
726 credit insurance.
727 [(101)] (102) "Limited line credit insurance producer" means a person who sells,
728 solicits, or negotiates one or more forms of limited line credit insurance coverage to
729 [individuals] an individual through a master, corporate, group, or individual policy.

730 [(102)] (103) "Limited line insurance" includes:
731 (a) bail bond;
732 (b) limited line credit insurance;
733 (c) legal expense insurance;
734 (d) motor club insurance;
735 (e) rental car-related insurance;
736 (f) travel insurance; and
737 (g) [any other] another form of limited insurance that the commissioner determines by
738 rule should be designated a form of limited line insurance.
739 [(103)] (104) "Limited lines authority" includes:
740 (a) the lines of insurance listed in Subsection [(102)] (103); and
741 (b) a customer service representative.
742 [(104)] (105) "Limited lines producer" means a person who sells, solicits, or negotiates
743 limited lines insurance.
744 [(105)] (106) (a) "Long-term care insurance" means an insurance policy or rider
745 advertised, marketed, offered, or designated to provide coverage:
746 (i) in a setting other than an acute care unit of a hospital;
747 (ii) for not less than 12 consecutive months for [each] a covered person on the basis of:
748 (A) expenses incurred;
749 (B) indemnity;
750 (C) prepayment; or
751 (D) another method;
752 (iii) for one or more necessary or medically necessary services that are:
753 (A) diagnostic;
754 (B) preventative;
755 (C) therapeutic;
756 (D) rehabilitative;
757 (E) maintenance; or

758 (F) personal care; and
759 (iv) that may be issued by:
760 (A) an insurer;
761 (B) a fraternal benefit society;
762 (C) (I) a nonprofit health hospital; and
763 (II) a medical service corporation;
764 (D) a prepaid health plan;
765 (E) a health maintenance organization; or
766 (F) an entity similar to the entities described in Subsections [(105)] (106)(a)(iv)(A)
767 through (E) to the extent that the entity is otherwise authorized to issue life or health care
768 insurance.
769 (b) "Long-term care insurance" includes:
770 (i) any of the following that provide directly or supplement long-term care insurance:
771 (A) a group or individual annuity or rider; or
772 (B) a life insurance policy or rider;
773 (ii) a policy or rider that provides for payment of benefits [based on] on the basis of:
774 (A) cognitive impairment; or
775 (B) functional capacity; or
776 (iii) a qualified long-term care insurance contract.
777 (c) "Long-term care insurance" does not include:
778 (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
779 (ii) basic hospital expense coverage;
780 (iii) basic medical/surgical expense coverage;
781 (iv) hospital confinement indemnity coverage;
782 (v) major medical expense coverage;
783 (vi) income replacement or related asset-protection coverage;
784 (vii) accident only coverage;
785 (viii) coverage for a specified:

786 (A) disease; or
787 (B) accident;
788 (ix) limited benefit health coverage; or
789 (x) a life insurance policy that accelerates the death benefit to provide the option of a
790 lump sum payment:
791 (A) if the following are not conditioned on the receipt of long-term care:
792 (I) benefits; or
793 (II) eligibility; and
794 (B) the coverage is for one or more the following qualifying events:
795 (I) terminal illness;
796 (II) medical conditions requiring extraordinary medical intervention; or
797 (III) permanent institutional confinement.
798 [(106)] (107) "Medical malpractice insurance" means insurance against legal liability
799 incident to the practice and provision of a medical [services] service other than the practice and
800 provision of a dental [services] service.
801 [(107)] (108) "Member" means a person having membership rights in an insurance
802 corporation.
803 [(108)] (109) "Minimum capital" or "minimum required capital" means the capital that
804 must be constantly maintained by a stock insurance corporation as required by statute.
805 [(109)] (110) "Mortgage accident and health insurance" means insurance offered in
806 connection with an extension of credit that provides indemnity for payments coming due on a
807 mortgage while the debtor is disabled.
808 [(110)] (111) "Mortgage guaranty insurance" means surety insurance under which
809 [mortgagees and other creditors are] a mortgagee or other creditor is indemnified against losses
810 caused by the default of [debtors] a debtor.
811 [(111)] (112) "Mortgage life insurance" means insurance on the life of a debtor in
812 connection with an extension of credit that pays if the debtor dies.
813 [(112)] (113) "Motor club" means a person:

814 (a) licensed under:
815 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
816 (ii) Chapter 11, Motor Clubs; or
817 (iii) Chapter 14, Foreign Insurers; and
818 (b) that promises for an advance consideration to provide for a stated period of time
819 one or more:
820 (i) legal services under Subsection 31A-11-102 (1)(b);
821 (ii) bail services under Subsection 31A-11-102 (1)(c); or
822 (iii) (A) trip reimbursement;
823 (B) towing services;
824 (C) emergency road services;
825 (D) stolen automobile services;
826 (E) a combination of the services listed in Subsections [(112)] (113)(b)(iii)(A) through
827 (D); or
828 (F) [any] other services given in Subsections 31A-11-102 (1)(b) through (f).
829 [(113)] (114) "Mutual" means a mutual insurance corporation.
830 [(114)] (115) "Network plan" means health care insurance:
831 (a) that is issued by an insurer; and
832 (b) under which the financing and delivery of medical care is provided, in whole or in
833 part, through a defined set of providers under contract with the insurer, including the financing
834 and delivery of [items] an item paid for as medical care.
835 [(115)] (116) "Nonparticipating" means a plan of insurance under which the insured is
836 not entitled to receive [dividends] a dividend representing [shares] a share of the surplus of the
837 insurer.
838 [(116)] (117) "Ocean marine insurance" means insurance against loss of or damage to:
839 (a) ships or hulls of ships;
840 (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys,
841 securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia interests,

842 or other cargoes in or awaiting transit over the oceans or inland waterways;
843 (c) earnings such as freight, passage money, commissions, or profits derived from
844 transporting goods or people upon or across the oceans or inland waterways; or
845 (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
846 owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
847 in connection with maritime activity.
848 [(117)] (118) "Order" means an order of the commissioner.
849 [(118)] (119) "Outline of coverage" means a summary that explains an accident and
850 health insurance policy.
851 [(119)] (120) "Participating" means a plan of insurance under which the insured is
852 entitled to receive [dividends] a dividend representing [shares] a share of the surplus of the
853 insurer.
854 [(120)] (121) "Participation," as used in a health benefit plan, means a requirement
855 relating to the minimum percentage of eligible employees that must be enrolled in relation to the
856 total number of eligible employees of an employer reduced by each eligible employee who
857 voluntarily declines coverage under the plan because the employee:
858 (a) has other group health care insurance coverage[.]; or
859 (b) receives:
860 (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
861 Security Amendments of 1965; or
862 (ii) another government health benefit.
863 [(121)] (122) "Person" includes:
864 (a) an individual[,];
865 (b) a partnership[,];
866 (c) a corporation[,];
867 (d) an incorporated or unincorporated association[,];
868 (e) a joint stock company[,];
869 (f) a trust[,];

870 (g) a limited liability company[,];
871 (h) a reciprocal[,];
872 (i) a syndicate[,]; or [any]
873 (j) another similar entity or combination of entities acting in concert.
874 [(122)] (123) "Personal lines insurance" means property and casualty insurance
875 coverage sold for primarily noncommercial purposes to:
876 (a) [individuals; and] an individual; or
877 (b) [families] a family.
878 [(123)] (124) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
879 [(124)] (125) "Plan year" means:
880 (a) the year that is designated as the plan year in:
881 (i) the plan document of a group health plan; or
882 (ii) a summary plan description of a group health plan;
883 (b) if the plan document or summary plan description does not designate a plan year or
884 there is no plan document or summary plan description:
885 (i) the year used to determine deductibles or limits;
886 (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis; or
887 (iii) the employer's taxable year if:
888 (A) the plan does not impose deductibles or limits on a yearly basis; and
889 (B) (I) the plan is not insured; or
890 (II) the insurance policy is not renewed on an annual basis; or
891 (c) in a case not described in Subsection [(124)] (125)(a) or (b), the calendar year.
892 [(125)] (126) (a) "Policy" means [any] a document, including any attached
893 [endorsements and riders, purporting] endorsement or application that:
894 (i) purports to be an enforceable contract[, which]; and
895 (ii) memorializes in writing some or all of the terms of an insurance contract.
896 (b) "Policy" includes a service contract issued by:
897 (i) a motor club under Chapter 11, Motor Clubs;

898 (ii) a service contract provided under Chapter 6a, Service Contracts; and
899 (iii) a corporation licensed under:
900 (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
901 (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
902 (c) "Policy" does not include:
903 (i) a certificate under a group insurance contract; or
904 (ii) a document that does not purport to have legal effect.
905 [(126)] (127) "Policyholder" means the person who controls a policy, binder, or oral
906 contract by ownership, premium payment, or otherwise.
907 [(127)] (128) "Policy illustration" means a presentation or depiction that includes
908 nonguaranteed elements of a policy of life insurance over a period of years.
909 [(128)] (129) "Policy summary" means a synopsis describing the elements of a life
910 insurance policy.
911 [(129)] (130) "Preexisting condition," with respect to a health benefit plan:
912 (a) means a condition that was present before the effective date of coverage, whether or
913 not [any] medical advice, diagnosis, care, or treatment was recommended or received before
914 that day; and
915 (b) does not include a condition indicated by genetic information unless an actual
916 diagnosis of the condition by a physician has been made.
917 [(130)] (131) (a) "Premium" means the monetary consideration for an insurance policy.
918 (b) "Premium" includes, however designated:
919 (i) [assessments] an assessment;
920 (ii) a membership [fees] fee;
921 (iii) a required [contributions] contribution; or
922 (iv) monetary consideration.
923 (c) (i) [Consideration] "Premium" does not include consideration paid to a third party
924 [administrators for their services is not "premium."] administrator for the third party
925 administrator's services.

926 (ii) [Amounts] "Premium" includes an amount paid by a third party [administrators to
927 insurers] administrator to an insurer for insurance on the risks administered by the third party
928 [administrators are "premium."] administrator.
929 [(131)] (132) "Principal officers" of a corporation means the officers designated under
930 Subsection 31A-5-203 (3).
931 [(132) "Proceedings"] (133) "Proceeding" includes [actions and] an action or special
932 statutory [proceedings] proceeding.
933 [(133)] (134) "Professional liability insurance" means insurance against legal liability
934 incident to the practice of a profession and provision of [any] a professional [services] service.
935 [(134)] (135) (a) Except as provided in Subsection [(134)] (135)(b), "property
936 insurance" means insurance against loss or damage to real or personal property of every kind
937 and any interest in that property:
938 (i) from all hazards or causes; and
939 (ii) against loss consequential upon the loss or damage including vehicle comprehensive
940 and vehicle physical damage coverages.
941 (b) "Property insurance" does not include:
942 (i) inland marine insurance as defined in Subsection [(80)] (81); and
943 (ii) ocean marine insurance as defined under Subsection [(116)] (117).
944 [(135)] (136) "Qualified long-term care insurance contract" or "federally tax qualified
945 long-term care insurance contract" means:
946 (a) an individual or group insurance contract that meets the requirements of Section
947 7702B(b), Internal Revenue Code; or
948 (b) the portion of a life insurance contract that provides long-term care insurance:
949 (i) (A) by rider; or
950 (B) as a part of the contract; and
951 (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue Code.
952 [(136)] (137) "Qualified United States financial institution" means an institution that:
953 (a) is:

954 (i) organized under the laws of the United States or any state; or
955 (ii) in the case of a United States office of a foreign banking organization, licensed
956 under the laws of the United States or any state;
957 (b) is regulated, supervised, and examined by a United States federal or state
958 [authorities] authority having regulatory authority over [banks and trust companies] a bank or
959 trust company; and
960 (c) meets the standards of financial condition and standing that are considered necessary
961 and appropriate to regulate the quality of a financial [institutions] institution whose letters of
962 credit will be acceptable to the commissioner as determined by:
963 (i) the commissioner by rule; or
964 (ii) the Securities Valuation Office of the National Association of Insurance
965 Commissioners.
966 [(137)] (138) (a) "Rate" means:
967 (i) the cost of a given unit of insurance; or
968 (ii) for property-casualty insurance, that cost of insurance per exposure unit either
969 expressed as:
970 (A) a single number; or
971 (B) a pure premium rate, adjusted before [any] the application of individual risk
972 variations based on loss or expense considerations to account for the treatment of:
973 (I) expenses;
974 (II) profit; and
975 (III) individual insurer variation in loss experience.
976 (b) "Rate" does not include a minimum premium.
977 [(138)] (139) (a) Except as provided in Subsection [(138)] (139)(b), "rate service
978 organization" means [any] a person who assists [insurers] an insurer in rate making or filing by:
979 (i) collecting, compiling, and furnishing loss or expense statistics;
980 (ii) recommending, making, or filing rates or supplementary rate information; or
981 (iii) advising about rate questions, except as an attorney giving legal advice.

982 (b) "Rate service organization" does not mean:
983 (i) an employee of an insurer;
984 (ii) a single insurer or group of insurers under common control;
985 (iii) a joint underwriting group; or
986 (iv) a natural person serving as an actuarial or legal consultant.
987 [(139)] (140) "Rating manual" means any of the following used to determine initial and
988 renewal policy premiums:
989 (a) a manual of rates;
990 (b) [classifications] a classification;
991 (c) a rate-related underwriting [rules] rule; and
992 (d) a rating [formulas that describe] formula that describes steps, policies, and
993 procedures for determining initial and renewal policy premiums.
994 [(140)] (141) "Received by the department" means:
995 (a) except as provided in Subsection [(140)] (141)(b), the date delivered to and
996 stamped received by the department, whether delivered:
997 (i) in person; or
998 (ii) electronically; and
999 (b) if delivered to the department by a delivery service, the delivery service's postmark
1000 date or pick-up date unless otherwise stated in:
1001 (i) statute;
1002 (ii) rule; or
1003 (iii) a specific filing order.
1004 [(141)] (142) "Reciprocal" or "interinsurance exchange" means [any] an unincorporated
1005 association of persons:
1006 (a) operating through an attorney-in-fact common to all of [them] the persons; and
1007 (b) exchanging insurance contracts with one another that provide insurance coverage on
1008 each other.
1009 [(142)] (143) "Reinsurance" means an insurance transaction where an insurer, for

1010 consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
1011 reinsurance transactions, this title sometimes refers to:
1012 (a) the insurer transferring the risk as the "ceding insurer"; and
1013 (b) the insurer assuming the risk as the:
1014 (i) "assuming insurer"; or
1015 (ii) "assuming reinsurer."
1016 [(143)] (144) "Reinsurer" means [any] a person licensed in this state as an insurer with
1017 the authority to assume reinsurance.
1018 [(144)] (145) "Residential dwelling liability insurance" means insurance against liability
1019 resulting from or incident to the ownership, maintenance, or use of a residential dwelling that is
1020 a detached single family residence or multifamily residence up to four units.
1021 [(145)] (146) (a) "Retrocession" means reinsurance with another insurer of a liability
1022 assumed under a reinsurance contract.
1023 (b) A reinsurer "retrocedes" when [it] the reinsurer reinsures with another insurer part
1024 of a liability assumed under a reinsurance contract.
1025 [(146)] (147) "Rider" means an endorsement to:
1026 (a) an insurance policy; or
1027 (b) an insurance certificate.
1028 [(147)] (148) (a) "Security" means [any] a:
1029 (i) note;
1030 (ii) stock;
1031 (iii) bond;
1032 (iv) debenture;
1033 (v) evidence of indebtedness;
1034 (vi) certificate of interest or participation in [any] a profit-sharing agreement;
1035 (vii) collateral-trust certificate;
1036 (viii) preorganization certificate or subscription;
1037 (ix) transferable share;

1038 (x) investment contract;
1039 (xi) voting trust certificate;
1040 (xii) certificate of deposit for a security;
1041 (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
1042 payments out of production under such a title or lease;
1043 (xiv) commodity contract or commodity option;
1044 (xv) certificate of interest or participation in, temporary or interim certificate for, receipt
1045 for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in
1046 Subsections [(147)] (148)(a)(i) through (xiv); or
1047 (xvi) [other] another interest or instrument commonly known as a security.
1048 (b) "Security" does not include:
1049 (i) any of the following under which an insurance company promises to pay money in a
1050 specific lump sum or periodically for life or some other specified period:
1051 (A) insurance;
1052 (B) endowment policy; or
1053 (C) annuity contract; or
1054 (ii) a burial certificate or burial contract.
1055 (149) "Secondary medical condition" means a complication related to an exclusion from
1056 coverage in accident and health insurance.
1057 [(148)] (150) "Self-insurance" means [any] an arrangement under which a person
1058 provides for spreading its own risks by a systematic plan.
1059 (a) Except as provided in this Subsection [(148)] (150), "self-insurance" does not
1060 include an arrangement under which a number of persons spread their risks among themselves.
1061 (b) "Self-insurance" includes:
1062 (i) an arrangement by which a governmental entity undertakes to indemnify [its
1063 employees] an employee for liability arising out of the [employees'] employee's employment; and
1064 (ii) an arrangement by which a person with a managed program of self-insurance and
1065 risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or

