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H.B. 19 Enrolled

             1     

INSURANCE LAW RELATED AMENDMENTS

             2     
2011 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             5     
Senate Sponsor: J. Stuart Adams

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Insurance Code and other provisions related to the regulation of
             10      insurance and insurance products.
             11      Highlighted Provisions:
             12          This bill:
             13          .    amends definitions;
             14          .    creates the Insurance Department Restricted Account;
             15          .    addresses fees for captive insurance companies and the cap on the Captive
             16      Insurance Restricted Account;
             17          .    modifies restrictions on foreign title insurers;
             18          .    removes outdated language;
             19          .    addresses grace periods for accident and health insurance policies;
             20          .    modifies provisions related to individuals, group, or blanket accident and health
             21      insurance coverage;
             22          .    addresses health benefit plan offerings;
             23          .    addresses producer lines of authority;
             24          .    addresses a written agreement related to a voluntary surrender of a license;
             25          .    amends provisions related to continuing education;
             26          .    provides for training related to long-term care insurance;
             27          .    modifies title insurance agency and producer licensing requirements;
             28          .    addresses when a title insurance producer may do an escrow involving a real
             29      property transaction;


             30          .    modifies provisions related to disbursements from escrow accounts;
             31          .    modifies title insurance related assessments;
             32          .    addresses licensee compensation;
             33          .    addresses when a person may represent that the person acts in behalf of an insurer;
             34          .    modifies provisions related to providing the commissioner address, telephone, and
             35      email address information;
             36          .    addresses verification under a nonresident jurisdictional agreement;
             37          .    addresses per diem and travel expenses of public representatives on the board of
             38      directors of the Utah Life and Health Insurance Guaranty Association;
             39          .    addresses the establishment of classes of business;
             40          .    modifies rating restrictions;
             41          .    addresses the renewal of a bail bond surety company license;
             42          .    permits the commissioner to assign a department employee to engage in certain
             43      activities related to the regulation of captive insurance companies;
             44          .    requires a professional employer organization to notify the commissioner of
             45      material changes;
             46          .    removes the title insurance assessment from the sunset act;
             47          .    converts certain dedicated credits into several restricted accounts and provides that
             48      related appropriations are nonlapsing; and
             49          .    makes technical and conforming amendments.
             50      Money Appropriated in this Bill:
             51          None
             52      Other Special Clauses:
             53          This bill has an effective date.
             54          This bill provides for retrospective operation of certain provisions.
             55      Utah Code Sections Affected:
             56      AMENDS:
             57          31A-1-301, as last amended by Laws of Utah 2010, Chapter 10


             58          31A-2-208, as last amended by Laws of Utah 2010, Chapter 391
             59          31A-2-212, as last amended by Laws of Utah 2007, Chapter 309
             60          31A-3-101, as last amended by Laws of Utah 2008, Chapter 382
             61          31A-3-103, as last amended by Laws of Utah 2010, Chapter 10
             62          31A-3-304, as last amended by Laws of Utah 2010, Chapters 10, 68 and last amended
             63      by Coordination Clause, Laws of Utah 2010, Chapter 265
             64          31A-14-211, as last amended by Laws of Utah 2003, Chapter 298
             65          31A-22-607, as last amended by Laws of Utah 2004, Chapter 329
             66          31A-22-610.6, as enacted by Laws of Utah 2008, Chapters 345, 383, and 390
             67          31A-22-614.5, as last amended by Laws of Utah 2010, Chapter 357
             68          31A-22-618.5, as last amended by Laws of Utah 2010, Chapter 68
             69          31A-22-625, as last amended by Laws of Utah 2010, Chapters 10 and 68
             70          31A-22-701, as last amended by Laws of Utah 2010, Chapter 10
             71          31A-22-716, as last amended by Laws of Utah 2005, Chapter 71
             72          31A-22-721, as last amended by Laws of Utah 2004, Chapter 329
             73          31A-22-723, as last amended by Laws of Utah 2010, Chapter 68
             74          31A-23a-102, as last amended by Laws of Utah 2009, Chapter 349
             75          31A-23a-106, as last amended by Laws of Utah 2009, Chapter 349
             76          31A-23a-111, as last amended by Laws of Utah 2009, Chapters 349 and 355
             77          31A-23a-202, as last amended by Laws of Utah 2009, Chapter 127
             78          31A-23a-203, as last amended by Laws of Utah 2009, Chapter 349
             79          31A-23a-204, as last amended by Laws of Utah 2009, Chapter 349
             80          31A-23a-406, as last amended by Laws of Utah 2007, Chapter 325
             81          31A-23a-408, as renumbered and amended by Laws of Utah 2003, Chapter 298
             82          31A-23a-412, as renumbered and amended by Laws of Utah 2003, Chapter 298
             83          31A-23a-415, as last amended by Laws of Utah 2010, Chapter 10 and last amended by
             84      Coordination Clause, Laws of Utah 2010, Chapter 265
             85          31A-23a-501, as last amended by Laws of Utah 2010, Chapter 10


             86          31A-25-208, as last amended by Laws of Utah 2009, Chapter 349
             87          31A-26-206, as last amended by Laws of Utah 2008, Chapter 382
             88          31A-26-208, as last amended by Laws of Utah 2008, Chapter 3
             89          31A-26-213, as last amended by Laws of Utah 2009, Chapter 349
             90          31A-26-306, as last amended by Laws of Utah 2004, Chapter 173
             91          31A-28-107, as last amended by Laws of Utah 2010, Chapter 292
             92          31A-29-103, as last amended by Laws of Utah 2008, Chapters 3 and 385
             93          31A-29-106, as last amended by Laws of Utah 2008, Chapter 382
             94          31A-30-103, as last amended by Laws of Utah 2010, Chapter 68
             95          31A-30-105, as last amended by Laws of Utah 2010, Chapter 68
             96          31A-30-106, as last amended by Laws of Utah 2010, Chapter 68
             97          31A-30-106.1, as enacted by Laws of Utah 2010, Chapter 68
             98          31A-30-106.5, as last amended by Laws of Utah 2010, Chapter 68
             99          31A-30-108, as last amended by Laws of Utah 2008, Chapter 383
             100          31A-30-110, as last amended by Laws of Utah 2002, Chapter 308
             101          31A-30-112, as last amended by Laws of Utah 2009, Chapter 12
             102          31A-31-108, as last amended by Laws of Utah 2010, Chapter 391
             103          31A-31-109, as last amended by Laws of Utah 2010, Chapter 391
             104          31A-35-202, as last amended by Laws of Utah 2000, Chapter 259
             105          31A-35-406, as last amended by Laws of Utah 2010, Chapter 10
             106          31A-35-602, as last amended by Laws of Utah 2000, Chapter 259
             107          31A-37-103, as last amended by Laws of Utah 2008, Chapter 302
             108          31A-37-202, as last amended by Laws of Utah 2009, Chapter 183
             109          31A-37-504, as last amended by Laws of Utah 2007, Chapter 309
             110          59-9-105, as last amended by Laws of Utah 2002, Chapter 308
             111          63I-2-231, as last amended by Laws of Utah 2010, Chapters 68 and 285
             112          63J-1-602.2, as enacted by Laws of Utah 2010, Chapter 265 and last amended by
             113      Coordination Clause, Laws of Utah 2010, Chapter 265


             114          63J-1-602.3, as enacted by Laws of Utah 2010, Chapter 265
             115      ENACTS:
             116          31A-40-308, Utah Code Annotated 1953
             117      Uncodified Material Affected:
             118      ENACTS UNCODIFIED MATERIAL
             119     
             120      Be it enacted by the Legislature of the state of Utah:
             121          Section 1. Section 31A-1-301 is amended to read:
             122           31A-1-301. Definitions.
             123          As used in this title, unless otherwise specified:
             124          (1) (a) "Accident and health insurance" means insurance to provide protection against
             125      economic losses resulting from:
             126          (i) a medical condition including:
             127          (A) a medical care expense; or
             128          (B) the risk of disability;
             129          (ii) accident; or
             130          (iii) sickness.
             131          (b) "Accident and health insurance":
             132          (i) includes a contract with disability contingencies including:
             133          (A) an income replacement contract;
             134          (B) a health care contract;
             135          (C) an expense reimbursement contract;
             136          (D) a credit accident and health contract;
             137          (E) a continuing care contract; and
             138          (F) a long-term care contract; and
             139          (ii) may provide:
             140          (A) hospital coverage;
             141          (B) surgical coverage;


             142          (C) medical coverage;
             143          (D) loss of income coverage;
             144          (E) prescription drug coverage;
             145          (F) dental coverage; or
             146          (G) vision coverage.
             147          (c) "Accident and health insurance" does not include workers' compensation insurance.
             148          (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
             149      63G, Chapter 3, Utah Administrative Rulemaking Act.
             150          (3) "Administrator" is defined in Subsection [(159)] (161).
             151          (4) "Adult" means an individual who has attained the age of at least 18 years.
             152          (5) "Affiliate" means a person who controls, is controlled by, or is under common
             153      control with, another person. A corporation is an affiliate of another corporation, regardless of
             154      ownership, if substantially the same group of individuals manage the corporations.
             155          (6) "Agency" means:
             156          (a) a person other than an individual, including a sole proprietorship by which an
             157      individual does business under an assumed name; and
             158          (b) an insurance organization licensed or required to be licensed under Section
             159      31A-23a-301 , 31A-25-207 , or 31A-26-209 .
             160          (7) "Alien insurer" means an insurer domiciled outside the United States.
             161          (8) "Amendment" means an endorsement to an insurance policy or certificate.
             162          (9) "Annuity" means an agreement to make periodical payments for a period certain or
             163      over the lifetime of one or more individuals if the making or continuance of all or some of the
             164      series of the payments, or the amount of the payment, is dependent upon the continuance of
             165      human life.
             166          (10) "Application" means a document:
             167          (a) (i) completed by an applicant to provide information about the risk to be insured;
             168      and
             169          (ii) that contains information that is used by the insurer to evaluate risk and decide


             170      whether to:
             171          (A) insure the risk under:
             172          (I) the coverage as originally offered; or
             173          (II) a modification of the coverage as originally offered; or
             174          (B) decline to insure the risk; or
             175          (b) used by the insurer to gather information from the applicant before issuance of an
             176      annuity contract.
             177          (11) "Articles" or "articles of incorporation" means:
             178          (a) the original articles;
             179          (b) a special law;
             180          (c) a charter;
             181          (d) an amendment;
             182          (e) restated articles;
             183          (f) articles of merger or consolidation;
             184          (g) a trust instrument;
             185          (h) another constitutive document for a trust or other entity that is not a corporation;
             186      and
             187          (i) an amendment to an item listed in Subsections (11)(a) through (h).
             188          (12) "Bail bond insurance" means a guarantee that a person will attend court when
             189      required, up to and including surrender of the person in execution of a sentence imposed under
             190      Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
             191          (13) "Binder" is defined in Section 31A-21-102 .
             192          (14) "Blanket insurance policy" means a group policy covering a defined class of
             193      persons:
             194          (a) without individual underwriting or application; and
             195          (b) that is determined by definition [with or] without designating each person covered.
             196          (15) "Board," "board of trustees," or "board of directors" means the group of persons
             197      with responsibility over, or management of, a corporation, however designated.


             198          (16) "Bona fide office" means a physical office in this state:
             199          (a) that is open to the public;
             200          (b) that is staffed during regular business hours on regular business days; and
             201          (c) at which the public may appear in person to obtain services.
             202          [(16)] (17) "Business entity" means:
             203          (a) a corporation;
             204          (b) an association;
             205          (c) a partnership;
             206          (d) a limited liability company;
             207          (e) a limited liability partnership; or
             208          (f) another legal entity.
             209          [(17)] (18) "Business of insurance" is defined in Subsection [(85)] (87).
             210          [(18)] (19) "Business plan" means the information required to be supplied to the
             211      commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
             212      when these subsections apply by reference under:
             213          (a) Section 31A-7-201 ;
             214          (b) Section 31A-8-205 ; or
             215          (c) Subsection 31A-9-205 (2).
             216          [(19)] (20) (a) "Bylaws" means the rules adopted for the regulation or management of a
             217      corporation's affairs, however designated.
             218          (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
             219      corporation.
             220          [(20)] (21) "Captive insurance company" means:
             221          (a) an insurer:
             222          (i) owned by another organization; and
             223          (ii) whose exclusive purpose is to insure risks of the parent organization and an
             224      affiliated company; or
             225          (b) in the case of a group or association, an insurer:


             226          (i) owned by the insureds; and
             227          (ii) whose exclusive purpose is to insure risks of:
             228          (A) a member organization;
             229          (B) a group member; or
             230          (C) an affiliate of:
             231          (I) a member organization; or
             232          (II) a group member.
             233          [(21)] (22) "Casualty insurance" means liability insurance.
             234          [(22)] (23) "Certificate" means evidence of insurance given to:
             235          (a) an insured under a group insurance policy; or
             236          (b) a third party.
             237          [(23)] (24) "Certificate of authority" is included within the term "license."
             238          [(24)] (25) "Claim," unless the context otherwise requires, means a request or demand
             239      on an insurer for payment of a benefit according to the terms of an insurance policy.
             240          [(25)] (26) "Claims-made coverage" means an insurance contract or provision limiting
             241      coverage under a policy insuring against legal liability to claims that are first made against the
             242      insured while the policy is in force.
             243          [(26)] (27) (a) "Commissioner" or "commissioner of insurance" means Utah's
             244      insurance commissioner.
             245          (b) When appropriate, the terms listed in Subsection [(26)] (27)(a) apply to the
             246      equivalent supervisory official of another jurisdiction.
             247          [(27)] (28) (a) "Continuing care insurance" means insurance that:
             248          (i) provides board and lodging;
             249          (ii) provides one or more of the following:
             250          (A) a personal service;
             251          (B) a nursing service;
             252          (C) a medical service; or
             253          (D) any other health-related service; and


             254          (iii) provides the coverage described in this Subsection [(27)] (28)(a) under an
             255      agreement effective:
             256          (A) for the life of the insured; or
             257          (B) for a period in excess of one year.
             258          (b) Insurance is continuing care insurance regardless of whether or not the board and
             259      lodging are provided at the same location as a service described in Subsection [(27)] (28)(a)(ii).
             260          [(28)] (29) (a) "Control," "controlling," "controlled," or "under common control"
             261      means the direct or indirect possession of the power to direct or cause the direction of the
             262      management and policies of a person. This control may be:
             263          (i) by contract;
             264          (ii) by common management;
             265          (iii) through the ownership of voting securities; or
             266          (iv) by a means other than those described in Subsections [(28)] (29)(a)(i) through (iii).
             267          (b) There is no presumption that an individual holding an official position with another
             268      person controls that person solely by reason of the position.
             269          (c) A person having a contract or arrangement giving control is considered to have
             270      control despite the illegality or invalidity of the contract or arrangement.
             271          (d) There is a rebuttable presumption of control in a person who directly or indirectly
             272      owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
             273      voting securities of another person.
             274          [(29)] (30) "Controlled insurer" means a licensed insurer that is either directly or
             275      indirectly controlled by a producer.
             276          [(30)] (31) "Controlling person" means a person that directly or indirectly has the
             277      power to direct or cause to be directed, the management, control, or activities of a reinsurance
             278      intermediary.
             279          [(31)] (32) "Controlling producer" means a producer who directly or indirectly controls
             280      an insurer.
             281          [(32)] (33) (a) "Corporation" means an insurance corporation, except when referring to:


             282          (i) a corporation doing business:
             283          (A) as:
             284          (I) an insurance producer;
             285          (II) a limited line producer;
             286          (III) a consultant;
             287          (IV) a managing general agent;
             288          (V) a reinsurance intermediary;
             289          (VI) a third party administrator; or
             290          (VII) an adjuster; and
             291          (B) under:
             292          (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             293      Reinsurance Intermediaries;
             294          (II) Chapter 25, Third Party Administrators; or
             295          (III) Chapter 26, Insurance Adjusters; or
             296          (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
             297      Holding Companies.
             298          (b) "Stock corporation" means a stock insurance corporation.
             299          (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
             300          [(33)] (34) (a) "Creditable coverage" has the same meaning as provided in federal
             301      regulations adopted pursuant to the Health Insurance Portability and Accountability Act [of
             302      1996, Pub. L. 104-191, 110 Stat. 1936].
             303          (b) "Creditable coverage" includes coverage that is offered through a public health plan
             304      such as:
             305          (i) the Primary Care Network Program under a Medicaid primary care network
             306      demonstration waiver obtained subject to Section 26-18-3 ;
             307          (ii) the Children's Health Insurance Program under Section 26-40-106 ; or
             308          (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
             309      101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. 109-415.


             310          [(34)] (35) "Credit accident and health insurance" means insurance on a debtor to
             311      provide indemnity for payments coming due on a specific loan or other credit transaction while
             312      the debtor is disabled.
             313          [(35)] (36) (a) "Credit insurance" means insurance offered in connection with an
             314      extension of credit that is limited to partially or wholly extinguishing that credit obligation.
             315          (b) "Credit insurance" includes:
             316          (i) credit accident and health insurance;
             317          (ii) credit life insurance;
             318          (iii) credit property insurance;
             319          (iv) credit unemployment insurance;
             320          (v) guaranteed automobile protection insurance;
             321          (vi) involuntary unemployment insurance;
             322          (vii) mortgage accident and health insurance;
             323          (viii) mortgage guaranty insurance; and
             324          (ix) mortgage life insurance.
             325          [(36)] (37) "Credit life insurance" means insurance on the life of a debtor in connection
             326      with an extension of credit that pays a person if the debtor dies.
             327          [(37)] (38) "Credit property insurance" means insurance:
             328          (a) offered in connection with an extension of credit; and
             329          (b) that protects the property until the debt is paid.
             330          [(38)] (39) "Credit unemployment insurance" means insurance:
             331          (a) offered in connection with an extension of credit; and
             332          (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
             333          (i) specific loan; or
             334          (ii) credit transaction.
             335          [(39)] (40) "Creditor" means a person, including an insured, having a claim, whether:
             336          (a) matured;
             337          (b) unmatured;


             338          (c) liquidated;
             339          (d) unliquidated;
             340          (e) secured;
             341          (f) unsecured;
             342          (g) absolute;
             343          (h) fixed; or
             344          (i) contingent.
             345          [(40)] (41) (a) "Customer service representative" means a person that provides an
             346      insurance service and insurance product information:
             347          (i) for the customer service representative's:
             348          (A) producer; or
             349          (B) consultant employer; and
             350          (ii) to the customer service representative's employer's:
             351          (A) customer;
             352          (B) client; or
             353          (C) organization.
             354          (b) A customer service representative may only operate within the scope of authority of
             355      the customer service representative's producer or consultant employer.
             356          [(41)] (42) "Deadline" means a final date or time:
             357          (a) imposed by:
             358          (i) statute;
             359          (ii) rule; or
             360          (iii) order; and
             361          (b) by which a required filing or payment must be received by the department.
             362          [(42)] (43) "Deemer clause" means a provision under this title under which upon the
             363      occurrence of a condition precedent, the commissioner is considered to have taken a specific
             364      action. If the statute so provides, a condition precedent may be the commissioner's failure to
             365      take a specific action.


             366          [(43)] (44) "Degree of relationship" means the number of steps between two persons
             367      determined by counting the generations separating one person from a common ancestor and
             368      then counting the generations to the other person.
             369          [(44)] (45) "Department" means the Insurance Department.
             370          [(45)] (46) "Director" means a member of the board of directors of a corporation.
             371          [(46)] (47) "Disability" means a physiological or psychological condition that partially
             372      or totally limits an individual's ability to:
             373          (a) perform the duties of:
             374          (i) that individual's occupation; or
             375          (ii) any occupation for which the individual is reasonably suited by education, training,
             376      or experience; or
             377          (b) perform two or more of the following basic activities of daily living:
             378          (i) eating;
             379          (ii) toileting;
             380          (iii) transferring;
             381          (iv) bathing; or
             382          (v) dressing.
             383          [(47)] (48) "Disability income insurance" is defined in Subsection [(76)] (78).
             384          [(48)] (49) "Domestic insurer" means an insurer organized under the laws of this state.
             385          [(49)] (50) "Domiciliary state" means the state in which an insurer:
             386          (a) is incorporated;
             387          (b) is organized; or
             388          (c) in the case of an alien insurer, enters into the United States.
             389          [(50)] (51) (a) "Eligible employee" means:
             390          (i) an employee who:
             391          (A) works on a full-time basis; and
             392          (B) has a normal work week of 30 or more hours; or
             393          (ii) a person described in Subsection [(50)] (51)(b).


