Download Zipped Enrolled WordPerfect HB0039.ZIP
[Introduced][Amended][Status][Bill Documents][Fiscal Note][Bills Directory]

H.B. 39 Enrolled

             1     

INSURANCE RELATED AMENDMENTS

             2     
2010 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             5     
Senate Sponsor: Wayne L. Niederhauser

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Insurance Code and related provisions to make various
             10      amendments.
             11      Highlighted Provisions:
             12          This bill:
             13          .    modifies definitions;
             14          .    addresses fees, nonlapsing money, and the creation of restricted accounts;
             15          .    removes outdated language related to reporting;
             16          .    allows a member of the Title and Escrow Commission to continue to serve until
             17      replaced;
             18          .    modifies duties of the Title and Escrow Commission;
             19          .    modifies provisions related to variable contract law;
             20          .    modifies provisions related to approval of forms;
             21          .    addresses requirements for purchasing groups;
             22          .    clarifies language related to underinsured motorist coverage;
             23          .    addresses dependent coverage;
             24          .    modifies provisions related to catastrophic coverage of mental health conditions;
             25          .    addresses issuance of group or blanket accident and health insurance;
             26          .    modifies Utah's mini-COBRA provisions;
             27          .    addresses special enrollment periods relating to Medicaid and Children's Health
             28      Insurance Program;
             29          .    addresses provisions related to licensure and insurance adjusting;


             30          .    addresses licensee compensation;
             31          .    modifies definitions related to life settlements;
             32          .    provides for rulemaking and other processes related to surrender of a professional
             33      employer organization license;
             34          .    addresses the board of directors for the Utah Defined Contribution Risk Adjuster;
             35      and
             36          .    makes technical and conforming amendments.
             37      Monies Appropriated in this Bill:
             38          None
             39      Other Special Clauses:
             40          This bill provides an effective date and limited retrospective operation.
             41      Utah Code Sections Affected:
             42      AMENDS:
             43          31A-1-301, as last amended by Laws of Utah 2009, Chapter 349
             44          31A-2-403, as last amended by Laws of Utah 2008, Chapter 345
             45          31A-2-404, as last amended by Laws of Utah 2008, Chapter 382
             46          31A-3-103, as last amended by Laws of Utah 2009, Chapters 183 and 368
             47          31A-3-104, as last amended by Laws of Utah 2006, Chapter 117
             48          31A-3-304 (Superseded 07/01/10), as last amended by Laws of Utah 2009, Chapter
             49      183
             50          31A-3-304 (Effective 07/01/10), as last amended by Laws of Utah 2009, Chapter 183
             51          31A-5-217.5, as enacted by Laws of Utah 1992, Chapter 230
             52          31A-15-208, as enacted by Laws of Utah 1992, Chapter 258
             53          31A-20-106, as enacted by Laws of Utah 1985, Chapter 242
             54          31A-21-201, as last amended by Laws of Utah 2005, Chapter 123
             55          31A-21-301, as last amended by Laws of Utah 2001, Chapter 116
             56          31A-22-305.3, as last amended by Laws of Utah 2009, Chapter 231
             57          31A-22-411, as last amended by Laws of Utah 1991, Chapter 74


             58          31A-22-610.5, as last amended by Laws of Utah 2008, Chapter 3
             59          31A-22-625, as last amended by Laws of Utah 2008, Chapters 345 and 382
             60          31A-22-701, as last amended by Laws of Utah 2007, Chapter 307
             61          31A-22-722, as last amended by Laws of Utah 2009, Chapter 12
             62          31A-22-722.5, as enacted by Laws of Utah 2009, Chapter 274
             63          31A-23a-415, as last amended by Laws of Utah 2007, Chapter 325
             64          31A-23a-501, as last amended by Laws of Utah 2009, Chapters 12 and 274
             65          31A-26-201, as last amended by Laws of Utah 2003, Chapter 298
             66          31A-35-401, as last amended by Laws of Utah 2009, Chapter 183
             67          31A-35-406, as last amended by Laws of Utah 2009, Chapters 183 and 349
             68          31A-36-102, as last amended by Laws of Utah 2009, Chapter 355
             69          31A-40-103, as enacted by Laws of Utah 2008, Chapter 318
             70          31A-40-302, as enacted by Laws of Utah 2008, Chapter 318
             71          31A-42-201, as enacted by Laws of Utah 2009, Chapter 12
             72          63J-1-602, as enacted by Laws of Utah 2009, Chapter 368
             73      ENACTS:
             74          31A-3-105, Utah Code Annotated 1953
             75          31A-22-725, Utah Code Annotated 1953
             76          31A-40-307, Utah Code Annotated 1953
             77      Uncodified Material Affected:
             78      ENACTS UNCODIFIED MATERIAL
             79     
             80      Be it enacted by the Legislature of the state of Utah:
             81          Section 1. Section 31A-1-301 is amended to read:
             82           31A-1-301. Definitions.
             83          As used in this title, unless otherwise specified:
             84          (1) (a) "Accident and health insurance" means insurance to provide protection against
             85      economic losses resulting from:


             86          (i) a medical condition including:
             87          (A) a medical care expense; or
             88          (B) the risk of disability;
             89          (ii) accident; or
             90          (iii) sickness.
             91          (b) "Accident and health insurance":
             92          (i) includes a contract with disability contingencies including:
             93          (A) an income replacement contract;
             94          (B) a health care contract;
             95          (C) an expense reimbursement contract;
             96          (D) a credit accident and health contract;
             97          (E) a continuing care contract; and
             98          (F) a long-term care contract; and
             99          (ii) may provide:
             100          (A) hospital coverage;
             101          (B) surgical coverage;
             102          (C) medical coverage;
             103          (D) loss of income coverage;
             104          (E) prescription drug coverage;
             105          (F) dental coverage; or
             106          (G) vision coverage.
             107          (c) "Accident and health insurance" does not include workers' compensation
             108      insurance.
             109          (2) "Actuary" is as defined by the commissioner by rule, made in accordance with
             110      Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             111          (3) "Administrator" is defined in Subsection (159).
             112          (4) "Adult" means an individual who has attained the age of at least 18 years.
             113          (5) "Affiliate" means a person who controls, is controlled by, or is under common


             114      control with, another person. A corporation is an affiliate of another corporation, regardless of
             115      ownership, if substantially the same group of individuals manage the corporations.
             116          (6) "Agency" means:
             117          (a) a person other than an individual, including a sole proprietorship by which an
             118      individual does business under an assumed name; and
             119          (b) an insurance organization licensed or required to be licensed under Section
             120      31A-23a-301 .
             121          (7) "Alien insurer" means an insurer domiciled outside the United States.
             122          (8) "Amendment" means an endorsement to an insurance policy or certificate.
             123          (9) "Annuity" means an agreement to make periodical payments for a period certain or
             124      over the lifetime of one or more individuals if the making or continuance of all or some of the
             125      series of the payments, or the amount of the payment, is dependent upon the continuance of
             126      human life.
             127          (10) "Application" means a document:
             128          (a) (i) completed by an applicant to provide information about the risk to be insured;
             129      and
             130          (ii) that contains information that is used by the insurer to evaluate risk and decide
             131      whether to:
             132          (A) insure the risk under:
             133          (I) the coverage as originally offered; or
             134          (II) a modification of the coverage as originally offered; or
             135          (B) decline to insure the risk; or
             136          (b) used by the insurer to gather information from the applicant before issuance of an
             137      annuity contract.
             138          (11) "Articles" or "articles of incorporation" means:
             139          (a) the original articles;
             140          (b) a special law;
             141          (c) a charter;


             142          (d) an amendment;
             143          (e) restated articles;
             144          (f) articles of merger or consolidation;
             145          (g) a trust instrument;
             146          (h) another constitutive document for a trust or other entity that is not a corporation;
             147      and
             148          (i) an amendment to an item listed in Subsections (11)(a) through (h).
             149          (12) "Bail bond insurance" means a guarantee that a person will attend court when
             150      required, up to and including surrender of the person in execution of a sentence imposed under
             151      Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
             152          (13) "Binder" is defined in Section 31A-21-102 .
             153          (14) "Blanket insurance policy" means a group policy covering a defined class of
             154      persons:
             155          (a) without individual underwriting or application; and
             156          (b) that is determined by definition with or without designating each person covered.
             157          (15) "Board," "board of trustees," or "board of directors" means the group of persons
             158      with responsibility over, or management of, a corporation, however designated.
             159          (16) "Business entity" means:
             160          (a) a corporation;
             161          (b) an association;
             162          (c) a partnership;
             163          (d) a limited liability company;
             164          (e) a limited liability partnership; or
             165          (f) another legal entity.
             166          (17) "Business of insurance" is defined in Subsection (85).
             167          (18) "Business plan" means the information required to be supplied to the
             168      commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
             169      when these subsections apply by reference under:


             170          (a) Section 31A-7-201 ;
             171          (b) Section 31A-8-205 ; or
             172          (c) Subsection 31A-9-205 (2).
             173          (19) (a) "Bylaws" means the rules adopted for the regulation or management of a
             174      corporation's affairs, however designated.
             175          (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
             176      corporation.
             177          (20) "Captive insurance company" means:
             178          (a) an insurer:
             179          (i) owned by another organization; and
             180          (ii) whose exclusive purpose is to insure risks of the parent organization and an
             181      affiliated company; or
             182          (b) in the case of a group or association, an insurer:
             183          (i) owned by the insureds; and
             184          (ii) whose exclusive purpose is to insure risks of:
             185          (A) a member organization;
             186          (B) a group member; or
             187          (C) an affiliate of:
             188          (I) a member organization; or
             189          (II) a group member.
             190          (21) "Casualty insurance" means liability insurance.
             191          (22) "Certificate" means evidence of insurance given to:
             192          (a) an insured under a group insurance policy; or
             193          (b) a third party.
             194          (23) "Certificate of authority" is included within the term "license."
             195          (24) "Claim," unless the context otherwise requires, means a request or demand on an
             196      insurer for payment of a benefit according to the terms of an insurance policy.
             197          (25) "Claims-made coverage" means an insurance contract or provision limiting


             198      coverage under a policy insuring against legal liability to claims that are first made against the
             199      insured while the policy is in force.
             200          (26) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
             201      commissioner.
             202          (b) When appropriate, the terms listed in Subsection (26)(a) apply to the equivalent
             203      supervisory official of another jurisdiction.
             204          (27) (a) "Continuing care insurance" means insurance that:
             205          (i) provides board and lodging;
             206          (ii) provides one or more of the following:
             207          (A) a personal service;
             208          (B) a nursing service;
             209          (C) a medical service; or
             210          (D) any other health-related service; and
             211          (iii) provides the coverage described in this Subsection (27)(a) under an agreement
             212      effective:
             213          (A) for the life of the insured; or
             214          (B) for a period in excess of one year.
             215          (b) Insurance is continuing care insurance regardless of whether or not the board and
             216      lodging are provided at the same location as a service described in Subsection (27)(a)(ii).
             217          (28) (a) "Control," "controlling," "controlled," or "under common control" means the
             218      direct or indirect possession of the power to direct or cause the direction of the management
             219      and policies of a person. This control may be:
             220          (i) by contract;
             221          (ii) by common management;
             222          (iii) through the ownership of voting securities; or
             223          (iv) by a means other than those described in Subsections (28)(a)(i) through (iii).
             224          (b) There is no presumption that an individual holding an official position with
             225      another person controls that person solely by reason of the position.


             226          (c) A person having a contract or arrangement giving control is considered to have
             227      control despite the illegality or invalidity of the contract or arrangement.
             228          (d) There is a rebuttable presumption of control in a person who directly or indirectly
             229      owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
             230      voting securities of another person.
             231          (29) "Controlled insurer" means a licensed insurer that is either directly or indirectly
             232      controlled by a producer.
             233          (30) "Controlling person" means a person that directly or indirectly has the power to
             234      direct or cause to be directed, the management, control, or activities of a reinsurance
             235      intermediary.
             236          (31) "Controlling producer" means a producer who directly or indirectly controls an
             237      insurer.
             238          (32) (a) "Corporation" means an insurance corporation, except when referring to:
             239          (i) a corporation doing business:
             240          (A) as:
             241          (I) an insurance producer;
             242          (II) a limited line producer;
             243          (III) a consultant;
             244          (IV) a managing general agent;
             245          (V) a reinsurance intermediary;
             246          (VI) a third party administrator; or
             247          (VII) an adjuster; and
             248          (B) under:
             249          (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             250      Reinsurance Intermediaries;
             251          (II) Chapter 25, Third Party Administrators; or
             252          (III) Chapter 26, Insurance Adjusters; or
             253          (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance


             254      Holding Companies.
             255          (b) "Stock corporation" means a stock insurance corporation.
             256          (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
             257          (33) (a) "Creditable coverage" has the same meaning as provided in federal regulations
             258      adopted pursuant to the Health Insurance Portability and Accountability Act of 1996, Pub. L.
             259      104-191, 110 Stat. 1936.
             260          (b) "Creditable coverage" includes coverage that is offered through a public health
             261      plan such as:
             262          (i) the Primary Care Network Program under a Medicaid primary care network
             263      demonstration waiver obtained subject to Section 26-18-3 ;
             264          (ii) the Children's Health Insurance Program under Section 26-40-106 ; or
             265          (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub.
             266      L. 101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L.
             267      109-415.
             268          (34) "Credit accident and health insurance" means insurance on a debtor to provide
             269      indemnity for payments coming due on a specific loan or other credit transaction while the
             270      debtor is disabled.
             271          (35) (a) "Credit insurance" means insurance offered in connection with an extension
             272      of credit that is limited to partially or wholly extinguishing that credit obligation.
             273          (b) "Credit insurance" includes:
             274          (i) credit accident and health insurance;
             275          (ii) credit life insurance;
             276          (iii) credit property insurance;
             277          (iv) credit unemployment insurance;
             278          (v) guaranteed automobile protection insurance;
             279          (vi) involuntary unemployment insurance;
             280          (vii) mortgage accident and health insurance;
             281          (viii) mortgage guaranty insurance; and


             282          (ix) mortgage life insurance.
             283          (36) "Credit life insurance" means insurance on the life of a debtor in connection with
             284      an extension of credit that pays a person if the debtor dies.
             285          (37) "Credit property insurance" means insurance:
             286          (a) offered in connection with an extension of credit; and
             287          (b) that protects the property until the debt is paid.
             288          (38) "Credit unemployment insurance" means insurance:
             289          (a) offered in connection with an extension of credit; and
             290          (b) that provides indemnity if the debtor is unemployed for payments coming due on
             291      a:
             292          (i) specific loan; or
             293          (ii) credit transaction.
             294          (39) "Creditor" means a person, including an insured, having a claim, whether:
             295          (a) matured;
             296          (b) unmatured;
             297          (c) liquidated;
             298          (d) unliquidated;
             299          (e) secured;
             300          (f) unsecured;
             301          (g) absolute;
             302          (h) fixed; or
             303          (i) contingent.
             304          (40) (a) "Customer service representative" means a person that provides an insurance
             305      service and insurance product information:
             306          (i) for the customer service representative's:
             307          (A) producer; or
             308          (B) consultant employer; and
             309          (ii) to the customer service representative's employer's:


             310          (A) customer;
             311          (B) client; or
             312          (C) organization.
             313          (b) A customer service representative may only operate within the scope of authority
             314      of the customer service representative's producer or consultant employer.
             315          (41) "Deadline" means a final date or time:
             316          (a) imposed by:
             317          (i) statute;
             318          (ii) rule; or
             319          (iii) order; and
             320          (b) by which a required filing or payment must be received by the department.
             321          (42) "Deemer clause" means a provision under this title under which upon the
             322      occurrence of a condition precedent, the commissioner is considered to have taken a specific
             323      action. If the statute so provides, a condition precedent may be the commissioner's failure to
             324      take a specific action.
             325          (43) "Degree of relationship" means the number of steps between two persons
             326      determined by counting the generations separating one person from a common ancestor and
             327      then counting the generations to the other person.
             328          (44) "Department" means the Insurance Department.
             329          (45) "Director" means a member of the board of directors of a corporation.
             330          (46) "Disability" means a physiological or psychological condition that partially or
             331      totally limits an individual's ability to:
             332          (a) perform the duties of:
             333          (i) that individual's occupation; or
             334          (ii) any occupation for which the individual is reasonably suited by education,
             335      training, or experience; or
             336          (b) perform two or more of the following basic activities of daily living:
             337          (i) eating;


             338          (ii) toileting;
             339          (iii) transferring;
             340          (iv) bathing; or
             341          (v) dressing.
             342          (47) "Disability income insurance" is defined in Subsection (76).
             343          (48) "Domestic insurer" means an insurer organized under the laws of this state.
             344          (49) "Domiciliary state" means the state in which an insurer:
             345          (a) is incorporated;
             346          (b) is organized; or
             347          (c) in the case of an alien insurer, enters into the United States.
             348          (50) (a) "Eligible employee" means:
             349          (i) an employee who:
             350          (A) works on a full-time basis; and
             351          (B) has a normal work week of 30 or more hours; or
             352          (ii) a person described in Subsection (50)(b).
             353          (b) "Eligible employee" includes, if the individual is included under a health benefit
             354      plan of a small employer:
             355          (i) a sole proprietor;
             356          (ii) a partner in a partnership; or
             357          (iii) an independent contractor.
             358          (c) "Eligible employee" does not include, unless eligible under Subsection (50)(b):
             359          (i) an individual who works on a temporary or substitute basis for a small employer;
             360          (ii) an employer's spouse; or
             361          (iii) a dependent of an employer.
             362          (51) "Employee" means an individual employed by an employer.
             363          (52) "Employee benefits" means one or more benefits or services provided to:
             364          (a) an employee; or
             365          (b) a dependent of an employee.


             366          (53) (a) "Employee welfare fund" means a fund:
             367          (i) established or maintained, whether directly or through a trustee, by:
             368          (A) one or more employers;
             369          (B) one or more labor organizations; or
             370          (C) a combination of employers and labor organizations; and
             371          (ii) that provides employee benefits paid or contracted to be paid, other than income
             372      from investments of the fund:
             373          (A) by or on behalf of an employer doing business in this state; or
             374          (B) for the benefit of a person employed in this state.
             375          (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
             376      revenues.
             377          (54) "Endorsement" means a written agreement attached to a policy or certificate to
             378      modify the policy or certificate coverage.
             379          (55) "Enrollment date," with respect to a health benefit plan, means:
             380          (a) the first day of coverage; or
             381          (b) if there is a waiting period, the first day of the waiting period.
             382          (56) (a) "Escrow" means:
             383          (i) a real estate settlement or real estate closing conducted by a third party pursuant to
             384      the requirements of a written agreement between the parties in a real estate transaction; or
             385          (ii) a settlement or closing involving:
             386          (A) a mobile home;
             387          (B) a grazing right;
             388          (C) a water right; or
             389          (D) other personal property authorized by the commissioner.
             390          (b) "Escrow" includes the act of conducting a:
             391          (i) real estate settlement; or
             392          (ii) real estate closing.
             393          (57) "Escrow agent" means:


             394          (a) an insurance producer with:
             395          (i) a title insurance line of authority; and
             396          (ii) an escrow subline of authority; or
             397          (b) a person defined as an escrow agent in Section 7-22-101 .
             398          (58) (a) "Excludes" is not exhaustive and does not mean that another thing is not also
             399      excluded.
             400          (b) The items listed in a list using the term "excludes" are representative examples for
             401      use in interpretation of this title.
             402          (59) "Exclusion" means for the purposes of accident and health insurance that an
             403      insurer does not provide insurance coverage, for whatever reason, for one of the following:
             404          (a) a specific physical condition;
             405          (b) a specific medical procedure;
             406          (c) a specific disease or disorder; or
             407          (d) a specific prescription drug or class of prescription drugs.
             408          (60) "Expense reimbursement insurance" means insurance:
             409          (a) written to provide a payment for an expense relating to hospital confinement
             410      resulting from illness or injury; and
             411          (b) written:
             412          (i) as a daily limit for a specific number of days in a hospital; and
             413          (ii) to have a one or two day waiting period following a hospitalization.
             414          (61) "Fidelity insurance" means insurance guaranteeing the fidelity of a person
             415      holding a position of public or private trust.
             416          (62) (a) "Filed" means that a filing is:
             417          (i) submitted to the department as required by and in accordance with applicable
             418      statute, rule, or filing order;
             419          (ii) received by the department within the time period provided in applicable statute,
             420      rule, or filing order; and
             421          (iii) accompanied by the appropriate fee in accordance with:


             422          (A) Section 31A-3-103 ; or
             423          (B) rule.
             424          (b) "Filed" does not include a filing that is rejected by the department because it is not
             425      submitted in accordance with Subsection (62)(a).
             426          (63) "Filing," when used as a noun, means an item required to be filed with the
             427      department including:
             428          (a) a policy;
             429          (b) a rate;
             430          (c) a form;
             431          (d) a document;
             432          (e) a plan;
             433          (f) a manual;
             434          (g) an application;
             435          (h) a report;
             436          (i) a certificate;
             437          (j) an endorsement;
             438          (k) an actuarial certification;
             439          (l) a licensee annual statement;
             440          (m) a licensee renewal application;
             441          (n) an advertisement; or
             442          (o) an outline of coverage.
             443          (64) "First party insurance" means an insurance policy or contract in which the insurer
             444      agrees to pay a claim submitted to it by the insured for the insured's losses.
             445          (65) "Foreign insurer" means an insurer domiciled outside of this state, including an
             446      alien insurer.
             447          (66) (a) "Form" means one of the following prepared for general use:
             448          (i) a policy;
             449          (ii) a certificate;