1066 employees for liability or risk which is related to the relationship or employment.
1067 (c) "Self-insurance" does not include [any] an arrangement with an independent
1068 [contractors] contractor.
1069 [(149)] (151) "Sell" means to exchange a contract of insurance:
1070 (a) by any means;
1071 (b) for money or its equivalent; and
1072 (c) on behalf of an insurance company.
1073 [(150)] (152) "Short-term care insurance" means [any] an insurance policy or rider
1074 advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
1075 insurance, but that provides coverage for less than 12 consecutive months for each covered
1076 person.
1077 [(151)] (153) "Significant break in coverage" means a period of 63 consecutive days
1078 during each of which an individual does not have [any] creditable coverage.
1079 [(152)] (154) "Small employer," in connection with a health benefit plan, means an
1080 employer who, with respect to a calendar year and to a plan year:
1081 (a) employed an average of at least two employees but not more than 50 eligible
1082 employees on each business day during the preceding calendar year; and
1083 (b) employs at least two employees on the first day of the plan year.
1084 [(153)] (155) "Special enrollment period," in connection with a health benefit plan, has
1085 the same meaning as provided in federal regulations adopted pursuant to the Health Insurance
1086 Portability and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936.
1087 [(154)] (156) (a) "Subsidiary" of a person means an affiliate controlled by that person
1088 either directly or indirectly through one or more affiliates or intermediaries.
1089 (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
1090 shares are owned by that person either alone or with its affiliates, except for the minimum
1091 number of shares the law of the subsidiary's domicile requires to be owned by directors or
1092 others.
1093 [(155)] (157) Subject to Subsection [(82)] (83)(b), "surety insurance" includes:

1094 (a) a guarantee against loss or damage resulting from the failure of [principals] a
1095 principal to pay or perform [their] the principal's obligations to a creditor or other obligee;
1096 (b) bail bond insurance; and
1097 (c) fidelity insurance.
1098 [(156)] (158) (a) "Surplus" means the excess of assets over the sum of paid-in capital
1099 and liabilities.
1100 (b) (i) "Permanent surplus" means the surplus of a mutual insurer that [has been] is
1101 designated by the insurer as permanent.
1102 (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209 require
1103 that mutuals doing business in this state maintain specified minimum levels of permanent
1104 surplus.
1105 (iii) Except for assessable mutuals, the minimum permanent surplus requirement is
1106 essentially the same as the minimum required capital requirement that applies to stock insurers.
1107 (c) "Excess surplus" means:
1108 (i) for [life or accident and health insurers, health organizations, and property and
1109 casualty insurers] a life insurer, accident and health insurer, health organization, or property and
1110 casualty insurer as defined in Section 31A-17-601 , the lesser of:
1111 (A) that amount of an insurer's or health organization's total adjusted capital, as defined
1112 in Subsection [(159)] (161), that exceeds the product of:
1113 (I) 2.5; and
1114 (II) the sum of the insurer's or health organization's minimum capital or permanent
1115 surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
1116 (B) that amount of an insurer's or health organization's total adjusted capital, as defined
1117 in Subsection [(159)] (161), that exceeds the product of:
1118 (I) 3.0; and
1119 (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
1120 (ii) for [monoline mortgage guaranty insurers, financial guaranty insurers, and title
1121 insurers,] a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer that

1122 amount of an insurer's paid-in-capital and surplus that exceeds the product of:
1123 (A) 1.5; and
1124 (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
1125 [(157)] (159) "Third party administrator" or "administrator" means [any] a person who
1126 collects charges or premiums from, or who, for consideration, adjusts or settles claims of
1127 residents of the state in connection with insurance coverage, annuities, or service insurance
1128 coverage, except:
1129 (a) a union on behalf of its members;
1130 (b) a person administering [any] a:
1131 (i) pension plan subject to the federal Employee Retirement Income Security Act of
1132 1974;
1133 (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
1134 (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
1135 (c) an employer on behalf of the employer's employees or the employees of one or more
1136 of the subsidiary or affiliated corporations of the employer;
1137 (d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance
1138 for which the insurer holds a license in this state; or
1139 (e) a person:
1140 (i) licensed or exempt from licensing under:
1141 (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
1142 Reinsurance Intermediaries; or
1143 (B) Chapter 26, Insurance Adjusters; and
1144 (ii) whose activities are limited to those authorized under the license the person holds or
1145 for which the person is exempt.
1146 [(158)] (160) "Title insurance" means the insuring, guaranteeing, or indemnifying of
1147 [owners] an owner of real or personal property or the [holders] holder of liens or encumbrances
1148 on that property, or others interested in the property against loss or damage suffered by reason
1149 of liens or encumbrances upon, defects in, or the unmarketability of the title to the property, or

1150 invalidity or unenforceability of any liens or encumbrances on the property.
1151 [(159)] (161) "Total adjusted capital" means the sum of an insurer's or health
1152 organization's statutory capital and surplus as determined in accordance with:
1153 (a) the statutory accounting applicable to the annual financial statements required to be
1154 filed under Section 31A-4-113 ; and
1155 (b) [any other items] another item provided by the RBC instructions, as RBC
1156 instructions is defined in Section 31A-17-601 .
1157 [(160)] (162) (a) "Trustee" means "director" when referring to the board of directors of
1158 a corporation.
1159 (b) "Trustee," when used in reference to an employee welfare fund, means an individual,
1160 firm, association, organization, joint stock company, or corporation, whether acting individually
1161 or jointly and whether designated by that name or any other, that is charged with or has the
1162 overall management of an employee welfare fund.
1163 [(161)] (163) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted
1164 insurer" means an insurer:
1165 (i) not holding a valid certificate of authority to do an insurance business in this state; or
1166 (ii) transacting business not authorized by a valid certificate.
1167 (b) "Admitted insurer" or "authorized insurer" means an insurer:
1168 (i) holding a valid certificate of authority to do an insurance business in this state; and
1169 (ii) transacting business as authorized by a valid certificate.
1170 [(162)] (164) "Underwrite" means the authority to accept or reject risk on behalf of the
1171 insurer.
1172 [(163)] (165) "Vehicle liability insurance" means insurance against liability resulting
1173 from or incident to ownership, maintenance, or use of [any] a land vehicle or aircraft, exclusive
1174 of a vehicle comprehensive [and] or vehicle physical damage [coverages] coverage under
1175 Subsection [(134)] (135).
1176 [(164)] (166) "Voting security" means a security with voting rights, and includes [any]
1177 a security convertible into a security with a voting right associated with the security.

1178 [(165)] (167) "Waiting period" for a health benefit plan means the period that must pass
1179 before coverage for an individual, who is otherwise eligible to enroll under the terms of the
1180 health benefit plan, can become effective.
1181 [(166)] (168) "Workers' compensation insurance" means:
1182 (a) insurance for indemnification of [employers] an employer against liability for
1183 compensation based on:
1184 (i) a compensable accidental [injuries] injury; and
1185 (ii) occupational disease disability;
1186 (b) employer's liability insurance incidental to workers' compensation insurance and
1187 written in connection with workers' compensation insurance; and
1188 (c) insurance assuring to [the persons] a person entitled to workers' compensation
1189 benefits the compensation provided by law.
1190 Section 2. Section 31A-2-203 is amended to read:
1191 31A-2-203. Examinations and alternatives.
1192 (1) (a) Whenever the commissioner [considers it necessary in order to inform the
1193 commissioner about any] determines that information is needed about a matter related to the
1194 enforcement of this title, the commissioner may examine the affairs and condition of:
1195 (i) a licensee under this title;
1196 (ii) an applicant for a license under this title;
1197 (iii) a person or organization of persons doing or in process of organizing to do an
1198 insurance business in this state; or
1199 (iv) a person who is not, but should be, licensed under this title.
1200 (b) When reasonably necessary for an examination under Subsection (1)(a), the
1201 commissioner may examine:
1202 (i) so far as [they relate] it relates to the examinee, [the accounts, records, documents,
1203 or evidences of transactions] an account, record, document, or evidence of a transaction of:
1204 (A) the insurer or other licensee;
1205 (B) [any] an officer or other person who has executive authority over or is in charge of

1206 any segment of the examinee's affairs; or
1207 (C) [any] an affiliate of the examinee; or
1208 (ii) [any] a third party model or product used by the examinee.
1209 (c) (i) On demand, [each] an examinee under Subsection (1)(a) shall make available to
1210 the commissioner for examination:
1211 (A) [any of] the examinee's own [accounts, records, files, documents, or evidences of
1212 transactions] account, record, file, document, or evidence of a transaction; and
1213 (B) to the extent reasonably necessary for an examination, [the accounts, records, files,
1214 documents, or evidences of transactions of any persons] an account, record, file, document, or
1215 evidence of a transaction of a person described under Subsection (1)(b).
1216 (ii) Except as provided in Subsection (1)(c)(iii), failure to make [the documents] an item
1217 described in Subsection (1)(c)(i) available is concealment of records under Subsection
1218 31A-27a-207 (1)(e).
1219 (iii) If the examinee is unable to obtain [accounts, records, files, documents, or
1220 evidences of transactions from persons] an account, record, file, document, or evidence of a
1221 transaction from a person described under Subsection (1)(b), that failure is not concealment of
1222 records if the examinee immediately terminates the relationship with the other person.
1223 (d) (i) Neither the commissioner nor an examiner may remove [any] an account, record,
1224 file, document, evidence of a transaction, or other property of the examinee from the examinee's
1225 offices unless:
1226 (A) the examinee consents in writing; or
1227 (B) a court grants permission.
1228 (ii) The commissioner may make and remove [copies or abstracts] a copy or abstract of
1229 the following described in Subsection (1)(d)(i):
1230 (A) an account;
1231 (B) a record;
1232 (C) a file;
1233 (D) a document;

1234 (E) evidence of a transaction; or
1235 (F) other property.
1236 (2) (a) Subject to the other provisions of this section, the commissioner shall examine as
1237 needed and as otherwise provided by law:
1238 (i) every insurer, both domestic and nondomestic;
1239 (ii) every licensed rate service organization; and
1240 (iii) any other licensee.
1241 (b) The commissioner shall examine [insurers] an insurer, both domestic and
1242 nondomestic, no less frequently than once every five years, but the commissioner may use in lieu
1243 [examinations] an examination under Subsection (4) to satisfy this requirement.
1244 (c) The commissioner shall revoke the certificate of authority of an insurer or the
1245 license of a rate service organization that has not been examined, or submitted an acceptable in
1246 lieu report under Subsection (4), within the past five years.
1247 (d) (i) Any 25 persons who are policyholders, shareholders, or creditors of a domestic
1248 insurer may by verified petition demand a hearing under Section 31A-2-301 to determine
1249 whether the commissioner should conduct an unscheduled examination of the insurer.
1250 (ii) Persons demanding the hearing under this Subsection (2)(d) shall be given an
1251 opportunity in the hearing to present evidence that an examination of the insurer is necessary.
1252 (iii) If the evidence justifies an examination, the commissioner shall order an
1253 examination.
1254 (e) (i) [When] If the board of directors of a domestic insurer requests that the
1255 commissioner examine the insurer, the commissioner shall examine the insurer as soon as
1256 reasonably possible.
1257 (ii) If the examination requested under this Subsection (2)(e) is conducted within two
1258 years after completion of a comprehensive examination by the commissioner, costs of the
1259 requested examination may not be deducted from premium taxes under Section 59-9-102 unless
1260 the commissioner's order specifically provides for the deduction.
1261 (f) [Bail] A bail bond surety [companies] company, as defined in Section 31A-35-102 ,

1262 [are exempted] is exempt from:
1263 (i) the five-year examination requirement in Subsection (2)(b);
1264 (ii) the revocation under Subsection (2)(c); and
1265 (iii) Subsections (2)(d) and (2)(e).
1266 (3) (a) The commissioner may order an independent audit or examination by one or
1267 more technical experts, including a certified public [accountants and actuaries] accountant or
1268 actuary:
1269 (i) in lieu of all or part of an examination under Subsection (1) or (2); or
1270 (ii) in addition to an examination under Subsection (1) or (2).
1271 (b) [Any] An audit or evaluation under this Subsection (3) is subject to Subsection (5),
1272 Section 31A-2-204 , and Subsection 31A-2-205 (4).
1273 (4) (a) In lieu of all or [any] a part of an examination under this section, the
1274 commissioner may accept the report of an examination made by:
1275 (i) the insurance department of another state; or
1276 (ii) another government agency in:
1277 (A) this state;
1278 (B) the federal government; or
1279 (C) another state.
1280 (b) An examination by the commissioner under Subsection (1) or (2) or accepted by the
1281 commissioner under this Subsection (4) may use:
1282 (i) an audit already made by a certified public accountant; or
1283 (ii) an actuarial evaluation made by an actuary approved by the commissioner.
1284 (5) (a) An examination may be comprehensive or limited with respect to the examinee's
1285 affairs and condition. The commissioner shall determine the nature and scope of each
1286 examination, taking into account all relevant factors, including:
1287 (i) the length of time the examinee has been licensed in this state;
1288 (ii) the nature of the business being examined;
1289 (iii) the nature of the accounting or other records available;

1290 (iv) one or more reports from:
1291 (A) independent auditors; and
1292 (B) self-certification entities; and
1293 (v) the nature of examinations performed elsewhere.
1294 (b) The examination of an alien insurer [shall be] is limited to one or more insurance
1295 transactions and assets in the United States, unless the commissioner orders otherwise after
1296 finding that extraordinary circumstances necessitate a broader examination.
1297 (6) To effectively administer this section, the commissioner:
1298 (a) shall:
1299 (i) maintain one or more effective financial condition and market regulation surveillance
1300 systems including:
1301 (A) financial and market analysis; and
1302 (B) a review of insurance regulatory information system reports;
1303 (ii) employ a priority scheduling method that focuses on insurers and other licensees
1304 most in need of examination; and
1305 (iii) use examination management techniques similar to those outlined in the Financial
1306 Condition Examination Handbook of the National Association of Insurance Commissioners; and
1307 (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
1308 may make rules pertaining to [the] a financial condition and market regulation surveillance
1309 [systems] system.
1310 Section 3. Section 31A-2-403 is amended to read:
1311 31A-2-403. Title and Escrow Commission created.
1312 (1) (a) [There] Subject to Subsection (1)(b), there is created within the department the
1313 Title and Escrow Commission that is comprised of five members appointed by the governor
1314 with the consent of the Senate as follows:
1315 (i) four members shall each:
1316 (A) be or have been licensed under the title insurance line of authority; and
1317 (B) as of the day on which the member is appointed, be or have been licensed with the

1318 search or escrow subline of authority for at least five years; [and]
1319 (C) as of the day on which the member is appointed, not be from the same county as
1320 another member appointed under this Subsection (1)(a)(i); and
1321 (ii) one member shall be a member of the general public from any county in the state.
1322 (b) No more than one commission member may be appointed from[: (i) any county in
1323 the state; or (ii) any] a single company.
1324 (2) (a) Subject to Subsection (2)(c), [each] a member of the commission shall file with
1325 the department a disclosure of any position of employment or ownership interest that the
1326 member of the commission has with respect to [any] a person that is subject to the jurisdiction
1327 of the department.
1328 (b) The disclosure statement required by this Subsection (2) shall be:
1329 (i) filed by no later than the day on which the person begins that person's appointment;
1330 and
1331 (ii) amended when a significant change occurs in any matter required to be disclosed
1332 under this Subsection (2).
1333 (c) A member of the commission is not required to disclose an ownership interest that
1334 the member of the commission has if the ownership interest is held as part of a mutual fund,
1335 trust, or similar investment.
1336 (3) (a) Except as required by Subsection (3)(b), as terms of current commission
1337 members expire, the governor shall appoint each new member to a four-year term ending on
1338 June 30.
1339 (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
1340 time of appointment, adjust the length of terms to ensure that the terms of the commission
1341 members are staggered so that approximately half of the commission is appointed every two
1342 years.
1343 (c) A commission member may not serve more than one consecutive term.
1344 (d) When a vacancy occurs in the membership for any reason, the governor, with the
1345 consent of the Senate, shall appoint a replacement [shall be appointed] for the unexpired term.

