S.B. 64

1

WORKERS' COMPENSATION FUND SUBSIDIARY
2 AMENDMENTS
3 2011 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: J. Stuart Adams
6 House Sponsor: Todd E. Kiser
7
8 LONG TITLE
9 General Description:
10 This bill amends the Insurance Code to address the authority of a subsidiary of the
11 Workers' Compensation Fund.
12 Highlighted Provisions:
13 This bill:
14 . permits a subsidiary of the Workers' Compensation Fund to become licensed to
15 write and to write property or casualty insurance on a risk located in Utah; and
16 . makes technical and conforming amendments.
17 Money Appropriated in this Bill:
18 None
19 Other Special Clauses:
20 None
21 Utah Code Sections Affected:
22 AMENDS:
23 31A-33-103.5, as last amended by Laws of Utah 2001, Chapters 33 and 116
24
25 Be it enacted by the Legislature of the state of Utah:
26 Section 1. Section 31A-33-103.5 is amended to read:
27 31A-33-103.5. Powers of fund -- Limitations.

28 (1) The fund may form or acquire subsidiaries or enter into a joint enterprise:
29 (a) in accordance with Section 31A-33-107 ; and
30 (b) except as limited by this section and applicable insurance rules and statutes.
31 (2) Subject to applicable insurance rules and statutes, the fund may only offer:
32 (a) workers' compensation insurance in Utah;
33 (b) workers' compensation insurance in a state other than Utah to the extent necessary
34 to:
35 (i) accomplish its purpose under Subsection 31A-33-102 (1)(b); and
36 (ii) provide workers' compensation or occupational disease insurance coverage to Utah
37 employers and their employees engaged in interstate commerce; and
38 (c) workers' compensation products and services in Utah or other states.
39 (3) Subject to applicable insurance rules and statutes, a subsidiary of the fund may:
40 (a) offer workers' compensation insurance coverage only:
41 (i) in a state other than Utah; and
42 (ii) (A) to insure the following against liability for compensation based on job-related
43 accidental injuries and occupational diseases:
44 (I) an employer, as defined in Section 34A-2-103 , that has a majority of its employees,
45 as defined in Section 34A-2-104 , hired or regularly employed in Utah;
46 (II) an employer, as defined in Section 34A-2-103 , whose principal administrative
47 office is located in Utah;
48 (III) a subsidiary or affiliate of an employer described in Subsection (3)(a)(ii)(A)(I) or
49 (II); or
50 (IV) an employer, as defined in Section 34A-2-103 , whose purchase of insurance arises
51 solely out of the purchase of workers' compensation products and services from the fund or a
52 fund subsidiary; or
53 (B) for a state fund organization that is not an admitted insurer in the other state:
54 (I) on a fee for service basis; and
55 (II) without bearing any insurance risk; [and]
56 (b) offer workers' compensation products and services in Utah and other states[.]; and
57 (c) subject to Subsection (6), for a risk located in Utah:
58 (i) become licensed under this title to write:

59 (A) property insurance; or
60 (B) casualty insurance, including a surety or other bond; and
61 (ii) once licensed under this title, to write:
62 (A) property insurance; or
63 (B) casualty insurance, including a surety or other bond.
64 (4) The fund shall write workers' compensation insurance in accordance with Section
65 31A-22-1001 .
66 (5) (a) The fund may enter into a joint enterprise that offers workers' compensation
67 insurance and other coverage only in the state, provided:
68 (i) the joint enterprise offers only property or liability insurance in addition to workers'
69 compensation insurance;
70 (ii) the fund may not bear any insurance risk associated with the insurance coverage
71 other than risk associated with workers' compensation insurance; and
72 (iii) the offer of other insurance shall be part of an insurance program that includes
73 workers' compensation insurance coverage that is provided by the fund.
74 (b) The fund or a subsidiary of the fund may not offer, or enter into a joint enterprise
75 that offers, or otherwise participate in the offering of accident and health insurance.
76 (6) The fund shall operate a subsidiary of the fund that writes property or casualty
77 insurance under Subsection (3)(c):
78 (a) as a separate for-profit entity that is taxable to the extent otherwise provided by law;
79 and
80 (b) in manner compatible with the fund's:
81 (i) federal tax exempt status under Section 501(c)(27)(B), Internal Revenue Code; and
82 (ii) obligation to comply with Section 31A-22-1001 .




Legislative Review Note
as of 2-2-11 11:44 AM

Office of Legislative Research and General Counsel