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H.B. 52 Enrolled

             1     

INSURANCE CODE AND RELATED AMENDMENTS

             2     
2009 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             5     
Senate Sponsor: John L. Valentine

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Insurance Code and related provisions.
             10      Highlighted Provisions:
             11          This bill:
             12          .    modifies definitions;
             13          .    provides for rulemaking authority related to annual financial reporting requirements
             14      similar to those adopted by the National Association of Insurance Commissioners;
             15          .    modifies provisions related to audit committees:
             16              .    making the board of directors an audit committee in certain circumstances;
             17              .    providing rulemaking authority for rules pertaining to an audit committee
             18      requirement; and
             19              .    clarifying insider directors;
             20          .    addresses single risk limitations;
             21          .    addresses the suicide provisions;
             22          .    authorizes the commissioner to make rules related to federal law requirements
             23      involving genetic information and involving marketing;
             24          .    addresses general requirements for licensing and when the commissioner may deny
             25      a license application;
             26          .    modifies license types and classifications;
             27          .    addresses reinstatement of a voluntarily surrendered license;
             28          .    modifies requirements related to a title insurance producer's reserve fund;
             29          .    addresses designations by an insurer, agency licensee, or organization of an


             30      individual licensee;
             31          .    addresses loss of a license if an individual licensee commits an act or fails to
             32      perform a duty;
             33          .    exempts a nonresident licensee from trust account requirements of this state by
             34      requiring that the licensee comply with the trust account requirements of the
             35      licensee's home state;
             36          .    modifies notice requirements related to termination of coverage when an employer
             37      receives premium by deducting wages or salary;
             38          .    modifies exemptions from the prohibition on sharing commissions;
             39          .    modifies provisions related to a bail bond licensee;
             40          .    shortens the period of time an applicant for a bail bond surety company license has
             41      to request a hearing for a denial;
             42          .    modifies the renewal process for a bail bond surety company;
             43          .    permits the commissioner to accept a comprehensive annual independent audit in
             44      lieu of an examination for a captive insurance company;
             45          .    provides for the sharing of information with the Insurance Department related to
             46      professional employer organizations;
             47          .    makes certain records private records under the Government Records Access and
             48      Management Act; and
             49          .    makes technical and conforming amendments, including repealing outdated
             50      language.
             51      Monies Appropriated in this Bill:
             52          None
             53      Other Special Clauses:
             54          None
             55      Utah Code Sections Affected:
             56      AMENDS:
             57          31A-1-301, as last amended by Laws of Utah 2008, Chapters 345 and 382


             58          31A-2-203, as last amended by Laws of Utah 2008, Chapters 345 and 382
             59          31A-5-412, as last amended by Laws of Utah 1987, Chapters 91 and 95
             60          31A-8-215, as last amended by Laws of Utah 2004, Chapter 90
             61          31A-20-108, as last amended by Laws of Utah 2008, Chapter 257
             62          31A-22-404, as last amended by Laws of Utah 2008, Chapter 345
             63          31A-22-620, as last amended by Laws of Utah 2005, Chapter 78
             64          31A-22-1602, as enacted by Laws of Utah 2002, Chapter 120
             65          31A-23a-102, as last amended by Laws of Utah 2004, Chapters 90 and 173
             66          31A-23a-104, as last amended by Laws of Utah 2008, Chapter 382
             67          31A-23a-105, as last amended by Laws of Utah 2008, Chapter 345
             68          31A-23a-106, as last amended by Laws of Utah 2007, Chapter 325
             69          31A-23a-111, as last amended by Laws of Utah 2008, Chapters 345 and 382
             70          31A-23a-113, as last amended by Laws of Utah 2006, Chapter 312
             71          31A-23a-115, as last amended by Laws of Utah 2008, Chapter 382
             72          31A-23a-203, as last amended by Laws of Utah 2005, Chapter 124
             73          31A-23a-204, as last amended by Laws of Utah 2008, Chapter 220
             74          31A-23a-302, as last amended by Laws of Utah 2008, Chapter 382
             75          31A-23a-409, as last amended by Laws of Utah 2004, Chapter 2
             76          31A-23a-410, as renumbered and amended by Laws of Utah 2003, Chapter 298
             77          31A-23a-504, as last amended by Laws of Utah 2007, Chapter 307
             78          31A-25-203, as last amended by Laws of Utah 2008, Chapter 345
             79          31A-25-208, as last amended by Laws of Utah 2008, Chapter 382
             80          31A-25-210, as enacted by Laws of Utah 2006, Chapter 312
             81          31A-26-203, as last amended by Laws of Utah 2008, Chapter 345
             82          31A-26-204, as last amended by Laws of Utah 2007, Chapter 325
             83          31A-26-210, as last amended by Laws of Utah 2007, Chapter 306
             84          31A-26-213, as last amended by Laws of Utah 2008, Chapter 382
             85          31A-26-214.5, as enacted by Laws of Utah 2006, Chapter 312


             86          31A-35-405, as last amended by Laws of Utah 2008, Chapter 382
             87          31A-35-406, as last amended by Laws of Utah 2008, Chapter 382
             88          31A-37-502, as last amended by Laws of Utah 2008, Chapter 302
             89          31A-37a-402, as enacted by Laws of Utah 2008, Chapter 302
             90          35A-4-312, as last amended by Laws of Utah 2008, Chapters 58 and 382
             91          63G-2-302, as last amended by Laws of Utah 2008, Chapter 91 and renumbered and
             92      amended by Laws of Utah 2008, Chapter 382
             93     
             94      Be it enacted by the Legislature of the state of Utah:
             95          Section 1. Section 31A-1-301 is amended to read:
             96           31A-1-301. Definitions.
             97          As used in this title, unless otherwise specified:
             98          (1) (a) "Accident and health insurance" means insurance to provide protection against
             99      economic losses resulting from:
             100          (i) a medical condition including:
             101          (A) a medical care expense; or
             102          (B) the risk of disability;
             103          (ii) accident; or
             104          (iii) sickness.
             105          (b) "Accident and health insurance":
             106          (i) includes a contract with disability contingencies including:
             107          (A) an income replacement contract;
             108          (B) a health care contract;
             109          (C) an expense reimbursement contract;
             110          (D) a credit accident and health contract;
             111          (E) a continuing care contract; and
             112          (F) a long-term care contract; and
             113          (ii) may provide:


             114          (A) hospital coverage;
             115          (B) surgical coverage;
             116          (C) medical coverage;
             117          (D) loss of income coverage;
             118          (E) prescription drug coverage;
             119          (F) dental coverage; or
             120          (G) vision coverage.
             121          (c) "Accident and health insurance" does not include workers' compensation
             122      insurance.
             123          (2) "Actuary" is as defined by the commissioner by rule, made in accordance with
             124      Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             125          (3) "Administrator" is defined in Subsection (159).
             126          (4) "Adult" means [a natural person] an individual who has attained the age of at least
             127      18 years.
             128          (5) "Affiliate" means a person who controls, is controlled by, or is under common
             129      control with, another person. A corporation is an affiliate of another corporation, regardless of
             130      ownership, if substantially the same group of [natural persons manages] individuals manage
             131      the corporations.
             132          (6) "Agency" means:
             133          (a) a person other than an individual, including a sole proprietorship by which [a
             134      natural person] an individual does business under an assumed name; and
             135          (b) an insurance organization licensed or required to be licensed under Section
             136      31A-23a-301 .
             137          (7) "Alien insurer" means an insurer domiciled outside the United States.
             138          (8) "Amendment" means an endorsement to an insurance policy or certificate.
             139          (9) "Annuity" means an agreement to make periodical payments for a period certain or
             140      over the lifetime of one or more [natural persons] individuals if the making or continuance of
             141      all or some of the series of the payments, or the amount of the payment, is dependent upon the


             142      continuance of human life.
             143          (10) "Application" means a document:
             144          (a) (i) completed by an applicant to provide information about the risk to be insured;
             145      and
             146          (ii) that contains information that is used by the insurer to evaluate risk and decide
             147      whether to:
             148          (A) insure the risk under:
             149          (I) the coverage as originally offered; or
             150          (II) a modification of the coverage as originally offered; or
             151          (B) decline to insure the risk; or
             152          (b) used by the insurer to gather information from the applicant before issuance of an
             153      annuity contract.
             154          (11) "Articles" or "articles of incorporation" means:
             155          (a) the original articles;
             156          (b) a special law;
             157          (c) a charter;
             158          (d) an amendment;
             159          (e) restated articles;
             160          (f) articles of merger or consolidation;
             161          (g) a trust instrument;
             162          (h) another constitutive document for a trust or other entity that is not a corporation;
             163      and
             164          (i) an amendment to an item listed in Subsections (11)(a) through (h).
             165          (12) "Bail bond insurance" means a guarantee that a person will attend court when
             166      required, up to and including surrender of the person in execution of a sentence imposed under
             167      Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
             168          (13) "Binder" is defined in Section 31A-21-102 .
             169          (14) "Blanket insurance policy" means a group policy covering a defined class of


             170      persons:
             171          (a) without individual underwriting or application; and
             172          (b) that is determined by definition with or without designating each person covered.
             173          (15) "Board," "board of trustees," or "board of directors" means the group of persons
             174      with responsibility over, or management of, a corporation, however designated.
             175          (16) "Business entity" means:
             176          (a) a corporation;
             177          (b) an association;
             178          (c) a partnership;
             179          (d) a limited liability company;
             180          (e) a limited liability partnership; or
             181          (f) another legal entity.
             182          (17) "Business of insurance" is defined in Subsection (85).
             183          (18) "Business plan" means the information required to be supplied to the
             184      commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
             185      when these subsections apply by reference under:
             186          (a) Section 31A-7-201 ;
             187          (b) Section 31A-8-205 ; or
             188          (c) Subsection 31A-9-205 (2).
             189          (19) (a) "Bylaws" means the rules adopted for the regulation or management of a
             190      corporation's affairs, however designated.
             191          (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
             192      corporation.
             193          (20) "Captive insurance company" means:
             194          (a) an insurer:
             195          (i) owned by another organization; and
             196          (ii) whose exclusive purpose is to insure risks of the parent organization and an
             197      affiliated company; or


             198          (b) in the case of a group or association, an insurer:
             199          (i) owned by the insureds; and
             200          (ii) whose exclusive purpose is to insure risks of:
             201          (A) a member organization;
             202          (B) a group member; or
             203          (C) an affiliate of:
             204          (I) a member organization; or
             205          (II) a group member.
             206          (21) "Casualty insurance" means liability insurance [as defined in Subsection (97)].
             207          (22) "Certificate" means evidence of insurance given to:
             208          (a) an insured under a group insurance policy; or
             209          (b) a third party.
             210          (23) "Certificate of authority" is included within the term "license."
             211          (24) "Claim," unless the context otherwise requires, means a request or demand on an
             212      insurer for payment of a benefit according to the terms of an insurance policy.
             213          (25) "Claims-made coverage" means an insurance contract or provision limiting
             214      coverage under a policy insuring against legal liability to claims that are first made against the
             215      insured while the policy is in force.
             216          (26) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
             217      commissioner.
             218          (b) When appropriate, the terms listed in Subsection (26)(a) apply to the equivalent
             219      supervisory official of another jurisdiction.
             220          (27) (a) "Continuing care insurance" means insurance that:
             221          (i) provides board and lodging;
             222          (ii) provides one or more of the following:
             223          (A) a personal service;
             224          (B) a nursing service;
             225          (C) a medical service; or


             226          (D) any other health-related service; and
             227          (iii) provides the coverage described in this Subsection (27)(a)[(i)] under an agreement
             228      effective:
             229          (A) for the life of the insured; or
             230          (B) for a period in excess of one year.
             231          (b) Insurance is continuing care insurance regardless of whether or not the board and
             232      lodging are provided at the same location as a service described in Subsection (27)(a)(ii).
             233          (28) (a) "Control," "controlling," "controlled," or "under common control" means the
             234      direct or indirect possession of the power to direct or cause the direction of the management
             235      and policies of a person. This control may be:
             236          (i) by contract;
             237          (ii) by common management;
             238          (iii) through the ownership of voting securities; or
             239          (iv) by a means other than those described in Subsections (28)(a)(i) through (iii).
             240          (b) There is no presumption that an individual holding an official position with
             241      another person controls that person solely by reason of the position.
             242          (c) A person having a contract or arrangement giving control is considered to have
             243      control despite the illegality or invalidity of the contract or arrangement.
             244          (d) There is a rebuttable presumption of control in a person who directly or indirectly
             245      owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
             246      voting securities of another person.
             247          (29) "Controlled insurer" means a licensed insurer that is either directly or indirectly
             248      controlled by a producer.
             249          (30) "Controlling person" means a person that directly or indirectly has the power to
             250      direct or cause to be directed, the management, control, or activities of a reinsurance
             251      intermediary.
             252          (31) "Controlling producer" means a producer who directly or indirectly controls an
             253      insurer.


             254          (32) (a) "Corporation" means an insurance corporation, except when referring to:
             255          (i) a corporation doing business:
             256          (A) as:
             257          (I) an insurance producer;
             258          (II) a limited line producer;
             259          (III) a consultant;
             260          (IV) a managing general agent;
             261          (V) a reinsurance intermediary;
             262          (VI) a third party administrator; or
             263          (VII) an adjuster; and
             264          (B) under:
             265          (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             266      Reinsurance Intermediaries;
             267          (II) Chapter 25, Third Party Administrators; or
             268          (III) Chapter 26, Insurance Adjusters; or
             269          (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
             270      Holding Companies.
             271          (b) "Stock corporation" means a stock insurance corporation.
             272          (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
             273          (33) "Creditable coverage" has the same meaning as provided in federal regulations
             274      adopted pursuant to the Health Insurance Portability and Accountability Act of 1996, Pub. L.
             275      104-191, 110 Stat. 1936.
             276          (34) "Credit accident and health insurance" means insurance on a debtor to provide
             277      indemnity for payments coming due on a specific loan or other credit transaction while the
             278      debtor is disabled.
             279          (35) (a) "Credit insurance" means insurance offered in connection with an extension
             280      of credit that is limited to partially or wholly extinguishing that credit obligation.
             281          (b) "Credit insurance" includes:


             282          (i) credit accident and health insurance;
             283          (ii) credit life insurance;
             284          (iii) credit property insurance;
             285          (iv) credit unemployment insurance;
             286          (v) guaranteed automobile protection insurance;
             287          (vi) involuntary unemployment insurance;
             288          (vii) mortgage accident and health insurance;
             289          (viii) mortgage guaranty insurance; and
             290          (ix) mortgage life insurance.
             291          (36) "Credit life insurance" means insurance on the life of a debtor in connection with
             292      an extension of credit that pays a person if the debtor dies.
             293          (37) "Credit property insurance" means insurance:
             294          (a) offered in connection with an extension of credit; and
             295          (b) that protects the property until the debt is paid.
             296          (38) "Credit unemployment insurance" means insurance:
             297          (a) offered in connection with an extension of credit; and
             298          (b) that provides indemnity if the debtor is unemployed for payments coming due on
             299      a:
             300          (i) specific loan; or
             301          (ii) credit transaction.
             302          (39) "Creditor" means a person, including an insured, having a claim, whether:
             303          (a) matured;
             304          (b) unmatured;
             305          (c) liquidated;
             306          (d) unliquidated;
             307          (e) secured;
             308          (f) unsecured;
             309          (g) absolute;


             310          (h) fixed; or
             311          (i) contingent.
             312          (40) (a) "Customer service representative" means a person that provides an insurance
             313      service and insurance product information:
             314          (i) for the customer service representative's:
             315          (A) producer; or
             316          (B) consultant employer; and
             317          (ii) to the customer service representative's employer's:
             318          (A) customer;
             319          (B) client; or
             320          (C) organization.
             321          (b) A customer service representative may only operate within the scope of authority
             322      of the customer service representative's producer or consultant employer.
             323          (41) "Deadline" means [the] a final date or time:
             324          (a) imposed by:
             325          (i) statute;
             326          (ii) rule; or
             327          (iii) order; and
             328          (b) by which a required filing or payment must be received by the department.
             329          (42) "Deemer clause" means a provision under this title under which upon the
             330      occurrence of a condition precedent, the commissioner is considered to have taken a specific
             331      action. If the statute so provides, a condition precedent may be the commissioner's failure to
             332      take a specific action.
             333          (43) "Degree of relationship" means the number of steps between two persons
             334      determined by counting the generations separating one person from a common ancestor and
             335      then counting the generations to the other person.
             336          (44) "Department" means the Insurance Department.
             337          (45) "Director" means a member of the board of directors of a corporation.


             338          (46) "Disability" means a physiological or psychological condition that partially or
             339      totally limits an individual's ability to:
             340          (a) perform the duties of:
             341          (i) that individual's occupation; or
             342          (ii) any occupation for which the individual is reasonably suited by education,
             343      training, or experience; or
             344          (b) perform two or more of the following basic activities of daily living:
             345          (i) eating;
             346          (ii) toileting;
             347          (iii) transferring;
             348          (iv) bathing; or
             349          (v) dressing.
             350          (47) "Disability income insurance" is defined in Subsection (76).
             351          (48) "Domestic insurer" means an insurer organized under the laws of this state.
             352          (49) "Domiciliary state" means the state in which an insurer:
             353          (a) is incorporated;
             354          (b) is organized; or
             355          (c) in the case of an alien insurer, enters into the United States.
             356          (50) (a) "Eligible employee" means:
             357          (i) an employee who:
             358          (A) works on a full-time basis; and
             359          (B) has a normal work week of 30 or more hours; or
             360          (ii) a person described in Subsection (50)(b).
             361          (b) "Eligible employee" includes, if the individual is included under a health benefit
             362      plan of a small employer:
             363          (i) a sole proprietor;
             364          (ii) a partner in a partnership; or
             365          (iii) an independent contractor.


             366          (c) "Eligible employee" does not include, unless eligible under Subsection (50)(b):
             367          (i) an individual who works on a temporary or substitute basis for a small employer;
             368          (ii) an employer's spouse; or
             369          (iii) a dependent of an employer.
             370          (51) "Employee" means an individual employed by an employer.
             371          (52) "Employee benefits" means one or more benefits or services provided to:
             372          (a) an employee; or
             373          (b) a dependent of an employee.
             374          (53) (a) "Employee welfare fund" means a fund:
             375          (i) established or maintained, whether directly or through a trustee, by:
             376          (A) one or more employers;
             377          (B) one or more labor organizations; or
             378          (C) a combination of employers and labor organizations; and
             379          (ii) that provides employee benefits paid or contracted to be paid, other than income
             380      from investments of the fund:
             381          (A) by or on behalf of an employer doing business in this state; or
             382          (B) for the benefit of a person employed in this state.
             383          (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
             384      revenues.
             385          (54) "Endorsement" means a written agreement attached to a policy or certificate to
             386      modify [one or more of the provisions of] the policy or certificate coverage.
             387          (55) "Enrollment date," with respect to a health benefit plan, means:
             388          (a) the first day of coverage; or
             389          (b) if there is a waiting period, the first day of the waiting period.
             390          (56) (a) "Escrow" means:
             391          (i) a real estate settlement or real estate closing conducted by a third party pursuant to
             392      the requirements of a written agreement between the parties in a real estate transaction; or
             393          (ii) a settlement or closing involving:


             394          (A) a mobile home;
             395          (B) a grazing right;
             396          (C) a water right; or
             397          (D) other personal property authorized by the commissioner.
             398          (b) "Escrow" includes the act of conducting a:
             399          (i) real estate settlement; or
             400          (ii) real estate closing.
             401          (57) "Escrow agent" means:
             402          (a) an insurance producer with:
             403          (i) a title insurance line of authority; and
             404          (ii) an escrow subline of authority; or
             405          (b) a person defined as an escrow agent in Section 7-22-101 .
             406          (58) (a) "Excludes" is not exhaustive and does not mean that another thing is not also
             407      excluded.
             408          (b) The items listed in a list using the term "excludes" are representative examples for
             409      use in interpretation of this title.
             410          (59) "Exclusion" means for the purposes of accident and health insurance that an
             411      insurer does not provide insurance coverage, for whatever reason, for one of the following:
             412          (a) a specific physical condition;
             413          (b) a specific medical procedure;
             414          (c) a specific disease or disorder; or
             415          (d) a specific prescription drug or class of prescription drugs.
             416          (60) "Expense reimbursement insurance" means insurance:
             417          (a) written to provide a payment for an expense relating to hospital confinement
             418      resulting from illness or injury; and
             419          (b) written:
             420          (i) as a daily limit for a specific number of days in a hospital; and
             421          (ii) to have a one or two day waiting period following a hospitalization.