             394          (b) "Eligible employee" includes, if the individual is included under a health benefit
             395      plan of a small employer:
             396          (i) a sole proprietor;
             397          (ii) a partner in a partnership; or
             398          (iii) an independent contractor.
             399          (c) "Eligible employee" does not include, unless eligible under Subsection [(50)]
             400      (51)(b):
             401          (i) an individual who works on a temporary or substitute basis for a small employer;
             402          (ii) an employer's spouse; or
             403          (iii) a dependent of an employer.
             404          [(51)] (52) "Employee" means an individual employed by an employer.
             405          [(52)] (53) "Employee benefits" means one or more benefits or services provided to:
             406          (a) an employee; or
             407          (b) a dependent of an employee.
             408          [(53)] (54) (a) "Employee welfare fund" means a fund:
             409          (i) established or maintained, whether directly or through a trustee, by:
             410          (A) one or more employers;
             411          (B) one or more labor organizations; or
             412          (C) a combination of employers and labor organizations; and
             413          (ii) that provides employee benefits paid or contracted to be paid, other than income
             414      from investments of the fund:
             415          (A) by or on behalf of an employer doing business in this state; or
             416          (B) for the benefit of a person employed in this state.
             417          (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
             418      revenues.
             419          [(54)] (55) "Endorsement" means a written agreement attached to a policy or certificate
             420      to modify the policy or certificate coverage.
             421          [(55)] (56) "Enrollment date," with respect to a health benefit plan, means:


             422          (a) the first day of coverage; or
             423          (b) if there is a waiting period, the first day of the waiting period.
             424          [(56)] (57) (a) "Escrow" means:
             425          (i) a real estate settlement or real estate closing conducted by a third party pursuant to
             426      the requirements of a written agreement between the parties in a real estate transaction; or
             427          (ii) a settlement or closing involving:
             428          (A) a mobile home;
             429          (B) a grazing right;
             430          (C) a water right; or
             431          (D) other personal property authorized by the commissioner.
             432          (b) "Escrow" includes the act of conducting a:
             433          (i) real estate settlement; or
             434          (ii) real estate closing.
             435          [(57)] (58) "Escrow agent" means:
             436          (a) an insurance producer with:
             437          (i) a title insurance line of authority; and
             438          (ii) an escrow subline of authority; or
             439          (b) a person defined as an escrow agent in Section 7-22-101 .
             440          [(58)] (59) (a) "Excludes" is not exhaustive and does not mean that another thing is not
             441      also excluded.
             442          (b) The items listed in a list using the term "excludes" are representative examples for
             443      use in interpretation of this title.
             444          [(59)] (60) "Exclusion" means for the purposes of accident and health insurance that an
             445      insurer does not provide insurance coverage, for whatever reason, for one of the following:
             446          (a) a specific physical condition;
             447          (b) a specific medical procedure;
             448          (c) a specific disease or disorder; or
             449          (d) a specific prescription drug or class of prescription drugs.


             450          [(60)] (61) "Expense reimbursement insurance" means insurance:
             451          (a) written to provide a payment for an expense relating to hospital confinement
             452      resulting from illness or injury; and
             453          (b) written:
             454          (i) as a daily limit for a specific number of days in a hospital; and
             455          (ii) to have a one or two day waiting period following a hospitalization.
             456          [(61)] (62) "Fidelity insurance" means insurance guaranteeing the fidelity of a person
             457      holding a position of public or private trust.
             458          [(62)] (63) (a) "Filed" means that a filing is:
             459          (i) submitted to the department as required by and in accordance with applicable
             460      statute, rule, or filing order;
             461          (ii) received by the department within the time period provided in applicable statute,
             462      rule, or filing order; and
             463          (iii) accompanied by the appropriate fee in accordance with:
             464          (A) Section 31A-3-103 ; or
             465          (B) rule.
             466          (b) "Filed" does not include a filing that is rejected by the department because it is not
             467      submitted in accordance with Subsection [(62)] (63)(a).
             468          [(63)] (64) "Filing," when used as a noun, means an item required to be filed with the
             469      department including:
             470          (a) a policy;
             471          (b) a rate;
             472          (c) a form;
             473          (d) a document;
             474          (e) a plan;
             475          (f) a manual;
             476          (g) an application;
             477          (h) a report;


             478          (i) a certificate;
             479          (j) an endorsement;
             480          (k) an actuarial certification;
             481          (l) a licensee annual statement;
             482          (m) a licensee renewal application;
             483          (n) an advertisement; or
             484          (o) an outline of coverage.
             485          [(64)] (65) "First party insurance" means an insurance policy or contract in which the
             486      insurer agrees to pay a claim submitted to it by the insured for the insured's losses.
             487          [(65)] (66) "Foreign insurer" means an insurer domiciled outside of this state, including
             488      an alien insurer.
             489          [(66)] (67) (a) "Form" means one of the following prepared for general use:
             490          (i) a policy;
             491          (ii) a certificate;
             492          (iii) an application;
             493          (iv) an outline of coverage; or
             494          (v) an endorsement.
             495          (b) "Form" does not include a document specially prepared for use in an individual
             496      case.
             497          [(67)] (68) "Franchise insurance" means an individual insurance policy provided
             498      through a mass marketing arrangement involving a defined class of persons related in some
             499      way other than through the purchase of insurance.
             500          [(68)] (69) "General lines of authority" include:
             501          (a) the general lines of insurance in Subsection [(69)] (70);
             502          (b) title insurance under one of the following sublines of authority:
             503          (i) search, including authority to act as a title marketing representative;
             504          (ii) escrow, including authority to act as a title marketing representative; and
             505          (iii) title marketing representative only;


             506          (c) surplus lines;
             507          (d) workers' compensation; and
             508          (e) any other line of insurance that the commissioner considers necessary to recognize
             509      in the public interest.
             510          [(69)] (70) "General lines of insurance" include:
             511          (a) accident and health;
             512          (b) casualty;
             513          (c) life;
             514          (d) personal lines;
             515          (e) property; and
             516          (f) variable contracts, including variable life and annuity.
             517          [(70)] (71) "Group health plan" means an employee welfare benefit plan to the extent
             518      that the plan provides medical care:
             519          (a) (i) to an employee; or
             520          (ii) to a dependent of an employee; and
             521          (b) (i) directly;
             522          (ii) through insurance reimbursement; or
             523          (iii) through another method.
             524          [(71)] (72) (a) "Group insurance policy" means a policy covering a group of persons
             525      that is issued:
             526          (i) to a policyholder on behalf of the group; and
             527          (ii) for the benefit of a member of the group who is selected under a procedure defined
             528      in:
             529          (A) the policy; or
             530          (B) an agreement that is collateral to the policy.
             531          (b) A group insurance policy may include a member of the policyholder's family or a
             532      dependent.
             533          [(72)] (73) "Guaranteed automobile protection insurance" means insurance offered in


             534      connection with an extension of credit that pays the difference in amount between the
             535      insurance settlement and the balance of the loan if the insured automobile is a total loss.
             536          [(73)] (74) (a) Except as provided in Subsection [(73)] (74)(b), "health benefit plan"
             537      means a policy or certificate that:
             538          (i) provides health care insurance;
             539          (ii) provides major medical expense insurance; or
             540          (iii) is offered as a substitute for hospital or medical expense insurance, such as:
             541          (A) a hospital confinement indemnity; or
             542          (B) a limited benefit plan.
             543          (b) "Health benefit plan" does not include a policy or certificate that:
             544          (i) provides benefits solely for:
             545          (A) accident;
             546          (B) dental;
             547          (C) income replacement;
             548          (D) long-term care;
             549          (E) a Medicare supplement;
             550          (F) a specified disease;
             551          (G) vision; or
             552          (H) a short-term limited duration; or
             553          (ii) is offered and marketed as supplemental health insurance.
             554          [(74)] (75) "Health care" means any of the following intended for use in the diagnosis,
             555      treatment, mitigation, or prevention of a human ailment or impairment:
             556          (a) a professional service;
             557          (b) a personal service;
             558          (c) a facility;
             559          (d) equipment;
             560          (e) a device;
             561          (f) supplies; or


             562          (g) medicine.
             563          [(75)] (76) (a) "Health care insurance" or "health insurance" means insurance
             564      providing:
             565          (i) a health care benefit; or
             566          (ii) payment of an incurred health care expense.
             567          (b) "Health care insurance" or "health insurance" does not include accident and health
             568      insurance providing a benefit for:
             569          (i) replacement of income;
             570          (ii) short-term accident;
             571          (iii) fixed indemnity;
             572          (iv) credit accident and health;
             573          (v) supplements to liability;
             574          (vi) workers' compensation;
             575          (vii) automobile medical payment;
             576          (viii) no-fault automobile;
             577          (ix) equivalent self-insurance; or
             578          (x) a type of accident and health insurance coverage that is a part of or attached to
             579      another type of policy.
             580          (77) "Health Insurance Portability and Accountability Act" means the Health Insurance
             581      Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended.
             582          [(76)] (78) "Income replacement insurance" or "disability income insurance" means
             583      insurance written to provide payments to replace income lost from accident or sickness.
             584          [(77)] (79) "Indemnity" means the payment of an amount to offset all or part of an
             585      insured loss.
             586          [(78)] (80) "Independent adjuster" means an insurance adjuster required to be licensed
             587      under Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
             588          [(79)] (81) "Independently procured insurance" means insurance procured under
             589      Section 31A-15-104 .


             590          [(80)] (82) "Individual" means a natural person.
             591          [(81)] (83) "Inland marine insurance" includes insurance covering:
             592          (a) property in transit on or over land;
             593          (b) property in transit over water by means other than boat or ship;
             594          (c) bailee liability;
             595          (d) fixed transportation property such as bridges, electric transmission systems, radio
             596      and television transmission towers and tunnels; and
             597          (e) personal and commercial property floaters.
             598          [(82)] (84) "Insolvency" means that:
             599          (a) an insurer is unable to pay its debts or meet its obligations as the debts and
             600      obligations mature;
             601          (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
             602      RBC under Subsection 31A-17-601 (8)(c); or
             603          (c) an insurer is determined to be hazardous under this title.
             604          [(83)] (85) (a) "Insurance" means:
             605          (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
             606      persons to one or more other persons; or
             607          (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
             608      group of persons that includes the person seeking to distribute that person's risk.
             609          (b) "Insurance" includes:
             610          (i) a risk distributing arrangement providing for compensation or replacement for
             611      damages or loss through the provision of a service or a benefit in kind;
             612          (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
             613      business and not as merely incidental to a business transaction; and
             614          (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
             615      but with a class of persons who have agreed to share the risk.
             616          [(84)] (86) "Insurance adjuster" means a person who directs the investigation,
             617      negotiation, or settlement of a claim under an insurance policy other than life insurance or an


             618      annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
             619          [(85)] (87) "Insurance business" or "business of insurance" includes:
             620          (a) providing health care insurance by an organization that is or is required to be
             621      licensed under this title;
             622          (b) providing a benefit to an employee in the event of a contingency not within the
             623      control of the employee, in which the employee is entitled to the benefit as a right, which
             624      benefit may be provided either:
             625          (i) by a single employer or by multiple employer groups; or
             626          (ii) through one or more trusts, associations, or other entities;
             627          (c) providing an annuity:
             628          (i) including an annuity issued in return for a gift; and
             629          (ii) except an annuity provided by a person specified in Subsections 31A-22-1305 (2)
             630      and (3);
             631          (d) providing the characteristic services of a motor club as outlined in Subsection
             632      [(113)] (115);
             633          (e) providing another person with insurance;
             634          (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
             635      or surety, a contract or policy of title insurance;
             636          (g) transacting or proposing to transact any phase of title insurance, including:
             637          (i) solicitation;
             638          (ii) negotiation preliminary to execution;
             639          (iii) execution of a contract of title insurance;
             640          (iv) insuring; and
             641          (v) transacting matters subsequent to the execution of the contract and arising out of
             642      the contract, including reinsurance; [and]
             643          [(vi)] (h) transacting or proposing a life settlement; and
             644          [(h)] (i) doing, or proposing to do, any business in substance equivalent to Subsections
             645      [(85)] (87)(a) through [(g)] (h) in a manner designed to evade this title.


             646          [(86)] (88) "Insurance consultant" or "consultant" means a person who:
             647          (a) advises another person about insurance needs and coverages;
             648          (b) is compensated by the person advised on a basis not directly related to the insurance
             649      placed; and
             650          (c) except as provided in Section 31A-23a-501 , is not compensated directly or
             651      indirectly by an insurer or producer for advice given.
             652          [(87)] (89) "Insurance holding company system" means a group of two or more
             653      affiliated persons, at least one of whom is an insurer.
             654          [(88)] (90) (a) "Insurance producer" or "producer" means a person licensed or required
             655      to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
             656          [(b) With regards to the selling, soliciting, or negotiating of an insurance product to an
             657      insurance customer or an insured:]
             658          [(i) "producer] (b) (i) "Producer for the insurer" means a producer who is compensated
             659      directly or indirectly by an insurer for selling, soliciting, or negotiating [a] an insurance product
             660      of that insurer[; and].
             661          (ii) "Producer for the insurer" may be referred to as an "agent."
             662          [(ii) "producer] (c) (i) "Producer for the insured" means a producer who:
             663          (A) is compensated directly and only by an insurance customer or an insured; and
             664          (B) receives no compensation directly or indirectly from an insurer for selling,
             665      soliciting, or negotiating [a] an insurance product of that insurer to an insurance customer or
             666      insured.
             667          (ii) "Producer for the insured" may be referred to as a "broker."
             668          [(89)] (91) (a) "Insured" means a person to whom or for whose benefit an insurer
             669      makes a promise in an insurance policy and includes:
             670          (i) a policyholder;
             671          (ii) a subscriber;
             672          (iii) a member; and
             673          (iv) a beneficiary.


             674          (b) The definition in Subsection [(89)] (91)(a):
             675          (i) applies only to this title; and
             676          (ii) does not define the meaning of this word as used in an insurance policy or
             677      certificate.
             678          [(90)] (92) (a) "Insurer" means a person doing an insurance business as a principal
             679      including:
             680          (i) a fraternal benefit society;
             681          (ii) an issuer of a gift annuity other than an annuity specified in Subsections
             682      31A-22-1305 (2) and (3);
             683          (iii) a motor club;
             684          (iv) an employee welfare plan; and
             685          (v) a person purporting or intending to do an insurance business as a principal on that
             686      person's own account.
             687          (b) "Insurer" does not include a governmental entity to the extent the governmental
             688      entity is engaged in an activity described in Section 31A-12-107 .
             689          [(91)] (93) "Interinsurance exchange" is defined in Subsection [(142)] (144).
             690          [(92)] (94) "Involuntary unemployment insurance" means insurance:
             691          (a) offered in connection with an extension of credit; and
             692          (b) that provides indemnity if the debtor is involuntarily unemployed for payments
             693      coming due on a:
             694          (i) specific loan; or
             695          (ii) credit transaction.
             696          [(93)] (95) "Large employer," in connection with a health benefit plan, means an
             697      employer who, with respect to a calendar year and to a plan year:
             698          (a) employed an average of at least 51 eligible employees on each business day during
             699      the preceding calendar year; and
             700          (b) employs at least two employees on the first day of the plan year.
             701          [(94)] (96) "Late enrollee," with respect to an employer health benefit plan, means an


             702      individual whose enrollment is a late enrollment.
             703          [(95)] (97) "Late enrollment," with respect to an employer health benefit plan, means
             704      enrollment of an individual other than:
             705          (a) on the earliest date on which coverage can become effective for the individual
             706      under the terms of the plan; or
             707          (b) through special enrollment.
             708          [(96)] (98) (a) Except for a retainer contract or legal assistance described in Section
             709      31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
             710      specified legal expense.
             711          (b) "Legal expense insurance" includes an arrangement that creates a reasonable
             712      expectation of an enforceable right.
             713          (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
             714      legal services incidental to other insurance coverage.
             715          [(97)] (99) (a) "Liability insurance" means insurance against liability:
             716          (i) for death, injury, or disability of a human being, or for damage to property,
             717      exclusive of the coverages under:
             718          (A) Subsection [(107)] (109) for medical malpractice insurance;
             719          (B) Subsection [(134)] (136) for professional liability insurance; and
             720          (C) Subsection [(168)] (170) for workers' compensation insurance;
             721          (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
             722      insured who is injured, irrespective of legal liability of the insured, when issued with or
             723      supplemental to insurance against legal liability for the death, injury, or disability of a human
             724      being, exclusive of the coverages under:
             725          (A) Subsection [(107)] (109) for medical malpractice insurance;
             726          (B) Subsection [(134)] (136) for professional liability insurance; and
             727          (C) Subsection [(168)] (170) for workers' compensation insurance;
             728          (iii) for loss or damage to property resulting from an accident to or explosion of a
             729      boiler, pipe, pressure container, machinery, or apparatus;


             730          (iv) for loss or damage to property caused by:
             731          (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
             732          (B) water entering through a leak or opening in a building; or
             733          (v) for other loss or damage properly the subject of insurance not within another kind
             734      of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
             735          (b) "Liability insurance" includes:
             736          (i) vehicle liability insurance;
             737          (ii) residential dwelling liability insurance; and
             738          (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
             739      boiler, machinery, or apparatus of any kind when done in connection with insurance on the
             740      elevator, boiler, machinery, or apparatus.
             741          [(98)] (100) (a) "License" means authorization issued by the commissioner to engage in
             742      an activity that is part of or related to the insurance business.
             743          (b) "License" includes a certificate of authority issued to an insurer.
             744          [(99)] (101) (a) "Life insurance" means:
             745          (i) insurance on a human life; and
             746          (ii) insurance pertaining to or connected with human life.
             747          (b) The business of life insurance includes:
             748          (i) granting a death benefit;
             749          (ii) granting an annuity benefit;
             750          (iii) granting an endowment benefit;
             751          (iv) granting an additional benefit in the event of death by accident;
             752          (v) granting an additional benefit to safeguard the policy against lapse; and
             753          (vi) providing an optional method of settlement of proceeds.
             754          [(100)] (102) "Limited license" means a license that:
             755          (a) is issued for a specific product of insurance; and
             756          (b) limits an individual or agency to transact only for that product or insurance.
             757          [(101)] (103) "Limited line credit insurance" includes the following forms of


             758      insurance:
             759          (a) credit life;
             760          (b) credit accident and health;
             761          (c) credit property;
             762          (d) credit unemployment;
             763          (e) involuntary unemployment;
             764          (f) mortgage life;
             765          (g) mortgage guaranty;
             766          (h) mortgage accident and health;
             767          (i) guaranteed automobile protection; and
             768          (j) another form of insurance offered in connection with an extension of credit that:
             769          (i) is limited to partially or wholly extinguishing the credit obligation; and
             770          (ii) the commissioner determines by rule should be designated as a form of limited line
             771      credit insurance.
             772          [(102)] (104) "Limited line credit insurance producer" means a person who sells,
             773      solicits, or negotiates one or more forms of limited line credit insurance coverage to an
             774      individual through a master, corporate, group, or individual policy.
             775          [(103)] (105) "Limited line insurance" includes:
             776          (a) bail bond;
             777          (b) limited line credit insurance;
             778          (c) legal expense insurance;
             779          (d) motor club insurance;
             780          (e) [rental car-related] car rental related insurance;
             781          (f) travel insurance;
             782          (g) crop insurance;
             783          (h) self-service storage insurance; [and]
             784          (i) guaranteed asset protection waiver; and
             785          [(i)] (j) another form of limited insurance that the commissioner determines by rule


             786      should be designated a form of limited line insurance.
             787          [(104)] (106) "Limited lines authority" includes:
             788          (a) the lines of insurance listed in Subsection [(103)] (105); and
             789          (b) a customer service representative.
             790          [(105)] (107) "Limited lines producer" means a person who sells, solicits, or negotiates
             791      limited lines insurance.
             792          [(106)] (108) (a) "Long-term care insurance" means an insurance policy or rider
             793      advertised, marketed, offered, or designated to provide coverage:
             794          (i) in a setting other than an acute care unit of a hospital;
             795          (ii) for not less than 12 consecutive months for a covered person on the basis of:
             796          (A) expenses incurred;
             797          (B) indemnity;
             798          (C) prepayment; or
             799          (D) another method;
             800          (iii) for one or more necessary or medically necessary services that are:
             801          (A) diagnostic;
             802          (B) preventative;
             803          (C) therapeutic;
             804          (D) rehabilitative;
             805          (E) maintenance; or
             806          (F) personal care; and
             807          (iv) that may be issued by:
             808          (A) an insurer;
             809          (B) a fraternal benefit society;
             810          (C) (I) a nonprofit health hospital; and
             811          (II) a medical service corporation;
             812          (D) a prepaid health plan;
             813          (E) a health maintenance organization; or


             814          (F) an entity similar to the entities described in Subsections [(106)] (108)(a)(iv)(A)
             815      through (E) to the extent that the entity is otherwise authorized to issue life or health care
             816      insurance.
             817          (b) "Long-term care insurance" includes:
             818          (i) any of the following that provide directly or supplement long-term care insurance:
             819          (A) a group or individual annuity or rider; or
             820          (B) a life insurance policy or rider;
             821          (ii) a policy or rider that provides for payment of benefits on the basis of:
             822          (A) cognitive impairment; or
             823          (B) functional capacity; or
             824          (iii) a qualified long-term care insurance contract.
             825          (c) "Long-term care insurance" does not include:
             826          (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
             827          (ii) basic hospital expense coverage;
             828          (iii) basic medical/surgical expense coverage;
             829          (iv) hospital confinement indemnity coverage;
             830          (v) major medical expense coverage;
             831          (vi) income replacement or related asset-protection coverage;
             832          (vii) accident only coverage;
             833          (viii) coverage for a specified:
             834          (A) disease; or
             835          (B) accident;
             836          (ix) limited benefit health coverage; or
             837          (x) a life insurance policy that accelerates the death benefit to provide the option of a
             838      lump sum payment:
             839          (A) if the following are not conditioned on the receipt of long-term care:
             840          (I) benefits; or
             841          (II) eligibility; and