             450          (iii) an application;
             451          (iv) an outline of coverage; or
             452          (v) an endorsement.
             453          (b) "Form" does not include a document specially prepared for use in an individual
             454      case.
             455          (67) "Franchise insurance" means an individual insurance policy provided through a
             456      mass marketing arrangement involving a defined class of persons related in some way other
             457      than through the purchase of insurance.
             458          (68) "General lines of authority" include:
             459          (a) the general lines of insurance in Subsection (69);
             460          (b) title insurance under one of the following sublines of authority:
             461          (i) search, including authority to act as a title marketing representative;
             462          (ii) escrow, including authority to act as a title marketing representative; and
             463          (iii) title marketing representative only;
             464          (c) surplus lines;
             465          (d) workers' compensation; and
             466          (e) any other line of insurance that the commissioner considers necessary to recognize
             467      in the public interest.
             468          (69) "General lines of insurance" include:
             469          (a) accident and health;
             470          (b) casualty;
             471          (c) life;
             472          (d) personal lines;
             473          (e) property; and
             474          (f) variable contracts, including variable life and annuity.
             475          (70) "Group health plan" means an employee welfare benefit plan to the extent that the
             476      plan provides medical care:
             477          (a) (i) to an employee; or


             478          (ii) to a dependent of an employee; and
             479          (b) (i) directly;
             480          (ii) through insurance reimbursement; or
             481          (iii) through another method.
             482          (71) (a) "Group insurance policy" means a policy covering a group of persons that is
             483      issued:
             484          (i) to a policyholder on behalf of the group; and
             485          (ii) for the benefit of a member of the group who is selected under a procedure defined
             486      in:
             487          (A) the policy; or
             488          (B) an agreement that is collateral to the policy.
             489          (b) A group insurance policy may include a member of the policyholder's family or a
             490      dependent.
             491          (72) "Guaranteed automobile protection insurance" means insurance offered in
             492      connection with an extension of credit that pays the difference in amount between the
             493      insurance settlement and the balance of the loan if the insured automobile is a total loss.
             494          (73) (a) Except as provided in Subsection (73)(b), "health benefit plan" means a policy
             495      or certificate that:
             496          (i) provides health care insurance;
             497          (ii) provides major medical expense insurance; or
             498          (iii) is offered as a substitute for hospital or medical expense insurance, such as:
             499          (A) a hospital confinement indemnity; or
             500          (B) a limited benefit plan.
             501          (b) "Health benefit plan" does not include a policy or certificate that:
             502          (i) provides benefits solely for:
             503          (A) accident;
             504          (B) dental;
             505          (C) income replacement;


             506          (D) long-term care;
             507          (E) a Medicare supplement;
             508          (F) a specified disease;
             509          (G) vision; or
             510          (H) a short-term limited duration; or
             511          (ii) is offered and marketed as supplemental health insurance.
             512          (74) "Health care" means any of the following intended for use in the diagnosis,
             513      treatment, mitigation, or prevention of a human ailment or impairment:
             514          (a) a professional service;
             515          (b) a personal service;
             516          (c) a facility;
             517          (d) equipment;
             518          (e) a device;
             519          (f) supplies; or
             520          (g) medicine.
             521          (75) (a) "Health care insurance" or "health insurance" means insurance providing:
             522          (i) a health care benefit; or
             523          (ii) payment of an incurred health care expense.
             524          (b) "Health care insurance" or "health insurance" does not include accident and health
             525      insurance providing a benefit for:
             526          (i) replacement of income;
             527          (ii) short-term accident;
             528          (iii) fixed indemnity;
             529          (iv) credit accident and health;
             530          (v) supplements to liability;
             531          (vi) workers' compensation;
             532          (vii) automobile medical payment;
             533          (viii) no-fault automobile;


             534          (ix) equivalent self-insurance; or
             535          (x) a type of accident and health insurance coverage that is a part of or attached to
             536      another type of policy.
             537          (76) "Income replacement insurance" or "disability income insurance" means
             538      insurance written to provide payments to replace income lost from accident or sickness.
             539          (77) "Indemnity" means the payment of an amount to offset all or part of an insured
             540      loss.
             541          (78) "Independent adjuster" means an insurance adjuster required to be licensed under
             542      Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
             543          (79) "Independently procured insurance" means insurance procured under Section
             544      31A-15-104 .
             545          (80) "Individual" means a natural person.
             546          (81) "Inland marine insurance" includes insurance covering:
             547          (a) property in transit on or over land;
             548          (b) property in transit over water by means other than boat or ship;
             549          (c) bailee liability;
             550          (d) fixed transportation property such as bridges, electric transmission systems, radio
             551      and television transmission towers and tunnels; and
             552          (e) personal and commercial property floaters.
             553          (82) "Insolvency" means that:
             554          (a) an insurer is unable to pay its debts or meet its obligations as the debts and
             555      obligations mature;
             556          (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
             557      RBC under Subsection 31A-17-601 (8)(c); or
             558          (c) an insurer is determined to be hazardous under this title.
             559          (83) (a) "Insurance" means:
             560          (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
             561      persons to one or more other persons; or


             562          (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
             563      group of persons that includes the person seeking to distribute that person's risk.
             564          (b) "Insurance" includes:
             565          (i) a risk distributing arrangement providing for compensation or replacement for
             566      damages or loss through the provision of a service or a benefit in kind;
             567          (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
             568      business and not as merely incidental to a business transaction; and
             569          (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
             570      but with a class of persons who have agreed to share the risk.
             571          (84) "Insurance adjuster" means a person who directs the investigation, negotiation, or
             572      settlement of a claim under an insurance policy other than life insurance or an annuity, on
             573      behalf of an insurer, policyholder, or a claimant under an insurance policy.
             574          (85) "Insurance business" or "business of insurance" includes:
             575          (a) providing health care insurance by an organization that is or is required to be
             576      licensed under this title;
             577          (b) providing a benefit to an employee in the event of a contingency not within the
             578      control of the employee, in which the employee is entitled to the benefit as a right, which
             579      benefit may be provided either:
             580          (i) by a single employer or by multiple employer groups; or
             581          (ii) through one or more trusts, associations, or other entities;
             582          (c) providing an annuity:
             583          (i) including an annuity issued in return for a gift; and
             584          (ii) except an annuity provided by a person specified in Subsections 31A-22-1305 (2)
             585      and (3);
             586          (d) providing the characteristic services of a motor club as outlined in Subsection
             587      (113);
             588          (e) providing another person with insurance;
             589          (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,


             590      or surety, a contract or policy of title insurance;
             591          (g) transacting or proposing to transact any phase of title insurance, including:
             592          (i) solicitation;
             593          (ii) negotiation preliminary to execution;
             594          (iii) execution of a contract of title insurance;
             595          (iv) insuring; [and]
             596          (v) transacting matters subsequent to the execution of the contract and arising out of
             597      the contract, including reinsurance; and
             598          (vi) transacting or proposing a life settlement; and
             599          (h) doing, or proposing to do, any business in substance equivalent to Subsections
             600      (85)(a) through (g) in a manner designed to evade this title.
             601          (86) "Insurance consultant" or "consultant" means a person who:
             602          (a) advises another person about insurance needs and coverages;
             603          (b) is compensated by the person advised on a basis not directly related to the
             604      insurance placed; and
             605          (c) except as provided in Section 31A-23a-501 , is not compensated directly or
             606      indirectly by an insurer or producer for advice given.
             607          (87) "Insurance holding company system" means a group of two or more affiliated
             608      persons, at least one of whom is an insurer.
             609          (88) (a) "Insurance producer" or "producer" means a person licensed or required to be
             610      licensed under the laws of this state to sell, solicit, or negotiate insurance.
             611          (b) With regards to the selling, soliciting, or negotiating of an insurance product to an
             612      insurance customer or an insured:
             613          (i) "producer for the insurer" means a producer who is compensated directly or
             614      indirectly by an insurer for selling, soliciting, or negotiating a product of that insurer; and
             615          (ii) "producer for the insured" means a producer who:
             616          (A) is compensated directly and only by an insurance customer or an insured; and
             617          (B) receives no compensation directly or indirectly from an insurer for selling,


             618      soliciting, or negotiating a product of that insurer to an insurance customer or insured.
             619          (89) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
             620      promise in an insurance policy and includes:
             621          (i) a policyholder;
             622          (ii) a subscriber;
             623          (iii) a member; and
             624          (iv) a beneficiary.
             625          (b) The definition in Subsection (89)(a):
             626          (i) applies only to this title; and
             627          (ii) does not define the meaning of this word as used in an insurance policy or
             628      certificate.
             629          (90) (a) "Insurer" means a person doing an insurance business as a principal including:
             630          (i) a fraternal benefit society;
             631          (ii) an issuer of a gift annuity other than an annuity specified in Subsections
             632      31A-22-1305 (2) and (3);
             633          (iii) a motor club;
             634          (iv) an employee welfare plan; and
             635          (v) a person purporting or intending to do an insurance business as a principal on that
             636      person's own account.
             637          (b) "Insurer" does not include a governmental entity to the extent the governmental
             638      entity is engaged in an activity described in Section 31A-12-107 .
             639          (91) "Interinsurance exchange" is defined in Subsection (142).
             640          (92) "Involuntary unemployment insurance" means insurance:
             641          (a) offered in connection with an extension of credit; and
             642          (b) that provides indemnity if the debtor is involuntarily unemployed for payments
             643      coming due on a:
             644          (i) specific loan; or
             645          (ii) credit transaction.


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


             674      being, exclusive of the coverages under:
             675          (A) Subsection (107) for medical malpractice insurance;
             676          (B) Subsection (134) for professional liability insurance; and
             677          (C) Subsection (168) for workers' compensation insurance;
             678          (iii) for loss or damage to property resulting from an accident to or explosion of a
             679      boiler, pipe, pressure container, machinery, or apparatus;
             680          (iv) for loss or damage to property caused by:
             681          (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
             682          (B) water entering through a leak or opening in a building; or
             683          (v) for other loss or damage properly the subject of insurance not within another kind
             684      of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
             685          (b) "Liability insurance" includes:
             686          (i) vehicle liability insurance;
             687          (ii) residential dwelling liability insurance; and
             688          (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
             689      boiler, machinery, or apparatus of any kind when done in connection with insurance on the
             690      elevator, boiler, machinery, or apparatus.
             691          (98) (a) "License" means authorization issued by the commissioner to engage in an
             692      activity that is part of or related to the insurance business.
             693          (b) "License" includes a certificate of authority issued to an insurer.
             694          (99) (a) "Life insurance" means:
             695          (i) insurance on a human life; and
             696          (ii) insurance pertaining to or connected with human life.
             697          (b) The business of life insurance includes:
             698          (i) granting a death benefit;
             699          (ii) granting an annuity benefit;
             700          (iii) granting an endowment benefit;
             701          (iv) granting an additional benefit in the event of death by accident;


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


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


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


             786          (A) if the following are not conditioned on the receipt of long-term care:
             787          (I) benefits; or
             788          (II) eligibility; and
             789          (B) the coverage is for one or more the following qualifying events:
             790          (I) terminal illness;
             791          (II) medical conditions requiring extraordinary medical intervention; or
             792          (III) permanent institutional confinement.
             793          (107) "Medical malpractice insurance" means insurance against legal liability incident
             794      to the practice and provision of a medical service other than the practice and provision of a
             795      dental service.
             796          (108) "Member" means a person having membership rights in an insurance
             797      corporation.
             798          (109) "Minimum capital" or "minimum required capital" means the capital that must
             799      be constantly maintained by a stock insurance corporation as required by statute.
             800          (110) "Mortgage accident and health insurance" means insurance offered in
             801      connection with an extension of credit that provides indemnity for payments coming due on a
             802      mortgage while the debtor is disabled.
             803          (111) "Mortgage guaranty insurance" means surety insurance under which a
             804      mortgagee or other creditor is indemnified against losses caused by the default of a debtor.
             805          (112) "Mortgage life insurance" means insurance on the life of a debtor in connection
             806      with an extension of credit that pays if the debtor dies.
             807          (113) "Motor club" means a person:
             808          (a) licensed under:
             809          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             810          (ii) Chapter 11, Motor Clubs; or
             811          (iii) Chapter 14, Foreign Insurers; and
             812          (b) that promises for an advance consideration to provide for a stated period of time
             813      one or more:


             814          (i) legal services under Subsection 31A-11-102 (1)(b);
             815          (ii) bail services under Subsection 31A-11-102 (1)(c); or
             816          (iii) (A) trip reimbursement;
             817          (B) towing services;
             818          (C) emergency road services;
             819          (D) stolen automobile services;
             820          (E) a combination of the services listed in Subsections (113)(b)(iii)(A) through (D); or
             821          (F) other services given in Subsections 31A-11-102 (1)(b) through (f).
             822          (114) "Mutual" means a mutual insurance corporation.
             823          (115) "Network plan" means health care insurance:
             824          (a) that is issued by an insurer; and
             825          (b) under which the financing and delivery of medical care is provided, in whole or in
             826      part, through a defined set of providers under contract with the insurer, including the financing
             827      and delivery of an item paid for as medical care.
             828          (116) "Nonparticipating" means a plan of insurance under which the insured is not
             829      entitled to receive a dividend representing a share of the surplus of the insurer.
             830          (117) "Ocean marine insurance" means insurance against loss of or damage to:
             831          (a) ships or hulls of ships;
             832          (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys,
             833      securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
             834      interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
             835          (c) earnings such as freight, passage money, commissions, or profits derived from
             836      transporting goods or people upon or across the oceans or inland waterways; or
             837          (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
             838      owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
             839      in connection with maritime activity.
             840          (118) "Order" means an order of the commissioner.
             841          (119) "Outline of coverage" means a summary that explains an accident and health


             842      insurance policy.
             843          (120) "Participating" means a plan of insurance under which the insured is entitled to
             844      receive a dividend representing a share of the surplus of the insurer.
             845          (121) "Participation," as used in a health benefit plan, means a requirement relating to
             846      the minimum percentage of eligible employees that must be enrolled in relation to the total
             847      number of eligible employees of an employer reduced by each eligible employee who
             848      voluntarily declines coverage under the plan because the employee:
             849          (a) has other group health care insurance coverage; or
             850          (b) receives:
             851          (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
             852      Security Amendments of 1965; or
             853          (ii) another government health benefit.
             854          (122) "Person" includes:
             855          (a) an individual;
             856          (b) a partnership;
             857          (c) a corporation;
             858          (d) an incorporated or unincorporated association;
             859          (e) a joint stock company;
             860          (f) a trust;
             861          (g) a limited liability company;
             862          (h) a reciprocal;
             863          (i) a syndicate; or
             864          (j) another similar entity or combination of entities acting in concert.
             865          (123) "Personal lines insurance" means property and casualty insurance coverage sold
             866      for primarily noncommercial purposes to:
             867          (a) an individual; or
             868          (b) a family.
             869          (124) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).


             870          (125) "Plan year" means:
             871          (a) the year that is designated as the plan year in:
             872          (i) the plan document of a group health plan; or
             873          (ii) a summary plan description of a group health plan;
             874          (b) if the plan document or summary plan description does not designate a plan year or
             875      there is no plan document or summary plan description:
             876          (i) the year used to determine deductibles or limits;
             877          (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
             878      or
             879          (iii) the employer's taxable year if:
             880          (A) the plan does not impose deductibles or limits on a yearly basis; and
             881          (B) (I) the plan is not insured; or
             882          (II) the insurance policy is not renewed on an annual basis; or
             883          (c) in a case not described in Subsection (125)(a) or (b), the calendar year.
             884          (126) (a) "Policy" means a document, including [any] an attached endorsement or
             885      application that:
             886          (i) purports to be an enforceable contract; and
             887          (ii) memorializes in writing some or all of the terms of an insurance contract.
             888          (b) "Policy" includes a service contract issued by:
             889          (i) a motor club under Chapter 11, Motor Clubs;
             890          (ii) a service contract provided under Chapter 6a, Service Contracts; and
             891          (iii) a corporation licensed under:
             892          (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
             893          (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
             894          (c) "Policy" does not include:
             895          (i) a certificate under a group insurance contract; or
             896          (ii) a document that does not purport to have legal effect.
             897          (127) "Policyholder" means a person who controls a policy, binder, or oral contract by


             898      ownership, premium payment, or otherwise.
             899          (128) "Policy illustration" means a presentation or depiction that includes
             900      nonguaranteed elements of a policy of life insurance over a period of years.
             901          (129) "Policy summary" means a synopsis describing the elements of a life insurance
             902      policy.
             903          (130) "Preexisting condition," with respect to a health benefit plan:
             904          (a) means a condition that was present before the effective date of coverage, whether
             905      or not medical advice, diagnosis, care, or treatment was recommended or received before that
             906      day; and
             907          (b) does not include a condition indicated by genetic information unless an actual
             908      diagnosis of the condition by a physician has been made.
             909          (131) (a) "Premium" means the monetary consideration for an insurance policy.
             910          (b) "Premium" includes, however designated:
             911          (i) an assessment;
             912          (ii) a membership fee;
             913          (iii) a required contribution; or
             914          (iv) monetary consideration.
             915          (c) (i) "Premium" does not include consideration paid to a third party administrator for
             916      the third party administrator's services.
             917          (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
             918      insurance on the risks administered by the third party administrator.
             919          (132) "Principal officers" for a corporation means the officers designated under
             920      Subsection 31A-5-203 (3).
             921          (133) "Proceeding" includes an action or special statutory proceeding.
             922          (134) "Professional liability insurance" means insurance against legal liability incident
             923      to the practice of a profession and provision of a professional service.
             924          (135) (a) Except as provided in Subsection (135)(b), "property insurance" means
             925      insurance against loss or damage to real or personal property of every kind and any interest in


             926      that property:
             927          (i) from all hazards or causes; and
             928          (ii) against loss consequential upon the loss or damage including vehicle
             929      comprehensive and vehicle physical damage coverages.
             930          (b) "Property insurance" does not include:
             931          (i) inland marine insurance; and
             932          (ii) ocean marine insurance.
             933          (136) "Qualified long-term care insurance contract" or "federally tax qualified
             934      long-term care insurance contract" means:
             935          (a) an individual or group insurance contract that meets the requirements of Section
             936      7702B(b), Internal Revenue Code; or
             937          (b) the portion of a life insurance contract that provides long-term care insurance:
             938          (i) (A) by rider; or
             939          (B) as a part of the contract; and
             940          (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
             941      Code.
             942          (137) "Qualified United States financial institution" means an institution that:
             943          (a) is:
             944          (i) organized under the laws of the United States or any state; or
             945          (ii) in the case of a United States office of a foreign banking organization, licensed
             946      under the laws of the United States or any state;
             947          (b) is regulated, supervised, and examined by a United States federal or state authority
             948      having regulatory authority over a bank or trust company; and
             949          (c) meets the standards of financial condition and standing that are considered
             950      necessary and appropriate to regulate the quality of a financial institution whose letters of
             951      credit will be acceptable to the commissioner as determined by:
             952          (i) the commissioner by rule; or
             953          (ii) the Securities Valuation Office of the National Association of Insurance


             954      Commissioners.
             955          (138) (a) "Rate" means:
             956          (i) the cost of a given unit of insurance; or
             957          (ii) for property or casualty insurance, that cost of insurance per exposure unit either
             958      expressed as:
             959          (A) a single number; or
             960          (B) a pure premium rate, adjusted before the application of individual risk variations
             961      based on loss or expense considerations to account for the treatment of:
             962          (I) expenses;
             963          (II) profit; and
             964          (III) individual insurer variation in loss experience.
             965          (b) "Rate" does not include a minimum premium.
             966          (139) (a) Except as provided in Subsection (139)(b), "rate service organization" means
             967      a person who assists an insurer in rate making or filing by:
             968          (i) collecting, compiling, and furnishing loss or expense statistics;
             969          (ii) recommending, making, or filing rates or supplementary rate information; or
             970          (iii) advising about rate questions, except as an attorney giving legal advice.
             971          (b) "Rate service organization" does not mean:
             972          (i) an employee of an insurer;
             973          (ii) a single insurer or group of insurers under common control;
             974          (iii) a joint underwriting group; or
             975          (iv) an individual serving as an actuarial or legal consultant.
             976          (140) "Rating manual" means any of the following used to determine initial and
             977      renewal policy premiums:
             978          (a) a manual of rates;
             979          (b) a classification;
             980          (c) a rate-related underwriting rule; and
             981          (d) a rating formula that describes steps, policies, and procedures for determining


             982      initial and renewal policy premiums.
             983          (141) "Received by the department" means:
             984          (a) the date delivered to and stamped received by the department, if delivered in
             985      person;
             986          (b) the post mark date, if delivered by mail;
             987          (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
             988          (d) the received date recorded on an item delivered, if delivered by:
             989          (i) facsimile;
             990          (ii) email; or
             991          (iii) another electronic method; or
             992          (e) a date specified in:
             993          (i) a statute;
             994          (ii) a rule; or
             995          (iii) an order.
             996          (142) "Reciprocal" or "interinsurance exchange" means an unincorporated association
             997      of persons:
             998          (a) operating through an attorney-in-fact common to all of the persons; and
             999          (b) exchanging insurance contracts with one another that provide insurance coverage
             1000      on each other.
             1001          (143) "Reinsurance" means an insurance transaction where an insurer, for
             1002      consideration, transfers any portion of the risk it has assumed to another insurer. In referring
             1003      to reinsurance transactions, this title sometimes refers to:
             1004          (a) the insurer transferring the risk as the "ceding insurer"; and
             1005          (b) the insurer assuming the risk as the:
             1006          (i) "assuming insurer"; or
             1007          (ii) "assuming reinsurer."
             1008          (144) "Reinsurer" means a person licensed in this state as an insurer with the authority
             1009      to assume reinsurance.