             422          (61) "Fidelity insurance" means insurance guaranteeing the fidelity of a person
             423      holding a position of public or private trust.
             424          (62) (a) "Filed" means that a filing is:
             425          (i) submitted to the department as required by and in accordance with applicable
             426      statute, rule, or filing order;
             427          (ii) received by the department within the time period provided in applicable statute,
             428      rule, or filing order; and
             429          (iii) accompanied by the appropriate fee in accordance with:
             430          (A) Section 31A-3-103 ; or
             431          (B) rule.
             432          (b) "Filed" does not include a filing that is rejected by the department because it is not
             433      submitted in accordance with Subsection (62)(a).
             434          (63) "Filing," when used as a noun, means an item required to be filed with the
             435      department including:
             436          (a) a policy;
             437          (b) a rate;
             438          (c) a form;
             439          (d) a document;
             440          (e) a plan;
             441          (f) a manual;
             442          (g) an application;
             443          (h) a report;
             444          (i) a certificate;
             445          (j) an endorsement;
             446          (k) an actuarial certification;
             447          (l) a licensee annual statement;
             448          (m) a licensee renewal application;
             449          (n) an advertisement; or


             450          (o) an outline of coverage.
             451          (64) "First party insurance" means an insurance policy or contract in which the insurer
             452      agrees to pay a claim submitted to it by the insured for the insured's losses.
             453          (65) "Foreign insurer" means an insurer domiciled outside of this state, including an
             454      alien insurer.
             455          (66) (a) "Form" means one of the following prepared for general use:
             456          (i) a policy;
             457          (ii) a certificate;
             458          (iii) an application;
             459          (iv) an outline of coverage; or
             460          (v) an endorsement.
             461          (b) "Form" does not include a document specially prepared for use in an individual
             462      case.
             463          (67) "Franchise insurance" means an individual insurance policy provided through a
             464      mass marketing arrangement involving a defined class of persons related in some way other
             465      than through the purchase of insurance.
             466          (68) "General lines of authority" include:
             467          (a) the general lines of insurance in Subsection (69);
             468          (b) title insurance under one of the following sublines of authority:
             469          (i) search, including authority to act as a title marketing representative;
             470          (ii) escrow, including authority to act as a title marketing representative; and
             471          [(iii) search and escrow, including authority to act as a title marketing representative;
             472      and]
             473          [(iv)] (iii) title marketing representative only;
             474          (c) surplus lines;
             475          (d) workers' compensation; and
             476          (e) any other line of insurance that the commissioner considers necessary to recognize
             477      in the public interest.


             478          (69) "General lines of insurance" include:
             479          (a) accident and health;
             480          (b) casualty;
             481          (c) life;
             482          (d) personal lines;
             483          (e) property; and
             484          (f) variable contracts, including variable life and annuity.
             485          (70) "Group health plan" means an employee welfare benefit plan to the extent that the
             486      plan provides medical care:
             487          (a) (i) to an employee; or
             488          (ii) to a dependent of an employee; and
             489          (b) (i) directly;
             490          (ii) through insurance reimbursement; or
             491          (iii) through another method.
             492          (71) (a) "Group insurance policy" means a policy covering a group of persons that is
             493      issued:
             494          (i) to a policyholder on behalf of the group; and
             495          (ii) for the benefit of a member of the group who is selected under a procedure defined
             496      in:
             497          (A) the policy; or
             498          (B) an agreement that is collateral to the policy.
             499          (b) A group insurance policy may include a member of the policyholder's family or a
             500      dependent.
             501          (72) "Guaranteed automobile protection insurance" means insurance offered in
             502      connection with an extension of credit that pays the difference in amount between the
             503      insurance settlement and the balance of the loan if the insured automobile is a total loss.
             504          (73) (a) Except as provided in Subsection (73)(b), "health benefit plan" means a policy
             505      or certificate that:


             506          (i) provides health care insurance;
             507          (ii) provides major medical expense insurance; or
             508          (iii) is offered as a substitute for hospital or medical expense insurance, such as:
             509          (A) a hospital confinement indemnity; or
             510          (B) a limited benefit plan.
             511          (b) "Health benefit plan" does not include a policy or certificate that:
             512          (i) provides benefits solely for:
             513          (A) accident;
             514          (B) dental;
             515          (C) income replacement;
             516          (D) long-term care;
             517          (E) a Medicare supplement;
             518          (F) a specified disease;
             519          (G) vision; or
             520          (H) a short-term limited duration; or
             521          (ii) is offered and marketed as supplemental health insurance.
             522          (74) "Health care" means any of the following intended for use in the diagnosis,
             523      treatment, mitigation, or prevention of a human ailment or impairment:
             524          (a) a professional service;
             525          (b) a personal service;
             526          (c) a facility;
             527          (d) equipment;
             528          (e) a device;
             529          (f) supplies; or
             530          (g) medicine.
             531          (75) (a) "Health care insurance" or "health insurance" means insurance providing:
             532          (i) a health care benefit; or
             533          (ii) payment of an incurred health care expense.


             534          (b) "Health care insurance" or "health insurance" does not include accident and health
             535      insurance providing a benefit for:
             536          (i) replacement of income;
             537          (ii) short-term accident;
             538          (iii) fixed indemnity;
             539          (iv) credit accident and health;
             540          (v) supplements to liability;
             541          (vi) workers' compensation;
             542          (vii) automobile medical payment;
             543          (viii) no-fault automobile;
             544          (ix) equivalent self-insurance; or
             545          (x) a type of accident and health insurance coverage that is a part of or attached to
             546      another type of policy.
             547          (76) "Income replacement insurance" or "disability income insurance" means
             548      insurance written to provide payments to replace income lost from accident or sickness.
             549          (77) "Indemnity" means the payment of an amount to offset all or part of an insured
             550      loss.
             551          (78) "Independent adjuster" means an insurance adjuster required to be licensed under
             552      Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
             553          (79) "Independently procured insurance" means insurance procured under Section
             554      31A-15-104 .
             555          (80) "Individual" means a natural person.
             556          (81) "Inland marine insurance" includes insurance covering:
             557          (a) property in transit on or over land;
             558          (b) property in transit over water by means other than boat or ship;
             559          (c) bailee liability;
             560          (d) fixed transportation property such as bridges, electric transmission systems, radio
             561      and television transmission towers and tunnels; and


             562          (e) personal and commercial property floaters.
             563          (82) "Insolvency" means that:
             564          (a) an insurer is unable to pay its debts or meet its obligations as the debts and
             565      obligations mature;
             566          (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
             567      RBC under Subsection 31A-17-601 (8)(c); or
             568          (c) an insurer is determined to be hazardous under this title.
             569          (83) (a) "Insurance" means:
             570          (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
             571      persons to one or more other persons; or
             572          (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
             573      group of persons that includes the person seeking to distribute that person's risk.
             574          (b) "Insurance" includes:
             575          (i) a risk distributing arrangement providing for compensation or replacement for
             576      damages or loss through the provision of a service or a benefit in kind;
             577          (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
             578      business and not as merely incidental to a business transaction; and
             579          (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
             580      but with a class of persons who have agreed to share the risk.
             581          (84) "Insurance adjuster" means a person who directs the investigation, negotiation, or
             582      settlement of a claim under an insurance policy other than life insurance or an annuity, on
             583      behalf of an insurer, policyholder, or a claimant under an insurance policy.
             584          (85) "Insurance business" or "business of insurance" includes:
             585          (a) providing health care insurance[, as defined in Subsection (75),] by an
             586      organization that is or [should] is required to be licensed under this title;
             587          (b) providing a benefit to an employee in the event of a contingency not within the
             588      control of the employee, in which the employee is entitled to the benefit as a right, which
             589      benefit may be provided either:


             590          (i) by a single employer or by multiple employer groups; or
             591          (ii) through one or more trusts, associations, or other entities;
             592          (c) providing an annuity:
             593          (i) including an annuity issued in return for a gift; and
             594          (ii) except an annuity provided by a person specified in Subsections 31A-22-1305 (2)
             595      and (3);
             596          (d) providing the characteristic services of a motor club as outlined in Subsection
             597      (113);
             598          (e) providing another person with insurance [as defined in Subsection (83)];
             599          (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
             600      or surety, a contract or policy of title insurance;
             601          (g) transacting or proposing to transact any phase of title insurance, including:
             602          (i) solicitation;
             603          (ii) negotiation preliminary to execution;
             604          (iii) execution of a contract of title insurance;
             605          (iv) insuring; and
             606          (v) transacting matters subsequent to the execution of the contract and arising out of
             607      the contract, including reinsurance; and
             608          (h) doing, or proposing to do, any business in substance equivalent to Subsections
             609      (85)(a) through (g) in a manner designed to evade [the provisions of] this title.
             610          (86) "Insurance consultant" or "consultant" means a person who:
             611          (a) advises another person about insurance needs and coverages;
             612          (b) is compensated by the person advised on a basis not directly related to the
             613      insurance placed; and
             614          (c) except as provided in Section 31A-23a-501 , is not compensated directly or
             615      indirectly by an insurer or producer for advice given.
             616          (87) "Insurance holding company system" means a group of two or more affiliated
             617      persons, at least one of whom is an insurer.


             618          (88) (a) "Insurance producer" or "producer" means a person licensed or required to be
             619      licensed under the laws of this state to sell, solicit, or negotiate insurance.
             620          (b) With regards to the selling, soliciting, or negotiating of an insurance product to an
             621      insurance customer or an insured:
             622          (i) "producer for the insurer" means a producer who is compensated directly or
             623      indirectly by an insurer for selling, soliciting, or negotiating a product of that insurer; and
             624          (ii) "producer for the insured" means a producer who:
             625          (A) is compensated directly and only by an insurance customer or an insured; and
             626          (B) receives no compensation directly or indirectly from an insurer for selling,
             627      soliciting, or negotiating a product of that insurer to an insurance customer or insured.
             628          (89) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
             629      promise in an insurance policy and includes:
             630          (i) a policyholder;
             631          (ii) a subscriber;
             632          (iii) a member; and
             633          (iv) a beneficiary.
             634          (b) The definition in Subsection (89)(a):
             635          (i) applies only to this title; and
             636          (ii) does not define the meaning of this word as used in an insurance policy or
             637      certificate.
             638          (90) (a) [(i)] "Insurer" means a person doing an insurance business as a principal
             639      including:
             640          [(A)] (i) a fraternal benefit society;
             641          [(B)] (ii) an issuer of a gift annuity other than an annuity specified in Subsections
             642      31A-22-1305 (2) and (3);
             643          [(C)] (iii) a motor club;
             644          [(D)] (iv) an employee welfare plan; and
             645          [(E)] (v) a person purporting or intending to do an insurance business as a principal on


             646      that person's own account.
             647          [(ii)] (b) "Insurer" does not include a governmental entity to the extent the
             648      governmental entity is engaged in an activity described in Section 31A-12-107 .
             649          [(b) "Admitted insurer" is defined in Subsection (163)(b).]
             650          [(c) "Alien insurer" is defined in Subsection (7).]
             651          [(d) "Authorized insurer" is defined in Subsection (163)(b).]
             652          [(e) "Domestic insurer" is defined in Subsection (48).]
             653          [(f) "Foreign insurer" is defined in Subsection (65).]
             654          [(g) "Nonadmitted insurer" is defined in Subsection (163)(a).]
             655          [(h) "Unauthorized insurer" is defined in Subsection (163)(a).]
             656          (91) "Interinsurance exchange" is defined in Subsection (142).
             657          (92) "Involuntary unemployment insurance" means insurance:
             658          (a) offered in connection with an extension of credit; and
             659          (b) that provides indemnity if the debtor is involuntarily unemployed for payments
             660      coming due on a:
             661          (i) specific loan; or
             662          (ii) credit transaction.
             663          (93) "Large employer," in connection with a health benefit plan, means an employer
             664      who, with respect to a calendar year and to a plan year:
             665          (a) employed an average of at least 51 eligible employees on each business day during
             666      the preceding calendar year; and
             667          (b) employs at least two employees on the first day of the plan year.
             668          (94) "Late enrollee," with respect to an employer health benefit plan, means an
             669      individual whose enrollment is a late enrollment.
             670          (95) "Late enrollment," with respect to an employer health benefit plan, means
             671      enrollment of an individual other than:
             672          (a) on the earliest date on which coverage can become effective for the individual
             673      under the terms of the plan; or


             674          (b) through special enrollment.
             675          (96) (a) Except for a retainer contract or legal assistance described in Section
             676      31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
             677      specified legal expense.
             678          (b) "Legal expense insurance" includes an arrangement that creates a reasonable
             679      expectation of an enforceable right.
             680          (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
             681      legal services incidental to other insurance coverage.
             682          (97) (a) "Liability insurance" means insurance against liability:
             683          (i) for death, injury, or disability of a human being, or for damage to property,
             684      exclusive of the coverages under:
             685          (A) Subsection (107) for medical malpractice insurance;
             686          (B) Subsection (134) for professional liability insurance; and
             687          (C) Subsection (168) for workers' compensation insurance;
             688          (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
             689      insured who is injured, irrespective of legal liability of the insured, when issued with or
             690      supplemental to insurance against legal liability for the death, injury, or disability of a human
             691      being, exclusive of the coverages under:
             692          (A) Subsection (107) for medical malpractice insurance;
             693          (B) Subsection (134) for professional liability insurance; and
             694          (C) Subsection (168) for workers' compensation insurance;
             695          (iii) for loss or damage to property resulting from an accident to or explosion of a
             696      boiler, pipe, pressure container, machinery, or apparatus;
             697          (iv) for loss or damage to property caused by:
             698          (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
             699          (B) water entering through a leak or opening in a building; or
             700          (v) for other loss or damage properly the subject of insurance not within another kind
             701      of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.


             702          (b) "Liability insurance" includes:
             703          (i) vehicle liability insurance [as defined in Subsection (165)];
             704          (ii) residential dwelling liability insurance [as defined in Subsection (145)]; and
             705          (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
             706      boiler, machinery, or apparatus of any kind when done in connection with insurance on the
             707      elevator, boiler, machinery, or apparatus.
             708          (98) (a) "License" means [the] authorization issued by the commissioner to engage in
             709      an activity that is part of or related to the insurance business.
             710          (b) "License" includes a certificate of authority issued to an insurer.
             711          (99) (a) "Life insurance" means:
             712          (i) insurance on a human life; and
             713          (ii) insurance pertaining to or connected with human life.
             714          (b) The business of life insurance includes:
             715          (i) granting a death benefit;
             716          (ii) granting an annuity benefit;
             717          (iii) granting an endowment benefit;
             718          (iv) granting an additional benefit in the event of death by accident;
             719          (v) granting an additional benefit to safeguard the policy against lapse; and
             720          (vi) providing an optional method of settlement of proceeds.
             721          (100) "Limited license" means a license that:
             722          (a) is issued for a specific product of insurance; and
             723          (b) limits an individual or agency to transact only for that product or insurance.
             724          (101) "Limited line credit insurance" includes the following forms of insurance:
             725          (a) credit life;
             726          (b) credit accident and health;
             727          (c) credit property;
             728          (d) credit unemployment;
             729          (e) involuntary unemployment;


             730          (f) mortgage life;
             731          (g) mortgage guaranty;
             732          (h) mortgage accident and health;
             733          (i) guaranteed automobile protection; and
             734          (j) another form of insurance offered in connection with an extension of credit that:
             735          (i) is limited to partially or wholly extinguishing the credit obligation; and
             736          (ii) the commissioner determines by rule should be designated as a form of limited line
             737      credit insurance.
             738          (102) "Limited line credit insurance producer" means a person who sells, solicits, or
             739      negotiates one or more forms of limited line credit insurance coverage to an individual through
             740      a master, corporate, group, or individual policy.
             741          (103) "Limited line insurance" includes:
             742          (a) bail bond;
             743          (b) limited line credit insurance;
             744          (c) legal expense insurance;
             745          (d) motor club insurance;
             746          (e) rental car-related insurance;
             747          (f) travel insurance; [and]
             748          (g) crop insurance;
             749          (h) self-service storage insurance; and
             750          [(g)] (i) another form of limited insurance that the commissioner determines by rule
             751      should be designated a form of limited line insurance.
             752          (104) "Limited lines authority" includes:
             753          (a) the lines of insurance listed in Subsection (103); and
             754          (b) a customer service representative.
             755          (105) "Limited lines producer" means a person who sells, solicits, or negotiates limited
             756      lines insurance.
             757          (106) (a) "Long-term care insurance" means an insurance policy or rider advertised,


             758      marketed, offered, or designated to provide coverage:
             759          (i) in a setting other than an acute care unit of a hospital;
             760          (ii) for not less than 12 consecutive months for a covered person on the basis of:
             761          (A) expenses incurred;
             762          (B) indemnity;
             763          (C) prepayment; or
             764          (D) another method;
             765          (iii) for one or more necessary or medically necessary services that are:
             766          (A) diagnostic;
             767          (B) preventative;
             768          (C) therapeutic;
             769          (D) rehabilitative;
             770          (E) maintenance; or
             771          (F) personal care; and
             772          (iv) that may be issued by:
             773          (A) an insurer;
             774          (B) a fraternal benefit society;
             775          (C) (I) a nonprofit health hospital; and
             776          (II) a medical service corporation;
             777          (D) a prepaid health plan;
             778          (E) a health maintenance organization; or
             779          (F) an entity similar to the entities described in Subsections (106)(a)(iv)(A) through
             780      (E) to the extent that the entity is otherwise authorized to issue life or health care insurance.
             781          (b) "Long-term care insurance" includes:
             782          (i) any of the following that provide directly or supplement long-term care insurance:
             783          (A) a group or individual annuity or rider; or
             784          (B) a life insurance policy or rider;
             785          (ii) a policy or rider that provides for payment of benefits on the basis of:


             786          (A) cognitive impairment; or
             787          (B) functional capacity; or
             788          (iii) a qualified long-term care insurance contract.
             789          (c) "Long-term care insurance" does not include:
             790          (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
             791          (ii) basic hospital expense coverage;
             792          (iii) basic medical/surgical expense coverage;
             793          (iv) hospital confinement indemnity coverage;
             794          (v) major medical expense coverage;
             795          (vi) income replacement or related asset-protection coverage;
             796          (vii) accident only coverage;
             797          (viii) coverage for a specified:
             798          (A) disease; or
             799          (B) accident;
             800          (ix) limited benefit health coverage; or
             801          (x) a life insurance policy that accelerates the death benefit to provide the option of a
             802      lump sum payment:
             803          (A) if the following are not conditioned on the receipt of long-term care:
             804          (I) benefits; or
             805          (II) eligibility; and
             806          (B) the coverage is for one or more the following qualifying events:
             807          (I) terminal illness;
             808          (II) medical conditions requiring extraordinary medical intervention; or
             809          (III) permanent institutional confinement.
             810          (107) "Medical malpractice insurance" means insurance against legal liability incident
             811      to the practice and provision of a medical service other than the practice and provision of a
             812      dental service.
             813          (108) "Member" means a person having membership rights in an insurance


             814      corporation.
             815          (109) "Minimum capital" or "minimum required capital" means the capital that must
             816      be constantly maintained by a stock insurance corporation as required by statute.
             817          (110) "Mortgage accident and health insurance" means insurance offered in
             818      connection with an extension of credit that provides indemnity for payments coming due on a
             819      mortgage while the debtor is disabled.
             820          (111) "Mortgage guaranty insurance" means surety insurance under which a
             821      mortgagee or other creditor is indemnified against losses caused by the default of a debtor.
             822          (112) "Mortgage life insurance" means insurance on the life of a debtor in connection
             823      with an extension of credit that pays if the debtor dies.
             824          (113) "Motor club" means a person:
             825          (a) licensed under:
             826          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             827          (ii) Chapter 11, Motor Clubs; or
             828          (iii) Chapter 14, Foreign Insurers; and
             829          (b) that promises for an advance consideration to provide for a stated period of time
             830      one or more:
             831          (i) legal services under Subsection 31A-11-102 (1)(b);
             832          (ii) bail services under Subsection 31A-11-102 (1)(c); or
             833          (iii) (A) trip reimbursement;
             834          (B) towing services;
             835          (C) emergency road services;
             836          (D) stolen automobile services;
             837          (E) a combination of the services listed in Subsections (113)(b)(iii)(A) through (D); or
             838          (F) other services given in Subsections 31A-11-102 (1)(b) through (f).
             839          (114) "Mutual" means a mutual insurance corporation.
             840          (115) "Network plan" means health care insurance:
             841          (a) that is issued by an insurer; and