             842          (B) the coverage is for one or more the following qualifying events:
             843          (I) terminal illness;
             844          (II) medical conditions requiring extraordinary medical intervention; or
             845          (III) permanent institutional confinement.
             846          [(107)] (109) "Medical malpractice insurance" means insurance against legal liability
             847      incident to the practice and provision of a medical service other than the practice and provision
             848      of a dental service.
             849          [(108)] (110) "Member" means a person having membership rights in an insurance
             850      corporation.
             851          [(109)] (111) "Minimum capital" or "minimum required capital" means the capital that
             852      must be constantly maintained by a stock insurance corporation as required by statute.
             853          [(110)] (112) "Mortgage accident and health insurance" means insurance offered in
             854      connection with an extension of credit that provides indemnity for payments coming due on a
             855      mortgage while the debtor is disabled.
             856          [(111)] (113) "Mortgage guaranty insurance" means surety insurance under which a
             857      mortgagee or other creditor is indemnified against losses caused by the default of a debtor.
             858          [(112)] (114) "Mortgage life insurance" means insurance on the life of a debtor in
             859      connection with an extension of credit that pays if the debtor dies.
             860          [(113)] (115) "Motor club" means a person:
             861          (a) licensed under:
             862          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             863          (ii) Chapter 11, Motor Clubs; or
             864          (iii) Chapter 14, Foreign Insurers; and
             865          (b) that promises for an advance consideration to provide for a stated period of time
             866      one or more:
             867          (i) legal services under Subsection 31A-11-102 (1)(b);
             868          (ii) bail services under Subsection 31A-11-102 (1)(c); or
             869          (iii) (A) trip reimbursement;


             870          (B) towing services;
             871          (C) emergency road services;
             872          (D) stolen automobile services;
             873          (E) a combination of the services listed in Subsections [(113)] (115)(b)(iii)(A) through
             874      (D); or
             875          (F) other services given in Subsections 31A-11-102 (1)(b) through (f).
             876          [(114)] (116) "Mutual" means a mutual insurance corporation.
             877          [(115)] (117) "Network plan" means health care insurance:
             878          (a) that is issued by an insurer; and
             879          (b) under which the financing and delivery of medical care is provided, in whole or in
             880      part, through a defined set of providers under contract with the insurer, including the financing
             881      and delivery of an item paid for as medical care.
             882          [(116)] (118) "Nonparticipating" means a plan of insurance under which the insured is
             883      not entitled to receive a dividend representing a share of the surplus of the insurer.
             884          [(117)] (119) "Ocean marine insurance" means insurance against loss of or damage to:
             885          (a) ships or hulls of ships;
             886          (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, money,
             887      securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
             888      interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
             889          (c) earnings such as freight, passage money, commissions, or profits derived from
             890      transporting goods or people upon or across the oceans or inland waterways; or
             891          (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
             892      owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
             893      in connection with maritime activity.
             894          [(118)] (120) "Order" means an order of the commissioner.
             895          [(119)] (121) "Outline of coverage" means a summary that explains an accident and
             896      health insurance policy.
             897          [(120)] (122) "Participating" means a plan of insurance under which the insured is


             898      entitled to receive a dividend representing a share of the surplus of the insurer.
             899          [(121)] (123) "Participation," as used in a health benefit plan, means a requirement
             900      relating to the minimum percentage of eligible employees that must be enrolled in relation to
             901      the total number of eligible employees of an employer reduced by each eligible employee who
             902      voluntarily declines coverage under the plan because the employee:
             903          (a) has other group health care insurance coverage; or
             904          (b) receives:
             905          (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
             906      Security Amendments of 1965; or
             907          (ii) another government health benefit.
             908          [(122)] (124) "Person" includes:
             909          (a) an individual;
             910          (b) a partnership;
             911          (c) a corporation;
             912          (d) an incorporated or unincorporated association;
             913          (e) a joint stock company;
             914          (f) a trust;
             915          (g) a limited liability company;
             916          (h) a reciprocal;
             917          (i) a syndicate; or
             918          (j) another similar entity or combination of entities acting in concert.
             919          [(123)] (125) "Personal lines insurance" means property and casualty insurance
             920      coverage sold for primarily noncommercial purposes to:
             921          (a) an individual; or
             922          (b) a family.
             923          [(124)] (126) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
             924          [(125)] (127) "Plan year" means:
             925          (a) the year that is designated as the plan year in:


             926          (i) the plan document of a group health plan; or
             927          (ii) a summary plan description of a group health plan;
             928          (b) if the plan document or summary plan description does not designate a plan year or
             929      there is no plan document or summary plan description:
             930          (i) the year used to determine deductibles or limits;
             931          (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
             932      or
             933          (iii) the employer's taxable year if:
             934          (A) the plan does not impose deductibles or limits on a yearly basis; and
             935          (B) (I) the plan is not insured; or
             936          (II) the insurance policy is not renewed on an annual basis; or
             937          (c) in a case not described in Subsection [(125)] (127)(a) or (b), the calendar year.
             938          [(126)] (128) (a) "Policy" means a document, including an attached endorsement or
             939      application that:
             940          (i) purports to be an enforceable contract; and
             941          (ii) memorializes in writing some or all of the terms of an insurance contract.
             942          (b) "Policy" includes a service contract issued by:
             943          (i) a motor club under Chapter 11, Motor Clubs;
             944          (ii) a service contract provided under Chapter 6a, Service Contracts; and
             945          (iii) a corporation licensed under:
             946          (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
             947          (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
             948          (c) "Policy" does not include:
             949          (i) a certificate under a group insurance contract; or
             950          (ii) a document that does not purport to have legal effect.
             951          [(127)] (129) "Policyholder" means a person who controls a policy, binder, or oral
             952      contract by ownership, premium payment, or otherwise.
             953          [(128)] (130) "Policy illustration" means a presentation or depiction that includes


             954      nonguaranteed elements of a policy of life insurance over a period of years.
             955          [(129)] (131) "Policy summary" means a synopsis describing the elements of a life
             956      insurance policy.
             957          [(130)] (132) "Preexisting condition," with respect to a health benefit plan:
             958          (a) means a condition that was present before the effective date of coverage, whether or
             959      not medical advice, diagnosis, care, or treatment was recommended or received before that day;
             960      and
             961          (b) does not include a condition indicated by genetic information unless an actual
             962      diagnosis of the condition by a physician has been made.
             963          [(131)] (133) (a) "Premium" means the monetary consideration for an insurance policy.
             964          (b) "Premium" includes, however designated:
             965          (i) an assessment;
             966          (ii) a membership fee;
             967          (iii) a required contribution; or
             968          (iv) monetary consideration.
             969          (c) (i) "Premium" does not include consideration paid to a third party administrator for
             970      the third party administrator's services.
             971          (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
             972      insurance on the risks administered by the third party administrator.
             973          [(132)] (134) "Principal officers" for a corporation means the officers designated under
             974      Subsection 31A-5-203 (3).
             975          [(133)] (135) "Proceeding" includes an action or special statutory proceeding.
             976          [(134)] (136) "Professional liability insurance" means insurance against legal liability
             977      incident to the practice of a profession and provision of a professional service.
             978          [(135)] (137) (a) Except as provided in Subsection [(135)] (137)(b), "property
             979      insurance" means insurance against loss or damage to real or personal property of every kind
             980      and any interest in that property:
             981          (i) from all hazards or causes; and


             982          (ii) against loss consequential upon the loss or damage including vehicle
             983      comprehensive and vehicle physical damage coverages.
             984          (b) "Property insurance" does not include:
             985          (i) inland marine insurance; and
             986          (ii) ocean marine insurance.
             987          [(136)] (138) "Qualified long-term care insurance contract" or "federally tax qualified
             988      long-term care insurance contract" means:
             989          (a) an individual or group insurance contract that meets the requirements of Section
             990      7702B(b), Internal Revenue Code; or
             991          (b) the portion of a life insurance contract that provides long-term care insurance:
             992          (i) (A) by rider; or
             993          (B) as a part of the contract; and
             994          (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
             995      Code.
             996          [(137)] (139) "Qualified United States financial institution" means an institution that:
             997          (a) is:
             998          (i) organized under the laws of the United States or any state; or
             999          (ii) in the case of a United States office of a foreign banking organization, licensed
             1000      under the laws of the United States or any state;
             1001          (b) is regulated, supervised, and examined by a United States federal or state authority
             1002      having regulatory authority over a bank or trust company; and
             1003          (c) meets the standards of financial condition and standing that are considered
             1004      necessary and appropriate to regulate the quality of a financial institution whose letters of credit
             1005      will be acceptable to the commissioner as determined by:
             1006          (i) the commissioner by rule; or
             1007          (ii) the Securities Valuation Office of the National Association of Insurance
             1008      Commissioners.
             1009          [(138)] (140) (a) "Rate" means:


             1010          (i) the cost of a given unit of insurance; or
             1011          (ii) for property or casualty insurance, that cost of insurance per exposure unit either
             1012      expressed as:
             1013          (A) a single number; or
             1014          (B) a pure premium rate, adjusted before the application of individual risk variations
             1015      based on loss or expense considerations to account for the treatment of:
             1016          (I) expenses;
             1017          (II) profit; and
             1018          (III) individual insurer variation in loss experience.
             1019          (b) "Rate" does not include a minimum premium.
             1020          [(139)] (141) (a) Except as provided in Subsection [(139)] (141)(b), "rate service
             1021      organization" means a person who assists an insurer in rate making or filing by:
             1022          (i) collecting, compiling, and furnishing loss or expense statistics;
             1023          (ii) recommending, making, or filing rates or supplementary rate information; or
             1024          (iii) advising about rate questions, except as an attorney giving legal advice.
             1025          (b) "Rate service organization" does not mean:
             1026          (i) an employee of an insurer;
             1027          (ii) a single insurer or group of insurers under common control;
             1028          (iii) a joint underwriting group; or
             1029          (iv) an individual serving as an actuarial or legal consultant.
             1030          [(140)] (142) "Rating manual" means any of the following used to determine initial and
             1031      renewal policy premiums:
             1032          (a) a manual of rates;
             1033          (b) a classification;
             1034          (c) a rate-related underwriting rule; and
             1035          (d) a rating formula that describes steps, policies, and procedures for determining
             1036      initial and renewal policy premiums.
             1037          [(141)] (143) "Received by the department" means:


             1038          (a) the date delivered to and stamped received by the department, if delivered in
             1039      person;
             1040          (b) the post mark date, if delivered by mail;
             1041          (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
             1042          (d) the received date recorded on an item delivered, if delivered by:
             1043          (i) facsimile;
             1044          (ii) email; or
             1045          (iii) another electronic method; or
             1046          (e) a date specified in:
             1047          (i) a statute;
             1048          (ii) a rule; or
             1049          (iii) an order.
             1050          [(142)] (144) "Reciprocal" or "interinsurance exchange" means an unincorporated
             1051      association of persons:
             1052          (a) operating through an attorney-in-fact common to all of the persons; and
             1053          (b) exchanging insurance contracts with one another that provide insurance coverage
             1054      on each other.
             1055          [(143)] (145) "Reinsurance" means an insurance transaction where an insurer, for
             1056      consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
             1057      reinsurance transactions, this title sometimes refers to:
             1058          (a) the insurer transferring the risk as the "ceding insurer"; and
             1059          (b) the insurer assuming the risk as the:
             1060          (i) "assuming insurer"; or
             1061          (ii) "assuming reinsurer."
             1062          [(144)] (146) "Reinsurer" means a person licensed in this state as an insurer with the
             1063      authority to assume reinsurance.
             1064          [(145)] (147) "Residential dwelling liability insurance" means insurance against
             1065      liability resulting from or incident to the ownership, maintenance, or use of a residential


             1066      dwelling that is a detached single family residence or multifamily residence up to four units.
             1067          [(146)] (148) (a) "Retrocession" means reinsurance with another insurer of a liability
             1068      assumed under a reinsurance contract.
             1069          (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
             1070      liability assumed under a reinsurance contract.
             1071          [(147)] (149) "Rider" means an endorsement to:
             1072          (a) an insurance policy; or
             1073          (b) an insurance certificate.
             1074          [(148)] (150) (a) "Security" means a:
             1075          (i) note;
             1076          (ii) stock;
             1077          (iii) bond;
             1078          (iv) debenture;
             1079          (v) evidence of indebtedness;
             1080          (vi) certificate of interest or participation in a profit-sharing agreement;
             1081          (vii) collateral-trust certificate;
             1082          (viii) preorganization certificate or subscription;
             1083          (ix) transferable share;
             1084          (x) investment contract;
             1085          (xi) voting trust certificate;
             1086          (xii) certificate of deposit for a security;
             1087          (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
             1088      payments out of production under such a title or lease;
             1089          (xiv) commodity contract or commodity option;
             1090          (xv) certificate of interest or participation in, temporary or interim certificate for,
             1091      receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
             1092      in Subsections [(148)] (150)(a)(i) through (xiv); or
             1093          (xvi) another interest or instrument commonly known as a security.


             1094          (b) "Security" does not include:
             1095          (i) any of the following under which an insurance company promises to pay money in a
             1096      specific lump sum or periodically for life or some other specified period:
             1097          (A) insurance;
             1098          (B) an endowment policy; or
             1099          (C) an annuity contract; or
             1100          (ii) a burial certificate or burial contract.
             1101          [(149)] (151) "Secondary medical condition" means a complication related to an
             1102      exclusion from coverage in accident and health insurance.
             1103          [(150)] (152) (a) "Self-insurance" means an arrangement under which a person
             1104      provides for spreading its own risks by a systematic plan.
             1105          [(a)] (b) Except as provided in this Subsection [(150)] (152), "self-insurance" does not
             1106      include an arrangement under which a number of persons spread their risks among themselves.
             1107          [(b)] (c) "Self-insurance" includes:
             1108          (i) an arrangement by which a governmental entity undertakes to indemnify an
             1109      employee for liability arising out of the employee's employment; and
             1110          (ii) an arrangement by which a person with a managed program of self-insurance and
             1111      risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
             1112      employees for liability or risk that is related to the relationship or employment.
             1113          [(c)] (d) "Self-insurance" does not include an arrangement with an independent
             1114      contractor.
             1115          [(151)] (153) "Sell" means to exchange a contract of insurance:
             1116          (a) by any means;
             1117          (b) for money or its equivalent; and
             1118          (c) on behalf of an insurance company.
             1119          [(152)] (154) "Short-term care insurance" means an insurance policy or rider
             1120      advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
             1121      insurance, but that provides coverage for less than 12 consecutive months for each covered


             1122      person.
             1123          [(153)] (155) "Significant break in coverage" means a period of 63 consecutive days
             1124      during each of which an individual does not have creditable coverage.
             1125          [(154)] (156) "Small employer," in connection with a health benefit plan, means an
             1126      employer who, with respect to a calendar year and to a plan year:
             1127          (a) employed an average of at least two employees but not more than 50 eligible
             1128      employees on each business day during the preceding calendar year; and
             1129          (b) employs at least two employees on the first day of the plan year.
             1130          [(155)] (157) "Special enrollment period," in connection with a health benefit plan, has
             1131      the same meaning as provided in federal regulations adopted pursuant to the Health Insurance
             1132      Portability and Accountability Act [of 1996, Pub. L. 104-191, 110 Stat. 1936].
             1133          [(156)] (158) (a) "Subsidiary" of a person means an affiliate controlled by that person
             1134      either directly or indirectly through one or more affiliates or intermediaries.
             1135          (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
             1136      shares are owned by that person either alone or with its affiliates, except for the minimum
             1137      number of shares the law of the subsidiary's domicile requires to be owned by directors or
             1138      others.
             1139          [(157)] (159) Subject to Subsection [(83)] (85)(b), "surety insurance" includes:
             1140          (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
             1141      perform the principal's obligations to a creditor or other obligee;
             1142          (b) bail bond insurance; and
             1143          (c) fidelity insurance.
             1144          [(158)] (160) (a) "Surplus" means the excess of assets over the sum of paid-in capital
             1145      and liabilities.
             1146          (b) (i) "Permanent surplus" means the surplus of a mutual insurer that is designated by
             1147      the insurer as permanent.
             1148          (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209 require
             1149      that mutuals doing business in this state maintain specified minimum levels of permanent


             1150      surplus.
             1151          (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
             1152      same as the minimum required capital requirement that applies to stock insurers.
             1153          (c) "Excess surplus" means:
             1154          (i) for a life insurer, accident and health insurer, health organization, or property and
             1155      casualty insurer as defined in Section 31A-17-601 , the lesser of:
             1156          (A) that amount of an insurer's or health organization's total adjusted capital that
             1157      exceeds the product of:
             1158          (I) 2.5; and
             1159          (II) the sum of the insurer's or health organization's minimum capital or permanent
             1160      surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
             1161          (B) that amount of an insurer's or health organization's total adjusted capital that
             1162      exceeds the product of:
             1163          (I) 3.0; and
             1164          (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
             1165          (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
             1166      that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
             1167          (A) 1.5; and
             1168          (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
             1169          [(159)] (161) "Third party administrator" or "administrator" means a person who
             1170      collects charges or premiums from, or who, for consideration, adjusts or settles claims of
             1171      residents of the state in connection with insurance coverage, annuities, or service insurance
             1172      coverage, except:
             1173          (a) a union on behalf of its members;
             1174          (b) a person administering a:
             1175          (i) pension plan subject to the federal Employee Retirement Income Security Act of
             1176      1974;
             1177          (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or


             1178          (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
             1179          (c) an employer on behalf of the employer's employees or the employees of one or
             1180      more of the subsidiary or affiliated corporations of the employer;
             1181          (d) an insurer licensed under [Chapter 5, 7, 8, 9, or 14] the following, but only for a
             1182      line of insurance for which the insurer holds a license in this state[; or]:
             1183          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
             1184          (ii) Chapter 7, Nonprofit Health Service Insurance Corporations;
             1185          (iii) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1186          (iv) Chapter 9, Insurance Fraternals; or
             1187          (v) Chapter 14, Foreign Insurers; or
             1188          (e) a person:
             1189          (i) licensed or exempt from licensing under:
             1190          (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             1191      Reinsurance Intermediaries; or
             1192          (B) Chapter 26, Insurance Adjusters; and
             1193          (ii) whose activities are limited to those authorized under the license the person holds
             1194      or for which the person is exempt.
             1195          [(160)] (162) "Title insurance" means the insuring, guaranteeing, or indemnifying of an
             1196      owner of real or personal property or the holder of liens or encumbrances on that property, or
             1197      others interested in the property against loss or damage suffered by reason of liens or
             1198      encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity
             1199      or unenforceability of any liens or encumbrances on the property.
             1200          [(161)] (163) "Total adjusted capital" means the sum of an insurer's or health
             1201      organization's statutory capital and surplus as determined in accordance with:
             1202          (a) the statutory accounting applicable to the annual financial statements required to be
             1203      filed under Section 31A-4-113 ; and
             1204          (b) another item provided by the RBC instructions, as RBC instructions is defined in
             1205      Section 31A-17-601 .