1346 (4) (a) A member of the commission may not receive compensation or benefits for the
1347 member's services, but may receive per diem and expenses incurred in the performance of the
1348 member's official duties at the rates established by the Division of Finance under Sections
1349 63A-3-106 and 63A-3-107 .
1350 (b) A member may decline to receive per diem and expenses for the member's service.
1351 (5) Members of the commission shall annually select one member to serve as chair.
1352 (6) (a) The commission shall meet at least monthly.
1353 (b) The commissioner may call additional meetings:
1354 (i) at the commissioner's discretion;
1355 (ii) upon the request of the chair of the commission; or
1356 (iii) upon the written request of three or more commission members.
1357 (c) (i) Three members of the commission constitute a quorum for the transaction of
1358 business.
1359 (ii) The action of a majority of the members when a quorum is present is the action of
1360 the commission.
1361 (7) The department shall staff the commission.
1362 Section 4. Section 31A-4-102 is amended to read:
1363 31A-4-102. Qualified insurers.
1364 (1) A person may not conduct an insurance business in Utah[, either] in person, through
1365 [agents or brokers, or] an agent, through a broker, through the mail, or [any other] through
1366 another method of communication, except:
1367 (a) an insurer:
1368 (i) authorized to do business in Utah under [Title 31A,] Chapter 5, 7, 8, 9, 10, 11, 13,
1369 or 14[,]; and
1370 (ii) within the limits of its certificate of authority;
1371 (b) a joint underwriting group under Section 31A-2-214 or 31A-20-102 ;
1372 (c) an insurer doing business under Section 31A-15-103 ;
1373 (d) a person who[, pursuant to Section 31A-1-105 ,] submits to the commissioner a

1374 certificate from the United States Department of Labor, or such other evidence as satisfies the
1375 commissioner, that the laws of Utah are preempted with respect to specified activities of that
1376 person by Section 514 of the Employee Retirement Income Security Act of 1974 or other
1377 federal law; or
1378 (e) a person exempt from [the application of the Insurance Code] this title under
1379 Section 31A-1-103 [and all other applicable statutes] or another applicable statute.
1380 (2) As used in this section, "insurer" includes a bail bond surety company, as defined in
1381 Section 31A-35-102 .
1382 Section 5. Section 31A-4-106 is amended to read:
1383 31A-4-106. Provision of health care.
1384 (1) As used in this section, "health care provider" has the same definition as in Section
1385 78-14-3 .
1386 (2) Except under Subsection (3) or (4), unless authorized to do so or employed by
1387 someone authorized to do so under Chapter 5, 7, 8, 9, or 14, a person may not:
1388 (a) directly or indirectly provide health care[, or];
1389 (b) arrange for[,] health care;
1390 (c) manage[,] or administer the provision or arrangement of[,] health care;
1391 (d) collect advance payments for[,] health care; or
1392 (e) compensate [providers] a provider of health care [unless authorized to do so or
1393 employed by someone authorized to do so under Chapter 5, 7, 8, 9, or 14].
1394 (3) Subsection (2) does not apply to:
1395 (a) a natural person or professional corporation that alone or with others professionally
1396 associated with the natural person or professional corporation, and without receiving
1397 consideration for services in advance of the need for a particular service, provides the service
1398 personally with the aid of nonprofessional assistants;
1399 (b) a health care facility as defined in Section 26-21-2 [which] that:
1400 (i) is licensed or exempt from licensing under Title 26, Chapter 21, Health Care Facility
1401 Licensing and Inspection Act; and

1402 (ii) does not engage in health care insurance as defined under Section 31A-1-301 ;
1403 (c) a person who files with the commissioner [under Section 31A-1-105 ] a certificate
1404 from the United States Department of Labor, or other evidence satisfactory to the
1405 commissioner, showing that the laws of Utah are preempted under Section 514 of the Employee
1406 Retirement Income Security Act of 1974 or other federal law;
1407 (d) a person licensed under Chapter 23a, Insurance Marketing - Licensing Producers,
1408 Consultants, and Reinsurance Intermediaries, who [has arranged]:
1409 (i) arranges for the insurance of all services under:
1410 [(i)] (A) Subsection (2) by an insurer authorized to do business in Utah; or
1411 [(ii)] (B) Section 31A-15-103 ; or
1412 [(iii)] (ii) works for an uninsured employer that complies with Chapter 13, Employee
1413 Welfare Funds and Plans; or
1414 (e) an employer that self-funds its obligations to provide health care services or
1415 indemnity for its employees if the employer complies with Chapter 13, Employee Welfare Funds
1416 and Plans.
1417 (4) A person may not provide administrative or management services for [any other]
1418 another person subject to Subsection (2) and not exempt under Subsection (3) unless the
1419 person:
1420 (a) is an authorized insurer under Chapter 5, 7, 8, 9, or 14[,]; or
1421 (b) complies with Chapter 25, Third Party Administrators.
1422 (5) [It is unlawful for any] An insurer or person [providing, administering, or managing]
1423 who provides, administers, or manages health care insurance under Chapter 5, 7, 8, 9, or 14 [to]
1424 may not enter into a contract that limits a health care provider's ability to advise the health care
1425 provider's patients or clients fully about treatment options or other issues that affect the health
1426 care of the health care provider's patients or clients.
1427 Section 6. Section 31A-6a-103 is amended to read:
1428 31A-6a-103. Requirements for doing business.
1429 (1) A service contract may not be issued, sold, or offered for sale in this state unless the

1430 service contract is insured under a service contract reimbursement insurance policy issued by:
1431 (a) an insurer authorized to do business in this state; or
1432 (b) a recognized surplus lines carrier.
1433 (2) (a) A service contract may not be issued, sold, or offered for sale unless [a true and
1434 correct copy of the service contract and the provider's reimbursement insurance policy have
1435 been filed with the commissioner. A copy of a contract and policy must be filed] the service
1436 contract provider completes the registration process described in this Subsection (2).
1437 (b) To register, a service contract provider shall submit to the department the following:
1438 (i) an application for registration;
1439 (ii) a fee established in accordance with Section 31A-3-103 ;
1440 (iii) a copy of any service contract that the service contract provider offers in this state;
1441 and
1442 (iv) a copy of the service contract provider's reimbursement insurance policy.
1443 (c) A service provider shall submit the information described in Subsection (2)(b) no
1444 less than 30 days [prior to the issuance, sale offering for sale, or use of the] before the day on
1445 which the service provider issues, sells, offers for sale, or uses a service contract or
1446 reimbursement insurance policy in this state.
1447 [(b) Each] (d) A service provider shall file any modification of the terms of [any] a
1448 service contract or reimbursement insurance policy [must also be filed] 30 days [prior to its use]
1449 before the day on which it is used in this state.
1450 [(c) Persons] (e) A person complying with this chapter [are] is not required to comply
1451 with:
1452 (i) Subsections 31A-21-201 (1) and 31A-23a-402 (3); or
1453 (ii) Chapter 19a, Utah Rate Regulation Act.
1454 (3) (a) Premiums collected on a service [contracts] contract are not subject to premium
1455 taxes.
1456 (b) Premiums collected by [issuers] an issuer of a reimbursement insurance [policies]
1457 policy are subject to premium taxes.

1458 (4) A person marketing, selling, or offering to sell a service [contracts] contract for a
1459 service contract [providers] provider that complies with this chapter is exempt from the
1460 licensing requirements of this title.
1461 (5) [Service] A service contract [providers] provider complying with this chapter [are]
1462 is not required to comply with:
1463 (a) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1464 (b) Chapter 7, Nonprofit Health Service Insurance Corporations;
1465 (c) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
1466 (d) Chapter 9, Insurance Fraternals;
1467 (e) Chapter 10, Annuities;
1468 (f) Chapter 11, Motor Clubs;
1469 (g) Chapter 12, State Risk Management Fund;
1470 (h) Chapter 13, Employee Welfare Funds and Plans;
1471 (i) Chapter 14, Foreign Insurers;
1472 (j) Chapter 19a, Utah Rate Regulation Act;
1473 (k) Chapter 25, Third Party Administrators; and
1474 (l) Chapter 28, Guaranty Associations.
1475 Section 7. Section 31A-6a-104 is amended to read:
1476 31A-6a-104. Required disclosures.
1477 (1) [All] A service contract reimbursement insurance [policies] policy insuring a service
1478 [contracts] contract that is issued, sold, or offered for sale in this state must conspicuously state
1479 that, upon failure of the service contract provider to perform under the contract, the issuer of
1480 the policy shall:
1481 (a) pay on behalf of the service contract provider any sums the service contract provider
1482 is legally obligated to pay according to the service contract provider's contractual obligations
1483 under the service contract issued or sold by the service contract provider; or [shall]
1484 (b) provide the service which the service contract provider is legally obligated to
1485 perform, according to the service contract provider's contractual obligations under the service

1486 [contracts] contract issued or sold by the service contract provider.
1487 (2) (a) A service contract may not be issued, sold, or offered for sale in this state unless
1488 the service contract contains [a statement] the following statements in substantially the
1489 following form[,]:
1490 (i) "Obligations of the provider under this service contract are guaranteed under a
1491 service contract reimbursement insurance policy. Should the provider fail to pay or provide
1492 service on any claim within 60 days after proof of loss has been filed, the contract holder is
1493 entitled to make a claim directly against the Insurance Company." [The]; and
1494 (ii) "This service contract or warranty is subject to limited regulation by the Utah
1495 Insurance Department. To file a complaint, contact the Utah Insurance Department."
1496 (b) A service contract or reimbursement insurance policy may not be issued, sold, or
1497 offered for sale in this state unless the contract contains a statement in substantially the
1498 following form, "Coverage afforded under this contract is not guaranteed by the Property and
1499 Casualty Guaranty Association."
1500 (3) A service contract shall [also]:
1501 (a) conspicuously state the name [and], address, and a toll free claims service telephone
1502 number of the reimbursement insurer[.];
1503 [(3) The contract must] (b) identify the service contract provider, the seller, and the
1504 service contract holder[.];
1505 [(4) The contract must]
1506 (c) conspicuously state the total purchase price and the terms under which [it] the
1507 service contract is to be paid[.];
1508 (d) conspicuously state the existence of any deductible amount;
1509 (e) specify the merchandise, service to be provided, and any limitation, exception, or
1510 exclusion;
1511 (f) state a term, restriction, or condition governing the transferability of the service
1512 contract; and
1513 (g) state a term, restriction, or condition that governs cancellation of the service

1514 contract as provided in Sections 31A-21-303 through 31A-21-305 by either the contract holder
1515 or service contract provider.
1516 [(5)] (4) If prior approval of repair work is required, [the] a service contract must
1517 conspicuously state the procedure for obtaining prior approval and for making a claim,
1518 including:
1519 (a) a toll free telephone number for claim service; and
1520 (b) a procedure for obtaining reimbursement for emergency repairs performed outside
1521 of normal business hours.
1522 [(6) The contract must conspicuously state the existence of any deductible amount.]
1523 [(7) The contract must specify the merchandise, services to be provided and any
1524 limitations, exceptions, or exclusions. Any preexisting conditions clause]
1525 (5) A preexisting condition clause in a service contract must specifically state which
1526 preexisting [conditions are] condition is excluded from coverage.
1527 [(8) The] (6) (a) Except as provided in Subsection (6)(c), a service contract must state
1528 the conditions upon which the use of a nonmanufacturers' [parts will be] part is allowed.
1529 [Conditions stated]
1530 (b) A condition described in Subsection (6)(a) must comply with applicable state and
1531 federal laws.
1532 [(9) The contract must state any terms, restrictions, or conditions governing the
1533 transferability of the service contract.]
1534 [(10) The contract must state the terms, restrictions, or conditions governing
1535 cancellation of the contract by either the contract holder or provider, and must satisfy the
1536 provisions of Sections 31A-21-303 through 31A-21-305 .]
1537 (c) This Subsection (6) does not apply to a home warranty contract.
1538 [(11) A service contract or reimbursement insurance policy may not be issued, sold, or
1539 offered for sale in this state unless the contract contains a statement in substantially the
1540 following form, "Coverage afforded under this contract is not guaranteed by the Property and
1541 Casualty Guaranty Association."]

1542 Section 8. Section 31A-6a-105 is amended to read:
1543 31A-6a-105. Prohibited acts.
1544 (1) Except as provided in Subsection 31A-6a-104 (2), a service contract provider may
1545 not use in its name, [contracts] a contract, or literature:
1546 (a) any of the following words:
1547 (i) "insurance[,]";
1548 (ii) "casualty[,]";
1549 (iii) "surety[,]";
1550 (iv) "mutual[,]"; or [any other words]
1551 (v) another word descriptive of the insurance, casualty, or surety business; or
1552 (b) a name deceptively similar to the name or description of [any]:
1553 (i) an insurance or surety corporation[,]; or [any other]
1554 (ii) another service contract provider.
1555 (2) A service contract provider or [his] the service contract provider's representative
1556 may not:
1557 (a) make, permit, or cause to be made [any] a false or misleading statement[, or] in
1558 connection with the sale, offer to sell, or advertisement of a service contract; or
1559 (b) deliberately omit [any] a material statement that would be considered misleading if
1560 omitted, in connection with the sale, offer to sell, or advertisement of a service contract.
1561 (3) A bank, savings and loan association, insurance company, or other lending
1562 institution may not require the purchase of a service contract as a condition of a loan.
1563 (4) Except for a bank, savings and loan association, industrial bank, or credit union, a
1564 service contract provider, unless licensed by the department, may not sell, or be the obligated
1565 party for:
1566 (a) a guaranteed asset protection waiver;
1567 (b) a debt cancellation agreement; or
1568 (c) a debt suspension agreement.
1569 Section 9. Section 31A-22-404 is amended to read:

1570 31A-22-404. Suicide.
1571 (1) (a) Suicide is not a defense to a claim under a life insurance policy that [has been] is
1572 in force as to a policyholder or certificate holder for two years from the date of issuance of the
1573 later of:
1574 (i) the policy; or
1575 (ii) the certificate.
1576 (b) Subsection (1)(a) applies whether:
1577 (i) the suicide [was] is voluntary or involuntary; or
1578 (ii) the insured [was] is sane or insane.
1579 (c) If a suicide occurs within the two-year period described in Subsection (1)(a), the
1580 insurer shall pay to the beneficiary an amount not less than the premium paid [for the life
1581 insurance policy.] less the following:
1582 (i) a dividend paid;
1583 (ii) an indebtedness; and
1584 (iii) a partial withdrawal.
1585 (2) (a) If after a life insurance policy is in effect the policy allows the insured to obtain a
1586 death benefit that is larger than when the policy was originally effective for an additional
1587 premium, the payment of the additional increment of benefit may be limited in the event of a
1588 suicide within a two-year period beginning on the [date] day on which the increment increase
1589 takes effect.
1590 (b) If a suicide occurs within the two-year period described in Subsection (2)(a), the
1591 insurer shall pay to the beneficiary an amount not less than the additional premium paid for the
1592 additional increment of benefit.
1593 (3) This section does not apply to:
1594 (a) a policy insuring against death by accident only; or
1595 (b) [the] an accident or double indemnity [provisions] provision of an insurance policy.
1596 Section 10. Section 31A-22-409 is amended to read:
1597 31A-22-409. Standard Nonforfeiture Law for Individual Deferred Annuities.

1598 (1) This section is known as the "Standard Nonforfeiture Law for Individual Deferred
1599 Annuities."
1600 (2) This section does not apply to:
1601 (a) [any] reinsurance;
1602 (b) a group annuity purchased under a retirement plan or plan of deferred
1603 compensation:
1604 (i) established or maintained by:
1605 (A) an employer, including a partnership or sole proprietorship;
1606 (B) an employee organization; or
1607 (C) both an employer and an employee organization; and
1608 (ii) other than a plan providing individual retirement accounts or individual retirement
1609 annuities under Section 408, Internal Revenue Code;
1610 (c) a premium deposit fund;
1611 (d) a variable annuity;
1612 (e) an investment annuity;
1613 (f) an immediate annuity;
1614 (g) a deferred annuity contract after annuity payments have commenced;
1615 (h) a reversionary annuity; or
1616 (i) [any] a contract that [shall be] is delivered outside this state through an agent or
1617 other representative of the company issuing the contract.
1618 (3) (a) If a policy is issued after this section takes effect as set forth in Subsection (15),
1619 a contract of annuity, except as stated in Subsection (2), may not be delivered or issued for
1620 delivery in this state unless the contract of annuity contains in substance:
1621 (i) the provisions described in Subsection (3)(b); or
1622 (ii) provisions corresponding to the provisions described in Subsection (3)(b) that in the
1623 opinion of the commissioner are at least as favorable to the contractholder, governing cessation
1624 of payment of consideration under the contract.
1625 (b) Subsection (3)(a)(i) requires the following provisions:

1626 (i) the company shall grant a paid-up annuity benefit on a plan stipulated in the contract
1627 of such a value as specified in Subsections (7), (8), (9), (10), and (12):
1628 (A) upon cessation of payment of consideration under a contract; or
1629 (B) upon a written request of the contract owner;
1630 (ii) if a contract provides for a lump-sum settlement at maturity, or at any other time,
1631 upon surrender of the contract at or before the commencement of any annuity payments, the
1632 company shall pay in lieu of any paid-up annuity benefit a cash surrender benefit of such amount
1633 as is specified in Subsections (7), (8), (10), and (12);
1634 (iii) a statement of the mortality table, if any, and interest rates used in calculating any
1635 of the following that are guaranteed under the contract:
1636 (A) minimum paid-up annuity [benefits] benefit;
1637 (B) cash surrender [benefits] benefit; or
1638 (C) death [benefits] benefit;
1639 (iv) sufficient information to determine the amounts of the benefits described in
1640 Subsection (3)(b)(iii);
1641 (v) a statement that any paid-up annuity, cash surrender, or death benefits that may be
1642 available under the contract are not less than the minimum benefits required by [any] a statute of
1643 the state in which the contract is delivered; and
1644 (vi) an explanation of the manner in which [the benefits] a benefit described in
1645 Subsection (3)(b)(v) [are] is altered by the existence of any:
1646 (A) additional amounts credited by the company to the contract;
1647 (B) indebtedness to the company on the contract; or
1648 (C) prior withdrawals from or partial surrender of the contract.
1649 (c) Notwithstanding the requirements of this Subsection (3), [any] a deferred annuity
1650 contract may provide that if no consideration [has been] is received under a contract for a
1651 period of two full years and the portion of the paid-up annuity benefit at maturity on the plan
1652 stipulated in the contract arising from consideration paid before the period would be less than
1653 $20 monthly:

1654 (i) the company may at the company's option terminate the contract by payment in cash
1655 of the then present value of such portion of the paid-up annuity benefit, calculated on the basis
1656 of the mortality table specified in the contract, if any, and the interest rate specified in the
1657 contract for determining the paid-up annuity benefit; and
1658 (ii) the payment described in Subsection (3)(c)(i), relieves the company of any further
1659 obligation under the contract.
1660 (d) A company may reserve the right to defer the payment of cash surrender benefit for
1661 a period not to exceed six months after demand for the payment of the cash surrender benefit
1662 with surrender of the contract.
1663 (4) For a policy issued before June 1, 2006, the minimum values as specified in
1664 Subsections (7), (8), (9), (10), and (12) of any paid-up annuity, cash surrender, or death benefits
1665 available under an annuity contract shall be based upon minimum nonforfeiture amounts as
1666 established in this Subsection (4).
1667 (a) (i) With respect to [contracts] a contract providing for flexible considerations, the
1668 minimum nonforfeiture amount at any time at or before the commencement of any annuity
1669 payments shall be equal to an accumulation up to such time, at a rate of interest of 3% per
1670 annum of percentages of the net considerations paid prior to such time:
1671 (A) decreased by the sum of:
1672 (I) any prior withdrawals from or partial surrenders of the contract accumulated at a
1673 rate of interest of 3% per annum; and
1674 (II) the amount of any indebtedness to the company on the contract, including interest
1675 due and accrued; and
1676 (B) increased by any existing additional amounts credited by the company to the
1677 contract.
1678 (ii) For purposes of this Subsection (4)(a), the net consideration for a given contract
1679 year used to define the minimum nonforfeiture amount shall be:
1680 (A) an amount not less than zero; and
1681 (B) equal to the corresponding gross considerations credited to the contract during that