             1010          (145) "Residential dwelling liability insurance" means insurance against liability
             1011      resulting from or incident to the ownership, maintenance, or use of a residential dwelling that
             1012      is a detached single family residence or multifamily residence up to four units.
             1013          (146) (a) "Retrocession" means reinsurance with another insurer of a liability assumed
             1014      under a reinsurance contract.
             1015          (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
             1016      liability assumed under a reinsurance contract.
             1017          (147) "Rider" means an endorsement to:
             1018          (a) an insurance policy; or
             1019          (b) an insurance certificate.
             1020          (148) (a) "Security" means a:
             1021          (i) note;
             1022          (ii) stock;
             1023          (iii) bond;
             1024          (iv) debenture;
             1025          (v) evidence of indebtedness;
             1026          (vi) certificate of interest or participation in a profit-sharing agreement;
             1027          (vii) collateral-trust certificate;
             1028          (viii) preorganization certificate or subscription;
             1029          (ix) transferable share;
             1030          (x) investment contract;
             1031          (xi) voting trust certificate;
             1032          (xii) certificate of deposit for a security;
             1033          (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
             1034      payments out of production under such a title or lease;
             1035          (xiv) commodity contract or commodity option;
             1036          (xv) certificate of interest or participation in, temporary or interim certificate for,
             1037      receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed


             1038      in Subsections (148)(a)(i) through (xiv); or
             1039          (xvi) another interest or instrument commonly known as a security.
             1040          (b) "Security" does not include:
             1041          (i) any of the following under which an insurance company promises to pay money in
             1042      a specific lump sum or periodically for life or some other specified period:
             1043          (A) insurance;
             1044          (B) an endowment policy; or
             1045          (C) an annuity contract; or
             1046          (ii) a burial certificate or burial contract.
             1047          (149) "Secondary medical condition" means a complication related to an exclusion
             1048      from coverage in accident and health insurance.
             1049          (150) "Self-insurance" means an arrangement under which a person provides for
             1050      spreading its own risks by a systematic plan.
             1051          (a) Except as provided in this Subsection (150), "self-insurance" does not include an
             1052      arrangement under which a number of persons spread their risks among themselves.
             1053          (b) "Self-insurance" includes:
             1054          (i) an arrangement by which a governmental entity undertakes to indemnify an
             1055      employee for liability arising out of the employee's employment; and
             1056          (ii) an arrangement by which a person with a managed program of self-insurance and
             1057      risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
             1058      employees for liability or risk that is related to the relationship or employment.
             1059          (c) "Self-insurance" does not include an arrangement with an independent contractor.
             1060          (151) "Sell" means to exchange a contract of insurance:
             1061          (a) by any means;
             1062          (b) for money or its equivalent; and
             1063          (c) on behalf of an insurance company.
             1064          (152) "Short-term care insurance" means an insurance policy or rider advertised,
             1065      marketed, offered, or designed to provide coverage that is similar to long-term care insurance,


             1066      but that provides coverage for less than 12 consecutive months for each covered person.
             1067          (153) "Significant break in coverage" means a period of 63 consecutive days during
             1068      each of which an individual does not have creditable coverage.
             1069          (154) "Small employer," in connection with a health benefit plan, means an employer
             1070      who, with respect to a calendar year and to a plan year:
             1071          (a) employed an average of at least two employees but not more than 50 eligible
             1072      employees on each business day during the preceding calendar year; and
             1073          (b) employs at least two employees on the first day of the plan year.
             1074          (155) "Special enrollment period," in connection with a health benefit plan, has the
             1075      same meaning as provided in federal regulations adopted pursuant to the Health Insurance
             1076      Portability and Accountability Act of 1996, Pub. L. [No.] 104-191, 110 Stat. 1936.
             1077          (156) (a) "Subsidiary" of a person means an affiliate controlled by that person either
             1078      directly or indirectly through one or more affiliates or intermediaries.
             1079          (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
             1080      shares are owned by that person either alone or with its affiliates, except for the minimum
             1081      number of shares the law of the subsidiary's domicile requires to be owned by directors or
             1082      others.
             1083          (157) Subject to Subsection (83)(b), "surety insurance" includes:
             1084          (a) a guarantee against loss or damage resulting from the failure of a principal to pay
             1085      or perform the principal's obligations to a creditor or other obligee;
             1086          (b) bail bond insurance; and
             1087          (c) fidelity insurance.
             1088          (158) (a) "Surplus" means the excess of assets over the sum of paid-in capital and
             1089      liabilities.
             1090          (b) (i) "Permanent surplus" means the surplus of a mutual insurer that is designated by
             1091      the insurer as permanent.
             1092          (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209 require
             1093      that mutuals doing business in this state maintain specified minimum levels of permanent


             1094      surplus.
             1095          (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
             1096      same as the minimum required capital requirement that applies to stock insurers.
             1097          (c) "Excess surplus" means:
             1098          (i) for a life insurer, accident and health insurer, health organization, or property and
             1099      casualty insurer as defined in Section 31A-17-601 , the lesser of:
             1100          (A) that amount of an insurer's or health organization's total adjusted capital that
             1101      exceeds the product of:
             1102          (I) 2.5; and
             1103          (II) the sum of the insurer's or health organization's minimum capital or permanent
             1104      surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
             1105          (B) that amount of an insurer's or health organization's total adjusted capital that
             1106      exceeds the product of:
             1107          (I) 3.0; and
             1108          (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
             1109          (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title
             1110      insurer that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
             1111          (A) 1.5; and
             1112          (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
             1113          (159) "Third party administrator" or "administrator" means a person who collects
             1114      charges or premiums from, or who, for consideration, adjusts or settles claims of residents of
             1115      the state in connection with insurance coverage, annuities, or service insurance coverage,
             1116      except:
             1117          (a) a union on behalf of its members;
             1118          (b) a person administering a:
             1119          (i) pension plan subject to the federal Employee Retirement Income Security Act of
             1120      1974;
             1121          (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or


             1122          (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
             1123          (c) an employer on behalf of the employer's employees or the employees of one or
             1124      more of the subsidiary or affiliated corporations of the employer;
             1125          (d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance
             1126      for which the insurer holds a license in this state; or
             1127          (e) a person:
             1128          (i) licensed or exempt from licensing under:
             1129          (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             1130      Reinsurance Intermediaries; or
             1131          (B) Chapter 26, Insurance Adjusters; and
             1132          (ii) whose activities are limited to those authorized under the license the person holds
             1133      or for which the person is exempt.
             1134          (160) "Title insurance" means the insuring, guaranteeing, or indemnifying of an owner
             1135      of real or personal property or the holder of liens or encumbrances on that property, or others
             1136      interested in the property against loss or damage suffered by reason of liens or encumbrances
             1137      upon, defects in, or the unmarketability of the title to the property, or invalidity or
             1138      unenforceability of any liens or encumbrances on the property.
             1139          (161) "Total adjusted capital" means the sum of an insurer's or health organization's
             1140      statutory capital and surplus as determined in accordance with:
             1141          (a) the statutory accounting applicable to the annual financial statements required to
             1142      be filed under Section 31A-4-113 ; and
             1143          (b) another item provided by the RBC instructions, as RBC instructions is defined in
             1144      Section 31A-17-601 .
             1145          (162) (a) "Trustee" means "director" when referring to the board of directors of a
             1146      corporation.
             1147          (b) "Trustee," when used in reference to an employee welfare fund, means an
             1148      individual, firm, association, organization, joint stock company, or corporation, whether
             1149      acting individually or jointly and whether designated by that name or any other, that is


             1150      charged with or has the overall management of an employee welfare fund.
             1151          (163) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted insurer"
             1152      means an insurer:
             1153          (i) not holding a valid certificate of authority to do an insurance business in this state;
             1154      or
             1155          (ii) transacting business not authorized by a valid certificate.
             1156          (b) "Admitted insurer" or "authorized insurer" means an insurer:
             1157          (i) holding a valid certificate of authority to do an insurance business in this state; and
             1158          (ii) transacting business as authorized by a valid certificate.
             1159          (164) "Underwrite" means the authority to accept or reject risk on behalf of the
             1160      insurer.
             1161          (165) "Vehicle liability insurance" means insurance against liability resulting from or
             1162      incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a vehicle
             1163      comprehensive or vehicle physical damage coverage under Subsection (135).
             1164          (166) "Voting security" means a security with voting rights, and includes a security
             1165      convertible into a security with a voting right associated with the security.
             1166          (167) "Waiting period" for a health benefit plan means the period that must pass
             1167      before coverage for an individual, who is otherwise eligible to enroll under the terms of the
             1168      health benefit plan, can become effective.
             1169          (168) "Workers' compensation insurance" means:
             1170          (a) insurance for indemnification of an employer against liability for compensation
             1171      based on:
             1172          (i) a compensable accidental injury; and
             1173          (ii) occupational disease disability;
             1174          (b) employer's liability insurance incidental to workers' compensation insurance and
             1175      written in connection with workers' compensation insurance; and
             1176          (c) insurance assuring to a person entitled to workers' compensation benefits the
             1177      compensation provided by law.


             1178          Section 2. Section 31A-2-403 is amended to read:
             1179           31A-2-403. Title and Escrow Commission created.
             1180          (1) (a) Subject to Subsection (1)(b), there is created within the department the Title
             1181      and Escrow Commission that is comprised of five members appointed by the governor with
             1182      the consent of the Senate as follows:
             1183          (i) four members shall each:
             1184          (A) be or have been licensed under the title insurance line of authority; [and]
             1185          (B) as of the day on which the member is appointed, be or have been licensed with the
             1186      search or escrow subline of authority for at least five years; and
             1187          (C) as of the day on which the member is appointed, not be from the same county as
             1188      another member appointed under this Subsection (1)(a)(i); and
             1189          (ii) one member shall be a member of the general public from any county in the state.
             1190          (b) No more than one commission member may be appointed from a single company.
             1191          (2) (a) Subject to Subsection (2)(c), a [member of the] commission member shall file
             1192      with the [department] commissioner a disclosure of any position of employment or ownership
             1193      interest that the [member of the] commission member has with respect to a person that is
             1194      subject to the jurisdiction of the [department] commissioner.
             1195          (b) The disclosure statement required by this Subsection (2) shall be:
             1196          (i) filed by no later than the day on which the person begins that person's appointment;
             1197      and
             1198          (ii) amended when a significant change occurs in any matter required to be disclosed
             1199      under this Subsection (2).
             1200          (c) A [member of the] commission member is not required to disclose an ownership
             1201      interest that the [member of the] commission member has if the ownership interest is held as
             1202      part of a mutual fund, trust, or similar investment.
             1203          (3) (a) Except as required by Subsection (3)(b), as terms of current commission
             1204      members expire, the governor shall appoint each new commission member to a four-year term
             1205      ending on June 30.


             1206          (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
             1207      time of appointment, adjust the length of terms to ensure that the terms of the commission
             1208      members are staggered so that approximately half of the commission is appointed every two
             1209      years.
             1210          (c) A commission member may not serve more than one consecutive term.
             1211          (d) When a vacancy occurs in the membership for any reason, the governor, with the
             1212      consent of the Senate, shall appoint a replacement for the unexpired term.
             1213          (e) Notwithstanding the other provisions of this Subsection (3), a commission member
             1214      serves until a successor is appointed by the governor with the consent of the Senate.
             1215          (4) (a) A [member of the] commission member may not receive compensation or
             1216      benefits for the commission member's services, but may receive per diem and expenses
             1217      incurred in the performance of the commission member's official duties at the rates established
             1218      by the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
             1219          (b) A commission member may decline to receive per diem and expenses for the
             1220      commission member's service.
             1221          (5) Members of the commission shall annually select one commission member to serve
             1222      as chair.
             1223          (6) (a) The commission shall meet at least monthly.
             1224          (b) The commissioner may call additional meetings:
             1225          (i) at the commissioner's discretion;
             1226          (ii) upon the request of the chair of the commission; or
             1227          (iii) upon the written request of three or more commission members.
             1228          (c) (i) Three [members of the] commission members constitute a quorum for the
             1229      transaction of business.
             1230          (ii) The action of a majority of the commission members when a quorum is present is
             1231      the action of the commission.
             1232          (7) The [department] commissioner shall staff the commission.
             1233          Section 3. Section 31A-2-404 is amended to read:


             1234           31A-2-404. Duties of the commissioner and Title and Escrow Commission.
             1235          (1) Notwithstanding the other provisions of this chapter, to the extent provided in this
             1236      part, the commissioner shall administer and enforce the provisions in this title related to:
             1237          (a) title insurance; and
             1238          (b) escrow conducted by a title licensee or title insurer.
             1239          (2) The commission shall:
             1240          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             1241      and subject to Subsection (3), make rules for the administration of the provisions in this title
             1242      related to title insurance including rules related to:
             1243          (i) rating standards and rating methods for a title [agencies and producers] licensee, as
             1244      provided in Section 31A-19a-209 ;
             1245          (ii) the licensing for a title licensee, including the licensing requirements of Sections
             1246      31A-23a-203 and 31A-23a-204 ;
             1247          (iii) continuing education requirements of Section 31A-23a-202 ;
             1248          (iv) examination procedures, after consultation with the [department] commissioner
             1249      and the [department's] commissioner's test administrator when required by Section
             1250      31A-23a-204 ; and
             1251          (v) standards of conduct for a title licensee;
             1252          (b) concur in the issuance and renewal of [licenses] a license in accordance with
             1253      Section 31A-23a-105 or 31A-26-203 ;
             1254          (c) in accordance with Section 31A-3-103 , establish, with the concurrence of the
             1255      [department] commissioner, [all] the fees imposed by this title on a title licensee;
             1256          (d) in accordance with Section 31A-23a-415 determine, after consulting with the
             1257      commissioner, the assessment on a title insurer as defined in Section 31A-23a-415 ;
             1258          (e) conduct [all] an administrative [hearings] hearing not delegated by the commission
             1259      to an administrative law judge related to the:
             1260          (i) licensing of [any] an applicant;
             1261          (ii) conduct of [any] a title licensee; or


             1262          (iii) approval of a continuing education [programs] program required by Section
             1263      31A-23a-202 ;
             1264          [(f) with the concurrence of the commissioner, approve assets that can be included in a
             1265      reserve fund required by Section 31A-23a-204 ;]
             1266          [(g)] (f) with the concurrence of the commissioner, approve a continuing education
             1267      [programs] program required by Section 31A-23a-202 ;
             1268          [(h)] (g) with the concurrence of the commissioner, impose [penalties] a penalty:
             1269          (i) under this title related to:
             1270          (A) title insurance; or
             1271          (B) escrow conducted by a title licensee;
             1272          (ii) after investigation by the [department] commissioner in accordance with Part 3,
             1273      Procedures and Enforcement; and
             1274          (iii) that [are] is enforced by the commissioner;
             1275          [(i)] (h) advise the commissioner on the administration and enforcement of any
             1276      [matters] matter affecting the title insurance industry;
             1277          [(j)] (i) advise the commissioner on matters affecting the [department's]
             1278      commissioner's budget related to title insurance; and
             1279          [(k)] (j) perform other duties as provided in this title.
             1280          (3) The commission may make a rule under this title only if at the time the
             1281      commission files its proposed rule and rule analysis with the Division of Administrative Rules
             1282      in accordance with Section 63G-3-301 , the commission provides the Real Estate Commission
             1283      that same information.
             1284          (4) (a) The commissioner shall annually report the information described in
             1285      Subsection (4)(b) in writing to:
             1286          (i) the commission; and
             1287          (ii) the Business and Labor Interim Committee.
             1288          (b) The information required to be reported under this Subsection (4):
             1289          (i) may not identify a person; and


             1290          (ii) shall include:
             1291          (A) the number of complaints the [department] commissioner receives with regard to
             1292      transactions involving title insurance or a title licensee during the calendar year immediately
             1293      proceeding the report;
             1294          (B) the type of complaints described in Subsection (4)(b)(ii)(A); and
             1295          (C) for each complaint described in Subsection (4)(b)(ii)(A):
             1296          (I) any action taken by the [department] commissioner with regard to the complaint;
             1297      and
             1298          (II) the time-period beginning the day on which a complaint is made and ending the
             1299      day on which the [department] commissioner determines it will take no further action with
             1300      regard to the complaint.
             1301          Section 4. Section 31A-3-103 is amended to read:
             1302           31A-3-103. Fees.
             1303          (1) For purposes of this section[: (a) "Services"], "services" means functions that are
             1304      reasonable and necessary to enable the commissioner to perform the duties imposed by this
             1305      title including:
             1306          [(i)] (a) issuing [and] or renewing [licenses and certificates] a license or certificate of
             1307      authority;
             1308          [(ii)] (b) filing a policy [forms] form;
             1309          [(iii)] (c) reporting [agent appointments and terminations] a producer appointment or
             1310      termination; and
             1311          [(iv)] (d) filing an annual [statements] statement.
             1312          (2) Except as otherwise provided by this title:
             1313          (a) the commissioner may set and collect a fee for services provided by the
             1314      commissioner;
             1315          (b) [Fees] a fee related to the renewal of [licenses] a license may be imposed no more
             1316      frequently than once each year[.]; and
             1317          [(2) A] (c) a fee charged by the [department] commissioner shall be set in accordance


             1318      with Section 63J-1-504 .
             1319          (3) [(a) A fee approved by the Legislature] Except as otherwise provided in this title, a
             1320      fee established pursuant to this section shall be deposited into the General Fund for
             1321      appropriation by the Legislature.
             1322          [(b) A fee approved pursuant to this section that relates to the use of electronic or other
             1323      similar technology to provide the services of the department shall be deposited into the
             1324      General Fund as a dedicated credit to be used by the department to provide services through
             1325      use of electronic commerce or other similar technology.]
             1326          (4) (a) The commissioner shall [separately] publish [the] a schedule of fees [approved
             1327      by the Legislature and make it available upon request for $1 per copy. This fee schedule shall
             1328      also be included in any compilation of rules promulgated by the commissioner] established
             1329      pursuant to this section.
             1330          [(5)] (b) The commissioner shall, by rule, establish the deadlines for payment of [any]
             1331      a fee established [by the department in accordance with] pursuant to this section.
             1332          Section 5. Section 31A-3-104 is amended to read:
             1333           31A-3-104. Technology fees -- Restricted account.
             1334          (1) The [department may charge] commissioner may impose a fee for requests for
             1335      information:
             1336          (a) that is obtained from an electronic database of the [department] commissioner; or
             1337          (b) derived from data that is generated by electronic means.
             1338          (2) In addition to any fee authorized in this title, the [department] commissioner shall
             1339      impose a supplemental fee on the issuance or renewal of any of the following issued by the
             1340      department:
             1341          (a) a license;
             1342          (b) a registration; or
             1343          (c) a certificate of authority.
             1344          (3) A fee imposed under this section shall be:
             1345          (a) established in accordance with [Subsection 31A-3-103 (3)] Section 31A-3-103 ; and


             1346          (b) deposited into the [General Fund as a dedicated credit in accordance with
             1347      Subsection 31A-3-103 (3)] Technology Development Restricted Account.
             1348          (4) (a) There is created in the General Fund a restricted account known as the
             1349      "Technology Development Restricted Account."
             1350          (b) The Technology Development Restricted Account shall consist of the fees imposed
             1351      by the commissioner in accordance with this section.
             1352          (c) The commissioner shall administer the Technology Development Restricted
             1353      Account. Subject to appropriations by the Legislature, the commissioner shall use the money
             1354      deposited into the Technology Development Restricted Account to provide services through
             1355      use of electronic commerce or other similar technology.
             1356          (d) The money in the Technology Development Restricted Account is nonlapsing.
             1357          Section 6. Section 31A-3-105 is enacted to read:
             1358          31A-3-105. Criminal Background Check Restricted Account.
             1359          (1) There is created in the General Fund a restricted account known as the "Criminal
             1360      Background Check Restricted Account."
             1361          (2) The Criminal Background Check Restricted Account shall consist of the fees
             1362      imposed by the commissioner in accordance with:
             1363          (a) Subsection 31A-16-103 (3);
             1364          (b) Subsection 31A-23a-105 (3);
             1365          (c) Subsection 31A-25-203 (3); and
             1366          (d) Subsection 31A-26-203 (3).
             1367          (3) The commissioner shall administer the Criminal Background Check Restricted
             1368      Account. Subject to appropriations by the Legislature, the commissioner shall use the money
             1369      deposited into the Criminal Background Check Restricted Account to pay the costs the
             1370      department is required to pay related to obtaining criminal background information in
             1371      accordance with the provisions listed in Subsection (2)(a).
             1372          (4) The money in the Criminal Background Check Restricted Account is nonlapsing.
             1373          Section 7. Section 31A-3-304 (Superseded 07/01/10) is amended to read:


             1374           31A-3-304 (Superseded 07/01/10). Annual fees -- Other taxes or fees prohibited
             1375      -- Captive Insurance Restricted Account.
             1376          (1) (a) A captive insurance company shall pay an annual fee imposed under this
             1377      section to obtain or renew a certificate of authority.
             1378          (b) The commissioner shall:
             1379          (i) determine the annual fee pursuant to [Sections ] Section 31A-3-103 [and
             1380      63J-1-504 ]; and
             1381          (ii) consider whether the annual fee is competitive with fees imposed by other states
             1382      on captive insurance companies.
             1383          (2) A captive insurance company that fails to pay the fee required by this section is
             1384      subject to the relevant sanctions of this title.
             1385          (3) (a) Except as provided in Subsection (3)(b) and notwithstanding Title 59, Chapter
             1386      9, Taxation of Admitted Insurers, the fee provided for in this section constitutes the sole tax or
             1387      fee under the laws of this state that may be otherwise levied or assessed on a captive insurance
             1388      company, and no other occupation tax or other tax or fee may be levied or collected from a
             1389      captive insurance company by the state or a county, city, or municipality within this state.
             1390          (b) Notwithstanding Subsection (3)(a), a captive insurance company is subject to real
             1391      and personal property taxes.
             1392          (4) A captive insurance company shall pay the fee imposed by this section to the
             1393      [department] commissioner by March 31 of each year.
             1394          [(5) (a) The funds received pursuant to Subsection (2) shall be deposited into the
             1395      General Fund as a dedicated credit to be used by the department to:]
             1396          (5) (a) Money received pursuant to Subsection (2) shall be deposited into the Captive
             1397      Insurance Restricted Account.
             1398          (b) There is created in the General Fund a restricted account known as the "Captive
             1399      Insurance Restricted Account."
             1400          (c) The Captive Insurance Restricted Account shall consist of the fees imposed by the
             1401      commissioner in accordance with this section.