             1206          [(162)] (164) (a) "Trustee" means "director" when referring to the board of directors of
             1207      a corporation.
             1208          (b) "Trustee," when used in reference to an employee welfare fund, means an
             1209      individual, firm, association, organization, joint stock company, or corporation, whether acting
             1210      individually or jointly and whether designated by that name or any other, that is charged with
             1211      or has the overall management of an employee welfare fund.
             1212          [(163)] (165) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted
             1213      insurer" means an insurer:
             1214          (i) not holding a valid certificate of authority to do an insurance business in this state;
             1215      or
             1216          (ii) transacting business not authorized by a valid certificate.
             1217          (b) "Admitted insurer" or "authorized insurer" means an insurer:
             1218          (i) holding a valid certificate of authority to do an insurance business in this state; and
             1219          (ii) transacting business as authorized by a valid certificate.
             1220          [(164)] (166) "Underwrite" means the authority to accept or reject risk on behalf of the
             1221      insurer.
             1222          [(165)] (167) "Vehicle liability insurance" means insurance against liability resulting
             1223      from or incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a
             1224      vehicle comprehensive or vehicle physical damage coverage under Subsection [(135)] (137).
             1225          [(166)] (168) "Voting security" means a security with voting rights, and includes a
             1226      security convertible into a security with a voting right associated with the security.
             1227          [(167)] (169) "Waiting period" for a health benefit plan means the period that must
             1228      pass before coverage for an individual, who is otherwise eligible to enroll under the terms of
             1229      the health benefit plan, can become effective.
             1230          [(168)] (170) "Workers' compensation insurance" means:
             1231          (a) insurance for indemnification of an employer against liability for compensation
             1232      based on:
             1233          (i) a compensable accidental injury; and


             1234          (ii) occupational disease disability;
             1235          (b) employer's liability insurance incidental to workers' compensation insurance and
             1236      written in connection with workers' compensation insurance; and
             1237          (c) insurance assuring to a person entitled to workers' compensation benefits the
             1238      compensation provided by law.
             1239          Section 2. Section 31A-2-208 is amended to read:
             1240           31A-2-208. Publications.
             1241          (1) The commissioner may prepare and distribute books, pamphlets, and other
             1242      publications relating to insurance. Except as otherwise provided under this title, the
             1243      [insurance] commissioner may charge the cost of producing [the publications] a publication to
             1244      those desiring to receive [them] the publication. Money collected from subscription fees
             1245      charged for [these publications] a publication shall be deposited [as dedicated credits to be used
             1246      solely for the production and mailing costs of the publications] into the Relative Value Study
             1247      Restricted Account, created in Section 59-9-105 , to be used as provided in Section 59-9-105 .
             1248          (2) The commissioner shall have the annual report required in Subsection
             1249      31A-2-207 (5) printed:
             1250          (a) in a form determined by [him] the commissioner; and
             1251          (b) in sufficient numbers to meet [all] requests for copies.
             1252          (3) The commissioner shall publish in [his] the annual report required in Subsection
             1253      31A-2-207 (5) an up-to-date chart and explanation of the organization of [his] the
             1254      commissioner's office, making clear the allocation of responsibility and authority among the
             1255      staff. This [document] up-to-date chart and explanation shall be printed in sufficient numbers
             1256      [sufficient] to meet [all] requests for copies.
             1257          Section 3. Section 31A-2-212 is amended to read:
             1258           31A-2-212. Miscellaneous duties.
             1259          (1) Upon issuance of [any] an order limiting, suspending, or revoking [an insurer's] a
             1260      person's authority to do business in Utah, and [on institution of any proceedings] when the
             1261      commissioner begins a proceeding against [the] an insurer under Chapter 27a, Insurer


             1262      Receivership Act, the commissioner:
             1263          (a) shall notify by mail [all agents] the producers of the person or insurer of whom the
             1264      commissioner has record; and
             1265          (b) may publish notice of the order or proceeding in any manner the commissioner
             1266      considers necessary to protect the rights of the public.
             1267          (2) When required for evidence in [any] a legal proceeding, the commissioner shall
             1268      furnish a certificate of [the] authority of [any] a licensee to transact [insurance] the business of
             1269      insurance in Utah on any particular date. The court or other officer shall receive the certificate
             1270      of authority in lieu of the commissioner's testimony.
             1271          (3) (a) On the request of [any] an insurer authorized to do a surety business, the
             1272      commissioner shall furnish a copy of the insurer's certificate of authority to [any] a designated
             1273      public officer in this state who requires that certificate of authority before accepting a bond.
             1274          (b) The public officer described in Subsection (3)(a) shall file the certificate of
             1275      authority furnished under Subsection (3)(a).
             1276          (c) After a certified copy of a certificate of authority [has been] is furnished to a public
             1277      officer, it is not necessary, while the certificate of authority remains effective, to attach a copy
             1278      of it to any instrument of suretyship filed with that public officer.
             1279          (d) Whenever the commissioner revokes the certificate of authority or [starts
             1280      proceedings] begins a proceeding under Chapter 27a, Insurer Receivership Act, against [any]
             1281      an insurer authorized to do a surety business, the commissioner shall immediately give notice
             1282      of that action to each public officer who [was] is sent a certified copy under this Subsection (3).
             1283          (4) (a) The commissioner shall immediately notify every judge and clerk of [all] the
             1284      courts of record in the state when:
             1285          (i) an authorized insurer doing a surety business:
             1286          (A) files a petition for receivership; or
             1287          (B) is in receivership; or
             1288          (ii) the commissioner has reason to believe that the authorized insurer doing surety
             1289      business:


             1290          (A) is in financial difficulty; or
             1291          (B) has unreasonably failed to carry out any of its contracts.
             1292          (b) Upon the receipt of the notice required by this Subsection (4), it is the duty of the
             1293      judges and clerks to notify and require [every] a person that [has filed] files with the court a
             1294      bond on which the authorized insurer doing surety business is surety[,] to immediately file a
             1295      new bond with a new surety.
             1296          (5) The commissioner shall require an insurer that issues, sells, renews, or offers health
             1297      insurance coverage in this state to comply with the Health Insurance Portability and
             1298      Accountability Act[, P.L. 104-191, pursuant to 110 Stat. 1968, Sec. 2722].
             1299          Section 4. Section 31A-3-101 is amended to read:
             1300           31A-3-101. General finance provisions.
             1301          [(1) The department's expenses shall be paid from the General Fund.] Department
             1302      expenditures shall conform to the Legislature's appropriation adopted under Title 63J, Chapter
             1303      1, Budgetary Procedures Act.
             1304          [(2) Except as provided in Section 31A-2-206 , or as otherwise specifically provided in
             1305      this title, all money collected by the commissioner shall be deposited without deduction in the
             1306      General Fund.]
             1307          Section 5. Section 31A-3-103 is amended to read:
             1308           31A-3-103. Fees.
             1309          (1) For purposes of this section, "services" means functions that are reasonable and
             1310      necessary to enable the commissioner to perform the duties imposed by this title including:
             1311          (a) issuing or renewing a license or certificate of authority;
             1312          (b) filing a policy form;
             1313          (c) reporting a producer appointment or termination; and
             1314          (d) filing an annual statement.
             1315          (2) Except as otherwise provided by this title:
             1316          (a) the commissioner may set and collect a fee for services provided by the
             1317      commissioner;


             1318          (b) a fee related to the renewal of a license may be imposed no more frequently than
             1319      once each year; and
             1320          (c) a fee charged by the commissioner shall be set in accordance with Section
             1321      63J-1-504 .
             1322          [(3) Except as otherwise provided in this title, a fee established pursuant to this section
             1323      shall be deposited into the General Fund for appropriation by the Legislature.]
             1324          [(4)] (3) (a) The commissioner shall publish a schedule of fees established pursuant to
             1325      this section.
             1326          (b) The commissioner shall, by rule, establish the deadlines for payment of a fee
             1327      established pursuant to this section.
             1328          (4) (a) Beginning July 1, 2011, there is created in the General Fund a restricted account
             1329      known as the "Insurance Department Restricted Account."
             1330          (b) Except as provided in Subsection (4)(c), the Insurance Department Restricted
             1331      Account shall consist of:
             1332          (i) fees authorized by this section; and
             1333          (ii) other money received by the department, including:
             1334          (A) reimbursements for examination costs incurred by the department; and
             1335          (B) forfeitures collected under this title.
             1336          (c) The department shall deposit money it receives that is subject to a restricted account
             1337      or enterprise fund created by this title into the restricted account or enterprise fund in
             1338      accordance with the statute creating the restricted account or enterprise fund, and the
             1339      department may not deposit the money into the Insurance Department Restricted Account.
             1340          (d) Subject to appropriation by the Legislature, the department may expend money in
             1341      the Insurance Department Restricted Account to fund the operations of the department.
             1342          (e) At the end of each fiscal year, the director of the Division of Finance shall transfer
             1343      into the General Fund any money deposited into the Insurance Department Restricted Account
             1344      under Subsection (4)(b) that exceeds the legislative appropriations from the Insurance
             1345      Department Restricted Account for that year.


             1346          Section 6. Section 31A-3-304 is amended to read:
             1347           31A-3-304. Annual fees -- Other taxes or fees prohibited -- Captive Insurance
             1348      Restricted Account.
             1349          (1) (a) A captive insurance company shall pay an annual fee imposed under this section
             1350      to obtain or renew a certificate of authority.
             1351          (b) The commissioner shall:
             1352          (i) determine the annual fee pursuant to Section 31A-3-103 ; and
             1353          (ii) consider whether the annual fee is competitive with fees imposed by other states on
             1354      captive insurance companies.
             1355          (2) A captive insurance company that fails to pay the fee required by this section is
             1356      subject to the relevant sanctions of this title.
             1357          (3) (a) Except as provided in Subsection (3)[(b)](d) and notwithstanding Title 59,
             1358      Chapter 9, Taxation of Admitted Insurers, [the fee provided for in this section constitutes the
             1359      sole tax or fee] the following constitute the sole taxes, fees, or charges under the laws of this
             1360      state that may be [otherwise] levied or assessed on a captive insurance company[, and no other
             1361      occupation tax or other tax or fee may be levied or collected from a captive insurance company
             1362      by the state or a county, city, or municipality within this state.]:
             1363          [(b) Notwithstanding Subsection (3)(a), a]
             1364          (i) a fee under this section;
             1365          (ii) a fee under Chapter 37, Captive Insurance Companies Act; and
             1366          (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
             1367      Act.
             1368          (b) The state or a county, city, or town within the state may not levy or collect an
             1369      occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
             1370      against a captive insurance company.
             1371          (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
             1372      against a captive insurance company.
             1373          (d) A captive insurance company is subject to real and personal property taxes.


             1374          (4) A captive insurance company shall pay the fee imposed by this section to the
             1375      commissioner by [March 31] June 20 of each year.
             1376          (5) (a) Money received pursuant to [Subsection (2)] a fee described in Subsection
             1377      (3)(a) shall be deposited into the Captive Insurance Restricted Account.
             1378          (b) There is created in the General Fund a restricted account known as the "Captive
             1379      Insurance Restricted Account."
             1380          (c) The Captive Insurance Restricted Account shall consist of the fees [imposed by the
             1381      commissioner in accordance with this section] described in Subsection (3)(a).
             1382          (d) The commissioner shall administer the Captive Insurance Restricted Account.
             1383      Subject to appropriations by the Legislature, the commissioner shall use the money deposited
             1384      into the Captive Insurance Restricted Account to:
             1385          (i) administer and enforce:
             1386          (A) Chapter 37, Captive Insurance Companies Act; and
             1387          (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
             1388          (ii) promote the captive insurance industry in Utah.
             1389          (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
             1390      except that at the end of each fiscal year, money received by the commissioner in excess of
             1391      [$600,000] $950,000 shall be treated as free revenue in the General Fund.
             1392          Section 7. Section 31A-14-211 is amended to read:
             1393           31A-14-211. Restrictions on foreign title insurers.
             1394          (1) An authorized foreign title insurer may not insure property in this state except:
             1395          (a) through a title insurance producer who is a resident in Utah; or
             1396          (b) through a bona fide [branch] office in Utah:
             1397          (i) that is under the direction and control of the authorized foreign title insurer [that
             1398      pays all];
             1399          (ii) for which the authorized foreign title insurer pays the expenses [of the branch
             1400      office], including compensation of [all] the employees[; or] of the bona fide office;
             1401          (iii) at which a person may request information about title services related to a real


             1402      estate transaction for which the person is a party;
             1403          (iv) at which a person may deliver written communications to the authorized foreign
             1404      title insurer as required by the real estate transaction for which the person is a party; and
             1405          (v) at which a person may deliver escrow money related to a real estate transaction for
             1406      which the person is a party.
             1407          [(c) through a subsidiary title insurer authorized to do business in Utah.]
             1408          (2) This section does not apply to reinsurance.
             1409          Section 8. Section 31A-22-607 is amended to read:
             1410           31A-22-607. Grace period.
             1411          (1) [Every] (a) An individual or franchise accident and health insurance policy shall
             1412      contain one or more clauses providing for a grace period for premium payment only of:
             1413          (i) at least 15 days for a weekly or monthly premium [policies] policy; and
             1414          (ii) 30 days for [all other policies] a policy that is not a weekly or monthly premium
             1415      policy, for each premium after the first premium payment. [A carrier]
             1416          (b) An insurer may elect to include a grace period that is longer than 15 days for a
             1417      weekly or monthly [policies] policy.
             1418          [(a) The] (c) An individual or franchise accident and health insurance policy is not in
             1419      force during [the] a grace period.
             1420          [(b) If the] (d) If an insurer receives payment before [the] a grace period expires, the
             1421      individual or franchise accident and health insurance policy continues in force with no gap in
             1422      coverage.
             1423          [(c) If the] (e) If an insurer does not receive payment before [the] a grace period
             1424      expires, the [policy shall be] individual or franchise accident and health insurance policy is
             1425      terminated as of the last date for which the premium [was] is paid in full.
             1426          [(d)] (f) A grace period is not required if the policyholder has requested that the
             1427      individual or franchise accident and health insurance policy be discontinued.
             1428          (2) [Every] (a) A group or blanket accident and health insurance policy shall provide
             1429      for a grace period of at least 30 days, unless the policyholder gives written notice of


             1430      discontinuance [prior to] before the date of discontinuance, in accordance with the policy
             1431      terms. [In group or blanket policies, the]
             1432          (b) A group or blanket accident and health insurance policy is in force during a grace
             1433      period.
             1434          (c) If an insurer does not receive payment before a grace period expires, the group or
             1435      blanket accident and health insurance policy is terminated as of the last day of the grace period.
             1436          (d) A group or blanket accident and health insurance policy may provide for payment
             1437      of a pro rata premium for the period the group or blanket accident and health insurance policy
             1438      is in effect during [the] a grace period under this Subsection (2).
             1439          (3) If [the] an insurer has not guaranteed the insured a right to renew an accident and
             1440      health insurance policy, [any] a grace period beyond the expiration or anniversary date may, if
             1441      provided in the accident and health insurance policy, be cut off by compliance with the notice
             1442      provision under Subsection 31A-21-303 (4)(b).
             1443          Section 9. Section 31A-22-610.6 is amended to read:
             1444           31A-22-610.6. Special enrollment for individuals receiving premium assistance.
             1445          (1) As used in this section:
             1446          (a) "Premium assistance" means assistance under Title 26, Chapter 18, Medical
             1447      Assistance Act, in the payment of premium.
             1448          (b) "Qualified beneficiary" means an individual who is approved to receive premium
             1449      assistance.
             1450          (2) Subject to the other provisions in this section, an individual may enroll under this
             1451      section at a time outside of an employer health benefit plan open enrollment period, regardless
             1452      of previously waiving coverage, if the individual is:
             1453          (a) a qualified beneficiary who is eligible for coverage as an employee under the
             1454      employer health benefit plan; or
             1455          (b) a dependent of the qualified beneficiary who is eligible for coverage under the
             1456      employer health benefit plan.
             1457          (3) To be eligible to enroll outside of an open enrollment period, an individual


             1458      described in Subsection (2) shall enroll in the employer health benefit plan by no later than 30
             1459      days from the day on which the qualified beneficiary receives initial written notification, after
             1460      July 1, 2008, that the qualified beneficiary is eligible to receive premium assistance.
             1461          (4) An individual described in Subsection (2) may enroll under this section only in an
             1462      employer health benefit plan that is available at the time of enrollment to similarly situated
             1463      eligible employees or dependents of eligible employees.
             1464          (5) Coverage under an employer health benefit plan for an individual described in
             1465      Subsection (2) may begin as soon as the first day of the month immediately following
             1466      enrollment of the individual in accordance with this section.
             1467          (6) This section does not modify any requirement related to premiums that applies
             1468      under an employer health benefit plan to a similarly situated eligible employee or dependent of
             1469      an eligible employee under the employer health benefit plan.
             1470          (7) An employer health benefit plan may require an individual described in Subsection
             1471      (2) to satisfy a preexisting condition waiting period that:
             1472          (a) is allowed under the Health Insurance Portability and Accountability Act [of 1996,
             1473      Pub. L. 104-191, 110 Stat. 1936]; and
             1474          (b) is not longer than 12 months.
             1475          Section 10. Section 31A-22-614.5 is amended to read:
             1476           31A-22-614.5. Uniform claims processing -- Electronic exchange of health
             1477      information.
             1478          (1) (a) Except as provided in Subsection (1)(c), all insurers offering health insurance
             1479      shall use a uniform claim form and uniform billing and claim codes.
             1480          (b) Beginning January 1, 2011, all health benefit plans, and dental and vision plans,
             1481      shall provide for the electronic exchange of uniform:
             1482          (i) eligibility and coverage information; and
             1483          (ii) coordination of benefits information.
             1484          (c) For purposes of Subsection (1)(a), "health insurance" does not include a policy or
             1485      certificate that provides benefits solely for:


             1486          (i) income replacement; or
             1487          (ii) long-term care.
             1488          (2) (a) The uniform electronic standards and information required in Subsection (1)
             1489      shall be adopted and approved by the commissioner in accordance with Title 63G, Chapter 3,
             1490      Utah Administrative Rulemaking Act.
             1491          (b) When adopting rules under this section the commissioner:
             1492          (i) shall:
             1493          (A) consult with national and state organizations involved with the standardized
             1494      exchange of health data, and the electronic exchange of health data, to develop the standards
             1495      for the use and electronic exchange of uniform:
             1496          (I) claim forms;
             1497          (II) billing and claim codes;
             1498          (III) insurance eligibility and coverage information; and
             1499          (IV) coordination of benefits information; and
             1500          (B) meet federal mandatory minimum standards following the adoption of national
             1501      requirements for transaction and data elements in the federal Health Insurance Portability and
             1502      Accountability Act [of 1996, Pub. L. 104-191, 110 Stat. 1936];
             1503          (ii) may not require an insurer or administrator to use a specific software product or
             1504      vendor; and
             1505          (iii) may require an insurer who participates in the all payer database created under
             1506      Section 26-33a-106.1 to allow data regarding demographic and insurance coverage information
             1507      to be electronically shared with the state's designated secure health information master person
             1508      index to be used:
             1509          (A) in compliance with data security standards established by:
             1510          (I) the federal Health Insurance Portability and Accountability Act [of 1996, Pub. L.
             1511      104-191, 110 Stat. 1936]; and
             1512          (II) the electronic commerce agreements established in a business associate agreement;
             1513      and


             1514          (B) for the purpose of coordination of health benefit plans.
             1515          (3) (a) The commissioner shall coordinate the administrative rules adopted under the
             1516      provisions of this section with the administrative rules adopted by the Department of Health for
             1517      the implementation of the standards for the electronic exchange of clinical health information
             1518      under Section 26-1-37 . The department shall establish procedures for developing the rules
             1519      adopted under this section, which ensure that the Department of Health is given the opportunity
             1520      to comment on proposed rules.
             1521          (b) (i) The commissioner may provide information to health care providers regarding
             1522      resources available to a health care provider to verify whether a health care provider's practice
             1523      management software system meets the uniform electronic standards for data exchange
             1524      required by this section.
             1525          (ii) The commissioner may provide the information described in Subsection (3)(b)(i)
             1526      by partnering with:
             1527          (A) a not-for-profit, broad based coalition of state health care insurers and health care
             1528      providers who are involved in the electronic exchange of the data required by this section; or
             1529          (B) some other person that the commissioner determines is appropriate to provide the
             1530      information described in Subsection (3)(b)(i).
             1531          (c) The commissioner shall regulate any fees charged by insurers to the providers for:
             1532          (i) uniform claim forms;
             1533          (ii) electronic billing; or
             1534          (iii) the electronic exchange of clinical health information permitted by Section
             1535      26-1-37 .
             1536          Section 11. Section 31A-22-618.5 is amended to read:
             1537           31A-22-618.5. Health benefit plan offerings.
             1538          (1) The purpose of this section is to increase the range of health benefit plans available
             1539      in the small group, small employer group, large group, and individual insurance markets.
             1540          (2) A health maintenance organization that is subject to Chapter 8, Health Maintenance
             1541      Organizations and Limited Health Plans:


             1542          (a) shall offer to potential purchasers at least one health benefit plan that is subject to
             1543      the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             1544      and
             1545          (b) may offer to a potential purchaser one or more health benefit plans that:
             1546          (i) are not subject to one or more of the following:
             1547          (A) the limitations on insured indemnity benefits in Subsection 31A-8-105 (4);
             1548          (B) the limitation on point of service products in Subsections 31A-8-408 (3) through
             1549      (6);
             1550          (C) except as provided in Subsection (2)(b)(ii), basic health care services as defined in
             1551      Section 31A-8-101 ; or
             1552          (D) coverage mandates enacted after January 1, 2009 that are not required by federal
             1553      law, provided that the insurer offers one plan under Subsection (2)(a) that covers the mandate
             1554      enacted after January 1, 2009; and
             1555          (ii) when offering a health plan under this section, provide coverage for an emergency
             1556      medical condition as required by Section 31A-22-627 as follows:
             1557          (A) within the organization's service area, covered services shall include health care
             1558      services from non-affiliated providers when medically necessary to stabilize an emergency
             1559      medical condition; and
             1560          (B) outside the organization's service area, covered services shall include medically
             1561      necessary health care services for the treatment of an emergency medical condition that are
             1562      immediately required while the enrollee is outside the geographic limits of the organization's
             1563      service area.
             1564          (3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
             1565      Maintenance Organizations and Limited Health Plans:
             1566          (a) notwithstanding Subsection 31A-22-617 (2), may offer a health benefit plan that
             1567      groups providers into the following reimbursement levels:
             1568          (i) tier one contracted providers;
             1569          (ii) tier two contracted providers who the insurer must reimburse at least 75% of tier


             1570      one providers; and
             1571          (iii) one or more tiers of non-contracted providers; [and]
             1572          (b) notwithstanding Subsection 31A-22-617 (9) may offer a health benefit plan that is
             1573      not subject to Section 31A-22-618 ;
             1574          (c) beginning July 1, 2012, may offer [products under Subsection (3)(a)] health benefit
             1575      plans that:
             1576          (i) are not subject to Subsection 31A-22-617 (2); and
             1577          (ii) are subject to the reimbursement requirements in Section 31A-8-501 ;
             1578          (d) when offering a health plan under this Subsection (3), shall provide coverage of
             1579      emergency care services as required by Section 31A-22-627 by providing coverage at a
             1580      reimbursement level of at least 75% of [tier one providers] the health benefit plan's highest
             1581      contracted provider category; and
             1582          (e) are not subject to coverage mandates enacted after January 1, 2009 that are not
             1583      required by federal law, provided that an insurer offers one plan that covers a mandate enacted
             1584      after January 1, 2009.
             1585          (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
             1586      Subsection (2)(b).
             1587          (5) (a) Any difference in price between a health benefit plan offered under Subsections
             1588      (2)(a) and (b) shall be based on actuarially sound data.
             1589          (b) Any difference in price between a health benefit plan offered under Subsections
             1590      (3)(a) and (b) shall be based on actuarially sound data.
             1591          (6) Nothing in this section limits the number of health benefit plans that an insurer may
             1592      offer.
             1593          Section 12. Section 31A-22-625 is amended to read:
             1594           31A-22-625. Catastrophic coverage of mental health conditions.
             1595          (1) As used in this section:
             1596          (a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
             1597      that does not impose a lifetime limit, annual payment limit, episodic limit, inpatient or