1682 contract year less:
1683 (I) an annual contract charge of $30; and
1684 (II) a collection charge of $1.25 per consideration credited to the contract during that
1685 contract year.
1686 (iii) The percentages of net considerations shall be:
1687 (A) 65% of the net consideration for the first contract year; and
1688 (B) 87-1/2% of the net considerations for the second and later contract years.
1689 (iv) Notwithstanding Subsection (4)(a)(iii), the percentage shall be 65% of the portion
1690 of the total net consideration for any renewal contract year that exceeds by not more than two
1691 times the sum of those portions of the net considerations in all prior contract years for which the
1692 percentage was 65%.
1693 (b) (i) Except as provided in Subsections (4)(b)(ii) and (iii), with respect to [contracts]
1694 a contract providing for fixed scheduled consideration, minimum nonforfeiture amounts shall be:
1695 (A) calculated on the assumption that considerations are paid annually in advance; and
1696 (B) defined as for contracts with flexible considerations that are paid annually.
1697 (ii) The portion of the net consideration for the first contract year to be accumulated
1698 shall be equal to an amount that is the sum of:
1699 (A) 65% of the net consideration for the first contract year; and
1700 (B) 22-1/2% of the excess of the net consideration for the first contract year over the
1701 lesser of the net considerations for:
1702 (I) the second contract year; and
1703 (II) the third contract year.
1704 (iii) The annual contract charge shall be the lesser of $30 or 10% of the gross annual
1705 consideration.
1706 (c) With respect to [contracts] a contract providing for a single consideration payment,
1707 minimum nonforfeiture amounts shall be defined as for contracts with flexible considerations
1708 except that:
1709 (i) the percentage of net consideration used to determine the minimum nonforfeiture

1710 amount shall be equal to 90%; and
1711 (ii) the net consideration shall be the gross consideration less a contract charge of $75.
1712 (5) For a policy issued on or after June 1, 2006, the minimum values as specified in
1713 Subsections (7), (8), (9), (10), and (12) of any paid-up annuity, cash surrender, or death benefits
1714 available under an annuity contract shall be based upon minimum nonforfeiture amounts as
1715 established in this Subsection (5).
1716 (a) The minimum nonforfeiture amount at any time at or before the commencement of
1717 any annuity payments shall be equal to an accumulation up to such time, at rates of interest as
1718 indicated in Subsection (5)(b), of 87-1/2% of the gross considerations paid before such time
1719 decreased by the sum of:
1720 (i) any prior withdrawals from or partial surrenders of the contract accumulated at rates
1721 of interest as indicated in Subsection (5)(b);
1722 (ii) an annual contract charge of $50, accumulated at rates of interest as indicated in
1723 Subsection (5)(b);
1724 (iii) any premium tax paid by the company for the contract, accumulated at rates of
1725 interest as indicated in Subsection (5)(b); and
1726 (iv) the amount of any indebtedness to the company on the contract, including interest
1727 due and accrued.
1728 (b) (i) The interest rate used in determining minimum nonforfeiture amounts shall be an
1729 annual rate of interest determined as the lesser of:
1730 (A) 3% per annum; and
1731 (B) the five-year Constant Maturity Treasury Rate reported by the Federal Reserve,
1732 rounded to the nearest 1/20th of 1%, as of a date or average over a period no longer than 15
1733 months prior to the contract issue date or redetermination date under Subsection (5)(b)(iii):
1734 (I) reduced by 125 basis points; and
1735 (II) where the resulting interest rate is not less than 1%.
1736 (ii) The interest rate shall apply for an initial period and may be redetermined for
1737 additional periods.

1738 (iii) (A) If the interest rate will be reset, the contract shall state:
1739 (I) the initial period;
1740 (II) the redetermination date;
1741 (III) the redetermination basis; and
1742 (IV) the redetermination period.
1743 (B) The basis is the date or average over a specified period that produces the value of
1744 the five-year Constant Maturity Treasury Rate to be used at each redetermination date.
1745 (c) (i) During the period or term that a contract provides substantive participation in an
1746 equity indexed benefit, the reduction described in Subsection (5)(b)(i)(B)(I) may be increased by
1747 up to an additional 100 basis points to reflect the value of the equity index benefit.
1748 (ii) The present value of the additional reduction at the contract issue date and at each
1749 redetermination date may not exceed the market value of the benefit.
1750 (iii) (A) The commissioner may require a demonstration that the present value of the
1751 additional reduction does not exceed the market value of the benefit.
1752 (B) If the demonstration required under Subsection (5)(c)(iii)(A) is not made to the
1753 satisfaction of the commissioner, the commissioner may disallow or limit the additional
1754 reduction.
1755 (6) Notwithstanding Subsection (4), for a policy issued on or after June 1, 2004 and
1756 before June 1, 2006, at the election of a company, on a contract form-by-contract form basis,
1757 the minimum values as specified in Subsections (7), (8), (9), (10), and (12) of any paid-up
1758 annuity, cash surrender, or death benefits available under an annuity contract may be based upon
1759 minimum nonforfeiture amounts as established in Subsection (5).
1760 (7) (a) [Any] A paid-up annuity benefit available under a contract shall be such that the
1761 contract's present value on the date annuity payments are to commence is at least equal to the
1762 minimum nonforfeiture amount on that date.
1763 (b) The present value described in Subsection (7)(a) shall be computed using the
1764 mortality table, if any, and the interest rate specified in the contract for determining the
1765 minimum paid-up annuity benefits guaranteed in the contract.

1766 (8) (a) For [contracts] a contract that [provide] provides cash surrender benefits, the
1767 cash surrender benefits available before maturity may not be less than the present value as of the
1768 date of surrender of that portion of the cash surrender value that would be provided under the
1769 contract at maturity arising from considerations paid before the time of cash surrender:
1770 (i) decreased by the amount appropriate to reflect any prior withdrawals from or partial
1771 surrender of the contract;
1772 (ii) decreased by the amount of any indebtedness to the company on the contract,
1773 including interest due and accrued; and
1774 (iii) increased by any existing additional amounts credited by the company to the
1775 contract.
1776 (b) For purposes of this Subsection (8), the present value [being] is to be calculated on
1777 the basis of an interest rate not more than 1% higher than the interest rate specified in the
1778 contract for accumulating the net considerations to determine the maturity value.
1779 (c) In no event shall [any] a cash surrender benefit be less than the minimum
1780 nonforfeiture amount at that time.
1781 (d) The death benefit under a contract described in Subsection (8)(a) shall be at least
1782 equal to the cash surrender benefit.
1783 (9) (a) For [contracts] a contract that [do] does not provide cash surrender benefits, the
1784 present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior
1785 to maturity may not be less than the present value of that portion of the maturity value of the
1786 paid-up annuity benefit provided under the contract arising from considerations paid before the
1787 time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity
1788 increased by any existing additional amounts credited by the company to the contract.
1789 (b) For purposes of [this] Subsection (9)(a), the present value [being calculated] for the
1790 period prior to the maturity date is to be calculated on the basis of the interest rate specified in
1791 the contract for accumulating the net considerations to determine maturity value.
1792 (c) For [contracts] a contract that [do] does not provide [any] a death [benefits] benefit
1793 before commencement of any annuity payments, the present values shall be calculated on the

1794 basis of the interest rate and the mortality table specified in the contract for determining the
1795 maturity value of the paid-up annuity benefit.
1796 (d) In no event shall the present value of a paid-up annuity benefit be less than the
1797 minimum nonforfeiture amount at that time.
1798 (10) (a) For the purpose of determining the benefits calculated under Subsections (8)
1799 and (9), the maturity date shall be considered to be [the latest date]:
1800 (i) in the case of an annuity contract issued on or before May 5, 2002, under which an
1801 election may be made to have an annuity payment commence at an optional maturity date, the
1802 latest date for which an election is permitted by the contract, except that it may not be
1803 considered to be later than the later of:
1804 [(i)] (A) the anniversary of the contract next following the [annuitant's 70th birthday]
1805 day on which the annuitant becomes 70 years of age; or
1806 [(ii)] (B) the tenth anniversary of the contract[.]; or
1807 (ii) in the case of an annuity contract issued on or after May 6, 2002, the latest date
1808 permitted by the contract, except that it may not be considered to be later than the later of:
1809 (A) the anniversary of the contract next following the day on which the annuitant
1810 becomes 70 years of age; or
1811 (B) the tenth anniversary of the contract.
1812 (b) In the case of an annuity contract issued on or after May 6, 2002:
1813 [(b) For] (i) for a contract that provides cash surrender benefits, the cash surrender
1814 value on or past the maturity date shall be equal to the amount used to determine the annuity
1815 benefit payments[.]; and
1816 [(c) A] (ii) a surrender charge may not be imposed on or past maturity.
1817 (11) [Any] A contract that does not provide cash surrender benefits or does not provide
1818 death benefits at least equal to the minimum nonforfeiture amount before the commencement of
1819 any annuity payments shall include a statement in a prominent place in the contract that these
1820 benefits are not provided.
1821 (12) [Any] A paid-up annuity, cash surrender, or death [benefits] benefit available at

1822 any time, other than on the contract anniversary under [any] a contract with fixed scheduled
1823 considerations, shall be calculated with allowance for the lapse of time and the payment of any
1824 scheduled considerations beyond the beginning of the contract year in which cessation of
1825 payment of considerations under the contract occurs.
1826 (13) (a) For [any] a contract that provides, within the same contract by rider or
1827 supplemental contract provisions, both annuity benefits and life insurance benefits that are in
1828 excess of the greater of cash surrender benefits or a return of the gross considerations with
1829 interest, the minimum nonforfeiture benefits shall:
1830 (i) be equal to the sum of:
1831 (A) the minimum nonforfeiture benefits for the annuity portion; and
1832 (B) the minimum nonforfeiture benefits, if any, for the life insurance portion; and
1833 (ii) computed as if each portion were a separate contract.
1834 (b) (i) Notwithstanding Subsections (7), (8), (9), (10), and (12), additional benefits
1835 payable, as described in Subsection (13)(b)(ii), and consideration for the additional benefits
1836 payable, shall be disregarded in ascertaining, if required by this section:
1837 (A) the minimum nonforfeiture amounts;
1838 (B) paid-up annuity;
1839 (C) cash surrender; and
1840 (D) death benefits.
1841 (ii) For purposes of this Subsection (13), an additional benefit is a benefit payable:
1842 (A) in the event of total and permanent disability;
1843 (B) as reversionary annuity or deferred reversionary annuity benefits; or
1844 (C) as other policy benefits additional to life insurance, endowment, and annuity
1845 benefits.
1846 (iii) The inclusion of the additional benefits described in this Subsection (13) may not be
1847 required in any paid-up benefits, unless the additional benefits separately would require:
1848 (A) minimum nonforfeiture amounts;
1849 (B) paid-up annuity;

1850 (C) cash surrender; and
1851 (D) death benefits.
1852 (14) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
1853 the commissioner may adopt rules necessary to implement this section, including:
1854 (a) ensuring that any additional reduction under Subsection (5)(c) is consistent with the
1855 requirements imposed by Subsection (5)(c); and
1856 (b) providing for adjustments in addition to the adjustments allowed under Subsection
1857 (5)(c) to the calculation of minimum nonforfeiture amounts for:
1858 (i) [contracts] a contract that [provide] provides substantive participation in an equity
1859 index benefit; and
1860 (ii) [other contracts] a contract for which the commissioner determines adjustments are
1861 justified.
1862 (15) (a) After this section takes effect, [any] a company may file with the commissioner
1863 a written notice of its election to comply with this section after a specified date before July 1,
1864 1988.
1865 (b) This section applies to annuity contracts of a company issued on or after the date
1866 the company specifies in the notice.
1867 (c) If a company makes no election under Subsection (15)(a), the operative date of this
1868 section for such company is July 1, 1988.
1869 Section 11. Section 31A-22-428 is enacted to read:
1870 31A-22-428. Interest payable on life insurance proceeds.
1871 (1) For a life insurance policy delivered or issued for delivery in this state on or after
1872 May 5, 2008, the insurer shall pay interest on the death proceeds payable upon the death of the
1873 insured.
1874 (2) (a) Except as provided in Subsection (4), for the period beginning on the date of
1875 death and ending the day before the day described in Subsection (3)(b), interest under
1876 Subsection (1) shall accrue at a rate no less than:
1877 (i) the rate applicable to policy funds left on deposit; or

1878 (ii) if there is no rate described in Subsection (2)(a)(i), at the Two Year Treasury
1879 Constant Maturity Rate as published by the Federal Reserve.
1880 (b) The rate described in Subsection (2)(a) is the rate in effect on the day on which the
1881 death occurs.
1882 (c) Interest is payable until the day on which the claim is paid.
1883 (3) (a) Unless the claim is paid and except as provided in Subsection (4), beginning on
1884 the day described in Subsection (3)(b) and ending the day on which the claim is paid, interest
1885 shall accrue at the rate in Subsection (2) plus additional interest at the rate of 10% annually.
1886 (b) Interest accrues under Subsection (3)(a) beginning with the day that is 31 days from
1887 the latest of:
1888 (i) the day on which the insurer receives proof of death;
1889 (ii) the day on which the insurer receives sufficient information to determine:
1890 (A) liability;
1891 (B) the extent of the liability; and
1892 (C) the appropriate payee legally entitled to the proceeds; and
1893 (iii) the day on which:
1894 (A) legal impediments to payment of proceeds that depend on the action of parties
1895 other than the insurer are resolved; and
1896 (B) the insurer receives sufficient evidence of the resolution of the legal impediments
1897 described in Subsection (3)(b)(iii)(A).
1898 (4) A court of competent jurisdiction may require payment of interest from the date of
1899 death to the day on which a claim is paid at a rate equal to the sum of:
1900 (a) the rate specified in Subsection (2); and
1901 (b) the legal rate identified in Subsection 15-1-1 (2).
1902 Section 12. Section 31A-22-610.6 is enacted to read:
1903 31A-22-610.6. Special enrollment for individuals receiving premium assistance.
1904 (1) As used in this section:
1905 (a) "Premium assistance" means assistance under Title 26, Chapter 18, Medical

1906 Assistance Act, in the payment of premium.
1907 (b) "Qualified beneficiary" means an individual who is approved to receive a premium
1908 assistance.
1909 (2) Subject to the other provisions in this section, an individual may enroll under this
1910 section at a time outside of an employer health benefit plan open enrollment period, regardless
1911 of previously waiving coverage, if the individual is:
1912 (a) a qualified beneficiary who is eligible for coverage as an employee under the
1913 employer health benefit plan; or
1914 (b) a dependent of the qualified beneficiary who is eligible for coverage under the
1915 employer health benefit plan.
1916 (3) To be eligible to enroll outside of an open enrollment period, an individual described
1917 in Subsection (2) shall enroll in the employer health benefit plan by no later than 30 days from
1918 the day on which the qualified beneficiary receives written notification that the qualified
1919 beneficiary is eligible to receive premium assistance.
1920 (4) An individual described in Subsection (2) may enroll under this section only in an
1921 employer health benefit plan that is available at the time of enrollment to similarly situated
1922 eligible employees or dependents of eligible employees.
1923 (5) Coverage under an employer health benefit plan for an individual described in
1924 Subsection (2) may begin as soon as the first day of the month immediately following
1925 enrollment of the individual in accordance with this section.
1926 (6) This section does not modify any requirement related to premiums that applies
1927 under an employer health benefit plan to a similarly situated eligible employee or dependent of
1928 an eligible employee under the employer health benefit plan.
1929 (7) An employer health benefit plan may require an individual described in Subsection
1930 (2) to satisfy a preexisting condition waiting period that:
1931 (a) is allowed under the Health Insurance Portability and Accountability Act of 1996,
1932 Pub. L. 104-191, 110 Stat. 1936; and
1933 (b) is not longer than 12 months.