             1402          (d) The commissioner shall administer the Captive Insurance Restricted Account.
             1403      Subject to appropriations by the Legislature, the commissioner shall use the money deposited
             1404      into the Captive Insurance Restricted Account to:
             1405          (i) administer and enforce Chapter 37, Captive Insurance Companies Act; and
             1406          (ii) promote the captive insurance industry in Utah.
             1407          [(b) At] (e) The money in the Captive Insurance Restricted Account is nonlapsing,
             1408      except that at the end of each fiscal year, [funds] money received by the [department]
             1409      commissioner in excess of $250,000 shall be treated as free revenue in the General Fund.
             1410          Section 8. Section 31A-3-304 (Effective 07/01/10) is amended to read:
             1411           31A-3-304 (Effective 07/01/10). Annual fees -- Other taxes or fees prohibited --
             1412      Captive Insurance Restricted Account.
             1413          (1) (a) A captive insurance company shall pay an annual fee imposed under this
             1414      section to obtain or renew a certificate of authority.
             1415          (b) The commissioner shall:
             1416          (i) determine the annual fee pursuant to [Sections ] Section 31A-3-103 [and
             1417      63J-1-504 ]; and
             1418          (ii) consider whether the annual fee is competitive with fees imposed by other states
             1419      on captive insurance companies.
             1420          (2) A captive insurance company that fails to pay the fee required by this section is
             1421      subject to the relevant sanctions of this title.
             1422          (3) (a) Except as provided in Subsection (3)(b) and notwithstanding Title 59, Chapter
             1423      9, Taxation of Admitted Insurers, the fee provided for in this section constitutes the sole tax or
             1424      fee under the laws of this state that may be otherwise levied or assessed on a captive insurance
             1425      company, and no other occupation tax or other tax or fee may be levied or collected from a
             1426      captive insurance company by the state or a county, city, or municipality within this state.
             1427          (b) Notwithstanding Subsection (3)(a), a captive insurance company is subject to real
             1428      and personal property taxes.
             1429          (4) A captive insurance company shall pay the fee imposed by this section to the


             1430      [department] commissioner by March 31 of each year.
             1431          [(5) (a) The funds received pursuant to Subsection (2) shall be deposited into the
             1432      General Fund as a dedicated credit to be used by the department to:]
             1433          (5) (a) Money received pursuant to Subsection (2) shall be deposited into the Captive
             1434      Insurance Restricted Account.
             1435          (b) There is created in the General Fund a restricted account known as the "Captive
             1436      Insurance Restricted Account."
             1437          (c) The Captive Insurance Restricted Account shall consist of the fees imposed by the
             1438      commissioner in accordance with this section.
             1439          (d) The commissioner shall administer the Captive Insurance Restricted Account.
             1440      Subject to appropriations by the Legislature, the commissioner shall use the money deposited
             1441      into the Captive Insurance Restricted Account to:
             1442          (i) administer and enforce Chapter 37, Captive Insurance Companies Act; and
             1443          (ii) promote the captive insurance industry in Utah.
             1444          [(b) At] (e) The money in the Captive Insurance Restricted Account is nonlapsing,
             1445      except that at the end of each fiscal year, [funds] money received by the [department]
             1446      commissioner in excess of $750,000 shall be treated as free revenue in the General Fund.
             1447          Section 9. Section 31A-5-217.5 is amended to read:
             1448           31A-5-217.5. Variable contract law.
             1449          (1) This section applies to [all] a separate [accounts] account that [are] is used to
             1450      support [any] one or more of the following:
             1451          (a) a variable life insurance [policies] policy that [satisfy] satisfies the requirements of
             1452      Section 817, Internal Revenue Code;
             1453          (b) a variable annuity [contracts] policy, including a modified guaranteed [annuities]
             1454      annuity; or
             1455          (c) benefits under [plans] a plan governed by the Employee Retirement Income
             1456      Security Act of 1974.
             1457          (2) [In the event of] If there is a conflict between this section and [any other] another


             1458      section of this title as it relates to [these accounts] a separate account described in Subsection
             1459      (1), this section prevails.
             1460          (3) [A] (a) Subject to the other provisions of this Subsection (3), a domestic life
             1461      [insurance company] insurer may:
             1462          (i) establish one or more separate accounts[,]; and [may]
             1463          (ii) allocate to those separate accounts amounts, which include:
             1464          (A) proceeds applied under optional modes of settlement or under dividend options, to
             1465      provide for life insurance or annuities[,]; and
             1466          (B) benefits incidental to life insurance or annuities, payable in fixed [or], variable, or
             1467      both fixed and variable amounts [or both, subject to the following:].
             1468          [(a) The] (b) An insurer shall credit to or charge against a separate account the
             1469      income, gains, and losses, realized or unrealized, from assets allocated to [a] the separate
             1470      account [shall be credited to or charged against the account], without regard to other income,
             1471      gains, or losses of the [company] insurer.
             1472          [(b)] (c) Except as may be provided with respect to reserves for guaranteed benefits
             1473      and funds referred to in Subsection [(c)] (3)(d):
             1474          (i) an insurer may invest or reinvest amounts allocated to [any] a separate account and
             1475      accumulations on [such] those amounts [may be invested and reinvested] without regard to
             1476      [any] the requirements or limitations prescribed by the laws of this state governing the
             1477      investments of a life [insurance companies] insurer; and
             1478          (ii) an insurer may not take into account the investments in [any such] a separate
             1479      account [may not be taken into account] in applying the investment limitations that otherwise
             1480      apply to the investments of the [company] insurer.
             1481          [(c)] (d) Except with the approval of the commissioner and under any [conditions]
             1482      condition the commissioner prescribes as to investments and other matters [as he may
             1483      prescribe], which shall recognize the guaranteed nature of the benefits provided, an insurer
             1484      may not maintain in a separate account reserves for:
             1485          (i) benefits guaranteed as to dollar amount and duration[,]; and


             1486          (ii) funds guaranteed as to principal amount or stated rate of interest [may not be
             1487      maintained in a separate account].
             1488          [(d) Unless] (e) (i) Except as provided in Subsection (3)(e)(ii) and unless otherwise
             1489      approved by the commissioner, assets allocated to a separate account shall be valued:
             1490          (A) at their market value on the date of valuation[,]; or
             1491          (B) if there is no readily available market, then as provided under the terms of the
             1492      contract [or the], rules, or other written agreement that applies to the separate account.
             1493      [However, unless]
             1494          (ii) Unless otherwise approved by the commissioner, the portion of [any of] the assets
             1495      of [the] a separate account that are equal to the [company's] insurer's reserve liability with
             1496      regard to the guaranteed benefits and funds referred to in Subsection [(c)] (3)(d) shall be
             1497      valued in accordance with the rules that otherwise apply to the company's assets.
             1498          [(e) Amounts allocated] (f)(i) An insurer owns the amounts it allocates to a separate
             1499      account in the exercise of the power granted by this section [shall be owned by the company,
             1500      and the company], and the insurer may not be, nor hold itself out to be, a trustee with respect
             1501      to those amounts. [If, and to]
             1502          (ii) To the extent provided under the applicable [contracts, that] insurance policy, an
             1503      insurer may not charge the portion of the assets of [any] a separate account that is equal to the
             1504      reserves and other [contract] insurance liabilities with respect to the separate account [may not
             1505      be chargeable] with liabilities arising out of any other business the [company] insurer may
             1506      conduct.
             1507          [(f)] (g) (i) A sale, exchange, or other transfer of assets may not be made by [a
             1508      company] an insurer between any of its separate accounts or between any other investment
             1509      account and one or more of its separate accounts unless[,]:
             1510          (A) in case of a transfer into a separate account, the transfer is made solely to establish
             1511      the account or to support the operation of the [contracts] insurance policies with respect to the
             1512      separate account to which the transfer is made[,]; and [unless]
             1513          (B) the transfer, whether into or from a separate account, is made by:


             1514          (I) a transfer of cash[,]; or [by]
             1515          (II) if the transfer of securities is approved by the commissioner, a transfer of
             1516      securities having a readily determinable market value[, if the transfer of securities is approved
             1517      by the commissioner].
             1518          (ii) The commissioner may approve [other transfers] a transfer not described in
             1519      Subsection (2)(g)(i) among [such] the accounts described in Subsection (2)(g)(i) if, in [his] the
             1520      commissioner's opinion, the [transfers] transfer would not be inequitable.
             1521          [(g)] (h) To the extent [a company] an insurer considers it necessary to comply with
             1522      [any] an applicable federal or state [laws, the company,] law, the insurer with respect to [any]
             1523      a separate account, including [any] a separate account which is a management investment
             1524      company or a unit investment trust, may provide for [persons] a person having an interest in
             1525      the separate account to have appropriate voting and other rights and special procedures for the
             1526      conduct of the business of the separate account, including:
             1527          (i) special rights and procedures relating to investment policy[,];
             1528          (ii) investment advisory services[,];
             1529          (iii) selection of independent public accountants[,]; and
             1530          (iv) the selection of a committee, the members of which need not be otherwise
             1531      affiliated with the [company] insurer, to manage the business of the separate account.
             1532          [(4) Any contract providing benefits payable in variable amounts delivered or issued
             1533      for delivery in this state shall contain a statement of the essential features of the procedures to
             1534      be followed by the insurance company in determining the dollar amount of the variable
             1535      benefits. Any contract under which the benefits vary to reflect investment experience,
             1536      including a group contract and any certificate in evidence of variable benefits issued under a
             1537      group contract, shall state that the dollar amount will vary according to investment experience.
             1538      The contract shall contain on its first page a statement to the effect that the benefits under the
             1539      contract are on a variable basis.]
             1540          [(5) (a) A company may not deliver or issue for delivery within this state variable
             1541      contracts unless it is licensed or organized to do a life insurance or annuity business in this


             1542      state, and the commissioner is satisfied that its condition or method of operation in connection
             1543      with the issuance of such contracts will not render its operation hazardous to the public or its
             1544      policyholders in this state. In this connection, the commissioner shall consider among other
             1545      things:]
             1546          [(i) the history and financial condition of the company;]
             1547          [(ii) the character, responsibility, and fitness of the officers and directors of the
             1548      company; and]
             1549          [(iii) (A) the law and regulation under which the company is authorized in the state of
             1550      domicile to issue variable contracts.]
             1551          [(B) The state of entry of an alien company shall be considered its place of domicile
             1552      for the purposes of Subsection (iii)(A).]
             1553          [(b) If the company is a subsidiary of an admitted life insurance company, or affiliated
             1554      with such a company through common management or ownership, it may be considered by the
             1555      commissioner to have met the provisions of this section if either it or the parent or the
             1556      affiliated company meets the requirements of this section.]
             1557          [(6) Notwithstanding any other provision of law, the commissioner shall have sole
             1558      authority to regulate the issuance and sale of variable contracts, and to make rules necessary
             1559      and appropriate to carry out the purposes and provisions of this chapter.]
             1560          [(7) (a) Except for Sections 31A-22-402 , 31A-22-407 , and 31A-22-409 , in the case of
             1561      a variable annuity contract and Sections 31A-22-402 , 31A-22-407 , and 31A-22-408 in the
             1562      case of a variable life insurance policy, and except as otherwise provided in this chapter, all
             1563      pertinent provisions of this title apply to separate accounts and contracts relating to the
             1564      separate accounts. Any individual variable life insurance contract, delivered or issued for
             1565      delivery in this state shall contain grace, reinstatement, and nonforfeiture provisions
             1566      appropriate to the contract.]
             1567          [(b) The reserve liability for variable contracts shall be established in accordance with
             1568      actuarial procedures that recognize the variable nature of the benefits provided and any
             1569      mortality guarantees.]


             1570          Section 10. Section 31A-15-208 is amended to read:
             1571           31A-15-208. Purchasing groups -- Filing and registration requirements.
             1572          (1) A purchasing group [which] that intends to do business in this state shall, prior to
             1573      doing business, furnish notice to the insurance commissioner:
             1574          (a) identifying the state in which the purchasing group is domiciled;
             1575          (b) identifying [all other states] any state in which the purchasing group intends to do
             1576      business;
             1577          (c) specifying the lines and classifications of liability insurance [which] that the
             1578      purchasing group intends to purchase;
             1579          (d) identifying the [insurance companies] insurers from which the group intends to
             1580      purchase its insurance and the domicile of the [company] insurers;
             1581          (e) specifying the method by which, and any persons through whom, insurance will be
             1582      offered to group members whose risks are resident or located in this state;
             1583          (f) identifying the principal place of business of the purchasing group; and
             1584          (g) providing any other information required by the [insurance] commissioner to
             1585      verify that the purchasing group is [qualified within the definition in Subsection] a
             1586      "purchasing group," as defined in Section 31A-15-202 [(10)].
             1587          (2) A purchasing group shall notify the commissioner of [any changes in any of the
             1588      items] a change in an item listed in Subsection (1) within 10 days of the change.
             1589          (3) [The] (a) A purchasing group shall annually register with the commissioner and
             1590      pay a filing fee. [The]
             1591          (b) A purchasing group shall designate the commissioner as its agent solely for the
             1592      purpose of receiving service of legal documents or process.
             1593          (c) The registration and fee requirements of this Subsection (3) do not apply to a
             1594      purchasing group [which] that only purchases insurance that was authorized under the Product
             1595      Liability Risk Retention Act of 1981, and [which] that:
             1596          [(a)] (i) in any state of the United States:
             1597          [(i)] (A) was domiciled before April 1, 1986; and


             1598          [(ii)] (B) is domiciled after October 27, 1986;
             1599          [(b) (i)] (ii) (A) before October 27, 1986, purchased insurance from an [insurance
             1600      carrier] insurer licensed in any state; and
             1601          [(ii)] (B) since October 27, 1986, purchased its insurance from an [insurance carrier]
             1602      insurer licensed in any state; or
             1603          [(c)] (iii) was a purchasing group under the requirements of the Product Liability Risk
             1604      Retention Act of 1981 before October 27, 1986.
             1605          (4) [Each] A purchasing group that is required to give notice under Subsection (1)
             1606      shall also furnish information required by the commissioner to:
             1607          (a) verify that the entity qualifies as a purchasing group;
             1608          (b) determine where the purchasing group is located; and
             1609          (c) determine appropriate tax treatment of the purchasing group.
             1610          Section 11. Section 31A-20-106 is amended to read:
             1611           31A-20-106. Variable contracts.
             1612          [No] (1) (a) An insurer may not deliver or issue for delivery within this state [any
             1613      contract providing] an insurance policy that provides a life or annuity [benefits in variable
             1614      amounts] benefit in a variable amount until the insurer [has satisfied]:
             1615          (i) is licensed to do a life insurance or annuity business in this state; and
             1616          (ii) satisfies the commissioner that [its] the insurer's condition and methods of
             1617      operation in connection with those types of [contracts] insurance policies do not render [its]
             1618      the insurer's operation hazardous to the public or its policyholders in [Utah] this state.
             1619          (b) Notwithstanding any other provision of law, the commissioner has sole authority
             1620      to:
             1621          (i) regulate the issuance and sale of a variable contract; and
             1622          (ii) make rules necessary and appropriate to carry out this chapter in relation to a
             1623      variable contract.
             1624          (2) In determining the qualification of an insurer requesting authority to deliver [those
             1625      contracts in Utah] an insurance policy described in Subsection (1) in this state, the


             1626      commissioner shall consider:
             1627          [(1)] (a) the history and financial condition of the insurer;
             1628          [(2)] (b) the character, responsibility, and general fitness of the insurer's officers and
             1629      directors; and
             1630          [(3)] (c) in the case of a foreign insurer, whether the regulation provided by the state of
             1631      its domicile or the jurisdiction in which its head office is located provides protection to
             1632      policyholders and the public substantially equal to that provided by [the Insurance Code] this
             1633      title and the rules issued under [it] this title.
             1634          (3) If an insurer is a subsidiary of an admitted life insurer, or affiliated with an
             1635      admitted life insurer through common management or ownership, the commissioner may
             1636      consider the insurer to have met the requirements of this section if:
             1637          (a) the insurer meets the requirements of this section; or
             1638          (b) the parent or the affiliated insurer meets the requirements of this section.
             1639          (4) This title applies to a separate account or a contract relating to the separate
             1640      account, except:
             1641          (a) Sections 31A-22-402 , 31A-22-407 , and 31A-22-409 , in the case of a variable
             1642      annuity policy;
             1643          (b) Sections 31A-22-402 , 31A-22-407 , and 31A-22-408 , in the case of a variable life
             1644      insurance policy; and
             1645          (c) as otherwise provided in this title.
             1646          Section 12. Section 31A-21-201 is amended to read:
             1647           31A-21-201. Filing of forms.
             1648          (1) (a) Except as exempted under Subsections 31A-21-101 (2) through (6), a form may
             1649      not be used, sold, or offered for sale [unless] until the form [has been] is filed with the
             1650      commissioner.
             1651          (b) A form is considered filed with the commissioner when the commissioner receives:
             1652          (i) the form;
             1653          (ii) the applicable filing fee as prescribed under Section 31A-3-103 ; and


             1654          (iii) the applicable transmittal forms as required by the commissioner.
             1655          (2) In filing a form for use in this state the insurer is responsible for assuring that the
             1656      form is in compliance with this title and rules adopted by the commissioner.
             1657          (3) (a) The commissioner may prohibit the use of a form at any time upon a finding
             1658      that:
             1659          (i) the form [is]:
             1660          (A) is inequitable;
             1661          (B) is unfairly discriminatory;
             1662          (C) is misleading;
             1663          (D) is deceptive;
             1664          (E) is obscure;
             1665          (F) is unfair;
             1666          (G) encourages misrepresentation; or
             1667          (H) is not in the public interest;
             1668          (ii) the form provides benefits or contains [other provisions that endanger] another
             1669      provision that endangers the solidity of the insurer;
             1670          (iii) [in the case of the basic policy and the application for a basic policy, the basic]
             1671      except an application required by Section 31A-22-635 , the form is an insurance policy or
             1672      application for [the basic] an insurance policy that fails to conspicuously, as defined by rule,
             1673      provide:
             1674          (A) the exact name of the insurer;
             1675          (B) the state of domicile of the insurer filing the [basic] insurance policy or
             1676      application for the [basic] insurance policy; and
             1677          (C) for a life insurance and annuity [policies] insurance policy only, the address of the
             1678      administrative office of the insurer filing the [basic] insurance policy or application for the
             1679      [basic] insurance policy;
             1680          (iv) the form violates a statute or a rule adopted by the commissioner; or
             1681          (v) the form is otherwise contrary to law.