             1598      outpatient service limit, or maximum out-of-pocket limit that places a greater financial burden
             1599      on an insured for the evaluation and treatment of a mental health condition than for the
             1600      evaluation and treatment of a physical health condition.
             1601          (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
             1602      factors, such as deductibles, copayments, or coinsurance, before reaching a maximum
             1603      out-of-pocket limit.
             1604          (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
             1605      limit for physical health conditions and another maximum out-of-pocket limit for mental health
             1606      conditions, except that if separate out-of-pocket limits are established, the out-of-pocket limit
             1607      for mental health conditions may not exceed the out-of-pocket limit for physical health
             1608      conditions.
             1609          (b) (i) "50/50 mental health coverage" means coverage in a health benefit plan that
             1610      pays for at least 50% of covered services for the diagnosis and treatment of mental health
             1611      conditions.
             1612          (ii) "50/50 mental health coverage" may include a restriction on:
             1613          (A) episodic limits;
             1614          (B) inpatient or outpatient service limits; or
             1615          (C) maximum out-of-pocket limits.
             1616          (c) "Large employer" is as defined in 42 U.S.C. Sec. 300gg-91.
             1617          (d) (i) "Mental health condition" means a condition or disorder involving mental illness
             1618      that falls under a diagnostic category listed in the Diagnostic and Statistical Manual, as
             1619      periodically revised.
             1620          (ii) "Mental health condition" does not include the following when diagnosed as the
             1621      primary or substantial reason or need for treatment:
             1622          (A) a marital or family problem;
             1623          (B) a social, occupational, religious, or other social maladjustment;
             1624          (C) a conduct disorder;
             1625          (D) a chronic adjustment disorder;


             1626          (E) a psychosexual disorder;
             1627          (F) a chronic organic brain syndrome;
             1628          (G) a personality disorder;
             1629          (H) a specific developmental disorder or learning disability; or
             1630          (I) mental retardation.
             1631          (e) "Small employer" is as defined in 42 U.S.C. Sec. 300gg-91.
             1632          (2) (a) At the time of purchase and renewal, an insurer shall offer to a small employer
             1633      that it insures or seeks to insure a choice between catastrophic mental health coverage and
             1634      50/50 mental health coverage.
             1635          (b) In addition to complying with Subsection (2)(a), an insurer may offer to provide:
             1636          (i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
             1637      that exceed the minimum requirements of this section; or
             1638          (ii) coverage that excludes benefits for mental health conditions.
             1639          (c) A small employer may, at its option, choose either catastrophic mental health
             1640      coverage, 50/50 mental health coverage, or coverage offered under Subsection (2)(b),
             1641      regardless of the employer's previous coverage for mental health conditions.
             1642          (d) An insurer is exempt from the 30% index rating restriction in Section
             1643      31A-30-106.1 and, for the first year only that catastrophic mental health coverage is chosen, the
             1644      15% annual adjustment restriction in Section 31A-30-106.1 , for any small employer with 20 or
             1645      less enrolled employees who chooses coverage that meets or exceeds catastrophic mental
             1646      health coverage.
             1647          (3) An insurer shall offer a large employer mental health and substance use disorder
             1648      benefit in compliance with Section 2705 of the Public Health Service Act, 42 U.S.C. Sec.
             1649      [300gg-5] 300gg-26, and federal regulations adopted pursuant to that act.
             1650          (4) (a) An insurer may provide catastrophic mental health coverage to a small employer
             1651      through a managed care organization or system in a manner consistent with Chapter 8, Health
             1652      Maintenance Organizations and Limited Health Plans, regardless of whether the insurance
             1653      policy uses a managed care organization or system for the treatment of physical health


             1654      conditions.
             1655          (b) (i) Notwithstanding any other provision of this title, an insurer may:
             1656          (A) establish a closed panel of providers for catastrophic mental health coverage; and
             1657          (B) refuse to provide a benefit to be paid for services rendered by a nonpanel provider
             1658      unless:
             1659          (I) the insured is referred to a nonpanel provider with the prior authorization of the
             1660      insurer; and
             1661          (II) the nonpanel provider agrees to follow the insurer's protocols and treatment
             1662      guidelines.
             1663          (ii) If an insured receives services from a nonpanel provider in the manner permitted by
             1664      Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
             1665      average amount paid by the insurer for comparable services of panel providers under a
             1666      noncapitated arrangement who are members of the same class of health care providers.
             1667          (iii) This Subsection (4)(b) may not be construed as requiring an insurer to authorize a
             1668      referral to a nonpanel provider.
             1669          (c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
             1670      mental health condition must be rendered:
             1671          (i) by a mental health therapist as defined in Section 58-60-102 ; or
             1672          (ii) in a health care facility:
             1673          (A) licensed or otherwise authorized to provide mental health services pursuant to:
             1674          (I) Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act; or
             1675          (II) Title 62A, Chapter 2, Licensure of Programs and Facilities; and
             1676          (B) that provides a program for the treatment of a mental health condition pursuant to a
             1677      written plan.
             1678          (5) The commissioner may prohibit an insurance policy that provides mental health
             1679      coverage in a manner that is inconsistent with this section.
             1680          (6) The commissioner shall:
             1681          (a) adopt rules, in accordance with Title 63G, Chapter 3, Utah Administrative


             1682      Rulemaking Act, as necessary to ensure compliance with this section; and
             1683          (b) provide general figures on the percentage of insurance policies that include:
             1684          (i) no mental health coverage;
             1685          (ii) 50/50 mental health coverage;
             1686          (iii) catastrophic mental health coverage; and
             1687          (iv) coverage that exceeds the minimum requirements of this section.
             1688          (7) This section may not be construed as discouraging or otherwise preventing an
             1689      insurer from providing mental health coverage in connection with an individual insurance
             1690      policy.
             1691          (8) This section shall be repealed in accordance with Section 63I-1-231 .
             1692          Section 13. Section 31A-22-701 is amended to read:
             1693           31A-22-701. Groups eligible for group or blanket insurance.
             1694          (1) As used in this section, "association group" means a lawfully formed association of
             1695      individuals or business entities that:
             1696          (a) purchases insurance on a group basis on behalf of members; and
             1697          (b) is formed and maintained in good faith for purposes other than obtaining insurance.
             1698          (2) A group [or blanket] accident and health insurance policy may be issued to:
             1699          (a) a group:
             1700          (i) to which a group life insurance policy may be issued under Sections 31A-22-502 ,
             1701      31A-22-503 , 31A-22-504 , 31A-22-506 , 31A-22-507 , and 31A-22-509 ; and
             1702          (ii) that is formed [for a reason other than the purchase of insurance] and maintained in
             1703      good faith for a purpose other than obtaining insurance;
             1704          (b) an association group that:
             1705          (i) has been actively in existence for at least five years;
             1706          (ii) has a constitution and bylaws;
             1707          (iii) is formed and maintained in good faith for purposes other than obtaining
             1708      insurance;
             1709          (iv) does not condition membership in the association group on any health


             1710      status-related factor relating to an individual, including an employee of an employer or a
             1711      dependent of an employee;
             1712          (v) makes accident and health insurance coverage offered through the association
             1713      group available to all members regardless of any health status-related factor relating to the
             1714      members or individuals eligible for coverage through a member; [and]
             1715          (vi) does not make accident and health insurance coverage offered through the
             1716      association group available other than in connection with a member of the association group;
             1717      [or] and
             1718          (vii) is actuarially sound; or
             1719          (c) a group specifically authorized by the commissioner under Section 31A-22-509 ,
             1720      upon a finding that:
             1721          (i) authorization is not contrary to the public interest;
             1722          (ii) the [proposed] group is actuarially sound;
             1723          (iii) formation of the proposed group may result in economies of scale in acquisition,
             1724      administrative, marketing, and brokerage costs;
             1725          (iv) the insurance policy, insurance certificate, or other indicia of coverage that will be
             1726      offered to the proposed group is substantially equivalent to insurance policies that are
             1727      otherwise available to similar groups;
             1728          (v) the group would not present hazards of adverse selection; [and]
             1729          (vi) the premiums for the insurance policy and any contributions by or on behalf of the
             1730      insured persons are reasonable in relation to the benefits provided[.]; and
             1731          (vii) the group is formed and maintained in good faith for a purpose other than
             1732      obtaining insurance.
             1733          (3) A blanket accident and health insurance policy:
             1734          (a) covers a defined class of persons;
             1735          (b) may not be offered or underwritten on an individual basis;
             1736          (c) shall cover only a group that is:
             1737          (i) actuarially sound; and


             1738          (ii) formed and maintained in good faith for a purpose other than obtaining insurance;
             1739      and
             1740          (d) may [also] be issued only to:
             1741          [(a)] (i) a common carrier or an operator, owner, or lessee of a means of transportation,
             1742      as policyholder, covering persons who may become passengers as defined by reference to
             1743      [their] the person's travel status;
             1744          [(b)] (ii) an employer, as policyholder, covering any group of employees, dependents,
             1745      or guests, as defined by reference to specified hazards incident to any activities of the
             1746      policyholder;
             1747          [(c)] (iii) an institution of learning, including a school district, a school jurisdictional
             1748      [units] unit, or the head, principal, or governing board of [any of those units] a school
             1749      jurisdictional unit, as policyholder, covering students, teachers, or employees;
             1750          [(d)] (iv) a religious, charitable, recreational, educational, or civic organization, or
             1751      branch of one of those organizations, as policyholder, covering [any] a group of members or
             1752      participants as defined by reference to specified hazards incident to the activities sponsored or
             1753      supervised by the policyholder;
             1754          [(e)] (v) a sports team, camp, or sponsor of [the] a sports team or camp, as
             1755      policyholder, covering members, campers, employees, officials, or supervisors;
             1756          [(f)] (vi) a volunteer fire department, first aid, civil defense, or other similar volunteer
             1757      organization, as policyholder, covering [any] a group of members or participants as defined by
             1758      reference to specified hazards incident to activities sponsored, supervised, or participated in by
             1759      the policyholder;
             1760          [(g)] (vii) a newspaper or other publisher, as policyholder, covering its carriers;
             1761          [(h)] (viii) an association, including a labor union, [which] that has a constitution and
             1762      bylaws and [which has been] that is organized in good faith for purposes other than that of
             1763      obtaining insurance, as policyholder, covering [any] a group of members or participants as
             1764      defined by reference to specified hazards incident to the activities or operations sponsored or
             1765      supervised by the policyholder; and


             1766          [(i) a health insurance purchasing association, as defined in Section 31A-34-103 ,
             1767      organized and controlled solely by participating employers; and]
             1768          [(j)] (ix) any other class of risks that, in the judgment of the commissioner, may be
             1769      properly eligible for blanket accident and health insurance.
             1770          (4) The judgment of the commissioner may be exercised on the basis of:
             1771          (a) individual risks;
             1772          (b) a class of risks; or
             1773          (c) both Subsections (4)(a) and (b).
             1774          Section 14. Section 31A-22-716 is amended to read:
             1775           31A-22-716. Required provision for notice of termination.
             1776          (1) Every policy for group or blanket accident and health coverage issued or renewed
             1777      after July 1, 1990, shall include a provision that obligates the policyholder to give 30 days prior
             1778      written notice of termination to each employee or group member and to notify each employee
             1779      or group member of his rights to continue coverage upon termination.
             1780          (2) An insurer's monthly notice to the policyholder of premium payments due shall
             1781      include a statement of the policyholder's obligations as set forth in Subsection (1). Insurers
             1782      shall provide a sample notice to the policyholder at least once a year.
             1783          (3) For the purpose of compliance with federal law and the Health Insurance Portability
             1784      and Accountability Act[, P.L. No. 104-191, 110 Stat. 1960], all health benefit plans, health
             1785      insurers, and student health plans must provide a certificate of creditable coverage to each
             1786      covered person upon the person's termination from the plan as soon as reasonably possible.
             1787          Section 15. Section 31A-22-721 is amended to read:
             1788           31A-22-721. A health benefit plan for a plan sponsor -- Discontinuance and
             1789      nonrenewal.
             1790          (1) Except as otherwise provided in this section, a health benefit plan for a plan
             1791      sponsor is renewable and continues in force:
             1792          (a) with respect to all eligible employees and dependents; and
             1793          (b) at the option of the plan sponsor.


             1794          (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
             1795          (a) for a network plan, if:
             1796          (i) there is no longer any enrollee under the group health plan who lives, resides, or
             1797      works in:
             1798          (A) the service area of the insurer; or
             1799          (B) the area for which the insurer is authorized to do business; and
             1800          (ii) in the case of the small employer market, the insurer applies the same criteria the
             1801      insurer would apply in denying enrollment in the plan under Subsection 31A-30-108 (7); or
             1802          (b) for coverage made available in the small or large employer market only through an
             1803      association, if:
             1804          (i) the employer's membership in the association ceases; and
             1805          (ii) the coverage is terminated uniformly without regard to any health status-related
             1806      factor relating to any covered individual.
             1807          (3) A health benefit plan for a plan sponsor may be discontinued if:
             1808          (a) a condition described in Subsection (2) exists;
             1809          (b) the plan sponsor fails to pay premiums or contributions in accordance with the
             1810      terms of the contract;
             1811          (c) the plan sponsor:
             1812          (i) performs an act or practice that constitutes fraud; or
             1813          (ii) makes an intentional misrepresentation of material fact under the terms of the
             1814      coverage;
             1815          (d) the insurer:
             1816          (i) elects to discontinue offering a particular health benefit product delivered or issued
             1817      for delivery in this state;
             1818          (ii) (A) provides notice of the discontinuation in writing:
             1819          (I) to each plan sponsor, employee, and dependent of a plan sponsor or employee; and
             1820          (II) at least 90 days before the date the coverage will be discontinued;
             1821          (B) provides notice of the discontinuation in writing:


             1822          (I) to the commissioner; and
             1823          (II) at least three working days prior to the date the notice is sent to the affected plan
             1824      sponsors, employees, and dependents of plan sponsors or employees;
             1825          (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase any
             1826      other health benefit products currently being offered:
             1827          (I) by the insurer in the market; or
             1828          (II) in the case of a large employer, any other health benefit plan currently being
             1829      offered in that market; and
             1830          (D) in exercising the option to discontinue that product and in offering the option of
             1831      coverage in this section, the insurer acts uniformly without regard to:
             1832          (I) the claims experience of a plan sponsor;
             1833          (II) any health status-related factor relating to any covered participant or beneficiary; or
             1834          (III) any health status-related factor relating to a new participant or beneficiary who
             1835      may become eligible for coverage; or
             1836          (e) the insurer:
             1837          (i) elects to discontinue all of the insurer's health benefit plans:
             1838          (A) in the small employer market; or
             1839          (B) the large employer market; or
             1840          (C) both the small and large employer markets; and
             1841          (ii) (A) provides notice of the discontinuance in writing:
             1842          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             1843          (II) at least 180 days before the date the coverage will be discontinued;
             1844          (B) provides notice of the discontinuation in writing:
             1845          (I) to the commissioner in each state in which an affected insured individual is known
             1846      to reside; and
             1847          (II) at least 30 business days prior to the date the notice is sent to the affected plan
             1848      sponsors, employees, and dependents of a plan sponsor or employee;
             1849          (C) discontinues and nonrenews all plans issued or delivered for issuance in the


             1850      market; and
             1851          (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
             1852          (4) A large employer health benefit plan may be discontinued or nonrenewed:
             1853          (a) if a condition described in Subsection (2) exists; or
             1854          (b) for noncompliance with the insurer's:
             1855          (i) minimum participation requirements; or
             1856          (ii) employer contribution requirements.
             1857          (5) A small employer health benefit plan may be discontinued or nonrenewed:
             1858          (a) if a condition described in Subsection (2) exists; or
             1859          (b) for noncompliance with the insurer's employer contribution requirements.
             1860          (6) A small employer health benefit plan may be nonrenewed:
             1861          (a) if a condition described in Subsection (2) exists; or
             1862          (b) for noncompliance with the insurer's minimum participation requirements.
             1863          (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
             1864      discontinued if after issuance of coverage the eligible employee:
             1865          (i) engages in an act or practice that constitutes fraud in connection with the coverage;
             1866      or
             1867          (ii) makes an intentional misrepresentation of material fact in connection with the
             1868      coverage.
             1869          (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
             1870          (i) 12 months after the date of discontinuance; and
             1871          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
             1872      to reenroll.
             1873          (c) At the time the eligible employee's coverage is discontinued under Subsection
             1874      (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
             1875      discontinued.
             1876          (d) An eligible employee may not be discontinued under this Subsection (7) because of
             1877      a fraud or misrepresentation that relates to health status.


             1878          (8) (a) Except as provided in Subsection (8)(b), an insurer that elects to discontinue
             1879      offering a health benefit plan under Subsection (3)(e) shall be prohibited from writing new
             1880      business in such market in this state for a period of five years beginning on the date of
             1881      discontinuation of the last coverage that is discontinued.
             1882          (b) The commissioner may waive the prohibition under Subsection (8)(a) when the
             1883      commissioner finds that waiver is in the public interest:
             1884          (i) to promote competition; or
             1885          (ii) to resolve inequity in the marketplace.
             1886          (9) If an insurer is doing business in one established geographic service area of the
             1887      state, this section applies only to the insurer's operations in that geographic service area.
             1888          (10) An insurer may modify a health benefit plan for a plan sponsor only:
             1889          (a) at the time of coverage renewal; and
             1890          (b) if the modification is effective uniformly among all plans with a particular product
             1891      or service.
             1892          (11) For purposes of this section, a reference to "plan sponsor" includes a reference to
             1893      the employer:
             1894          (a) with respect to coverage provided to an employer member of the association; and
             1895          (b) if the health benefit plan is made available by an insurer in the employer market
             1896      only through:
             1897          (i) an association;
             1898          (ii) a trust; or
             1899          (iii) a discretionary group.
             1900          (12) (a) A small employer that, after purchasing a health benefit plan in the small group
             1901      market, employs on average more than 50 eligible employees on each business day in a
             1902      calendar year may continue to renew the health benefit plan purchased in the small group
             1903      market.
             1904          (b) A large employer that, after purchasing a health benefit plan in the large group
             1905      market, employs on average less than 51 eligible employees on each business day in a calendar


             1906      year may continue to renew the health benefit plan purchased in the large group market.
             1907          (13) An insurer offering employer sponsored health benefit plans shall comply with the
             1908      Health Insurance Portability and Accountability Act, [P. L. 104-191, 110 Stat. 1962, Sec. 2701
             1909      and 2702] 42 U.S.C. Sec. 300gg and 300gg-1.
             1910          Section 16. Section 31A-22-723 is amended to read:
             1911           31A-22-723. Conversion from group coverage.
             1912          (1) Notwithstanding Subsection 31A-1-103 (3)(f), and except as provided in Subsection
             1913      (3), [all policies] a policy of accident and health insurance offered on a group basis under this
             1914      title, or Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act, shall
             1915      provide that a person whose insurance under the group policy has been terminated is entitled to
             1916      choose a converted individual policy in accordance with this section and Section 31A-22-724 .
             1917          (2) A person who has lost group coverage may elect conversion coverage with the
             1918      insurer that provided prior group coverage if the person:
             1919          (a) has been continuously covered for a period of three months by the group policy or
             1920      the group's preceding policies immediately prior to termination;
             1921          (b) has exhausted either:
             1922          (i) Utah mini-COBRA coverage as required in Section 31A-22-722 ;
             1923          (ii) federal COBRA coverage; or
             1924          (iii) alternative coverage under Section 31A-22-724 ;
             1925          (c) has not acquired or is not covered under any other group coverage that covers [all]
             1926      preexisting conditions, including maternity, if the coverage exists; and
             1927          (d) resides in the insurer's service area.
             1928          (3) This section does not apply if the person's prior group coverage:
             1929          (a) is a stand alone policy that only provides one of the following:
             1930          (i) catastrophic benefits;
             1931          (ii) aggregate stop loss benefits;
             1932          (iii) specific stop loss benefits;
             1933          (iv) benefits for specific diseases;


             1934          (v) accidental injuries only;
             1935          (vi) dental; or
             1936          (vii) vision;
             1937          (b) is an income replacement policy;
             1938          (c) was terminated because the insured:
             1939          (i) failed to pay any required individual contribution;
             1940          (ii) performed an act or practice that constitutes fraud in connection with the coverage;
             1941      or
             1942          (iii) made intentional misrepresentation of material fact under the terms of coverage; or
             1943          (d) was terminated pursuant to Subsection 31A-8-402.3 (2)(a), 31A-22-721 (2)(a), or
             1944      31A-30-107 (2)(a).
             1945          (4) (a) The [employer] insurer shall provide written notification of the right to an
             1946      individual conversion policy within 30 days of the insurer receiving notice of, the insured's
             1947      termination of COBRA or Utah mini-COBRA coverage to:
             1948          (i) the terminated insured;
             1949          (ii) the ex-spouse; or
             1950          (iii) in the case of the death of the insured:
             1951          (A) the surviving spouse; and
             1952          (B) the guardian of any dependents, if different from a surviving spouse.
             1953          (b) The notification required by Subsection (4)(a) shall:
             1954          (i) be sent by first class mail;
             1955          (ii) contain the name, address, and telephone number of the insurer that will provide
             1956      the conversion coverage; and
             1957          (iii) be sent to the insured's last-known address as shown on the records of the
             1958      employer of:
             1959          (A) the insured;
             1960          (B) the ex-spouse; and
             1961          (C) if the policy terminates by reason of the death of the insured to:


             1962          (I) the surviving spouse; and
             1963          (II) the guardian of any dependents, if different from a surviving spouse.
             1964          (5) (a) An insurer is not required to issue a converted policy [which] that provides
             1965      benefits in excess of those provided under the group policy from which conversion is made.
             1966          (b) Except as provided in Subsection (5)(c), if the conversion is made from a health
             1967      benefit plan, the employee or member shall be offered[: (i) at least the basic benefit plan as
             1968      provided in Section 31A-22-613.5 through December 31, 2009; and (ii) beginning January 1,
             1969      2010, only] the alternative coverage as provided in Subsection 31A-22-724 (1)(a).
             1970          (c) If the benefit levels required under Subsection (5)(b) exceed the benefit levels
             1971      provided under the group policy, the conversion policy may offer benefits [which] that are
             1972      substantially similar to those provided under the group policy.
             1973          (6) Written application for [the] a converted policy shall be made and the first premium
             1974      paid to the insurer no later than [60] 30 days after [termination of the group accident and health
             1975      insurance] the date of notice under Subsection (4)(a).
             1976          (7) [The] A converted policy shall be issued without evidence of insurability.
             1977          (8) (a) The initial premium for the converted policy for the first 12 months and
             1978      subsequent renewal premiums shall be determined in accordance with premium rates
             1979      applicable to age, class of risk of the person, and the type and amount of insurance provided.
             1980          (b) The initial premium for the first 12 months may not be raised based on pregnancy
             1981      of a covered insured.
             1982          (c) The premium for converted policies shall be payable monthly or quarterly as
             1983      required by the insurer for the policy form and plan selected, unless another mode or premium
             1984      payment is mutually agreed upon.
             1985          (9) [The] A converted policy becomes effective at the time the insurance under the
             1986      group policy terminates.
             1987          (10) (a) A newly issued converted policy covers the employee or the member and must
             1988      also cover [all] dependents covered by the group policy at the date of termination of the group
             1989      coverage.