1934 Section 13. Section 31A-22-613.5 is amended to read:
1935 31A-22-613.5. Price and value comparisons of health insurance -- Basic Health
1936 Care Plan.
1937 (1) This section applies generally to all health insurance policies and health maintenance
1938 organization contracts.
1939 (2) The commissioner shall adopt a Basic Health Care Plan consistent with this section
1940 to be offered under the open enrollment provisions of Chapter 30, Individual, Small Employer,
1941 and Group Health Insurance Act.
1942 (3) (a) The commissioner shall promote informed consumer behavior and responsible
1943 health insurance and health plans by requiring an insurer issuing health insurance policies or
1944 health maintenance organization contracts to provide to all enrollees, prior to enrollment in the
1945 health benefit plan or health insurance policy, written disclosure of:
1946 (i) restrictions or limitations on prescription drugs and biologics including the use of a
1947 formulary and generic substitution; and
1948 (ii) coverage limits under the plan.
1949 (b) In addition to the requirements of Subsections (3)(a) and (d), an insurer described in
1950 Subsection (3)(a) shall submit the written disclosure required by this Subsection (3) to the
1951 commissioner:
1952 (i) upon commencement of operations in the state; and
1953 (ii) anytime the insurer amends any of the following described in Subsection (3)(a):
1954 (A) treatment policies;
1955 (B) practice standards;
1956 (C) restrictions; or
1957 (D) coverage limits of the insurer's health benefit plan or health insurance policy.
1958 (c) The commissioner may adopt rules to implement the disclosure requirements of this
1959 Subsection (3), taking into account:
1960 (i) business confidentiality of the insurer;
1961 (ii) definitions of terms; and

1962 (iii) the method of disclosure to enrollees.
1963 (d) If under Subsection (3)(a)(i) a formulary is used, the insurer shall make available to
1964 prospective enrollees and maintain evidence of the fact of the disclosure of:
1965 (i) the drugs included;
1966 (ii) the patented drugs not included; and
1967 (iii) any conditions that exist as a precedent to coverage.
1968 (4) The Basic Health Care Plan adopted by the commissioner under this section shall
1969 provide for:
1970 (a) a lifetime maximum benefit per person not to exceed $1,000,000;
1971 (b) an annual maximum benefit per person not [to exceed $300,000] less than
1972 $250,000;
1973 (c) an out-of-pocket maximum [per person not to exceed $5,000,] of cost-sharing
1974 features:
1975 (i) including [the]:
1976 (A) a deductible;
1977 (B) a copayment; and
1978 (C) coinsurance;
1979 (ii) not to exceed $5,000 per person; and
1980 (iii) for family coverage, not to exceed three times the per person out-of-pocket
1981 maximum provided in Subsection (4)(c)(ii);
1982 (d) in relation to its cost-sharing features:
1983 (i) a deductible of:
1984 (A) not less than $1,500 per person for major medical expenses; and
1985 (B) for family coverage, not to exceed three times the per person deductible for major
1986 medical expenses under Subsection (4)(d)(i)(A); and
1987 (ii) (A) a copayment of not less than:
1988 (I) $25 per visit for office services; and
1989 (II) $150 per visit to an emergency room; or

1990 (B) coinsurance of not less than:
1991 (I) 20% per visit for office services; and
1992 (II) 20% per visit for an emergency room; and
1993 (e) in relation to cost-sharing features for prescription drugs:
1994 (i) (A) a deductible [of] not [less than $500] to exceed $1,000 per person; and
1995 (B) for family coverage, not to exceed three times the per person deductible provided in
1996 Subsection (4)(e)(i)(A); and
1997 (ii) (A) a copayment of not less than:
1998 (I) the lesser of the cost of the prescription drug or $15 for the lowest level of cost for
1999 prescription drugs;
2000 (II) the lesser of the cost of the prescription drug or [$30] $25 for the second level of
2001 cost for prescription drugs; and
2002 (III) the lesser of the cost of the prescription drug or [$60] $35 for the highest level of
2003 cost for prescription drugs; or
2004 (B) coinsurance of not less than:
2005 (I) the lesser of the cost of the prescription drug or 25% for the lowest level of cost for
2006 prescription drugs;
2007 (II) the lesser of the cost of the prescription drug or 40% for the second level of cost
2008 for prescription drugs; and
2009 (III) the lesser of the cost of the prescription drug or 60% for the highest level of cost
2010 for prescription drugs.
2011 Section 14. Section 31A-22-625 is amended to read:
2012 31A-22-625. Catastrophic coverage of mental health conditions.
2013 (1) As used in this section:
2014 (a) (i) "Catastrophic mental health coverage" means coverage in a health [insurance
2015 policy] benefit plan or health maintenance organization contract that does not impose [any] a
2016 lifetime limit, annual payment limit, episodic limit, inpatient or outpatient service limit, or
2017 maximum out-of-pocket limit that places a greater financial burden on an insured for the

2018 evaluation and treatment of a mental health condition than for the evaluation and treatment of a
2019 physical health condition.
2020 (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
2021 factors, such as deductibles, copayments, or coinsurance, prior to reaching any maximum
2022 out-of-pocket limit.
2023 (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
2024 limit for physical health conditions and another maximum out-of-pocket limit for mental health
2025 conditions, provided that, if separate out-of-pocket limits are established, the out-of-pocket
2026 limit for mental health conditions may not exceed the out-of-pocket limit for physical health
2027 conditions.
2028 (b) (i) "50/50 mental health coverage" means coverage in a health [insurance policy]
2029 benefit plan or health maintenance organization contract that pays for at least 50% of covered
2030 services for the diagnosis and treatment of mental health conditions.
2031 (ii) "50/50 mental health coverage" may include a restriction on episodic limits,
2032 inpatient or outpatient service limits, or maximum out-of-pocket limits.
2033 (c) "Large employer" is as defined in Section 31A-1-301 .
2034 (d) (i) "Mental health condition" means any condition or disorder involving mental
2035 illness that falls under any of the diagnostic categories listed in the Diagnostic and Statistical
2036 Manual, as periodically revised.
2037 (ii) "Mental health condition" does not include the following when diagnosed as the
2038 primary or substantial reason or need for treatment:
2039 (A) marital or family problem;
2040 (B) social, occupational, religious, or other social maladjustment;
2041 (C) conduct disorder;
2042 (D) chronic adjustment disorder;
2043 (E) psychosexual disorder;
2044 (F) chronic organic brain syndrome;
2045 (G) personality disorder;

2046 (H) specific developmental disorder or learning disability; or
2047 (I) mental retardation.
2048 (e) "Small employer" is as defined in Section 31A-1-301.
2049 (2) (a) At the time of purchase and renewal, an insurer shall offer to each small
2050 employer that it insures or seeks to insure a choice between catastrophic mental health coverage
2051 and 50/50 mental health coverage.
2052 (b) In addition to Subsection (2)(a), an insurer may offer to provide:
2053 (i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
2054 that exceed the minimum requirements of this section; or
2055 (ii) coverage that excludes benefits for mental health conditions.
2056 (c) A small employer may, at its option, choose either catastrophic mental health
2057 coverage, 50/50 mental health coverage, or coverage offered under Subsection (2)(b),
2058 regardless of the employer's previous coverage for mental health conditions.
2059 (d) An insurer is exempt from the 30% index rating restriction in Subsection
2060 31A-30-106 (1)(b) and, for the first year only that catastrophic mental health coverage is chosen,
2061 the 15% annual adjustment restriction in Subsection 31A-30-106 (1)(c)(ii), for any small
2062 employer with 20 or less enrolled employees who chooses coverage that meets or exceeds
2063 catastrophic mental health coverage.
2064 (3) (a) At the time of purchase and renewal of a health benefit plan, an insurer shall
2065 offer catastrophic mental health coverage to each large employer that it insures or seeks to
2066 insure.
2067 (b) In addition to Subsection (3)(a), an insurer may offer to provide catastrophic mental
2068 health coverage at levels that exceed the minimum requirements of this section.
2069 (c) A large employer may, at its option, choose either catastrophic mental health
2070 coverage, coverage that excludes benefits for mental health conditions, or coverage offered
2071 under Subsection (3)(b).
2072 (4) (a) An insurer may provide catastrophic mental health coverage through a managed
2073 care organization or system in a manner consistent with the provisions in Chapter 8, Health

2074 Maintenance Organizations and Limited Health Plans, regardless of whether the policy or
2075 contract uses a managed care organization or system for the treatment of physical health
2076 conditions.
2077 (b) (i) Notwithstanding any other provision of this title, an insurer may:
2078 (A) establish a closed panel of providers for catastrophic mental health coverage; and
2079 (B) refuse to provide any benefit to be paid for services rendered by a nonpanel
2080 provider unless:
2081 (I) the insured is referred to a nonpanel provider with the prior authorization of the
2082 insurer; and
2083 (II) the nonpanel provider agrees to follow the insurer's protocols and treatment
2084 guidelines.
2085 (ii) If an insured receives services from a nonpanel provider in the manner permitted by
2086 Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
2087 average amount paid by the insurer for comparable services of panel providers under a
2088 noncapitated arrangement who are members of the same class of health care providers.
2089 (iii) Nothing in this Subsection (4)(b) may be construed as requiring an insurer to
2090 authorize a referral to a nonpanel provider.
2091 (c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
2092 mental health condition must be rendered:
2093 (i) by a mental health therapist as defined in Section 58-60-102 ; or
2094 (ii) in a health care facility licensed or otherwise authorized to provide mental health
2095 services pursuant to Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act, or
2096 Title 62A, Chapter 2, Licensure of Programs and Facilities, that provides a program for the
2097 treatment of a mental health condition pursuant to a written plan.
2098 (5) The commissioner may [disapprove any] prohibit a policy or contract that provides
2099 mental health coverage in a manner that is inconsistent with [the provisions of] this section.
2100 (6) The commissioner shall:
2101 (a) adopt rules as necessary to ensure compliance with this section; and

2102 (b) provide general figures on the percentage of contracts and policies that include no
2103 mental health coverage, 50/50 mental health coverage, catastrophic mental health coverage, and
2104 coverage that exceeds the minimum requirements of this section.
2105 (7) The Health and Human Services Interim Committee shall review:
2106 (a) the impact of this section on insurers, employers, providers, and consumers of
2107 mental health services before January 1, 2004; and
2108 (b) make a recommendation as to whether the provisions of this section should be
2109 modified and whether the cost-sharing requirements for mental health conditions should be the
2110 same as for physical health conditions.
2111 (8) (a) An insurer shall offer catastrophic mental health coverage as part of a health
2112 maintenance organization contract that is governed by Chapter 8, Health Maintenance
2113 Organizations and Limited Health Plans, that is in effect on or after January 1, 2001.
2114 (b) An insurer shall offer catastrophic mental health coverage as a part of a health
2115 [insurance policy] benefit plan that is not governed by Chapter 8, Health Maintenance
2116 Organizations and Limited Health Plans, that is in effect on or after July 1, 2001.
2117 (c) This section does not apply to the purchase or renewal of an individual insurance
2118 policy or contract.
2119 (d) Notwithstanding Subsection (8)(c), nothing in this section may be construed as
2120 discouraging or otherwise preventing insurers from continuing to provide mental health
2121 coverage in connection with an individual policy or contract.
2122 (9) This section shall be repealed in accordance with Section 63-55-231 .
2123 Section 15. Section 31A-22-807 is amended to read:
2124 31A-22-807. Filing and approval of forms -- Loss ratio standards.
2125 (1) [All forms of policies, certificates of insurance, statements of insurance,
2126 endorsements, and riders] A policy, certificate of insurance, statement of insurance, or
2127 endorsement form intended for use in Utah [are] is subject to Section 31A-21-201 .
2128 (2) In addition to the grounds for [disapproval] prohibiting use of a form under
2129 Subsection 31A-21-201 (3), it is a ground [for disapproval] to prohibit the use of a form that the

2130 benefits provided in the form are not reasonable in relation to the premium charge.
2131 (3) (a) In ascertaining whether the benefits are reasonable in relation to the premium
2132 charged, the commissioner shall consider:
2133 (i) the mortality cost of the life insurance [and];
2134 (ii) the morbidity cost of the accident and health insurance[,]; and
2135 (iii) the reserves set up for the payment of claims unreported or in the process of
2136 settlement. [The]
2137 (b) For purposes of this section, benefits are considered reasonable in relation to the
2138 premium charged if, given the costs described in this Subsection (3), the premium rate charged
2139 develops or may reasonably be expected to develop a loss ratio of:
2140 (i) not less than 50% for credit life insurance; and
2141 (ii) not less than 55% for credit accident and health insurance [given the above costs].
2142 (4) Benefits are considered reasonable in relation to premium charged if the ratio of
2143 claims incurred to premium earned during the most recent four-year period at the rates in use
2144 produces a loss ratio that is equal to or exceeds the minimum loss ratio standard specified in
2145 Subsection (3).
2146 (5) If the minimum loss ratio test produces a loss ratio that exceeds [Subsection (4)'s]
2147 the minimum loss ratio standard in Subsection (4) by five percentage points or more, the insurer
2148 may file for approval and use [rates] a rate that [are] is higher than the prima facie [rates] rate, if
2149 it can be expected that the use of [those] the higher [rates] rate will continue to produce a loss
2150 ratio for [the accounts to which they are] an account to which it is applied that will satisfy the
2151 minimum loss ratio test.
2152 (6) If the minimum loss ratio test produces a loss ratio that is lower than [Subsection
2153 (4)'s] the minimum loss standard in Subsection (4) by five percentage points or more, the
2154 commissioner may require that the insurer:
2155 (a) file an adjusted [rates] rate that can be expected to produce a loss ratio that will
2156 satisfy the minimum loss ratio test[,]; or [to]
2157 (b) submit reasons acceptable to the commissioner why the insurer should not be

2158 required to file [these adjusted rates] an adjusted rate.
2159 Section 16. Section 31A-23a-105 is amended to read:
2160 31A-23a-105. General requirements for individual and agency license issuance
2161 and renewal.
2162 (1) The commissioner shall issue or renew a license to act as a producer, limited line
2163 producer, customer service representative, consultant, managing general agent, or reinsurance
2164 intermediary to any person who, as to the license type and line of authority classification applied
2165 for under Section 31A-23a-106 :
2166 (a) [has satisfied] satisfies the application requirements under Section 31A-23a-104 ;
2167 (b) [has satisfied] satisfies the character requirements under Section 31A-23a-107 ;
2168 (c) [has satisfied] satisfies any applicable continuing education requirements under
2169 Section 31A-23a-202 ;
2170 (d) [has satisfied] satisfies any applicable examination requirements under Section
2171 31A-23a-108 ;
2172 (e) [has satisfied] satisfies any applicable training period requirements under Section
2173 31A-23a-203 ;
2174 (f) if a nonresident:
2175 (i) [has complied] complies with Section 31A-23a-109 ; and
2176 (ii) holds an active similar license in that person's state of residence;
2177 (g) if an applicant for a title insurance producer license, [has satisfied] satisfies the
2178 requirements of Sections 31A-23a-203 and 31A-23a-204 ;
2179 (h) if an applicant for a license to act as a viatical settlement provider or viatical
2180 settlement producer, [has satisfied] satisfies the requirements of Section 31A-23a-117 ; and
2181 (i) [has paid] pays the applicable fees under Section 31A-3-103 .
2182 (2) (a) This Subsection (2) applies to the following persons:
2183 (i) an applicant for a pending:
2184 (A) individual or agency producer license;
2185 (B) limited line producer license;

2186 (C) customer service representative license;
2187 (D) consultant license;
2188 (E) managing general agent license; or
2189 (F) reinsurance intermediary license; or
2190 (ii) a licensed:
2191 (A) individual or agency producer;
2192 (B) limited line producer;
2193 (C) customer service representative;
2194 (D) consultant;
2195 (E) managing general agent; or
2196 (F) reinsurance intermediary.
2197 (b) A person described in Subsection (2)(a) shall report to the commissioner:
2198 (i) any administrative action taken against the person:
2199 (A) in another jurisdiction; or
2200 (B) by another regulatory agency in this state; and
2201 (ii) any criminal prosecution taken against the person in any jurisdiction.
2202 (c) The report required by Subsection (2)(b) shall:
2203 (i) be filed:
2204 (A) at the time the person files the application for an individual or agency license; and
2205 (B) for an action or prosecution that occurs on or after the day on which the person
2206 files the application:
2207 (I) for an administrative action, within 30 days of the final disposition of the
2208 administrative action; or
2209 (II) for a criminal prosecution, within 30 days of the initial [pretrial hearing date]
2210 appearance before a court; and
2211 (ii) include a copy of the complaint or other relevant legal documents related to the
2212 action or prosecution described in Subsection (2)(b).
2213 (3) (a) The department may [request:] require a person applying for a license or for

2214 consent to engage in the business of insurance to submit to a criminal background check as a
2215 condition of receiving a license or consent.
2216 (b) A person, if required to submit to a criminal background check under Subsection
2217 (3)(a), shall:
2218 (i) submit a fingerprint card in a form acceptable to the department; and
2219 (ii) consent to a fingerprint background check by:
2220 (A) the Utah Bureau of Criminal Identification; and
2221 (B) the Federal Bureau of Investigation.
2222 (c) For a person who submits a fingerprint card and consents to a fingerprint
2223 background check under Subsection (3)(b), the department may request:
2224 (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
2225 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
2226 (ii) complete Federal Bureau of Investigation criminal background checks through the
2227 national criminal history system.
2228 [(b)] (d) Information obtained by the department from the review of criminal history
2229 records received under this Subsection (3)[(a)] shall be used by the department for the purposes
2230 of:
2231 (i) determining if a person satisfies the character requirements under Section
2232 31A-23a-107 for issuance or renewal of a license;
2233 (ii) determining if a person has failed to maintain the character requirements under
2234 Section 31A-23a-107 ; and
2235 (iii) preventing persons who violate the federal Violent Crime Control and Law
2236 Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in the business of
2237 insurance in the state.
2238 [(c)] (e) If the department requests the criminal background information, the
2239 department shall:
2240 (i) pay to the Department of Public Safety the costs incurred by the Department of
2241 Public Safety in providing the department criminal background information under Subsection

2242 (3)[(a)](c)(i);
2243 (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
2244 of Investigation in providing the department criminal background information under Subsection
2245 (3)[(a)](c)(ii); and
2246 (iii) charge the person applying for a license [or], for renewal of a license, or for
2247 consent to engage in the business of insurance a fee equal to the aggregate of Subsections
2248 (3)[(c)](e)(i) and (ii).
2249 (4) To become a resident licensee in accordance with Section 31A-23a-104 and this
2250 section, a person licensed as one of the following in another state who moves to this state shall
2251 apply within 90 days of establishing legal residence in this state:
2252 (a) insurance producer;
2253 (b) limited line producer;
2254 (c) customer service representative;
2255 (d) consultant;
2256 (e) managing general agent; or
2257 (f) reinsurance intermediary.
2258 (5) Notwithstanding the other provisions of this section, the commissioner may:
2259 (a) issue a license to an applicant for a license for a title insurance line of authority only
2260 with the concurrence of the Title and Escrow Commission; and
2261 (b) renew a license for a title insurance line of authority only with the concurrence of
2262 the Title and Escrow Commission.
2263 Section 17. Section 31A-23a-110 is amended to read:
2264 31A-23a-110. Form and contents of license.
2265 (1) [Licenses] A license issued under this chapter shall be in the form the commissioner
2266 prescribes and shall set forth:
2267 (a) the name[,] and address[, and telephone number] of the licensee;
2268 (b) the license types and lines of authority under Section 31A-23a-106 ;
2269 (c) the date of license issuance; and