             842          (b) under which the financing and delivery of medical care is provided, in whole or in
             843      part, through a defined set of providers under contract with the insurer, including the financing
             844      and delivery of an item paid for as medical care.
             845          (116) "Nonparticipating" means a plan of insurance under which the insured is not
             846      entitled to receive a dividend representing a share of the surplus of the insurer.
             847          (117) "Ocean marine insurance" means insurance against loss of or damage to:
             848          (a) ships or hulls of ships;
             849          (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys,
             850      securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
             851      interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
             852          (c) earnings such as freight, passage money, commissions, or profits derived from
             853      transporting goods or people upon or across the oceans or inland waterways; or
             854          (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
             855      owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
             856      in connection with maritime activity.
             857          (118) "Order" means an order of the commissioner.
             858          (119) "Outline of coverage" means a summary that explains an accident and health
             859      insurance policy.
             860          (120) "Participating" means a plan of insurance under which the insured is entitled to
             861      receive a dividend representing a share of the surplus of the insurer.
             862          (121) "Participation," as used in a health benefit plan, means a requirement relating to
             863      the minimum percentage of eligible employees that must be enrolled in relation to the total
             864      number of eligible employees of an employer reduced by each eligible employee who
             865      voluntarily declines coverage under the plan because the employee:
             866          (a) has other group health care insurance coverage; or
             867          (b) receives:
             868          (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
             869      Security Amendments of 1965; or


             870          (ii) another government health benefit.
             871          (122) "Person" includes:
             872          (a) an individual;
             873          (b) a partnership;
             874          (c) a corporation;
             875          (d) an incorporated or unincorporated association;
             876          (e) a joint stock company;
             877          (f) a trust;
             878          (g) a limited liability company;
             879          (h) a reciprocal;
             880          (i) a syndicate; or
             881          (j) another similar entity or combination of entities acting in concert.
             882          (123) "Personal lines insurance" means property and casualty insurance coverage sold
             883      for primarily noncommercial purposes to:
             884          (a) an individual; or
             885          (b) a family.
             886          (124) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
             887          (125) "Plan year" means:
             888          (a) the year that is designated as the plan year in:
             889          (i) the plan document of a group health plan; or
             890          (ii) a summary plan description of a group health plan;
             891          (b) if the plan document or summary plan description does not designate a plan year or
             892      there is no plan document or summary plan description:
             893          (i) the year used to determine deductibles or limits;
             894          (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
             895      or
             896          (iii) the employer's taxable year if:
             897          (A) the plan does not impose deductibles or limits on a yearly basis; and


             898          (B) (I) the plan is not insured; or
             899          (II) the insurance policy is not renewed on an annual basis; or
             900          (c) in a case not described in Subsection (125)(a) or (b), the calendar year.
             901          (126) (a) "Policy" means a document, including any attached endorsement or
             902      application that:
             903          (i) purports to be an enforceable contract; and
             904          (ii) memorializes in writing some or all of the terms of an insurance contract.
             905          (b) "Policy" includes a service contract issued by:
             906          (i) a motor club under Chapter 11, Motor Clubs;
             907          (ii) a service contract provided under Chapter 6a, Service Contracts; and
             908          (iii) a corporation licensed under:
             909          (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
             910          (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
             911          (c) "Policy" does not include:
             912          (i) a certificate under a group insurance contract; or
             913          (ii) a document that does not purport to have legal effect.
             914          (127) "Policyholder" means [the] a person who controls a policy, binder, or oral
             915      contract by ownership, premium payment, or otherwise.
             916          (128) "Policy illustration" means a presentation or depiction that includes
             917      nonguaranteed elements of a policy of life insurance over a period of years.
             918          (129) "Policy summary" means a synopsis describing the elements of a life insurance
             919      policy.
             920          (130) "Preexisting condition," with respect to a health benefit plan:
             921          (a) means a condition that was present before the effective date of coverage, whether
             922      or not medical advice, diagnosis, care, or treatment was recommended or received before that
             923      day; and
             924          (b) does not include a condition indicated by genetic information unless an actual
             925      diagnosis of the condition by a physician has been made.


             926          (131) (a) "Premium" means the monetary consideration for an insurance policy.
             927          (b) "Premium" includes, however designated:
             928          (i) an assessment;
             929          (ii) a membership fee;
             930          (iii) a required contribution; or
             931          (iv) monetary consideration.
             932          (c) (i) "Premium" does not include consideration paid to a third party administrator for
             933      the third party administrator's services.
             934          (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
             935      insurance on the risks administered by the third party administrator.
             936          (132) "Principal officers" [of] for a corporation means the officers designated under
             937      Subsection 31A-5-203 (3).
             938          (133) "Proceeding" includes an action or special statutory proceeding.
             939          (134) "Professional liability insurance" means insurance against legal liability incident
             940      to the practice of a profession and provision of a professional service.
             941          (135) (a) Except as provided in Subsection (135)(b), "property insurance" means
             942      insurance against loss or damage to real or personal property of every kind and any interest in
             943      that property:
             944          (i) from all hazards or causes; and
             945          (ii) against loss consequential upon the loss or damage including vehicle
             946      comprehensive and vehicle physical damage coverages.
             947          (b) "Property insurance" does not include:
             948          (i) inland marine insurance [as defined in Subsection (81)]; and
             949          (ii) ocean marine insurance [as defined under Subsection (117)].
             950          (136) "Qualified long-term care insurance contract" or "federally tax qualified
             951      long-term care insurance contract" means:
             952          (a) an individual or group insurance contract that meets the requirements of Section
             953      7702B(b), Internal Revenue Code; or


             954          (b) the portion of a life insurance contract that provides long-term care insurance:
             955          (i) (A) by rider; or
             956          (B) as a part of the contract; and
             957          (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
             958      Code.
             959          (137) "Qualified United States financial institution" means an institution that:
             960          (a) is:
             961          (i) organized under the laws of the United States or any state; or
             962          (ii) in the case of a United States office of a foreign banking organization, licensed
             963      under the laws of the United States or any state;
             964          (b) is regulated, supervised, and examined by a United States federal or state authority
             965      having regulatory authority over a bank or trust company; and
             966          (c) meets the standards of financial condition and standing that are considered
             967      necessary and appropriate to regulate the quality of a financial institution whose letters of
             968      credit will be acceptable to the commissioner as determined by:
             969          (i) the commissioner by rule; or
             970          (ii) the Securities Valuation Office of the National Association of Insurance
             971      Commissioners.
             972          (138) (a) "Rate" means:
             973          (i) the cost of a given unit of insurance; or
             974          (ii) for [property-casualty] property or casualty insurance, that cost of insurance per
             975      exposure unit either expressed as:
             976          (A) a single number; or
             977          (B) a pure premium rate, adjusted before the application of individual risk variations
             978      based on loss or expense considerations to account for the treatment of:
             979          (I) expenses;
             980          (II) profit; and
             981          (III) individual insurer variation in loss experience.


             982          (b) "Rate" does not include a minimum premium.
             983          (139) (a) Except as provided in Subsection (139)(b), "rate service organization" means
             984      a person who assists an insurer in rate making or filing by:
             985          (i) collecting, compiling, and furnishing loss or expense statistics;
             986          (ii) recommending, making, or filing rates or supplementary rate information; or
             987          (iii) advising about rate questions, except as an attorney giving legal advice.
             988          (b) "Rate service organization" does not mean:
             989          (i) an employee of an insurer;
             990          (ii) a single insurer or group of insurers under common control;
             991          (iii) a joint underwriting group; or
             992          (iv) [a natural person] an individual serving as an actuarial or legal consultant.
             993          (140) "Rating manual" means any of the following used to determine initial and
             994      renewal policy premiums:
             995          (a) a manual of rates;
             996          (b) a classification;
             997          (c) a rate-related underwriting rule; and
             998          (d) a rating formula that describes steps, policies, and procedures for determining
             999      initial and renewal policy premiums.
             1000          (141) "Received by the department" means:
             1001          (a) [except as provided in Subsection (141)(b),] the date delivered to and stamped
             1002      received by the department, [whether] if delivered[: (i)] in person; [or]
             1003          [(ii) electronically; and]
             1004          [(b) if delivered to the department by a delivery service, the delivery service's
             1005      postmark date or pick-up date unless otherwise stated in:]
             1006          (b) the post mark date, if delivered by mail;
             1007          (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
             1008          (d) the received date recorded on an item delivered, if delivered by:
             1009          (i) facsimile;


             1010          (ii) email; or
             1011          (iii) another electronic method; or
             1012          (e) a date specified in:
             1013          (i) a statute;
             1014          (ii) a rule; or
             1015          (iii) [a specific filing] an order.
             1016          (142) "Reciprocal" or "interinsurance exchange" means an unincorporated association
             1017      of persons:
             1018          (a) operating through an attorney-in-fact common to all of the persons; and
             1019          (b) exchanging insurance contracts with one another that provide insurance coverage
             1020      on each other.
             1021          (143) "Reinsurance" means an insurance transaction where an insurer, for
             1022      consideration, transfers any portion of the risk it has assumed to another insurer. In referring
             1023      to reinsurance transactions, this title sometimes refers to:
             1024          (a) the insurer transferring the risk as the "ceding insurer"; and
             1025          (b) the insurer assuming the risk as the:
             1026          (i) "assuming insurer"; or
             1027          (ii) "assuming reinsurer."
             1028          (144) "Reinsurer" means a person licensed in this state as an insurer with the authority
             1029      to assume reinsurance.
             1030          (145) "Residential dwelling liability insurance" means insurance against liability
             1031      resulting from or incident to the ownership, maintenance, or use of a residential dwelling that
             1032      is a detached single family residence or multifamily residence up to four units.
             1033          (146) (a) "Retrocession" means reinsurance with another insurer of a liability assumed
             1034      under a reinsurance contract.
             1035          (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
             1036      liability assumed under a reinsurance contract.
             1037          (147) "Rider" means an endorsement to:


             1038          (a) an insurance policy; or
             1039          (b) an insurance certificate.
             1040          (148) (a) "Security" means a:
             1041          (i) note;
             1042          (ii) stock;
             1043          (iii) bond;
             1044          (iv) debenture;
             1045          (v) evidence of indebtedness;
             1046          (vi) certificate of interest or participation in a profit-sharing agreement;
             1047          (vii) collateral-trust certificate;
             1048          (viii) preorganization certificate or subscription;
             1049          (ix) transferable share;
             1050          (x) investment contract;
             1051          (xi) voting trust certificate;
             1052          (xii) certificate of deposit for a security;
             1053          (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
             1054      payments out of production under such a title or lease;
             1055          (xiv) commodity contract or commodity option;
             1056          (xv) certificate of interest or participation in, temporary or interim certificate for,
             1057      receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
             1058      in Subsections (148)(a)(i) through (xiv); or
             1059          (xvi) another interest or instrument commonly known as a security.
             1060          (b) "Security" does not include:
             1061          (i) any of the following under which an insurance company promises to pay money in
             1062      a specific lump sum or periodically for life or some other specified period:
             1063          (A) insurance;
             1064          (B) an endowment policy; or
             1065          (C) an annuity contract; or


             1066          (ii) a burial certificate or burial contract.
             1067          (149) "Secondary medical condition" means a complication related to an exclusion
             1068      from coverage in accident and health insurance.
             1069          (150) "Self-insurance" means an arrangement under which a person provides for
             1070      spreading its own risks by a systematic plan.
             1071          (a) Except as provided in this Subsection (150), "self-insurance" does not include an
             1072      arrangement under which a number of persons spread their risks among themselves.
             1073          (b) "Self-insurance" includes:
             1074          (i) an arrangement by which a governmental entity undertakes to indemnify an
             1075      employee for liability arising out of the employee's employment; and
             1076          (ii) an arrangement by which a person with a managed program of self-insurance and
             1077      risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
             1078      employees for liability or risk [which] that is related to the relationship or employment.
             1079          (c) "Self-insurance" does not include an arrangement with an independent contractor.
             1080          (151) "Sell" means to exchange a contract of insurance:
             1081          (a) by any means;
             1082          (b) for money or its equivalent; and
             1083          (c) on behalf of an insurance company.
             1084          (152) "Short-term care insurance" means an insurance policy or rider advertised,
             1085      marketed, offered, or designed to provide coverage that is similar to long-term care insurance,
             1086      but that provides coverage for less than 12 consecutive months for each covered person.
             1087          (153) "Significant break in coverage" means a period of 63 consecutive days during
             1088      each of which an individual does not have creditable coverage.
             1089          (154) "Small employer," in connection with a health benefit plan, means an employer
             1090      who, with respect to a calendar year and to a plan year:
             1091          (a) employed an average of at least two employees but not more than 50 eligible
             1092      employees on each business day during the preceding calendar year; and
             1093          (b) employs at least two employees on the first day of the plan year.


             1094          (155) "Special enrollment period," in connection with a health benefit plan, has the
             1095      same meaning as provided in federal regulations adopted pursuant to the Health Insurance
             1096      Portability and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936.
             1097          (156) (a) "Subsidiary" of a person means an affiliate controlled by that person either
             1098      directly or indirectly through one or more affiliates or intermediaries.
             1099          (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
             1100      shares are owned by that person either alone or with its affiliates, except for the minimum
             1101      number of shares the law of the subsidiary's domicile requires to be owned by directors or
             1102      others.
             1103          (157) Subject to Subsection (83)(b), "surety insurance" includes:
             1104          (a) a guarantee against loss or damage resulting from the failure of a principal to pay
             1105      or perform the principal's obligations to a creditor or other obligee;
             1106          (b) bail bond insurance; and
             1107          (c) fidelity insurance.
             1108          (158) (a) "Surplus" means the excess of assets over the sum of paid-in capital and
             1109      liabilities.
             1110          (b) (i) "Permanent surplus" means the surplus of a mutual insurer that is designated by
             1111      the insurer as permanent.
             1112          (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209 require
             1113      that mutuals doing business in this state maintain specified minimum levels of permanent
             1114      surplus.
             1115          (iii) Except for assessable mutuals, the minimum permanent surplus requirement is
             1116      [essentially] the same as the minimum required capital requirement that applies to stock
             1117      insurers.
             1118          (c) "Excess surplus" means:
             1119          (i) for a life insurer, accident and health insurer, health organization, or property and
             1120      casualty insurer as defined in Section 31A-17-601 , the lesser of:
             1121          (A) that amount of an insurer's or health organization's total adjusted capital[, as


             1122      defined in Subsection (161),] that exceeds the product of:
             1123          (I) 2.5; and
             1124          (II) the sum of the insurer's or health organization's minimum capital or permanent
             1125      surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
             1126          (B) that amount of an insurer's or health organization's total adjusted capital[, as
             1127      defined in Subsection (161),] that exceeds the product of:
             1128          (I) 3.0; and
             1129          (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
             1130          (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title
             1131      insurer that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
             1132          (A) 1.5; and
             1133          (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
             1134          (159) "Third party administrator" or "administrator" means a person who collects
             1135      charges or premiums from, or who, for consideration, adjusts or settles claims of residents of
             1136      the state in connection with insurance coverage, annuities, or service insurance coverage,
             1137      except:
             1138          (a) a union on behalf of its members;
             1139          (b) a person administering a:
             1140          (i) pension plan subject to the federal Employee Retirement Income Security Act of
             1141      1974;
             1142          (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
             1143          (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
             1144          (c) an employer on behalf of the employer's employees or the employees of one or
             1145      more of the subsidiary or affiliated corporations of the employer;
             1146          (d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance
             1147      for which the insurer holds a license in this state; or
             1148          (e) a person:
             1149          (i) licensed or exempt from licensing under:


             1150          (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             1151      Reinsurance Intermediaries; or
             1152          (B) Chapter 26, Insurance Adjusters; and
             1153          (ii) whose activities are limited to those authorized under the license the person holds
             1154      or for which the person is exempt.
             1155          (160) "Title insurance" means the insuring, guaranteeing, or indemnifying of an owner
             1156      of real or personal property or the holder of liens or encumbrances on that property, or others
             1157      interested in the property against loss or damage suffered by reason of liens or encumbrances
             1158      upon, defects in, or the unmarketability of the title to the property, or invalidity or
             1159      unenforceability of any liens or encumbrances on the property.
             1160          (161) "Total adjusted capital" means the sum of an insurer's or health organization's
             1161      statutory capital and surplus as determined in accordance with:
             1162          (a) the statutory accounting applicable to the annual financial statements required to
             1163      be filed under Section 31A-4-113 ; and
             1164          (b) another item provided by the RBC instructions, as RBC instructions is defined in
             1165      Section 31A-17-601 .
             1166          (162) (a) "Trustee" means "director" when referring to the board of directors of a
             1167      corporation.
             1168          (b) "Trustee," when used in reference to an employee welfare fund, means an
             1169      individual, firm, association, organization, joint stock company, or corporation, whether
             1170      acting individually or jointly and whether designated by that name or any other, that is
             1171      charged with or has the overall management of an employee welfare fund.
             1172          (163) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted insurer"
             1173      means an insurer:
             1174          (i) not holding a valid certificate of authority to do an insurance business in this state;
             1175      or
             1176          (ii) transacting business not authorized by a valid certificate.
             1177          (b) "Admitted insurer" or "authorized insurer" means an insurer:


             1178          (i) holding a valid certificate of authority to do an insurance business in this state; and
             1179          (ii) transacting business as authorized by a valid certificate.
             1180          (164) "Underwrite" means the authority to accept or reject risk on behalf of the
             1181      insurer.
             1182          (165) "Vehicle liability insurance" means insurance against liability resulting from or
             1183      incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a vehicle
             1184      comprehensive or vehicle physical damage coverage under Subsection (135).
             1185          (166) "Voting security" means a security with voting rights, and includes a security
             1186      convertible into a security with a voting right associated with the security.
             1187          (167) "Waiting period" for a health benefit plan means the period that must pass
             1188      before coverage for an individual, who is otherwise eligible to enroll under the terms of the
             1189      health benefit plan, can become effective.
             1190          (168) "Workers' compensation insurance" means:
             1191          (a) insurance for indemnification of an employer against liability for compensation
             1192      based on:
             1193          (i) a compensable accidental injury; and
             1194          (ii) occupational disease disability;
             1195          (b) employer's liability insurance incidental to workers' compensation insurance and
             1196      written in connection with workers' compensation insurance; and
             1197          (c) insurance assuring to a person entitled to workers' compensation benefits the
             1198      compensation provided by law.
             1199          Section 2. Section 31A-2-203 is amended to read:
             1200           31A-2-203. Examinations and alternatives.
             1201          (1) (a) [Whenever] When the commissioner determines that information is needed
             1202      about a matter related to the enforcement of this title, the commissioner may examine the
             1203      affairs and condition of:
             1204          (i) a licensee under this title;
             1205          (ii) an applicant for a license under this title;


             1206          (iii) a person or organization of persons doing or in process of organizing to do an
             1207      insurance business in this state; or
             1208          (iv) a person who is not, but [should] is required to be, licensed under this title.
             1209          (b) When reasonably necessary for an examination under Subsection (1)(a), the
             1210      commissioner may examine:
             1211          (i) so far as it relates to the examinee, an account, record, document, or evidence of a
             1212      transaction of:
             1213          (A) the insurer or other licensee;
             1214          (B) an officer or other person who has executive authority over or is in charge of any
             1215      segment of the examinee's affairs; or
             1216          (C) an affiliate of the examinee; or
             1217          (ii) a third party model or product used by the examinee.
             1218          (c) (i) On demand, an examinee under Subsection (1)(a) shall make available to the
             1219      commissioner for examination:
             1220          (A) the examinee's own account, record, file, document, or evidence of a transaction;
             1221      and
             1222          (B) to the extent reasonably necessary for an examination, an account, record, file,
             1223      document, or evidence of a transaction of a person described under Subsection (1)(b).
             1224          (ii) Except as provided in Subsection (1)(c)(iii), failure to make an item described in
             1225      Subsection (1)(c)(i) available is concealment of records under Subsection 31A-27a-207 (1)(e).
             1226          (iii) If [the] an examinee is unable to obtain an account, record, file, document, or
             1227      evidence of a transaction from a person described under Subsection (1)(b), that failure is not
             1228      concealment of records if the examinee immediately terminates the relationship with the other
             1229      person.
             1230          (d) (i) [Neither the] The commissioner [nor] or an examiner may not remove an
             1231      account, record, file, document, evidence of a transaction, or other property of [the] an
             1232      examinee from the examinee's offices unless:
             1233          (A) the examinee consents in writing; or


             1234          (B) a court grants permission.
             1235          (ii) The commissioner may make and remove a copy or abstract of the following
             1236      described in Subsection (1)(d)(i):
             1237          (A) an account;
             1238          (B) a record;
             1239          (C) a file;
             1240          (D) a document;
             1241          (E) evidence of a transaction; or
             1242          (F) other property.
             1243          (2) (a) Subject to the other provisions of this section, the commissioner shall examine
             1244      as needed and as otherwise provided by law:
             1245          (i) every insurer, both domestic and nondomestic;
             1246          (ii) every licensed rate service organization; and
             1247          (iii) any other licensee.
             1248          (b) The commissioner shall examine an insurer, both domestic and nondomestic, no
             1249      less frequently than once every five years, but the commissioner may use in lieu an
             1250      examination under Subsection (4) to satisfy this requirement.
             1251          (c) The commissioner shall revoke the certificate of authority of an insurer or the
             1252      license of a rate service organization that has not been examined, or submitted an acceptable
             1253      in lieu report under Subsection (4), within the past five years.
             1254          (d) (i) Any 25 persons who are policyholders, shareholders, or creditors of a domestic
             1255      insurer may by verified petition demand a hearing under Section 31A-2-301 to determine
             1256      whether the commissioner should conduct an unscheduled examination of the insurer.
             1257          (ii) Persons demanding the hearing under this Subsection (2)(d) shall be given an
             1258      opportunity in the hearing to present evidence that an examination of the insurer is necessary.
             1259          (iii) If the evidence justifies an examination, the commissioner shall order an
             1260      examination.
             1261          (e) (i) If the board of directors of a domestic insurer requests that the commissioner