             1990          (b) The only dependents that may be added after the policy has been issued are children
             1991      and dependents as required by Section 31A-22-610 and Subsections 31A-22-610.5 (6) and (7).
             1992          (c) At the option of the insurer, a separate converted policy may be issued to cover
             1993      [any] a dependent.
             1994          (11) (a) To the extent [the] a group policy provided maternity benefits, [the] a
             1995      conversion policy shall provide maternity benefits equal to the lesser of the maternity benefits
             1996      of the group policy or the conversion policy until termination of a pregnancy that exists on the
             1997      date of conversion if one of the following is pregnant on the date of the conversion:
             1998          (i) the insured;
             1999          (ii) a spouse of the insured; or
             2000          (iii) a dependent of the insured.
             2001          (b) [The requirements of this] This Subsection (11) [do] does not apply to a pregnancy
             2002      that occurs after the date of conversion.
             2003          (12) Except as provided in this Subsection (12), a converted policy is renewable with
             2004      respect to [all individuals or dependents] an individual or dependent at the option of the
             2005      insured. An insured may be terminated from a converted policy for the following reasons:
             2006          (a) a dependent is no longer eligible under the converted policy;
             2007          (b) for a network plan, if the individual no longer lives, resides, or works in:
             2008          (i) the insured's service area; or
             2009          (ii) the area for which the covered carrier is authorized to do business;
             2010          (c) the individual fails to pay premiums or contributions in accordance with the terms
             2011      of the converted policy, including any timeliness requirements;
             2012          (d) the individual performs an act or practice that constitutes fraud in connection with
             2013      the coverage;
             2014          (e) the individual makes an intentional misrepresentation of material fact under the
             2015      terms of the coverage; or
             2016          (f) coverage is terminated uniformly without regard to any health status-related factor
             2017      relating to any covered individual.


             2018          (13) Conditions pertaining to health may not be used as a basis for classification under
             2019      this section.
             2020          (14) An insurer is only required to offer a conversion policy that complies with
             2021      Subsection 31A-22-724 (1)(b) and, notwithstanding Sections 31A-8-402.5 and 31A-30-107.1 ,
             2022      may discontinue any other conversion policy if:
             2023          (a) the discontinued conversion policy is discontinued uniformly without regard to
             2024      [any] a health related factor;
             2025          (b) [any affected] an affected individual is provided with 90 days' advanced written
             2026      notice of the discontinuation of the existing conversion policy;
             2027          (c) the [policy holder] policyholder is offered the insurer's conversion policy that
             2028      complies with Subsection 31A-22-724 (1)(b); and
             2029          (d) the [policy holder] policyholder is not re-rated for purposes of premium calculation.
             2030          (15) This section does not apply to a blanket accident and health insurance policy
             2031      issued under Section 31A-22-701 .
             2032          Section 17. Section 31A-23a-102 is amended to read:
             2033           31A-23a-102. Definitions.
             2034          As used in this chapter:
             2035          (1) "Bail bond producer" means a person who:
             2036          (a) is appointed by:
             2037          (i) a surety insurer that issues bail bonds; or
             2038          (ii) a bail bond surety company licensed under Chapter 35, Bail Bond Act;
             2039          (b) is designated to execute or countersign undertakings of bail in connection with a
             2040      judicial proceeding; and
             2041          (c) receives or is promised money or other things of value for engaging in an act
             2042      described in Subsection (1)(b).
             2043          (2) "Escrow" means a license subline of authority in conjunction with the title
             2044      insurance line of authority that allows a person to conduct escrow as defined in Section
             2045      31A-1-301 .


             2046          (3) "Home state" means a state or territory of the United States or the District of
             2047      Columbia in which an insurance producer:
             2048          (a) maintains the insurance producer's principal:
             2049          (i) place of residence; or
             2050          (ii) place of business; and
             2051          (b) is licensed to act as an insurance producer.
             2052          (4) "Insurer" is as defined in Section 31A-1-301 , except that the following persons or
             2053      similar persons are not insurers for purposes of Part 7, Producer Controlled Insurers:
             2054          (a) a risk retention group as defined in:
             2055          (i) the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499;
             2056          (ii) the Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.; and
             2057          (iii) Chapter 15, Part 2, Risk Retention Groups Act;
             2058          (b) a residual market pool;
             2059          (c) a joint underwriting authority or association; and
             2060          (d) a captive insurer.
             2061          (5) "License" is defined in Section 31A-1-301 .
             2062          (6) (a) "Managing general agent" means a person that:
             2063          (i) manages all or part of the insurance business of an insurer, including the
             2064      management of a separate division, department, or underwriting office;
             2065          (ii) acts as an agent for the insurer whether it is known as a managing general agent,
             2066      manager, or other similar term;
             2067          (iii) produces and underwrites an amount of gross direct written premium equal to, or
             2068      more than 5% of, the policyholder surplus as reported in the last annual statement of the insurer
             2069      in any one quarter or year:
             2070          (A) with or without the authority;
             2071          (B) separately or together with an affiliate; and
             2072          (C) directly or indirectly; and
             2073          (iv) (A) adjusts or pays claims in excess of an amount determined by the


             2074      commissioner; or
             2075          (B) negotiates reinsurance on behalf of the insurer.
             2076          (b) Notwithstanding Subsection (6)(a), the following persons may not be considered as
             2077      managing general agent for the purposes of this chapter:
             2078          (i) an employee of the insurer;
             2079          (ii) a United States manager of the United States branch of an alien insurer;
             2080          (iii) an underwriting manager that, pursuant to contract:
             2081          (A) manages all the insurance operations of the insurer;
             2082          (B) is under common control with the insurer;
             2083          (C) is subject to Chapter 16, Insurance Holding Companies; and
             2084          (D) is not compensated based on the volume of premiums written; and
             2085          (iv) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal
             2086      insurer or inter-insurance exchange under powers of attorney.
             2087          (7) "Negotiate" means the act of conferring directly with or offering advice directly to a
             2088      purchaser or prospective purchaser of a particular contract of insurance concerning a
             2089      substantive benefit, term, or condition of the contract if the person engaged in that act:
             2090          (a) sells insurance; or
             2091          (b) obtains insurance from insurers for purchasers.
             2092          (8) "Reinsurance intermediary" means:
             2093          (a) a reinsurance intermediary-broker; or
             2094          (b) a reinsurance intermediary-manager.
             2095          (9) "Reinsurance intermediary-broker" means a person other than an officer or
             2096      employee of the ceding insurer, firm, association, or corporation who solicits, negotiates, or
             2097      places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority
             2098      or power to bind reinsurance on behalf of the insurer.
             2099          (10) (a) "Reinsurance intermediary-manager" means a person who:
             2100          (i) has authority to bind or who manages all or part of the assumed reinsurance
             2101      business of a reinsurer, including the management of a separate division, department, or


             2102      underwriting office; and
             2103          (ii) acts as an agent for the reinsurer whether the person is known as a reinsurance
             2104      intermediary-manager, manager, or other similar term.
             2105          (b) Notwithstanding Subsection (10)(a), the following persons may not be considered
             2106      reinsurance intermediary-managers for the purpose of this chapter with respect to the reinsurer:
             2107          (i) an employee of the reinsurer;
             2108          (ii) a United States manager of the United States branch of an alien reinsurer;
             2109          (iii) an underwriting manager that, pursuant to contract:
             2110          (A) manages all the reinsurance operations of the reinsurer;
             2111          (B) is under common control with the reinsurer;
             2112          (C) is subject to Chapter 16, Insurance Holding Companies; and
             2113          (D) is not compensated based on the volume of premiums written; and
             2114          (iv) the manager of a group, association, pool, or organization of insurers that:
             2115          (A) engage in joint underwriting or joint reinsurance; and
             2116          (B) are subject to examination by the insurance commissioner of the state in which the
             2117      manager's principal business office is located.
             2118          (11) "Search" means a license subline of authority in conjunction with the title
             2119      insurance line of authority that allows a person to issue title insurance commitments or policies
             2120      on behalf of a title insurer.
             2121          (12) "Sell" means to exchange a contract of insurance:
             2122          (a) by any means;
             2123          (b) for money or its equivalent; and
             2124          (c) on behalf of an insurance company.
             2125          (13) "Solicit" means:
             2126          (a) attempting to sell insurance;
             2127          (b) asking or urging a person to apply for:
             2128          (i) a particular kind of insurance; and
             2129          (ii) insurance from a particular insurance company;


             2130          (c) advertising insurance, including advertising for the purpose of obtaining leads for
             2131      the sale of insurance; or
             2132          (d) holding oneself out as being in the insurance business.
             2133          (14) "Terminate" means:
             2134          (a) the cancellation of the relationship between:
             2135          (i) an individual licensee or agency licensee and a particular insurer; or
             2136          (ii) an individual licensee and a particular agency licensee; or
             2137          (b) the termination of:
             2138          (i) an individual licensee's or agency licensee's authority to transact insurance on behalf
             2139      of a particular insurance company; or
             2140          (ii) an individual licensee's authority to transact insurance on behalf of a particular
             2141      agency licensee.
             2142          (15) "Title marketing representative" means a person who:
             2143          (a) represents a title insurer in soliciting, requesting, or negotiating the placing of:
             2144          (i) title insurance; or
             2145          (ii) escrow services; and
             2146          (b) does not have a search or escrow license as provided in Section 31A-23a-106 .
             2147          (16) "Uniform application" means the version of the National Association of Insurance
             2148      [Commissioner's] Commissioners' uniform application for resident and nonresident producer
             2149      licensing at the time the application is filed.
             2150          (17) "Uniform business entity application" means the version of the National
             2151      Association of Insurance [Commissioner's] Commissioners' uniform business entity application
             2152      for resident and nonresident business entities at the time the application is filed.
             2153          Section 18. Section 31A-23a-106 is amended to read:
             2154           31A-23a-106. License types.
             2155          (1) (a) A resident or nonresident license issued under this chapter shall be issued under
             2156      the license types described under Subsection (2).
             2157          (b) A license type and a line of authority pertaining to a license type describe the type


             2158      of licensee and the lines of business that a licensee may sell, solicit, or negotiate. A license type
             2159      is intended to describe the matters to be considered under any education, examination, and
             2160      training required of a license applicant under Sections 31A-23a-108 , 31A-23a-202 , and
             2161      31A-23a-203 .
             2162          (2) (a) A producer license type includes the following lines of authority:
             2163          (i) life insurance, including a nonvariable contract;
             2164          (ii) variable contracts, including variable life and annuity, if the producer has the life
             2165      insurance line of authority;
             2166          (iii) accident and health insurance, including a contract issued to a policyholder under
             2167      Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
             2168      Organizations and Limited Health Plans;
             2169          (iv) property insurance;
             2170          (v) casualty insurance, including a surety or other bond;
             2171          (vi) title insurance under one or more of the following categories:
             2172          (A) search, including authority to act as a title marketing representative;
             2173          (B) escrow, including authority to act as a title marketing representative; and
             2174          (C) title marketing representative only;
             2175          (vii) personal lines insurance; and
             2176          (viii) surplus lines, if the producer has the property or casualty or both lines of
             2177      authority.
             2178          (b) A limited line producer license type includes the following limited lines of
             2179      authority:
             2180          (i) limited line credit insurance;
             2181          (ii) travel insurance;
             2182          (iii) motor club insurance;
             2183          (iv) car rental related insurance;
             2184          (v) legal expense insurance;
             2185          (vi) crop insurance;


             2186          (vii) self-service storage insurance; [and]
             2187          (viii) bail bond producer[.]; and
             2188          (ix) guaranteed asset protection waiver.
             2189          (c) A customer service representative license type includes the following lines of
             2190      authority, if held by the customer service representative's employer producer:
             2191          (i) life insurance, including a nonvariable contract;
             2192          (ii) accident and health insurance, including a contract issued to a policyholder under
             2193      Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
             2194      Organizations and Limited Health Plans;
             2195          (iii) property insurance;
             2196          (iv) casualty insurance, including a surety or other bond;
             2197          (v) personal lines insurance; and
             2198          (vi) surplus lines, if the employer producer has the property or casualty or both lines of
             2199      authority.
             2200          (d) A consultant license type includes the following lines of authority:
             2201          (i) life insurance, including a nonvariable contract;
             2202          (ii) variable contracts, including variable life and annuity, if the consultant has the life
             2203      insurance line of authority;
             2204          (iii) accident and health insurance, including a contract issued to a policyholder under
             2205      Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
             2206      Organizations and Limited Health Plans;
             2207          (iv) property insurance;
             2208          (v) casualty insurance, including a surety or other bond; and
             2209          (vi) personal lines insurance.
             2210          (e) A managing general agent license type includes the following lines of authority:
             2211          (i) life insurance, including a nonvariable contract;
             2212          (ii) variable contracts, including variable life and annuity, if the managing general
             2213      agent has the life insurance line of authority;


             2214          (iii) accident and health insurance, including a contract issued to a policyholder under
             2215      Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
             2216      Organizations and Limited Health Plans;
             2217          (iv) property insurance;
             2218          (v) casualty insurance, including a surety or other bond; and
             2219          (vi) personal lines insurance.
             2220          (f) A reinsurance intermediary license type includes the following lines of authority:
             2221          (i) life insurance, including a nonvariable contract;
             2222          (ii) variable contracts, including variable life and annuity, if the reinsurance
             2223      intermediary has the life insurance line of authority;
             2224          (iii) accident and health insurance, including a contract issued to a policyholder under
             2225      Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
             2226      Organizations and Limited Health Plans;
             2227          (iv) property insurance;
             2228          (v) casualty insurance, including a surety or other bond; and
             2229          (vi) personal lines insurance.
             2230          (g) A [holder of licenses] person who holds a license under [Subsections] Subsection
             2231      (2)(a), (d), (e), [and] or (f) has [all] the qualifications necessary to act as a holder of a license
             2232      under Subsections (2)(b) and (c), except that the person may not act under Subsection
             2233      (2)(b)(viii) or (ix).
             2234          (3) (a) The commissioner may by rule recognize other producer, limited line producer,
             2235      customer service representative, consultant, managing general agent, or reinsurance
             2236      intermediary lines of authority as to kinds of insurance not listed under Subsections (2)(a)
             2237      through (f).
             2238          (b) Notwithstanding Subsection (3)(a), for purposes of title insurance the Title and
             2239      Escrow Commission may by rule, with the concurrence of the commissioner and subject to
             2240      Section 31A-2-404 , recognize other categories for a title insurance producer line of authority
             2241      not listed under Subsection (2)(a)(vi).


             2242          (4) The variable contracts, including variable life and annuity line of authority requires:
             2243          (a) licensure as a registered agent or broker by the [National Association of Securities
             2244      Dealers] Financial Industry Regulatory Authority; and
             2245          (b) current registration with a securities broker-dealer.
             2246          (5) A surplus lines producer is a producer who has a surplus lines line of authority.
             2247          Section 19. Section 31A-23a-111 is amended to read:
             2248           31A-23a-111. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             2249      terminating a license -- Rulemaking for renewal or reinstatement.
             2250          (1) A license type issued under this chapter remains in force until:
             2251          (a) revoked or suspended under Subsection (5);
             2252          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             2253      administrative action;
             2254          (c) the licensee dies or is adjudicated incompetent as defined under:
             2255          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             2256          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             2257      Minors;
             2258          (d) lapsed under Section 31A-23a-113 ; or
             2259          (e) voluntarily surrendered.
             2260          (2) The following may be reinstated within one year after the day on which the license
             2261      is no longer in force:
             2262          (a) a lapsed license; or
             2263          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             2264      not be reinstated after the license period in which the license is voluntarily surrendered.
             2265          (3) Unless otherwise stated in [the] a written agreement for the voluntary surrender of a
             2266      license, submission and acceptance of a voluntary surrender of a license does not prevent the
             2267      department from pursuing additional disciplinary or other action authorized under:
             2268          (a) this title; or
             2269          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah


             2270      Administrative Rulemaking Act.
             2271          (4) A line of authority issued under this chapter remains in force until:
             2272          (a) the qualifications pertaining to a line of authority are no longer met by the licensee;
             2273      or
             2274          (b) the supporting license type:
             2275          (i) is revoked or suspended under Subsection (5);
             2276          (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
             2277      administrative action;
             2278          (iii) the licensee dies or is adjudicated incompetent as defined under:
             2279          (A) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             2280          (B) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             2281      Minors;
             2282          (iv) lapsed under Section 31A-23a-113 ; or
             2283          (v) voluntarily surrendered.
             2284          (5) (a) If the commissioner makes a finding under Subsection (5)(b), as part of an
             2285      adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             2286      commissioner may:
             2287          (i) revoke:
             2288          (A) a license; or
             2289          (B) a line of authority;
             2290          (ii) suspend for a specified period of 12 months or less:
             2291          (A) a license; or
             2292          (B) a line of authority;
             2293          (iii) limit in whole or in part:
             2294          (A) a license; or
             2295          (B) a line of authority; or
             2296          (iv) deny a license application.
             2297          (b) The commissioner may take an action described in Subsection (5)(a) if the


             2298      commissioner finds that the licensee:
             2299          (i) is unqualified for a license or line of authority under Section 31A-23a-104 ,
             2300      31A-23a-105 , or 31A-23a-107 ;
             2301          (ii) violates:
             2302          (A) an insurance statute;
             2303          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             2304          (C) an order that is valid under Subsection 31A-2-201 (4);
             2305          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
             2306      delinquency proceedings in any state;
             2307          (iv) fails to pay a final judgment rendered against the person in this state within 60
             2308      days after the day on which the judgment became final;
             2309          (v) fails to meet the same good faith obligations in claims settlement that is required of
             2310      admitted insurers;
             2311          (vi) is affiliated with and under the same general management or interlocking
             2312      directorate or ownership as another insurance producer that transacts business in this state
             2313      without a license;
             2314          (vii) refuses:
             2315          (A) to be examined; or
             2316          (B) to produce its accounts, records, and files for examination;
             2317          (viii) has an officer who refuses to:
             2318          (A) give information with respect to the insurance producer's affairs; or
             2319          (B) perform any other legal obligation as to an examination;
             2320          (ix) provides information in the license application that is:
             2321          (A) incorrect;
             2322          (B) misleading;
             2323          (C) incomplete; or
             2324          (D) materially untrue;
             2325          (x) violates an insurance law, valid rule, or valid order of another state's insurance


