Download Zipped Introduced WordPerfect SB0062S01.ZIP
[Status][Bill Documents][Fiscal Note][Bills Directory]
First Substitute S.B. 62
1
2
3
4
5
6
7
8 LONG TITLE
9 General Description:
10 This bill modifies the Insurance Code by amending provisions relating to uninsured and
11 underinsured motorist coverage.
12 Highlighted Provisions:
13 This bill:
14 . provides that if a covered person elects to submit a claim for uninsured or
15 underinsured motorist benefits to binding arbitration or files litigation, the covered
16 person shall provide a written demand to the uninsured or underinsured motorist
17 carrier for payment of uninsured or underinsured motorist compensation with
18 certain documentation;
19 . provides that an uninsured or underinsured motorist carrier that receives an election
20 for arbitration or a notice of filing for litigation and the demand for payment of
21 uninsured or underinsured motorist benefits shall have a reasonable time, not to
22 exceed 60 days, to provide a written response to the written demand for payment
23 and tender the amount, if any, of the uninsured or underinsured motorist carrier's
24 determination of the amount owed to the claimant;
25 . provides that a covered person may elect to litigate or arbitrate any remaining claim
26 if an uninsured or underinsured motorist carrier's tender is less than the total amount of the
27 uninsured or underinsured policy limits;
28 . provides procedures for litigating or arbitrating a claim for uninsured or
29 underinsured motorist compensation;
30 . provides that if a litigation or arbitration award is greater than a certain amount, the
31 carrier is liable for the award amount and certain costs;
32 . establishes a cap on certain amounts an uninsured motorist carrier or an
33 underinsured motorist carrier pay;
34 . provides that litigating or arbitrating a covered person's demand for uninsured or
35 underinsured motorist compensation does not limit any other cause of action that
36 arose or may arise against the carrier that is the subject of the litigation from the
37 same dispute; and
38 . makes technical changes.
39 Monies Appropriated in this Bill:
40 None
41 Other Special Clauses:
42 This bill provides an immediate effective date.
43 This bill provides revisor instructions.
44 Utah Code Sections Affected:
45 AMENDS:
46 31A-22-305, as last amended by Laws of Utah 2008, Chapter 3
47 31A-22-305.3, as last amended by Laws of Utah 2009, Chapter 231
48
49 Be it enacted by the Legislature of the state of Utah:
50 Section 1. Section 31A-22-305 is amended to read:
51 31A-22-305. Uninsured motorist coverage.
52 (1) As used in this section, "covered persons" includes:
53 (a) the named insured;
54 (b) persons related to the named insured by blood, marriage, adoption, or guardianship,
55 who are residents of the named insured's household, including those who usually make their
56 home in the same household but temporarily live elsewhere;
57 (c) any person occupying or using a motor vehicle:
58 (i) referred to in the policy; or
59 (ii) owned by a self-insured; and
60 (d) any person who is entitled to recover damages against the owner or operator of the
61 uninsured or underinsured motor vehicle because of bodily injury to or death of persons under
62 Subsection (1)(a), (b), or (c).
63 (2) As used in this section, "uninsured motor vehicle" includes:
64 (a) (i) a motor vehicle, the operation, maintenance, or use of which is not covered
65 under a liability policy at the time of an injury-causing occurrence; or
66 (ii) (A) a motor vehicle covered with lower liability limits than required by Section
67 31A-22-304 ; and
68 (B) the motor vehicle described in Subsection (2)(a)(ii)(A) is uninsured to the extent of
69 the deficiency;
70 (b) an unidentified motor vehicle that left the scene of an accident proximately caused
71 by the motor vehicle operator;
72 (c) a motor vehicle covered by a liability policy, but coverage for an accident is
73 disputed by the liability insurer for more than 60 days or continues to be disputed for more than
74 60 days; or
75 (d) (i) an insured motor vehicle if, before or after the accident, the liability insurer of
76 the motor vehicle is declared insolvent by a court of competent jurisdiction; and
77 (ii) the motor vehicle described in Subsection (2)(d)(i) is uninsured only to the extent
78 that the claim against the insolvent insurer is not paid by a guaranty association or fund.
79 (3) (a) Uninsured motorist coverage under Subsection 31A-22-302 (1)(b) provides
80 coverage for covered persons who are legally entitled to recover damages from owners or
81 operators of uninsured motor vehicles because of bodily injury, sickness, disease, or death.
82 (b) For new policies written on or after January 1, 2001, the limits of uninsured
83 motorist coverage shall be equal to the lesser of the limits of the insured's motor vehicle
84 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
85 under the insured's motor vehicle policy, unless the insured purchases coverage in a lesser
86 amount by signing an acknowledgment form that:
87 (i) is filed with the department;
88 (ii) is provided by the insurer;
89 (iii) waives the higher coverage;
90 (iv) reasonably explains the purpose of uninsured motorist coverage; and
91 (v) discloses the additional premiums required to purchase uninsured motorist
92 coverage with limits equal to the lesser of the limits of the insured's motor vehicle liability
93 coverage or the maximum uninsured motorist coverage limits available by the insurer under the
94 insured's motor vehicle policy.
95 (c) A self-insured, including a governmental entity, may elect to provide uninsured
96 motorist coverage in an amount that is less than its maximum self-insured retention under
97 Subsections (3)(b) and (4)(a) by issuing a declaratory memorandum or policy statement from
98 the chief financial officer or chief risk officer that declares the:
99 (i) self-insured entity's coverage level; and
100 (ii) process for filing an uninsured motorist claim.
101 (d) Uninsured motorist coverage may not be sold with limits that are less than the
102 minimum bodily injury limits for motor vehicle liability policies under Section 31A-22-304 .
103 (e) The acknowledgment under Subsection (3)(b) continues for that issuer of the
104 uninsured motorist coverage until the insured, in writing, requests different uninsured motorist
105 coverage from the insurer.
106 (f) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
107 policies existing on that date, the insurer shall disclose in the same medium as the premium
108 renewal notice, an explanation of:
109 (A) the purpose of uninsured motorist coverage; and
110 (B) the costs associated with increasing the coverage in amounts up to and including
111 the maximum amount available by the insurer under the insured's motor vehicle policy.