             1262      examine the insurer, the commissioner shall examine the insurer as soon as reasonably
             1263      possible.
             1264          (ii) If the examination requested under this Subsection (2)(e) is conducted within two
             1265      years after completion of a comprehensive examination by the commissioner, costs of the
             1266      requested examination may not be deducted from premium taxes under Section 59-9-102
             1267      unless the commissioner's order specifically provides for the deduction.
             1268          (f) A bail bond surety company, as defined in Section 31A-35-102 , is exempt from:
             1269          (i) the five-year examination requirement in Subsection (2)(b);
             1270          (ii) the revocation under Subsection (2)(c); and
             1271          (iii) Subsections (2)(d) and (2)(e).
             1272          (3) (a) The commissioner may order an independent audit or examination by one or
             1273      more technical experts, including a certified public accountant or actuary:
             1274          (i) in lieu of all or part of an examination under Subsection (1) or (2); or
             1275          (ii) in addition to an examination under Subsection (1) or (2).
             1276          (b) An audit or evaluation under this Subsection (3) is subject to Subsection (5),
             1277      Section 31A-2-204 , and Subsection 31A-2-205 (4).
             1278          (4) (a) In lieu of all or a part of an examination under this section, the commissioner
             1279      may accept the report of an examination made by:
             1280          (i) the insurance department of another state; or
             1281          (ii) another government agency in:
             1282          (A) this state;
             1283          (B) the federal government; or
             1284          (C) another state.
             1285          (b) An examination by the commissioner under Subsection (1) or (2) or accepted by
             1286      the commissioner under this Subsection (4) may use:
             1287          (i) an audit [already made] completed by a certified public accountant; or
             1288          (ii) an actuarial evaluation made by an actuary approved by the commissioner.
             1289          (5) (a) An examination may be comprehensive or limited with respect to the


             1290      examinee's affairs and condition. The commissioner shall determine the nature and scope of
             1291      [each] an examination, taking into account all relevant factors, including:
             1292          (i) the length of time the examinee has been licensed in this state;
             1293          (ii) the nature of the business being examined;
             1294          (iii) the nature of the accounting or other records available;
             1295          (iv) one or more reports from:
             1296          (A) independent auditors; and
             1297          (B) self-certification entities; and
             1298          (v) the nature of examinations performed elsewhere.
             1299          (b) The examination of an alien insurer is limited to one or more insurance
             1300      transactions and assets in the United States, unless the commissioner orders otherwise after
             1301      finding that extraordinary circumstances necessitate a broader examination.
             1302          (6) To effectively administer this section, the commissioner:
             1303          (a) shall:
             1304          (i) maintain one or more effective financial condition and market regulation
             1305      surveillance systems including:
             1306          (A) financial and market analysis; and
             1307          (B) a review of insurance regulatory information system reports;
             1308          (ii) employ a priority scheduling method that focuses on insurers and other licensees
             1309      most in need of examination; and
             1310          (iii) use examination management techniques similar to those outlined in the Financial
             1311      Condition Examination Handbook of the National Association of Insurance Commissioners;
             1312      and
             1313          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             1314      may make rules pertaining to:
             1315          (i) a financial condition and market regulation surveillance system[.]; and
             1316          (ii) annual financial reporting requirements similar to those outlined in the Annual
             1317      Financial Reporting Model Regulation of the National Association of Insurance


             1318      Commissioners.
             1319          Section 3. Section 31A-5-412 is amended to read:
             1320           31A-5-412. Committees of directors.
             1321          (1) (a) If provided for in the articles or bylaws of a corporation, the board, by
             1322      resolution adopted by a majority of the full board, may designate one or more committees.
             1323      [Each of these committees]
             1324          (b) A committee designated under this Subsection (1) shall consist of three or more
             1325      directors serving at the pleasure of the board.
             1326          (c) The board may designate one or more directors as alternate members of [any] a
             1327      committee to substitute for an absent member at any meeting of the committee.
             1328          (d) The designation of a committee and delegation of authority to [it] the committee
             1329      does not relieve the board or [any] a director of responsibility imposed by law upon [it or him
             1330      by law] the board or director.
             1331          (2) (a) (i) Except for [corporations] a corporation described under Subsection
             1332      31A-5-407 (4), [every] a corporation shall have an audit committee.
             1333          (ii) A corporation's entire board constitutes the audit committee if the corporation:
             1334          (A) is described under Subsection 31A-5-407 (4); and
             1335          (B) does not have an audit committee that complies with this Subsection (2).
             1336          (b) [No] If a corporation is required to have an audit committee under Subsection
             1337      (2)(a), a member of the audit committee may not be an inside director as defined under
             1338      Subsection 31A-5-407 (3).
             1339          (c) [The] An audit committee shall maintain an overview of the audit activities,
             1340      systems, and staff of the company and of the activities of the outside auditors, in order to
             1341      advise the board on the adequacy of fiscal control. [The]
             1342          (d) A corporation shall give an audit committee [has] direct and private access to
             1343      company data and personnel as that committee considers necessary[, and].
             1344          (e) An audit committee may meet privately with the outside directors as [it] the audit
             1345      committee sees fit.


             1346          (f) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1347      commissioner may make rules pertaining to audit committee requirements similar to those
             1348      outlined in the Annual Financial Reporting Model Regulation of the National Association of
             1349      Insurance Commissioners.
             1350          (3) (a) When the board is not in session, a committee may exercise the powers of the
             1351      board in the management of the business and affairs of the corporation to the extent authorized
             1352      in the resolution or in the articles or bylaws, except action regarding:
             1353          [(a)] (i) compensation or indemnification of [any] a person who is:
             1354          (A) a director[,];
             1355          (B) a principal officer[,]; or
             1356          (C) one of the three most highly paid employees;
             1357          [(b)] (ii) benefits or payments requiring shareholder or policyholder approval;
             1358          [(c)] (iii) approval of a contract requiring board approval under Section 31A-5-414 [,
             1359      or];
             1360          (iv) approval of [any other] a transaction in which a director has a material interest
             1361      adverse to the corporation;
             1362          [(d)] (v) amendment of the articles or bylaws;
             1363          [(e)] (vi) merger or consolidation under Section 31A-5-501 , 31A-5-502 , or
             1364      31A-5-503 [,];
             1365          (vii) conversion under Section 31A-5-505 , 31A-5-506 , 31A-5-507 , or 31A-5-509 [,];
             1366          (viii) voluntary dissolution under Section 31A-5-504 [, or];
             1367          (ix) transfer of business or assets under Section 31A-5-508 ;
             1368          [(f)] (x) any other decision requiring shareholder or policyholder approval;
             1369          [(g)] (xi) amendment or repeal of an action taken by the full board, which by its terms
             1370      is not subject to amendment or repeal by a committee;
             1371          [(h)] (xii) dividends or other distributions to shareholders, policyholders, or voting
             1372      members other than in the routine implementation of a policy [determinations] determination
             1373      of the full board;


             1374          [(i)] (xiii) selection of a principal [officers] officer; and
             1375          [(j)] (xiv) filling [vacancies] a vacancy on the board or on a committee created under
             1376      Subsection (1), except that the articles or bylaws may provide for a temporary [appointments]
             1377      appointment to fill [vacancies] a vacancy on the board or a committee. [These temporary
             1378      appointments]
             1379          (b) A temporary appointment provided for in Subsection (3)(a)(xiv) may last only until
             1380      the end of the next board meeting.
             1381          (4) [At the next meeting following action by any committee, the] The full board shall
             1382      review [any] a transaction in which an officer has a material financial interest adverse to the
             1383      corporation at the next board meeting after the transaction.
             1384          Section 4. Section 31A-8-215 is amended to read:
             1385           31A-8-215. Management.
             1386          Chapter 5, Part 4, Management of Insurance Corporations, applies to organizations,
             1387      except that for purposes of this chapter, [Subsection] Subsections 31A-5-412 (3)[(e)](a)(vi)
             1388      through (ix) shall be read: "corporate reorganizations under Section 31A-8-216 ."
             1389          Section 5. Section 31A-20-108 is amended to read:
             1390           31A-20-108. Single risk limitation.
             1391          (1) This section applies to all lines of insurance, including ocean marine and
             1392      reinsurance, except:
             1393          (a) title insurance;
             1394          (b) workers' compensation insurance;
             1395          (c) occupational disease insurance; [and]
             1396          (d) employers' liability insurance[.]; and
             1397          (e) health insurance.
             1398          (2) (a) Except as provided under Subsections (3) and (4) and under Section
             1399      31A-20-109 , an insurer authorized to do an insurance business in Utah may not expose itself
             1400      to loss on a single risk in an amount exceeding 10% of its capital and surplus.
             1401          (b) The commissioner may adopt rules to calculate surplus under this section.


             1402          (c) An insurer may deduct the portion of a risk reinsured by a reinsurance contract
             1403      worthy of a reserve credit under Sections 31A-17-404 through 31A-17-404.4 in determining
             1404      the limitation of risk under this section.
             1405          (3) (a) The commissioner may adopt rules, after hearings held with notice provided
             1406      under Section 31A-2-303 , to specify the maximum exposure to which an assessable mutual
             1407      may subject itself.
             1408          (b) The rules described in Subsection (3)(a) may provide for classifications of
             1409      insurance and insurers to preserve the solidity of insurers.
             1410          (4) As used in this section, a "single risk" includes all losses reasonably expected as a
             1411      result of the same event.
             1412          (5) A company transacting fidelity or surety insurance may expose itself to a risk or
             1413      hazard in excess of the amount prescribed in Subsection (2), if the commissioner, after
             1414      considering all the facts and circumstances, approves the risk.
             1415          Section 6. Section 31A-22-404 is amended to read:
             1416           31A-22-404. Suicide.
             1417          (1) (a) Suicide is not a defense to a claim under a life insurance policy that is in force
             1418      [as to a policyholder or certificate holder] for two years from the date of issuance of the later
             1419      of:
             1420          (i) the policy; or
             1421          (ii) the certificate.
             1422          (b) Subsection (1)(a) applies whether:
             1423          (i) the insured's death by suicide is voluntary or involuntary; or
             1424          (ii) the insured is sane or insane.
             1425          (c) If a suicide occurs within the two-year period described in Subsection (1)(a), the
             1426      insurer shall pay to the beneficiary an amount not less than the premium paid less the
             1427      following:
             1428          (i) a dividend paid;
             1429          (ii) an indebtedness; and


             1430          (iii) a partial withdrawal.
             1431          (2) (a) If after a life insurance policy is in effect the policy allows the [insured to
             1432      obtain] policyholder to purchase a death benefit that is larger than when the policy was
             1433      originally effective for an additional premium, the payment of the additional increment of
             1434      benefit may be limited in the event of a suicide within a two-year period beginning on the day
             1435      on which the increment increase takes effect.
             1436          (b) If a suicide occurs within the two-year period described in Subsection (2)(a), the
             1437      insurer shall pay to the beneficiary an amount not less than the additional premium paid for
             1438      the additional increment of benefit.
             1439          (3) For a survivorship life insurance policy, this section applies when within two years
             1440      from the day on which the survivorship life insurance policy is issued:
             1441          (a) the death of all insureds results from suicide; or
             1442          (b) the death of the surviving insured results from suicide.
             1443          [(3)] (4) This section does not apply to:
             1444          (a) a policy insuring against death by accident only; or
             1445          (b) an accident or double indemnity provision of an insurance policy.
             1446          Section 7. Section 31A-22-620 is amended to read:
             1447           31A-22-620. Medicare Supplement Insurance Minimum Standards Act.
             1448          (1) As used in this section:
             1449          (a) "Applicant" means:
             1450          (i) in the case of an individual Medicare supplement policy, the person who seeks to
             1451      contract for insurance benefits; and
             1452          (ii) in the case of a group Medicare supplement policy, the proposed certificate holder.
             1453          (b) "Certificate" means any certificate delivered or issued for delivery in this state
             1454      under a group Medicare supplement policy.
             1455          (c) "Certificate form" means the form on which the certificate is delivered or issued
             1456      for delivery by the issuer.
             1457          (d) "Issuer" includes insurance companies, fraternal benefit societies, health care


             1458      service plans, health maintenance organizations, and any other entity delivering, or issuing for
             1459      delivery in this state, Medicare supplement policies or certificates.
             1460          (e) "Medicare" means the "Health Insurance for the Aged Act," Title XVIII of the
             1461      Social Security Amendments of 1965, as then constituted or later amended.
             1462          (f) "Medicare Supplement Policy":
             1463          (i) means a group or individual policy of disability insurance, other than a policy
             1464      issued pursuant to a contract under Section 1876 of the federal Social Security Act, 42 U.S.C.
             1465      Section 1395 et seq., or an issued policy under a demonstration project specified in 42 U.S.C.
             1466      Section 1395ss(g)(1), that is advertised, marketed, or designed primarily as a supplement to
             1467      reimbursements under Medicare for the hospital, medical, or surgical expenses of persons
             1468      eligible for Medicare; and
             1469          (ii) does not include Medicare Advantage plans established under Medicare Part C,
             1470      outpatient prescription drug plans established under Medicare Part D, or any health care
             1471      prepayment plan that provides benefits pursuant to an agreement under Section 1833(a)(1)(A)
             1472      of the Social Security Act.
             1473          (g) "Policy form" means the form on which the policy is delivered or issued for
             1474      delivery by the issuer.
             1475          (2) (a) Except as otherwise specifically provided, this section applies to:
             1476          (i) all Medicare supplement policies delivered or issued for delivery in this state on or
             1477      after the effective date of this section;
             1478          (ii) all certificates issued under group Medicare supplement policies, that have been
             1479      delivered or issued for delivery in this state on or after the effective date of this section; and
             1480          (iii) policies or certificates that were in force prior to the effective date of this section,
             1481      with respect to requirements for benefits, claims payment, and policy reporting practice under
             1482      Subsection (3)(d), and loss ratios under Subsection (4).
             1483          (b) This section does not apply to a policy of one or more employers or labor
             1484      organizations, or of the trustees of a fund established by one or more employers or labor
             1485      organizations, or a combination of employers and labor unions, for employees or former


             1486      employees or a combination of employees and former employees, or for members or former
             1487      members of the labor organizations, or a combination of members and former members of
             1488      labor organizations.
             1489          (c) This section does not prohibit, nor does it apply to insurance policies or health care
             1490      benefit plans, including group conversion policies, provided to Medicare eligible persons that
             1491      are not marketed or held out to be Medicare supplement policies or benefit plans.
             1492          (3) (a) A Medicare supplement policy or certificate in force in the state may not
             1493      contain benefits that duplicate benefits provided by Medicare.
             1494          (b) Notwithstanding any other provision of law of this state, a Medicare supplement
             1495      policy or certificate may not exclude or limit benefits for loss incurred more than six months
             1496      from the effective date of coverage because it involved a preexisting condition. The policy or
             1497      certificate may not define a preexisting condition more restrictively than: "A condition for
             1498      which medical advice was given or treatment was recommended by or received from a
             1499      physician within six months before the effective date of coverage."
             1500          (c) The commissioner shall adopt rules to establish specific standards for policy
             1501      provisions of Medicare supplement policies and certificates. The standards adopted shall be in
             1502      addition to and in accordance with applicable laws of this state. A requirement of this title
             1503      relating to minimum required policy benefits, other than the minimum standards contained in
             1504      this section, may not apply to Medicare supplement policies and certificates. The standards
             1505      may include:
             1506          (i) terms of renewability;
             1507          (ii) initial and subsequent conditions of eligibility;
             1508          (iii) nonduplication of coverage;
             1509          (iv) probationary periods;
             1510          (v) benefit limitations, exceptions, and reductions;
             1511          (vi) elimination periods;
             1512          (vii) requirements for replacement;
             1513          (viii) recurrent conditions; and


             1514          (ix) definitions of terms.
             1515          (d) The commissioner shall adopt rules establishing minimum standards for benefits,
             1516      claims payment, marketing practices, compensation arrangements, and reporting practices for
             1517      Medicare supplement policies and certificates.
             1518          (e) The commissioner may adopt rules to conform Medicare supplement policies and
             1519      certificates to the requirements of federal law and regulations, including:
             1520          (i) requiring refunds or credits if the policies do not meet loss ratio requirements;
             1521          (ii) establishing a uniform methodology for calculating and reporting loss ratios;
             1522          (iii) assuring public access to policies, premiums, and loss ratio information of issuers
             1523      of Medicare supplement insurance;
             1524          (iv) establishing a process for approving or disapproving policy forms and certificate
             1525      forms and proposed premium increases;
             1526          (v) establishing a policy for holding public hearings prior to approval of premium
             1527      increases; [and]
             1528          (vi) establishing standards for Medicare select policies and certificates[.]; and
             1529          (vii) nondiscrimination for genetic testing or genetic information.
             1530          (f) The commissioner may adopt rules that prohibit policy provisions not otherwise
             1531      specifically authorized by statute that, in the opinion of the commissioner, are unjust, unfair,
             1532      or unfairly discriminatory to any person insured or proposed to be insured under a Medicare
             1533      supplement policy or certificate.
             1534          (4) Medicare supplement policies shall return to policyholders benefits that are
             1535      reasonable in relation to the premium charged. The commissioner shall make rules to
             1536      establish minimum standards for loss ratios of Medicare supplement policies on the basis of
             1537      incurred claims experience, or incurred health care expenses where coverage is provided by a
             1538      health maintenance organization on a service basis rather than on a reimbursement basis, and
             1539      earned premiums in accordance with accepted actuarial principles and practices.
             1540          (5) (a) To provide for full and fair disclosure in the sale of Medicare supplement
             1541      policies, a Medicare supplement policy or certificate may not be delivered in this state unless


             1542      an outline of coverage is delivered to the applicant at the time application is made.
             1543          (b) The commissioner shall prescribe the format and content of the outline of coverage
             1544      required by Subsection (5)(a).
             1545          (c) For purposes of this section, "format" means style arrangements and overall
             1546      appearance, including such items as the size, color, and prominence of type and arrangement
             1547      of text and captions. The outline of coverage shall include:
             1548          (i) a description of the principal benefits and coverage provided in the policy;
             1549          (ii) a statement of the renewal provisions, including any reservation by the issuer of a
             1550      right to change premiums; and disclosure of the existence of any automatic renewal premium
             1551      increases based on the policyholder's age; and
             1552          (iii) a statement that the outline of coverage is a summary of the policy issued or
             1553      applied for and that the policy should be consulted to determine governing contractual
             1554      provisions.
             1555          (d) The commissioner may make rules for captions or notice if the commissioner finds
             1556      that the rules are:
             1557          (i) in the public interest; and
             1558          (ii) designed to inform prospective insureds that particular insurance coverages are not
             1559      Medicare supplement coverages, for all accident and health insurance policies sold to persons
             1560      eligible for Medicare, other than:
             1561          (A) a medicare supplement policy; or
             1562          (B) a disability income policy.
             1563          (e) The commissioner may prescribe by rule a standard form and the contents of an
             1564      informational brochure for persons eligible for Medicare, that is intended to improve the
             1565      buyer's ability to select the most appropriate coverage and improve the buyer's understanding
             1566      of Medicare. Except in the case of direct response insurance policies, the commissioner may
             1567      require by rule that the informational brochure be provided concurrently with delivery of the
             1568      outline of coverage to any prospective insureds eligible for Medicare. With respect to direct
             1569      response insurance policies, the commissioner may require by rule that the prescribed