             1682          (b) Subsection (3)(a)(iii) does not apply to [riders and endorsements] an endorsement
             1683      to [a basic] an insurance policy.
             1684          (c) (i) [Whenever] When the commissioner prohibits the use of a form under
             1685      Subsection (3)(a), the commissioner may order that, on or before a date not less than 15 days
             1686      after the order, the use of the form be discontinued.
             1687          (ii) Once use of a form [has been] is prohibited, the form may not be used [unless]
             1688      until appropriate changes are filed with and reviewed by the commissioner.
             1689          (iii) [Whenever] When the commissioner prohibits the use of a form under Subsection
             1690      (3)(a), the commissioner may require the insurer to disclose contract deficiencies to the
             1691      existing policyholders.
             1692          (d) If the commissioner prohibits use of a form under this Subsection (3), the
             1693      prohibition shall:
             1694          (i) be in writing;
             1695          (ii) constitute an order; and
             1696          (iii) state the reasons for the prohibition.
             1697          (4) (a) If, after a hearing, the commissioner determines that it is in the public interest,
             1698      the commissioner may require by rule or order that [certain forms] a form be subject to the
             1699      commissioner's approval [prior to their] before its use.
             1700          (b) The rule or order described in Subsection (4)(a) shall prescribe the filing
             1701      procedures for [the forms] a form if the procedures are different [than] from the procedures
             1702      stated in this section.
             1703          (c) The [types of forms that may be addressed] type of form that under Subsection
             1704      (4)(a) [include] the commissioner may require approval of before use includes:
             1705          (i) a form for a particular class of insurance;
             1706          (ii) a form for a specific line of insurance;
             1707          (iii) a specific type of form; or
             1708          (iv) a form for a specific market segment.
             1709          (5) (a) An insurer shall maintain a complete and accurate record of the following for


             1710      the time period described in Subsection (5)(b):
             1711          (i) [any] a form:
             1712          (A) filed under this section for use; [and] or
             1713          (B) that is in use; and
             1714          (ii) [any] a document filed under this section with a form described in Subsection
             1715      (5)(a)(i).
             1716          (b) The insurer shall maintain a record required under Subsection (5)(a) for the
             1717      balance of the current year, plus five years from:
             1718          (i) the last day on which the form is used; or
             1719          (ii) the last day [any] an insurance policy that is issued using the form is in effect.
             1720          Section 13. Section 31A-21-301 is amended to read:
             1721           31A-21-301. Clauses required to be in a prominent position.
             1722          (1) The following portions of insurance policies shall appear conspicuously in the
             1723      policy:
             1724          (a) as required by Subsection 31A-21-201 (3)(a)(iii):
             1725          (i) the exact name of the insurer;
             1726          (ii) the state of domicile of the insurer; and
             1727          (iii) for life insurance and annuity policies only, the address of the administrative
             1728      office of the insurer;
             1729          (b) information that two or more insurers under Subsection (1)(a) undertake only
             1730      several liability, as required by Section 31A-21-306 ;
             1731          (c) if a policy is assessable, a statement of that;
             1732          (d) a statement that benefits are variable, as required by [Subsection ] Section
             1733      31A-22-411 [(1)]; however, the methods of calculation need not be in a prominent position;
             1734          (e) the right to return a life or accident and health insurance policy under Sections
             1735      31A-22-423 and 31A-22-606 ; and
             1736          (f) the beginning and ending dates of insurance protection.
             1737          (2) Each clause listed in Subsection (1) shall be displayed conspicuously and


             1738      separately from any other clause.
             1739          Section 14. Section 31A-22-305.3 is amended to read:
             1740           31A-22-305.3. Underinsured motorist coverage.
             1741          (1) As used in this section:
             1742          (a) "Covered person" has the same meaning as defined in Section 31A-22-305 .
             1743          (b) (i) "Underinsured motor vehicle" includes a motor vehicle, the operation,
             1744      maintenance, or use of which is covered under a liability policy at the time of an
             1745      injury-causing occurrence, but which has insufficient liability coverage to compensate fully
             1746      the injured party for all special and general damages.
             1747          (ii) The term "underinsured motor vehicle" does not include:
             1748          (A) a motor vehicle that is covered under the liability coverage of the same policy that
             1749      also contains the underinsured motorist coverage;
             1750          (B) an uninsured motor vehicle as defined in Subsection 31A-22-305 (2); or
             1751          (C) a motor vehicle owned or leased by:
             1752          (I) [the] a named insured;
             1753          (II) [the] a named insured's spouse; or
             1754          (III) [any] a dependent of [the] a named insured.
             1755          (2) (a) (i) Underinsured motorist coverage under Subsection 31A-22-302 (1)(c)
             1756      provides coverage for a covered [persons] person who [are] is legally entitled to recover
             1757      damages from [owners or operators] an owner or operator of an underinsured motor [vehicles]
             1758      vehicle because of bodily injury, sickness, disease, or death.
             1759          (ii) A covered person occupying or using a motor vehicle owned, leased, or furnished
             1760      to the covered person, the covered person's spouse, or covered person's resident relative may
             1761      recover underinsured benefits only if the motor vehicle is:
             1762          (A) described in the policy under which a claim is made; or
             1763          (B) a newly acquired or replacement motor vehicle covered under the terms of the
             1764      policy.
             1765          (b) For new policies written on or after January 1, 2001, the limits of underinsured


             1766      motorist coverage shall be equal to the lesser of the limits of the insured's motor vehicle
             1767      liability coverage or the maximum underinsured motorist coverage limits available by the
             1768      insurer under the insured's motor vehicle policy, unless the insured purchases coverage in a
             1769      lesser amount by signing an acknowledgment form that:
             1770          (i) is filed with the department;
             1771          (ii) is provided by the insurer;
             1772          (iii) waives the higher coverage;
             1773          (iv) reasonably explains the purpose of underinsured motorist coverage; and
             1774          (v) discloses the additional premiums required to purchase underinsured motorist
             1775      coverage with limits equal to the lesser of the limits of the insured's motor vehicle liability
             1776      coverage or the maximum underinsured motorist coverage limits available by the insurer under
             1777      the insured's motor vehicle policy.
             1778          (c) A self-insured, including a governmental entity, may elect to provide underinsured
             1779      motorist coverage in an amount that is less than its maximum self-insured retention under
             1780      Subsections (2)(b) and (2)(g) by issuing a declaratory memorandum or policy statement from
             1781      the chief financial officer or chief risk officer that declares the:
             1782          (i) self-insured entity's coverage level; and
             1783          (ii) process for filing an underinsured motorist claim.
             1784          (d) Underinsured motorist coverage may not be sold with limits that are less than:
             1785          (i) $10,000 for one person in any one accident; and
             1786          (ii) at least $20,000 for two or more persons in any one accident.
             1787          (e) [The] An acknowledgment under Subsection (2)(b) continues for that issuer of the
             1788      underinsured motorist coverage until the insured, in writing, requests different underinsured
             1789      motorist coverage from the insurer.
             1790          (f) (i) The named insured's underinsured motorist coverage, as described in Subsection
             1791      (2)(a), is secondary to the liability coverage of an owner or operator of an underinsured motor
             1792      vehicle, as described in Subsection (1).
             1793          (ii) Underinsured motorist coverage may not be set off against the liability coverage of


             1794      the owner or operator of an underinsured motor vehicle, but shall be added to, combined with,
             1795      or stacked upon the liability coverage of the owner or operator of the underinsured motor
             1796      vehicle to determine the limit of coverage available to the injured person.
             1797          (g) (i) A named insured may reject underinsured motorist coverage by an express
             1798      writing to the insurer that provides liability coverage under Subsection 31A-22-302 (1)(a).
             1799          (ii) [This] A written rejection under this Subsection (2)(g) shall be on a form provided
             1800      by the insurer that includes a reasonable explanation of the purpose of underinsured motorist
             1801      coverage and when it would be applicable.
             1802          (iii) [This] A written rejection under this Subsection (2)(g) continues for that issuer of
             1803      the liability coverage until the insured in writing requests underinsured motorist coverage from
             1804      that liability insurer.
             1805          [(h) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
             1806      policies existing on that date, the insurer shall disclose in the same medium as the premium
             1807      renewal notice, an explanation of:]
             1808          [(A) the purpose of underinsured motorist coverage; and]
             1809          [(B) the costs associated with increasing the coverage in amounts up to and including
             1810      the maximum amount available by the insurer under the insured's motor vehicle policy.]
             1811          [(ii) The disclosure required by this Subsection (2)(h) shall be sent to all insureds that
             1812      carry underinsured motorist coverage limits in an amount less than the insured's motor vehicle
             1813      liability policy limits or the maximum underinsured motorist coverage limits available by the
             1814      insurer under the insured's motor vehicle policy.]
             1815          (3) (a) (i) Except as provided in this Subsection (3), a covered person injured in a
             1816      motor vehicle described in a policy that includes underinsured motorist benefits may not elect
             1817      to collect underinsured motorist coverage benefits from [any other] another motor vehicle
             1818      insurance policy.
             1819          (ii) The limit of liability for underinsured motorist coverage for two or more motor
             1820      vehicles may not be added together, combined, or stacked to determine the limit of insurance
             1821      coverage available to an injured person for any one accident.


             1822          (iii) Subsection (3)(a)(ii) applies to all persons except a covered person described
             1823      under Subsections (3)(b)(i) and (ii).
             1824          (b) (i) Except as provided in Subsection (3)(b)(ii), a covered person injured while
             1825      occupying, using, or maintaining a motor vehicle that is not owned, leased, or furnished to the
             1826      covered person, the covered person's spouse, or the covered person's resident parent or resident
             1827      sibling, may also recover benefits under any one other policy under which [they are] the
             1828      covered person is also a covered person.
             1829          (ii) (A) A covered person may recover benefits from no more than two additional
             1830      policies, one additional policy from each parent's household if the covered person is:
             1831          (I) a dependent minor of parents who reside in separate households; and
             1832          (II) injured while occupying or using a motor vehicle that is not owned, leased, or
             1833      furnished to the covered person, the covered person's resident parent, or the covered person's
             1834      resident sibling.
             1835          (B) Each parent's policy under this Subsection (3)(b)(ii) is liable only for the
             1836      percentage of the damages that the limit of liability of each parent's policy of underinsured
             1837      motorist coverage bears to the total of both parents' underinsured coverage applicable to the
             1838      accident.
             1839          (iii) A covered person's recovery under any available policies may not exceed the full
             1840      amount of damages.
             1841          (iv) Underinsured coverage on a motor vehicle occupied at the time of an accident
             1842      [shall be] is primary coverage, and the coverage elected by a person described under
             1843      Subsections 31A-22-305 (1)(a) and (b) [shall be] is secondary coverage.
             1844          (v) The primary and the secondary coverage may not be set off against the other.
             1845          (vi) A covered person as described under Subsection (3)(b)(i) is entitled to the highest
             1846      limits of underinsured motorist coverage under only one additional policy per household
             1847      applicable to that covered person as a named insured, spouse, or relative.
             1848          (vii) A covered injured person is not barred against making subsequent elections if
             1849      recovery is unavailable under previous elections.


             1850          (viii) (A) As used in this section, "interpolicy stacking" means recovering benefits for
             1851      a single incident of loss under more than one insurance policy.
             1852          (B) Except to the extent permitted by this Subsection (3), interpolicy stacking is
             1853      prohibited for underinsured motorist coverage.
             1854          (c) Underinsured motorist coverage:
             1855          (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
             1856      Compensation Act;
             1857          (ii) may not be subrogated by [the] a workers' compensation insurance carrier;
             1858          (iii) may not be reduced by [any] benefits provided by workers' compensation
             1859      insurance;
             1860          (iv) may be reduced by health insurance subrogation only after the covered person
             1861      [has been] is made whole;
             1862          (v) may not be collected for bodily injury or death sustained by a person:
             1863          (A) while committing a violation of Section 41-1a-1314 ;
             1864          (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
             1865      in violation of Section 41-1a-1314 ; or
             1866          (C) while committing a felony; and
             1867          (vi) notwithstanding Subsection (3)(c)(v), may be recovered:
             1868          (A) for a person under 18 years of age who is injured within the scope of Subsection
             1869      (3)(c)(v), but is limited to medical and funeral expenses; or
             1870          (B) by a law enforcement officer as defined in Section 53-13-103 , who is injured
             1871      within the course and scope of the law enforcement officer's duties.
             1872          (4) The inception of the loss under Subsection 31A-21-313 (1) for underinsured
             1873      motorist claims occurs upon the date of the last liability policy payment.
             1874          (5) (a) Within five business days after notification that all liability insurers have
             1875      tendered their liability policy limits, the underinsured carrier shall either:
             1876          (i) waive any subrogation claim the underinsured carrier may have against the person
             1877      liable for the injuries caused in the accident; or


             1878          (ii) pay the insured an amount equal to the policy limits tendered by the liability
             1879      carrier.
             1880          (b) If neither option is exercised under Subsection (5)(a), the subrogation claim is
             1881      considered to be waived by the underinsured carrier.
             1882          (6) Except as otherwise provided in this section, a covered person may seek, subject to
             1883      the terms and conditions of the policy, additional coverage under any policy:
             1884          (a) that provides coverage for damages resulting from motor vehicle accidents; and
             1885          (b) that is not required to conform to Section 31A-22-302 .
             1886          (7) (a) When a claim is brought by a named insured or a person described in
             1887      Subsection 31A-22-305 (1) and is asserted against the covered person's underinsured motorist
             1888      carrier, the claimant may elect to resolve the claim:
             1889          (i) by submitting the claim to binding arbitration; or
             1890          (ii) through litigation.
             1891          (b) Unless otherwise provided in the policy under which underinsured benefits are
             1892      claimed, the election provided in Subsection (7)(a) is available to the claimant only.
             1893          (c) Once [the] a claimant [has elected] elects to commence litigation under Subsection
             1894      (7)(a)(ii), the claimant may not elect to resolve the claim through binding arbitration under
             1895      this section without the written consent of the underinsured motorist coverage carrier.
             1896          (d) (i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
             1897      binding arbitration under Subsection (7)(a)(i) shall be resolved by a single arbitrator.
             1898          (ii) All parties shall agree on the single arbitrator selected under Subsection (7)(d)(i).
             1899          (iii) If the parties are unable to agree on a single arbitrator as required under
             1900      Subsection (7)(d)(ii), the parties shall select a panel of three arbitrators.
             1901          (e) If the parties select a panel of three arbitrators under Subsection (7)(d)(iii):
             1902          (i) each side shall select one arbitrator; and
             1903          (ii) the arbitrators appointed under Subsection (7)(e)(i) shall select one additional
             1904      arbitrator to be included in the panel.
             1905          (f) Unless otherwise agreed to in writing:


             1906          (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
             1907      under Subsection (7)(d)(i); or
             1908          (ii) if an arbitration panel is selected under Subsection (7)(d)(iii):
             1909          (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
             1910          (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
             1911      under Subsection (7)(e)(ii).
             1912          (g) Except as otherwise provided in this section or unless otherwise agreed to in
             1913      writing by the parties, an arbitration proceeding conducted under this section [shall be] is
             1914      governed by Title 78B, Chapter 11, Utah Uniform Arbitration Act.
             1915          (h) [The] An arbitration shall be conducted in accordance with Rules 26 through 37,
             1916      54, and 68 of the Utah Rules of Civil Procedure.
             1917          (i) [All issues] An issue of discovery shall be resolved by the arbitrator or the
             1918      arbitration panel.
             1919          (j) A written decision by a single arbitrator or by a majority of the arbitration panel
             1920      [shall constitute] constitutes a final decision.
             1921          (k) (i) The amount of an arbitration award may not exceed the underinsured motorist
             1922      policy limits of all applicable underinsured motorist policies, including applicable
             1923      underinsured motorist umbrella policies.
             1924          (ii) If the initial arbitration award exceeds the underinsured motorist policy limits of
             1925      all applicable underinsured motorist policies, the arbitration award shall be reduced to an
             1926      amount equal to the combined underinsured motorist policy limits of all applicable
             1927      underinsured motorist policies.
             1928          (l) The arbitrator or arbitration panel may not decide [the issues] an issue of coverage
             1929      or extra-contractual damages, including:
             1930          (i) whether the claimant is a covered person;
             1931          (ii) whether the policy extends coverage to the loss; or
             1932          (iii) [any allegations or claims] an allegation or claim asserting consequential damages
             1933      or bad faith liability.


             1934          (m) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or
             1935      class-representative basis.
             1936          (n) If the arbitrator or arbitration panel finds that the [action was] arbitration is not
             1937      brought, pursued, or defended in good faith, the arbitrator or arbitration panel may award
             1938      reasonable attorney fees and costs against the party that failed to bring, pursue, or defend the
             1939      [claim] arbitration in good faith.
             1940          (o) An arbitration award issued under this section shall be the final resolution of all
             1941      claims not excluded by Subsection (7)(l) between the parties unless:
             1942          (i) the award [was] is procured by corruption, fraud, or other undue means; or
             1943          (ii) either party, within 20 days after service of the arbitration award:
             1944          (A) files a complaint requesting a trial de novo in the district court; and
             1945          (B) serves the nonmoving party with a copy of the complaint requesting a trial de novo
             1946      under Subsection (7)(o)(ii)(A).
             1947          (p) (i) Upon filing a complaint for a trial de novo under Subsection (7)(o), [the] a
             1948      claim shall proceed through litigation pursuant to the Utah Rules of Civil Procedure and Utah
             1949      Rules of Evidence in the district court.
             1950          (ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
             1951      request a jury trial with a complaint requesting a trial de novo under Subsection (7)(o)(ii)(A).
             1952          (q) (i) If the claimant, as the moving party in a trial de novo requested under
             1953      Subsection (7)(o), does not obtain a verdict that is at least $5,000 and is at least 20% greater
             1954      than the arbitration award, the claimant is responsible for all of the nonmoving party's costs.
             1955          (ii) If the underinsured motorist carrier, as the moving party in a trial de novo
             1956      requested under Subsection (7)(o), does not obtain a verdict that is at least 20% less than the
             1957      arbitration award, the underinsured motorist carrier is responsible for all of the nonmoving
             1958      party's costs.
             1959          (iii) Except as provided in Subsection (7)(q)(iv), the costs under this Subsection (7)(q)
             1960      shall include:
             1961          (A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and


             1962          (B) the costs of expert witnesses and depositions.
             1963          (iv) An award of costs under this Subsection (7)(q) may not exceed $2,500.
             1964          (r) For purposes of determining whether a party's verdict is greater or less than the
             1965      arbitration award under Subsection (7)(q), a court may not consider any recovery or other
             1966      relief granted on a claim for damages if the claim for damages:
             1967          (i) was not fully disclosed in writing prior to the arbitration proceeding; or
             1968          (ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil
             1969      Procedure.
             1970          (s) If a district court determines, upon a motion of the nonmoving party, that [the] a
             1971      moving party's use of the trial de novo process [was] is filed in bad faith in accordance with
             1972      Section 78B-5-825 , the district court may award reasonable attorney fees to the nonmoving
             1973      party.
             1974          (t) Nothing in this section is intended to limit [any] a claim under [any other] another
             1975      portion of an applicable insurance policy.
             1976          (u) If there are multiple underinsured motorist policies, as set forth in Subsection (3),
             1977      the claimant may elect to arbitrate in one hearing the claims against all the underinsured
             1978      motorist carriers.
             1979          Section 15. Section 31A-22-411 is amended to read:
             1980           31A-22-411. Contracts providing variable benefits.
             1981          (1) [(a) Any contract which] An insurance policy that provides for payment of
             1982      [benefits in variable amounts] a benefit in a variable amount shall contain a statement of the
             1983      essential features of the procedure to be followed by the insurer in determining the dollar
             1984      amount of the variable benefits. [The contract shall contain:]
             1985          (2) A variable insurance policy shall contain:
             1986          [(i)] (a) an appropriate nonforfeiture [benefits] benefit in lieu of those required by
             1987      either Section 31A-22-408 or 31A-22-409 ;
             1988          [(ii)] (b) an appropriate reinstatement [provisions] provision in lieu of those required
             1989      by Section 31A-22-407 ; and


             1990          [(iii)] (c) a grace period [provisions] provision appropriate to that type of [contract]
             1991      insurance policy in lieu of those required by Section 31A-22-402 .
             1992          [(b) This] (3) An individual [contract and any] insurance policy and a certificate
             1993      issued under a group [contract shall state that] insurance policy shall conspicuously state on its
             1994      first page that:
             1995          (a) the dollar amount may decrease or increase [and shall conspicuously display on its
             1996      first page a statement that the benefits under the contract are] according to investment
             1997      experience; and
             1998          (b) a benefit under the insurance policy is payable on a variable basis[, with a
             1999      statement specifying where the details of the variable provisions are found in the contract].
             2000          [(c) Life] (4) A life insurance [and] or annuity [policies] policy with a variable
             2001      [benefits] benefit issued under a separate account shall, on either the application or the
             2002      insurance policy, state that the insurer's liabilities with respect to a variable [benefits] benefit
             2003      under the insurance policy are subject to satisfaction only out of the insurer's variable account
             2004      assets.
             2005          [(2) Any contract subject to Subsection (1)]
             2006          (5)(a) A variable insurance policy shall state whether it may be amended as to:
             2007          (i) investment policy[,];
             2008          (ii) voting rights[,]; and
             2009          (iii) conduct of the business and affairs of [any segregated] a separate account.
             2010          (b) Subject to any preemptive provision of federal law, [this type of] an amendment of
             2011      the type described in this Subsection (5) is subject to:
             2012          (i) filing under Section 31A-21-201 ; and
             2013          (ii) approval by a majority of the policyholders in the [segregated] separate account.
             2014          Section 16. Section 31A-22-610.5 is amended to read:
             2015           31A-22-610.5. Dependent coverage.
             2016          (1) As used in this section, "child" has the same meaning as defined in Section
             2017      78B-12-102 .