112 (ii) The disclosure required under this Subsection (3)(f) shall be sent to all insureds that
113 carry uninsured motorist coverage limits in an amount less than the insured's motor vehicle
114 liability policy limits or the maximum uninsured motorist coverage limits available by the
115 insurer under the insured's motor vehicle policy.
116 (4) (a) (i) Except as provided in Subsection (4)(b), the named insured may reject
117 uninsured motorist coverage by an express writing to the insurer that provides liability
118 coverage under Subsection 31A-22-302 (1)(a).
119 (ii) This rejection shall be on a form provided by the insurer that includes a reasonable
120 explanation of the purpose of uninsured motorist coverage.
121 (iii) This rejection continues for that issuer of the liability coverage until the insured in
122 writing requests uninsured motorist coverage from that liability insurer.
123 (b) (i) All persons, including governmental entities, that are engaged in the business of,
124 or that accept payment for, transporting natural persons by motor vehicle, and all school
125 districts that provide transportation services for their students, shall provide coverage for all
126 motor vehicles used for that purpose, by purchase of a policy of insurance or by self-insurance,
127 uninsured motorist coverage of at least $25,000 per person and $500,000 per accident.
128 (ii) This coverage is secondary to any other insurance covering an injured covered
129 person.
130 (c) Uninsured motorist coverage:
131 (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
132 Compensation Act;
133 (ii) may not be subrogated by the workers' compensation insurance carrier;
134 (iii) may not be reduced by any benefits provided by workers' compensation insurance;
135 (iv) may be reduced by health insurance subrogation only after the covered person has
136 been made whole;
137 (v) may not be collected for bodily injury or death sustained by a person:
138 (A) while committing a violation of Section 41-1a-1314 ;
139 (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
140 in violation of Section 41-1a-1314 ; or
141 (C) while committing a felony; and
142 (vi) notwithstanding Subsection (4)(c)(v), may be recovered:
143 (A) for a person under 18 years of age who is injured within the scope of Subsection
144 (4)(c)(v) but limited to medical and funeral expenses; or
145 (B) by a law enforcement officer as defined in Section 53-13-103 , who is injured
146 within the course and scope of the law enforcement officer's duties.
147 (d) As used in this Subsection (4), "motor vehicle" has the same meaning as under
148 Section 41-1a-102 .
149 (5) When a covered person alleges that an uninsured motor vehicle under Subsection
150 (2)(b) proximately caused an accident without touching the covered person or the motor
151 vehicle occupied by the covered person, the covered person must show the existence of the
152 uninsured motor vehicle by clear and convincing evidence consisting of more than the covered
153 person's testimony.
154 (6) (a) The limit of liability for uninsured motorist coverage for two or more motor
155 vehicles may not be added together, combined, or stacked to determine the limit of insurance
156 coverage available to an injured person for any one accident.
157 (b) (i) Subsection (6)(a) applies to all persons except a covered person as defined under
158 Subsection (7)(b)(ii).
159 (ii) A covered person as defined under Subsection (7)(b)(ii) is entitled to the highest
160 limits of uninsured motorist coverage afforded for any one motor vehicle that the covered
161 person is the named insured or an insured family member.
162 (iii) This coverage shall be in addition to the coverage on the motor vehicle the covered
163 person is occupying.
164 (iv) Neither the primary nor the secondary coverage may be set off against the other.
165 (c) Coverage on a motor vehicle occupied at the time of an accident shall be primary
166 coverage, and the coverage elected by a person described under Subsections (1)(a) and (b) shall
167 be secondary coverage.
168 (7) (a) Uninsured motorist coverage under this section applies to bodily injury,
169 sickness, disease, or death of covered persons while occupying or using a motor vehicle only if
170 the motor vehicle is described in the policy under which a claim is made, or if the motor
171 vehicle is a newly acquired or replacement motor vehicle covered under the terms of the policy.
172 Except as provided in Subsection (6) or this Subsection (7), a covered person injured in a
173 motor vehicle described in a policy that includes uninsured motorist benefits may not elect to
174 collect uninsured motorist coverage benefits from any other motor vehicle insurance policy
175 under which the person is a covered person.
176 (b) Each of the following persons may also recover uninsured motorist benefits under
177 any one other policy in which they are described as a "covered person" as defined in Subsection
178 (1):
179 (i) a covered person injured as a pedestrian by an uninsured motor vehicle; and
180 (ii) except as provided in Subsection (7)(c), a covered person injured while occupying
181 or using a motor vehicle that is not owned, leased, or furnished:
182 (A) to the covered person;
183 (B) to the covered person's spouse; or
184 (C) to the covered person's resident parent or resident sibling.
185 (c) (i) A covered person may recover benefits from no more than two additional
186 policies, one additional policy from each parent's household if the covered person is:
187 (A) a dependent minor of parents who reside in separate households; and
188 (B) injured while occupying or using a motor vehicle that is not owned, leased, or
189 furnished:
190 (I) to the covered person;
191 (II) to the covered person's resident parent; or
192 (III) to the covered person's resident sibling.
193 (ii) Each parent's policy under this Subsection (7)(c) is liable only for the percentage of
194 the damages that the limit of liability of each parent's policy of uninsured motorist coverage
195 bears to the total of both parents' uninsured coverage applicable to the accident.
196 (d) A covered person's recovery under any available policies may not exceed the full
197 amount of damages.
198 (e) A covered person in Subsection (7)(b) is not barred against making subsequent
199 elections if recovery is unavailable under previous elections.
200 (f) (i) As used in this section, "interpolicy stacking" means recovering benefits for a
201 single incident of loss under more than one insurance policy.
202 (ii) Except to the extent permitted by Subsection (6) and this Subsection (7),
203 interpolicy stacking is prohibited for uninsured motorist coverage.
204 (8) (a) When a claim is brought by a named insured or a person described in
205 Subsection (1) and is asserted against the covered person's uninsured motorist carrier, the
206 claimant may elect to resolve the claim:
207 (i) by submitting the claim to binding arbitration; or
208 (ii) through litigation.