             1570      brochure be provided upon request to any prospective insureds eligible for Medicare, but in no
             1571      event later than the time of policy delivery.
             1572          (f) The commissioner may adopt reasonable rules to govern the full and fair disclosure
             1573      of the information in connection with the replacement of accident and health policies,
             1574      subscriber contracts, or certificates by persons eligible for Medicare.
             1575          (6) Notwithstanding Subsection (1), Medicare supplement policies and certificates
             1576      shall have a notice prominently printed on the first page of the policy or certificate, or attached
             1577      to the front page, stating in substance that the applicant has the right to return the policy or
             1578      certificate within 30 days of its delivery and to have the premium refunded if, after
             1579      examination of the policy or certificate, the applicant is not satisfied for any reason. Any
             1580      refund made pursuant to this section shall be paid directly to the applicant by the issuer in a
             1581      timely manner.
             1582          (7) Every issuer of Medicare supplement insurance policies or certificates in this state
             1583      shall provide a copy of any Medicare supplement advertisement intended for use in this state,
             1584      whether through written or broadcast medium, to the commissioner for review.
             1585          (8) The commissioner may adopt rules to conform Medicare and Medicare supplement
             1586      policies and certificates to the marketing requirements of federal law and regulation.
             1587          Section 8. Section 31A-22-1602 is amended to read:
             1588           31A-22-1602. Genetic testing restrictions.
             1589          [With] Except as provided under Section 31A-22-620 , with respect to [matters] a
             1590      matter related to genetic testing and private genetic information, an insurer shall comply with
             1591      [Section 26-45-104 and the other] the applicable provisions of Title 26, Chapter 45, Genetic
             1592      Testing Privacy Act, including Section 26-45-104 .
             1593          Section 9. Section 31A-23a-102 is amended to read:
             1594           31A-23a-102. Definitions.
             1595          As used in this chapter:
             1596          (1) "Bail bond producer" means a person who:
             1597          (a) is appointed by:


             1598          (i) a surety insurer that issues bail bonds; or
             1599          (ii) a bail bond surety company licensed under Chapter 35, Bail Bond Act;
             1600          (b) is designated to execute or countersign undertakings of bail in connection with a
             1601      judicial [proceedings] proceeding; and
             1602          (c) receives or is promised money or other things of value for engaging in an act
             1603      described in Subsection (1)(b).
             1604          (2) "Escrow" means a license subline of authority in conjunction with the title
             1605      insurance line of authority that allows a person to conduct escrow as defined in Section
             1606      31A-1-301 .
             1607          (3) "Home state" means [any] a state or territory of the United States or the District of
             1608      Columbia in which an insurance producer:
             1609          (a) maintains the insurance producer's principal:
             1610          (i) place of residence; or
             1611          (ii) place of business; and
             1612          (b) is licensed to act as an insurance producer.
             1613          (4) "Insurer" is as defined in Section 31A-1-301 , except that the following persons or
             1614      similar persons are not insurers for purposes of Part 7, Producer Controlled Insurers:
             1615          (a) [all] a risk retention [groups] group as defined in:
             1616          (i) the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499;
             1617          (ii) the Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.; and
             1618          (iii) Chapter 15, Part 2, Risk Retention Groups Act;
             1619          (b) [all] a residual market [pools and] pool;
             1620          (c) a joint underwriting [authorities or associations] authority or association; and
             1621          [(c) all] (d) a captive [insurers] insurer.
             1622          (5) "License" is defined in Section 31A-1-301 .
             1623          (6) (a) "Managing general agent" means [any] a person that:
             1624          (i) manages all or part of the insurance business of an insurer, including the
             1625      management of a separate division, department, or underwriting office;


             1626          (ii) acts as an agent for the insurer whether it is known as a managing general agent,
             1627      manager, or other similar term;
             1628          (iii) [with or without the authority, either separately or together with affiliates, directly
             1629      or indirectly] produces and underwrites an amount of gross direct written premium equal to, or
             1630      more than 5% of, the policyholder surplus as reported in the last annual statement of the
             1631      insurer in any one quarter or year[; and]:
             1632          (A) with or without the authority;
             1633          (B) separately or together with an affiliate; and
             1634          (C) directly or indirectly; and
             1635          (iv) (A) adjusts or pays claims in excess of an amount determined by the
             1636      commissioner; or
             1637          (B) negotiates reinsurance on behalf of the insurer.
             1638          (b) Notwithstanding Subsection (6)(a), the following persons may not be considered as
             1639      managing general agent for the purposes of this chapter:
             1640          (i) an employee of the insurer;
             1641          (ii) a United States manager of the United States branch of an alien insurer;
             1642          (iii) an underwriting manager that, pursuant to contract:
             1643          (A) manages all the insurance operations of the insurer;
             1644          (B) is under common control with the insurer;
             1645          (C) is subject to Chapter 16, Insurance Holding Companies; and
             1646          (D) is not compensated based on the volume of premiums written; and
             1647          (iv) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal
             1648      insurer or inter-insurance exchange under powers of attorney.
             1649          (7) "Negotiate" means the act of conferring directly with or offering advice directly to
             1650      a purchaser or prospective purchaser of a particular contract of insurance concerning [any of
             1651      the] a substantive [benefits, terms, or conditions] benefit, term, or condition of the contract if
             1652      the person engaged in that act:
             1653          (a) sells insurance; or


             1654          (b) obtains insurance from insurers for purchasers.
             1655          (8) "Reinsurance intermediary" means:
             1656          (a) a reinsurance intermediary-broker; or
             1657          (b) a reinsurance intermediary-manager.
             1658          (9) "Reinsurance intermediary-broker" means a person other than an officer or
             1659      employee of the ceding insurer, firm, association, or corporation who solicits, negotiates, or
             1660      places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority
             1661      or power to bind reinsurance on behalf of the insurer.
             1662          (10) (a) "Reinsurance intermediary-manager" means a person who:
             1663          (i) has authority to bind or who manages all or part of the assumed reinsurance
             1664      business of a reinsurer, including the management of a separate division, department, or
             1665      underwriting office; and
             1666          (ii) acts as an agent for the reinsurer whether the person is known as a reinsurance
             1667      intermediary-manager, manager, or other similar term.
             1668          (b) Notwithstanding Subsection (10)(a), the following persons may not be considered
             1669      reinsurance intermediary-managers for the purpose of this chapter with respect to the
             1670      reinsurer:
             1671          (i) an employee of the reinsurer;
             1672          (ii) a United States manager of the United States branch of an alien reinsurer;
             1673          (iii) an underwriting manager that, pursuant to contract:
             1674          (A) manages all the reinsurance operations of the reinsurer;
             1675          (B) is under common control with the reinsurer;
             1676          (C) is subject to Chapter 16, Insurance Holding Companies; and
             1677          (D) is not compensated based on the volume of premiums written; and
             1678          (iv) the manager of a group, association, pool, or organization of insurers that:
             1679          (A) engage in joint underwriting or joint reinsurance; and
             1680          (B) are subject to examination by the insurance commissioner of the state in which the
             1681      manager's principal business office is located.


             1682          (11) "Search" means a license subline of authority in conjunction with the title
             1683      insurance line of authority that allows a person to issue title insurance commitments or
             1684      policies on behalf of a title insurer.
             1685          (12) "Sell" means to exchange a contract of insurance:
             1686          (a) by any means;
             1687          (b) for money or its equivalent; and
             1688          (c) on behalf of an insurance company.
             1689          (13) "Solicit" means:
             1690          (a) attempting to sell insurance;
             1691          (b) asking or urging a person to apply for:
             1692          (i) a particular kind of insurance; and
             1693          (ii) insurance from a particular insurance company;
             1694          (c) advertising insurance, including advertising for the purpose of obtaining leads for
             1695      the sale of insurance; or
             1696          (d) holding oneself out as being in the insurance business.
             1697          (14) "Terminate" means:
             1698          (a) the cancellation of the relationship between:
             1699          [(i) an insurance producer; and]
             1700          [(ii) a particular insurer; or]
             1701          (i) an individual licensee or agency licensee and a particular insurer; or
             1702          (ii) an individual licensee and a particular agency licensee; or
             1703          (b) the termination of [the producer's]:
             1704          (i) an individual licensee's or agency licensee's authority to transact insurance on
             1705      behalf of a particular insurance company[.]; or
             1706          (ii) an individual licensee's authority to transact insurance on behalf of a particular
             1707      agency licensee.
             1708          (15) "Title marketing representative" means a person who:
             1709          (a) represents a title insurer in soliciting, requesting, or negotiating the placing of:


             1710          (i) title insurance; or
             1711          (ii) escrow services; and
             1712          (b) does not have a search or escrow license as provided in Section 31A-23a-106 .
             1713          (16) "Uniform application" means the version of the National Association of Insurance
             1714      Commissioner's uniform application for resident and nonresident producer licensing at the
             1715      time the application is filed.
             1716          (17) "Uniform business entity application" means the version of the National
             1717      Association of Insurance Commissioner's uniform business entity application for resident and
             1718      nonresident business entities at the time the application is filed.
             1719          Section 10. Section 31A-23a-104 is amended to read:
             1720           31A-23a-104. Application for individual license -- Application for agency license.
             1721          (1) This section applies to an initial or renewal license as a:
             1722          (a) producer;
             1723          (b) limited line producer;
             1724          (c) customer service representative;
             1725          (d) consultant;
             1726          (e) managing general agent; or
             1727          (f) reinsurance intermediary.
             1728          (2) (a) Subject to Subsection (2)(b), an application for an initial or renewal individual
             1729      license shall be:
             1730          (i) made to the commissioner on forms and in a manner the commissioner prescribes;
             1731      and
             1732          (ii) accompanied by a license fee that is not refunded if the application:
             1733          (A) is denied; or
             1734          (B) if incomplete, is never completed by the applicant.
             1735          (b) An application described in this Subsection (2) shall provide:
             1736          (i) information about the applicant's identity;
             1737          (ii) the applicant's Social Security number;


             1738          (iii) the applicant's personal history, experience, education, and business record;
             1739          (iv) whether the applicant is 18 years of age or older;
             1740          (v) whether the applicant has committed an act that is a ground for denial, suspension,
             1741      or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ; and
             1742          (vi) any other information the commissioner reasonably requires.
             1743          (3) The commissioner may require [any documents] a document reasonably necessary
             1744      to verify the information contained in an application filed under this section.
             1745          (4) An applicant's Social Security number contained in an application filed under this
             1746      section is a private record under Section 63G-2-302 .
             1747          (5) (a) Subject to Subsection (5)(b), an application for an initial or renewal agency
             1748      license shall be:
             1749          (i) made to the commissioner on forms and in a manner the commissioner prescribes;
             1750      and
             1751          (ii) accompanied by a license fee that is not refunded if the application:
             1752          (A) is denied; or
             1753          (B) if incomplete, is never completed by the applicant.
             1754          (b) An application described in Subsection (5)(a) shall provide:
             1755          (i) information about the applicant's identity;
             1756          (ii) the applicant's federal employer identification number;
             1757          (iii) the designated responsible licensed producer;
             1758          (iv) the identity of all owners, partners, officers, and directors;
             1759          (v) whether the applicant has committed an act that is a ground for denial, suspension,
             1760      or revocation as set forth in Section 31A-23a-105 or 31A-23a-111 ; and
             1761          (vi) any other information the commissioner reasonably requires.
             1762          Section 11. Section 31A-23a-105 is amended to read:
             1763           31A-23a-105. General requirements for individual and agency license issuance
             1764      and renewal.
             1765          (1) (a) The commissioner shall issue or renew a license to a person described in


             1766      Subsection (1)(b) to act as:
             1767          (i) a producer[,];
             1768          (ii) a limited line producer[,];
             1769          (iii) a customer service representative[,];
             1770          (iv) a consultant[,];
             1771          (v) a managing general agent[,]; or
             1772          (vi) a reinsurance intermediary [to any person].
             1773          (b) The commissioner shall issue or renew a license under Subsection (1)(a) to a
             1774      person who, as to the license type and line of authority classification applied for under Section
             1775      31A-23a-106 :
             1776          (a) satisfies the application requirements under Section 31A-23a-104 ;
             1777          (b) satisfies the character requirements under Section 31A-23a-107 ;
             1778          (c) satisfies any applicable continuing education requirements under Section
             1779      31A-23a-202 ;
             1780          (d) satisfies any applicable examination requirements under Section 31A-23a-108 ;
             1781          (e) satisfies any applicable training period requirements under Section 31A-23a-203 ;
             1782          (f) has not committed an act that is a ground for denial, suspension, or revocation as
             1783      provided in Section 31A-23a-111 ;
             1784          [(f)] (g) if a nonresident:
             1785          (i) complies with Section 31A-23a-109 ; and
             1786          (ii) holds an active similar license in that person's state of residence;
             1787          [(g)] (h) if an applicant for a title insurance producer license, satisfies the requirements
             1788      of Sections 31A-23a-203 and 31A-23a-204 ;
             1789          [(h)] (i) if an applicant for a license to act as a viatical settlement provider or viatical
             1790      settlement producer, satisfies the requirements of Section 31A-23a-117 ; and
             1791          [(i)] (j) pays the applicable fees under Section 31A-3-103 .
             1792          (2) (a) This Subsection (2) applies to the following persons:
             1793          (i) an applicant for a pending:


             1794          (A) individual or agency producer license;
             1795          (B) limited line producer license;
             1796          (C) customer service representative license;
             1797          (D) consultant license;
             1798          (E) managing general agent license; or
             1799          (F) reinsurance intermediary license; or
             1800          (ii) a licensed:
             1801          (A) individual or agency producer;
             1802          (B) limited line producer;
             1803          (C) customer service representative;
             1804          (D) consultant;
             1805          (E) managing general agent; or
             1806          (F) reinsurance intermediary.
             1807          (b) A person described in Subsection (2)(a) shall report to the commissioner:
             1808          (i) [any] an administrative action taken against the person:
             1809          (A) in another jurisdiction; or
             1810          (B) by another regulatory agency in this state; and
             1811          (ii) [any] a criminal prosecution taken against the person in any jurisdiction.
             1812          (c) The report required by Subsection (2)(b) shall:
             1813          (i) be filed:
             1814          (A) at the time the person files the application for an individual or agency license; and
             1815          (B) for an action or prosecution that occurs on or after the day on which the person
             1816      files the application:
             1817          (I) for an administrative action, within 30 days of the final disposition of the
             1818      administrative action; or
             1819          (II) for a criminal prosecution, within 30 days of the initial appearance before a court;
             1820      and
             1821          (ii) include a copy of the complaint or other relevant legal documents related to the


             1822      action or prosecution described in Subsection (2)(b).
             1823          (3) (a) The department may require a person applying for a license or for consent to
             1824      engage in the business of insurance to submit to a criminal background check as a condition
             1825      of receiving a license or consent.
             1826          (b) A person, if required to submit to a criminal background check under Subsection
             1827      (3)(a), shall:
             1828          (i) submit a fingerprint card in a form acceptable to the department; and
             1829          (ii) consent to a fingerprint background check by:
             1830          (A) the Utah Bureau of Criminal Identification; and
             1831          (B) the Federal Bureau of Investigation.
             1832          (c) For a person who submits a fingerprint card and consents to a fingerprint
             1833      background check under Subsection (3)(b), the department may request:
             1834          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             1835      2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             1836          (ii) complete Federal Bureau of Investigation criminal background checks through the
             1837      national criminal history system.
             1838          (d) Information obtained by the department from the review of criminal history
             1839      records received under this Subsection (3) shall be used by the department for the purposes of:
             1840          (i) determining if a person satisfies the character requirements under Section
             1841      31A-23a-107 for issuance or renewal of a license;
             1842          (ii) determining if a person has failed to maintain the character requirements under
             1843      Section 31A-23a-107 ; and
             1844          (iii) preventing [persons] a person who [violate] violates the federal Violent Crime
             1845      Control and Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in
             1846      the business of insurance in the state.
             1847          (e) If the department requests the criminal background information, the department
             1848      shall:
             1849          (i) pay to the Department of Public Safety the costs incurred by the Department of


             1850      Public Safety in providing the department criminal background information under Subsection
             1851      (3)(c)(i);
             1852          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             1853      of Investigation in providing the department criminal background information under
             1854      Subsection (3)(c)(ii); and
             1855          (iii) charge the person applying for a license[, for renewal of a license,] or for consent
             1856      to engage in the business of insurance a fee equal to the aggregate of Subsections (3)(e)(i) and
             1857      (ii).
             1858          (4) To become a resident licensee in accordance with Section 31A-23a-104 and this
             1859      section, a person licensed as one of the following in another state who moves to this state shall
             1860      apply within 90 days of establishing legal residence in this state:
             1861          (a) insurance producer;
             1862          (b) limited line producer;
             1863          (c) customer service representative;
             1864          (d) consultant;
             1865          (e) managing general agent; or
             1866          (f) reinsurance intermediary.
             1867          (5) (a) The commissioner may deny a license application for a license listed in
             1868      Subsection (5)(b) if the person applying for the license, as to the license type and line of
             1869      authority classification applied for under Section 31A-23a-106 :
             1870          (i) fails to satisfy the requirements as set forth in this section; or
             1871          (ii) commits an act that is grounds for denial, suspension, or revocation as set forth in
             1872      Section 31A-23a-111 .
             1873          (b) This Subsection (5) applies to the following licenses:
             1874          (i) producer;
             1875          (ii) limited line producer;
             1876          (iii) customer service representative;
             1877          (iv) consultant;


             1878          (v) managing general agent; or
             1879          (vi) reinsurance intermediary.
             1880          [(5)] (6) Notwithstanding the other provisions of this section, the commissioner may:
             1881          (a) issue a license to an applicant for a license for a title insurance line of authority
             1882      only with the concurrence of the Title and Escrow Commission; and
             1883          (b) renew a license for a title insurance line of authority only with the concurrence of
             1884      the Title and Escrow Commission.
             1885          Section 12. Section 31A-23a-106 is amended to read:
             1886           31A-23a-106. License types.
             1887          (1) (a) A resident or nonresident license issued under this chapter shall be issued under
             1888      the license types described under Subsection (2).
             1889          (b) [License types] A license type and [lines] a line of authority pertaining to [each] a
             1890      license type describe the type of licensee and the lines of business that a licensee may sell,
             1891      solicit, or negotiate. [License types are] A license type is intended to describe the matters to
             1892      be considered under any education, examination, and training required of a license
             1893      [applicants] applicant under Sections 31A-23a-108 , 31A-23a-202 , and 31A-23a-203 .
             1894          (2) (a) A producer license type includes the following lines of authority:
             1895          (i) life insurance, including a nonvariable [contracts] contract;
             1896          (ii) variable contracts, including variable life and annuity, if the producer has the life
             1897      insurance line of authority;
             1898          (iii) accident and health insurance, including [contracts] a contract issued to
             1899      [policyholders] a policyholder under Chapter 7, Nonprofit Health Service Insurance
             1900      Corporations, or Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1901          (iv) property insurance;
             1902          (v) casualty insurance, including a surety [and] or other [bonds] bond;
             1903          (vi) title insurance under one or more of the following categories:
             1904          (A) search, including authority to act as a title marketing representative;
             1905          (B) escrow, including authority to act as a title marketing representative; and


             1906          [(C) search and escrow, including authority to act as a title marketing representative;
             1907      and]
             1908          [(D)] (C) title marketing representative only;
             1909          [(vii) workers' compensation insurance;]
             1910          [(viii)] (vii) personal lines insurance; and
             1911          [(ix)] (viii) surplus lines, if the producer has the property or casualty or both lines of
             1912      authority.
             1913          (b) A limited line producer license type includes the following limited lines of
             1914      authority:
             1915          (i) limited line credit insurance;
             1916          (ii) travel insurance;
             1917          (iii) motor club insurance;
             1918          (iv) car rental related insurance;
             1919          (v) legal expense insurance; [and]
             1920          (vi) crop insurance;
             1921          (vii) self-service storage insurance; and
             1922          [(vi)] (viii) bail bond producer.
             1923          (c) A customer service representative license type includes the following lines of
             1924      authority, if held by the customer service representative's employer producer:
             1925          (i) life insurance, including a nonvariable [contracts] contract;
             1926          (ii) accident and health insurance, including [contracts] a contract issued to
             1927      [policyholders] a policyholder under Chapter 7, Nonprofit Health Service Insurance
             1928      Corporations, or Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1929          (iii) property insurance;
             1930          (iv) casualty insurance, including a surety [and] or other [bonds;] bond;
             1931          [(v) workers' compensation insurance;]
             1932          [(vi)] (v) personal lines insurance; and
             1933          [(vii)] (vi) surplus lines, if the employer producer has the property or casualty or both


             1934      lines of authority.
             1935          (d) A consultant license type includes the following lines of authority:
             1936          (i) life insurance, including a nonvariable [contracts] contract;
             1937          (ii) variable contracts, including variable life and annuity, if the consultant has the life
             1938      insurance line of authority;
             1939          (iii) accident and health insurance, including [contracts] a contract issued to
             1940      [policyholders] a policyholder under Chapter 7, Nonprofit Health Service Insurance
             1941      Corporations, or Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1942          (iv) property insurance;
             1943          (v) casualty insurance, including a surety [and] or other [bonds;] bond; and
             1944          [(vi) workers' compensation insurance; and]
             1945          [(vii)] (vi) personal lines insurance.
             1946          (e) A managing general agent license type includes the following lines of authority:
             1947          (i) life insurance, including a nonvariable [contracts] contract;
             1948          (ii) variable contracts, including variable life and annuity, if the managing general
             1949      agent has the life insurance line of authority;
             1950          (iii) accident and health insurance, including [contracts] a contract issued to
             1951      [policyholders] a policyholder under Chapter 7, Nonprofit Health Service Insurance
             1952      Corporations, or Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1953          (iv) property insurance;
             1954          (v) casualty insurance, including a surety [and] or other [bonds;] bond; and
             1955          [(vi) workers' compensation insurance; and]
             1956          [(vii)] (vi) personal lines insurance.
             1957          (f) A reinsurance intermediary license type includes the following lines of authority:
             1958          (i) life insurance, including a nonvariable [contracts] contract;
             1959          (ii) variable contracts, including variable life and annuity, if the reinsurance
             1960      intermediary has the life insurance line of authority;
             1961          (iii) accident and health insurance, including [contracts] a contract issued to