2270 (d) any other information the commissioner considers necessary.
2271 (2) A licensee under this chapter doing business under [any other] another name than
2272 the licensee's legal name shall notify the commissioner [prior to] before using the assumed name
2273 in this state.
2274 Section 18. Section 31A-23a-111 is amended to read:
2275 31A-23a-111. Revocation, suspension, surrender, lapsing, limiting, or otherwise
2276 terminating a license -- Rulemaking for renewal or reinstatement.
2277 (1) A license type issued under this chapter remains in force until:
2278 (a) revoked or suspended under Subsection (5);
2279 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
2280 administrative action;
2281 (c) the licensee dies or is adjudicated incompetent as defined under:
2282 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
2283 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
2284 Minors;
2285 (d) lapsed under Section 31A-23a-113 ; or
2286 (e) voluntarily surrendered.
2287 (2) The following may be reinstated within one year after the day on which the license is
2288 inactivated:
2289 (a) a lapsed license; or
2290 (b) a voluntarily surrendered license.
2291 (3) Unless otherwise stated in the written agreement for the voluntary surrender of a
2292 license, submission and acceptance of a voluntary surrender of a license does not prevent the
2293 department from pursuing additional disciplinary or other action authorized under:
2294 (a) this title; or
2295 (b) rules made under this title in accordance with Title 63, Chapter 46a, Utah
2296 Administrative Rulemaking Act.
2297 (4) A line of authority issued under this chapter remains in force until:

2298 (a) the qualifications pertaining to a line of authority are no longer met by the licensee;
2299 or
2300 (b) the supporting license type:
2301 (i) is revoked or suspended under Subsection (5); or
2302 (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
2303 administrative action.
2304 (5) (a) If the commissioner makes a finding under Subsection (5)(b), after an
2305 adjudicative proceeding under Title 63, Chapter 46b, Administrative Procedures Act, the
2306 commissioner may:
2307 (i) revoke:
2308 (A) a license; or
2309 (B) a line of authority;
2310 (ii) suspend for a specified period of 12 months or less:
2311 (A) a license; or
2312 (B) a line of authority; or
2313 (iii) limit in whole or in part:
2314 (A) a license; or
2315 (B) a line of authority.
2316 (b) The commissioner may take an action described in Subsection (5)(a) if the
2317 commissioner finds that the licensee:
2318 (i) is unqualified for a license or line of authority under Sections 31A-23a-104 and
2319 31A-23a-105 ;
2320 (ii) [has violated] violates:
2321 (A) an insurance statute;
2322 (B) a rule that is valid under Subsection 31A-2-201 (3); or
2323 (C) an order that is valid under Subsection 31A-2-201 (4);
2324 (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
2325 delinquency proceedings in any state;

2326 (iv) fails to pay any final judgment rendered against the person in this state within 60
2327 days after the day on which the judgment became final;
2328 (v) fails to meet the same good faith obligations in claims settlement that is required of
2329 admitted insurers;
2330 (vi) is affiliated with and under the same general management or interlocking
2331 directorate or ownership as another insurance producer that transacts business in this state
2332 without a license;
2333 (vii) refuses:
2334 (A) to be examined; or
2335 (B) to produce its accounts, records, and files for examination;
2336 (viii) has an officer who refuses to:
2337 (A) give information with respect to the insurance producer's affairs; or
2338 (B) perform any other legal obligation as to an examination;
2339 (ix) provides information in the license application that is:
2340 (A) incorrect;
2341 (B) misleading;
2342 (C) incomplete; or
2343 (D) materially untrue;
2344 (x) [has violated any] violates an insurance law, valid rule, or valid order of another
2345 state's insurance department;
2346 (xi) [has obtained or attempted] obtains or attempts to obtain a license through
2347 misrepresentation or fraud;
2348 (xii) [has improperly withheld, misappropriated, or converted] improperly withholds,
2349 misappropriates, or converts any monies or properties received in the course of doing insurance
2350 business;
2351 (xiii) [has] intentionally [misrepresented] misrepresents the terms of an actual or
2352 proposed:
2353 (A) insurance contract; [or]

2354 (B) application for insurance; or
2355 (C) viatical settlement;
2356 (xiv) [has been] is convicted of a felony;
2357 (xv) [has admitted or been] admits or is found to have committed [any] an insurance
2358 unfair trade practice or fraud;
2359 (xvi) in the conduct of business in this state or elsewhere [has]:
2360 (A) [used] uses fraudulent, coercive, or dishonest practices; or
2361 (B) [demonstrated] demonstrates incompetence, untrustworthiness, or financial
2362 irresponsibility;
2363 (xvii) has [had] an insurance license, or its equivalent, denied, suspended, or revoked in
2364 [any other] another state, province, district, or territory;
2365 (xviii) [has forged] forges another's name to:
2366 (A) an application for insurance; or
2367 (B) a document related to an insurance transaction;
2368 (xix) [has] improperly [used] uses notes or [any other] another reference material to
2369 complete an examination for an insurance license;
2370 (xx) [has] knowingly [accepted] accepts insurance business from an individual who is
2371 not licensed;
2372 (xxi) [has failed] fails to comply with an administrative or court order imposing a child
2373 support obligation;
2374 (xxii) [has failed] fails to:
2375 (A) pay state income tax; or
2376 (B) comply with [any] an administrative or court order directing payment of state
2377 income tax;
2378 (xxiii) [has violated or permitted] violates or permits others to violate the federal
2379 Violent Crime Control and Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034; or
2380 (xxiv) [has engaged in methods and practices] engages in a method or practice in the
2381 conduct of business that [endanger] endangers the legitimate interests of customers and the

2382 public.
2383 (c) For purposes of this section, if a license is held by an agency, both the agency itself
2384 and any natural person named on the license are considered to be the holders of the license.
2385 (d) If a natural person named on the agency license commits [any] an act or fails to
2386 perform [any] a duty that is a ground for suspending, revoking, or limiting the natural person's
2387 license, the commissioner may suspend, revoke, or limit the license of:
2388 (i) the natural person;
2389 (ii) the agency, if the agency:
2390 (A) is reckless or negligent in its supervision of the natural person; or
2391 (B) knowingly [participated] participates in the act or failure to act that is the ground
2392 for suspending, revoking, or limiting the license; or
2393 (iii) (A) the natural person; and
2394 (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
2395 (6) A licensee under this chapter is subject to the penalties for acting as a licensee
2396 without a license if:
2397 (a) the licensee's license is:
2398 (i) revoked;
2399 (ii) suspended;
2400 (iii) limited;
2401 (iv) surrendered in lieu of administrative action;
2402 (v) lapsed; or
2403 (vi) voluntarily surrendered; and
2404 (b) the licensee:
2405 (i) continues to act as a licensee; or
2406 (ii) violates the terms of the license limitation.
2407 (7) A licensee under this chapter shall immediately report to the commissioner:
2408 (a) a revocation, suspension, or limitation of the person's license in [any other] another
2409 state, the District of Columbia, or a territory of the United States;

2410 (b) the imposition of a disciplinary sanction imposed on that person by [any other]
2411 another state, the District of Columbia, or a territory of the United States; or
2412 (c) a judgment or injunction entered against that person on the basis of conduct
2413 involving:
2414 (i) fraud;
2415 (ii) deceit;
2416 (iii) misrepresentation; or
2417 (iv) a violation of an insurance law or rule.
2418 (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
2419 license in lieu of administrative action may specify a time, not to exceed five years, within which
2420 the former licensee may not apply for a new license.
2421 (b) If no time is specified in the order or agreement described in Subsection (8)(a), the
2422 former licensee may not apply for a new license for five years from the day on which the order
2423 or agreement is made without the express approval by the commissioner.
2424 (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
2425 a license issued under this part if so ordered by a court.
2426 (10) The commissioner shall by rule prescribe the license renewal and reinstatement
2427 procedures in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
2428 Section 19. Section 31A-23a-116 is amended to read:
2429 31A-23a-116. Services performed for unauthorized insurers.
2430 (1) A person licensed under Chapter 23a, Insurance Marketing - Licensing Producers,
2431 Consultants, and Reinsurance Intermediaries, may not perform [any] an act that assists [any] a
2432 person not authorized as an insurer to act as an insurer.
2433 (2) It is a violation of this section to assist [any] a person purporting to be exempt from
2434 state insurance regulation under Section 514 of the Employee Retirement Income Security Act
2435 of 1974, unless that person [has rebutted the presumption of jurisdiction under Section
2436 31A-1-105 ] submits to the commissioner a certificate from the United States Department of
2437 Labor, or other evidence satisfactory to the commissioner, showing that the laws of Utah are

2438 preempted under Section 514 of the Employee Retirement Income Security Act of 1974 or
2439 other federal law.
2440 (3) It is not a violation of this section:
2441 (a) to assist [persons] a person engaged in self insurance as defined under Section
2442 31A-1-301 ; or
2443 (b) for a surplus lines producer to engage in the placement of insurance under Section
2444 31A-15-103 .
2445 Section 20. Section 31A-25-203 is amended to read:
2446 31A-25-203. General requirements for license issuance.
2447 (1) The commissioner shall issue a license to act as a third party administrator to [any] a
2448 person who [has]:
2449 (a) [satisfied] satisfies the character requirements under Section 31A-25-204 ;
2450 (b) [satisfied] satisfies the financial responsibility requirement under Section
2451 31A-25-205 ;
2452 (c) if a nonresident, [complied] complies with Section 31A-25-206 ; and
2453 (d) [paid] pays the applicable fees under Section 31A-3-103 .
2454 (2) The license of [each] a third party administrator licensed under former Title 31,
2455 Chapter 15a, is continued under this chapter.
2456 (3) (a) This Subsection (3) applies to the following persons:
2457 (i) an applicant for a third party administrator's license; or
2458 (ii) a licensed third party administrator.
2459 (b) A person described in Subsection (3)(a) shall report to the commissioner:
2460 (i) [any] an administrative action taken against the person:
2461 (A) in another jurisdiction; or
2462 (B) by another regulatory agency in this state; and
2463 (ii) [any] a criminal prosecution taken against the person in any jurisdiction.
2464 (c) The report required by Subsection (3)(b) shall:
2465 (i) be filed:

2466 (A) at the time the person applies for a third party administrator's license; and
2467 (B) for an action or prosecution that occurs on or after the day on which the person
2468 applies for a third party administrator license:
2469 (I) for an administrative action, within 30 days of the final disposition of the
2470 administrative action; or
2471 (II) for a criminal prosecution, within 30 days of the initial [pretrial hearing] appearance
2472 before a court; and
2473 (ii) include a copy of the complaint or other relevant legal documents related to the
2474 action or prosecution described in Subsection (3)(b).
2475 (4) (a) The department may require a person applying for a license or for consent to
2476 engage in the business of insurance to submit to a criminal background check as a condition of
2477 receiving a license or consent.
2478 (b) A person, if required to submit to a criminal background check under Subsection
2479 (4)(a), shall:
2480 (i) submit a fingerprint card in a form acceptable to the department; and
2481 (ii) consent to a fingerprint background check by:
2482 (A) the Utah Bureau of Criminal Identification; and
2483 (B) the Federal Bureau of Investigation.
2484 [(4) (a) The] (c) For a person who submits a fingerprint card and consents to a
2485 fingerprint background check under Subsection (4)(b), the department may request concerning
2486 a person applying for a third party administrator's license:
2487 (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
2488 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
2489 (ii) complete Federal Bureau of Investigation criminal background checks through the
2490 national criminal history system.
2491 [(b)] (d) Information obtained by the department from the review of criminal history
2492 records received under this Subsection (4)[(a)] shall be used by the department for the purposes
2493 of:

2494 (i) determining if a person satisfies the character requirements under Section
2495 31A-25-204 for issuance or renewal of a license;
2496 (ii) determining if a person has failed to maintain the character requirements under
2497 Section 31A-25-204 ; and
2498 (iii) preventing persons who violate the federal Violent Crime Control and Law
2499 Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in the business of
2500 insurance in the state.
2501 [(c)] (e) If the department requests the criminal background information, the
2502 department shall:
2503 (i) pay to the Department of Public Safety the costs incurred by the Department of
2504 Public Safety in providing the department criminal background information under Subsection
2505 (4)[(a)](c)(i);
2506 (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
2507 of Investigation in providing the department criminal background information under Subsection
2508 (4)[(a)](c)(ii); and
2509 (iii) charge the person applying for a license [or], for renewal of a license, or for
2510 consent to engage in the business of insurance a fee equal to the aggregate of Subsections
2511 (4)[(c)](e)(i) and (ii).
2512 Section 21. Section 31A-26-203 is amended to read:
2513 31A-26-203. Adjuster's license required.
2514 (1) The commissioner shall issue a license to act as an independent adjuster or public
2515 adjuster to [any] a person who, as to the license classification applied for under Section
2516 31A-26-204 [, has]:
2517 (a) [satisfied] satisfies the character requirements under Section 31A-26-205 ;
2518 (b) [satisfied] satisfies the applicable continuing education requirements under Section
2519 31A-26-206 ;
2520 (c) [satisfied] satisfies the applicable examination requirements under Section
2521 31A-26-207 ;

2522 (d) if a nonresident, [complied] complies with Section 31A-26-208 ; and
2523 (e) [paid] pays the applicable fees under Section 31A-3-103 .
2524 (2) (a) This Subsection (2) applies to the following persons:
2525 (i) an applicant for:
2526 (A) an independent adjuster's license; or
2527 (B) a public adjuster's license;
2528 (ii) a licensed independent adjuster; or
2529 (iii) a licensed public adjuster.
2530 (b) A person described in Subsection (2)(a) shall report to the commissioner:
2531 (i) [any] an administrative action taken against the person:
2532 (A) in another jurisdiction; or
2533 (B) by another regulatory agency in this state; and
2534 (ii) [any] a criminal prosecution taken against the person in any jurisdiction.
2535 (c) The report required by Subsection (2)(b) shall:
2536 (i) be filed:
2537 (A) at the time the person applies for an adjustor's license; and
2538 (B) for an action or prosecution that occurs on or after the day on which the person
2539 applies for an adjustor's license:
2540 (I) for an administrative action, within 30 days of the final disposition of the
2541 administrative action; or
2542 (II) for a criminal prosecution, within 30 days of the initial [pretrial hearing date]
2543 appearance before a court; and
2544 (ii) include a copy of the complaint or other relevant legal documents related to the
2545 action or prosecution described in Subsection (2)(b).
2546 (3) (a) The department may require a person applying for a license or for consent to
2547 engage in the business of insurance to submit to a criminal background check as a condition of
2548 receiving a license or consent.
2549 (b) A person, if required to submit to a criminal background check under Subsection

2550 (3)(a), shall:
2551 (i) submit a fingerprint card in a form acceptable to the department; and
2552 (ii) consent to a fingerprint background check by:
2553 (A) the Utah Bureau of Criminal Identification; and
2554 (B) the Federal Bureau of Investigation.
2555 [(3) (a) The] (c) For a person who submits a fingerprint card and consents to a
2556 fingerprint background check under Subsection (3)(b), the department may request concerning
2557 a person applying for an independent or public adjuster's license:
2558 (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
2559 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
2560 (ii) complete Federal Bureau of Investigation criminal background checks through the
2561 national criminal history system.
2562 [(b)] (d) Information obtained by the department from the review of criminal history
2563 records received under this Subsection (3)[(a)] shall be used by the department for the purposes
2564 of:
2565 (i) determining if a person satisfies the character requirements under Section
2566 31A-26-205 for issuance or renewal of a license;
2567 (ii) determining if a person has failed to maintain the character requirements under
2568 Section 31A-25-204 ; and
2569 (iii) preventing persons who violate the federal Violent Crime Control and Law
2570 Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in the business of
2571 insurance in the state.
2572 [(c)] (e) If the department requests the criminal background information, the
2573 department shall:
2574 (i) pay to the Department of Public Safety the costs incurred by the Department of
2575 Public Safety in providing the department criminal background information under Subsection
2576 (3)[(a)](c)(i);
2577 (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau

2578 of Investigation in providing the department criminal background information under Subsection
2579 (3)[(a)](c)(ii); and
2580 (iii) charge the person applying for a license [or], for renewal of a license, or for
2581 consent to engage in the business of insurance a fee equal to the aggregate of Subsections
2582 (3)[(c)](e)(i) and (ii).
2583 (4) Notwithstanding the other provisions of this section, the commissioner may:
2584 (a) issue a license to an applicant for a license for a title insurance classification only
2585 with the concurrence of the Title and Escrow Commission; or
2586 (b) renew a license for a title insurance classification only with the concurrence of the
2587 Title and Escrow Commission.
2588 Section 22. Section 31A-27a-513 is amended to read:
2589 31A-27a-513. Reinsurance continuation and termination.
2590 (1) For purposes of this section:
2591 (a) "Coverage date" is the day on which an order of liquidation is entered.
2592 (b) "Election date" is the day on which an affected guaranty association elects to
2593 assume under this section the rights and obligations of a ceding insurer that relate to a policy or
2594 annuity covered, in whole or in part, by the affected guaranty association.
2595 (2) A contract reinsuring a life insurance policy, disability income insurance policy,
2596 long-term care insurance policy, or an annuity issued by a ceding insurer that is placed in
2597 rehabilitation proceedings pursuant to this chapter shall be continued or terminated pursuant to:
2598 (a) the terms or conditions of each contract; and
2599 (b) this section.
2600 (3) A contract reinsuring a life insurance policy, disability income insurance policy,
2601 long-term care insurance policy, or an annuity issued by a ceding insurer that is placed into
2602 liquidation pursuant to this chapter shall be continued, subject to this section, unless:
2603 (a) the contract is terminated pursuant to the contract's terms before the coverage date;
2604 or
2605 (b) the contract is terminated pursuant to the order of liquidation, in which case