209 (b) Unless otherwise provided in the policy under which uninsured benefits are
210 claimed, the election provided in Subsection (8)(a) is available to the claimant only.
211 (c) Once the claimant has elected to commence litigation under Subsection (8)(a)(ii),
212 the claimant may not elect to resolve the claim through binding arbitration under this section
213 without the written consent of the uninsured motorist carrier.
214 (d) (i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
215 binding arbitration under Subsection (8)(a)(i) shall be resolved by a single arbitrator.
216 (ii) All parties shall agree on the single arbitrator selected under Subsection (8)(d)(i).
217 (iii) If the parties are unable to agree on a single arbitrator as required under Subsection
218 (8)(d)(ii), the parties shall select a panel of three arbitrators.
219 (e) If the parties select a panel of three arbitrators under Subsection (8)(d)(iii):
220 (i) each side shall select one arbitrator; and
221 (ii) the arbitrators appointed under Subsection (8)(e)(i) shall select one additional
222 arbitrator to be included in the panel.
223 (f) Unless otherwise agreed to in writing:
224 (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
225 under Subsection (8)(d)(i); or
226 (ii) if an arbitration panel is selected under Subsection (8)(d)(iii):
227 (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
228 (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
229 under Subsection (8)(e)(ii).
230 (g) Except as otherwise provided in this section or unless otherwise agreed to in
231 writing by the parties, an arbitration proceeding conducted under this section shall be governed
232 by Title 78B, Chapter 11, Utah Uniform Arbitration Act.
233 (h) The arbitration shall be conducted in accordance with Rules 26 through 37, 54, and
234 68 of the Utah Rules of Civil Procedure.
235 (i) All issues of discovery shall be resolved by the arbitrator or the arbitration panel.
236 (j) A written decision by a single arbitrator or by a majority of the arbitration panel
237 shall constitute a final decision.
238 (k) (i) The amount of an arbitration award may not exceed the uninsured motorist
239 policy limits of all applicable uninsured motorist policies, including applicable uninsured
240 motorist umbrella policies.
241 (ii) If the initial arbitration award exceeds the uninsured motorist policy limits of all
242 applicable uninsured motorist policies, the arbitration award shall be reduced to an amount
243 equal to the combined uninsured motorist policy limits of all applicable uninsured motorist
244 policies.
245 (l) The arbitrator or arbitration panel may not decide the issues of coverage or
246 extra-contractual damages, including:
247 (i) whether the claimant is a covered person;
248 (ii) whether the policy extends coverage to the loss; or
249 (iii) any allegations or claims asserting consequential damages or bad faith liability.
250 (m) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or
251 class-representative basis.
252 (n) If the arbitrator or arbitration panel finds that the action was not brought, pursued,
253 or defended in good faith, the arbitrator or arbitration panel may award reasonable attorney fees
254 and costs against the party that failed to bring, pursue, or defend the claim in good faith.
255 (o) An arbitration award issued under this section shall be the final resolution of all
256 claims not excluded by Subsection (8)(l) between the parties unless:
257 (i) the award was procured by corruption, fraud, or other undue means; or
258 (ii) either party, within 20 days after service of the arbitration award:
259 (A) files a complaint requesting a trial de novo in the district court; and
260 (B) serves the nonmoving party with a copy of the complaint requesting a trial de novo
261 under Subsection (8)(o)(ii)(A).
262 (p) (i) Upon filing a complaint for a trial de novo under Subsection (8)(o), the claim
263 shall proceed through litigation pursuant to the Utah Rules of Civil Procedure and Utah Rules
264 of Evidence in the district court.
265 (ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
266 request a jury trial with a complaint requesting a trial de novo under Subsection (8)(o)(ii)(A).
267 (q) (i) If the claimant, as the moving party in a trial de novo requested under
268 Subsection (8)(o), does not obtain a verdict that is at least $5,000 and is at least 20% greater
269 than the arbitration award, the claimant is responsible for all of the nonmoving party's costs.
270 (ii) If the uninsured motorist carrier, as the moving party in a trial de novo requested
271 under Subsection (8)(o), does not obtain a verdict that is at least 20% less than the arbitration
272 award, the uninsured motorist carrier is responsible for all of the nonmoving party's costs.
273 (iii) Except as provided in Subsection (8)(q)(iv), the costs under this Subsection (8)(q)
274 shall include:
275 (A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
276 (B) the costs of expert witnesses and depositions.
277 (iv) An award of costs under this Subsection (8)(q) may not exceed $2,500.
278 (r) For purposes of determining whether a party's verdict is greater or less than the
279 arbitration award under Subsection (8)(q), a court may not consider any recovery or other relief
280 granted on a claim for damages if the claim for damages:
281 (i) was not fully disclosed in writing prior to the arbitration proceeding; or
282 (ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil
283 Procedure.
284 (s) If a district court determines, upon a motion of the nonmoving party, that the
285 moving party's use of the trial de novo process was filed in bad faith in accordance with
286 Section 78B-5-825 , the district court may award reasonable attorney fees to the nonmoving
287 party.
288 (t) Nothing in this section is intended to limit any claim under any other portion of an
289 applicable insurance policy.
290 (u) If there are multiple uninsured motorist policies, as set forth in Subsection (7), the
291 claimant may elect to arbitrate in one hearing the claims against all the uninsured motorist
292 carriers.