             1962      [policyholders] a policyholder under Chapter 7, Nonprofit Health Service Insurance
             1963      Corporations, or Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1964          (iv) property insurance;
             1965          (v) casualty insurance, including a surety [and] or other [bonds;] bond; and
             1966          [(vi) workers' compensation insurance; and]
             1967          [(vii)] (vi) personal lines insurance.
             1968          (g) A holder of licenses under Subsections (2)(a), (d), (e), and (f) has all qualifications
             1969      necessary to act as a holder of a license under Subsections (2)(b) and (c).
             1970          (3) (a) The commissioner may by rule recognize other producer, limited line producer,
             1971      customer service representative, consultant, managing general agent, or reinsurance
             1972      intermediary lines of authority as to kinds of insurance not listed under Subsections (2)(a)
             1973      through (f).
             1974          (b) Notwithstanding Subsection (3)(a), for purposes of title insurance the Title and
             1975      Escrow Commission may by rule, with the concurrence of the commissioner and subject to
             1976      Section 31A-2-404 , recognize other categories for a title insurance producer line of authority
             1977      not listed under Subsection (2)(a)(vi).
             1978          (4) The variable contracts, including variable life and annuity line of authority
             1979      requires:
             1980          (a) licensure as a registered agent or broker by the National Association of Securities
             1981      Dealers; and
             1982          (b) current registration with a securities [broker/dealer] broker-dealer.
             1983          (5) A surplus lines producer is a producer who has a surplus lines line of authority.
             1984          Section 13. Section 31A-23a-111 is amended to read:
             1985           31A-23a-111. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             1986      terminating a license -- Rulemaking for renewal or reinstatement.
             1987          (1) A license type issued under this chapter remains in force until:
             1988          (a) revoked or suspended under Subsection (5);
             1989          (b) surrendered to the commissioner and accepted by the commissioner in lieu of


             1990      administrative action;
             1991          (c) the licensee dies or is adjudicated incompetent as defined under:
             1992          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             1993          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             1994      Minors;
             1995          (d) lapsed under Section 31A-23a-113 ; or
             1996          (e) voluntarily surrendered.
             1997          (2) The following may be reinstated within one year after the day on which the license
             1998      is [inactivated] no longer in force:
             1999          (a) a lapsed license; or
             2000          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             2001      not be reinstated after the license period in which the license is voluntarily surrendered.
             2002          (3) Unless otherwise stated in the written agreement for the voluntary surrender of a
             2003      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             2004      department from pursuing additional disciplinary or other action authorized under:
             2005          (a) this title; or
             2006          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             2007      Administrative Rulemaking Act.
             2008          (4) A line of authority issued under this chapter remains in force until:
             2009          (a) the qualifications pertaining to a line of authority are no longer met by the licensee;
             2010      or
             2011          (b) the supporting license type:
             2012          (i) is revoked or suspended under Subsection (5); [or]
             2013          (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
             2014      administrative action[.];
             2015          (iii) the licensee dies or is adjudicated incompetent as defined under:
             2016          (A) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             2017          (B) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and


             2018      Minors;
             2019          (iv) lapsed under Section 31A-23a-113 ; or
             2020          (v) voluntarily surrendered.
             2021          (5) (a) If the commissioner makes a finding under Subsection (5)(b), [after] as part of
             2022      an adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             2023      commissioner may:
             2024          (i) revoke:
             2025          (A) a license; or
             2026          (B) a line of authority;
             2027          (ii) suspend for a specified period of 12 months or less:
             2028          (A) a license; or
             2029          (B) a line of authority; [or]
             2030          (iii) limit in whole or in part:
             2031          (A) a license; or
             2032          (B) a line of authority[.]; or
             2033          (iv) deny a license application.
             2034          (b) The commissioner may take an action described in Subsection (5)(a) if the
             2035      commissioner finds that the licensee:
             2036          (i) is unqualified for a license or line of authority under [Sections] Section
             2037      31A-23a-104 [and], 31A-23a-105 , or 31A-23a-107 ;
             2038          (ii) violates:
             2039          (A) an insurance statute;
             2040          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             2041          (C) an order that is valid under Subsection 31A-2-201 (4);
             2042          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
             2043      delinquency proceedings in any state;
             2044          (iv) fails to pay [any] a final judgment rendered against the person in this state within
             2045      60 days after the day on which the judgment became final;


             2046          (v) fails to meet the same good faith obligations in claims settlement that is required of
             2047      admitted insurers;
             2048          (vi) is affiliated with and under the same general management or interlocking
             2049      directorate or ownership as another insurance producer that transacts business in this state
             2050      without a license;
             2051          (vii) refuses:
             2052          (A) to be examined; or
             2053          (B) to produce its accounts, records, and files for examination;
             2054          (viii) has an officer who refuses to:
             2055          (A) give information with respect to the insurance producer's affairs; or
             2056          (B) perform any other legal obligation as to an examination;
             2057          (ix) provides information in the license application that is:
             2058          (A) incorrect;
             2059          (B) misleading;
             2060          (C) incomplete; or
             2061          (D) materially untrue;
             2062          (x) violates an insurance law, valid rule, or valid order of another state's insurance
             2063      department;
             2064          (xi) obtains or attempts to obtain a license through misrepresentation or fraud;
             2065          (xii) improperly withholds, misappropriates, or converts [any] monies or properties
             2066      received in the course of doing insurance business;
             2067          (xiii) intentionally misrepresents the terms of an actual or proposed:
             2068          (A) insurance contract;
             2069          (B) application for insurance; or
             2070          (C) viatical settlement;
             2071          (xiv) is convicted of a felony;
             2072          (xv) admits or is found to have committed an insurance unfair trade practice or fraud;
             2073          (xvi) in the conduct of business in this state or elsewhere:


             2074          (A) uses fraudulent, coercive, or dishonest practices; or
             2075          (B) demonstrates incompetence, untrustworthiness, or financial irresponsibility;
             2076          (xvii) has an insurance license, or its equivalent, denied, suspended, or revoked in
             2077      another state, province, district, or territory;
             2078          (xviii) forges another's name to:
             2079          (A) an application for insurance; or
             2080          (B) a document related to an insurance transaction;
             2081          (xix) improperly uses notes or another reference material to complete an examination
             2082      for an insurance license;
             2083          (xx) knowingly accepts insurance business from an individual who is not licensed;
             2084          (xxi) fails to comply with an administrative or court order imposing a child support
             2085      obligation;
             2086          (xxii) fails to:
             2087          (A) pay state income tax; or
             2088          (B) comply with an administrative or court order directing payment of state income
             2089      tax;
             2090          (xxiii) violates or permits others to violate the federal Violent Crime Control and Law
             2091      Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034; or
             2092          (xxiv) engages in a method or practice in the conduct of business that endangers the
             2093      legitimate interests of customers and the public.
             2094          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             2095      and any [natural person named on] individual designated under the license are considered to
             2096      be the holders of the license.
             2097          (d) If [a natural person named on] an individual designated under the agency license
             2098      commits an act or fails to perform a duty that is a ground for suspending, revoking, or limiting
             2099      the [natural person's] individual's license, the commissioner may suspend, revoke, or limit the
             2100      license of:
             2101          (i) the [natural person] individual;


             2102          (ii) the agency, if the agency:
             2103          (A) is reckless or negligent in its supervision of the [natural person] individual; or
             2104          (B) knowingly participates in the act or failure to act that is the ground for suspending,
             2105      revoking, or limiting the license; or
             2106          (iii) (A) the [natural person] individual; and
             2107          (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
             2108          (6) A licensee under this chapter is subject to the penalties for acting as a licensee
             2109      without a license if:
             2110          (a) the licensee's license is:
             2111          (i) revoked;
             2112          (ii) suspended;
             2113          (iii) limited;
             2114          (iv) surrendered in lieu of administrative action;
             2115          (v) lapsed; or
             2116          (vi) voluntarily surrendered; and
             2117          (b) the licensee:
             2118          (i) continues to act as a licensee; or
             2119          (ii) violates the terms of the license limitation.
             2120          (7) A licensee under this chapter shall immediately report to the commissioner:
             2121          (a) a revocation, suspension, or limitation of the person's license in another state, the
             2122      District of Columbia, or a territory of the United States;
             2123          (b) the imposition of a disciplinary sanction imposed on that person by another state,
             2124      the District of Columbia, or a territory of the United States; or
             2125          (c) a judgment or injunction entered against that person on the basis of conduct
             2126      involving:
             2127          (i) fraud;
             2128          (ii) deceit;
             2129          (iii) misrepresentation; or


             2130          (iv) a violation of an insurance law or rule.
             2131          (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender
             2132      a license in lieu of administrative action may specify a time, not to exceed five years, within
             2133      which the former licensee may not apply for a new license.
             2134          (b) If no time is specified in [the] an order or agreement described in Subsection
             2135      (8)(a), the former licensee may not apply for a new license for five years from the day on
             2136      which the order or agreement is made without the express approval by the commissioner.
             2137          (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
             2138      a license issued under this part if so ordered by a court.
             2139          (10) The commissioner shall by rule prescribe the license renewal and reinstatement
             2140      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2141          Section 14. Section 31A-23a-113 is amended to read:
             2142           31A-23a-113. License lapse and voluntary surrender.
             2143          (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
             2144          (i) pay when due a fee under Section 31A-3-103 ;
             2145          (ii) complete continuing education requirements under Section 31A-23a-202 before
             2146      submitting the license renewal application;
             2147          (iii) submit a completed renewal application as required by Section 31A-23a-104 ;
             2148          (iv) submit additional documentation required to complete the licensing process as
             2149      related to a specific license type or line of authority; or
             2150          (v) maintain an active license in a resident state if the licensee is a nonresident
             2151      licensee.
             2152          (b) (i) A licensee whose license lapses due to the following may request an action
             2153      described in Subsection (1)(b)(ii):
             2154          (A) military service;
             2155          (B) voluntary service for a period of time designated by the person for whom the
             2156      licensee provides voluntary service; or
             2157          (C) some other extenuating circumstances, such as long-term medical disability.


             2158          (ii) A licensee described in Subsection (1)(b)(i) may request:
             2159          (A) reinstatement of the license no later than one year after the day on which the
             2160      license lapses; and
             2161          (B) waiver of any of the following imposed for failure to comply with renewal
             2162      procedures:
             2163          (I) an examination requirement;
             2164          (II) reinstatement fees set under Section 31A-3-103 ;
             2165          (III) continuing education requirements; or
             2166          (IV) other sanction imposed for failure to comply with renewal procedures.
             2167          (2) If a license [type or line of authority] issued under this chapter is voluntarily
             2168      surrendered, the license or line of authority may be reinstated [within one year]:
             2169          (a) during the license period in which the license is voluntarily surrendered; and
             2170          (b) no later than one year after the day on which the license [or line of authority is
             2171      inactivated] is voluntarily surrendered.
             2172          Section 15. Section 31A-23a-115 is amended to read:
             2173           31A-23a-115. Appointment of individual and agency insurance producer, limited
             2174      line producer, or managing general agent -- Reports and lists.
             2175          (1) (a) An insurer shall appoint [a natural person] an individual or agency [that has an]
             2176      with whom it has a contract as an insurance producer, limited line producer, or managing
             2177      general agent [license] to act [as an insurance producer, limited line producer, or managing
             2178      general agent on the insurer's behalf prior to any producer, limited line producer, or managing
             2179      general agent doing] on the insurer's behalf in order for the licensee to do business for the
             2180      insurer in this state.
             2181          (b) An insurer shall report to the commissioner, at intervals and in the form the
             2182      commissioner establishes by rule:
             2183          (i) [all] a new [appointments] appointment; and
             2184          [(ii) all terminations of appointments.]
             2185          (ii) a termination of appointment.


             2186          (2) (a) (i) An insurer shall report to the commissioner the cause of termination of an
             2187      appointment[.] if:
             2188          (A) the reason for termination is a reason described in Subsection 31A-23a-111 (5)(b);
             2189      or
             2190          (B) the insurer has knowledge that the individual or agency licensee is found to have
             2191      engaged in an activity described in Subsection 31A-23a-111 (5)(b) by:
             2192          (I) a court;
             2193          (II) a government body; or
             2194          (III) a self-regulatory organization, which the commissioner may define by rule made
             2195      in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2196          (ii) The information provided to the commissioner under this Subsection (2) is a
             2197      private record under Title 63G, Chapter 2, Government Records Access and Management Act.
             2198          (b) An insurer is immune from civil action, civil penalty, or damages if the insurer
             2199      complies in good faith with this Subsection (2) in reporting to the commissioner the cause of
             2200      termination of an appointment.
             2201          (c) Notwithstanding any other provision in this section, an insurer is not immune from
             2202      any action or resulting penalty imposed on the reporting insurer as a result of proceedings
             2203      brought by or on behalf of the department if the action is based on evidence other than the
             2204      report submitted in compliance with this Subsection (2).
             2205          (3) If an insurer appoints an agency, the insurer need not appoint, report, or pay
             2206      appointment reporting fees for [natural persons] an individual designated on the agency's
             2207      license under Section 31A-23a-302 .
             2208          (4) If an insurer lists a licensee in a report submitted under Subsection (2), there is a
             2209      rebuttable presumption that in placing a risk with the insurer the appointed licensee or any of
             2210      the licensee's licensed employees [acted] act on behalf of the insurer.
             2211          Section 16. Section 31A-23a-203 is amended to read:
             2212           31A-23a-203. Training period requirements.
             2213          (1) A producer is eligible to add the surplus lines of authority to the person's


             2214      producer's license if the producer:
             2215          (a) has passed the applicable examination;
             2216          (b) has been a producer with property and casualty lines of authority for at least three
             2217      years during the four years immediately preceding the date of application; and
             2218          (c) has paid the applicable fee under Section 31A-3-103 .
             2219          (2) A person is eligible to become a consultant only if the person has acted in a
             2220      capacity that would provide the person with preparation to act as an insurance consultant for a
             2221      period aggregating not less than three years during the four years immediately preceding the
             2222      date of application.
             2223          (3) The training periods required under this section apply only to [natural persons] an
             2224      individual applying for [licenses] a license under this chapter.
             2225          Section 17. Section 31A-23a-204 is amended to read:
             2226           31A-23a-204. Special requirements for title insurance producers and agencies.
             2227          A title insurance producer, including an agency, shall be licensed in accordance with
             2228      this chapter, with the additional requirements listed in this section.
             2229          (1) (a) A person that receives a new license under this title [on or after July 1, 2007] as
             2230      a title insurance agency, shall at the time of licensure be owned or managed by one or more
             2231      [natural persons] individuals who are licensed [with the following lines of authority] for at
             2232      least three of the five years immediately proceeding the date on which the title insurance
             2233      agency applies for a license[: (i)] with both [a]:
             2234          [(A)] (i) a search line of authority; and
             2235          [(B)] (ii) an escrow line of authority[; or].
             2236          [(ii) a search and escrow line of authority.]
             2237          (b) A title insurance agency subject to Subsection (1)(a) may comply with Subsection
             2238      (1)(a) by having the title insurance agency owned or managed by:
             2239          (i) one or more [natural persons] individuals who are licensed with the search line of
             2240      authority for the time period provided in Subsection (1)(a); and
             2241          (ii) one or more [natural persons] individuals who are licensed with the escrow line of


             2242      authority for the time period provided in Subsection (1)(a).
             2243          (c) The Title and Escrow Commission may by rule, subject to Section 31A-2-404 ,
             2244      exempt an attorney with real estate experience from the experience requirements in Subsection
             2245      (1)(a).
             2246          (2) (a) A title insurance agency or producer appointed by an insurer shall maintain:
             2247          (i) a fidelity bond;
             2248          (ii) a professional liability insurance policy; or
             2249          (iii) a financial protection:
             2250          (A) equivalent to that described in Subsection (2)(a)(i) or (ii); and
             2251          (B) that the commissioner considers adequate.
             2252          (b) The bond, insurance, or financial protection required by this Subsection (2):
             2253          (i) shall be supplied under a contract approved by the commissioner to provide
             2254      protection against the improper performance of any service in conjunction with the issuance of
             2255      a contract or policy of title insurance; and
             2256          (ii) be in a face amount no less than $50,000.
             2257          (c) The Title and Escrow Commission may by rule, subject to Section 31A-2-404 ,
             2258      exempt title insurance producers from the requirements of this Subsection (2) upon a finding
             2259      that, and only so long as, the required policy or bond is generally unavailable at reasonable
             2260      rates.
             2261          (3) [(a)] A title insurance agency or producer appointed by an insurer [shall] may
             2262      maintain a reserve fund to the extent [required by this Subsection (3)] monies were deposited
             2263      before July 1, 2008, and not withdrawn to the income of the title insurance producer.
             2264          [(b) On or after July 1, 2008, a title insurance agency or producer may not deposit
             2265      monies to a reserve fund required by this Subsection (3).]
             2266          [(c) On or after July 1, 2008, a title insurance agency or producer for the portion of the
             2267      assets held in the reserve fund over the preceding ten years may:]
             2268          [(i) withdraw from the reserve fund in accordance with a time schedule adopted by the
             2269      title insurance agency or producer that allows:]


             2270          [(A) all the monies to be withdrawn in one year; or]
             2271          [(B) the monies to be withdrawn in equal partial withdrawals of principal over a time
             2272      period of two years, three years, four years, five years, or ten years; and]
             2273          [(ii) restore the amounts withdrawn to the income of the title insurance producer.]
             2274          [(d) The title insurance producer may withdraw interest from the reserve fund related
             2275      to the principal amount as it accrues.]
             2276          [(e) (i) A disbursement may not be made from the reserve fund except as provided in
             2277      Subsection (3)(c) unless the title insurance producer ceases doing business as a result of:]
             2278          [(A) a sale of assets;]
             2279          [(B) a merger of the producer with another producer;]
             2280          [(C) a termination of the producer's license;]
             2281          [(D) an insolvency; or]
             2282          [(E) any cessation of business by the producer.]
             2283          [(ii) A disbursement from the reserve fund may be made only to settle a claim arising
             2284      from the improper performance of the title insurance producer in providing services defined in
             2285      Section 31A-23a-406 .]
             2286          [(iii) The commissioner shall be notified ten days before any disbursement from the
             2287      reserve fund.]
             2288          [(iv) The notice required by this Subsection (3)(e) shall contain:]
             2289          [(A) the amount of claim;]
             2290          [(B) the nature of the claim; and]
             2291          [(C) the name of the payee.]
             2292          [(f) (i) Except as provided in Subsection (3)(c), the reserve fund shall be maintained by
             2293      the title insurance producer or the title insurance producer's representative for a period of two
             2294      years after the day on which the title insurance producer ceases doing business.]
             2295          [(ii) Any assets remaining in the reserve fund at the end of the two years specified in
             2296      Subsection (3)(c)(i) may be withdrawn and restored to the former title insurance producer.]
             2297          (4) [Any] An examination for licensure shall include questions regarding the search


             2298      and examination of title to real property.
             2299          (5) A title insurance producer may not perform the functions of escrow unless the title
             2300      insurance producer has been examined on the fiduciary duties and procedures involved in
             2301      those functions.
             2302          (6) The Title and Escrow Commission shall adopt rules, subject to Section 31A-2-404 ,
             2303      after consulting with the department and the department's test administrator, establishing an
             2304      examination for a license that will satisfy this section.
             2305          (7) A license may be issued to a title insurance producer who has qualified:
             2306          (a) to perform only searches and examinations of title as specified in Subsection (4);
             2307          (b) to handle only escrow arrangements as specified in Subsection (5); or
             2308          (c) to act as a title marketing representative.
             2309          (8) (a) A person licensed to practice law in Utah is exempt from the requirements of
             2310      Subsections (2) and (3) if that person issues 12 or less policies in any 12-month period.
             2311          (b) In determining the number of policies issued by a person licensed to practice law
             2312      in Utah for purposes of Subsection (8)(a), if the person licensed to practice law in Utah issues
             2313      a policy to more than one party to the same closing, the person is considered to have issued
             2314      only one policy.
             2315          (9) A person licensed to practice law in Utah, whether exempt under Subsection (8) or
             2316      not, shall maintain a trust account separate from a law firm trust account for all title and real
             2317      estate escrow transactions.
             2318          Section 18. Section 31A-23a-302 is amended to read:
             2319           31A-23a-302. Agency designations.
             2320          (1) An agency shall designate [a natural person] an individual that has [a] an
             2321      individual producer, limited line producer, customer service representative, consultant,
             2322      managing general agent, or reinsurance intermediary license to act on [its] the agency's behalf
             2323      [prior to] in order for the licensee [doing] to do business for the agency in this state.
             2324          (2) An agency shall report to the commissioner, at intervals and in the form the
             2325      commissioner establishes by rule:


             2326          (a) [all] a new [designations] designation; and
             2327          (b) [all] a terminated [designations] designation.
             2328          (3) (a) An agency licensed under this chapter shall report to the commissioner the
             2329      cause of termination of a designation[.] if:
             2330          (i) the reason for termination is a reason described in Subsection 31A-23a-111 (5)(b);
             2331      or
             2332          (ii) the agency has knowledge that the individual licensee is found to have engaged in
             2333      an activity described in Subsection 31A-23a-111 (5)(b) by:
             2334          (A) a court;
             2335          (B) a government body; or
             2336          (C) a self-regulatory organization, which the commissioner may define by rule made
             2337      in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2338          (b) The information provided the commissioner under Subsection (3)(a) is a private
             2339      record under Title 63G, Chapter 2, Government Records Access and Management Act.
             2340          (c) An agency is immune from civil action, civil penalty, or damages if the agency
             2341      complies in good faith with this Subsection (3) in reporting to the commissioner the cause of
             2342      termination of a designation.
             2343          (d) Notwithstanding any other provision in this section, an agency is not immune from
             2344      [any] an action or resulting penalty imposed on the reporting agency as a result of proceedings
             2345      brought by or on behalf of the department if the action is based on evidence other than the
             2346      report submitted in compliance with this Subsection (3).
             2347          (4) An agency licensed under this chapter may act in [the capacities] a capacity for
             2348      which it is licensed only through [natural persons who are] an individual who is licensed under
             2349      this chapter to act in the same [capacities] capacity.
             2350          (5) An agency licensed under this chapter shall designate and report to the
             2351      commissioner [by rule] in accordance with any rule made by the commissioner the name of [at
             2352      least one natural person] the designated responsible licensed individual who has authority to
             2353      act on behalf of the agency in all matters pertaining to compliance with this title and orders of


             2354      the commissioner.
             2355          (6) If an agency designates a licensee in reports submitted under Subsection (2) or (5),
             2356      there is a rebuttable presumption that the designated licensee [acted] acts on behalf of the
             2357      agency.
             2358          (7) (a) When a license is held by an agency, both the agency itself and any individual
             2359      designated under the agency license shall be considered to be the holder of the agency license
             2360      for purposes of this section.
             2361          (b) If an individual designated under the agency license commits an act or fails to
             2362      perform a duty that is a ground for suspending, revoking, or limiting the agency license, the
             2363      commissioner may suspend, revoke, or limit the license of:
             2364          (i) the individual;
             2365          (ii) the agency, if the agency:
             2366          (A) is reckless or negligent in its supervision of the individual; or
             2367          (B) knowingly participates in the act or failure to act that is the ground for suspending,
             2368      revoking, or limiting the license; or
             2369          (iii) (A) the individual; and
             2370          (B) the agency if the agency meets the requirements of Subsection (7)(b)(ii).
             2371          Section 19. Section 31A-23a-409 is amended to read:
             2372           31A-23a-409. Trust obligation for monies collected.
             2373          (1) (a) [Every] Subject to Subsection (7), a licensee is a trustee for [all funds] monies
             2374      received or collected for forwarding to insurers or to insureds.
             2375          (b) (i) Except [for amounts necessary to pay bank charges, and except for funds paid
             2376      by insureds and belonging in part to the licensee as fees or commissions] as provided in
             2377      Subsection (1)(b)(ii), a licensee may not commingle trust funds with:
             2378          [(i)] (A) the licensee's own [funds] monies; or
             2379          [(ii) funds] (B) monies held in any other capacity.
             2380          (ii) This Subsection (1)(b) does not apply to:
             2381          (A) amounts necessary to pay bank charges; and


             2382          (B) monies paid by insureds and belonging in part to the licensee as a fee or
             2383      commission.
             2384          (c) Except as provided under Subsection (4), [every] a licensee owes to insureds and
             2385      insurers the fiduciary duties of a trustee with respect to money to be forwarded to insurers or
             2386      insureds through the licensee.
             2387          (d) (i) Unless [the funds] monies are sent to the appropriate payee by the close of the
             2388      next business day after their receipt, the licensee shall deposit them in an account authorized
             2389      under Subsection (2).
             2390          (ii) [Funds] Monies deposited under this Subsection (1)(d) shall remain in an account
             2391      authorized under Subsection (2) until sent to the appropriate payee.
             2392          (2) [Funds] Monies required to be deposited under Subsection (1) shall be deposited:
             2393          (a) in a federally insured trust account in a depository institution, as defined in Section
             2394      7-1-103 , which:
             2395          (i) has an office in this state, if the licensee depositing the monies is a resident
             2396      licensee;
             2397          (ii) has federal deposit insurance; and
             2398          (iii) is authorized by its primary regulator to engage in the trust business, as defined by
             2399      Section 7-5-1 , in this state; or
             2400          (b) in some other account, approved by the commissioner by rule or order, providing
             2401      safety comparable to federally insured trust accounts.
             2402          (3) It is not a violation of Subsection (2)(a) if the amounts in the accounts exceed the
             2403      amount of the federal insurance on the accounts.
             2404          (4) A trust account into which [funds] monies are deposited may be interest bearing.
             2405      The interest accrued on the account may be paid to the licensee, so long as the licensee
             2406      otherwise complies with this section and with the contract with the insurer.
             2407          (5) A [financial] depository institution or other organization holding trust funds under
             2408      this section may not offset or impound trust account funds against debts and obligations
             2409      incurred by the licensee.


             2410          (6) [Any] A licensee who, not being lawfully entitled [thereto] to do so, diverts or
             2411      appropriates any portion of the [funds] monies held under Subsection (1) to the licensee's own
             2412      use, is guilty of theft under Title 76, Chapter 6, Part 4, Theft. Section 76-6-412 applies in
             2413      determining the classification of the offense. Sanctions under Section 31A-2-308 also apply.
             2414          (7) A nonresident licensee:
             2415          (a) shall comply with Subsection (1)(a) by complying with the trust account
             2416      requirements of the nonresident licensee's home state; and
             2417          (b) is not required to comply with the other provisions of this section.
             2418          Section 20. Section 31A-23a-410 is amended to read:
             2419           31A-23a-410. Insurer's liability if insured pays premium to a licensee or group
             2420      policyholder.
             2421          (1) Subject to Subsections (2) and (5), as between the insurer and the insured, the
             2422      insurer is considered to have received the premium and is liable to the insured for losses
             2423      covered by the insurance and for any unearned premiums upon cancellation of the insurance if
             2424      an insurer, including a surplus lines insurer:
             2425          (a) [has assumed] assumes a risk; and
             2426          (b) the premium for that insurance [has been] is received by:
             2427          (i) a licensee who placed the insurance;
             2428          (ii) a group policyholder;
             2429          (iii) an employer who deducts part or all of the premium from an employee's wages or
             2430      salary; or
             2431          (iv) an employer who pays all or part of the premium for an employee.
             2432          (2) Subsection (1) does not apply if:
             2433          (a) the insured pays a licensee, knowing the licensee does not intend to submit the
             2434      premium to the insurer; or
             2435          (b) the insured has premium withheld from the insured's wages or salary knowing the
             2436      employer does not intend to submit it to the insurer.
             2437          (3) (a) In the case of an employer who has received the premium by deducting all or


             2438      part of it from the wages or salaries of the certificate holders, the insurer may terminate its
             2439      liability by giving notice of coverage termination to:
             2440          (i) the certificate holders [reasonable notice of coverage termination.];
             2441          (ii) the policyholder; and
             2442          (iii) the producer, if any, for the policy.
             2443          (b) The insurer may not send the notice required by Subsection (3)(a) to a certificate
             2444      holder before 20 days after the day on which premium is due and unpaid.
             2445          (c) The liability of the insurer for the losses covered by the insurance terminates at the
             2446      later of:
             2447          [(a)] (i) the last day of the coverage period for which premium has been withheld by
             2448      the employer; [or]
             2449          [(b) 15] (ii) ten days after the date the insurer mails [actual] notice to the certificate
             2450      holder that coverage has terminated[, but in the event]; or
             2451          (iii) if the insurer fails to provide [actual] notice as required by this Subsection (3),
             2452      [then the liability of the insurer for losses described in Subsection (1) shall terminate] 45 days
             2453      from the last date for which premium [was] is received. [While the insurer shall be liable for
             2454      losses as herein provided, the provisions of this section apply only to apportion the liability for
             2455      those losses described and do not operate to extend any insurance contract policy or coverage
             2456      beyond its date of termination nor alter or amend provisions thereof.]
             2457          (4) Despite an employer's collection of premium under Subsection (1), the
             2458      responsibility of an insurer to continue to cover the losses covered by the insurance to group
             2459      policy certificate holders terminates upon the effective date of notice from the policyholder
             2460      that:
             2461          (a) coverage of a similar kind and quality has been obtained from another insurer; or
             2462          (b) the policyholder is electing to voluntarily terminate the certificate holder's
             2463      coverage and has given the employees notice of the termination.
             2464          (5) If the insurer is obligated to pay [any claims] a claim pursuant to [the provisions
             2465      of] this section, the licensee or employer who received the premium and failed to forward it


             2466      [shall be] is obligated to the insurer for the entire unpaid premium due under the policy [of
             2467      insurance] together with reasonable expenses of suit and reasonable [attorney's] attorney fees.
             2468          (6) If, under an employee health insurance plan, an employee builds up credit for
             2469      future coverage because the employee has not used the policy protection, or in some other
             2470      way, the insurer is obligated to the employee for that future coverage earned while the policy
             2471      was in full effect.
             2472          (7) (a) Notwithstanding that an insurer is liable for losses as provided in this section,
             2473      this section applies only to apportion the liability for the losses described in this section.
             2474          (b) This section does not:
             2475          (i) extend a policy or coverage beyond its date of termination; or
             2476          (ii) alter or amend a provision of a policy.
             2477          Section 21. Section 31A-23a-504 is amended to read:
             2478           31A-23a-504. Sharing commissions.
             2479          (1) (a) Except as provided in Subsection 31A-15-103 (3), a licensee under this chapter
             2480      or an insurer may only pay consideration or reimburse out-of-pocket expenses to a person if
             2481      the licensee knows that the person is licensed under this chapter as to the particular type of
             2482      insurance to act in Utah as:
             2483          (i) a producer;
             2484          (ii) a limited line producer;
             2485          (iii) a customer service representative;
             2486          (iv) a consultant;
             2487          (v) a managing general agent; or
             2488          (vi) a reinsurance intermediary.
             2489          (b) A person may only accept commission compensation or other compensation as a
             2490      person described in Subsections (1)(a)(i) through (vi) that is directly or indirectly the result of
             2491      [any] an insurance transaction if that person is licensed under this chapter to act as described
             2492      in Subsection (1)(a).
             2493          (2) (a) Except as provided in Section 31A-23a-501 , a consultant may not pay or


             2494      receive [any] a commission or other compensation that is directly or indirectly the result of
             2495      [any] an insurance transaction.
             2496          (b) A consultant may share a consultant fee or other compensation received for
             2497      consulting services performed within Utah only:
             2498          (i) with another consultant licensed under this chapter; and
             2499          (ii) to the extent that the other consultant contributed to the services performed.
             2500          (3) This section does not prohibit:
             2501          (a) the payment of renewal commissions to former licensees under this chapter, former
             2502      Title 31, Chapter 17, or their successors in interest under a deferred compensation or agency
             2503      sales agreement[.];
             2504          [(4) This section does not prohibit]
             2505          (b) compensation paid to or received by a person for referral of a potential customer
             2506      that seeks to purchase or obtain an opinion or advice on an insurance product if:
             2507          [(a)] (i) the person is not licensed to sell insurance;
             2508          [(b)] (ii) the person does not sell or provide opinions or advice on the product; and
             2509          [(c)] (iii) the compensation does not depend on whether the referral results in a
             2510      purchase or sale[.]; or
             2511          (c) the payment or assignment of a commission, service fee, brokerage, or other
             2512      valuable consideration to an agency or a person who does not sell, solicit, or negotiate
             2513      insurance in this state, unless the payment would constitute an inducement or commission
             2514      rebate under Section 31A-23a-402 .
             2515          [(5)] (4) (a) In selling a policy of title insurance, sharing of commissions under
             2516      Subsection (1) may not occur if it will result in:
             2517          (i) an unlawful rebate;
             2518          (ii) compensation in connection with controlled business; or
             2519          (iii) payment of a forwarding fee or finder's fee.
             2520          (b) A person may share compensation for the issuance of a title insurance policy only
             2521      to the extent that the person contributed to the search and examination of the title or other


             2522      services connected with the title insurance policy.
             2523          [(6)] (5) This section does not apply to a bail bond [producers] producer or bail
             2524      enforcement [agents] agent as defined in Section 31A-35-102 .
             2525          Section 22. Section 31A-25-203 is amended to read:
             2526           31A-25-203. General requirements for license issuance.
             2527          (1) The commissioner shall issue a license to act as a third party administrator to a
             2528      person who:
             2529          (a) satisfies the character requirements under Section 31A-25-204 ;
             2530          (b) satisfies the financial responsibility requirement under Section 31A-25-205 ;
             2531          (c) has not committed an act that is a ground for denial, suspension, or revocation
             2532      provided in Section 31A-25-208 ;
             2533          [(c)] (d) if a nonresident, complies with Section 31A-25-206 ; and
             2534          [(d)] (e) pays the applicable fees under Section 31A-3-103 .
             2535          [(2) The license of a third party administrator licensed under former Title 31, Chapter
             2536      15a, is continued under this chapter.]
             2537          [(3)] (2) (a) This Subsection [(3)] (2) applies to the following persons:
             2538          (i) an applicant for a third party administrator's license; or
             2539          (ii) a licensed third party administrator.
             2540          (b) A person described in Subsection [(3)] (2)(a) shall report to the commissioner:
             2541          (i) an administrative action taken against the person:
             2542          (A) in another jurisdiction; or
             2543          (B) by another regulatory agency in this state; and
             2544          (ii) a criminal prosecution taken against the person in any jurisdiction.
             2545          (c) The report required by Subsection [(3)] (2)(b) shall:
             2546          (i) be filed:
             2547          (A) at the time the person applies for a third party administrator's license; and
             2548          (B) [for] if an action or prosecution [that] occurs on or after the day on which the
             2549      person applies for a third party administrator license:


             2550          (I) for an administrative action, within 30 days of the final disposition of the
             2551      administrative action; or
             2552          (II) for a criminal prosecution, within 30 days of the initial appearance before a court;
             2553      and
             2554          (ii) include a copy of the complaint or other relevant legal documents related to the
             2555      action or prosecution described in Subsection [(3)] (2)(b).
             2556          [(4)] (3) (a) The department may require a person applying for a license or for consent
             2557      to engage in the business of insurance to submit to a criminal background check as a condition
             2558      of receiving a license or consent.
             2559          (b) A person, if required to submit to a criminal background check under Subsection
             2560      [(4)] (3)(a), shall:
             2561          (i) submit a fingerprint card in a form acceptable to the department; and
             2562          (ii) consent to a fingerprint background check by:
             2563          (A) the Utah Bureau of Criminal Identification; and
             2564          (B) the Federal Bureau of Investigation.
             2565          (c) For a person who submits a fingerprint card and consents to a fingerprint
             2566      background check under Subsection [(4)] (3)(b), the department may request concerning a
             2567      person applying for a third party administrator's license:
             2568          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             2569      2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             2570          (ii) complete Federal Bureau of Investigation criminal background checks through the
             2571      national criminal history system.
             2572          (d) Information obtained by the department from the review of criminal history
             2573      records received under this Subsection [(4)] (3) shall be used by the department for the
             2574      purposes of:
             2575          (i) determining if a person satisfies the character requirements under Section
             2576      31A-25-204 for issuance or renewal of a license;
             2577          (ii) determining if a person has failed to maintain the character requirements under


             2578      Section 31A-25-204 ; and
             2579          (iii) preventing [persons] a person who [violate] violates the federal Violent Crime
             2580      Control and Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in
             2581      the business of insurance in the state.
             2582          (e) If the department requests the criminal background information, the department
             2583      shall:
             2584          (i) pay to the Department of Public Safety the costs incurred by the Department of
             2585      Public Safety in providing the department criminal background information under Subsection
             2586      [(4)] (3)(c)(i);
             2587          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
             2588      of Investigation in providing the department criminal background information under
             2589      Subsection [(4)] (3)(c)(ii); and
             2590          (iii) charge the person applying for a license[, for renewal of a license,] or for consent
             2591      to engage in the business of insurance a fee equal to the aggregate of Subsections [(4)]
             2592      (3)(e)(i) and (ii).
             2593          (4) The commissioner may deny a license application to act as a third party
             2594      administrator to a person who:
             2595          (a) fails to satisfy the requirements of this section; or
             2596          (b) commits an act that is a ground for denial, suspension, or revocation provided in
             2597      Section 31A-25-208 .
             2598          Section 23. Section 31A-25-208 is amended to read:
             2599           31A-25-208. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             2600      terminating a license -- Rulemaking for renewal and reinstatement.
             2601          (1) A license type issued under this chapter remains in force until:
             2602          (a) revoked or suspended under Subsection (4);
             2603          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             2604      administrative action;
             2605          (c) the licensee dies or is adjudicated incompetent as defined under:


             2606          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             2607          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             2608      Minors;
             2609          (d) lapsed under Section 31A-25-210 ; or
             2610          (e) voluntarily surrendered.
             2611          (2) The following may be reinstated within one year after the day on which the license
             2612      is [inactivated] no longer in force:
             2613          (a) a lapsed license; or
             2614          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             2615      not be reinstated after the license period in which the license is voluntarily surrendered.
             2616          (3) Unless otherwise stated in the written agreement for the voluntary surrender of a
             2617      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             2618      department from pursuing additional disciplinary or other action authorized under:
             2619          (a) this title; or
             2620          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             2621      Administrative Rulemaking Act.
             2622          (4) (a) If the commissioner makes a finding under Subsection (4)(b), [after] as part of
             2623      an adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             2624      commissioner may:
             2625          (i) revoke a license;
             2626          (ii) suspend a license for a specified period of 12 months or less; [or]
             2627          (iii) limit a license in whole or in part[.]; or
             2628          (iv) deny a license application.
             2629          (b) The commissioner may take an action described in Subsection (4)(a) if the
             2630      commissioner finds that the licensee:
             2631          (i) is unqualified for a license under [Sections] Section 31A-25-202 [and],
             2632      31A-25-203 , or 31A-25-204 ;
             2633          (ii) has violated:


             2634          (A) an insurance statute;
             2635          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             2636          (C) an order that is valid under Subsection 31A-2-201 (4);
             2637          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
             2638      delinquency proceedings in any state;
             2639          (iv) fails to pay [any] a final judgment rendered against the person in this state within
             2640      60 days after the day on which the judgment became final;
             2641          (v) fails to meet the same good faith obligations in claims settlement that is required of
             2642      admitted insurers;
             2643          (vi) is affiliated with and under the same general management or interlocking
             2644      directorate or ownership as another third party administrator that transacts business in this
             2645      state without a license;
             2646          (vii) refuses:
             2647          (A) to be examined; or
             2648          (B) to produce its accounts, records, and files for examination;
             2649          (viii) has an officer who refuses to:
             2650          (A) give information with respect to the third party administrator's affairs; or
             2651          (B) perform any other legal obligation as to an examination;
             2652          (ix) provides information in the license application that is:
             2653          (A) incorrect;
             2654          (B) misleading;
             2655          (C) incomplete; or
             2656          (D) materially untrue;
             2657          (x) has violated an insurance law, valid rule, or valid order of another state's insurance
             2658      department;
             2659          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             2660          (xii) has improperly withheld, misappropriated, or converted [any] monies or
             2661      properties received in the course of doing insurance business;


             2662          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             2663          (A) insurance contract; or
             2664          (B) application for insurance;
             2665          (xiv) has been convicted of a felony;
             2666          (xv) has admitted or been found to have committed [any] an insurance unfair trade
             2667      practice or fraud;
             2668          (xvi) in the conduct of business in this state or elsewhere has:
             2669          (A) used fraudulent, coercive, or dishonest practices; or
             2670          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             2671          (xvii) has had an insurance license or its equivalent, denied, suspended, or revoked in
             2672      any other state, province, district, or territory;
             2673          (xviii) has forged another's name to:
             2674          (A) an application for insurance; or
             2675          (B) a document related to an insurance transaction;
             2676          (xix) has improperly used notes or any other reference material to complete an
             2677      examination for an insurance license;
             2678          (xx) has knowingly accepted insurance business from an individual who is not
             2679      licensed;
             2680          (xxi) has failed to comply with an administrative or court order imposing a child
             2681      support obligation;
             2682          (xxii) has failed to:
             2683          (A) pay state income tax; or
             2684          (B) comply with [any] an administrative or court order directing payment of state
             2685      income tax;
             2686          (xxiii) has violated or permitted others to violate the federal Violent Crime Control
             2687      and Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034; or
             2688          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             2689      the legitimate interests of customers and the public.