2606 Subsection (10) applies.
2607 (4) (a) (i) At any time within 180 days of the coverage date, an affected guaranty
2608 association covering a life insurance policy, disability income insurance policy, long-term care
2609 insurance policy, or an annuity, in whole or in part, may elect to assume the rights and
2610 obligations of the ceding insurer that relate to the policy or annuity covered, in whole or in part,
2611 by the affected guaranty association, under one or more reinsurance contracts between the
2612 insolvent insurer and the insolvent insurer's reinsurers selected by the affected guaranty
2613 association.
2614 (ii) An assumption under this Subsection (4)(a) is effective as of the coverage date.
2615 (iii) The election described in this Subsection (4)(a) is made by the affected guaranty
2616 association or a nationally recognized association of guaranty associations that is designated by
2617 the affected guaranty association to act on the affected guaranty association's behalf for
2618 purposes of this Subsection (4)(a) by sending written notice, return receipt requested, to the
2619 affected reinsurers.
2620 (b) (i) To facilitate the earliest practicable decision about whether to assume a contract
2621 of reinsurance and to protect the financial position of the estate, the receiver and each reinsurer
2622 of the ceding insurer shall make available the information described in Subsection (4)(b)(ii):
2623 (A) upon request to an affected guaranty association; or
2624 (B) to a nationally recognized association of guaranty associations that is designated by
2625 the affected guaranty association to act on behalf of the affected guaranty associations for
2626 purposes of this Subsection (4) as soon as possible after commencement of formal delinquency
2627 proceedings.
2628 (ii) The information described in Subsection (4)(b)(i) is:
2629 (A) copies of all in-force contracts of reinsurance;
2630 (B) all records related to in-force contracts of reinsurance relevant to the determination
2631 of whether the in-force contracts of reinsurance should be assumed; and
2632 (C) notice of:
2633 (I) [any] a default under the in-force contracts of reinsurance; or

2634 (II) [any] a known event or condition that with the passage of time could become a
2635 default under the in-force contracts of reinsurance.
2636 (c) Subsections (4)(c)(i) through (vi) apply to a reinsurance contract assumed by an
2637 affected guaranty association under this Subsection (4).
2638 (i) The guaranty association is responsible for the following that relates to a life
2639 insurance policy, disability income insurance policy, long-term care insurance policy, or an
2640 annuity covered, in whole or in part, by the guaranty association:
2641 (A) all unpaid premiums due under a reinsurance contract, for the periods both before
2642 and after the coverage date; and
2643 (B) the performance of all other obligations to be performed after the coverage date.
2644 (ii) The affected guaranty association:
2645 (A) may charge a policy of insurance or annuity covered in part by the affected guaranty
2646 association, through reasonable allocation methods, the costs for reinsurance in excess of the
2647 obligations of the affected guaranty association; and
2648 (B) if it imposes a charge under this Subsection (4)(c)(ii), shall provide notice and an
2649 accounting of the charge to the liquidator.
2650 (iii) The affected guaranty association is entitled to any amount payable by the reinsurer
2651 under the reinsurance contract with respect to a loss or event:
2652 (A) that:
2653 (I) occurs in a period on or after the coverage date; and
2654 (II) relates to a life insurance policy, disability income insurance policy, long-term care
2655 insurance policy, or an annuity covered, in whole or in part, by the affected guaranty
2656 association; and
2657 (B) except that upon receipt of the amount, the affected guaranty association is obliged
2658 to pay to the beneficiary under the insurance policy or annuity on account of which the amount
2659 is paid a portion of the amount equal to the lesser of:
2660 (I) the amount received by the affected guaranty association; and
2661 (II) an amount calculated by:

2662 (Aa) determining the excess of the amount received by the affected guaranty association
2663 over the amount equal to the benefits paid by the affected guaranty association on account of
2664 the policy or annuity; and
2665 (Bb) subtracting the retention of the insurer applicable to the loss or event.
2666 (iv) (A) Within 30 days following the election date, the affected guaranty association
2667 and each reinsurer under a contract assumed by the affected guaranty association shall calculate
2668 the net balance due to or from the affected guaranty association under each reinsurance contract
2669 as of the election date with respect to a policy or annuity covered, in whole or in part, by the
2670 affected guaranty association.
2671 (B) The calculation required by Subsection (4)(c)(iv)(A) shall give full credit to all
2672 items paid by the insurer, the insurer's receiver, or the reinsurer before the election date.
2673 (C) The reinsurer shall pay the receiver an amount due for a loss or event before the
2674 coverage date, subject to any setoff for premiums unpaid for periods before the coverage date.
2675 (D) Within five days of the completion of the calculation required by Subsection
2676 (4)(c)(iv)(A), the affected guaranty association or reinsurer shall pay any balance due the other
2677 after completion of the calculation.
2678 (E) A dispute over an amount due to either the affected guaranty association or the
2679 reinsurer shall be resolved by arbitration:
2680 (I) pursuant to the terms of the affected reinsurance contract; or
2681 (II) if the affected reinsurance contract contains no arbitration clause, as provided in
2682 Subsection (10)(d).
2683 (v) If the receiver receives an amount due the affected guaranty association pursuant to
2684 Subsection (4)(c)(iii), the receiver shall remit that amount to the affected guaranty association
2685 as promptly as practicable.
2686 (vi) If the affected guaranty association or the receiver on the affected guaranty
2687 association's behalf, within 60 days of the election date, pays the unpaid premiums due for
2688 periods both before and after the election date that relate to a life insurance policy, disability
2689 income insurance policy, long-term care insurance policy, or an annuity covered, in whole or in

2690 part, by the affected guaranty association, the reinsurer may not:
2691 (A) terminate the reinsurance contract for failure to pay premiums, insofar as the
2692 reinsurance contract relates to a life insurance policy, disability income insurance policy,
2693 long-term care insurance policy, or an annuity covered, in whole or in part, by the affected
2694 guaranty association; and
2695 (B) set off any unpaid amounts due under other contracts, or unpaid amounts due from
2696 parties other than the affected guaranty association, against amounts due the affected guaranty
2697 association.
2698 (5) (a) If pursuant to court approval under Section 31A-27a-402 a receiver continues a
2699 life insurance policy, disability income insurance policy, long-term care insurance policy, or an
2700 annuity in force following an order of liquidation, and the policy of insurance or annuity is not
2701 covered in whole or in part by one or more affected guaranty associations, the receiver may
2702 elect to assume the rights and obligations of the ceding insurer under one or more of the
2703 reinsurance contracts that relate to the policy or annuity:
2704 (i) within 180 days of the coverage date; and
2705 (ii) if the contract is not terminated as set forth in Subsection (2).
2706 (b) The election described in this Subsection (5) shall be made by sending written
2707 notice, return receipt requested, to the affected reinsurers.
2708 (c) If the election described in this Subsection (5) is made:
2709 (i) payment of premiums on the reinsurance contract for the policy or annuity, for
2710 periods both before and after the coverage date, shall be chargeable against the estate as a Class
2711 1 administrative expense; and
2712 (ii) amounts paid by the reinsurer on account of losses on the policy or annuity shall be
2713 to the estate of the insolvent insurer.
2714 (6) During the period beginning on the coverage date and ending on the election date:
2715 (a) (i) neither the affected guaranty association nor the reinsurer has any rights or
2716 obligations under a reinsurance contract that the affected guaranty association has the right to
2717 assume under Subsection (4), whether for a period before or after the coverage date;

2718 (ii) (A) with respect to the period after the coverage date, neither the receiver nor the
2719 reinsurer has any rights or obligations under a reinsurance contract that the receiver has the
2720 right to assume under Subsection (5); and
2721 (B) with respect to the period before the coverage date, the rights and obligations of the
2722 affected guaranty association and the reinsurer remain unchanged; and
2723 (iii) the reinsurer, the receiver, and an affected guaranty association shall, to the extent
2724 practicable, provide each other data and records reasonably requested; and
2725 (b) once the affected guaranty association or the receiver, as the case may be, elects or
2726 declines to elect to assume a reinsurance contract, the parties' rights and obligations are
2727 governed by Subsection (4), (5), or (10), as applicable.
2728 (7) (a) If an affected guaranty association does not elect to assume a reinsurance
2729 contract by the election date pursuant to Subsection (4), the affected guaranty association has
2730 no rights or obligations, in each case for periods both before and after the coverage date, with
2731 respect to the reinsurance contract.
2732 (b) If a receiver does not elect to assume a reinsurance contract by the election date
2733 pursuant to Subsection (5), the receiver and the reinsurer:
2734 (i) retain their respective rights and obligations with respect to the reinsurance contract
2735 for the period before the coverage date; and
2736 (ii) have no rights or obligations to each other for the period after the coverage date,
2737 except as provided in Subsection (10).
2738 (c) (i) If an affected guaranty association or the receiver, as the case may be, does not
2739 elect to assume a reinsurance contract by the election date, the reinsurance contract terminates
2740 retroactively effective on the coverage date.
2741 (ii) A reinsurance contract covering a life insurance policy, disability income insurance
2742 policy, long-term care insurance policy, or an annuity that is terminated pursuant to Section
2743 31A-27a-402 terminates effective on the coverage date.
2744 (iii) Subsection (10) applies to a reinsurance contract described in Subsection (7)(c)(i)
2745 or (ii).

2746 (8) (a) Subject to Subsection (8)(b), when a life insurance policy, disability income
2747 insurance policy, long-term care insurance policy, an annuity, or guaranty association obligation
2748 with respect to that policy or annuity is transferred to an assuming insurer, reinsurance on the
2749 policy or annuity may also be transferred:
2750 (i) by the affected guaranty association, in the case of a contract assumed under
2751 Subsection (4); or
2752 (ii) by the receiver, in the case of a contract assumed under Subsection (5).
2753 (b) A transfer under Subsection (8)(a), is subject to the following:
2754 (i) unless the reinsurer and the assuming insurer agree otherwise, the reinsurance
2755 contract transferred may not cover a new policy of insurance or new annuity in addition to those
2756 transferred;
2757 (ii) the obligations described in Subsections (4) and (5) do not apply with respect to
2758 matters arising after the effective date of the transfer; and
2759 (iii) notice shall be given in writing, return receipt requested, by the transferring party to
2760 the affected reinsurer not less than 30 days before the effective date of the transfer.
2761 (9) (a) This section shall, to the extent provided in this chapter, supersede a law or an
2762 affected reinsurance contract that provides for or requires a payment of reinsurance proceeds on
2763 account of a loss or event:
2764 (i) that occurs in a period after the coverage date; and
2765 (ii) to the receiver of the insolvent insurer or to any other person.
2766 (b) The receiver shall remain entitled to any amounts payable by the reinsurer under the
2767 reinsurance contract with respect to a loss or event that occurs in a period before the coverage
2768 date, subject to this chapter including applicable setoff provisions.
2769 (10) If a contract reinsuring a life insurance policy, disability income insurance policy,
2770 long-term care insurance policy, or an annuity is terminated pursuant to this chapter, the
2771 procedures of this Subsection (10) apply.
2772 (a) The reinsurer and the receiver shall, upon written notice to the other party to the
2773 reinsurance contract no later than 30 days after the receipt by the reinsurer of notice of

2774 termination, commence a mandatory negotiation and arbitration procedure in accordance with
2775 this Subsection (10).
2776 (b) (i) Each party shall appoint an actuary to determine an estimated sum due as a result
2777 of the termination of the reinsurance contract calculated in a way expected to make the parties
2778 economically indifferent as to whether the reinsurance contract continues or terminates, giving
2779 due regard to the economic effects of the insolvency.
2780 (ii) The estimated sum described in this Subsection (10)(b) shall:
2781 (A) take into account the present value of future cash flows expected under the
2782 reinsurance contract; and
2783 (B) be based on a gross premium valuation of net liability using current assumptions:
2784 (I) that reflect postinsolvency experience expectations, with no additional margins;
2785 (II) that are net of any amounts payable and receivable; and
2786 (III) with a market value adjustment to reflect premature sale of assets to fund the
2787 settlement.
2788 (c) (i) Within 90 days of the day on which the written request pursuant to Subsection
2789 (10)(a) is made, each party shall provide the other party with:
2790 (A) its estimate of the sum due as a result of the termination of the reinsurance contract;
2791 and
2792 (B) all relevant documents and other information supporting the estimate.
2793 (ii) The parties shall make a good faith effort to reach agreement on the sum due.
2794 (d) (i) If the parties are unable to reach agreement within 90 days following the day on
2795 which the materials required in Subsection (10)(c) are submitted, either party may initiate
2796 arbitration proceedings:
2797 (A) as provided in the reinsurance contract; or
2798 (B) if the reinsurance contract does not contain an arbitration clause, pursuant to this
2799 Subsection (10)(d) by providing the other party with a written demand for arbitration.
2800 (ii) Arbitration under Subsection (10)(d)(i)(B) shall be conducted pursuant to the
2801 following procedures:

2802 (A) Venue for the arbitration shall be within the county of the court's jurisdiction or
2803 another location agreed to by the parties.
2804 (B) Within 30 days of the responding party's receipt of the arbitration demand, each
2805 party shall appoint an arbitrator who is:
2806 (I) a disinterested active or retired officer or executive of a life insurance or reinsurance
2807 company; or
2808 (II) other professional with no less than ten years experience in or relating to the field of
2809 life insurance or life reinsurance.
2810 (C) The two arbitrators appointed under Subsection (10)(d)(ii)(B) shall appoint an
2811 independent, impartial, disinterested umpire who is an:
2812 (I) active or retired officer or executive of a life insurance or reinsurance company; or
2813 (II) other professional with no less than ten years experience in the field of life insurance
2814 or life reinsurance.
2815 (D) If the arbitrators appointed under Subsection (10)(d)(ii)(B) are unable to agree on
2816 an umpire:
2817 (I) each arbitrator shall provide the other with the names of three qualified individuals;
2818 (II) each arbitrator shall strike two names from the other's list; and
2819 (III) the umpire shall be chosen by drawing lots from the remaining individuals.
2820 (E) Within 60 days following the day on which the umpire is appointed, each party
2821 shall, unless otherwise ordered by the arbitration panel, submit to the arbitration panel:
2822 (I) the party's estimates of the sum due as a result of the termination of the reinsurance
2823 contract; and
2824 (II) all relevant documents and other information supporting the estimate.
2825 (F) The time periods set forth in this Subsection (10)(d)(ii) may be extended upon
2826 mutual agreement of the parties.
2827 (G) The arbitration panel has all powers necessary to conduct the arbitration
2828 proceedings in a fair and appropriate manner, including the power to:
2829 (I) request additional information from the parties;

2830 (II) authorize discovery;
2831 (III) hold hearings; and
2832 (IV) hear testimony.
2833 (H) The arbitration panel may, if the arbitration panel considers it necessary, appoint
2834 one or more independent actuarial experts, the expense of which shall be shared equally
2835 between the parties.
2836 (I) An arbitration panel considering the matters set forth in this Subsection (10)(d) shall:
2837 (I) apply the standards set forth in Subsection (10)(b); and
2838 (II) issue a written award specifying a net settlement amount due from one party or the
2839 other as a result of the termination of the reinsurance contract.
2840 (e) The supervising court shall confirm an award issued under Subsection (10)(d)(ii)(I)
2841 absent proof of statutory grounds for vacating or modifying arbitration awards under the
2842 Federal Arbitration Act, 9 U.S.C. Sec. 1 et seq.
2843 (f) (i) If the net settlement amount agreed or awarded pursuant to this Subsection (10)
2844 is payable by the reinsurer, the reinsurer shall pay the amount due to the estate subject to any
2845 applicable setoff under Section 31A-27a-510 .
2846 (ii) If the net settlement amount agreed or awarded pursuant to this Subsection (10) is
2847 payable by the insurer, the reinsurer is considered to have a timely filed claim against the estate
2848 for that amount, which claim shall be paid pursuant to the priority established in Subsection
2849 31A-27a-701 (2)(f).
2850 (iii) A guaranty association:
2851 (A) is not entitled to receive the net settlement amount, except to the extent it is entitled
2852 to share in the estate assets as creditors of the estate; and
2853 (B) has no responsibility for the net settlement amount.
2854 (11) (a) Except as otherwise provided in this section, this section does not alter or
2855 modify the terms and conditions of a reinsurance contract.
2856 (b) This section does not abrogate or limit any rights of a reinsurer to claim that it is
2857 entitled to rescind a reinsurance contract.

2858 (c) This section does not give a policyholder or beneficiary an independent cause of
2859 action against a reinsurer that is not otherwise set forth in the reinsurance contract.
2860 (d) This section does not limit or affect any guaranty association's rights as a creditor of
2861 the estate against the assets of the estate.
2862 (e) This section does not apply to a reinsurance agreement covering property or
2863 casualty risks.
2864 Section 23. Section 31A-27a-515 is amended to read:
2865 31A-27a-515. Commutation and release agreements.
2866 (1) For purposes of this section, "casualty claims" means the insurer's aggregate claims
2867 arising out of insurance contracts in the following lines:
2868 (a) farm owner multiperil;
2869 (b) homeowner multiperil;
2870 (c) commercial multiperil;
2871 (d) medical malpractice;
2872 (e) workers' compensation;
2873 (f) other liability;
2874 (g) products liability;
2875 (h) auto liability;
2876 (i) aircraft, all peril; and
2877 (j) international, for lines listed in Subsections (1)(a) through (i).
2878 (2) (a) Notwithstanding Section 31A-27a-512 , the liquidator and a reinsurer may
2879 negotiate a voluntary commutation and release of all obligations arising from a reinsurance
2880 agreement in which the insurer is the ceding party.
2881 (b) A commutation and release agreement voluntarily entered into by the parties shall be
2882 commercially reasonable, actuarially sound, and in the best interests of the creditors of the
2883 insurer.
2884 (c) (i) An agreement subject to this Subsection (2) that has a gross consideration in
2885 excess of $250,000 shall be submitted pursuant to Section 31A-27a-107 to the receivership

2886 court for approval.
2887 (ii) An agreement described in this Subsection (2)(c) shall be approved by the
2888 receivership court if it meets the standards described in this Subsection (2).
2889 (3) Without derogating from Section 31A-27a-512 , if the liquidator is unable to
2890 negotiate a voluntary commutation with a reinsurer with respect to a reinsurance agreement
2891 between the insurer and that reinsurer, the liquidator may, in addition to any other remedy
2892 available under applicable law, apply to the receivership court, with notice to the reinsurer, for
2893 an order requiring that the parties submit commutation proposals with respect to the reinsurance
2894 agreement to a panel of three arbitrators:
2895 (a) at any time after 75% of the actuarially estimated ultimate incurred liability for all of
2896 the casualty claims against the liquidation estate is reached by allowance of claims in the
2897 liquidation estate pursuant to Sections 31A-27a-603 and 31A-27a-605 , calculated:
2898 (i) as of the day on which the order of liquidation is entered by or at the instance of the
2899 liquidator; and
2900 (ii) for purposes of this Subsection (3), not performed during the five-year period
2901 subsequent to the day on which the order of liquidation is entered; or
2902 (b) at any time in regard to a reinsurer if that reinsurer has a total adjusted capital that is
2903 less than 250% of its authorized control level RBC as defined in Section 31A-17-601 .
2904 (4) Venue for the arbitration is within the district of the receivership court's jurisdiction
2905 or at another location agreed to by the parties.
2906 (5) (a) If the liquidator determines that commutation would be in the best interests of
2907 the creditors of the liquidation estate, the liquidator may petition the receivership court to order
2908 arbitration.
2909 (b) If the liquidator petitions the receivership court under Subsection (5)(a), the
2910 receivership court shall require that the liquidator and the reinsurer each appoint an arbitrator
2911 within 30 days after the day on which the order for arbitration is entered.
2912 (c) If either party fails to appoint an arbitrator within the 30-day period, the other party
2913 may appoint both arbitrators and the appointments are binding on the parties.