293 (9) (a) Within 30 days after a covered person elects to submit a claim for uninsured
294 motorist benefits to binding arbitration or files litigation, the covered person shall provide to
295 the uninsured motorist carrier:
296 (i) a written demand for payment of uninsured motorist coverage benefits, setting forth:
297 (A) the specific monetary amount of the demand; and
298 (B) the factual and legal basis and any supporting documentation for the demand;
299 (ii) a written statement under oath disclosing:
300 (A) (I) the names and last known addresses of all health care providers who have
301 rendered health care services to the covered person that are material to the claims for which
302 uninsured motorist benefits are sought for a period of five years preceding the date of the event
303 giving rise to the claim for uninsured motorist benefits up to the time the election for
304 arbitration or litigation has been exercised; and
305 (II) whether the covered person has seen other health care providers who have rendered
306 health care services to the covered person, which the covered person claims are immaterial to
307 the claims for which uninsured motorist benefits are sought, for a period of five years
308 preceding the date of the event giving rise to the claim for uninsured motorist benefits up to the
309 time the election for arbitration or litigation has been exercised that have not been disclosed
310 under Subsection (9)(a)(ii)(A)(I);
311 (B) (I) the names and last known addresses of all health insurers or other entities to
312 whom the covered person has submitted claims for health care services or benefits material to
313 the claims for which uninsured motorist benefits are sought, for a period of five years
314 preceding the date of the event giving rise to the claim for uninsured motorist benefits up to the
315 time the election for arbitration or litigation has been exercised; and
316 (II) whether the identity of any health insurers or other entities to whom the covered
317 person has submitted claims for health care services or benefits which the covered person
318 claims are immaterial to the claims for which uninsured motorist benefits are sought, for a
319 period of five years preceding the date of the event giving rise to the claim for uninsured
320 motorist benefits up to the time the election for arbitration or litigation have not been disclosed;
321 and
322 (C) if lost wages, diminished earning capacity, or similar damages are claimed, all
323 employers of the covered person for a period of five years preceding the date of the event
324 giving rise to the claim for uninsured motorist benefits up to the time the election for
325 arbitration or litigation has been exercised;
326 (D) other documents to reasonably support the claims being asserted; and
327 (E) all state and federal statutory lienholders including a statement as to whether the
328 covered person is a recipient of Medicare or Medicaid benefits or Utah Children's Health
329 Insurance benefits under Title 26, Chapter 40, Utah Children's Health Insurance Act, or if the
330 claim is subject to any other state or federal statutory liens; and
331 (iii) signed authorizations to allow the uninsured motorist carrier to only obtain records
332 and billings from the individuals or entities disclosed.
333 (b) (i) If the uninsured motorist carrier determines that the disclosure of undisclosed
334 health care providers or health care insurers under Subsection (9)(a)(ii) is reasonably necessary,
335 the uninsured motorist carrier may:
336 (A) make a request for the disclosure of the identity of the health care providers or
337 health care insurers; and
338 (B) make a request for authorizations to allow the uninsured motorist carrier to only
339 obtain records and billings from the individuals or entities not disclosed.
340 (ii) If the covered person does not provide the requested information within 10 days:
341 (A) the covered person shall disclose, in writing, the legal or factual basis for the
342 failure to disclose the health care providers or health care insurers; and
343 (B) either the covered person or the uninsured motorist carrier may request the
344 arbitrator or arbitration panel to resolve the issue of whether the identities or records are to be
345 provided if the covered person has elected arbitration.
346 (iii) The time periods imposed by Subsection (9)(c)(i) are tolled pending resolution of
347 the dispute concerning the disclosure and production of records of the health care providers or
348 health care insurers.
349 (c) (i) An uninsured motorist carrier that receives an election for arbitration or a notice
350 of filing litigation and the demand for payment of uninsured motorist benefits under Subsection
351 (9)(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the demand and
352 receipt of the items specified in Subsection (9)(a)(i) through (iii), to:
353 (A) provide a written response to the written demand for payment provided for in
354 Subsection (9)(a)(i);
355 (B) except as provided in Subsection (9)(c)(i)(C), tender the amount, if any, of the
356 uninsured motorist carrier's determination of the amount owed to the covered person; and
357 (C) if the covered person is a recipient of Medicare or Medicaid benefits or Utah
358 Children's Health Insurance benefits under Title 26, Chapter 40, Utah Children's Health
359 Insurance Act, or if the claim is subject to any other state or federal statutory liens, tender the
360 amount, if any, of the uninsured motorist carrier's determination of the amount owed to the
361 covered person less:
362 (I) if the amount of the state or federal statutory lien is established, the amount of the
363 lien; or
364 (II) if the amount of the state or federal statutory lien is not established, two times the
365 amount of the medical expenses subject to the state or federal statutory lien until such time as
366 the amount of the state or federal statutory lien is established.
367 (ii) If the amount tendered by the uninsured motorist carrier under Subsection (9)(c)(i)
368 is the total amount of the uninsured motorist policy limits, the tendered amount shall be
369 accepted by the covered person.
370 (c) A covered person who receives a written response from an uninsured motorist
371 carrier as provided for in Subsection (9)(c)(i), may:
372 (i) elect to accept the amount tendered in Subsection (9)(c)(i) as payment in full of all
373 uninsured motorist claims; or
374 (ii) elect to:
375 (A) accept the amount tendered in Subsection (9)(c)(i) as partial payment of all
376 uninsured motorist claims; and
377 (B) litigate or arbitrate the remaining claim.
378 (d) If a covered person elects to accept the amount tendered under Subsection (9)(c)(i)
379 as partial payment of all uninsured motorist claims, the final award obtained through
380 arbitration, litigation, or later settlement shall be reduced by any payment made by the
381 uninsured motorist carrier under Subsection (9)(c)(i).
382 (e) In an arbitration proceeding on the remaining uninsured claims:
383 (i) the parties may not disclose to the arbitrator or arbitration panel the amount paid
384 under Subsection (9)(c)(i) until after the arbitration award has been rendered; and
385 (ii) the parties may not disclose the amount of the limits of uninsured motorist benefits
386 provided by the policy.
387 (f) If the final award obtained through arbitration or litigation is greater than the
388 average of the covered person's initial written demand for payment provided for in Subsection
389 (9)(a)(i) and the uninsured motorist carrier's initial written response provided for in Subsection
390 (9)(c)(i), the uninsured motorist carrier shall pay:
391 (i) the final award obtained through arbitration or litigation, except that if the award
392 exceeds the policy limits of the subject uninsured motorist policy by more than $15,000, the
393 amount shall be reduced to an amount equal to the policy limits plus $15,000; and
394 (ii) any of the following applicable costs:
395 (A) any costs as set forth in Rule 54(d), Utah Rules of Civil Procedure;
396 (B) the arbitrator or arbitration panel's fee; and
397 (C) the reasonable costs of expert witnesses and depositions used in the presentation of
398 evidence during arbitration or litigation.