             2018          (2) (a) Any individual or group accident and health insurance policy or health
             2019      maintenance organization contract that provides coverage for a policyholder's or certificate
             2020      holder's dependent [shall] may not terminate coverage of an unmarried dependent by reason of
             2021      the dependent's age before the dependent's 26th birthday and shall, upon application, provide
             2022      coverage for all unmarried dependents up to age 26.
             2023          (b) The cost of coverage for unmarried dependents 19 to 26 years of age shall be
             2024      included in the premium on the same basis as other dependent coverage.
             2025          (c) This section does not prohibit the employer from requiring the employee to pay all
             2026      or part of the cost of coverage for unmarried dependents.
             2027          (d) An individual health insurance policy, group health insurance policy, or health
             2028      maintenance organization, shall continue in force coverage for a dependent through the last
             2029      day of the month in which the dependent ceases to be a dependent:
             2030          (i) if premiums are paid; and
             2031          (ii) notwithstanding Section 31A-8-402.3 , 31A-8-402.5 , 31A-22-721 , 31A-30-107.1 ,
             2032      or 31A-30-107.3 .
             2033          (3) An individual or group accident and health insurance policy or health maintenance
             2034      organization contract shall reinstate dependent coverage, and for purposes of all exclusions
             2035      and limitations, shall treat the dependent as if the coverage had been in force since it was
             2036      terminated; if:
             2037          (a) the dependent has not reached the age of 26 by July 1, 1995;
             2038          (b) the dependent had coverage prior to July 1, 1994;
             2039          (c) prior to July 1, 1994, the dependent's coverage was terminated solely due to the age
             2040      of the dependent; and
             2041          (d) the policy has not been terminated since the dependent's coverage was terminated.
             2042          (4) (a) When a parent is required by a court or administrative order to provide health
             2043      insurance coverage for a child, an accident and health insurer may not deny enrollment of a
             2044      child under the accident and health insurance plan of the child's parent on the grounds the
             2045      child:


             2046          (i) was born out of wedlock and is entitled to coverage under Subsection (5);
             2047          (ii) was born out of wedlock and the custodial parent seeks enrollment for the child
             2048      under the custodial parent's policy;
             2049          (iii) is not claimed as a dependent on the parent's federal tax return; or
             2050          (iv) does not reside with the parent or in the insurer's service area.
             2051          (b) A child enrolled as required under Subsection (4)(a)(iv) is subject to the terms of
             2052      the accident and health insurance plan contract pertaining to services received outside of an
             2053      insurer's service area. A health maintenance organization must comply with Section
             2054      31A-8-502 .
             2055          (5) When a child has accident and health coverage through an insurer of a
             2056      noncustodial parent, and when requested by the noncustodial or custodial parent, the insurer
             2057      shall:
             2058          (a) provide information to the custodial parent as necessary for the child to obtain
             2059      benefits through that coverage, but the insurer or employer, or the agents or employees of
             2060      either of them, are not civilly or criminally liable for providing information in compliance with
             2061      this Subsection (5)(a), whether the information is provided pursuant to a verbal or written
             2062      request;
             2063          (b) permit the custodial parent or the service provider, with the custodial parent's
             2064      approval, to submit claims for covered services without the approval of the noncustodial
             2065      parent; and
             2066          (c) make payments on claims submitted in accordance with Subsection (5)(b) directly
             2067      to the custodial parent, the child who obtained benefits, the provider, or the state Medicaid
             2068      agency.
             2069          (6) When a parent is required by a court or administrative order to provide health
             2070      coverage for a child, and the parent is eligible for family health coverage, the insurer shall:
             2071          (a) permit the parent to enroll, under the family coverage, a child who is otherwise
             2072      eligible for the coverage without regard to an enrollment season restrictions;
             2073          (b) if the parent is enrolled but fails to make application to obtain coverage for the


             2074      child, enroll the child under family coverage upon application of the child's other parent, the
             2075      state agency administering the Medicaid program, or the state agency administering 42 U.S.C.
             2076      Sec. 651 through 669, the child support enforcement program; and
             2077          (c) (i) when the child is covered by an individual policy, not disenroll or eliminate
             2078      coverage of the child unless the insurer is provided satisfactory written evidence that:
             2079          (A) the court or administrative order is no longer in effect; or
             2080          (B) the child is or will be enrolled in comparable accident and health coverage through
             2081      another insurer which will take effect not later than the effective date of disenrollment; or
             2082          (ii) when the child is covered by a group policy, not disenroll or eliminate coverage of
             2083      the child unless the employer is provided with satisfactory written evidence, which evidence is
             2084      also provided to the insurer, that Subsection (9)(c)(i), (ii) or (iii) has happened.
             2085          (7) An insurer may not impose requirements on a state agency that has been assigned
             2086      the rights of an individual eligible for medical assistance under Medicaid and covered for
             2087      accident and health benefits from the insurer that are different from requirements applicable to
             2088      an agent or assignee of any other individual so covered.
             2089          (8) Insurers may not reduce their coverage of pediatric vaccines below the benefit level
             2090      in effect on May 1, 1993.
             2091          (9) When a parent is required by a court or administrative order to provide health
             2092      coverage, which is available through an employer doing business in this state, the employer
             2093      shall:
             2094          (a) permit the parent to enroll under family coverage any child who is otherwise
             2095      eligible for coverage without regard to any enrollment season restrictions;
             2096          (b) if the parent is enrolled but fails to make application to obtain coverage of the
             2097      child, enroll the child under family coverage upon application by the child's other parent, by
             2098      the state agency administering the Medicaid program, or the state agency administering 42
             2099      U.S.C. Sec. 651 through 669, the child support enforcement program;
             2100          (c) not disenroll or eliminate coverage of the child unless the employer is provided
             2101      satisfactory written evidence that:


             2102          (i) the court order is no longer in effect;
             2103          (ii) the child is or will be enrolled in comparable coverage which will take effect no
             2104      later than the effective date of disenrollment; or
             2105          (iii) the employer has eliminated family health coverage for all of its employees; and
             2106          (d) withhold from the employee's compensation the employee's share, if any, of
             2107      premiums for health coverage and to pay this amount to the insurer.
             2108          (10) An order issued under Section 62A-11-326.1 may be considered a "qualified
             2109      medical support order" for the purpose of enrolling a dependent child in a group accident and
             2110      health insurance plan as defined in Section 609(a), Federal Employee Retirement Income
             2111      Security Act of 1974.
             2112          (11) This section does not affect any insurer's ability to require as a precondition of
             2113      any child being covered under any policy of insurance that:
             2114          (a) the parent continues to be eligible for coverage;
             2115          (b) the child shall be identified to the insurer with adequate information to comply
             2116      with this section; and
             2117          (c) the premium shall be paid when due.
             2118          (12) The provisions of this section apply to employee welfare benefit plans as defined
             2119      in Section 26-19-2 .
             2120          (13) The commissioner shall adopt rules interpreting and implementing this section
             2121      with regard to out-of-area court ordered dependent coverage.
             2122          Section 17. Section 31A-22-625 is amended to read:
             2123           31A-22-625. Catastrophic coverage of mental health conditions.
             2124          (1) As used in this section:
             2125          (a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
             2126      [or health maintenance organization contract] that does not impose a lifetime limit, annual
             2127      payment limit, episodic limit, inpatient or outpatient service limit, or maximum out-of-pocket
             2128      limit that places a greater financial burden on an insured for the evaluation and treatment of a
             2129      mental health condition than for the evaluation and treatment of a physical health condition.


             2130          (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
             2131      factors, such as deductibles, copayments, or coinsurance, [prior to] before reaching [any] a
             2132      maximum out-of-pocket limit.
             2133          (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
             2134      limit for physical health conditions and another maximum out-of-pocket limit for mental
             2135      health conditions, [provided that,] except that if separate out-of-pocket limits are established,
             2136      the out-of-pocket limit for mental health conditions may not exceed the out-of-pocket limit for
             2137      physical health conditions.
             2138          (b) (i) "50/50 mental health coverage" means coverage in a health benefit plan [or
             2139      health maintenance organization contract] that pays for at least 50% of covered services for
             2140      the diagnosis and treatment of mental health conditions.
             2141          (ii) "50/50 mental health coverage" may include a restriction on:
             2142          (A) episodic limits[,];
             2143          (B) inpatient or outpatient service limits[,]; or
             2144          (C) maximum out-of-pocket limits.
             2145          (c) "Large employer," [is as defined in Section 31A-1-301 ] is as defined in 42 U.S.C.
             2146      Sec. 300gg-91.
             2147          (d) (i) "Mental health condition" means [any] a condition or disorder involving mental
             2148      illness that falls under [any of the] a diagnostic [categories] category listed in the Diagnostic
             2149      and Statistical Manual, as periodically revised.
             2150          (ii) "Mental health condition" does not include the following when diagnosed as the
             2151      primary or substantial reason or need for treatment:
             2152          (A) a marital or family problem;
             2153          (B) a social, occupational, religious, or other social maladjustment;
             2154          (C) a conduct disorder;
             2155          (D) a chronic adjustment disorder;
             2156          (E) a psychosexual disorder;
             2157          (F) a chronic organic brain syndrome;


             2158          (G) a personality disorder;
             2159          (H) a specific developmental disorder or learning disability; or
             2160          (I) mental retardation.
             2161          (e) "Small employer" is as defined in [Section 31A-1-301 ] 42 U.S.C. Sec. 300gg-91.
             2162          (2) (a) At the time of purchase and renewal, an insurer shall offer to [each] a small
             2163      employer that it insures or seeks to insure a choice between catastrophic mental health
             2164      coverage and 50/50 mental health coverage.
             2165          (b) In addition to complying with Subsection (2)(a), an insurer may offer to provide:
             2166          (i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
             2167      that exceed the minimum requirements of this section; or
             2168          (ii) coverage that excludes benefits for mental health conditions.
             2169          (c) A small employer may, at its option, choose either catastrophic mental health
             2170      coverage, 50/50 mental health coverage, or coverage offered under Subsection (2)(b),
             2171      regardless of the employer's previous coverage for mental health conditions.
             2172          (d) An insurer is exempt from the 30% index rating restriction in Subsection
             2173      31A-30-106 (1)(b) and, for the first year only that catastrophic mental health coverage is
             2174      chosen, the 15% annual adjustment restriction in Subsection 31A-30-106 (1)(c)(ii), for any
             2175      small employer with 20 or less enrolled employees who chooses coverage that meets or
             2176      exceeds catastrophic mental health coverage.
             2177          [(3) (a) At the time of purchase and renewal of a health benefit plan, an insurer shall
             2178      offer catastrophic mental health coverage to each large employer that it insures or seeks to
             2179      insure.]
             2180          [(b) In addition to Subsection (3)(a), an insurer may offer to provide catastrophic
             2181      mental health coverage at levels that exceed the minimum requirements of this section.]
             2182          [(c) A large employer may, at its option, choose either catastrophic mental health
             2183      coverage, coverage that excludes benefits for mental health conditions, or coverage offered
             2184      under Subsection (3)(b).]
             2185          (3) An insurer shall offer a large employer mental health and substance use disorder


             2186      benefit in compliance with Section 2705 of the Public Health Service Act, 42 U.S.C. Sec.
             2187      300gg-5, and federal regulations adopted pursuant to that act.
             2188          (4) (a) An insurer may provide catastrophic mental health coverage to a small
             2189      employer through a managed care organization or system in a manner consistent with [the
             2190      provisions in] Chapter 8, Health Maintenance Organizations and Limited Health Plans,
             2191      regardless of whether the insurance policy [or contract] uses a managed care organization or
             2192      system for the treatment of physical health conditions.
             2193          (b) (i) Notwithstanding any other provision of this title, an insurer may:
             2194          (A) establish a closed panel of providers for catastrophic mental health coverage; and
             2195          (B) refuse to provide [any] a benefit to be paid for services rendered by a nonpanel
             2196      provider unless:
             2197          (I) the insured is referred to a nonpanel provider with the prior authorization of the
             2198      insurer; and
             2199          (II) the nonpanel provider agrees to follow the insurer's protocols and treatment
             2200      guidelines.
             2201          (ii) If an insured receives services from a nonpanel provider in the manner permitted
             2202      by Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
             2203      average amount paid by the insurer for comparable services of panel providers under a
             2204      noncapitated arrangement who are members of the same class of health care providers.
             2205          (iii) [Nothing in this] This Subsection (4)(b) may not be construed as requiring an
             2206      insurer to authorize a referral to a nonpanel provider.
             2207          (c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
             2208      mental health condition must be rendered:
             2209          (i) by a mental health therapist as defined in Section 58-60-102 ; or
             2210          (ii) in a health care facility:
             2211          (A) licensed or otherwise authorized to provide mental health services pursuant to:
             2212          (I) Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act[,]; or
             2213          (II) Title 62A, Chapter 2, Licensure of Programs and Facilities[,]; and


             2214          (B) that provides a program for the treatment of a mental health condition pursuant to
             2215      a written plan.
             2216          (5) The commissioner may prohibit [a] an insurance policy [or contract] that provides
             2217      mental health coverage in a manner that is inconsistent with this section.
             2218          (6) The commissioner shall:
             2219          (a) adopt rules, in accordance with Title 63G, Chapter 3, Utah Administrative
             2220      Rulemaking Act, as necessary to ensure compliance with this section; and
             2221          (b) provide general figures on the percentage of [contracts and] insurance policies that
             2222      include:
             2223          (i) no mental health coverage[,];
             2224          (ii) 50/50 mental health coverage[,];
             2225          (iii) catastrophic mental health coverage[,]; and
             2226          (iv) coverage that exceeds the minimum requirements of this section.
             2227          [(7) The Health and Human Services Interim Committee shall review:]
             2228          [(a) the impact of this section on insurers, employers, providers, and consumers of
             2229      mental health services before January 1, 2004; and]
             2230          [(b) make a recommendation as to whether the provisions of this section should be
             2231      modified and whether the cost-sharing requirements for mental health conditions should be the
             2232      same as for physical health conditions.]
             2233          [(8) (a) An insurer shall offer catastrophic mental health coverage as part of a health
             2234      maintenance organization contract that is governed by Chapter 8, Health Maintenance
             2235      Organizations and Limited Health Plans, that is in effect on or after January 1, 2001.]
             2236          [(b) An insurer shall offer catastrophic mental health coverage as a part of a health
             2237      benefit plan that is not governed by Chapter 8, Health Maintenance Organizations and Limited
             2238      Health Plans, that is in effect on or after July 1, 2001.]
             2239          [(c) This section does not apply to the purchase or renewal of an individual insurance
             2240      policy or contract.]
             2241          [(d) Notwithstanding Subsection (8)(c), nothing in this]


             2242          (7) This section may not be construed as discouraging or otherwise preventing
             2243      [insurers] an insurer from [continuing to provide] providing mental health coverage in
             2244      connection with an individual insurance policy [or contract].
             2245          [(9)] (8) This section shall be repealed in accordance with Section 63I-1-231 .
             2246          Section 18. Section 31A-22-701 is amended to read:
             2247           31A-22-701. Groups eligible for group or blanket insurance.
             2248          (1) As used in this section, "association group" means a lawfully formed association of
             2249      individuals or business entities that:
             2250          (a) purchases insurance on a group basis on behalf of members; and
             2251          (b) is formed and maintained in good faith for purposes other than obtaining
             2252      insurance.
             2253          [(1)] (2) A group or blanket accident and health insurance policy may be issued to:
             2254          (a) [any] a group:
             2255          (i) to which a group life insurance policy may be issued under Sections 31A-22-502
             2256      [through], 31A-22-503 , 31A-22-504 , 31A-22-506 , 31A-22-507 , and 31A-22-509 ; and
             2257          (ii) that is formed for a reason other than the purchase of insurance; [or]
             2258          (b) an association group that:
             2259          (i) has been actively in existence for at least five years;
             2260          (ii) has a constitution and bylaws;
             2261          (iii) is formed and maintained in good faith for purposes other than obtaining
             2262      insurance;
             2263          (iv) does not condition membership in the association group on any health
             2264      status-related factor relating to an individual, including an employee of an employer or a
             2265      dependent of an employee;
             2266          (v) makes accident and health insurance coverage offered through the association
             2267      group available to all members regardless of any health status-related factor relating to the
             2268      members or individuals eligible for coverage through a member; and
             2269          (vi) does not make accident and health insurance coverage offered through the


             2270      association group available other than in connection with a member of the association group;
             2271      or
             2272          [(b) any] (c) a group specifically authorized by the commissioner under Section
             2273      31A-22-509 , upon a finding that:
             2274          (i) authorization is not contrary to the public interest;
             2275          (ii) the proposed group is actuarially sound;
             2276          (iii) formation of the proposed group may result in economies of scale in acquisition,
             2277      administrative, marketing, and brokerage costs;
             2278          (iv) the [health] insurance policy, insurance certificate, or other indicia of coverage
             2279      that will be offered to the proposed group is substantially equivalent to insurance policies that
             2280      are otherwise available to similar groups; [and]
             2281          [(v) the proposed group is formed for a reason other than the purchase of insurance.]
             2282          (v) the group would not present hazards of adverse selection; and
             2283          (vi) the premiums for the insurance policy and any contributions by or on behalf of the
             2284      insured persons are reasonable in relation to the benefits provided.
             2285          [(2)] (3) A blanket insurance policy may also be issued to:
             2286          (a) [any] a common carrier or [any] an operator, owner, or lessee of a means of
             2287      transportation, as policyholder, covering persons who may become passengers as defined by
             2288      reference to their travel status;
             2289          (b) an employer, as policyholder, covering any group of employees, dependents, or
             2290      guests, as defined by reference to specified hazards incident to any activities of the
             2291      policyholder;
             2292          (c) an institution of learning, including a school district, school jurisdictional units, or
             2293      the head, principal, or governing board of any of those units, as policyholder, covering
             2294      students, teachers, or employees;
             2295          (d) [any] a religious, charitable, recreational, educational, or civic organization, or
             2296      branch of those organizations, as policyholder, covering any group of members or participants
             2297      as defined by reference to specified hazards incident to the activities sponsored or supervised


             2298      by the policyholder;
             2299          (e) a sports team, camp, or sponsor of the team or camp, as policyholder, covering
             2300      members, campers, employees, officials, or supervisors;
             2301          (f) [any] a volunteer fire department, first aid, civil defense, or other similar volunteer
             2302      organization, as policyholder, covering any group of members or participants as defined by
             2303      reference to specified hazards incident to activities sponsored, supervised, or participated in by
             2304      the policyholder;
             2305          (g) a newspaper or other publisher, as policyholder, covering its carriers;
             2306          (h) an association, including a labor union, which has a constitution and bylaws and
             2307      which has been organized in good faith for purposes other than that of obtaining insurance, as
             2308      policyholder, covering any group of members or participants as defined by reference to
             2309      specified hazards incident to the activities or operations sponsored or supervised by the
             2310      policyholder;
             2311          (i) a health insurance purchasing association, as defined in Section 31A-34-103 ,
             2312      organized and controlled solely by participating employers; and
             2313          (j) any other class of risks [which] that, in the judgment of the commissioner, may be
             2314      properly eligible for blanket accident and health insurance.
             2315          [(3)] (4) The judgment of the commissioner may be exercised on the basis of:
             2316          (a) individual risks;
             2317          (b) a class of risks; or
             2318          (c) both Subsections [(3)] (4)(a) and (b).
             2319          Section 19. Section 31A-22-722 is amended to read:
             2320           31A-22-722. Utah mini-COBRA benefits for employer group coverage.
             2321          (1) An insured [has the right to] may extend the employee's coverage under the current
             2322      employer's group policy for a period of 12 months, except as provided in [Subsection]
             2323      Subsections (2) and 31A-22-722.5 (4). The right to extend coverage includes:
             2324          (a) voluntary termination;
             2325          (b) involuntary termination;


             2326          (c) retirement;
             2327          (d) death;
             2328          (e) divorce or legal separation;
             2329          (f) loss of dependent status;
             2330          (g) sabbatical;
             2331          (h) [any] a disability;
             2332          (i) leave of absence; or
             2333          (j) reduction of hours.
             2334          (2) (a) Notwithstanding [the provisions of] Subsection (1), an employee [does not
             2335      have the right to] may not extend coverage under the current employer's group insurance
             2336      policy if the employee:
             2337          (i) [failed] fails to pay [any required individual contribution] premiums or
             2338      contributions in accordance with the terms of the insurance policy;
             2339          (ii) acquires other group coverage covering all preexisting conditions including
             2340      maternity, if the coverage exists;
             2341          (iii) [performed] performs an act or practice that constitutes fraud in connection with
             2342      the coverage;
             2343          (iv) [made] makes an intentional misrepresentation of material fact under the terms of
             2344      the coverage;
             2345          (v) [was] is terminated from employment for gross misconduct;
             2346          (vi) [has not been] is not continuously covered under the current employer's group
             2347      policy for a period of three months immediately [prior to] before the termination of the
             2348      insurance policy due to [the events] an event set forth in Subsection (1);
             2349          (vii) is eligible for [any] an extension of coverage required by federal law; [or]
             2350          (viii) establishes residence outside of this state;
             2351          (ix) moves out of the insurer's service area;
             2352          (x) is eligible for similar coverage under another group insurance policy;
             2353          (xi) has the employee's coverage terminated because the employer's coverage is