             2690          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             2691      and any [natural person named on] individual designated under the license are considered to
             2692      be the holders of the agency license.
             2693          (d) If [a natural person named on] an individual designated under the agency license
             2694      commits [any] an act or fails to perform [any] a duty that is a ground for suspending,
             2695      revoking, or limiting the [natural person's] individual's license, the commissioner may
             2696      suspend, revoke, or limit the license of:
             2697          (i) the [natural person] individual;
             2698          (ii) the agency if the agency:
             2699          (A) is reckless or negligent in its supervision of the [natural person] individual; or
             2700          (B) knowingly participated in the act or failure to act that is the ground for
             2701      suspending, revoking, or limiting the license; or
             2702          (iii) (A) the [natural person] individual; and
             2703          (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
             2704          (5) A licensee under this chapter is subject to the penalties for acting as a licensee
             2705      without a license if:
             2706          (a) the licensee's license is:
             2707          (i) revoked;
             2708          (ii) suspended;
             2709          (iii) limited;
             2710          (iv) surrendered in lieu of administrative action;
             2711          (v) lapsed; or
             2712          (vi) voluntarily surrendered; and
             2713          (b) the licensee:
             2714          (i) continues to act as a licensee; or
             2715          (ii) violates the terms of the license limitation.
             2716          (6) A licensee under this chapter shall immediately report to the commissioner:
             2717          (a) a revocation, suspension, or limitation of the person's license in any other state, the


             2718      District of Columbia, or a territory of the United States;
             2719          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             2720      the District of Columbia, or a territory of the United States; or
             2721          (c) a judgment or injunction entered against the person on the basis of conduct
             2722      involving:
             2723          (i) fraud;
             2724          (ii) deceit;
             2725          (iii) misrepresentation; or
             2726          (iv) a violation of an insurance law or rule.
             2727          (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender
             2728      a license in lieu of administrative action may specify a time, not to exceed five years, within
             2729      which the former licensee may not apply for a new license.
             2730          (b) If no time is specified in the order or agreement described in Subsection (7)(a), the
             2731      former licensee may not apply for a new license for five years from the day on which the order
             2732      or agreement is made without the express approval of the commissioner.
             2733          (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
             2734      a license issued under this part if so ordered by the court.
             2735          (9) The commissioner shall by rule prescribe the license renewal and reinstatement
             2736      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2737          Section 24. Section 31A-25-210 is amended to read:
             2738           31A-25-210. License lapse and voluntary surrender.
             2739          (1) (a) A license issued under this chapter shall lapse if the licensee fails to:
             2740          (i) pay when due a fee under Section 31A-3-103 ;
             2741          (ii) submit a completed renewal application as required by Section 31A-25-202 ;
             2742          (iii) produce, when due, evidence of compliance with the financial responsibility
             2743      requirement under Section 31A-25-205 ; or
             2744          (iv) maintain an active license in a resident state if the licensee is a nonresident
             2745      licensee.


             2746          (b) (i) A licensee whose license lapses due to the following may request an action
             2747      described in Subsection (1)(b)(ii):
             2748          (A) military service;
             2749          (B) voluntary service for a period of time designated by the person for whom the
             2750      licensee provides voluntary service; or
             2751          (C) some other extenuating circumstances, such as long-term medical disability.
             2752          (ii) A licensee described in Subsection (1)(b)(i) may request:
             2753          (A) reinstatement of the license no later than one year from the day on which the
             2754      license lapses; and
             2755          (B) waiver of any of the following imposed for failure to comply with renewal
             2756      procedures:
             2757          (I) an examination requirement;
             2758          (II) reinstatement fees set under Section 31A-3-103 ; or
             2759          (III) other sanction imposed for failure to comply with renewal procedures.
             2760          (2) If a license issued under this chapter is voluntarily surrendered, the license may be
             2761      reinstated [within one year]:
             2762          (a) during the license period in which the license is voluntarily surrendered; and
             2763          (b) no later than one year after the day on which the license is [inactivated] voluntarily
             2764      surrendered.
             2765          Section 25. Section 31A-26-203 is amended to read:
             2766           31A-26-203. Adjuster's license required.
             2767          (1) The commissioner shall issue a license to act as an independent adjuster or public
             2768      adjuster to a person who, as to the license classification applied for under Section 31A-26-204 :
             2769          (a) satisfies the character requirements under Section 31A-26-205 ;
             2770          (b) satisfies the applicable continuing education requirements under Section
             2771      31A-26-206 ;
             2772          (c) satisfies the applicable examination requirements under Section 31A-26-207 ;
             2773          (d) has not committed an act that is a ground for denial, suspension, or revocation


             2774      provided for in Section 31A-26-213 ;
             2775          [(d)] (e) if a nonresident, complies with Section 31A-26-208 ; and
             2776          [(e)] (f) pays the applicable fees under Section 31A-3-103 .
             2777          (2) (a) This Subsection (2) applies to the following persons:
             2778          (i) an applicant for:
             2779          (A) an independent adjuster's license; or
             2780          (B) a public adjuster's license;
             2781          (ii) a licensed independent adjuster; or
             2782          (iii) a licensed public adjuster.
             2783          (b) A person described in Subsection (2)(a) shall report to the commissioner:
             2784          (i) an administrative action taken against the person:
             2785          (A) in another jurisdiction; or
             2786          (B) by another regulatory agency in this state; and
             2787          (ii) a criminal prosecution taken against the person in any jurisdiction.
             2788          (c) The report required by Subsection (2)(b) shall:
             2789          (i) be filed:
             2790          (A) at the time the person applies for an adjustor's license; and
             2791          (B) [for] if an action or prosecution [that] occurs on or after the day on which the
             2792      person applies for an adjustor's license:
             2793          (I) for an administrative action, within 30 days of the final disposition of the
             2794      administrative action; or
             2795          (II) for a criminal prosecution, within 30 days of the initial appearance before a court;
             2796      and
             2797          (ii) include a copy of the complaint or other relevant legal documents related to the
             2798      action or prosecution described in Subsection (2)(b).
             2799          (3) (a) The department may require a person applying for a license or for consent to
             2800      engage in the business of insurance to submit to a criminal background check as a condition
             2801      of receiving a license or consent.


             2802          (b) A person, if required to submit to a criminal background check under Subsection
             2803      (3)(a), shall:
             2804          (i) submit a fingerprint card in a form acceptable to the department; and
             2805          (ii) consent to a fingerprint background check by:
             2806          (A) the Utah Bureau of Criminal Identification; and
             2807          (B) the Federal Bureau of Investigation.
             2808          (c) For a person who submits a fingerprint card and consents to a fingerprint
             2809      background check under Subsection (3)(b), the department may request concerning a person
             2810      applying for an independent or public adjuster's license:
             2811          (i) criminal background information maintained pursuant to Title 53, Chapter 10, Part
             2812      2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
             2813          (ii) complete Federal Bureau of Investigation criminal background checks through the
             2814      national criminal history system.
             2815          (d) Information obtained by the department from the review of criminal history
             2816      records received under this Subsection (3) shall be used by the department for the purposes of:
             2817          (i) determining if a person satisfies the character requirements under Section
             2818      31A-26-205 for issuance or renewal of a license;
             2819          (ii) determining if a person has failed to maintain the character requirements under
             2820      Section [ 31A-25-204 ] 31A-26-205 ; and
             2821          (iii) preventing [persons] a person who [violate] violates the federal Violent Crime
             2822      Control and Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034, from engaging in
             2823      the business of insurance in the state.
             2824          (e) If the department requests the criminal background information, the department
             2825      shall:
             2826          (i) pay to the Department of Public Safety the costs incurred by the Department of
             2827      Public Safety in providing the department criminal background information under Subsection
             2828      (3)(c)(i);
             2829          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau


             2830      of Investigation in providing the department criminal background information under
             2831      Subsection (3)(c)(ii); and
             2832          (iii) charge the person applying for a license[, for renewal of a license,] or for consent
             2833      to engage in the business of insurance a fee equal to the aggregate of Subsections (3)(e)(i) and
             2834      (ii).
             2835          (4) The commissioner may deny a license application to act as an independent adjuster
             2836      or public adjuster to a person who, as to the license classification applied for under Section
             2837      31A-26-204 :
             2838          (a) fails to satisfy the requirements in this section; or
             2839          (b) commits an act that is a ground for denial, suspension, or revocation provided for
             2840      in Section 31A-26-213 .
             2841          [(4)] (5) Notwithstanding the other provisions of this section, the commissioner may:
             2842          (a) issue a license to an applicant for a license for a title insurance classification only
             2843      with the concurrence of the Title and Escrow Commission; or
             2844          (b) renew a license for a title insurance classification only with the concurrence of the
             2845      Title and Escrow Commission.
             2846          Section 26. Section 31A-26-204 is amended to read:
             2847           31A-26-204. License classifications.
             2848          A resident or nonresident license issued under this chapter shall be issued under the
             2849      classifications described under Subsections (1), (2), and (3). [These classifications are
             2850      intended to describe] A classification describes the matters to be considered under [any] a
             2851      prerequisite education [and] or examination required of license applicants under Sections
             2852      31A-26-206 and 31A-26-207 .
             2853          (1) Independent adjuster license classifications include:
             2854          (a) accident and health insurance, including related service insurance under Chapter 7,
             2855      Nonprofit Health Service Insurance [Corporation] Corporations, or Chapter 8, Health
             2856      Maintenance Organizations and Limited Health Plans;
             2857          (b) property and [liability] casualty insurance, [which includes:] including a surety or


             2858      other bond;
             2859          [(i) property insurance;]
             2860          [(ii) liability insurance;]
             2861          [(iii) surety bonds; and]
             2862          [(iv) policies containing combinations or variations of these coverages;]
             2863          [(c) service insurance;]
             2864          [(d) title insurance;]
             2865          [(e) credit insurance; and]
             2866          (c) crop insurance; and
             2867          [(f)] (d) workers' compensation insurance.
             2868          (2) Public adjuster license classifications include:
             2869          (a) accident and health insurance, including related service insurance under Chapter 7
             2870      or 8;
             2871          (b) property and [liability] casualty insurance, [which includes:] including a surety or
             2872      other bond;
             2873          [(i) property insurance;]
             2874          [(ii) liability insurance;]
             2875          [(iii) surety bonds; and]
             2876          [(iv) policies containing combinations or variations of these coverages;]
             2877          [(c) service insurance;]
             2878          [(d) title insurance;]
             2879          [(e) credit insurance; and]
             2880          (c) crop insurance; and
             2881          [(f)] (d) workers' compensation insurance.
             2882          (3) (a) The commissioner may by rule:
             2883          (i) recognize other independent adjuster or public adjuster license classifications as to
             2884      other kinds of insurance not listed under Subsection (1); and
             2885          (ii) create license classifications that grant only part of the authority arising under


             2886      another license class.
             2887          (b) Notwithstanding Subsection (3)(a), for purpose of title insurance, the Title and
             2888      Escrow Commission may make the rules provided for in Subsection (3)(a), subject to Section
             2889      31A-2-404 .
             2890          Section 27. Section 31A-26-210 is amended to read:
             2891           31A-26-210. Reports from organizations licensed as adjusters.
             2892          [(1) Organizations licensed as adjusters under Section 31A-26-203 shall report to the
             2893      commissioner, at the times and in the detail and form as prescribed by rule, every change in
             2894      the list of natural person adjusters authorized to act in that position for the organization.]
             2895          [(2) Each organization licensed as an adjuster shall, at the time of paying its license
             2896      continuation fee under Section 31A-3-103 , report to the commissioner, in the form established
             2897      by the commissioner by rule, all natural person adjusters acting in that position for the
             2898      organization.]
             2899          [(3) Organizations]
             2900          (1) An organization licensed as an adjuster under Section 31A-26-203 shall designate
             2901      an individual who has an individual adjuster license to act on the organization's behalf in order
             2902      for the licensee to do business for the organization in this state.
             2903          (2) An organization licensed under this chapter shall report to the commissioner, at
             2904      intervals and in the form the commissioner establishes by rule:
             2905          (a) a new designation; and
             2906          (b) a terminated designation.
             2907          (3) (a) An organization licensed under this chapter shall report to the commissioner
             2908      the cause of termination of a designation if:
             2909          (i) the reason for termination is a reason described in Subsection 31A-26-213 (5)(b); or
             2910          (ii) the organization has knowledge that the individual licensee is found to have
             2911      engaged in an activity described in Subsection 31A-26-213 (5)(b) by:
             2912          (A) a court;
             2913          (B) a government body; or


             2914          (C) a self-regulatory organization, which the commissioner may define by rule made
             2915      in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2916          (b) The information provided the commissioner under Subsection (3)(a) is a private
             2917      record under Title 63G, Chapter 2, Government Records Access and Management Act.
             2918          (c) An organization is immune from civil action, civil penalty, or damages if the
             2919      organization complies in good faith with this Subsection (3) in reporting to the commissioner
             2920      the cause of termination of a designation.
             2921          (d) Notwithstanding any other provision in this section, an organization is not immune
             2922      from an action or resulting penalty imposed on the reporting organization as a result of a
             2923      proceeding brought by or on behalf of the department if the action is based on evidence other
             2924      than the report submitted in compliance with this Subsection (3).
             2925          (4) An organization licensed under this chapter may act in a capacity for which it is
             2926      licensed only through an individual who is licensed under this chapter to act in the same
             2927      capacity.
             2928          (5) An organization licensed under this chapter shall designate and report promptly to
             2929      the commissioner the name of [at least one natural person] the designated responsible licensed
             2930      individual who has authority to act on behalf of the organization in all matters pertaining to
             2931      compliance with this title and orders of the commissioner.
             2932          (6) If an agency designates a licensee in a report submitted under Subsection (2) or
             2933      (5), there is a rebuttable presumption that the designated licensee acts on behalf of the agency.
             2934          [(4) Where] (7) (a) When a license is held by an organization, both the organization
             2935      itself and [any persons named on] an individual designated under the license shall, for
             2936      purposes of this section, be considered to be the holders of the organization license.
             2937          (b) If [a person named on] an individual designated under the organization license
             2938      commits [any] an act or fails to perform [any] a duty [which] that is a ground for suspending,
             2939      revoking, or limiting the organization license, the commissioner may suspend, revoke, or limit
             2940      the license of [that person or the organization, or both.]:
             2941          (i) that individual;


             2942          (ii) the organization, if the organization:
             2943          (A) is reckless or negligent in its supervision of the individual; or
             2944          (B) knowingly participates in the act or failure to act that is the ground for suspending,
             2945      revoking, or limiting the license; or
             2946          (iii) (A) the individual; and
             2947          (B) the organization, if the organization meets the requirements of Subsection
             2948      (7)(b)(ii).
             2949          Section 28. Section 31A-26-213 is amended to read:
             2950           31A-26-213. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             2951      terminating a license -- Rulemaking for renewal or reinstatement.
             2952          (1) A license type issued under this chapter remains in force until:
             2953          (a) revoked or suspended under Subsection (5);
             2954          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             2955      administrative action;
             2956          (c) the licensee dies or is adjudicated incompetent as defined under:
             2957          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             2958          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             2959      Minors;
             2960          (d) lapsed under Section 31A-26-214.5 ; or
             2961          (e) voluntarily surrendered.
             2962          (2) The following may be reinstated within one year after the day on which the license
             2963      is [inactivated] no longer in force:
             2964          (a) a lapsed license; or
             2965          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             2966      not be reinstated after the license period in which it is voluntarily surrendered.
             2967          (3) Unless otherwise stated in the written agreement for the voluntary surrender of a
             2968      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             2969      department from pursuing additional disciplinary or other action authorized under:


             2970          (a) this title; or
             2971          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             2972      Administrative Rulemaking Act.
             2973          (4) A license classification issued under this chapter remains in force until:
             2974          (a) the qualifications pertaining to a license classification are no longer met by the
             2975      licensee; or
             2976          (b) the supporting license type:
             2977          (i) is revoked or suspended under Subsection (5); or
             2978          (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
             2979      administrative action.
             2980          (5) (a) If the commissioner makes a finding under Subsection (5)(b) [after] as part of
             2981      an adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             2982      commissioner may:
             2983          (i) revoke:
             2984          (A) a license; or
             2985          (B) a license classification;
             2986          (ii) suspend for a specified period of 12 months or less:
             2987          (A) a license; or
             2988          (B) a license classification; [or]
             2989          (iii) limit in whole or in part:
             2990          (A) a license; or
             2991          (B) a license classification[.]; or
             2992          (iv) deny a license application.
             2993          (b) The commissioner may take an action described in Subsection (5)(a) if the
             2994      commissioner finds that the licensee:
             2995          (i) is unqualified for a license or license classification under [Sections] Section
             2996      31A-26-202 , 31A-26-203 , [and] 31A-26-204 , or 31A-26-205 ;
             2997          (ii) has violated:


             2998          (A) an insurance statute;
             2999          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             3000          (C) an order that is valid under Subsection 31A-2-201 (4);
             3001          (iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
             3002      delinquency proceedings in any state;
             3003          (iv) fails to pay [any] a final judgment rendered against the person in this state within
             3004      60 days after the judgment became final;
             3005          (v) fails to meet the same good faith obligations in claims settlement that is required of
             3006      admitted insurers;
             3007          (vi) is affiliated with and under the same general management or interlocking
             3008      directorate or ownership as another insurance adjuster that transacts business in this state
             3009      without a license;
             3010          (vii) refuses:
             3011          (A) to be examined; or
             3012          (B) to produce its accounts, records, and files for examination;
             3013          (viii) has an officer who refuses to:
             3014          (A) give information with respect to the insurance adjuster's affairs; or
             3015          (B) perform any other legal obligation as to an examination;
             3016          (ix) provides information in the license application that is:
             3017          (A) incorrect;
             3018          (B) misleading;
             3019          (C) incomplete; or
             3020          (D) materially untrue;
             3021          (x) has violated [any] an insurance law, valid rule, or valid order of another state's
             3022      insurance department;
             3023          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             3024          (xii) has improperly withheld, misappropriated, or converted [any] monies or
             3025      properties received in the course of doing insurance business;


             3026          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             3027          (A) insurance contract; or
             3028          (B) application for insurance;
             3029          (xiv) has been convicted of a felony;
             3030          (xv) has admitted or been found to have committed [any] an insurance unfair trade
             3031      practice or fraud;
             3032          (xvi) in the conduct of business in this state or elsewhere has:
             3033          (A) used fraudulent, coercive, or dishonest practices; or
             3034          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             3035          (xvii) has had an insurance license, or its equivalent, denied, suspended, or revoked in
             3036      any other state, province, district, or territory;
             3037          (xviii) has forged another's name to:
             3038          (A) an application for insurance; or
             3039          (B) [any] a document related to an insurance transaction;
             3040          (xix) has improperly used notes or any other reference material to complete an
             3041      examination for an insurance license;
             3042          (xx) has knowingly accepted insurance business from an individual who is not
             3043      licensed;
             3044          (xxi) has failed to comply with an administrative or court order imposing a child
             3045      support obligation;
             3046          (xxii) has failed to:
             3047          (A) pay state income tax; or
             3048          (B) comply with [any] an administrative or court order directing payment of state
             3049      income tax;
             3050          (xxiii) has violated or permitted others to violate the federal Violent Crime Control
             3051      and Law Enforcement Act of 1994, 18 U.S.C. Secs. 1033 and 1034; or
             3052          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             3053      the legitimate interests of customers and the public.


             3054          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             3055      and any [natural person named on] individual designated under the license are considered to
             3056      be the holders of the license.
             3057          (d) If [a natural person named on] an individual designated under the agency license
             3058      commits [any] an act or fails to perform [any] a duty that is a ground for suspending,
             3059      revoking, or limiting the [natural person's] individual's license, the commissioner may
             3060      suspend, revoke, or limit the license of:
             3061          (i) the [natural person] individual;
             3062          (ii) the agency, if the agency:
             3063          (A) is reckless or negligent in its supervision of the [natural person] individual; or
             3064          (B) knowingly participated in the act or failure to act that is the ground for
             3065      suspending, revoking, or limiting the license; or
             3066          (iii) (A) the [natural person] individual; and
             3067          (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
             3068          (6) A licensee under this chapter is subject to the penalties for conducting an
             3069