399 (g) (i) The covered person shall provide an affidavit of costs within five days of an
400 arbitration award.
401 (ii) (A) Objection to the affidavit of costs shall specify with particularity the costs to
402 which the uninsured motorist carrier objects.
403 (B) The objection shall be resolved by the arbitrator or arbitration panel.
404 (iii) The award of costs by the arbitrator or arbitration panel under Subsection (9)(f)(ii)
405 may not exceed $5,000.
406 (h) (i) A covered person shall disclose all material information, other than rebuttal
407 evidence, as specified in Subsection (9)(a).
408 (ii) If the information under Subsection (9)(h)(i) is not disclosed, the covered person
409 may not recover costs or any amounts in excess of the policy under Subsection (9)(f).
410 (i) This Subsection (9) does not limit any other cause of action that arose or may arise
411 against the uninsured motorist carrier from the same dispute.
412 (j) The provisions of this Subsection (9) only apply to motor vehicle accidents that
413 occur on or after the effective date of this bill.
414 Section 2. Section 31A-22-305.3 is amended to read:
415 31A-22-305.3. Underinsured motorist coverage.
416 (1) As used in this section:
417 (a) "Covered person" has the same meaning as defined in Section 31A-22-305 .
418 (b) (i) "Underinsured motor vehicle" includes a motor vehicle, the operation,
419 maintenance, or use of which is covered under a liability policy at the time of an injury-causing
420 occurrence, but which has insufficient liability coverage to compensate fully the injured party
421 for all special and general damages.
422 (ii) The term "underinsured motor vehicle" does not include:
423 (A) a motor vehicle that is covered under the liability coverage of the same policy that
424 also contains the underinsured motorist coverage;
425 (B) an uninsured motor vehicle as defined in Subsection 31A-22-305 (2); or
426 (C) a motor vehicle owned or leased by:
427 (I) the named insured;
428 (II) the named insured's spouse; or
429 (III) any dependent of the named insured.
430 (2) (a) (i) Underinsured motorist coverage under Subsection 31A-22-302 (1)(c)
431 provides coverage for covered persons who are legally entitled to recover damages from
432 owners or operators of underinsured motor vehicles because of bodily injury, sickness, disease,
433 or death.
434 (ii) A covered person occupying or using a motor vehicle owned, leased, or furnished
435 to the covered person, the covered person's spouse, or covered person's resident relative may
436 recover underinsured benefits only if the motor vehicle is:
437 (A) described in the policy under which a claim is made; or
438 (B) a newly acquired or replacement motor vehicle covered under the terms of the
439 policy.
440 (b) For new policies written on or after January 1, 2001, the limits of underinsured
441 motorist coverage shall be equal to the lesser of the limits of the insured's motor vehicle
442 liability coverage or the maximum underinsured motorist coverage limits available by the
443 insurer under the insured's motor vehicle policy, unless the insured purchases coverage in a
444 lesser amount by signing an acknowledgment form that:
445 (i) is filed with the department;
446 (ii) is provided by the insurer;
447 (iii) waives the higher coverage;
448 (iv) reasonably explains the purpose of underinsured motorist coverage; and
449 (v) discloses the additional premiums required to purchase underinsured motorist
450 coverage with limits equal to the lesser of the limits of the insured's motor vehicle liability
451 coverage or the maximum underinsured motorist coverage limits available by the insurer under
452 the insured's motor vehicle policy.
453 (c) A self-insured, including a governmental entity, may elect to provide underinsured
454 motorist coverage in an amount that is less than its maximum self-insured retention under
455 Subsections (2)(b) and (2)(g) by issuing a declaratory memorandum or policy statement from
456 the chief financial officer or chief risk officer that declares the:
457 (i) self-insured entity's coverage level; and
458 (ii) process for filing an underinsured motorist claim.
459 (d) Underinsured motorist coverage may not be sold with limits that are less than:
460 (i) $10,000 for one person in any one accident; and
461 (ii) at least $20,000 for two or more persons in any one accident.
462 (e) The acknowledgment under Subsection (2)(b) continues for that issuer of the
463 underinsured motorist coverage until the insured, in writing, requests different underinsured
464 motorist coverage from the insurer.
465 (f) (i) The named insured's underinsured motorist coverage, as described in Subsection
466 (2)(a), is secondary to the liability coverage of an owner or operator of an underinsured motor
467 vehicle, as described in Subsection (1).
468 (ii) Underinsured motorist coverage may not be set off against the liability coverage of
469 the owner or operator of an underinsured motor vehicle, but shall be added to, combined with,
470 or stacked upon the liability coverage of the owner or operator of the underinsured motor
471 vehicle to determine the limit of coverage available to the injured person.
472 (g) (i) A named insured may reject underinsured motorist coverage by an express
473 writing to the insurer that provides liability coverage under Subsection 31A-22-302 (1)(a).
474 (ii) This written rejection shall be on a form provided by the insurer that includes a
475 reasonable explanation of the purpose of underinsured motorist coverage and when it would be
476 applicable.
477 (iii) This rejection continues for that issuer of the liability coverage until the insured in
478 writing requests underinsured motorist coverage from that liability insurer.
479 (h) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
480 policies existing on that date, the insurer shall disclose in the same medium as the premium
481 renewal notice, an explanation of:
482 (A) the purpose of underinsured motorist coverage; and
483 (B) the costs associated with increasing the coverage in amounts up to and including
484 the maximum amount available by the insurer under the insured's motor vehicle policy.
485 (ii) The disclosure required by this Subsection (2)(h) shall be sent to all insureds that
486 carry underinsured motorist coverage limits in an amount less than the insured's motor vehicle
487 liability policy limits or the maximum underinsured motorist coverage limits available by the
488 insurer under the insured's motor vehicle policy.
489 (3) (a) (i) Except as provided in this Subsection (3), a covered person injured in a
490 motor vehicle described in a policy that includes underinsured motorist benefits may not elect
491 to collect underinsured motorist coverage benefits from any other motor vehicle insurance
492 policy.