             2354      terminated, except as provided in Subsection (8); or
             2355          [(viii) elected] (xii) elects alternative coverage under Section 31A-22-724 .
             2356          (b) The right to extend coverage under Subsection (1) applies to [any] spouse or
             2357      dependent [coverages] coverage, including a surviving spouse or dependents whose coverage
             2358      under the insurance policy terminates by reason of the death of the employee or member.
             2359          (3) (a) The employer shall [provide written notification] notify the following in writing
             2360      of the right to extend group coverage and the payment amounts required for extension of
             2361      coverage, including the manner, place, and time in which the payments shall be made [to]:
             2362          (i) [the] a terminated insured;
             2363          (ii) [the] an ex-spouse of an insured; or
             2364          (iii) if Subsection (2)(b) applies:
             2365          (A) [to] a surviving spouse; and
             2366          (B) the guardian of surviving dependents, if different from a surviving spouse.
             2367          (b) The notification required in Subsection (3)(a) shall be sent first class mail within
             2368      30 days after the termination date of the group coverage to:
             2369          (i) the terminated insured's home address as shown on the records of the employer;
             2370          (ii) the address of the surviving spouse, if different from the insured's address and if
             2371      shown on the records of the employer;
             2372          (iii) the guardian of any dependents address, if different from the insured's address,
             2373      and if shown on the records of the employer; and
             2374          (iv) the address of the ex-spouse, if shown on the records of the employer.
             2375          (4) The insurer shall provide the employee, spouse, or any eligible dependent the
             2376      opportunity to extend the group coverage at the payment amount stated in Subsection (5) if:
             2377          (a) the employer policyholder does not provide the terminated insured the written
             2378      notification required by Subsection (3)(a); and
             2379          (b) the employee or other individual eligible for extension contacts the insurer within
             2380      60 days of coverage termination.
             2381          (5) [The] A premium amount for extended group coverage may not exceed 102% of


             2382      the group rate in effect for a group member, including an employer's contribution, if any, for a
             2383      group insurance policy.
             2384          (6) Except as provided in this Subsection (6), [the] coverage extends without
             2385      interruption for 12 months and may not terminate if the terminated insured or, with respect to
             2386      a minor, the parent or guardian of the terminated insured:
             2387          (a) elects to extend group coverage within 60 days of losing group coverage; and
             2388          (b) tenders the amount required to the employer or insurer.
             2389          (7) The insured's coverage may be terminated [prior to] before 12 months if the
             2390      terminated insured:
             2391          (a) establishes residence outside of this state;
             2392          (b) moves out of the insurer's service area;
             2393          (c) fails to pay premiums or contributions in accordance with the terms of the
             2394      insurance policy, including any timeliness requirements;
             2395          (d) performs an act or practice that constitutes fraud in connection with the coverage;
             2396          (e) makes an intentional misrepresentation of material fact under the terms of the
             2397      coverage;
             2398          (f) becomes eligible for similar coverage under another group insurance policy; or
             2399          (g) has the coverage terminated because the employer's coverage is terminated, except
             2400      as provided in Subsection (8).
             2401          (8) If the current employer coverage is terminated and the employer replaces coverage
             2402      with similar coverage under another group insurance policy, without interruption, the
             2403      terminated insured, spouse, or the surviving spouse and guardian of dependents if Subsection
             2404      (2)(b) applies, [have the right to] may obtain extension of coverage under the replacement
             2405      group insurance policy:
             2406          (a) for the balance of the period the terminated insured would have extended coverage
             2407      under the replaced group insurance policy; and
             2408          (b) if the terminated insured is otherwise eligible for extension of coverage.
             2409          (9) (a) Within 30 days of the insured's exhaustion of extension of coverage, the


             2410      employer shall provide the terminated insured and the ex-spouse, or, in the case of the death of
             2411      the insured, the surviving spouse, or guardian of any dependents, written notification of the
             2412      right to an individual conversion policy under Section 31A-22-723 .
             2413          (b) The notification required by Subsection (9)(a):
             2414          (i) shall be sent first class mail to:
             2415          (A) the insured's last-known address as shown on the records of the employer;
             2416          (B) the address of the surviving spouse, if different from the insured's address, and if
             2417      shown on the records of the employer;
             2418          (C) the guardian of any dependents last known address as shown on the records of the
             2419      employer, if different from the address of the surviving spouse; and
             2420          (D) the address of the ex-spouse as shown on the records of the employer, if
             2421      applicable; and
             2422          (ii) shall contain the name, address, and telephone number of the insurer that will
             2423      provide the conversion coverage.
             2424          Section 20. Section 31A-22-722.5 is amended to read:
             2425           31A-22-722.5. Mini-COBRA election -- American Recovery and Reinvestment
             2426      Act.
             2427          (1) [An] (a) If the conditions of Subsection (1)(b) are met, an individual has a right[,
             2428      until April 18, 2009,] to contact the individual's employer or the insurer for the employer to
             2429      participate in a second election period for mini-COBRA benefits under Section 31A-22-722 in
             2430      accordance with Section 3001 of the American Recovery and Reinvestment Act of 2009 (Pub.
             2431      S. 111-5), as amended, until the later of:
             2432          (i) February 17, 2010; or
             2433          (ii) 30 days after the day on which the individual's insurer provides the notice
             2434      described in Section 3001(a)(16)(D), of the American Recovery and Reinvestment Act of
             2435      2009, as amended by Pub. L. 111-118, Div. B, Sec. 1010(c).
             2436          (b) Subsection (1)(a) applies if the individual:
             2437          [(a)] (i) was involuntarily terminated from employment between [September 1, 2008


             2438      and February 17, 2009] March 1, 2009 and April 30, 2009, as defined in Section 3001 of the
             2439      American Recovery and Reinvestment Act of 2009 (Pub. S. 111-5), as amended;
             2440          [(b)] (ii) is eligible for COBRA premium assistance under Section 3001 of the
             2441      American Recovery and Reinvestment Act of 2009 (Pub. S. 111-5), as amended; [and]
             2442          [(c)] (iii) was eligible for Utah mini-COBRA as provided in Section 31A-22-722 at
             2443      the time of termination[.];
             2444          (iv) elected Utah mini-COBRA; and
             2445          (v) has the individual's coverage terminated between December 1, 2009 through
             2446      February 1, 2010, for reasons other than those identified in Subsection 31A-22-722 (7).
             2447          (2) (a) An individual or the employer of the individual shall contact the insurer and
             2448      inform the insurer that the individual wants to take advantage of the second election period for
             2449      mini-COBRA coverage under the provisions of Section 3001 of the American Recovery and
             2450      Reinvestment Act of 2009 (Pub. S. 111-5), as amended.
             2451          (b) An individual or an employer on behalf of an eligible individual must submit the
             2452      enrollment forms for coverage under Subsection (1) to the insurer [prior to May 1, 2009.] by
             2453      no later than the later of:
             2454          (i) March 19, 2010; or
             2455          (ii) 30 days after the day on which the notice of the second election period is provided
             2456      as described in Subsection (1)(a).
             2457          (3) The provision regarding the application of pre-existing condition waivers to the
             2458      extended second election period for federal COBRA under Section 3001 of the American
             2459      Recovery and Reinvestment Act of 2009 (Pub. S. 111-5), as amended, shall apply to the
             2460      extended second election for state mini-COBRA under this section.
             2461          (4) An insured has the right to extend the employee's coverage under the current
             2462      employer's group policy beyond 12 months to the period of time the insured is eligible to
             2463      receive assistance in accordance with Section 3001 of the American Recovery and
             2464      Reinvestment Act of 2009 (Pub. S. 111-5), as amended.
             2465          [(4)] (5) An insurer that violates this section is subject to penalties in accordance with


             2466      Section 31A-2-308 .
             2467          Section 21. Section 31A-22-725 is enacted to read:
             2468          31A-22-725. Special enrollment periods relating to Medicaid and Children's
             2469      Health Insurance Program.
             2470          (1) A person is eligible to enroll for coverage under the terms of an employer's group
             2471      health benefit plan if:
             2472          (a) the person is:
             2473          (i) an employee who is eligible, but not enrolled, for coverage under the terms of the
             2474      employer's group health benefit plan; or
             2475          (ii) a dependent of an employee, if the dependent is eligible, but not enrolled, for
             2476      coverage under the terms of the employer's group health benefit plan; and
             2477          (b) the conditions of either Subsection (2) or (3) are met.
             2478          (2) Subsection (1) applies if:
             2479          (a) the employee or dependent is covered under:
             2480          (i) a Medicaid health benefit plan under Title XIX of the Social Security Act; or
             2481          (ii) a state child health benefit plan under Title XXI of the Social Security Act;
             2482          (b) coverage of the employee or dependent described in Subsection (2)(a) is
             2483      terminated as a result of loss of eligibility for the coverage; and
             2484          (c) the employee requests coverage under the employer's group health plan no later
             2485      than 60 days after the date of termination of the coverage described in Subsection (2)(a).
             2486          (3) Subsection (1) applies if:
             2487          (a) the employee or dependent becomes eligible for assistance, with respect to
             2488      coverage under the employer's group health plan under a plan described in Subsection (2)(a),
             2489      including under a waiver or demonstration project conducted under or in relation to a plan
             2490      described in Subsection (2)(a); and
             2491          (b) the employee requests coverage under the employer's group health plan no later
             2492      than 60 days after the date the employee or dependent is determined to be eligible for the
             2493      assistance described in Subsection (3)(a).


             2494          Section 22. Section 31A-23a-415 is amended to read:
             2495           31A-23a-415. Assessment on title insurance agencies or title insurers -- Account
             2496      created.
             2497          (1) For purposes of this section:
             2498          (a) "Premium" is as defined in Subsection 59-9-101 (3).
             2499          (b) "Title insurer" means a person:
             2500          (i) making any contract or policy of title insurance as:
             2501          (A) insurer;
             2502          (B) guarantor; or
             2503          (C) surety;
             2504          (ii) proposing to make any contract or policy of title insurance as:
             2505          (A) insurer;
             2506          (B) guarantor; or
             2507          (C) surety; or
             2508          (iii) transacting or proposing to transact any phase of title insurance, including:
             2509          (A) soliciting;
             2510          (B) negotiating preliminary to execution;
             2511          (C) executing of a contract of title insurance;
             2512          (D) insuring; and
             2513          (E) transacting matters subsequent to the execution of the contract and arising out of
             2514      the contract.
             2515          (c) "Utah risks" means insuring, guaranteeing, or indemnifying with regard to real or
             2516      personal property located in Utah, an owner of real or personal property, the holders of liens or
             2517      encumbrances on that property, or others interested in the property against loss or damage
             2518      suffered by reason of:
             2519          (i) liens or encumbrances upon, defects in, or the unmarketability of the title to the
             2520      property; or
             2521          (ii) invalidity or unenforceability of any liens or encumbrances on the property.


             2522          (2) (a) [Beginning on July 1, 1998, the] The commissioner may assess each title
             2523      insurer and each title insurance agency an annual assessment:
             2524          (i) determined by the Title and Escrow Commission:
             2525          (A) after consultation with the commissioner; and
             2526          (B) in accordance with this Subsection (2); and
             2527          (ii) to be used for the purposes described in Subsection (3).
             2528          (b) A title insurance agency shall be assessed up to:
             2529          (i) $200 for the first office in each county in which the title insurance agency
             2530      maintains an office; and
             2531          (ii) $100 for each additional office the title insurance agency maintains in the county
             2532      described in Subsection (2)(b)(i).
             2533          (c) A title insurer shall be assessed up to:
             2534          (i) $200 for the first office in each county in which the title insurer maintains an
             2535      office;
             2536          (ii) $100 for each additional office the title insurer maintains in the county described
             2537      in Subsection (2)(c)(i); and
             2538          (iii) an amount calculated by:
             2539          (A) aggregating the assessments imposed on:
             2540          (I) title insurance agencies under Subsection (2)(b); and
             2541          (II) title insurers under Subsections (2)(c)(i) and (2)(c)(ii);
             2542          (B) subtracting the amount determined under Subsection (2)(c)(iii)(A) from the total
             2543      costs and expenses determined under Subsection (2)(d); and
             2544          (C) multiplying:
             2545          (I) the amount calculated under Subsection (2)(c)(iii)(B); and
             2546          (II) the percentage of total premiums for title insurance on Utah risk that are premiums
             2547      of the title insurer.
             2548          (d) Notwithstanding Section 31A-3-103 and subject to Section 31A-2-404 , the Title
             2549      and Escrow Commission by rule shall establish the amount of costs and expenses described


             2550      under Subsection (3) that will be covered by the assessment, except the costs or expenses to be
             2551      covered by the assessment may not exceed $75,000 annually.
             2552          (3) (a) [All money] Money received by the state under this section[: (a) shall be
             2553      deposited in the General Fund as a dedicated credit of the department; and (b) may be
             2554      expended by the department] shall be deposited into the Title Licensee Enforcement Restricted
             2555      Account.
             2556          (b) There is created in the General Fund a restricted account known as the "Title
             2557      Licensee Enforcement Restricted Account."
             2558          (c) The Title Licensee Enforcement Restricted Account shall consist of the money
             2559      received by the state under this section.
             2560          (d) The commissioner shall administer the Title Licensee Enforcement Restricted
             2561      Account. Subject to appropriations by the Legislature, the commissioner shall use the money
             2562      deposited into the Title Licensee Enforcement Restricted Account only to pay for [any] a cost
             2563      or expense incurred by the department in the administration, investigation, and enforcement of
             2564      this part and Part 5, Compensation of Producers and Consultants, related to:
             2565          (i) the marketing of title insurance; and
             2566          (ii) audits of agencies.
             2567          (e) The money in the Title Licensee Enforcement Restricted Account is nonlapsing.
             2568          (4) The assessment imposed by this section shall be in addition to any premium
             2569      assessment imposed under Subsection 59-9-101 (3).
             2570          Section 23. Section 31A-23a-501 is amended to read:
             2571           31A-23a-501. Licensee compensation.
             2572          (1) As used in this section:
             2573          (a) "Commission compensation" includes funds paid to or credited for the benefit of a
             2574      licensee from:
             2575          (i) commission amounts deducted from insurance premiums on insurance sold by or
             2576      placed through the licensee; or
             2577          (ii) commission amounts received from an insurer or another licensee as a result of the


             2578      sale or placement of insurance.
             2579          (b) (i) "Compensation from an insurer or third party administrator" means
             2580      commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options,
             2581      gifts, prizes, or any other form of valuable consideration:
             2582          (A) whether or not payable pursuant to a written agreement; and
             2583          (B) received from:
             2584          (I) an insurer; or
             2585          (II) a third party to the transaction for the sale or placement of insurance.
             2586          (ii) "Compensation from an insurer or third party administrator" does not mean
             2587      compensation from a customer that is:
             2588          (A) a fee or pass-through costs as provided in Subsection (1)(e); or
             2589          (B) a fee or amount collected by or paid to the producer that does not exceed an
             2590      amount established by the commissioner by administrative rule.
             2591          (c) (i) "Customer" means:
             2592          (A) the person signing the application or submission for insurance; or
             2593          (B) the authorized representative of the insured actually negotiating the placement of
             2594      insurance with the producer.
             2595          (ii) "Customer" does not mean a person who is a participant or beneficiary of:
             2596          (A) an employee benefit plan; or
             2597          (B) a group or blanket insurance policy or group annuity contract sold, solicited, or
             2598      negotiated by the producer or affiliate.
             2599          (d) (i) "Noncommission compensation" includes all funds paid to or credited for the
             2600      benefit of a licensee other than commission compensation.
             2601          (ii) "Noncommission compensation" does not include charges for pass-through costs
             2602      incurred by the licensee in connection with obtaining, placing, or servicing an insurance
             2603      policy.
             2604          (e) "Pass-through costs" include:
             2605          (i) costs for copying documents to be submitted to the insurer; and


             2606          (ii) bank costs for processing cash or credit card payments.
             2607          (2) A licensee may receive from an insured or from a person purchasing an insurance
             2608      policy, noncommission compensation if the noncommission compensation is stated on a
             2609      separate, written disclosure.
             2610          (a) The disclosure required by this Subsection (2) shall:
             2611          (i) include the signature of the insured or prospective insured acknowledging the
             2612      noncommission compensation;
             2613          (ii) clearly specify the amount or extent of the noncommission compensation; and
             2614          (iii) be provided to the insured or prospective insured before the performance of the
             2615      service.
             2616          (b) Noncommission compensation shall be:
             2617          (i) limited to actual or reasonable expenses incurred for services; and
             2618          (ii) uniformly applied to all insureds or prospective insureds in a class or classes of
             2619      business or for a specific service or services.
             2620          (c) A copy of the signed disclosure required by this Subsection (2) must be maintained
             2621      by any licensee who collects or receives the noncommission compensation or any portion of
             2622      the noncommission compensation.
             2623          (d) All accounting records relating to noncommission compensation shall be
             2624      maintained by the person described in Subsection (2)(c) in a manner that facilitates an audit.
             2625          (3) (a) A licensee may receive noncommission compensation when acting as a
             2626      producer for the insured in connection with the actual sale or placement of insurance if:
             2627          (i) the producer and the insured have agreed on the producer's noncommission
             2628      compensation; and
             2629          (ii) the producer has disclosed to the insured the existence and source of any other
             2630      compensation that accrues to the producer as a result of the transaction.
             2631          (b) The disclosure required by this Subsection (3) shall:
             2632          (i) include the signature of the insured or prospective insured acknowledging the
             2633      noncommission compensation;


             2634          (ii) clearly specify the amount or extent of the noncommission compensation and the
             2635      existence and source of any other compensation; and
             2636          (iii) be provided to the insured or prospective insured before the performance of the
             2637      service.
             2638          (c) The following additional noncommission compensation is authorized:
             2639          (i) compensation received by a producer of a compensated corporate surety who under
             2640      procedures approved by a rule or order of the commissioner is paid by surety bond principal
             2641      debtors for extra services;
             2642          (ii) compensation received by an insurance producer who is also licensed as a public
             2643      adjuster under Section 31A-26-203 , for services performed for an insured in connection with a
             2644      claim adjustment, so long as the producer does not receive or is not promised compensation
             2645      for aiding in the claim adjustment prior to the occurrence of the claim;
             2646          (iii) compensation received by a consultant as a consulting fee, provided the
             2647      consultant complies with the requirements of Section 31A-23a-401 ; or
             2648          (iv) other compensation arrangements approved by the commissioner after a finding
             2649      that they do not violate Section 31A-23a-401 and are not harmful to the public.
             2650          (4) (a) For purposes of this Subsection (4), "producer" includes:
             2651          (i) a producer;
             2652          (ii) an affiliate of a producer; or
             2653          (iii) a consultant.
             2654          (b) Beginning January 1, 2010, in addition to any other disclosures required by this
             2655      section, a producer may not accept or receive any compensation from an insurer or third party
             2656      administrator for the placement of a health benefit plan, other than a hospital confinement
             2657      indemnity policy, unless prior to the customer's purchase of the health benefit plan the
             2658      producer:
             2659          (i) except as provided in Subsection (4)(c), discloses in writing to the customer that
             2660      the producer will receive compensation from the insurer or third party administrator for the
             2661      placement of insurance, including the amount or type of compensation known to the producer


             2662      at the time of the disclosure; and
             2663          (ii) except as provided in Subsection (4)(c):
             2664          (A) obtains the customer's signed acknowledgment that the disclosure under
             2665      Subsection (4)(b)(i) was made to the customer; or
             2666          (B) [certifies to the insurer] (I) signs a statement that the disclosure required by
             2667      Subsection (4)(b)(i) was made to the customer[.]; and
             2668          (II) keeps the signed statement on file in the producer's office while the health benefit
             2669      plan placed with the customer is in force.
             2670          (c) If the compensation to the producer from an insurer or third party administrator is
             2671      for the renewal of a health benefit plan, once the producer has made an initial disclosure that
             2672      complies with Subsection (4)(b), the producer does not have to disclose compensation
             2673      received for the subsequent yearly renewals in accordance with Subsection (4)(b) until the
             2674      renewal period immediately following 36 months after the initial disclosure.
             2675          (d) (i) [A copy of the signed acknowledgment required by Subsection (4)(b) must be
             2676      maintained by the] A licensee who collects or receives any part of the compensation from an
             2677      insurer or third party administrator in a manner that facilitates an audit[.] shall, while the
             2678      health benefit plan placed with the customer is in force, maintain a copy of:
             2679          (A) the signed acknowledgment described in Subsection (4)(b)(i); or
             2680          (B) the signed statement described in Subsection (4)(b)(ii).
             2681          (ii) The standard application developed in accordance with Section 31A-22-635 shall
             2682      include a place for a producer to provide the disclosure required by this Subsection (4), and if
             2683      completed, shall satisfy the requirement of Subsection (4)(d)(i).
             2684          (e) Subsection (4)(b)(ii) does not apply to:
             2685          (i) a person licensed as a producer who acts only as an intermediary between an
             2686      insurer and the customer's producer, including a managing general agent; or
             2687          (ii) the placement of insurance in a secondary or residual market.
             2688          (5) This section does not alter the right of any licensee to recover from an insured the
             2689      amount of any premium due for insurance effected by or through that licensee or to charge a