             2326      department;
             2327          (xi) obtains or attempts to obtain a license through misrepresentation or fraud;
             2328          (xii) improperly withholds, misappropriates, or converts money or properties received
             2329      in the course of doing insurance business;
             2330          (xiii) intentionally misrepresents the terms of an actual or proposed:
             2331          (A) insurance contract;
             2332          (B) application for insurance; or
             2333          (C) life settlement;
             2334          (xiv) is convicted of a felony;
             2335          (xv) admits or is found to have committed an insurance unfair trade practice or fraud;
             2336          (xvi) in the conduct of business in this state or elsewhere:
             2337          (A) uses fraudulent, coercive, or dishonest practices; or
             2338          (B) demonstrates incompetence, untrustworthiness, or financial irresponsibility;
             2339          (xvii) has an insurance license, or its equivalent, denied, suspended, or revoked in
             2340      another state, province, district, or territory;
             2341          (xviii) forges another's name to:
             2342          (A) an application for insurance; or
             2343          (B) a document related to an insurance transaction;
             2344          (xix) improperly uses notes or another reference material to complete an examination
             2345      for an insurance license;
             2346          (xx) knowingly accepts insurance business from an individual who is not licensed;
             2347          (xxi) fails to comply with an administrative or court order imposing a child support
             2348      obligation;
             2349          (xxii) fails to:
             2350          (A) pay state income tax; or
             2351          (B) comply with an administrative or court order directing payment of state income
             2352      tax;
             2353          (xxiii) violates or permits others to violate the federal Violent Crime Control and Law


             2354      Enforcement Act of 1994, 18 U.S.C. [Secs.] Sec. 1033 and 1034; or
             2355          (xxiv) engages in a method or practice in the conduct of business that endangers the
             2356      legitimate interests of customers and the public.
             2357          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             2358      and any individual designated under the license are considered to be the holders of the license.
             2359          (d) If an individual designated under the agency license commits an act or fails to
             2360      perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
             2361      the commissioner may suspend, revoke, or limit the license of:
             2362          (i) the individual;
             2363          (ii) the agency, if the agency:
             2364          (A) is reckless or negligent in its supervision of the individual; or
             2365          (B) knowingly participates in the act or failure to act that is the ground for suspending,
             2366      revoking, or limiting the license; or
             2367          (iii) (A) the individual; and
             2368          (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
             2369          (6) A licensee under this chapter is subject to the penalties for acting as a licensee
             2370      without a license if:
             2371          (a) the licensee's license is:
             2372          (i) revoked;
             2373          (ii) suspended;
             2374          (iii) limited;
             2375          (iv) surrendered in lieu of administrative action;
             2376          (v) lapsed; or
             2377          (vi) voluntarily surrendered; and
             2378          (b) the licensee:
             2379          (i) continues to act as a licensee; or
             2380          (ii) violates the terms of the license limitation.
             2381          (7) A licensee under this chapter shall immediately report to the commissioner:


             2382          (a) a revocation, suspension, or limitation of the person's license in another state, the
             2383      District of Columbia, or a territory of the United States;
             2384          (b) the imposition of a disciplinary sanction imposed on that person by another state,
             2385      the District of Columbia, or a territory of the United States; or
             2386          (c) a judgment or injunction entered against that person on the basis of conduct
             2387      involving:
             2388          (i) fraud;
             2389          (ii) deceit;
             2390          (iii) misrepresentation; or
             2391          (iv) a violation of an insurance law or rule.
             2392          (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
             2393      license in lieu of administrative action may specify a time, not to exceed five years, within
             2394      which the former licensee may not apply for a new license.
             2395          (b) If no time is specified in an order or agreement described in Subsection (8)(a), the
             2396      former licensee may not apply for a new license for five years from the day on which the order
             2397      or agreement is made without the express approval by the commissioner.
             2398          (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
             2399      a license issued under this part if so ordered by a court.
             2400          (10) The commissioner shall by rule prescribe the license renewal and reinstatement
             2401      procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             2402          Section 20. Section 31A-23a-202 is amended to read:
             2403           31A-23a-202. Continuing education requirements.
             2404          (1) Pursuant to this section, the commissioner shall by rule prescribe the continuing
             2405      education requirements for a producer and a consultant.
             2406          (2) (a) The commissioner may not state a continuing education requirement in terms of
             2407      formal education.
             2408          (b) The commissioner may state a continuing education requirement in terms of
             2409      [classroom hours, or their equivalent,] hours of insurance-related instruction received.


             2410          (c) Insurance-related formal education may be a substitute, in whole or in part, for
             2411      [classroom hours, or their equivalent,] the hours required under Subsection (2)(b).
             2412          (3) (a) The commissioner shall impose continuing education requirements in
             2413      accordance with a two-year licensing period in which the licensee meets the requirements of
             2414      this Subsection (3).
             2415          (b) (i) Except as provided in this section, the continuing education requirements shall
             2416      require:
             2417          (A) that a licensee complete 24 credit hours of continuing education for every two-year
             2418      licensing period;
             2419          (B) that 3 of the 24 credit hours described in Subsection (3)(b)(i)(A) be ethics courses;
             2420      and
             2421          (C) that the licensee complete at least half of the required hours through classroom
             2422      hours of insurance-related instruction.
             2423          (ii) [The hours not completed through classroom hours] An hour of continuing
             2424      education in accordance with Subsection (3)(b)(i)[(C)] may be obtained through:
             2425          (A) classroom attendance;
             2426          [(A)] (B) home study;
             2427          [(B)] (C) watching a video recording;
             2428          [(C)] (D) experience credit; or
             2429          [(D)] (E) another method provided by rule.
             2430          (iii) (A) Notwithstanding Subsections (3)(b)(i)(A) and (B), a title insurance producer is
             2431      required to complete 12 credit hours of continuing education for every two-year licensing
             2432      period, with 3 of the credit hours being ethics courses unless the title insurance producer is
             2433      licensed in this state as a title insurance producer for 20 or more consecutive years.
             2434          (B) If a title insurance producer is licensed in this state as a title insurance producer for
             2435      20 or more consecutive years, the title insurance producer is required to complete 6 credit hours
             2436      of continuing education for every two-year licensing period, with 3 of the credit hours being
             2437      ethics courses.


             2438          (C) Notwithstanding Subsection (3)(b)(iii)(A) or (B), a title insurance producer is
             2439      considered to have met the continuing education requirements imposed under Subsection
             2440      (3)(b)(iii)(A) or (B) if the title insurance producer:
             2441          (I) is an active member in good standing with the Utah State Bar;
             2442          (II) is in compliance with the continuing education requirements of the Utah State Bar;
             2443      and
             2444          (III) if requested by the department, provides the department evidence that the title
             2445      insurance producer complied with the continuing education requirements of the Utah State Bar.
             2446          (c) A licensee may obtain continuing education hours at any time during the two-year
             2447      licensing period.
             2448          (d) (i) A licensee is exempt from continuing education requirements under this section
             2449      if:
             2450          (A) the licensee was first licensed before April 1, 1978;
             2451          (B) the license does not have a continuous lapse for a period of more than one year,
             2452      except for a license for which the licensee has had an exemption approved before May 11,
             2453      2011;
             2454          [(B)] (C) the licensee requests an exemption from the department; and
             2455          [(C)] (D) the department approves the exemption.
             2456          (ii) If the department approves the exemption under Subsection (3)(d)(i), the licensee is
             2457      not required to apply again for the exemption.
             2458          (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2459      commissioner shall, by rule:
             2460          (i) publish a list of insurance professional designations whose continuing education
             2461      requirements can be used to meet the requirements for continuing education under Subsection
             2462      (3)(b);
             2463          (ii) authorize a continuing education provider or a state or national professional
             2464      producer or consultant association to:
             2465          (A) offer a qualified program for a license type or line of authority on a geographically


             2466      accessible basis; and
             2467          (B) collect a reasonable fee for funding and administration of a continuing education
             2468      program, subject to the review and approval of the commissioner; and
             2469          (iii) provide that membership by a producer or consultant in a state or national
             2470      professional producer or consultant association is considered a substitute for the equivalent of
             2471      two hours for each year during which the producer or consultant is a member of the
             2472      professional association, except that the commissioner may not give more than two hours of
             2473      continuing education credit in a year regardless of the number of professional associations of
             2474      which the producer or consultant is a member.
             2475          (f) A fee permitted under Subsection (3)(e)(ii)(B) that is charged for attendance at a
             2476      professional producer or consultant association program may be less for an association
             2477      member, on the basis of the member's affiliation expense, but shall preserve the right of a
             2478      nonmember to attend without affiliation.
             2479          (4) The commissioner shall approve a continuing education provider or continuing
             2480      education course that satisfies the requirements of this section.
             2481          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2482      commissioner shall by rule set the processes and procedures for continuing education provider
             2483      registration and course approval.
             2484          (6) The requirements of this section apply only to a producer or consultant who is an
             2485      individual.
             2486          (7) A nonresident producer or consultant is considered to have satisfied this state's
             2487      continuing education requirements if the nonresident producer or consultant satisfies the
             2488      nonresident producer's or consultant's home state's continuing education requirements for a
             2489      licensed insurance producer or consultant.
             2490          (8) A producer or consultant subject to this section shall keep documentation of
             2491      completing the continuing education requirements of this section for two years after the end of
             2492      the two-year licensing period to which the continuing education applies.
             2493          Section 21. Section 31A-23a-203 is amended to read:


             2494           31A-23a-203. Training period requirements.
             2495          (1) A producer is eligible to add the surplus lines of authority to the person's producer's
             2496      license if the producer:
             2497          (a) has passed the applicable examination;
             2498          (b) has been a producer with property and casualty lines of authority for at least three
             2499      years during the four years immediately preceding the date of application; and
             2500          (c) has paid the applicable fee under Section 31A-3-103 .
             2501          (2) A person is eligible to become a consultant only if the person has acted in a
             2502      capacity that would provide the person with preparation to act as an insurance consultant for a
             2503      period aggregating not less than three years during the four years immediately preceding the
             2504      date of application.
             2505          (3) (a) A resident producer with an accident and health line of authority may only sell
             2506      long-term care insurance if the producer:
             2507          (i) initially completes a minimum of three hours of long-term care training before
             2508      selling long-term care coverage; and
             2509          (ii) after completing the training required by Subsection (3)(a)(i), completes a
             2510      minimum of three hours of long-term care training during each subsequent two-year licensing
             2511      period.
             2512          (b) A course taken to satisfy a long-term care training requirement may be used toward
             2513      satisfying a producer continuing education requirement.
             2514          (c) Long-term care training is not a continuing education requirement to renew a
             2515      producer license.
             2516          (d) An insurer that issues long-term care insurance shall demonstrate to the
             2517      commissioner, upon request, that a producer who is appointed by the insurer and who sells
             2518      long-term care insurance coverage is in compliance with this Subsection (3).
             2519          [(3)] (4) The training periods required under this section apply only to an individual
             2520      applying for a license under this chapter.
             2521          Section 22. Section 31A-23a-204 is amended to read:


             2522           31A-23a-204. Special requirements for title insurance producers and agencies.
             2523          A title insurance producer, including an agency, shall be licensed in accordance with
             2524      this chapter, with the additional requirements listed in this section.
             2525          (1) (a) A person that receives a new license under this title as a title insurance agency,
             2526      shall at the time of licensure be owned or managed by [one or more individuals who are] at
             2527      least one individual who is licensed for at least three of the five years immediately [proceeding]
             2528      preceding the date on which the title insurance agency applies for a license with both:
             2529          (i) a search line of authority; and
             2530          (ii) an escrow line of authority.
             2531          (b) A title insurance agency subject to Subsection (1)(a) may comply with Subsection
             2532      (1)(a) by having the title insurance agency owned or managed by:
             2533          (i) one or more individuals who are licensed with the search line of authority for the
             2534      time period provided in Subsection (1)(a); and
             2535          (ii) one or more individuals who are licensed with the escrow line of authority for the
             2536      time period provided in Subsection (1)(a).
             2537          (c) A person licensed as a title insurance agency shall at all times during the term of
             2538      licensure be owned or managed by at least one individual who is licensed for at least three
             2539      years within the preceding five-year period with both:
             2540          (i) a search line of authority; and
             2541          (ii) an escrow line of authority.
             2542          [(c)] (d) The Title and Escrow Commission may by rule, subject to Section 31A-2-404 ,
             2543      exempt an attorney with real estate experience from the experience requirements in Subsection
             2544      (1)(a).
             2545          (2) (a) A title insurance agency or producer appointed by an insurer shall maintain:
             2546          (i) a fidelity bond;
             2547          (ii) a professional liability insurance policy; or
             2548          (iii) a financial protection:
             2549          (A) equivalent to that described in Subsection (2)(a)(i) or (ii); and


             2550          (B) that the commissioner considers adequate.
             2551          (b) The bond, insurance, or financial protection required by this Subsection (2):
             2552          (i) shall be supplied under a contract approved by the commissioner to provide
             2553      protection against the improper performance of any service in conjunction with the issuance of
             2554      a contract or policy of title insurance; and
             2555          (ii) be in a face amount no less than $50,000.
             2556          (c) The Title and Escrow Commission may by rule, subject to Section 31A-2-404 ,
             2557      exempt title insurance producers from the requirements of this Subsection (2) upon a finding
             2558      that, and only so long as, the required policy or bond is generally unavailable at reasonable
             2559      rates.
             2560          (3) A title insurance agency or producer appointed by an insurer may maintain a
             2561      reserve fund to the extent monies were deposited before July 1, 2008, and not withdrawn to the
             2562      income of the title insurance producer.
             2563          (4) An examination for licensure shall include questions regarding the search and
             2564      examination of title to real property.
             2565          (5) A title insurance producer may not perform the functions of escrow unless the title
             2566      insurance producer has been examined on the fiduciary duties and procedures involved in those
             2567      functions.
             2568          (6) The Title and Escrow Commission shall adopt rules, subject to Section 31A-2-404 ,
             2569      after consulting with the department and the department's test administrator, establishing an
             2570      examination for a license that will satisfy this section.
             2571          (7) A license may be issued to a title insurance producer who has qualified:
             2572          (a) to perform only searches and examinations of title as specified in Subsection (4);
             2573          (b) to handle only escrow arrangements as specified in Subsection (5); or
             2574          (c) to act as a title marketing representative.
             2575          (8) (a) A person licensed to practice law in Utah is exempt from the requirements of
             2576      Subsections (2) and (3) if that person issues 12 or less policies in any 12-month period.
             2577          (b) In determining the number of policies issued by a person licensed to practice law in


             2578      Utah for purposes of Subsection (8)(a), if the person licensed to practice law in Utah issues a
             2579      policy to more than one party to the same closing, the person is considered to have issued only
             2580      one policy.
             2581          (9) A person licensed to practice law in Utah, whether exempt under Subsection (8) or
             2582      not, shall maintain a trust account separate from a law firm trust account for all title and real
             2583      estate escrow transactions.
             2584          Section 23. Section 31A-23a-406 is amended to read:
             2585           31A-23a-406. Title insurance producer's business.
             2586          (1) A title insurance producer may do escrow involving real property transactions if all
             2587      of the following exist:
             2588          (a) the title insurance producer is licensed with:
             2589          (i) the title line of authority; and
             2590          (ii) the escrow subline of authority;
             2591          (b) the title insurance producer is appointed by a title insurer authorized to do business
             2592      in the state;
             2593          (c) the title insurance producer issues one or more of the following [is to be issued] as
             2594      part of the transaction:
             2595          (i) an owner's policy of title insurance; or
             2596          (ii) a lender's policy of title insurance;
             2597          (d) [(i) all funds] money deposited with the title insurance producer in connection with
             2598      any escrow:
             2599          [(A) are] (i) is deposited:
             2600          [(I)] (A) in a federally insured financial institution; and
             2601          [(II)] (B) in a trust account that is separate from all other trust account [funds that are]
             2602      money that is not related to real estate transactions; [and]
             2603          [(B) are] (ii) is the property of the one or more persons entitled to [them] the money
             2604      under the provisions of the escrow; and
             2605          [(ii) are] (iii) is segregated escrow by escrow in the records of the title insurance


             2606      producer;
             2607          (e) earnings on [funds] money held in escrow may be paid out of the escrow account to
             2608      any person in accordance with the conditions of the escrow; [and]
             2609          (f) the escrow does not require the title insurance producer to hold:
             2610          (i) construction [funds] money; or
             2611          (ii) [funds] money held for exchange under Section 1031, Internal Revenue Code[.];
             2612      and
             2613          (g) the title insurance producer shall maintain a physical office in Utah staffed by a
             2614      person with an escrow subline of authority who processes the escrow.
             2615          (2) Notwithstanding Subsection (1), a title insurance producer may engage in the
             2616      escrow business if:
             2617          (a) the escrow involves:
             2618          (i) a mobile home;
             2619          (ii) a grazing right;
             2620          (iii) a water right; or
             2621          (iv) other personal property authorized by the commissioner; and
             2622          (b) the title insurance producer complies with [all the requirements of] this section
             2623      except for [the requirement of] Subsection (1)(c).
             2624          (3) [Funds] Money held in escrow:
             2625          (a) [are] is not subject to any debts of the title insurance producer;
             2626          (b) may only be used to fulfill the terms of the individual escrow under which the
             2627      [funds were] money is accepted; and
             2628          (c) may not be used until [all] the conditions of the escrow [have been] are met.
             2629          (4) Assets or property other than escrow [funds] money received by a title insurance
             2630      producer in accordance with an escrow shall be maintained in a manner that will:
             2631          (a) reasonably preserve and protect the asset or property from loss, theft, or damages;
             2632      and
             2633          (b) otherwise comply with [all] the general duties and responsibilities of a fiduciary or


             2634      bailee.
             2635          (5) (a) A check from the trust account described in Subsection (1)(d) may not be
             2636      drawn, executed, or dated, or [funds] money otherwise disbursed unless the segregated escrow
             2637      account from which [funds are] money is to be disbursed contains a sufficient credit balance
             2638      consisting of collected [or] and cleared [funds] money at the time the check is drawn, executed,
             2639      or dated, or [funds are] money is otherwise disbursed.
             2640          (b) As used in this Subsection (5), [funds are] money is considered to be "collected [or]
             2641      and cleared," and may be disbursed as follows:
             2642          (i) cash may be disbursed on the same day the cash is deposited;
             2643          (ii) a wire transfer may be disbursed on the same day the wire transfer is deposited; and
             2644          [(iii) the following may be disbursed on the day following the date of deposit:]
             2645          [(A) a cashier's check;]
             2646          [(B) a certified check;]
             2647          [(C) a teller's check;]
             2648          [(D) a U.S. Postal Service money order; and]
             2649          [(E) a check drawn on a Federal Reserve Bank or Federal Home Loan Bank; and]
             2650          [(iv) any other check or deposit may be disbursed:]
             2651          [(A) within the time limits provided under the Expedited Funds Availability Act, 12
             2652      U.S.C. Section 4001 et seq., as amended, and related regulations of the Federal Reserve
             2653      System; or]
             2654          [(B) upon written notification from the financial institution to which the funds have
             2655      been deposited, that final settlement has occurred on the deposited item.]
             2656          [(c) Subject to Subsections (5)(a) and (b), any material change to a settlement
             2657      statement made after the final closing documents are executed must be authorized or
             2658      acknowledged by date and signature on each page of the settlement statement by the one or
             2659      more persons affected by the change before disbursement of funds.]
             2660          (iii) the proceeds of one or more of the following financial instruments may be
             2661      disbursed on the same day the financial instruments are deposited if received from a single


             2662      party to the real estate transaction and if the aggregate of the financial instruments for the real
             2663      estate transaction is less than $10,000:
             2664          (A) a cashier's check, certified check, or official check that is drawn on an existing
             2665      account at a federally insured financial institution;
             2666          (B) a check drawn on the trust account of a principal broker or associate broker
             2667      licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices Act, if the title
             2668      producer has reasonable and prudent grounds to believe sufficient money will be available
             2669      from the trust account on which the check is drawn at the time of disbursement of proceeds
             2670      from the title producer's escrow account;
             2671          (C) a personal check not to exceed $500 per closing;
             2672          (D) a check drawn on the escrow account of another title producer, if the title producer
             2673      in the escrow transaction has reasonable and prudent grounds to believe that sufficient money
             2674      will be available for withdrawal from the account upon which the check is drawn at the time of
             2675      disbursement of money from the escrow account of the title producer in the escrow transaction;
             2676      or
             2677          (E) a check issued by a farm credit service authorized under the Farm Credit Act of
             2678      1971, 12 U.S.C. Sec. 2001 et seq., as amended.
             2679          (c) Money received from a financial instrument described in Subsection (5)(b)(iii)(B)
             2680      or (C) may be disbursed:
             2681          (i) within the time limits provided under the Expedited Funds Availability Act, 12
             2682      U.S.C. Sec. 4001 et seq., as amended, and related regulations of the Federal Reserve System; or
             2683          (ii) upon notification from the financial institution to which the money has been
             2684      deposited that final settlement has occurred on the deposited financial instrument.
             2685          (6) [The] A title insurance producer shall maintain [records of all receipts and
             2686      disbursements of escrow funds] a record of a receipt or disbursement of escrow money.
             2687          (7) [The] A title insurance producer shall comply with:
             2688          (a) Section 31A-23a-409 ;
             2689          (b) Title 46, Chapter 1, Notaries Public Reform Act; and


             2690          (c) any rules adopted by the Title and Escrow Commission, subject to Section
             2691      31A-2-404 , that govern escrows.
             2692          (8) If a title insurance producer conducts a search for real estate located in the state, the
             2693      title insurance producer shall conduct a minimum mandatory search, as defined by rule made
             2694      by the Title and Escrow Commission, subject to Section 31A-2-404 .
             2695          Section 24. Section 31A-23a-408 is amended to read:
             2696           31A-23a-408. Representations of agency.
             2697          [No] A person may not represent [himself as] that the person is acting in behalf of an
             2698      insurer unless a written agency contract is in effect giving the person authority from the insurer
             2699      and the insurer [has appointed] appoints that person to act in behalf of the insurer.
             2700          Section 25. Section 31A-23a-412 is amended to read:
             2701           31A-23a-412. Place of business and residence address -- Records.
             2702          (1) (a) [All licensees] A licensee under this chapter shall register and maintain with the
             2703      commissioner:
             2704          (i) the address and telephone numbers of [their] the licensee's principal place of
             2705      business[.]; and
             2706          (ii) a valid business email address at which the commissioner may contact the licensee.
             2707          (b) If [the] a licensee is an individual, in addition to complying with Subsection (1)(a)
             2708      the individual shall [provide to] register and maintain with the commissioner the individual's
             2709      residence address and telephone number.
             2710          (c) A licensee shall notify the commissioner within 30 days of [any] a change of any of
             2711      the following required to be registered with the commissioner under this section:
             2712          (i) an address [or];
             2713          (ii) a telephone number[.]; or
             2714          (iii) a business email address.
             2715          (2) (a) Except as provided under Subsection (3), [every] a licensee under this chapter
             2716      shall keep at the principal place of business address registered under Subsection (1), separate
             2717      and distinct books and records of [all] the transactions consummated under the Utah license.