493 (ii) The limit of liability for underinsured motorist coverage for two or more motor
494 vehicles may not be added together, combined, or stacked to determine the limit of insurance
495 coverage available to an injured person for any one accident.
496 (iii) Subsection (3)(a)(ii) applies to all persons except a covered person described
497 under Subsections (3)(b)(i) and (ii).
498 (b) (i) Except as provided in Subsection (3)(b)(ii), a covered person injured while
499 occupying, using, or maintaining a motor vehicle that is not owned, leased, or furnished to the
500 covered person, the covered person's spouse, or the covered person's resident parent or resident
501 sibling, may also recover benefits under any one other policy under which they are a covered
502 person.
503 (ii) (A) A covered person may recover benefits from no more than two additional
504 policies, one additional policy from each parent's household if the covered person is:
505 (I) a dependent minor of parents who reside in separate households; and
506 (II) injured while occupying or using a motor vehicle that is not owned, leased, or
507 furnished to the covered person, the covered person's resident parent, or the covered person's
508 resident sibling.
509 (B) Each parent's policy under this Subsection (3)(b)(ii) is liable only for the
510 percentage of the damages that the limit of liability of each parent's policy of underinsured
511 motorist coverage bears to the total of both parents' underinsured coverage applicable to the
512 accident.
513 (iii) A covered person's recovery under any available policies may not exceed the full
514 amount of damages.
515 (iv) Underinsured coverage on a motor vehicle occupied at the time of an accident shall
516 be primary coverage, and the coverage elected by a person described under Subsections
517 31A-22-305 (1)(a) and (b) shall be secondary coverage.
518 (v) The primary and the secondary coverage may not be set off against the other.
519 (vi) A covered person as described under Subsection (3)(b)(i) is entitled to the highest
520 limits of underinsured motorist coverage under only one additional policy per household
521 applicable to that covered person as a named insured, spouse, or relative.
522 (vii) A covered injured person is not barred against making subsequent elections if
523 recovery is unavailable under previous elections.
524 (viii) (A) As used in this section, "interpolicy stacking" means recovering benefits for a
525 single incident of loss under more than one insurance policy.
526 (B) Except to the extent permitted by this Subsection (3), interpolicy stacking is
527 prohibited for underinsured motorist coverage.
528 (c) Underinsured motorist coverage:
529 (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
530 Compensation Act;
531 (ii) may not be subrogated by the workers' compensation insurance carrier;
532 (iii) may not be reduced by any benefits provided by workers' compensation insurance;
533 (iv) may be reduced by health insurance subrogation only after the covered person has
534 been made whole;
535 (v) may not be collected for bodily injury or death sustained by a person:
536 (A) while committing a violation of Section 41-1a-1314 ;
537 (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
538 in violation of Section 41-1a-1314 ; or
539 (C) while committing a felony; and
540 (vi) notwithstanding Subsection (3)(c)(v), may be recovered:
541 (A) for a person under 18 years of age who is injured within the scope of Subsection
542 (3)(c)(v) but limited to medical and funeral expenses; or
543 (B) by a law enforcement officer as defined in Section 53-13-103 , who is injured
544 within the course and scope of the law enforcement officer's duties.
545 (4) The inception of the loss under Subsection 31A-21-313 (1) for underinsured
546 motorist claims occurs upon the date of the last liability policy payment.
547 (5) (a) Within five business days after notification that all liability insurers have
548 tendered their liability policy limits, the underinsured carrier shall either:
549 (i) waive any subrogation claim the underinsured carrier may have against the person
550 liable for the injuries caused in the accident; or
551 (ii) pay the insured an amount equal to the policy limits tendered by the liability carrier.
552 (b) If neither option is exercised under Subsection (5)(a), the subrogation claim is
553 considered to be waived by the underinsured carrier.
554 (6) Except as otherwise provided in this section, a covered person may seek, subject to
555 the terms and conditions of the policy, additional coverage under any policy:
556 (a) that provides coverage for damages resulting from motor vehicle accidents; and
557 (b) that is not required to conform to Section 31A-22-302 .
558 (7) (a) When a claim is brought by a named insured or a person described in
559 Subsection 31A-22-305 (1) and is asserted against the covered person's underinsured motorist
560 carrier, the claimant may elect to resolve the claim:
561 (i) by submitting the claim to binding arbitration; or
562 (ii) through litigation.
563 (b) Unless otherwise provided in the policy under which underinsured benefits are
564 claimed, the election provided in Subsection (7)(a) is available to the claimant only.
565 (c) Once the claimant has elected to commence litigation under Subsection (7)(a)(ii),
566 the claimant may not elect to resolve the claim through binding arbitration under this section
567 without the written consent of the underinsured motorist coverage carrier.
568 (d) (i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
569 binding arbitration under Subsection (7)(a)(i) shall be resolved by a single arbitrator.
570 (ii) All parties shall agree on the single arbitrator selected under Subsection (7)(d)(i).
571 (iii) If the parties are unable to agree on a single arbitrator as required under Subsection
572 (7)(d)(ii), the parties shall select a panel of three arbitrators.
573 (e) If the parties select a panel of three arbitrators under Subsection (7)(d)(iii):
574 (i) each side shall select one arbitrator; and
575 (ii) the arbitrators appointed under Subsection (7)(e)(i) shall select one additional
576 arbitrator to be included in the panel.
577 (f) Unless otherwise agreed to in writing:
578 (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
579 under Subsection (7)(d)(i); or
580 (ii) if an arbitration panel is selected under Subsection (7)(d)(iii):
581 (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
582 (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
583 under Subsection (7)(e)(ii).
584 (g) Except as otherwise provided in this section or unless otherwise agreed to in
585 writing by the parties, an arbitration proceeding conducted under this section shall be governed
586 by Title 78B, Chapter 11, Utah Uniform Arbitration Act.
587 (h) The arbitration shall be conducted in accordance with Rules 26 through 37, 54, and
588 68 of the Utah Rules of Civil Procedure.