2914 (d) The two arbitrators shall be active or retired executive officers of insurance or
2915 reinsurance companies, not under the control of or affiliated with the insurer or the reinsurer.
2916 (e) (i) Within 30 days after the day on which both arbitrators have been appointed, the
2917 two arbitrators shall agree to the appointment of a third independent, impartial, disinterested
2918 arbitrator.
2919 (ii) If agreement to the disinterested arbitrator is not reached within the 30-day period,
2920 the third arbitrator shall be appointed by the receivership court.
2921 (f) The disinterested arbitrator shall be a person who:
2922 (i) is or, if retired, has been, an executive officer of a United States domiciled insurance
2923 or reinsurance company that is not under the control of or affiliated with either of the parties;
2924 and
2925 (ii) has at least 15 years experience in the reinsurance industry.
2926 (6) (a) The arbitration panel may choose to retain as an expert to assist the panel in its
2927 determinations, a retired, disinterested executive officer of a United States domiciled insurance
2928 or reinsurance company having at least 15 years loss reserving actuarial experience.
2929 (b) If the arbitration panel is unable to unanimously agree on the identity of the expert
2930 within 14 days of the day on which the disinterested arbitrator is appointed, the expert shall be:
2931 (i) designated by the commissioner:
2932 (A) by rule made in accordance with Title 63, Chapter 46a, Utah Administrative
2933 Rulemaking Act; and
2934 (B) on the basis of recommendations made by a nationally recognized society of
2935 actuaries; and
2936 (ii) a disinterested person that has knowledge, experience, and training applicable to the
2937 line of insurance that is the subject of the arbitration.
2938 (c) The expert:
2939 (i) may not vote in the proceeding; and
2940 (ii) shall issue a written report and recommendations to the arbitration panel within 60
2941 days after the day on which the arbitration panel receives the commutation proposals submitted

2942 by the parties pursuant to Subsection (7), which report shall:
2943 (A) be included as part of the arbitration record; and
2944 (B) accompany the award issued by the arbitration panel pursuant to Subsection (8).
2945 (d) The cost of the expert is to be paid equally by the parties.
2946 (7) Within 90 days after the day on which the disinterested arbitrator is appointed under
2947 Subsection (5), each party shall submit to the arbitration panel:
2948 (a) the party's commutation proposals; and
2949 (b) other documents and information relevant to the determination of the parties' rights
2950 and obligations under the reinsurance agreement to be commuted, including:
2951 (i) a written review of any disputed paid claim balances;
2952 (ii) any open claim files and related case reserves at net present value; and
2953 (iii) any actuarial estimates with the basis of computation of any other reserves and any
2954 incurred-but-not-reported losses at net present value.
2955 (8) (a) Within 90 days after the day on which the parties submit the information
2956 required by Subsection (7), the arbitration panel:
2957 (i) shall issue an award, determined by a majority of the arbitration panel, specifying the
2958 terms of a commercially reasonable and actuarially sound commutation agreement between the
2959 parties; or
2960 (ii) may issue an award declining commutation between the parties for a period not to
2961 exceed two years if a majority of the arbitration panel determines that it is unable to derive a
2962 commercially reasonable and actuarially sound commutation on the basis of:
2963 (A) the submissions of the parties; and
2964 (B) if applicable, the report and recommendation of the expert retained in accordance
2965 with Subsection (6).
2966 (b) Following the expiration of the two-year period described in Subsection (8)(a), the
2967 liquidator may again invoke arbitration in accordance with Subsection (2), in which event
2968 Subsections (2) through (9) apply to the renewed proceeding, except that the arbitration panel is
2969 obliged to issue an award under Subsection (8)(a).

2970 (9) Once an award is issued, the liquidator shall promptly submit the award to the
2971 receivership court for confirmation.
2972 (10) (a) Within 30 days of the day on which the receivership court confirms the award,
2973 the reinsurer shall give notice to the receiver that the reinsurer:
2974 (i) will commute the reinsurer's liabilities to the insurer for the amount of the award in
2975 return for a full and complete release of all liabilities between the parties, whether past, present,
2976 or future; or
2977 (ii) will not commute the reinsurer's liabilities to the insurer.
2978 (b) If the reinsurer's liabilities are not commuted under Subsection (10)(a), the reinsurer
2979 shall:
2980 (i) establish and maintain in accordance with Section 31A-27a-516 a reinsurance
2981 recoverable trust in the amount of 102% of the award; and
2982 (ii) pay the costs and fees associated with establishing and maintaining the trust
2983 established under this Subsection (10)(b).
2984 (11) (a) If the reinsurer notifies the liquidator that it will commute the reinsurer's
2985 liabilities pursuant to Subsection (10)(a)(i), the liquidator has 30 days from the day on which the
2986 reinsurer notifies the liquidator to:
2987 (i) tender to the reinsurer a proposed commutation and release agreement:
2988 (A) providing for a full and complete release of all liabilities between the parties,
2989 whether past, present, or future; and
2990 (B) that requires that the reinsurer make payment of the commutation amount within 14
2991 days from the day on which the agreement is consummated; or
2992 (ii) reject the commutation in writing, subject to receivership court approval.
2993 (b) If the liquidator rejects the commutation subject to approval of the receivership
2994 court in accordance with Subsection (11)(a)(ii), the reinsurer shall establish and maintain a
2995 reinsurance recoverable trust in accordance with Section 31A-27a-516 .
2996 (c) The liquidator and the reinsurer shall share equally in the costs and fees associated
2997 with establishing and maintaining the trust established under Subsection (11)(b).

2998 (12) Except for the period provided in Subsection (8)(b), the time periods established in
2999 Subsections (6), (7), (8), (10), and (11) may be extended:
3000 (a) upon the consent of the parties; or
3001 (b) by order of the receivership court, for good cause shown.
3002 (13) Subject to Subsection (14), this section may not be construed to supersede or
3003 impair any provision in a reinsurance agreement that establishes a commercially reasonable and
3004 actuarially sound method for valuing and commuting the obligations of the parties to the
3005 reinsurance agreement by providing in the contract the specific methodology to be used for
3006 valuing and commuting the obligations between the parties.
3007 (14) (a) A commutation provision in a reinsurance agreement is not effective if it is
3008 demonstrated to the receivership court that the provision is entered into in contemplation of the
3009 insolvency of one or more of the parties.
3010 (b) A contractual commutation provision entered into within one year of the day on
3011 which the liquidation order of the insurer is entered is rebuttably presumed to have been entered
3012 into in contemplation of insolvency.
3013 Section 24. Section 31A-27a-516 is amended to read:
3014 31A-27a-516. Reinsurance recoverable trust provisions.
3015 (1) As used in this section:
3016 (a) "Beneficiary" means the domiciliary insurance commissioner, as liquidator of the
3017 insurer for whose sole benefit a reinsurance recoverable trust is established.
3018 (b) "Grantor" means the reinsurer who has established a reinsurance recoverable trust
3019 for the sole benefit of the beneficiary.
3020 (c) "Qualified United States financial institution" means an institution that:
3021 (i) (A) is organized under the laws of the United States or any state of the United
3022 States; or
3023 (B) in the case of a United States branch or agency office of a foreign banking
3024 organization, licensed under the laws of the United States or any state of the United States;
3025 (ii) is granted authority to operate with fiduciary powers; and

3026 (iii) is regulated, supervised, and examined by federal or state authorities having
3027 regulatory authority over banks and trust companies.
3028 (d) "Reinsurance recoverable trust" means a trust established pursuant to Section
3029 31A-27a-515 .
3030 (2) (a) The trustee of a reinsurance recoverable trust shall be a qualified United States
3031 financial institution.
3032 (b) The trust agreement governing a reinsurance recoverable trust shall:
3033 (i) be entered into by the beneficiary, the grantor, and a trustee;
3034 (ii) create a trust account into which assets shall be deposited in accordance with
3035 Section 31A-27a-515 ;
3036 (iii) provide that the beneficiary may withdraw assets from the trust only:
3037 (A) (I) on the basis of a filed claim allowed pursuant to Section 31A-27a-603 or
3038 31A-27a-605 ;
3039 [(B)] (II) where the grantor is notified, in writing, of the allowance of the claim;
3040 [(C)] (III) to the extent that the amount to be withdrawn exceeds any setoff permitted
3041 by Section 31A-27a-510 due to the grantor; and
3042 [(D)] (IV) when 60 days expires during which the grantor fails to:
3043 [(I)] (Aa) pay the claim; or
3044 [(II)] (Bb) subject to and without derogation from Section 31A-27a-512 , which at all
3045 times governs and remains binding on the reinsurer, file notice of a written dispute with respect
3046 to the claim under and in terms of the reinsurance agreement; or
3047 [(E)] (B) if the beneficiary complies with any different or other terms and conditions
3048 mutually agreed to by the beneficiary and the grantor in the trust agreement;
3049 (iv) require the trustee to:
3050 (A) receive assets and hold all assets at the trustee's office in the United States in a safe
3051 place;
3052 (B) determine that all assets are in such form that the beneficiary, or the trustee upon
3053 direction by the beneficiary, may whenever necessary negotiate the assets, without consent or

3054 signature from the grantor or any other person;
3055 (C) furnish to the grantor and the beneficiary a statement of all assets in the trust
3056 account upon its inception and at intervals no less frequent than the end of each calendar
3057 quarter; and
3058 (D) notify the grantor and the beneficiary within ten days of a deposit to or withdrawal
3059 from the trust account;
3060 (v) be made subject to and governed by the laws of this state;
3061 (vi) prohibit the invasion of the trust corpus for the purpose of paying compensation to,
3062 or reimbursing the expenses of, the trustee;
3063 (vii) provide that the trustee is liable for the trustee's negligence, willful misconduct, or
3064 lack of good faith;
3065 (viii) subject to Subsection (2)(c), provide that the trustee may resign upon delivery of a
3066 written notice of resignation, effective not less than 90 days after the day on which the
3067 beneficiary and grantor receive the notice;
3068 (ix) subject to Subsection (2)(c), provide that the trustee may be removed by the
3069 grantor by delivery to the trustee and the beneficiary of a written notice of removal, effective
3070 not less than 90 days after the day on which the trustee and the beneficiary receive the notice;
3071 (x) provide that the grantor has the full and unqualified right to vote any shares of stock
3072 in the trust account except that, subject to other provisions of this section, an interest or
3073 dividend paid on shares of stock or other obligation in the trust account shall remain in the trust;
3074 (xi) specify categories of investments reasonably acceptable to the beneficiary;
3075 (xii) authorize the trustee to invest funds and to accept substitutions, by the grantor,
3076 that the trustee determines are at least equal in market value to the assets withdrawn provided
3077 that no investment or substitution shall be made without prior approval from the beneficiary,
3078 which may not be unreasonably or arbitrarily withheld;
3079 (xiii) subject to Subsection (2)(d), provide that the beneficiary may at any time
3080 designate a party to which all or part of the trust assets are to be transferred;
3081 (xiv) specify the types of assets that may be included in the trust account:

3082 (A) which shall consist only of:
3083 (I) cash in United States dollars;
3084 (II) certificates of deposit issued by a United States bank and payable in United States
3085 dollars;
3086 (III) investments permitted by this state's insurance law; or
3087 (IV) any combination of the types specified by this Subsection (2)(b)(xiv)(A);
3088 (B) except that if investments in or issued by an entity controlling, controlled by, or
3089 under common control with either the grantor or the beneficiary of the trust, may not exceed
3090 5% of total investments; and
3091 (C) subject to the assets deposited in the trust account being valued according to the
3092 asset's current fair market value;
3093 (xv) give the grantor the right to seek approval from the beneficiary, which may not be
3094 unreasonably or arbitrarily withheld, to withdraw from the trust account all or any part of the
3095 trust assets and transfer those assets to the grantor, if:
3096 (A) the grantor, at the time of withdrawal, replaces the withdrawn assets with other
3097 qualified assets so as to maintain at all times the deposit in the required amount; or
3098 (B) after withdrawal and transfer, the market value of the trust account is no less than
3099 102% of the award made pursuant to Subsection 31A-27a-515 [(7)] (8)(a);
3100 (xvi) provide for the return of any amount withdrawn in excess of the actual amounts
3101 required for:
3102 (A) payment of reported allowed claims under Subsection (2)(b)(iii); and
3103 (B) interest payments at a rate not in excess of the prime rate of interest on the excess
3104 amounts withdrawn; and
3105 (xvii) provide for termination of the reinsurance recoverable trust in accordance with
3106 Subsection (6).
3107 (c) Notwithstanding Subsection (2)(b)(viii) or (ix), a resignation or removal may not be
3108 effective until:
3109 (i) a successor trustee is appointed and approved by the beneficiary and the grantor; and

3110 (ii) all assets in the trust are transferred to the new trustee.
3111 (d) Notwithstanding Subsection (2)(b)(xiii), a transfer may be conditioned upon the
3112 trustee receiving, before or simultaneously with, other specified assets.
3113 (e) Subsection (2)(b) may not be construed to alter the rights or obligations of the
3114 parties pursuant to contractual and statutory provisions providing for notice and the
3115 determination of a claim.
3116 (3) The grantor shall, before depositing assets with the trustee, execute assignments or
3117 endorsements in blank, or transfer legal title to the trustee of all shares, obligations, or any other
3118 assets requiring assignments, in order that the beneficiary, or the trustee upon the direction of
3119 the beneficiary, may whenever necessary negotiate these assets without consent or signature
3120 from the grantor or any other person.
3121 (4) (a) Without derogating Section 31A-27a-512 , the grantor or the beneficiary may
3122 request that the receivership court review the amount held if:
3123 (i) the grantor and beneficiary fail to reach agreement on the extent, if any, to which
3124 supplementation or reduction of a reinsurance recoverable trust should be occasioned;
3125 (ii) (A) the reinsurance recoverable trust is exhausted; or
3126 (B) the reinsurance recoverable trust is insufficient to respond to claims allowed
3127 pursuant to Section 31A-27a-603 or 31A-27a-605 ; and
3128 (iii) the grantor or the beneficiary believe that the amount held in the reinsurance
3129 recoverable trust is either deficient or overstated.
3130 (b) The review described in this Subsection (4) shall be conducted applying procedures
3131 and terms as the receivership court shall, in its sole discretion, direct.
3132 (5) A reinsurance recoverable trust shall terminate upon the earlier of:
3133 (a) receivership court approval of a voluntary commutation between the grantor and the
3134 beneficiary pursuant to Subsection 31A-27a-515 [(1)] (2);
3135 (b) the mutual agreement of the grantor and the beneficiary; or
3136 (c) a finding by the receivership court that the grantor has discharged its liabilities to the
3137 beneficiary.

3138 (6) Upon termination of a reinsurance recoverable trust, all assets not previously
3139 withdrawn by the beneficiary, pursuant to Subsection (2)(b)(iii), shall, with written approval of
3140 the beneficiary, be delivered to the grantor.
3141 Section 25. Section 31A-30-102 is amended to read:
3142 31A-30-102. Purpose statement.
3143 The purpose of this chapter is to:
3144 (1) prevent abusive rating practices;
3145 (2) require disclosure of rating practices to purchasers;
3146 (3) establish rules regarding:
3147 (a) a universal individual and small group application; and
3148 (b) renewability of coverage;
3149 (4) improve the overall fairness and efficiency of the individual and small group
3150 insurance market; and
3151 (5) provide increased access for individuals and small employers to health insurance.
3152 Section 26. Section 31A-30-112 is amended to read:
3153 31A-30-112. Employee participation levels.
3154 (1) (a) Except as provided in Subsection (2), [requirements] a requirement used by a
3155 covered carrier in determining whether to provide coverage to a small employer, including
3156 [requirements] a requirement for minimum participation of eligible employees and minimum
3157 employer contributions, shall be applied uniformly among all small employers with the same
3158 number of eligible employees applying for coverage or receiving coverage from the covered
3159 carrier.
3160 (b) In addition to applying Subsection 31A-1-301 [(120)](121), a covered carrier may
3161 require that a small employer have a minimum of two eligible employees to meet participation
3162 requirements.
3163 (2) A covered carrier may not increase [any] a requirement for minimum employee
3164 participation or [any] a requirement for minimum employer contribution applicable to a small
3165 employer at any time after the small employer [has been] is accepted for coverage.

3166