             2718          (b) The books and records described in Subsection (2)(a) shall:
             2719          (i) be in an organized form;
             2720          (ii) be available to the commissioner for inspection upon reasonable notice; and
             2721          (iii) include all of the following:
             2722          (A) if the licensee is a producer, limited line producer, consultant, managing general
             2723      agent, or reinsurance intermediary:
             2724          (I) a record of each insurance contract procured by or issued through the licensee, with
             2725      the names of insurers and insureds, the amount of premium and commissions or other
             2726      compensation, and the subject of the insurance;
             2727          (II) the names of any other producers, limited line producers, consultants, managing
             2728      general agents, or reinsurance intermediaries from whom business is accepted, and of persons
             2729      to whom commissions or allowances of any kind are promised or paid; and
             2730          (III) a record of [all] the consumer complaints forwarded to the licensee by an
             2731      insurance regulator;
             2732          (B) if the licensee is a consultant, a record of each agreement outlining the work
             2733      performed and the fee for the work; and
             2734          (C) any additional information which:
             2735          (I) is customary for a similar business; or
             2736          (II) may reasonably be required by the commissioner by rule.
             2737          (3) Subsection (2) is satisfied if the books and records specified in Subsection (2) can
             2738      be obtained immediately from a central storage place or elsewhere by on-line computer
             2739      terminals located at the registered address.
             2740          (4) A licensee who represents only a single insurer satisfies Subsection (2) if the
             2741      insurer maintains the books and records pursuant to Subsection (2) at a place satisfying
             2742      Subsections (1) and (5).
             2743          (5) (a) The books and records maintained under Subsection (2) or Section
             2744      31A-23a-413 shall be available for the inspection of the commissioner during all business
             2745      hours for a period of time after the date of the transaction as specified by the commissioner by


             2746      rule, but in no case for less than the current calendar year plus three years.
             2747          (b) Discarding books and records after the applicable record retention period has
             2748      expired does not place the licensee in violation of a later-adopted longer record retention
             2749      period.
             2750          Section 26. Section 31A-23a-415 is amended to read:
             2751           31A-23a-415. Assessment on title insurance agencies or title insurers -- Account
             2752      created.
             2753          (1) For purposes of this section:
             2754          (a) "Premium" is as defined in Subsection 59-9-101 (3).
             2755          (b) "Title insurer" means a person:
             2756          (i) making any contract or policy of title insurance as:
             2757          (A) insurer;
             2758          (B) guarantor; or
             2759          (C) surety;
             2760          (ii) proposing to make any contract or policy of title insurance as:
             2761          (A) insurer;
             2762          (B) guarantor; or
             2763          (C) surety; or
             2764          (iii) transacting or proposing to transact any phase of title insurance, including:
             2765          (A) soliciting;
             2766          (B) negotiating preliminary to execution;
             2767          (C) executing of a contract of title insurance;
             2768          (D) insuring; and
             2769          (E) transacting matters subsequent to the execution of the contract and arising out of
             2770      the contract.
             2771          (c) "Utah risks" means insuring, guaranteeing, or indemnifying with regard to real or
             2772      personal property located in Utah, an owner of real or personal property, the holders of liens or
             2773      encumbrances on that property, or others interested in the property against loss or damage


             2774      suffered by reason of:
             2775          (i) liens or encumbrances upon, defects in, or the unmarketability of the title to the
             2776      property; or
             2777          (ii) invalidity or unenforceability of any liens or encumbrances on the property.
             2778          (2) (a) The commissioner may assess each title insurer and each title insurance agency
             2779      an annual assessment:
             2780          (i) determined by the Title and Escrow Commission:
             2781          (A) after consultation with the commissioner; and
             2782          (B) in accordance with this Subsection (2); and
             2783          (ii) to be used for the purposes described in Subsection (3).
             2784          (b) A title insurance agency shall be assessed up to:
             2785          (i) [$200] $250 for the first office in each county in which the title insurance agency
             2786      maintains an office; and
             2787          (ii) [$100] $150 for each additional office the title insurance agency maintains in the
             2788      county described in Subsection (2)(b)(i).
             2789          (c) A title insurer shall be assessed up to:
             2790          (i) [$200] $250 for the first office in each county in which the title insurer maintains an
             2791      office;
             2792          (ii) [$100] $150 for each additional office the title insurer maintains in the county
             2793      described in Subsection (2)(c)(i); and
             2794          (iii) an amount calculated by:
             2795          (A) aggregating the assessments imposed on:
             2796          (I) title insurance agencies under Subsection (2)(b); and
             2797          (II) title insurers under Subsections (2)(c)(i) and (2)(c)(ii);
             2798          (B) subtracting the amount determined under Subsection (2)(c)(iii)(A) from the total
             2799      costs and expenses determined under Subsection (2)(d); and
             2800          (C) multiplying:
             2801          (I) the amount calculated under Subsection (2)(c)(iii)(B); and


             2802          (II) the percentage of total premiums for title insurance on Utah risk that are premiums
             2803      of the title insurer.
             2804          (d) Notwithstanding Section 31A-3-103 and subject to Section 31A-2-404 , the Title
             2805      and Escrow Commission by rule shall establish the amount of costs and expenses described
             2806      under Subsection (3) that will be covered by the assessment, except the costs or expenses to be
             2807      covered by the assessment may not exceed [$75,000] $80,000 annually.
             2808          (3) (a) Money received by the state under this section shall be deposited into the Title
             2809      Licensee Enforcement Restricted Account.
             2810          (b) There is created in the General Fund a restricted account known as the "Title
             2811      Licensee Enforcement Restricted Account."
             2812          (c) The Title Licensee Enforcement Restricted Account shall consist of the money
             2813      received by the state under this section.
             2814          (d) The commissioner shall administer the Title Licensee Enforcement Restricted
             2815      Account. Subject to appropriations by the Legislature, the commissioner shall use the money
             2816      deposited into the Title Licensee Enforcement Restricted Account only to pay for a cost or
             2817      expense incurred by the department in the administration, investigation, and enforcement of
             2818      this part and Part 5, Compensation of Producers and Consultants, related to:
             2819          (i) the marketing of title insurance; and
             2820          (ii) audits of agencies.
             2821          (e) An appropriation from the Title Licensee Enforcement Restricted Account is
             2822      nonlapsing.
             2823          (4) The assessment imposed by this section shall be in addition to any premium
             2824      assessment imposed under Subsection 59-9-101 (3).
             2825          Section 27. Section 31A-23a-501 is amended to read:
             2826           31A-23a-501. Licensee compensation.
             2827          (1) As used in this section:
             2828          (a) "Commission compensation" includes funds paid to or credited for the benefit of a
             2829      licensee from:


             2830          (i) commission amounts deducted from insurance premiums on insurance sold by or
             2831      placed through the licensee; or
             2832          (ii) commission amounts received from an insurer or another licensee as a result of the
             2833      sale or placement of insurance.
             2834          (b) (i) "Compensation from an insurer or third party administrator" means
             2835      commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options,
             2836      gifts, prizes, or any other form of valuable consideration:
             2837          (A) whether or not payable pursuant to a written agreement; and
             2838          (B) received from:
             2839          (I) an insurer; or
             2840          (II) a third party to the transaction for the sale or placement of insurance.
             2841          (ii) "Compensation from an insurer or third party administrator" does not mean
             2842      compensation from a customer that is:
             2843          (A) a fee or pass-through costs as provided in Subsection (1)(e); or
             2844          (B) a fee or amount collected by or paid to the producer that does not exceed an
             2845      amount established by the commissioner by administrative rule.
             2846          (c) (i) "Customer" means:
             2847          (A) the person signing the application or submission for insurance; or
             2848          (B) the authorized representative of the insured actually negotiating the placement of
             2849      insurance with the producer.
             2850          (ii) "Customer" does not mean a person who is a participant or beneficiary of:
             2851          (A) an employee benefit plan; or
             2852          (B) a group or blanket insurance policy or group annuity contract sold, solicited, or
             2853      negotiated by the producer or affiliate.
             2854          (d) (i) "Noncommission compensation" includes all funds paid to or credited for the
             2855      benefit of a licensee other than commission compensation.
             2856          (ii) "Noncommission compensation" does not include charges for pass-through costs
             2857      incurred by the licensee in connection with obtaining, placing, or servicing an insurance policy.


             2858          (e) "Pass-through costs" include:
             2859          (i) costs for copying documents to be submitted to the insurer; and
             2860          (ii) bank costs for processing cash or credit card payments.
             2861          (2) A licensee may receive from an insured or from a person purchasing an insurance
             2862      policy, noncommission compensation if the noncommission compensation is stated on a
             2863      separate, written disclosure.
             2864          (a) The disclosure required by this Subsection (2) shall:
             2865          (i) include the signature of the insured or prospective insured acknowledging the
             2866      noncommission compensation;
             2867          (ii) clearly specify the amount or extent of the noncommission compensation; and
             2868          (iii) be provided to the insured or prospective insured before the performance of the
             2869      service.
             2870          (b) Noncommission compensation shall be:
             2871          (i) limited to actual or reasonable expenses incurred for services; and
             2872          (ii) uniformly applied to all insureds or prospective insureds in a class or classes of
             2873      business or for a specific service or services.
             2874          (c) A copy of the signed disclosure required by this Subsection (2) must be maintained
             2875      by any licensee who collects or receives the noncommission compensation or any portion of
             2876      the noncommission compensation.
             2877          (d) All accounting records relating to noncommission compensation shall be
             2878      maintained by the person described in Subsection (2)(c) in a manner that facilitates an audit.
             2879          (3) (a) A licensee may receive noncommission compensation when acting as a
             2880      producer for the insured in connection with the actual sale or placement of insurance if:
             2881          (i) the producer and the insured have agreed on the producer's noncommission
             2882      compensation; and
             2883          (ii) the producer has disclosed to the insured the existence and source of any other
             2884      compensation that accrues to the producer as a result of the transaction.
             2885          (b) The disclosure required by this Subsection (3) shall:


             2886          (i) include the signature of the insured or prospective insured acknowledging the
             2887      noncommission compensation;
             2888          (ii) clearly specify the amount or extent of the noncommission compensation and the
             2889      existence and source of any other compensation; and
             2890          (iii) be provided to the insured or prospective insured before the performance of the
             2891      service.
             2892          (c) The following additional noncommission compensation is authorized:
             2893          (i) compensation received by a producer of a compensated corporate surety who under
             2894      procedures approved by a rule or order of the commissioner is paid by surety bond principal
             2895      debtors for extra services;
             2896          (ii) compensation received by an insurance producer who is also licensed as a public
             2897      adjuster under Section 31A-26-203 , for services performed for an insured in connection with a
             2898      claim adjustment, so long as the producer does not receive or is not promised compensation for
             2899      aiding in the claim adjustment prior to the occurrence of the claim;
             2900          (iii) compensation received by a consultant as a consulting fee, provided the consultant
             2901      complies with the requirements of Section 31A-23a-401 ; or
             2902          (iv) other compensation arrangements approved by the commissioner after a finding
             2903      that they do not violate Section 31A-23a-401 and are not harmful to the public.
             2904          (4) (a) For purposes of this Subsection (4), "producer" includes:
             2905          (i) a producer;
             2906          (ii) an affiliate of a producer; or
             2907          (iii) a consultant.
             2908          (b) Beginning January 1, 2010, in addition to any other disclosures required by this
             2909      section, a producer may not accept or receive any compensation from an insurer or third party
             2910      administrator for the placement of a health benefit plan, other than a hospital confinement
             2911      indemnity policy, unless prior to the customer's purchase of the health benefit plan the
             2912      producer:
             2913          (i) except as provided in Subsection (4)(c), discloses in writing to the customer that the


             2914      producer will receive compensation from the insurer or third party administrator for the
             2915      placement of insurance, including the amount or type of compensation known to the producer
             2916      at the time of the disclosure; and
             2917          (ii) except as provided in Subsection (4)(c):
             2918          (A) obtains the customer's signed acknowledgment that the disclosure under
             2919      Subsection (4)(b)(i) was made to the customer; or
             2920          (B) (I) signs a statement that the disclosure required by Subsection (4)(b)(i) was made
             2921      to the customer; and
             2922          (II) keeps the signed statement on file in the producer's office while the health benefit
             2923      plan placed with the customer is in force.
             2924          (c) If the compensation to the producer from an insurer or third party administrator is
             2925      for the renewal of a health benefit plan, once the producer has made an initial disclosure that
             2926      complies with Subsection (4)(b), the producer does not have to disclose compensation received
             2927      for the subsequent yearly renewals in accordance with Subsection (4)(b) until the renewal
             2928      period immediately following 36 months after the initial disclosure.
             2929          (d) (i) A licensee who collects or receives any part of the compensation from an insurer
             2930      or third party administrator in a manner that facilitates an audit shall, while the health benefit
             2931      plan placed with the customer is in force, maintain a copy of:
             2932          (A) the signed acknowledgment described in Subsection (4)(b)(i); or
             2933          (B) the signed statement described in Subsection (4)(b)(ii).
             2934          (ii) The standard application developed in accordance with Section 31A-22-635 shall
             2935      include a place for a producer to provide the disclosure required by this Subsection (4), and if
             2936      completed, shall satisfy the requirement of Subsection (4)(d)(i).
             2937          (e) Subsection (4)(b)(ii) does not apply to:
             2938          (i) a person licensed as a producer who acts only as an intermediary between an insurer
             2939      and the customer's producer, including a managing general agent; or
             2940          (ii) the placement of insurance in a secondary or residual market.
             2941          (5) This section does not alter the right of any licensee to recover from an insured the


             2942      amount of any premium due for insurance effected by or through that licensee or to charge a
             2943      reasonable rate of interest upon past-due accounts.
             2944          (6) This section does not apply to bail bond producers or bail enforcement agents as
             2945      defined in Section 31A-35-102 .
             2946          (7) A licensee may not receive noncommission compensation from an insured or
             2947      enrollee for providing a service or engaging in an act that is required to be provided or
             2948      performed in order to receive commission compensation, except for the surplus lines
             2949      transactions that do not receive commissions.
             2950          Section 28. Section 31A-25-208 is amended to read:
             2951           31A-25-208. Revocation, suspension, surrender, lapsing, limiting, or otherwise
             2952      terminating a license -- Rulemaking for renewal and reinstatement.
             2953          (1) A license type issued under this chapter remains in force until:
             2954          (a) revoked or suspended under Subsection (4);
             2955          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
             2956      administrative action;
             2957          (c) the licensee dies or is adjudicated incompetent as defined under:
             2958          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
             2959          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
             2960      Minors;
             2961          (d) lapsed under Section 31A-25-210 ; or
             2962          (e) voluntarily surrendered.
             2963          (2) The following may be reinstated within one year after the day on which the license
             2964      is no longer in force:
             2965          (a) a lapsed license; or
             2966          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
             2967      not be reinstated after the license period in which the license is voluntarily surrendered.
             2968          (3) Unless otherwise stated in [the] a written agreement for the voluntary surrender of a
             2969      license, submission and acceptance of a voluntary surrender of a license does not prevent the


             2970      department from pursuing additional disciplinary or other action authorized under:
             2971          (a) this title; or
             2972          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
             2973      Administrative Rulemaking Act.
             2974          (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
             2975      adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
             2976      commissioner may:
             2977          (i) revoke a license;
             2978          (ii) suspend a license for a specified period of 12 months or less;
             2979          (iii) limit a license in whole or in part; or
             2980          (iv) deny a license application.
             2981          (b) The commissioner may take an action described in Subsection (4)(a) if the
             2982      commissioner finds that the licensee:
             2983          (i) is unqualified for a license under Section 31A-25-202 , 31A-25-203 , or 31A-25-204 ;
             2984          (ii) has violated:
             2985          (A) an insurance statute;
             2986          (B) a rule that is valid under Subsection 31A-2-201 (3); or
             2987          (C) an order that is valid under Subsection 31A-2-201 (4);
             2988          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
             2989      delinquency proceedings in any state;
             2990          (iv) fails to pay a final judgment rendered against the person in this state within 60
             2991      days after the day on which the judgment became final;
             2992          (v) fails to meet the same good faith obligations in claims settlement that is required of
             2993      admitted insurers;
             2994          (vi) is affiliated with and under the same general management or interlocking
             2995      directorate or ownership as another third party administrator that transacts business in this state
             2996      without a license;
             2997          (vii) refuses:


             2998          (A) to be examined; or
             2999          (B) to produce its accounts, records, and files for examination;
             3000          (viii) has an officer who refuses to:
             3001          (A) give information with respect to the third party administrator's affairs; or
             3002          (B) perform any other legal obligation as to an examination;
             3003          (ix) provides information in the license application that is:
             3004          (A) incorrect;
             3005          (B) misleading;
             3006          (C) incomplete; or
             3007          (D) materially untrue;
             3008          (x) has violated an insurance law, valid rule, or valid order of another state's insurance
             3009      department;
             3010          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
             3011          (xii) has improperly withheld, misappropriated, or converted money or properties
             3012      received in the course of doing insurance business;
             3013          (xiii) has intentionally misrepresented the terms of an actual or proposed:
             3014          (A) insurance contract; or
             3015          (B) application for insurance;
             3016          (xiv) has been convicted of a felony;
             3017          (xv) has admitted or been found to have committed an insurance unfair trade practice
             3018      or fraud;
             3019          (xvi) in the conduct of business in this state or elsewhere has:
             3020          (A) used fraudulent, coercive, or dishonest practices; or
             3021          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
             3022          (xvii) has had an insurance license or its equivalent, denied, suspended, or revoked in
             3023      any other state, province, district, or territory;
             3024          (xviii) has forged another's name to:
             3025          (A) an application for insurance; or


             3026          (B) a document related to an insurance transaction;
             3027          (xix) has improperly used notes or any other reference material to complete an
             3028      examination for an insurance license;
             3029          (xx) has knowingly accepted insurance business from an individual who is not
             3030      licensed;
             3031          (xxi) has failed to comply with an administrative or court order imposing a child
             3032      support obligation;
             3033          (xxii) has failed to:
             3034          (A) pay state income tax; or
             3035          (B) comply with an administrative or court order directing payment of state income
             3036      tax;
             3037          (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
             3038      Law Enforcement Act of 1994, 18 U.S.C. [Secs.] Sec. 1033 and 1034; or
             3039          (xxiv) has engaged in methods and practices in the conduct of business that endanger
             3040      the legitimate interests of customers and the public.
             3041          (c) For purposes of this section, if a license is held by an agency, both the agency itself
             3042      and any individual designated under the license are considered to be the holders of the agency
             3043      license.
             3044          (d) If an individual designated under the agency license commits an act or fails to
             3045      perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
             3046      the commissioner may suspend, revoke, or limit the license of:
             3047          (i) the individual;
             3048          (ii) the agency if the agency:
             3049          (A) is reckless or negligent in its supervision of the individual; or
             3050          (B) knowingly participated in the act or failure to act that is the ground for suspending,
             3051      revoking, or limiting the license; or
             3052          (iii) (A) the individual; and
             3053          (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).


             3054          (5) A licensee under this chapter is subject to the penalties for acting as a licensee
             3055      without a license if:
             3056          (a) the licensee's license is:
             3057          (i) revoked;
             3058          (ii) suspended;
             3059          (iii) limited;
             3060          (iv) surrendered in lieu of administrative action;
             3061          (v) lapsed; or
             3062          (vi) voluntarily surrendered; and
             3063          (b) the licensee:
             3064          (i) continues to act as a licensee; or
             3065          (ii) violates the terms of the license limitation.
             3066          (6) A licensee under this chapter shall immediately report to the commissioner:
             3067          (a) a revocation, suspension, or limitation of the person's license in any other state, the
             3068      District of Columbia, or a territory of the United States;
             3069          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             3070      the District of Columbia, or a territory of the United States; or
             3071          (c) a judgment or injunction entered against the person on the basis of conduct
             3072      involving:
             3073          (i) fraud;
             3074          (ii) deceit;
             3075          (iii) misrepresentation; or
             3076          (iv) a violation of an insurance law or rule.
             3077