589 (i) All issues of discovery shall be resolved by the arbitrator or the arbitration panel.
590 (j) A written decision by a single arbitrator or by a majority of the arbitration panel
591 shall constitute a final decision.
592 (k) (i) The amount of an arbitration award may not exceed the underinsured motorist
593 policy limits of all applicable underinsured motorist policies, including applicable underinsured
594 motorist umbrella policies.
595 (ii) If the initial arbitration award exceeds the underinsured motorist policy limits of all
596 applicable underinsured motorist policies, the arbitration award shall be reduced to an amount
597 equal to the combined underinsured motorist policy limits of all applicable underinsured
598 motorist policies.
599 (l) The arbitrator or arbitration panel may not decide the issues of coverage or
600 extra-contractual damages, including:
601 (i) whether the claimant is a covered person;
602 (ii) whether the policy extends coverage to the loss; or
603 (iii) any allegations or claims asserting consequential damages or bad faith liability.
604 (m) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or
605 class-representative basis.
606 (n) If the arbitrator or arbitration panel finds that the action was not brought, pursued,
607 or defended in good faith, the arbitrator or arbitration panel may award reasonable attorney fees
608 and costs against the party that failed to bring, pursue, or defend the claim in good faith.
609 (o) An arbitration award issued under this section shall be the final resolution of all
610 claims not excluded by Subsection (7)(l) between the parties unless:
611 (i) the award was procured by corruption, fraud, or other undue means; or
612 (ii) either party, within 20 days after service of the arbitration award:
613 (A) files a complaint requesting a trial de novo in the district court; and
614 (B) serves the nonmoving party with a copy of the complaint requesting a trial de novo
615 under Subsection (7)(o)(ii)(A).
616 (p) (i) Upon filing a complaint for a trial de novo under Subsection (7)(o), the claim
617 shall proceed through litigation pursuant to the Utah Rules of Civil Procedure and Utah Rules
618 of Evidence in the district court.
619 (ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
620 request a jury trial with a complaint requesting a trial de novo under Subsection (7)(o)(ii)(A).
621 (q) (i) If the claimant, as the moving party in a trial de novo requested under
622 Subsection (7)(o), does not obtain a verdict that is at least $5,000 and is at least 20% greater
623 than the arbitration award, the claimant is responsible for all of the nonmoving party's costs.
624 (ii) If the underinsured motorist carrier, as the moving party in a trial de novo requested
625 under Subsection (7)(o), does not obtain a verdict that is at least 20% less than the arbitration
626 award, the underinsured motorist carrier is responsible for all of the nonmoving party's costs.
627 (iii) Except as provided in Subsection (7)(q)(iv), the costs under this Subsection (7)(q)
628 shall include:
629 (A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
630 (B) the costs of expert witnesses and depositions.
631 (iv) An award of costs under this Subsection (7)(q) may not exceed $2,500.
632 (r) For purposes of determining whether a party's verdict is greater or less than the
633 arbitration award under Subsection (7)(q), a court may not consider any recovery or other relief
634 granted on a claim for damages if the claim for damages:
635 (i) was not fully disclosed in writing prior to the arbitration proceeding; or
636 (ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil
637 Procedure.
638 (s) If a district court determines, upon a motion of the nonmoving party, that the
639 moving party's use of the trial de novo process was filed in bad faith in accordance with
640 Section 78B-5-825 , the district court may award reasonable attorney fees to the nonmoving
641 party.
642 (t) Nothing in this section is intended to limit any claim under any other portion of an
643 applicable insurance policy.
644 (u) If there are multiple underinsured motorist policies, as set forth in Subsection (3),
645 the claimant may elect to arbitrate in one hearing the claims against all the underinsured
646 motorist carriers.
647 (8) (a) Within 30 days after a covered person elects to submit a claim for underinsured
648 motorist benefits to binding arbitration or files litigation, the covered person shall provide to
649 the underinsured motorist carrier:
650 (i) a written demand for payment of underinsured motorist coverage benefits, setting
651 forth:
652 (A) the specific monetary amount of the demand; and
653 (B) the factual and legal basis and any supporting documentation for the demand;
654 (ii) a written statement under oath disclosing:
655 (A) (I) the names and last known addresses of all health care providers who have
656 rendered health care services to the covered person that are material to the claims for which the
657 underinsured motorist benefits are sought for a period of five years preceding the date of the
658 event giving rise to the claim for underinsured motorist benefits up to the time the election for
659 arbitration or litigation has been exercised; and
660 (II) whether the covered person has seen other health care providers who have rendered
661 health care services to the covered person, which the covered person claims are immaterial to
662 the claims for which underinsured motorist benefits are sought, for a period of five years
663 preceding the date of the event giving rise to the claim for underinsured motorist benefits up to
664 the time the election for arbitration or litigation has been exercised that have not been disclosed
665 under Subsection (8)(a)(ii)(A)(I);
666 (B) (I) the names and last known addresses of all health insurers or other entities to
667 whom the covered person has submitted claims for health care services or benefits material to
668 the claims for which underinsured motorist benefits are sought, for a period of five years
669 preceding the date of the event giving rise to the claim for underinsured motorist benefits up to
670 the time the election for arbitration or litigation has been exercised; and
671 (II) whether the identity of any health insurers or other entities to whom the covered
672 person has submitted claims for health care services or benefits which the covered person
673 claims are immaterial to the claims for which underinsured motorist benefits are sought, for a
674 period of five years preceding the date of the event giving rise to the claim for underinsured
675 motorist benefits up to the time the election for arbitration or litigation have not been disclosed;
676 and
677 (C) if lost wages, diminished earning capacity, or similar damages are claimed, all
678 employers of the covered person for a period of five years preceding the date of the event
679 giving rise to the claim for underinsured motorist benefits up to the time the election for
680 arbitration or litigation has been exercised;
681 (D) other documents to reasonably support the claims being asserted; and
682 (E) all state and federal statutory lienholders including a statement as to whether the
683 covered person is a recipient of Medicare or Medicaid benefits or Utah Children's Health
684 Insurance benefits under Title 26, Chapter 40, Utah Children's Health Insurance Act, or if the
685 claim is subject to any other state or federal statutory liens; and
686 (iii) signed authorizations to allow the underinsured motorist carrier to only obtain
687 records and billings from the individuals or entities disclosed.