             2690      reasonable rate of interest upon past-due accounts.
             2691          (6) This section does not apply to bail bond producers or bail enforcement agents as
             2692      defined in Section 31A-35-102 .
             2693          Section 24. Section 31A-26-201 is amended to read:
             2694           31A-26-201. Requirement of license.
             2695          (1) Except as provided in Subsection (2)[, no]:
             2696          (a) a person may not perform, offer to perform, or solicit the opportunity to perform
             2697      [any] an act of insurance adjusting without a valid license under Section 31A-26-203 ; and
             2698      [no]
             2699          (b) a person may not use the insurance adjusting services of another if the person
             2700      knows or should know that the one providing these services does not have a license as required
             2701      by law.
             2702          (2) The following are exempt from the license requirement of Subsection (1), when
             2703      acting in the indicated [capacities] capacity:
             2704          (a) [a person] an individual engaged in insurance adjusting as a regular salaried
             2705      employee of, and not an independent contractor for, an insurer;
             2706          (b) an arbitrator or an umpire selected by the claimant and insurer to decide, alone or
             2707      with others, whether a claim should be paid and how much should be paid;
             2708          (c) an attorney at law acting in an attorney-client relationship;
             2709          (d) an insurance producer, but only as to [the classes]:
             2710          (i) a class of insurance for which [he] the insurance producer is licensed under Section
             2711      31A-23a-106 ; and [only as to claims]
             2712          (ii) a claim adjusted on the request of an insurer for which [he] the insurance producer
             2713      is a producer;
             2714          (e) a regular salaried employee of, and not an independent contractor for, a
             2715      policyholder or claimant under an insurance policy;
             2716          (f) an employee of a licensed insurance adjuster who provides only administrative or
             2717      clerical assistance;


             2718          (g) [person] an individual who does not do insurance adjusting under Section
             2719      31A-26-102 , but who is specially employed to obtain facts about a loss for or furnish technical
             2720      assistance to a licensed adjuster or a company adjuster, including:
             2721          (i) a photographer[,];
             2722          (ii) an estimator [or];
             2723          (iii) an appraiser[,];
             2724          (iv) a marine surveyor[,];
             2725          (v) a private detective[,];
             2726          (vi) an engineer[,]; and
             2727          (vii) a handwriting expert;
             2728          (h) a holder of a group insurance policy, with respect to administrative activities in
             2729      connection with that insurance policy, who receives no compensation for [his] the
             2730      policyholder's services beyond the actual expenses estimated on a reasonable basis;
             2731          (i) [a person] an individual engaged in insurance adjusting as a regular salaried
             2732      employee of, and not an independent contractor for, an administrator licensed under Chapter
             2733      25[; and], Third Party Administrators; or
             2734          (j) a person who gives advice or assistance without compensation or expectation of
             2735      compensation, direct or indirect.
             2736          (3) [No] A claim settlement between an insurer and an insured or a claimant under an
             2737      insurance [contract is] policy may not be considered invalid as a result of a violation of this
             2738      section.
             2739          Section 25. Section 31A-35-401 is amended to read:
             2740           31A-35-401. Requirement for license or certificate of authority -- Process -- Fees
             2741      -- Limitations.
             2742          (1) (a) A person may not engage in the bail bond surety insurance business unless that
             2743      person:
             2744          (i) is a bail bond surety company licensed under this chapter;
             2745          (ii) is a surety insurer that is granted a certificate under this section in the same


             2746      manner as other insurers doing business in this state are granted certificates of authority under
             2747      this title; or
             2748          (iii) is a bail bond producer licensed in accordance with this section.
             2749          (b) A bail bond surety company shall be licensed under this chapter as an agency.
             2750          (c) A bail bond producer shall be licensed under Chapter 23a, Insurance Marketing -
             2751      Licensing Producers, Consultants, and Reinsurance Intermediaries, as a limited lines producer.
             2752          (2) A person applying for a bail bond surety company license under this chapter shall
             2753      submit to the commissioner:
             2754          (a) a completed application form as prescribed by the commissioner;
             2755          (b) a fee as determined by the commissioner in accordance with Section [ 63J-1-504 ]
             2756      31A-3-103 ; and
             2757          (c) any additional information required by rule.
             2758          (3) [Fees] A fee required under this section [are] is not refundable.
             2759          (4) [Fees] A fee collected from a bail bond surety company shall be deposited in a
             2760      restricted account created in Section 31A-35-407 .
             2761          (5) (a) A bail bond surety company shall be domiciled in Utah.
             2762          (b) A bail bond producer shall be a resident of Utah.
             2763          (c) A foreign surety insurer that is granted a certificate to issue bail bonds may only
             2764      issue bail bonds through a bail bond surety company licensed under this chapter.
             2765          Section 26. Section 31A-35-406 is amended to read:
             2766           31A-35-406. Renewal and reinstatement.
             2767          (1) (a) To renew its license under this chapter, on or before the last day of the month in
             2768      which the license expires a bail bond surety company shall:
             2769          (i) complete and submit a renewal application to the department; and
             2770          (ii) pay the department the applicable renewal fee established in accordance with
             2771      Section [ 63J-1-504 ] 31A-3-103 .
             2772          (b) A bail bond surety company shall renew its license under this chapter annually as
             2773      established by department rule, regardless of when the license is issued.


             2774          (2) A bail bond surety company may apply for reinstatement of an expired bail bond
             2775      surety company license within one year following the expiration of the license under
             2776      Subsection (1) by:
             2777          (a) submitting the renewal application required by Subsection (1); and
             2778          (b) paying a license reinstatement fee established in accordance with Section
             2779      [ 63J-1-504 ] 31A-3-103 .
             2780          (3) If a bail bond surety company license has been expired for more than one year, the
             2781      person applying for reinstatement of the bail bond surety license shall:
             2782          (a) submit a new application form to the commissioner; and
             2783          (b) pay the application fee established in accordance with Section [ 63J-1-504 ]
             2784      31A-3-103 .
             2785          (4) If a bail bond surety company license is suspended, the applicant may not submit
             2786      an application for a bail bond surety company license until after the end of the period of
             2787      suspension.
             2788          (5) [Fees] A fee collected under this section shall be deposited in the restricted account
             2789      created in Section 31A-35-407 .
             2790          Section 27. Section 31A-36-102 is amended to read:
             2791           31A-36-102. Definitions.
             2792          As used in this chapter:
             2793          (1) (a) "Advertising" means a communication placed before the public to:
             2794          (i) create an interest in a life settlement; or
             2795          (ii) induce a person pursuant to a life settlement to sell, assign, devise, bequest, or
             2796      transfer the death benefit or ownership of:
             2797          (A) a policy; or
             2798          (B) an interest in a policy.
             2799          (b) "Advertising" includes the following, if the requirements of Subsection (1)(a) are
             2800      met:
             2801          (i) a written, electronic, or printed communication;


             2802          (ii) a communication by means of a recorded telephone message;
             2803          (iii) a communication transmitted on radio, television, the Internet, or similar
             2804      communications media; and
             2805          (iv) a film strip, motion picture, or video.
             2806          (2) "Business of life settlements" includes the following:
             2807          (a) offering a life settlement;
             2808          (b) soliciting a life settlement;
             2809          (c) negotiating a life settlement;
             2810          (d) procuring a life settlement;
             2811          (e) effectuating a life settlement;
             2812          (f) purchasing a life settlement;
             2813          (g) investing in a life settlement;
             2814          (h) financing a life settlement;
             2815          (i) monitoring a life settlement;
             2816          (j) tracking a life settlement;
             2817          (k) underwriting a life settlement;
             2818          (l) selling a life settlement;
             2819          (m) transferring a life settlement;
             2820          (n) assigning a life settlement;
             2821          (o) pledging a life settlement;
             2822          (p) hypothecating a life settlement; or
             2823          (q) in any other manner acquiring an interest in [a] an insurance policy by means of a
             2824      life settlement.
             2825          (3) "Chronically ill" means:
             2826          (a) being unable to perform at least two activities of daily living, such as eating,
             2827      toileting, moving from one place to another, bathing, dressing, or continence;
             2828          (b) requiring substantial supervision for protection from threats to health and safety
             2829      because of severe cognitive impairment; or


             2830          (c) having a level of disability similar to that described in Subsection (3)(a).
             2831          (4) "Depository institution" is as defined in Section 7-1-103 .
             2832          (5) (a) "Financing entity" means a person:
             2833          (i) who has direct ownership in a policy that is the subject of a life settlement;
             2834          (ii) whose principal activity related to a life settlement is providing money to effect the
             2835      life settlement or the purchase of one or more settled policies; and
             2836          (iii) who has an agreement in writing with one or more licensed life settlement
             2837      providers to finance the acquisition of one or more life settlements.
             2838          (b) "Financing entity" includes, if the requirements of Subsection (5)(a) are met, the
             2839      following:
             2840          (i) an underwriter;
             2841          (ii) a placement agent;
             2842          (iii) an enhancer of credit;
             2843          (iv) a lender;
             2844          (v) a purchaser of securities; and
             2845          (vi) a purchaser of a policy from a life settlement provider.
             2846          (c) "Financing entity" does not include:
             2847          (i) a nonaccredited investor; or
             2848          (ii) a life settlement purchaser.
             2849          (6) "Form" means, in addition to a form as defined in Section 31A-1-301 :
             2850          (a) a life settlement;
             2851          (b) a disclosure to an owner;
             2852          (c) a notice of intent to settle; or
             2853          (d) a verification of coverage.
             2854          (7) "Life expectancy" means the mean number of months an individual insured under
             2855      a policy to be settled can be expected to live considering medical records and appropriate
             2856      experiential data.
             2857          (8) (a) "Life settlement" means a written agreement:


             2858          (i) between an owner and a life settlement provider; and
             2859          (ii) [for] that establishes the terms for the payment of anything of value[, that is less
             2860      than the expected death benefit of the policy,] in exchange for the owner assigning, selling,
             2861      transferring, devising, releasing, or bequeathing, at the time of or after the exchange, the death
             2862      benefit or ownership of:
             2863          (A) any portion of a policy; or
             2864          (B) a beneficial interest in the policy.
             2865          (b) "Life settlement" includes:
             2866          (i) the transfer for compensation or value of ownership or beneficial interest in a trust
             2867      or other entity that owns a policy if the trust or other entity is formed or operated for the
             2868      principal purpose of acquiring one or more policies; or
             2869          (ii) a premium finance loan made for a policy by a lender to an owner on, before, or
             2870      after the date of issuance of the policy if the owner:
             2871          (A) receives on the date of the premium finance loan a guarantee of a future life
             2872      settlement value of the policy; or
             2873          (B) agrees on the date of the premium finance loan to sell the policy or any portion of
             2874      the policy's death benefit on a date following the issuance of the policy.
             2875          (c) An agreement described in Subsection (8)(a) is a "life settlement" even if it is
             2876      referred to by a different name, including:
             2877          (i) a ["life] "viatical settlement"; or
             2878          (ii) a "senior settlement."
             2879          (d) "Life settlement" does not include:
             2880          (i) a loan or accelerated death benefit by an insurer pursuant to the terms of a policy;
             2881          (ii) loan proceeds that are used solely to pay:
             2882          (A) premiums for a policy; and
             2883          (B) the loan costs or other expenses incurred by the lender, including:
             2884          (I) interest;
             2885          (II) an arrangement fee;


             2886          (III) a use fee;
             2887          (IV) closing costs;
             2888          (V) attorney fees and expenses;
             2889          (VI) trustee fees and expenses; and
             2890          (VII) third party collateral provider fees and expenses, including fees payable to a
             2891      letter of credit issuer;
             2892          (iii) (A) a loan made by a licensed lender in which the licensed lender takes an interest
             2893      in a policy solely to secure repayment of a loan; or
             2894          (B) the transfer of a policy by a lender, if:
             2895          (I) the loan is:
             2896          (Aa) a loan described in Subsection (8)(d)(iii)(A); or
             2897          (Bb) a premium finance loan that is not a life settlement;
             2898          (II) the loan is defaulted on;
             2899          (III) the policy is transferred; and
             2900          (IV) neither the default itself nor the transfer of the policy in connection with the
             2901      default is pursuant to an agreement with any other person for the purpose of evading
             2902      regulation under this chapter;
             2903          (iv) an agreement where all the participants in the agreement:
             2904          (A) (I) are closely related to the insured by blood or law; or
             2905          (II) have a lawful substantial economic interest in the continued life, health, and bodily
             2906      safety of the person insured; and
             2907          (B) are trusts established primarily for the benefit of the participants in the agreement;
             2908          (v) a designation, consent, or agreement by an insured who is an employee of an
             2909      employer in connection with the purchase by the employer, or trust established by the
             2910      employer, of life insurance on the life of the employee; or
             2911          (vi) a business succession planning arrangement not made for the purpose of evading
             2912      regulation under this chapter:
             2913          (A) (I) between one or more shareholders in a corporation; or


             2914          (II) between a corporation and:
             2915          (Aa) one or more of its shareholders; or
             2916          (Bb) one or more trusts established by its shareholders;
             2917          (B) (I) between one or more partners in a partnership; or
             2918          (II) between a partnership and:
             2919          (Aa) one or more of its partners; or
             2920          (Bb) one or more trusts established by its partners; or
             2921          (C) (I) between one or more members in a limited liability company; or
             2922          (II) between a limited liability company and:
             2923          (Aa) one or more of its members; or
             2924          (Bb) one or more trusts established by its members.
             2925          (9) (a) "Life settlement producer" means a person licensed in the state as a life
             2926      insurance producer that on behalf of an owner and for consideration offers or attempts to
             2927      negotiate a life settlement between the owner and one or more life settlement providers.
             2928          (b) "Life settlement producer" does not include an attorney licensed to practice law in
             2929      any state, a certified public accountant, or a financial planner accredited by a nationally
             2930      recognized accrediting agency:
             2931          (i) that is retained to represent an owner; and
             2932          (ii) whose compensation is not paid directly or indirectly by:
             2933          (A) a life settlement provider; or
             2934          (B) a life settlement purchaser.
             2935          (10) (a) "Life settlement provider" means a person other than an owner that enters into
             2936      or effectuates a life settlement.
             2937          (b) "Life settlement provider" does not include:
             2938          (i) a licensed lender that takes an assignment of a policy as security for a loan,
             2939      including a:
             2940          (A) depository institution; or
             2941          (B) lender that makes a premium finance loan that is not described in Subsection


             2942      (8)(b)(ii);
             2943          (ii) the issuer of a policy;
             2944          (iii) an authorized or eligible insurer that provides stop-loss coverage to:
             2945          (A) a life settlement provider;
             2946          (B) a life settlement purchaser;
             2947          (C) a financing entity;
             2948          (D) a special purpose entity; or
             2949          (E) a related provider trust;
             2950          (iv) a financing entity;
             2951          (v) a special purpose entity;
             2952          (vi) a related provider trust;
             2953          (vii) a life settlement purchaser; or
             2954          (viii) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A
             2955      that purchases a settled policy from a life settlement provider.
             2956          (11) (a) "Life settlement purchaser" means a person that, to derive an economic
             2957      benefit:
             2958          (i) provides a sum of money as consideration for a policy or an interest in the death
             2959      benefits of a policy; or
             2960          (ii) owns, acquires, or is entitled to a beneficial interest in a trust that:
             2961          (A) owns a life settlement; or
             2962          (B) is the beneficiary of a policy that has been or will be the subject of a life
             2963      settlement.
             2964          (b) "Life settlement purchaser" does not include:
             2965          (i) a life settlement provider;
             2966          (ii) a life settlement producer;
             2967          (iii) an accredited investor as defined in Regulation D, Rule 501, 17 C.F.R. Sec.
             2968      230.501;
             2969          (iv) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A;


             2970          (v) a financing entity;
             2971          (vi) a special purpose entity; or
             2972          (vii) a related provider trust.
             2973          (12) (a) "Owner" means any of the following who resides in this state and seeks to
             2974      enter into a life settlement:
             2975          (i) the owner of a policy; or
             2976          (ii) the holder of a certificate of [insurance under] a group policy [of group insurance].
             2977          (b) "Owner" is not limited to [a person] an individual who is terminally ill or
             2978      chronically ill except when the limitation is expressly provided in this chapter.
             2979          (c) "Owner" does not include:
             2980          (i) a life settlement provider;
             2981          (ii) a life settlement producer;
             2982          (iii) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A;
             2983          (iv) a financing entity;
             2984          (v) a special purpose entity; or
             2985          (vi) a related provider trust.
             2986          (13) "Policy" means:
             2987          (a) an individual or group life insurance policy;
             2988          (b) an individual or group annuity policy;
             2989          [(b)] (c) a group life insurance certificate [for life insurance; or];
             2990          (d) a group annuity certificate; or
             2991          [(c)] (e) a [contract or arrangement of] life insurance policy or an annuity policy,
             2992      whether or not delivered or issued for delivery in Utah:
             2993          (i) affecting the rights of a resident of Utah; or
             2994          (ii) bearing a reasonable relation to Utah.
             2995          (14) "Premium finance loan" is a loan made primarily for the purpose of making
             2996      premium payments on a policy if the loan is secured by an interest in the policy.
             2997          (15) "Related provider trust" means a trust established by a licensed life settlement


             2998      provider or a financing entity solely to hold the ownership of or beneficial interests in
             2999      purchased policies in connection with financing.
             3000          (16) "Settled policy" means a policy that is acquired by a life settlement provider
             3001      pursuant to a life settlement.
             3002          (17) "Special purpose entity" means an entity formed by a licensed life settlement
             3003      provider solely to enable the life settlement provider to gain access to institutional markets for
             3004      capital.
             3005          (18) (a) "Stranger-originated life insurance" means an act, practice, or arrangement to
             3006      initiate a policy for the benefit of a third party investor or other person who has no insurable
             3007      interest in the insured resulting in the requirements of Section 31A-21-104 not being met.
             3008          (b) "Stranger-originated life insurance" includes when:
             3009          (i) a policy is purchased with resources or guarantees from or through a person who, at
             3010      the time of policy origination, could not lawfully initiate the policy itself; and
             3011          (ii) at the time of policy origination, there is an agreement, whether oral or written, to
             3012      directly or indirectly transfer to a third party the ownership of a policy, policy benefits, or
             3013      both.
             3014          (c) "Stranger-originated life insurance" does not include:
             3015          (i) a life settlement that complies with:
             3016          (A) this chapter; and
             3017          (B) Section 31A-21-104 ; or
             3018          (ii) an act, practice, or arrangement described in Subsection (8)(d).
             3019          (19) "Terminally ill" means having a condition that reasonably may be expected to
             3020      result in death within 24 months.
             3021          Section 28. Section 31A-40-103 is amended to read:
             3022           31A-40-103. Duties of the commissioner.
             3023          (1) (a) The commissioner shall maintain a list of professional employer organizations
             3024      that are licensed under this chapter.
             3025          (b) The commissioner shall make the list required by this Subsection (1) available to


             3026      the public by electronic or other means.
             3027          (2) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             3028      the commissioner:
             3029          (a) shall make rules to prescribe the requirements for forms required under this
             3030      chapter; [and]
             3031          (b) may make rules to prescribe the requirements and process for correcting under
             3032      Section 31A-40-205 :
             3033          (i) a deficiency in working capital; or
             3034          (ii) negative working capital;
             3035          [(b)] (c) may make rules to prescribe the requirements for the review and submission
             3036      of a financial statement under Section 31A-40-305 :
             3037          (i) that are consistent with generally accepted accounting principles; and
             3038          (ii) including the timeliness of a financial statement[.]; and
             3039          (d) may make rules to prescribe the requirements and process for when a professional
             3040      employer organization license is terminated by:
             3041          (i) voluntary surrender of the professional organization license; or
             3042          (ii) involuntary surrender of the professional organization license.
             3043          (3) A rule in effect on May 5, 2008 under the repealed Title 58, Chapter 59,
             3044      Professional Employer Organization Registration Act, [shall be: (a) renumbered as a rule
             3045      made under this chapter; and (b) remain] remains in effect until such time as the
             3046      commissioner modifies or repeals the rule.
             3047          [(4) The commissioner shall report to the Business and Labor Committee by no later
             3048      than the November 2009 interim meeting as to whether the commissioner recommends that
             3049      the working capital requirements of Section 31A-40-205 be modified.]
             3050          Section 29. Section 31A-40-302 is amended to read:
             3051           31A-40-302. Licensing process.
             3052