688 (b) (i) If the underinsured motorist carrier determines that the disclosure of undisclosed
689 health care providers or health care insurers under Subsection (8)(a)(ii) is reasonably necessary,
690 the underinsured motorist carrier may:
691 (A) make a request for the disclosure of the identity of the health care providers or
692 health care insurers; and
693 (B) make a request for authorizations to allow the underinsured motorist carrier to only
694 obtain records and billings from the individuals or entities not disclosed.
695 (ii) If the covered person does not provide the requested information within 10 days:
696 (A) the covered person shall disclose, in writing, the legal or factual basis for the
697 failure to disclose the health care providers or health care insurers; and
698 (B) either the covered person or the underinsured motorist carrier may request the
699 arbitrator or arbitration panel to resolve the issue of whether the identities or records are to be
700 provided if the covered person has elected arbitration.
701 (iii) The time periods imposed by Subsection (8)(c)(i) are tolled pending resolution of
702 the dispute concerning the disclosure and production of records of the health care providers or
703 health care insurers.
704 (c) (i) An underinsured motorist carrier that receives an election for arbitration or a
705 notice of filing litigation and the demand for payment of underinsured motorist benefits under
706 Subsection (8)(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the
707 demand and receipt of the items specified in Subsection (8)(a)(i) through (iii), to:
708 (A) provide a written response to the written demand for payment provided for in
709 Subsection (8)(a)(i);
710 (B) except as provided in Subsection (8)(c)(i)(C), tender the amount, if any, of the
711 underinsured motorist carrier's determination of the amount owed to the covered person; and
712 (C) if the covered person is a recipient of Medicare or Medicaid benefits or Utah
713 Children's Health Insurance benefits under Title 26, Chapter 40, Utah Children's Health
714 Insurance Act, or if the claim is subject to any other state or federal statutory liens, tender the
715 amount, if any, of the underinsured motorist carrier's determination of the amount owed to the
716 covered person less:
717 (I) if the amount of the state or federal statutory lien is established, the amount of the
718 lien; or
719 (II) if the amount of the state or federal statutory lien is not established, two times the
720 amount of the medical expenses subject to the state or federal statutory lien until such time as
721 the amount of the state or federal statutory lien is established.
722 (ii) If the amount tendered by the underinsured motorist carrier under Subsection
723 (8)(c)(i) is the total amount of the underinsured motorist policy limits, the tendered amount
724 shall be accepted by the covered person.
725 (c) A covered person who receives a written response from an underinsured motorist
726 carrier as provided for in Subsection (8)(c)(i), may:
727 (i) elect to accept the amount tendered in Subsection (8)(c)(i) as payment in full of all
728 underinsured motorist claims; or
729 (ii) elect to:
730 (A) accept the amount tendered in Subsection (8)(c)(i) as partial payment of all
731 underinsured motorist claims; and
732 (B) litigate or arbitrate the remaining claim.
733 (d) If a covered person elects to accept the amount tendered under Subsection (8)(c)(i)
734 as partial payment of all underinsured motorist claims, the final award obtained through
735 arbitration, litigation, or later settlement shall be reduced by any payment made by the
736 underinsured motorist carrier under Subsection (8)(c)(i).
737 (e) In an arbitration proceeding on the remaining underinsured claims:
738 (i) the parties may not disclose to the arbitrator or arbitration panel the amount paid
739 under Subsection (8)(c)(i) until after the arbitration award has been rendered; and
740 (ii) the parties may not disclose the amount of the limits of underinsured motorist
741 benefits provided by the policy.
742 (f) If the final award obtained through arbitration or litigation is greater than the
743 average of the covered person's initial written demand for payment provided for in Subsection
744 (8)(a)(i) and the underinsured motorist carrier's initial written response provided for in
745 Subsection (8)(c)(i), the underinsured motorist carrier shall pay:
746 (i) the final award obtained through arbitration or litigation, except that if the award
747 exceeds the policy limits of the subject underinsured motorist policy by more than $15,000, the
748 amount shall be reduced to an amount equal to the policy limits plus $15,000; and
749 (ii) any of the following applicable costs:
750 (A) any costs as set forth in Rule 54(d), Utah Rules of Civil Procedure;
751 (B) the arbitrator or arbitration panel's fee; and
752 (C) the reasonable costs of expert witnesses and depositions used in the presentation of
753 evidence during arbitration or litigation.
754 (g) (i) The covered person shall provide an affidavit of costs within five days of an
755 arbitration award.
756 (ii) (A) Objection to the affidavit of costs shall specify with particularity the costs to
757 which the underinsured motorist carrier objects.
758 (B) The objection shall be resolved by the arbitrator or arbitration panel.
759 (iii) The award of costs by the arbitrator or arbitration panel under Subsection (8)(f)(ii)
760 may not exceed $5,000.
761 (h) (i) A covered person shall disclose all material information, other than rebuttal
762 evidence, as specified in Subsection (8)(a).
763 (ii) If the information under Subsection (8)(h)(i) is not disclosed, the covered person
764 may not recover costs or any amounts in excess of the policy under Subsection (8).
765 (i) This Subsection (8) does not limit any other cause of action that arose or may arise
766 against the underinsured motorist carrier from the same dispute.
767 (j) The provisions of this Subsection (8) only apply to motor vehicle accidents that
768 occur on or after the effective date of this bill.
769 Section 3. Effective date.
770 If approved by two-thirds of all the members elected to each house, this bill takes effect
771 upon approval by the governor, or the day following the constitutional time limit of Utah
772 Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
773 the date of veto override.
774 Section 4. Revisor instructions.
775 It is the intent of the Legislature that the Office of Legislative Research and General
776 Counsel, in preparing the database for publication, delete "the effective date of this bill" where
777 it appears in this bill and replace it with the actual date on which the bill takes effect.
[Bill Documents][Bills Directory]